EXHIBIT 10.20.7
[Form of]
Monsanto Company 2005 Long-Term Incentive Plan
Terms and Conditions
of this Fiscal Year 2010
Strategic Performance Goal Restricted Stock Unit Grant
You have received an Award of Restricted Stock Units (the “Units”) under the
Monsanto Company 2005 Long-Term Incentive Plan (the “Plan”). The Grant Date and
the number of Units initially covered by this Award (the “Initial Number of
Units”) are set forth in the document you have received entitled “Restricted
Stock Units Statement.” The maximum number of Units that you may receive under
this Award (the “Maximum Number of Units”) is two times the Initial Number of
Units. The Restricted Stock Units Statement and these terms and conditions
collectively constitute the Award Certificate for the Units, and describe the
provisions applicable to the Units.
     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
Restricted Stock Units Statement. The “Company” means Monsanto Company, a
Delaware corporation incorporated February 9, 2000.
     2. Nature of Units. The Units represent the right to receive, in certain
circumstances, a number of Shares determined in accordance with the Restricted
Stock Units Statement and these terms and conditions. Until such time (if any)
as Shares are delivered to you, you will not have any of the rights of a common
stockholder of the Company with respect to those Shares, your rights with
respect to the Units and those Shares will be those of a general creditor of the
Company, and you may not sell, assign, transfer, pledge, hypothecate, give away,
or otherwise dispose of the Units. Any attempt on your part to dispose of the
Units will result in their being forfeited. However, you shall have the right to
receive a cash payment (the “Dividend Equivalent Payment”) with respect to the
Units (if any) that vest pursuant to this Award, subject to withholding pursuant
to paragraph 6 below, in an amount equal to the aggregate cash dividends that
would have been paid to you if you had been the record owner, on each record
date for a cash dividend during the period from the Grant Date through the
settlement date of the Units, of a number of Shares equal to the number of Units
that vest under this Award. The Dividend Equivalent Payment shall be made on
such settlement date. You shall not be entitled to receive any payments with
respect to any non-cash dividends or other distributions that may be made with
respect to the Shares.
     3. Vesting of Units. (a) 162(m) Performance Goal. In order to vest in the
Maximum Number of Units or any lesser number of Units under this Award, the
162(m) Performance Goal must be met (as determined and certified by the
Committee following August 31, 2012). The “162(m) Performance Goal” is that the
Company‘s Net Income, as defined in the next sentence, must exceed zero for the

 

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period from September 1, 2009 through August 31, 2012 (the “Performance
Period”). “Net Income” means gross profit (i) minus (A) sales, general and
administrative expenses, (B) research and development expense, (C) amortization,
(D) net interest expense, and (E) income taxes and (ii) plus or minus other
income and expense; all as reported in the Company‘s financial statements; but
excluding positive or negative effects of (I) restructuring charges and
reversals, (II) the outcome of lawsuits, (III) research and development
write-offs on acquisitions, (IV) impact of liabilities, expenses or settlements
related to Solutia, Inc. or agreements associated with a Solutia, Inc. plan of
reorganization, (V) unbudgeted business sales and divestitures, and (VI) the
cumulative effects of changes in accounting methodology made after August 31,
2009.
     (b) Strategic Performance Goals. If the Section 162(m) Performance Goal is
met, then the number of Units eligible for vesting under this Award will be
determined 50% based upon the Company’s achievement of cumulative gross profit
for SmartStax Corn during the Performance Period (the “SmartStax Goal”), 40%
based upon the Company’s achievement of cumulative gross profit for RoundUp
Ready 2 Yield Soybean during the Performance Period (the “RR2 Yield Goal”), and
10% based upon the Company’s achievement of commercialization of Drought 1 Corn
by the end of the Performance Period (the “Drought 1 Corn Goal,” and, together
with the SmartStax Corn Goal and the RR2 Yield Goal, the “Goals” and each,
singularly, a “Goal”), for fiscal years 2010, 2011 and 2012 as compared to the
targets set forth on Exhibit A hereto. Not later than November 15, 2012, the
Committee will determine the extent to which the Goals have been met and the
number of Units eligible for vesting under this Award and the number of Units to
be forfeited, as follows.
Below Threshold-Level Performance: For each Goal as to which performance is
below threshold level, the applicable Goal-Specific Initial Number of Units (as
defined below) shall be forfeited.
Above Threshold-Level/Below Target Performance: For each Goal as to which
performance is above threshold level but below target level, a number of Units
shall become eligible for vesting, equal to (i) the applicable Goal-Specific
Initial Number of Units times (ii) the percentage determined by straight-line
interpolating between 50% and 100%, based on the relationship between actual
performance, threshold-level performance, and target-level performance for the
applicable Goal.
Target-Level Performance: For each Goal as to which target-level performance is
achieved, the applicable Goal-Specific Initial Number of Units shall be eligible
for vesting.
Above Target-Level Performance: For each Goal as to which greater

 

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than target-level performance is achieved, a number of Units shall become
eligible for vesting, equal to (i) the applicable Goal-Specific Initial Number
of Units times (ii) the percentage determined by straight-line interpolating
between 100% and 200%, based on the relationship between actual performance,
target-level performance and outstanding-level performance for the applicable
Goal (for this purpose, performance above the outstanding level for the
applicable Goal shall be deemed to be performance at such outstanding level).
Goal-Specific Initial Number of Units. The Goal-Specific Initial Number of Units
shall equal the product of (x) the Initial Number of Units and (y) (i) 50%, in
the case of the SmartStax Goal, (ii) 40%, in the case of the RR2 Yield Goal, or
(iii) 10%, in the case of the Drought 1 Corn Goal.
     (c) Number of Units; Effect of Forfeiture. From the Grant Date through
November 14, 2012, the number of Units subject to this Award shall be the
Initial Number of Units. If the 162(m) Performance Goal is not met, or if none
of the Goals is met at the threshold level or above, all Units under this Award
will be forfeited as of November 15, 2012. Otherwise, the number of Units
subject to this Award from November 15, 2012 through August 31, 2013 shall be
the number of Units that are eligible for vesting after application of the
foregoing and those Units will vest effective as of August 31, 2013, except as
otherwise provided in paragraph 3(d) below.
     (d) Effect of Termination of Service. If you incur a Termination of Service
before August 31, 2012 as a result of a Job Elimination, or your Disability or
death, then effective as of November 15, 2012, a number of Units shall vest,
equal to (i) the number of Units (if any) that become eligible for vesting,
based upon the application of paragraphs (b) and (c) above, times (ii) a
fraction, the numerator of which is the number of days from September 1, 2009
through your date of termination, and the denominator of which is 1096. If your
employment terminates after August 31, 2012 and before August 31, 2013 as a
result of a Job Elimination, or your Disability or death, effective as of
November 15, 2012 (or, if later, the date of such Termination of Service), a
number of Units subject to this Award shall vest, equal to the number of Units
(if any) that become eligible for vesting, based upon the application of
paragraphs (b) and (c) above. If your employment terminates before August 31,
2013 (and other than subsequent to a Change of Control) for any other reason,
all Units subject to this Award shall be forfeited as of the date of your
termination. For purposes of this Agreement, “Job Elimination” means a
Termination without Cause due to a job-elimination or divestiture of the
Affiliate or Subsidiary by which you were employed.
     4. Delivery of Shares. The Company shall deliver to you a number of Shares
equal to the number of Units (if any) that vest pursuant to this Award, subject
to withholding as provided in paragraph 6 below. Such delivery shall, subject

 

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to paragraph 5 below, take place as soon as practicable, but in no event more
than 90 days, after August 31, 2013.
     5. Change of Control. Upon the occurrence of a Change of Control that
qualifies as an event described in Section 409A(a)(2)(A)(v) of the Code and the
regulations thereunder (a “Section 409A Change of Control”), notwithstanding any
other provision of this Award Certificate other than paragraph 6, the number of
Units subject to this Award shall vest in full and, subject to paragraph 6
below, shall be settled by delivery of Shares to you in a single lump sum as
soon as practicable, but in no event more than 30 days following the Change of
Control. For this purpose, (a) the number of Units subject to this Award shall
be determined pursuant to paragraph 3(c) above as of the date of such Change of
Control, except that if the date of the Change of Control is after August 31,
2012 and before November 15, 2012, the adjustments to the number of Units
pursuant to paragraphs 3(a) and (b) shall apply effective as of the date of such
Change of Control, and (b) if you have had a Termination of Service before the
date of such Change of Control, the provisions of paragraph 3(d) shall also
apply. Upon the occurrence of a Change in Control that is not a Section 409A
Change of Control, the number of Units subject to this Award (determined in
accordance with the preceding sentence) shall vest in full and shall, subject to
paragraph 6 below, be settled by delivery of Shares to you on the date set forth
in Section 4 above.
     6. Withholding. Notwithstanding any other provision of this Award
Certificate, your right to receive the Dividend Equivalent Payment and to
receive Shares in settlement of any Units is subject to withholding of all taxes
that are required to be paid or withheld in connection with such Dividend
Equivalent Payment or the delivery of such Shares. With respect to the delivery
of Shares, you must make arrangements satisfactory to the Company for the
payment of any such taxes.
     7. Recoupment Policy. Notwithstanding any other provision of this Award
Certificate, this Award shall be subject to the terns of the Company’s
Recoupment Policy, which is hereby incorporated herein by reference.
     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.
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 any manner adverse to you without your consent.

 

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     11. 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. If there is a conflict between the
provisions of this Award Certificate and the Plan, the provisions of the Plan
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 and governing law, as well as 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 Units in the event of a corporate transaction,
and (d) make all other determinations necessary or advisable for the
administration of the Plan.