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Exhibit 10.2

Archer-Daniels-Midland Company
2002 Incentive Compensation Plan

Stock Option Agreement

Stock Option Agreement (the “Agreement”), dated as of _______ (the “Date of
Grant”), between Archer-Daniels-Midland Company, a Delaware corporation (the
“Company”), and ____________________ (the “Optionee”), an Employee of the
Company. This Agreement is pursuant to the terms of the Company’s 2002 Incentive
Compensation Plan (the “Plan”). The applicable terms of the Plan are
incorporated herein by reference, including the definition of capitalized terms
contained in the Plan.

Section 1. Stock Option Award. The Company grants to the Optionee, on the terms
and conditions hereinafter set forth, an Option with respect to _______ shares
of the Company’s common stock (the “Option Shares”) under the Plan.

Section 2. Exercise Price. The exercise price per share of the Option Shares
shall be $ _______ per share (“Option Price”).

Section 3. Vesting.

(a) Vesting Schedule. Subject to the forfeiture provisions of Sections 6 and 10
hereof, this Option shall become vested and exercisable as to the Option Shares
in installments in accordance with the following vesting schedule:

 
Vesting Date
 
 
Number of Option Shares
 
 
 
 
 
 
 
 
 
 

At times in this Agreement, when the vesting, exercise or cancellation of this
Option (or portion thereof) and the corresponding right to acquire Option Shares
thereunder is discussed, for ease of reference the document will refer to the
vesting, exercise or cancellation, as applicable, of “Option Shares.”

(b) Accelerated Vesting. Notwithstanding the foregoing provisions of this
Section 3, but subject to Section 10 hereof, all Option Shares shall become
fully and immediately vested and exercisable upon the occurrence of a Change of
Control of the Company (as defined in Appendix A hereto) or the death of
Optionee.

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Section 4. Nonqualified Stock Option. This Option shall be treated as a
Nonqualified Stock Option under the Plan.

Section 5. Option Term. Option Shares that become exercisable pursuant to
Section 3 hereof may be purchased at any time following vesting and prior to the
expiration of the Option Term. For purposes hereof, the “Option Term” shall
commence on the Date of Grant and shall expire on the day prior to the tenth
anniversary thereof, unless earlier terminated as provided in Sections 6 or 10
hereof. Upon the expiration of the Option Term, any unexercised Option Shares
shall be cancelled and shall be of no further force or effect.

Section 6. Effect of Termination of Service. Except as set forth below in this
Section 6, if Optionee’s service as an Employee is terminated for any reason
prior to the occurrence of any otherwise applicable vesting date or event
provided in Section 3 hereof, the Optionee shall (i) forfeit any interest in the
Option Shares that have not yet become vested, which shall be cancelled and be
of no further force or effect, and (ii) subject to Section 10 hereof, retain the
right to exercise any Option Shares that have previously become vested until the
expiration of three months after the effective date of such termination of
service. Notwithstanding the foregoing, in the event that Optionee’s employment
terminates as a result of Optionee’s Retirement or Disability then Optionee
shall, subject to Section 10 hereof, (i) continue to vest in the Option Shares
in accordance with the provisions of Section 3 hereof, and (ii) retain the right
to exercise all vested Option Shares until the expiration of the full Option
Term. In addition, in the event that Optionee’s employment terminates as a
result of Optionee’s death then Optionee shall receive the accelerated vesting
described in Section 3(b) and shall retain the right to exercise all vested
Option Shares until the expiration of the full Option Term.

Section 7. Procedure for Exercise. The Option may be exercised, in whole or part
(for the purchase of whole shares only), by delivery of a written notice in the
form specified by the Company (the “Notice”), along with payment in full of the
Option Price, from the Optionee to the Secretary of the Company at the Company’s
principal office, which Notice shall: (i) state the number of Option Shares
being exercised; (ii) state the method of payment for the Option Shares and tax
withholding pursuant to Section 8 hereof; (iii) include any representation of
the Optionee required pursuant to Section 9 hereof; (iv) in the event that the
Option shall be exercised by any person other than the Optionee pursuant to
Section 13 hereof include appropriate proof of the right of such person to
exercise the Option; and (v) comply with such further requirements consistent
with the Plan as the Committee may from time to time prescribe.

Section 8. Payment of Exercise Price. Payment of the Option Price shall be made
(i) in cash or by cash equivalent, (ii) by tendering, either by actual delivery
of Shares or by attestation, previously acquired Shares that have been held by
the Optionee for at least 6 months, valued at the Fair Market Value of such
Shares on the trading date immediately preceding the date of exercise, (iii) by
irrevocably authorizing a third party with which the Optionee has a brokerage or
similar relationship to sell the Shares (or a sufficient portion of such Shares)
acquired upon the exercise of the Option and remit to the Company a portion of
the sale proceeds sufficient to pay the entire Option Price to the Company, or
(iv) by a combination of the methods described above. Delivery of Shares upon
such exercise shall be subject to payment by the Optionee to the Company of any
required withholding taxes. Optionee may elect to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction. Any such election
shall be irrevocable, made in writing, signed by the Participant, and submitted
to the Secretary of the Company.

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Section 9. Securities Law Compliance. No Option Shares shall be purchased upon
the exercise of the Option unless and until the Company and/or the Optionee
shall have complied with all applicable federal or state registration, listing
and/or qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction, unless the Committee has received
evidence satisfactory to it that a prospective Optionee may acquire such shares
pursuant to an exemption from registration under the applicable securities laws.
Any determination in this connection by the Committee shall be final, binding,
and conclusive. The Company reserves the right to legend any certificate for
shares of Common Stock, conditioning sales of such shares upon compliance with
applicable federal and state securities laws and regulations.

Section 10. Forfeiture Conditions. Notwithstanding any provision herein to the
contrary, in the event of termination of the Optionee’s employment for “cause”
(as defined below), the breach of any non-competition or confidentiality
restrictions applicable to the Optionee, or the Optionee’s participation in an
activity that is deemed by the Committee to be detrimental to the Company
(including, without limitation, criminal activity or accepting employment with a
competitor of the Company), (i) the Optionee’s right to exercise any unexercised
portion of the Option shall immediately terminate and all rights thereunder
shall cease, (ii) the Optionee’s right to receive an issuance of Option Shares
upon settlement of the Option shall immediately terminate, and, (iii) if the
Option has been exercised, in whole or in part, then either (A) the Option
Shares issued upon exercise of the Option shall be forfeited and returned to the
Company and the Optionee shall be repaid the lesser of (x) the then-current Fair
Market Value per Share or (y) the Option Price paid for such Option Shares, or
(B) the Optionee will be required to pay to the Company in cash an amount equal
to the gain realized by the Optionee from the exercise of such Option (measured
by the difference between the Fair Market Value of the Option Shares on the date
of exercise and the Option Price paid by the Optionee).

For purposes hereof, “cause” shall have the meaning specified in such Optionee’s
employment agreement with the Company, or, in the case of an Optionee who is not
employed pursuant to an employment agreement, “cause” shall mean any of the
following acts by the Optionee: (i) embezzlement or misappropriation of
corporate funds, (ii) any acts resulting in a conviction for, or plea of guilty
or nolo contendere, a charge of commission of a felony, (iii) misconduct
resulting in injury to the Company or any subsidiary, (iv) activities harmful to
the reputation of the Company or any subsidiary, (v) a violation of Company or
subsidiary operating guidelines or policies, (vi) willful refusal to perform, or
substantial disregard of, the duties properly assigned to the Optionee, or (vi)
a significant violation of any contractual, statutory or common law duty of
loyalty to the Company or any subsidiary.

 

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Section 11. No Rights as Stockholder or Employee.

(a) The Optionee shall not have any privileges of a stockholder of the Company
with respect to any Option Shares subject to (but not acquired upon valid
exercise of) the Option, nor shall the Company have any obligation to issue any
dividends or otherwise afford any rights to which Shares are entitled with
respect to any such Option Shares, until the date of the issuance to the
Optionee of a stock certificate evidencing such Shares.

(b) Nothing in this Agreement or the Option shall confer upon the Optionee any
right to continue as an Employee of the Company or any Subsidiary or Affiliate
or to interfere in any way with the right of the Company or any Subsidiary or
Affiliate to terminate the Optionee’s employment at any time.

Section 12. Adjustments. If at any time while the Option is outstanding, the
number of outstanding Shares is changed by reason of a reorganization,
recapitalization, stock split or any of the other events described in Section
4.2 of the Plan, the number and kind of Option Shares and/or the Option Price of
such Option Shares shall be adjusted in accordance with the provisions of the
Plan. In the event of certain corporate events specified in Article 19 of the
Plan, any outstanding Options granted hereunder may be replaced by substituted
options or canceled in exchange for payment of cash in accordance with the
procedures and provisions of Article 19 of the Plan.

Section 13. Restriction on Transfer of Option. The Option may not be
transferred, pledged, assigned, hypothecated or otherwise disposed of in any way
by the Optionee, except by will or by the laws of descent and distribution.
Except as provided below, this Option may be exercisable during the Optionee’s
lifetime only by the Optionee. In the event an Optionee becomes legally
incapacitated, the Option shall be exercisable by the Optionee’s legal guardian,
committee or legal representative. If the Optionee dies, the Option shall
thereafter be exercisable by the Optionee’s executors or administrators. The
Option shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and void and
without effect.

Section 14. Notices. Any notice hereunder by the Optionee shall be given to the
Company in writing and such notice shall be deemed duly given only upon receipt
thereof at the following address: Corporate Secretary, Archer-Daniels-Midland
Company, 4666 Faries Parkway, Decatur, Illinois 62526, or at such other address
as the Company may designate by notice to the Optionee. Any notice hereunder by
the Company shall be given to the Optionee in writing and such notice shall be
deemed duly given only upon receipt thereof at such address as the Optionee may
have on file with the Company.

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Section 15. Construction. The construction of this Agreement is vested in the
Committee, and the Committee’s construction shall be final and conclusive.

Section 16. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Illinois, without giving effect to the
choice of law principles thereof.

Archer-Daniels-Midland Company

By:_____________________________________
        Paul B. Mulhollem
  President & Chief Operating Officer

OPTIONEE

By:_____________________________________

 

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APPENDIX A
 
Definition of Change in Control
 
 
For purposes of this Agreement, a "Change in Control" of the Company shall mean:
 
(i) an acquisition subsequent to the Date of Grant by any individual, entity or
group (within the meaning of section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of thirty percent (30%) or more of either (A) the then outstanding
shares of Common Stock or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company, (2)
any acquisition by the Company and (3) any acquisition by an employee benefit
plan (or related trust) sponsored or maintained by the Company or any
Subsidiary;
 
(ii) during any period of two (2) consecutive years (not including any period
prior to the Date of Grant), individuals who at the beginning of such period
constitute the Board (and any new directors whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was so approved) cease for any reason (except for death, disability or
voluntary retirement) to constitute a majority thereof;
 
(iii) the consummation of a merger, consolidation, reorganization or similar
corporate transaction which has been approved by the stockholders of the
Company, whether or not the Company is the surviving company in such
transaction, other than a merger, consolidation, or reorganization that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the combined voting power of the voting securities of the Company (or
such surviving entity) outstanding immediately after such merger, consolidation,
or reorganization;
 
(iv) the approval by the stockholders of the Company of (A) the sale or other
disposition of all or substantially all of the assets of the Company or (B) a
complete liquidation or dissolution of the Company; or
 
(v) adoption by the Board of a resolution to the effect that any person has
acquired effective control of the business and affairs of the Company.
 

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