Document:

exhibit10-3.htm

EXHIBIT 10.3

[Form of]

Monsanto Company [2005] Long-Term Incentive Plan

 

Fiscal Year [20__] Management

Terms and Conditions

of this Nonqualified Option Grant

You have received a grant of Non-Qualified Options (collectively, 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

 

            [                     ], [20__]                                       1/3 of the Option

 

November 15, [20__]                                       1/3 of the Option

November 15, [20__]                        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, notwithstanding the provisions of Section 11.17 of the Plan.

(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 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 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 after the first anniversary of the Grant Date (or, if earlier, after a Change of Control), including, without limitation, by reason of a Retirement Event, death, Disability, or involuntary termination other than 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 Section 6.5 of the Plan.

 

(a)   Retirement Event.  If you experience a Termination of Service as a result of a Retirement Event after the first anniversary of the Grant Date (or, if earlier, after a Change of Control), 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 Event” means:  (i) a Termination of Service (other than by the Company for Cause) on or after your 55th birthday and your completion of five years of service with the Company and any of its Subsidiaries and Affiliates; or (ii) a Termination without Cause on or after your 50th birthday due to a job-elimination or divestiture of the Affiliate or Subsidiary by which you were employed.

(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 (or, if earlier, after a Change of Control), the Option shall become fully vested and shall 

 

  

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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 as a result of a Retirement Event or a voluntary termination governed by Section 4(e)) or a Termination Without Cause that is neither a Retirement Event 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 (other than a Retirement Event) due to a job-elimination or divestiture of the business, Affiliate or Subsidiary by which you were employed, 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 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 

 

  

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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.

 

  

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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.

 

 

5exhibit10-4.htm

EXHIBIT 10.4

Monsanto Company 2005 Long-Term Incentive Plan

Terms and Conditions

of this Fiscal Year 2011

Financial 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.  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, 2012).  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, 2010 through August 31, 2012.  “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, 2010.

 

(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 2011 and 2012 as compared to the Goals 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, 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 above threshold level but below target level, a number of Units shall become eligible for vesting, 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.

 

Target-Level Performance:  For each Goal as to which target-level performance is achieved, one-third of the Initial Number of Units shall be eligible for vesting.

 

Above Target-Level Performance:  For each Goal as to which greater than target-level performance is achieved, a number of Units shall become eligible for vesting, equal to (i) one-third of the Initial Number of Units times (ii) the percentage determined by straight-line interpolating between 100% and 200%,

 

  

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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).

 

(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.  Subject to Section 5, 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, subject to Section 5, 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 (other than a Job Elimination subsequent to a Change of Control, which shall be governed by Section 5(d)), a Retirement Event, or your Disability or death (each, a “Proration Event”), 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 “Proration Fraction”), the numerator of which is the number of days from September 1, 2010 through your date of termination, and the denominator of which is 730 (subject to the special rule of Section 5(c)(iv) that applies in the event that a Change of Control occurs between such Termination of Service and August 31, 2012).  If your employment terminates after August 31, 2012 and before August 31, 2013 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)), a Retirement Event, or your Disability or death, effective as of November 15, 2012 (or, if later, the date of such Termination of Service), then (x) if such Termination of Service precedes a Change of Control, 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 or (y) if such Termination of Service follows a Change of Control, the applicable Replacement Award shall vest in full.  Except as provided in Section 5(d), if your employment terminates before August 31, 2013 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, “Retirement Event” means a Termination of Service (other than by the Company for Cause) on or after the later of your 55th birthday and the date on which you complete five years of service with the Company and any of its Subsidiaries or Affiliates, and “Job Elimination” means a Termination without Cause due to a job-elimination or divestiture of the Affiliate or Subsidiary by which you were employed.

 

  

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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 90 days, after August 31, 2013.  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, notwithstanding the provisions of Section 11.17 of the Plan.

 

(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 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 the Units subject to 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 

 

  

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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 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, 2010 and prior to September 1, 2011, the number of Units subject to the 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, 2011 and prior to September 1, 2012, the number of Units subject to the this Award as of such Change of Control shall be the sum of (x) 50% of the Initial Number of Units plus (y) 50% 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 2011 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, 2012 and prior to September 1, 2013, the number of Units subject to the this Award as of such Change of Control shall be determined pursuant to paragraph 3(c), 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 the Committee shall make the determinations necessary for application of such adjustments 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) 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 

 

  

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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, 

 

  

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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.

 

 

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