EXHIBIT 10.4
AGCO CORPORATION
2006 LONG-TERM INCENTIVE PLAN
STOCK APPRECIATION RIGHTS 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 stock appreciation right ("SAR") 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) 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.
(b) 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.
(c) 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.
(d) EXERCISE PRICE. The "Exercise Price" is $____________ per SAR.
(e) 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.
(f) GRANT DATE. The "Grant Date" is ____________________________.
(g) 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.
(h) PARTICIPANT. The "Participant" is __________________________.
(i) SARS. The number of "SARs" shall be _______________. The award of
SARs does not entitle the Participant to any rights as a shareholder of the
Company with respect to the SARs, including accounting of the payment of
dividends on the Company's Stock during the period prior to the exercise of
the SARs.
(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 SARs
granted to the Participant and the Exercise Price per SAR as set forth in
Section 1.
3. DATE OF EXERCISE.
(a) Subject to the limitations of this Agreement, the SARs shall be
exercisable according to the following schedule, with respect to each
installment shown in the
2
schedule on and after the Vesting Date applicable to such installment (each
an "Installment"):
3
(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 (as
defined in Section 8) occur on or before such Vesting Date. Notwithstanding
the foregoing provisions of this Section 3, the SARs shall become
exercisable (to the extent not then otherwise exercisable) as follows:
(i) The SARs 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.
(ii) The SARs 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 SARs may be exercised on or after the Date of
Termination only as to that portion of the Covered Shares as to which they
were exercisable immediately prior to the Date of Termination, or as to
which they became exercisable on the Date of Termination in accordance with
this Section 3.
4. EXPIRATION. The SARs 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.
5. EXERCISE OF SARS. At any time at which the Participant may exercise the
SARs in accordance with the provisions of this Agreement, such SARs may be
exercised by filing a
4
written notice with the Secretary of the Company at its corporate headquarters.
The right to exercise one or more SARs shall expire in accordance with the
provisions of this Agreement. Upon the exercise of a SAR, the Participant shall
receive an amount from the Company which is equal to the excess of the Fair
Market Value of a share of Stock on the date of exercise over the Exercise Price
of one share of Stock. Such amount shall be paid to the Participant, in shares
of Stock (based on the Fair Market Value of such shares on the date of
exercise).
6. WITHHOLDING. To the extent necessary, the Participant must satisfy his
federal, state, and local, if any, withholding taxes imposed by reason of the
exercise of the SAR 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 Participant 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 SAR is
exercised, is sufficient to satisfy the amount of withholding tax; or (iv) by
any combination of the above. Participant 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
1; 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 SARs are 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 SARs 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 SARs prior to such transfer.
(c) The foregoing right to transfer the SARs 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 SARs.
8. HEIRS AND SUCCESSORS.
5
(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.
(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 SAR 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
6
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.
13. FRACTIONAL SHARES. In lieu of issuing a fraction of a share upon any
exercise of the SARs, 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 SAR, until a stock
certificate has been duly issued following exercise of the SAR 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 WITHHOLDING ELECTION
STOCK APPRECIATION RIGHTS AGREEMENT
PURSUANT TO THE AGCO CORPORATION
2006 LONG-TERM INCENTIVE PLAN
TO: __________________________________
FROM: __________________________________
RE: Withholding Election
This election relates to the SAR 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 SAR.
[ ] the legal representative of the estate of the original recipient of
the SAR.
[ ] the legal guardian of the original recipient of the SAR.
[ ] an Immediate Family Member other than the original recipient of the
SAR.
(3) The SAR to which this election relates was issued under the AGCO
Corporation 2006 Long-Term Incentive Plan (the "Plan") in the name of
____________________________ for the value appreciation of a total of
____________ shares of Stock of the Company. This election relates to
________________ shares of Stock, the appreciation of which is payable upon
exercise of the SAR, 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 SAR 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.
8
[ ] 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 SAR 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)
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇, ▇▇▇▇▇, Zip Code
9
