FEDERAL
AGRICULTURAL MORTGAGE CORPORATION
2008
OMNIBUS INCENTIVE PLAN
FORM OF
SAR AGREEMENT
THIS
AGREEMENT (the “
Agreement
”),
effective as of -----, 2008 (the “
Grant
Date
”), between the Federal Agricultural Mortgage Corporation, a
federally chartered instrumentality of the United States and an institution of
the Farm Credit System (the “
Company
”),
and [---] (the “
Participant
”).
WHEREAS,
the Participant is an
[employee/director]
of the
Company and its Subsidiaries and pursuant to the terms of the Company’s 2008
Omnibus Incentive Plan (the “
Plan
”),
the Company desires to provide the Participant with an incentive to remain in
the employment of the Company and to align the Participant’s interest with the
interest of the Company’s stockholders;
NOW,
THEREFORE, in consideration of the covenants and agreements herein contained,
the parties hereto agree as follows:
1.
Definitions
. Capitalized
terms used herein without definition shall have the meanings assigned to them in
the Plan.
2.
Grant of
SARs
. Subject to the terms and conditions contained herein and
in the Plan, Company hereby grants to the Participant [
]
SARs with a Grant Price
of $[____]. Each SAR represents the right to receive upon exercise an
amount equal to the excess, if any, of (i) the Fair Market Value of a Share
on the Exercise Date (as defined in Section 2(c)) over (ii) the Grant
Price.
3.
Terms and Conditions of
SARs
. The SARs evidenced hereby are subject to the following
terms and conditions:
(a)
Vesting
. Subject
to the Participant’s continued employment and the terms and conditions set forth
in the Plan and this Agreement, [
]
of the SARs shall vest on
[ ]. Any
fractional SARs resulting from the application of the vesting schedule shall be
aggregated and the SARs resulting from such aggregation shall vest on
[ ].
(b)
Term
. The
SARs shall expire and shall no longer be exercisable on and after the [
For employees
:
tenth (10
th
)
][
For directors
: seventh (7
th
)]
anniversary of the Grant Date (the “
Expiration
Date
”), subject to earlier termination in accordance with this
Agreement.
(c)
Exercise
. Subject
to the limitations set forth in this Agreement and the Plan, the Participant may
exercise vested SARs, in whole or in part, by submitting a written exercise
notice in a form approved by the Committee from time to time. The
exercise date (the “
Exercise
Date
”) shall be the date on which Company receives a written notice of
exercise, duly completed and submitted by the Participant relating to the SARs,
if such notice is received by 5:00 p.m. (Eastern Time) and the following
business day if notice is received after such time.
(d)
Settlement of
SARs
. Payment in respect of the SARs that have been exercised
shall be made to the Participant as soon as administratively practicable
following the Exercise Date. The amount of payment will be equal to
the excess of the Fair Market Value of the Shares on the Exercise Date over the
Grant Price multiplied by the number of SARs being exercised (the “
SAR Payment
Amount
”). The SAR Payment Amount shall be paid in
Shares. The number of Shares to be delivered will be equal to SAR
Payment Amount divided by the Fair Market Value of the Shares on the Exercise
Date rounded up to the nearest whole Share.
(e)
Issuance of
Certificate
.
A certificate
evidencing the appropriate number of Shares shall be issued in the name of the
Participant as soon as practicable following such exercise.
4.
Termination of
Employment
.
(a)
General
. [
For employees
: If the
Participant ceases to be employed by the Company for any reason other than
death, Disability, Retirement or for Cause: (i) unvested SARs
shall be cancelled immediately; and (ii) vested SARs shall, remain exercisable
until the earlier of (A) the Expiration Date and (B) ninety (90) days following
the Participant’s date of termination.] [
For directors
: If the
Participant ceases to be a Director of the Company for any reason other than
death, Disability or for Cause: (i) unvested SARs shall be
cancelled immediately; and (ii) vested SARs shall, remain exercisable until the
earlier of (A) the Expiration Date and (B) one year following the Participant’s
date of termination.]
(b)
Death;
Disability
. If the Participant ceases to be [employed by/a
director of] the Company due to the Participant’s death or
Disability: (i) unvested SARs shall automatically vest and become
exercisable; and (ii) vested SARs shall remain exercisable until the earlier
of: (A) the Expiration Date; and (B) one (1) year following the
Participant’s date of termination.
(c)
Retirement
. If
the Participant ceases to be employed by the Company due to the Participant’s
Retirement (as defined below): (i) unvested SARs shall continue
to vest as scheduled; and (ii) vested SARs shall remain exercisable until the
earlier of: (A) the Expiration Date; and (B) five (5) years
following the Participant’s date of termination. For purposes of this
Agreement “
Retirement
”
means the termination of the Participant’s employment without Cause after
attaining (A) age fifty-five (55) and (B) a combined age and years of employment
at the Company of at least seventy-five (75).
(d)
Death Following Termination
from the Company
. If, during the ninety (90) day period
following the Participant’s termination from the Company other than by
Retirement, the Participant dies, any vested SARs shall, remain exercisable
until the earlier of (i) the Expiration Date and (ii) one (1) year
following the Participant’s date of death.
(e)
Termination for
Cause
. If the Participant ceases to be
[employed by/a director of]
the Company for Cause, any outstanding SARs (whether or not vested) shall be
cancelled immediately and the Participant will have no rights with respect to
the cancelled SARs.
5. Incorporation
of Plan Terms. This Agreement sets forth the general terms and
conditions of the SARs granted on the Grant Date. This Agreement and
the SARs shall be subject to the Plan, the terms of which are hereby
incorporated herein by reference. A copy of the Plan is available on
the Company’s intranet or may be obtained by contacting
[ ]
at
[ ]. In
the event of any conflict or inconsistency between the Plan and this Agreement,
the Plan shall govern. By accepting the SARs the Participant
acknowledges receipt of the Plan (in written or electronic form) and represents
that he or she is familiar with its terms and provisions and hereby accept the
SARs subject to all of the terms and provisions of the Plan and all
interpretations, amendments, rules and regulations which may, from time to time,
be promulgated and adopted pursuant to the Plan. If the Participant
receives or has received any other award under the Plan or any other equity
compensation plan for any year, it shall be governed by the terms of the
applicable award agreement, which may be different from those set forth
herein.
6.
Restrictions on Transfer of
SARs
. The SARs may not be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of to any third party without prior
written consent of the Company except by will or the laws of descent and
distribution or pursuant to a domestic relations order and during the
Participant’s lifetime, the SARs shall be exercisable only by the Participant or
his or her legal guardian or representative. Notwithstanding the
foregoing, the Committee may, in its sole discretion and subject to the terms
and conditions it establishes from time to time, authorize the Participant to
transfer the SARs to one or more Immediate Family Members (or to trusts,
partnerships, or limited liability companies established exclusively for
Immediate Family Members) provided that there is no consideration for such
transfer, or, in the case of a SARs grant to a Director, to the Director’s
employer, if such transfer is a condition of the Director being authorized to
serve as a Director and is made without monetary consideration. Any
attempt to assign, transfer, pledge, hypothecate or otherwise dispose of the
SARs contrary to the provisions of the Plan or this Agreement shall be null and
void and without effect.
7.
Waiver
. The
waiver by either party of compliance with any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any other provision
of this Agreement, or of any subsequent breach by such party of a provision of
this Agreement.
8.
Entire
Agreement
. This Agreement and the Plan constitute the entire
agreement and understanding between the parties with regard to the subject
matter hereof. They supersede all other agreements, representations
or understandings (whether oral or written and whether express or implied) that
relate to the SARs granted pursuant to this Agreement. By accepting
the SARs, the Participant shall be deemed to accept all of the terms and
conditions of the Plan and this Agreement.
9.
Amendments
. The
Committee shall have the power to alter, amend, modify or terminate the Plan or
this Agreement at any time;
provided
,
however
, that no such
termination, amendment or modification may adversely affect, in any material
respect, the Participant’s rights under this Agreement without the Participant’s
consent. Notwithstanding the foregoing, the Company shall have broad
authority to amend this Agreement without the consent
of the
Participant to the extent it deems necessary or desirable (i) to comply
with or take into account changes in or interpretations of, applicable tax laws,
securities laws, employment laws, accounting rules and other applicable laws,
rules and regulations, (ii) to take into account unusual or nonrecurring
events or market conditions, or (iii) to take into account significant
acquisitions or dispositions of assets or other property by the Company. Any
amendment, modification or termination shall, upon adoption, become and be
binding on all persons affected thereby without requirement for consent or other
action with respect thereto by any such person. The Committee shall
give written notice to the Participant in accordance with Section 12(i) of
any such amendment, modification or termination as promptly as practicable after
the adoption thereof. The foregoing shall not restrict the ability of
the Participant and the Company by mutual consent to alter or amend the terms of
the SARs in any manner that is consistent with the Plan and approved by the
Committee.
10.
Adjustments
. Notwithstanding
anything to the contrary contained herein, the Committee will make or
provide for such adjustments to the SARs as are equitably required to prevent
dilution or enlargement of the rights of the Participant that would otherwise
result from (a) any stock dividend, extraordinary dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, or (b) any change of control, merger, consolidation, spin-off,
split-off, spin-out, split-up, reorganization, partial or complete liquidation
or other distribution of assets, or issuance of rights or warrants to purchase
securities, or (c) any other corporate transaction or event having an effect
similar to any of the foregoing. Moreover, in the event of any such
transaction or event, the Committee, in its discretion, may provide in
substitution for the Award such alternative consideration (including, without
limitation, cash or other equity awards), if any, as it may determine to be
equitable in the circumstances and may require in connection therewith the
surrender of the SARs.
11.
Listing
. Notwithstanding
anything to the contrary contained herein, the SARs may not be exercised, and
the Shares acquired upon exercise of a SAR may not be purchased, sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of or encumbered in any
way, unless such transaction is in compliance with (a) the requirements of
any securities exchange, securities association, market system or quotation
system on which securities of the Company of the same class as the Shares are
then traded or quoted, (b) any restrictions on transfer imposed by the Company’s
charter legislation or bylaws, and (c) any policy or procedure the Company has
adopted with respect to the trading of its securities, in each case as in effect
on the date of the intended transaction.
12.
Miscellaneous
.
(a)
No Right to Future
Grants
. The SARs are discretionary awards. Neither
the Plan nor the grant of the SARs or any other awards confers on the
Participant any right or entitlement to receive another award under the Plan or
any other plan at any time in the future or with respect to any future
period.
(b)
No Right to Continued
Employment
. The SARs are awarded by virtue of the
Participant’s employment with, and services performed for, the Company and its
Subsidiaries. Neither the Plan nor this Agreement constitute an
employment agreement and
nothing
herein shall modify the terms of the Participant’s employment, including,
without limitation, the Participant’s status as an "at will"
employee, if applicable. None of the Plan, this Agreement, the grant
of SARs, nor any action taken or omitted to be taken under these documents shall
be deemed to create or confer on the Participant any right to be retained in the
employ of the Company, or to interfere with or to limit in any way the right of
the Company to terminate the Participant’s employment at any time.
(c)
Stockholder
Rights
. Prior to settlement, the Participant shall have no
rights of a stockholder with respect to the Shares underlying the
SARs.
(d)
No
Advice
. Nothing in the Plan or this Agreement should be
construed as providing the Participant with financial, tax, legal or other
advice with respect to the SARs. The Company recommends that the
Participant consult with his or her financial, tax, legal and other advisors to
provide advice in connection with the SARs.
(e)
Assignment
. The
Participant may not assign any of his or her rights hereunder except as
permitted by the Plan or by will or the laws of descent and
distribution. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the heirs and permitted
successors and assigns of such party. All agreements herein by or on
behalf of Company, or by or on behalf of the Participant, shall bind and inure
to the benefit of the heirs and permitted successors and assigns of such parties
hereto. Company shall have the right to assign any of its rights and
to delegate any of its duties under this Agreement to any of its Subsidiaries or
affiliates.
(f)
Tax
Withholding
. The Company shall have the right to require the
Participant to remit to the Company, prior to the delivery of any cash or
certificates evidencing Shares, an amount sufficient to satisfy any federal,
state or local tax withholding requirements. Prior to the Company’s
determination of such withholding liability, the Participant may, if permitted
by the Committee, make an irrevocable election to satisfy, in whole or in part,
such obligation to remit taxes by directing the Company to withhold cash or
Shares that would otherwise be received by such individual upon exercise of the
SARs. The Company and its affiliates shall also have the right to
deduct from all cash payments made to the Participant (whether or not such
payment is in connection with the SARs) any federal, state or local taxes
required to be withheld with respect to such payments.
(g)
Headings
. The
headings of sections and subsections herein are included solely for convenience
of reference and shall not affect the meaning of any of the provisions of this
Agreement.
(h)
Section 409A of the
Code
. As the Grant Price is equal to the Fair Market Value of
a Share on the Grant Date, the SARs are intended to be exempt from Section 409A
of the Internal Revenue Code of 1986, as amended, and the regulations and
guidance promulgated thereunder (“
Section
409A
”). Notwithstanding the foregoing or any provision of the
Plan or this Agreement, if any provision of this Award Agreement or the Plan
contravenes Section 409A or could cause the Participant to incur any tax,
interest or penalties under Section 409A, the Committee may, in its sole
discretion and without the Participant’s consent, modify such
provision
to (i) comply with, or avoid being subject to, Section 409A, or to avoid the
incurrence of taxes, interest and penalties under Section 409A, and/or (ii)
maintain, to the maximum extent practicable, the original intent and economic
benefit to the Participant of the applicable provision without materially
increasing the cost to the Company or contravening the provisions of Section
409A. This Section 12(h) does not create an obligation on the part of
the Company to modify the Plan or this Award Agreement and does not guarantee
that the SARs will not be subject to taxes, interest and penalties under Section
409A.
(i)
Notices
. Any
notice required by the terms of the Plan or this Agreement shall be given in
writing and shall be deemed effective upon personal delivery, sending or posting
of electronic communications or upon deposit in the mail, by registered or
certified mail. Notice to the Company shall be delivered to [----] at
[----] to the Participant at either (i) the address that most
recently provided to the Company or (ii) by Company email, Company intranet
postings or other electronic means that are generally used for Company employee
communications.
13.
Governing
Law
. This Agreement shall be governed by and construed in
accordance with federal law. To the extent federal law incorporates
state law, that state law shall be the laws of the District of Columbia
excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of the Plan or this Agreement to the
substantive law of another jurisdiction. By accepting the SARs the
Participant hereby submits to the exclusive jurisdiction and venue of the
federal courts in the District of Columbia, to resolve any and all issues that
may arise out of or relate to the Plan or this Agreement.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer as of the Grant Date.
FEDERAL
AGRICULTURAL MORTGAGE CORPORATION
By:
______________________
Name:
Title: