<PAGE>
EXHIBIT 10.3
AGCO CORPORATION
2006 LONG-TERM INCENTIVE PLAN
INCENTIVE 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 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;
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
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.
<PAGE>
(f) 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.
(g) GRANT DATE. The "Grant Date" is
_____________________________.
(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 intended to constitute an "incentive stock option"
as that term
is used in Code section 422, and shall be so construed. To the
extent that the
aggregate fair market value (determined at the time of grant) of
Shares with
respect to which incentive stock options are exercisable for the
first time by
the Participant during any calendar year under all plans of the
Company and its
affiliates exceeds $100,000, the options or portions thereof which
exceed such
limit (according to the order in which they were granted) shall be
treated as
nonstatutory stock options. It should be understood that there is
no assurance
that the option will, in fact, be treated as an incentive stock
option. To the
extent an Option is not treated as an incentive stock option, it
shall be
treated as a nonstatutory stock option.
2
<PAGE>
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"):
<TABLE>
<CAPTION>
VESTING DATE APPLICABLE TO
INSTALLMENT
INSTALLMENT
-----------
--------------------------
<S>
<C>
[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]
</TABLE>
(b) 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) If the Participant's Date of Termination occurs by reason
of
the Participant's death or Disability, the Option shall become
fully
exercisable upon the Participant's Date of Termination; and
(ii) If the Participant's Date of Termination does not occur on
or before the Change in Control, the Option shall become fully
exercisable upon a Change in Control.
(c) 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 (5 years in the
case
of a
10% or greater shareholder);
(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;
3
<PAGE>
(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.
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 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.
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
4
<PAGE>
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
