def14a
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
Proxy Statement Pursuant to
Section 14(a) of the Securities
Exchange Act of 1934
Filed by the
Registrant þ Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to
§240.14a-12
ARTIO GLOBAL INVESTORS INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Form, Schedule or Registration Statement No.:
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330 Madison Avenue
New York, New York 10017
Dear Stockholder:
You are cordially invited to attend the 2010 annual meeting of
stockholders (the Annual Meeting) of Artio Global
Investors Inc. (Investors). Our Annual Meeting will
be held on Tuesday, May 11, 2010, at
9:00 a.m. (Eastern Time). We are pleased that this
years Annual Meeting, our first as a public company, will
be a completely virtual meeting of stockholders,
that is, you may participate solely by means of remote
communication. You will be able to attend the Annual
Meeting, vote and submit your questions during the Annual
Meeting via live webcast by visiting
www.virtualshareholdermeeting.com/ART. Prior to
the Annual Meeting, you will be able to vote at
www.proxyvote.com.
We are also pleased to be furnishing our proxy materials to
stockholders primarily over the Internet. We believe this
process will expedite stockholders receipt of the
materials, lower the costs of our Annual Meeting and conserve
natural resources. On March 26, 2010, we mailed our
stockholders a notice containing instructions on how to access
our Proxy Statement and Annual Report and vote online. The
notice also included instructions on how to receive a paper copy
of our proxy materials, including the notice of Annual Meeting,
Proxy Statement, Annual Report and proxy card. If you received
your proxy materials by mail, the notice of Annual Meeting,
Proxy Statement, Annual Report and proxy card from our Board of
Directors were enclosed. If you received your proxy materials
via e-mail,
the e-mail
contained voting instructions and Internet links to the Proxy
Statement and Annual Report.
The agenda for this years Annual Meeting includes the
following items:
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Election of a director;
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Ratification of KPMG LLP as our independent registered public
accountants; and
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Such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
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Whether or not you plan to attend the Annual Meeting, please
read our Proxy Statement for detailed information on each of the
proposals. Also, our Annual Report to Stockholders consists of
our Annual Review and Annual Report on
Form 10-K,
and contains information about Investors and its financial
performance.
Your vote is important to us and our business and we strongly
urge you to cast your vote.
Sincerely,
Richard Pell
Chairman, Chief Executive Officer and
Chief Investment Officer
New York, New York
March 26, 2010
TABLE OF
CONTENTS
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330 Madison Avenue
New York, New York 10017
Notice is hereby given that the 2010 annual meeting of
stockholders (the Annual Meeting or
Meeting) of Artio Global Investors Inc., a Delaware
corporation, will be held on Tuesday, May 11, 2010, at
9:00 a.m. (Eastern Time). You can attend the Annual
Meeting online, vote your shares electronically and submit
questions during the Meeting, by visiting
www.virtualshareholdermeeting.com/ART. Be sure to
have your
12-Digit
Control Number to enter the Annual Meeting. The Annual Meeting
will be held for the following purposes:
(1) to elect one director to hold office until the annual
meeting of stockholders of the Company in the year 2013 and
until his successor is duly elected and qualified;
(2) to ratify the appointment of KPMG LLP as our
independent registered public accountants for the fiscal year
ending December 31, 2010; and
(3) to transact such other business as may properly come
before the Annual Meeting and any adjournment or postponement
thereof.
Stockholders of record at the close of business on
March 16, 2010, are entitled to notice of, and to vote at,
the Annual Meeting. Prior to the Annual Meeting, those
stockholders will be able to vote at
www.proxyvote.com. Each stockholder is entitled to
one vote for each share of any class of our common stock held at
that time. A list of these stockholders will be open for
examination by any stockholder for any purpose germane to the
Annual Meeting for a period of 10 days prior to the Annual
Meeting through the Corporate Secretary at our principal
executive offices at 330 Madison Avenue, New York, New York
10017, and electronically during the Annual Meeting at
www.virtualshareholdermeeting.com/ART when you
enter your
12-Digit
Control Number.
You have three options for submitting your vote before the
Annual Meeting:
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Internet;
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Phone; or
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Mail.
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We encourage you to vote promptly, even if you plan to attend
the Annual Meeting.
By Order of the Board of Directors,
Adam R. Spilka
Corporate Secretary
New York, New York
March 26, 2010
Artio
Global Investors Inc.
330 Madison Avenue
New York, New York 10017
PROXY
STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 11, 2010
This Proxy Statement is furnished to the stockholders of Artio
Global Investors Inc. (the Company or
Investors) and subsidiaries (collectively,
we, us or our) in connection
with the solicitation of proxies by the Board of Directors of
the Company (the Board of Directors or the
Board) for use at the annual meeting of stockholders
of the Company to be held on Tuesday, May 11, 2010, at
9:00 a.m. (Eastern Time) (the Annual Meeting or
the Meeting), for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders.
Investors is comprised of the Company and its subsidiaries,
including Artio Global Holdings LLC (Holdings), an
intermediate holding company, and its wholly owned subsidiary,
Artio Global Management LLC (Investment Adviser), a
registered investment adviser under the Investment Advisers Act
of 1940. Holdings is approximately 74% owned by Investors, 13%
owned by Richard Pell, our Chairman, Chief Executive Officer and
Chief Investment Officer (Pell), and 13% owned by
Rudolph-Riad Younes, our Head of International Equity
(Younes, together with Pell, the
Principals).
INTERNET
AVAILABILITY OF PROXY MATERIALS
We are making this Proxy Statement and our Annual Report to
Stockholders for the fiscal year ended December 31, 2009,
including our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 with audited
financial statements (the Annual Report), available
to our stockholders primarily via the Internet. Prior to the
Annual Meeting, stockholders will be able to vote, as well as
access these documents, at www.proxyvote.com. At
the Annual Meeting, stockholders will be able to attend, vote,
access these documents and submit questions, by visiting
www.virtualshareholdermeeting.com/ART.
On March 26, 2010, we mailed to our stockholders a Notice
of Internet Availability containing instructions on how to
access our proxy materials or request a hard copy of our proxy
materials, including this Proxy Statement and our Annual Report.
The Notice of Internet Availability also provides instructions
on how to access your proxy card to be able to vote through the
Internet or by telephone. If you received a Notice of Internet
Availability by mail, you will not receive a printed copy of the
proxy materials unless you request such a copy. Other
stockholders, in accordance with their prior requests, have
received
e-mail
notification with instructions about how to access our proxy
materials and vote via the Internet, or have been mailed paper
copies of our proxy materials and proxy card or vote instruction
form.
Internet distribution of proxy materials is designed to expedite
receipt by stockholders, lower the cost of the Annual Meeting
and conserve natural resources. However, if you received a
Notice of Internet Availability by mail and would like to
receive a printed copy of our proxy materials, please follow the
instructions for requesting such materials contained on the
Notice of Internet Availability. If you have previously elected
to receive our proxy materials electronically, you will continue
to receive these materials via
e-mail
unless you elect otherwise.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 11, 2010
The Proxy
Statement and Annual Report are available at
www.ir.artioglobal.com
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ATTENDING
THE ANNUAL MEETING
The Company will be hosting the Annual Meeting live via the
Internet. A summary of the information you need to attend the
Meeting online is provided below:
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Any stockholder can attend the Annual Meeting live via the
Internet at www.ir.artioglobal.com
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Webcast starts at 9:00 a.m. (Eastern Time), but access to
the Annual Meeting will be available 15 minutes prior to
such time and we encourage you to login during that period
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Stockholders may vote and submit questions while attending the
Annual Meeting on the Internet
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Please have your
12-Digit
Control Number to enter the Annual Meeting
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Instructions on how to attend and participate via the Internet,
including how to demonstrate proof of stock ownership, are
posted at www.virtualshareholdermeeting.com/ART
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Webcast replay of the Annual Meeting will be available until
December 31, 2010 at www.ir.artioglobal.com
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ABOUT THE
ANNUAL MEETING
Voting
Procedures
Stockholders of record at the close of business on
March 16, 2010 (the Record Date) will be
entitled to vote at the Annual Meeting. On the Record Date,
there were 27,733,299 shares of the Companys
Class A common stock (the Class A common
stock), 15,600,000 shares of the Companys
Class B common stock (the Class B common
stock), and 16,755,844 shares of the Companys
Class C common stock (the Class C common
stock, and together with the Class A common stock and
the Class B common stock, the Common Stock),
outstanding and entitled to vote. The holders of a majority of
the aggregate of the Common Stock issued and outstanding and
entitled to vote at the Meeting, present in person or
represented by proxy, will constitute a quorum.
Shares of Class A common stock were issued to the public in
our September 2009 initial public offering (IPO).
The holders of Class A common stock are entitled to
one-vote-per-share and any dividends we may pay. Shares of
Class A common stock are listed on the New York Stock
Exchange (the NYSE) under the symbol ART.
Shares of Class B common stock were issued to
Messrs. Pell and Younes as part of a reorganization
completed in connection with our IPO. Shares of Class B
common stock have no economic rights (and therefore no rights to
any dividends we may pay) but entitle the holders to
one-vote-per-share together with holders of Class A and
Class C common stock. Class B common stock is intended
solely to provide our partners with voting interests in
Investors commensurate with their economic interests in
Holdings. Shares of Class B common stock are not currently,
and are not expected to be, registered for public sale or listed
on the NYSE or any other securities exchange.
Shares of Class C common stock are held by GAM Holding
Ltd., our former sole stockholder (formerly known as Julius Baer
Holding Ltd., GAM). Each share of Class C
common stock has economic rights that are equivalent to a share
of Class A common stock. Shares of Class C common
stock entitle the holders to an aggregate vote equal to the
greater of (i) the number of votes they would be entitled
to on a one-vote-per-share basis and (ii) 20% of the
combined voting power of all classes of Common Stock. Prior to
the IPO, GAM entered into a shareholders agreement under which
it agreed that, if it has voting power as a holder of
Class C common stock in excess of what it would be entitled
to on a one-vote-per-share basis, it would, on all matters, vote
those excess shares on the same basis and in the same proportion
as the votes cast by the holders of our Class A and
Class B common stock. If GAM were to transfer the shares of
Class C common stock to anyone other than any of its
subsidiaries, or us, such shares would automatically convert to
an equal number of shares of Class A common stock. In
addition, on the second anniversary of the IPO, the outstanding
shares of Class C common stock will automatically convert
into shares of Class A common stock on a
one-for-one
basis.
Vote
Required and the Effect of Abstentions, Withheld Votes and
Broker Non-Votes
The persons whom the Company appoints to act as the independent
inspector of elections will treat all Common Stock represented
by a returned, properly executed proxy as present for purposes
of determining the existence of a quorum at the Annual Meeting.
Cumulative voting is not permitted. Votes cast at the Annual
Meeting will be counted by Broadridge Financial Solutions Inc.,
who is acting as the independent inspector of elections.
Abstentions and broker non-votes will be counted as
present in determining the existence of a quorum. A broker
non-vote occurs when a bank or broker holding shares of a
beneficial stockholder does not vote on a particular proposal
because it has not received instructions from the beneficial
stockholder and the bank or broker does not have discretionary
voting power for that particular item.
In the election of the director, the director nominee must
receive a plurality of the votes of the shares present in person
or represented by proxy at the Annual Meeting and entitled to
vote, in order to be elected. With respect to the election of
the director, votes may be cast FOR the nominee or WITHHELD
against the nominee. Abstentions and broker non-votes will have
no effect.
The affirmative vote of a majority of the votes of the shares
present in person or represented by proxy at the Annual Meeting
and entitled to vote at the Annual Meeting is required to ratify
the appointment of KPMG
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LLP, an independent registered public accounting firm, as the
Companys independent registered public accountants. With
respect to the ratification of the appointment of KPMG LLP,
votes may be cast FOR the proposal or AGAINST the proposal, or a
stockholder may abstain from voting on the proposal. Abstentions
will have the effect of a negative vote.
Under the rules of the NYSE, brokers that do not receive voting
instructions from their customers who are the beneficial
stockholders of the Companys Common Stock, are entitled to
vote on the ratification of the appointment of KPMG LLP. Recent
changes to these rules prohibit brokers from voting on the
election of directors if such beneficial stockholders do not
provide voting instructions.
Where a signed proxy card is returned, but no specific
instructions are indicated, your shares will be voted FOR each
of the proposals.
How You
Can Vote
You can ensure that your shares are voted at the Annual Meeting
by submitting your vote instructions by telephone or by the
Internet, or by completing, signing, and dating a proxy card.
Submitting your instructions or proxy by any of these methods
will not affect your ability to attend and vote during the
Annual Meeting at
www.virtualshareholdermeeting.com/ART.
If you are not the holder of record of your shares (i.e., they
are held in the name of a broker, bank or other nominee), you
will receive a voting card from your broker, bank or other
nominee (or an agent acting on behalf of such institution) that
you must return to your broker, bank or other nominee or its
agent in order for your shares to be voted. Your shares will
then be voted by proxy by your broker, bank or other nominee. If
you are not a holder of record of your shares, you will be
entitled to vote electronically through the Internet or by
telephone by following the instructions on the voting card that
you receive from your broker, bank or other nominee (or an agent
acting on behalf of such institution).
If your shares of Common Stock are held by a broker, bank or
other nominee and you wish to vote those shares at the Annual
Meeting, you must obtain from the nominee holding your shares a
properly executed legal proxy, identifying you as a stockholder
of our Company, authorizing you to act on behalf of the nominee
at the Annual Meeting and specifying the number of shares with
respect to which the authorization is granted.
Revocation
of Proxy
A stockholder who gives a proxy may revoke it at any time before
it is exercised by voting at the Annual Meeting via the
Internet, delivering a subsequent proxy or notifying the
Corporate Secretary of the Company in writing at any time before
the original proxy is voted at the Annual Meeting. Any such
correspondence must be mailed to the General Counsels
attention at Artio Global Investors Inc., 330 Madison Avenue,
New York, New York 10017 and received before May 11, 2010.
Persons
Making the Solicitation
The Board of Directors is soliciting your proxy to provide you
with an opportunity to vote on all matters to come before the
Annual Meeting, whether or not you attend. We are not incurring
any costs in connection with the solicitation of proxies. Our
directors, officers and regular employees, without additional
compensation, may solicit proxies by mail, telephone,
e-mail and
personal communications.
Boards
Voting Recommendations
The Board of Directors urges you to vote, and solicits your
proxy, as follows:
(1) FOR the election of Duane R. Kullberg, the sole
nominee for membership on the Companys Board of Directors,
to serve until the annual meeting of stockholders in the year
2013 and until his successor is duly elected and qualified;
(2) FOR the ratification of the appointment of KPMG
LLP as the Companys independent registered public
accountants for the fiscal year ending December 31,
2010; and
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(3) At the discretion of the designated proxies, on any
other matter that may properly come before the Annual Meeting,
and any adjournment or postponement thereof.
The Companys executive officers and directors owning and
having the right to vote 15,616,543 shares, representing
approximately 26% of the outstanding shares of Common Stock,
have stated their present intention to vote their shares FOR the
nominee for election as director and FOR the ratification of
KPMG LLP and the Companys independent registered public
accountants. Further, GAM, owning and having the sole
dispositive right to vote their 16,755,844 shares,
representing approximately 27.9% of the outstanding shares of
the Common Stock, has stated its present intention to vote its
shares FOR the nominee for election as director and FOR the
ratification of KPMG LLP as the Companys independent
registered public accountants.
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PROPOSAL 1
ELECTION OF CLASS I DIRECTOR
General
Information
Our Board is divided into three classes, with each director
serving a three-year term and one class being elected at each
years annual meeting of stockholders. Mr. Kullberg is
a Class I director (with a term expiring at this Annual
Meeting). Ms. Buse and Mr. Ledwidge are Class II
directors (with terms expiring in 2011). Messrs. Pell and
Wisher are Class III directors (with terms expiring in
2012).
At the Annual Meeting, therefore, only one director is proposed
to be elected, who will serve until the annual meeting of
stockholders in the year 2013 and until his respective successor
is duly elected and qualified. The persons designated as the
Companys proxies intend to vote FOR the election of the
sole nominee listed below, unless otherwise directed.
The Board has nominated, and the proxies will vote to elect,
Mr. Kullberg as a member of the Board of Directors to serve
for a period of three years. Mr. Kullberg has consented to
be nominated and to serve, if elected.
The Board has determined that Mr. Kullberg is independent.
See Corporate Governance Director
Independence for more information on this conclusion.
About the
Nominee
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Name
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Position
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Duane Kullberg
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Director
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Duane Kullberg became a director of the Company in
September 2009, at the time of the IPO. He was Managing Partner
and Chief Executive Officer of Arthur Andersen, S.C. from 1980
to 1989. Prior to his election as Chief Executive Officer, he
was a partner in the Minneapolis and Chicago offices and Head of
the Audit Practice, worldwide, from 1978 to 1980.
Mr. Kullberg has also served as Vice Chairman of the
U.S. Japanese Business Council and was a member of the
Services Policy Advisory Committee of the Office of the
U.S. Trade Representative. He is currently a Public
Director on the Chicago Board Options Exchange and a past member
of the boards of Carlson Companies, Inc., Nuveen Investments,
Inc. and Visibility, Inc. Mr. Kullberg is a life trustee of
Northwestern University, the Art Institute of Chicago and the
University of Minnesota Foundation.
THE BOARD
OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION
OF
MR. KULLBERG.
7
DIRECTORS
AND EXECUTIVE OFFICERS
About
Directors Continuing in Office and Executive Officers
The following table provides information regarding our directors
and executive officers. See Corporate
Governance Board Structure, Leadership and Nominee
Qualifications Skills, Qualifications and Experience
of Our Board for further information regarding additional
skills and attributes of our Board members. (Information about
Mr. Kullberg, whose term expires at the Annual Meeting, may
be found above.)
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Name
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Richard Pell
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Chairman, Chief Executive Officer and Chief Investment Officer
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Glen Wisher
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President and Director
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Francis Harte
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Chief Financial Officer
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Tony Williams
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Chief Operating Officer
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Rudolph-Riad Younes
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Head of International Equity
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Adam Spilka
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General Counsel and Corporate Secretary
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Elizabeth Buse
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Director
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Francis Ledwidge
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Director
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Richard Pell has been our Chief Investment Officer
since 1995, and our Chief Executive Officer and one of our
directors since December 2007. Prior to December 2007,
Mr. Pell served, and continues to serve, as Co-Portfolio
Manager of the International Equity strategy and Co-Portfolio
Manager of the Total Return Bond strategy. Mr. Pell joined
the Julius Baer Group in 1995 subsequent to his tenure as Head
of Global Portfolio Management with Bankers Trust Company,
where he was employed for five years. Beginning in 1988,
Mr. Pell was employed by Mitchell Hutchins Institutional
Investors where he served as Head of Corporate Bonds and
Mortgage-Backed Securities.
Glen Wisher has been our President since December
2007 and has been a director since September 2004. He joined the
Julius Baer Group in 1995 as a fixed income portfolio manager in
London. Mr. Wisher was appointed Head of Institutional
Asset Management in the U.S. in 2001 and Chief Executive
Officer of Julius Baer Americas Inc. in 2004. Prior to joining
the Julius Baer Group, Mr. Wisher worked at S.G. Warburg
Co. Mr. Wisher also serves as Chairman of the board of
managers of Investment Adviser and serves on the Board of Artio
Global Equity Fund, Inc. He is also a trustee of the Artio
Global Investment Funds.
Francis Harte has been our Chief Financial Officer
since July 2002. Since joining the Julius Baer Group in 2002,
Mr. Harte has also served as our Financial and Operations
Principal, from 2002 to 2006, and was Senior Vice President and
Chief Financial Officer of Bank Julius Baer & Co.
Ltd. New York Branch from 2002 to 2005 and Treasurer
and Financial and Operations Principal of GAM USA Inc. from 2005
to September 2007. Prior to this, Mr. Harte acted as a
Managing Director and Chief Financial Officer for the North
American based activities of Dresdner Kleinwort Benson and,
prior to that, Mr. Harte held positions at The First Boston
Corporation and Deloitte, Haskins & Sells. He is a
Certified Public Accountant in the State of New York.
Tony Williams has been our Chief Operating Officer
since December 2007 and served as a member of our Board prior to
the IPO. He joined as Chief Operating Officer of Investment
Adviser in 2003 and, in 2004, became the Head of Asset
Management Americas for Investment Adviser. Prior to that,
Mr. Williams acted as Head of Cross Border Strategies at JP
Morgan Fleming Asset Management and Chief Operating Officer at
Fleming Asset Management in New York. Previously,
Mr. Williams was a Client Services Director at Fleming
Asset Management, UK.
Rudolph-Riad Younes has been our Head of
International Equity since 2001. He joined Investment Adviser as
a portfolio manager in 1993 and has served as Co-Portfolio
Manager of the International Equity Fund since 1995 and
International Equity Fund II since 2005. Prior to joining
the Julius Baer Group in 1993, Mr. Younes was an Associate
Director at Swiss Bank Corp. He is a Chartered Financial Analyst.
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Adam Spilka has been our General Counsel and
Corporate Secretary since March 2008. From April 2002,
Mr. Spilka was Senior Vice President, Counsel and Assistant
Secretary of AllianceBernstein L.P., where he was head of the
Corporate, M&A and Securities Practice Group from July
2003. He became Secretary of AllianceBernstein L.P. in July
2004. Prior to 2002, Mr. Spilka served as Vice President
and Counsel at the company now known as AXA Equitable Life
Insurance Company. Mr. Spilka began his legal career in
1987 as a corporate associate at Debevoise & Plimpton
LLP.
Elizabeth Buse became a director of the Company in
September 2009, at the time of the IPO. Since 2007, she has been
Global Head of Product at Visa Inc. Prior to that, she served as
Executive Vice President of Product Development &
Management for Visa USA from 2003 to 2007, Executive Vice
President of Emerging Markets & Technologies from 2000
to 2002, and Senior Vice President of Emerging Technologies from
1998 to 2000. Before joining Visa, Ms. Buse was employed by
First Data Corporation and Windermere Associates.
Francis Ledwidge became a director of the Company
in September 2009, at the time of the IPO. He has been a
Managing Partner of Eddystone, LLC and the Chief Investment
Officer of Eddystone Capital, LLC since 1997. From 1989 to 1995,
Mr. Ledwidge served as the Chief Investment Officer of
Bankers Trusts international private banking division in
the United States and Switzerland and was later responsible for
much of Bankers Trusts institutional international and
global asset management businesses. Prior to that, he worked at
Robert Fleming from 1976 to 1989, first as a portfolio manager
and director of Robert Fleming Investment Management in London
and then as a sell side research director at Eberstadt Fleming
in New York. Before joining Flemings, he worked as a buy side
analyst at British Electric Traction.
9
CORPORATE
GOVERNANCE
The Board
of Directors Board Composition
Our Board consists of five directors. Our amended and restated
certificate of incorporation provides that our Board will
consist of no less than three and no more than 11 persons.
The exact number of members on our Board will be determined from
time to time by resolution of a majority of our full Board.
The directors hold regular meetings, attend special meetings as
required and spend such time on the affairs of the Company as
their duties require. Pursuant to the Companys Corporate
Governance Guidelines, directors are expected to attend the
Companys annual meeting, all Board meetings, and the
meetings of the committees on which they serve. After the
Companys IPO on September 24, 2009 through the
remainder of the year ended December 31, 2009, the Board
held a total of two meetings, regular and special. Each director
attended the meetings of the Board and the meetings of the
committees on which they sit during this period. During this
time, the non-employee directors met informally on at least one
occasion.
Under the terms of Mr. Pells employment agreement,
Mr. Pell will serve as Chairman of our Board during the
period that he remains our Chief Executive Officer, unless he
decides to cede this role or declines to stand for reelection to
the Board. If Mr. Pell ceases to be a member of our Board,
he will be entitled to attend meetings of our Board as an
observer until the date on which the restrictions on sale under
his exchange agreement with us terminate. Until the later of the
date upon which Mr. Younes ceases to be employed by us and
the restrictions on sale under the exchange agreement terminate,
he will be entitled to attend meetings of our Board as an
observer.
As long as GAM directly or indirectly owns shares of our
Class C common stock constituting at least 10% of the
number of outstanding shares of our Common Stock, it will be
entitled to appoint a member to our Board or to exercise
observer rights. GAM has opted to appoint an observer to our
Board, but may in the future decide to appoint a member to our
Board. If GAMs ownership interest in us falls below 10%,
it will no longer be entitled to appoint a member to our Board
but it will be entitled to certain observer rights until the
later of the date upon which (i) we cease to use the
Julius Baer name pursuant to the transition services
agreement we entered into with Julius Baer Group Ltd. and
(ii) GAM ceases to own at least 5% of the outstanding
shares of our Common Stock.
Board
Committees
Audit
Committee
Our Audit Committees responsibilities include, among
others:
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|
|
reviewing the audit plans and findings of our independent
registered public accounting firm and our internal audit and
risk staff, as well as the results of regulatory examinations,
and tracking managements corrective action plans where
necessary;
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|
|
reviewing our financial statements, including any significant
financial items
and/or
changes in accounting policies, with our senior management and
independent registered public accounting firm;
|
|
|
reviewing our financial risk and control procedures, compliance
programs and significant tax, legal and regulatory matters;
|
|
|
implementing and monitoring our Whistleblower Policy; and
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|
|
appointing annually our independent registered public
accountants, evaluating their qualifications, independence and
performance, determining its compensation and setting clear
hiring policies for employees or former employees of the
independent registered public accountants.
|
Ms. Buse and Messrs. Kullberg and Ledwidge serve on
the Audit Committee and Mr. Kullberg serves as its Chair.
Ms. Buse and Messrs. Kullberg and Ledwidge are all
financially literate and independent under the NYSE rules
and under
Rule 10A-3
of the Securities Exchange Act of 1934, as amended (the
Exchange Act). Mr. Kullberg is an audit
committee financial expert within the meaning of the applicable
rules of the
10
U.S. Securities and Exchange Commission (SEC)
and the NYSE. In fiscal year 2009, after the IPO, the Audit
Committee held a total of three meetings, one regular and two
special.
Nominating
and Corporate Governance Committee
Our Nominating and Corporate Governance Committees
responsibilities include, among others:
|
|
|
making recommendations to the Board regarding the selection of
director candidates, qualification and competency requirements
for service on the Board and the suitability of proposed
nominees as directors;
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|
|
advising the Board with respect to the corporate governance
principles applicable to us;
|
|
|
overseeing the evaluation of the Board and management; and
|
|
|
reviewing and approving any related party transaction, pursuant
to our Related Person Transaction Policy.
|
Ms. Buse and Messrs. Kullberg and Ledwidge serve on
the Nominating and Corporate Governance Committee and
Mr. Ledwidge serves as its Chair. In fiscal year 2009,
after the IPO, the Nominating and Corporate Governance Committee
held one regular meeting.
Compensation
Committee
Our Compensation Committees responsibilities include,
among others:
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|
|
reviewing and approving the compensation of our executive
officers;
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|
|
overseeing and administering, and making recommendations to our
Board with respect to, our cash and equity incentive
plans; and
|
|
|
reviewing and making recommendations to the Board with respect
to director compensation.
|
Ms. Buse and Messrs. Kullberg and Ledwidge serve on
the Compensation Committee and Ms. Buse serves as its
Chair. In fiscal year 2009, after the IPO, the Compensation
Committee held two meetings, one regular and one special.
The Compensation Committee consults with Mercer LLC
(Mercer), a compensation consultant that advises the
Compensation Committee on matters related to our executive
officers compensation and general compensation programs.
The Compensation Committee also consults with McLagan Partners,
Inc. (McLagan), who assists the Compensation
Committee by providing comparative market data on compensation
practices and programs. Mercer and McLagan also provide guidance
on industry best practices. For further discussion of the role
of the Compensation Committee, please see the section of this
Proxy Statement entitled Compensation Discussion and
Analysis. Please also see Compensation Discussion
and Analysis Elements of Our Compensation
Program Mercer and Affiliates for further
information regarding the Companys transactions with
Mercer and its affiliates.
Compensation
Committee Interlocks and Insider Participation
Prior to our IPO, we had a compensation committee consisting of
members of management. Beginning September 23, 2009, the
independent directors joined the Board, and were named the sole
members of the Boards Compensation Committee. None of our
executive officers serves as a member of a compensation
committee, or other committee serving an equivalent function, of
any entity that has one or more of its executive officers
serving as a member of our Board or our Compensation Committee.
Board
Structure, Leadership and Nominee Qualifications
Executive
Chairman
Our Board and management do not have a dogmatic view of whether
the Chairman of our Board should be an executive of the Company
or independent. Rather, we believe that the choice depends upon
a number of factors, taking into account the candidates for the
position and the best interests of the Company and its
stockholders. Currently, Mr. Pell is both our Chief
Executive Officer and Chairman. His critical role in growing the
firm since its beginnings, the high regard in which he is held
by employees and clients, and his
11
knowledge of our industry, make him a compelling choice for
Chairman. However, it is possible that an independent director
could become the Chairman in the future.
Skills,
Qualifications and Experience of Our Board
As described below, each of our directors has demonstrated the
characteristics we seek in nominees. In addition, each of our
directors brings a number of skills and experiences that, in the
aggregate, have in our view created a Board with a desirable
breadth and depth. Ms. Buse actively manages a large number
of people operating around the world in a global financial
services organization. Mr. Kullbergs experience as
Chief Executive Officer of a former big six
accounting firm and his presence on several corporate boards
contributes both financial and public governance expertise.
Mr. Ledwidges asset management experience provides a
useful understanding of the demands of investing others
assets. Mr. Pell, one of our two management directors,
offers meticulous insight into the Companys products and
structure, through his role as Chief Investment Officer and
Chief Executive Officer. Mr. Wisher, as the Companys
President, and the other management director, provides incisive
knowledge about the Companys people, processes and
strategies. Though our directors have only worked together for a
relatively brief period, we believe they have already formed a
cohesive group that is providing effective oversight and
meaningfully contributing to the Companys strategic
development and governance.
We have not adopted a policy with regard to the consideration of
diversity. However, we believe that the different experiences
and skills of our directors are complementary, and serve to
strengthen our Board; we are therefore more likely to look for a
new nominee to bring experiences and skills that differ from
those already represented on our Board.
Criteria
for Nominees
When seeking candidates for the Board, the Nominating and
Corporate Governance Committee may solicit suggestions from
incumbent directors, management, stockholders or others. The
Nominating and Corporate Governance Committee has authority
under its charter to retain a search firm for this purpose, but
has not done so. After conducting an initial evaluation of a
potential candidate, the Nominating and Corporate Governance
Committee will interview that candidate if it believes such
candidate might be suitable to be a director. The Nominating and
Corporate Governance Committee may also ask the candidate to
meet with management. If the Nominating and Corporate Governance
Committee believes a candidate would be a valuable addition to
the Board, it will recommend to the full Board that
candidates nomination.
The Nominating and Corporate Governance Committee will select
each nominee based on the nominees skills, achievements
and experience. The Nominating and Corporate Governance
Committee considers a variety of factors in selecting
candidates, including, but not limited to the following:
independence, wisdom, integrity, an understanding and general
acceptance of the Companys corporate philosophy, relevant
business or professional knowledge and experience, a proven
record of accomplishment with excellent organizations, an
inquiring mind, a willingness to speak ones mind, an
ability to challenge and stimulate management and a willingness
to commit time and energy.
Stockholders may submit candidates for nomination to the Board
based on this criteria by writing to the Chair of the Nominating
and Corporate Governance Committee at 330 Madison Avenue, New
York, New York 10017. The Nominating and Corporate Governance
Committee will evaluate candidates recommended by stockholders
in the same manner as all other candidates.
Director
Independence
Under the Companys Corporate Governance Guidelines, a
majority of the Board must be comprised of directors who are
independent under the rules of the NYSE. No director will be
deemed to be independent unless the Board affirmatively
determines that the director has no material relationship with
the Company, either directly or as an officer, stockholder or
partner of an organization that has a relationship with the
Company. The Board observes all criteria established by the NYSE
and applicable rules of the SEC. In its review of director
independence, the Board considers all relevant facts and
circumstances, including without limitation, all personal or
business relationships any director may have with the Company or
its auditor.
In March 2010, the Board determined the independence of each
member of the Board, other than Messrs. Pell and Wisher, in
accordance with our Corporate Governance Guidelines. Each
director affirmatively determined
12
by the Board to have met the standards set forth in
Section 303A.02(b) of the NYSE listing standards is
referred to herein as an Independent Director. The
Board has determined that each of Ms. Buse and
Messrs. Kullberg and Ledwidge are Independent Directors
because none of them had a material relationship with the
Company or its auditor. In making this determination, our Board
considered all relevant facts and circumstances, as required by
applicable NYSE listing standards, including a small holding of
Mr. Pells in a third-party fund where
Mr. Ledwidge acts as the Chief Investment Officer.
Boards
Role in Risk Oversight
Management focuses intensely on risk management and believes
that in a well-controlled risk environment, risks can be
generally anticipated and managed. We have historically managed
risk at multiple levels throughout the organization, including
directly by the portfolio managers, at the Chief Investment
Officer level, and more broadly through an Enterprise Risk
Management framework overseen by the Management Committee, which
identifies, assesses and manages the broad range of risks that
face our Company. Our Board has begun to receive quarterly
reports regarding our risk management activities, with a focus
on the key risks we face. The Board will play a key role in
overseeing the Companys risk tolerances and risk
management efforts.
Our Enterprise Risk Management framework includes the creation
of a number of internal committees, such as the Compliance
Committee, the Operating Committee, the Information Technology
Steering Committee and the Trading and Investments Committee,
each of which operates pursuant to a written charter. The Risk
Management Committee, which reports to the Management Committee,
coordinates the risks overseen by each of these committees, and
provides centralized oversight and management thereof.
In addition to the internal committees described above, the
Company has a risk management group that focuses on
investment-related risk. At the investment portfolio level, we
seek to manage risk daily on a real-time basis with an emphasis
on identifying which investments are working, which investments
are not, and what factors are influencing performance on both an
intended and unintended basis. This approach to managing
portfolio-level risk is not designed to avoid taking risks, but
to seek to ensure that the risks we choose to take are rewarded
with an appropriate premium opportunity for those risks. This
approach to managing portfolio-level risk is an integral
component of our investment processes.
Communications
with the Board of Directors
As provided on the Investor Relations section of the
Companys website, all interested parties who wish to
communicate with the Board, the Chairman, the Independent
Directors as a group or any of the Independent Directors to
provide comments, report concerns or to ask questions may do so
by sending a letter to the Lead Director,
c/o General
Counsel, Artio Global Investors Inc., 330 Madison Avenue, New
York, New York 10017, and should specify the intended recipient
or recipients. All such communications, other than unsolicited
commercial solicitations or communications, will be forwarded to
the appropriate director or directors for review. Any such
unsolicited commercial solicitation or communication not
forwarded to the appropriate director or directors will be
available to any independent director who wishes to review it.
The Nominating and Corporate Governance Committee, on behalf of
the Board, will review any letters it may receive concerning the
Companys corporate governance processes and will make
recommendations to the Board based on such communications. In
addition, the Audit Committee has established a Whistleblower
Policy pursuant to which the Companys employees may
confidentially communicate with the General Counsel or the Chair
of the Audit Committee or may phone the employee report line,
which is available 24 hours each day.
Website
Access to Corporate Governance Documents
The Company has adopted a Code of Business Conduct (the
Code of Business Conduct) which applies to all
employees. Copies of the charters for the Audit Committee,
Compensation Committee and Nominating and Corporate Governance
Committee, as well as the Companys Corporate Governance
Guidelines, Code of Business Conduct and Related Person
Transaction Policy, are available free of charge on the
Companys website at www.ir.artioglobal.com
or by writing to Investor Relations, Artio Global Investors
Inc., 330 Madison Avenue, New York, New York 10017. Any waivers
or amendments related to the Code of Business Conduct will be
posted promptly on the Companys website.
13
DIRECTOR
COMPENSATION FOR 2009
Annual
Fees
Each non-employee director receives the following annual fees
for service on our Board and any standing committees of our
Board:
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|
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an annual fee consisting of $60,000 paid in cash and $60,000 of
fully-vested shares of Class A common stock, subject to
transfer restrictions; and
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an annual fee of $25,000 paid in cash for the Chair of the Audit
Committee and $20,000 paid in cash for the Chair of each other
standing committee of our Board.
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|
|
Fees Earned
|
|
|
|
|
|
|
|
|
or Paid
|
|
Stock
|
|
|
|
|
|
|
in Cash
|
|
Awards
|
|
Total
|
Name
|
|
Year
|
|
($)(1)
|
|
($)(2)
|
|
($)
|
|
Elizabeth Buse
|
|
|
2009
|
|
|
|
53,333
|
|
|
|
120,000
|
|
|
|
173,333
|
|
Duane Kullberg
|
|
|
2009
|
|
|
|
56,667
|
|
|
|
120,000
|
|
|
|
176,667
|
|
Francis Ledwidge
|
|
|
2009
|
|
|
|
53,333
|
|
|
|
120,000
|
|
|
|
173,333
|
|
|
|
|
|
(1)
|
|
Amounts shown in this column
represent the portion of the cash fees that were earned for
services performed during 2009.
|
|
(2)
|
|
Amounts include a one-time
non-forfeitable award of $60,000 of fully-vested shares of
Class A common stock upon joining the Board.
|
Fees paid in respect of 2009 were paid following the closing of
the IPO. Fees for service in future years will be paid
immediately following each regularly scheduled annual
stockholder meeting. If a director joins the Board at any time
other than the annual stockholder meeting, the annual fees will
be prorated and paid at the time that the director joins the
Board. However, the fees in respect of 2009 were not prorated
for the partial year in recognition of the independent
directors efforts prior to the IPO. The directors have the
right to elect to receive a portion of their annual cash
retainer in stock prior to the year of service in accordance
with restrictions as may be required by law.
All directors will be reimbursed for reasonable expenses
incurred in attending meetings of the Board, committees and
stockholders, including those for travel, meals and lodging.
Joining
the Board: One-Time Award
As reflected in the table above, non-employee directors also
receive a one-time non-forfeitable award of $60,000 of
fully-vested shares of Class A common stock. This one-time
award was made to each sitting non-employee director at the time
of the IPO and will be made to each new non-employee director at
the time he or she joins the Board. These stock awards are
subject to certain transfer restrictions that lapse based on
time, generally pro rata over three years.
14
PRINCIPAL
STOCKHOLDERS
The following table sets forth information regarding the
beneficial ownership of our Class A common stock as of
March 1, 2010 for:
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each person who is known by us to beneficially own more than 5%
of any class of our outstanding shares;
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each of our named executive officers;
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each of our directors; and
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all of our executive officers and directors as a group.
|
The number of shares of our Class A common stock
outstanding and the percentage of beneficial ownership set forth
below under Total Voting Power assumes that all New
Class A Units held by the Principals and all shares of
Class C common stock held by GAM are converted into shares
of our Class A common stock.
Beneficial ownership is determined in accordance with the rules
of the SEC. These rules generally attribute beneficial ownership
of securities to persons who possess sole or shared voting power
or investment power with respect to such securities. Except as
otherwise indicated, all persons listed below have sole voting
and investment power with respect to the shares beneficially
owned by them, subject to applicable community property laws.
Except as otherwise indicated, the address for each of our
principal stockholders is
c/o Artio
Global Investors Inc., 330 Madison Ave, New York, New York 10017.
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|
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|
|
|
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Common Stock
|
|
|
|
|
Beneficially Owned
|
|
Total
|
|
|
|
|
|
|
Percent of
|
|
Voting
|
|
|
Number of
|
|
|
|
Class
|
|
Power
|
Name of Beneficial
Owner
|
|
Shares
|
|
Class
|
|
(%)
|
|
(%)
|
|
Richard Pell
|
|
|
7,800,000
|
(1)(2)
|
|
|
B
|
|
|
|
50.0
|
|
|
|
13.0
|
|
Rudolph-Riad Younes
|
|
|
7,800,000
|
(1)(3)
|
|
|
B
|
|
|
|
50.0
|
|
|
|
13.0
|
|
Glen Wisher
|
|
|
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(4)
|
|
|
|
|
|
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0.0
|
|
|
|
0.0
|
|
Tony Williams
|
|
|
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(4)
|
|
|
|
|
|
|
0.0
|
|
|
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0.0
|
|
Francis Harte
|
|
|
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(4)
|
|
|
|
|
|
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0.0
|
|
|
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0.0
|
|
Elizabeth Buse
|
|
|
4,881
|
|
|
|
A
|
|
|
|
*
|
|
|
|
*
|
|
Duane Kullberg
|
|
|
4,881
|
|
|
|
A
|
|
|
|
*
|
|
|
|
*
|
|
Francis Ledwidge
|
|
|
6,781
|
(5)
|
|
|
A
|
|
|
|
*
|
|
|
|
*
|
|
Executive officers and directors as a group
(9 persons)
|
|
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15,616,543
|
(4)(6)
|
|
|
|
|
|
|
|
|
|
|
26.0
|
|
5% Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAM Holding Ltd.
|
|
|
16,755,844
|
(7)
|
|
|
C
|
|
|
|
100.0
|
|
|
|
27.9
|
|
Cramer Rosenthal McGlynn, LLC
|
|
|
2,286,832
|
(8)
|
|
|
A
|
|
|
|
8.2
|
|
|
|
3.8
|
|
Pennant Capital
|
|
|
2,033,000
|
(9)
|
|
|
A
|
|
|
|
7.3
|
|
|
|
3.4
|
|
Norges Bank (Central Bank of Norway)
|
|
|
1,825,058
|
(10)
|
|
|
A
|
|
|
|
6.6
|
|
|
|
3.0
|
|
Samlyn Capital
|
|
|
1,677,700
|
(11)
|
|
|
A
|
|
|
|
6.0
|
|
|
|
2.8
|
|
|
|
|
|
*
|
|
Less than 1%
|
|
(1)
|
|
Represents New Class A Units
exchangeable on a
one-for-one
basis for shares of Class A common stock.
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|
(2)
|
|
Based on information contained in a
Schedule 13G filed with the SEC on February 16, 2010,
by Richard Pell,
c/o Artio
Global Investors Inc., 330 Madison Avenue, New York, New York
10017. Includes New Class A Units held by a Grantor
Retained Annuity Trust (GRAT), as to which
Mr. Pell is the settlor and trustee and receives annual
annuity payments therefrom. Mr. Pells spouse and
children are the remaindermen. Pursuant to SEC rules,
Mr. Pell is considered the beneficial owner of such
securities.
|
|
(3)
|
|
Based on information contained in a
Schedule 13G filed with the SEC on February 16, 2010,
by Rudolph-Riad Younes,
c/o Artio
Global Investors Inc., 330 Madison Avenue, New York, New York
10017. Includes New Class A Units held by a GRAT, as to
which Mr. Younes is the settlor and trustee and receives
annual annuity payments therefrom. Mr. Younes spouse,
if any, and the lineal descendants of his parents (other than
Mr. Younes) are the remaindermen. Pursuant to SEC rules,
Mr. Younes is considered the beneficial owner of such
securities.
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15
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|
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(4)
|
|
Does not include approximately
226,562 restricted stock units (including dividend equivalents)
held by each of Messrs. Wisher and Williams or
approximately 92,767 restricted stock units (including dividend
equivalents) held by Mr. Harte; these restricted stock
units will not convert to Class A common stock within
60 days. See Compensation Discussion and
Analysis for more information regarding their restricted
stock units.
|
|
(5)
|
|
Includes 400 shares of
Class A common stock held by Mr. Ledwidges wife
and 200 shares of Class A common stock held by
Mr. Ledwidges son, as to which Mr. Ledwidge
serves as custodian pursuant to the Uniform Transfers to Minors
Act.
|
|
(6)
|
|
Does not include approximately
26,398 restricted stock units (including dividend equivalents)
held by Mr. Spilka; these restricted stock units will not
convert to Class A common stock within 60 days. See
Compensation Discussion and Analysis for more
information regarding executives restricted stock units.
|
|
(7)
|
|
Based on information contained in a
Schedule 13G filed with the SEC on February 16, 2010,
by GAM, Klausstrasse 10, 8034 Zurich, Switzerland. According to
the Schedule 13G, GAM beneficially owns and has sole voting
and dispositive power over 16,755,844 shares of Class C
common stock. Each share of Class C common stock has
economic rights (including rights to dividends and distributions
upon liquidation) equal to the economic rights of a share of the
Class A common stock. On the second anniversary of the IPO,
any outstanding shares of Class C common stock will
automatically convert on a
one-for-one
basis to Class A common stock. If GAM transfers the shares
of Class C common stock to anyone other than any of its
subsidiaries, or us, such shares would automatically convert to
shares of Class A common stock.
|
|
(8)
|
|
Based on information contained in
Schedule 13G filed with the SEC on February 10, 2010,
by Cramer Rosenthal McGlynn, LLC (Cramer), 520
Madison Avenue, New York, New York 10022. According to the
Schedule 13G, Cramer has sole voting power over
2,229,982 shares of our Class A common stock and sole
dispositive power over 2,286,832 shares of Class A
common stock.
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|
(9)
|
|
Based on information contained in
Schedule 13G/A filed with the SEC on December 10,
2009, jointly by Alan Fournier
c/o Pennant
Capital Management, L.L.C., Pennant Capital Management, L.L.C.
and Pennant Windward Master Fund, L.P.
c/o Pennant
Capital Management, L.L.C. (collectively, Pennant
Capital), 26 Main Street, Suite 203, Chatham, New
Jersey 07928. According to the Schedule 13G/A, Alan
Fournier and Pennant Capital Management, L.L.C., each
beneficially own 2,033,000 shares of Class A common
stock and have shared voting and dispositive power over
2,033,000 shares of Class A common stock. Further,
according to the Schedule 13G/A, Pennant Windward Master
Fund, L.P. beneficially owns 1,435,710 shares of
Class A common stock and has shared voting and dispositive
power over 1,435,710 shares of Class A common stock.
|
|
(10)
|
|
Based on information contained in
Schedule 13G/A filed with the SEC on February 3, 2010,
by Norges Bank (Central Bank of Norway), Bankplassen 2,
PO Box 1179 Sentrum, NO 0107 Oslo, Norway. According
to the Schedule 13G/A, Norges Bank has sole voting and
dispositive power over 1,825,058 shares of Class A
common stock.
|
|
(11)
|
|
Based on information contained in
Schedule 13G filed with the SEC on November 6, 2009,
by Samlyn Capital, LLC and Robert Pohly
c/o Samlyn
Capital, LLC (together with Samlyn Capital, LLC Samlyn
Capital), 500 Park Avenue, 2nd Floor, New York, New York
10022. According to the Schedule 13G, Samlyn Capital, LLC
and Robert Pohly
c/o Samlyn
Capital LLC each have shared voting and dispositive power over
1,677,700 shares of Class A common stock.
|
16
COMPENSATION
DISCUSSION AND ANALYSIS
This section discusses the principles underlying our policies
and decisions relating to executive officers compensation,
describes the manner and context in which compensation is earned
by and awarded to our executive officers and provides
perspective on the tables and narrative that follow.
Introduction
Prior to our IPO, all material elements of our compensation
program had been determined by our former parent company and
were based on recommendations by our Chief Executive Officer and
President. As a result of our IPO, shares of our Class A
common stock began trading on the NYSE. This provided a new
opportunity for us to make equity-based awards to our executive
officers and, indeed, to encourage broader equity ownership at
all levels of the Company. We facilitated such equity ownership
immediately following the IPO though an aggregate grant of
2,147,758 restricted stock units to our officers and employees,
as described under Equity Awards. At the
same time, our new independent directors joined our Board. Thus,
2009 was in many ways a transitional year for our approach to
compensation. This Compensation Discussion and Analysis
(CD&A) describes how 2009 performance year
compensation decisions were made in the context of both
historical compensation practices and recent modifications that
take advantage of opportunities provided by our public company
status. This CD&A will also give a forward-looking view of
the new compensation practices we are discussing with our
Compensation Committee.
Compensation
Program Philosophy and Objectives
Our paramount goal is to provide compelling investment results
for our clients. This will permit us to achieve attractive
returns for our stockholders, and to provide a stimulating
environment for our employees. The investment management
business largely depends upon the skills of its workforce, and
so we devote considerable time, effort and resources to attract
and retain top caliber individuals who can contribute to the
Companys goals. Compensation levels are calibrated to be
competitive, recognizing that we seek to employ individuals who
merit above-median compensation. However, we recognize that
compensation is only one of the drivers of employee satisfaction
and engagement. We want management and staff to enjoy an open
and transparent corporate culture, where people are
intellectually stimulated, in a setting with other
high-performing and accomplished colleagues. Thus, we view
compensation both as one of the tools available to retain
people, and also as a way to encourage behavior that furthers
our culture.
We believe that the compensation program for our executive
officers must support our business strategy: be competitive;
attract, motivate and retain highly-qualified individuals; and
be directly linked both to the Companys performance and
the individuals performance. Our compensation program is
designed to encourage and challenge our executive officers and
to reward the achievement of sustained, superior performance and
long-term service with the Company. Historically, we followed a
policy of providing cash incentive bonuses and deferred awards
allocated to Artio-sponsored mutual funds (in the case of
Messrs. Wisher, Williams, Harte and Spilka) and
equity-like compensation (in the case of
Messrs. Pell and Younes, as further described below) to
drive and reward exceptional performance.
Because the IPO occurred at the end of the third quarter of
2009, the Companys approach to 2009 executive compensation
relied heavily on historical practices, with two noteworthy
exceptions. The first exception resulted from one of the
reorganization transactions that occurred in connection with the
IPO: we entered into employment agreements with
Messrs. Pell and Younes. We determined that it was
appropriate in light of the structural changes caused by the
IPO. Further, the employment agreements are intended to secure
their commitment to the Company, which we intend to review
periodically. The second exception relates to the modifications
to the Artio Global Investors Inc. Incentive Award and Special
Deferred Compensation Award Program (the deferral
plan). Previously, the deferral plan permitted deferred
awards only to be allocated among Artio-sponsored mutual funds.
Also, the amount of an employees incentive award subject
to deferral was less than at many other peer firms. Working with
our Compensation Committee and Mercer, a compensation consulting
firm, we modified both of these aspects of the deferral plan.
That is, for 2009 (except as described below for our
executives), approximately 50% of the deferred awards are in the
form of restricted stock units, which we believe helps to align
our employees interests with those of our stockholders and
our clients. Further, the amended deferral plan now subjects a
greater portion of incentive award to deferral;
17
deferrals are triggered for lower incentive award amounts and
all incentive awards are deferred at higher percentage rates. As
noted above, for all employees who receive a deferred award,
except our executive officers, approximately half of the
deferred award is in the form of restricted stock units.
Deferred awards for executive officers, other than
Messrs. Pell and Younes, consist only of restricted stock
units, which vest in three equal annual installments (except for
amounts relating to awards granted pursuant to the Artio Global
Investors Inc. 2009 Stock Incentive Plan on September 29,
2009, which vest over a five-year period). The three-year awards
vest on each of the first three anniversaries of the date of
grant, provided that the executive officer continues to be
employed by the Company on each applicable vesting date. Thus,
for 2009, executives awards (other than for
Messrs. Pell and Younes) feature significant portions of
equity-based incentive compensation. Going forward, we expect
equity-based compensation will continue to be a meaningful
portion of our executive officers compensation. However,
because Messrs. Pell and Younes each own approximately 13%
of the Companys equity, the Compensation Committee
determined that it was beneficial for all of Messrs. Pell
and Younes deferred awards to be allocated to
Artio-sponsored mutual funds. See footnote 1 to
2009 Summary Compensation Table for more
information regarding these awards.
Prior to the IPO, Messrs. Pell and Younes previously
enjoyed equity-like returns in the Company through
their ownership of Class B member interests in Investment
Adviser. These returns included distributions in respect of
profits on these member interests. For most of 2009, the Company
had been accruing compensation expense for Messrs. Pell and
Younes based upon their profits interests. Thus, for three
quarters of the year, the compensation of Messrs. Pell and
Younes consisted of their traditional distributions in respect
of their Class B member interests. However, in connection
with the IPO, Messrs. Pell and Younes exchanged their
Class B member interests for New Class A Units in
Holdings and entered into employment agreements that set target
annual minimum bonus amounts of $3,500,000 for each of
Messrs. Pell and Younes for the first two years following
the IPO. Because these employment agreements became effective at
the end of the third quarter of 2009 (the time of the IPO, and
when the independent Compensation Committee was established),
the Compensation Committee awarded bonuses to each of
Mr. Pell and Mr. Younes for 2009 that reflect
approximately one quarter of the target annual minimum, without
further adjustment, which were then subject to the amended
deferral plan.
For 2010, management and the Compensation Committee have agreed
upon criteria by which executive officers performance may
be assessed. Each executive will be compensated on the basis of
achieving both firm-wide and individual goals. Our Compensation
Committee will review and approve these goals and objectives
relevant to our Chief Executive Officers compensation,
evaluate his performance and determine his compensation
accordingly. In addition, our Compensation Committee will review
recommendations of our Chief Executive Officer and
managements Human Resources Committee regarding
compensation of the other executive officers. We intend to
continue to design our compensation program to attract, retain
and motivate executives and other professionals of the highest
quality and effectiveness. We intend to focus our programs on
rewarding the type of performance that increases long-term
stockholder value, including optimizing investment results,
growing revenue, retaining clients, developing new client
relationships, improving operational efficiency and managing
risks. We will periodically evaluate our compensation program to
ensure compliance with these objectives.
Use of
Comparative Compensation Data
To ensure that our compensation levels remain reasonable and
competitive, we have historically reviewed survey information
concerning salary, bonus and total compensation levels in
comparative companies within the investment management industry
compiled by McLagan, a compensation consulting firm specializing
in the financial services industry. In 2008, the survey and peer
group data that we used to determine the level of executive
compensation for Messrs. Wisher, Williams, Harte and Spilka
represented a group of over 220 companies, including
standalone asset management firms and subsidiaries of larger
financial services firms. For 2009 compensation, the group of
companies included
U.S.-based
investment management and advisory firms who participated in the
McLagan Compensation and Performance Surveys and is a more
focused group, as demonstrated below. We have not specifically
set our pay levels versus the McLagan survey results; rather we
have used the comparative survey data as a part of our
decision-making process relating to the base salary, annual
bonus levels and long-term incentives for our executive team.
Our Compensation
18
Committee has begun a review of our use of consultants and
comparative data (including our survey and peer group) in our
compensation-related decision making and will determine our
approach going forward.
The following is a list of companies we used in our 2009
comparative compensation analysis:
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Aberdeen Asset Management, Inc.
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Loomis, Sayles & Company L.P.
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Acadian Asset Management, LLC
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Lord Abbett Co. LLC
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Fred Alger Management, Inc.
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Morgan Stanley Investment Management, LLC
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American Century Investments
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NWQ Investment Management Company, LLC
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AXA Rosenberg Investment Management Ltd.
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Oppenheimer Capital LLC
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Batterymarch Financial Management, Inc.
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PanAgra Asset Management, Inc.
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William Blair & Company LLC
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PIMCO Advisors, L.P.
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Boston Company Asset Management, LLC
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Pioneer Investment Management, USA
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The Brandes Investment Partners, Inc.
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T. Rowe Price Associates, Inc.
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Brandywine Global Investment Management, LLC
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Putnam Investments
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Calamos Investments
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Pyramis Global Advisors
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ClearBridge Advisors
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Pzena Investment Management, LLC
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Delaware Investments
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RCM Capital Management LLC
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Driehaus Capital Management LLC
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RiverSource Investment Advisors, LLC (Ameriprise)
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Dwight Asset Management, LLC
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Schroder Investment Management N.A., Inc.
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Eaton Vance Management
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Thornburg Investment Management
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Fischer, Francis Trees & Watts, Inc.
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Tradewinds Global Investors, LLC
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Franklin Templeton Investments
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Trust Company of the West
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GE Asset Management
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UBS Global Asset Management
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Goldman Sachs Asset Management
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Waddell & Reed Investment Management Co.
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Invesco Plc
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Wellington Management Company, LLP
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Janus Capital Group
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Western Asset Management Company
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Jennison Associates, LLC
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Winslow Capital Management Inc.
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JPMorgan Asset Management
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Elements
of Our Compensation Program
We currently provide the following elements of compensation to
some or all of our executive officers:
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base salary;
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annual discretionary cash incentive awards;
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mandatory deferral of a portion of annual incentive awards above
a certain threshold;
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equity ownership in the Company;
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ownership interests in the operating subsidiaries of the Company
(only applicable to Messrs. Pell and Younes); and
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retirement plans.
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Each compensation element fulfills one or more of our
compensation program objectives.
As is typical in the investment management industry, the base
salaries of our executive team have represented a minority of
their compensation. In the case of executives (other than
Messrs. Pell and Younes), a large portion of their current
compensation has been paid in the form of annual discretionary
incentive awards, a portion of which is subject to vesting and
payment on a deferred basis. In the case of Messrs. Pell
and Younes, the majority of their annual remuneration has been
the economic return derived through the ownership
19
interests that they previously held in Investment Adviser. In
future years, Messrs. Pell and Younes will also be entitled
to receive annual discretionary incentive awards and
distributions based on their ownership interests in Holdings.
Base
Salary
Salaries are reviewed annually to maintain competitive levels.
Any changes to salaries are determined based on the
individuals responsibilities and compared to peer group
data, which have historically been derived from the McLagan
survey of the focused group companies listed above. In 2009, of
our six executive officers, only Messrs. Pell and Younes
received increases in base salary, which resulted from their
entry into employment agreements. See Executive
Compensation Employment Agreements.
Discretionary
Cash Bonus and Mandatory Bonus Deferral
In the investment management industry, annual incentive awards
represent a significant portion of the overall compensation
packages of executives. Our executive officers are eligible to
earn annual incentive awards under our deferral program. Under
this deferral program, annual incentive awards are awarded in
our sole discretion to select employees and officers based on
criteria established by us. The annual incentive awards are
intended to reward annual achievement and may consist of a cash
bonus component and a deferred compensation component. The
amount of each executives award will be determined by the
Compensation Committee, based upon recommendations by the Chief
Executive Officer and managements Human Resources
Committee at the end of each fiscal year. The recommendations
will reflect a combination of factors, including, but not
limited to, overall Company performance, the individuals
performance, the executives prior compensation and
competitive market pay requirements. Historically, annual
incentive awards have not been subject to minimum amounts,
strictly defined performance standards or other criteria set in
advance. Thus, in determining 2009 annual incentive awards, we
took into account a broad range of relevant factors, including,
but not limited to, operational efficiency, revenue growth, the
completion of our IPO and the overall state of the market.
Prior to the IPO, we had not formally set target levels of
corporate or individual performance in connection with our
incentive award programs, and executive compensation had not
been tied to meeting particular financial measurements;
accordingly, there has been a significant subjective character
to our historical awards. Working with McLagan, management and
the Compensation Committee have defined a set of performance
criteria for executive compensation that will include
achievement of both firm-wide and individual goals. While not
providing a formula-based linkage between performance and pay,
the new performance framework is expected to add additional
rigor and objectivity to the pay decision-making process.
We believe that the Companys business objectives and its
expectations of each employee are clearly communicated on an
ongoing basis, and the Companys latitude to assess
performance and determine annual awards on a discretionary basis
has inspired a high level of performance from employees and has
provided the Company appropriate flexibility. Historically,
incentive award amounts paid to Messrs. Wisher, Williams,
Harte and Spilka have reflected our view of the
individuals performance relative to his responsibilities,
and have taken account of the Companys financial results
and industry data regarding compensation for similar roles. In
2009, annual incentive awards for Messrs. Wisher, Williams,
Harte and Spilka were reviewed and approved by our Compensation
Committee, and were based on the recommendations of our Human
Resources Committee and Chief Executive Officer.
A portion of the annual incentive awards of each of our
executive officers typically has been required to be deferred.
The percentage of deferral is based on a schedule and dollar
amount that is set forth in the program. The annual deferred
compensation awards vest in three equal annual installments (on
each of the first three anniversaries of the date of grant,
provided that the executive officer continues to be employed by
the Company on each applicable vesting date). Historically, the
deferred portion reflected investment returns as if invested in
one or more of our mutual funds chosen by the participant. As
noted above, as of February 2010, for the 2009 performance year,
deferred awards granted to executive officers pursuant to the
deferral plan, other than Messrs. Pell and Younes,
consisted solely of restricted stock units. We believe that
mandatory deferral of a portion of each executives
incentive compensation and subjecting that deferred compensation
to
20
a vesting period serves as an effective retention tool and
serves to align managements interests with those of
stockholders and clients. However, significant adverse
volatility in the Companys stock price could result in a
significant deterioration in the value of restricted stock units
granted, thus lessening the effectiveness of this compensation
tool.
Ownership
Interests in the Company and its Operating
Subsidiaries
Prior to our IPO, Messrs. Pell and Younes contributed their
pre-existing equity interests in Investment Adviser to Holdings
in exchange for New Class A Units in Holdings. Currently,
Messrs. Pell and Younes each hold approximately 13% of the
New Class A Units of Holdings. At the time of the exchange,
we entered into an exchange agreement (the Exchange
Agreement) with each of Messrs. Pell and Younes under
which they have the right to exchange a specified portion of
their New Class A Units for shares of Class A common
stock on a
one-for-one
basis, subject to customary conversion rate adjustments for
stock splits, stock dividends and reclassifications and other
similar transactions, and subject to the other terms of the
Exchange Agreement. See Relationships and Related Party
Transactions Exchange Agreement. Thus, a
substantial portion of the economic return of Messrs. Pell
and Younes will be obtained through their ownership interests in
Holdings and related distributions. We believe that the link
between the amount of the economic return they realize and our
performance will encourage their continued exceptional
performance. In addition, we believe that the restrictions on
transfer and the ownership requirements to which they are
subject help align their interests with the interests of our
stockholders. As noted above, the Compensation Committee decided
not to award any restricted stock units to Messrs. Pell and
Younes for 2009 in light of their current level of equity
ownership.
Equity
Awards
In September 2009, the Board of Directors adopted the Artio
Global Investors Inc. 2009 Stock Incentive Plan (the
Plan), and reserved 9.7 million shares of
Class A common stock for share awards. Under the Plan, the
Board of Directors is authorized to grant incentive stock
options, nonqualified stock options, stock appreciation rights,
restricted stock, restricted stock units, performance awards and
other stock-based awards to directors, officers and other
employees of, and consultants to, the Company and its affiliates.
On September 29, 2009 (pursuant to the Plan) in an effort
to develop equity ownership across the Company after the IPO, we
made an aggregate grant of 2,147,758 restricted stock units to
all officers and employees of the Company and its subsidiaries,
other than Messrs. Pell and Younes. 74,500 of those
restricted stock units vested on February 5, 2010. The
restricted stock units granted to executive officers or
employees (2,071,758 shares), including
Messrs. Wisher, Williams, Harte and Spilka, will vest as to
one-fifth of the total award on each of the first five
anniversaries of the date of grant, provided the executive
officer or employee continues to be employed through each
applicable vesting date. If their employment terminates and they
are party to an employment agreement, their rights with respect
to the restricted stock units will be governed by such
employment agreement, and for those employees without employment
agreements, such rights will be governed by the Plan.
In addition, on February 5, 2010, we made an aggregate
grant of 215,398 restricted stock units to certain executive
officers and employees as part of the incentive compensation
awards with respect to 2009. These restricted stock unit grants
will vest as to one-third of the total award on each of the
first three anniversaries of the date of grant, provided the
executive officer or employee continues to be employed through
each applicable vesting date.
We believe that these awards and any future equity awards under
the Plan will further align the interests of our executive
officers and employees, with those of our stockholders and
clients. In addition, because the value of an award will
increase as the value of our stock increases, and awards will be
subject to a vesting schedule, equity awards also encourage high
performance over a long period.
21
The table below sets forth the grants made pursuant to the Plan
as of March 1, 2010:
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Artio Global Investors Inc. 2009 Stock Incentive Plan
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Shares Subject
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to Transfer
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Restrictions or
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Restricted
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Stock Units
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Dollar Value
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Name and Position
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(as
Applicable)(1)
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($)(2)
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Glen Wisher
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226,562
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5,883,844
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Tony Williams
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226,562
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5,883,844
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Francis Harte
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92,767
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2,404,051
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Executive officers and directors as a group
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586,931
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15,197,558
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All other employees
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1,795,072
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(3)
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46,718,059
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(1)
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Includes restricted stock units
issued as dividend equivalents.
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(2)
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The value of the awards is based on
the fair market value on the date of grant.
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(3)
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Includes 74,500 restricted stock
units that vested in February 2010 and were settled in shares of
Class A common stock. Excludes 1,500 restricted stock units
that were forfeited.
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Artio
Global Investors Inc. Management Incentive Plan
In September 2009, the Board and shareholders adopted the Artio
Global Investors Inc. Management Incentive Plan providing for
the payment of annual bonuses to our executive team. Our
Compensation Committee will establish the terms and provisions
of any incentive awards, including the performance objectives,
the performance period, which may be annual or over a multiyear
period, and any other features it may determine in its
discretion. The performance objectives may include any or all of
a combination of individual, team, department, division,
subsidiary, group or corporate performance objectives. Incentive
awards under this plan generally will be paid in cash.
Employment
Agreements
We have entered into employment agreements with all executive
officers and employment agreements may be used from time to time
with other employees.
Retirement
Plans
Our retirement plans include a 401(k) profit sharing plan, a
money purchase pension plan, and a nonqualified supplemental
retirement plan, which is linked to our money purchase plan. The
401(k) profit sharing plan and money purchase pension plan are
broad-based tax-qualified plans. The nonqualified supplemental
retirement plan is offered to our officers, including our
executive officers, to increase their retirement benefits above
amounts available under the money purchase plan. Unlike the
money purchase plan, the nonqualified supplemental retirement
plan is an unsecured obligation of the company and is not
qualified for tax purposes. Each of the three plans is deemed to
be a defined contribution plan. The contribution amount under
the benefit formula under the nonqualified supplemental
retirement plan is described in the narrative that accompanies
the 2009 Nonqualified Deferred Compensation Table
below. We believe our retirement plan program is competitive and
is an important tool in attracting and retaining executives.
Benefit
Plans
The Company provides its named executive officers with health
and welfare benefits on the same terms as those offered to other
employees.
22
Impact of
Accounting and Tax Considerations
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the Code) allows a federal income tax
deduction for compensation exceeding $1 million paid to the
Chief Executive Officer and certain other named executive
officers if the payments are made under qualifying
performance-based plans. All compensation paid to the named
executive officers is intended to qualify as tax deductible
under Section 162(m) of the Code. The Compensation
Committee will, however, consider awarding compensation to named
executive officers that is not fully deductible under
Section 162(m) of the Code in cases where it is determined
to be in the best interest of the Company and stockholders to do
so.
Mercer
and Affiliates
Mercer HR Services LLC (Mercer HR) and Marsh USA
Inc. (Marsh) share a common parent
(Marsh & McLennan Companies Inc.) with Mercer, one of
our compensation consultants. Independent from the
Companys retention of Mercer, Mercer HR and Marsh were
engaged by the Company in 2009 as described below.
Mercer was retained by management and reached its recommended
approach to modifying our deferral plan, after meetings with
management to ensure that Mercer understood our historical use
of the deferral plan, and our belief that equity should be an
important feature of our compensation philosophy as a public
company. The Companys payments to Mercer in connection
with this project were approximately $39,000.
In 2009, the Company paid approximately $127,000 to Mercer HR to
provide shareholder services to participants in employee benefit
plans that invest in our funds. The amount of the payment is a
fixed small percentage of related assets under management.
Marsh is a leading insurance brokerage, and for many years we
have sought their assistance in obtaining directors and
officers insurance. In light of our public company status,
our insurance coverage increased and Marsh acted as insurance
broker in arranging this coverage. In 2009, we paid Marsh
approximately $312,300 in insurance commissions.
Risks
Related to Compensation Policies
In keeping with our risk management framework, we think of risks
not only in the abstract, but of risks that might hinder our
achieving a particular objective. We have identified two primary
risks relating to compensation: the risk that compensation will
not be sufficient to retain talent, and the risk that
compensation may provide unintended incentives. To combat these
risks, as noted above, compensation of employees throughout the
Company is benchmarked against comparative compensation data,
permitting us to set compensation levels that we believe
contribute to low rates of employee attrition. Further, the
Principals equity holdings in the Company are subject to a
five-year holding period, as further described under
Certain Relationships and Related Party
Transactions Related Party Transactions
Exchange Agreement. The other executives equity
awards are subject to vesting over three- or five- year periods,
and the Principals recent incentive awards are subject to
a three-year deferral period. We believe both the levels of
compensation and the structure of the deferral plan have had the
effect of retaining key personnel.
Performance criteria for some of our executives now include
firm-wide risk management practices (some relating to mitigating
certain of the firms key risks, and some relating to
oversight of the ordinary course risks to which the
firm is subject). We believe these criteria will provide
additional incentives to manage the wide range of risks related
to the Company. We have not seen any employee behaviors
motivated by our compensation policies and practices that create
increased risks for our stockholders or our clients.
Based on the foregoing, we do not believe that our compensation
policies and practices are reasonably likely to have a material
adverse effect on the Company. The Compensation Committee will
monitor the effects of its compensation decisions to determine
whether risks are being appropriately managed.
23
REPORT OF
THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis. Based on
such reviews and discussions, the Compensation Committee
recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in the Companys Proxy
Statement and be incorporated by reference in the Companys
Annual Report on
Form 10-K.
Compensation Committee of the Board of Directors
Elizabeth Buse, Chair
Duane R. Kullberg
Francis Ledwidge
Notwithstanding any SEC filing by the Company that includes or
incorporates by reference other SEC filings in their entirety,
this Compensation Committee Report shall not be deemed to be
filed with the SEC, except as specifically provided
otherwise therein.
24
EXECUTIVE
COMPENSATION
2009
Summary Compensation Table
The following table presents summary information concerning the
compensation earned during the years ended December 31,
2009, 2008 and 2007 by our Chief Executive Officer, Chief
Financial Officer and the next three most highly compensated
executive officers, whom we refer to collectively as the
named executive officers.
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|
|
Stock
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)(1)
|
|
($)(2)
|
|
($)(3)
|
|
($)
|
|
Richard Pell
|
|
|
2009
|
|
|
|
427,151
|
|
|
|
894,000
|
(4)
|
|
|
|
|
|
|
26,690
|
|
|
|
1,347,841
|
|
Chief Executive Officer
|
|
|
2008
|
|
|
|
400,000
|
|
|
|
|
(4)
|
|
|
|
|
|
|
7,035,440
|
|
|
|
7,435,440
|
|
|
|
|
2007
|
|
|
|
400,000
|
|
|
|
|
(4)
|
|
|
|
|
|
|
27,475
|
|
|
|
427,475
|
|
Rudolph-Riad Younes
|
|
|
2009
|
|
|
|
427,151
|
|
|
|
894,000
|
(4)
|
|
|
|
|
|
|
26,690
|
|
|
|
1,347,841
|
|
Head of International Equity
|
|
|
2008
|
|
|
|
400,000
|
|
|
|
|
(4)
|
|
|
|
|
|
|
7,035,440
|
|
|
|
7,435,440
|
|
|
|
|
2007
|
|
|
|
400,000
|
|
|
|
|
(4)
|
|
|
|
|
|
|
27,475
|
|
|
|
427,475
|
|
Glen Wisher
|
|
|
2009
|
|
|
|
350,000
|
|
|
|
667,500
|
|
|
|
5,321,295
|
|
|
|
18,840
|
|
|
|
6,357,635
|
|
President
|
|
|
2008
|
|
|
|
350,000
|
|
|
|
1,250,000
|
|
|
|
|
|
|
|
18,840
|
|
|
|
1,618,840
|
|
|
|
|
2007
|
|
|
|
350,000
|
|
|
|
1,920,000
|
|
|
|
|
|
|
|
19,625
|
|
|
|
2,289,625
|
|
Tony Williams
|
|
|
2009
|
|
|
|
280,000
|
|
|
|
667,500
|
|
|
|
5,321,295
|
|
|
|
7,850
|
|
|
|
6,276,645
|
|
Chief Operating Officer
|
|
|
2008
|
|
|
|
280,000
|
|
|
|
1,250,000
|
|
|
|
|
|
|
|
7,850
|
|
|
|
1,537,850
|
|
|
|
|
2007
|
|
|
|
280,000
|
|
|
|
1,920,000
|
|
|
|
|
|
|
|
8,635
|
|
|
|
2,208,635
|
|
Francis Harte
|
|
|
2009
|
|
|
|
250,000
|
|
|
|
435,000
|
|
|
|
2,128,508
|
|
|
|
3,140
|
|
|
|
2,816,648
|
|
Chief Financial Officer
|
|
|
2008
|
|
|
|
250,000
|
|
|
|
600,000
|
|
|
|
|
|
|
|
3,140
|
|
|
|
853,140
|
|
|
|
|
2007
|
|
|
|
250,000
|
|
|
|
675,000
|
|
|
|
|
|
|
|
3,925
|
|
|
|
928,925
|
|
|
|
|
|
(1)
|
|
Amounts shown in this column
represent the cash portion of the annual discretionary bonus
award granted to the individual relative to performance during
2009, 2008 or 2007, as applicable, as well as the deferred
portion of the annual award that was directed into the
Companys mutual funds. The deferred portion of the annual
awards that were awarded in February 2010, in respect of the
2009 performance year, to Messrs. Wisher, Williams and
Harte as restricted stock units are excluded from this table,
but are described below in this footnote. A portion of the total
bonus is subject to mandatory deferral and vesting over a
three-year period. The deferred portion of these bonuses is as
follows: for Mr. Pell, $342,000 all of which was directed
into the Companys mutual funds; for Mr. Younes,
$342,000 all of which was directed into the Companys
mutual funds; for Mr. Wisher, $549,000 for 2009, all of
which was awarded as restricted stock units, $275,000 for 2008,
all of which was directed into the Companys mutual funds,
and $530,520 for 2007, all of which was directed into the
Companys mutual funds; for Mr. Williams, $549,000 for
2009, all of which was awarded as restricted stock units,
$275,000 for 2008, all of which was directed into the
Companys mutual funds, and $530,500 for 2007, all of which
was directed into the Companys mutual funds; and for
Mr. Harte, $270,000 for 2009, all of which was awarded as
restricted stock units, $67,500 for 2008, all of which was
directed into the Companys mutual funds, and $90,000 for
2007, all of which was directed into the Companys mutual
funds. The deferred portion that was directed into the
Companys mutual funds is also reflected in the 2009
Nonqualified Deferred Compensation Table below.
|
|
(2)
|
|
Amounts shown in this column
represent the grant date fair value of the restricted stock unit
awards granted on September 29, 2009 in connection with the
Companys IPO, which are based on the closing price on the
grant date. These awards will vest as to one-fifth of the total
award on each of the first five anniversaries of the date of
grant, provided the executive continues to be employed through
each applicable vesting date.
|
|
(3)
|
|
Amounts shown in this column
reflect Company contributions to the executives account
under the Companys nonqualified supplemental retirement
plan and the 2008 payment to each of Messrs. Pell and
Younes in the amount of $7,008,750 relating to their deferred
compensation agreement.
|
|
(4)
|
|
Prior to the IPO, Messrs. Pell
and Younes did not receive bonuses, but instead benefited from
the increased value of their Class B profits interests as
well as distributions in respect of such interests. We incurred
the following compensation charges (for financial accounting
purposes) relating to the allocation of income to
Messrs. Pell and Younes pursuant to their Class B
profits interests: for Mr. Pell, $16,831,250 for 2009,
$38,036,900 for 2008, and $41,756,150 for 2007; and for
Mr. Younes, $16,831,250 for 2009, $38,036,900 for 2008, and
$41,756,150 for 2007. We also incurred compensation charges (for
financial accounting purposes) for the changes in redemption
value of their Class B profits interests of
Messrs. Pell and Younes, which, in respect of 2009 included
$126,100,000 for each of Messrs. Pell and Younes relating
to the acceleration of the vesting of their Class B profits
interests based on the offering price of the IPO, which was
$26.00 per share. Such amounts, which are non-cash in nature,
are as follows: for Mr. Pell, $133,054,900 for 2009,
$27,278,700 for 2008, and $38,421,950 for 2007; and for
Mr. Younes, $133,054,900 for 2009, $27,278,700 for 2008,
and $38,421,950 for 2007. Further, in connection with the IPO,
we entered into a tax receivable agreement
|
25
|
|
|
|
|
with the Principals under which
they are entitled to receive 85% of the tax benefits realized by
us in our tax returns as a result of the increases in tax basis
created by each Principals exchange of New Class A
Units of Holdings for shares of our Class A common stock.
The net present value of such amount totals $97,908,600 and is
shown as compensation expense within our financial statements.
The table above excludes such amount, which is allocated equally
to Messrs. Pell and Younes.
|
2009 Grants of Plan-Based Awards Table
The following table sets forth information concerning the 2009
grants of plan-based awards to the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards:
|
|
Grant Date
|
|
|
|
|
|
|
Number of
|
|
Fair Value
|
|
|
|
|
Grant
|
|
Shares of
|
|
of Stock
|
|
|
|
|
Approval
|
|
Stock or
|
|
Awards
|
Name
|
|
Grant Date
|
|
Date
|
|
Units (#)
|
|
($)
|
|
Richard Pell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rudolph-Riad Younes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glen Wisher
|
|
|
9/29/09
|
|
|
|
9/03/09
|
|
|
|
202,716
|
|
|
|
5,321,295
|
|
Tony Williams
|
|
|
9/29/09
|
|
|
|
9/03/09
|
|
|
|
202,716
|
|
|
|
5,321,295
|
|
Francis Harte
|
|
|
9/29/09
|
|
|
|
9/03/09
|
|
|
|
81,086
|
|
|
|
2,128,508
|
|
|
The amounts shown reflect restricted stock unit awards that will
vest as to one-fifth of the total award on each of the first
five anniversaries of the date of grant, provided the executive
continues to be employed through each applicable vesting date.
The amounts were approved by the Board prior to the IPO and the
formation of the Compensation Committee. All of the restricted
stock units receive dividend equivalents.
2009
Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth information concerning the
outstanding equity awards as of December 31, 2009, for the
named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
Market
|
|
|
Number of
|
|
Value of
|
|
|
Shares or
|
|
Shares or
|
|
|
Units of
|
|
Units of
|
|
|
Stock That
|
|
Stock That
|
|
|
Have Not
|
|
Have Not
|
Name
|
|
Vested (#)
|
|
Vested ($)
|
|
Richard Pell
|
|
|
|
|
|
|
|
|
Rudolph-Riad Younes
|
|
|
|
|
|
|
|
|
Glen Wisher
|
|
|
202,716
|
|
|
|
5,167,231
|
|
Tony Williams
|
|
|
202,716
|
|
|
|
5,167,231
|
|
Francis Harte
|
|
|
81,086
|
|
|
|
2,066,882
|
|
|
The amounts shown reflect restricted stock unit awards that will
vest as to one-fifth of the total award on each of the first
five anniversaries of the date of grant, provided the executive
officer continues to be employed through each applicable vesting
date. The amounts were approved by the Board prior to the IPO
and the formation of the Compensation Committee. All of the
restricted stock units receive dividend equivalents.
26
2009
Nonqualified Deferred Compensation Table
The following table sets forth information concerning the
nonqualified deferred compensation benefits of the named
executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
|
|
Aggregate
|
|
|
Contributions in
|
|
Contributions in
|
|
Earnings (Losses)
|
|
Aggregate
|
|
Balance at
|
|
|
Last FY
|
|
Last FY
|
|
in Last FY
|
|
Withdrawals or
|
|
Last FYE
|
Name
|
|
($)(1)
|
|
($)(2)
|
|
($)
|
|
Distributions
|
|
($)
|
|
Richard Pell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified supplemental retirement plan
|
|
|
|
|
|
|
26,690
|
|
|
|
72,681
|
|
|
|
|
|
|
|
420,479
|
|
Mandatory bonus deferral plan
|
|
|
342,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
342,000
|
|
Rudolph-Riad Younes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified supplemental retirement plan
|
|
|
|
|
|
|
26,690
|
|
|
|
45,747
|
|
|
|
|
|
|
|
262,143
|
|
Mandatory bonus deferral plan
|
|
|
342,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
342,000
|
|
Glen Wisher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified supplemental retirement plan
|
|
|
|
|
|
|
18,840
|
|
|
|
26,318
|
|
|
|
|
|
|
|
149,925
|
|
Mandatory bonus deferral plan
|
|
|
|
|
|
|
|
|
|
|
261,713
|
|
|
|
272,976
|
|
|
|
875,163
|
|
Tony Williams
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified supplemental retirement plan
|
|
|
|
|
|
|
7,850
|
|
|
|
7,374
|
|
|
|
|
|
|
|
41,354
|
|
Mandatory bonus deferral plan
|
|
|
|
|
|
|
|
|
|
|
230,480
|
|
|
|
264,195
|
|
|
|
855,712
|
|
Francis Harte
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified supplemental retirement plan
|
|
|
|
|
|
|
3,140
|
|
|
|
5,381
|
|
|
|
|
|
|
|
30,834
|
|
Mandatory bonus deferral plan
|
|
|
|
|
|
|
|
|
|
|
56,733
|
|
|
|
25,012
|
|
|
|
159,205
|
|
|
|
|
|
(1)
|
|
Represents amounts deferred in
conjunction with the Companys Incentive Award and Special
Deferred Compensation Award Program relating to 2009. These
amounts were not reflected within compensation expense in 2009
because they were deferred and vest over a three-year period and
the compensation expense (for financial accounting purposes)
will be distributed evenly throughout the vesting period. The
deferrals for Messrs. Pell and Younes were directed into
the Companys mutual funds; the deferrals for
Messrs. Wisher, Williams and Harte were awarded as
restricted stock units in February 2010 and are therefore
excluded from this table. The deferrals for Messrs. Pell
and Younes that were directed into the Companys mutual
funds are included in the 2009 Summary Compensation
Table above; deferrals for Messrs. Wisher, Williams
and Harte are described in footnote 1 to such table.
|
|
(2)
|
|
Represents the Companys
contribution to the executives accounts under our
nonqualified supplemental retirement plan.
|
Under the Companys deferral program, annual incentive
awards are awarded in the Companys sole discretion to
select employees and officers. The portion of a
participants annual cash incentive award that will be
automatically deferred under the program is determined in
accordance with the schedule contained in the program document.
The deferred portion of the incentive award vests and is paid
(as it relates to those awards directed into the Companys
mutual funds) in equal installments over three years (with the
exception of the awards granted on September 29, 2009,
which vest as to one-fifth of the total award on each of the
first five anniversaries of the date of grant, provided the
executive continues to be employed through each applicable
vesting date) commencing on the first anniversary of the date
the non-deferred portion of the incentive awards are paid, as
long as the participant remains employed by the Company through
the applicable vesting date. A participant forfeits all rights
to a deferred award if the participant violates the
non-competition, non-solicitation and confidentiality covenants
set forth in the program or violates the terms of any release
previously entered into as a condition of receipt of payment
under the program. If a participants employment terminates
by reason of the participants death,
disability, retirement or a
qualifying termination (as these terms are defined
in the program), the participant will be fully vested in his
deferred compensation and the deferred amounts will be paid in
accordance with the payment schedule described above. A
qualifying termination means a termination as a
result of the permanent elimination of the participants
job position or any termination by the company (or its
successor) without cause following a change in
control (as the term is defined in the program).
27
We offer a nonqualified supplemental retirement plan to our
officers. This plan is a nonqualified plan and is an unsecured
obligation of the Company. The contribution amount is determined
by multiplying the individuals base salary in excess of
the compensation limit for determining contributions to
qualified plans mandated by the Internal Revenue Service in
effect for the plan year by 15.7%.
Potential
Payments upon Termination or Change in Control
We entered into employment agreements (see
Employment Agreements below) that
provide for compensation to the named executive officers in the
event of certain types of termination of employment. The table
below provides details of the nature and amounts of compensation
that would have been payable to each named executive officer if
their employment was terminated as of December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
Involuntary
|
|
Change in
|
|
|
Due to Death
|
|
Not for Cause
|
|
Control
|
|
|
or Disability
|
|
Termination
|
|
Termination
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
Richard
Pell(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Rudolph-Riad
Younes(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Glen
Wisher(2)
|
|
|
2,695,146
|
(2(a))
|
|
|
6,282,705
|
(2(b))
|
|
|
8,607,959
|
(2(c))
|
Tony
Williams(2)
|
|
|
2,709,028
|
(2(a))
|
|
|
6,104,087
|
(2(b))
|
|
|
8,429,341
|
(2(c))
|
Francis
Harte(2)
|
|
|
864,531
|
(2(a))
|
|
|
2,629,888
|
(2(b))
|
|
|
3,559,985
|
(2(c))
|
|
|
|
|
(1)
|
|
The amounts shown in the table for
Messrs. Pell and Younes reflect the following payments and
benefits to which they would have been entitled if their
employment were terminated by death, permanent incapacity, or
resignation: (i) $0 for any accrued but unpaid base salary
(and other vested and accrued employee benefits) through
December 31, 2009, under the assumption that there would
have been none (the Company paid salary for the last payroll
period in 2009 on December 31, 2009); and (ii) $0 for
earned but unpaid bonus for 2009, as bonuses with respect to
2008 were paid during 2009 prior to December 31, 2009.
Please refer to Employment Agreements
for further description of the termination of employment
provisions contained in the Principals employment
agreements.
|
|
(2)
|
|
The amounts shown in the table for
Messrs. Wisher, Williams and Harte reflect the following
payments and benefits to which they would have been entitled if
they were terminated by death, disability or by the
Company without cause (as such terms are described
in the employment agreements):
|
|
|
|
|
(a)
|
Termination due to Death or Disability: (i) $0 for
accrued benefits under the assumption that there would have been
none; (ii) $0 for earned but unpaid bonuses for 2008, as
bonuses with respect to 2008 were paid during 2009 prior to
December 31, 2009; (iii) a pro-rata bonus equal to
$1,556,667 for Mr. Wisher, $1,590,000 for Mr. Williams
and $600,000 for Mr. Harte (calculated as 100%, as the
executives were employed for all of 2009, of the greater of
(x) the bonus granted for 2008 performance of $1,250,000
for each of Mr. Wisher and Mr. Williams and $600,000
for Mr. Harte and (y) the average bonus granted for
2008, 2007 and 2006 performance of $1,556,667 for
Mr. Wisher, $1,590,000 for Mr. Williams and $575,000
for Mr. Harte); (iv) pro-rata vesting of the
restricted stock units, totaling a value of $263,316 for each of
Mr. Wisher and Mr. Williams (calculated as the product
of 202,716 shares multiplied by the closing market
value on December 31, 2009 of $25.49 multiplied by
93 days divided by 1,825 days) and $105,326 for
Mr. Harte (calculated in the same manner for
81,086 shares); and (v) the vesting of the prior year
bonus awards, including any gains or losses related to such
deferrals, that were subject to mandatory deferral, totaling
$875,163 for Mr. Wisher, $855,712 for Mr. Williams and
$159,205 for Mr. Harte.
|
|
|
(b)
|
Involuntary Not for Cause Termination: (i) $0 for
accrued benefits under the assumption that there would have been
none; (ii) continued payments of base salary for the
remaining term of the employment agreement of three years,
totaling $962,500 for Mr. Wisher, $770,000 for
Mr. Williams and $687,500 for Mr. Harte; (iii) $0
for earned but unpaid bonus for 2008, as bonuses with respect to
2008 were paid during 2009 prior to December 31, 2009;
(iv) a pro-rata bonus equal to $1,556,667 for
Mr. Wisher, $1,590,000 for Mr. Williams and $600,000
for Mr. Harte (calculated as 100%, as the executives were
employed for all of 2009, of the greater of (x) the bonus
granted for 2008 performance of $1,250,000 for each of
Mr. Wisher and Mr. Williams and $600,000 for
Mr. Harte and (y) the average bonus granted for 2008,
2007 and 2006 performance of $1,556,667 for Mr. Wisher,
$1,590,000 for Mr. Williams and $575,000 for
Mr. Harte); (v) $46,398 for the employers
portion of continued medical and dental premiums for each
executive until the end of the three-year employment term;
(vi) the vesting of the prior year bonus awards, including
any gains or losses related to such deferrals, that were subject
to mandatory deferral, totaling $875,163 for Mr. Wisher,
$855,712 for Mr. Williams and $159,205 for Mr. Harte;
and (vii) continued vesting of the restricted stock units
granted to the executive at the time of the IPO through the
remaining term of the three-year employment agreement, totaling
$2,841,977 for each of Mr. Wisher and Mr. Williams and
$1,136,785 for Mr. Harte. The amount of $2,841,977 for each
of Mr. Wisher and Mr. Williams is calculated as the
product of: (1) 202,716 shares multiplied by
(2) $25.49
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28
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multiplied
by (3) the
remaining
33-month
portion of the three-year employment agreement divided by
(4) the five-year vesting period. The amount of $1,136,785
for Mr. Harte is calculated in the same manner for
81,086 shares. The actual value of the restricted stock
units that vest pursuant to clause (vii) will vary based on
the actual price of the shares underlying the restricted stock
units as of the dates of vesting and settlement during the
three-year remaining term of the agreement.
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(c)
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Change in Control Termination: Amounts reflect the same
amounts as for Involuntary Not for Cause Termination as
described in footnote (2)(b), except with respect to
clause (vii) thereof. If the executives had been terminated
by the Company as a result of a change in control (as defined
under the Artio Global Investors Inc. 2009 Stock Incentive
Plan), all of the restricted stock units would vest and the
restrictions would lapse as of the change in control, totaling a
value of $5,167,231 for each of Mr. Wisher and
Mr. Williams (calculated as the product of
202,716 shares multiplied by the closing market
value on December 31, 2009 of $25.49) and $2,066,882 for
Mr. Harte (calculated as the product of 81,086 shares
multiplied by $25.49).
|
Please refer to Employment Agreements
for further description of the termination of employment
provisions contained in the employment agreements.
No compensation is expected to be payable to the named executive
officers in the event of a change in control of the Company.
However, upon a change of control of the Company (as defined in
the Exchange Agreement), the restrictions on the sale of
Class A common stock received by Messrs. Pell and
Younes upon exchange of New Class A Units pursuant to the
Exchange Agreement will cease. In addition, the non-compete and
non-solicitation provisions to which the Principals are subject
under the Exchange Agreement will terminate if a change of
control or a potential change of control occurs and the relevant
Principal is terminated by us without cause or resigns with good
reason (in each case as such terms are defined in the Exchange
Agreement). See Relationships and Related Party
Transactions Exchange Agreement. Further, if
Messrs. Wisher, Williams or Harte are terminated by the
Company as a result of a change in control (as defined in the
Artio Global Investors Inc. 2009 Stock Incentive Plan), all
restrictions with respect to their restricted stock unit awards
will lapse as of the date of the change in control. See
Employment Agreements.
Employment
Agreements
We entered into employment agreements with each of our executive
officers in September 2009. The agreements with
Messrs. Pell and Younes provide that Mr. Pell will
serve as our Chief Executive Officer and Chief Investment
Officer and Mr. Younes as our Head of International Equity.
Pursuant to their employment agreements, Messrs. Pell and
Younes each receive an annual base salary of not less than
$500,000 and an annual bonus for each calendar year, targeted at
a minimum of $3,500,000 annually for each of the first two years
after the date of the IPO, such bonus amounts subject to
modification by the Board of Directors and subject to the
amended deferral plan. The employment agreements also provide
that each of Messrs. Pell and Younes is eligible to
participate in our employee benefit plans. The agreements will
be in effect until terminated by either Mr. Pell or
Mr. Younes, as applicable, or us. If Mr. Pell or
Mr. Younes employment is terminated by us or if
Mr. Pell or Mr. Younes employment terminates due
to resignation, death or permanent incapacity, Mr. Pell or
Mr. Younes, as applicable, (or his estate or
representative) shall receive: (i) any accrued but unpaid
base salary (and other vested and accrued employee benefits)
through the termination date; and (ii) any earned but
unpaid annual bonus relating to a bonus year completed prior to
his termination of employment and determined in accordance with
applicable bonus procedures. The agreements include customary
non-disparagement and confidentiality provisions, and provisions
that all work product produced by Mr. Pell or
Mr. Younes, as applicable, in the course of employment
belong to us. Finally, the agreements also permit
Messrs. Pell and Younes to refer, in the context of future
employment or investment management activities, to the track
record of funds managed by us for which Mr. Pell or
Mr. Younes, as applicable, had management or investment
authority, so long as such future activities are not prohibited
by the non-competition provisions set out in the Exchange
Agreement.
The agreements for our other named executive officers provide
that Mr. Wisher will serve as our President,
Mr. Williams as our Chief Operating Officer and
Mr. Harte as our Chief Financial Officer. The agreements
are effective for a three-year term (through September 29,
2012). At the end of the initial three-year term, the agreements
will automatically renew for an additional year and each year
thereafter, unless either party gives notice of intent not to
renew the agreement at least 90 days prior to the end of
the term. Pursuant to the agreements, Mr. Wisher will
receive an annual base salary of $350,000; Mr. Williams
will receive an annual
29
base salary of $280,000; and Mr. Harte will receive an
annual base salary of $250,000. In addition, each of the
employment agreements provides for an annual bonus for each
calendar year. The employment agreements also provide that each
of the executive officers will be eligible to participate in our
employee benefit plans. If Messrs. Wisher, Williams or
Harte are terminated by the Company without cause,
they will be entitled to receive accrued benefits; continued
payment of base salary for the greater of the remaining term of
the agreement or 12 months (18 months for
Mr. Wisher); payment of any annual bonus earned, but not
paid, as of the date of termination of employment; a pro-rata
bonus determined by multiplying the greater of the prior
years bonus or the last three years average bonus
times the percentage of days the executive was employed for the
current year; continued medical and dental benefits through the
end of the term of the agreement or the date the executive
becomes covered under another plan; and continued vesting of
restricted stock units granted to the executive at the time of
the IPO through the remaining term of the agreement. If the
Company elects not to renew the agreement and
Messrs. Wisher, Williams or Harte are willing and able to
provide services in circumstances that constitute an involuntary
termination, the executive will be entitled to the payments and
benefits described above that are payable upon a termination
without cause other than continued medical and
dental benefits and restricted stock unit vesting. If
Messrs. Wisher, Williams or Harte die or become disabled
during the term of the agreement, they will be entitled to
accrued benefits and payments of the annual bonus and pro-rata
bonus described above. In addition, a percentage of awards under
the Artio Global Investors Inc. 2009 Stock Incentive Plan that
would have vested in the year of death will vest, determined by
dividing the number of days the executive was employed in that
year by 365. If the executives are terminated by the Company as
a result of a change in control (as defined under the Artio
Global Investors Inc. 2009 Stock Incentive Plan), all
restrictions with respect to their restricted stock units will
lapse as of the change in control.
As a condition to the receipt of any payments or benefits upon
termination, Messrs. Wisher, Williams or Harte agree that
they will not compete with the company and its affiliates
(unless the Company elects not to renew the agreement or
terminates the agreement for any reason other than
cause) and will not solicit any clients or employees
of the company or its affiliates for a period of 12 months
following termination.
30
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth information as of
December 31, 2009, with respect to the Artio Global
Investors Inc. 2009 Stock Incentive Plan under which the
Companys Common Stock is authorized for issuance.
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|
|
|
|
|
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Equity Compensation Plan Information Table
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Number of
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|
|
|
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Securities
|
|
|
|
|
|
|
Remaining
|
|
|
|
|
|
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Available for
|
|
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Number of
|
|
|
|
Future Issuance
|
|
|
Securities to be
|
|
|
|
Under Equity
|
|
|
Issued Upon
|
|
Weighted-Average
|
|
Compensation
|
|
|
Exercise of
|
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Exercise Price of
|
|
Plans (Excluding
|
|
|
Outstanding
|
|
Outstanding
|
|
Securities
|
|
|
Options, Warrants
|
|
Options, Warrants
|
|
Reflected in
|
|
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and Rights
|
|
and Rights
|
|
Column (a))
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Plan Category
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|
(a)
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|
(b)
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|
(c)
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|
Equity compensation plans approved by stockholders
|
|
|
2,146,758
|
(1)
|
|
|
|
|
|
|
7,538,599
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Equity compensation plans not approved by stockholders
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
2,146,758
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|
|
|
|
|
|
|
7,538,599
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|
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|
(1)
|
|
Reflects shares that may be issued
to settle outstanding restricted stock units that have been
granted to employees.
|
31
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies
and Procedures for Related Party Transactions
In September 2009, our Board adopted a Related Person
Transaction Policy pursuant to which the Nominating and
Corporate Governance Committee of our Board must approve and
ratify any related person transaction. All Related Persons
(defined below) are required to report to our Corporate
Secretary any related person transaction prior to its inception
and the Corporate Secretary and Chair of the Nominating and
Corporate Governance Committee will determine whether it should
be submitted to the Nominating and Corporate Governance
Committee for consideration. From the IPO through the remainder
of the year ended December 31, 2009, no related person
transactions have been reported to the Corporate Secretary or
the Nominating and Corporate Governance Committee.
Our Related Person Transaction Policy covers all transactions,
arrangements or relationships (or any series of similar
transactions, arrangements or relationships) in which the
Company (including any of its subsidiaries) was, is or will be a
participant, and in which any Related Person had, has or will
have a direct or indirect material interest.
Our Related Person Transaction Policy provides that the
following transactions shall be deemed pre-approved by the
Nominating and Corporate Governance Committee:
(i) transactions involving the purchase or sale of products
or services in the ordinary course of business, not exceeding
$120,000; (ii) transactions in which the Related
Persons interest derives solely from his or her service as
a director of another corporation or organization that is a
party to the transaction; (iii) transactions in which the
Related Persons interest derives solely from his or her
ownership of less than 10% of the equity interest in another
person (other than a general partnership interest) which is a
party to the transaction; (iv) transactions in which the
Related Persons interest derives solely from his or her
service as a director, trustee or officer (or similar position)
of a
not-for-profit
organization or charity that receives donations from the
Company, which donations are made in accordance with the
Companys matching program that is available on the same
terms to all employees of the Company; (v) compensation
arrangements of any executive officer, other than an individual
who is an Immediate Family Member of a Related Person, if such
arrangements have been approved by the Compensation Committee;
and (vi) director compensation arrangements, if such
arrangements have been approved by the Board.
A Related Person, as defined in our Related Person
Transaction Policy, means any person who is, or at any time
since the beginning of the Companys last fiscal year was,
a director or executive officer of the Company; any Immediate
Family Member (which means a child, stepchild, parent,
stepparent, spouse, sibling,
mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother-in-law,
sister-in-law)
or any person sharing the household (other than a tenant or
employee) of a director or executive officer of the Company; any
nominee for director and the Immediate Family Members of such
nominee; and a 5% or more beneficial owner of the Companys
voting securities or any Immediate Family Member of such owner.
If we become aware of an existing related person transaction
that has not been approved under the Related Person Transaction
Policy, the transaction will be referred to the Nominating and
Corporate Governance Committee, which will evaluate all options
available, including ratification, revision or termination of
such transaction. Our Related Person Transaction Policy requires
any director who may be interested in a related person
transaction to recuse himself or herself from any consideration
of such related person transaction.
Related
Party Transactions
The following is a summary of material provisions of various
transactions we have entered into with our executive officers,
management, directors or 5% or greater shareholders.
Registration
Rights Agreement
In connection with our IPO, we entered into a registration
rights agreement with our Principals and GAM pursuant to which
we granted them, their affiliates and certain of their
transferees the right, under certain circumstances and subject
to certain restrictions, to require us to register under the
Securities Act shares of our
32
Class A common stock issuable upon exchange of the New
Class A Units or upon conversion of the Class C common
stock, respectively, held or acquired by them. Under the
registration rights agreement, the Principals and GAM have the
right to request us to register the sale of their shares and can
also require us to make available shelf registration statements
permitting sales of shares into the market from time to time
over an extended period. In addition, the agreement provides our
Principals and GAM with the ability to exercise certain
piggyback registration rights in connection with registered
offerings requested by any of such holders or initiated by us.
Shareholders
Agreements
In connection with our IPO, GAM entered into a shareholders
agreement with us under which it agreed that, to the extent it
has voting power as a holder of Class C common stock in
excess of what it would be entitled to on a one-vote-per-share
basis, it will on all matters vote such excess on the same basis
and in the same proportion as the votes cast by the holders of
our Class A and Class B common stock.
As long as GAM owns shares of our Class C common stock
constituting at least 10% of the aggregate number of shares
outstanding of our Common Stock, the agreement will permit it to
appoint a member to our Board or to exercise observer rights.
GAM has opted to appoint an observer to our Board, but may in
the future decide to appoint a member to our Board in lieu of
exercising such observer rights. If GAMs ownership
interest in us falls below 10%, it will no longer be entitled to
appoint a member of our Board but it will be entitled to certain
observer rights until the later of the date upon which
(i) we cease to use the Julius Baer brand name pursuant to
the transition services agreement between us and GAM and
(ii) GAM ceases to own at least 5% of the outstanding
shares of our Common Stock.
Mr. Younes entered into a shareholders agreement with us
under which he is entitled to attend meetings of our Board as an
observer until the later of the date upon which (i) he
ceases to be employed by us and (ii) the restrictions on
sales under the Exchange Agreement (described below) terminate.
Mr. Pell entered into a shareholders agreement with us
under which, if he ceases to be a member of our Board, he will
be entitled to attend meetings of our Board as an observer until
the date on which the restrictions on sales under the Exchange
Agreement (described below) terminate.
Exchange
Agreement
In connection with our IPO, the Principals entered into an
Exchange Agreement with us under which, from time to time, each
Principal (and certain of his permitted transferees, including
the GRATs) will have the right to exchange his New Class A
Units, which represent membership interests in Holdings, for
shares of Class A common stock of the Company on a
one-for-one
basis, subject to customary conversion rate adjustments for
stock splits, stock dividends, reclassifications and other
similar transactions. Any exchange of New Class A Units
will generally be a taxable event for the exchanging Principal.
As a result, each Principal will be permitted to sell shares of
Class A common stock in connection with any exchange in an
amount necessary to generate proceeds (after deducting discounts
and commissions) sufficient to cover the taxes payable on such
exchange (the amount of shares permitted to be sold determined
based upon the stock price on the date of exchange, whether or
not such shares are sold then or thereafter). In addition, each
Principal is permitted to sell up to 20% of the remaining shares
of Class A common stock that he owns (calculated assuming
all New Class A Units have been exchanged by him) on or
after the first anniversary of the pricing of the IPO and an
additional 20% of such remaining shares of Class A common
stock on or after each of the next four anniversaries. As a
Principal exchanges New Class A Units for shares of our
Class A common stock, our membership interests in Holdings
will be correspondingly increased, the Principals
corresponding shares of Class B common stock will be
cancelled and existing holders of Class A common stock will
be diluted. The restrictions on sales described above will
terminate with respect to each Principal upon the occurrence of
(i) any breach by us of any of the agreements we have with
such Principal that materially and adversely affects such
Principal, after notice and an opportunity to cure,
(ii) conduct by us of any business other than through our
operating company or any of our operating companys
subsidiaries, (iii) any change of control (as defined
below) or (iv) the dissolution, liquidation or winding up
of Holdings. As used in the Exchange
33
Agreement, the prohibition on selling Class A
common stock is defined broadly to prohibit a Principal from
pledging, selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or contract to sell,
granting any option, right or warrant to purchase, lending, or
otherwise transferring or disposing of, directly or indirectly,
any of his shares of Class A common stock or his New
Class A Units (other than transfers to permitted
transferees) or entering into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Class A common stock or
New Class A Units, whether any such transaction is to be
settled by delivery of Class A common stock or such other
securities, in cash or otherwise.
The Exchange Agreement also includes non-solicit and
non-competition covenants that preclude each Principal from
soliciting our employees or customers and from competing with
our business generally in the period beginning with the closing
of the IPO and ending two years after termination of his
employment with us. The non-compete and non-solicitation
provisions will terminate if a change of control or
a potential change of control occurs and the
relevant Principal is terminated by us without cause or resigns
with good reason.
Change of control is defined under the Exchange
Agreement as: (i) any person or group, other than the
Principals, GAM and their permitted transferees (or any group
consisting of such persons), (a) is or becomes the
beneficial owner, directly or indirectly, of 50% or more of the
voting stock of the company or, in the context of a
consolidation, merger or other corporate reorganization in which
the company is not the surviving entity, 50% or more of the
voting stock generally entitled to elect directors of such
surviving entity (or in the case of a triangular merger, of the
parent entity of such surviving entity), calculated on a fully
diluted basis, or (b) has obtained the power (whether or
not exercised) to elect a majority of the Board (or equivalent
governing body) of our company or its successors; (ii) the
Board (or equivalent governing body) of our Company or its
successors shall cease to consist of a majority of continuing
directors, which is defined as the directors on the date of the
IPO and subsequently elected directors whose election is
approved by the continuing directors; (iii) we or our
successors, alone or together with the Principals and the
permitted transferees of the Principals, cease to own 50% or
more of the equity interests of Holdings; or (iv) the sale
of all or substantially all the assets of our Company or
Holdings.
A potential change of control will deemed to have
occurred if: (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a change
of control; (ii) the Board of our Company adopts a
resolution to the effect that a potential change of control has
occurred; (iii) any person commences a proxy contest, files
solicitation material with the SEC, files a Statement on
Schedule 13D with the SEC or commences a tender offer or
exchange offer for any of the outstanding shares of our
Companys Common Stock, and a change of control occurs
within nine months following any of such events; or
(iv) any person commences discussions or negotiations with
our Company regarding the appointment or nomination of one or
more individuals as a director(s) of our Company, or commences
discussions or negotiations with our Company regarding the sale
or other disposition of a material product line of our Company
or of a material portion of our Companys assets, and a
change of control occurs as a result of any such event or events
within nine months following any such event or events.
Amended
and Restated Limited Liability Company Agreement of
Holdings
As a result of the reorganization and IPO, Holdings is the sole
owner of Investment Adviser. The form of the operating agreement
is filed as an exhibit to the registration statement on
Form S-1
used in connection with the IPO, and the following description
of the operating agreement is qualified by reference thereto.
As the sole managing member of Holdings, we control all of its
affairs and decision making. As such, we, through our officers
and directors, will be responsible for all its operational and
administrative decisions and the
day-to-day
management of its business. However, any issuance by Holdings of
equity interests other than New Class A Units and any
voluntary dissolution generally will require the consent of all
members, including the Principals. In addition, any amendments
to the operating agreement will require the consent of each
Principal until such Principal (together with his permitted
transferees) holds less than 2% of the equity interests of
Holdings. The consent of each Principal also will be required
for amendments to certain fundamental provisions of the
operating agreement.
34
In accordance with the operating agreement, net profits and net
losses of Holdings will be allocated to its members pro rata in
accordance with the respective percentages of their New
Class A Units. Accordingly, net profits and net losses are
currently allocated approximately 74% to us and approximately
13% to each of our Principals.
The holders of New Class A Units, including us, will
generally incur U.S. federal, state and local income taxes
on their proportionate share of any net taxable income of
Holdings. Net profits and net losses will generally be allocated
to its members, including us, pro rata in accordance with the
percentages of their respective New Class A Units. The
operating agreement requires pro rata cash distributions to the
members of Holdings in respect of taxable income allocated to
such members. The cash distributions to the holders of its New
Class A Units for this purpose will be calculated at an
assumed tax rate. Further, taxable income of Holdings for this
purpose will be calculated without regard to (i) any
deduction arising out of any exchange pursuant to the Exchange
Agreement and (ii) any deduction that we determine is not
available to any member, determined as if all members were
individuals, for interest expense in respect of the indebtedness
incurred by it in connection with the IPO (or any interest
expense in respect of any future indebtedness incurred to repay
the principal of such indebtedness existing before the IPO, up
to the aggregate amount of such indebtedness).
The operating agreement provides that at any time we issue a
share of our Class A common stock, we are entitled to
transfer the net proceeds received by us with respect to such
share, if any, to Holdings and it shall be required to issue to
us one New Class A Unit. Conversely, if at any time, any
shares of our Class A common stock are redeemed by us for
cash, we can cause Holdings, immediately prior to such
redemption of our Class A common stock, to redeem an equal
number of New Class A Units held by us, upon the same terms
and for the same price, as the shares of our Class A common
stock are redeemed.
In connection with the IPO and related reorganization
transactions, we amended and restated Investment Advisers
operating agreement. This resulted in the complete acceleration
of the unvested portion of the Class B profits interests of
the Principals, the elimination of both our obligation to
repurchase such interests and the ability of the Principals to
put their interests to Investment Adviser and the conversion of
Investment Advisers multiple-class capital structure into
a single new class of membership units.
Tax
Receivable Agreement
Pursuant to the Exchange Agreement described above, from time to
time we may be required to acquire New Class A Units from
the Principals in exchange for shares of our Class A common
stock and the cancellation of a corresponding number of shares
of our Class B common stock held by the Principals.
Holdings intends to make an election under Section 754 of
the Code in effect for each taxable year in which such an
exchange occurs, pursuant to which each exchange is expected to
result in an increase in the tax basis of tangible and
intangible assets of Holdings with respect to such New
Class A Units acquired by us in such exchanges. This
increase in tax basis is likely to increase (for tax purposes)
depreciation and amortization allocable to us from Holdings and
therefore reduce the amount of income tax we would otherwise be
required to pay in the future. This increase in tax basis may
also decrease gain (or increase loss) on future dispositions of
certain capital assets to the extent increased tax basis is
allocated to those capital assets.
In connection with the IPO, we entered into a tax receivable
agreement with the Principals requiring us to pay 85% of the
amount of the reduction in tax payments, if any, in
U.S. federal, state and local income tax that we realize
(or are deemed to realize upon an early termination of the tax
receivable agreement or a change of control, both discussed
below) as a result of the increases in tax basis created by each
Principals exchanges described above. For purposes of the
tax receivable agreement, reduction in tax payments will be
computed by comparing our actual income tax liability to the
amount of such taxes that we would otherwise have been required
to pay had there been no increase to the tax basis of the
tangible and intangible assets of Holdings. The term of the tax
receivable agreement commenced upon the completion of the IPO
and will continue until all such tax benefits have been utilized
or expired, unless we exercise our right to terminate the tax
receivable agreement early. If we exercise our right to
terminate the tax receivable agreement early, we will be
obligated to make an early termination payment to the
Principals, or their transferees, based upon the net present
value (based upon certain assumptions and deemed events set
forth in the tax receivable agreement, including the
35
assumption that we would have enough taxable income in the
future to fully utilize the tax benefit resulting from any
increased tax basis that results from each exchange and that any
New Class A Units that the Principals or their transferees
own on the termination date are deemed to be exchanged on the
termination date) of all payments that would be required to be
paid by us under the tax receivable agreement. If certain change
of control events were to occur, we would be obligated to make
payments to the Principals using certain assumptions and deemed
events similar to those used to calculate an early termination
payment.
The actual increase in tax basis, as well as the amount and
timing of any payments under the tax receivable agreement, will
vary depending upon a number of factors, including the timing of
exchanges, the price of our Class A common stock at the
time of an exchange, the extent to which such exchanges are
taxable, the amount and timing of our income and the tax rates
then applicable.
To date, each Principal exchanged 1.2 million of his New
Class A Units for an equivalent number of shares of
Class A common stock. In connection with the exchange, we
elected to step up our tax basis in the incremental assets
acquired in accordance with Section 754 of the Code. The
tax benefits arising from the resultant
step-up in
tax basis became determinable, and deferred tax benefits of
$38.4 million were recorded, and will be recovered
generally over a
15-year
period. These benefits will be shared between us and each
Principal under the tax receivable agreement.
Recovery of deferred tax benefits over the
15-year
period will depend on our ability to generate sufficient taxable
income. The deferred tax asset of $39.6 million as of
December 31, 2009, will require annual taxable income of
$6.2 million over the
15-year
amortization period (at current tax rates) to be recovered in
full. As our taxable income has historically been significantly
in excess of such amount, we believe that it is more likely than
not that the deferred tax asset will be recovered and,
therefore, no valuation allowance is necessary.
The payments under the tax receivable agreement are not
conditioned on the Principals maintaining an ownership interest
in us. Payments under the tax receivable agreement are expected
to give rise to certain additional tax benefits attributable to
further increases in basis or, in certain circumstances, in the
form of deductions for imputed interest. Any such benefits are
covered by the tax receivable agreement and will increase the
amounts due thereunder. In addition, the tax receivable
agreement will provide for interest accrued from the due date
(without extensions) of the corresponding tax return to the date
of payment specified by the agreement.
Although we are not aware of any issue that would cause the IRS
to challenge a tax basis increase, we will not be reimbursed for
any payments previously made under the tax receivable agreement
if such basis increase is successfully challenged by the IRS. As
a result, in certain circumstances, payments could be made under
the tax receivable agreement in excess of our cash tax savings.
Transition
Services and Indemnification Agreements
In connection with the IPO, we entered into an indemnification
and co-operation agreement with GAM under which it will
indemnify us for any future losses relating to certain of our
legacy activities. In addition, we entered into a transition
services agreement with Julius Baer Group Ltd., pursuant to
which Julius Baer Group Ltd. will provide us with certain
services in connection with the operation of our business,
principally including the continued use of the Julius
Baer brand in a limited form and for a transitional period
following the IPO.
Indemnification
Agreements with Executive Officers and Directors
We have entered into separate indemnification agreements with
our executive officers and directors, which require us to
indemnify them against liabilities to the fullest extent
permitted by Delaware law.
36
Other
Interested Party Transactions
We earned revenue from advising our SEC-registered mutual funds,
which are marketed using the Company brand. Amounts earned from
such activity, which are reported in investment management fees,
are as follows:
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Year ended December 31, 2008
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$253.9 million
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Year ended December 31, 2007
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We engage in transactions with GAM and other affiliates as part
of our business. Compensation for, and expenses of, these
transactions are governed by agreements between the parties. We
earned revenue
sub-advising
certain offshore funds sponsored by affiliates of GAM. The
affiliates whom we
sub-advise
include Bank Julius Baer & Co. Ltd., as well as GAM
International Management Limited.
Amounts earned from
sub-advising
funds for affiliates, which are reported in investment
management fees, are as follows:
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Year ended December 31, 2008
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We held investments in Company registered investment companies
(pursuant to which certain of our employees had the choice of
investing their deferred bonuses) totaling $7.9 million,
$5.9 million and $4.8 million as of December 31,
2009, 2008 and 2007, respectively. Net gains (losses) on
securities held for deferred compensation were $2.0 million
and $(2.9) million for 2009 and 2008, respectively. There
were no gains (losses) on securities held for deferred
compensation for 2007.
We allocated $4.7 million for the year ended
December 31, 2007, to affiliates for both direct and
indirect expenses of occupancy (including rent and
depreciation), information technology and support system costs
(including depreciation), and administration and management
under the terms of service level agreements entered into with
such affiliates. The affiliates include Julius Baer Financial
Markets LLC and GAM USA Inc., both of which are 100% owned by
GAM. There were no allocated expenses for the years ended
December 31, 2009 and 2008.
We paid GAM $2.7 million, $6.4 million and
$7.3 million in licensing fees for the years ended
December 31, 2009, 2008 and 2007, respectively, for
licensing under the terms of a service level agreement entered
into with GAM. Following the IPO, we no longer pay these license
fees.
Julius Baer Financial Markets LLC, which was distributed at book
value to GAM as of December 1, 2007, is no longer our
subsidiary and is therefore shown in discontinued operations of
our consolidated financial statements.
Grantor
Retained Annuity Trusts
In September 2009, each of our Principals transferred a portion
of his existing Class B profits interest in Investment
Adviser to a GRAT for which such Principal serves as settlor and
trustee. The Principals, together with the GRATs, contributed
their Class B profits interests to Holdings in connection
with the IPO in exchange for New Class A Units in Holdings.
Each GRAT also acquired a number of shares of our Class B
common stock corresponding to the number of New Class A
Units it received. Pursuant to SEC rules, each Principal is
considered the beneficial owner of the securities held by the
GRAT for which he serves as settlor and trustee.
The GRATs (together with certain permitted transferees of the
Principals) generally have the same rights and obligations as
the Principals (including consent rights) under each of the
agreements described in this Related Party
Transactions section, and each reference to a
Principal in this section should be deemed to
include the GRATs and such permitted transferees.
37
REPORT OF
THE AUDIT COMMITTEE
The Companys management has the primary responsibility for
the financial statements and the reporting process, including
the system of internal accounting controls. The Audit Committee,
in its oversight role, has reviewed and discussed the audited
financial statements with the Companys management. Based
on the Audit Committees review of the audited financial
statements as of, and for, the fiscal year ended
December 31, 2009, and its discussions with management
regarding such audited financial statements, and its receipt of
written disclosures and the statement from the independent
registered public accountants required by Public Company
Accounting Oversight Board Rule 3526, Communications
with Audit Committees Concerning Independence, its
discussions with the independent registered public accountants
regarding such auditors independence, the matters required
to be discussed by the Statement on Auditing Standards 61, as
amended (Communication with Audit Committees, AICPA Professional
Standards, Vol. 1, AU Section 380), as adopted by the
Public Company Accounting Oversight Board in Rule 3200T,
its discussions with the independent registered public
accountants regarding significant deficiencies and material
weaknesses, if any, in the Companys system of internal
control over financial reporting, and other matters the Audit
Committee deemed relevant and appropriate, the Audit Committee
recommended to the Board of Directors that the audited financial
statements as of and for the fiscal year ended December 31,
2009, be included in the Companys Annual Report on
Form 10-K
for such fiscal year.
In the performance of its oversight duties and responsibilities,
during the fiscal year ended December 31, 2009, the Audit
Committee also reviewed the financial statements contained in
the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2009 with both
management and the Companys independent registered public
accountants; reviewed the Companys quarterly earnings
releases; reviewed periodic reports from management covering
changes, if any, in accounting policies, procedures and
disclosures, and the status of the effectiveness of internal
control over financial reporting; and reviewed and discussed
with management the Companys major financial risk
exposures and the steps management has taken to monitor and
control such exposures (including managements risk
assessment and risk management policies).
Audit Committee of the Board of Directors
Duane R. Kullberg, Chair
Elizabeth Buse
Francis Ledwidge
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PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee of the Board is required by law and
applicable NYSE rules to be directly responsible for the
appointment, compensation and retention of the Companys
independent registered public accountants. The Audit Committee
has appointed KPMG LLP as the independent registered public
accountants for the fiscal year ending December 31, 2010.
While stockholder ratification is not required by the
Companys bylaws or otherwise, the Board is submitting the
selection of KPMG LLP to the stockholders for ratification as
part of good corporate governance practices. If the stockholders
fail to ratify the selection, the Audit Committee may, but is
not required to, reconsider whether to retain KPMG LLP. Even if
the selection is ratified, the Audit Committee in its discretion
may direct the appointment of different independent registered
public accountants at any time during the year if it determines
that such a change would be in the best interest of the Company
and its stockholders.
Fees
Billed to the Company by KPMG LLP During Fiscal Years Ended 2009
and 2008
Audit
Fees
Audit fees, including expenses, billed to the Company by KPMG
LLP were $0.9 million in both 2009 and 2008. Audit fees
include professional services for the audit of the
Companys financial statements, and review of interim
quarterly financial statements. These financial statements were
included in the Companys Quarterly Report on
Form 10-Q,
and Annual Report on
Form 10-K.
The fees do not include audits of the Companys internal
control over financial reporting under Section 404 of the
Sarbanes-Oxley Act of 2002, as the Company is not yet required
to have such an audit.
Audit-related
Fees
The Company paid audit-related fees and expenses to KPMG LLP of
$1.4 million in 2009, compared with $2.3 million in
2008, for audits of Company-sponsored retirement plans,
financial statements, certain Company-sponsored institutional
investment vehicles, and services related to the Companys
filing of the registration statement on
Form S-1.
Taxes
The Company paid tax fees and expenses to KPMG LLP for tax
compliance and consulting services of $0.2 million in 2009
and $0.1 million in 2008.
All
Other Fees
KPMG LLP did not provide any services not described above in
2009 and 2008.
The Audit Committee believes that the foregoing expenditures are
compatible with maintaining the independence of the
Companys public accountants. The Audit Committee
pre-approved all such audit and non-audit services by our
independent registered public accountants that were performed
after the Companys IPO on September 24, 2009 through
the remainder of the year ended December 31, 2009.
The Audit Committee has adopted procedures for pre-approving all
audit and permissible non-audit services provided by the
independent registered public accountants. The Audit Committee
will annually review and pre-approve the audit, review and
attest services, as well as non-audit services, to be provided
during the next audit cycle by the independent registered public
accountants. To the extent practicable, the Audit Committee will
also review and approve a budget for such services. Services
proposed to be provided by the independent registered public
accountants that have not been pre-approved during the annual
review and the fees for such proposed services must be
pre-approved by the Audit Committee, or its Chair. Additionally,
fees for previously approved services that are expected to
exceed the previously approved budget must also be pre-approved
by the Audit Committee, or its Chair. The Chair will present any
decisions to the full Audit Committee at the next regularly
scheduled meeting. All requests or applications for the
independent registered public accountants to provide services to
the Company shall be submitted to the Audit Committee by the
39
OTHER
MATTERS
Management of the Company is not aware of other matters to be
presented for action at the 2010 Annual Meeting. However, if
other matters are presented, it is the intention of the persons
designated as the Companys proxies to vote in accordance
with their judgment on such matters.
SECTION 16(a)
BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Exchange Act requires the
Companys executive officers, directors and persons who own
more than 10% of the Companys Common Stock to file initial
reports of ownership and changes in ownership with the SEC. To
the Companys knowledge, with respect to the fiscal year
ended December 31, 2009, all applicable filings were timely
made.
STOCKHOLDER
PROPOSALS FOR THE 2011 ANNUAL MEETING
Stockholder proposals intended to be included in the proxy
statement relating to the Companys 2011 annual meeting
pursuant to
Rule 14a-8
(Rule 14a-8)
under the Exchange Act must be received by the Corporate
Secretary of the Company at 330 Madison Avenue, New York, New
York 10017, no later than December 31, 2010, and must
otherwise comply with
Rule 14a-8.
Any stockholder proposals received outside of the
Rule 14a-8
procedure for consideration at the Companys 2011 annual
meeting must comply with the requirements set forth in our
bylaws and must be delivered to the Corporate Secretary of the
Company at 330 Madison Avenue, New York, New York 10017, no
later than March 12, 2011, but no earlier than
February 10, 2011, or such notice will be considered
untimely under
Rule 14a-4(c)(1)
of the Exchange Act and our bylaws. If such timely notice of a
stockholder proposal is not given, the proposal may not be
brought before the 2011 Annual Meeting. The deadlines above are
calculated by reference to the date of this years Annual
Meeting.
If the date of next years annual meeting is scheduled
earlier than April 11, 2011 or later than July 10,
2011, a timely notice must be received by the Company no later
than 70 days prior to the date of the 2011 annual meeting
and the
10th day
following the day on which a public announcement of the date of
the meeting was made. If such a change occurs, we will inform
stockholders of such change and the effect of such change within
the dates provided above, by including notice under Item 5
of Part II in our earliest possible quarterly report on
Form 10-Q,
or, if that is impracticable, by other means reasonably
calculated to inform our stockholders of such change and the new
deadlines.
HOUSEHOLDING
To reduce the expense of delivering duplicate proxy materials to
stockholders who may have more than one account holding the
Companys Common Stock, but sharing the same address, we
have adopted a procedure approved by the SEC called
householding. Under this procedure, certain
registered stockholders who have the same address and last name,
and who do not participate in electronic delivery of proxy
materials, will receive only one copy of our Notice of Internet
Availability and, as applicable, any additional proxy materials
that are delivered until such time as one or more of these
stockholders notifies us that they want to receive separate
copies. Stockholders who participate in householding will
continue to have access to and utilize separate proxy voting
instructions.
If you are a registered stockholder and would like to have
separate copies of the Notice of Internet Availability or proxy
materials mailed to you in the future, you must submit a request
to opt out of householding in writing to Broadridge Financial
Solutions, Inc., Householding Department, 51 Mercedes Way,
Edgewood, New York 11717 or call the Company at
1-800-542-1061,
and we will cease householding all such documents within
30 days. If you are a beneficial stockholder, information
regarding householding of proxy materials should have been
forwarded to you by your bank or broker. Registered stockholders
are those stockholders who maintain shares under their own
names. Beneficial stockholders are those stockholders who have
their shares deposited with a bank or brokerage firm.
41
However, please note that if you want to receive a paper proxy
card, voter instruction form or other proxy materials for
purposes of this years Annual Meeting, you should follow
the instructions included in the Notice of Internet Availability
that was sent to you.
ELECTRONIC
DELIVERY OF FUTURE PROXY MATERIALS
If you receive your proxy materials by mail, we encourage you to
elect to receive future copies of proxy statements and annual
reports by
e-mail. To
enroll in the online program, go to
www.proxyvote.com, click on Stockholder Electronic
Delivery and follow the enrollment instructions. Upon completion
of enrollment, you will receive an
e-mail
confirming the election to use the electronic delivery services.
The enrollment in the online program will remain in effect for
as long as your brokerage account is active or until enrollment
is cancelled. Enrolling to receive proxy materials online will
save the Company the cost of printing and mailing documents, as
well as help preserve our natural resources.
Your vote is important. Please sign, date, and return your
proxy card by mail, or submit your proxy over the Internet or by
telephone promptly.
By Order of the Board of Directors,
Adam R. Spilka
Corporate Secretary
New York, New York
March 26, 2010
42
ARTIO GLOBAL INVESTORS INC.
330 MADISON AVENUE
NEW YORK, NY 10017
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of
information up until 11:59 p.m. Eastern Time the day before the cut-off date or
meeting date. Have your proxy card in hand when you access the web site and
follow the instructions to obtain your records and to create an electronic voting
instruction form.
VOTE BY
MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we
have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,
Edgewood, NY 11717 before the meeting date.
Submitting your instructions by either of these methods will not affect your
ability to attend and vote during the Annual Meeting at:
www.virtualshareholdermeeting.com/ART
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TO VOTE, MARK BLOCKS
BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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M21536-P89856 |
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
ARTIO GLOBAL INVESTORS INC.
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The Board of Directors recommends you vote |
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FOR the following proposals: |
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Election of Directors |
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Nominee: |
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1a) Duane R. Kullberg |
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The ratification of KPMG LLP as independent registered public accountants for the fiscal year ending December 31, 2010 |
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NOTE:
Such other business as may properly come before the meeting or any adjournment thereof.
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Please sign exactly as your name(s) appear(s) hereon. When signing as
attorney, executor, administrator, or other fiduciary, please give full title as
such. Joint owners should each sign personally. All holders must sign. If a
corporation or partnership, please sign in full corporate or partnership
name, by authorized officer. |
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Signature [PLEASE SIGN WITHIN BOX] |
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Signature (Joint Owners) |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
M21537-P89856
ARTIO GLOBAL INVESTORS INC.
Annual Meeting of Stockholders
May 11, 2010 9:00 AM (Eastern Time)
This proxy is solicited by the Board of Directors
Dear Stockholder:
You are cordially invited to attend the 2010 Annual Meeting of Stockholders (Annual Meeting) of
Artio Global Investors Inc. Our Annual Meeting will be held on Tuesday, May 11, 2010, at 9:00 a.m.
(Eastern Time). We are pleased that this years Annual Meeting will be a completely virtual meeting
of stockholders. You will be able to attend the Annual Meeting, vote and submit your questions
during the Annual Meeting via live webcast by visiting www.virtualshareholdermeeting.com/ART. You
will need the 12-Digit Control Number included in this proxy card in order to be able to enter the
Annual Meeting.
The undersigned hereby appoints Adam Spilka and Francis Harte as proxies, each with full power of
substitution, to represent and vote as designated on the reverse side, all shares of common stock
of Artio Global Investors Inc., held of record by the undersigned on March 16, 2010, at the Annual
Meeting.
This proxy is solicited on behalf of the Board of Directors of the Company. This proxy, when
properly executed, will be voted in accordance with the instructions given on the reverse side. If
no instructions are given, this proxy will be voted FOR the election of the nominee listed in
proposal 1 and FOR proposal 2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting.
Continued and to be signed on reverse side