SEMINIS INC
424B1, 1999-06-30
AGRICULTURAL PRODUCTION-CROPS
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<PAGE>   1
                                                 Filed Pursuant to Rule 424(b)1)
                                                 Registration No. 333-72141

                               13,750,000 Shares

[SEMINIS LOGO]                   SEMINIS, INC.

                              Class A Common Stock
                             ----------------------

     This is an initial public offering of shares of Class A common stock of
Seminis, Inc. This prospectus relates to an offering of 11,000,000 shares in the
United States. In addition, 2,750,000 shares are being offered outside the
United States in an international offering.

     Prior to the offering, there has been no public market for the common
stock. The shares of Class A common stock have been approved for listing on the
Nasdaq National Market under the symbol "SMNS".

     See "Risk Factors" on page 8 to read about factors you should consider
before buying shares of the Class A common stock.
                             ----------------------

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

                             ----------------------

<TABLE>
<CAPTION>
                                                              Per Share       Total
                                                              ---------       -----
<S>                                                           <C>          <C>
Initial public offering price...............................   $15.00      $206,250,000
Underwriting discounts......................................   $ 0.87      $ 11,962,500
Proceeds, before expenses, to Seminis.......................   $14.13      $194,287,500
</TABLE>

     The U.S. underwriters may, under certain circumstances, purchase up to an
additional 1,650,000 shares from Seminis at the initial public offering price
less the underwriting discount. The international underwriters may similarly
purchase up to an aggregate of an additional 412,500 shares.
                             ----------------------
                              GREENHILL & CO., LLC

   has acted as financial advisor to Seminis in connection with the offering.
                             ----------------------
     The underwriters expect to deliver the shares against payment in New York,
New York on July 6, 1999.

GOLDMAN, SACHS & CO.                                           J.P. MORGAN & CO.
ING BARING FURMAN SELZ LLC
                        MORGAN STANLEY DEAN WITTER

                                                    SALOMON SMITH BARNEY

                             VECTORMEX INCORPORATED
                             ----------------------

                        Prospectus dated June 29, 1999.
<PAGE>   2

                              [INSIDE FRONT COVER

Collage of pictures with black background. Larger picture of the globe with
other pictures laying on top. Other pictures include:

     -  Three open cans of seeds

     -  Person reviewing illuminated research material above which is the
       caption "RESEARCH"

     -  Person examining vegetables and fruits in laboratory above which is the
       caption "NUTRITION"

     -  Person examining seeds, with farm equipment in background, upon which is
       superimposed a pair of hands holding an onion above which is the caption
       "GLOBAL SUPPLY"

     -  Person in greenhouse, upon which is superimposed a person looking
       through a microscope along the side of which is the word "DEVELOPING" and
       along the bottom at which is the word "SOLUTIONS"

     -  Two people in field of growing produce along the side of which is the
       caption "CREATING VALUE"

     -  Collection of vegetables and fruits along the side of which is the word
       "QUALITY" and along the bottom of which is the word "CONVENIENCE"

     -  Three infant faces along the side of which is the caption "SUSTENANCE"

Along the bottom of page is the word "SEMINIS".]
<PAGE>   3

                         [Inside Front Cover Folds Out

Fold out page will have a map of the world. Countries in which Seminis does
business will be highlighted with a color different from all other countries.
The map includes a series of different colored circles indicating the
approximate location of each production, research and distribution/sales sites.
The map contains a legend detailing the following:

                         Red Circle -- Production Sites
                        Yellow Circle -- Research Sites
                 Blue Circle -- Distribution Center/Sales Sites
                   Circled Number -- Reflects Multiple Sites
                   Darker Green Square -- Country with Sales
                  Lighter Green Square -- Unpenetrated Market

Along the bottom of the map is the word "Seminis".]
<PAGE>   4

                               PROSPECTUS SUMMARY

     This summary may not contain all the information that may be important to
you. You should read the entire prospectus, including the consolidated financial
statements and related notes, before making a decision to purchase our Class A
common stock offered through this prospectus. Please note that the meanings of
certain technical words relating to our business are provided in the glossary
located on page G-1 of this prospectus. All of the brand names and trademarks
appearing in this prospectus are our property, except Asgrow(R), which we have a
license to use, Roundup Ready(R) and SAP/R3(R).

                                  THE COMPANY

      Seminis is the largest developer, producer and marketer of vegetable and
fruit seeds in the world. We use seeds as the delivery vehicle for innovative
agricultural technology. We develop seeds designed to do one or more of the
following:

- - reduce the need for chemicals;

- - increase crop yield;

- - reduce spoilage;

- - offer longer shelf life;

- - create tastier foods; and

- - create foods with better nutritional content.

      We produce more than 8,000 distinct products covering most species of
vegetables and fruits. We market our seeds through three international brands
with broad product offerings -- Asgrow, Petoseed and Royal Sluis -- and nine
specialty regional brands.

      We have established a worldwide presence and a global distribution system.
We market our seeds in over 120 countries and have 70 research and development
stations in 19 countries and production sites in 32 countries. This allows us to
remain close to local markets around the world, adapt our products to any local
climate and meet the preferences of local consumers. In fiscal 1998, we had
approximately $383.8 million in net seed sales. This represents an approximate
19% share of the global commercial vegetable and fruit seed market, which is
generally highly fragmented.

      We focus our research and development activities on products that are
likely to have practical market uses, create significant market value, command
premium pricing and capture leading local market share. Our product development
effort focuses on input traits, such as resistance to pests and adverse weather
conditions, and output traits, such as crop yield, color, texture, flavor and
ready-to-eat convenience. Information on these traits is contained in our
germplasm, our key technology asset. Over the last three fiscal years, we have
spent approximately 11% of our net sales, or approximately $132.8 million, on
research and development.

      We augment our internal product development efforts with technology
alliances with more than 100 companies, including the Monsanto Company, research
institutions and universities. In the United States and Europe, we currently own
or have pending over 60 patents and patent applications and have protected more
than 360 varieties under plant variety protection laws.

      The development of seeds that produce pest-resistant, higher yielding
vegetables and fruits with better nutritional value is of growing importance
because of expected increases in consumption of vegetables and fruits, increased
health consciousness and a steady decline in available arable land. By using
vegetable and fruit seeds that resist diseases and insects, growers will
increase their yield and save significant costs by reducing pesticide use.
Processors and distributors benefit from products with longer shelf-lives which
reduce spoilage. Consumers benefit from healthier, tastier vegetables and fruits
that last longer and offer ready-to-eat convenience. We attempt to enhance our
profitability by expanding the global vegetable and fruit market and capturing a
premium price for the benefit our products create throughout this production and
distribution chain.

                                        3
<PAGE>   5

                                    HISTORY

      Seminis was formed in 1994 to consolidate various industry-leading
vegetable and fruit seed brands into one consumer-oriented, agrobiotechnology
company. Our core business was created through the acquisition of the Asgrow
seed business from the Upjohn Company in December 1994 and the subsequent
combination of the Asgrow business with the Petoseed and Royal Sluis businesses
in October 1995. Each of these full-line brands has a long history--Asgrow for
143 years, Petoseed for 49 years and Royal Sluis for 172 years.

      We have been at the forefront of the consolidation of the vegetable and
fruit seed industry and have completed nine acquisitions since our formation in
1994. We have historically used acquisitions as a cost efficient way to gain
access to or ownership of key technologies, patents and germplasm collections,
to add developed and proven products to our portfolio and to enter new and
established markets. In fiscal 1998, we completed four acquisitions, including
the purchase of a 50% stake in LSL PlantScience LLC to add a new line of tomato
varieties, the acquisition of two South Korean companies, Hungnong Seed Co.,
Ltd. and Choong Ang Seed Co., Ltd., to enhance our product lines for the Asian
market, and the acquisition of Nath Sluis to broaden our product lines in India.
In November 1998, we completed the acquisition of the vegetable seed business of
Sementes Agroceres S.A., a Brazilian company, to strengthen our presence and
product lines in South America.

      Our principal executive offices are located at 1905 Lirio Avenue, Saticoy,
California 93004. Our telephone number is (805)647-1572.

                                        4
<PAGE>   6

                                  THE OFFERING

The following information is based on no shares of Class A common stock
outstanding and 46,074,386 shares of Class B common stock outstanding on the
date of this prospectus. This excludes the 267,181 shares of Class A common
stock issuable upon the exercise of stock options outstanding on the date of
this prospectus and an additional 3,409,969 shares of Class A common stock
reserved as of that date for future issuance under our employee benefit plans.

<TABLE>
<S>                                            <C>
Common Stock Offered by Seminis..............  13,750,000 shares of Class A common stock
Common Stock to be Outstanding After the
  Offering...................................  13,750,000 shares of Class A common stock;
                                               46,074,386 shares of Class B common stock;
                                               59,824,386 total shares of Class A common
                                               stock and Class B common stock; 61,886,886
                                               shares if the underwriters' over-allotment
                                               option is exercised in full
Over-Allotment Option........................  2,062,500 shares of Class A common stock from
                                               Seminis
Use of Proceeds..............................  To redeem preferred stock and repay certain
                                               indebtedness
Voting Rights................................  Holders of Class B common stock are entitled
                                               to three votes per share and holders of Class
                                               A common stock are entitled to one vote per
                                               share
Nasdaq National Market Symbol................  "SMNS"
</TABLE>

                                        5
<PAGE>   7

                      SUMMARY CONSOLIDATED FINANCIAL DATA

      Income (loss) from continuing operations available for common stockholders
in fiscal 1998 reflects the optional repurchase by Seminis of a portion of its
mandatorily redeemable common stock at an amount in excess of the redemption
value. Seminis is required to deduct this difference, which totalled $134.3
million, from income (loss) from continuing operations for purposes of
determining income (loss) from continuing operations available for common
stockholders and related per share amounts. The loss from operations in fiscal
1996 includes the write-off of acquired research in-process of $36.7 million in
connection with the Petoseed acquisition. Gross profit in fiscal 1996 includes
the effects of the purchase accounting step-up of the Petoseed and Royal Sluis
inventories in excess of historical value of $60.0 million. Gross profit in
fiscal 1995 includes the effects of the purchase accounting step-up of the
Asgrow inventories in excess of historical value of $11.8 million.

      Supplemental pro forma summary consolidated results of operations data for
fiscal 1998 and for the six months ended March 31, 1999 assume the following
transactions occurred effective October 1, 1997:

- - the acquisition of Hungnong;

- - the conversion of $35.9 million of convertible subordinated debt due our
  majority stockholder Savia, S.A. de C.V., or Savia, to 1,916,462 shares of
  Class B common stock, and the assumed related reduction in interest expense;

- - the application of net proceeds of $191.7 million from the offering of
  13,750,000 shares of Class A common stock by Seminis and borrowings of $292.5
  million under Seminis' new $350.0 million credit facility to repay
  indebtedness, and the assumed related reduction in interest expense;

- - the conversion of $12.3 million of the $20.0 million intercompany advance from
  Savia into shares of Class C preferred stock, and the assumed related increase
  in preferred stock dividends; and
- - the conversion of 6,771,500 shares of Class B redeemable common stock of
  Seminis, Inc., an Illinois corporation and predecessor to Seminis, into
  3,385,750 shares of Class B common stock, followed immediately by a
  one-for-one stock dividend, and the assumed elimination of both the related
  accretion of redemption value and the related excess of repurchase price over
  the redemption value for the repurchase of the Class B redeemable common
  stock.

      Historical data for income (loss) from continuing operations available for
common stockholders reflect deductions for dividends on mandatorily redeemable
preferred stock, for accretion of the redemption value of mandatorily redeemable
common stock and, in fiscal 1998, for the excess of purchase price over
redemption value of the mandatorily redeemable common stock repurchased. These
deductions are not reflected in supplemental pro forma data.

      Supplemental pro forma as adjusted summary consolidated balance sheet data
as of March 31, 1999 assume that the application of net proceeds from the
offering and borrowings under the new credit facility, the recapitalization as
described in the third, fourth and fifth bulleted items above and the automatic
conversion of Class A preferred stock into Class B preferred stock, occurred
effective March 31, 1999. This data also give effect to borrowings by Seminis of
$473.0 million under its current credit agreement and the repayment of the
current credit agreement from the proceeds of the offering and borrowings under
the new credit facility.

                                        6
<PAGE>   8

<TABLE>
<CAPTION>
                                                HISTORICAL                                         HISTORICAL
                              ----------------------------------------------   SUPPLEMENTAL    -------------------   SUPPLEMENTAL
                                                                                 PRO FORMA         SIX MONTHS         PRO FORMA
                               NINE MONTHS          FISCAL YEAR ENDED           FISCAL YEAR           ENDED           SIX MONTHS
                                  ENDED               SEPTEMBER 30,                ENDED            MARCH 31,           ENDED
                              SEPTEMBER 30,   ------------------------------   SEPTEMBER 30,   -------------------    MARCH 31,
                                  1995          1996       1997       1998         1998          1998       1999         1999
                              -------------     ----       ----       ----     -------------     ----       ----     ------------
                                                             (in thousands, except per share data)
<S>                           <C>             <C>        <C>        <C>        <C>             <C>        <C>        <C>
RESULTS OF OPERATIONS:
Net sales...................      $101,833    $381,398   $379,544   $428,423     $455,987      $222,339   $282,311     $282,311
Gross profit................      48,916       167,267    229,437    265,617      278,153       137,681    175,700      175,700
Research and development
  expenses..................      14,250        42,300     41,039     49,416       51,700        21,117     31,225       31,225
Selling, general and
  administrative expenses...      34,822       134,990    136,438    158,588      169,328        69,966    100,113      100,113
Management fees paid to
  Savia.....................          --            --      6,200      8,465        8,465         4,422         --           --
Amortization of intangible
  assets....................         350        14,785     12,394     14,457       21,985         6,115     13,657       13,657
Income (loss) from
  operations................        (506)      (61,508)    33,366     34,691       26,675        36,061     30,705       30,705
Income (loss) from
  continuing operations.....      (5,315)      (56,085)    11,325      6,762        6,529        17,312      4,086       10,534
Income (loss) from
  continuing operations
  available for common
  stockholders..............      (5,315)      (64,418)     2,089   (133,367)         299      (119,685)     1,224        7,207
Income (loss) from
  continuing operations
  available for common
  stockholders per common
  share, basic and
  diluted...................    $  (0.18)     $  (2.15)  $   0.07   $  (4.23)    $   0.01      $  (3.99)  $   0.03     $   0.12
Weighted average shares
  outstanding, basic and
  diluted...................      30,000        30,000     30,000     31,536       58,264        30,000     38,025       59,824
</TABLE>

<TABLE>
<CAPTION>
                                                                                                           SUPPLEMENTAL
                                                                                                            PRO FORMA
                                                                        HISTORICAL                         AS ADJUSTED
                                                  ------------------------------------------------------   ------------
                                                             AS OF SEPTEMBER 30,                 AS OF        AS OF
                                                  ------------------------------------------   MARCH 31,    MARCH 31,
                                                    1995        1996       1997       1998       1999          1999
                                                    ----        ----       ----       ----     ---------    ---------
                                                                             (in thousands)
<S>                                               <C>         <C>        <C>        <C>        <C>         <C>
BALANCE SHEET DATA:
Working capital (deficit).......................  $ (22,940)  $158,467   $200,792   $272,097    $334,601     $389,976
Total assets....................................    349,769    632,463    519,673    862,189    983,097       980,189
Intercompany advance from Savia.................         --         --         --         --     20,000            --
Long-term debt..................................         20    234,356     80,331    394,446    442,572       302,697
Subordinated debt due Savia.....................         --         --         --     35,857         --            --
Mandatorily redeemable stock
  Common........................................         --    114,875    122,111     48,416     49,940            --
  Preferred.....................................         --     25,000     25,000     25,000     25,000        25,000
Total stockholders' equity......................    174,241    112,772    159,681    160,421    230,310       477,022
</TABLE>

                                        7
<PAGE>   9

                                  RISK FACTORS

     Before you invest in the shares, you should be aware that there are various
risks, including those described below. You should consider carefully these risk
factors together with all of the other information included in the prospectus
before you decide to purchase the Class A common stock.

                                 COMPANY RISKS

OUR RESEARCH AND DEVELOPMENT MAY NOT BE SUCCESSFUL

      Our success is based, in part, upon our ability to discover and develop
new products which customers will want. As a result, we continue to invest in
research and development in order to enable us to identify and develop new
products to meet consumer demands. In fiscal 1998, our investment in research
and development represented 12% of net sales. Despite investments in this area,
our research and development may not result in the discovery or successful
development of new products which will be accepted by our customers.

LOSS OF THE BENEFITS OF LICENSE AND TECHNOLOGY AGREEMENTS COULD HARM OUR
BUSINESS

      We have the benefit of license and technology agreements through Savia.
Generally, Savia has the right to provide technology to us as long as we are
controlled by Savia. In the event that Savia no longer controls us, or loses the
right to give technology to us, and we fail to obtain similar technology on our
own, the loss of such technology could have a material adverse effect on our
business, results of operations or financial condition.

SAVIA WILL EFFECTIVELY CONTROL OUR COMPANY

      Following the offering, Savia will own approximately 67.9% of our
outstanding common stock and control 80.2% of the vote of our common stock.
Accordingly, Savia will control us and have the power to approve all actions
requiring the approval of our stockholders, including the power to elect all of
our directors. Therefore, Savia will effectively control our management.

SAVIA COLLATERIZED ITS RECENT BORROWINGS WITH SHARES OF OUR COMMON STOCK

      Savia recently borrowed money from some financial institutions and pledged
as collateral shares of our common stock which it owns. These pledged shares
constitute 49% of our issued and outstanding common stock prior to the offering.
Savia also placed additional shares of our common stock that it owns into a
trust, which shares constitute 2% of our issued and outstanding shares of common
stock prior to the offering. Upon completion of the offering, Savia will be
required to pledge and put into trust additional shares of common stock to
maintain these percentages. If Savia defaults on its obligations, the lenders
could sell the pledged shares to recover the borrowed money. Upon the
foreclosure of the pledged shares, the shares will automatically convert to
Class A common stock, which only have one vote per share. The sale of the
foreclosed stock could depress the market price of the Class A common stock and
could result in there being a new controlling stockholder.

THE INABILITY TO IDENTIFY AND COMPLETE ACQUISITIONS COULD HARM OUR BUSINESS

      We have historically grown through acquisitions and may continue to grow
through strategic acquisitions. We may not be able to identify or acquire
additional businesses, or do so on acceptable terms, to meet our acquisition
strategy.

USING COMMON STOCK FOR FUTURE ACQUISITIONS MAY CAUSE DILUTION OF OUR COMMON
STOCK

      The availability of financing for our acquisition efforts cannot be
readily predicted. If we use common stock for future acquisitions, the
purchasers of shares of Class A common stock in the offering may experience
dilution.

                                        8
<PAGE>   10

OUR FAILURE TO ACCURATELY FORECAST AND MANAGE INVENTORY COULD RESULT IN AN
UNEXPECTED SHORTFALL OR SURPLUS OF SEEDS WHICH COULD HARM OUR BUSINESS

      We monitor our inventory levels based on our own projections of future
demand. Because of the length of time necessary to produce commercial quantities
of seed, we must make production decisions well in advance of sales. An
inaccurate forecast of demand for any seed variety can result in the
unavailability of seeds in high demand. This may depress sales volumes and
adversely affect customer relationships. Conversely, an inaccurate forecast can
result in an over-supply of seeds which may increase costs, negatively impact
cash flow, reduce the quality of inventory and ultimately create write-offs of
inventory, any of which could have a material adverse effect on our business,
results of operations or financial condition.

WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY

      A substantial portion of our products are hybrid seed varieties which may
be copied through the acquisition of very small quantities of germplasm. A
competitor could obtain our germplasm or information identifying the origin of
our seeds and produce seeds with similar or identical characteristics to those
of our products. Attempting to protect our intellectual property, through
litigation or otherwise, can be time consuming and expensive, have uncertain
results and, in some countries, be ineffective.

A CHANGE IN UNITED STATES LAW PROTECTING PLANT PATENTS COULD TAKE AWAY PATENT
PROTECTION FOR OUR PATENTED SEEDS

      In a recent lawsuit in a United States federal court, a party challenged
whether utility patents could cover living plants and seeds. If the court rules
that plants and seeds cannot be protected by patents, we could lose patent
protection for many of our patented seeds, which could have a material adverse
effect on our business, results of operations or financial condition.

WE MAY NOT BE ABLE TO OBTAIN INTELLECTUAL PROPERTY RIGHTS FROM THIRD PARTIES

      Our ability to commercialize seed products may depend on whether we have
the right to use applicable technologies. We often use a large number of
technologies to develop a single product. Obtaining the right to use the
technologies can be complicated because:

- - technologies may be subject to proprietary intellectual property rights, many
  of which have been patented;

- - pending patent applications, overlapping patent claims and litigation over
  issued patents means ownership of technologies is uncertain; and

- - licenses for proprietary technologies may be unavailable on terms acceptable
  to us or because exclusive rights to use are given to other companies.

IMPLEMENTATION OF OUR NEW BUSINESS INFORMATION SYSTEM MAY DELAY THE COLLECTION
OF FINANCIAL AND OPERATIONAL INFORMATION

      We are currently implementing a new business information system to manage
our financial reporting and operating systems on a worldwide basis. While our
main facilities in California and The Netherlands have been using this system
since July 1998, we are still integrating our other subsidiaries and units. The
collection of operational information on a worldwide basis takes more time and
effort than we formerly experienced, which may delay management decisions on
operational matters.

                                 INDUSTRY RISKS

TECHNOLOGICAL ADVANCES BY OUR COMPETITORS COULD HARM OUR BUSINESS

      We face substantial competition due to technological advances by
competitors such as other seed companies, pharmaceutical and chemical companies
and biotechnology companies. Many of these companies have substantially greater
resources than we. If a competitor introduces a competitively successful
product, it could take us a number of years to develop a competitive seed
variety, which could have a material adverse

                                        9
<PAGE>   11

effect on our business, results of operations or financial condition.

BETTER PRICING AND FINANCIAL TERMS OFFERED BY OUR COMPETITORS COULD HARM OUR
BUSINESS

      We compete on the basis of pricing and financial terms. From time to time,
our competitors may offer better pricing and financial terms causing our market
share or profitability to decline, which could have a material adverse effect on
our business, results of operations or financial condition.

EXTREME WEATHER CONDITIONS, DISEASE AND PESTS COULD HARM OUR BUSINESS

      Seed production is subject to a variety of agricultural risks. Extreme
weather conditions, disease and pests can materially and adversely affect the
quality and quantity of seeds produced. There can be no assurance that these
factors will not affect a substantial portion of our production facilities in
any year and have a material adverse effect on our business, results of
operations or financial condition.

DEFECTIVE SEEDS COULD RESULT IN WARRANTY CLAIMS AND NEGATIVE PUBLICITY

      Seeds may contain adverse characteristics that are difficult to detect
prior to their sale and use. The large number of varieties that we produce can
result in deliveries of the wrong type of seed or contamination of one type of
seed by another. Any defects that may be found in our seeds in the future could
result in losses to growers. Losses claimed by growers may include the value of
lost crops, which could greatly exceed the value of the seeds we sell. If we
sell defective or contaminated seeds, large numbers of growers may experience
crop failures during the same growing season. Further, growers may attribute
poor crop yields or crop failure to perceived seed defects that may not exist,
which could still result in claims against us. Any claims, whether valid or not,
could result in negative publicity, which could have a material adverse effect
on our business, results of operations or financial condition.

INSURANCE COVERING WARRANTY CLAIMS MAY BECOME UNAVAILABLE OR BE INADEQUATE

      We maintain third-party seedsmen's errors and omissions insurance covering
warranty claims. However, these policies are subject to annual renewal and
revision and have deductibles and coverage limits. As a result, we may not be
offered continued coverage in the future. Even if coverage is offered, it may be
at a price and on terms not acceptable to us. If claims exceed coverage limits,
or insurance is not available to us, the occurrence of significant claims could
have a material adverse effect on our business, results of operations or
financial condition.

GENETICALLY ENGINEERED PRODUCTS MAY NOT BE ACCEPTED BY THE PUBLIC

      While less than 1% of our existing products are genetically engineered, we
expect that these products will represent a larger percentage of our sales in
the future. The commercial success of our genetically engineered products will
depend, in part, on public acceptance of the growth and consumption of
genetically engineered plants and plant products. Recently, there has been
much-publicized opposition in Europe to the sale of genetically engineered
products. Claims that genetically engineered plant products are unsafe or pose a
danger to the environment may cause additional negative publicity and influence
public attitudes and governmental regulation, which could have a material
adverse effect on our business, results of operations or financial condition.

GENETICALLY ENGINEERED PRODUCTS MAY BECOME SUBJECT TO ADDITIONAL FUTURE
REGULATION

      The field testing, production and marketing of genetically engineered
seeds by us is subject to federal, state, local and foreign governmental
regulation. Regulatory agencies administering existing or future laws may not
allow us to produce and market our genetically engineered products in a timely
manner or under technically or commercially feasible conditions. Regulatory
action or private litigation could result in expenses, delays or other
impediments to our product development programs or the commercial

                                       10
<PAGE>   12

sale of resulting products which could have a
material adverse effect on our business, results of operations or financial
condition.

FAILURE TO COMPLY WITH GOVERNMENT REGULATIONS AND CONTROLS COULD HARM OUR
BUSINESS

      Our products are subject to government regulations and controls such as:

- - national certification requirements;

- - import approval requirements;

- - plant or seed health certifications;

- - labeling regulations; and

- - trade regulations and changes in tariffs.

      Governmental agricultural programs that encourage or discourage the
planting of crops may also affect seed demand. Failure to comply with such
regulations could adversely affect our ability to deliver our products on a
competitive and timely basis and have a material adverse effect on our business,
results of operations or financial condition.

                                 OFFERING RISKS

FUTURE SALES OF COMMON STOCK COULD DEPRESS THE PRICE OF OUR CLASS A COMMON STOCK

      After this offering, Savia will own 40,615,619 of the outstanding shares
of common stock and our other stockholders owning stock prior to the offering
will own 5,458,767 shares of common stock. A decision by Savia or our other
stockholders to sell this stock could depress the market price of the Class A
common stock.

PURCHASERS OF SHARES OF CLASS A COMMON STOCK IN THE OFFERING WILL EXPERIENCE
SUBSTANTIAL DILUTION

      Purchasers of shares of Class A common stock will experience immediate and
substantial dilution of $10.50 in net tangible book value per share, or
approximately 70.0% of the offering price. In contrast, existing stockholders
paid an average price of $8.57 per share.

                           -------------------------

     This prospectus contains certain forward-looking statements that involve
risks and uncertainties. These statements relate to our future plans,
objectives, expectations and intentions. These statements may be identified by
the use of words such as "expects," "anticipates," "intends" and "plans" and
similar expressions. Our actual results could differ materially from those
discussed in these statements. Factors that could contribute to such differences
include, but are not limited to, those discussed above and elsewhere in this
prospectus.

                                       11
<PAGE>   13

                                USE OF PROCEEDS

      The net proceeds to Seminis from the offering are $191.7 million, $220.8
million if the underwriters' over-allotment option is exercised in full.

      Seminis has entered into a new credit agreement with the Bank of Montreal
and Harris Trust and Savings Bank providing for a credit facility for up to
$350.0 million. Seminis intends to use the net proceeds of the offering and
funds available under the new credit facility to repay indebtedness of Seminis
and pay $3.5 million of fees and expenses relating to its new credit facility.

- - Seminis will repay the following indebtedness:

      -- borrowings of $473.0 million under its current credit agreement
         comprised of a $28.0 million secured revolving credit note, bearing
         interest at the rate of 9.8% per annum as of May 7, 1999 and due June
         30, 2000, and a $445.0 million secured term loan, bearing interest at a
         rate of 9.8% per annum as of May 7, 1999 and due June 30, 2000, and

      -- $7.7 million of an intercompany advance of $20.0 million from Savia
         accruing interest at the rate of 10.0% per annum, the balance of which
         will be converted into shares of our Class C preferred stock.

      Seminis entered into its current credit agreement on April 30, 1999. The
proceeds of the current credit agreement were used to repay Seminis' old credit
agreement, to repay a $10.0 million bank demand note and to finance working
capital. The proceeds of the old credit agreement were used to repurchase Class
B mandatorily redeemable common stock of Seminis' predecessor, Seminis, Inc., an
Illinois corporation, acquire the South Korean seed companies Hungnong and
Choong Ang, acquire assets and distribution rights of LSL PlantScience and
acquire assets comprising the Agroceres brand vegetable seed business in Brazil.
The proceeds from the Savia intercompany advance and the bank demand note were
used to finance working capital requirements.

      Pending such uses, Seminis may invest the net proceeds in U.S. government
obligations, short-term debt securities and other money market instruments.

                                DIVIDEND POLICY

      Seminis intends to retain future earnings for use in Seminis' business and
does not anticipate declaring or paying any cash dividends on its common stock
in the foreseeable future. Further, any determination to declare and pay cash
dividends will be made by the board of directors of Seminis in light of Seminis'
earnings, financial condition, capital requirements and contractual agreements,
and other factors deemed relevant by the board of directors at that time. In
addition, Seminis' new credit agreement contains certain restrictive covenants,
including covenants that directly or indirectly prohibit Seminis' ability to pay
dividends and make other distributions.

                                       12
<PAGE>   14

                                 CAPITALIZATION

      The following table sets forth, as of March 31, 1999, the consolidated pro
forma capitalization of Seminis giving effect to the recapitalization referred
to in note 16 of the notes to consolidated financial statements of Seminis. The
consolidated supplemental pro forma capitalization of Seminis gives effect to
borrowings by Seminis of $473.0 million under the current credit agreement and
the repayment of its old credit agreement and the bank demand note. Unamortized
loan fees of $4.0 million, net of tax, relating to the old credit agreement were
charged to accumulated deficit. The consolidated supplemental pro forma as
adjusted capitalization of Seminis shows the capitalization after the sale by
Seminis of 13,750,000 shares of Class A common stock offered hereby and
borrowings of $292.5 million under Seminis' new $350.0 million credit agreement
and the application of the net proceeds therefrom, the conversion of $12.3
million of the intercompany advance from Savia into shares of our Class C
preferred stock, as described in "Use of Proceeds," the charge to accumulated
deficit of the unamortized loan fees of $3.3 million, net of tax, relating to
the current credit agreement and the automatic conversion of Class A preferred
stock into Class B preferred stock as if these transactions had occurred on
March 31, 1999.

      The unamortized loan fees of $6.4 million relating to the old credit
agreement were charged to results of operations as an extraordinary item of $4.0
million, net of tax, on April 30, 1999. The unamortized loan fees of $5.3
million relating to the current credit agreement will be charged to results of
operations as an extraordinary item of $3.3 million, net of tax, upon repayment
of the current credit agreement using the net proceeds of the offering and
borrowings under the new credit agreement.

<TABLE>
<CAPTION>
                                                             MARCH 31, 1999
                                                -----------------------------------------
                                                                             SUPPLEMENTAL
                                                   PRO       SUPPLEMENTAL     PRO FORMA
                                                  FORMA       PRO FORMA      AS ADJUSTED
                                                  -----      ------------    ------------
                                                  (in thousands, except per share data)
<S>                                             <C>          <C>             <C>
SHORT-TERM DEBT:
  Demand note due bank........................  $  10,000     $      --       $      --
  Intercompany advance from Savia.............     20,000        20,000              --
  Other short-term borrowings.................     16,869        16,869          16,869
  Current maturities of long-term debt........     24,246        12,396          17,396
                                                ---------     ---------       ---------
          Total short-term debt...............  $  71,115     $  49,265       $  34,265
                                                =========     =========       =========
LONG-TERM DEBT:
  Old credit agreement........................  $ 427,375     $      --       $      --
  Current credit agreement....................         --       473,000              --
  New credit agreement........................         --            --         287,500
  Other long-term debt........................     15,197        15,197          15,197
                                                ---------     ---------       ---------
          Total long-term debt................    442,572       488,197         302,697
                                                ---------     ---------       ---------
</TABLE>

                                       13
<PAGE>   15

<TABLE>
<CAPTION>
                                                             MARCH 31, 1999
                                                -----------------------------------------
                                                                             SUPPLEMENTAL
                                                   PRO       SUPPLEMENTAL     PRO FORMA
                                                  FORMA       PRO FORMA      AS ADJUSTED
                                                  -----      ------------    ------------
                                                  (in thousands, except per share data)
<S>                                             <C>          <C>             <C>
MANDATORILY REDEEMABLE STOCK:
  Class A redeemable preferred stock, $.01 par
     value; 25 shares authorized; 25 shares
     issued and outstanding pro forma, 25
     shares issued and outstanding
     supplemental pro forma and no shares
     issued and outstanding supplemental pro
     forma as adjusted........................  $  25,000     $  25,000       $      --
                                                ---------     ---------       ---------
  Class B redeemable preferred stock, $.01 par
     value; 25 shares authorized; no shares
     issued and outstanding pro forma, no
     shares issued and outstanding
     supplemental pro forma and 25 shares
     issued and outstanding supplemental pro
     forma as adjusted........................         --            --          25,000
                                                ---------     ---------       ---------
STOCKHOLDERS' EQUITY:
  Class C preferred stock, $.01 par value; 6
     shares authorized; 3 shares issued and
     outstanding pro forma, 3 shares issued
     and outstanding supplemental pro forma
     and 4 shares issued and outstanding
     supplemental pro forma as adjusted.......          1             1               1
  Class A common stock, $.01 par value; 91,000
     shares authorized; no shares issued and
     outstanding pro forma, no shares issued
     and outstanding supplemental pro forma
     and 13,750 shares issued and outstanding
     supplemental pro forma as adjusted.......         --            --             138
  Class B common stock, $.01 par value; 67,000
     shares authorized; 46,074 shares issued
     and outstanding pro forma, 46,074 shares
     issued and outstanding supplemental pro
     forma and 46,074 shares issued and
     outstanding supplemental pro forma as
     adjusted.................................        461           461             461
  Additional paid-in capital..................    433,873       433,873         637,735
  Accumulated deficit.........................   (143,215)     (147,188)       (150,443)
  Accumulated other comprehensive loss........    (10,870)      (10,870)        (10,870)
                                                ---------     ---------       ---------
          Total stockholders' equity..........    280,250       276,277         477,022
                                                ---------     ---------       ---------
               Total capitalization...........  $ 747,822     $ 789,474       $ 804,719
                                                =========     =========       =========
</TABLE>

                                       14
<PAGE>   16

                                    DILUTION

      Pro forma net tangible book value per share is determined by dividing the
pro forma tangible net book value of Seminis, its total assets less intangible
assets and total liabilities, by the aggregate number of shares of common stock
outstanding after giving effect to the recapitalization referred to in note 16
of the consolidated financial statements of Seminis. After giving effect to the
sale of 13,750,000 shares of Class A common stock by Seminis hereby, pro forma
net tangible book value of Seminis as of March 31, 1999 would have been
approximately $269.3 million, or $4.50 per share. This represents an immediate
increase in pro forma net tangible book value of $2.93 per share to the current
stockholders of Seminis and an immediate dilution in pro forma net tangible book
value of $10.50 per share to purchasers of Class A common stock in the offering.
The following table illustrates this per share dilution:

<TABLE>
<S>                                                           <C>     <C>
Initial public offering price per share.....................          $15.00
Pro forma net tangible book value per share of common stock
  at March 31, 1999.........................................  $1.57
Increase in pro forma net tangible book value per share of
  common stock attributable to purchasers in the offering...   2.93
                                                              -----
Pro forma net tangible book value per share of common stock
  after the offering........................................            4.50
                                                                      ------
Dilution in pro forma net tangible book value per share to
  purchasers of Class A common stock in the offering........          $10.50
                                                                      ======
</TABLE>

      The following table summarizes, on the pro forma basis described above, as
of March 31, 1999, the number of shares purchased, the total consideration paid
or to be paid and the average price per share paid or to be paid by the existing
stockholders and the purchasers of Class A common stock in the offering, before
the deduction of underwriting discounts and estimated expenses payable by
Seminis:

<TABLE>
<CAPTION>
                                                                                 AVERAGE
                                    SHARES PURCHASED     TOTAL CONSIDERATION      PRICE
                                    -----------------    -------------------       PER
                                    NUMBER    PERCENT     AMOUNT     PERCENT      SHARE
                                    ------    -------     ------     -------     -------
                                    (in thousands, except percentages and per share data)
<S>                                 <C>       <C>        <C>         <C>        <C>
Existing stockholders.............  46,074      77.0%    $394,686      65.7%     $ 8.57
Purchasers of Class A common stock
  in the offering.................  13,750      23.0      206,250      34.3       15.00
                                    ------     -----     --------     -----
  Total...........................  59,824     100.0%    $600,936     100.0%
                                    ======     =====     ========     =====
</TABLE>

                                       15
<PAGE>   17

                      SELECTED CONSOLIDATED FINANCIAL DATA

      The selected consolidated results of operations and consolidated balance
sheet data of Seminis as of and for each of the years in the three-year period
ended September 30, 1998 were derived from the audited consolidated financial
statements of Seminis, including the notes thereto, appearing elsewhere in this
prospectus. The selected consolidated results of operations and balance sheet
data of Seminis as of and for the nine months ended September 30, 1995 were
derived from audited financial statements which do not appear in this
prospectus. The selected financial data as of and for the six months ended March
31, 1998 and 1999 are derived from unaudited financial statements of Seminis,
which in the opinion of management includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the financial
information set forth therein. Selected financial data for periods prior to
January 1, 1995 and the beginning of Seminis' operations has not been presented,
as such information is not available and cannot be reliably determined. The data
presented below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements, including the notes thereto, and unaudited pro forma data
appearing elsewhere in this prospectus.

      Income (loss) from continuing operations available for common stockholders
in fiscal 1998 reflects the optional repurchase by Seminis of a portion of its
mandatorily redeemable common stock at an amount in excess of the redemption
value. Seminis is required to deduct this difference, which totalled $134.3
million, from income (loss) from continuing operations for purposes of
determining income (loss) from continuing operations available for common
stockholders and related per share amounts. The loss from operations in fiscal
1996 includes the write-off of acquired research in-process of $36.7 million in
connection with the Petoseed acquisition. Gross profit in fiscal 1996 includes
the effects of the purchase accounting step-up of the Petoseed and Royal Sluis
inventories in excess of historical value of $60.0 million. Gross profit in
fiscal 1995 include the effects of the purchase accounting step-up of the Asgrow
inventories in excess of historical value of $11.8 million.

      Supplemental pro forma summary consolidated results of operations data for
fiscal 1998 and the six months ended March 31, 1999 assume that the following
transactions occurred effective October 1, 1997:

- - the acquisition of Hungnong;

- - the conversion of $35.9 million of convertible subordinated debt due to Savia
  to 1,916,462 shares of Class B common stock, and the assumed related reduction
  in interest expense;

- - the application of net proceeds of $191.7 million from the offering of
  13,750,000 shares of Class A common stock by Seminis and borrowings of $292.5
  million under Seminis' new $350.0 million credit facility to repay
  indebtedness and the assumed related reduction in interest expense;

- - the conversion of $12.3 million of the $20.0 million intercompany advance from
  Savia into shares of Class C preferred stock, and the assumed related increase
  in preferred stock dividends; and

- - the conversion, of 6,771,500 shares of Class B redeemable common stock of
  Seminis, Inc., an Illinois corporation and predecessor to Seminis, into
  3,385,750 shares of Class B common stock, followed immediately by a
  one-for-one stock dividend, and the assumed elimination of both the related
  accretion of redemption value and the related excess of repurchase price over
  the redemption value for the repurchase of the Class B redeemable common
  stock.

      Historical data for income (loss) from continuing operations available for
common stockholders reflect deductions for dividends on preferred stock,
mandatorily redeemable preferred stock, for accretion of the redemption value of
mandatorily redeemable
                                       16
<PAGE>   18

common stock and, in fiscal 1998, for the excess of purchase price over
redemption value of the mandatorily redeemable common stock repurchased. These
deductions are not reflected in supplemental pro forma data.

      Supplemental pro forma as adjusted summary consolidated balance sheet data
as of March 31, 1999 assume that the application of net proceeds from the
offering and borrowings under the new credit facility, the recapitalization
described in the third, fourth and fifth bulleted items above, and the automatic
conversion of Class A preferred stock into Class B preferred stock, occurred
effective March 31, 1999. This data also give effect to borrowings by Seminis of
$473.0 million under its current credit agreement and the repayment of the
current credit agreement from the proceeds of the offering and borrowings under
the new credit facility.

ACQUISITIONS AND EFFECTS OF PURCHASE ACCOUNTING.  Seminis was formed in 1994 to
consolidate various industry-leading vegetable and fruit seed brands into one
consumer-oriented, agrobiotechnology company. Seminis' core business was created
through the acquisition of the Asgrow seed business from the Upjohn Company in
December 1994 and the subsequent combination of the Asgrow vegetable and fruit
seed business with the Petoseed and Royal Sluis businesses in October 1995. In
fiscal 1998, Seminis completed four acquisitions, including the purchase of a
50% stake in LSL PlantScience, the acquisition of two South Korean companies,
Hungnong and Choong Ang, and the acquisition of Nath Sluis. In November 1998,
Seminis completed the acquisition of the vegetable seed business of Agroceres, a
Brazilian company. As a result of these transactions, the results of operations
and consolidated financial position reflect the effects of purchase accounting,
as more fully described above.

                                       17
<PAGE>   19

<TABLE>
<CAPTION>

                                                                                                   HISTORICAL
                                              HISTORICAL                      SUPPLEMENTAL    --------------------   SUPPLEMENTAL
                            -----------------------------------------------     PRO FORMA          SIX MONTHS         PRO FORMA
                             NINE MONTHS                                       FISCAL YEAR           ENDED            SIX MONTHS
                                ENDED       FISCAL YEAR ENDED SEPTEMBER 30,       ENDED            MARCH 31,            ENDED
                            SEPTEMBER 30,   -------------------------------   SEPTEMBER 30,   --------------------    MARCH 31,
                                1995          1996       1997       1998          1998          1998        1999         1999
                            -------------     ----       ----       ----      -------------     ----        ----     ------------
                                                            (in thousands, except per share data)
<S>                         <C>             <C>        <C>        <C>         <C>             <C>         <C>        <C>
RESULTS OF OPERATIONS:
Net sales.................    $101,833      $381,398   $379,544   $ 428,423     $455,987      $ 222,339   $282,311     $282,311
Gross profit..............      48,916       167,267    229,437     265,617      278,153        137,681    175,700      175,700
Research and development
 expenses.................      14,250        42,300     41,039      49,416       51,700         21,117     31,225       31,225
Selling, general and
 administrative expenses..      34,822       134,990    136,438     158,588      169,328         69,966    100,113      100,113
Management fees paid to
 Savia....................          --            --      6,200       8,465        8,465          4,422         --           --
Amortization of intangible
 assets...................         350        14,785     12,394      14,457       21,985          6,115     13,657       13,657

Income (loss) from
 operations...............        (506)      (61,508)    33,366      34,691       26,675         36,061     30,705       30,705
Income (loss) from
 continuing operations....      (5,315)      (56,085)    11,325       6,762        6,529         17,312      4,086       10,534
Income (loss) from
 continuing operations
 available for common
 stockholders.............      (5,315)      (64,418)     2,089    (133,367)         299       (119,685)     1,224        7,207
Income (loss) from
 continuing operations
 available for common
 stockholders per common
 share, basic and
 diluted..................    $  (0.18)     $  (2.15)  $   0.07   $   (4.23)    $   0.01      $   (3.99)  $   0.03     $   0.12
Weighted average shares
 outstanding, basic and
 diluted..................      30,000        30,000     30,000      31,536       58,264         30,000     38,025       59,824
</TABLE>

<TABLE>
<CAPTION>
                                                                                                                     SUPPLEMENTAL
                                                                                                                      PRO FORMA
                                                                                  HISTORICAL                         AS ADJUSTED
                                                            ------------------------------------------------------   ------------
                                                                       AS OF SEPTEMBER 30,                 AS OF        AS OF
                                                            ------------------------------------------   MARCH 31,    MARCH 31,
                                                              1995        1996       1997       1998       1999          1999
                                                              ----        ----       ----       ----     ---------    ---------
                                                                                       (in thousands)
<S>                                                         <C>         <C>        <C>        <C>        <C>         <C>
BALANCE SHEET DATA:
Working capital (deficit).................................  $ (22,940)  $158,467   $200,792   $272,097   $334,601      $389,976
Total assets..............................................    349,769    632,463    519,673    862,189    983,097       980,189
Intercompany advance from Savia...........................         --         --         --         --     20,000            --
Long-term debt............................................         20    234,356     80,331    394,446    442,572       302,697
Subordinated debt due Savia...............................         --         --         --     35,857         --            --
Mandatorily redeemable stock
 Common...................................................         --    114,875    122,111     48,416     49,940            --
 Preferred................................................         --     25,000     25,000     25,000     25,000        25,000
Total stockholders' equity................................    174,241    112,772    159,681    160,421    230,310       477,022
</TABLE>

                                       18
<PAGE>   20

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the Selected Consolidated Financial Data and consolidated financial statements,
including the notes thereto, appearing elsewhere in this prospectus. The
following discussion and analysis contains certain "forward-looking statements"
which are subject to certain risks, uncertainties and contingencies, including,
but not limited to, those set forth under the heading "Risk Factors", which
could cause Seminis' actual business, results of operations or financial
condition to differ materially from those expressed in, or implied by, such
statements.

                                    OVERVIEW

      Seminis is the largest developer, producer and marketer of vegetable and
fruit seeds in the world. Seminis uses seeds as the delivery vehicle for its
innovative agricultural technology. Seminis develops seeds designed to do one or
more of the following: reduce the need for chemicals, increase crop yield,
reduce spoilage, offer longer shelf life and create tastier foods with better
nutritional content. As a result, Seminis is creating the foundation to obtain
premium pricing at all steps of the vegetable and fruit production and
distribution chain: growers, distributors, processors, retailers and end-
consumers.

      Seminis produces more than 60 species and 8,000 distinct varieties of
vegetable and fruit seeds. Seminis markets its seeds through three full-line
brands -- Asgrow, Petoseed and Royal Sluis -- and nine specialty brands.

      Seminis was formed in 1994 to consolidate various industry-leading
vegetable and fruit seed brands into one consumer-oriented, agrobiotechnology
company. Its core business was created through the acquisition of the Asgrow
seed business from the Upjohn Company in December 1994 and the subsequent
combination of the Asgrow business with the Petoseed and Royal Sluis businesses
in October 1995. Each of these full-line brands has a long history -- Asgrow for
143 years, Petoseed for 49 years and Royal Sluis for 172 years. In January 1997,
in order to focus on more profitable vegetable and fruit seed production,
Seminis sold its Asgrow agronomics business to Monsanto. In the summer of 1998,
Seminis acquired, for an aggregate of approximately $163.1 million, a 50%
interest in LSL PlantScience and the distribution rights for specific varieties
of long shelf life tomatoes and 70% of Hungnong and 100% of Choong Ang, both
South Korean organizations. Seminis' consolidated financial statements include
the results of operations of these companies since their acquisition.

      In order to achieve its position as the premier vegetable and fruit seed
company, Seminis has completed nine acquisitions since its formation in 1994 and
has incurred significant expenses related to the development of its
infrastructure, including its human resource capability, information systems and
brand marketing teams, and its research and development capability. Seminis
expenses its investments in research and development and in the creation of its
worldwide sales capability. The comparability of Seminis' results of operations
from year to year has also been affected by the impact of acquisition accounting
under purchase accounting principles, write-offs of in-process research and
development projects acquired through acquisitions, interest expense
attributable to acquisition financings, exposure to foreign currency
fluctuations and charges for management fees paid to Savia.

      The above factors adversely affected Seminis' results of operations for
the first six months of fiscal 1999, as discussed below, and continue to impact
the third quarter of fiscal 1999. The seed business is highly seasonal;
generally, net sales are highest in Seminis' second fiscal quarter. Seminis has
historically operated at a loss from continuing operations and at a net loss in
the first and third fiscal quarters due to lower sales during such quarters. As
a result of a higher level of operating expenses, together with higher interest
expense, Seminis experienced significantly lower income from continuing
operations and net income for the first six
                                       19
<PAGE>   21

months of fiscal 1999 as compared to fiscal 1998.

      For the two months ended May 31, 1999, net sales were $72.7 million as
compared to $62.6 million for the corresponding period in the prior fiscal year.
Seminis incurred a loss from operations of $2.3 million, a loss from continuing
operations of $7.6 million and a net loss of $11.6 million for the two months
ended May 31, 1999 as compared to income from operations of $0.1 million, a loss
from continuing operations of $3.4 million and a net loss of $3.4 million for
the corresponding fiscal 1998 period. Depending on the level of sales for the
remainder of the current quarter, Seminis may incur a loss from operations for
the third quarter of fiscal 1999. Further, after giving effect to the higher
level of interest expense, Seminis expects to incur a significantly higher loss
from continuing operations and, after giving effect to the extraordinary item
related to the writeoff of unamortized loan fees, a significantly higher net
loss for the third quarter of fiscal 1999 as compared to the third quarter of
fiscal 1998.

                             RESULTS OF OPERATIONS

      The table below sets forth Seminis' results of operations data expressed
as a percentage of net sales. In fiscal 1996, gross profit before the effects of
purchase accounting would have been 59.6% of net sales.

<TABLE>
<CAPTION>
                                                                               SIX MONTHS
                                                     FISCAL YEAR ENDED           ENDED
                                                       SEPTEMBER 30,           MARCH 31,
                                                  -----------------------    --------------
                                                  1996     1997     1998     1998     1999
                                                  ----     ----     ----     ----     ----
                                                                              (unaudited)
<S>                                               <C>      <C>      <C>      <C>      <C>
Net sales.......................................  100.0%   100.0%   100.0%   100.0%   100.0%
                                                  -----    -----    -----    -----    -----
Gross profit....................................   43.9     60.5     62.0     61.9     62.2
Research and development expenses...............   11.1     10.8     11.5      9.5     11.1
Selling, general and administrative expenses....   35.4     35.9     37.0     31.5     35.5
Management fees paid to Savia...................     --      1.6      2.0      2.0       --
Amortization of intangible assets...............    3.9      3.4      3.4      2.7      4.7
Write-off of acquired research in-process.......    9.6       --       --       --       --
                                                  -----    -----    -----    -----    -----
Income (loss) from operations...................  (16.1)     8.8      8.1     16.2     10.9
Interest expense, net...........................   (6.3)    (2.8)    (6.3)    (4.1)    (8.4)
Other non-operating income (loss), net..........   (0.5)    (2.0)     0.6     (0.1)    (0.1)
                                                  -----    -----    -----    -----    -----
Income (loss) from continuing operations before
  income taxes..................................  (22.9)     4.0      2.4     12.0      2.4
Income tax benefit (expense)....................    8.2     (1.0)    (0.8)    (4.2)    (1.0)
                                                  -----    -----    -----    -----    -----
Income (loss) from continuing operations........  (14.7)     3.0      1.6      7.8      1.4
Income from and gain on disposal of discontinued
  operations....................................    1.6     13.4       --       --       --
                                                  -----    -----    -----    -----    -----
Net income (loss)...............................  (13.1)%   16.4%     1.6%     7.8%     1.4%
                                                  =====    =====    =====    =====    =====
</TABLE>

 SIX MONTHS ENDED MARCH 31, 1999 COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998

NET SALES

      Net sales increased 27.0% to $282.3 million for the six months ended March
31, 1999 from $222.3 million for the six months ended March 31, 1998. The sales
increase was primarily due to $33.7 million in sales generated by the newly
acquired South Korean subsidiaries, Hungnong and Choong Ang, which were acquired
in July 1998. The balance of the increase reflected higher net sales mainly
through increases in volume in

                                       20
<PAGE>   22

all geographic regions and for each of our major brands -- Asgrow, Petoseed and
Royal Sluis.

GROSS PROFIT

      Gross profit increased 27.6% to $175.7 million for the six months ended
March 31, 1999 from $137.7 million for the six months ended March 31, 1998.
Gross margin increased to 62.2% for the six months ended March 31, 1999 from
61.9% for the six months ended March 31, 1998. This increase in gross margin was
primarily due to an increase in sales of higher margin, long shelf-life tomato
seeds and a decrease in sales of lower margin varieties to food processors in
North America.

RESEARCH AND DEVELOPMENT EXPENSES

      Research and development expenses increased 47.9% to $31.2 million for the
six months ended March 31, 1999 from $21.1 million for the six months ended
March 31, 1998. This increase was primarily due to $3.2 million of expenses
incurred by the newly acquired South Korean subsidiaries and a $2.1 million
charge as the first of three equal planned installments of Seminis' research
incentive program, the next two installments of which are due in the fourth
quarter of fiscal 1999 and the first quarter of fiscal 2000. This incentive
program is a part of Seminis' continuing efforts to attract and retain industry
leading breeders and research personnel.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling, general and administrative expenses increased 43.1% to $100.1
million for the six months ended March 31, 1999 from $70.0 million for the six
months ended March 31, 1998. Selling expenses increased primarily due to
acquisitions, establishment of a worldwide marketing force, the implementation
of a multi-brand sales strategy in the Middle East and the addition of new
direct sales programs in both South America and Eastern Europe. General and
administrative expenses increased due to the expensing of costs of the SAP/R3(R)
management information system, acquisitions and increased investment in our
management information systems infrastructure. Management believes that the
increase of selling, general and administrative expenses as a percentage of net
sales for the six months ended March 31, 1999 as compared with the prior period
was necessary to enhance Seminis' future growth and organizational efficiency.

MANAGEMENT FEES PAID TO SAVIA

      The management fee paid to Savia was $4.4 million for the six months ended
March 31, 1998. This fee was discontinued effective October 1, 1998.

AMORTIZATION OF INTANGIBLE ASSETS

      Amortization of intangible assets increased 123.3% to $13.7 million for
the six months ended March 31, 1999 from $6.1 million for the six months ended
March 31, 1998. This increase was due to amortization of goodwill and intangible
assets relating to the acquisitions of Hungnong, Choong Ang and LSL PlantScience
in July 1998 and the acquisition of Agroceres in November 1998.

INTEREST EXPENSE, NET

      Interest expense, net, increased 155.2% to $23.7 million for the six
months ended March 31, 1999 from $9.3 million for the six months ended March 31,
1998. This increase was primarily due to increased borrowings used to finance
the repurchase of shares of common stock in January 1998 for $211.8 million, to
finance acquisitions and to support working capital requirements, and due to
higher interest rates under Seminis' existing credit facility.

OTHER NON-OPERATING INCOME (LOSS), NET

      Seminis had other non-operating loss, net, of $0.2 million for both the
six months ended March 31, 1999 and March 31, 1998. Non-operating loss, net,
recorded in the six months ended March 31, 1999 includes a foreign currency gain
of $1.7 million which was more than offset by a minority interest provision of
$1.6 million, reflecting primarily the minority interest in Hungnong, and other
non-operating losses of $0.3 million. The foreign currency gain is primarily due
to a gain on an intercompany loan to Hungnong.
                                       21
<PAGE>   23

INCOME TAX BENEFIT (EXPENSE)

      Income tax expense decreased 70.1% to $2.8 million for the six months
ended March 31, 1999 from $9.3 million for the six months ended March 31, 1998.
Seminis' effective tax rate was 40.4% for the six months ended March 31, 1999
compared to 34.9% for the six months ended March 31, 1998. The increase in the
effective tax rate was primarily due to increased minority interest expense,
which is not deductible for tax purposes.

NET INCOME (LOSS)

      Net income decreased 76.4% to $4.1 million for the six months ended March
31, 1999 from $17.3 million for the six months ended March 31, 1998. This
decrease was primarily due to increased operating expenses, including a
significant increase in the amortization of intangible assets, and interest
expense, net.

   YEAR ENDED SEPTEMBER 30, 1998 COMPARED WITH YEAR ENDED SEPTEMBER 30, 1997

NET SALES

      Net sales increased 12.9% to $428.4 million in fiscal 1998 from $379.5
million in fiscal 1997. Of the $48.9 million increase, $17.2 million was due to
sales generated by companies acquired during fiscal 1998. The balance of the
increase was primarily due to increased Petoseed brand sales in all geographic
regions and increased Asgrow brand sales to food processors in North America.

GROSS PROFIT

      Gross profit increased 15.8% to $265.6 million in fiscal 1998 from $229.4
million in fiscal 1997. Gross margin increased to 62.0% in fiscal 1998 from
60.5% in fiscal 1997. The increase in gross profit was primarily due to
increased gross profit in Brazil that resulted from the replacement of an
independent distributor with Seminis' own direct sales force and lower
provisions for seed claims because of improved quality assurance and expanded
seedsman's errors and omissions insurance coverage worldwide. The increase in
gross margin was partially offset by an increase in sales to food processors in
North America and wholesalers in Northern Europe, which bear lower margins.

RESEARCH AND DEVELOPMENT EXPENSES

      Research and development expenses increased 20.4% to $49.4 million in
fiscal 1998 from $41.0 million in fiscal 1997. This increase was due to
expansion of breeding programs to support Seminis' brand marketing strategy and
increased biotechnology costs including increased expenditures in Seminis'
molecular marker program and increased costs associated with third-party
technology. The increase was, to a lesser extent, associated with increased
costs to support new research stations in Spain and Turkey, as well as newly
acquired research stations in South Korea and India.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling, general and administrative expenses increased 16.2% to $158.6
million in fiscal 1998 from $136.4 million in fiscal 1997. This increase was
part of our continuing investment in building Seminis' infrastructure, including
costs associated with brand marketing, implementation of the SAP/R3(R)
management information system, creation of a human resources function and
expansion of quality assurance programs. The increase was also, to a lesser
extent, due to specific allowances for receivables from Eastern Europe, Jordan
and South Korea. The allowance for doubtful accounts increased to 8.4% of gross
receivables in 1998 from 6.9% of gross receivables in 1997. Based on Seminis'
ongoing evaluations of its customers' financial condition, the increase in
allowance is not expected to continue.

MANAGEMENT FEES PAID TO SAVIA

      The management fee paid to Savia increased 36.5% to $8.5 million in fiscal
1998 from $6.2 million in fiscal 1997. The management fee was discontinued
effective October 1, 1998.

AMORTIZATION OF INTANGIBLE ASSETS

      Amortization of intangible assets increased 16.6% to $14.5 million in
fiscal 1998 from $12.4 million in fiscal 1997. This increase was due to the
amortization of goodwill and

                                       22
<PAGE>   24

other intangibles relating to the July 1998 Hungnong and Choong Ang
acquisitions.

INTEREST EXPENSE, NET

      Interest expense, net, increased 157.0% to $27.1 million in fiscal 1998
from $10.5 million in fiscal 1997. This increase was primarily due to higher
interest rates and increased borrowings used to fund the repurchase of shares of
mandatorily redeemable common stock in January 1998 for $211.8 million, to
finance acquisitions and to support working capital requirements.

OTHER NON-OPERATING INCOME (LOSS), NET

      Seminis had other non-operating income, net, of $2.6 million in fiscal
1998 as compared to other non-operating loss, net, of $7.7 million in fiscal
1997. The other non-operating income, net, in fiscal 1998 was primarily due to
currency gains on intercompany loans to Seminis' subsidiaries. The other
non-operating loss, net, in fiscal 1997 was primarily due to currency losses on
intercompany loans to Seminis' subsidiaries.

INCOME TAX BENEFIT (EXPENSE)

      Seminis' income tax expense decreased 10.5% to $3.4 million in fiscal 1998
from $3.8 million in fiscal 1997 due to lower taxable income. Seminis' effective
tax rate was 33.7% in fiscal 1998 compared to 25.3% in fiscal 1997. The increase
in the effective tax rate was primarily due to an increase in goodwill
amortization which is non-deductible for tax purposes.

INCOME (LOSS) FROM CONTINUING OPERATIONS

      Income from continuing operations decreased to $6.8 million in fiscal 1998
from $11.3 million in fiscal 1997. This decrease was primarily due to an
increase in the net interest expense of $16.5 million and an increase in the
management fee paid to Savia of $2.3 million.

NET INCOME (LOSS)

      Net income decreased to $6.8 million in fiscal 1998 from $62.2 million in
fiscal 1997. This decrease was principally due to the $48.3 million after-tax
gain on the sale of the Seminis' agronomics business in January 1997.

   YEAR ENDED SEPTEMBER 30, 1997 COMPARED WITH YEAR ENDED SEPTEMBER 30, 1996

NET SALES

      Net sales decreased by 0.5% to $379.5 million in fiscal 1997 from $381.4
million in fiscal 1996. Net sales, excluding the effect of currency
translations, increased 4.0% during this period, largely as a result of
increased sales to the Middle East region and also increased Incotec sales in
Northern Europe. Incotec is a Seminis subsidiary that provides seed enhancement
technology to the seed industry. This increase was more than offset by the
effects of currency translation in fiscal 1997 when the U.S. dollar was stronger
relative to fiscal 1996.

GROSS PROFIT

      Gross profit increased 37.2% to $229.4 million in fiscal 1997 from $167.3
million in fiscal 1996. Gross margin increased to 60.5% in fiscal 1997 from
43.9% in fiscal 1996. Fiscal 1996 results were adversely impacted by purchase
accounting adjustments of $60.0 million relating to inventories acquired in the
Petoseed acquisition. Excluding the effects of purchase accounting, gross profit
in fiscal 1996 would have been $227.3 million. The slight increase in gross
profit is primarily due to the increase in higher margin Incotec sales.

RESEARCH AND DEVELOPMENT EXPENSES

      Research and development expenses decreased 3.0% to $41.0 million in
fiscal 1997 from $42.3 million in fiscal 1996 primarily due to Seminis'
consolidation of its European research facilities.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling, general and administrative expenses increased 1.1% to $136.4
million in fiscal 1997 from $135.0 million in fiscal 1996. This increase was
primarily due to expanded quality assurance testing programs.

MANAGEMENT FEES PAID TO SAVIA

      The management fee paid to Savia in fiscal 1997 was $6.2 million and no
management fee was paid in fiscal 1996.
                                       23
<PAGE>   25

AMORTIZATION OF INTANGIBLE ASSETS

      Amortization of intangible assets decreased 16.2% to $12.4 million in
fiscal 1997 from $14.8 million in fiscal 1996. This decrease was due to use of a
declining balance amortization method.

WRITE-OFF OF ACQUIRED RESEARCH IN-PROCESS

      In connection with the Petoseed and Royal Sluis acquisitions in 1996,
$36.7 million of the purchase price was allocated to in-process research and
development projects that had not reached technological feasibility and had no
probable alternative future uses, which the Company expensed at the date of
acquisition. There were no acquisitions in 1997 which resulted in write-offs of
acquired research in-process.

INTEREST EXPENSE, NET

      Interest expense, net, decreased 56.2% to $10.5 million in fiscal 1997
from $24.1 million in fiscal 1996. This decrease was primarily due to the
repayment of debt using the proceeds from the January 1997 sale of Seminis'
agronomics business.

OTHER NON-OPERATING INCOME (LOSS), NET

      Other non-operating loss, net, increased 302.8% to $7.7 million in fiscal
1997 from $1.9 million in fiscal 1996. This increase was primarily due to
currency losses on intercompany loans to Seminis' subsidiaries.

INCOME TAX BENEFIT (EXPENSE)

      For continuing operations Seminis' income tax expense increased to $3.8
million in fiscal 1997 from a benefit of $31.4 million in fiscal 1996. Seminis'
effective tax rate was 25.3% in fiscal 1997. In fiscal 1996, Seminis realized a
tax benefit from its pre-tax loss from continuing operations.

INCOME (LOSS) FROM CONTINUING OPERATIONS

      Seminis had income from continuing operations of $11.3 million in fiscal
1997 as compared to a loss from continuing operations of $56.1 million in fiscal
1996. This change was due primarily as a result of the previously described
purchase accounting adjustments combined with reduced interest expense.

NET INCOME (LOSS)

      Net income was $62.2 million in fiscal 1997 as compared to a net loss of
$50.0 million in fiscal 1996. This change was due to the application of purchase
accounting adjustments of $60.0 million and a write-off of $36.7 million for
acquired research in-process relating to the acquisition of Petoseed and Royal
Sluis in the first quarter of fiscal 1996 and a gain of $48.3 million on the
sale of Seminis' agronomics business in the second quarter of fiscal 1997.

                                  SEASONALITY

      The seed business is highly seasonal. Generally, net sales are highest in
the second fiscal quarter due to increased demand from northern hemisphere
growers who plant seed in the early spring. Seminis recorded 35.2% of its fiscal
1998 net sales during its second fiscal quarter. Seminis has historically
operated at a loss the first and third fiscal quarters due to lower sales during
such quarters and Seminis expects to incur a net loss in the third quarter of
fiscal 1999. Seminis' results in any particular quarter should not be considered
indicative of those to be expected for a full year.

      The following table sets forth results of operations data for the last ten
fiscal quarters. Income (loss) from continuing operations includes management
fees paid to Savia which began in the second quarter of fiscal 1997 and
continued through the quarter ended September 30, 1998.

<TABLE>
<CAPTION>
                                                                      QUARTER ENDED
                          ------------------------------------------------------------------------------------------------------
                                       FISCAL 1997                               FISCAL 1998                     FISCAL 1999
                          --------------------------------------   ---------------------------------------   -------------------
                          DEC. 31   MAR. 31    JUN. 30   SEP. 30   DEC. 31   MAR. 31    JUN. 30   SEP. 30    DEC. 31    MAR. 31
                          -------   -------    -------   -------   -------   -------    -------   -------    -------    -------
                                                                      (in thousands)
<S>                       <C>       <C>        <C>       <C>       <C>       <C>        <C>       <C>        <C>        <C>
Net sales...............  $63,459   $139,654   $81,129   $95,302   $71,395   $150,944   $92,817   $113,267   $ 84,861   $197,450
Gross profit............   39,237     86,671    44,942    58,587    44,045     93,636    55,341     72,595     53,010    122,690
Income (loss) from
 continuing operations..   (6,943)    18,561    (3,797)    3,504    (6,112)    23,424    (5,790)    (4,760)   (18,399)    22,485
</TABLE>

                                       24
<PAGE>   26

                        LIQUIDITY AND CAPITAL RESOURCES

      Seminis has historically relied on commercial bank borrowings to finance
its operations and internal infrastructure, on commercial bank borrowings and
equity investments by its stockholders to finance its acquisition and internal
investment program and loans from Savia to finance working capital requirements.

      Net cash used in operating activities increased to $25.7 million in fiscal
1998 from $3.0 million in fiscal 1997 mainly to support increased inventory
levels. Capital expenditures increased to $28.5 million in fiscal 1998 from
$19.3 million in fiscal 1997. The increase was due to increased investment in
greenhouse production facilities and research equipment technologies and
facilities.

      Seminis has budgeted capital expenditures for fiscal 1999 of approximately
$50.0 million, including $16.0 million for a new office and operating facility
in Oxnard, California, and $11.0 million for investments in research and
development facilities and equipment. While Seminis is always exploring
acquisition opportunities, it has not designated any of its capital budget for
acquisitions. Although not part of its capital budget, Seminis paid $19.5
million for the November 1998 Agroceres acquisition and $8.6 million for the
December 1998 purchase of 5% of the shares of Hungnong.

      In January 1997, Seminis sold its Asgrow agronomics business for $240.0
million to provide greater focus on its core vegetable and fruit seed business.
The proceeds of the sale were used to repay long-term debt. In January 1998,
Seminis repurchased shares of mandatorily redeemable common stock for $211.8
million. Seminis entered into its old credit agreement in order to finance the
repurchase. In July 1998, Savia and two of its affiliates made additional equity
investments of $138.2 million. The proceeds of the stock issuance and the
proceeds from an additional $75.0 million borrowing provided by an amendment to
the term-loan provisions of the old credit agreement were used to finance the
acquisition of Hungnong and Choong Ang, to advance working capital to the
acquired companies, to purchase a 50% interest in LSL PlantScience and to reduce
outstanding revolving debt borrowings.

      As part of the acquisition of its 70% interest in Hungnong, Seminis gave
Savia a convertible subordinated note in exchange for a loan of approximately
$35.9 million to provide financing for an unrelated company, Young Il Chemical
Company, owned by the minority shareholders of Hungnong. Seminis received a note
receivable for $35.6 million from Young Il Chemical, which is secured by common
stock owned by the minority shareholders representing a 25% interest in
Hungnong. The convertible note to Savia was converted by Savia into 1,916,462
shares of Class B common stock on February 1, 1999.

      Seminis' total indebtedness as of September 30, 1998 was $456.9 million,
of which $384.5 million was borrowings under the old credit agreement, $35.9
million was the subordinated debt borrowing from Savia, $18.3 million was
borrowings by the newly acquired South Korean subsidiaries and $18.2 million was
borrowings primarily by other foreign subsidiaries. The old credit agreement
consisted of a $75.0 million revolver portion and term credits of $370.5 million
as of September 30, 1998. As of September 30, 1998, Seminis had borrowed $14.0
million under the revolver, leaving $61.0 million in available borrowings.

      In December 1998, Savia made an equity investment in Seminis of $10.0
million in exchange for 1,000 shares of Class C preferred stock to finance the
purchase of shares of Hungnong which Seminis was obligated to purchase from the
minority shareholders of Hungnong in connection with the acquisition of
Hungnong. In March 1999, Savia made an additional equity investment of $20.0
million in exchange for 2,000 shares of Class C preferred stock to finance
working capital requirements.

      Seminis borrowed an additional $20.0 million from Savia in January 1999 as
an intercompany advance. The intercompany advance was used to finance working
capital requirements. Seminis entered into its current credit agreement on April
30, 1999, which
                                       25
<PAGE>   27
includes a $445.0 million term loan and a $28.0 million revolving credit
facility. The proceeds of the current credit agreement were used to repay the
old credit agreement, to repay a $10.0 million bank demand note and to finance
working capital.

      Seminis' total indebtedness as of March 31, 1999 was $513.7 million, of
which $439.2 million was borrowings under the old credit agreement, $20.0
million was an intercompany advance from Savia, $10.0 million was borrowings
under a bank demand note, $20.7 million was borrowings by the newly acquired
South Korean subsidiaries and $23.8 million was borrowings primarily by other
foreign subsidiaries. Seminis incurred additional indebtedness of $23.8 million
as a result of entering into the current credit agreement on April 30, 1999.

      The old credit agreement placed and the current credit agreement places
limits on dividends, foreign debt, leasing, capital expenditures and
acquisitions and also required Seminis to meet quarterly financial ratio
covenants including fixed charge coverage and minimum net worth. In February
1999, Seminis and the lenders under the old credit agreement entered into a
waiver and amendment of the old credit agreement to waive compliance with the
debt coverage ratio covenant for the periods ended December 31, 1998 and March
31, 1999. In March 1999, Seminis and the same lenders entered into a waiver and
amendment of the fixed charge coverage ratio covenant for the periods ended
December 31, 1998 and March 31, 1999. The borrowings under the old credit
agreement and the bank demand note were repaid on April 30, 1999 with the
proceeds of the current credit agreement. The current credit agreement will be
repaid with the proceeds of this offering and borrowings under the new credit
facility.

      On June 28, 1999, Seminis entered into a new credit agreement with Bank of
Montreal and Harris Trust and Savings Bank providing for a $350.0 million credit
facility, consisting of a term loan in the amount of $200.0 million and a
revolving line of credit in the amount of $150.0 million. The term loan will
amortize semi-annually with the balance due on June 30, 2004 and the revolving
line of credit will mature on June 30, 2004. The new credit agreement will bear
interest in accordance with a grid pricing formula based on the achievement of a
specific debt ratio, with such interest ranging from the prime rate to the prime
rate plus 0.5%, or, at the option of Seminis, ranging from LIBOR plus 1.25% to
LIBOR plus 2.0%. Seminis will also pay commitment fees quarterly on the unused
amount of the revolver.

      The new credit agreement contains a number of financial covenants,
including net worth and indebtedness tests, and limitations on its ability to
make acquisitions, transfer or sell assets, create liens, pay dividends, enter
into transactions with its affiliates or enter into a merger, consolidation or
sale of substantially all of its assets or take other actions. The new credit
agreement will be secured by the intellectual property of Seminis and 100% of
the shares of Seminis Vegetable Seeds, Inc. and shares of some other
international subsidiaries. The new credit agreement provides for events of
default typical of facilities of its type, as well as an event of default if
Pulsar Internacional, S.A. de C.V., together with its affiliates, which includes
Savia, fails to hold a majority of the board of directors or direct the
management of Seminis or control at least 51% of the voting rights of Seminis.

      Under Seminis' new $350.0 million credit agreement, Seminis anticipates
borrowings of $292.5 million as of the closing of this offering. Seminis
currently believes that the cash proceeds from the offering, together with
existing cash balances and available borrowings under the new credit agreement,
will be sufficient to meet anticipated cash requirements for the foreseeable
future based on Seminis' current level of operations. There can be no assurance
that additional capital beyond the amounts currently forecasted by Seminis will
not be required or that any such required additional capital will be available
on reasonable terms, if at all, at such time as required by Seminis.

                                       26
<PAGE>   28

      Seminis' exposure to foreign currency fluctuations is primarily foreign
currency gains or losses that occur from intercompany loans between Seminis and
its foreign subsidiaries. The only material hedging contract to which Seminis or
any of its subsidiaries is a party is a contract executed in December 1998 to
hedge approximately $31.3 million of a $48.0 million loan taken by SVS Holland
B.V., a subsidiary of Seminis, which loan was in United States dollars. SVS
Holland B.V. entered into the hedging contract in order to reduce the exposure
to foreign currency fluctuations because SVS Holland's functional currency is
the Dutch Guilder.

                           IMPACT OF YEAR 2000 ISSUE

      The Year 2000 issue involves the potential for system and processing
failures of date-related information resulting from computer-controlled systems
using two digits rather than four to define the applicable year. Any computer
programs that have date-sensitive software may recognize a date using '00' as
the year 1900 rather than the year 2000. This could result in a system failure
or miscalculations causing disruptions of operations, including, among other
things, an inability to process transactions, send invoices or engage in similar
normal business activities.

      Seminis is currently installing a new corporate-wide management
information system to coordinate all aspects of sales, marketing, distribution,
production and finance, which is Year 2000 compliant. Seminis is focusing its
effort for Year 2000 compliance on the verification of existing systems.
Seminis' business applications will be compliant by July 1999 in its two main
facilities in the United States and The Netherlands. Seminis' remaining
subsidiaries will be Year 2000 compliant by November 1999, with its worldwide
telecommunications systems compliant by August 1999 and its office software
compliant by November 1999. Seminis' computer hardware, such as servers for
business applications, are also currently Year 2000 compliant in the United
States. Seminis will not be required to make any major equipment upgrades or
system replacements in its compliance effort.

      Seminis expects that costs to implement new software as well as to become
Year 2000 compliant will be approximately $25.0 million upon completion, of
which approximately $21.0 million has been spent as of March 31, 1999.

      Seminis' most critical vendors are growers who produce seed, often located
in developing countries. Such vendors are not highly reliant on information
technology and therefore will only be minimally affected by the Year 2000 issue.
The vendors are able to accept contracts, produce, harvest and ship seeds
without the use of information systems. If a few growers in developed countries
are unable to produce seed, production will shift to unaffected growers,
resulting in only limited shortages. In the case of our non-seed vendors,
supplies can be substituted with other products if necessary. For example,
although Seminis uses cans to package products, they can be replaced with pouch
packaging if needed without affecting Seminis' customers.

      If Year 2000 problems arise in chips that are embedded in Seminis
processing equipment, then the equipment can be disconnected from automatic
control and run manually. In this event, the impact on Seminis operations would
be minor at most. If some of the subsidiaries cannot use their information
systems, invoicing and inventory management can be done manually.

                                       27
<PAGE>   29

                                    BUSINESS

                                    OVERVIEW

      Seminis is the largest developer, producer and marketer of vegetable and
fruit seeds in the world. Seminis uses seeds as the delivery vehicle for
innovative agricultural technology. For example, Seminis develops seeds designed
to do one or more of the following: reduce the need for chemicals, increase crop
yield, reduce spoilage, offer longer shelf life and create tastier foods with
better nutritional content. Seminis focuses its research and development
activities on products that are likely to have practical market uses, create
significant market value, command premium pricing and capture leading local
market share. As a result, Seminis is creating and setting the foundation to
capture value through premium pricing at all steps of the vegetable and fruit
production and distribution chain: growers, distributors, processors, retailers
and end-consumers.

      Seminis produces more than 60 species and 8,000 distinct varieties of
vegetable and fruit seeds. Seminis markets its seeds through three full-line
brands -- Asgrow, Petoseed and Royal Sluis -- and nine specialty brands. The
product lines marketed under these brands cover most species of vegetables and
fruits, including beans, broccoli, cabbage, carrots, cauliflower, celery,
Chinese cabbage, cucumbers, eggplant, leeks, lettuce, melons, onions, peas,
peppers, pumpkin, radish, spinach, squash, sweet corn, tomatoes, and watermelon.

      Seminis has established a worldwide presence and a global distribution
system. Seminis markets seeds in over 120 countries and has 70 research and
development stations in 19 countries and production sites in 32 countries. This
allows Seminis to remain close to local markets around the world, adapt its
products to any microclimate and meet the preferences of local consumers. In
fiscal 1998, Seminis had approximately $383.8 million in net seed sales. This
represents an approximate 19% share of the global commercial vegetable and fruit
seed market, which is generally highly fragmented.

      The total worldwide vegetable and fruit commercial seed sales in 1998 are
estimated at $2.0 billion. However, given new advances in agricultural
technology, Seminis believes that the achievable market for vegetable and fruit
seeds, as well as its share of the market, can be expanded. These technological
advances, such as Roundup Ready(R) Weed Control, virus resistance, Bt based
insect control and fungal disease resistance, enable Seminis to price its
products based on the incremental benefit they provide to growers, distributors,
processors, retailers and end-consumers.

                               INDUSTRY OVERVIEW

      Over the past several decades, improvements in farm productivity have
allowed the agricultural industry to keep pace with growing food demand. While
many of the steps in agriculture -- tilling, planting and harvesting -- have
remained the same for centuries, yield-enhancing technologies such as
mechanization and the use of hybrid seed and crop protection chemicals have
allowed farmers to meet the ever-growing demand for food. More recently, the
application of genetic improvements to crop plants has provided greater value to
growers which can be captured by the seed industry through higher prices and
greater demand.

      One of the biggest challenges of the 21st century will be to further
develop sustainable agricultural production systems that can meet the food and
nutritional requirements of the world's growing population. The United Nations
is projecting that world population will increase by 35% to 7.7 billion from
1995 to 2020, with 95% of the population increase expected in developing
countries. Given the limited amount of arable land, which is decreasing,
increases in agricultural production must come from improvements in agricultural
productivity through technology. In addition, there is significant resistance,
particularly in developed countries, to agricultural production growth achieved
through increases in chemical inputs such as pesticides. Consequently, the
burden of meeting

                                       28
<PAGE>   30

increased demand for food rests primarily on the emergence of new technologies
and farming methods that facilitate improvements in crop yields and replace
existing agricultural chemicals.

      In developing countries, which have a relatively large vegetarian
population, vegetable and fruit consumption has grown over 75% from 1985 to
1996. Consumption of vegetables and fruits worldwide has increased approximately
50% in the same time period. However, vegetable and fruit yields have not kept
pace with consumption increases, growing only 18% per hectare since 1985. Given
current population estimates and consumption rates, consumption of vegetables
and fruits is expected to increase by 60% from 1996 to 2010. World production of
vegetables and fruits must increase to meet expected demand.

      Two breakthroughs in plant science occurred in the 1980's that may
facilitate increased productivity and higher quality vegetables and fruits. The
first was the understanding of how genes, the fundamental components of the
genetic code, work in plants to produce traits such as disease resistance or
higher nutritional content. The second was the development of transformation
technology, which is a process to introduce new genes into plants. By using
developments in plant breeding, biotechnology and genomics, leading vegetable
and fruit seed companies are creating the changes in productivity and quality
necessary to provide sustainable vegetable and fruit production growth.

      In addition, vegetables and fruits are proven to be valuable in meeting
basic nutritional needs and in preventing disease. They also have very little
fat, are low in calories and contain vitamins and other nutritional compounds.
Diets high in vegetables and fruits protect against obesity and, thus, against
the risk of cardiovascular disease and stroke, and can also protect against
diabetes, iron-deficiency anemia and cataracts. According to the World Cancer
Research Fund and the American Institute for Cancer Research, there is also a
strong and consistent pattern showing that diets high in vegetables and fruits
can significantly reduce the risk of cancer. Seminis believes that vegetables
and fruits represent nature's most direct delivery mechanism for improved health
and nutrition.

      The world's vegetable and fruit seed industry, with its unique combination
of nutritional benefits, local market adaptability, yield enhancing
technologies, year-round availability and streamlined production and
distribution system, is positioned to meet the world's growing need for healthy
and nutritious food products. Seminis' development of seeds that produce
disease-resistant, higher-yielding and healthier vegetables and fruits are of
growing importance for regional and global markets because of expected
increasing consumption of vegetables and fruits, along with a steady decline in
arable land.

                THE VEGETABLE AND FRUIT SEED MARKET OPPORTUNITY

      Total worldwide vegetable and fruit commercial seed sales in 1998 are
estimated at $2.0 billion, of which $409.5 million represented sales in the
United States. Given new advances in agricultural technology, such as Roundup
Ready(R) weed control, virus resistance, Bt based insect control and fungal
disease resistance, Seminis believes that the achievable market for vegetable
and fruit seeds, as well as its share of the market, can be expanded. These
technological advances enable Seminis to develop new products which provide
benefits throughout the vegetable and fruit production and distribution
chain -- growers, distributors, processors, retailers and end-consumers -- by,
for instance, reducing growers' costs, reducing spoilage or having better
appearance and taste. As a result, Seminis prices its products based on the
incremental value they provide to growers, distributors, processors, retailers
and end-consumers.

GROWERS

      Grower sales of vegetables and fruits in the United States in 1997 were
estimated at $9.2 billion. Seed costs to growers represented approximately 4% of
their sales.

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<PAGE>   31

Reducing growers non-seed costs is a means for Seminis to increase its
profitability. New seed products with enhanced input traits -- including
herbicide tolerance and disease and insect resistance -- are already displacing
other farm input costs, such as fertilizers, pesticides and labor, resulting in
higher seed prices.

      The model for pricing seeds to reflect the displacement of the farmer's
input costs is one that has been well established in agronomic crops in recent
years. Because seed products with genetic enhancements can substantially reduce
other input costs, as well as the chemical load on the environment, they are
able to drive a reallocation of grower spending. Insect resistant corn seed
eliminated $15 to $20 of agrochemical costs per acre. As a result, these seeds
are sold, on average, at a 21% premium to traditional corn seed and still
provide the grower with a 26% overall savings of input costs. Similarly,
herbicide tolerant soybean seeds eliminated approximately $12 of agrochemical
costs per acre. These seeds are sold, on average, at a 33% premium to
traditional soybean seed, but provide the grower with a 26% overall input cost
savings. In 1998, approximately 20% of the total corn and 35% of the total
soybean acreage, or over 40 million acres in the United States, was planted with
corn and soybeans genetically resistant to insects and/or herbicides.

      The chemical cost-displacement potential in vegetable and fruit crops may
be more attractive than in agronomic crops. Whereas agronomic crops occupy much
larger planted acreage in the United States, vegetables and fruits typically
require higher expenditures on crop protection chemicals and fertilizers given
their relatively high end-market value. In fact, the average tomato grower in
Florida spends $1,500 per acre on chemicals and $3,800 per acre on all
production inputs, versus $73 and $160, respectively, for a typical acre of
corn. In the United States, chemical costs represent between 20% and 35% of
vegetable and fruit grower's total production expenditures, with labor and water
representing the two other largest components of the cost structure. The
vegetable and fruit grower's input intensive cost structure makes growers
particularly receptive to new products, like genetically improved seeds, which
reduce input costs and improve the economics of growing vegetables and fruits.

DISTRIBUTION

      Vegetable and fruit sales by distributors in the United States in 1996
were estimated at $30.0 billion. The production and distribution chain for fresh
vegetables and fruits in the United States is relatively simple. Products move
from the grower to the packer/shipper to the distributor and, ultimately, to the
retailer. Alternatively, products move directly from the grower to the
processor. Cost is added at each stage in the chain, reflecting both the profit
margin and product shrinkage due primarily to spoilage. On average, shrinkage
across the entire production and distribution chain accounts for approximately
25% of the cost of fresh vegetables and fruits to the retailer -- or more than
$7.0 billion annually.

      Reducing spoilage presents a clear opportunity for seed companies to
achieve premium pricing. Through traditional breeding and biotechnology, Seminis
has developed new seed varieties with enhanced shelf life characteristics. These
new seed varieties sell at a significant premium to traditional offerings and,
in most cases, capture a substantial portion of the savings from reduced
spoilage. For example, Seminis' long shelf life tomato seeds sell for $5,200 per
pound versus $1,400 per pound for a traditional variety. Because these product
enhancements can increase profitability at each step in the production and
distribution chain, demand for these products is driven by all production and
distribution chain participants, not just growers.

PROCESSORS

      Processor sales in the United States were greater than $13.0 billion in
1992. Processors of vegetables and fruits freeze, dehydrate, make into paste or
can fresh vegetables and fruits into shelf-stable containers. Processors either
produce their
                                       30
<PAGE>   32

own vegetables and fruits or contract for their production with growers.

      In many cases, processors either purchase seeds directly from seed
companies or approve the seed purchases of their contract growers. A large
portion of costs associated with processing fresh vegetables and fruits is the
vegetable and fruit itself and the energy costs to freeze or heat the vegetable
or fruit or to evaporate water. During processing, flavor components can be lost
or inactivated. Developing new varieties for processors with higher yield or
which require less processing time or heat required to process vegetables and
fruits or which conserve flavor are important objectives for seed companies.

      Seminis has focused its efforts on improving the processing
characteristics of vegetables and fruits. For example, Seminis has an agreement
with Zeneca to develop tomatoes which can be made into an improved paste. This
genetically modified product is the top selling tomato paste in the United
Kingdom. Similarly, Seminis' collaboration with carrot growers and processors
has pioneered the development of a carrot suitable for processing into ready-to-
eat baby carrots.

RETAIL

      Retail sales of fresh and frozen vegetables and fruits in the United
States in 1996 are estimated at $50.0 billion. Seminis is developing new seed
varieties with enhanced output or quality traits to expand the grocery market
for vegetables and fruits and capture a larger portion of consumer spending.
Seminis continuously emphasizes the development of new vegetable and fruit seed
products with desirable consumer qualities, including enhanced color, texture,
sweetness and taste, which may command a premium price on the grocery store
shelf. In addition, Seminis is producing seeds for ready-to-eat products, such
as baby carrots and prepackaged lettuce.

      Direct consumption of vegetables and fruits by the end-consumer in the
form that the farmer produces them facilitates premium pricing for higher
quality products. In contrast, agronomic crops typically undergo a variety of
processing steps prior to their use as ingredients in the commoditized animal
feed sector.

      The trend toward healthier lifestyles and emphasis on nutrition is further
expanding the market potential for vegetable and fruit seeds. Vegetables and
fruits with enhanced nutritional content will likely command a premium at the
grocery store. The challenge for the vegetable and fruit seed industry will be
to develop an integrated grower-packaging-distribution-marketing system that
allows the seed producer to benefit from pricing increases at each step of the
production and distribution chain.

                           SEMINIS BUSINESS STRATEGY

      Seminis' vision is to apply technology to vegetable and fruit seeds to
enhance profitability throughout the vegetable and fruit production and
distribution chain. To realize this vision, Seminis expects to capitalize on its
competitive strengths, which include its ability to consistently introduce new
technology through product innovation, a strong germplasm bank, well established
brand names and a worldwide distribution system. Seminis distinguishes itself
from its competitors by having a global strategy that addresses local needs.
Seminis intends to enhance its leadership position in the global vegetable and
fruit seed industry by expanding its existing product lines and introducing
high-quality, technologically innovative seeds tailored to local preferences.

- - Enhance leadership position in worldwide vegetable and fruit seed
  market -- Seminis is the global leader in the vegetable and fruit seed
  business with $383.8 million in net seed sales during fiscal 1998. Seminis has
  achieved its premier global position through its high-quality seeds, its
  innovative technology, its multi-brand marketing strategy and its world-wide
  distribution capabilities. Seminis' full-line brands--Asgrow, Petoseed and
  Royal Sluis--have been available in their home markets for at least 45 years
  and, collectively, enjoy an approximate 19% share of the global commercial
  vegetable
                                       31
<PAGE>   33

  and fruit seed market. Seminis intends to enhance its position as leader in
  the vegetable and fruit seed industry through the production and supply of
  current products, expansion of existing product lines and introduction of
  high-quality, technologically innovative seeds tailored to local preferences.

- - Expand technology leadership position through continuous new product
  innovations -- Seminis' new product development efforts utilize traditional
  breeding, proprietary technology, biotechnology, biochemistry, genomics and
  plant pathology to introduce innovative products to the marketplace in an
  efficient and cost-effective manner. Seminis has more than 4,500 products in
  its development pipeline. Seminis augments its internal product development
  efforts with more than 100 technological agreements and arrangements with
  leading companies, research institutions and universities. Seminis intends to
  remain at the forefront of seed innovation by coupling its internal product
  development capability, technology alliances and extensive germplasm bank with
  its intimate knowledge of the evolving demands and preferences of growers,
  distributors, processors and end-consumers.

- - Further consolidate the vegetable and fruit seed industry -- Seminis has led
  the consolidation of the vegetable and fruit seed industry and has consummated
  nine mergers or acquisitions to date. Seminis expects to augment its market
  position through continued strategic acquisitions to expand its business and
  further internal growth. Seminis will target strategic acquisitions that
  provide it with access to new technology, supplement its product line or
  improve its market position.

- - Capture enhanced value created by proprietary seeds -- As a result of its
  innovative product development efforts, Seminis expects to introduce products
  which will reduce input costs to growers and provide enhanced consumer value.
  Seminis' seeds can increase yields and crop uniformity, reduce the grower's
  dependence on chemicals and fertilizers and improve the appearance, taste and
  nutritional value of foods. By expanding the global vegetable and fruit market
  through premium pricing along the production and distribution chain, Seminis
  can enhance its profitability.

                                    PRODUCTS

      Seminis develops and produces vegetable and fruit seeds adapted to the
local conditions in which they will be grown. Local requirements are largely
dictated by environmental conditions, such as temperature or rainfall, retail
demand for traits, such as shelf life, and consumer preferences for flavor,
ready-to-eat convenience and quality. Seminis' depth of product lines enables
growers to meet local market demands.

DEVELOPED COUNTRIES

      In developed countries, the growth of the vegetable and fruit seed market
is primarily driven by a demand for foods with enhanced nutritive qualities and
increased consumer awareness of the health benefits of vegetables and fruits.
According to a 1996 consumer survey in the United States, 89% of consumers cited
nutritional reasons as to why they eat vegetables and 73% said that they would
pay more for healthier versions of the foods they eat. Seeds for the production
of vegetables and fruits in developed countries are predominantly hybrids to
ensure crop uniformity and productivity. Seminis estimates that, in the United
States, 85% of all vegetable and fruit seeds are hybrids.

DEVELOPING COUNTRIES

      In developing countries the growth of the vegetable and fruit seed market
is largely driven by rapidly expanding population growth and conversion from the
use of open-pollinated seed to hybrid seed varieties. Growers are realizing the
value of hybrids and are increasingly converting to hybrid seeds to obtain
higher yields per acre, greater uniformity, greater resistance to pests,
diseases and environmental conditions and improved quality, flavor and nutrition
for

                                       32
<PAGE>   34

consumers. Seminis develops and sells new hybrids specifically designed for the
local markets in developing countries. Given the benefits of hybrid seeds,
growers are often willing to pay a substantially higher price for hybrid seeds
than for open-pollinated seeds.

MULTI-BRAND STRATEGY

      Through its customer-focused, multi-brand strategy, Seminis provides
choices to growers with respect to product, price, promotion and service. It
also furthers Seminis' goal of providing growers with information to enable
growers to anticipate change in consumer trends rather than react to them.
Seminis has three full-line brands, Asgrow, Petoseed and Royal Sluis, each with
its own identity and positioning. Each brand features independent products with
varying strengths and market fit. Seminis also markets nine specialized brands,
which enables it to respond quickly to changing market needs, dietary
preferences or regional growing practices. These brands may focus on specialized
growing practices, such as greenhouse or protected culture, specific customer
segments within a sub-market, such as large lettuce growers in the southwestern
United States, or regional and cultural preferences, such as Asian vegetables or
fruited crops for the Middle East. With differentiated Seminis brands, growers
can exercise their options for choice while staying within the Seminis family.
Seminis believes that it can maintain and reinforce its competitive advantage
through the careful positioning of its brands.

FULL-LINE BRANDS

      Seminis markets a full-line of seeds under its Asgrow, Petoseed and Royal
Sluis brands. These brands are well recognized for consistently developing and
marketing high quality seeds for most major vegetable and fruit species. Seminis
believes that its brands rank among the leading brands worldwide in the
vegetable and fruit seed market.

      Asgrow and Petoseed enjoy high brand awareness in the United States
vegetable and fruit seed industry. According to a 1996 study, Asgrow has a 99%
brand-awareness rating among growers, while 88% of growers and dealers have a
high awareness of the Petoseed brand. In Europe, growers and dealers also have
high brand awareness of Seminis' brands. According to a 1997 independent
industry study of over 1,000 growers and distributors, there is a "high" to
"very high" awareness of Royal Sluis in many European countries, including
France, Italy, The Netherlands, the United Kingdom and Turkey. Similarly, Asgrow
and Petoseed have high brand awareness in many European markets, including
Asgrow in Italy and Petoseed in Spain.

      ASGROW -- Asgrow was established in 1856 and was acquired by Seminis in
December 1994 from the Upjohn Company for $304.0 million. After the acquisition,
Seminis sold the Asgrow agronomics seed business for $240.0 million. Asgrow is
known for providing seeds that possess traits satisfying end-user demands such
as flavor, ready-to-eat convenience and quality. Its strong reputation has been
enhanced through its success with hybrids such as carrots and onions. Asgrow is
also strong in large seed varieties such as green beans, where Seminis believes
it has a U.S. market share of over 70%. Asgrow also has a strong presence in
many European countries.

      PETOSEED -- Petoseed was established in 1950 and was combined with the
Asgrow seed business in 1995 for $133.5 million. Petoseed has built its
reputation through pioneering work in hybrid tomato development, but expanded
its presence in the industry through its full-line of market-driven, innovative
products. This brand has strengths in many areas, including hot peppers. Seminis
believes that, worldwide, growers currently plant more Petoseed hybrid jalapeno
peppers than all other hybrid jalapeno brands combined. Petoseed is known for
consistently introducing new hybrids with multiple disease resistance enhanced
traits and increased field productivity.

      ROYAL SLUIS -- Royal Sluis was established in 1827 and was acquired by
Seminis in 1995 along with Petoseed. The acquisition of Royal Sluis, one of
Europe's

                                       33
<PAGE>   35

largest vegetable seed companies, expanded Seminis' European presence. Royal
Sluis focuses on high-quality, cool season crops such as beans, broccoli,
cabbage, carrots, cauliflower, leeks, lettuce and spinach. In addition to its
strong reputation for service and quality, Royal Sluis pioneered new seed
technology to improve seed quality and germination.

      As shown in the table below, each of Seminis' full-line brands is distinct
in terms of leading species, brand strategy, pricing strategy and brand
identity.

<TABLE>
<CAPTION>
   BRAND         LEADING SPECIES          BRAND STRATEGY      PRICING STRATEGY       BRAND IDENTITY
   -----      ----------------------   --------------------   -----------------   --------------------
<S>           <C>                      <C>                    <C>                 <C>
Asgrow        Beans                    Maintain strong        Price at premium    Focus on desirable
              Broccoli                 links to growers,      to market           output (quality)
              Carrots                  distributors and                           traits
              Fresh Market Tomatoes    retailers
              Melons
              Onions
              Peas
              Pickling Cucumbers
              Squash
              Sweet Peppers
Petoseed      Broccoli                 Focus on extending     Price for value     Enhance grower
              Cucumbers                the product line                           success through
              Fresh Market Tomatoes    through additional                         innovative hybrids
              Hot Peppers              disease resistance
              Lettuce                  and hybrid
              Melons                   conversion in new
              Processing Tomatoes      markets
              Squash
              Sweet Peppers
Royal Sluis   Beans                    Provide service/       Price at premium    Provide service
              Cabbage                  expertise to enhance   to market           through knowledge
              Lettuce                  grower benefits                            about local growing
              Radish                                                              and market
              Spinach                                                             conditions
</TABLE>

REGIONAL OR SPECIALTY BRANDS

      In addition to its full-line brands, Seminis markets seeds through
regional or specialty brands, which are targeted to respond to the needs of
local markets. These needs are driven by dietary preferences, desire for local
products, specialized farm growing practices and local environmental and
climatic conditions.

      BRUINSMA -- Bruinsma was established in 1934 and was acquired by Seminis
in December 1994 along with Asgrow. Bruinsma's reputation was built on its high-
quality, protected crop varieties. Protected farming is a practice in which
crops are grown from high-value seed in greenhouses or tunnels. This practice
continues to expand worldwide and is particularly reflected in European markets,
where protected growing is an effective means of meeting consumer demand for
vegetables and fruits with premium appearance. Bruinsma focuses on the
development and marketing of cucumber, eggplant, pepper and tomato varieties.

      CALIFORNIA -- California was established in 1972 by Petoseed. California
is best known for seeds bred to meet the consumer preferences and farming
practices of the Middle East. The California brand concentrates on cucumber,
melon, pepper varieties, squash and tomato.

      CHOONG ANG -- Choong Ang was established in 1946 and was acquired by
Seminis in 1998 for $20.5 million. Choong Ang is one of the top vegetable and
fruit seed brands in South Korea. This brand has

                                       34
<PAGE>   36

market strength in Chinese cabbage, hot peppers, oriental melon, radish and
watermelon.

      GENECORP -- Genecorp was established in 1982 and was acquired along with
Asgrow in December 1994. Genecorp is a lettuce seed specialist with a
significant market share in the western United States, a region that contains
95% of domestic lettuce acreage.

      HORTICERES -- Horticeres, as a brand of the Agroceres vegetable seed
business, was acquired by Seminis in 1998 for $19.5 million. Horticeres is a
leading brand in Brazil where it is known for beans, lettuce, okra, tomato and
tropical cauliflower.

      HUNGNONG -- Hungnong was established in 1936 and was acquired by Seminis
in 1998 for $120.6 million. Hungnong is a leading vegetable seed brand in South
Korea. Hungnong is known for its strength in broccoli, cabbage, Chinese cabbage,
hot peppers and oriental radishes. Twenty-five percent of Hungnong's sales occur
outside of South Korea, with five percent outside Asia, primarily in the United
States.

      LSL PLANTSCIENCE -- LSL PlantScience was formed in 1998 through an
alliance between Seminis and LSL Biotechnologies with an investment by Seminis
of $22.0 million. LSL PlantScience is known for its DiVine Ripe brand of
tomatoes which offer delayed ripening characteristics for vine-ripened flavor
and increased shelf-life. In addition to marketing LSL PlantScience's tomato
varieties, Seminis obtained access to LSL PlantScience's existing research and
technology agreements. LSL PlantScience varieties are marketed worldwide.

      NATH SLUIS -- Seminis acquired a 90% equity interest in Nath Sluis in 1998
for $2.0 million. Nath Sluis breeds, produces and markets vegetables and fruits
specifically for the Indian market.

      SENECA -- Seneca was acquired by Seminis in 1997 for $1.7 million.  Seneca
focuses on hybrid sweet corn for the United States and Canadian markets.

      YATES -- In 1997, Seminis acquired a 20% interest in the Yates Vegetable
Seed Company for $1.7 million. This company breeds cauliflower, lettuce and
onions for the Australian, European and North American markets. Yates also
distributes the Asgrow and Genecorp brands in Australia.

                              SALES AND MARKETING

      Seminis' product sales are widely diversified geographically, with Europe
representing the largest percentage of total sales outside of North America. The
table below illustrates the breadth of Seminis' products and sales for each
geographic region.

                      FISCAL 1998 NET SEED SALES BY REGION

<TABLE>
<CAPTION>
                                                                               FISCAL 1998
                                                             FISCAL 1998     NET SEED SALES
                                                           NET SEED SALES      GROWTH VS.
                                                           AS A PERCENTAGE     FISCAL 1997
                                           FISCAL 1998        OF TOTAL       NET SEED SALES
GEOGRAPHIC REGION                         NET SEED SALES      NET SALES      AS A PERCENTAGE
- -----------------                         --------------   ---------------   ---------------
                                          (in millions)
<S>                                       <C>              <C>               <C>
North America...........................      $155.2            36.2%             11.0%
Southern Europe.........................        88.1            20.6               5.8
Northern & East Europe..................        50.2            11.7              21.6
Middle East/North Africa................        35.5             8.3              19.6
South America...........................        24.9             5.8              34.2
Asia/Rest of World......................        29.9             7.0              67.7
</TABLE>

                                       35
<PAGE>   37

      Seminis reinforces its brands' market positions through strategic
planning, pricing and communications. Seminis believes that, with its strong
brands, it has an advantage in the marketplace when introducing new products.
The reliability and trust associated with its brands can lend credibility to new
product claims.

      Seminis' strategy of providing differentiated products and services to its
customers through its multiple brands is reflected in its approach to sales and
marketing. Each brand has its own separate and distinct sales force, product
managers and marketing team. Along with separate breeding and product
development, each brand team focuses on offering differentiated products and
services to meet the needs of a wide range of customers.

      Seminis sells its brands worldwide by using a multi-level distribution
strategy involving direct sales, dealers, distributors and importers. Largely
driven by local market needs, Seminis' distribution strategy for each geographic
region is designed to maximize the market penetration of its brands. Seminis'
North American sales are mainly concentrated in the Asgrow and Petoseed brands.
The Petoseed brand is sold primarily through dealers and the Asgrow brand is
sold primarily direct to growers. Each brand has a distinct North American sales
force. In Europe, Royal Sluis, Petoseed and Asgrow are typically sold through
direct sales groups. In the Middle East, Petoseed is Seminis' top brand and is
sold through distributors.

      While the majority of its sales are direct to growers, Seminis also
fosters close relationships with dealers and distributors. Where there is a
market need, Seminis uses these dealers as an outside direct sales force.
Dealers extend the Seminis brands' ability to reach growers in areas where there
are geographic or other limitations to direct sales efforts. Seminis is highly
selective in the dealers and distributors chosen to represent its brands.
Dealers are selected based on shared vision, technical expertise, local market
knowledge and financial stability. In addition, Seminis builds
dealer/distributor loyalty through an emphasis on service, access to breeders,
joint trials, ongoing training and extensive promotional material support.

      Seminis' marketing communications department coordinates all advertising,
public relations and publicity activities for Seminis and its brands and
provides highly targeted promotional support to its sales and marketing efforts
worldwide.

                                  ACQUISITIONS

      All of the sectors of the agricultural industry have experienced
significant consolidation during the past several years. Consolidation at the
upstream end of the production chain--among chemical, seed and biotechnology
companies--has been driven primarily by developments in agricultural technology
and the need to secure access to the best available seed germplasm.

      In agronomic crops such as corn, cotton, soybeans, wheat and rice, the
consolidation has been led by major agrochemical/ biotechnology companies such
as Monsanto, Dow, DuPont and Hoechst (AgrEvo). These companies have invested in
the seed industry to access delivery systems for their biotechnology products.
Access to the best available germplasm has become a key competitive priority in
the industry. In vegetable and fruit crops, access to germplasm is an equally
important competitive issue. The company with access to the best available
germplasm will have the strongest position in the delivery system for future
generations of biotechnology products.

      Seminis has been at the forefront of the consolidation of the vegetable
and fruit seed industry and has completed nine acquisitions to date. Seminis has
historically used acquisitions as a cost-efficient means of adding developed and
proven products to its portfolio, gaining access to or ownership of key
technology, patents and germplasm collections and entering new and established
markets. The transactions completed in fiscal 1998 exemplify this point. First,
the purchase of a 50% stake in LSL PlantScience added a new line of tomato
varieties. Similarly in fiscal 1998, the acquisition of two South Korea-based
companies, Hungnong and Choong

                                       36
<PAGE>   38

Ang, strongly enhanced Seminis' line of products for the Asian market and
provides products to meet the growing worldwide demand for Asian vegetables and
fruits. Also in 1998, Seminis' purchase of 90% of the equity of Nath Sluis
significantly increased Seminis' presence in India. Finally, in November 1998,
the acquisition of the Agroceres vegetable seed business strengthened Seminis'
presence and product lines in Brazil, a region that requires special varieties
developed for tropical and subtropical climates.

      As the leading vegetable and fruit seed company, Seminis believes it is
well positioned to benefit from continued consolidation of the vegetable and
fruit seed industry. In order to expand the breadth and depth of its product
line, Seminis expects to continue targeting strategic acquisitions and alliances
that supplement its product line and expand its customer base.

                            NEW PRODUCT DEVELOPMENT

      Seminis utilizes both traditional breeding and biotechnology to create
continuous new product innovations. Seminis focuses its internal product
development activities on products that are likely to have practical market
applications, create significant market value, command premium pricing and
capture leading local market share.

      Seminis currently owns or has pending over 60 patents in such areas as
virus resistance, product quality, breeding technology, gene expression, cell
selection and resistance genes. In addition, Seminis has protected more than 360
varieties under plant variety protection laws.

      Principal new products are listed in the following table.

                                       37
<PAGE>   39

        PRINCIPAL NEW PRODUCTS INTRODUCED IN THE LAST THREE FISCAL YEARS

<TABLE>
<CAPTION>
  SPECIES              TARGET REGION               DIRECT BENEFICIARY      BENEFIT/ADDED TRAIT
  -------              -------------               ------------------      -------------------
  <S>                  <C>                         <C>                     <C>
  Bean                 Europe                      Grower/consumer         Darker color, better uniformity
                       Europe                      Grower/consumer         Darker color, disease resistance
                       USA/Italy                   Trader/consumer         Improved appearance
  Broccoli             CA/Europe                   Grower/trader           Improved export quality
                       CA/Mexico                   Grower/trader           Better export quality
  Carrot               CA                          Consumer                Better taste for consumer
  Fresh Market Tomato  Europe                      Grower                  Disease resistance
                       Mexico                      Grower                  Higher yield
                       South Europe/Spain          Grower                  Disease resistance
                       Florida                     Trader                  Fruit firmness-shippability
                       Middle East                 Trader                  Longer shelf life
                       West Africa/East Africa     Trader                  Longer shelf life
  Hot Pepper           Mexico                      Grower/trader           Early maturity of jumbo size fruit
                       Mexico                      Grower                  Larger fruit, higher yield
  Lettuce              CA/AZ                       Grower                  Disease resistance
                       Italy/France                Grower                  Disease resistance, larger size
  Long Cucumber        Northwest Europe            Grower/trader/consumer  Better vigor, higher quality fruit
  Long Day Onion       Northwest USA               Trader/consumer         Longer storability
  Pea                  USA/Italy/France            Trader/consumer         Improved color/appearance
                       USA/UK/Italy/France         Trader                  Improved processor traits
  Pickling Cucumber    Eastern Europe              Trader/consumer         Improved fruity quality
                       USA                         Trader                  Better size
                       USA                         Trader                  Improved processing traits
                       USA/Brazil/Mexico           Trader/consumer         Improved fruit quality
                       USA/Mexico/North Africa     Grower                  Higher yield
  Processing Tomato    Spain                       Trader                  Improved peeling/dicing capabilities
  Short Day Onion      Texas/Mexico/South America  Grower/consumer         Higher yield, lower pungency
  Spinach              Europe                      Grower                  Disease resistance
                       Europe                      Grower/trader           Disease resistance, higher quality leaf
  Sweet Corn           USA/Canada                  Consumer                Improved taste
  Sweet Pepper         Florida                     Grower                  Bacterial disease resistance
                       Florida                     Grower                  Disease resistance
  Watermelon           USA/South America/Italy     Consumer                Seedless
</TABLE>

                                       38
<PAGE>   40

     The following table outlines selected products under development for
production over the next two to three years.

                        SELECTED PRODUCTS IN DEVELOPMENT

<TABLE>
<CAPTION>
SPECIES     FEATURE                        EXPECTED BENEFIT                                      DIRECT BENEFICIARY
- -------     -------                        ----------------                                      ------------------
<S>         <C>                            <C>                                                   <C>
Broccoli    Cytoplasmic male sterility     Lower production costs; increased product uniformity  Grower
Cabbage     Cytoplasmic male sterility     Increased yield; lower production costs; increased
                                           product uniformity                                    Grower
            Fungal disease resistance      Increased yield; lower production costs; increased
                                           product quality                                       Grower
Carrot      Disease resistance             Increased yield; lower production costs               Grower
            Improved flavor                Consumer benefit                                      Consumer
Lettuce     Fungal disease resistance      Increased yield; lower production costs               Grower
Melon       Multiple virus resistance      Increased yield; lower production costs; increased
                                           product uniformity                                    Grower
            Extended shelf-life            Consumer benefit; reduced spoilage                    Consumer/trader
Onion       Disease resistance             Increased yield; lower production costs               Grower
Pea         High sugar                     Better taste                                          Consumer
Pepper      Bacterial disease resistance   Increased yield; lower production costs               Grower
Spinach     Tolerance to yellowing and     New market opportunity                                Grower
            over-wintering
Squash      Multiple virus resistance      Increased yield of marketable quality fruit           Grower/trader/consumer
Tomato      Virus resistance               Increased yield; market expansion                     Grower
            Multiple disease resistance    Increased yield; lower production costs               Grower
            High (Beta)-carotene           Consumer health benefit                               Consumer
            High lycopene                  Consumer health benefit                               Consumer
Watermelon  Genetic male sterility         Increased product uniformity                          Grower/trader/consumer
</TABLE>

PRODUCT DEVELOPMENT STRATEGY

      Seminis' new product development efforts utilize traditional breeding,
proprietary technology, biotechnology, genomics and plant pathology to introduce
innovative products to the marketplace in an efficient and cost-effective
manner. Seminis augments its internal product development efforts through
technological alliances with leading companies, research institutions and
universities. Seminis believes that its internal research and development
capability and access to innovative technology, coupled with its extensive
germplasm bank, position it to best meet the changing demands and preferences of
growers and end-consumers and increase its market share and global reach.

PRODUCT DEVELOPMENT PLATFORM

      Seminis conducts research and development activities in 70 locations
throughout the world, including 20 in North America, 16 in Europe, three in the
Middle East, three in South America and 28 in Asia. By diversifying its research
and development geographically, Seminis is able to take advantage of local
breeding characteristics and many different microclimates. It is also better
able to tailor its products to local tastes and preferences.

      Each region of the world has unique requirements for the production of
vegetables and fruits. These requirements are driven by local environmental
conditions such as temperature or rainfall as well as local consumer preference
such as that for very sweet pink tomatoes in Japan or more acidic red tomatoes
in Italy. Seminis maintains an internally developed, proprietary database that
contains information on local production and local consumer needs. Seminis has
compiled the information in this database to enable its plant breeders and
marketing and sales personnel to design new products to meet the needs of the
local market.

      Seminis believes it has the largest research and development staff in the

                                       39
<PAGE>   41

vegetable and fruit seed industry, with over 850 people employed in research and
development functions, including over 150 professionals with Ph.D. or M.S.
degrees, with 114 plant breeders, 22 biotechnologists and 21 pathologists.
Seminis' plant breeding staff is structured by brand and, within each brand, by
species, to maintain brand focus and adequately respond to changing consumer
demands and preferences. All plant breeders regardless of their brand
affiliation have access to technology developed from Seminis' biotechnology,
biochemistry and pathology laboratories. Seminis fosters competition among its
brands and breeders to ensure that new product development is achieved in an
aggressive timeframe.

GERMPLASM

      Seminis owns what it believes is the largest vegetable and fruit germplasm
bank in the world. Seminis' germplasm bank is its key strategic asset.
Germplasm, Seminis' bank of genetic information, is contained in millions of
seeds. These seeds capture the characteristics of vegetables and fruits grown
for Seminis' customers in different regions of the world, including input
traits, such as resistance to pests and adverse weather conditions, and output
traits, such as crop yield, color, texture, flavor and ready-to-eat convenience.
This extensive germplasm bank is extremely difficult to replicate, having been
developed through more than 100 years of intense research and development
effort.

      The merger of the Petoseed, Asgrow and Royal Sluis germplasm, plus the
additions of germplasm from Bruinsma, Seneca, Hungnong, Choong Ang, Nath Sluis,
LSL PlantScience and the Agroceres vegetable seed business, has created a very
diverse germplasm bank. The strength of Seminis' germplasm bank is its diversity
of materials available and the gene characteristics contained in the materials.
Seminis' breeders utilize its germplasm, as well as its proprietary
technologies, to develop innovative products suitable to the needs of different
markets and conditions. Seminis' extensive germplasm bank is the basis for its
continued growth.

TECHNOLOGY

      Seminis' product development technology positions it as one of the leaders
in agricultural innovation. The time and capital required for the development of
new products represent the most formidable barrier to entry in the vegetable and
fruit seed industry. On average, it takes five to twelve years for a proprietary
variety to reach commercial viability. Seminis works to minimize failure in the
market by focusing on identifiable market needs, while reducing time-to-market
and development costs. Seminis employs biotechnology, biochemistry, tissue
culture, dihaploids, cytoplasmic male sterility and molecular markers to enhance
its traditional breeding programs and improve the efficiency of its new product
development efforts.

      BREEDING -- Seminis maintains significant breeding programs for over 60
major vegetable and fruit species that yield over 300 different varieties each
year. No other company produces as many products in the vegetable and fruit
line. Seminis' breeding strategy is to create vegetable and fruit hybrids and
varieties with combinations of traits that are superior to principal competitor
hybrids and varieties and that meet or anticipate the changing demands of the
market. These improved traits include varieties that are economical to produce,
have high field and marketable yields, possess superior disease resistance,
environmental tolerance and nutritional content and have long shelf lives,
superior processing characteristics and consumer benefits such as improved
taste, appearance and nutrition and ready-to-eat convenience.

      PLANT AND GENETIC TECHNOLOGY -- Through the use of its proprietary
processes, Seminis enhances the efficiency of its breeding programs by enabling
its breeders to identify and incorporate important traits into the breeding
line, while significantly reducing the lead-time necessary to introduce
commercially viable products. These proprietary processes include the use of
tissue culture, dihaploid breeding, cytoplasmic male sterility, molecular
markers and biotechnology and genomics.

                                       40
<PAGE>   42

- - Tissue Culture -- Tissue culture is a laboratory technique that enables plants
  to be grown from plant tissue, such as a leaf or bud, rather than a seed.
  Tissue culture reduces the loss of plants, speeds up breeding cycles, reduces
  costs and allows the maintenance of parental inbreds that have difficulty in
  producing seeds. Tissue culture is used in the following breeding programs:
  broccoli, brussel sprouts, cabbage, carrots, cauliflower, celery, cucumbers,
  leeks, lettuce, melon, onions and squash.

- - Dihaploid Breeding -- Plants with two identical sets of chromosomes --
  dihaploids -- are highly desirable in plant breeding due to the uniformity of
  their genetic information. The formation of dihaploids typically occurs only
  under laboratory conditions. When dihaploids are used in a breeding program,
  all future progeny will be genetically identical, thereby increasing the
  uniformity of the crop. Using dihaploids in a breeding program reduces the
  breeding cycle by up to 50%. For example, a dihaploid breeding program for
  biennial crops can reduce breeding from 16 years to 8 years; with annual
  crops, a dihaploid program reduces a normal breeding program from 11 years to
  7 years. Seminis currently utilizes dihaploids in the commercial development
  of its hybrid products including broccoli, cabbage, cauliflower, Chinese
  cabbage, eggplant, lettuce, melon, onion, pepper and radish.

- - Cytoplasmic Male Sterility -- Cytoplasmic male sterility is a genetic feature
  that blocks development of the male (pollen) part of flowers. The resulting
  plants are only female fertile, which allow them to be efficiently crossed
  with pollen from another plant ensuring the proper cross is made. The use of
  cytoplasmic male sterility technology during commercial seed production
  increases hybrid purity, accelerates the production time for a seed crop and
  improves product uniformity. The grower also benefits by having a more
  consistent and uniform crop. Seminis currently utilizes cytoplasmic male
  sterility technology commercially to produce broccoli, cauliflower and hot
  pepper hybrids. Since the hybrids are usually sterile, this technology also
  protects Seminis' germplasm by preventing its reproduction in second
  generations.

- - Molecular Markers -- Molecular marker technology integrates molecular biology
  and information systems with plant breeding to identify important genetic
  sequences and "tag" them so that they can be readily found in seeds or plant
  tissue without growing the plant itself. Molecular markers are used for
  genetic identification of proprietary products and verification that the
  correct product was produced. They are also used to increase the precision and
  speed of developing superior varieties through selection. Seminis employs
  molecular markers in five species.

- - Biotechnology and Genomics -- Biotechnology, or genetic engineering, allows
  for the identification and direct transfer of a specific gene into a plant. An
  individual company's competitive position in biotechnology is reflected in its
  ability to access genes that determine specific characteristics and to develop
  efficient gene transfer systems to create transgenic plants.

  Seminis has focused its initial biotechnology efforts in Roundup Ready(R), or
  herbicide tolerant, weed control, virus resistance, insect resistance, fungal
  disease resistance and quality traits, such as long shelf life. Seminis'
  principal sources of genes, or traits, are technology licensing agreements or
  research collaborations with private companies, research institutions and
  universities.

  Given the large number of different species of vegetables and fruits in
  Seminis' product line, Seminis has focused its efforts in biotechnology on
  developing rapid and reliable methods to introduce new genes into a wide array
  of species. Seminis employs scientists with expertise in biology,
  biochemistry, molecular biology and plant sciences to develop techniques to
  introduce new genes into plants and produce viable progeny. Seminis believes
  that it has the world's leading capability in gene transfer techniques in
  vegetables and fruits.
                                       41
<PAGE>   43

  Genomics, the next wave of biotechnology, allows for the expansion of
  biotechnology's application from single genes to families of genes. Many
  important traits involve gene families such as yield, fruit development and
  flavor. Genomics integrates knowledge about a gene family structure and its
  function or trait, thereby allowing for the trait to be more easily bred into
  related plant species or transferred by way of genetic engineering to other
  plant species. Seminis' activity in genomics is largely concentrated in its
  molecular markers program.

      PLANT PATHOLOGY -- Vegetables and fruits are susceptible to diseases that
can affect yield as well as quality of the final product. In order for Seminis'
plant breeders to develop vegetable and fruit varieties resistant to diseases,
Seminis believes it has established the largest plant pathology group in the
industry to identify and understand diseases important in vegetables and fruits.
With 18 scientists in a network of laboratories throughout the world, Seminis is
currently working on more than 100 different diseases, targeting those that have
the greatest impact on commercial vegetable and fruit production.

      As a result of these efforts, Seminis leads the industry with the widest
range of disease resistant hybrids that require reduced or no chemical
applications while enhancing growers' yield potential. Its plant pathology
resources also enable Seminis to maintain rigorous quality control standards.
All seed-lots are screened for a wide variety of diseases that could be carried
on the seed. Lots that may be contaminated are treated to destroy the disease
organisms or are destroyed.

                            STRATEGIC RELATIONSHIPS

      Seminis actively seeks access to technology applicable to vegetables and
fruits from companies, research institutions and leading universities. Either
directly or through Savia, Seminis has over 100 technology agreements providing
it access to germplasm, genes, technology, patents and proprietary knowledge.
Seminis' major strategic relationships include technology agreements with
Monsanto, the John Innes Center, Bionova Holding Corporation, an affiliate of
Savia, and Mendel Biotechnology, Inc. As a result of its broad technology
alliances, Seminis has relative freedom to operate in the vegetable and fruit
seed market.

      MONSANTO TECHNOLOGY COLLABORATION AGREEMENT.  Monsanto is a worldwide
manufacturer and seller of a diversified line of agricultural products,
nutrition and consumer products and pharmaceuticals, with leading agricultural
biotechnology. Monsanto has made significant investments in the development of
technologies useful in the identification, transfer and expression of genes in
plants. Monsanto and Savia executed a worldwide, non-exclusive agreement in
January 1997 which provides Seminis access to Monsanto biotechnology applied to
vegetables and fruits. Seminis gains early insight into new technologies being
developed by Monsanto for agronomic crops that can also improve the input and
quality characteristics of vegetables and fruits.

      Through the agreement, Seminis has access to numerous Monsanto patents and
pending patents covering the use of selectable markers, a range of promoters
which control gene expression and the agrobacterium transformation system, a
common means of transferring genes into plants. It also has access to a range of
valuable traits such as Roundup Ready(R) weed control, Bt insect resistance and
genes for disease control and quality traits. By partnering with Seminis,
Monsanto is able to leverage its research and development investment across the
broadest spectrum of crops.

      JOHN INNES CENTER TECHNOLOGY AGREEMENT.  The John Innes Center and
Sainsbury Laboratory are premier agricultural research institutions located in
Norwich, England. John Innes has built a substantial technology position for
traits involved in improving plant yield, quality and growth characteristics of
vegetable crops. On December 1, 1997, John Innes and Savia entered a five-year
agreement which provides Savia and its affiliates with access to

                                       42
<PAGE>   44

significant plant disease control technology that will improve its capability to
develop broad fungal disease resistance and enhanced nutritional and health
benefits from vegetables.

      BIONOVA HOLDING CORPORATION RESEARCH AGREEMENT.  Bionova, an affiliate of
Savia, is a biotechnology company focused on developing novel genes for seed and
vegetatively propagated plants like strawberries, bananas and grapes. Under the
research agreement between Bionova and Seminis, Seminis funds research at
Bionova for specific vegetable and fruit crop projects, principally in early
stage molecular biology research related to the introduction of Monsanto genes
into vegetables and fruits. The agreement also provides access to other genes
and technologies including transwitch technology, pea and pepper transformation
and agrobacterium transformation. The results of this funded research are the
exclusive property of Seminis. Under the terms of the agreement, Seminis pays
royalties on all products that are commercialized using Bionova technology.

      MENDEL BIOTECHNOLOGY EQUITY PARTICIPATION AND RESEARCH AGREEMENT. Mendel
Biotechnology studies the structure and function of genes using a mustard plant
species, Arabidopsis thaliana. This plant is particularly well suited for basic
discovery research due to its small size and simple genetic structure. Seminis
has a license agreement with Mendel Biotechnology to access genes for the
improvement of plant growth and development. In conjunction with Savia's equity
stake in Mendel Biotechnology, Savia and Mendel Biotechnology have a technology
agreement which provides Seminis access to genes and technology developed by
Mendel Biotechnology's genomics effort in vegetables and fruits.

      OTHER TECHNOLOGY AGREEMENTS AND COLLABORATIONS.  Seminis actively develops
collaborations and acquires technologies from private corporations, research
institutions and leading universities. Seminis believes that its investment in
technology agreements and collaborations reduces the cost and risk normally
associated with new product development, as Seminis utilizes collaborators for
most of its basic research. Seminis typically shares the value created as a
result of its agreements and collaborations with its partners once a product
reaches commercialization.

                           PRODUCTION AND OPERATIONS

      Seminis typically contracts with seed growers to produce its seeds. It
also produces seed on company-owned farms. Seminis provides the producer with
male and female "parent" lines, which are multiplied into commercial quantities
of hybrid seed. The producer returns the hybrid seed to Seminis for cleaning and
packaging prior to sale to the customer.

      Seminis' seeds are produced both domestically and internationally in over
30 countries in the Northern and Southern Hemispheres to mitigate growing risks
associated with weather or disease in any one region. In the United States,
Seminis produces seed in Arizona, California, Idaho, Oregon and Washington
through contract production with high-quality, dependable growers. Seeds are
produced internationally through subsidiaries in Argentina, Canada, Chile,
China, Ecuador, France, Germany, Guatemala, Hungary, Italy, Latvia, Mexico, New
Zealand, Peru, South Africa, South Korea, Thailand and The Netherlands, and
through exclusive agents using proprietary Seminis technology in Australia,
China, Czech Republic, Denmark, France, Germany, Hungary, India, Israel, Italy,
Japan, Moldova, New Zealand, Romania, Slovakia, South Africa, Taiwan, Tanzania,
Thailand, Turkey and Vietnam.

      By geographically diversifying its production facilities, Seminis can
schedule its planting on a year-round basis, maximize yield, reduce inventory
requirements and ensure adequate supplies. In addition, Seminis ensures
availability of quality products throughout the world by maintaining production
capabilities for each variety in two locations in each hemisphere. For example,
a new variety with strong, unanticipated demand in the Northern Hemisphere can
be supplied by using additional production from

                                       43
<PAGE>   45

the Southern Hemisphere. Alternatively, acreage that was planned to produce
tomato seed could be switched into pepper seed production if excess tomato seed
enters the marketplace.

      Seminis controls contract production by providing on-site management and
technical personnel to oversee the production process. Seminis also supplies
producers with stock seed, specialized hybridizing techniques and specialized
sowing and harvesting equipment to ensure product quality. Production is split
among numerous species, ranging from hand-labor intensive hybrid crops such as
peppers and tomatoes, to machine planted and harvested seed crops such as peas,
beans and corn. Product quantities are determined by a three-year sales
forecast, product safety stock in inventory and the production history for the
region and product.

      Seminis has its main processing facilities in California, Chile, Idaho and
The Netherlands, and auxiliary processing centers in New Zealand and South
Korea. The location of seed processing centers is intended to facilitate the
flow of seed from production areas to major markets. Seminis has recently
employed a logistics system integrating the planning functions in production,
operations and sales. The implementation of this system is expected to provide
real time information about inventory from crop in ground to finished and
available inventory for sales over a three-year time horizon. Using better
information systems and efficient capacity utilization, Seminis expects to
complete the consolidation and rationalization of its operations over the next
two years.

INCOTEC

      Incotec Inc., a subsidiary of Seminis, provides sophisticated seed
enhancement technology to the seed industry. Incotec offers products for precise
sowing, improved seed emergences and germination. Incotec enhances seed
performance by applying fungicides or other chemicals and protective coatings to
protect against disease or improve a seed's germination behavior. Incotec also
pelletizes seeds to make them uniform and, therefore, more suitable for
precision sowing equipment. This technology helps growers worldwide increase
their productivity and profits by allowing them to obtain better crop
uniformity, even under inconsistent climate and field conditions.

      Incotec pioneered seed priming -- a technology that accelerates
germination -- nearly 30 years ago. Today, Incotec offers diversified technology
to serve the vegetable and fruit, flower and tobacco seed industries. Incotec
expects to achieve future growth through investment in new seed enhancement
technology and product development, a stronger presence in the agronomic seed
enhancement market and the pursuit of strategic alliances with outside
technology suppliers and the agricultural chemical industry.

                               QUALITY ASSURANCE

      Seminis' extensive quality assurance program provides growers with
confidence in seed performance. Seminis' seeds undergo a rigorous quality
assurance program, which includes extensive field and greenhouse variety
identification trials, physiological and pathology tests and other sophisticated
laboratory techniques using genetic marker technology. Seed quality is monitored
thoroughly through methods ranging from inspection of the parent plants for
health and genetic purity to harvest and sale of only the most vigorous seed.

      Once harvested and conditioned, seeds are evaluated and certified by
technicians, pathologists and other scientists for characteristics such as
genetic purity, physical purity, germination, moisture content, vigor and the
absence of seed-borne diseases. This program ensures that Seminis seeds produce
plants that have high yields, are tolerant to drought, insects and diseases and
efficiently use soil and water nutrients.

      Seminis has begun an ISO 9000 certification effort, which will result in
standardized quality systems throughout Seminis. ISO 9000 is a series of
international standards for the development and implementation of quality
systems for all types of industries, as issued by the

                                       44
<PAGE>   46

International Organization for Standardization in Geneva, Switzerland. These
quality systems are aimed at building quality into the product at each stage of
research, production and operations. Seminis expects to earn ISO 9000
certification for most of its operations in mid-1999.

                                  COMPETITION

      Seminis faces substantial competition from technological advances by
competitors such as other seed companies, chemical and pharmaceutical companies
and biotechnology companies, many of which have substantially greater resources
than Seminis. To remain competitive, Seminis expends substantial resources for
research and development and strives to maintain technological alliances.
Seminis also competes on the basis of pricing and financial terms.

                             INTELLECTUAL PROPERTY

      Seminis uses a wide array of technological and proprietary processes to
enhance its germplasm and product development programs. These technologies and
proprietary processes enable Seminis to create novel product concepts and reduce
the time to market by, in many cases, two to five years. Seminis files for
patents on technology that is patentable, although it does not file for patents
on all potentially patentable technologies. Seminis currently owns or has
pending patents in such areas as virus resistance, product quality, breeding
technology, gene expression, cell selection and resistance genes, including 63
issued or allowed patents in Australia, Austria, Belgium, Canada, Denmark,
France, Germany, Great Britain, Italy, Luxembourg, Spain, Sweden, Switzerland,
The Netherlands and the United States. Seminis currently has 135 patent
applications filed, or pending, in Argentina, Australia, Brazil, Canada, Chile,
China, the Czech Republic, the European Union, Hungary, India, Indonesia,
Israel, Japan, Macedonia, Mexico, New Zealand, Norway, Poland, Romania, Russia,
South Korea, Saudi Arabia, Spain, Thailand, Turkey, Ukraine and the United
States.

      Intellectual property rights protect Seminis products and technologies
from use by competitors and others. Intellectual property rights of importance
for Seminis include utility patents, registrations under plant variety
protection laws and trade secrets. Intellectual property rights focus on
open-pollinated varieties, parental lines, traits and gene technologies related
to hybrid varieties, novel traits, novel breeding technologies, molecular
markers and disease resistance.

      In many countries, including the United States, most of the European Union
and Japan, plant varieties can be protected under laws which grant rights to
plant breeders to protect their seeds, including the right to prevent third
parties from importing or exporting, storing, processing, reproducing or selling
protected varieties within the territory of protection. Seminis has protected
368 plant varieties under plant variety protection certificates or plant variety
right certificates in the United States, the European Union, Kenya and Israel.
Seminis has filed another 75 applications for plant variety protection in the
United States and the European Union.

      Seminis intends to continue developing comprehensive intellectual property
and protection through utility patents, including key varieties and parent
lines. Seminis will also aggressively expand protection of its varieties and
parent lines through plant variety rights. Proprietary technologies not
protected under these mechanisms are protected under trade secret laws.

                                   REGULATION

      The developing, testing and commercialization of seed products are subject
to legislation and regulation in various countries. These regulations may govern
genetic exclusivity, environmental concerns, product viability, performance and
labeling. While regulation adds a cost of doing business to the industry, it
also provides protection for research and development investment in new
products, thereby encouraging continued new product development.

                                       45
<PAGE>   47

REGISTRATION PROCESS

      Variety registration varies from country to country, but generally each
variety must be phenotypically unique. That is, the size, color, maturity and
quality must be verifiably different from the varieties that already exist in
the market. Once a variety is registered it cannot be changed. In the United
States, the registration process is voluntary and determination that a variety
is unique is left to the breeder. In Europe the registration process is
regulated and determination of uniqueness is made in official trials.

PHYTOSANITARY CERTIFICATION

      The purpose of phytosanitary requirements is to prevent the spread of
plant diseases that can be carried on seed or other plant tissue. Each
seed-producing country has agricultural inspectors that check the seed crops for
the presence of specified diseases. After these crops are harvested, laboratory
tests are also conducted to ensure that the seed is clean. Having passed the
inspection and lab tests, the department or ministry of agriculture of the
producing country issues a phytosanitary certificate stating that the seed is
free of specified diseases. Importing countries then allow the seed to cross
their borders on the basis of these certificates.

LABELING OF GENETICALLY ENGINEERED PRODUCTS

      There are no worldwide, accepted regulations for genetically engineered
products. Consequently, Seminis is required to seek and obtain regulatory
approvals in each country where seeds will be sold and where the harvested
produce will be exported. In the European Union and Switzerland, labeling of
genetically engineered products is mandatory, whereas in other countries, such
as Canada and the United States, labeling is required only if there is a
compositional change or a health risk associated with the product. Japan,
Australia and New Zealand are considering labeling requirements. Other regions
where Seminis sells products either have labeling requirements similar to the
United States or have no labeling requirements. Seminis will comply with the
labeling requirements of each country in which it conducts business.

ENVIRONMENTAL REGULATION

      Seminis' business is not sensitive to, or highly regulated by,
environmental laws. Seminis uses various equipment which is subject to federal,
state and local clean air and water regulations. Also, Seminis' research and
quality assurance divisions conduct various agricultural growing operations
utilizing chemicals routinely used in any farming operation. Seminis' foreign
operations are also subject to laws of foreign jurisdictions as to environmental
matters. Seminis believes it is in full compliance with these laws.

      In its operations, Seminis uses very limited amounts of materials or
matters which have been categorized as "hazardous substances." Seminis believes
that its use has always been in full compliance with all applicable laws, rules
and regulations.

      Seminis has no knowledge of any current, pending or threatened citation or
complaint, civil or criminal, relating to any alleged violation of any law, rule
or regulation relating to any environmental matter.

                             PROPERTIES/FACILITIES

      Seminis' principal office is located in a company-owned facility in
Saticoy, California and plans to relocate this facility to Oxnard, California in
1999. Seminis directly controls significant, open-field production capacity in
Chile, Mexico and Peru on land predominantly owned by Seminis. Seminis' main
greenhouse production facilities are located in France and Mexico on sites owned
by Seminis, and in Chile and The Netherlands on sites owned by Seminis and
contracted out to third parties who grow seeds exclusively for Seminis.

      Seminis maintains several processing facilities throughout the world,
equipped to handle seed cleaning, sizing, treating, testing and packaging.
Seminis owns and operates processing facilities in California, Idaho,
Washington, Chile, France, New Zealand, South Africa, South Korea, Thailand and
The Netherlands.

                                       46
<PAGE>   48

      Seminis conducts its research primarily at six company-owned research
centers in France, Italy, South Korea, The Netherlands and the United States.
Seminis owns 49 and leases 21 additional research facilities.

                                   EMPLOYEES

      As of December 31, 1998, Seminis had approximately 3,000 employees.
Seminis believes it has good relations with its employees.

                               LEGAL PROCEEDINGS

      Seminis is involved from time to time as a defendant in various lawsuits
arising in the normal course of business. Seminis believes that no current
claims, individually or in the aggregate, will have a material adverse effect on
Seminis' business, results of operations or financial condition.

      In November 1998, Seminis received notice from Monsanto of a complaint
filed by Pioneer Hi-Bred International, Inc. in the United States District Court
for the Southern District of Iowa against Asgrow Seed Company LLC. The complaint
alleges violations of the Lanham Act, misappropriation of trade secrets and
other common law causes of action. Monsanto claimed that indemnities provided by
Seminis to Monsanto in connection with Seminis' sale of the Asgrow agronomics
business to Monsanto covered the claims in Pioneer's complaint. Also in November
1998, Seminis provided notice to Pharmacia & Upjohn that in connection with
Seminis' acquisition of the Asgrow Seed Company and the subsequent sale of the
Asgrow agronomics business Upjohn agreed to indemnify Seminis and Monsanto in
connection with the matters asserted in Pioneer's complaint. Seminis is
currently investigating this matter and is in discussion with Pharmacia & Upjohn
and Monsanto. Seminis does not believe that it has any material exposure in
connection with this matter.

      As part of the formation of LSL PlantScience, LSL Biotechnologies
contributed certain agreements between LSL Biotechnologies and a third party.
These agreements contain provisions that permanently restrict the third party
from engaging in the development or marketing of open field tomato seeds having
long-shelf-life characteristics in certain areas in the world, including North
America. In addition, these agreements restrict the third party from engaging in
the production of such seeds until the year 2000. Seminis understands that the
staff of the Antitrust Division of the United States Department of Justice has
informed LSL Biotechnologies' counsel that the Department of Justice staff has
recommended the filing of a complaint against LSL Biotechnologies to ask a court
to delete the restrictive provisions in those agreements. Seminis believes that
there will not be a material impact upon its business if the Department of
Justice is successful in deleting the restrictive covenants.

                                       47
<PAGE>   49

                                   MANAGEMENT

                        DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth information with respect to the directors
and executive officers of Seminis as of May 1, 1999.

<TABLE>
<CAPTION>
NAME                                  AGE                        TITLE
- ----                                  ---                        -----
<S>                                   <C>    <C>
Alfonso Romo Garza..................  48     Director and Chairman of the Board
Alejandro Rodriguez Graue...........  48     Director, President and Chief Operating
                                             Officer
Francisco Gonzalez Sebastia.........  67     Director
Bernardo Jimenez Barrera............  46     Director
G. Carl Ball........................  77     Director
George Carl Ball, Jr................  47     Director
Dr. Peter Davis.....................  55     Director
Timothy M. George...................  46     Director
Frank J. Pipp.......................  73     Director
Dr. Eli Shlifer.....................  68     Director
Eugenio Najera Solorzano............  51     Director
Christopher J. Steffen..............  57     Director
Octavio Hernandez...................  45     Vice President and Chief Financial Officer
Dr. Allen Stevens...................  63     Vice President -- Research and Development
Jordi Majo..........................  48     Vice President -- Europe, Middle East, and
                                             North Africa, Sales
James H. Hulbert....................  44     Vice President -- North America
Dr. Mark D. Stowers.................  42     Vice President -- Business Development
</TABLE>

      ALFONSO ROMO GARZA has been the Chairman of the Board of Seminis since
October 1995. Mr. Romo has been Chief Executive Officer of Pulsar Internacional,
S.A. de C.V., an affiliate of Savia, since 1984. Mr. Romo has also been the
Chairman of the Board and Chief Executive Officer of Savia since 1988, the
Chairman of the Board and Chief Executive Officer of Seguros Comercial America,
S.A. de C.V., a majority owned subsidiary of Savia, since 1989 and the Chairman
of the Board of Empaques Ponderosa, S.A. de C.V., a majority owned subsidiary of
Savia, since 1995. Mr. Romo is a director of Cementos Mexicanos, S.A. de C.V.

      ALEJANDRO RODRIGUEZ GRAUE has been a director of Seminis since May 1998.
Mr. Rodriguez has been President of Seminis since February 1999. Mr. Rodriguez
has been President and Chief Operating Officer of Seminis Vegetable Seeds, Inc.,
a subsidiary of Seminis, since February 1997. From 1992 to 1997, Mr. Rodriguez
was the General Director (Chief Operating Officer) of Agro Industrias Moderna,
S.A. de C.V., a subsidiary of Savia.

      FRANCISCO GONZALEZ SEBASTIA has been a director of Seminis since October
1995. Mr. Gonzalez has served as an advisor to Savia since February 1997. From
October 1995 to February 1997, he served as the Chief Executive Officer of
Seminis. From January 1994 to October 1995, Mr. Gonzalez served as Chief
Executive Officer for the Agrobiotechnology Division of Savia. Mr. Gonzalez is a
director of Savia and Bionova Holding Corporation, a majority owned subsidiary
of Savia and an affiliate of Seminis.

      BERNARDO JIMENEZ BARRERA has been a director of Seminis since October
1995. Mr. Jimenez has been the Chief Executive Officer, Chairman of the Board
and a director of Bionova since October 1996. From October

                                       48
<PAGE>   50

1995 to October 1996, Mr. Jimenez was Chief Financial Officer of Savia. From
March 1993 to October 1995, Mr. Jimenez served as head of the Industrial Banking
Division of the Vector Group, a financial services company in Mexico which is
affiliated with Savia. Mr. Jimenez is a director of Savia.

      G. CARL BALL has been a director of Seminis since October 1995. Mr. Ball
was Chairman of the Board of Geo. J. Ball, Inc. from 1962 until its merger with
Seminis in October 1995. G. Carl Ball is the father of George C. Ball, Jr.

      GEORGE C. BALL, JR. has been a director of Seminis since October 1995. Mr.
Ball has been President of Burpee Holding Company since 1993. Mr. Ball was a
director of Geo J. Ball, Inc. from 1989 until its merger with Seminis in October
1995. Mr. Ball also served a two year term as Chairman of the Board of Petoseed.
George C. Ball, Jr. is the son of G. Carl Ball.

      DR. PETER DAVIS has been a director of Seminis since October 1995. From
1975 to 1994, Dr. Davis was a member of the faculty of the Wharton School of the
University of Pennsylvania. Dr. Davis has been President of the Family Business
Group Inc., a consulting firm specializing in strategic issues for closely-held
companies, since May 1986. Dr. Davis is a member of the executive committee of
Pulsar and a director of Bionova.

      TIMOTHY M. GEORGE has been a director of Seminis since May 1999. Mr.
George has been a Managing Director of Greenhill & Co., LLC since February 1997.
From August 1984 to February 1997, Mr. George served as a Managing Director of
Morgan Stanley Dean Witter, Inc. Mr. George also has a membership interest in
Greenhill & Co., LLC, which has been retained by Seminis to act as financial
advisor in connection with the offering.

      FRANK J. PIPP has been a director of Seminis since December 1995. Mr. Pipp
has been a consultant to Xerox Corporation since 1988. From 1980 to 1988, Mr.
Pipp was Corporate Officer, Group Vice President of Xerox responsible for
worldwide product development and manufacturing. Mr. Pipp is a director of
Advanced Hi-Tech, Inc., AAVID Thermal Technologies Inc. and Nypro, Inc.

      DR. ELI SHLIFER has been a director of Seminis since January 1997. Dr.
Shlifer is self employed and has served as a consultant for Pulsar for more than
five years. Dr. Shlifer is a director of Bionova.

      EUGENIO NAJERA SOLORZANO has been a director of Seminis since May 1998.
Since August 1997, Mr. Najera has been in charge of new business development at
Savia. From November 1992 to September 1997, Mr. Najera was the Chief Operating
Officer of Cigarrera La Moderna, S.A. de C.V. Mr. Najera is a director of Savia
and Bionova.

      CHRISTOPHER J. STEFFEN has been a director of Seminis since January 1997.
Since December 1996, Mr. Steffen has been a business consultant. From May 1993
to December 1996, Mr. Steffen was Vice Chairman and a director of Citicorp,
predecessor to CitiGroup, N.A. and its principal subsidiary, Citibank, N.A.

      OCTAVIO HERNANDEZ has been Vice President and Chief Financial Officer of
Seminis since April 1999. Mr. Hernandez served as Director of Business
Development of Seminis from October 1997 until the time he took his current
position. For more than three years prior to being with Seminis, Mr. Hernandez
was Director of Business Development for Savia, focusing on the agro-
biotechnology industry.

      DR. ALLEN STEVENS has been Vice President -- Research and Development of
Seminis since February 1999. Dr. Stevens has been Vice President of Research of
Seminis Vegetable Seeds since October 1995 when Petoseed was acquired as part of
Seminis' merger into Geo. J. Ball, Inc. Dr. Stevens joined Petoseed as Vice
President of Research in 1989.

      JORDI MAJO has been Vice President -- Europe, Middle East and North
Africa, Sales of Seminis Vegetable Seeds since October 1998. Mr. Majo served as
Vice President and General Manager, South Europe, Middle East and North Africa
from 1981 to 1998, General Manager of Petosluis Iberica from 1995 to

                                       49
<PAGE>   51

1996 and General Manager of Petoseed Iberica from 1981 to 1995.

      JAMES H. HULBERT has been Vice President -- North America of Seminis since
February 1999. Mr. Hulbert has also served as Vice President of Sales and
Marketing for the Americas and Strategic Planning of Seminis Vegetable Seeds
since 1996. From 1993 to 1996, Mr. Hulbert served as Vice President, Sales for
North America and Asia for Seminis and Petoseed which was acquired as part of
Seminis' merger into Geo. J. Ball, Inc.

      DR. MARK D. STOWERS has been Vice President -- Business Development of
Seminis since February 1999. From 1996 to 1999 Dr. Stowers was Vice President
World Wide Marketing of Seminis Vegetable Seeds. From 1995 to 1996, Dr. Stowers
served as Vice President of Operations and Information of Gargiulo, Inc., a
wholly-owned subsidiary of Monsanto. Dr. Stowers was Business Director/Business
Development Director for Monsanto Company from 1989 to 1995.

                    CLASSIFICATION OF THE BOARD OF DIRECTORS

      The board of directors is classified into three classes with each class
elected to a term of three years, except during an initial phase-in period. The
terms of Messrs. Gonzalez, Jimenez, Davis and Shlifer will expire at the 2000
annual meeting. The terms of Messrs. G. Carl Ball, George Carl Ball, Pipp and
Steffen will expire at the 2001 annual meeting. The terms of Messrs. Romo,
Najera, Rodriguez and George will expire at the 2002 annual meeting.

                      COMMITTEES OF THE BOARD OF DIRECTORS

      The board of directors has appointed an audit committee and a compensation
committee. The current members of the audit committee are Messrs. George, Pipp
and Steffen, with Mr. George serving as chairman of the committee. The audit
committee makes recommendations concerning the engagement of independent public
accountants, reviews the results of Seminis' annual audit and reviews with
Seminis' independent public accountants Seminis' internal controls and financial
management policies. The current members of the compensation committee are
Messrs. George, Pipp and Steffen, with Mr. George serving as chairman of the
committee. The compensation committee establishes Seminis' general compensation
and benefits policy and recommends to the board of directors compensation for
Seminis' officers and key employees.

                           COMPENSATION OF DIRECTORS

      Seminis anticipates that following the consummation of the offering,
Seminis' outside directors will be paid an annual board membership fee of
$25,000, a fee of $2,500 for each meeting of the board of directors attended and
a fee of $750 for each committee meeting attended. Committee chairmen will be
paid an additional annual fee of $2,000 and an additional fee of $250 for each
committee meeting attended. Outside directors will also be eligible to receive
options under the Seminis stock option plan.

                             EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

      The following table presents summary information concerning compensation
paid or accrued by Seminis for services rendered in all capacities during the
fiscal year ended September 30, 1998 for (1) the President and Chief Operating
Officer and (2) the four other most highly compensated executive officers of
Seminis who were serving at the end of fiscal 1998. Mr. Larkin retired from
Seminis in April 1999.

                                       50
<PAGE>   52

<TABLE>
<CAPTION>
                                                                                      LONG-TERM
                                                                                     COMPENSATION
                                                                                        AWARDS
                                                                                     ------------
                                                         ANNUAL COMPENSATION          SECURITIES
                                                    -----------------------------     UNDERLYING
NAME AND PRINCIPAL POSITION                         YEAR    SALARY($)    BONUS($)     OPTIONS(#)
- ---------------------------                         ----    ---------    --------    ------------
<S>                                                 <C>     <C>          <C>         <C>
Alejandro Rodriguez Graue.........................  1998     352,910      628,093          35,046
  President and Chief Operating Officer
James M. Larkin...................................  1998     249,933      201,940          13,476
  Vice President and Chief Financial Officer
Dr. Allen Stevens.................................  1998     222,848      107,182          15,251
  Vice President--Research and Development
James H. Hulbert..................................  1998     187,443      152,303          12,828
  Vice President--North America
Jordi Majo........................................  1998     194,947       99,551           8,095
  Vice President--Europe, Middle East and North
    Africa, Sales of Seminis Vegetable Seeds, a
    subsidiary of Seminis
</TABLE>

OPTIONS GRANTED IN FISCAL 1998

      The table below sets forth information regarding stock options granted
pursuant to the Seminis, Inc. 1998 Stock Option Plan during the fiscal year
ended September 30, 1998 to each of the named executive officers.

      The percent of total options granted to employees in the last fiscal year
is based on an aggregate of 267,181 options granted, net of forfeitures, to
employees in fiscal 1998, including options granted to the named executive
officers. The exercise price per share of each option was equal to the fair
market value of the Class A common stock on the date of the grant as determined
by the board of directors.

      Potential realizable values are computed by:

- - multiplying the number of shares of Class A common stock subject to a given
  option by the initial public offering price;

- - assuming that the aggregate stock value derived from that calculation
  compounds at the annual 5% or 10% rate shown in the table for the entire term
  of the option; and

- - subtracting from that result the aggregate option exercise price.

      The 5% and 10% assumed annual rates of stock price appreciation are
mandated by the rules of the Securities and Exchange Commission and do not
represent Seminis' estimate or projection of future Class A common stock prices.
Actual gain, if any, resulting from stock option exercises and Class A common
stock holdings are dependent on the future performance of the Class A common
stock, overall stock market conditions and the option holder's continued
employment with Seminis through the vesting period. There can be no assurance
that the amounts reflected in the table will be achieved.

                                       51
<PAGE>   53

<TABLE>
<CAPTION>
                                                                                                 POTENTIAL
                                                 INDIVIDUAL GRANTS                               REALIZABLE
                                      ----------------------------------------                VALUE AT ASSUMED
                                                     PERCENT OF                                 ANNUAL RATES
                                       NUMBER OF    TOTAL OPTIONS    EXERCISE                  OF STOCK PRICE
                                      SECURITIES     GRANTED TO      OR BASE                    APPRECIATION
                                      UNDERLYING      EMPLOYEES     PRICE PER                 FOR OPTION TERM
                                        OPTIONS        IN LAST        SHARE      EXPIRATION   ----------------
NAME                                  GRANTED(#)     FISCAL YEAR    ($/SHARE)       DATE      5%($)    10%($)
- ----                                  ----------    -------------   ---------    ----------   ------   ------
<S>                                   <C>           <C>             <C>          <C>          <C>      <C>
Alejandro Rodriguez Graue...........    35,046          13.1%         18.71       6/30/08     159,810  583,866
James M. Larkin.....................    13,476           5.0          18.71       6/30/08     61,451   224,510
Dr. Allen Stevens...................    15,251           5.7          18.71       6/30/08     69,545   254,082
James H. Hulbert....................    12,828           4.8          18.71       6/30/08     58,496   213,714
Jordi Majo..........................     8,095           3.0          18.71       6/30/08     36,913   134,863
</TABLE>

FISCAL 1998 YEAR END OPTION VALUES

      The following table sets forth information concerning unexercised options
held by the named executive officers as of September 30, 1998. Based on the
initial public offering price, none of the unexercised options are in-
the-money.

<TABLE>
<CAPTION>
                                              NUMBER OF SECURITIES              VALUE OF UNEXERCISED
                                             UNDERLYING UNEXERCISED             IN-THE-MONEY OPTIONS
                                          OPTIONS AT FISCAL YEAR END(#)         AT FISCAL YEAR END($)
                                          -----------------------------     -----------------------------
NAME                                      EXERCISABLE     UNEXERCISABLE     EXERCISABLE     UNEXERCISABLE
- ----                                      -----------     -------------     -----------     -------------
<S>                                       <C>             <C>               <C>             <C>
Alejandro Rodriguez Graue...............     8,762           26,284               --               --
James M. Larkin.........................     3,369           10,107               --               --
Dr. Allen Stevens.......................     3,813           11,438               --               --
James H. Hulbert........................     3,207            9,621               --               --
Jordi Majo..............................     2,024            6,071               --               --
</TABLE>

THE 1998 STOCK OPTION PLAN

      In early 1998, Seminis adopted a stock option plan, the Seminis, Inc. 1998
Stock Option Plan. The plan provides for the issuance of up to 3,677,150 shares
of Class A common stock pursuant to options granted to key employees. If any
options granted under the plan expire or terminate prior to exercise, the shares
subject to the portion of the option not exercised will be available for
subsequent grants. The number of shares and the exercise price per share of
Class A common stock that may be issued pursuant to outstanding stock options
will be subject to adjustment upon the occurrence of events described in the
plan. Individuals eligible for awards under the plan shall be key employees,
consultants, advisors and members of the board of directors or those who will
become key employees, consultants, advisors and members of the board of
directors of Seminis or any subsidiary.

      The plan is administered by the board of directors, or by a committee of
two or more directors of Seminis, as may be appointed by the board of directors.
The board of directors or the committee has broad powers to administer and
interpret the plan, including the authority:

      - to establish rules for the administration of the plan;

      - to select the participants in the plan;

      - to determine the types of awards to be granted and the number of shares
        covered by such awards; and

      - to set the terms and conditions of such awards.

                                       52
<PAGE>   54

All determinations and interpretations of the board of directors or the
committee are binding on all interested parties.

      Options granted under the plan may be either "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, or "nonqualified stock options" that do not qualify for special tax
treatment under Section 422 or similar provisions of the Internal Revenue Code.
No stock option may be granted with a per share exercise price less than the
fair market value, as defined below, of a share of the underlying Class A common
stock on the date the stock option is granted. Fair market value of a share of
Class A common stock for a particular day means the fair market value of a share
of Class A common stock, as determined in good faith by the board of directors
in its sole discretion, using the most recent prior annual valuation of Seminis,
as defined in the plan.

      In general, unless otherwise provided in the participant's award agreement
or employment agreement, stock options shall become exercisable in four equal
annual installments, commencing on the first anniversary of the date of the
grant. The terms of each option granted under the plan will expire ten years, or
five years for 10% stockholders, after the date immediately preceding the date
on which the option was granted. If a participant's employment with Seminis or
any subsidiary is terminated for cause, any then unexercised options shall be
forfeited and canceled by Seminis. If a participant's employment is terminated
without cause by Seminis or voluntarily by the participant, all options
exercisable on the date of termination may be exercised by the participant for
ninety and thirty days, respectively. If a participant dies or becomes disabled,
all stock options exercisable on the date of death or termination due to
disability may be exercised for six months thereafter. The board of directors
has discretion to lengthen these post-termination exercise periods. All
unexercisable stock options are forfeited upon termination of employment for any
reason. In addition, in the event a participant's employment is terminated for
any reason prior to the closing of the offering, all shares of Class A common
stock acquired by the participant are subject to the right of Seminis to buy
these shares within 270 days after any such employment termination.

      In general, awards under the plan may not be transferred by the
participant other than by will or the laws of distribution, and options may be
exercised, during the participant's lifetime, only by the participant. In
addition, prior to the closing of the offering, shares of Class A common stock
acquired upon the exercise of a stock option are transferable only to trust
arrangements established for the benefit of a participant's immediate family
members. Notwithstanding the above, if Savia decides to sell all or
substantially all of its interest in Seminis to a third party, Savia can compel
a participant to sell the participant's Class A common stock to the third party
buyer on the same terms and conditions upon which Savia is selling its interest.

      The board of directors may terminate or amend the plan at any time except
that the terms of any option agreements then outstanding may not be materially
adversely affected without the consent of the individual.

      Currently, options to acquire approximately 267,181 shares of Class A
common stock have been awarded under the plan with an exercise price of $18.71
per share. Upon the closing of the offering, no additional awards will be made
under the plan on the terms described above. However, after the offering, awards
may be made pursuant to the plan, as amended, as described below.

                         THE AMENDED AND RESTATED PLAN

      Prior and subject to the closing of the offering, the board of directors
approved, and adopted, and Seminis adopted, amendments to and a restatement of
the stock option plan. The primary purposes of the amendment and restatement of
the plan were to eliminate provisions of the plan that would be inappropriate
for a publicly-held corporation, to qualify awards under the plan as "qualified
performance-based compensation" under Section 162(m) of the Internal Revenue
Code and to facilitate obtaining Securities Exchange Act Rule 16b-3 exemptions
for awards made
                                       53
<PAGE>   55

under the plan. The amended and restated plan will, after the closing of the
offering, be administered only by a committee of the board of directors
comprised of non-employee directors. The material terms of the amended and
restated plan are substantially similar to the terms of the plan prior to its
amendment and restatement, except that under the amended and restated plan:

- - The fair market value of the shares of Class A common stock will, in the
  normal course, no longer be determined by Seminis' board of directors on an
  annual basis or otherwise, but rather by reference to the closing price of the
  Class A common stock as reported for the Nasdaq National Market;

- - The amended and restated plan will be administered solely by an administrative
  committee of non-employee directors;

- - Annual maximum award limitations have been incorporated into the amended and
  restated plan precluding any participant from receiving stock options covering
  more than 750,000 shares of the Class A common stock in any one calendar year;

- - The administrative committee will have the discretion to award transferable
  stock options;

- - Seminis will no longer have the right to purchase from a terminated
  participant the Class A common stock acquired by such participant upon the
  exercise of a stock option;

- - The shares of Class A common stock acquired by a participant upon the exercise
  of a stock option will no longer be subject to any plan-based transfer or lock
  up restrictions;

- - Savia will no longer possess any rights to require a participant to sell his
  or her shares of Class A common stock acquired pursuant to the exercise of any
  stock option; and

- - In the event of a merger, reorganization or consolidation of Seminis, it will
  be able to elect to redeem unexercised stock options in exchange for a cash
  payment equal to the excess, if any, of the fair market value of the shares
  underlying the stock options over the aggregate exercise price of the stock
  options.

                                       54
<PAGE>   56

                             PRINCIPAL STOCKHOLDERS

      The table below sets forth information regarding the beneficial ownership
of common stock, as of the date of this prospectus, by each of Seminis'
directors, the President and Chief Operating Officer and the other named
executive officers, each person known to Seminis to own beneficially more than
5% of the outstanding shares of common stock, and all directors and executive
officers of Seminis as a group.

      As of the date of this prospectus, there are no shares of Class A common
stock outstanding. The number of shares of Class A common stock reflect options
that are exercisable within 60 days of the date of this prospectus, and the
calculation of percentage beneficial ownership of Class A common stock assumes
the exercise of these options only by the respective named stockholder.

      The calculation of percentage beneficial ownership of Class B common stock
is based on 46,074,386 shares of Class B common stock outstanding prior to the
offering. In addition, the number of shares of Class B common stock for each
person in the table assumes such persons do not convert any Class B common stock
into Class A common stock. The number of shares beneficially owned by Alfonso
Romo Garza includes shares beneficially owned by Savia and other entities
controlled by Mr. Romo as well as shares directly owned by Mr. Romo. The number
of shares beneficially owned by Savia includes shares beneficially owned by
entities controlled by Savia as well as shares directly owned by Savia. As of
the date of this prospectus, Seminis had no holders of Class A common stock and
18 holders of Class B common stock.

      The persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as those beneficially owned by them.

<TABLE>
<CAPTION>
                                                     CLASS A              CLASS B                 TOTAL
                                                   COMMON STOCK         COMMON STOCK           COMMON STOCK
                                                 ----------------   --------------------   --------------------
     NAME AND ADDRESS OF BENEFICIAL OWNERS       NUMBER   PERCENT     NUMBER     PERCENT     NUMBER     PERCENT
     -------------------------------------       ------   -------     ------     -------     ------     -------
<S>                                              <C>      <C>       <C>          <C>       <C>          <C>
Alfonso Romo Garza.............................      --      --%    42,823,515    92.9%    42,823,515    92.9%
  Chairman of the Board and Director
  c/o Pulsar International, S.A. de C.V
  Ave. Roble No. 300
  Torre Alta
  Col. Valle del Campestre
  66265 Garza Garcia, N.L. Mexico
Savia, S.A. de C.V. ...........................      --      --     40,615,619    88.2     40,615,619    88.2
  Av. Batallon de San Patricio
  No. 111-40 Piso
  Colonia Valle Oriente
  66269 San Pedro, Garza Garcia, N.L
G. Carl Ball...................................      --      --      1,042,362     2.3      1,042,362     2.3
George C. Ball, Jr. ...........................      --      --        180,131       *        180,131       *
Francisco Gonzalez Sebastia....................      --      --             --      --             --      --
Bernardo Jimenez Barrera.......................      --      --             --      --             --      --
Dr. Peter Davis................................      --      --             --      --             --      --
Timothy M. George..............................      --      --             --      --             --      --
Frank J. Pipp..................................      --      --             --      --             --      --
Dr. Eli Shlifer................................      --      --             --      --             --      --
Eugenio Najera Solorzano.......................      --      --             --      --             --      --
Christopher J. Steffen.........................      --      --             --      --             --      --
Alejandro Rodriguez Graue......................   8,762   100.0             --       *          8,762       *
James M. Larkin................................   6,738   100.0             --       *          6,738       *
Dr. Allen Stevens..............................   3,813   100.0             --       *          3,813       *
James H. Hulbert...............................   3,207   100.0             --       *          3,207       *
Jordi Majo.....................................   2,024   100.0             --       *          2,024       *
All directors and executive officers of
  Seminis as a group (16 persons)..............  24,544   100.0     44,046,008    95.6     44,070,552    95.6
</TABLE>

- ---------------
* Less than 1%.

                                       55
<PAGE>   57

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Pursuant to an agreement between Seminis and Bionova, Seminis pays Bionova
a minimum fee of $2.5 million per year for access to the results of Bionova's
biotechnology research. This agreement will end pursuant to its terms on January
1, 2007. Savia is the majority stockholder in Bionova.

      In connection with the sale of the agronomic segment in fiscal 1997,
Seminis paid $8.0 million in fees to Savia for investment banking and other
professional fees and services provided in connection with the sale.

      Seminis paid management fees to Savia of $8.5 million in fiscal 1998 and
$6.2 million in fiscal 1997. This management fee was discontinued as of October
1, 1998.

      As part of the financing provided by Savia to Seminis in connection with
the acquisition of Hungnong, Savia loaned Seminis $35.9 million evidenced by a
subordinated convertible note bearing interest at a rate of 10% per annum,
payable quarterly, which was due in annual installments through July 2001. Savia
converted this note into 1,916,462 shares of Class B common stock on February 1,
1999.

      In December 1998, Savia made an equity investment in Seminis of $10.0
million in exchange for 1,000 shares of Class C preferred stock. Seminis issued
33.8 shares of Class C preferred stock as required dividend payments through
April 1, 1999. In March 1999, Savia made an additional equity investment in
Seminis of $20.0 million in exchange for 2,000 shares of Class C preferred
stock.

      In January 1999, Savia made an intercompany advance to Seminis of $20.0
million for working capital requirements. Of the advance, $7.7 million will be
repaid with the proceeds of the offering and Seminis' new credit agreement, and
the balance will be converted into shares of our Class C preferred stock.

      In March 1999, as part of a financing, Savia pledged as collateral shares
of Class B common stock it owns. These shares constitute 49% of the issued and
outstanding common stock of Seminis prior to the offering. Savia also placed
additional shares of Class B common stock into a trust, which shares constitute
2% of the issued and outstanding shares of common stock of Seminis prior to the
offering. Upon completion of the offering, Savia will be required to pledge, or
put into the trust, additional shares of Class B common stock that it owns to
maintain an aggregate collateral deposit of 51%.

                        SHARES ELIGIBLE FOR FUTURE SALE

      Upon completion of the offering, Seminis will have a total of 13,750,000
shares of Class A common stock outstanding. All shares of Class A common stock
sold in the offering will be freely tradable by persons other than "affiliates"
of Seminis without restriction under the Securities Act. All shares of Class B
common stock, and any shares of Class A common stock issued upon conversion of
shares of the Class B common stock or issued upon exercise of outstanding
options, will be "restricted" securities within the meaning of Rule 144 under
the Securities Act and may not be sold in the absence of registration under the
Securities Act unless an exemption from registration is available, including the
exemption provided by Rule 144.

      In general, under Rule 144 as currently in effect, beginning 90 days after
the offering, a person, or persons whose shares are aggregated, who has
beneficially owned "restricted" shares for at least one year, including a person
who may be deemed an affiliate of Seminis, is entitled to sell within any
three-month period a number of shares of Class A common stock that does not
exceed the greater of 1% of the then-outstanding shares of Class A common stock
of Seminis or the average weekly trading volume of the Class A common stock on
the Nasdaq National Market during the four calendar weeks preceding such sale.
Sales under Rule 144 are subject to restrictions relating to manner of sale,
notice and the availability of current public information about Seminis. A
person who is not an affiliate of Seminis and has not been such at any time
during the 90 days preceding a sale, and who

                                       56
<PAGE>   58

has beneficially owned "restricted" shares for at least two years, would be
entitled to sell such shares immediately following the offering without regard
to the volume limitations, manner of sale provisions or notice or other
requirements of Rule 144 of the Securities Act. However, the transfer agent may
require an opinion of counsel that a proposed sale of "restricted" shares comes
within the terms of Rule 144 of the Securities Act prior to effecting a transfer
of such shares. Such opinion would be provided by and at the cost of the
transferor.

      Seminis has agreed that it will not sell, offer to sell, contract to sell
or otherwise dispose of any shares of common stock or any securities convertible
into or exchangeable for shares of common stock, without the prior consent of
Goldman, Sachs & Co., for a period of 180 days from the date of this prospectus.
This agreement does not apply to options or shares issued pursuant to its
existing employee benefit plans. In addition, Seminis may issue shares of common
stock to fund future acquisitions, provided that the recipient enters into a
similar lock-up arrangement.

      Savia, the directors and executive officers of Seminis and other
stockholders holding in the aggregate 46,074,386 shares of common stock have
agreed that they will not dispose of or hedge any of Seminis' common stock or
any securities convertible into or exchangeable for shares of common stock for a
period of 180 days from the date of this prospectus, without the prior written
consent of Goldman, Sachs & Co. In addition, Savia may pledge additional shares
of common stock to the extent necessary to comply with its recent borrowings.
The other stockholders have agreed in a registration rights agreement between
them and Seminis that they will not sell publicly shares of common stock for 180
days from the date of this prospectus. See the "Underwriting" section for a
detailed description of these agreements.

                          DESCRIPTION OF CAPITAL STOCK

                                    GENERAL

      Seminis' certificate of incorporation provides that it has authority to
issue 10,000,000 shares of preferred stock, par value $.01 per share. Of these
10,000,000 shares, Seminis has authorized 25,000 shares of Class A mandatorily
redeemable preferred stock, 25,000 shares of Class B mandatorily redeemable
preferred stock and 6,000 shares of Class C preferred stock. For the remaining
9,944,000 shares of preferred stock reserved for issuance by Seminis, the board
of directors may fix the relative rights and preferences in a resolution of the
board of directors.

      Seminis' certificate of incorporation also provides that it has authority
to issue 158,000,000 shares of common stock, par value $.01 per share. The
common stock is divided into two classes, consisting of 91,000,000 shares of
Class A common stock and 67,000,000 shares of Class B common stock. Upon
consummation of the offering, 13,750,000 shares of Class A common stock,
46,074,386 shares of Class B common stock, 25,000 shares of Class B mandatorily
redeemable preferred stock and, after the conversion of $12.3 million of the
intercompany advance from Savia, 4,263.8 shares of Class C preferred stock will
be issued and outstanding.

                                  COMMON STOCK

VOTING RIGHTS

      Holders of Class B common stock are entitled to three votes per share and
holders of Class A common stock are entitled to one vote per share on all
matters submitted to a vote of stockholders. Class A common stock and Class B
common stock shall vote as a single class on all matters to be voted on by
Seminis' stockholders, including, without limitation, any consolidation or
merger of Seminis into or with any other corporation or the sale or transfer by
Seminis of all or substantially all of its assets. With the approval of a
majority of the shares of the Class B common stock, voting separately as a
class, Seminis may lower the number of votes per share each share of Class B
common stock shall be entitled to vote.

                                       57
<PAGE>   59

DIVIDENDS

      Holders of common stock are entitled to receive ratably dividends payable
in cash, in stock or otherwise if, as and when declared by the board of
directors out of assets legally available therefor, subject to any preferential
rights of any outstanding preferred stock.

CONVERSION RIGHTS

      Each share of Class B common stock shall automatically be converted into
one share of Class A common stock, without any action by Seminis or further
action by the holder thereof, upon the transfer of such share, other than the
following transfers:

- - to any other holder of Class B common stock or an affiliate of a holder of
  Class B common stock which holder is a "Business Organization," as defined in
  the certificate of incorporation;

- - to a trust for the sole benefit of a holder of Class B common stock who is a
  natural person;

- - to a spouse, sibling, parent, grandparent or descendant, whether natural or
  adopted, of a holder of Class B common stock;

- - to a trust for the sole benefit of a spouse, sibling, parent, grandparent or
  descendant, whether natural or adopted, of a holder of Class B common stock;

- - by will to a spouse, sibling, parent, grandparent or descendant, whether
  natural or adopted, of a holder of Class B common stock;

- - pursuant to the laws of descent and distribution to a spouse, sibling, parent,
  grandparent or descendant, whether natural or adopted, of a holder of Class B
  common stock;

- - to any charitable foundation or other organization qualified under Section
  501(c)(3) of the Internal Revenue Code of 1986, as amended; or

- - to Seminis.

      Each share of Class B common stock shall, at the option of the holder
thereof, be convertible into one share of Class A common stock at any time. For
purposes of this paragraph, "Affiliate" means, with respect to any Business
Organization, any natural person or Business Organization that, directly or
indirectly through one of more intermediaries, controls, or is controlled by, or
is under common control with, such Business Organization.

OTHER RIGHTS

      On liquidation, dissolution or winding up of Seminis, after payment in
full of the amounts required to be paid to the holders of any outstanding
preferred stock, all holders of common stock are entitled to receive ratably any
assets available for distribution to holders of shares of common stock after the
payment of all debts and other liabilities of Seminis. No shares of common stock
have preemptive rights to purchase additional shares of common stock. All the
outstanding shares of common stock are fully paid and nonassessable. The rights,
preferences and privileges of holders of common stock are, and the shares
offered by Seminis will be, subject to and may be adversely affected by the
rights of holders of outstanding preferred stock. All shares of Class A common
stock and Class B common stock which are acquired by Seminis shall be available
for reissuance by Seminis at any time.

                                PREFERRED STOCK

GENERALLY

      The board of directors of Seminis is authorized, subject to limitations
prescribed by law, without further stockholder approval, to issue from time to
time up to an aggregate of 10,000,000 shares of preferred stock, in one or more
series, and to determine or alter the designations, preferences, rights, and any
qualifications, limitations, or restrictions of the shares of each such series
thereof, including dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, including sinking fund provisions, redemption price
or prices, liquidation preferences and the number of shares constituting any
series or designations of such series. The exercise of this authority eliminates
delays associated with a stockholder vote in specific instances. The ability of
the board of directors to issue preferred stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes, could have
the effect of making it more difficult for a third party to acquire, or of
discouraging a third

                                       58
<PAGE>   60

party from acquiring, a majority of the outstanding voting stock of Seminis.

      The voting and other rights of the holders of common stock will be subject
to, and may be adversely affected by, the rights of holders of any preferred
stock that may be issued in the future.

CONVERSION

      Upon consummation of the offering, the Class A mandatorily redeemable
preferred stock will automatically convert to Class B mandatorily redeemable
preferred stock. Except for the issuance of Class B mandatorily redeemable
preferred stock resulting from this automatic conversion, Seminis has no plans
to issue any shares of preferred stock. See "Use of Proceeds."

DIVIDENDS

      The Class A mandatorily redeemable preferred stock and the Class B
mandatorily redeemable preferred stock will accrue dividends at a rate of 8% per
annum and shall be paid on the first day of January, April, July and October of
each year. The Class C preferred stock will accrue dividends at a rate of 10%
per annum and shall be paid on the first day of January, April, July and October
of each year, except that each quarterly payment until and including the
quarterly payment due January 2001 shall be paid by issuing additional shares of
Class C preferred stock.

REDEMPTION

      The Class A mandatorily redeemable preferred stock and the Class B
mandatorily redeemable preferred stock may be redeemed, at the option of
Seminis, at any time after the completion of the offering. On the earlier of
October 1, 2005 or the date of a "Company Sale," as defined in the certificate
of designations setting forth the terms of the Class A and Class B preferred
stock, Seminis shall be required to redeem all of the outstanding shares of
Class A and Class B mandatorily redeemable preferred stock. The Class C
preferred stock may be redeemed, at any time, at the option of Seminis.

  ANTI-TAKEOVER EFFECTS OF CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS

      Provisions of the certificate of incorporation and by-laws could
discourage potential acquisition proposals and could delay or prevent a change
in control of Seminis. These provisions are intended to enhance the likelihood
of continuity and stability in the composition of the board of directors and in
the policies formulated by the board of directors and to discourage types of
transactions that may involve an actual or threatened change of control of
Seminis.

BOARD OF DIRECTORS

      The certificate of incorporation and by-laws of Seminis provide that the
number of directors be fixed by a board of directors resolution and that the
board of directors be divided into three classes of directors, with the classes
to be as nearly equal in number of directors as possible and each class to be
elected to a term of three years, except that during the initial phase-in
period, one class shall be initially elected for a term expiring at the 2000
annual meeting, one class shall be initially elected for a term expiring at the
2001 annual meeting and one class shall be initially elected for a term expiring
at the 2002 meeting. At each annual meeting of stockholders, the class of
directors to be elected at such meeting will be elected for a three-year term
and the directors in the other classes will continue in office.

      The classification of directors has the effect of making it more difficult
to change the composition of the board of directors. At least two annual
meetings of stockholders, instead of one, generally will be required to effect a
change in the majority of the board of directors. A director may be removed only
for cause by the vote of holders of at least a majority of the votes cast by the
holders of capital stock of Seminis entitled to vote generally in the election
of directors, voting together as a single class.

      The by-laws of Seminis provide that a vacancy in the board of directors
occurring from an increase in the number of directors or otherwise may be filled
by the vote of a majority of directors then in office, though less than a
quorum. This precludes a third party or a majority stockholder from removing

                                       59
<PAGE>   61

incumbent directors without cause and simultaneously gaining control of the
board of directors by filling, with its own nominees, the vacancies created by
removal.

STOCKHOLDER ACTION AND SPECIAL MEETINGS

      The certificate of incorporation provides that all stockholder action must
be effected at a duly called meeting. The certificate of incorporation also does
not permit stockholders of Seminis to call special meetings of stockholders.

ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

      The by-laws establish an advance notice procedure for the nomination,
other than by or at the direction of the board of directors or a committee
thereof, of candidates for election as directors as well as for other
stockholder proposals to be considered at stockholders' meetings. A notice
regarding any nomination must contain, as to each nominee, all information
relating to such person that is required to be disclosed in solicitations of
proxies for the election of directors, or that is otherwise required, in each
case pursuant to Regulation 14A of the Securities Exchange Act of 1934,
including each such person's written consent to serving as a director if
elected. A notice regarding any business, including nomination of directors, to
be brought before an annual meeting must contain the following:

- - a brief description of the business desired to be brought before the annual
  meeting and the reasons for conducting such business at the annual meeting;

- - the name and address of the stockholder proposing such business;

- - the class and number of shares of Seminis' stock beneficially owned by the
  stockholder; and

- - any material interest of the stockholder in such business.

      Although the notice provisions do not give the board of directors any
power to approve or disapprove stockholders' nominations or proposals for action
by Seminis, they may have the effect of precluding a contest for the election of
directors or the consideration of stockholder proposals if the procedures
established by the by-laws of Seminis are not followed and of discouraging or
deterring a third party from conducting a solicitation of proxies to elect its
own slate of directors or to approve its proposal, without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to
Seminis and its stockholders. The purpose of requiring advance notice is to
afford the board of directors an opportunity to consider the qualifications of
the proposed nominees or the merits of other stockholder proposals and, to the
extent deemed necessary or desirable by the board of directors, to inform
stockholders about those matters.

STOCKHOLDER RIGHTS

      The certificate of incorporation authorizes the board of directors to
create and issue, whether or not in connection with the issuance and sale of any
of its securities or property, rights entitling the holders thereof to purchase
securities of Seminis or any other corporation. The times at which and the terms
upon which such rights are to be issued are to be determined by the board of
directors and set forth in the contracts or other instruments that evidence such
rights. The authority of the board of directors with respect to such rights
shall include, without limitation, the determination of the initial purchase
price, the times and circumstances under which such rights may be exercised,
provisions denying holders of a specified percentage of the outstanding capital
stock of Seminis the right to exercise such rights and provisions to permit
Seminis to redeem or exchange such rights. This provision in the certificate of
incorporation could have the effect of discouraging third parties from seeking,
or impairing their ability to seek, to acquire a significant portion of the
outstanding securities of Seminis, to engage in any transaction which might
result in a change of control of Seminis or to enter into any agreement,
arrangement or understanding with another party to accomplish the foregoing or
for the purpose of acquiring, holding, voting or disposing of any securities of
Seminis.

                                       60
<PAGE>   62

                           DELAWARE TAKEOVER STATUTE

      Seminis is subject to Section 203 of the General Corporation Law of
Delaware which, subject to exceptions, prohibits a Delaware corporation from
engaging in any "business combination" with any "interested stockholder" for a
period of three years following the time that such stockholder became an
interested stockholder, unless:

- - prior to such time, the board of directors of the corporation approved either
  the business combination or the transaction which resulted in the stockholder
  becoming an interested stockholder;

- - upon consummation of the transaction which resulted in the stockholder
  becoming an interested stockholder, the interested stockholder owned at least
  85% of the voting stock of the corporation outstanding at the time the
  transaction commenced, excluding for purposes of determining the number of
  shares outstanding those shares owned by persons who are directors and also
  officers, and by employee stock plans in which employee participants do not
  have the right to determine confidentially whether shares held subject to the
  plan will be tendered in a tender or exchange offer; or

- - at or subsequent to such time, the business combination is approved by the
  board of directors and authorized at an annual or special meeting of
  stockholders, and not by written consent, by the affirmative vote of at least
  66 2/3% of the outstanding voting stock which is not owned by the interested
  stockholder.

      In general, Section 203 defines as interested stockholder as (x) any
entity or person beneficially owning 15% or more of the outstanding voting stock
of the corporation and (y) any affiliate or associate of the corporation that
beneficially owned 15% or more of the outstanding voting stock of the
corporation at any time within the three year period immediately prior to the
date on which it is sought to determine whether such person or entity is an
interested stockholder. Section 203 defines business combination generally to
include:

- - any merger or consolidation involving the corporation and the interested
  stockholder;

- - any sale, transfer, pledge or other disposition involving the interested
  stockholder of 10% or more of the assets of the corporation;

- - subject to exceptions, any transaction which results in the issuance or
  transfer by the corporation of any stock of the corporation to the interested
  stockholder;

- - any transaction involving the corporation which has the effect of increasing
  the proportionate share of the stock of any class or series of the corporation
  beneficially owned by the interested stockholder; or

- - the receipt by the interested stockholder of the benefit of any loans,
  advances, guarantees, pledges or other financial benefits provided by or
  through the corporation.

                              REGISTRATION RIGHTS

      Pursuant to the Registration Rights Agreement, dated as of October 1,
1995, by and among Seminis and some of its stockholders, if Seminis, at any time
up to the fifth anniversary of such date, proposes to register any of its
securities under the Securities Act solely for its own account, such
stockholders will be entitled, subject to limitations and restrictions, to
include in such registration, on no more than four occasions, up to 3,894,500
shares of common stock held by such stockholders. Seminis will be required to
bear all registration and selling expenses, except for underwriting discounts,
selling expenses and fees and expenses of counsel representing the registering
stockholders, in connection with such registrations. The stockholders who are
parties to the registration rights agreement are prohibited from making,
entering into or participating in a public sale or distribution of common stock
for 180 days following the offering. The foregoing registration rights are
transferable and may be amended or waived only with the written consent of
Seminis, Savia and a representative of the stockholders holding common stock
subject to the registration rights agreement.

                       LIMITATION ON DIRECTORS' LIABILITY

      Seminis' certificate of incorporation contains a provision which limits
the personal

                                       61
<PAGE>   63

liability of each of Seminis' directors for monetary damages for breaches of
fiduciary duty as a director to Seminis or its stockholders, except for
liability of a director for the following:

- - breach of the duty of loyalty to Seminis or its stockholders;

- - acts or omissions not in good faith or involving intentional misconduct or a
  knowing violation of law;

- - any transaction from which the director derived an improper personal benefit;
  or

- - under Section 174 of the Delaware General Corporation Law, which relates to
  unlawful payments of dividends or unlawful stock purchases or redemptions.

      The inclusion of this provision in the certificate of incorporation may
have the effect of reducing the likelihood of derivative litigation against
directors, and may discourage or deter stockholders or management from bringing
a lawsuit against directors for breach of their duty of care, even though such
an action, if successful, might otherwise have benefited Seminis and its
stockholders. Seminis' by-laws also contain provisions indemnifying its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law. Management believes that these provisions will assist Seminis
in attracting and retaining qualified individuals to serve as directors.

                         INDEMNIFICATION AND INSURANCE

      The by-laws provide that Seminis will indemnify each person who was or is
made a party or threatened to be made a party to or is otherwise involved in any
action, suit or proceeding whether civil, criminal, administrative or
investigative, by reason of the fact that he or she or a person of whom he or
she is the legal representative is or was a director or an officer of Seminis,
to the fullest extent allowed by the Delaware General Corporation Law. This
right of indemnification shall include the right to be paid by Seminis the
expenses, including attorneys' fees, incurred in defending any such proceeding
in advance of its final disposition. However, if Delaware law so requires, the
advancement of such expenses will only be made upon the delivery to Seminis of
an undertaking by or on behalf of such person to repay all amounts so advanced
if it shall ultimately be determined by final judicial decision, from which
there is no further right to appeal, that such person is not entitled to be
indemnified for such expenses by Seminis.

      In addition, the by-laws provide that Seminis may maintain insurance to
protect itself and any director, officer, employee or agent of Seminis against
any expense, liability or loss, whether or not Seminis would have the power to
indemnify a person against any expense, liability or loss under Delaware law.
The by-laws further provide that Seminis may, to the extent permitted by the
board of directors, grant rights to indemnification, and rights to advancement
to expenses, to any employee or agent of Seminis. Seminis has obtained insurance
through Savia for the benefit of Seminis' officers and directors insuring such
persons against liabilities, including liabilities under the securities laws.

      Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
Seminis pursuant to the foregoing provisions, Seminis has been informed that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.

                                    LISTING

      The shares of Class A common stock have been approved for listing, subject
to official notice of issuance, on the Nasdaq National Market under the symbol
"SMNS."

                                 TRANSFER AGENT

      The transfer agent and registrar for the Class A common stock is American
Stock Transfer & Trust Company.

                                       62
<PAGE>   64

                                 LEGAL MATTERS

      The validity of the Class A common stock offered hereby will be passed
upon for Seminis by Milbank, Tweed, Hadley & McCloy LLP, New York, New York.
Howard S. Kelberg is a partner in the firm of Milbank, Tweed, Hadley & McCloy
LLP and is Secretary to Seminis since 1995. Legal matters in connection with the
offering will be passed upon for the underwriters by Cahill Gordon & Reindel, a
partnership including a professional corporation, New York, New York.

                                    EXPERTS

      The consolidated financial statements of Seminis, Inc. as of September 30,
1997 and 1998 and for each of the three years in the period ended September 30,
1998 included in this prospectus have been so included in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.

      The consolidated financial statements of Hungnong Seed Co., Ltd. as of
December 31, 1997 and for the year then ended included in this prospectus have
been so included in reliance on the report of Seonjin Accounting Corporation,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

                             AVAILABLE INFORMATION

      Seminis has filed with the Securities and Exchange Commission, or the SEC,
a registration statement on Form S-1 for the Class A common stock being offered
by this prospectus. This prospectus does not contain all of the information set
forth in the registration statement and its exhibits and schedules. For more
information regarding Seminis and the shares of Class A common stock offered by
this prospectus, read the registration statement, including the exhibits and
schedules. Statements contained in this prospectus as to the contents of any
contract or other document are not necessarily complete. For each contract which
is an exhibit to the registration statement, any statement regarding such
contract is qualified by the provisions of such exhibit. Interested persons may
read the registration statement and any other document Seminis may file with the
SEC at the SEC's Public Reference Section, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and the SEC's Regional Offices located at 500 West
Madison Street, Suite 1400, Chicago, IL and 7 World Trade Center, 13th Floor,
New York, NY 10048 or on the Internet at http://www.sec.gov. Copies of all or a
portion of the registration statement can be obtained from the Public Reference
Section of the SEC upon payment of a prescribed fee.

      As a result of the offering, Seminis will become subject to the
information and reporting requirements of the Securities Exchange Act of 1934,
as amended. Seminis will fulfill its obligations with respect to those
requirements by filing periodic reports, proxy statements and other information
with the SEC. Upon approval of the Class A common stock for listing on the
Nasdaq National Market, such reports, proxy and information statements and other
information concerning Seminis may also be inspected at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C. 20006.

      We intend to furnish our stockholders with annual reports containing
audited financial statements and quarterly reports containing unaudited interim
financial information for the first three fiscal quarters of each fiscal year.

                                       63
<PAGE>   65

                                 SEMINIS, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              -----
<S>                                                           <C>
SEMINIS, INC.
Report of Independent Accountants...........................    F-2
Consolidated Balance Sheets as of September 30, 1997 and
  1998, and March 31, 1999..................................    F-3
Consolidated Statements of Operations for the Years Ended
  September 30, 1996, 1997 and 1998 and for the six months
  ended March 31, 1998 and 1999.............................    F-5
Consolidated Statements of Stockholders' Equity for the
  Years Ended September 30, 1996, 1997 and 1998 and for the
  six months ended March 31, 1999...........................    F-6
Consolidated Statements of Cash Flows for the Years Ended
  September 30, 1996, 1997 and 1998 and for the six months
  ended March 31, 1998 and 1999.............................    F-7
Notes to Consolidated Financial Statements..................    F-8

HUNGNONG SEED CO., LTD.
Report of Independent Accountants...........................   F-28
Consolidated Balance Sheet as of December 31, 1997..........   F-29
Consolidated Statements of Operations for the Year Ended
  December 31, 1997 and the Six Months Ended June 30, 1998
  (unaudited)...............................................   F-30
Consolidated Statements of Stockholders' Deficit for the
  Year Ended December 31, 1997..............................   F-31
Consolidated Statements of Cash Flows for the Year Ended
  December 31, 1997 and the Six Months Ended June 30, 1998
  (unaudited)...............................................   F-32
Notes to Consolidated Financial Statements..................   F-33

PRO FORMA FINANCIAL DATA
Unaudited Pro Forma Consolidated Statement of Operations for
  the Year Ended September 30, 1998.........................   F-39
</TABLE>

                                       F-1
<PAGE>   66

                       REPORT OF INDEPENDENT ACCOUNTANTS

    To the Board of Directors and
    Stockholders of Seminis, Inc.

    In our opinion, the accompanying consolidated balance sheets and the related
    consolidated statements of operations, of stockholders' equity and of cash
    flows present fairly, in all material respects, the financial position of
    Seminis, Inc. and its subsidiaries at September 30, 1997 and 1998, and the
    results of their operations and their cash flows for each of the three years
    in the period ended September 30, 1998, in conformity with generally
    accepted accounting principles. These financial statements are the
    responsibility of the Company's management; our responsibility is to express
    an opinion on these financial statements based on our audits. We conducted
    our audits of these statements in accordance with generally accepted
    auditing standards which require that we plan and perform the audit to
    obtain reasonable assurance about whether the financial statements are free
    of material misstatement. An audit includes examining, on a test basis,
    evidence supporting the amounts and disclosures in the financial statements,
    assessing the accounting principles used and significant estimates made by
    management, and evaluating the overall financial statement presentation. We
    believe that our audits provide a reasonable basis for the opinion expressed
    above.

    PRICEWATERHOUSECOOPERS LLP

    Los Angeles, California
    December 18, 1998, except as to Note 16,
    which is as of June 25, 1999

                                       F-2
<PAGE>   67

                                 SEMINIS, INC.

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              AS OF SEPTEMBER 30,       AS OF       PRO FORMA AS OF
                                                              -------------------     MARCH 31,        MARCH 31,
                                                                1997       1998          1999             1999
                                                                ----       ----       ---------     ---------------
                                                                                     (unaudited)      (unaudited)
                                                                      (in thousands, except per share data)
<S>                                                           <C>        <C>         <C>            <C>
ASSETS:
Current assets
  Cash and cash equivalents.................................  $ 30,271   $  28,895    $  28,213        $  28,213
  Accounts receivable, less allowance for doubtful accounts
    of $8,116, $12,451 and $13,691, respectively............   109,013     134,701      204,927          204,927
  Inventories...............................................   162,145     245,319      269,769          269,769
  Current maturities from Young Il Chemical Company note....        --       7,000        7,000            7,000
  Refundable income taxes...................................     8,457       4,376        2,335            2,335
  Prepaid expenses and other current assets.................     2,547       5,024        4,870            4,870
                                                              --------   ---------    ---------        ---------
        Total current assets................................   312,433     425,315      517,114          517,114
Note receivable from Young Il Chemical Company..............        --      28,612       28,612           28,612
Property, plant and equipment, net..........................   128,180     189,255      202,152          202,152
Intangible assets, net......................................    69,092     191,272      207,701          207,701
Other assets................................................     9,968      27,735       27,518           27,518
                                                              --------   ---------    ---------        ---------
                                                              $519,673   $ 862,189    $ 983,097        $ 983,097
                                                              ========   =========    =========        =========

LIABILITIES, MANDATORILY REDEEMABLE STOCK AND STOCKHOLDERS' EQUITY:
Current liabilities
  Demand note due bank......................................  $     --   $      --    $  10,000        $  10,000
  Short-term borrowings.....................................    12,631       6,819       16,869           16,869
  Intercompany advance from Savia...........................        --          --       20,000           20,000
  Current maturities of long-term debt......................     1,011      19,825       24,246           24,246
  Current maturities of convertible subordinated debt due
    Savia...................................................        --       7,000           --               --
  Accounts payable..........................................    47,517      41,049       42,358           42,358
  Accrued liabilities.......................................    50,482      78,525       69,040           69,040
                                                              --------   ---------    ---------        ---------
        Total current liabilities...........................   111,641     153,218      182,513          182,513
Long-term debt..............................................    80,331     394,446      442,572          442,572
Convertible subordinated debt due Savia.....................        --      28,857           --               --
Deferred income taxes.......................................    20,585      34,850       35,984           35,984
Minority interest in subsidiaries...........................       324      16,981       16,778           16,778
                                                              --------   ---------    ---------        ---------
        Total liabilities...................................   212,881     628,352      677,847          677,847
                                                              --------   ---------    ---------        ---------
Commitments and contingencies (Note 12)
Mandatorily Redeemable Stock
  Class A Redeemable Preferred Stock, $.01 par value; 25
    shares authorized; 25 shares issued and outstanding.....    25,000      25,000       25,000           25,000
  Class B Redeemable Preferred Stock, $.01 par value; 25
    shares authorized; none issued and outstanding..........        --          --           --               --
  Old Class B Redeemable Common Stock, $.01 par value;
    20,000 shares authorized as of September 30, 1997 and
    6,772 shares authorized as of September 30, 1998 and
    March 31, 1999; 18,091 shares issued and outstanding as
    of September 30, 1997, 6,772 shares issued and
    outstanding as of September 30, 1998 and March 31, 1999
    and none issued and outstanding on a pro forma basis....   122,111      48,416       49,940               --
                                                              --------   ---------    ---------        ---------
        Total mandatorily redeemable stock..................   147,111      73,416       74,940           25,000
                                                              --------   ---------    ---------        ---------
</TABLE>

                                       F-3
<PAGE>   68
                                 SEMINIS, INC.

                   CONSOLIDATED BALANCE SHEETS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                              AS OF SEPTEMBER 30,       AS OF       PRO FORMA AS OF
                                                              -------------------     MARCH 31,        MARCH 31,
                                                                1997       1998          1999             1999
                                                                ----       ----       ---------     ---------------
                                                                                     (unaudited)      (unaudited)
                                                                      (in thousands, except per share data)
<S>                                                           <C>        <C>         <C>            <C>
Stockholders' Equity
  Class C Preferred Stock, $.01 par value; no shares
    authorized as of September 30, 1997 and 0 shares
    authorized as of September 30, 1998 and 6 shares
    authorized as of March 31, 1999; no shares issued and
    outstanding as of September 30, 1997 and September 30,
    1998, 3 shares issued and outstanding as of March 31,
    1999 and on a pro forma basis...........................  $     --   $      --    $       1        $       1
  Class A Common Stock, $.01 par value; no shares authorized
    as of September 30, 1997, 91,000 shares authorized as of
    September 30, 1998 and March 31, 1999; none issued and
    outstanding.............................................        --          --           --               --
  Class B Common Stock, $.01 par value; 55,000 shares
    authorized as of September 30, 1997 and 60,229 shares
    authorized as of September 30, 1998; 30,000 shares
    issued and outstanding as of September 30, 1997, 37,386
    shares issued and outstanding as of September 30, 1998;
    39,302 shares issued and outstanding as of March 31,
    1999 and 46,074 shares issued and outstanding on a pro
    forma basis.............................................         1         374          393              461
  Additional paid-in capital................................   179,999     317,826      384,001          433,873
  Accumulated deficit.......................................   (11,072)   (144,439)    (143,215)        (143,215)
  Accumulated other comprehensive loss......................    (9,247)    (13,340)     (10,870)         (10,870)
                                                              --------   ---------    ---------        ---------
        Total stockholders' equity..........................   159,681     160,421      230,310          280,250
                                                              --------   ---------    ---------        ---------
                                                              $519,673   $ 862,189    $ 983,097        $ 983,097
                                                              ========   =========    =========        =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
                                       F-4
<PAGE>   69

                                 SEMINIS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                     FOR THE YEARS ENDED            FOR THE SIX MONTHS ENDED
                                                                        SEPTEMBER 30,                      MARCH 31,
                                                              ---------------------------------    --------------------------
                                                                1996        1997        1998          1998           1999
                                                                ----        ----        ----          ----           ----
                                                                                                   (unaudited)    (unaudited)
                                                                           (in thousands, except per share data)
<S>                                                           <C>         <C>         <C>          <C>            <C>
Net sales...................................................  $381,398    $379,544    $ 428,423     $ 222,339      $282,311
Cost of goods sold..........................................   214,131     150,107      162,806        84,658       106,611
                                                              --------    --------    ---------     ---------      --------
    Gross profit............................................   167,267     229,437      265,617       137,681       175,700
                                                              --------    --------    ---------     ---------      --------
Operating expenses
  Research and development expenses.........................    42,300      41,039       49,416        21,117        31,225
  Selling, general and administrative expenses..............   134,990     136,438      158,588        69,966       100,113
  Management fees paid to Savia.............................        --       6,200        8,465         4,422            --
  Amortization of intangible assets.........................    14,785      12,394       14,457         6,115        13,657
  Write-off of acquired research in-process.................    36,700          --           --            --            --
                                                              --------    --------    ---------     ---------      --------
        Total operating expenses............................   228,775     196,071      230,926       101,620       144,995
                                                              --------    --------    ---------     ---------      --------
Income (loss) from operations...............................   (61,508)     33,366       34,691        36,061        30,705
                                                              --------    --------    ---------     ---------      --------
Other income (expense)
  Interest income...........................................     1,147       1,177        1,952           325         2,580
  Interest expense..........................................   (25,222)    (11,714)     (29,034)       (9,607)      (26,264)
  Foreign currency gain (loss)..............................      (154)     (8,656)       3,205          (213)        1,665
  Minority interest.........................................      (630)         (9)        (219)          (36)       (1,544)
  Other, net................................................    (1,119)      1,000         (397)           54          (283)
                                                              --------    --------    ---------     ---------      --------
                                                               (25,978)    (18,202)     (24,493)       (9,477)      (23,846)
                                                              --------    --------    ---------     ---------      --------
Income (loss) from continuing operations before income
  taxes.....................................................   (87,486)     15,164       10,198        26,584         6,859
Income tax benefit (expense)................................    31,401      (3,839)      (3,436)       (9,272)       (2,773)
                                                              --------    --------    ---------     ---------      --------
Income (loss) from continuing operations....................   (56,085)     11,325        6,762        17,312         4,086
                                                              --------    --------    ---------     ---------      --------
Discontinued operations
  Income from operations (net of income tax of $3,960 and
    $1,558 for 1996 and 1997, respectively).................     6,060       2,542           --            --            --
  Gain on disposal (net of income tax of $29,602)...........        --      48,298           --            --            --
                                                              --------    --------    ---------     ---------      --------
                                                                 6,060      50,840           --            --            --
                                                              --------    --------    ---------     ---------      --------
Net income (loss)...........................................   (50,025)     62,165        6,762        17,312         4,086
Preferred stock dividends...................................    (2,000)     (2,000)      (2,000)       (1,000)       (1,338)
Accretion of Old Class B Redeemable Common Stock............    (6,333)     (7,236)      (3,840)       (1,708)       (1,524)
Excess of repurchase price over redemption value for
  repurchase of Old Class B Redeemable Common Stock.........        --          --     (134,289)     (134,289)           --
                                                              --------    --------    ---------     ---------      --------
Net income (loss) available for common stockholders.........  $(58,358)   $ 52,929    $(133,367)    $(119,685)     $  1,224
                                                              ========    ========    =========     =========      ========
Income (loss) available for common stockholders per common
  share, basic and diluted
    Income (loss) from continuing operations................  $  (2.15)   $   0.07    $   (4.23)    $   (3.99)     $   0.03
    Discontinued operations.................................      0.20        1.69           --            --            --
                                                              --------    --------    ---------     ---------      --------
    Net income (loss) available for common stockholders.....  $  (1.95)   $   1.76    $   (4.23)    $   (3.99)     $   0.03
                                                              ========    ========    =========     =========      ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.
                                       F-5
<PAGE>   70

                                 SEMINIS, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                      CLASS C           CLASS B                                    ACCUMULATED
                                  PREFERRED STOCK     COMMON STOCK     ADDITIONAL                     OTHER           TOTAL
                                  ---------------   ----------------    PAID-IN     ACCUMULATED   COMPREHENSIVE   STOCKHOLDERS'
                                  NUMBER   AMOUNT   NUMBER   AMOUNT     CAPITAL       DEFICIT         LOSS           EQUITY
                                  ------   ------   ------   ------    ----------   -----------   -------------   -------------
                                                                         (in thousands)
<S>                               <C>      <C>      <C>      <C>       <C>          <C>           <C>             <C>
Balance, September 30, 1995.....    --      $ --    30,000   $    1     $179,999     $  (5,643)     $   (116)       $ 174,241
Comprehensive loss
    Net loss....................    --        --       --        --           --       (50,025)           --          (50,025)
    Translation adjustment......    --        --       --        --           --            --        (3,111)          (3,111)
                                                                                                                    ---------
                                                                                                                      (53,136)
Dividends on Class A Redeemable
  Preferred Stock...............    --        --       --        --           --        (2,000)           --           (2,000)
Accretion of Old Class B
  Redeemable
  Common Stock..................    --        --       --        --           --        (6,333)           --           (6,333)
                                   ---      ----    ------   -------    --------     ---------      --------        ---------
    Balance, September 30,
      1996......................    --        --    30,000        1      179,999       (64,001)       (3,227)         112,772
                                                                                                                    ---------
Comprehensive income
    Net income..................    --        --       --        --           --        62,165            --           62,165
    Translation adjustment......    --        --       --        --           --            --        (6,020)          (6,020)
                                                                                                                    ---------
                                                                                                                       56,145
Dividends on Class A Redeemable
  Preferred Stock...............    --        --       --        --           --        (2,000)           --           (2,000)
Accretion of Old Class B
  Redeemable
  Common Stock..................    --        --       --        --           --        (7,236)           --           (7,236)
                                   ---      ----    ------   -------    --------     ---------      --------        ---------
    Balance, September 30,
      1997......................    --        --    30,000        1      179,999       (11,072)       (9,247)         159,681
                                                                                                                    ---------
Comprehensive income
    Net income..................    --        --       --        --           --         6,762            --            6,762
    Translation adjustment......    --        --       --        --           --            --        (4,093)          (4,093)
                                                                                                                    ---------
                                                                                                                        2,669
Dividends on Class A Redeemable
  Preferred Stock...............    --        --       --        --           --        (2,000)           --           (2,000)
Accretion of Old Class B
  Redeemable
  Common Stock..................    --        --       --        --           --        (3,840)           --           (3,840)
Excess of repurchase price over
  redemption value for
  repurchase of Old Class B
  Redeemable Common Stock.......    --        --       --        --           --      (134,289)           --         (134,289)
Increase in par value following
  stock split...................    --        --       --       299         (299)           --            --               --
Issuance of shares..............    --        --    7,386        74      138,126            --            --          138,200
                                   ---      ----    ------   -------    --------     ---------      --------        ---------
    Balance, September 30,
      1998......................    --        --    37,386      374      317,826      (144,439)      (13,340)         160,421
                                   ---      ----    ------   -------    --------     ---------      --------        ---------
Comprehensive income
    Net income..................    --        --       --        --           --         4,086            --            4,086
    Translation adjustment......    --        --       --        --           --            --         2,470            2,470
                                                                                                                    ---------
                                                                                                                        6,556
Dividends on Class C
    Preferred Stock.............    --        --       --        --          338          (338)           --               --
Dividends on Class A
    Redeemable Preferred
      Stock.....................    --        --       --        --           --        (1,000)           --           (1,000)
Accretion of Old Class B
    Redeemable Common Stock.....    --        --       --        --           --        (1,524)           --           (1,524)
Issuance of shares..............     3         1       --        --       29,999            --            --           30,000
Conversion of
    Subordinated Debt due
      Savia.....................    --        --    1,916        19       35,838            --            --           35,857
                                   ---      ----    ------   -------    --------     ---------      --------        ---------
    Balance, March 31, 1999.....     3      $  1    39,302   $  393     $384,001     $(143,215)     $(10,870)       $ 230,310
                                   ===      ====    ======   =======    ========     =========      ========        =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
                                       F-6
<PAGE>   71

                                 SEMINIS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                              FOR THE SIX MONTHS
                                                       FOR THE YEARS ENDED SEPTEMBER 30,        ENDED MARCH 31,
                                                       ---------------------------------   -------------------------
                                                         1996        1997        1998         1998          1999
                                                         ----        ----        ----         ----          ----
                                                                                           (unaudited)   (unaudited)
                                                                              (in thousands)
<S>                                                    <C>         <C>         <C>         <C>           <C>
Cash flows from operating activities:
  Net income (loss)..................................  $ (50,025)  $  62,165   $   6,762    $  17,312     $   4,086
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
    Depreciation and amortization....................     29,702      26,746      31,341       14,085        23,177
    Write-off of acquired research in process........     36,700          --          --           --            --
    Deferred income tax expense (benefit)............    (39,725)      5,521        (108)        (590)       (1,722)
    Net income from Agronomics Segment...............     (6,060)    (50,840)         --           --            --
    Unrealized foreign currency loss.................         --       8,653          --           --            --
    Other............................................      1,944      (1,562)      2,414          435         1,313
    Changes in assets and liabilities
      Accounts receivable............................     (4,696)    (11,907)        125      (50,164)      (74,910)
      Inventories....................................     49,181     (27,192)    (57,347)     (25,678)      (25,396)
      Prepaid expenses and other assets..............     (4,015)     (4,971)     (1,591)     (10,276)        1,059
      Current income taxes...........................     (9,453)     (4,528)      3,457       17,972         2,419
      Accounts payable...............................      6,041      11,746     (10,975)     (24,990)        2,274
      Other liabilities..............................      7,405     (16,794)        204       (5,750)       (9,608)
                                                       ---------   ---------   ---------    ---------     ---------
    Net cash provided by (used in) operating
      activities.....................................     16,999      (2,963)    (25,718)     (67,644)      (77,308)
                                                       ---------   ---------   ---------    ---------     ---------
Cash flows from investing activities:
  Purchases of fixed and intangible assets...........    (15,192)    (19,260)    (61,123)     (15,058)      (19,837)
  Proceeds from disposition of assets................      1,515       3,773         869           --           992
  Discontinued operations, Agronomics Segment........         --     196,475          --           --            --
  Net cash receipts from Agronomics Segment..........      3,344          --          --           --            --
  Acquisition of minority interests in
    subsidiaries.....................................     (8,500)     (7,669)         --           --            --
  Cash acquired in Ball Merger.......................     48,820          --          --           --            --
  Hungnong acquisition, net of cash acquired.........         --          --     (33,933)          --            --
  Loan to Young Il Chemical Company..................         --          --     (35,612)          --            --
  Choong Ang acquisition, net of cash acquired.......         --          --     (19,388)          --            --
  Pre-acquisition advances to acquired companies.....         --          --     (34,975)          --            --
  Agroceres acquisition, net of cash acquired........         --          --          --           --       (19,455)
  Exercise of Hungnong put option....................         --          --          --           --        (8,673)
  Other..............................................       (509)     (6,425)       (136)       1,216          (755)
                                                       ---------   ---------   ---------    ---------     ---------
    Net cash provided by (used in) investing
      activities.....................................     29,478     166,894    (184,298)     (13,842)      (47,728)
                                                       ---------   ---------   ---------    ---------     ---------
Cash flows from financing activities:
  Proceeds from long-term debt.......................    271,981     165,471     402,172      388,888        62,822
  Repayments of long-term debt.......................    (27,820)   (333,319)   (109,905)    (100,000)       (8,951)
  Repurchase of Old Class B Redeemable Common
    Stock............................................         --          --    (211,824)    (211,824)           --
  Demand note from bank..............................         --          --          --           --        10,000
  Net short-term borrowings (repayments).............   (303,502)        653     (44,048)      (8,561)       11,080
  Intercompany advance from Savia....................         --          --          --           --        20,000
  Preferred stock dividends..........................     (1,500)     (2,000)     (2,000)      (1,000)       (1,000)
  Subordinated loan from Savia.......................         --          --      35,857           --            --
  Issuance of Class B Common Stock...................         --          --     138,200           --            --
  Issuance of Class C Preferred Stock................         --          --          --           --        30,000
                                                       ---------   ---------   ---------    ---------     ---------
    Net cash provided by (used in) financing
      activities.....................................    (60,841)   (169,195)    208,452       67,503       123,951
                                                       ---------   ---------   ---------    ---------     ---------
Effect of exchange rate changes on cash..............     (1,710)     (3,382)        188         (360)          403
                                                       ---------   ---------   ---------    ---------     ---------
Decrease in cash and cash equivalents................    (16,074)     (8,646)     (1,376)     (14,343)         (682)
Cash and cash equivalents, beginning of period.......     54,991      38,917      30,271       30,271        28,895
                                                       ---------   ---------   ---------    ---------     ---------
Cash and cash equivalents, end of period.............  $  38,917   $  30,271   $  28,895    $  15,928     $  28,213
                                                       =========   =========   =========    =========     =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
                                       F-7
<PAGE>   72

                                 SEMINIS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

      Seminis, Inc. is the largest developer, producer and marketer of vegetable
and fruit seeds in the world. The Company is a majority-owned subsidiary of
Savia, S.A. de C.V. ("Savia") and effectively began operations when it purchased
Asgrow Seed Company ("Asgrow") in December 1994.

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

      The consolidated financial statements include the accounts of the Company
and its majority controlled and owned subsidiaries. Investments in
unconsolidated entities, representing ownership interests between 20% and 50%,
are accounted for using the equity method of accounting. All material
intercompany transactions and balances have been eliminated in consolidation.
Certain reclassifications have been made to prior years' financial statements to
conform to fiscal year 1998 presentation.

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the fiscal year, including estimates and assumptions related to
customer discounts and allowances. Actual results could differ from those
estimates.

INTERIM FINANCIAL INFORMATION

      Seminis generally operates on a thirteen week calendar closing on the
Friday closest to the natural calendar quarter. For convenience, all quarters
are described by their natural calendar dates. The accompanying unaudited
financial statements have been prepared in accordance with generally accepted
accounting principles and, in the opinion of management, reflect all adjustments
(consisting only of normal recurring adjustments) considered necessary to fairly
present the Company's financial position, results of operations and cash flows
for the periods presented. Information as of and for the six months ended March
31, 1998 and 1999 included in the footnotes is unaudited. The results of
operations for the six months ended March 31, 1999 are not necessarily
indicative of the results to be expected for any subsequent quarter or for the
year ending September 30, 1999.

REVENUE RECOGNITION

      Product sales are recognized upon shipment of goods and are reduced by
provisions for discounts and allowances based on the Company's historical
experience.

CASH AND CASH EQUIVALENTS

      The Company classifies as cash equivalents all highly liquid investments
purchased with an original maturity of three months or less. The Company invests
its excess cash in deposits with major international banks, in government
securities and in money market accounts with financial institutions. Such
investments are considered cash equivalents for purposes of reporting cash flows
and bear minimal risk.

ACCOUNTS RECEIVABLE

      Accounts receivable are valued net of reserves for bad debts, discounts
and allowances. Calculations of reserves are based on historical experience and
anticipated market conditions and are adjusted as management determines
necessary. The Company performs ongoing credit evaluations of its customers'
financial condition and generally does not require collateral. The Company's
diversified customer base limits the amount of credit exposure to any one
customer.

                                       F-8
<PAGE>   73
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

      No customer accounts for more than 10% of accounts receivable or sales.

INVENTORIES

      Inventories are stated at the lower of cost or estimated net realizable
value. Costs for substantially all inventories are determined using the
first-in, first-out ("FIFO") method and include the cost of materials, direct
labor and the applicable share of overhead costs. Unharvested crop-growing costs
are included as part of inventory and represent costs incurred to plant and
maintain seed crops which will be harvested during the subsequent fiscal year.
Inventories are periodically reviewed and reserves established for deteriorated,
excess and obsolete items.

PROPERTY, PLANT AND EQUIPMENT

      Property, plant and equipment are stated at cost. Provisions for
depreciation have been made using the straight-line and accelerated methods for
financial reporting purposes and accelerated methods for tax purposes. Estimated
useful lives generally range from 5 to 40 years for buildings and improvements
and from 3 to 20 years for machinery and equipment.

INTANGIBLE ASSETS

      Intangible assets consist of the excess of purchase price over the fair
market value of net assets acquired in purchase acquisitions, and the costs of
acquired germplasm patents and trademarks. Goodwill is amortized over 15 years
on a straight-line basis. The costs of acquired germplasm, patents and
trademarks are being amortized over 10 to 20 years on an accelerated basis.
Software costs and other intangibles are amortized over 3 to 5 years and 10
years, respectively, on straight-line bases.

CAPITALIZED SOFTWARE COSTS

      Costs of computer software developed and obtained for internal use are
capitalized and amortized over respective license periods or expected useful
lives, which range from three to five years. Capitalized computer software costs
include external direct costs for licenses and services, and payroll and
payroll-related costs for employees who are directly associated with developing
or installing such software.

IMPAIRMENT OF LONG-LIVED ASSETS

      The Company continually monitors its long-lived assets to determine
whether any impairment of these assets has occurred. In making such
determination, the Company evaluates the performance of the underlying
businesses, products and product lines. The Company recognizes impairment of
long-lived assets in the event the net book value of such assets exceeds the
future undiscounted cash flows attributable to such assets. No material
impairments have been experienced.

SEEDMEN'S ERRORS AND OMISSIONS

      The Company maintains third party seedmen's errors and omissions insurance
covering claims by growers for losses incurred as a result of seed quality or
errors arising in fulfilling customer orders. Such policies are subject to
annual renewal and revision and have coverage limits, deductibles and other
terms. Provisions are made for anticipated losses in excess of coverage amounts
provided by insurance based on historical experience and expected resolution.
The Company performs ongoing evaluations of such claims and adjusts reserves as
necessary to reflect expected settlements.

ACCRETION OF REDEMPTION OBLIGATION FOR REDEEMABLE COMMON STOCK

      Redeemable common stock is recorded at redemption value; annual accretion
of the redemption obligation is based on the terms

                                       F-9
<PAGE>   74
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

of the Shareholders' Agreement, dated as of October 1, 1995 by and among the
Company, Savia and certain of the Company's stockholders, and is charged
directly to accumulated deficit.

RESEARCH AND DEVELOPMENT EXPENSES

      Research and development costs are charged to operations as incurred.
Costs attributable to in-process research and development activities acquired in
a purchase transaction are written-off at the date of acquisition.

INCOME TAXES

      Deferred income taxes are determined using the liability method. A
deferred tax asset or liability is determined based on the difference between
the financial statement and tax basis of assets and liabilities as measured by
the enacted tax rates which will be in effect when these differences reverse.
Deferred tax expense is the result of changes in the asset and liability for
deferred taxes.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

      The financial statements of the Company's foreign subsidiaries are
generally measured using the local currency as the functional currency. Assets
and liabilities of these subsidiaries are translated at the rates of exchange at
the balance sheet date. Income and expense items are translated at average
quarterly rates of exchange prevailing during the fiscal year. The resultant
translation adjustments are included in accumulated other comprehensive loss as
a separate component of stockholders' equity. Gains and losses from foreign
currency transactions are included in the statement of operations.

      Subsidiaries operating in highly inflationary economies or primarily using
the United States dollar as their functional currency include gains and losses
from foreign currency transactions and balance sheet translation adjustments in
the statement of operations.

      The fiscal year 1997 foreign currency loss of $8,656 included in the
statement of operations was primarily due to the effect of exchange rate
fluctuations on the relative values of certain intercompany loans among the
Company's various operating subsidiaries.

FINANCIAL INSTRUMENTS

      The Company uses interest rate swap and collar agreements to manage
interest costs and risks associated with changing interest rates. Amounts
currently due to or from interest rate swap counterparties are recorded in
interest expense in the period in which they accrue. Counterparties to the
interest rate swap and collar agreements are major financial institutions.
Credit loss from counterparty non-performance is not anticipated.

      The Company's other financial instruments consist primarily of cash,
accounts receivable, notes receivable, accounts payable, accrued liabilities,
debt and mandatorily redeemable securities. These balances are carried in the
financial statements at amounts that approximate fair market value unless
separately disclosed in the Notes to Consolidated Financial Statements.

COMPREHENSIVE INCOME

      Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. For the Company, comprehensive income consists of its
reported net income or loss and the change in the foreign currency translation
adjustment during a period.

STOCK-BASED COMPENSATION

      The Company accounts for stock-based employee compensation arrangements in

                                      F-10
<PAGE>   75
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

accordance with the provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB No. 25"), and complies with the disclosure provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"). Under APB No. 25, compensation cost is
recognized based on the difference, if any, on the date of grant between the
fair market value of the Company's stock and the amount an employee must pay to
acquire the stock.

STOCK SPLIT

      In May 1998, the Company's board of directors approved a 500 for 1 stock
split for all common shares. All common share information set forth in the
consolidated financial statements and notes thereto has been restated to reflect
the stock split.

SUPPLEMENTARY CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                             FOR THE YEARS ENDED             FOR THE SIX MONTHS
                                                SEPTEMBER 30,                 ENDED MARCH 31,
                                        -----------------------------    --------------------------
                                         1996       1997       1998         1998           1999
                                         ----       ----       ----         ----           ----
                                                                         (unaudited)    (unaudited)
<S>                                     <C>        <C>        <C>        <C>            <C>
Cash paid for interest................  $23,876    $15,175    $21,590      $5,049         $30,178
Cash paid (refunded) for income
  taxes...............................   17,777      2,847         87      (8,110)          2,076
Supplemental non-cash transactions
  Issuance of preferred stock in
    payment of Class C Preferred Stock
    dividends.........................       --         --         --          --             338
</TABLE>

INCOME (LOSS) PER COMMON SHARE

      Income (loss) per common share has been computed pursuant to the
provisions of Statement of Financial Accounting Standards No. 128, "Earnings per
Share." Basic income (loss) per common share is computed by dividing income
(loss) available to common stockholders by the average number of common shares
outstanding during each period. Income (loss) available to common stockholders
represents reported net income less preferred dividend requirements, accretion
of redemption value for redeemable common stock, and the excess of the
repurchase price paid over the redemption value of mandatorily redeemable common
stock. Diluted income (loss) per common share reflects the potential dilution
that could occur if dilutive securities and other contracts were exercised or
converted into common stock or resulted in the issuance of common stock. The
following table provides a reconciliation of income (loss) from continuing
operations and sets forth the

                                      F-11
<PAGE>   76
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

computation for basic and diluted earnings
per share (before discontinued operations):

<TABLE>
<CAPTION>
                                                  FOR THE YEARS ENDED            FOR THE SIX MONTHS
                                                     SEPTEMBER 30,                 ENDED MARCH 31,
                                            -------------------------------   -------------------------
                                              1996       1997       1998         1998          1999
                                              ----       ----       ----         ----          ----
                                                                              (unaudited)   (unaudited)
<S>                                         <C>        <C>        <C>         <C>           <C>
NUMERATOR FOR BASIC AND DILUTED:
Income (loss) from continuing
  operations..............................  $(56,085)  $ 11,325   $   6,762    $  17,312     $  4,086
Preferred stock dividends.................    (2,000)    (2,000)     (2,000)      (1,000)      (1,338)
Accretion of Old Class B Redeemable Common
  Stock...................................    (6,333)    (7,236)     (3,840)      (1,708)      (1,524)
Excess of repurchase price over redemption
  value for repurchase of Old Class B
  Redeemable Common Stock.................        --         --    (134,289)    (134,289)          --
                                            --------   --------   ---------    ---------     --------
    Income (loss) from continuing
      operations available to common
      stockholders........................  $(64,418)  $  2,089   $(133,367)   $(119,685)    $  1,224
                                            ========   ========   =========    =========     ========
DENOMINATOR--SHARES:
Weighted average common shares outstanding
  (basic).................................    30,000     30,000      31,536       30,000       38,025
Add potential common shares:
  Old Class B Redeemable Common Stock.....    18,091     18,091       9,602       12,432        6,772
Less antidilutive effect of potential
  common shares...........................   (18,091)   (18,091)     (9,602)     (12,432)      (6,772)
                                            --------   --------   ---------    ---------     --------
    Weighted average common shares
      outstanding (diluted)...............    30,000     30,000      31,536       30,000       38,025
                                            ========   ========   =========    =========     ========
INCOME (LOSS) PER COMMON SHARE FROM
  CONTINUING OPERATIONS:
  Basic and diluted.......................  $  (2.15)  $   0.07   $   (4.23)   $   (3.99)    $   0.03
</TABLE>

RECENT ACCOUNTING PRONOUNCEMENTS

      In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 requires companies to
record derivatives on the balance sheet as assets or liabilities, measured at
fair market value. It also requires that gains or losses resulting from changes
in the values of those derivatives be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting. The Company is
required to adopt SFAS No. 133 for its fiscal year beginning October 1, 1999.
Management believes the adoption of SFAS No. 133 will not have a material impact
on the Company's consolidated financial position or results of operations.

NOTE 2--MERGERS AND ACQUISITIONS

PETOSEED CO, INC.

      On October 1, 1995, the Company acquired Petoseed Co, Inc. ("Petoseed")
through a tax-free merger (the "Merger") with George J. Ball, Inc. ("Ball"). As
part of the transaction, Seminis exchanged redeemable common and redeemable
preferred shares of Seminis for Ball's interest in Petoseed as described in Note
9. Following the Merger and exchange of stock, Savia owned approximately 62% of
Seminis and the Ball stockholders owned approximately 38%.

                                      F-12
<PAGE>   77
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

      The total purchase price ascribed to the transaction was approximately
$133,542 and was based on the fair market value of the securities exchanged
which consisted of the following:

<TABLE>
<S>                                                           <C>
Old Class B Redeemable Common Stock issued to Ball
  Stockholders..............................................  $108,542
Class A Redeemable Preferred Stock issued to Ball
  Stockholders..............................................    25,000
                                                              --------
          Total consideration...............................  $133,542
                                                              ========
</TABLE>

      The Merger was accounted for using the purchase method of accounting.
Accordingly, the purchase price was allocated to the net assets acquired based
on their estimated fair market values. The fair market value of the assets
acquired and liabilities assumed was $370,678 and $237,136, respectively.

      The results of operations of Petoseed have been combined with those of the
Company since the date of acquisition. Cost of sales for the year ended
September 30, 1996 includes costs in excess of historical value of $60,000
relating to the step-up of the Petoseed inventories. In addition, $36,700 of the
purchase price was allocated to in-process research and development projects
that had not reached technological feasibility and had no probable alternative
future uses; the Company expensed such amount at the date of the acquisition.

HUNGNONG SEED CO., LTD

      In July 1998, the Company acquired newly and previously issued common
stock of Hungnong Seed Co., Ltd. ("Hungnong"), a South Korean vegetable seed
company, representing a 70% ownership interest, for $120,620. The acquisition
was funded by capital contributions by the Company's stockholders (Note 9) and
borrowings under the Company's long-term debt facility (Note 8). The results of
Hungnong's operations have been combined with those of the Company since the
date of acquisition. The gross acquisition cost of $120,620 includes $86,687 of
acquired cash.

      The acquisition was accounted for using the purchase method of accounting.
Accordingly, a portion of the purchase price was allocated to the net assets
acquired based on their estimated fair market values. The fair market value of
assets acquired and liabilities assumed was $196,176 and $144,513 respectively.
The balance of the purchase price, $68,957, was recorded as excess of cost over
net assets acquired (i.e. goodwill) and is being amortized over 15 years on a
straight-line basis.

      In connection with the purchase of its 70% interest in Hungnong, Seminis
loaned $35,612 to Young Il Chemical Company which is owned by minority
stockholders of Hungnong. The U.S. dollar denominated note receivable bears
interest at 10% per year, payable quarterly, and is due in installments of
$7,000 in July 1999, $7,000 in July 2000 and $21,612 in July 2001. The note
receivable is secured by common stock owned by minority stockholders
representing ownership of a 25% interest of Hungnong and is held in trust by an
independent trustee (the "Collateral Shares"). Under terms of the note
agreement, in the event of payment default or the occurrence of certain other
events such as the bankruptcy or insolvency, among others, of Young Il Chemical
Company, maturity of the note receivable accelerates. Transfer of ownership of
the Collateral Shares satisfies payment of the note in accordance with formula
provisions of the note agreement. The note agreement provides that, in
determining the payment to

                                      F-13
<PAGE>   78
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

be applied, each one percent of equity interest has a 2 billion South Korean won
value (based on the fair market value of Hungnong at acquisition) and is
applied, at the then-current exchange rate, to reduce the outstanding balance
due until paid in full. Any remaining unpaid amounts are due on demand.

      Seminis has pledged the note receivable from Young Il Chemical Company as
security for the subordinated debt due Savia (see Note 15). In the event of
default and transfer of shares to Seminis in payment of the note receivable,
Seminis is obligated under the convertible subordinated debt agreement to
transfer such shares to Savia and apply such shares as payments on the
subordinated debt.

HUNGNONG PUT OPTION

      The Hungnong minority shareholders have the option to put their 30%
interest in Hungnong to the Company at a price of 2 billion South Korean won for
each 1% of outstanding shares plus accrued interest which accrues at 10% per
annum from July 15, 1998. This option expires on July 15, 2001. On November 15,
1998, the Hungnong minority shareholders exercised their put option for 5% of
the outstanding shares of Hungnong. As a result, on December 15, 1998, the
Company paid $8,673 to increase its ownership in Hungnong from 70% to 75%. As of
March 31, 1999, the remaining potential obligation in U.S. dollars related to
the put option is approximately $40,883.

CHOONG ANG SEED COMPANY

      In July 1998, the Company acquired all of the outstanding shares of Choong
Ang Seed Company ("Choong Ang"), a South Korean vegetable seed company, for
$20,500. The acquisition was funded by capital contributions by the Company's
stockholders (Note 9) and borrowings under long-term debt facilities (Note 8).
The results of Choong Ang's operations have been combined with those of the
Company since the date of acquisition. The gross acquisition cost of $20,500
excludes $1,112 of acquired cash.

      The acquisition was accounted for using the purchase method of accounting.
Accordingly, a portion of the purchase price was allocated to the net assets
acquired based on their estimated fair market values. The fair market value of
assets acquired and liabilities assumed was $35,272 and $21,589, respectively.
The balance of the purchase price, $6,817, was recorded as excess of cost over
net assets acquired (goodwill) and is being amortized over 15 years on a
straight-line basis.

      Unaudited pro forma consolidated results of operations are presented in
the table below for each of the two years in the period ended September 30,
1998. The pro forma results reflect the Hungnong and Choong Ang acquisitions as
if they had

                                      F-14
<PAGE>   79
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

occurred at the beginning of each respective
fiscal year:

<TABLE>
<CAPTION>
                                                         1997        1998
                                                       --------    --------
<S>                                                    <C>         <C>
Total revenues.......................................  $462,911    $466,054
Income (loss) from continuing operations.............     2,407      (1,292)
Income (loss) from continuing operations available
  for common stockholders............................    (6,829)   (141,421)
Income (loss) from continuing operations available
  for common stockholders per common share
  Basic and diluted..................................  $  (0.20)   $  (4.05)
Weighted average common shares outstanding
  Basic and diluted..................................    33,757      34,912
</TABLE>

      In management's opinion, the unaudited pro forma combined results of
operations may not necessarily be indicative of the actual results that would
have occurred had the acquisition been consummated at the beginning of fiscal
year 1997 or 1998 or of future operations of the combined companies under the
ownership and management of the Company.

AGROCERES

      On November 10, 1998 the Company purchased the assets, subject to certain
liabilities, of the vegetable division of Sementes Agroceres, S.A.
("Agroceres"), a Brazilian company, for $19,455. Agroceres produces and
distributes vegetable seeds throughout Brazil. The acquisition was financed
through borrowings on the Company's revolving line of credit.

      The acquisition was accounted for using the purchase method of accounting.
Accordingly, a portion of the purchase price was allocated to the net assets
acquired based on their estimated fair market values. The fair value of assets
acquired and liabilities assumed was $8,802 and $987, respectively. The balance
of the purchase price, $11,640, was recorded as excess of cost over net assets
acquired (goodwill) and is being amortized over 15 years on a straight-line
basis.

NOTE 3--INVENTORIES

     Inventories consist of the following at September 30, 1997 and 1998:

<TABLE>
<CAPTION>
                                      AS OF SEPTEMBER 30,        AS OF
                                      --------------------     MARCH 31,
                                        1997        1998          1999
                                        ----        ----          ----
                                                              (unaudited)
<S>                                   <C>         <C>         <C>
Seed................................  $138,293    $209,928      $231,481
Unharvested crop growing costs......    15,424      20,405        23,608
Supplies............................     8,428      14,986        14,680
                                      --------    --------      --------
                                      $162,145    $245,319      $269,769
                                      ========    ========      ========
</TABLE>

                                      F-15
<PAGE>   80
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 4--PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consist of the following at September 30,
1997 and 1998:

<TABLE>
<CAPTION>
                                                         1997        1998
                                                         ----        ----
<S>                                                    <C>         <C>
Land.................................................  $ 26,695    $ 65,156
Buildings and improvements...........................    70,198      95,989
Machinery and equipment..............................    49,273      60,637
                                                       --------    --------
                                                        146,166     221,782
Less: accumulated depreciation.......................   (17,986)    (32,527)
                                                       --------    --------
                                                       $128,180    $189,255
                                                       ========    ========
</TABLE>

NOTE 5--INTANGIBLES

     Intangible assets at September 30, 1997 and 1998 consist of the following
and are net of accumulated amortization for the respective fiscal years as
parenthetically noted:

<TABLE>
<CAPTION>
                                                         1997        1998
                                                         ----        ----
<S>                                                     <C>        <C>
Goodwill (net of $1,313 and $3,521)...................  $12,208    $ 85,066
Software costs (net of $342 and $492).................    2,212      12,681
Trademarks (net of $2,831 and $4,038).................   12,069      10,862
Germplasm (net of $22,824 and $32,388)................   40,576      59,999
Other intangible assets (net of $1,050 and $2,260)....    2,027      22,664
                                                        -------    --------
                                                        $69,092    $191,272
                                                        =======    ========
</TABLE>

NOTE 6--SHORT-TERM BORROWINGS

     Short-term borrowings consist of the following at September 30, 1997 and
1998:

<TABLE>
<CAPTION>
                                                           1997       1998
                                                           ----       ----
<S>                                                       <C>        <C>
Italian bank borrowing..................................  $ 9,851    $   --
Other borrowings........................................    2,780     6,819
                                                          -------    ------
                                                          $12,631    $6,819
                                                          =======    ======
</TABLE>

      In March 1998, the Company repaid the Italian bank borrowing and canceled
a stand-by letter of credit which guaranteed this foreign borrowing. Other
borrowings relate primarily to non-U.S. borrowings and bear interest rates
ranging from approximately 4% to 12% at September 30, 1997 and 4% to 18% at
September 30, 1998.

                                      F-16
<PAGE>   81
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 7--ACCRUED LIABILITIES

     Accrued liabilities consist of the following at September 30, 1997 and
1998:

<TABLE>
<CAPTION>
                                                          1997       1998
                                                          ----       ----
<S>                                                      <C>        <C>
Employee salaries and related benefits.................  $20,173    $35,082
Seedmen's errors and omissions.........................    8,586      7,346
Interest...............................................      519      7,963
Other..................................................   21,204     28,134
                                                         -------    -------
                                                         $50,482    $78,525
                                                         =======    =======
</TABLE>

NOTE 8--LONG-TERM DEBT

     Long-term borrowings consist of the following at September 30, 1997 and
1998:

<TABLE>
<CAPTION>
                                                         1997        1998
                                                         ----        ----
<S>                                                     <C>        <C>
Credit agreement borrowings...........................  $74,000    $384,525
South Korean bank borrowings due in annual
  installments through 2007...........................       --      18,339
Other borrowings......................................    7,342      11,407
                                                        -------    --------
                                                         81,342     414,271
Less current portion..................................   (1,011)    (19,825)
                                                        -------    --------
                                                        $80,331    $394,446
                                                        =======    ========
</TABLE>

      Other borrowings consist of various domestic and foreign, government and
non-government loans of less than $2,000 each, bearing interest annually at
rates ranging from 0% to 13% through 2007.

      At September 30, 1997, the Company's credit agreement consisted of a
$100,000 revolving line of credit. Concurrent with the repurchase of 11,319
shares of Old Class B Redeemable Common Stock from the former Ball stockholders
(Note 9) and the retirement of the previous credit agreement, the Company
entered into a $375,000 credit agreement consisting of a $75,000 revolving line
of credit and $300,000 in term loans (the "Credit Facility"). The revolving line
of credit expires on December 31, 2002 and the term loans have varying
maturities ranging from December 31, 2002 to December 31, 2004. The Credit
Facility was amended in July 1998 in conjunction with the Hungnong and Choong
Ang acquisitions (Note 2) to include an additional $75,000 term portion expiring
December 31, 2004.

      The Company, at its option, may elect to pay interest on Credit Facility
borrowings based on either the prime rate or the London interbank offered rate
("LIBOR") plus defined margins ranging from 0.75% to 2.75%. The Company is
required to pay a commitment fee, up to a maximum of 0.5%, on the unused portion
of the revolving line of credit. Interest rate margins and commitment fee rates
are reset quarterly based upon a defined leverage ratio. For the fiscal year
ended September 30, 1998, the Company incurred interest at a weighted-average
rate of 8.6% per annum under the Credit Facility.

      In fiscal year 1998, loan origination fees of $7,713 were capitalized and
are being amortized to interest expense using the

                                      F-17
<PAGE>   82
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

straight-line method over the life of the agreement. Interest expense includes
loan origination fees of $208 in fiscal year 1996, $514 in fiscal year 1997 and
$891 in fiscal year 1998.

      The Company uses interest rate hedge agreements to effectively convert
variable rate Credit Facility debt to a fixed basis. The fair values of the
hedge agreements are not recognized in the financial statements. At September
30, 1998, the Company had outstanding interest rate hedge agreements with
notional amounts of $226,000 and an unrecognized loss of approximately $5,950.

      Under the Credit Facility, the Company is required to maintain certain
financial ratios and meet certain net worth and indebtedness tests. The Credit
Facility also places limits on dividends, foreign debt, leasing, capital
expenditures and acquisitions. The Company was in compliance with all covenants
associated with the Credit Facility at September 30, 1998. The indebtedness
under the Credit Facility is secured by the majority of the Company's domestic
assets and by the majority of the shares of certain foreign subsidiaries.

SUBSEQUENT EVENT (UNAUDITED)

      In February 1999, Seminis and the lenders under the old credit agreement
entered into a waiver and amendment of the old credit agreement to waive
compliance with certain financial ratio covenants as of December 31, 1998 and
March 31, 1999 and to revise the March 31, 1999 covenants. The amendment of the
old credit agreement also required Seminis to issue and sell no later than May
31, 1999 subordinated debt securities, common equity securities or any
combination thereof for an aggregate sales price of not less than $150,000. See
Note 17.

      As of September 30, 1998, long-term debt maturities are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
SEPTEMBER 30
- ------------
<S>                                <C>
   1999..........................  $ 19,825
   2000..........................    22,824
   2001..........................    19,908
   2002..........................    21,880
   2003..........................    33,074
 Thereafter......................   296,760
                                   --------
                                   $414,271
                                   ========
</TABLE>

NOTE 9--CAPITAL STOCK AND MANDATORILY REDEEMABLE EQUITY SECURITIES

CLASS A REDEEMABLE PREFERRED STOCK

      As part of the Ball Merger, the Company issued 25 shares of Class A
Redeemable Preferred Stock to the stockholders of Ball. Holders of the Class A
Redeemable Preferred Stock have the right to cause the Company to redeem the
shares at any time prior to October 1, 2000. The redemption price shall be
$1,000 per share.

      Each share of Class A Redeemable Preferred Stock will be automatically
converted into one share of Class B Redeemable Preferred Stock upon the earlier
of the occurrence of an initial public offering, October 1, 2000 or the
occurrence of certain other events. In addition, each share of Class A
Redeemable Preferred Stock will be convertible at the option of the holder at
any time into one share of Class B Redeemable Preferred Stock.

      The Class A Redeemable Preferred Stock has no voting rights. The Company
pays quarterly dividends on all issued shares of Class A Redeemable Preferred
Stock at a rate of 8% per year. Dividends are cumulative if unpaid and are added
to the redemption value of the shares. The liquidation value of the shares is
equal to the redemption value at any point in time.

                                      F-18
<PAGE>   83
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

CLASS B REDEEMABLE PREFERRED STOCK

      The Company is authorized to issue up to 25 shares of its Class B
Redeemable Preferred Stock. No shares have been issued to date. Terms of Class B
Redeemable Preferred Stock are identical to the Class A Redeemable Preferred
Stock with respect to dividends and liquidation preferences, however, Class B
Redeemable Preferred Stock is not redeemable at the option of the holder. The
Company shall redeem all outstanding shares of the Class B Redeemable Preferred
Stock on October 1, 2005.

OLD CLASS B REDEEMABLE COMMON STOCK

      The Company also issued 18,091 shares of Old Class B Redeemable Common
Stock to the Ball stockholders as part of the Ball Merger. Holders of Old Class
B Redeemable Common Stock have the right to cause the Company to redeem the
shares on October 1, 2000, or earlier if an early redemption event occurs. The
redemption price accretes at an annual rate of approximately 6% up to a maximum
of $8.05 per share at October 1, 2000. The redemption price was $6.35 per share
on October 1, 1996, $6.75 per share on October 1, 1997 and $7.15 per share on
October 1, 1998.

      Each share of Old Class B Redeemable Common Stock is automatically
convertible into one share of Class B Common Stock upon the consummation of an
initial public offering, October 1, 2000 or the occurrence of certain other
events. In addition, each share of Old Class B Redeemable Common Stock will be
convertible at the option of the holder at any time into one share of Class B
Common Stock; however, upon such conversion, the Old Class B Redeemable Common
Stock will lose its redemption rights and dilute other protections.

      If any of the classes of mandatorily redeemable stock are required to be
redeemed, Savia is obligated to make a capital contribution to the Company in an
amount equal to the redemption price the Company is required to pay. In the
event Savia fails to make this capital contribution or the Company fails to
complete any redemption, whether or not Savia makes the capital contribution,
the holders of Old Class B Redeemable Common Stock will be entitled to 100 votes
per share and to elect a majority of the board of directors.

      In January 1998, the Company repurchased 11,319 shares of Old Class B
Redeemable Common Stock from the former Ball stockholders for $211,824. Such
shares were canceled upon repurchase. Prior to this transaction, Savia purchased
3,895 shares of Old Class B Redeemable Common Stock from the former Ball
stockholders at the same price of $18.71 per share. Such shares remain
outstanding.

CLASS A COMMON STOCK

      The Company is authorized to issue up to 91,000 shares of Class A Common
Stock. No shares have been issued, however, 3,677 shares were reserved for
issuance for options granted to employees in fiscal year 1998. Class A Common
Stock is entitled to one vote per share.

CLASS B COMMON STOCK

      Following the Ball Merger, Savia owned all 30,000 outstanding shares of
the Company's Class B Common Stock. Holders of the Class B Common Stock are
entitled to three votes per share.

      During fiscal year 1998, the Company issued 7,386 shares of Class B Common
Stock to Savia or its affiliates for cash in the amount of $138,200. The share
price of $18.71 was based on the fair market value of the Company at the time of
the transaction.

CLASS C PREFERRED STOCK (UNAUDITED)

      The Company is authorized to issue up to 6 shares of its Class C Preferred
Stock. In

                                      F-19
<PAGE>   84
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

December 1998, Savia made an equity
investment in Seminis of $10,000 in exchange for 1 shares of Class C Preferred
Stock to finance the purchase of shares of Hungnong which Seminis was obligated
to purchase from the minority shareholders of Hungnong in connection with the
acquisition of Hungnong and to provide working capital. In March 1999, Savia
made an additional equity investment in Seminis of $20,000 in exchange for 2
shares of Class C Preferred Stock to finance working capital requirements.

      Shares of Class C Preferred Stock have no voting rights and are redeemable
at the option of the Company. Dividends accrue cumulatively at the rate of 10%
per year and are payable quarterly. Dividends payable through January 2001 are
payable by issuing additional fully paid and non assessable shares of Class C
Preferred Stock.

NOTE 10--INCOME TAXES

Consolidated pre-tax income (loss) consists of the following:

<TABLE>
<CAPTION>
                                                    1996        1997        1998
                                                    ----        ----        ----
<S>                                               <C>         <C>         <C>
U.S. operations...............................    $(82,596)   $(18,455)   $(28,771)
Foreign operations............................      (4,890)     33,619      38,969
                                                  --------    --------    --------
                                                  $(87,486)   $ 15,164    $ 10,198
                                                  ========    ========    ========
</TABLE>

The expense (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                    1996        1997        1998
                   Current:                         ----        ----        ----
<S>                                               <C>         <C>         <C>
  Federal.....................................    $ (1,479)   $ (7,420)   $ (7,049)
  State.......................................         582        (833)       (691)
  Foreign.....................................       9,221       6,571      11,284
                                                  --------    --------    --------
                                                     8,324      (1,682)      3,544
                                                  --------    --------    --------
Deferred:
  Federal.....................................     (26,168)       (306)     (2,833)
  State.......................................      (2,457)         27        (264)
  Foreign.....................................     (11,100)      5,800       2,989
                                                  --------    --------    --------
                                                   (39,725)      5,521        (108)
                                                  --------    --------    --------
                                                  $(31,401)   $  3,839    $  3,436
                                                  ========    ========    ========
</TABLE>

      Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax

                                      F-20
<PAGE>   85
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

assets and liabilities as of September 30, 1997 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                1997        1998
                                                                ----        ----
<S>                                                           <C>         <C>
Deferred tax assets:
  Reserve for doubtful accounts.............................  $  1,573    $  3,902
  Inventories...............................................     5,149       7,492
  Other accruals............................................     6,977       6,698
  Net operating loss carryforwards and other credits........    11,040       8,154
                                                              --------    --------
          Total deferred tax assets.........................    24,739      26,246
  Valuation allowance.......................................    (5,610)     (7,246)
                                                              --------    --------
          Net deferred tax assets...........................    19,129      19,000
                                                              --------    --------
Deferred tax liabilities:
  Depreciation and amortization.............................   (30,021)    (42,212)
  Accrued taxes on undistributed foreign earnings...........    (9,693)    (11,638)
                                                              --------    --------
          Total deferred tax liabilities....................   (39,714)    (53,850)
                                                              --------    --------
                                                              $(20,585)   $(34,850)
                                                              ========    ========
</TABLE>

      The valuation adjustment for deferred tax assets as of September 30, 1998
and September 30, 1997 was $7,246 and $5,610, respectively. The net change in
the total valuation allowance for the years ended September 30, 1998 and
September 30, 1997 was an increase of $1,636 and a decrease of $2,154,
respectively.

      The Company's net operating loss carryforwards balance primarily relates
to a Netherlands net operating loss carryforward that has an indefinite life.
Based on management's assessment, it is more likely than not that the net
deferred tax assets will be realized through future taxable earnings or
alternative tax strategies.

      The Company provides for Federal income taxes on the undistributed
earnings of certain foreign subsidiaries. The earnings for all other foreign
subsidiaries will only be distributed to the United States to the extent any
Federal income tax can be fully offset by foreign tax credits.

      The expense (benefit) for income taxes varies from income taxes based on
the federal statutory rate as follows:

<TABLE>
<CAPTION>
                                                       1996       1997       1998
                                                       ----       ----       ----
<S>                                                  <C>         <C>        <C>
Income tax at statutory Federal rate...............  $(30,400)   $ 5,311    $ 3,569
State and local income tax benefit, net of Federal
  income tax effect................................    (2,617)      (334)      (180)
Research and other tax credits.....................    (1,003)    (1,083)      (977)
Foreign earnings taxed at different rates..........     1,552        969        959
Net reduction in valuation allowances..............        --     (1,303)    (1,009)
</TABLE>

                                      F-21
<PAGE>   86
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                       1996       1997       1998
                                                       ----       ----       ----
<S>                                                  <C>         <C>        <C>
Goodwill amortization..............................       152        239        825
Other..............................................       915         40        249
                                                     --------    -------    -------
                                                     $(31,401)   $ 3,839    $ 3,436
                                                     ========    =======    =======
</TABLE>

NOTE 11--EMPLOYEE BENEFITS

PENSION PLANS

      U.S. PLANS. The Company maintains a Company-sponsored defined contribution
savings plan covering eligible employees. Company contributions are based on a
percentage of employee contributions and on employee salaries. Company
contributions totaled $665, $1,797 and $2,050 in fiscal years 1996, 1997 and
1998, respectively. The Company also maintains a qualified profit sharing plan.
Annual contributions are made at the discretion of the Company's board of
directors and totaled $899, $1,660 and $1,284, in fiscal years 1996, 1997 and
1998, respectively.

      FOREIGN PLANS. In accordance with the local statutory requirements, the
Company sponsors retirement and severance plans at several of its foreign
locations. The Company has recorded an accrual of $3,405 at September 30, 1997
and $10,509 at September 30, 1998 for anticipated payments to be made to foreign
employees upon retirement or termination.
      The Company provides defined-benefit pension plans in certain foreign
countries where required by statute. The Company's funding policy for foreign
defined-benefit plans is consistent with the local requirements in each country.
The funded status of these plans as of September 30, 1997 and 1998 was as
follows:

<TABLE>
<CAPTION>
                                                               1997       1998
                                                               ----       ----
<S>                                                           <C>        <C>
Vested benefit obligation...................................  $24,455    $28,090
                                                              =======    =======
Accumulated benefit obligation..............................  $24,455    $28,090
                                                              =======    =======
Projected benefit obligation................................  $32,606    $39,356
Fair market value of plan assets............................   31,323     36,712
                                                              -------    -------
Projected benefit obligations in excess of plan assets......   (1,283)    (2,644)
Unrecognized net loss.......................................    4,377      7,035
                                                              -------    -------
Prepaid pension asset.......................................  $ 3,094    $ 4,391
                                                              =======    =======
</TABLE>

                                      F-22
<PAGE>   87
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

      The components of net pension expense for the foreign plans, based on the
most recent valuation dates, were as follows:

<TABLE>
<CAPTION>
                                                       1996       1997       1998
                                                       ----       ----       ----
<S>                                                   <C>        <C>        <C>
Service cost........................................  $ 1,764    $ 1,069    $ 1,096
Interest cost.......................................    1,817      1,908      1,956
Actual gain on plan assets..........................   (1,908)    (2,291)    (1,596)
Net amortization and deferral.......................      221        156       (593)
                                                      -------    -------    -------
                                                      $1,894..   $   842    $   863
                                                      =======    =======    =======
</TABLE>

      Assumptions used in the above calculations were as follows:

<TABLE>
<CAPTION>
                                                              1996    1997    1998
                                                              ----    ----    ----
<S>                                                           <C>     <C>     <C>
Weighted-average discount rate..............................  6.0%    6.0%    6.0%
Rate of future compensation increases.......................  4.0     4.0     4.0
Long-term rate of return on plan assets.....................  7.5     7.5     7.5
</TABLE>

STOCK OPTION PLAN

      In 1998, the Company adopted the Seminis 1998 Stock Option Plan (the
"Stock Option Plan") under which key employees and those who will become key
employees may be granted options to purchase shares of the Company's authorized
but unissued Class A Common Stock. The board of directors reserved 3,677 shares
for issuance under the plan and, in July 1998, awarded options to acquire 267
shares by plan participants at $18.71 per share (Note 9). Under the Stock Option
Plan, the option exercise price is equal to fair market value at the date of
grant, as determined by independent appraisal.
      Options currently expire no later than ten years from the grant date and
generally vest over four years. Proceeds received by the Company from exercises
will be credited to common stock and additional paid-in capital.
      Stock option plan activity during the fiscal year was as follows:

<TABLE>
<CAPTION>
                                                                 OPTIONS GRANTED
                                                 SHARES       ---------------------
                                                AVAILABLE      NUMBER      EXERCISE
                                               FOR OPTIONS    OF SHARES     PRICE
                                               -----------    ---------    --------
<S>                                            <C>            <C>          <C>
Reserved.....................................     3,677           --        $   --
Grants.......................................      (267)         267         18.71
Exercises....................................        --           --            --
Cancellations................................        --           --            --
                                                  -----          ---        ------
September 30, 1998...........................     3,410          267        $18.71
                                                  =====          ===        ======
</TABLE>

      As of September 30, 1998, no options were exercisable. Options outstanding
at September 30, 1998 will expire if not exercised on or before June 30, 2008.

                                      F-23
<PAGE>   88
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

      Pro forma information regarding net income is required by SFAS No. 123.
This information is required to be determined as if the Company had accounted
for its employee stock options granted under the fair market value method of
that statement. The fair market value of options granted in fiscal year 1998 was
$16.41 per share using a minimum value method assuming a risk-free interest rate
of 5.48%, an expected life of four years and no projected dividend yields.
Unlike other permitted option pricing models, the minimum value method excludes
stock price volatility, which cannot be reasonably estimated for the Company.

      For purposes of pro forma disclosures, the estimated fair market value of
the options is amortized to expense over the options' vesting periods. There is
no difference in net loss per share in applying the pro forma provisions of SFAS
No. 123 for the year ended September 30, 1998.

NOTE 12--COMMITMENTS AND CONTINGENCIES

LEASES

      The Company leases land, buildings, machinery and equipment under
operating leases. Rental expenses aggregated approximately $8,080, $6,685 and
$9,788 in fiscal years 1996, 1997 and 1998, respectively.

      Minimum annual lease commitments under non-cancelable operating leases at
September 30, 1998 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
SEPTEMBER 30
- ------------
<S>                                   <C>
   1999.............................  $3,779
   2000.............................   1,916
   2001.............................     678
   2002.............................     368
   2003.............................     218
  Thereafter........................     643
                                      ------
                                      $7,602
                                      ======
</TABLE>

CONTINGENCIES

      The Company has been named as a defendant in various lawsuits arising out
of alleged seedmen's errors and omissions. The Company maintains third-party
seedsmen's errors and omissions insurance covering these types of claims, thus
policies are subject to annual renewal and revisions and house deductibles and
coverage limits. An accrual for management's estimate of exposure related to
such claims has been recorded in the financial statements and is disclosed in
Note 7. It is the opinion of management that the ultimate resolution of these
matters will not have a material adverse effect on the Company's financial
position or results of operations.

      Historically, resolution of asserted claims has been in line with
management's expectations.

NOTE 13--DISCONTINUED OPERATIONS

      At the time Asgrow was purchased from the Upjohn Company in 1995, the
Company operated in two distinct business segments, Vegetable Seeds and
Agronomics Seeds (the "Agronomics Segment"). On October 1, 1996, management
elected to dispose of its Agronomics Segment and on January 31, 1997, the
Agronomics Segment was sold to Monsanto for a gross sales price of $240,000. As
a result of this transaction, the Agronomics Segment has been accounted for as a
discontinued operation and, accordingly, its operations are segregated in the
accompanying statements of operations. Net revenues for the Agronomics Segment
were $194,074 and $77,637 in fiscal years 1996 and 1997, respectively.

                                      F-24
<PAGE>   89
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 14--GEOGRAPHIC INFORMATION

      The Company operates principally in one business segment consisting of the
development, production and marketing of vegetable and fruit seeds. Revenues
derived from sales to external customers attributed to the Company's country of
domicile, to individual countries representing more than 10% of the Company's
consolidated net sales and to all other foreign countries in total are
summarized as follows:

<TABLE>
<CAPTION>
                                                    1996        1997        1998
                                                    ----        ----        ----
<S>                                               <C>         <C>         <C>
Net sales
  United States.................................  $113,164    $117,015    $132,274
  Italy.........................................    48,779      47,411      47,376
  Spain.........................................    24,433      22,891      24,749
  Mexico........................................    23,625      28,637      31,355
  Other foreign.................................   171,397     163,590     192,669
                                                  --------    --------    --------
     Consolidated net sales.....................  $381,398    $379,544    $428,423
                                                  ========    ========    ========
</TABLE>

Long-lived assets other than financial instruments and deferred tax assets
located in the Company's country of domicile, located in individual foreign
countries representing more than 10% of the Company's consolidated long-lived
assets and located in all other foreign countries in total in which the Company
holds assets are summarized as follows:

<TABLE>
<CAPTION>
                                                                1997        1998
                                                                ----        ----
<S>                                                           <C>         <C>
Long-lived assets
  United States.............................................  $116,704    $152,242
  The Netherlands...........................................    44,006      43,032
  South Korea...............................................        --     156,974
  Other foreign.............................................    46,530      56,014
                                                              --------    --------
     Consolidated long-lived assets.........................  $207,240    $408,262
                                                              ========    ========
</TABLE>

NOTE 15--RELATED PARTIES

      Balances and transactions with related parties included in the
consolidated financial statements are as follows:

      a) Research and development expenses include $2,500 in both fiscal years
         1997 and 1998 in biotechnology research fees incurred pursuant to an
         agreement between the Company and Bionova Holding Corporation, a
         publicly traded company. Savia is the majority stockholder in Bionova.

      b) Operating expenses for fiscal years 1997 and 1998 include $6,200 and
         $8,465, respectively, in management fees paid to Savia.

      c) Gain on disposal of the Agronomics Segment includes $8,000 in fees paid
         in fiscal year 1997 to Savia for investment banking and other
         professional fees and services provided in connection with the sale.

      d) Convertible subordinated debt of $35,857 at September 30, 1998 is
         payable to Savia, bears interest at 10% per year and was due in
         installments of $7,000 in July 1999, $7,000 in July 2000 and $21,857 in

                                      F-25
<PAGE>   90
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

         July 2001. Advances to Young Il Chemical Company (Note 2) secured the
         convertible subordinated debt. On February 1, 1999, the convertible
         subordinated debt was converted into 1,916 shares of Class B Common
         Stock at $18.71 per share.

      e) Other accrued liabilities at September 30, 1998 include $2,286
         representing accrued management fees and interest on the subordinated
         debt.

      f) Unaudited -- In December 1998, Savia made an equity investment in the
         Company of $10,000 in exchange for 1 shares of Class C Preferred Stock
         to finance the purchase of shares of Hungnong which the Company was
         obligated to purchase from the minority shareholders of Hungnong in
         connection with the acquisition of Hungnong and to provide working
         capital. Through April 1999 an additional 0.0338 shares of Class C
         Preferred Stock has been issued as dividends.

      g) Unaudited -- In January 1999, Seminis borrowed $20,000 from Savia as an
         intercompany advance to finance working capital requirements. This
         intercompany advance bears interest at 10.0% per year.

      h) Unaudited -- In March 1999, Savia made an additional equity investment
         in the Company of $20,000 in exchange for 2 shares of Class C Preferred
         Stock to finance working capital requirements.

NOTE 16--RECAPITALIZATION

      Prior to the effective date of the registration statement, the board of
directors of Seminis, Inc., an Illinois corporation, authorized the
reincorporation of the Company in Delaware. In conjunction with the
reincorporation, the holders of certain securities agreed to a plan for the
recapitalization of the Company (the "Recapitalization") to occur concurrently.
The Recapitalization provides for the exchange of shares of the Illinois
corporation for shares of the Delaware corporation as follows: (i) all preferred
stock is to be exchanged for like preferred stock; (ii) all 6,772 shares of
Class B Redeemable Common Stock ("Old Class B Redeemable Common Stock") are to
be converted into one-half the number of such shares of Class B Common Stock;
(iii) all Class A Common Stock is to be exchanged for one-half the number of
such shares of Class B Common Stock; and (iv) all options to purchase Class C
Common Stock are to be exchanged for options to purchase Class A Common Stock.
Immediately following the Recapitalization, the Company shall pay a 1-for-1
stock dividend to all holders of Class B Common Stock. These consolidated
financial statements reflect the pending Recapitalization and stock dividend as
described above with the exception of the conversion of Old Class B Redeemable
Common Stock into Class B Common Stock.

      The unaudited pro forma information presented in the consolidated balance
sheet at March 31, 1999 reflects the conversion of Old Class B Redeemable Common
Stock into Class B Common Stock as if the conversion had occurred on March 31,
1999.

        NOTE 17--SUBSEQUENT EVENT--CURRENT CREDIT AGREEMENT (UNAUDITED)

      On April 30, 1999 Seminis entered into a credit agreement (the "Current
Credit Agreement") with Bank of Montreal and Harris Trust and Savings Bank which
includes a $445,000 secured term loan and a $28,000 secured revolving credit
facility. The Company borrowed $473,000 under the Current Credit Agreement to
repay the $10,000 bank demand note and $439,225 outstanding under Seminis' old
credit agreement. The remaining $23,775 of borrowings were for payment of loan
origination fees of $5,250 and working
                                      F-26
<PAGE>   91
                                 SEMINIS, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

capital. The loan origination fees relating to the Current Credit Agreement were
capitalized and will be amortized as interest expense using the straight line
method over the term of the agreement. Unamortized loan fees of $6,408 relating
to the old Credit Facility were charged to operations as an extraordinary item
of $3,973, net of tax.

      The Company, at its option, may elect to pay interest on the Current
Credit Agreement borrowings based on either LIBOR plus defined margins of 4%
through June 30, 1999, 5% from July 1, 1999 through August 30, 1999 and 6%
thereafter until maturity on June 30, 2000, or the prime rate plus defined
margins of 2.5% through June 30, 1999, 3.5% from July 1, 1999 through August 30,
1999 and 4.5% thereafter until maturity on June 30, 2000. The Company is
required to pay a commitment fee of 0.5% on the unused portion of the revolving
line of credit.

      Under the Current Credit Agreement the Company is required to apply the
net proceeds of debt or equity offerings to repay borrowings outstanding. The
Company is required to meet a minimum interest coverage ratio and a minimum net
worth test. The Current Credit Agreement also places limits on dividends,
foreign debt, leasing, capital expenditures, transactions with affiliates and
acquisitions.

      If the Current Credit Agreement is not repaid by July 31, 1999, Seminis is
required to pay a non-refundable fee of 3% of the used and unused portions, as
defined in the agreement, of the revolving credit and term loan portions of the
Current Credit Agreement and issue to the lenders warrants to purchase, at a
nominal price, shares of Seminis' common stock aggregating 3% of the outstanding
shares of common stock on July 31, 1999, determined on a fully diluted basis. As
part of the use of proceeds from the offering and funds available under the new
credit facility, the Company will repay all borrowings under the Current Credit
Agreement.

      On May 6, 1999, Seminis entered into a commitment letter with Bank of
Montreal and Harris Trust and Savings Bank providing for an underwritten credit
facility. Seminis anticipates that the new credit facility will be an unsecured
credit facility for $350.0 million, consisting of a term loan in the amount of
$200.0 million and a revolving line of credit in the amount of $150.0 million.
The term loan will amortize semi-annually with the balance due on June 30, 2004
and the revolving line of credit will mature on June 30, 2004. Seminis
anticipates that the new credit facility will bear interest in accordance with a
grid pricing formula based on the achievement of a specific debt ratio, with
such interest ranging from the prime rate to the prime rate plus 0.5% or, at the
option of Seminis, ranging from LIBOR plus 1.25% to LIBOR plus 2.0%. Seminis
will also pay commitment fees quarterly on the unused amount of the revolver.

      Seminis expects the new credit facility to contain a number of financial
covenants, including net worth and indebtedness tests, and limitations on its
ability to make acquisitions, transfer or sell assets, create liens, pay
dividends, enter into transactions with its affiliates or enter into a merger,
consolidation or sale of substantially all of its assets, among other actions.
The new credit facility may be secured, depending upon the amount of net
proceeds of the offering and Seminis' debt ratio after the offering. Seminis
also expects that its new credit facility will provide for events of default
typical of facilities of its type, as well as an event of default if Pulsar
Internacional, S.A. de C.V., together with its affiliates, which includes Savia,
fails to hold a majority of the board of directors or direct the management of
Seminis or control at least 51% of the voting rights of Seminis.

                                      F-27
<PAGE>   92

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of Hungnong Seed Co., Ltd

     We have audited the accompanying consolidated balance sheet of Hungnong
Seed Co., Ltd and its subsidiaries (collectively referred to as the "Company")
as of December 31, 1997 and the related consolidated statements of operations,
of stockholders' equity and of cash flows for the year then ended (all expressed
in South Korean Won). These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of December
31, 1997, and the results of its operations and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.

     As described in Note 1, the Company's functional currency is the South
Korean Won, however, solely for the convenience of readers outside of South
Korea, the consolidated financial statements have been translated into U.S.
dollars. Our audits examined the translation of the South Korean Won amounts
into U.S. dollar amounts and, in our opinion, such translation has been made in
conformity with the basis stated in Note 1.

     As described in Note 1, in July 1998, Seminis, Inc. acquired a controlling
interest in the Company.

     As described in Note 1, the consolidated statements of operations and of
cash flows for the six month period ended June 30, 1998 are unaudited and are
presented solely for comparative purposes.

                                SEONJIN ACCOUNTING CORPORATION

Seoul, South Korea
October 28, 1998

                                      F-28
<PAGE>   93

                             HUNGNONG SEED CO., LTD

                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                DECEMBER 31, 1997
                                                                -----------------
                                                              (in thousands of U.S.
                                                               dollars, except per
                                                                   share data)
<S>                                                           <C>
ASSETS:
Current assets
  Cash and cash equivalents.................................        $  2,144
  Marketable securities.....................................             422
  Accounts receivable, less allowance for doubtful accounts
     of $2,250..............................................          10,023
  Inventories...............................................          22,272
  Prepaid expenses and other current assets.................           1,951
                                                                    --------
          Total current assets..............................          36,812
Property, plant and equipment, net..........................          19,488
Deferred income taxes.......................................           3,175
Other assets................................................           7,001
                                                                    --------
          Total assets......................................        $ 66,476
                                                                    ========
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Current liabilities
  Short-term borrowings (includes $6,700 due to related
     party).................................................        $ 37,277
  Current maturities of long-term debt......................          11,839
  Accounts payable..........................................           3,833
  Accrued liabilities.......................................          22,486
                                                                    --------
          Total current liabilities.........................          75,435
Long-term debt, net of current maturities...................          18,167
Minority interest in subsidiaries...........................             453
Net obligations of discontinued operations..................           5,395
                                                                    --------
          Total liabilities.................................          99,450
                                                                    --------
Commitments and contingencies (Note 8)
Stockholders' deficit
  Common stock, $6.34 par value; 2,000 shares authorized;
     1,000 shares issued and outstanding....................           6,340
  Accumulated deficit.......................................         (59,363)
  Unrealized loss on marketable securities..................          (1,294)
  Foreign currency translation..............................          21,343
                                                                    --------
          Total stockholders' deficit.......................         (32,974)
                                                                    --------
          Total liabilities and stockholders' deficit.......        $ 66,476
                                                                    ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
                                      F-29
<PAGE>   94

                             HUNGNONG SEED CO., LTD

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                       YEAR ENDED        SIX MONTHS ENDED
                                                    DECEMBER 31, 1997     JUNE 30, 1998
                                                    -----------------    ----------------
                                                                           (unaudited)
                                                       (in thousands of U.S. dollars)
<S>                                                 <C>                  <C>
Net sales.........................................     $ 58,126              $17,317
Cost of goods sold................................        26,531               8,258
                                                        --------             -------
          Gross profit............................        31,595               9,059
                                                        --------             -------
Operating expenses
  Research and development expenses...............         4,514               1,326
  Selling, general and administrative expenses....        23,406               5,771
                                                        --------             -------
          Total operating expenses................        27,920               7,097
                                                        --------             -------
Income from continuing operations.................         3,675               1,962
Other income (expense)
  Interest income.................................         1,436                 341
  Interest expense................................       (13,749)             (6,540)
  Foreign currency gain (loss)....................         1,340                (433)
  Minority interest...............................          (428)               (116)
  Other, net......................................          (257)               (519)
                                                        --------             -------
                                                         (11,658)             (7,267)
                                                        --------             -------
Loss from continuing operations before income
  taxes...........................................        (7,983)             (5,305)
Income tax benefit................................           282               1,060
                                                        --------             -------
Loss from continuing operations...................        (7,701)             (4,245)
                                                        --------             -------
Discontinued operations (Note 9):
  Loss from operations before income taxes........       (10,698)             (2,016)
  Income tax benefit..............................            --                  --
                                                        --------             -------
     Loss from discontinued operations............       (10,698)             (2,016)
                                                        --------             -------
Net loss..........................................      $(18,399)            $(6,261)
                                                        ========             =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
                                      F-30
<PAGE>   95

                             HUNGNONG SEED CO., LTD

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                                  UNREALIZED
                                   COMMON STOCK                    LOSS ON       FOREIGN         TOTAL
                                  ---------------   ACCUMULATED   MARKETABLE    CURRENCY     STOCKHOLDERS'
                                  NUMBER   AMOUNT     DEFICIT     SECURITIES   TRANSLATION      DEFICIT
                                  ------   ------   -----------   ----------   -----------   -------------
                                           (in thousands of U.S. dollars, except per share data)
<S>                               <C>      <C>      <C>           <C>          <C>           <C>

Balance, December 31, 1996......  1,000    $6,340    $(40,964)     $  (857)      $  (129)      $(35,610)
Net loss........................                      (18,399)                                  (18,399)
Unrealized loss on marketable
  securities....................                                      (783)                        (783)
Foreign currency translation....                                       346        21,472         21,818
                                  -----    ------    --------      -------       -------       --------
Balance, December 31, 1997......  1,000    $6,340    $(59,363)     $(1,294)      $21,343       $(32,974)
                                  =====    ======    ========      =======       =======       ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
                                      F-31
<PAGE>   96

                             HUNGNONG SEED CO., LTD

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              YEAR ENDED      SIX MONTHS
                                                             DECEMBER 31,        ENDED
                                                                 1997        JUNE 30, 1998
                                                             ------------    -------------
                                                                              (unaudited)
                                                                 (in thousands of U.S.
                                                                       dollars)
<S>                                                          <C>             <C>
Cash flows from operating activities Net loss..............    $(18,399)       $ (6,261)
  Adjustments to reconcile net loss to net cash used in
     operating activities:
     Depreciation and amortization.........................       1,450             419
     Deferred income tax benefit...........................      (2,164)         (1,165)
     Net loss from discontinued operations.................      10,698           2,016
     Minority interest.....................................         428             116
     Other.................................................         701             333
     Changes in assets and liabilities
       Accounts receivable.................................      (3,773)          3,240
       Inventories.........................................      (5,295)           (454)
       Prepaid expenses and other assets...................       1,307           1,013
       Accounts payable....................................      (1,672)         (1,793)
       Accrued liabilities.................................       7,332          (9,320)
                                                               --------        --------
          Net cash used in operating activities............      (9,387)        (11,856)
                                                               --------        --------
Cash flows from investing activities
  Purchases of fixed assets................................      (2,199)           (633)
  Proceeds from disposition of assets......................       1,727             165
  Other assets.............................................        (216)          2,078
  Discontinued operations advances account.................      (3,217)         (4,429)
                                                               --------        --------
          Net cash used in investing activities............      (3,905)         (2,819)
                                                               --------        --------
Cash flows from financing activities
  Proceeds from long-term debt.............................      18,280           8,797
  Repayments of long-term debt.............................      (8,655)           (212)
  Net short-term borrowings................................         224           6,141
                                                               --------        --------
          Net cash provided by financing activities........       9,849          14,726
                                                               --------        --------
Effect of exchange rate changes on cash....................      (1,879)             49
                                                               --------        --------
(Decrease) increase in cash and cash equivalents...........      (5,322)            100
Cash and cash equivalents, beginning of period.............       7,466           2,144
                                                               --------        --------
Cash and cash equivalents, end of period...................    $  2,144        $  2,244
                                                               ========        ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
                                      F-32
<PAGE>   97

                             HUNGNONG SEED CO., LTD

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (IN THOUSANDS OF U.S. DOLLARS)

NOTE 1-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND CHANGE IN OWNERSHIP

      Hungnong Seed Co., Ltd ("Hungnong") is a South Korean-based vegetable seed
company. As of December 31, 1997, the shares of Hungnong were primarily held by
certain members of a Korean family (the "Korean Family"). In July 1998, Seminis,
Inc., an Illinois Corporation hereinafter referred to as Seminis, purchased 70%
of the outstanding shares of Hungnong from the Korean Family (the "Seminis
Acquisition"). See Note 10 for further discussion of the Seminis Acquisition.

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

      The Company's consolidated financial statements included herein have been
prepared in accordance with accounting principles generally accepted in the
United States of America and include the accounts of Hungnong Seed Co., Ltd and
its majority controlled and owned subsidiaries ("the Company"). All material
intercompany transactions and balances have been eliminated in consolidation.
See Note 9 for discussion of the Company's discontinued operations.

      The Company's functional currency is the South Korean Won and the
Company's monetary accounts are predominately denominated in South Korean Won.
The consolidated financial statements have been translated into U.S. dollar
amounts in accordance with the provisions of Statement of Financial Accounting
Standards No. 52, "Foreign Currency Translation."

      To enhance the comparability of the financial information, consolidated
statements of operations and of cash flows for the six months ended June 30,
1998, which are unaudited, are presented with those for the year ended December
31, 1997.

      The preparation of financial statements in conformity with generally
accepted accounting principles in the U.S. requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the fiscal year, including customer returns and allowances.
Actual results could differ from those estimates.

REVENUE RECOGNITION

      Product sales are recognized upon shipment of goods and are reduced by
management's estimates for the effect of discounts and allowances. Customer
payments received in advance of shipment are recorded as advances from
customers.

CASH AND CASH EQUIVALENTS

      The Company classifies as cash equivalents all highly liquid investments
purchased with an original maturity of three months or less. The Company invests
its excess cash in deposits with financial institutions. Such investments are
considered cash equivalents for purposes of reporting cash flows and bear
minimal risk.

MARKETABLE SECURITIES

      The Company considers its investment portfolio available-for-sale as
defined in Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" and accordingly, these
investments are recorded at fair value. Adjustments for changes in unrealized
appreciation or depreciation are recorded as Unrealized Loss on Marketable
Securities in the Statement of Stockholders' Deficit.

ACCOUNTS RECEIVABLE

      Accounts receivable are recorded net of reserves for bad debts, discounts
and

                                      F-33
<PAGE>   98
                             HUNGNONG SEED CO., LTD

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)

allowances. Determination of reserves are based on historical experience and
anticipated market conditions and are adjusted by management as deemed
necessary. The Company performs ongoing credit evaluations of its customers'
financial condition and does not require collateral. The Company's diversified
customer base limits the amount of credit exposure to any one customer.

INVENTORIES

      Inventories are stated at the lower of cost or estimated realizable value.
Costs for inventories are determined using the average cost method and include
the costs of materials, direct labor and the applicable share of overhead costs.
Unharvested crop-growing costs are included as part of inventory cost and
represent costs incurred to plan and maintain seed crops that will be harvested
during the subsequent fiscal year. Inventories are periodically reviewed and
reserves established for deteriorated, excess and obsolete items.

PROPERTY, PLANT AND EQUIPMENT

      Property, plant and equipment are stated at cost. Provisions for
depreciation of plant and equipment have been made using the straight-line and
accelerated method for financial reporting and tax purposes. Estimated useful
lives generally range from 8 to 40 years for buildings and improvements, from 5
to 18 years for machinery and equipment and from 3 to 20 years for office
furniture and equipment.

SEVERANCE AND RETIREMENT BENEFITS

      In accordance with South Korean law, employees who have been with the
Company for more than one year are entitled to lump-sum payments based on
current rates of pay and length of service when they leave the Company. The
Company's liability as of December 31, 1997 for these benefits is included in
accrued liabilities.

RESEARCH AND DEVELOPMENT AND OTHER COSTS

      Research and development costs are charged to operations as incurred.

SUPPLEMENTARY CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                     1997
                                    -------
<S>                                 <C>
Cash paid for interest............  $13,947
Cash paid for income taxes........  $ 1,852
</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

      The Company's financial instruments consist primarily of cash, accounts
receivable, inventories and debt. These balances are carried in the financial
statements at amounts that approximate fair value unless separately disclosed in
the Notes to Consolidated Financial Statements.

RELATED PARTIES

      Balances and transactions with related parties that are included in the
consolidated financial statements are not material except for short-term
borrowings from shareholders of $6,700 which accrues interest at 15% and was
repaid in July 1998.

NOTE 2--INVENTORIES

Inventories as of December 31, 1997 are comprised of the following:

<TABLE>
<S>                                                           <C>
Seed........................................................  $19,033
Unharvested crop-growing costs..............................    1,714
Supplies....................................................    1,525
                                                              -------
          Total inventories.................................  $22,272
                                                              =======
</TABLE>

                                      F-34
<PAGE>   99
                             HUNGNONG SEED CO., LTD

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)

NOTE 3--PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of December 31, 1997 includes the following:

<TABLE>
<S>                                                           <C>
Land and improvements.......................................  $ 5,839
Building and improvements...................................   18,413
Machinery and equipment.....................................    3,693
                                                              -------
          Total cost........................................   27,945
          Accumulated depreciation..........................   (8,457)
                                                              -------
               Net property, plant and equipment............  $19,488
                                                              =======
</TABLE>

NOTE 4--OTHER ASSETS

Other assets as of December 31, 1997 consist of the following:

<TABLE>
<S>                                                           <C>
Restricted cash and deposits................................  $2,371
Restricted deposit for payments of retirement benefits......   2,860
Long-term bank deposits.....................................   1,483
Other.......................................................     287
                                                              ------
                                                              $7,001
                                                              ======
</TABLE>

      Restricted cash and deposits consist primarily of cash advanced to
financial institutions as per certain borrowing agreements. Restricted deposits
for payment of retirement benefits consist primarily of advances to financial
institutions to be used to settle Company severance obligations.

NOTE 5--ACCRUED LIABILITIES

Accrued liabilities as of December 31, 1997 consist of the following:

<TABLE>
<S>                                                           <C>
Accrued severance and other.................................  $ 6,667
Advances from customers.....................................    7,296
Seedmen's errors and omissions liability....................    3,230
Other.......................................................    5,293
                                                              -------
                                                              $22,486
                                                              =======
</TABLE>

NOTE 6--DEBT

      Short-term borrowings as of December 31, 1997 consist primarily of
borrowings from various South Korean financial institutions. Interest accrues at
fixed interest rates ranging from 10% to 42%.

      Except for the non-South Korean Won borrowings of $1,798 below, long-term
debt consist of South Korean Won borrowings which were translated to U.S.
dollars using an exchange rate of 1,415 South Korean Won to 1 U.S. Dollar.
Substantially all loans are secured by the Company's assets. Long-term

                                      F-35
<PAGE>   100
                             HUNGNONG SEED CO., LTD

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)

debt as of December 31, 1997 consist of the
following:

<TABLE>
<S>                                                           <C>
9.0%-13.25% bank borrowings due 1998 through 2000...........  $  7,809
11.5% bank loan due in 1998.................................     5,654
5.0% South Korean government research loans due 1998 through
  2007......................................................     1,553
8.0%-8.8% non-South Korean Won borrowings due 2001 through
  2005......................................................     1,798
10.0%-13.0% subordinated debentures due 1998 through 2000...    13,192
                                                              --------
                                                                30,006
     Less current portion...................................   (11,839)
                                                              --------
                                                              $ 18,167
                                                              ========
</TABLE>

      For the year ended December 31, 1997 the Company incurred interest at a
weighted-average rate of 14% per annum on its outstanding borrowings.

      As of December 31, 1997, long-term debt matures as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31:
- ------------
<S>                                 <C>
  1998............................  $11,839
  1999............................    8,995
  2000............................    6,271
  2001............................      596
  2002............................      591
Thereafter........................    1,714
                                    -------
                                    $30,006
                                    =======
</TABLE>

      In July 1998, the Company significantly reduced its short-term borrowings
and long-term debt through the issuance of common stock and borrowings from
Seminis, Inc. in conjunction with the Seminis Acquisition. See Note 10 for
further discussion on the Seminis Acquisition.

NOTE 7--INCOME TAXES

      The benefit for income taxes consists of the following:

<TABLE>
<CAPTION>
                                     1997
                                     ----
<S>                                 <C>
Current expense...................  $(1,840)
Deferred benefit..................    2,122
                                    -------
Income tax benefit................  $   282
                                    =======
</TABLE>

      Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant

                                      F-36
<PAGE>   101
                             HUNGNONG SEED CO., LTD

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)

components of the Company's deferred tax
accounts are as follows:

<TABLE>
<CAPTION>
                                                               1997
                                                               ----
<S>                                                           <C>
Deferred tax assets:
  Accounts receivable.......................................  $ 1,981
  Accrued liabilities.......................................    1,758
  Research and development costs............................      580
  Fixed assets..............................................    1,246
  Other, net................................................        4
                                                              -------
          Deferred tax assets...............................    5,569
Deferred tax asset valuation allowance......................   (2,394)
                                                              -------
          Net deferred tax asset............................  $ 3,175
                                                              =======
</TABLE>

      Management believes net deferred tax assets will be realized through
future taxable earnings or alternative tax strategies.

      As of December 31, 1997, the Company's Chinese subsidiary had unremitted
earnings of $1,253. The Company has not made a South Korean tax provision on
these unremitted earnings as such undistributed earnings are expected to be
reinvested indefinitely in China.

      A reconciliation of the income tax benefit at the statutory income tax
rate and the recorded income tax benefit for the year ended December 31, 1997 is
as follows:

<TABLE>
<CAPTION>
                                                               1997
                                                               ----
<S>                                                           <C>
Income tax benefit at South Korean statutory rate...........  $2,327
Unrealizable deferred tax assets............................  (1,824)
Foreign tax rate differential...............................    (199)
Other, net..................................................     (22)
                                                              ------
                                                              $  282
                                                              ======
</TABLE>

NOTE 8--COMMITMENTS AND CONTINGENT LIABILITIES

LEASES

      The Company leases land, buildings, machinery and equipment under
operating leases. Rental expenses aggregated approximately $633 for the year
ended December 31, 1997.

      Minimum annual lease commitments under existing non-cancelable operating
leases as of December 31, 1997 are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31:
- ------------
<S>                                    <C>
  1998...............................  $375
  1999...............................   309
  2000...............................   156
  2001...............................     6
                                       ----
                                       $846
                                       ====
</TABLE>

                                      F-37
<PAGE>   102
                             HUNGNONG SEED CO., LTD

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
                         (IN THOUSANDS OF U.S. DOLLARS)

CONTINGENCIES

      The Company has been named as a defendant in various lawsuits arising out
of alleged seedmen's errors and omissions. An accrual related to such claims has
been recorded in the financial statements based on management's estimate of the
ultimate resolution of these matters.

NOTE 9--DISCONTINUED OPERATIONS

      As part of its strategy and plan of acquisition of the Company, in July
1998, Seminis discontinued the Company's non-vegetable seed operations. The
non-seed operations primarily include Handock Electronics, a South Korean based
automotive parts supplier and Hungnong Industrial, a South Korean based
agricultural equipment manufacturer. The non-vegetable seed operations are
accounted for as discontinued operations, and accordingly, their operations are
segregated in the accompanying Consolidated Statement of Operations. The
accompanying Consolidated Balance Sheet has also been restated to separately
reflect the net obligations of discontinued operations.

      Net sales of discontinued operations were approximately $19,742 and $5,145
for the year ended December 31, 1997 and six months ended June 30, 1998
(unaudited), respectively. Seminis plans to wind down operations by June 1999.

NOTE 10--SUBSEQUENT EVENT

SEMINIS ACQUISITION

      In July 1998, Seminis acquired 70% of the shares of the Company through
the purchase of 1,428,000 newly issued shares of the Company (for cash in the
amount of $82,537) and 271,585 previously issued shares from the South Korean
Family. Below is the Hungnong share ownership prior to and after the Seminis
Acquisition.

<TABLE>
<CAPTION>
                                                                        SHARES HELD BY
                                                              -----------------------------------
                                                               KOREAN
                                                               FAMILY       SEMINIS       TOTAL
                                                               ------       -------       -----
<S>                                                           <C>          <C>          <C>
As of June 30, 1998.........................................  1,000,000           --    1,000,000
Company issued shares in July 1998..........................         --    1,428,000    1,428,000
Seminis July 1998 purchase shares from South Korean
  Family....................................................   (271,585)     271,585           --
                                                              ---------    ---------    ---------
As of July 31, 1998.........................................    728,415    1,699,585    2,428,000
                                                              =========    =========    =========
</TABLE>

                                      F-38
<PAGE>   103

            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED SEPTEMBER 30, 1998

      Effective July 1, 1998, Seminis acquired for cash certain assets and
assumed certain liabilities of Hungnong Seed Co. in a transaction accounted for
under the purchase method of accounting. The total purchase price paid was
$120,620. A portion of the purchase price was allocated to the net assets
acquired based on their estimated fair market values. The fair market value of
assets acquired and liabilities assumed were $196,176 and $144,513,
respectively. The balance of the purchase price, $68,957, was recorded as excess
of cost over net assets acquired (i.e., goodwill) and is being amortized over 15
years on a straight-line basis. A summary of the purchase price allocation is as
follows:

<TABLE>
<CAPTION>
                                                       BOOK                       FAIR
                                                      VALUE      ADJUSTMENT      VALUE
                                                      -----      ----------      -----
                                                       (in thousands of U.S. dollars)
<S>                                                 <C>          <C>           <C>
Cash and cash equivalents.........................   $ 86,687     $     --      $ 86,687
Accounts receivable...............................     12,508           --        12,508
Inventories.......................................     19,293           --        19,293
Property, plant and equipment, net................     21,089       23,148        44,237
Germplasm.........................................         --       27,000        27,000
Goodwill..........................................         --       68,957        68,957
Other.............................................      6,451           --         6,451
                                                     --------     --------      --------
          Total assets............................    146,028      119,105       265,133
Current liabilities...............................    (93,391)          --       (93,391)
Non-current liabilities...........................    (15,213)     (18,555)      (33,768)
Minority interest.................................         --      (17,354)      (17,354)
                                                     --------     --------      --------
          Net assets acquired.....................   $ 37,424     $ 83,196      $120,620
                                                     ========     ========      ========
</TABLE>

      The following unaudited pro forma consolidated results of operations
assume the acquisition was effective October 1, 1997. Seminis' historical
results of operations include the results of operations of Hungnong from the
date of acquisition (July 1, 1998) to September 30, 1998, including the effects
of purchase accounting. Hungnong's historical results of operations represents
its results of operations for the period prior to acquisition (October 1, 1997
through June 30, 1998). Pro forma adjustments are made to reflect those expenses
for the period October 1, 1997 through June 30, 1998 which are recurring in
nature and are not otherwise reflected in the historical results of operations
of either Seminis or Hungnong. As more fully described below and in the Notes to
Seminis' Consolidated Financial Statements, the pro forma adjustments include
the assumed amortization of the effects of purchase accounting adjustments,
assumed interest income from the note receivable from Young II Chemical Company,
the net elimination of interest expense based on Seminis' assumed capitalization
of Hungnong at October 1, 1997, the assumed reduction in interest expense
related to the subordinated debt held by Savia due to conversion to common
shares effective October 1, 1997, assumed minority interest benefit and the
assumed income tax effects of pro forma adjustments.

                                      F-39
<PAGE>   104
            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
              FOR THE YEAR ENDED SEPTEMBER 30, 1998 -- (CONTINUED)

<TABLE>
<CAPTION>
                                                     HISTORICAL          ADJUSTMENTS     PRO FORMA
                                              ------------------------     FOR THE        FOR THE
                                              SEMINIS(1)   HUNGNONG(2)   ACQUISITION    ACQUISITIONS
                                              ----------   -----------   -----------    ------------
                                                      (in thousands, except per share data)
<S>                                           <C>          <C>           <C>            <C>
Net sales...................................  $ 428,423      $27,564       $    --       $ 455,987
Cost of goods sold..........................    162,806       15,028            --         177,834
                                              ---------      -------       -------       ---------
         Gross profit.......................    265,617       12,536            --         278,153
                                              ---------      -------       -------       ---------
Operating expenses
  Research and development expenses.........     49,416        2,284            --          51,700
  Selling, general and administrative
    expenses................................    158,588       10,740            --         169,328
  Management fees paid to Savia.............      8,465           --            --           8,465
  Amortization of intangible assets.........     14,457           --         7,528(3)       21,985
                                              ---------      -------       -------       ---------
         Total operating expenses...........    230,926       13,024         7,528         251,478
                                              ---------      -------       -------       ---------
Income (loss) from operations...............     34,691         (488)       (7,528)         26,675
Other income (expense)
  Interest income...........................      1,952          646         2,689(4)        5,287
  Interest expense..........................    (29,034)      (9,459)        3,871(5)      (34,622)
  Foreign currency gain (loss)..............      3,205         (148)           --           3,057
  Minority interest.........................       (219)        (207)        2,942(6)        2,516
  Other, net................................       (397)        (574)           --            (971)
                                              ---------      -------       -------       ---------
                                                (24,493)      (9,742)        9,502         (24,733)
                                              ---------      -------       -------       ---------
Income (loss) from continuing operations
  before income taxes.......................     10,198      (10,230)        1,974           1,942
Income tax benefit (expense)................     (3,436)       1,120          (918)(7)      (3,234)
                                              ---------      -------       -------       ---------
Income (loss) from continuing operations....  $   6,762      $(9,110)      $ 1,056       $  (1,292)
                                              =========      =======       =======       =========
Income (loss) from continuing operations
  available for common stockholders.........  $(133,367)     $(9,110)      $ 1,056       $(141,421)
                                              =========      =======       =======       =========
Loss from continuing operations available
  for common stockholders per common
  share.....................................     $(4.23)     $    --       $    --       $   (4.05)
                                              =========      =======       =======       =========
Weighted average common shares
  outstanding...............................     31,536           --            --          34,912
                                              =========      =======       =======       =========
</TABLE>

- ---------------
(1) Includes results of operations of Hungnong from July 1, 1998.

(2) Reflects operations of Hungnong for the period from October 1, 1997 through
    June 30, 1998.

(3) To reflect nine months of amortization of Hungnong purchase accounting
    adjustments which include fair value step-ups for intangible assets,
    goodwill, and buildings. The intangible assets step-up is being amortized
    over approximately a 10 year period on an accelerated basis. The goodwill
    and building step-ups are being amortized over approximately 15 and 20 year
    periods, respectively, on a straight-line basis.

(4) To reflect assumed interest income from the note receivable from Young II
    Chemical Company for the period October 1, 1997 through June 30, 1998. See
    Note 2 -- Hungnong Seed Co. Ltd. of Seminis' Notes to Consolidated Financial
    Statements for discussion of the note receivable.

                                      F-40
<PAGE>   105
            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
              FOR THE YEAR ENDED SEPTEMBER 30, 1998 -- (CONTINUED)

(5) To reflect assumed elimination of interest expense of $2,975 due to assumed
    capitalization of Hungnong by Seminis effective October 1, 1997 and assumed
    reduction of interest expense of $896 related to subordinated debt due to
    Savia due to assumed conversion of debt to Class B common shares effective
    October 1, 1997. See Note 2 -- Hungnong Seed Co. Ltd. and Note 15 -- Related
    Parties of Seminis' Notes to Consolidated Financial Statements for
    discussion of the subordinated debt due to Savia.

(6) To reflect assumed allocation of net loss to minority interest based on 30%
    minority interest in Hungnong for the nine months ended June 30, 1998,
    including applicable pro forma adjustments.

(7) To reflect assumed income tax expense at a 37% effective tax rate applied to
    taxable pro forma adjustments.

                                      F-41
<PAGE>   106

                               GLOSSARY OF TERMS

      AGRONOMIC--(1) a description of crop characteristics related to yield,
disease, insect resistance, virus resistance and tolerance to adverse
environmental conditions or (2) related to cereal or oilseed crops.

      ARABLE--well-suited for the growing of crops.

      GENES--a part of DNA or RNA that contains information needed to make a
particular protein (e.g. an enzyme) or control or influence an inherited
physical trait or activity (e.g. eye color).

      GENOMICS--an understanding of the structure and function of the genetic
make-up of plants.

      GERMPLASM--the genetic resources used for crop improvements (e.g. plants,
seeds, pollen, DNA).

      HYBRID--seeds produced using genetically different parents.

      INPUT COSTS--grower costs of production (e.g. fertilizer, crop protection
chemicals).

      INPUT TRAITS--genetic traits or characteristics that reduce or eliminate
certain input costs or make crop plants resistant to pests or disease.

      OPEN-POLLINATED--seeds produced using a single parent.

      OUTPUT TRAITS--genetic traits or characteristics that enhance crop yield,
color, texture, flavor and ready-to-eat convenience.

      PHENOTYPICALLY--a visible or detectable characteristic of a plant.

      PHYTOSANITARY--plant material that is free of disease.

      PLANT BREEDING--the cross-fertilization of two like plants and selection
of desired offspring.

      PLANT PATHOLOGY--the study of plant diseases.

      TRANSWITCH TECHNOLOGY--complementary, recombinant DNA that prevents gene
function.

                                       G-1
<PAGE>   107

                                  UNDERWRITING

      Seminis, Savia and the underwriters for the U.S. offering named below have
entered into an underwriting agreement with respect to the shares being offered
in the United States. Subject to certain conditions, each U.S. underwriter has
severally agreed to purchase the number of shares indicated in the following
table. Goldman, Sachs & Co., J.P. Morgan Securities Inc., ING Baring Furman Selz
LLC, Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc. and VECTORMEX
Incorporated are the representatives of the U.S. underwriters.

<TABLE>
<CAPTION>
                        Underwriters                            Number of Shares
                        ------------                            ----------------
<S>                                                             <C>
Goldman, Sachs & Co. .......................................        2,970,000
J.P. Morgan Securities Inc. ................................        2,970,000
ING Baring Furman Selz LLC..................................        1,430,000
Morgan Stanley & Co. Incorporated...........................        1,430,000
Salomon Smith Barney Inc. ..................................        1,430,000
VECTORMEX Incorporated......................................          770,000
                                                                  -----------
  Total.....................................................       11,000,000
                                                                  ===========
</TABLE>

                             ----------------------

      If the U.S. underwriters sell more shares than the total number set forth
in the table above, the U.S. underwriters have an option to buy up to an
additional 1,650,000 shares from Seminis to cover such sales. They may exercise
that option for 30 days. If any shares are purchased pursuant to this option,
the U.S. underwriters will severally purchase shares in approximately the same
proportion as set forth in the table above.
      The following table shows the per share and total underwriting discounts
and commissions to be paid to the U.S. underwriters by Seminis. Such amounts are
shown assuming both no exercise and full exercise of the U.S. underwriters'
option to purchase additional shares.

<TABLE>
<CAPTION>
                              Paid by Seminis
                              ---------------
                             No           Full
                          Exercise      Exercise
                          --------      --------
<S>                      <C>           <C>
Per Share............    $     0.87    $      0.87
Total................    $9,570,000    $11,005,500
</TABLE>

      Shares sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $0.52 per share from the initial public offering price. Any such
securities dealers may resell any shares purchased from the underwriters to
certain other brokers or dealers at a discount of up to $0.10 per share from the
initial public offering price. If all the shares are not sold at the initial
offering price, the representatives may change the offering price and the other
selling terms.

      Seminis and Savia have entered into underwriting agreements with the
underwriters for the sale of 2,750,000 shares outside of the United States. The
terms and conditions of both offerings are the same and the sale of shares in
both offerings are conditioned on each other. Goldman Sachs International, J.P.
Morgan Securities Ltd., ING Barings Limited as agent for ING Bank N.V., London
Branch, Morgan Stanley & Co. International Limited and Salomon Brothers
International Limited are representatives of the underwriters for the
international offering outside the United States. Seminis has granted the
international underwriters a

                                       U-1
<PAGE>   108

similar option to purchase up to an aggregate of an additional 412,500 shares.

      The underwriters for both of the offerings have entered into an agreement
in which they agree to restrictions on where and to whom they and any dealer
purchasing from them may offer shares as a part of the distribution of the
shares. The underwriters also have agreed that they may sell shares among each
of the underwriting groups.

      Seminis and its directors and executive officers, Savia and all of the
other common stockholders of Seminis have agreed with the underwriters not to
dispose of or hedge any of their common stock or securities convertible into or
exchangeable for shares of common stock during the period from the date of this
prospectus continuing through the date 180 days after the date of this
prospectus, except with the prior written consent of Goldman, Sachs & Co. This
agreement does not apply to options or shares issued pursuant to Seminis'
existing employee benefit plans. In addition, Seminis may issue shares of common
stock to fund future acquisitions provided that the recipient enters into a
similar lock-up arrangement and Savia may pledge additional shares of common
stock to the extent necessary to comply with its recent borrowings. See "Shares
Available for Future Sale" for a discussion of certain transfer restrictions.

      Prior to the offerings, there has been no public market for the shares.
The initial public offering price has been negotiated among Seminis and the
representatives. Among the factors considered in determining the initial public
offering price of the shares, in addition to prevailing market conditions, were
Seminis' historical performance, estimates of the business potential and
earnings prospects of Seminis, an assessment of Seminis' management and the
consideration of the above factors in relation to market valuation of companies
in related businesses.

      The shares of Class A common stock have been approved for listing, subject
to official notice of issuance, on the Nasdaq National Market under the trading
symbol "SMNS".

      In connection with the offerings, the underwriters may purchase and sell
shares of Class A common stock in the open market. These transactions may
include short sales, stabilizing transactions and purchases to cover positions
created by short sales. Short sales involve the sale by the underwriters of a
greater number of shares than they are required to purchase in the offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the Class A
common stock while the offerings are in progress.

      The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.

      These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the Class A common stock. As a result, the price of
the Class A common stock may be higher than the price that otherwise might exist
in the open market. If these activities are commenced, they may be discontinued
by the underwriters at any time. These transactions may be effected on the
Nasdaq National Market, in the over-the-counter market or otherwise.

      The underwriters do not expect sales to discretionary accounts to exceed
five percent of the total number of shares offered.

      Seminis estimates that its share of the total expenses of the offerings,
excluding underwriting discounts and commissions, will be approximately $2.6
million.

      Seminis and Savia have agreed to indemnify the several underwriters
against certain liabilities, including liabilities under the Securities Act of
1933. However, Savia's indemnity obligations will not exceed $40.0 million.

      At Seminis' request, the underwriters have reserved shares of Class A
common stock for sale to directors, officers, employees and retirees of Seminis
who have

                                       U-2
<PAGE>   109

expressed an interest in participating in the offering. Seminis expects these
persons to purchase no more than 5% of the Class A common stock offered in the
offering. The number of shares available for sale to the general public will be
reduced to the extent such persons purchase such reserved shares.

      Alfonso Romo Garza, chairman of the board and director of Seminis and
beneficial owner of approximately 92.9% of the outstanding common stock, is one
of the principal shareholders of VECTORMEX Incorporated. Eugenio Najera
Solorzano, a director of Seminis, is also a director of Vector Casa de Bolsa,
S.A. de C.V., the indirect parent of VECTORMEX Incorporated.

      In view of the fact that VECTORMEX Incorporated is an affiliate of
Seminis, the offerings are being conducted in accordance with Conduct Rule 2720
of the National Association of Securities Dealers, Inc., which provides that the
offering price to the public may not be higher than that recommended by a
"qualified independent underwriter" who has participated in the preparation of
the registration statement and prospectus and has exercised the usual standards
of "due diligence" with respect thereto. Goldman, Sachs & Co. has agreed to
serve as "qualified independent underwriter" and the offering price to the
public will not be higher than the price recommended by Goldman, Sachs & Co.

      From time to time in the ordinary course of their respective businesses,
certain of the underwriters and their affiliates have engaged in and may in the
future engage in commercial banking and/or investment banking transactions with
Seminis and its affiliates.

      This prospectus may be used by the underwriters and other dealers in
connection with offers and sales of the shares, including sales of shares
initially sold by the underwriters in the offering being made outside of the
United States, to persons located in the United States.

      Greenhill & Co., LLC, a National Association of Securities Dealers, Inc.
member, has agreed with Seminis to act as its financial advisor in connection
with the offerings. For these services, Seminis has agreed to pay Greenhill &
Co., LLC an advisory fee of $500,000, a portion of which will be paid to
Greenhill & Co., LLC by the underwriters out of the gross underwriting
discounts. Timothy M. George, a director of Seminis, is also a member and a
Managing Director of Greenhill & Co., LLC.

                                       U-3
<PAGE>   110

                              [Inside Back Cover]

                               [Logo of Seminis]
                                [Logo of Asgrow]
                               [Logo of Petoseed]
                             [Logo of Royal Sluis]
                               [Logo of Bruinsma]
                              [Logo of California]
                              [Logo of Choong Ang]
                               [Logo of Genecorp]
                              [Logo of Horticeres]
                               [Logo of Hungnong]
                           [Logo of LSL PlantScience]
                                [Logo of Seneca]
<PAGE>   111

- ------------------------------------------------------
- ------------------------------------------------------
     No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.
                             ----------------------
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                           Page
                                           ----
<S>                                     <C>
Prospectus Summary.....................       3
Risk Factors...........................       8
Use of Proceeds........................      12
Dividend Policy........................      12
Capitalization.........................      13
Dilution...............................      15
Selected Consolidated Financial Data...      16
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations...........................      19
Business...............................      28
Management.............................      48
Principal Stockholders.................      55
Certain Relationships and Related
  Transactions.........................      56
Shares Eligible for Future Sale........      56
Description of Capital Stock...........      57
Legal Matters..........................      63
Experts................................      63
Available Information..................      63
Index to Consolidated Financial
  Statements...........................     F-1
Glossary of Terms......................     G-1
Underwriting...........................     U-1
</TABLE>

                             ----------------------

Through and including July 24, 1999 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to a dealer's obligation to deliver a prospectus when acting
as an underwriter and with respect to an unsold allotment or subscription.
- ------------------------------------------------------
- ------------------------------------------------------

- ---------------------------------------------------------
- ---------------------------------------------------------

                    13,750,000 Shares

                      SEMINIS, INC.

                   Class A Common Stock

                  ----------------------

                      [SEMINIS LOGO]
                  ----------------------
                   GOLDMAN, SACHS & CO.
                    J.P. MORGAN & CO.
                ING BARING FURMAN SELZ LLC
                MORGAN STANLEY DEAN WITTER
                   SALOMON SMITH BARNEY
                  VECTORMEX INCORPORATED
           Representatives of the Underwriters
- ---------------------------------------------------------
- ---------------------------------------------------------


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