Document:

exhibit10-2.htm

Exhibit 10.2

 

 

Fiscal Year [20__] Stock Option Grant

 

Terms and Conditions

 

You have received an Award of Non-Qualified Options (the “Option”) under the Monsanto Company 2005 Long-Term Incentive Plan (as Amended and Restated as of January 24, 2012) (the “Plan”).  The Grant Date, the number of Shares covered by the Option, and the Exercise Price are set forth in the document you received entitled “Long-Term Incentive Statement.”  The Long-Term Incentive 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 Long-Term Incentive Statement.  The “Company” means Monsanto Company, a Delaware corporation incorporated February 9, 2000.

 

2.         Exercisability.

(a)         The Option shall, subject to Sections 2(b) and 4, vest in accordance with the following schedule.

 

   Vesting Date                                                        Shares to Vest

 

November 15, [20__] [first year after grant]       1/3 of the Option

 

November 15, [20__] [second year after grant]     1/3 of the Option

November 15, [20__] [third year after grant]       Remaining unvested

    portion of the Option

(b)         The provisions of this Section 2(b) shall govern vesting of the Option upon a Change of Control.

(i)         Upon a Change of Control, the Option, if outstanding, shall vest in full, except to the extent that another award meeting the requirements of Section 2(b)(ii) is provided to you to replace the Option (any award meeting the requirements of Section 2(b)(ii), a “Replacement Award”).

(ii)         An award shall meet the conditions of this Section 2(b)(ii) (and hence qualify as a Replacement Award) if: (1) it is a stock option or stock appreciation right in respect of publicly traded equity securities of the Company or the surviving corporation following the Change of Control, (2) it has a value at least equal to the value of this Option as of the date of 

 

  

  

 

  

the Change of Control (other than in respect of customary fractional rounding of share amounts and exercise price), (3) it contains terms relating to vesting and exercisability (including with respect to Termination of Service) that are substantially identical to those of this Option, and (4) its other terms and conditions are not less favorable to you than the terms and conditions of this Option (including provisions that apply in the event of a subsequent Change of Control) as of the date of the Change of Control. Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of this Option if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 2(b)(ii) are satisfied shall be made by the Committee, as constituted immediately before the Change of Control, in its sole discretion.

(c)         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, subject to Section 4, 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 (unless such Termination of Service follows a Change of Control), the Option shall be forfeited. If you experience a Termination of Service on or after the first anniversary of the Grant Date (or, if earlier, a Change of Control), including, without limitation, by reason of Retirement, death, Disability, or an involuntary termination other than a Termination for Cause, the Option shall vest and remain exercisable (or be forfeited) to the extent, and only to the extent, provided in this Section 4, notwithstanding any differing treatment set forth in the Plan.

 

(a)         Retirement.  If you experience a Termination of Service by reason of Retirement (including by reason of a Termination without Cause) on or after the first anniversary of the Grant Date (or, if earlier, a Change of Control), the Option shall continue to vest on the schedule set forth in Section 2(a) 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.

(b) Death or Disability. If you experience a Termination of Service as a result of death or Disability on or after the first anniversary of the Grant Date (or, if earlier, a Change of Control), the Option shall become fully vested and shall remain exercisable until the earlier of the first anniversary (or, if such Termination of Service occurs on or after your 55th birthday and your completion of five years of service with the Company and any of its Subsidiaries and Affiliates, 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.

 

  

  

 

  

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

 

(d)         Voluntary Termination; Certain Terminations Without Cause.  If you experience a voluntary Termination of Service (other than by reason of Retirement or a voluntary termination governed by Section 4(e)) or a Termination without Cause that is neither a Retirement nor governed by Section 4(e), 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 Grant Date, and then shall be forfeited to the extent not exercised, and 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) Job Elimination; Termination Without Cause Following a Change of Control.  If you experience (x) a Termination without Cause due to a job-elimination or divestiture of the business, Affiliate or Subsidiary by which you were employed, on or after the first anniversary of the Grant Date, or (y) at any time following a Change of Control, either (1) a Termination without Cause or (2) a termination under circumstances entitling you to severance benefits under a constructive termination provision (including, without limitation, a “good reason” provision or a constructive “involuntary termination” provision) of an agreement, plan or program covering you, the Option shall become fully vested and shall remain exercisable until the earlier of the first anniversary (or, if such Termination of Service occurs on or after your 50th birthday due to a job elimination or a divestiture of the business, Affiliate or Subsidiary by which you were employed, 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.

 

5.         Exercise Procedures.

 

(a)         You may exercise the Option at any time after 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 by the Company, 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.

 

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.exhibit10-3.htm

Exhibit 10.3

Fiscal Year [20__]

Financial Goal Restricted Stock Units

Terms and Conditions

 

You have received an Award of Restricted Stock Units (the “Units”) under the Monsanto Company 2005 Long-Term Incentive Plan (as Amended and Restated as of January 24, 2012) (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 “Long-Term Incentive 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 Long-Term Incentive 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 Long-Term Incentive 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 Long-Term Incentive 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.  Subject to Section 5, 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, [20__] [third year after grant]).  The “162(m) Performance Goal” is that the Company’s Net Income, as defined in the next sentence, must exceed zero for the period from September 1, [20__] [year of grant] through August 31, [20__] [third year after grant].  “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) impact of liabilities, expenses or settlements related to Solutia, Inc. or agreements associated with a Solutia, Inc. plan of reorganization, (IV) unbudgeted business sales and divestitures, and (V) the cumulative effects of changes in accounting methodology made after August 31, [20__] [year of grant].

 

(b)         EPS, Cash Flow, and ROC Goals.  If the Section 162(m) Performance Goal is met, then the number of Units eligible for vesting under this Award will be determined one-third based upon the Company’s achievement of cumulative earnings per share (the “EPS Goal”), one-third based upon the Company’s achievement of cumulative cash flow (the “Cash Flow Goal”), and one-third based upon the Company’s achievement of return on capital (the “ROC Goal,” and, together with the EPS Goal and the Cash Flow Goal, the “Goals” and each, singularly, a “Goal”) for fiscal years [20__], [20__] and [20__] [three years after grant] as compared to the Goals set forth on Exhibit A hereto.  Not later than November 15, [20__] [third year after grant], the Committee will determine the extent to which the Goals have been met, the number of Units that have vested 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, one-third of the Initial Number of Units shall be forfeited.

Above Threshold-Level/Below Target Performance:  For each Goal as to which performance is at or above threshold level but below target level, a number of Units that is equal to (i) one-third of the 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, shall, subject to Section 3(c), vest as of November 15, [20__] [third year after grant].

 

Target-Level Performance:  For each Goal as to which target-level performance is achieved, one-third of the Initial Number of Units shall, subject to Section 3(c), vest as of November 15, [20__] [third year after grant].

 

Above Target-Level Performance:  For each Goal as to which greater than target-level performance is achieved, a number of Units that is equal to (i) one-third of the 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) shall, subject to Section 3(c), vest as of November 15, [20__] [third year after grant].

 

(c)         Effect of Termination of Service.  If you incur a Termination of Service before November 15, [20__] [third year after grant] as a result of a Job Elimination (other than a Job Elimination subsequent to a Change of Control, which shall be governed by Section 5(d)), your Retirement, or your 

 

  

  

 

  

Disability or death (each, a “Proration Event”), then effective as of November 15, [20__] [third year after grant], a number of Units shall vest, equal to (i) the number of Units (if any) that vest based upon the application of paragraphs (a) and (b) above (and, if applicable, taking into account Section 5(c)), times (ii) a fraction (the “Proration Fraction”), the numerator of which is the number of days from September 1, [20__] [year of grant] through your date of termination, and the denominator of which is 1172 (subject to the special rule of Section 5(c)(v) that applies in the event that a Change of Control occurs following such Termination of Service).  Except as provided in Section 5(d), if you incur a Termination of Service before November 15, [20__] [third year after grant] for any other reason, all Units subject to this Award shall be forfeited as of the date of such Termination of Service.

 

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 (except that in the event of settlement following conversion of this Award into a cash account pursuant to Section 5(a), delivery shall be in cash), subject to withholding as provided in paragraph 6 below.  Such delivery shall take place as soon as practicable, but in no event more than 15 days, after November 15, [20__] [third year after grant].  Notwithstanding the foregoing, with respect to a Termination of Service that is a “separation from service” within the meaning of Section 409A of the Code and that occurs during the two-year period following a Change of Control that qualifies as an event described in Section 409A(a)(2)(A)(v) of the Code and the regulations thereunder, such delivery shall take place as soon as practicable following the date of the applicable Termination of Service.  Nothing in this Agreement, including Section 5, shall preclude the Company from settling upon a Change of Control an Award that is not replaced by a Replacement Award (as defined below), to the extent effectuated in accordance with Treas. Regs. § 1.409A-3(j)(ix).

 

5.         Change of Control.  The provisions of this Section 5 shall govern vesting of this Award upon a Change of Control.

 

(a)         Upon the occurrence of a Change of Control, notwithstanding any other provision of this Award Certificate, the number of Units subject to this Award (determined in accordance with Section 5(c)) shall vest in full, except to the extent that another award meeting the requirements of Section 5(b) is provided to you to replace this Award (any award meeting the requirements of Section 5(b), a “Replacement Award”).  In the event that no Replacement Award is so provided to you, this Award shall be converted into a cash account (based on the number of Units as of the date of the Change of Control (determined in accordance with Section 5(c)) and the value per Share as of the Change of Control), which shall accrue interest at the applicable federal short-term rate provided for in Section 1274(d)(1)(A) of the Code, and be settled in accordance with Section 4 above.  For clarity, such account shall be fully vested as of the Change of Control, in no event shall the amount of such account be increased or decreased as a result of the circumstances of a subsequent Termination of Service, and the provisions of Section 2 relating to Dividend Equivalent Payments shall cease to apply following conversion of this Award into a cash account.

 

(b)         An award shall meet the conditions of this Section 5(b) (and hence qualify as a Replacement Award) if: (i) it is a restricted stock unit in respect of publicly traded equity 

 

  

  

 

  

securities of the Company or the surviving corporation following the Change of Control, (ii) it has a value at least equal to the value of this Award as of the date of the Change of Control (determined in accordance with Section 5(c)) and provides for vesting based solely on continued service (with no performance conditions), (iii) it contains terms relating to vesting (including with respect to Termination of Service) that are substantially identical to those of this Award, and (iv) its other terms and conditions are not less favorable to you than the terms and conditions of this Award (including provisions that apply in the event of a subsequent Change of Control) as of the date of the Change of Control. Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of this Award if the requirements of the preceding sentence are satisfied.  If a Replacement Award is granted, the Units shall not vest upon the Change of Control.  The determination of whether the conditions of this Section 5(b) are satisfied shall be made by the Committee, as constituted immediately before the Change of Control, in its sole discretion.

 

(c)         For purposes of this Section 5, the number of Units subject to this Award as of a Change of Control shall be determined in accordance with the following rules:

 

(i)         If the date of the Change of Control is after August 31, [20__] [year of grant] and prior to September 1, [20__] [first year after grant], the number of Units subject to this Award as of such Change of Control shall be the Initial Number of Units.

 

(ii)         If the date of the Change of Control is after August 31, [20__] [first year after grant] and prior to September 1, [20__] [second year after grant], the number of Units subject to this Award as of such Change of Control shall be the sum of (x) 67% of the Initial Number of Units plus (y) 33% of the number of Units that would have become eligible for vesting under Section 3(b) above, if Goal achievement were measured solely based upon the degree of achievement of the fiscal year [20__] [first year after grant] goals (assuming for this purpose that the Section 162(m) Performance Goal was achieved), the determination of such achievement to be made by the Committee no later than the date of the Change of Control, it being understood that to the extent that all necessary performance results are not available as of such date, the Committee shall make a good faith estimate.

 

(iii)         If the date of the Change of Control is after August 31, [20__] [second year after grant] and prior to September 1, [20__] [third year after grant], the number of Units subject to this Award as of such Change of Control shall be the sum of (x) 34% of the Initial Number of Units plus (y) 66% of the number of Units that would have become eligible for vesting under Section 3(b) above, if Goal achievement were measured solely based upon the degree of achievement of the fiscal year [20__] [first year after grant] and the fiscal year [20__] [second year after grant] goals (assuming for this purpose that the Section 162(m) Performance Goal was achieved), the determination of such achievement to be made by the Committee no later than the date of the Change of Control, it being understood that to the extent that all necessary performance results are not available as of such date, the Committee shall make a good faith estimate.

 

(iv)          If the date of the Change of Control is after August 31, [20__] [third year after grant] and on or before November 30, [20__] [third year after grant], the number of Units subject to this Award as of such Change of Control shall be determined pursuant to Section 3 based on actual performance (and the 

 

  

  

 

  

Committee shall make the applicable performance determinations no later than the date of the Change of Control, it being understood that to the extent that all necessary performance results are not available as of such date, the Committee shall make a good faith estimate).

 

(v)         Notwithstanding the foregoing provisions of this Section 5(c), if you have incurred a Termination of Service that is a Proration Event before the date of a Change of Control, the number of Units subject to this Award as of such Change of Control shall be determined by multiplying the number of Units determined in accordance with the rules set forth in the preceding paragraphs of this Section 5(c) by the Proration Fraction.

 

(d)         If you experience (x) a Termination without Cause or (y) a termination under circumstances entitling you to severance benefits under a constructive termination provision (including, without limitation, a “good reason” provision or a constructive “involuntary termination” provision) of an agreement, plan or program covering you, in either case, at any time following a Change of Control, the applicable Replacement Award shall vest in full.

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 terms 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.

 

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.

  

  

 

  

Proposed Definition of Performance Metrics for Financial Goal RSUs

Fiscal [20__] – Fiscal [20__]

Diluted Earnings Per Share (EPS)

	
·  

	
Defined in accordance with the Monsanto Company Statement of Consolidated Operations

	
·  

	
Items, either positive or negative, that are deemed to be extraordinary by the People and Compensation Committee of the Board of Directors are excluded for purposes of Earnings Per Share (but not Cash Flow) calculations

	
  

	
Restructuring charges and reversals

	
  

	
Impact of lawsuit outcomes

	
  

	
Impact of Solutia-related liabilities, expenses, settlements or agreements associated with Solutia’s reorganization plan

	
  

	
Impact of unbudgeted business sales/divestitures

	
  

	
Impact of changes in accounting rules

Cash Flow from Operating and Investing Activities

	
·  

	
Defined in accordance with the Monsanto Company Statement of Consolidated Cash Flows

	
·  

	
Items, either positive or negative, that are deemed to be extraordinary by the People and Compensation Committee of the Board of Directors are excluded for purposes of Cash Flow calculations

	
  

	
Impact of unbudgeted acquisitions

	
  

	
Impact of agreements associated with Solutia’s emergence from bankruptcy

Return on Capital (ROC)

	
·  

	
Earnings before interest and after taxes (EBIAT) divided by the average of the prior year-end and current year total assets less non-interest bearing liabilities, less excess cash (cash over $400,000,000)

ROC   =                                         EBIAT                                                                                                                                                       

    (Total Assets - non-interest bearing liabilities - excess cash)

	
·  

	
Items, either positive or negative, that are deemed to be extraordinary by the People and Compensation Committee of the Board of Directors are excluded for purposes of Return on Capital calculations

	
  

	
Impact of unbudgeted acquisition

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