AGCO DEF 14A Report ended April 30, 2020

---

---

---

---

---

---

---

•	Former Executive Chairman, President and CEO of Cooper Tire and Rubber Company from 2007 to 2016

•

Various executive positions with Whirlpool Corporation from 1975 to 2006 including Senior Vice President, Project Management Office; Corporate Vice President and General Director, Whirlpool Mexico; Corporate Vice President, Global Procurement Operations; President/Managing Director, Whirlpool Greater China, Inc. Hong Kong; Vice President, Manufacturing Technology, Whirlpool Asia (Singapore); and Vice President, Manufacturing & Technology, Refrigeration Products, Whirlpool Europe (Comerio, Italy)

•	Former member of the Board of Directors of The Manitowoc Company, Inc.

•	Former President and Chief Executive Officer of Ryerson Inc.

•	Former member of the Board of Directors of Gardner Denver, Inc.

•	Various senior management positions with The Timken Company from 1979 to 2010 including Executive Vice President; President, Bearings and Power Transmission Group; President, Industrial Group; Vice President, Bearings and Business Process Advancement; Director, Bearings and Business Process Advancement; Director, Manufacturing and Technology, Europe, Africa and West Asia (Europe)

•	Former Executive Vice President, Leidos Holdings, Inc. from August 2016 to January 2017

•	Former Executive Vice President, Information Systems & Global Solutions, Lockheed Martin Corporation from April 2013 to August 2016

•	Various leadership positions at Lockheed Martin Corporation from 1986 to 2013, including Chief Information Officer, Vice President of Corporate Internal Audit, Business Area Chief Information Officer and Vice President of Operations

•	Member of the Board of Directors and Audit Committee of Perspecta Inc.

•	Former member of the Board of Directors of 3M Company

•	Member of the Fox School of Business Management Information Systems Advisory Board

•	Named one of Fortune magazine’s “50 Most Powerful Women in Business”

---

•	Professor of Decision Sciences at College of Charleston in Charleston, South Carolina from 2014 to present

•	Former President of College of Charleston in Charleston, South Carolina from 2007 to 2014

•	Former Member of the Board of Directors and Chairman of the Corporate Governance Committee of Crawford & Company (Atlanta, Georgia)

•	Lead Director, Chairman of the Corporate Governance Committee and member of the Audit Committee for Primerica, Inc.

•	Judge for the Malcolm Baldrige National Quality Award from 1997 to 2000, was Chairman of the Board of Overseers for the Baldrige Award from 2004 to 2007 and is currently a member of the Board of Directors for the Foundation for the Baldrige Award

•	Former Dean of the Terry College of Business at the University of Georgia from 1998 to 2007

•	Former Dean of the Rutgers Business School at Rutgers University from 1993 to 1998

•	Former Faculty member of the Carlson School of Management at the University of Minnesota from 1977 to 1993, where he served as Director of the Operations Management Center from 1992 to 1993 and head of the Decision Sciences Area from 1983 to 1988

•	President of the U.S. Chamber of Commerce

•	Former Senior Executive Vice President and former Chief Operating Officer of the U.S. Chamber of Commerce

•	Member of the Board of Directors and Audit Committee of TransUnion

•	Led a prominent financial information boutique - Potomac Research Group (PRG)

•	Formerly with the Atlantic Media Company as President of the National Journal Group, a premier provider of information, news and analysis for Washington’s policy and political communities

•	Member of the Board of So Others Might Eat, a Washington, D.C. support system for the homeless

•	Former President of International Women’s Forum (Washington Chapter), a global group of leading women in business, law, government, technology and the arts

•	Named one of Washingtonian Magazine’s “100 Most Powerful Women in Washington”

•	Former President and Chief Executive Officer of BayWa Corporation, a trading and services company located in Munich, Germany, from 1991 until his retirement in 2008

•	Non-Executive Chairman of the Board of Directors and Audit Committee of Hauck & Aufhäuser Privatbankiers AG

---

•	Former Senior Vice President and Chief Financial Officer of ITT Corporation from 2005 to 2007

•	Several senior finance positions at United Technologies Corporation, including Vice President and Chief Financial Officer of Otis Elevator from 2001 to 2005 and Vice President and Chief Financial Officer of Carrier Corporation from 1996 to 2001

•	Various positions within Price Waterhouse (now PricewaterhouseCoopers LLP) from 1971 to 1993, serving as an audit partner from 1984 to 1993

•	Member of the Boards of Directors and Audit Committees of Belden Inc. and Kaman Corporation and the Chairman of the Audit Committee for Belden Inc.

•	Member of the Board of Directors, Chairman of Audit and member of the Officers & Directors Compensation Committee for PPG Industries, Inc.

•	Member of the Board of Directors, Compensation and Governance & Nominating Committees for Linde PLC. Mr. Richenhagen also served as a director of Praxair, Inc. from 2015 until the business combination of Praxair, Inc. and Linde AG.

•	Member of the Board of Directors for American Institute for Contemporary German Studies

•	Member of the Board of Directors for Metro Atlanta Chamber of Commerce

•	Former Member of President’s Advisory Council on Doing Business in Africa for the United States Department of Commerce

•	Former Chairman of the German American Chambers of Commerce of the United States

•	Former Chairman of the Board and Lifetime Honorary Director of the Association of Equipment Manufacturers (AEM)

•	Former Executive Vice President of Forbo International SA, a flooring material business based in Switzerland, from 2003 to 2004

•	Former Group President of Claas KGaA mbH, a global farm equipment manufacturer and distributor, from 1998 to 2002

•	Former Senior Executive Vice President for Schindler Deutschland Holdings GmbH, a worldwide manufacturer and distributor of elevators and escalators, from 1995 to 1998

•	Member of the Board of Trustees and Audit Committee of the Colonial Williamsburg Foundation

•	Chairman of the Advisory Board of the Illinois Neurological Institute

•	Board member, Audit Committee Chairman and past Chairman of the U.S. Chamber of Commerce

•	Numerous marketing and general management positions for Caterpillar Inc., both in the United States and Europe, including Group President from 1998 until his retirement in January 2008

•	Former Chairman of the Board of Trustees of Bradley University

•	Former member of Board of Directors of the Ford Motor Company

---

•	Chairman and Managing Director of Tractors and Farm Equipment Limited, the second largest agricultural tractor manufacturer in India, since December 2019 and previously Chairman and Chief Executive Officer since 2011

•	Various positions at Tractors and Farm Equipment Limited since 1981, including Director (1994 to 2011), Vice President (1991 to 1994) and General Manager – Planning & Coordination (1986 to 1991)

•	Chairman and member of the Board of Directors of Tata Steel Limited (India)

•	Former member of the Board of Directors of Tata Global Beverages Limited (India)

•	Member of the Board of Medical Research Foundation

•	Member of the Global Board of the U.S. Chamber of Commerce’s U.S. India Business Council

•	Former President of the Tractor Manufacturers Association of India, the Madras Management Association and the Madras Chamber of Commerce & Industry

•	Former member of the Board of Governors of the Indian Institute of Technology, Madras and the Indian Institute of Management, Tiruchirappalli

•	be an employee of the Company or have an “immediate family member,” as that term is defined in the General Commentary to Section 303A.02(b) of the NYSE rules, who is an executive officer of the Company at any time during the preceding three years;

•

receive or have an immediate family member who receives or solely own any business that receives during any twelve-month period within the preceding three years direct compensation from the Company or any subsidiary or other affiliate in excess of $120,000, other than for director and committee fees and pension or other forms of deferred compensation for prior service to the Company or, solely in the case of an immediate family member, compensation for services to the Company as a non-executive employee;

•	be a current partner or current employee of a firm that is the internal or external auditor of the Company or any subsidiary or other affiliate, or have an immediate family member that is a current partner or current employee of such a firm who personally works on an audit of the Company or any subsidiary or other affiliate;

•	have been or have an immediate family member who was at any time during the preceding three years a partner or employee of such an auditing firm who personally worked on an audit of the Company or any subsidiary or other affiliate within that time;

•	be employed or have an immediate family member that is employed either currently or at any time within the preceding three years as an executive officer of another company in which any present executive officers of the Company or any subsidiary or other affiliate serve or served at the same time on the other company’s Compensation Committee; or

•

be a current employee or have an immediate family member that is a current executive officer of a company that has made payments to or received payments from the Company or any subsidiary or other affiliate for property or services in an amount which, in any of the preceding three years of such other company, exceeds (or in the current year of such other company is likely to exceed) the greater of $1.0 million or two percent of the other company’s consolidated gross revenues for that respective year.

---

•	accept any consulting, advisory or other compensatory fee from the Company or any subsidiary; or

•	be an “affiliated person,” as that term is used in Section 10A(m)(3)(B)(ii) of the Securities Exchange Act of 1934 (the “Exchange Act”), of the Company or any of its subsidiaries.

•	be a current or former employee or former officer of the Company or an affiliate or receive any compensation from the Company other than for services as a director;

•	receive remuneration from the Company or an affiliate, either directly or indirectly, in any capacity other than as a “director,” as that term is defined in Section 162(m) of the Internal Revenue Code (“IRC”); or

•	have an interest in a transaction required under SEC rules to be described in the Company’s proxy statement.

---

---

•	career experience, particularly experience that is germane to the Company’s business, such as with agricultural products and services, legal, human resources, finance and marketing experience;

•	experience serving on other boards of directors or in the senior management of companies that have faced issues generally of the level of sophistication that the Company faces;

•	contribution to diversity of the Board;

•	integrity and reputation;

•	whether the candidate has the characteristics of an independent director;

•	academic credentials;

•	other obligations and time commitments and the ability to attend meetings in person; and

•	current membership on the Company’s Board — our Board values continuity (but not entrenchment).

---

•	a resume for the candidate detailing the candidate’s work experience and academic credentials;

•

written confirmation from the candidate that he or she (i) would like to be considered as a candidate and would serve if nominated and elected, (ii) consents to the disclosure of his or her name, (iii) has read the Company’s Global Code of Conduct (the “Code”) and that during the prior three years has not engaged in any conduct that, had he or she been a director, would have violated the Code or required a waiver, (iv) is, or is not, “independent” as that term is defined in the committee’s charter, and (v) has no plans to change or influence the control of the Company;

•	the name of the recommending stockholder as it appears in the Company’s books, the number of shares of common stock that are owned by the stockholder and written confirmation that the stockholder consents to the disclosure of his or her name. (If the recommending person is not a stockholder of record, he or she should provide proof of share ownership);

•	personal and professional references for the candidate, including contact information; and

•	any other information relating to the candidate required to be disclosed in solicitations of proxies for election of directors or as otherwise required, in each case, pursuant to Regulation 14A of the Exchange Act.

---

•	our corporate governance principles and charters for the Audit, Compensation, Executive, Finance, Governance and Succession Planning Committees of the Board, which are available under the headings “Governance Principles” and “Charters of the Committees of the Board,” respectively, in the “Corporate Governance” section of our website located under “Investors;” and

•	the Company’s Global Code of Conduct, which is available under the heading “Global Code of Conduct” in the “Corporate Governance” section of our website located under “Investors.”

---

---

---

•	A formal compensation philosophy approved by the Compensation Committee that targets executive’s total compensation levels (including NEOs) at the median (or 50 th percentile) of the market and provides opportunity for upside compensation levels for excellent performance;

•	A well-defined peer group of similar and reasonably-sized industrial and manufacturing comparators to benchmark NEO and other officer compensation;

•	An annual incentive compensation plan (“IC Plan”) that includes a minimum net income threshold that must be met before a payout is earned, a maximum payout level of 200% of target, and multiple performance measures that drive stockholder value and improvement in operational results, which mitigate too heavy of a focus on any one performance measure in particular;

•

A balanced long-term incentive plan (“LTI Plan”) consisting of a performance share plan, which comprises approximately 60% of an NEO’s target LTI award, restricted stock units (“RSUs”), which comprises approximately 20% of an NEO’s target LTI award, and a grant of stock-settled stock appreciation rights, which comprises approximately 20% of an NEO’s target LTI award. Each LTI vehicle contains a strong performance or retention orientation and aligns closely with stockholder interests;

•	Beginning in 2020, a performance-based adjustment of RSU awards;

•	Beginning with 2018, awards under the LTI Plan, a so-called “double trigger” equity vesting in the event of change of control;

•	A clawback policy, which allows the Company to take remedial action against an executive if the Board determines that an executive’s misconduct contributed to the Company having to restate its financial statements;

•	Stock ownership requirements that encourage executives to own a specified level of stock, which emphasizes the alignment of their interests with those of stockholders;

•	Modest perquisites for executives (including NEOs);

•	A plan design that mitigates the possibility of excessive risk that could harm long-term stockholder value;

•	For new executive employment agreements beginning in 2017, no gross-ups for excise taxes on severance payments due to a change of control; and

•	A conservative approach to share usage associated with our stock compensation plans.

---

•	Modest merit increases of base compensation, other than in connection with promotions;

•	IC Plan payouts for corporate goal achievement at 130% of target;

•	LTI Plan payouts at 200% of target for the 2017-2019 three-year performance cycle (which targets were set during an industry low point); and

•	Modification of performance metrics to focus on margin improvement.

---

---

---

---

---

---

•	A continuation of compensation that is highly weighted - on average, approximately 75% - to variable or “at risk” compensation;

•	Targeting compensation at the median (50 th percentile) of our peer group;

•	A continued focus on aligning incentives with corporate strategy; and

•	Extensive stockholder outreach and changes reflective of that process, including:

◦	Beginning in 2018, the implementation of “double trigger” vesting in connection with future equity awards;

◦	Elimination of excise tax gross-ups from future employment agreements; and

◦	Commencing in 2020, the addition of an adjustment to restricted stock unit (“RSU”) awards based upon operating margin improvement relative to an agricultural equipment and industrial company peer group and the addition of three-year cliff vesting (rather than annual vesting).

•	Andrew H. Beck, Senior Vice President — Chief Financial Officer

•	Eric P. Hansotia, Senior Vice President — Chief Operating Officer

•	Martin H. Richenhagen, Chairman of the Board, President and Chief Executive Officer

•	Rob Smith, Former Senior Vice President and General Manager, Europe/Middle East

•	Hans-Bernd Veltmaat, Senior Vice President — Chief Supply Chain Officer

---

•	The financial performance objectives in our annual and long-term incentive plans are reviewed and approved annually by the Compensation Committee;

•	Our annual and long-term incentive plans consist of multiple performance objectives, mitigating focus on any one objective in particular;

•	The vesting period for our NEOs’ stock-settled stock appreciation rights is 48 months, and the periods for performance shares and RSUs generally are 36 months;

•	Our NEOs (and directors) are subject to stock ownership requirements;

•	Compensation levels for our executives (including NEOs) generally are targeted at median levels of market competitiveness;

•	Our compensation programs support a conservative approach to share usage associated with our stock compensation plans;

•	The design of our compensation programs attempts to mitigate the possibility of excessive risk-taking that could harm the long-term value of AGCO;

•	For new executive employment agreements beginning in 2017, there is no gross-up for excise taxes on severance payments due to a change in control;

•	We adopted double-trigger equity vesting in the case of a change-in-control for equity awards made in 2018 and subsequent periods; and

•	We have a clawback provision in place that can require the return of any bonus or incentive compensation.

•	Are aligned with median market levels and competitive with companies of similar revenue size and complexity;

•	Align with stockholder interests;

•	Reward performance;

•	Attract and retain quality management;

•	Encourage executive stock ownership;

•	Mitigate excessive risk-taking; and

•	Are substantially consistent among our locations worldwide.

---

---

•	The Compensation Committee directly hired and has the authority to terminate the compensation advisor;

•	The compensation advisor reports directly to the Compensation Committee and the chairperson;

•	The compensation advisor meets regularly and as needed with the Compensation Committee in executive sessions that are not attended by any of our officers;

•	The compensation advisor and the team at Willis Towers Watson have direct access to all members of the Compensation Committee during and between meetings;

•	No regular member of the Willis Towers Watson executive compensation team owns any stock of AGCO, other than possibly investments in mutual funds or other funds that are managed without the member’s input; and

•	The executive compensation advisor and team at Willis Towers Watson do not have any personal or business relationships with any member of the Compensation Committee or executive officer of AGCO.

•	Willis Towers Watson has separated its executive compensation consulting services into a single, segregated business unit within Willis Towers Watson;

•	Willis Towers Watson associates are subject to a comprehensive Code of Conduct and Ethics, which addresses issues including conflicts of interest and associates’ ownership and trading of client company stock, among other areas;

•	The compensation advisor receives no direct incentives based on other services Willis Towers Watson provides to AGCO;

•	The compensation advisor is not the Willis Towers Watson client relationship manager for AGCO; and

•	Neither the compensation advisor nor any member of the advisor’s team participates in any activities related to the services provided to AGCO by other Willis Towers Watson business units.

---

---

•	Operating Margin as a Percentage of Net Sales: The percentage calculated when income from operations is divided by net sales (70% weight). This measure also excludes restructuring expenses and certain other approved items.

•	Free Cash Flow: Operating cash flow minus capital expenditures (30% weight).

(1)	Dollar amounts stated in millions; performance amounts reflect adjustments made in accordance with the awards.

---

•	LTI is performance-based and intended to engage executives in achieving longer-term goals and to make decisions in the best interests of stockholders;

•	Target award opportunities are generally competitive with median levels of other companies of similar size, industry and complexity;

•	Realizable gains with respect to each award are intended to vary with Company performance and stock price growth; and

•	Performance goals are aligned with stockholder interests and support the long-term success of AGCO.

---

(1)	Performance amounts reflect adjustments made in accordance with the awards.

---

---

---

---

---

---

(1)	Stock Awards for 2017

---

(2)	SSARs were awarded on January 24, 2017 , January 23, 2018 and January 22, 2019 . The SSARs vest over four years from the date of grant, or 25% per year. The amounts above reflect the aggregate grant date fair value computed in accordance with ASC 718.

(3)	Non-Equity Incentive Plan Compensation for 2017 . All annual incentive awards for 2017 were performance-based. These payments were earned in 2017 and paid in January or February 2018 under the IC Plan.

(4)

The change in each officer’s pension value is the change in the Company’s obligation to provide pension benefits (at a future retirement date) from the beginning of the year to the end of the year. The obligation shown in the “ 2019 Pension Benefits Table” presented below is the value today of a benefit that will be paid at the officer’s normal retirement age, based on the benefit formula and his or her current salary and service. The values shown in the Summary Compensation Table represent the change in the pension obligation since the prior year.

•

Service accruals: The benefits payable from the pension plans increase as participants earn additional years of service. Therefore, as each executive officer earns an additional year of service during the year, the benefit payable at retirement increases. Each of the NEOs who participate in a pension plan earned an additional year of benefit service during 2019 except for Mr. Beck who has already earned the maximum benefit service allowed under the plan.

•	Compensation increases/decreases since prior year: The benefits payable from the pension plans are related to salary. As executive officers’ salaries increase (decrease), then the expected benefits payable from the pension plans will increase (decrease) as well.

•	Aging: The amounts shown above are changes in the present values of retirement benefits that will be paid in the future. As the officers approach retirement, the present value of the liability increases due to the fact that the executive officer is one year closer to retirement than he was at the prior measurement date.

•

Changes in assumptions: The amounts shown above are changes in the present values of retirement benefits that will be paid in the future. The discount rate used to determine the present value is updated each year based on current economic conditions. This assumption does not impact the actual benefits paid to participants. The discount rate decreased from 2018 to 2019 , which resulted in a significant increase in the present value of the officers’ benefits.

---

•	Plan amendments: The Company periodically amends the retirement programs in order to remain competitive locally and/or align with our global benefits strategy. There were no such amendments during 2019 .

(a)	These amounts represent the value of the benefit to the executive officer for life insurance policies funded by the Company.

(b)	These amounts represent car lease payments made by the Company for cars used by executives and/or their family members, as well as payments for related gas and maintenance costs.

(c)

The amount for Mr. Beck includes commercial airfare related to attendance by Mr. Beck’s wife at a business-related event — $737. The amount for Mr. Hansotia includes commercial airfare related to attendance by Mr. Hansotia’s wife at a business-related event — $447. The amount for Mr. Richenhagen includes estate planning fees — $6,069 and commercial airfare related to attendance by Mr. Richenhagen’s wife at a business-related event — $5,164. Mr. Richenhagen’s wife accompanied Mr. Richenhagen when the Company’s corporate aircraft was used for attendance at corporate functions at no incremental cost. The amount for Mr. Smith includes housing allowance — $48,302, tax preparation fees — $18,101 and commercial airfare related to attendance by a guest of Mr. Smith at business-related events — $5,758. Mr. Veltmaat’s wife accompanied Mr. Veltmaat when the Company’s corporate aircraft was used for attendance at a corporate function at no incremental cost.

---

(1)	Amounts included in the table above represent the potential payout levels related to corporate objectives for the fiscal year 2019 under the Company’s IC Plan. The payment for these awards already have been determined and were paid on February 14, 2020 and February 25, 2020 to the NEOs. Refer to Note 3 of the 2019 Summary Compensation Table.

(2)	The amounts shown represent the number of shares the executive would receive if the “Threshold,” “Target” and “Maximum” levels of performance are reached.

---

---

(1)	SSAR awards vest ratably, or 25% annually, over four years beginning from the date of grant, which was January 26, 2016 for the 2016 grants, January 24, 2017 for the 2017 grants, January 23, 2018 for the 2018 grants and January 22, 2019 for the 2019 grants.

(2)	RSU awards vest in equal installments over three years beginning from the date of grant, which was January 24, 2017 for the 2017 grants, January 23, 2018 for the 2018 grants and January 22, 2019 for the 2019 grants.

(3)	The pre-established performance goals of certain one-year performance cycles under the PSP were achieved; however, the award is subject to a further vesting period. The number of shares are at the actual level of performance achieved.

(4)

The market value of RSU awards that have not vested is based on the closing price of the Company’s common stock on December 31, 2019, December 31, 2018 and December 31, 2017, which was $77.25, $55.67 and $71.43, respectively. The market value of the awards earned under the three one-year performance cycles under the PSP are based on the closing price of the Company’s common stock on December 31, 2019 and December 31, 2018, which was $77.25 and $55.67, respectively.

(5)	The amounts shown represent the number of shares awarded but unearned under the PSP in January 2018 and January 2019, respectively. The actual amounts that will be earned under the PSP are dependent upon the achievement of pre-established performance goals during the respective performance cycles.

(6)	Based on the closing price of the Company’s common stock on December 31, 2019 and December 31, 2018, which was $77.25 and $55.67, respectively.

(1)

The number of shares acquired on exercise of SSARs is computed by dividing the value realized on exercise by the market price of the underlying securities at exercise. The number of shares acquired upon exercise is inclusive of the following shares withheld for income tax purposes: Mr. Beck — 3,607 shares, Mr. Hansotia — 1,837 shares, Mr. Richenhagen — 35,435 shares, Mr. Smith — 351 shares and Mr. Veltmaat — 1,218 shares.

(2)	The dollar amount realized upon exercise is computed by multiplying the number of shares times the difference between the market price of the underlying securities at exercise and the exercise price of the SSARs.

(3)	Shares withheld for income tax purposes related to stock vested were as follows: Mr. Beck — 13,011 shares, Mr. Hansotia — 2,787 shares, Mr. Richenhagen — 73,348 shares, Mr. Smith — 15,572 shares and Mr. Veltmaat — 7,445 shares.

---

---

---

(1)

Based on plan provisions in effect as of December 31, 2019 . The executive officers participate in pension plans that will provide a monthly annuity benefit upon retirement. The values shown in this column are the estimated lump sum value today of the monthly benefits they will receive in the future (based on their current salary and service, as well as the assumptions and methods prescribed by the SEC). These values are not the monthly or annual benefits that they would receive.

---

---

(1)	All termination scenarios assume termination occurs on December 31, 2019 , and a stock price of $77.25, which was the closing price of the Company’s common stock on the last trading day of the Company’s year ended December 31, 2019 .

(2)	Upon termination within two years following a change of control, the following provisions apply to each of the NEOs:

•

Mr. Richenhagen receives a lump sum payment equal to (i) three times his base salary in effect at the time of termination, (ii) a pro-rata portion of his bonus or other incentive compensation earned for the year of termination and (iii) a bonus equal to three times the three-year average of Mr. Richenhagen’s awards received during the prior two completed years and the current year’s trend. He continues to receive life insurance and health benefits during a three-year period and disability benefits during a two-year period.

---

•

Messrs. Beck, Hansotia, Smith and Veltmaat receive a lump sum payment equal to (i) two times base salary in effect at the time of termination, (ii) a pro-rata portion of bonus or other incentive compensation earned for the year of termination and (iii) a bonus equal to two times the three-year average of the NEO’s awards received during the prior two completed years and the current year’s trend. Each of the NEOs continues to receive life insurance, disability and healthcare benefits during a two-year period.

•

Messrs. Beck, Hansotia, Richenhagen and Veltmaat will receive their ENPP retirement benefit payable as a lump sum. This lump sum is calculated in a similar fashion as values disclosed in the Pension Benefits Table, except it is determined based on the plan’s actuarial equivalence definition rather than the SEC prescribed assumptions. There is no enhancement to their pension benefit amount in the event of a change in control other than immediate vesting of the benefit.

(3)

All outstanding equity awards prior to 2018 held by the NEOs at the time of a change of control become non-cancelable, fully vested and exercisable, and all performance goals associated with any awards are deemed satisfied with respect to the greater of target performance or the level dictated by the trend of the Company’s performance to date, so that all compensation is immediately vested and payable.

(4)

In the case of a change of control, the retirement benefits are payable as a lump sum six months after termination of employment or, if such termination occurs more than twenty-four months after the change in control, in accordance with the terms of the ENPP. The difference between the “Retirement Benefits” values shown in the table above from the ENPP and the value shown in the “ 2019 Pension Benefits Table” is due to the fact that the interest and mortality assumptions prescribed by the plan in the event of a change of control are different from the assumptions used in the actuarial valuation. There is no enhancement to the benefit amount under a change of control other than immediate vesting of the benefit.

(5)	The change-in-control calculation has factored into it a value for the executive’s covenant not to compete.

(6)	As of December 31, 2019 , Mr. Richenhagen is eligible for retirement benefits. Messrs. Beck and Veltmaat are vested in their ENPP benefit, but are not eligible to commence their benefits. Mr. Hansotia is not vested in his ENPP benefit.

(7)	Upon death, the following provisions apply to each of the NEOs:

•	The estate receives the executive’s base salary in effect at the time of death for a period of three months. The estate is also entitled to all sums payable to the executive through the end of the month in which death occurs, including the pro-rata portion of his bonus earned at this time. The “Death Benefit” amount represents the value of the insurance proceeds payable upon death.

(8)	Upon disability, the following provisions apply to each of the NEOs:

•	Each of the NEOs receives all sums otherwise payable to them by the Company through the date of disability, including the pro-rata portion of the bonus earned. The “Disability Benefit” amount represents the annual value of the insurance proceeds payable to the executive on a monthly basis upon disability.

(9)	Unless such termination occurs within two years following a change of control, if employment is terminated without cause or if the executive voluntarily resigns with good reason, the following provisions apply to each of the NEOs:

•	For Mr. Richenhagen, he does not receive cash severance because he is over age 65. His employment agreement stipulates that no cash severance is paid when he reaches the age of 65. Mr. Richenhagen does receives a pro-rata portion of his bonus earned for the year of termination, which is payable at the time incentive compensation is generally payable by the Company.

•	For Mr. Beck, he receives his base salary in effect at the time of termination for a two-year severance period, paid at the same intervals as if he had remained employed with the Company. He also receives a pro-rata portion of his bonus earned for the year of termination, which is payable at the time incentive compensation is generally payable by the Company.

•

For Messrs. Hansotia, Smith and Veltmaat, each of the NEOs receive their base salary in effect at the time of termination for a one-year severance period, paid at the same intervals as if they had remained employed with the Company. Each NEO also receives a pro-rata portion of their bonus earned for the year of termination, which is payable at the time incentive compensation is generally payable by the Company.

(10)

Mr. Beck is currently vested in his ENPP retirement benefit. In the event of Mr. Beck’s termination due to a change of control, he will receive a $8,708,978 lump sum payment. In the event of his termination due to any other cause, he will receive a $789,486 annual annuity for 15 years beginning at age 65. The present value of this annuity (plus the value of the life annuity beginning at age 80 if he were to remain employed by the Company until age 65) equals the benefit disclosed in the Pension Benefits Table, based on the assumptions and methods defined by the SEC. In other words, there is no enhancement that would be added to his pension benefit if he had been terminated on December 31, 2019 .

---

(11)	Mr. Hansotia is not currently vested in his ENPP retirement benefit. In the event of Mr. Hansotia’s termination due to a change of control, he will receive a $1,267,800 lump sum payment. In the event of his termination due to any other cause on December 31, 2019, he would not receive an ENPP retirement benefit.

(12)

Mr. Richenhagen is currently vested in his ENPP retirement benefit. In the event of Mr. Richenhagen’s termination due to a change of control, he will receive a $29,271,280 lump sum payment. In the event of Mr. Richenhagen’s termination due to any other cause, he will receive $1,921,705 annually as a 15-year certain and life annuity beginning at termination. The present value of this annuity plus the value of the life annuity beginning 15 years later equals the benefit disclosed in the Pension Benefits Table, based on the assumptions and methods defined by the SEC. In other words, there is no enhancement that would be added to his pension benefit if he had been terminated on December 31, 2019 .

(13)

In the event of Mr. Smith’s termination due to a change of control, he will receive a $907,478 lump sum payment from his retirement plan. In the event of his termination due to death, he will receive a $2,019,853 lump sum payment.  In the event of his termination due to disability, he will receive a $415,289 annual annuity until age 65.  In the event of his termination due to any other cause, he will receive a lump sum payment of $907,478 , which corresponds to his vested benefits as per December 31, 2019 .

(14)

Mr. Veltmaat is currently vested in his ENPP retirement benefit. In the event of Mr. Veltmaat’s termination due to a change of control, he will receive a $6,905,785 lump sum payment. In the event of his termination due to any other cause, he will receive a $434,117 annual annuity for 15 years beginning at age 65. The present value of this annuity (plus the value of the life annuity beginning at age 80 if he were to remain employed by the Company until age 65) equals the benefits disclosed in the Pension Benefits Table, based on the assumptions and methods defined by the SEC. In other words, there is no enhancement that would be added to his pension benefit if he had been terminated on December 31, 2019 .

---

---

---

---

---

---

---