Archer-Daniels-Midland Company
Exhibit 10 (xxvi)
Xxxxxx-Xxxxxxx-Midland Company
2009 Incentive Compensation Plan
This Performance Share Unit Award Agreement (the “Agreement”), is made and entered into as of *[grant date] (the “Date of Grant”), by and between Xxxxxx-Xxxxxxx-Midland Company, a Delaware corporation (the “Company”), and «First_Name» «Last_Name», an employee of the Company (the “Grantee”). This Agreement is pursuant to the terms of the Company’s 2009 Incentive Compensation Plan, as amended (the “Plan”). The applicable terms of the Plan are incorporated herein by reference, including the definitions of capitalized terms contained in the Plan.
Section 14. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Illinois, without giving effect to the choice of law principles thereof.
GRANTEE
_____________________________________
[Name]
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XXXXXX-XXXXXXX-MIDLAND COMPANY
By:__________________________________
P.A. Xxxxxx
President and Chief Executive Officer
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dms.us.49080803.05
APPENDIX A
Earned Units and Performance-Based Objectives
Performance Period: January 1, 2013 through December 31, 2015
Vesting Date: March 31, 2016
Whether the Units that are the subject of this Award will be earned as of the last day of the Performance Period specified above will be determined as follows:
1. If the Company’s net earnings attributable to controlling interests for the Performance Period exceeds the sum of the Company’s dividend payments and after-tax interest expenses for the Performance Period, then all of the Units subject to this Award will be deemed to have been earned as of the last day of the Performance Period unless the Committee elects to exercise its discretion under Section 4 of the Agreement to reduce the number of earned Units.
2. The Committee expects that its decision whether or not to exercise its discretion under Section 4 of the Agreement to reduce the number of earned Units will be made in accordance with the following parameters:
(a) If (i) the Company’s Adjusted ROIC (as defined below) for each of the calendar years during the Performance Period is equal to or greater than the Company’s Weighted Average Cost of Capital (as defined below) for the same calendar year, and (ii) the Company’s Adjusted ROIC for any of the three calendar years during the Performance Period is equal to or greater than the Company’s Weighted Average Cost of Capital for the same calendar year plus 2%, then the Committee expects that it will not exercise its discretion to reduce the number of earned Units.
(b) If either of the conditions specified in clauses (i) and (ii) of Paragraph 2(a) are not satisfied during the Performance Period, then the Committee expects that it will exercise its discretion to reduce the number of earned Units to zero.
(c) For purposes of this Section 2, the following terms shall have meanings indicated:
(i) “Adjusted ROIC” for any calendar year means LIFO-Adjusted ROIC Earnings for that calendar year divided by LIFO-Adjusted Invested Capital for that calendar year.
(ii) “LIFO-Adjusted ROIC Earnings” for any calendar year means the Company’s net earnings attributable to controlling interests adjusted for the after-tax effects of interest expense (excluding interest expense of the Company’s financial business units) and changes in the LIFO inventory valuation reserve, and further adjusted for such Additional Adjustments as may be applicable.
(iii) “LIFO-Adjusted Invested Capital” for any calendar year means the average of quarter-end amounts for the four fiscal quarters during such calendar year, with each such quarter end amount being equal to the sum of the Company’s stockholders equity (excluding non-controlling interests) and interest-bearing liabilities (excluding interest-bearing liabilities of the Company’s financial business units), adjusted for the after-tax effect of the LIFO inventory valuation reserve and for such Additional Adjustments as may be applicable.
(iv) “Additional Adjustments” means, in connection with the calculation of LIFO-Adjusted ROIC Earnings and LIFO-Adjusted Invested Capital, adjustments determined by the Committee, in its discretion, to be appropriate in order to reflect the impact of significant extraordinary, unusual or infrequent events.
(v) “Weighted Average Cost of Capital” means the cost of the Company’s capital, expressed as an annual percentage, where each category of capital is proportionately weighted, as calculated by the Company in accordance with its customary practices.
3. The application of discretion by the Committee in accordance with Section 2 above may decrease, but may not increase, the number of Units that otherwise would be deemed to have been earned by application of the performance objective specified in Section 1 above.