Exhibit



EXHIBIT 10.3A





CHS ANNUAL VARIABLE PAY PLAN 
APPENDIX FISCAL 2019    


	
	
	Company Return on Invested Capital (ROIC) and Return on Asset (ROA) Goals






	
					
	Financial Performance Targets
	CHS ROIC
	CHS ROA
	Description
	Award as % of Target

	Maximum
	6.9%
	6.9%
	Maximum Performance Goal
	200%

	Target
	5.9%
	6.1%
	Targeted Performance Goal
	100%

	Threshold
	4.9%
	5.2%
	Minimum Performance Goal
	50%






	
	
	Return on Invested Capital (ROIC) Explanation




ROIC is a measurement of how efficiently the company uses its capital and the level of returns on that capital. It is calculated by dividing net operating profit after tax by funded debt plus equity. Further details on the ROIC calculation, goal determination and goals can be answered by the finance contact for your group. The formula used in the calculation of ROIC is as follows:
	
		
	ROIC=
	Adjusted Net Operating Profit After Tax*

	Funded Debt + Equity**






*(Earnings Before Taxes + Interest, Net) * (1- Effective Tax Rate) 
**(Average of Beginning and End of Year Funded Debt) + Beginning of Year Equity
Calculation uses FY18 July balance sheet for beginning of year funded debt and beginning of year equity. The FY19 July balance sheet will be used for end of year funded debt. Funded debt is calculated by adding long-long term debt plus the current portion of long-term debt plus any guarantees of funded debt.
	
	
	Return on Assets (ROA) Explanation




ROA is a measurement of how well a company uses its assets to generate earnings and maximizes returns on owner equity and company assets. It is calculated by dividing operating income by total assets minus working capital liabilities. Further details on the ROA calculation, goal determination and goals can be answered by the finance contact for your group. The formula used in the calculation of ROA is as follows:


	
		
	ROA=
	Adjusted Operating Income*

	Net Assets**






*Earnings Before Taxes + Interest, Net + Corporate Indirect Allocations 
**Beginning of Year Assets - Beginning of Year Working Capital Liabilities (current liabilities related to the Business Unit business activities excluding financing) 
Calculation uses FY18 July balance sheet to determine net assets. For individual Business Unit calculations interest income is not netted against interest expense.














EXHIBIT 10.3A



	
	
	Award Opportunity Example






This is an example for a participant with a $70,000 pay basis and a 5% target award opportunity. 
	
				
	Financial Performance Targets
	Award Opportunity Percentage
	Calculation
	Earned Award Amount 

	Maximum
	10.0%
	  $70,000 x 10.0%
	$7,000

	Target
	  5.0%
	$70,000 x 5.0%
	$3,500

	Threshold
	  2.5%
	$70,000 x 2.5%
	$1,750






	
	
	Award Calculation Example - Threshold Performance Attained




This is an example for a Business Unit participant with a $70,000 pay basis and a 5% target award opportunity.
	
							
	Plan Goals
	Goal Weighting
	Award Opportunity 
	X
	Award as % of Target
	=
	Earned Award Amount

	CHS ROIC
	10%
	   $350
	X
	   90%
	=
	$315

	Business Unit ROA
	60%
	$2,100
	X
	 100%
	=
	$2,100

	Individual Performance
	30%
	$1,050
	X
	 170%
	=
	$1,785

	Totals
	100%
	$3,500
	 
	 
	 
	$4,200






This is an example for a Corporate participant with a $70,000 pay basis and a 5% target award opportunity.
	
							
	Plan Goals
	Goal Weighting
	Award Opportunity
	X
	Award as % of Target
	=
	Earned Award Amount

	CHS ROIC
	60%
	$2,100
	X
	  90%
	=
	$1,890

	Enterprise ROA
	10%
	   $350
	X
	100%
	=
	   $350

	Individual Performance
	30%
	$1,050
	X
	170%
	=
	$1,785

	Totals
	100%
	$3,500
	 
	 
	 
	$4,025






	
	
	Award Calculation Example - Threshold Performance Not Attained




This is an example for Business Unit participant with a $70,000 pay basis and a 5% target award opportunity.
	
							
	Plan Goals
	Goal Weighting
	Award Opportunity 
	X
	Award as % of Target
	=
	Earned Award Amount 

	CHS ROIC
	10%
	   $350
	X
	   0%
	=
	$0

	Business Unit ROA
	60%
	$2,100
	X
	 110%
	=
	$2,310

	Individual Performance
	30%
	$1,050
	X
	 0%
	=
	$0

	Totals
	100%
	$3,500
	 
	 
	 
	$2,310