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AGM-A > SEC Filings for AGM-A > Form 8-K on 30-Oct-2012All Recent SEC Filings




Change in Directors or Principal Officers

Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Departure of Certain Officers

As previously disclosed, effective October 3, 2012, the employment of Michael A. Gerber as the President and Chief Executive Officer of the Federal Agricultural Mortgage Corporation ("Farmer Mac") was terminated. The termination of Mr. Gerber's employment agreement was treated as a termination without cause pursuant to Section 8(a)(iii) of his Amended and Restated Employment Agreement dated as of April 1, 2011 (the "Employment Agreement"), which was previously filed as Exhibit 10.2 to Farmer Mac's Quarterly Report on Form 10-Q filed on May 10, 2011. The Employment Agreement provides for the payment of severance pay to Mr. Gerber subject to his execution, without revocation, of a full release of claims in favor of Farmer Mac.
Effective as of October 26, 2012, Farmer Mac and Mr. Gerber entered into a separation agreement, waiver and release (the "Separation Agreement"), which provides for Mr. Gerber to receive severance benefits in accordance with the Employment Agreement. Pursuant to the Separation Agreement, Farmer Mac and Mr. Gerber have agreed to the following, among other things:

               Mr. Gerber's employment as Farmer Mac's President and Chief
                Executive Officer is terminated effective as of October 3, 2012
                and, to the extent that he serves on any boards of directors
                and/or serves as an officer of any of Farmer Mac's subsidiaries,
                affiliates or related entities, Mr. Gerber resigns from any
                boards and offices. In addition, the Employment Agreement is
                terminated effective as of October 3, 2012.

               Farmer Mac will pay Mr. Gerber as severance a cash payment of
                $2,755,000, less applicable taxes and withholdings. That amount
                was calculated in accordance with Section 8(b) (payment of
                accrued compensation) and Section 8(d) (severance pay) of the
                Employment Agreement for a termination of employment that is
                treated as a termination without cause.

               Mr. Gerber fully and unconditionally releases and discharges
                Farmer Mac and its former or current agents, shareholders,
                directors, officers, members, managers, employees, legal
                representatives, attorneys, affiliates, agents, representatives
                and other associated or affiliated persons from all claims
                arising out of his employment with Farmer Mac, the termination of
                his employment with Farmer Mac, the termination of the Employment
                Agreement and any other matter.

               Certain of Mr. Gerber's obligations under the Employment
                Agreement, such as those relating to non-disparagement, use of
                confidential or proprietary information, non-solicitation of
                Farmer Mac's employees, and non-competition with Farmer Mac will
                survive the termination of the Employment Agreement and,
                accordingly, remain in effect.

  The foregoing summary of the Separation Agreement does not purport to be

complete and is subject to, and qualified in its entirety by, the full text of the Separation Agreement, which is attached as Exhibit 10.1 and is incorporated herein by reference.

The $2,755,000 severance payment to Mr. Gerber will be made on or about November 15, 2012 during the fourth quarter of Farmer Mac's fiscal year. The effect of this severance payment on Farmer Mac's fourth quarter results is expected to be a net after-tax expense of approximately $968,000 after taking into account (1) the amount already accrued for Mr. Gerber's 2012 incentive compensation through third quarter 2012 and (2) the reversal of previously recognized expenses for 141,667 unvested stock appreciation rights and 55,000 unvested shares of restricted stock that were forfeited upon the termination of Mr. Gerber's employment. Mr. Gerber has 153,333 vested and exercisable stock appreciation rights that will expire on January 1, 2013 (90 days after the termination of his employment) if not exercised before then. Item 9.01 Financial Statements and Exhibits.

(d) Exhibits
Exhibit Number   Description

          10.1   Separation Agreement, Waiver and Release, effective as of October
                 26, 2012, by and between the Federal Agricultural Mortgage
                 Corporation and Michael A. Gerber.

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