EXHIBIT 10.5

Fiscal 2011 Annual Incentive Plan Summary
(September 1, 2010 through August 31, 2011 Performance Period)

General:
 
·  
The Fiscal 2011 Annual Incentive Plan (“Plan”) provides eligible employees the
opportunity to earn cash awards for Company and individual performance during
the Performance Period

·  
The Plan’s Performance Period is the Company’s 2011 fiscal year:  September 1,
2010 through August 31, 2011

·  
All regular employees of Monsanto Company (including each of its business units
and divisions) who do not participate in a sales, or a business-specific annual
incentive plan are eligible to participate; provided, however, that all
employees employed in the U.S. who are members of a collective bargaining unit
with whom incentive compensation was the subject of good faith bargaining shall
not be eligible to participate in the plan

·  
The People and Compensation Committee of the Board of Directors (the
“Committee”) establishes Company Financial Goals for the Performance Period with
respect to the following metrics:  Sales, Diluted Earnings Per Share and Cash
Flow.  Each employee participating in the Plan (a “Participant”) also has
individual performance goals relating to business and/or people initiatives

·  
A “Target Annual Incentive Opportunity,” expressed as a percentage of base pay,
is established for each Participant with respect to the Performance Period

·  
The “Target Award Pool” is the sum of base salaries of all Participants at the
end of the Performance Period multiplied by their respective Target Annual
Incentive Opportunities

·  
After the end of the Performance Period, the Committee determines the actual
amount of money available for awards (the “Award Pool”)  based on its assessment
of overall Company performance during the Performance Period measured against
the pre-established Financial Goals and other subjective performance factors

·  
Regardless of the attainment of any one or more of the Plan’s Financial Goals,
the Committee, in its sole discretion, determines whether the Award Pool should
be funded and the amount of the funding, if any

 
 
 

·  
The Award Pool is allocated to Participants based on:

 
Ø  
The Participant’s Target Annual Incentive Opportunity for the Performance Period

 
Ø  
The performance of the Participant’s business or function measured against
business or function goals, and

 
Ø  
The Participant’s individual performance during the Performance Period, measured
against individual goals

·  
Any amount earned by a Participant under the terms of the Plan (an “Award”) will
be paid in November 2011

Establishment of Financial Goals:

·  
The Committee determines Threshold, Target and Outstanding levels of Company
performance (“Performance Level”) for the Performance Period with respect to:

Ø Sales
10% weighting
Ø Diluted Earnings Per Share
50% weighting
Ø Cash Flow
40% weighting

 
·  
Sales, Diluted Earnings Per Share and Cash Flow are determined in accordance
with the “Definition of Performance Metrics” established by the Committee

Process for Funding Award Pool and Payout of Awards:

·  
A Target Award Pool is calculated, equal to the sum of base salaries of all Plan
Participants on the last day of the Performance Period, multiplied by their
respective Target Annual Incentive Opportunity

·  
After the end of the Performance Period, the Committee determines the actual
funding of the Award Pool based upon the Company’s Performance Level during the
Performance Period, measured against the Financial Goals and other subjective
performance factors as follows:

 
 
Performance Level
Potential Award Pool Funding
(As a Percent of Target Award Pool)
Threshold
35%
Target
100%
Outstanding
200%

·  
The Committee may consider subjective factors in determining whether or not any
Financial Goal has been attained and the amount of Award Pool funding with
respect to each Financial Goal, if any

 
2
 
 
·  
The amount of money available for funding the Award Pool is determined by
multiplying the value of the Target Award Pool by the percentage associated with
the Company’s Performance Level, as determined by the Committee

·  
Special considerations regarding attainment of Financial Goals and funding of
Award Pool

Ø  
The Award Pool will be funded at no less than 20% of Target level funding in the
event Monsanto pays dividends with respect to each of its financial quarters
ending during the Performance Period

Ø  
In the event Monsanto does pay dividends with respect to each of the Company’s
fiscal quarters ending during the Performance Period, but the Company does not
attain the Threshold level of performance with respect to the Diluted Earnings
Per Share Financial Goal (considering the definition of the Financial Goal for
Diluted Earnings Per Share performance metric and other subjective performance
factors), the Award Pool may not fund at greater than 20% of Target level
funding

Ø  
One or more of the Financial Goals may be funded at above Outstanding level
funding if the Committee determines that Company performance with respect to the
Financial Goal warrants such funding; provided, however, the overall Award Pool
would be capped at 200% of Target-level funding unless the Committee determines
in its discretion to fund above 200%

·  
Individual Awards are determined based on business or function and individual
performance

Ø  
People managers: 50% of Award based on development of people, team and personal
development (including diversity); 50% based on business results

Ø  
Non-managers: 75% of Award based on business results; 25% on personal
development

·  
A Participant’s Award may be greater than 200% of his or her Target Annual
Incentive Opportunity

·  
The payment and amount of any Award are subject to the sole discretion of the
Committee or its delegate

 
Events Affecting Payout of Individual Awards:
 
·  
If a Participant commences employment with the Company during the Performance
Period, he/she is eligible for an Award reflecting actual months of
participation to the nearest whole month

 
3
 
 
·  
If a Participant’s Target Annual Incentive Opportunity changes during the
Performance Period, he/she is eligible for an Award reflecting the Target Annual
Incentive Opportunity on the last day of the Performance Period

·  
If a Participant’s base pay changes during the Performance Period, any Award is
based on base pay on the last day of the Performance Period

·  
If a Participant transfers within the Company, his/her Award will come from the
unit or division in which he/she is working on the last day of the Performance
Period, but performance for the entire Performance Period will be considered

·  
A Participant who:

Ø  
voluntarily resigns other than on account of “Retirement” may be considered for
an Award only if the resignation occurs after the end of the Performance Period.
“Retirement” is defined as a voluntary termination of employment on or after
attaining age 55 and five years of employment with the Company and its
affiliates

 
Ø  
involuntarily separates without cause or for poor performance, is eligible for
an Award reflecting participation to the nearest whole month, provided that
he/she worked at least three months during the Performance Period

 
Ø  
retires, dies, or becomes permanently disabled, is eligible for an Award
reflecting actual participation to the nearest whole month provided that he/she
worked at least three months during the Performance Period

 
Ø  
incurs a “termination of employment for cause,” forfeits all rights to any
Award.  A “termination of employment for cause” is defined as a Participant’s
involuntary termination of employment on account of the Participant engaging in
(i) any willful or intentional neglect in performing his/her duties, including,
but not limited to, fraud, misappropriation or embezzlement involving property
of the Company or an affiliate, or (ii) any other intentional wrongful act that
may impair the goodwill or business of the Company or an affiliate, or that may
cause damage to any of their businesses

·  
Continued eligibility for employees employed in the U.S. who become represented
by a collective bargaining unit during the Performance Period will be determined
by good faith bargaining

·  
Any Award would be paid on or before November 15, 2011 in the U.S. (other
payment dates may apply outside the U.S.)

 
 
4