Document:

Exhibit 10.21

 

BUNGE
LIMITED ANNUAL INCENTIVE PLAN

 

PLAN
DOCUMENT

 

SECTION 1.                            ESTABLISHMENT
AND PURPOSE

 

1.1  Establishment
of the Plan.  Bunge Limited, a
company incorporated under the laws of Bermuda (the “Company”), hereby
establishes an annual incentive compensation plan to be known as the Bunge
Limited Annual Incentive Plan (the “Plan”).  The Plan permits the awarding of annual cash
bonuses to Employees (as defined below), based on the achievement of
performance goals that are pre-established by the Board of Directors of the
Company (the “Board”) or by the Committee (as defined below).

 

Upon approval by the Board, subject to
approval by the shareholders of the Company at the 2005 annual general meeting
of shareholders, the Plan shall become effective as of January 1, 2005 and
continue until December 31, 2010, unless terminated earlier as set forth
in Section 10.

 

1.2  Purpose.  The purposes of the Plan are to (i) provide
greater motivation for certain employees of the Company and its Subsidiaries
(as defined below) to attain and maintain the highest standards of performance,
(ii) attract and retain employees of outstanding competence and (iii) direct
the energies of employees towards the achievement of specific business goals
established for the Company and its Subsidiaries.

 

The purposes of the Plan shall be carried out
by the payment to Participants (as defined below) of annual incentive cash
awards, subject to the terms and conditions of the Plan.  The Plan also is intended to secure the full
deductibility of incentive awards payable to Participants where and when
relevant.  All compensation payable under
this Plan to its Participants is intended to be deductible by the Company under
Section 162(m) of the Code (as defined below).

 

SECTION 2.                            DEFINITIONS

 

As used in the Plan, the following terms
shall have the meanings set forth below (unless otherwise expressly provided).

 

“Award
Opportunity” means the various levels of incentive awards which a
Participant may earn under the Plan, as established by the Committee pursuant
to Section 5.1.

 

 

“Base
Salary” shall mean the regular base salary earned by a Participant
during a Plan Year prior to any salary reduction contributions made to any
deferred compensation plans sponsored or maintained by the Company or by any
Subsidiary; provided, however,
that Base Salary shall not include awards under this Plan, any bonuses, equity
awards, the matching contribution under any plan of the Company or any of its
Subsidiaries (as applicable) providing such, overtime, relocation allowances,
severance payments or any other special awards as determined by the Committee.

 

“Beneficial
Owner” shall have the meaning ascribed to such term in Rule 13d-3
of the General Rules and Regulations under the Exchange Act.

 

“Board”
has the meaning set forth in Section 1.1.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Committee”
means the Compensation Committee of the Board, provided that the Committee
shall consist of two or more individuals, appointed by the Board to administer
the Plan, pursuant to Section 3, who are “outside directors” to the extent
required by and within the meaning of Section 162(m) of the Code, as
amended from time to time.

 

“Company”
has the meaning set forth in Section 1.1.

 

“Disability” means that a Participant is (i) unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months or (ii) by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering the Participant.

 

“Effective
Date” means the date the Plan becomes effective, as set forth in Section 1.1
herein.

 

“Employee”
means an employee of the Company or a Subsidiary who is recommended by the
Chief Executive Officer of the Company, or his designee, and is approved by the
Committee for participation in the Plan, or is included in the Plan by the
Committee.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended from time
to time.

 

“Executive
Officers” shall mean an executive officer as set forth in Section 162(m)
of the Code or any other executive officer designated by the Committee for
purposes of exempting distributions under the Plan from Section 162(m)(3) of
the Code.

 

2

 

“Final
Award” means the actual award earned during a Plan Year by a
Participant, as determined by the Committee at the end of such Plan Year.

 

“Financial”
shall mean the corporate financial performance of the Company and its
Subsidiaries.

 

“Non-financial”
shall mean the non-financial performance of a specified segment of the Company’s
operations designated as such by the Chief Executive Officer and approved by
the Committee for purposes of the Plan, such as a business unit, organizational
unit, Subsidiary, division or other such segmentation.

 

“Participant”
means an Employee who is participating in the Plan pursuant to Section 4.

 

“Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d).

 

“Plan”
means the Bunge Limited Annual Incentive Plan.

 

“Plan Year”
means the calendar year, commencing on January 1st and ending
on December 31st.

 

“Retirement”
means normal or early retirement from employment with the Company or a
Subsidiary, as applicable, in accordance with the terms of the applicable
pension plan document and the retirement policies of the Company or of any
Subsidiary employing the Participant.

 

“Subsidiary” means any
company or corporation in which the Company beneficially owns, directly or
indirectly, 50% or more of the securities entitled to vote in the election of
the directors of the corporation.

 

“Target
Incentive Award” means the award to be paid to a Participant when
performance measures are achieved, as established by the Committee.

 

SECTION 3.                            ADMINISTRATION

 

The Plan shall be administered by the
Committee.  Except with respect to the
matters that under Section 162(m) of the Code and Treasury Regulation Section 1.162-27(e) are
required to be determined or established by the Committee to qualify awards
under the Plan as qualified performance-based compensation, the Committee shall
have the power to delegate to any officer or employee of the Company the
authority to administer and interpret the procedural aspects of the Plan,
subject to the Plan’s terms, including adopting and enforcing rules to
decide procedural and administrative issues.

 

3

 

The Committee shall be entitled to rely in
good faith upon any report or other information furnished to it by any officer
or employee of the Company or from the financial, accounting, legal or other
advisers of the Company.  Each member of
the Committee, each individual designated by the Committee to administer the
Plan and each other person acting at the direction of, or on behalf of, the
Committee shall not be liable for any determination or anything done or omitted
to be done in good faith by him or by any other member of the Committee or any
other such individual in connection with the Plan, except for his own willful
misconduct or as expressly provided by statute, and to the extent permitted by
law and the bye-laws of the Company, shall be fully indemnified and protected
by the Company with respect to such determination, act or omission.

 

Subject to the limitations set forth in the
Plan, the Committee shall: (i) select from the Employees of the Company
and its Subsidiaries, those who shall participate in the Plan, (ii) establish
Award Opportunities in such forms and amounts as it shall determine, (iii) impose
such limitations, restrictions, and conditions upon such Award Opportunities as
it shall deem appropriate, (iv) interpret the Plan and adopt, amend, and
rescind administrative guidelines and other rules and regulations relating
to the Plan, (v) make any and all factual and legal determinations in
connection with the administration and interpretation of the Plan, (vi) correct
any defect or omission or reconcile any inconsistency in this Plan or in any
Award Opportunity granted hereunder, and (vii) make all other necessary
determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan. 
The Committee’s determinations on matters within its authority shall be
conclusive and binding upon all parties.

 

SECTION 4.                            ELIGIBILITY
AND PARTICIPATION

 

4.1  Eligibility.  Each Employee who is recommended by the Chief
Executive Officer of the Company or his designee to participate in the Plan,
and who is approved by the Committee, or is included in the Plan by the
Committee, shall be eligible to participate in the Plan for such Plan Year,
subject to the limitations of Section 7 herein.

 

4.2  Participation.  Participation in the Plan shall be determined
annually by the Committee based upon the criteria set forth in the Plan.  Participation in the Plan during the
applicable Plan Year shall be limited to those Employees (“Participants”)
who are selected by the Committee; provided
that participation by an Employee of a Subsidiary shall constitute
such Subsidiary’s agreement to pay, at the direction of the Committee, awards
directly to its Employees or to reimburse the Company for the cost of such
participation in accordance with rules adopted by the Committee.  Employees
who are eligible to participate in the Plan shall be notified of the
performance goals and related Award Opportunities for the relevant Plan Year.

 

4.3  Partial
Plan Year Participation.  Except as
provided in Section 9, in the event that an Employee becomes eligible to
participate in the Plan subsequent to the commencement of a Plan Year, then
such Employee’s Final Award shall be based on the

 

4

 

Base Salary earned as an eligible Employee for the relevant Plan Year, provided that the Employee has
participated in the Plan for at least three months.

 

4.5  No
Right to Participate.  No Participant
or other Employee shall at any time have a right to participate in the Plan for
any Plan Year, despite having participated in the Plan during a prior Plan
Year.

 

SECTION 5.                            AWARD
DETERMINATION

 

5.1  Performance
Goals.  Prior to the beginning of
each Plan Year, or as soon as practicable thereafter (but in no event more than
ninety days from the beginning of such Plan Year), the Committee shall approve
or establish in writing the performance goals for that Plan Year.  For any performance period that is less than
twelve months, the performance goals shall be established before 25% of the
relevant performance period has elapsed.

 

Except as provided in Section 9, the
performance goals may include, without limitation, any combination of
Financial, Non-financial and individual performance goals.  Performance measures and their relative
weight may vary by job classification. 
After the performance goals are established, the Committee will align
the achievement of the performance goals with the Award Opportunities (as described
in Section 5.2 herein), such that the level of achievement of the
pre-established performance goals at the end of the Plan Year will determine
the amount of the Final Award.  Except as
provided in Section 9, the Committee also shall have the authority to
exercise subjective discretion in the determination of Final Awards, as well as
the authority to delegate the ability to exercise subjective discretion in this
respect.

 

The performance period with respect to which
awards may be payable under the Plan shall generally be the Plan Year; provided, however, that the Committee
shall have the authority and discretion to designate different performance
periods under the Plan.

 

5.2  Award
Opportunities.  Prior to the
beginning of each Plan Year, or as soon as practicable thereafter (but in no
event more than ninety days from the beginning of such Plan Year), the
Committee shall establish an Award Opportunity for each Participant.  Except as provided in Section 9, in the
event a Participant changes job levels during a Plan Year, the Participant’s Award
Opportunity may be adjusted to reflect the amount of time at each job level
during the Plan Year.

 

5.3  Adjustment
of Performance Goals.  Except as
provided in Section 9, the Committee shall have the right to adjust the
performance goals and the Award Opportunities (either up or down) during a Plan
Year, to the extent permitted by Code Section 162(m) and the regulations
and interpretative rulings thereunder, if it determines that the occurrence of
external changes or other unanticipated business conditions have materially
affected the fairness of the goals and have unduly influenced the Company’s
ability to meet them, including without limitation, events such as material
acquisitions,

 

5

 

changes in the capital structure of the Company, and extraordinary
accounting changes.  In addition,
performance goals and Award Opportunities will be calculated without regard to
any changes in accounting standards that may be required by the Financial
Accounting Standards Board after such performance goals or Award Opportunities
are established.  Further, in the event
of a Plan Year of less than twelve months, the Committee shall have the right
to adjust the performance goals and the Award Opportunities accordingly, at its
sole discretion, except as provided in Section 9.

 

5.4  Final
Award Determinations.  At the end of
each Plan Year, Final Awards shall be computed for each Participant as
determined by the Committee.  Except as
provided in Section 9, each Final Award shall be based upon the (i) Participant’s
Target Incentive Award percentage, multiplied by his Base Salary and (ii) satisfaction
of Financial, Non-financial and individual performance goals (if
applicable).  Final Award amounts may
vary above or below the Target Incentive Award, based on the level of
achievement of the pre-established Financial, Non-financial, and individual
performance goals.

 

5.5  Limitations.  The amount payable to a Participant for any
Plan Year shall not exceed U.S. $4,000,000.

 

SECTION 6.                            PAYMENT
OF FINAL AWARDS

 

6.1  Form and
Timing of Payment.  As soon as
practicable after the end of each Plan Year, the Committee shall certify in
writing the extent to which the Company and each Participant has achieved the
performance goals for such Plan Year, including the specific target
objective(s) and the satisfaction of any other material terms of the awards,
and the Committee shall calculate the amount of each Participant’s Final Award
for the relevant period.  Generally,
Final Award payments shall be payable to the Participant, or to his estate in
the case of death, in a single lump-sum cash payment, as soon as practicable
after the end of each Plan Year, after the Committee, in its sole discretion,
has certified in writing that the specified performance goals were achieved,
but in no event later than March 15th of such Plan Year.

 

6.2  Payment
of Partial Awards.  In the event a
Participant no longer meets the eligibility criteria as set forth in the Plan
during the course of a particular Plan Year, the Committee may, in its sole
discretion, compute and pay a partial award for the portion of the Plan Year
that an Employee was a Participant.

 

6.3  Unsecured
Interest.  No Participant or any
other party claiming an interest in amounts earned under the Plan shall have
any interest whatsoever in any specific asset of the Company or of any
Subsidiary.  To the extent that any party
acquires a right to receive payments under the Plan, such right shall be
equivalent to that of an unsecured general creditor of the Company.

 

6

 

SECTION 7.                            TERMINATION
OF EMPLOYMENT

 

7.1  Termination
of Employment Due to Death, Disability or Retirement.  In the event a Participant’s employment is
terminated by reason of death, Disability or Retirement, the Final Award
determined in accordance with Section 5.4 herein shall be reduced to
reflect participation prior to such termination only.  The reduced award shall be based upon the
amount of Base Salary earned during the Plan Year prior to termination.  In the case of a Participant’s Disability,
the employment termination shall be deemed to have occurred on the date the
Committee determines, in its sole discretion, that the requirements of
Disability have been satisfied.

 

The Final Award thus determined shall be
payable as soon as practicable following certification of the relevant
performance goals by the Committee for the Plan Year in which such termination
occurs, or sooner (except with respect to Executive Officers), as determined by
the Committee in its sole discretion.

 

7.2                                 Termination of
Employment for Other Reasons.  In the
event a Participant’s employment is terminated for any reason other than death,
Disability or Retirement (as determined by the Committee, in its sole
discretion), all of the Participant’s rights to a Final Award for the Plan Year
then in progress shall be forfeited. 
However, the Committee, in its sole discretion, may pay a partial award
for the portion of that Plan Year that the Participant was employed by the Company,
computed as determined by the Committee.

 

SECTION 8.                            RIGHTS
OF PARTICIPANTS

 

8.1  Employment.  Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s
employment at any time, nor confer upon any Participant any right to continue
in the employ of the Company.

 

8.2  Nontransferability.  No right or interest of any Participant in
the Plan shall be assignable or transferable, or subject to any lien, directly,
by operation of law, or otherwise, including, but not limited to, execution,
levy, garnishment, attachment, pledge, and bankruptcy.

 

SECTION 9.                            EXECUTIVE
OFFICERS

 

9.1  Applicability.  The provisions of this Section 9 shall
apply only to Executive Officers.  In the
event of any inconsistencies between this Section 9 and the other Plan
provisions, the provisions of this Section 9 shall control with respect to
Executive Officers.

 

9.2  No Participation After Commencement of
Plan Year.  An Executive Officer who
becomes eligible after the beginning of a Plan Year may not participate in the
Plan for such Plan Year.  Such Executive
Officer will be eligible to participate in the Plan for the succeeding Plan
Year.

 

7

 

9.3  Award
Determination.  Prior to the
beginning of each Plan Year, or as soon as practicable thereafter, the
Committee shall establish the Target Incentive Award percentage for each
Executive Officer and performance goals for that Plan Year.  Performance goals to be used shall be chosen from
among any combination of the Financial and Non-financial performance goals as
exemplified in Schedule A and such other individual performance goals as
established by the Committee.  The
Committee may select one or more of the performance goals specified from Plan
Year to Plan Year which need not be the same for each Executive Officer in a
given year.

 

At the end of the Plan Year and prior to
payment, the Committee shall certify in writing the extent to which the
performance goals and any other material terms were satisfied.  Final Awards shall be computed for each
Executive Officer based on (i) the Participant’s Target Incentive Award
multiplied by his Base Salary, and (ii) Financial, Non-financial and
individual performance (if applicable).

 

Final Award amounts may vary above or below
the Target Incentive Award based on the level of achievement of the pre-established
Financial, Non-financial and individual performance goals.

 

9.4  Non-adjustment
of Performance Goals.  Once
established, performance goals shall not be changed during the Plan Year.  Participants shall not receive any payout
when the Company or Non-financial segment (if applicable) does not achieve at
least minimum performance goals.

 

9.5 Discretionary Adjustments.  The Committee retains the discretion to
eliminate or decrease the amount of the Final Award otherwise payable to a
Participant.

 

9.6  Possible
Modification.  If, on advice of the
Company’s tax counsel, the Committee determines that Code Section 162(m)
and the regulations thereunder will not adversely affect the deductibility for
federal income tax purposes of any amount paid under the Plan by applying one
or more of Section 2, 4.3, 5.1, 5.2, 5.3 or 5.4 to an Executive Officer
without regard to the exceptions to such Section or Sections contained in
this Section 9, then the Committee may, in its sole discretion, apply such
Section or Sections to the Executive Officer without regard to the
exceptions to such Section or Sections that are contained in this Section 9.

 

8

 

SECTION 10.                     AMENDMENT AND
MODIFICATION

 

The Committee, in its sole discretion,
without notice, at any time and from time to time, may modify or amend, in
whole or in part, any or all of the provisions of the Plan, or suspend or
terminate it entirely; provided, however,
that no such modification, amendment, suspension, or termination may, without
the consent of a Participant (or his or her beneficiary in the case of the
death of the Participant), reduce the right of a Participant (or his or her
beneficiary, as the case may be) to a payment or distribution hereunder which
he or she has already earned and is otherwise entitled, except where such
modification, amendment, suspension or termination is necessary to comply with
applicable law, including without limitation, any modifications or amendments
made pursuant to Section 409A of the Code and any regulations, rulings and
other regulatory guidance issued thereunder.

 

SECTION 11.                     MISCELLANEOUS

 

11.1  Governing
Law.  The Plan, and all agreements
hereunder, shall be governed by and construed in accordance with the laws of
New York.

 

11.2  Withholding
Taxes.  The Company and its
Subsidiaries shall have the right to deduct from all payments under the Plan
any federal, state, local and/or foreign income, employment or other applicable
payroll taxes required by law to be withheld with respect to such payments.

 

11.3  Gender
and Number.  Except where otherwise
indicated by the context, any masculine term used herein also shall include the
feminine, the plural shall include the singular, and the singular shall include
the plural.

 

11.4  Severability.  In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

 

11.5  Costs
of the Plan.  All costs of
implementing and administering the Plan shall be borne by the Company.

 

11.6  Successors.  All obligations of the Company and its
Subsidiaries under the Plan shall be binding upon and inure to the benefit of
any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, amalgamation, consolidation,
or otherwise, of all or substantially all of the business and/or assets of the
Company.

 

9

 

SCHEDULE A

 

	
  Financial Performance Measures

  
	
   

  
	
  Operating Profit

  	
   

  	
  Income from Continuing Operations (Net
  Income After Minority Interests)

  
	
  EPS

  	
   

  	
  Net Financial Debt

  
	
  Operating Working Capital

  	
   

  	
  Free Cash Flow

  
	
  Return on Net Assets

  	
   

  	
  Revenue Growth

  
	
  Return on Invested Capital

  	
   

  	
  Days Sales Outstanding

  
	
  Return on Equity

  	
   

  	
  EBITDA

  
	
  Cash-flow Return on Investment

  	
   

  	
  Impairment Write-Offs

  
	
  Operating Earnings before Asset Impairment

  	
   

  	
  Return on Tangible Net Worth

  
	
  Interest Coverage

  	
   

  	
  Effective Tax Rate

  
	
  Pre Tax Income

  	
   

  	
  Net Sales

  
	
  Return on Tangible Net Assets

  	
   

  	
  Selling General and Administration Expenses

  
	
  Operating Cash Flow

  	
   

  	
  Share price

  
	
  Market Capitalization

  	
   

  	
  Cash Value Added

  
	
  Economic Value Added

  	
   

  	
  Margins

  
	
  Days Cash Cycle

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Non-Financial Performance Measures

  
	
   

  
	
  Product Quality

  	
   

  	
  Safety/Environment

  
	
  Headcount

  	
   

  	
  Quality

  
	
  Turn Around Time

  	
   

  	
  Days Loading

  
	
  Volumes

  	
   

  	
  Energy Usage

  
	
  Loading Time

  	
   

  	
  Customer/Supplier Satisfaction

  
	
  Market Share

  	
   

  	
  Amount of Inventory

  
	
  Productivity

  	
   

  	
  Days of Inventory

  
	
  Employee Turnover

  	
   

  	
  Satisfaction Indexes

  
	
  Recruiting

  	
   

  	
  Brand Recognition

  

 

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Exhibit 10.22  

 
 

BUNGE LIMITED BOARD OF DIRECTORS
  
    DESCRIPTION OF NON-EMPLOYEE DIRECTORS'
  COMPENSATION
  (May 2005—April 2006)    
    

Annual Retainer  

	•
	$60,000
per year. 

Committee Chairman Fees  

	•
	$20,000
per year for Audit Committee chair.

	•
	$10,000
per year for each other committee chair. 

Committee Member Fees  

	•
	$10,000
per year for Audit Committee membership.

	•
	$5,000
per year for each other committee membership. 

Meeting Fees  

	•
	If
the Board meets more than five times per year, each Director will receive a fee of $1,000 per day of meetings.

	•
	If
a committee meets more than five times per year, each committee member will receive a fee of $1,000 per day of meetings.

	•
	Directors
will receive $250 for each board or committee meeting held by teleconference if the number of board or committee meetings exceeds five for the year. 

Stock Options  

	•
	Each
year on the date of the Annual General Meeting, each continuing Director will be granted an option to purchase 5,500 shares of Bunge Limited Common Stock under the
Bunge Limited Non-Employee Directors' Equity Incentive Plan.

	•
	At
the time of appointment or election, each new Director will be granted an option to purchase 7,500 shares of Bunge Limited Common Stock under the Bunge Limited
Non-Employee Directors' Equity Incentive Plan. 

Deferral of Fees  

	•
	Directors
may defer all or a portion of their fees under the Deferred Compensation Plan for Non-Employee Directors. 

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BUNGE LIMITED BOARD OF DIRECTORS DESCRIPTION OF NON-EMPLOYEE DIRECTORS' COMPENSATION (May 2005—April 2006)

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