FEDERAL AGRICULTURAL MORTGAGE CORPORATION (NYSE:AGM) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02.
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Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e) Compensatory Arrangements of Certain Officers.
Renewal of CEO Employment Agreement
On March 2, 2017, in accordance with Section 2 of the Employment
Agreement dated December 3, 2014 (the Agreement) between Timothy
L. Buzby and the Federal Agricultural Mortgage Corporation
(Farmer Mac), the Board of Directors (the Board) of Farmer Mac
renewed the term of the Agreement for Mr. Buzby to continue to
serve as Farmer Macs President and Chief Executive Officer for an
additional one-year period ending on April 7, 2018, upon the
terms currently in effect.
Agreement dated December 3, 2014 (the Agreement) between Timothy
L. Buzby and the Federal Agricultural Mortgage Corporation
(Farmer Mac), the Board of Directors (the Board) of Farmer Mac
renewed the term of the Agreement for Mr. Buzby to continue to
serve as Farmer Macs President and Chief Executive Officer for an
additional one-year period ending on April 7, 2018, upon the
terms currently in effect.
Under the Agreement, Mr. Buzby receives an annual base salary and
annual cash incentive compensation based on a target amount of
his annual base salary, each of which may be modified in the sole
discretion of the Board or the Compensation Committee of the
Board. As previously disclosed on a Current Report on Form 8-K
filed on January 13, 2017, the Compensation Committee of the
Board approved an increase in Mr. Buzbys base salary from
$700,000 per year to $715,000 per year, effective January 1,
2017. Mr. Buzbys annual cash incentive compensation continues to
be based on a target amount of 80% of Mr. Buzbys annual base
salary, as set forth in the Agreement. The Agreement also
provides for Mr. Buzby to receive awards of long-term incentive
compensation from time to time in a form, and subject to such
conditions, as determined by the Board and the Compensation
Committee of the Board in their sole discretion. Mr. Buzby is
eligible for all employee benefits regularly provided to senior
executives of Farmer Mac and certain other benefits.
annual cash incentive compensation based on a target amount of
his annual base salary, each of which may be modified in the sole
discretion of the Board or the Compensation Committee of the
Board. As previously disclosed on a Current Report on Form 8-K
filed on January 13, 2017, the Compensation Committee of the
Board approved an increase in Mr. Buzbys base salary from
$700,000 per year to $715,000 per year, effective January 1,
2017. Mr. Buzbys annual cash incentive compensation continues to
be based on a target amount of 80% of Mr. Buzbys annual base
salary, as set forth in the Agreement. The Agreement also
provides for Mr. Buzby to receive awards of long-term incentive
compensation from time to time in a form, and subject to such
conditions, as determined by the Board and the Compensation
Committee of the Board in their sole discretion. Mr. Buzby is
eligible for all employee benefits regularly provided to senior
executives of Farmer Mac and certain other benefits.
Mr. Buzbys employment will terminate upon his death or disability
and may be terminated at any time by Farmer Mac with or without
cause (as defined in the Agreement), or by Mr. Buzby voluntarily
or if Farmer Mac materially breaches, and fails to cure, its
obligations under the Agreement.
and may be terminated at any time by Farmer Mac with or without
cause (as defined in the Agreement), or by Mr. Buzby voluntarily
or if Farmer Mac materially breaches, and fails to cure, its
obligations under the Agreement.
If Mr. Buzbys employment is terminated (i) by Farmer Mac other
than for cause (as defined in the Agreement) or (ii) by Mr. Buzby
in connection with an uncured material breach by Farmer Mac,
Farmer Mac will pay to Mr. Buzby all base salary, incentive
compensation, expense and reimbursements, vacation pay, and
similar amounts accrued and unpaid as of the date of termination.
Mr. Buzby would also be entitled to certain severance benefits,
subject to Mr. Buzbys execution of a separation agreement upon
specified terms.
than for cause (as defined in the Agreement) or (ii) by Mr. Buzby
in connection with an uncured material breach by Farmer Mac,
Farmer Mac will pay to Mr. Buzby all base salary, incentive
compensation, expense and reimbursements, vacation pay, and
similar amounts accrued and unpaid as of the date of termination.
Mr. Buzby would also be entitled to certain severance benefits,
subject to Mr. Buzbys execution of a separation agreement upon
specified terms.
If Mr. Buzby is terminated for cause or if Mr. Buzby voluntarily
resigns other than in connection with an uncured material breach
by Farmer Mac, Farmer Mac will pay such unpaid compensation as
has accrued up to the date of termination, excluding accrued
incentive compensation. If Mr. Buzbys employment is terminated
due to death or other incapacity or disability, Farmer Mac will,
subject to Mr. Buzbys (or his estates) execution of a separation
agreement upon specified terms, continue to pay Mr. Buzby (or his
estate), for the shorter of (i) twelve (12) months or (ii) the
period ending when Mr. Buzby ceases to receive or be eligible for
disability insurance payments, the difference between Mr. Buzbys
current base salary and the amount of disability insurance
payments
resigns other than in connection with an uncured material breach
by Farmer Mac, Farmer Mac will pay such unpaid compensation as
has accrued up to the date of termination, excluding accrued
incentive compensation. If Mr. Buzbys employment is terminated
due to death or other incapacity or disability, Farmer Mac will,
subject to Mr. Buzbys (or his estates) execution of a separation
agreement upon specified terms, continue to pay Mr. Buzby (or his
estate), for the shorter of (i) twelve (12) months or (ii) the
period ending when Mr. Buzby ceases to receive or be eligible for
disability insurance payments, the difference between Mr. Buzbys
current base salary and the amount of disability insurance
payments
received by Mr. Buzby under insurance policies provided by Farmer
Mac in accordance with the Agreement.
Mac in accordance with the Agreement.
The Agreement contains customary non-competition and
non-solicitation provisions in favor of Farmer Mac and also
provides that it may be renewed following the expiration of the
prior term for successive one-year periods upon a vote of the
Board.
non-solicitation provisions in favor of Farmer Mac and also
provides that it may be renewed following the expiration of the
prior term for successive one-year periods upon a vote of the
Board.
The foregoing description of the Agreement is qualified in its
entirety by reference to the full text of the Agreement (except
as it relates to Mr. Buzbys current base salary), which was
included as Exhibit 10.1 to the Current Report on Form 8-K
previously filed on December 8, 2014 and is incorporated by
reference in this report.
entirety by reference to the full text of the Agreement (except
as it relates to Mr. Buzbys current base salary), which was
included as Exhibit 10.1 to the Current Report on Form 8-K
previously filed on December 8, 2014 and is incorporated by
reference in this report.
Adoption of Nonqualified Deferred Compensation Plan
On March 2, 2017, the Board adopted the Nonqualified Deferred
Compensation Plan of Federal Agricultural Mortgage Corporation
(the Plan), effective as of May 1, 2017. The Plan is a
nonqualified deferred compensation plan designed to comply with
the provisions of Section 409A of the Internal Revenue Code of
1986, as amended (the Code). The Compensation Committee of the
Board has designated Farmer Macs four current executive officers
Timothy L. Buzby, John C. Covington, R. Dale Lynch, and Stephen
P. Mullery as the initial participants in the Plan.
Compensation Plan of Federal Agricultural Mortgage Corporation
(the Plan), effective as of May 1, 2017. The Plan is a
nonqualified deferred compensation plan designed to comply with
the provisions of Section 409A of the Internal Revenue Code of
1986, as amended (the Code). The Compensation Committee of the
Board has designated Farmer Macs four current executive officers
Timothy L. Buzby, John C. Covington, R. Dale Lynch, and Stephen
P. Mullery as the initial participants in the Plan.
The purpose of the Plan is to:
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restore retirement contributions by Farmer Mac on behalf of
each of its four executive officers to the level those individuals would have otherwise been eligible to receive in employer contributions under Farmer Macs 401(k) retirement plan in the absence of the limits imposed by Section 401(a)(17) of the Code on the amount of annual compensation that can be taken into account in determining employer contributions under a qualified retirement plan; and |
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permit each of Farmer Macs executive officers to elect to
defer a portion of that compensation without reference to the limitations in Farmer Macs 401(k) plan or those imposed by Section 415(c)(1)(A) of the Code for qualified defined contribution retirement plans. |
Under the Plan, Farmer Mac will credit the account of each
executive officer each year with an amount equal to 18.9% of the
difference between (i) the annual compensation limit under
401(a)(17) of the Code, which is $270,000 for 2017 and (ii) a
participants annual base salary, which for purposes of
calculating employer credits under the Plan is capped at $700,000
for Farmer Macs Chief Executive Officer and $500,000 for all
other participants. This fixed contribution percentage is the
same formula used for determining employer contributions to
Farmer Macs 401(k) plan based on an employees annual base salary
that is above the applicable Social Security wage base for that
year.
executive officer each year with an amount equal to 18.9% of the
difference between (i) the annual compensation limit under
401(a)(17) of the Code, which is $270,000 for 2017 and (ii) a
participants annual base salary, which for purposes of
calculating employer credits under the Plan is capped at $700,000
for Farmer Macs Chief Executive Officer and $500,000 for all
other participants. This fixed contribution percentage is the
same formula used for determining employer contributions to
Farmer Macs 401(k) plan based on an employees annual base salary
that is above the applicable Social Security wage base for that
year.
In addition to employer credits to the accounts of the executive
officers and subject to applicable tax laws, participants in the
Plan may elect to defer up to 80% of their base salary and up to
80% of any short-term incentive cash bonus scheduled to be
received in any one year. A participant may elect to defer
compensation until a fixed and determinable date that must be at
least two years after the first day of the year in which the
deferral election became effective.
officers and subject to applicable tax laws, participants in the
Plan may elect to defer up to 80% of their base salary and up to
80% of any short-term incentive cash bonus scheduled to be
received in any one year. A participant may elect to defer
compensation until a fixed and determinable date that must be at
least two years after the first day of the year in which the
deferral election became effective.
A participant will be fully vested in non-elective employer
credits upon the earliest to occur of: (i) death, (ii)
disability, or (iii) three (3) years following the effective date
of participation in the Plan. A participant will be immediately
fully vested in all amounts credited attributable to elective
deferrals of compensation.
credits upon the earliest to occur of: (i) death, (ii)
disability, or (iii) three (3) years following the effective date
of participation in the Plan. A participant will be immediately
fully vested in all amounts credited attributable to elective
deferrals of compensation.
The earliest to occur of the following events will trigger the
distribution of all amounts credited to a participants account,
including both non-elective employer credits and elective
deferrals: (i) death, (ii) disability, and (iii) the later to
occur of the participants separation from service (as defined in
Section 409A of the Code) or attaining the age of 65. A
participant may elect to receive these payments in a single lump
sum cash payment or in annual installments for a period of up to
ten (10) years, although account balances will become payable
immediately in a single lump sum cash payment upon a participants
death or disability. A participant also has the ability to
request a distribution in the event of an unforeseen emergency
(as defined in Section 409A of the Code).
distribution of all amounts credited to a participants account,
including both non-elective employer credits and elective
deferrals: (i) death, (ii) disability, and (iii) the later to
occur of the participants separation from service (as defined in
Section 409A of the Code) or attaining the age of 65. A
participant may elect to receive these payments in a single lump
sum cash payment or in annual installments for a period of up to
ten (10) years, although account balances will become payable
immediately in a single lump sum cash payment upon a participants
death or disability. A participant also has the ability to
request a distribution in the event of an unforeseen emergency
(as defined in Section 409A of the Code).
Account balances under the Plan earn or lose value based on the
investment performance of one or more of the investment funds
offered under the Plan and selected by the participants. The
investment funds offered under the Plan will be similar to the
investment options offered under Farmer Macs 401(k) retirement
plan available to all employees. All amounts credited to a
participants account under the Plan will represent Farmer Macs
contractual obligation to pay future benefits and will not be
secured by any segregated assets, thereby putting Plan
participants in a similar position to the unsecured general
creditors of Farmer Mac.
investment performance of one or more of the investment funds
offered under the Plan and selected by the participants. The
investment funds offered under the Plan will be similar to the
investment options offered under Farmer Macs 401(k) retirement
plan available to all employees. All amounts credited to a
participants account under the Plan will represent Farmer Macs
contractual obligation to pay future benefits and will not be
secured by any segregated assets, thereby putting Plan
participants in a similar position to the unsecured general
creditors of Farmer Mac.
The foregoing description of the Plan is qualified in its
entirety by the full text of the Plan, which will be filed as an
Exhibit to Farmer Macs Quarterly Report on Form 10-Q for the
period ending March 31, 2017.
entirety by the full text of the Plan, which will be filed as an
Exhibit to Farmer Macs Quarterly Report on Form 10-Q for the
period ending March 31, 2017.
About FEDERAL AGRICULTURAL MORTGAGE CORPORATION> (NYSE:AGM)
Federal Agricultural Mortgage Corporation (Farmer Mac) provides a secondary market for a range of loans made to borrowers in rural America. The Company operates through four segments: Farm & Ranch, the United States Department of Agriculture (USDA) Guarantees, Rural Utilities and Institutional Credit. The Company purchases mortgage loans on agricultural real estate and rural housing under the Farm & Ranch line of business. Under the USDA Guarantees business, Farmer Mac II LLC, a subsidiary of Farmer Mac, purchases agricultural, rural development, business and industry, and community facilities loans guaranteed by the USDA. The Company purchases and guarantees securities backed by rural utilities loans under the Rural Utilities business. Under the Institutional Credit line of business, Farmer Mac purchases or guarantees general obligations of institutions approved by Farmer Mac. The Company sells its guarantees of securities under the AgVantage brand name. FEDERAL AGRICULTURAL MORTGAGE CORPORATION> (NYSE:AGM) Recent Trading Information
FEDERAL AGRICULTURAL MORTGAGE CORPORATION> (NYSE:AGM) closed its last trading session down -0.47 at 56.15 with 30,461 shares trading hands.
