EXHIBIT 10.2
AGCO CORPORATION
2006 LONG-TERM INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
THIS AGREEMENT, entered into as of the Grant Date (as defined in Section
1), by and between the Participant and AGCO Corporation (the "Company");
WHEREAS, the Company maintains the AGCO Corporation 2006 Long-Term
Incentive Plan (the "Plan"), which is incorporated into and forms a part of this
Agreement, and the Participant has been selected by the committee administering
the Plan (the "Committee") to receive a Non-Qualified Stock Option Award under
the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:
1. TERMS OF AWARD AND DEFINITIONS. The following terms used in this
Agreement shall have the meanings set forth in this Section 1:
(a) COVERED SHARES. The number of "Covered Shares" shall be _________
shares of Stock.
(b) DATE OF TERMINATION. The Participant's "Date of Termination" shall
be the first day occurring on or after the Grant Date on which the
Participant is neither employed by the Company or any Subsidiary, a
director of the Company or any Subsidiary, an independent contractor
performing services for the Company or any Subsidiary nor providing
services as a consultant to the Company or any Subsidiary; provided that a
termination shall not be considered to have occurred while the Participant
is on an approved leave of absence from the Company or a Subsidiary. If, as
a result of a sale or other transaction, a Participant who is an employee
ceases to be an employee of the Company or any Subsidiary (and the
Participant's employer is or becomes an entity that is separate from the
Company or any Subsidiary), the occurrence of such transaction shall be
treated as the Participant's Date of Termination caused by the Participant
being discharged by the employer.
(c) DESIGNATED BENEFICIARY. The "Designated Beneficiary" shall be the
beneficiary or beneficiaries designated by the Participant in a writing
filed with the Committee in such form and at such time as the Committee
shall require.
(d) DISABILITY. Except as otherwise provided by the Committee, the
Participant shall be considered to have a "Disability" if he is eligible
for disability payments under the Company's long-term disability plan.
(e) EXERCISE PRICE. The "Exercise Price" is $__________ per share.
(f) GRANT DATE. The "Grant Date" is ____________________.
(g) GOOD CAUSE. With respect to any dismissal of the Participant from
his or her employment with the Company or any Subsidiary, shall mean (i) if
the Participant is a party to an employment agreement with the Company or
any Subsidiary that defines "cause," "good cause" or a similar term, "Good
Cause" shall mean such term as so defined, and (ii) otherwise (A) the
conviction of the Participant of, or the entry of a plea of guilty, first
offender probation before judgment, or nolo contendere by the Participant
to, any felony; (B) fraud, misappropriation or embezzlement by the
Participant; (C) the Participant's willful failure or gross negligence in
the performance of his assigned duties for the Company or any Subsidiary;
(D) the Participant's failure to follow reasonable and lawful directives of
his supervisor or his breach of his fiduciary duty to the Company or any
Subsidiary; (E) any act or omission of the Participant that has a
demonstrated and material adverse impact on the Company's or any
Subsidiary's business or reputation for honesty and fair dealing, other
than an act or failure to act by the Participant in good faith and without
reason to believe that such act or failure to act would adversely impact on
the Company's or any Subsidiary's business or reputation for honesty and
fair dealing; or (F) the breach by the Participant of any confidentiality
or non-competition agreement in favor of the Company or any Subsidiary.
(h) IMMEDIATE FAMILY. "Immediate Family" shall mean the Participant's
spouse, parents, children, stepchildren, adoptive relationships, sisters,
brothers and grandchildren and, for this purpose, shall also include the
Participant.
(i) PARTICIPANT. The "Participant" is ______________________.
(j) RETIREMENT. "Retirement" of the Participant shall mean the
occurrence of the Participant's Date of Termination on or after the date
the Participant attains age 65 or such earlier date as may be approved by
the Committee in its sole discretion.
Except where the context clearly implies or indicates the contrary, a word,
term, or phrase used in the Plan is similarly used in this Agreement.
2. AWARD AND EXERCISE PRICE. This Agreement specifies the terms of the
option (the "Option") granted to the Participant to purchase the number of
Covered Shares of Stock at the Exercise Price per share as set forth in Section
1. The Option is not intended to constitute an "incentive stock option" as that
term is used in Code section 422.
3. DATE OF EXERCISE.
(a) Subject to the limitations of this Agreement, the Option shall be
exercisable according to the following schedule, with respect to each
installment shown in the schedule on and after the Vesting Date applicable
to such installment (each an "Installment"):
2
(b)
VESTING DATE APPLICABLE TO
INSTALLMENT INSTALLMENT
----------- --------------------------
[FIRST YEAR ANNIVERSARY OF THE GRANT DATE]
[SECOND YEAR ANNIVERSARY OF THE GRANT DATE]
[THIRD YEAR ANNIVERSARY OF THE GRANT DATE]
[FOURTH YEAR ANNIVERSARY OF THE GRANT DATE]
(c) An Installment shall not become exercisable on the otherwise
applicable Vesting Date if the Participant's Date of Termination occurs on
or before such Vesting Date. Notwithstanding the foregoing provisions of
this Section 3, the Option shall become exercisable with respect to all of
the Covered Shares (to the extent it is not then otherwise exercisable) as
follows:
(i) The Option shall become fully exercisable upon the
Participant's Date of Termination, if the Participant's Date of
Termination occurs by reason of the Participant's death or Disability;
and
(ii) The Option shall become fully exercisable upon a Change in
Control, if the Participant's Date of Termination does not occur on or
before the Change in Control.
(d) Otherwise, the Option may be exercised on or after the Date of
Termination only as to that portion of the Covered Shares as to which it
was exercisable immediately prior to the Date of Termination, or as to
which it became exercisable on the Date of Termination in accordance with
this Section 3.
4. EXPIRATION. The Option shall not be exercisable after the Company's
close of business on the last business day that occurs prior to the Expiration
Date. The "Expiration Date" shall be earliest to occur of:
(a) The seven-year anniversary of the Grant Date;
(b) If the Participant's Date of Termination occurs by reason of
death, Disability or Retirement, the one-year anniversary of such Date of
Termination;
(c) If the Participant's Date of Termination occurs for reasons other
than death, Disability, Retirement, or Good Cause the 90-day anniversary of
such Date of Termination; or
(d) The date the Participant is dismissed from the Company for Good
Cause.
3
5. METHOD OF OPTION EXERCISE.
(a) Subject to the Agreement and the Plan, the Option may be exercised
in whole or in part by filing a written notice in substantially the form
attached hereto as Exhibit 1 with the Secretary of the Company at its
corporate headquarters prior to the Company's close of business on the last
business day that occurs prior to the Expiration Date. Such notice shall
specify the number of shares of Stock which the Participant elects to
purchase, and shall be accompanied by payment of the Exercise Price for
such shares of Stock indicated by the Participant's election.
(b) Payment shall be by cash or by check payable to the Company, or,
alternatively as follows to the extent permitted by the Committee at the
time of exercise:
(i) all or a portion of the Exercise Price may be paid by the
Participant by delivery of shares of Stock owned by the Participant
and acceptable to the Committee having an aggregate Fair Market Value
(valued as of the date of exercise) that is equal to the amount of
cash that would otherwise be required;
(ii) the Participant may pay the Exercise Price by authorizing a
third party to sell shares of Stock (or a sufficient portion of the
shares) acquired upon exercise of the Option and remit to the Company
a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise or,
(iii) the Participant may pay the Exercise Price by authorizing
the Company to withhold shares of Stock (or a sufficient portion of
the shares) acquired upon exercise of the Option having an aggregate
Fair Market Value (valued as of the date of exercise) that is equal to
the amount of cash that would be required to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
(c) The Option shall not be exercisable if and to the extent the
Company determines that such exercise would violate applicable state or
Federal securities laws or the rules and regulations of any securities
exchange on which the Stock is traded. If the Company makes such a
determination, it shall use all reasonable efforts to obtain compliance
with such laws, rules or regulations. In making any determination
hereunder, the Company may rely on the opinion of counsel for the Company.
(d) If the Company is an S-Corporation at the time a Participant seeks
to exercise the Award, the Option shall not be exercisable if and to the
extent the Company determines that such exercise would result in the loss
of the Company's status as an S Corporation. In making any determination
hereunder, the Company may rely on the opinion of counsel for the Company.
(e) As a condition to exercising the Option, the Optionee shall, if
requested by the Company, execute a shareholder agreement in the form
provided by the Company.
4
6. WITHHOLDING. To the extent necessary, the Optionee must satisfy his
federal, state, and local, if any, withholding taxes imposed by reason of the
exercise of the Option either by paying to the Company the full amount of the
withholding obligation (i) in cash; (ii) by tendering shares of Stock which are
owned by the Optionee prior to the date of exercise having a Fair Market Value
equal to the withholding obligation (a "Withholding Election"); (iii) by
electing, irrevocably and in writing (also a "Withholding Election"), to have
the smallest number of whole shares of Stock withheld by the Company which, when
multiplied by the Fair Market Value of the Stock as of the date the Option is
exercised, is sufficient to satisfy the amount of withholding tax; or (iv) by
any combination of the above. Optionee may make a Withholding Election only if
the following conditions are met:
(a) The Withholding Election is made on or prior to the date on which
the amount of tax required to be withheld is determined (the "Tax Date") by
executing and delivering to the Company a properly completed Notice of
Withholding Election in substantially the form attached hereto as Exhibit
2; and
(b) Any Withholding Election will be irrevocable; however, the
Committee may, in its sole discretion, disapprove and give no effect to the
Withholding Election.
7. TRANSFERABILITY.
(a) Except as otherwise provided in this Section 7, the Option is not
transferable other than as designated by the Participant by will or by the
laws of descent and distribution, and during the Participant's life, may be
exercised only by the Participant.
(b) Notwithstanding the foregoing, the Participant, with the approval
of the Committee, may transfer the Option for no consideration to or for
the benefit of the Participant's Immediate Family (including, without
limitation, to a trust for the benefit of the Participant's Immediate
Family, subject to such limits as the Committee may establish, and the
transferee shall remain subject to all the terms and conditions applicable
to the Option prior to such transfer, specifically including the terms and
conditions of the Shareholders Agreement. No such transfer which could
result in the loss of the Company's status as an S Corporation will be
allowed.
(c) The foregoing right to transfer the Option shall apply to the
right to consent to amendments to this Agreement and, in the discretion of
the Committee, shall also apply to the right to transfer ancillary rights
associated with the Option.
8. HEIRS AND SUCCESSORS.
(a) This Agreement shall be binding upon, and inure to the benefit of,
the Company and its successors and assigns, and upon any person acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the Company's assets and business.
5
(b) If any rights exercisable by the Participant or benefits
deliverable to the Participant under this Agreement have not been exercised
or delivered, respectively, at the time of the Participant's death, such
rights shall be exercisable by the Designated Beneficiary, and such
benefits shall be delivered to the Designated Beneficiary, in accordance
with the provisions of this Agreement and the Plan.
(c) If a deceased Participant has failed to designate a beneficiary,
or if the Designated Beneficiary does not survive the Participant, any
rights that would have been exercisable by the Participant and any benefits
distributable to the Participant shall be exercised by or distributed to
the legal representative of the estate of the Participant.
(d) If a deceased Participant has designated a beneficiary but the
Designated Beneficiary dies before the Designated Beneficiary's exercise of
all rights under this Agreement or before the complete distribution of
benefits to the Designated Beneficiary under this Agreement, then any
rights that would have been exercisable by the Designated Beneficiary shall
be exercised by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated Beneficiary
shall be distributed to the legal representative of the estate of the
Designated Beneficiary.
9. ADMINISTRATION. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement is final and binding on
all persons.
10. PLAN GOVERNS. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Participant from the office of the
Secretary of the Company; and this Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan.
11. NOT AN EMPLOYMENT CONTRACT. The Option will not confer on the
Participant any right with respect to continuance of employment or other service
with the Company or any Subsidiary, nor will it interfere in any way with any
right the Company or any Subsidiary would otherwise have to terminate or modify
the terms of such Participant's employment or other service at any time.
12. NOTICES. Any written notices provided for in this Agreement or the Plan
shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail. Notices sent by mail shall be deemed received three business days after
mailed but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant's address indicated by the
Company's records, or if to the Company, at the Company's principal executive
office.
6
13. FRACTIONAL SHARES. In lieu of issuing a fraction of a share upon any
exercise of the Option, the Company will be entitled to pay to the Participant
an amount equal to the fair market value of such fractional share.
14. NO RIGHTS AS SHAREHOLDER. The Participant shall not have any rights of
a shareholder with respect to the shares subject to the Option, until a stock
certificate has been duly issued following exercise of the Option as provided
herein.
15. AMENDMENT. This Agreement may be amended by written Agreement of the
Participant and the Company, without the consent of any other person.
16. FORFEITURE. Notwithstanding the foregoing, if, following the Date of
Termination, Participant violates any of Participant's post-termination
obligations to the Company or any Subsidiary, including, without limitation, any
obligation not to compete with the Company or any Subsidiary (regardless of
whether such obligation is enforceable under applicable law), not to solicit
employees of the Company or any Subsidiary, to maintain the confidentiality on
information belonging to the Company or any Subsidiary, or not to disparage the
Company or any Subsidiary or any of their affiliates, immediately upon demand by
the Company the Participant shall return to the Company the proceeds from this
Award to the extent received by the Participant on or after one year prior to
Date of Termination.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its name and on its behalf as of the Grant Date.
AGCO CORPORATION
By:
------------------------------------
Its:
-----------------------------------
7
EXHIBIT 1
NOTICE OF EXERCISE OF
STOCK OPTION TO PURCHASE STOCK OF
AGCO CORPORATION
Name: __________________________________
Address: _______________________________
_______________________________
Date: __________________________________
AGCO Corporation
Attn: Corporate Secretary
_________________________
_________________________
Re: Exercise of Non-qualified Stock Option
Dear Sir or Madam:
Subject to acceptance hereof in writing by AGCO Corporation (the "Company")
pursuant to the provisions of the AGCO Corporation 2006 Long-Term Incentive
Plan, I hereby give at least ten days but not more than thirty days prior notice
of my election to exercise options granted to me to purchase ______________
shares of Stock of the Company under the Non-qualified Stock Option Award
Agreement (the "Award") pursuant to the AGCO Corporation 2006 Long-Term
Incentive Plan dated as of ____________, ______. The purchase shall take place
as of ____________, _____ (the "Exercise Date").
On or before the Exercise Date, I will pay the applicable purchase price as
follows:
[ ] by delivery of cash or a certified check for $___________ for the
full purchase price payable to the order of the Company.
[ ] by delivery of a certified check for $___________ representing a
portion of the purchase price with the balance to consist of shares of
Stock that I own and that are represented by a stock certificate I
will surrender to the Company with my endorsement. If the number of
shares of Stock represented by such stock certificate exceed the
number to be applied against the purchase price, I understand that a
new stock certificate will be issued to me reflecting the excess
number of shares.
[ ] by delivery of a stock certificate representing shares of Stock that
I own which I will surrender to the Company with my endorsement as
payment of the purchase price. If the number of shares of Stock
represented by such certificate exceed the number to be applied
against the purchase price, I understand that a new certificate will
be issued to me reflecting the excess number of shares.
[ ] by the Company withholding from the purchased shares a number of
shares having an aggregate Fair Market Value on the date of exercise,
equal to the aggregate exercise price of all options being exercised.
Or, subject to your receipt of the written approval of the Committee (as
defined in the Plan), by _____________, ______ I will pay the purchase price by
delivery of cash or a certified check for $__________ representing all or a
portion of the purchase price with any remaining balance to consist of Stock
that I have owned for at least six months and that are represented by a stock
certificate I will surrender to the Company with my endorsement. If the number
of shares of Stock represented by such stock certificate exceed the number to be
applied against the purchase price, I understand that a new stock certificate
will be issued to me reflecting the excess number of shares.
As soon as the stock certificate is registered in my name, please deliver
it to me at the above address.
If the Stock being acquired is not registered for issuance to and resale by
the Optionee pursuant to an effective registration statement on Form S-8 (or
successor form) filed under the Securities Act of 1933, as amended (the "1933
Act"), I hereby represent, warrant, covenant, and agree with the Company as
follows:
The shares of the Stock being acquired by me will be acquired for my own
account without the participation of any other person, with the intent of
holding the Stock for investment and without the intent of participating,
directly or indirectly, in a distribution of the Stock and not with a view to,
or for resale in connection with, any distribution of the Stock, nor am I aware
of the existence of any distribution of the Stock;
I am not acquiring the Stock based upon any representation, oral or
written, by any person with respect to the future value of, or income from, the
Stock but rather upon an independent examination and judgment as to the
prospects of the Company;
The Stock was not offered to me by means of any publicly disseminated
advertisements or sales literature, nor am I aware of any offers made to other
persons by such means;
I am able to bear the economic risks of the investment in the Stock,
including the risk of a complete loss of my investment therein;
I understand and agree that the Stock will be issued and sold to me without
registration under any state law relating to the registration of securities for
sale, and will be issued and sold in reliance on the exemptions from
registration under the 1933 Act, provided by Sections 3(b) and/or 4(2) thereof
and the rules and regulations promulgated thereunder;
The Stock cannot be offered for sale, sold or transferred by me other than
pursuant to: (A) an effective registration under the 1933 Act or in a
transaction otherwise in compliance with the 1933 Act; and (B) evidence
satisfactory to the Company of compliance with the applicable securities laws of
other jurisdictions. The Company shall be entitled to rely upon an opinion of
counsel satisfactory to it with respect to compliance with the above laws;
Exhibit 1 - 2
The Company will be under no obligation to register the Stock or to comply
with any exemption available for sale of the Stock without registration or
filing, and the information or conditions necessary to permit routine sales of
securities of the Company under Rule 144 under the 1933 Act may not now be
available and no assurance has been given that it or they will become available.
The Company is under no obligation to act in any manner so as to make Rule 144
available with respect to the Stock;
I have and have had complete access to and the opportunity to review and
make copies of all material documents related to the business of the Company,
including, but not limited to, contracts, financial statements, tax returns,
leases, deeds and other books and records. I have examined such of these
documents as I wished and am familiar with the business and affairs of the
Company. I realize that the purchase of the Stock is a speculative investment
and that any possible profit therefrom is uncertain;
I have had the opportunity to ask questions of and receive answers from the
Company and any person acting on its behalf and to obtain all material
information reasonably available with respect to the Company and its affairs. I
have received all information and data with respect to the Company which I have
requested and which I have deemed relevant in connection with the evaluation of
the merits and risks of my investment in the Company;
I have such knowledge and experience in financial and business matters that
I am capable of evaluating the merits and risks of the purchase of the Stock
hereunder and I am able to bear the economic risk of such purchase; and
The agreements, representations, warranties and covenants made by me herein
extend to and apply to all of the Stock of the Company issued to me pursuant to
this Award. Acceptance by me of the certificate representing such Stock shall
constitute a confirmation by me that all such agreements, representations,
warranties and covenants made herein shall be true and correct at that time.
I understand that the certificates representing the shares being purchased
by me in accordance with this notice shall bear a legend referring to the
foregoing covenants, representations and warranties and restrictions on
transfer, and I agree that a legend to that effect may be placed on any
certificate which may be issued to me as a substitute for the certificates being
acquired by me in accordance with this notice.
Very truly yours,
----------------------------------------
AGREED TO AND ACCEPTED:
AGCO CORPORATION
By:
---------------------------------
Title:
------------------------------
Number of Shares Exercised:
------------
Number of Shares Remaining: Date:
------------ --------------------------------
Exhibit 1 - 3
EXHIBIT 2
NOTICE OF WITHHOLDING ELECTION
NON-QUALIFIED STOCK OPTION AWARD
PURSUANT TO THE AGCO CORPORATION
2006 LONG-TERM INCENTIVE PLAN
TO: _________________________________
FROM: _______________________________
RE: Withholding Election
This election relates to the Option identified in Paragraph 3 below. I hereby
certify that:
(1) My correct name and social security number and my current address are set
forth at the end of this document.
(2) I am (check one, whichever is applicable).
[ ] the original recipient of the Option.
[ ] the legal representative of the estate of the original recipient of
the Option.
[ ] the legal guardian of the original recipient of the Option.
[ ] an Immediate Family Member other than the original recipient of the
Option.
(3) The Option to which this election relates was issued under the AGCO
Corporation 2006 Long-Term Incentive Plan (the "Plan") in the name of
_________________________ for the purchase of a total of _________ shares
of Stock of the Company. This election relates to _______________ shares of
Stock issuable upon exercise of the Option, provided that the numbers set
forth above shall be deemed changed as appropriate to reflect the
applicable Plan provisions.
(4) In connection with any exercise of the Option with respect to the Stock, I
hereby elect one or more of the following:
[ ] to pay cash or certified check in the amount of $_______ to be
applied to pay federal, state, and local, if any, taxes arising from
the exercise.
[ ] to pay the full federal, state, and local, if any, taxes arising
from the exercise in cash or certified check.
[ ] to have certain of the shares issuable pursuant to the exercise
withheld by the Company for the purpose of having the value of the
shares applied to pay federal, state, and local, if any, taxes arising
from the exercise.
[ ] to tender shares held by me prior to the exercise of the Option for
the purpose of having the value of the shares applied to pay such
taxes.
The shares to be withheld or tendered, as applicable, shall have, as of the
Tax Date applicable to the exercise, a Fair Market Value equal to the
minimum statutory tax withholding requirement under federal, state, and
local law in connection with the exercise.
(5) This Withholding Election is made no later than the Tax Date and is
otherwise timely made pursuant to the Plan.
(6) I understand that this Withholding Election may not be revised, amended or
revoked by me.
(7) The Plan has been made available to me by the Company. I have read and
understand the Plan and I have no reason to believe that any of the
conditions to the making of this Withholding Election have not been met.
(8) Capitalized terms used in this Notice of Withholding Election without
definition shall have the meanings given to them in the Plan.
Dated:
----------------------------- ----------------------------------------
Signature
------------------------------------ ----------------------------------------
Social Security Number Name (Printed)
----------------------------------------
Xxxxxx Xxxxxxx
----------------------------------------
Xxxx, Xxxxx, Zip Code
Exhibit 1 - 2
