1998 Incentive Stock Plan

Exhibit 10(a)
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AGRIBRANDS INTERNATIONAL, INC.
1998 INCENTIVE STOCK PLAN


Section I. General Provisions


A. Purpose of Plan


The purpose of the Agribrands International, Inc. 1998 Incentive Stock Plan (the "Plan") is to enhance the profitability and value of the Company for the benefit of its shareholders by (i) providing for stock options and other stock awards to attract, retain and motivate officers and other key employees who make important contributions to the success of the Company, and (ii) providing stock options and other stock awards to encourage stock ownership by the non-employee members of the Board of Directors of the Company.


B. Definitions


Unless otherwise defined herein, all capitalized terms have the same meaning as in the Rights Agreement between Agribrands, International, Inc. and Continental Stock Transfer & Trust Company.


1. "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall become, at any time after the date of the Rights Agreement (whether or not such status continues for any period), the Beneficial Owner of Common Stock representing 20% or more of the Common Stock then outstanding, other than as a result of a Permitted Offer. Notwithstanding the foregoing, (A) the term "Acquiring Person" shall not include (i) the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding Common Stock for or pursuant to the terms of any such plan, or (ii) any Person, who or which together with all Affiliates and Associates of such Person becomes the Beneficial Owner of 20% or more of the then outstanding Common Stock as a result of the acquisition of Common Stock directly from the Company (provided, however, that if, after such acquisition, such Person, or an Affiliate or Associate of such Person, becomes the Beneficial Owner of any additional Common Stock in an acquisition not made directly from the Company, then such Person shall be deemed an Acquiring Person), or (iii) a Grandfathered Person, and (B) no Person shall be deemed to be an "Acquiring Person" (X) as a result of the acquisition of Common Stock by the Company which, by reducing the number of Common Stock outstanding, increases the proportional number of shares beneficially owned by such Person together with all Affiliates and Associates of such Person; except that if (i) a Person would become an Acquiring Person (but for the operation of this subclause (X)) as a result of the acquisition of Common Stock by the Company, and (ii) after such share acquisition by the Company, such Person, or an Affiliate or Associate of such Person, becomes the Beneficial Owner of any additional Common Stock, then such Person shall be deemed an Acquiring Person, (Y) if such Person, or an Affiliate or Associate of such Person, inadvertently becomes the Beneficial Owner of 20% or more of the outstanding Common Stock, or (Z) if a Person, or an Affiliate or Associate of such Person, is the involuntary transferee of Common Stock from a Grandfathered Person (including, but not limited to, when such


3 involuntary transfer is as a result of the death of a Grandfathered Person), provided that, in the case of any situation referred to in subclause (Y) or (Z) above (1) within 8 days thereafter such Person notifies the Board of Directors that such Person acquired the Common Stock in question inadvertently or involuntarily, respectively, and (2) within 2 days after such notification, such Person is the Beneficial Owner of less than 20% of the outstanding Common Stock. Notwithstanding anything to the contrary in this Agreement, any Common Stock owned by a Grandfathered Person shall not be taken into account when computing the number of Common Stock beneficially owned by an Affiliate or Associate of a Grandfathered Person, provided that such Affiliate or Associate (i) does not constitute a member of a group (as defined for purposes of Section 13(d) of the Exchange act) including such Grandfathered Person, or (ii) is not otherwise acting in concert with such Grandfathered Person, each with respect to the Company.


2. "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.


3. "Beneficial Owner" means a Person who is deemed to have acquired beneficial ownership of any securities:


(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date hereof;


(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a
Person shall be deemed the Beneficial Owner of, or to beneficially
own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or


(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to paragraph
(ii)) above or disposing of any securities of the


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Company. Notwithstanding anything in this definition of "Beneficial
Owner" to the contrary, the phrase "then outstanding", when used with
reference to a Person's beneficial ownership of securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.


4. "Board" means the Board of Directors of the Company.


5. "Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in St. Louis, Missouri are authorized or obligated by law or executive order to close.


6. "Change in Control" means the earlier of:


(i) the close of business on the tenth Business Day after the
Shares Acquisition Date; or


(ii) the close of business on the tenth Business Day (or such
later date as may be determined by action of the Board of Directors of
the Company prior to such time as any Person becomes an Acquiring
Person, as defined in the Rights Agreement) after the date that a
tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, or any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Stock
for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2 of the General Rules
and Regulations under the Exchange Act, if upon consummation thereof,
such Person would be the Beneficial Owner of 20% or more of the shares
of Common Stock then outstanding; or


(iii) the Company shall consolidate with, or merge with and into
any other Person; or


(iv) the Company shall consolidate with, or merge with, any
other Person, and the Company shall be the continuing or surviving
corporation of such consolidation or merger (other than, in a case of
any transaction described in (iii) or (iv), a merger or consolidation
which would result in all of the securities generally entitled to vote
in the election of directors ("voting securities") of the Company
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into securities of the
surviving entity) all of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having changed as
a result of such merger or consolidation); or


(v) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or
a series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the


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Company or any Subsidiary of the Company in one or more transactions
each of which does not violate Section 11(n) of the Rights Agreement.


7. "Committee" means the Nominating and Compensation Committee of the Board of Directors of the Company or any successor committee the Board may designate to administer the Plan. The Committee shall be comprised of at least three non-Employee members of the Board.


8. "Common Stock" means Agribrands International, Inc. $.01 par value Common Stock.


9. "Company" means Agribrands International, Inc.


10. "Corporate Officer" means the President, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Secretary and Treasurer of the Company.


11. "Director" or "Directors" means a non-Employee member or members of the Board of Directors of the Company.


12. "Employee" means any person who is employed by the Company or an Affiliate.


13. "Exchange Act" means the Securities Exchange Act of 1934, as amended.


14. "Fair Market Value" of any class or series of Stock means the fair and reasonable value thereof as determined by the Committee according to prices in trades as reported on the New York Stock Exchange Composite Transactions. If there are no prices so reported or if, in the opinion of the Committee, such reported prices do not represent the fair and reasonable value of the Stock, then the Committee shall determine Fair Market Value by any means it deems reasonable under the circumstances.


15. "Grandfathered Person" shall mean any of the members of the Company's Board of Directors as of the date of the Rights Agreement, who are David R. Banks, Jay W. Brown, M. Darrell Ingram, H. Davis McCarty, Joe R. Micheletto, Martin K. Sneider and William P. Stiritz, together with his immediate family and any other Grandfathered Person; provided, however, that a Grandfathered Person shall cease to be a Grandfathered Person at the time that (i) such Person is no longer a member of the Company's Board of Directors, and (ii) thereafter such Person becomes the Beneficial Owner of any Common Stock of the Company, other than as a result of (A) a dividend or distribution on the Common Stock, payable in Common Stock or securities convertible into Common Stock, which such dividend or distribution is payable to all holders of Common Stock, (B) a subdivision, combination, recapitalization or reclassification of the Common Stock, or (C) an acquisition of Common Stock as a result of exercise of Rights.


16. "Incentive Stock Option" means an option to purchase Stock which satisfies the requirements set forth in Section 422 of the Internal Revenue Code of 1986, as amended.


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17. "Non-Qualified Stock Option" means an option to purchase Stock which does not satisfy the requirements set forth in Section 422 of the Internal Revenue Code of 1986, as amended.


18. "Permitted Offer" means a tender or exchange offer which is for all outstanding Common Stock at a price and on terms determined, prior to the purchase of shares under such tender or exchange offer, by at least a majority of the members of the Board of Directors who are not officers of the Company and who are not (or would not be, if the offer were consummated) Acquiring Persons or Affiliates, Associates, nominees or representatives of an Acquiring Person, to be adequate or otherwise in the best interests of the Company and its stockholders (other than the Pers ...