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 Certificate, the 162(m) Performance Goal must be met (as determined and certified by the Committee following August 31, 20_ _ [the end of the third fiscal year]). 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_ _ through August 31, 20_ _ [including... the current and next two fiscal years]. "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, settlements or agreements related to the Company's indemnification obligations to Pharmacia LLC or Solutia Inc, (IV) unbudgeted business sales and divestitures, and (V) the cumulative effects of changes in accounting methodology made after August 31, 20_ _ [the date before the beginning of the performance period]. (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 Certificate 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_ _ [including the current and next two fiscal years] as compared to the Goals set forth on Exhibit A hereto. Not later than November 15, 20_ _ [three years 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 Certificate, 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_ _ [three years 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_ _ [three years 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_ _ [three years after grant]. (c) Effect of Termination of Service. If after the Grant Date and prior to November 15, 20_ _ [three years after grant], you incur: (i) a Termination of Service by reason of Retirement, death or Disability, or (ii) a Termination of Service without Cause on account a Job Elimination or divestiture, this Award Certificate shall continue in effect without regard to the continued services requirement of the final sentence of this paragraph, the Units granted to you hereunder shall continue to vest based on the degree of achievement of the performance goals set forth in Sections 3(a) and 3(b), and you shall be delivered Shares in accordance with Section 4 on the same terms that would have applied had you remained continuously employed through November 15, 20_ _ [three years after grant]. Except as provided in Section 5(c), if you incur a Termination of Service before November 15, 20_ _ [three years after grant] for any reason other than those set forth in the preceding sentence, all Units subject to this Award Certificate shall be forfeited as of the date of such Termination of Service.View More
