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EXHIBIT 10.3  

 
 

MAGNA ENTERTAINMENT CORP.
  
    AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
  
    I. INTRODUCTION    
    

        1.1    Purposes.    The
purposes of the Long-Term Incentive Plan (the "Plan") of Magna Entertainment Corp. (the "Company") are (i) to
align the interests of the Company's stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company's growth and success,
(ii) to advance the interests of the Company by attracting and retaining outside directors, officers, employees, consultants, independent contractors and agents and (iii) to motivate
such persons to act in the long-term best interests of the Company and its stockholders. 

1.2    Certain Definitions.  

        "Agreement" shall mean the written Stock Option Agreement evidencing an award
hereunder between the Company and the recipient of such award. 

        "Board" shall mean the Board of Directors of the Company. 

        "Bonus Stock" shall mean shares of Common Stock which are not subject to a Restriction Period or Performance
Measures. 

        "Bonus Stock Award" shall mean an award of Bonus Stock under this Plan. 

        "Cause" shall mean the willful and continued failure substantially to perform the duties assigned by the
Company (other than a failure resulting from the optionee's Disability), the willful engaging in conduct which is demonstrably injurious to the Company or any Subsidiary, monetarily or otherwise,
including conduct that, in the reasonable judgment of the Company, no longer conforms to the standard of the Company's executives or employees, any act of dishonesty, commission of a felony, or a
significant violation of any statutory or common law duty of loyalty to the Company. 

        "Code" shall mean the Internal Revenue Code of 1986, as amended. 

        "Committee" shall mean the Corporate Governance, Human Resources and Compensation Committee of
the Board. 

        "Common Stock" shall mean the Class A Subordinate Voting Stock of the Company. 

        "Company" has the meaning specified in Section 1.1. 

        "Disability" shall mean the inability of the holder of an award to perform substantially such holder's duties
and responsibilities for a continuous period of at least six months, as determined solely by the Committee. 

        "Eligible Participants" shall mean the persons specified in Section 1.4(a). 

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        "Eligible Director" shall mean those Outside Directors specified in Section 1.4(b). 

        "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. 

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

        "Fair Market Value" shall mean the closing transaction price of a share of Common Stock as reported on The
Nasdaq Stock Market on the trading day immediately prior to the date as of which such value is being determined; provided, however, that Fair Market Value may be determined by the Committee by
whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate. 

        "Free-Standing SAR" shall mean a SAR which is not issued in tandem with, or by reference to, an
option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock), cash or a combination thereof with an aggregate value equal to the excess
of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised. 

        "Incentive Stock Option" shall mean an option to purchase shares of Common Stock that meets the requirements
of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option. 

        "Insider" means (i) an insider as defined in the Securities Act (Ontario), other than a person who
falls within that definition solely by virtue of being a director or senior officer of a Subsidiary; and (ii) an associate of any person who is an insider by virtue of (i). 

        "Mature Shares" shall mean previously-acquired shares of Common Stock for which the holder thereof has good
title, free and clear of all liens and encumbrances and which such holder either (i) has held for at least six months or (ii) has purchased on the open market. 

        "Non-Statutory Stock Option" shall mean an option to purchase shares of Common Stock which is not
an Incentive Stock Option. 

        "Outstanding Issue" means the total number of shares of Common Stock, Class B stock of the Company and
Common Stock reserved for issuance by the Company upon the exchange, retraction or redemption, of the Exchangeable Shares of MEC (Holdings) Inc. issued and outstanding at the date of
calculation (excluding any such shares issued pursuant to share compensation arrangements during the 12-month period prior to the date of calculation). 

        "Outside Director" shall mean directors of the Company who are not officers or employees of the Company or
any affiliate. 

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        "Performance Measures" shall mean the criteria and objectives, established by the Committee, which shall be
satisfied or met (i) as a condition to the exercisability of all or a portion of a Stock Option or SAR, (ii) as a condition to the grant of a Stock Award or (iii) during the
applicable Restriction Period or Performance Period as a condition to the holder's receipt, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such award, or, in the
case of a Performance Share Award, of the shares of Common Stock subject to such award and/or of payment with respect to such award. In the sole discretion of the Committee, the Committee may amend or
adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of unusual or nonrecurring events affecting the Company or its financial statements or
changes in law or accounting principles. Such criteria and objectives may include one or more of the following: the attainment by a share of Common Stock of a specified Fair Market Value for a
specified period of time, earnings per share, return to stockholders (including dividends), return on equity, earnings of the Company, revenues, market share, cash flow or cost reduction goals, or any
combination of the foregoing. If the Committee desires that compensation payable pursuant to any award subject to Performance Measures be "qualified performance-based compensation" within the meaning
of Section 162(m) of the Code, the Performance Measures (i) shall be established by the Committee no later than 90 days after the beginning of the Performance Period or
Restriction Period, as applicable (or such other time designated by the Internal Revenue Service) and (ii) shall satisfy all other applicable requirements imposed under Treasury
Regulations promulgated under Section 162(m) of the Code, including the requirement that such Performance Measures be stated in terms of an objective formula or standard. 

        "Performance Period" shall mean any period designated by the Committee during which the Performance Measures
applicable to a Performance Share Award shall be measured. 

        "Performance Share" shall mean a right, contingent upon the attainment of specified Performance Measures
within a specified Performance Period, to receive one share of Common Stock, which may be Restricted Stock, or in lieu of all or a portion thereof, the Fair Market Value of such Performance Share
in cash. 

        "Performance Share Award" shall mean an award of Performance Shares under this Plan. 

        "Post-Termination Exercise Period" shall mean the period specified in or pursuant to
Section 2.3(a), Section 2.3(b), Section 2.3(d) or Section 2.3(e) following termination of employment with or the service to the Company during which a Stock Option or SAR
may be exercised. 

        "Restricted Stock" shall mean shares of Common Stock which are subject to a Restriction Period. 

        "Restricted Stock Award" shall mean an award of Restricted Stock under this Plan. 

        "Restriction Period" shall mean any period designated by the Committee during which the Common Stock subject
to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to
such award. 

        "Retirement" shall mean termination of employment with or service to the Company by reason of retirement on
or after age 60 with the consent of the Company. 

        "SAR" shall mean a stock appreciation right which may be a Free-Standing SAR or a
Tandem SAR. 

        "Stock Award" shall mean a Restricted Stock Award or a Bonus Stock Award. 

        "Stock Option" shall mean an Incentive Stock Option or a Non-Statutory Stock Option. 

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        "Subsidiary" and "Subsidiaries"
shall have the meanings set forth in Section 1.4. 

        "Tandem SAR" shall mean an SAR which is granted in tandem with, or by reference to, a Stock Option (including
a Non-Statutory Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all
or a portion of such Stock Option, shares of Common Stock (which may be Restricted Stock), cash or a combination thereof with an aggregate value equal to the excess of the Fair Market Value of one
share of Common Stock on the date of exercise over the base price of such
SAR, multiplied by the number of shares of Common Stock subject to such Stock Option, or portion thereof, which is surrendered. 

        "Tax Date" shall have the meaning set forth in Section 5.5. 

        "Ten Percent Holder" shall have the meaning set forth in Section 2.1(a). 

        1.3    Administration.    This
Plan shall be administered by the Committee. Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) Stock Options in the form of Incentive Stock
Options or Non-Statutory Stock Options, (ii) SARs in the form of Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form of Restricted Stock or Bonus
Stock and (iv) Performance Shares. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of
each award to such persons and, if applicable, the number of shares of Common Stock, the number of SARs and the number of Performance Shares subject to such an award, the exercise price or base price
associated with the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement
evidencing the award. The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding Stock Options and SARs shall become exercisable
in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock Award shall lapse, (iii) all or a portion of the Performance Period
applicable to any outstanding Performance Share Award shall lapse and (iv) the Performance Measures applicable to any outstanding award (if any) shall be deemed to be satisfied at the
maximum or any other level. Any such action by the Committee shall be subject to the requirements of Section 162(m) of the Code and regulations thereunder in the case of an award intended to be
qualified performance-based compensation, except if the action is determined in good faith by the Committee to be necessary in order to facilitate a transaction involving a Change of Control of the
Company. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration
of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award, such as limiting competitive employment or other activities. All such interpretations, rules,
regulations and conditions shall be final, binding and conclusive. 

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        The
Committee may delegate some or all of its power and authority hereunder to the Board, the Chairman of the Board, the President and Chief Executive Officer or other executive officer
of the Company as the Committee deems appropriate; provided, however, that (i) the Committee may not delegate its power and authority to the Board, the Chairman of the Board, or the President
and Chief Executive Officer or other executive officer of the Company with regard to the grant of an award to any person who is a "covered employee" within the meaning of Section 162(m) of the
Code or who, in the Committee's judgment, is likely to be a covered employee at any time during the period an award hereunder to such employee would be outstanding and (ii) the Committee
may not delegate its power and authority to the Chairman of the Board, President and Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in
this Plan of an officer or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer or other person. 

        A
majority of the Committee shall constitute a quorum. The acts of the Committee shall be either (i) acts of a majority of the members of the Committee present at any meeting at
which a quorum is present or (ii) acts approved in writing by all of the members of the Committee without a meeting. 

        1.4    Eligibility.    (a)
Participants in this Plan shall consist of such officers and other employees, consultants, independent contractors and agents of the Company, its subsidiaries from time to time and any other entity
designated by the Board or the Committee (individually a "Subsidiary" and collectively the "Subsidiaries") as the Committee in its sole
discretion may select from time to time. For purposes of this Plan, references to employment shall also mean an agency or independent contractor relationship and references to employment by the
Company shall also mean employment by a Subsidiary. The Committee's selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate
in this Plan at any other time; and (b) Outside Directors shall also be participants in the Plan. 

        1.5    Shares
Available.    Subject to adjustment as provided in Section 5.7, 108,000,000 shares of Common Stock shall be available for awards under
this Plan, consisting of: (i) 8,000,000 shares of Common Stock which shall be available for issuance pursuant to Stock Options and Tandem SARs, and (ii) 2,000,000 shares of Common Stock
which shall be available for issuance pursuant to any type of award under this Plan other than Stock Options and Tandem SARs. To the extent that shares of Common Stock subject to an outstanding Stock
Option (except to the extent shares of Common Stock are issued or delivered by the Company in connection with the exercise of a Tandem SAR), Free-Standing SAR, Stock Award or Performance
Share are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the delivery or withholding of shares of Common Stock to pay all or
a portion of the exercise price of an award, if any, or to satisfy all or a portion of the tax withholding obligations relating to an award, then such shares of Common Stock shall again be available
under this Plan. 

        Shares
of Common Stock shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares
or otherwise or a combination thereof. 

        To
the extent necessary for an award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder, the maximum number of shares
of Common Stock with respect to which Stock Options or SARs or a combination thereof may be granted during any calendar year to any person shall be 4,000,000, subject to adjustment as provided in
Section 5.7. 

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        Notwithstanding
anything else in the Plan, at no time shall: 

	(a)
	the
aggregate number of shares of Common Stock reserved for awards under the Plan (subject to adjustment as provided in Section 5.7), together with the number of shares of
Common Stock of the Company reserved for issuance under any other share compensation arrangements of the Company, result in the number of shares of Common Stock of the Company reserved for
issuance pursuant to share compensation arrangements exceeding 10% of the Outstanding Issue;

	(b)
	the
number of shares of Common Stock reserved for awards under the Plan to any one person (subject to adjustment as provided in Section 5.7), exceed 5% of the Outstanding
Issue;

	(c)
	the
aggregate number of shares of Common Stock issued within a one-year period pursuant to awards under the Plan, together with the number of shares of Common Stock of the
Company issued within such period under any other share compensation arrangements of the Company, exceed 10% of the Outstanding Issue;

	(d)
	the
aggregate number of shares of Common Stock reserved for awards under the Plan to Insiders of the Company, together with the number of shares of Common Stock of the Company
reserved for issuance to such persons under any other share compensation arrangements of the Company, exceed 10% of the Outstanding Issue;

	(e)
	the
aggregate number of shares of Common Stock issued within a one-year period to Insiders of the Company pursuant to awards under the Plan, together with the number of
shares of Common Stock of the Company issued within such period to such persons under any other share compensation arrangements of the Company, exceed 10% of the Outstanding Issue; or

	(f)
	the
aggregate number of shares of Common Stock issued within a one-year period to any one Insider of the Company and that Insider's associates (as defined in the
Securities Act (Ontario)) pursuant to awards under the Plan, together with the number of shares of Common Stock of the Company issued within such period to such persons under any other share
compensation arrangements of the Company, exceed 5% of the Outstanding Issue. 

        For
the purposes of paragraphs (d), (e) and (f) above, shares of Common Stock of the Company issued and awards granted to a person prior to such person becoming an
Insider may be excluded in determining the number of shares of Common Stock of the Company issuable to Insiders. 

 
 

II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS    
    

        2.1    Stock
Options.    The Committee may, in its discretion, grant Stock Options to purchase shares of Common Stock to such Eligible Participants as may be
selected by the Committee. Each Stock Option, or portion thereof, that is not an Incentive Stock Option, shall be a Non-Statutory Stock Option. An Incentive Stock Option may not be granted
to any person who is not an employee of the Company or any parent or subsidiary (as defined in Section 424 of the Code). Each Incentive Stock Option shall be granted within ten years of
the date this Plan is adopted by the Board. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which Stock Options
designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or subsidiary as
defined in Section 424 of the Code) exceeds the amount (currently $100,000) established by the Code, such Stock Options shall constitute Non-Statutory Stock Options. 

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        The
Committee shall grant Stock Options to purchase 10,000 shares of Common Stock to each Eligible Director in each of the following circumstances: 

	(i)
	immediately
following each such Eligible Director's election to the Board; and

	(ii)
	immediately
following the completion of each five (5) years of continuous service as a director of the Corporation. 

        Stock
Options granted to Eligible Directors shall vest as to 20% of the shares of Common Stock included in each such grant to Eligible Directors on the date of such grant, with an
additional 20% of the shares vesting on each of the second, third, fourth and fifth anniversary dates of each such grant. 

        Stock
Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable: 

	(a)
	Number
of Shares and Purchase Price.    The number of shares of Common Stock subject to a Stock Option, other than those granted to Eligible
Directors and the purchase price per share of Common Stock purchasable upon exercise of the Stock Option shall be determined by the Committee; provided, however, that the purchase price per share of
Common Stock purchasable upon exercise of a Stock Option shall not be less than 100% of the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant of such Stock
Option and (ii) the price of the last board lot of shares of Common Stock sold on The Toronto Stock Exchange on the last business day prior to the date of grant of such Stock Option on which a
board lot of shares of Common Stock traded on The Toronto Stock Exchange (the "TSE Permitted Price"); provided further, that if an Incentive Stock Option shall be granted to any person who, at
the time such Stock Option is granted, owns capital stock possessing more than ten percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or
subsidiary as defined in Section 424 of the Code) (a "Ten Percent Holder"), the purchase price per share of Common Stock shall be the greater of
(i) the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option and (ii) the TSE Permitted Price.

	(b)
	Option
Period and Exercisability.    The period during which a Stock Option may be exercised shall be determined by the Committee; provided,
however, that no Stock Option shall be exercisable later than ten years after its date of grant and shall expire at the end of such period, unless if the expiry of such Stock Option falls within a
trading blackout, in which case the Committee may grant an extension to such Stock Option for not more than ten business days following the otherwise occurring expiry date of such Stock Option;
provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such Stock Option shall not be exercised later than five years after its date of grant. The Committee may,
in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of a Stock Option or to the exercisability of all or a portion of a Stock Option other
than those granted to Eligible Directors. The Committee shall determine whether a Stock Option shall become exercisable in cumulative or non-cumulative installments and in part or in full
at any time. An exercisable Stock Option, or portion thereof, may be exercised only with respect to whole shares of Common Stock. 

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	(c)
	Method
of Exercise.    A Stock Option may be exercised (i) by giving written notice to the Company specifying the number of whole shares
of Common Stock to be purchased and accompanied by payment therefor in full (or arrangement made for such payment to the Company's satisfaction) either (A) in cash, (B) by
delivery (either actual delivery or by attestation procedures established by the Company) of Mature Shares having an aggregate Fair Market Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, (C) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or
(D) a combination of (A) and (B), in each case to the extent set forth in the Agreement relating to the Stock Option, (ii) if applicable, by surrendering to the Company any Tandem
SARs which are canceled by reason of the exercise of the Stock Option and (iii) by executing such documents as the Company may reasonably request. The Company shall have sole discretion to
disapprove of an election pursuant to any of clauses (B)-(D). Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the optionee. No certificate representing Common Stock shall be delivered until the full purchase price therefor has been paid (or arrangement made for such
payment to the Company's satisfaction). 

        2.2    Stock Appreciation
Rights.    The Committee may, in its discretion, grant SARs to Eligible Participants. The Agreement relating to a SAR shall specify whether the SAR is
a Tandem SAR or a Free-Standing SAR. 

        SARs
shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable: 

	(a)
	Number
of SARs and Base Price.    The number of SARs subject to an award shall be determined by the Committee. Any Tandem SAR related to an
Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the
related Stock Option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the greater of
(i) the Fair Market Value of a share of Common Stock on the date of grant of such SAR or (ii) the price of the last board lot of shares of Common Stock sold on The Toronto Stock Exchange
on the last business day prior to the date of grant of such SAR on which a board lot of shares of Common Stock traded on The Toronto Stock Exchange.

	(b)
	Exercise
Period and Exercisability.    The Agreement relating to an award of SARs shall specify whether such award may be settled in shares of
Common Stock (including shares of Restricted Stock) or cash or a combination thereof. The period for the exercise of an SAR shall be determined by the Committee; provided, however, that no Tandem SAR
shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related Stock Option; provided further, that no SAR shall be exercisable later than ten years after
its date of grant and shall expire at the end of such period. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR
or to the exercisability of all or a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at
any time. An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free-Standing SAR,
only with respect to a whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with
Section 3.2(c) and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d). Prior to the
exercise of an SAR for shares of Common Stock, including Restricted Stock, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common
Stock subject to such SAR and shall have rights as a stockholder of the Company in accordance with Section 5.9. 

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	(c)
	Method
of Exercise.    A Tandem SAR may be exercised (i) by giving written notice to the Company specifying the number of whole SARs
which are being exercised, (ii) by surrendering to the Company any Stock Options which are canceled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as
the Company may reasonably request. A Free-Standing SAR may be exercised (i) by giving written notice to the Company specifying the whole number of SARs which are being exercised
and (ii) by executing such documents as the Company may reasonably request. 

2.3    Termination of Employment or Service.  

	(a)
	Disability.    Unless
otherwise specified in the Agreement relating to a Stock Option or SAR, as the case may be, if the employment with or
service to the Company of the holder of a Stock Option or SAR terminates by reason of Disability, each Stock Option and SAR held by such holder shall be fully exercisable and may thereafter be
exercised by such holder (or such holder's legal representative or similar person) until and including the earliest to occur of (i) in the case of a holder who is an employee of the
Company, the date which is three (3) years or, in the case of a holder who is not an employee of the Company, the date which is one (1) year, (or such other period as set forth in
the Agreement relating to such Stock Option or SAR) after the effective date of such holder's termination of employment or service and (ii) the expiration date of the term of such Stock Option
or SAR.

	(b)
	Retirement.    Unless
otherwise specified in the Agreement relating to a Stock Option or SAR, as the case may be, if the employment with or
service to the Company of the holder of a Stock Option or SAR terminates by reason of Retirement, each Stock Option and SAR held by such holder shall be fully exercisable and may thereafter be
exercised by such holder (or such holder's legal representative or similar person) until and including the earliest to occur of (i) in the case of a holder who is an employee of the
Company, the date which is three (3) years or, in the case of a holder who is not an employee of the Company, the date which is one (1) year, (or such other period as set forth in
the Agreement relating to such Stock Option or SAR) after the effective date of such holder's termination of employment or service and (ii) the expiration date of the term of such Stock Option
or SAR.

	(c)
	Death.    Unless
otherwise specified in the Agreement relating to a Stock Option or SAR, as the case may be, if the employment with or service
to the Company of the holder of a Stock Option or SAR terminates by reason of death, each Stock Option and SAR held by such holder shall be fully exercisable by such holder's executors,
administrators, legal representatives, beneficiaries, or similar person until and including the earliest to occur of (i) the date which is 1 year (or such other period as set
forth in the Agreement relating to such Stock Option or SAR) after the date of death and (ii) the expiration date of the term of such Stock Option or SAR.

	(d)
	Other
Termination.    Unless otherwise specified in the Agreement relating to a Stock Option or SAR, as the case may be, if the employment with
the Company of the holder of a Stock Option or SAR terminates for any reason other than Disability, Retirement, death, or for Cause, each Stock Option and SAR held by such holder shall be exercisable
only to the extent that such Stock Option or SAR is exercisable on the effective date of such holder's termination of employment or service and may thereafter be exercised by such holder
(or such holder's legal representative or similar person) until and including the earliest to occur of (i) the date which is three (3) months (or such other period as set
forth in the Agreement relating to such Stock Option or SAR) after the effective date of such holder's termination of employment and (ii) the expiration date of the term of such Stock
Option or SAR. 

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	(e)
	Cause.    Notwithstanding
anything to the contrary in this Plan or in any Agreement relating to a Stock Option or SAR, as the case may be, if
the employment with or service to the Company of the holder of a Stock Option or SAR is terminated by the Company for Cause, each Stock Option and SAR held by such holder shall be automatically
canceled by the Company on the effective date of such holder's termination of employment or service. 

 
 

III. STOCK AWARDS    
    

        3.1    Stock
Awards.    The Committee may, in its discretion, grant Stock Awards to Eligible Participants. The Agreement relating to a Stock Award shall specify
whether the Stock Award is a Restricted Stock Award or Bonus Stock Award. 

        3.2    Terms of Stock
Awards.    Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent
with the terms of this Plan, as the Committee shall deem advisable. 

	(a)
	Number
of Shares and Other Terms.    The number of shares of Common Stock subject to a Restricted Stock Award or Bonus Stock Award and the
Performance Measures (if any) and Restriction Period applicable to a Restricted Stock Award shall be determined by the Committee.

	(b)
	Vesting
and Forfeiture.    The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if specified Performance Measures are satisfied or met during the
specified Restriction Period or (ii) if the holder of such award remains continuously in the employment of or service to the Company during the specified Restriction Period and for the
forfeiture of all or a portion of the shares of Common Stock subject to such award (x) if specified Performance Measures are not satisfied or met during the specified Restriction Period or
(y) if the holder of such award does not remain continuously in the employment of or service to the Company during the specified Restriction Period. 

        Bonus
Stock Awards shall not be subject to any Performance Measures or Restriction Periods. 

	(c)
	Share
Certificates.    During the Restriction Period, a certificate or certificates representing a Restricted Stock Award may be registered in
the holder's name or a nominee name at the discretion of the Company and may bear a legend, in addition to any legend which may be required pursuant to Section 5.6, indicating that the
ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award. As
determined by the Committee, all certificates registered in the holder's name shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of
attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate by the Company, which would permit transfer to the Company of all or a portion of the shares of
Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or
attainment of applicable Performance Measures), or upon the grant of a Bonus Stock Award, in each case subject to the Company's right to require payment of any taxes in accordance with
Section 5.5, a certificate or certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award. 

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	(d)
	Rights
with Respect to Restricted Stock Awards.    Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject
to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to
receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided, however, that a distribution with respect to shares of Common Stock, other
than a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.

	(e)
	Awards
to Certain Executive Officers.    Notwithstanding any other provision of this Article III, and only to the extent necessary to
ensure the deductibility to the Company of an award, the number of shares of Common Stock subject to a Stock Award granted to a "covered employee" within the meaning of Section 162(m) of the
Code in any calendar year shall not exceed 4,000,000. 

3.3    Termination of Employment or Service.  

	(a)
	Disability,
Retirement and Death.    Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, if the employment with or
service to the Company of the holder of such award terminates by reason of Disability, Retirement or death, the Restriction Period shall terminate as of the effective date of such holder's termination
of employment or service and all Performance Measures, if any, applicable to such award shall be deemed to have been satisfied at the minimum target level.

	(b)
	Other
Termination.    Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, if the employment with or service to the
Company of the holder of a Restricted Stock Award terminates for any reason other than Disability, Retirement or death, the portion of such award which is subject to a Restriction Period on the
effective date of such holder's termination of employment or service shall be forfeited by such holder and such portion shall be automatically canceled by the Company. 

 
 

IV. PERFORMANCE SHARE AWARDS    
    

        4.1    Performance Share
Awards.    The Committee may, in its discretion, grant Performance Share Awards to Eligible Participants. 

        4.2    Terms of Performance Share
Awards.    Performance Share Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem advisable. 

	(a)
	Number
of Performance Shares and Performance Measures.    The number of Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the Committee.

	(b)
	Vesting
and Forfeiture.    The Agreement relating to a Performance Share Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such award, if specified Performance Measures are satisfied or met during the specified Performance Period, and for the
forfeiture of all or a portion of such award, if specified Performance Measures are not satisfied or met during the specified Performance Period. 

11

 

	(c)
	Settlement
of Vested Performance Share Awards.    The Agreement relating to a Performance Share Award (i) shall specify whether such
award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof and (ii) may specify whether the holder thereof shall be entitled to
receive, on a current or deferred basis, dividend equivalents, and, if determined by the Committee, interest on or the deemed reinvestment of any deferred dividend equivalents, with respect to the
number of shares of Common Stock subject to such award. If a Performance Share Award is settled in shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be
issued in accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d).
Prior to the settlement of a Performance Share Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Company with
respect to the shares of Common Stock subject to such award and shall have rights as a stockholder of the Company in accordance with Section 5.9. 

4.3    Termination of Employment.  

	(a)
	Disability,
Retirement and Death.    Unless otherwise set forth in the Agreement relating to a Performance Share Award, if the employment with
or service to the Company of the holder of such award terminates by reason of Disability, Retirement or death, all Performance Measures applicable to such award shall be deemed to have been satisfied
at the minimum target level and the Performance Period applicable to such award shall thereupon terminate.

	(b)
	Other
Termination.    Unless otherwise set forth in the Agreement relating to a Performance Share Award, if the employment with or service to
the Company of the holder of a Performance Share Award terminates for any reason other than Disability, Retirement or death, the portion of such award which is subject to a Performance Period on the
effective date of such holder's termination of employment shall be forfeited and such portion shall be automatically canceled by the Company. 

 
 

V. GENERAL    
    

        5.1    Effective Date and Term of
Plan.    This Plan was approved by the directors of the Company on March 1, 2000 and was approved by the written consent of the holders of a
majority of the votes attached to the outstanding stock of the Company on March 1, 2000, which date is the effective date of this Plan. This Plan was amended and approved by the Board of
Directors of the Company on March 21, 2007 and ratified at a meeting of the holders of a majority of the votes attached to the outstanding stock of the Company on May 9, 2007. This Plan
shall terminate when shares of Common
Stock are no longer available for the grant, exercise or settlement of awards, unless terminated earlier by the Board. Termination of this Plan shall not affect the terms or conditions of any award
granted prior to termination. 

12

 

        5.2    Amendments.    The
Board may amend this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) and
Section 422 of the Code; provided, however, that no amendment shall be made without stockholder approval if such amendment would (i) increases the number of shares of Class A
Subordinate Voting Stock reserved for issuance under the Plan (other than an increase in proportion to an increase in the number of shares of Class A Subordinate Voting Stock outstanding as a
result of a stock split, stock dividend, recapitalization, reorganization, merger, combination, exchange of shares, or other similar change in capitalization or event); (ii) reduces the
exercise price of a Stock Option held by insiders except for the purpose of maintaining value of Stock Options in connection with a stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off, sale of substantially all assets or other similar change in capitalization or event, or any distribution to
holders of Class A Subordinate Voting Stock other than a regular cash dividend involving MEC (for this purpose, cancellation or termination of a Stock Option of a Plan participant prior
to its expiry date for the purpose of reissuing Stock Options to the same Plan participant with a lower exercise price shall be treated as an amendment to reduce the exercise price of a Stock Option);
(iii) extends the term of a Stock Option held by an insider beyond the option period determined by the Compensation Committee at the date of grant; (iv) extends eligibility to
participate in the Plan to persons other than officers and other employees, consultants, independent contractors and agents of MEC, its subsidiaries from time to time and any other entity controlled
by MEC and directors of MEC who are not officers or employees of MEC or any affiliate; (v) permits awards to be transferable other than for normal estate settlement purposes;
(vi) permits the award of a Stock Option with an expiry date beyond ten (10) years from its date of grant; or (vi) amends the provisions of this Plan respecting matters requiring
stockholder approval other than to add matters to be subject to stockholder approval; or (vii) without the consent of the affected option holder, amends any terms of Incentive Stock Options
that is inconsistent Section 422 of the Code, unless the Board has determined in good faith that such change is inconsistent with Section 422 of the Code and is necessary in order to
facilitate a transaction involving a change of control of Company. The amendment provisions of the Plan will provide that no amendment may materially impair the rights of a holder of an outstanding
award without the consent of such holder. 

        5.3    Agreement.    No
award shall be valid until an Agreement is executed by the Company and the recipient of such award and, upon execution by each party and delivery of the Agreement to the Company, such award shall be
effective as of the effective date set forth in the Agreement. 

        5.4    Non-Transferability of
Awards.    No award shall be transferable other than by will or by the laws of descent and distribution. Each award may be exercised or settled during
the holder's lifetime only by the holder. Except to the extent permitted by the second preceding sentence or the Agreement relating to an award, no award may be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any such award, such award and all rights thereunder shall immediately become null and void. 

        5.5    Tax
Withholding.    The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash
pursuant to an award made hereunder, payment by the holder of such award of any Federal, state, local or other taxes which may be required to be withheld or paid in connection with such award. An
Agreement may provide that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the
date the obligation to withhold or pay taxes arises in connection with an award (the "Tax Date"), or withhold an amount of cash which would otherwise be payable to
a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company,
(B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of Mature Shares having an aggregate Fair Market Value, determined as of the Tax
Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an
aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation,
(D) in the case of the exercise of a Stock Option, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or
(E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the award; provided, however, that the Company shall have sole discretion to
disapprove of an election pursuant to any of clauses (B)-(E). Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined
by applying the minimum statutory withholding rate. Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due
shall be paid in cash by the holder. 

13

 

        5.6    Restrictions on
Shares.    Each award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or
qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the exercise or settlement of such award or the delivery of shares thereunder, such award shall not be exercised or settled and such
shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the
Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other
disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder. 

        5.7    Adjustment.    Notwithstanding
anything to the contrary contained in this Plan, in the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation,
spin-off, sale of substantially all assets or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a regular cash dividend, the number
and class of securities available under this Plan, the number and class of securities subject to each outstanding Stock Option and the purchase price per security, the per person limits imposed by
Sections 1.5 and 3.2 on grants of Stock of SAR's and Stock Awards in a Calendar Year, the terms of each outstanding SAR, the number and class of securities subject to each outstanding
Stock Award, and the terms of each outstanding Performance Share shall be adjusted by the Committee, such adjustments to be made in the case of outstanding Stock Options and SARs without an increase
in the aggregate purchase price or base price. The decision of the Committee regarding any such adjustment shall be final, binding and conclusive. If any such adjustment would result in a fractional
security being (a) available under this Plan, such fractional security shall be disregarded, or (b) subject to an award under this Plan, the Company shall pay the holder of such award,
in connection with the first vesting, exercise or settlement of such award in whole or in part occurring after such adjustment, an amount in cash determined by multiplying (i) the fraction of
such security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on the vesting, exercise or settlement date over (B) the exercise or base
price, if any, of such award. 

        5.8    No Right of Participation or
Employment.    No person shall have any right to participate in this Plan other than Eligible Directors. Neither this Plan nor any award made hereunder
shall confer upon any person any right to continued employment by the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or
any affiliate of the Company to terminate the employment of any person at any time without liability hereunder. 

14

 

        5.9    Rights as
Stockholder.    No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of
the Company which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security. 

        5.10    Designation of
Beneficiary.    If permitted by the Company, a holder of an award may file with the Committee a written designation of one or more persons as such
holder's beneficiary or beneficiaries (both primary and contingent) in the event of the holder's death. To the extent an outstanding Stock Option or SAR granted hereunder is exercisable, such
beneficiary or beneficiaries shall be entitled to exercise such Stock Option or SAR. 

        Each
beneficiary designation shall become effective only when filed in writing with the Committee during the holder's lifetime on a form prescribed by the Committee. The spouse of a
married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Committee of a new beneficiary designation
shall cancel all previously filed beneficiary designations. 

        If
a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding Stock Option and SAR hereunder held by such
holder, to the extent exercisable, may be exercised by such holder's executor, administrator, legal representative or similar person. 

        5.11    Governing
Law.    This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not
otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles
of conflicts of laws. 

        5.12    Foreign
Employees.    Without amending this Plan, the Committee may grant awards to Eligible Participants or Eligible Directors who are foreign nationals on
such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan
and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in
other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees in or in which an Eligible Director resides. 

Effective
Date of Plan — March 1, 2000 

        Revised
to reflect an amendment made effective March 21, 2007 with the approval of the board of directors and ratified by stockholders on May 9, 2007. 

15

QuickLinks

MAGNA ENTERTAINMENT CORP. AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN I. INTRODUCTION

II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

III. STOCK AWARDS

IV. PERFORMANCE SHARE AWARDS

V. GENERALExhibit 10.3

Flavio Sa Carvalho

Chief
Personnel Officer

 

 

Ms.
Jacqualyn A. Fouse

1022
Harrison Drive

Kennedale,
Texas 76060

 

June
21, 2007

 

 

Dear
Jackie,

 

On behalf of Bunge Limited (“Bunge” or the “Company”),
I am very happy to confirm our offer for you to join Bunge Limited as the Chief
Financial Officer of the Company, based in White Plains, N.Y and reporting
directly to Alberto Weisser, Chairman & CEO.  Both Alberto and I are looking forward to
having you in our team leading this very important area of the Company and
helping us further Bunge’s growth and profitability. I know Bunge offers the
environment and challenges that you are seeking and I am sure you will enjoy
the Bunge  Group.

 

This Letter summarizes the basic employment
terms and conditions of our offer. These are:

 

1.                          Starting
Date: July 23, 2007 (“Hire Date”).

 

2.                          Main
Responsibilities: The Chief Financial Officer of Bunge Limited (the
CFO) is responsible for the general management of all finance and control
activities of Bunge Limited and for providing financial leadership for the worldwide operations of Bunge Limited. As
a key member of the senior management team of Bunge, the CFO sets guidelines and policies for all finance related
functions of the Company and ensures the best performance of such areas as
Treasury, Risk Management, Strategic Planning, Accounting and Control, Legal,
Investor Relations, Insurance and Tax and Internal Audit. Additionally, as a
member of the Executive Committee of Bunge, the CFO contributes to decisions in
other areas as they impact the organization as a whole seeking to achieve
maximum growth and profitability for the entire Company.

 

Working
with the Chief Executive Officer of Bunge and other senior managers of the
Company as appropriate, other key responsibilities of the CFO include but are
not limited to (1) spearheading strategy development and planning (2) assuring
sufficiency of funds for CAPEX and operating working capital, (3) safeguarding
corporate assets, (4) establishing and maintaining effective business systems
to support the development and management of the Company’s strategy, (5) overseeing the integrity of the Company’s
financial books and records, (6) ensuring compliance with applicable
finance/accounting laws and regulations; (7) representing the Company in
the financial community and with other relevant constituencies in both the
public and private sectors of the economy; (8) overseeing the establishment of
strategic alliances, acquisitions and divestitures; and (9) developing and leveraging appropriate leadership,
technical know-how and financial management skills capability within the
Company to enable effective and on-going corporate performance and growth, and
ultimately, the maximization of shareholder value.

 

 

3.                          Base
Salary: Your salary will be $660,000.00 per annum payable in 24 installments
per year.  Your salary will be reviewed
to consider relevant market rates and practices during our annual salary review
process in March 2008 and annually thereafter.

 

4.                          Annual
Incentive Program: Beginning in 2007, and each year thereafter, you
will be eligible for consideration for an award under the Company’s annual
executive incentive program. As CFO of the Company, the “target” of your annual
performance incentive award is 75% of your base salary (i.e., currently
approximately $495,000 per year), with a maximum upward potential of 2.5 times
this amount. Note that the actual annual award will be determined based on your
individual contribution during each performance year as well as on the results
achieved against select financial metrics. Bonuses, if due, are typically paid
in the first quarter of the year following the announcement of financial
results for the performance year and are contingent upon your continued
employment with the Company at the time they are to be paid.

 

5.                          Long
Term Incentive Program: You will also be eligible for consideration
for awards under the Company’s equity incentive program.  The value of this award is established
annually by the Compensation Committee of the Board based on a competitive
analysis of Bunge’s peer companies and other factors which impact the business.
For 2007, awards granted to other executives at your level in the organization
targeted to deliver approximately a value (based on the Black Scholes methodology)
equal to that of their target cash compensation. Awards are typically granted
in the form of options and/or performance based restricted share units during
the first quarter of each year.

 

Note that target amounts as well as the
metrics, pay-out formulas and conditions of both the annual incentive program
as well as those of the long-term incentive program, may be periodically
revised or altered to reflect changing industry or business conditions. Should
changes occur you will receive appropriate notice.

 

Based
on the above conditions, your overall annual cash compensation target,
exclusive of standard employee benefits, will be in excess of $1,150,000 with
an upside potential of approximately $1,900,000 depending on management’s
assessment of your individual contribution and on the results achieved by the
overall Company. This compensation opportunity considers the degree of
competitiveness that we want to attain, reflecting also our assessment of your
expected future performance.

 

Bunge also offers a very competitive package of
employee benefits. For your information, listed below in summary format are
some key features of our most significant benefits. Please note that, depending
on business conditions and competitive environment, the Company reserves the
right to change these benefits at any time without a retroactive impact on you.
Should you need clarification on any specific item, please contact me and/or
Tom Albert. Additional information will be sent to you automatically upon
acceptance of this offer.

 

 

a.               Group Medical
Coverage:

-                                            Becomes
effective on your Hire Date.

-                                            Covers all
pre-existing conditions.

-                                            Offers a
national PPO administered by UnitedHealthcare or by BlueCross/BlueShield.

-                                            The monthly
cost of this program for 2007 is approximately $88 for single coverage, $176
for the employee plus one family member and $226 for family coverage with
deductions taken on a pre-tax basis.

 

2

 

b.              Dental Insurance:

-                                            Offered by
Delta Dental. Becomes effective on your Hire Date.

-                                            The monthly
cost of this program for 2007 is approximately $6 for single coverage, $12 for
the employee plus one family member and $17 for family coverage with deductions
also taken on a pre-tax basis.

 

c.               Life Insurance
& AD&D:

-                                            Becomes
effective on your Hire Date.

-                                            Presently, this
plan is provided at no cost to you.

-                                            The benefit is
two times your annual base salary.

 

d.              Short Term Disability (STD):

-                                            Becomes effective on your Hire Date.

-                                            This program provides disability pay for
illnesses or disabilities incurred off the job.

-                                            Presently, the plan is provided at no
cost to you.

-                                            The duration of this benefit is up to 26
weeks based on the length of your service.

 

e.               Long Term Disability (LTD):

-                                            You are eligible to enroll on your Hire
Date.

-                                            You may elect to obtain coverage paying
for the premium on a pre-tax basis (in which case benefits paid will be
considered taxable income) or on an after-tax basis (in which case benefits, if
paid, will not be taxable).

-                                            When eligible, benefits under this plan
will begin after your 26th week of disability.

 

f.                 Bunge Savings Plan: (401 (k) Plan):

-                                            You are eligible to participate in this
plan upon your Hire Date.

-                                            Based on the present provisions you may
contribute between 1% and 50% (in 1% increments) of your base pay per year on a
pre-tax basis — for 2007 these contributions are capped at $15,500.

-                                            Currently, the Company will match $1 for
every pre-tax dollar you contribute to the Plan up to 3% of your salary and 50%
on contributions made on the next 2% of your salary.

-                                            Both Company and your individual
contributions are immediately vested.

-                                            You may direct your investments in any
combination of the funds offered.

-                                            In-service and hardship withdrawal loan
provision as well as loan options are available.

.

g.              Vacation: You are eligible for four weeks of vacation per
year.

 

h.              Holidays: The following holidays are currently recognized
by the Company:

	
   

  	
   

  	
  New Years Day

  	
   

  	
  Labor Day

  	
   

  	
  Presidents Day

  
	
   

  	
   

  	
  Good Friday

  	
   

  	
  Independence Day

  	
   

  	
  Memorial Day

  
	
   

  	
   

  	
  Thanksgiving Day

  	
   

  	
  Day after Thanksgiving

  	
   

  	
  Christmas Day

  

 

Employees hired before June 1 of any year
are eligible for one optional holiday in that year.  Employees hired on or after June 1 are not
eligible for any optional holidays until the next calendar year.  All other employees are eligible for two
optional days in each calendar year.

 

i.                  Pension Program: 
Currently, Bunge also offers a defined benefit pension program. Overall,
the program offers a benefit equal to 1% of your final average earnings (of the
highest 5 consecutive years) per year of service plus .5% of the amount by
which these earnings exceed career average social security wage basis. As a
U.S. based member of the Executive Committee of Bunge, you 

 

3

 

are eligible to participate in the Bunge
U.S. SERP and your “earnings” for purposes of the SERP are calculated based on
your salary earned plus 100% of the annual bonus actually earned.

 

All benefit programs are revised periodically
to reflect an appropriate degree of competitiveness. Overall, we target to
position our pension programs at the 50th percentile of our peer
group which is made up of select public companies. Should changes occur to any
of our programs, you will receive appropriate notice.

 

While we consider this package to be
appropriate, we also realize the impact that your move from Dallas-Fort Worth
to New York will have on several aspects of your life, especially until you are
fully established in your new residence and in Bunge. For this reason, the
following transition considerations are included in our offer:

 

1.               2007 Annual Bonus: In order to minimize any potentially
adverse financial impact caused by your joining Bunge during the middle of the
year, your 2007 bonus paid under our annual incentive program will be paid at
the established target level (see page 2, item 4 above for conditions).

 

2.               Transfer Expenses: You will be eligible for Bunge’s executive
relocation program. Under this program, Bunge will pay for all reasonable and
customary expenses incurred on your transfer to the White Plains/NY area.
These, for example, include the shipping and insurance costs for an air
shipment of up to 800 lbs. net of personal effects, and a surface shipment of
personal and household effects from Dallas-Forth Worth to NY/White Plains,
provided shipping occurs by December 30, 2007. In due course you will be
contacted by Executive Relocation to coordinate this process. Please note that,
typically, we do not cover the insurance costs of unusual/unique antiques,
artwork, jewelry and collectibles. If you have any such items please let me
know.

 

3.               Home Disposition and Purchase: Also covered by the relocation program are
costs associated with home disposition (with a third party buy-out option) and
those related to the lease or purchase of a new residence in the general area
of White Plains, N.Y., including payment of up to 2 points on a mortgage loan.
Bunge will also pay or reimburse you for temporary living accommodations in the
general White Plains/NY area until you are able to move to new permanent
housing. We generally expect domestic transfers to be completed in
approximately 60 days from your Hire Date at which point we discontinue
providing transferees with temporary housing facilities. You should coordinate
your temporary housing arrangements directly with me or with Tom Albert,
Director of HR in our White Plains Office (914-684 3465).

 

4.               Relocation Allowance: Please note that the payment or
reimbursement of certain relocation expenses may be considered taxable income
to you.  In lieu of grossing up these
expenses to yield an equivalent net amount to you, Bunge will pay you 2 months
of base salary (also taxable income to you) within 60 days after you join us.

 

5.               Joining Considerations: Recognizing that your move will cause
you to forego certain benefits as well as to forfeit certain unvested options
and restricted shares earned at your present job and also as an inducement for
you to join Bunge, subject to your continued employment with the Company at the
time that vesting occurs or that each payment is to be made, we will:

 

•                        Provide five years of additional credited
service for retirement and pension purposes which will be earned under the
Company’s non-tax qualified retirement plans at the rate of one extra year per
each of the first five years of your completed service with Bunge,

 

4

 

•                        Grant you at the time that you are hired
50,000 time-based restricted stock units of Bunge which will vest at the rate
of 33 1/3% per year on each of the first three anniversaries of your Hire Date,

 

•                        Also grant you 25,000 ten-year employee
stock options which will vest at the rate of 33 1/3 percent per year on each of
the first three anniversaries of your Hire Date,

 

•                        Pay you a hiring bonus of $300,000 gross
in two separate payments as follows: (1) US$150,000 within 30 days of your Hire
Date; and (2) $150,000 on the first anniversary of your Hire Date.

 

Our
offer also includes a severance protection. In essence, if after you join Bunge
your employment is involuntarily terminated by the Company without “Cause,” (as
defined in the Company’s Equity Incentive Plan) or you resign for Good Reason
(as defined below), you will vest in all unvested time-based restricted stock
units mentioned in item 5 above and, in addition, on or before the 60th
day following such termination or resignation you will receive (upon the
release of any employment related claims and covenants in form and substance
satisfactory to both you and Bunge) the greater of:

 

(a)                                              the standard severance benefits of the
Company as they may exist at that time, or

 

(b)                                             a lump sum payment equivalent to 12
months of your then prevailing base salary plus target bonus; provided,
however, that if such termination or resignation occurs on or before the first
anniversary of your Hire Date, in lieu of the 12 months of base salary plus
target bonus referred to above, you will receive the base salary (at your then
prevailing salary rate) that otherwise would have been payable to you had you
remained employed with the Company for the period from the date of such
termination or resignation through the second anniversary of your Hire Date
plus prorated target bonus for such period. 
If the termination is not due to performance, you will also receive a
prorated portion of your annual bonus calculated at target level for the year
in which the termination occurs.

 

In the event of a Change of Control (as defined
below), and your employment is involuntarily terminated by the Company without
Cause or you resign for Good Reason within the 12-month period following the
consummation of such Change of Control, you will vest in all unvested
time-based restricted stock units mentioned in item 5 above and, in addition,
on or before the 60th day following such termination or resignation
you will receive (upon the release of any employment related claims and
covenants in form and substance satisfactory to both you and Bunge or any
successor) a lump sum payment equivalent to the base salary (at your then
prevailing salary rate) that otherwise would have been payable to you had you
remained employed with the Company for the period from the date of such
termination or resignation through the second anniversary of the Change of
Control plus prorated target bonus for such period.  If the termination is not due to performance,
you will also receive a prorated portion of your annual bonus calculated at
target level for the year in which the termination occurs.

 

For purposes of this Letter,
“Good Reason” shall mean the occurrence of any of the following (without
your prior written consent):  (a) a
failure by the Company to pay material compensation due and payable to you in
connection with your employment; or (b) a material diminution of your authority,
responsibilities or position from those set forth on page 1, item 2 hereof; provided,
however, that no event or condition described in clauses (a) and (b) of
this paragraph shall constitute Good Reason unless (i) you give the
Company written notice of your objection to such event or condition within 90
days following the occurrence of such event or condition, (ii) such event
or condition is not corrected, in all material respects, by the Company in a
manner that is reasonably satisfactory to you within 30 days following the 

 

5

 

Company’s receipt of such
notice and (iii) you resign from your employment with the Company not more than
30 days following the expiration of the 30-day period described in the
foregoing clause (ii).

For
purposes of this Letter, a “Change of Control” shall mean the occurrence of any
of the following:

(a)                                  the acquisition
by any Person (as defined below) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended,
and the applicable rulings and regulations thereunder (the “Exchange Act”)) of
35% or more of the common shares of the Company (the “Common Stock”) then
outstanding, but shall not include any such acquisition by any employee benefit
plan of any member of the Bunge Group, or any Person or entity organized,
appointed or established by any member of the Bunge Group for or pursuant to
the terms of any such employee benefit plan;

 

(b)                                 the
consummation after approval by the shareholders of the Company of either (i) a
plan of complete liquidation or dissolution of the Company or (ii) a merger,
amalgamation or consolidation of the Company with any other corporation, the
issuance of voting securities of the Company in connection with a merger,
amalgamation or consolidation of the Company, a sale or other disposition of
all or substantially all of the assets of the Company or the acquisition of
assets of another corporation (each, a “Business Combination”), unless, in each
case of a Business Combination, immediately following such Business
Combination, all or substantially all of the individuals and entities who were
the beneficial owners of the Common Stock outstanding immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the then outstanding shares of common stock and more than 50% of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Common Stock; or

 

(c)                                  the failure for
any reason of the Approved Members (as defined below) to constitute at least a
majority of the Board.

“Approved
Members” shall mean the individuals who, as of the date hereof, constitute the
Board and subsequently elected members of the Board whose election is approved
or recommended by at least a majority of such current members or their
successors whose election was so approved or recommended (other than any
subsequently elected members whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board).

“Person”
shall mean any person, entity or “group” within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act, except that such term shall not
include (a) Bunge or its Subsidiaries (the “Bunge Group”), (c) a
trustee or other fiduciary holding securities under an employee benefit plan of
any member of the Bunge Group, (d) an underwriter temporarily holding
securities pursuant to an offering of such securities or (e) an entity owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

“Subsidiary”
shall mean (a) a corporation or other entity with respect to which the Company,
directly or indirectly, has the power, whether through the ownership of voting
securities, by contract or otherwise, to elect at least a majority of the
members of such corporation’s board of directors or analogous governing 

 

6

 

body
or (b) any other corporation or other entity in which the Company, directly or
indirectly, has an equity or similar interest.

Our offer is based on your
representation that you are not subject to any restrictive covenants with any
present and/or former employers and it is also based on the understanding that
your employment with Bunge is at will. Also based on Company policy, the offer
is contingent upon (1) the successful completion of a drug test before the
start date of your job, and (2) receipt of documents showing that you are
legally eligible to work in the United States.

 

You
are reminded that our agreement includes your promise that:

 

(i)                         you shall not (except to the extent
required by an order of a court having competent jurisdiction or under subpoena
from an appropriate government agency) disclose to any third person, whether
during or subsequent to your employment with the Company, any trade secrets;
customer lists; product development and related information; marketing plans
and related information; sales plans and related information; operating
policies and manuals; business plans; financial records; or other financial,
commercial, business or technical information related to the Company or any subsidiary
or affiliate thereof unless such information has been previously disclosed to
the public by the Company or has become public knowledge other than by a breach
of this Agreement; provided, however, that this limitation shall not apply to
any such disclosure made while you are employed by the Company, or any
subsidiary or affiliate thereof in the ordinary course of the performance of
your duties;

 

(iii)                   For at least eighteen months after the
termination of your employment, you shall not attempt, directly or indirectly,
to induce any Company agent or employee of the Company, or of any subsidiary or
any affiliate thereof to be employed or perform services elsewhere except if
you are previously authorized to do so by the CEO of Bunge Limited in writing;

 

(iv)                  For at least eighteen months after the
termination of your employment, you shall not attempt, directly or indirectly,
to induce any employee or agent of the Company, or of any subsidiary or
affiliate thereof to cease providing services to the Company, or any subsidiary
or affiliate thereof;

 

(v)                     Following the termination of your
employment, you shall provide assistance to and shall cooperate with the
Company or any subsidiary or affiliate thereof, upon its reasonable request,
with respect to matters within the scope of your duties and responsibilities
during your employment with the Company. 
(The Company agrees and acknowledges that it shall, to the maximum
extent possible under the then prevailing circumstances, coordinate (or cause a
subsidiary or affiliate thereof to coordinate) any such request with your other
commitments and responsibilities to minimize the degree to which such request
interferes with such commitments and responsibilities).  The Company agrees that it will reimburse you
for reasonable travel expenses (i.e., travel, meals and lodging) that you may
incur in providing assistance to the Company hereunder.

 

This agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without reference to principles of conflict of laws, and may not be amended or
modified other than by written agreement executed by the parties hereto or
their respective successors and legal representatives. In this manner, any
litigation or other proceeding commenced by either party to this agreement for
the purpose, in whole or in part, of enforcing the agreement or the parties’
respective rights or obligations hereunder shall be commenced in the federal or
state courts of New York.

 

7

 

You promise that except as required by
law or unless you have obtained the appropriate written consent of a Company
officer, you will not disclose to any person or entity (other than your legal
or financial advisors or members of your immediate family, who agree to keep
this information strictly confidential) the terms and conditions of this offer.

 

Jackie,
Alberto and I as well as the other members of the Bunge team whom you have met
during this process are delighted with the prospect of your joining us. If this
letter expresses your understanding of our agreement, your signature below will
indicate your acceptance of the terms herein. I would appreciate it if you
would return a signed copy to me by June 23, 2007. If you have any questions do
not hesitate to call Alberto or me.

 

I am looking forward to having you here in White Plains.

 

 

 

 

 

	
  /s/
  Flavio Sa Carvalho

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Flavio
  Sa Carvalho

  	
   

  	
  In
  agreement:

  	
  /s/ Jacqualyn A.
  Fouse

  	
   

  
	
  Chief
  Personnel Officer

  	
   

  	
   

  	
  Jacqualyn
  A. Fouse

  	
   

  
	
   

  	
   

  	
  Date: 
  June 21, 2007

  	
   

  

 

 

8

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