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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 25, 2005
BUNGE LIMITED
(Exact name of Registrant as specified in its charter)
Bermuda 001-16625 98-0231912
(State or other jurisdiction) (Commission file number) (I.R.S. employer
of incorporation) identification no.)
50 Main Street
White Plains, New York 10606
(Address of principal executive offices) (Zip Code)
(914) 684-2800
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4c))
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Item 1.01 Entry into a Material Definitive Agreement.
On February 24, 2005, the compensation committee (the "Committee")
of the Board of Directors (the "Board") of Bunge Limited ("Bunge") made the
following decisions regarding the compensation of the executive officers who
were named in the Summary Compensation Table of Bunge's Proxy Statement for 2004
and those who are expected to be Named Executive Officers in Bunge's Proxy
Statement in 2005 (together, the "Named Executive Officers").
1. Adoption of Annual Incentive Plan and 2005 Performance Measures for the
Annual Incentive Plan and the Equity Incentive Plan
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Annual Incentive Plan
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At the meeting of the Board of Directors of Bunge held on February
24 and 25, 2005, the Board of Directors, based on the recommendation of the
Committee, adopted the Bunge Limited Annual Incentive Plan (the "AIP") under
which participating Named Executive Officers are eligible to receive annual cash
bonuses based upon the achievement of certain pre-established financial and
non-financial performance measures relating to Bunge and individual performance
measures during the preceding calendar year.
The AIP has been established to attract and retain employees of
outstanding competence and to provide greater motivation to certain employees
while directing their energies towards the achievement of specific business
goals relating to Bunge. Employees of Bunge and its eligible subsidiaries who
are recommended by the Chief Executive Officer of Bunge, and are approved by the
Committee, are eligible to participate in the AIP. A target award is established
for each participant at the beginning of each plan year based upon a
participant's base salary and job level. The award earned will be based upon the
level of achievement of the performance measures, as determined by the Committee
at the end of each plan year.
The maximum amount payable under the AIP to a participant for any
calendar year will be $4,000,000. No bonuses under the AIP have yet been earned
by any of the participants, as the performance period has not yet passed,
therefore, the amount of the awards which ultimately may be payable for calendar
year 2005 (or any subsequent year) cannot be determined at this time. However,
no award for 2005 (or any subsequent year) will exceed the plan limit specified
above. A copy of the AIP will be filed as an Exhibit to Bunge's 2004 Annual
Report on Form 10-K and will be submitted for shareholder approval at Bunge's
2005 annual general meeting of shareholders.
2005 Performance Measures
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Also at the Committee meeting, the Committee adopted performance
measures that will apply to compensation paid to the Named Executive Officers in
2005 pursuant to the recently adopted AIP and the Equity Incentive Plan. The
performance measures used in 2005 for the AIP will be based upon return on net
assets and income from continuing operations for each Named Executive Officer
except Mr. Gwathmey. Mr. Gwathmey's 2005 performance measure for the AIP will be
based upon the return on net assets and operating profit of the operating unit
for which he is responsible. The 2005 performance measures for Performance-Based
Restricted Stock Units ("PBRSUs") awarded under the Equity Incentive Plan will
be based upon the cumulative earnings per share of Bunge for the three-year
performance period beginning on January 1, 2005. At its annual general meeting
to be held on May 27,
2005, Bunge will also request approval from its shareholders for the performance
measures that will apply to performance based awards granted under the Equity
Incentive Plan for 2005 and subsequent years.
2. Payout of Equity Awards for 2002
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At the Committee meeting, the Committee certified the achievement
of certain performance measures established in 2002 for the PBRSUs and, upon
settlement of the PBRSUs, our Named Executive Officers received, cash, Bunge
common shares or a combination thereof, as follows:
Performance-Based Restricted Stock Units Settlement
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Name Cash Amount Number of Shares
---- ----------- ----------------
Alberto Weisser $1,805,962 35,664
Archibald Gwathmey $1,203,975 638
William Wells $1,203,975 638
Andrew J. Burke $200,662 3,962
Joao Fernando Kfouri $401,325 212
Flavio Sa Carvalho $642,120 340
The performance measures that were achieved with respect to the
PBRSUs related to Bunge's cumulative earnings per share for the three-year
performance period ending on December 31, 2004.
3. Payout of Annual Bonuses for 2004
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Also at the Committee meeting, the Committee certified the
achievement of certain performance measures established at the beginning of 2004
and our Named Executive Officers received the following cash bonuses:
Cash Bonuses for 2004
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Name Amount
---- ------
Alberto Weisser $3,000,000
Archibald Gwathmey $1,000,000
William Wells $800,000
Andrew J. Burke $400,000
Joao Fernando Kfouri $500,000
Flavio Sa Carvalho $520,000
The performance measures that were achieved with respect to the
cash bonus awards related to return on net assets, income from continuing
operations or operating profit, as described in paragraph 1 above under "2005
Performance Measures."
4. Equity Awards for 2005
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2005 Stock Options
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At the Committee meeting, the Committee decided to grant the
following stock option awards to our Named Executive Officers:
Name Amount
---- ------
Alberto Weisser 95,000
Archibald Gwathmey 22,000
William Wells 22,000
Andrew J. Burke 11,400
Joao Fernando Kfouri 8,000
Flavio Sa Carvalho 11,400
The stock option awards were granted to our Named Executive
Officers as of February 25, 2005. The exercise price of the options was fixed on
the date of the grant, February 25, 2005, based on the average of the high and
low prices of Bunge common shares as of the close of business on that date. The
stock options will vest in three equal installments on each of February 25,
2006, 2007 and 2008 and will expire on February 24, 2015.
2005 Performance-Based Restricted Stock Units
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At the Committee meeting, the Committee also decided to grant the
following awards of PBRSUs to the Named Executive Officers:
Name Amount
---- ------
Alberto Weisser 38,000
Archibald Gwathmey 9,000
William Wells 9,000
Andrew J. Burke 4,600
Joao Fernando Kfouri 3,000
Flavio Sa Carvalho 4,600
The PBRSUs awards were granted as of February 25, 2005 and will
fully vest following the third anniversary of the date of their grant, subject
to the Named Executive Officer's continued employment with Bunge and the
satisfaction of the pre-established performance measures. Beginning with the
PBRSUs granted in 2005, vested PBRSU awards will be settled in Bunge common
shares only.
5. Restricted Stock Unit Awards
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At the Committee meeting, the Committee decided to award our Named
Executive Officers a one-time grant of time vested restricted stock units (the
"2004 Special Recognition Awards") in recognition of Bunge's financial results
in 2004. Our Named Executive Officers received 2004 Special Recognition Awards
in the following amounts:
Name Amount
---- ------
Alberto Weisser 22,000
Archibald Gwathmey 8,000
William Wells 8,000
Andrew J. Burke 4,000
Joao Fernando Kfouri 4,000
Flavio Sa Carvalho 4,000
The 2004 Special Recognition Awards were made as of February 25,
2005. The Special Recognition Awards will vest on February 25, 2010.
6. Non-Employee Directors' Compensation
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On February 25, 2005, the Board approved modifications to the
compensation paid to non-employee members of Bunge's Board. For 2005,
non-employee directors will receive an annual stock option award equal to 5,500
of Bunge's common shares and an initial stock option award equal to 7,500 of
Bunge's common shares upon their appointment or election to the Board.
Previously, non-employee directors received an annual stock option award equal
to 7,200 of Bunge's common shares and an initial stock option award equal to
9,000 of Bunge's common shares upon their appointment or election to the Board.
The other components of the non-employee directors' compensation remain
unchanged from the amounts in effect for 2004 and consist of the following:
o Annual retainer fee of $60,000;
o A fee of $10,000 per year for service as committee chair on any of our
committees, except for the Chair of the audit committee, who receives
$20,000 per year for his services due to the added workload and
responsibilities of this committee; and/or
o A fee of $5,000 per year for service as a member on any of our
committees, except for the members of the audit committee, who each
receive $10,000 per year for their services due to the added workload
and responsibilities of this committee.
Although directors do not receive an annual Board or committee
meeting attendance fee, if the Board and/or a committee meets in excess of five
times in a given year, each non-employee director receives a fee of $1,000 for
attendance at each such additional meeting of the Board and $1,000 per day of
meetings for attendance at committee meetings. In addition, non-employee
directors receive $250 for each Board or committee meeting held by
teleconference, if the number of Board or committee meetings has exceeded five
for the relevant year. We also reimburse our non-employee directors for
reasonable expenses incurred by them in attending Board meetings, committee
meetings or our annual shareholder meetings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: March 2, 2005.
Bunge Limited
(Registrant)
By: /s/ Carla L. Heiss
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Name: Carla L. Heiss
Title: Assistant General Counsel