AGCO CORPORATION
2006 LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2008)
AGCO CORPORATION
2006 LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2008)
The AGCO
Corporation 2006 Long-Term Incentive Plan has been established by
AGCO Corporation to (a) attract and retain persons eligible to
participate in the Plan; (b) motivate Participants, by means
of appropriate incentives, to achieve long-range goals;
(c) provide incentive compensation opportunities that are
competitive with those of other similar companies; and
(d) further identify Participants’ interests with those
of the Company’s other shareholders through compensation that
is based on the Company’s common stock; and thereby promote
the long-term financial interest of the Company and the
Subsidiaries, including the growth in value of the Company’s
equity and enhancement of long-term shareholder return.
1.1
Participation . Subject to the terms and conditions of the
Plan, the Committee shall determine and designate, from time to
time, from among the Eligible Individuals (including transferees of
Eligible Individuals to the extent the transfer is permitted by the
Plan and the applicable Award Agreement), those persons who will be
granted one or more Awards under the Plan, and thereby become
Participants in the Plan. In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions
of the Plan, and more than one Award may be granted to a
Participant.
1.2 Operation,
Administration, and Definitions . The operation and
administration of the Plan, including the Awards made under the
Plan, shall be subject to the provisions of Section 6
(relating to operation and administration). Capitalized terms in
the Plan shall be defined as set forth in the Plan (including the
definition provisions of Article II of the Plan).
In addition to the
other definitions contained herein, the following definitions shall
apply:
2.1 Award
. The term “Award” means any award or benefit granted
under the Plan, including, without limitation, the grant of
Options, SARs, Restricted Stock Awards and Performance Share
Awards.
2.2 Award
Agreement . The term “Award Agreement” is defined
in Section 5.2.
2.3 Board
. The term “Board” means the Board of Directors of the
Company.
2.4 Change in
Control . The term “Change in Control” shall mean a
change in the ownership of the Company, change in the effective
control of the Company or change in ownership of a substantial
portion of the Company’s assets, as described in
Section 409A of the Code, including each of the
following:
(a) A change in
the ownership of the Company occurs on the date that any one
person, or more than one person acting as a group, acquires
ownership of stock of the Company that, together with stock held by
such person or group, possess more than fifty percent (50%) of the
total fair market value or total voting power of the stock of the
Company (not including where any one person, or more than one
person acting as a group, who is considered to own more than fifty
percent (50%) of the total fair market value or total voting power
of the stock of the Company, acquires additional stock).
(b) A change in
the effective control of the Company is presumed (which presumption
may be rebutted by the Committee) to occur on the date that: any
one person, or more than one person acting as a group, acquires (or
has acquired during the twelve (12)-month period ending on the date
of the most recent acquisition by such person or persons) ownership
of stock of the Company possessing thirty percent (30%) or more of
the total voting power of the stock of the Company, or a majority
of the members of the Board is replaced during any twelve
(12)-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the
date of the appointment or election of such new
directors.
(c) A change in
the ownership of a substantial portion of the Company’s
assets occurs on the date that any one person, or more than one
person acting as a group, acquires (or has acquired during the
twelve (12)-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that
have a total fair market value equal to or more than forty percent
(40%) of the total fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions
unless the assets are transferred to (i) a stockholder of the
Company (immediately before the asset transfer) in exchange for or
with respect to its stock, (ii) an entity, fifty percent (50%)
or more of the total value or voting power of which is owned,
directly or indirectly by the Company, (iii) a person, or more
than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or
voting power of all of the outstanding stock of the Company, or
(iv) an entity, at least fifty percent (50%) of the total
value or voting power of which is owned, directly or indirectly, by
a person, or more than one person acting as a group, that owns
directly or indirectly, fifty percent (50%) or more of the total
value or voting power of all of the outstanding stock of the
Company.
2.5 Code .
The term “Code” means the Internal Revenue Code of
1986, as amended. A reference to any provision of the Code shall
include reference to any successor provision of the
Code.
2.6
Committee . The term “Committee” is defined in
Section 8.1.
2.7
Company. The term “Company” means AGCO Corporation,
a Delaware corporation.
2.8 Effective
Date . The term “Effective Date” means
January 1, 2006.
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2.9 Eligible
Individual . The term “Eligible Individual” means
any employee of the Company or a Subsidiary and any Board member,
consultant or other person providing services to the Company or a
Subsidiary. An Award may be granted to an individual, in connection
with hiring, retention or otherwise, prior to the date the employee
first performs services for the Company or the Subsidiaries,
provided that such Awards shall not become effective prior to the
date the individual first performs such services. However, only
employees of the Company or any Subsidiary shall be considered
Eligible Individuals with respect to Incentive Stock
Options.
2.10 Exchange
Act . The term “Exchange Act” means the Securities
Exchange Act of 1934, as amended.
2.11 Exercise
Price. The term “Exercise Price” is defined in
Section 3.1.
2.12 Fair
Market Value . The term “Fair Market Value” means,
for any particular date:
(a) for any period
during which the Stock shall be listed for trading on a national
securities exchange, the closing price per share of stock on such
exchange, or
(b) for any period
during which the Stock shall not be listed for trading on a
national securities exchange, but when prices for the Stock shall
be reported by the National Market System of the National
Association of Securities Dealers Automated Quotation System
(“NASDAQ”), the last transaction price per share as
quoted by National Market System of NASDAQ, or
(c) for any period
during which the Stock shall not be listed for trading on a
national securities exchange or its price reported by the National
Market System of NASDAQ, but when prices for the Stock shall be
reported by NASDAQ, the closing bid price as reported by the
NASDAQ, or
(d) in the event
neither Section 2.12 (a), (b) or (c) above shall be
applicable, the market price per share of Stock as determined in
good faith by the Committee using a reasonable valuation method
based on the facts and circumstances on the valuation date;
provided, however, that the use of a value per share of stock
previously calculated shall not be reasonable if, as of the date of
grant, such valuation fails to reflect information available after
the date of valuation that may materially affect the value of the
Company or if the valuation per share of stock was calculated on a
date more than twelve (12) months prior to the date of
grant.
If Fair Market
Value is to be determined as of a day when the securities markets
are not open, the Fair Market Value on that day shall be the Fair
Market Value on the preceding day when the markets were open. The
provisions of this Section 2.12 shall be interpreted in
accordance with Section 409A of the Code and the regulations
issued thereunder and applicable accounting principles.
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2.13 Incentive
Stock Option. The term “Incentive Stock Option”
means an Option that is intended to satisfy the requirements
applicable to an “incentive stock option” described in
section 422(b) of the Code.
2.14
Non-Qualified Option. The term “Non-Qualified
Option” means an Option that is not intended to be an
“incentive stock option” as that term is described in
section 422(b) of the Code.
2.15
Option. The term “Option” means either an Incentive
Stock Option or a Non-Qualified Option and the grant of an Option
entitles the Participant to purchase shares of Stock at an Exercise
Price established by the Committee.
2.16
Participant. The term “Participant” means those
Eligible Individuals who are granted one or more Awards under the
Plan.
2.17
Performance Measures . The term “Performance
Measures” means the measurable performance objectives, if
any, established by the Committee for a Performance Period that are
to be achieved with respect to an Award granted to a Participant
under the Plan. Performance Measures may be described in terms of
Company-wide objectives or in terms of objectives that are related
to performance of the division, Subsidiary, department or function
within the Company or a Subsidiary in which the Participant
receiving the Award is employed or on which the Participant’s
efforts have the most influence. The achievement of the Performance
Measures established by the Committee for any Performance Period
will be determined without regard to the effect on such Performance
Measures of any acquisition or disposition by the Company of a
trade or business, or of substantially all of the assets of a trade
or business, during the Performance Period and without regard to
any change in accounting standards by the Financial Accounting
Standards Board or any successor entity. The Performance Measures
established by the Committee for any Performance Period under the
Plan will consist of one or more of the following:
(1) earnings per
share and/or growth in earnings per share in relation to target
objectives, excluding the effect of extraordinary or nonrecurring
items;
(2) operating cash
flow and/or growth in operating cash flow in relation to target
objectives;
(3) cash available
in relation to target objectives;
(4) net income
and/or growth in net income in relation to target objectives,
excluding the effect of extraordinary or nonrecurring
items;
(5) revenue and/or
growth in revenue in relation to target objectives;
(6) total
shareholder return (measured as the total of the appreciation of
and dividends declared on the Stock) in relation to target
objectives;
(7) return on
invested capital in relation to target objectives;
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(8) return on
shareholder equity in relation to target objectives;
(9) return on
assets in relation to target objectives; and
(10) return on
common book equity in relation to target objectives.
If the Committee
determines that, as a result of a change in the business,
operations, corporate structure or capital structure of the
Company, or the manner in which the Company conducts its business,
or any other events or circumstances, the Performance Measures are
no longer suitable, the Committee may in its discretion modify such
Performance Measures or the related minimum acceptable level of
achievement, in whole or in part, with respect to a period as the
Committee deems appropriate and equitable, except where such action
would result in the loss of the otherwise available exemption of
the Award under Section 162(m) of the Code, if applicable. In such
case, the Committee will not make any modification of the
Performance Measures or minimum acceptable level of
achievement.
2.18
Performance Period. The term “Performance Period”
means with respect to an Award, a period of not less than one (1)
year within which the Performance Measures relating to such Award
are to be measured. Notwithstanding the foregoing, up to 250,000
Performance Shares may have Performance Periods that are less than
one (1) year. The Performance Period will be established by the
Committee at the time the Award is granted.
2.19
Performance Share . The term “Performance Share”
means an Award that is a grant of a right to receive shares of
Stock that is contingent on the achievement of performance or other
objectives during a specified period.
2.20 Plan.
The Term “Plan” means the 2006 AGCO Corporation
Long-Term Incentive Plan as amended and/or restated from time to
time.
2.21
Restricted Stock . The term “Restricted Stock”
means an Award that is a grant of shares of Stock with such shares
of Stock subject to a risk of forfeiture or other restrictions or
conditions that will lapse over a specified period or upon the
achievement of one or more goals relating to completion of service
by the Participant, or achievement of performance or other
objectives, as determined by the Committee.
2.22 SAR.
The term “SAR” means a stock appreciation right and the
grant of a SAR entitles the Participant to receive, in cash or
Stock (as determined in accordance with subsection 3.4), value
equal to (or otherwise based on) the excess of: (a) the Fair
Market Value of a specified number of shares of Stock at the time
of exercise; over (b) an Exercise Price established by the
Committee.
2.23
Subsidiaries . The term “Subsidiary” means any
corporation during any period in which it is a “subsidiary
corporation” (as that term is defined in Code
Section 424(f)) with respect to the Company.
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2.24 Stock
. The term “Stock” means shares of common stock of the
Company, par value $.01 per share.
2.25 Ten
Percent Shareholder . The term “Ten Percent
Shareholder” means an individual shareholder of the Company
owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any
parent or Subsidiary. For purposes of the preceding sentence, the
rules of Section 424 of the Code shall apply in determining
stock ownership.
ARTICLE III
OPTIONS AND SARS
3.1 Exercise
Price . The “Exercise Price” of each Option and SAR
granted under this Article 3 shall be established by the
Committee or shall be determined by a method established by the
Committee at the time the Option or SAR is granted; except that the
Exercise Price shall not be less than one-hundred percent (100%) of
the Fair Market Value of a share of Stock on the date of grant
(one-hundred and ten percent (110%) of the Fair Market Value on
such date in the event of an Incentive Stock Option granted to a
Participant who is a Ten Percent Shareholder).
3.2
Exercise . An Option and a SAR shall be exercisable in
accordance with such terms and conditions and during such periods
as may be established by the Committee. Notwithstanding the
foregoing, no Incentive Stock Options may be exercisable more than
ten (10) years after the date of grant (five (5) years
after the date of grant in the event of Incentive Stock Options
granted to a Participant who is a Ten Percent
Shareholder).
3.3 Payment of
Option Exercise Price . The payment of the Exercise Price of an
Option granted under this Article 3 shall be subject to the
following:
(a) Subject to the
following provisions of this Section 3.3, the full Exercise
Price for shares of Stock purchased upon the exercise of any Option
shall be paid at the time of such exercise (except that, in the
case of an exercise arrangement approved by the Committee and
described in Section 3.3(c), payment may be made as soon as
practicable after the exercise).
(b) The Exercise
Price shall be payable in cash or by tendering, by either actual
delivery of shares or by attestation, shares of Stock acceptable to
the Committee, and valued at Fair Market Value as of the day of
exercise, or in any combination thereof, as determined by the
Committee.
(c) The Committee
may permit a Participant to elect to pay the Exercise Price upon
the exercise of an Option by irrevocably 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 minimum tax withholding resulting from such
exercise.
3.4 Settlement
of Award . Shares of Stock delive
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