EXHIBIT 10.3

 

Form of

Terms and Conditions

of this Nonqualified Option Grant

 

You have received a Non-Qualified Option (the “Option”) under the Monsanto
Company [2005] Long-Term Incentive Plan (the “Plan”). The Grant Date, the number
of Shares covered by the Option, and the Exercise Price are set forth in the
document you have received entitled “Stock Option Statement.” The Stock Option
Statement and these terms and conditions collectively constitute the Award
Certificate for the Option, and describe the provisions applicable to the
Option. This Option is not intended to qualify as an “incentive stock option” as
defined in Section 422 of the Code.

1.            Definitions. Each capitalized term not otherwise defined herein
has the meaning set forth in the Plan or, if not defined in the Plan, in the
attached Stock Option Statement. The “Company” means Monsanto Company, a
Delaware corporation incorporated February 9, 2000.

 

2.

Exercisability. (a) The Option shall vest in accordance with the following
schedule.

 

Vesting Date

Shares to Vest

November 15, 2008

33%

November 15, 2009

33%

November 15, 2010

33%

 

(b)         Except as otherwise provided in the Plan, the Option may be
exercised at any time after it vests and before its term expires or it is sooner
forfeited as provided in Sections 3 and 4 below.

 

 

3.

Term. The term of the Option shall expire on the tenth anniversary of the Grant
Date.

4.            Retirement, Disability, Death or Other Termination of Service;
Transfer. If you experience a Termination of Service for any reason before the
first anniversary of the Grant Date, the Option shall be forfeited. If you
experience a Termination of Service after the first anniversary of the Grant
Date, including, without limitation, by reason of Retirement, death, or
Disability, the Option shall vest and remain exercisable (or be forfeited) to
the extent provided in this Section 4.

(a)          Retirement. If you experience a Termination of Service as a result
of Retirement after the first anniversary of the Grant Date, the Option shall
become fully vested and shall remain exercisable until the earlier of the fifth
anniversary of the date of your Termination of Service or the tenth anniversary
of the Grant Date, and then shall be forfeited to the extent not exercised. For
purposes of this Award Certificate, “Retirement” means a Termination of Service
for any reason other than a Termination for Cause on or after your 50th
birthday.

 

(b)           Death or Disability. If you experience a Termination of Service as
a result of death or Disability after the first anniversary of the Grant Date,
the Option shall become fully vested and shall remain exercisable until the
earlier of the first anniversary of the date of your Termination of Service or
the tenth anniversary of the Grant Date, and then shall be forfeited to the
extent not exercised.

 

(c)           Termination for Cause. If you experience a Termination for Cause,
the Option, whether vested or not, shall immediately be forfeited.

 

(d)           Voluntary Termination. If you experience a voluntary Termination
of Service, then, to the extent the Option is vested on the date of your
Termination of Service, it shall remain exercisable until the earlier of the
90th day after the date of your Termination of Service or the tenth anniversary
of the

 

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Grant Date, and then shall be forfeited to the extent not exercised. Any portion
of the Option that is not vested on the date of your Termination of Service
shall be forfeited upon your Termination of Service.

(e)           Involuntary Termination Other Than for Cause. If you experience an
involuntary Termination of Service, other than a Termination for Cause, after
the first anniversary of the Grant Date, the option shall become fully vested
and shall remain exercisable until the earlier of the first anniversary of the
date of your Termination of Service or the tenth anniversary of the Grant Date,
and then shall be forfeited to the extent not exercised.      

 

5.

Exercise Procedures.

(a)          You may exercise the Option at any time the Option has vested and
become exercisable by giving notice to the Company specifying the number of
Shares for which the Option is being exercised. The notice shall be provided to
the Company’s Designated Administrator, in a manner set forth by the Company or
the Designated Administrator for this purpose. The “Designated Administrator” is
the person or entity most recently specified by the Company as such for purposes
of the Plan.

(b)          The purchase price for the Shares for which the Option is being
exercised shall be paid in full at the time of exercise and any other
information required by the Committee shall be provided at that time. The
purchase price shall be paid (i) in cash or by check, (ii) by tendering to the
Designated Administrator whole Shares (but not fewer than 100 Shares), valued at
their Fair Market Value on the date of exercise, or (iii) by any other method
designated by the Committee. The Committee may require payment in a particular
or different method in order to comply with applicable law.

6.            Withholding. In order for Shares to be delivered when you exercise
the Option, you must make arrangements satisfactory to the Company for the
payment of any taxes required to be paid or withheld in connection with the
exercise of the Option. No more than the minimum required withholding will be
permitted in the form of Shares. While the Company reserves the right to modify
the methods of tax withholding that it deems acceptable, as of the time that
this Award Certificate is being delivered to you, tax withholding may be
satisfied by (i) cash or check, (ii) delivery of Shares, or (iii) retention,
sale to a third party or cancellation by the Company of Shares otherwise
deliverable upon the Option exercise.

7.            Nontransferability. The Option is not transferable by you other
than upon death by will, the laws of descent and distribution, or written
designation of a beneficiary. The Option is exercisable, during your lifetime,
only by you (or by your guardian or legal representative). Any person who holds
the Option is subject to the terms and conditions of this Award Certificate.  No
transfer of the Option shall be effective to bind the Company unless the Company
has been furnished with written notice of the transfer and appropriate evidence
to establish the validity of the transfer and the acceptance by the transferee
of the terms and conditions of this Award Certificate.

8.            No Right to Continued Employment or Service. This Award
Certificate shall not limit or restrict the right of the Company or any
Affiliate to terminate your employment or service at any time or for any reason.

9.            Effect of Award Certificate; Severability. This Award Certificate
shall be binding upon and shall inure to the benefit of any successor of the
Company and the person or entity to whom the Option may have been transferred by
will, the laws of descent and distribution or beneficiary designation. The
invalidity or enforceability of any provision of this Award Certificate shall
not affect the validity or enforceability of any other provision of this Award
Certificate. 

10. Amendment. The terms and conditions of this Award Certificate may not be
amended in a manner adverse to you without your consent.

 

 

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11. Discretionary Nature of the Plan. You acknowledge and agree that the Plan is
discretionary in nature and may be amended, cancelled, or terminated by the
Company, in its sole discretion, at any time.  The grant of the Option under the
Plan is a one-time benefit and does not create any contractual or other right to
receive a grant of stock options or benefits in lieu of stock options in the
future.  Future grants of stock options, if any, will be at the sole discretion
of the Company, including, but not limited to, the timing of any grant, the
number of stock options, vesting provisions, and the exercise price.

 

12.          Plan Interpretation. This Award Certificate is subject to the
provisions of the Plan, and all of the provisions of the Plan are hereby
incorporated into this Award Certificate as provisions of this Option. If there
is a conflict between the provisions of this Award Certificate and the Plan, the
provisions of the Plan (including, without limitation, those setting forth the
consequences of a Change of Control) govern. If there is any ambiguity in this
Award Certificate, any term that is not defined in this Award Certificate, or
any matters as to which this Award Certificate is silent, the Plan shall govern,
including, without limitation, the provisions of the Plan addressing
construction, governing law, and the powers of the Committee, among others, to
(a) interpret the Plan, (b) prescribe, amend and rescind rules and regulations
relating to the Plan, (c) make appropriate adjustments to the Option to reflect
non-United States laws or customs or in the event of a corporate transaction,
and (d) make all other determinations necessary or advisable for the
administration of the Plan.

 

[To be included in Award Certificates with respect to employees outside of the
United States:]

 

[13. Data Authorization. You acknowledge and consent to the collection, use,
processing and transfer of personal data as described in this paragraph.  The
Company, its Subsidiaries and Affiliates, and your employer hold certain
personal information about you, including your name, home address and telephone
number, date of birth, social security number or other employee identification
number, salary, nationality, job title, any shares of stock or directorships
held in the Company, details of all options or any other entitlement to shares
of stock awarded, cancelled, purchased, vested, unvested or outstanding in your
favor, for the purposes of managing and administering the Plan ("Data").  The
Company, its Subsidiaries and/or Affiliates will transfer Data amongst
themselves as necessary for the purpose of implementation, administration and
management of your participation in the Plan, and the Company, its Subsidiaries
and/or Affiliates may each further transfer Data to any third parties assisting
the Company in the implementation, administration and management of the Plan. 
These recipients may be located in the European Economic Area, or elsewhere,
such as the United States.  You authorize them to receive, possess, use, retain
and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data as may be required for the
administration of the Plan and/or the subsequent holding of shares of any time,
review Data, require any necessary amendments to it or withdraw the consents
herein in writing by contacting the Company; however, withdrawing your consent
may affect your ability to participate in the Plan.]