SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): June 1, 1998 (May 31, 1998)
AMERICAN HOME PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-1225 13-2526821
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
Five Giralda Farms, Madison, New Jersey 07940
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 973-660-5000
<PAGE>
Item 5. Other Events.
On May 31, 1998, American Home Products Corporation ("AHP"), MA
Sub, Inc., a wholly owned subsidiary of AHP ("Merger Sub"), and
Monsanto Company ("Monsanto") entered into an Agreement and Plan
of Merger (the "Merger Agreement"). As a result of the merger,
each outstanding share of Monsanto common stock would be converted
into the right to receive 1.15 shares of AHP common stock. The
combined company will be renamed at a later date.
The combined company's board of directors will consist of 22 members,
with representation equally divided between AHP and Monsanto.
Monsanto's Chairman and Chief Executive Officer, Robert B. Shapiro,
and AHP's Chairman, President and Chief Executive Officer, John R.
Stafford, will be co-chairmen and co-CEOs.
The merger is intended to constitute a reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended,
and to be accounted for as a pooling of interests. Consummation
of the merger is subject to various conditions, including receipt
of the necessary approvals of Monsanto's stockholders and AHP's
stockholders and receipt of required regulatory approvals.
The foregoing description of the Merger Agreement and the
transactions contemplated thereby does not purport to be complete
and is qualified in its entirety by reference to the Merger
Agreement, a copy of which is attached as Exhibit 2.1 hereto.
Item 7. Financial Statements and Exhibits
(c) Exhibits
(2.1) Agreement and Plan of Merger, dated as of May 31,
1998, among American Home Products Corporation, MA
Sub, Inc. and Monsanto Company.
(99) Press Release, dated June 1, 1998, announcing the
execution of the Merger Agreement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Paul J. Jones
Vice President and Comptroller
(Duly Authorized Signatory and
Chief Accounting Officer)
Dated: June 1, 1998
<PAGE>
EXHIBIT INDEX
(2.1) Agreement and Plan of Merger, dated as of May 31,
1998, among American Home Products Corporation, MA
Sub, Inc. and Monsanto Company.
(99) Press Release, dated June 1, 1998, announcing the
execution of the Merger Agreement.
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 31, 1998
AMONG
AMERICAN HOME PRODUCTS CORPORATION,
MA SUB, INC.
AND
MONSANTO COMPANY
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER . . . . . . . . . . . . . . . 2
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . 2
1.5 Certificate of Incorporation. . . . . . . . . . . . . . . . . . 2
1.6 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Officers and Directors of Surviving Corporation and
Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . 3
1.9 Monsanto Stock Options. . . . . . . . . . . . . . . . . . . . . 4
1.10 Certain Adjustments . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
EXCHANGE OF CERTIFICATES. . . . . . . . . . . . 5
2.1 Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Distributions with Respect to Unexchanged Shares. . . . . . . . 6
2.4 No Further Ownership Rights in Monsanto Common
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 No Fractional Shares of AHP Common Stock. . . . . . . . . . . . 7
2.6 Termination of Exchange Fund. . . . . . . . . . . . . . . . . . 7
2.7 No Liability. . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.8 Investment of the Exchange Fund . . . . . . . . . . . . . . . . 8
2.9 Lost Certificates . . . . . . . . . . . . . . . . . . . . . . . 8
2.10 Withholding Rights. . . . . . . . . . . . . . . . . . . . . . . 8
2.11 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . 8
2.12 Stock Transfer Books. . . . . . . . . . . . . . . . . . . . . . 8
2.13 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 9
3.1 Representations and Warranties of AHP.. . . . . . . . . . . . . 9
(a) Organization, Standing and Power;
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Capital Structure. . . . . . . . . . . . . . . . . . . . . 10
(c) Authority; No Conflicts. . . . . . . . . . . . . . . . . . 11
(d) Reports and Financial Statements . . . . . . . . . . . . . 12
(e) Information Supplied . . . . . . . . . . . . . . . . . . . 13
(f) Board Approval . . . . . . . . . . . . . . . . . . . . . . 13
(g) Vote Required. . . . . . . . . . . . . . . . . . . . . . . 14
(h) Litigation; Compliance with Laws . . . . . . . . . . . . . 14
(i) Absence of Certain Changes or Events . . . . . . . . . . . 14
(j) Environmental Matters. . . . . . . . . . . . . . . . . . . 15
(k) Intellectual Property. . . . . . . . . . . . . . . . . . . 16
(l) Brokers or Finders . . . . . . . . . . . . . . . . . . . . 16
(m) Opinion of AHP Financial Advisor . . . . . . . . . . . . . 17
(n) Accounting Matters . . . . . . . . . . . . . . . . . . . . 17
(o) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(p) Certain Contracts. . . . . . . . . . . . . . . . . . . . . 17
(q) Specified Litigation . . . . . . . . . . . . . . . . . . . 17
3.2 Representations and Warranties of Monsanto. . . . . . . . . . 18
(a) Organization, Standing and Power;
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Capital Structure. . . . . . . . . . . . . . . . . . . . . 19
(c) Authority; No Conflicts. . . . . . . . . . . . . . . . . . 20
(d) Reports and Financial Statements . . . . . . . . . . . . . 21
(e) Information Supplied . . . . . . . . . . . . . . . . . . . 22
(f) Board Approval . . . . . . . . . . . . . . . . . . . . . . 22
(g) Vote Required. . . . . . . . . . . . . . . . . . . . . . . 22
(h) Litigation; Compliance with Laws . . . . . . . . . . . . . 23
(i) Absence of Certain Changes or Events . . . . . . . . . . . 23
(j) Environmental Matters. . . . . . . . . . . . . . . . . . . 23
(k) Intellectual Property. . . . . . . . . . . . . . . . . . . 24
(l) Rights Agreement . . . . . . . . . . . . . . . . . . . . . 24
(m) Brokers or Finders . . . . . . . . . . . . . . . . . . . . 24
(n) Opinions of Monsanto Financial Advisors. . . . . . . . . . 25
(o) Accounting Matters . . . . . . . . . . . . . . . . . . . . 25
(p) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(q) Certain Contracts. . . . . . . . . . . . . . . . . . . . . 25
(r) Specified Litigation . . . . . . . . . . . . . . . . . . . 25
3.3 Representations and Warranties of AHP and Merger
Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Organization . . . . . . . . . . . . . . . . . . . . . . . 26
(b) Corporate Authorization. . . . . . . . . . . . . . . . . . 26
(c) Non-Contravention. . . . . . . . . . . . . . . . . . . . . 26
(d) No Business Activities . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . . 26
4.1 Covenants of AHP. . . . . . . . . . . . . . . . . . . . . . . 26
(a) Ordinary Course. . . . . . . . . . . . . . . . . . . . . . 27
(b) Dividends; Changes in Share Capital. . . . . . . . . . . . 27
(c) Issuance of Securities . . . . . . . . . . . . . . . . . . 27
(d) Governing Documents. . . . . . . . . . . . . . . . . . . . 28
(e) No Acquisitions. . . . . . . . . . . . . . . . . . . . . . 28
(f) No Dispositions. . . . . . . . . . . . . . . . . . . . . . 28
(g) Investments; Indebtedness. . . . . . . . . . . . . . . . . 28
(h) Pooling; Tax-Free Qualification. . . . . . . . . . . . . . 29
(i) Compensation . . . . . . . . . . . . . . . . . . . . . . . 29
(j) Accounting Methods; Income Tax Elections . . . . . . . . . 29
(k) Certain Agreements . . . . . . . . . . . . . . . . . . . . 29
4.2 Covenants of Monsanto . . . . . . . . . . . . . . . . . . . . . 29
(a) Ordinary Course. . . . . . . . . . . . . . . . . . . . . . 30
(b) Dividends; Changes in Share Capital. . . . . . . . . . . . 30
(c) Issuance of Securities . . . . . . . . . . . . . . . . . . 30
(d) Governing Documents. . . . . . . . . . . . . . . . . . . . 31
(e) No Acquisitions. . . . . . . . . . . . . . . . . . . . . . 31
(f) No Dispositions. . . . . . . . . . . . . . . . . . . . . . 31
(g) Investments; Indebtedness. . . . . . . . . . . . . . . . . 32
(h) Pooling; Tax-Free Qualification. . . . . . . . . . . . . . 32
(i) Compensation . . . . . . . . . . . . . . . . . . . . . . . 32
(j) Accounting Methods; Income Tax Elections . . . . . . . . . 32
(k) Certain Agreements . . . . . . . . . . . . . . . . . . . . 32
(l) Rights Agreement . . . . . . . . . . . . . . . . . . . . . 33
4.3 Governmental Filings. . . . . . . . . . . . . . . . . . . . . . 33
4.4 Control of Other Party's Business . . . . . . . . . . . . . . . 33
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . . 33
5.1 Preparation of Proxy Statement; Stockholders
Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.2 Newco Board of Directors; Office of the Chairman;
Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.3 Access to Information . . . . . . . . . . . . . . . . . . . . . 36
5.4 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . . . 36
5.5 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . 38
5.6 Employee Benefits Matters . . . . . . . . . . . . . . . . . . . 39
5.7 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . 41
5.8 Directors' and Officers' Indemnification and
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.9 Specified Litigation. . . . . . . . . . . . . . . . . . . . . . 42
5.10 Public Announcements. . . . . . . . . . . . . . . . . . . . . . 42
5.11 Accountant's Letters. . . . . . . . . . . . . . . . . . . . . . 42
5.12 Listing of Shares of AHP Common Stock . . . . . . . . . . . . . 43
5.13 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.14 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.15 Employment Agreements . . . . . . . . . . . . . . . . . . . . . 44
<PAGE>
ARTICLE VI
CONDITIONS PRECEDENT. . . . . . . . . . . . . 44
6.1 Conditions to Each Party's Obligation to Effect the
Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(a) Stockholder Approval . . . . . . . . . . . . . . . . . . . 44
(b) No Injunctions or Restraints, Illegality . . . . . . . . . 44
(c) HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . 44
(d) Governmental and Regulatory Approvals. . . . . . . . . . . 44
(e) NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . 45
(f) Effectiveness of the Form S-4. . . . . . . . . . . . . . . 45
(g) Pooling. . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.2 Additional Conditions to Obligations of AHP and
Merger Sub. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(a) Representations and Warranties . . . . . . . . . . . . . . 45
(b) Performance of Obligations of Monsanto. . . . . . . . . . 46
(c) Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . 46
(d) Rights Agreement . . . . . . . . . . . . . . . . . . . . . 46
6.3 Additional Conditions to Obligations of Monsanto.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(a) Representations and Warranties . . . . . . . . . . . . . . 46
(b) Performance of Obligations of AHP. . . . . . . . . . . . 46
(c) Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VII
TERMINATION AND AMENDMENT . . . . . . . . . . . 47
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . 52
7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VIII
GENERAL PROVISIONS . . . . . . . . . . . . . 56
8.1 Non-Survival of Representations, Warranties and
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.3 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . 57
8.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.5 Entire Agreement; No Third Party Beneficiaries. . . . . . . . . 58
8.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.9 Submission to Jurisdiction; Waivers . . . . . . . . . . . . . . 58
8.10 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.11 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 59
<PAGE>
LIST OF EXHIBITS
Exhibit Title
1.5 Form of Amended and Restated Certificate of
Incorporation of Surviving Corporation
1.6(a) Form of By-Laws of Surviving Corporation
1.6(b) Form of Amendments to By-Laws of AHP
1.7 Board of Directors of Surviving Corporation
5.2(a) Board of Directors and Office of the Chairmen
of Newco
5.14 Form of Affiliate Letter
6.2(c)(1) Form of AHP Tax Opinion
6.2(c)(2) Form of AHP Representations Letter
6.2(c)(3) Form of Monsanto Representations Letter
6.3(c)(1) Form of Monsanto Tax Opinion
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of May 31, 1998
(this "Agreement"), among AMERICAN HOME PRODUCTS CORPORATION, a
Delaware corporation ("AHP"), MA SUB, INC., a Delaware corporation
and a direct wholly-owned subsidiary of AHP ("Merger Sub"), and
MONSANTO COMPANY, a Delaware corporation ("Monsanto").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Monsanto and AHP deem
it advisable and in the best interests of each corporation and its
respective stockholders that Monsanto and AHP engage in a business
combination as peer firms in a merger of equals in order to advance
the long-term strategic business interests of Monsanto and AHP;
WHEREAS, the combination of Monsanto and AHP shall be
effected by the terms of this Agreement through a merger as
outlined below (the "Merger");
WHEREAS, in furtherance thereof, the respective Boards of
Directors of Monsanto and AHP have approved the Merger, upon the
terms and subject to the conditions set forth in this Agreement,
pursuant to which each share of common stock, par value $2.00 per
share, of Monsanto ("Monsanto Common Stock") issued and outstanding
immediately prior to the Effective Time (as defined in Section
1.3), other than shares owned or held directly or indirectly by AHP
or directly or indirectly by Monsanto, will be converted into the
right to receive shares of common stock, par value $0.33 1/3 per
share, of AHP ("AHP Common Stock") as set forth in Section 1.8;
WHEREAS, for Federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated thereunder;
and
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests transaction
under United States generally accepted accounting principles
("GAAP").
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth in this Agreement, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the
Delaware General Corporation Law (the "DGCL"), Merger Sub shall be
merged with and into Monsanto at the Effective Time. Following the
Merger, the separate corporate existence of Merger Sub shall cease
and Monsanto shall continue as the surviving corporation (the
"Surviving Corporation") under a new name to be mutually agreed
upon by Monsanto and AHP prior to the Effective Time.
1.2 Closing. Subject to the satisfaction or waiver
(subject to applicable law) of the conditions set forth in Article
VI, the closing of the Merger and the transactions contemplated by
this Agreement (the "Closing") will take place on the second
Business Day after the Determination Date (as defined in Section
7.1(h)); provided, that if an AHP Stock Decline (as defined in
Section 7.1(h)) or a Monsanto Stock Decline (as defined in
Section 7(i)) shall have occurred, the Closing will, subject to the
foregoing, take place on the seventh Business Day after the
Determination Date, unless this Agreement has been theretofore
terminated pursuant to its terms, unless another time or date is
agreed to in writing by the parties hereto (the actual time and
date of the Closing being referred to herein as the "Closing
Date"). The Closing shall be held at the offices of Simpson
Thacher & Bartlett, 425 Lexington Avenue, New York, New York,
10017, unless another place is agreed to in writing by the parties
hereto.
1.3 Effective Time. As soon as practicable following
the satisfaction of the conditions set forth in Article VI, at the
Closing the parties shall (i) file a certificate of merger (the
"Certificate of Merger") in such form as is required by and
executed in accordance with the relevant provisions of the DGCL and
(ii) make all other filings or recordings required under the DGCL.
The Merger shall become effective at such time as the Certificate
of Merger is duly filed with the Delaware Secretary of State or at
such subsequent time as AHP and Monsanto shall agree and as shall
be specified in the Certificate of Merger (the date and time the
Merger becomes effective being the "Effective Time").
1.4 Effects of the Merger. At and after the Effective
Time, the Merger will have the effects set forth in the DGCL.
Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of Monsanto and Merger Sub shall
be vested in the Surviving Corporation, and all debts, liabilities
and duties of Monsanto and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.5 Certificate of Incorporation. (a) The certificate
of incorporation of Monsanto, as in effect immediately prior to the
Effective Time, shall be amended and restated so as to read in its
entirety in the form set forth as Exhibit 1.5 and, as so amended
and restated , shall be the certificate of incorporation of the
Surviving Corporation, until thereafter changed or amended as
provided therein or by applicable law.
(b) The certificate of incorporation of AHP shall be
amended effective as of the Effective Time to change its name as
provided in Section 5.2(b) pursuant to Section 253(b) of the DGCL.
1.6 By-Laws. (a) The by-laws in the form attached as
Exhibit 1.6(a) shall be the by-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by
applicable law.
(b) The by-laws of AHP shall be amended effective as of
the Effective Time to the effect provided in Exhibit 1.6(b), with
such changes therein as the parties may mutually agree.
1.7 Officers and Directors of Surviving Corporation and
Newco. The officers of Monsanto as of the Effective Time shall be
the officers of the Surviving Corporation, until the earlier of
their resignation or removal or otherwise ceasing to be an officer
or until their respective successors are duly elected and
qualified, as the case may be. The directors of the Surviving
Corporation as of the Effective Time shall be as provided in
Exhibit 1.7, which individuals will serve as directors of the
Surviving Corporation until the earlier of their resignation or
removal or otherwise ceasing to be a director or until their
respective successors are duly elected and qualified. The officers
and directors of AHP as of the Effective Time, which shall change
its name as of the Effective Time to a new name to be mutually
agreed upon by Monsanto and AHP prior to the Effective Time
("Newco"), will be as provided in Section 5.2.
1.8 Effect on Capital Stock.
(a) At the Effective Time by virtue of the Merger and
without any action on the part of the holder thereof, each share of
Monsanto Common Stock issued and outstanding immediately prior to
the Effective Time (other than shares of Monsanto Common Stock
owned by AHP or Merger Sub or held by Monsanto, all of which shall
be canceled as provided in Section 1.8(c)) shall be converted into
the right to receive 1.15 shares (the "Exchange Ratio") of AHP
Common Stock (together with any cash in lieu of fractional shares
of AHP Common Stock to be paid pursuant to Section 2.5, the "Merger
Consideration").
(b) As a result of the Merger and without any action on
the part of the holders thereof, at the Effective Time, all shares
of Monsanto Common Stock shall cease to be outstanding and shall be
canceled and retired and shall cease to exist, and each holder of
a certificate which immediately prior to the Effective Time
represented any such shares of Monsanto Common Stock (a
"Certificate") shall thereafter cease to have any rights with
respect to such shares of Monsanto Common Stock, except as provided
herein or by law.
(c) Each share of Monsanto Common Stock issued and owned
or held by AHP, Merger Sub or Monsanto at the Effective Time shall,
by virtue of the Merger, cease to be outstanding and shall be
canceled and retired and no stock of AHP or other consideration
shall be delivered in exchange therefor.
(d) Each share of common stock, par value $0.01 per
share, of Merger Sub issued and outstanding immediately prior to
the Effective Time, shall remain issued, outstanding and unchanged
as validly issued, fully paid and nonassessable shares of common
stock, par value $0.01 per share, of the Surviving Corporation as
of the Effective Time.
1.9 Monsanto Stock Options.
(a) On or prior to the Effective Time, Monsanto will
take all action necessary such that each Monsanto Stock Option (as
defined in Section 3.2(b)) that was granted pursuant to the
Monsanto Stock Option Plans (as defined in Section 3.2(b)) prior to
the Effective Time and which remains outstanding immediately prior
to the Effective Time shall cease to represent a right to acquire
shares of Monsanto Common Stock and shall be converted, at the
Effective Time, into an option to acquire, on the same terms and
conditions as were applicable under the Monsanto Stock Option, that
number of shares of AHP Common Stock determined by multiplying the
number of shares of Monsanto Common Stock subject to such Monsanto
Stock Option by the Exchange Ratio, rounded, if necessary, to the
nearest whole share of AHP Common Stock, at a price per share
(rounded to the nearest one-hundredth of a cent) equal to the per
share exercise price specified in such Monsanto Stock Option
divided by the Exchange Ratio; provided, however, that in the case
of any Monsanto Stock Option to which Section 421 of the Code
applies by reason of its qualification under Section 422 of the
Code, the option price, the number of shares subject to such option
and the terms and conditions of exercise of such option shall be
determined in a manner consistent with the requirements of Section
424(a) of the Code.
(b) As soon as practicable after the Effective Time,
Newco shall deliver to the holders of Monsanto Stock Options
appropriate notices setting forth such holders' rights pursuant to
the Monsanto Stock Option Plans (including that, by virtue of the
Merger and pursuant to the terms of the Monsanto Stock Option
Plans, the Monsanto Stock Options have become fully vested and
exercisable) and the agreements evidencing the grants of such
Monsanto Stock Options shall continue in effect on the same terms
and conditions (subject to the adjustments required by this Section
1.9 after giving effect to the Merger and the terms of the Monsanto
Stock Option Plans). To the extent permitted by law, Newco shall
comply with the terms of the Monsanto Stock Option Plans and shall
take such reasonable steps as are necessary or required by, and
subject to the provisions of, such Monsanto Stock Option Plans, to
have the Monsanto Stock Options which qualified as incentive stock
options prior to the Effective Time continue to qualify as
incentive stock options of Newco after the Effective Time.
(c) Newco shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of AHP Common
Stock for delivery upon exercise of Monsanto Stock Options in
accordance with this Section 1.9. Promptly after the Effective
Time, Newco shall file a registration statement on Form S-3 or Form
S-8, as the case may be (or any successor or other appropriate
forms), with respect to the shares of AHP Common Stock subject to
such options and shall use commercially reasonable efforts to
maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such
options remain outstanding. With respect to those individuals who
subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), where applicable, Newco
shall administer the Monsanto Stock Option Plans in a manner
consistent with the exemptions provided by Rule 16b-3 promulgated
under the Exchange Act.
1.10 Certain Adjustments. If, between the date of
this Agreement and the Effective Time, the outstanding AHP Common
Stock or Monsanto Common Stock shall have been changed into a
different number of shares or different class by reason of any
reclassification, recapitalization, stock split, split-up,
combination or exchange of shares or a stock dividend or dividend
payable in any other securities shall be declared with a record
date within such period, or any similar event shall have occurred,
the Exchange Ratio shall be appropriately adjusted to provide to
the holders of Monsanto Common Stock the same economic effect as
contemplated by this Agreement prior to such event.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 Exchange Fund. Prior to the Effective Time, AHP
shall appoint a commercial bank or trust company reasonably
acceptable to Monsanto having net capital of not less than
$100,000,000, or a subsidiary thereof, to act as exchange agent
hereunder for the purpose of exchanging Certificates for the Merger
Consideration (the "Exchange Agent"). At or prior to the Effective
Time, AHP shall deposit with the Exchange Agent, in trust for the
benefit of holders of shares of Monsanto Common Stock, certificates
representing the AHP Common Stock issuable pursuant to Section 1.8
in exchange for outstanding shares of Monsanto Common Stock. AHP
agrees to make available to the Exchange Agent from time to time as
needed, cash sufficient to pay cash in lieu of fractional shares
pursuant to Section 2.5 and any dividends and other distributions
pursuant to Section 2.3. Any cash and certificates of AHP Common
Stock deposited with the Exchange Agent shall hereinafter be
referred to as the "Exchange Fund".
2.2 Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Surviving Corporation
shall cause the Exchange Agent to mail to each holder of a
Certificate (i) a letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to
the Exchange Agent, and which letter shall be in customary form and
have such other provisions as AHP may reasonably specify and (ii)
instructions for effecting the surrender of such Certificates in
exchange for the applicable Merger Consideration. Upon surrender
of a Certificate to the Exchange Agent together with such letter of
transmittal, duly executed and completed in accordance with the
instructions thereto, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor (A) one or more
shares of AHP Common Stock (which shall be in uncertificated
book-entry form unless a physical certificate is requested)
representing, in the aggregate, the whole number of shares that
such holder has the right to receive pursuant to Section 1.8 (after
taking into account all shares of Monsanto Common Stock then held
by such holder) and (B) a check in the amount equal to the cash
that such holder has the right to receive pursuant to the
provisions of this Article II, including cash in lieu of any
fractional shares of AHP Common Stock pursuant to Section 2.5 and
dividends and other distributions pursuant to Section 2.3. No
interest will be paid or will accrue on any cash payable pursuant
to Section 2.3 or Section 2.5. In the event of a transfer of
ownership of Monsanto Common Stock which is not registered in the
transfer records of Monsanto, one or more shares of AHP Common
Stock evidencing, in the aggregate, the proper number of shares of
AHP Common Stock, a check in the proper amount of cash in lieu of
any fractional shares of AHP Common Stock pursuant to Section 2.5
and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.3, may be issued with respect to
such Monsanto Common Stock to such a transferee if the Certificate
representing such shares of Monsanto Common Stock is presented to
the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
2.3 Distributions with Respect to Unexchanged Shares.
No dividends or other distributions declared or made with respect
to shares of AHP Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of AHP Common Stock that
such holder would be entitled to receive upon surrender of such
Certificate and no cash payment in lieu of fractional shares of AHP
Common Stock shall be paid to any such holder pursuant to Section
2.5 until such holder shall surrender such Certificate in
accordance with Section 2.2. Subject to the effect of applicable
laws, following surrender of any such Certificate, there shall be
paid to such holder of shares of AHP Common Stock issuable in
exchange therefor, without interest, (a) promptly after the time of
such surrender, the amount of any cash payable in lieu of
fractional shares of AHP Common Stock to which such holder is
entitled pursuant to Section 2.5 and the amount of dividends or
other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of AHP Common
Stock, and (b) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the
Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such shares of
AHP Common Stock.
2.4 No Further Ownership Rights in Monsanto Common
Stock. All shares of AHP Common Stock issued and cash paid upon
conversion of shares of Monsanto Common Stock in accordance with
the terms of Article I and this Article II (including any cash paid
pursuant to Section 2.3 or 2.5) shall be deemed to have been issued
or paid in full satisfaction of all rights pertaining to the shares
of Monsanto Common Stock.
2.5 No Fractional Shares of AHP Common Stock.
(a) No certificates or scrip or shares of AHP Common
Stock representing fractional shares of AHP Common Stock or book-
entry credit of the same shall be issued upon the surrender for
exchange of Certificates and such fractional share interests will
not entitle the owner thereof to vote or to have any rights of a
shareholder of AHP or a holder of shares of AHP Common Stock.
(b) Notwithstanding any other provision of this
Agreement, each holder of shares of Monsanto Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of AHP Common Stock (after taking
into account all Certificates delivered by such holder) shall
receive, in lieu thereof, cash (without interest) in an amount
equal to the product of (i) such fractional part of a share of AHP
Common Stock multiplied by (ii) the closing price for a share of
AHP Common Stock on the New York Stock Exchange, Inc. ("NYSE")
Composite Transactions Tape on the date of the Effective Time or,
if such date is not a Business Day, the Business Day immediately
following the date on which the Effective Time occurs. As promptly
as practicable after the determination of the amount of cash, if
any, to be paid to holders of fractional interests, the Exchange
Agent shall so notify AHP, and AHP shall cause the Surviving
Corporation to deposit such amount with the Exchange Agent and
shall cause the Exchange Agent to forward payments to such holders
of fractional interests subject to and in accordance with the terms
hereof.
2.6 Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of
Certificates for six months after the Effective Time shall be
delivered to the Surviving Corporation or otherwise on the
instruction of the Surviving Corporation, and any holders of the
Certificates who have not theretofore complied with this Article II
shall thereafter look only to the Surviving Corporation and AHP for
the Merger Consideration with respect to the shares of Monsanto
Common Stock formerly represented thereby to which such holders are
entitled pursuant to Section 1.8 and Section 2.2, any cash in lieu
of fractional shares of AHP Common Stock to which such holders are
entitled pursuant to Section 2.5 and any dividends or distributions
with respect to shares of AHP Common Stock to which such holders
are entitled pursuant to Section 2.3. Any such portion of the
Exchange Fund remaining unclaimed by holders of shares of Monsanto
Common Stock five years after the Effective Time (or such earlier
date immediately prior to such time as such amounts would otherwise
escheat to or become property of any Governmental Entity (as
defined in Section 3.1(c)(iii)) shall, to the extent permitted by
law, become the property of the Surviving Corporation free and
clear of any claims or interest of any Person previously entitled
thereto.
2.7 No Liability. None of AHP, Merger Sub, Monsanto,
the Surviving Corporation or the Exchange Agent shall be liable to
any Person in respect of any Merger Consideration from the Exchange
Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
2.8 Investment of the Exchange Fund. The Exchange Agent
shall invest any cash included in the Exchange Fund as directed by
the Surviving Corporation on a daily basis. Any interest and other
income resulting from such investments shall promptly be paid to
the Surviving Corporation.
2.9 Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving Corporation,
the posting by such Person of a bond in such reasonable amount as
the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the
Exchange Agent will deliver in exchange for such lost, stolen or
destroyed Certificate the applicable Merger Consideration with
respect to the shares of Monsanto Common Stock formerly represented
thereby, any cash in lieu of fractional shares of AHP Common Stock,
and unpaid dividends and distributions on shares of AHP Common
Stock deliverable in respect thereof, pursuant to this Agreement.
2.10 Withholding Rights. Each of the Surviving
Corporation and AHP shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to
any holder of shares of Monsanto Common Stock such amounts as it is
required to deduct and withhold with respect to the making of such
payment under the Code and the rules and regulations promulgated
thereunder, or any provision of state, local or foreign tax law.
To the extent that amounts are so withheld by the Surviving
Corporation or AHP, as the case may be, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Monsanto Common Stock in respect of
which such deduction and withholding was made by the Surviving
Corporation or AHP, as the case may be.
2.11 Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will
be authorized to execute and deliver, in the name and on behalf of
Monsanto or Merger Sub, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of
Monsanto or Merger Sub, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets acquired or to be acquired
by the Surviving Corporation as a result of, or in connection with,
the Merger.
2.12 Stock Transfer Books. The stock transfer books
of Monsanto shall be closed immediately upon the Effective Time and
there shall be no further registration of transfers of shares of
Monsanto Common Stock thereafter on the records of Monsanto. On or
after the Effective Time, any Certificates presented to the
Exchange Agent or AHP for any reason shall be converted into the
Merger Consideration with respect to the shares of Monsanto Common
Stock formerly represented thereby, any cash in lieu of fractional
shares of AHP Common Stock to which the holders thereof are
entitled pursuant to Section 2.5 and any dividends or other
distributions to which the holders thereof are entitled pursuant to
Section 2.3.
2.13 Affiliates. Notwithstanding anything to the
contrary herein, no shares of AHP Common Stock or cash shall be
delivered to a Person who may be deemed an "affiliate" of Monsanto
in accordance with Section 5.14 hereof for purposes of Rule 145
under the Securities Act of 1933, as amended (the "Securities Act")
or for purposes of qualifying the Merger for pooling of interests
accounting treatment under Opinion 16 of the Accounting Principles
Board and applicable rules and regulations of the Securities and
Exchange Commission (the "SEC") until such Person has executed and
delivered an Affiliate Agreement (as defined in Section 5.14) to
AHP.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of AHP. Except as
set forth in the AHP Disclosure Schedule delivered by AHP to
Monsanto prior to the execution of this Agreement (the "AHP
Disclosure Schedule") (each section of which qualifies the
correspondingly numbered representation and warranty or covenant to
the extent specified therein) AHP represents and warrants to
Monsanto as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of AHP and each of its Subsidiaries (as
defined in Section 8.11) is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has the
requisite power and authority to own, lease and operate its
properties and to carry on its business as now being
conducted, except where the failure to be so organized,
existing and in good standing or to have such power and
authority would not reasonably be expected to have a Material
Adverse Effect on AHP, and is duly qualified and in good
standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in
such jurisdictions where the failure so to qualify or to be in
good standing would not reasonably be expected to have a
Material Adverse Effect on AHP. The copies of the certificate
of incorporation and by-laws of AHP which were previously
furnished or made available to Monsanto are true, complete and
correct copies of such documents as in effect on the date of
this Agreement.
(ii) Exhibit 21 to AHP's Annual Report on Form
10-K for the year ended December 31, 1997 includes all the
Subsidiaries of AHP which as of the date of this Agreement are
Significant Subsidiaries (as defined in Rule 1-02 of
Regulation S-X of the SEC). All the outstanding shares of
capital stock of, or other equity interests in, each such
Significant Subsidiary have been validly issued and are fully
paid and nonassessable and are owned directly or indirectly by
AHP, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature
whatsoever (collectively "Liens") and free of any other
restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other
ownership interests). Except as set forth in the AHP SEC
Reports, as of the date of this Agreement, neither AHP nor any
of its Subsidiaries directly or indirectly owns any equity or
similar interest in, or any interest convertible into or
exchangeable or exercisable for, any corporation, partnership,
joint venture or other business association or entity (other
than Subsidiaries), that is or would reasonably be expected to
be material to AHP and its Subsidiaries taken as a whole.
(b) Capital Structure.
(i) As of May 26, 1998, the authorized capital
stock of AHP consisted of (A) 2,400,000,000 shares of AHP
Common Stock of which 1,314,414,504 shares were outstanding
and 107,498,740 shares were held in the treasury of AHP and
(B) 5,000,000 shares of Preferred Stock, par value $2.50 per
share, of which 27,717 shares designated as $2 Convertible
Preferred Stock (the "$2 Convertible Preferred Stock") were
outstanding. As of May 26, 1998, AHP had reserved or has
available 997,812 shares of AHP Common Stock for issuance upon
conversion of the $2 Convertible Preferred Stock. Since May
26, 1998 to the date of this Agreement, there have been no
issuances of shares of the capital stock of AHP or any other
securities of AHP other than issuances of shares upon
conversion of the $2 Convertible Preferred Stock or pursuant
to options or rights outstanding as of May 26, 1998 under the
Benefit Plans (as defined in Section 8.11(a)) of AHP. All
issued and outstanding shares of the capital stock of AHP are
duly authorized, validly issued, fully paid and nonassessable,
and no class of capital stock is entitled to preemptive
rights. There were outstanding as of May 26, 1998 no options,
warrants or other rights to acquire capital stock from AHP
other than options representing in the aggregate the right to
purchase 80,904,028 shares of AHP Common Stock (collectively,
the "AHP Stock Options") under AHP's 1980 Stock Option Plan,
AHP's 1985 Stock Option Plan, AHP's Management Incentive Plan,
AHP's 1990 Stock Incentive Plan, AHP's 1993 Stock Incentive
Plan and AHP's 1996 Stock Incentive Plan (collectively, the
"AHP Stock Option Plans"). Section 3.1(b) of the AHP
Disclosure Schedule sets forth a complete and correct list, as
of May 26, 1998, of the number of shares of AHP Common Stock
subject to AHP Stock Options or other rights to purchase or
receive AHP Common Stock granted under the AHP Benefit Plans
or otherwise, the dates of grant and the exercise prices
thereof. No options or warrants or other rights to acquire
capital stock from AHP have been issued or granted since May
26, 1998 to the date of this Agreement.
(ii) No bonds, debentures, notes or other
indebtedness of AHP having the right to vote on any matters on
which holders of capital stock of AHP may vote ("AHP Voting
Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this
Section 3.1(b) and as contemplated by Section 1.8 and Section
1.9, as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which
AHP or any of its Subsidiaries is a party or by which any of
them is bound obligating AHP or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting
securities of AHP or any of its Subsidiaries or obligating AHP
or any of its Subsidiaries to issue, grant, extend or enter
into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. As of the
date of this Agreement, there are no outstanding obligations
of AHP, any of its Subsidiaries or, to the knowledge of AHP,
any of its Majority Owned Affiliates to repurchase, redeem or
otherwise acquire any shares of capital stock of AHP, any of
its Subsidiaries or any of its Majority Owned Affiliates.
(c) Authority; No Conflicts.
(i) AHP has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject, in the case of the
issuance of the shares of AHP Common Stock to be issued in the
Merger (the "Share Issuance"), to the approval by the
stockholders of AHP of the Share Issuance by the Required AHP
Vote (as defined in Section 3.1(g)). The execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of AHP, subject in
the case of the Share Issuance, to the approval by the
stockholders of AHP of the Share Issuance by the Required AHP
Vote. This Agreement has been duly executed and delivered by
AHP and constitutes a valid and binding agreement of AHP,
enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors generally or by general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(ii) The execution and delivery of this
Agreement by AHP does not or will not, as the case may be, and
the consummation by AHP of the Merger and the other
transactions contemplated hereby will not, conflict with, or
result in any violation of, or constitute a default (with or
without notice or lapse of time, or both) under, or give rise
to a right of termination, amendment, cancellation or
acceleration of any obligation or the loss of a material
benefit under, or the creation of a lien, pledge, security
interest, charge or other encumbrance on any assets (any such
conflict, violation, default, right of termination, amendment,
cancellation or acceleration, loss or creation, a "Violation")
pursuant to: (A) any provision of the certificate of
incorporation or by-laws of AHP, any material Subsidiary of
AHP or, to the knowledge of AHP, any of its Majority Owned
Affiliates, or (B) except as would not reasonably be expected
to have a Material Adverse Effect on AHP or, to the knowledge
of AHP, Newco following the Merger, subject to obtaining or
making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in
paragraph (iii) below, any loan or credit agreement, note,
mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to AHP, any
Subsidiary of AHP or, to the knowledge of AHP, any of its
Majority Owned Affiliates, or their respective properties or
assets.
(iii) No consent, approval, order or
authorization of, or registration, declaration or filing with,
any supranational, national, state, municipal, local or
foreign government, any instrumentality, subdivision, court,
administrative agency or commission or other authority
thereof, or any quasi-governmental or private body exercising
any regulatory, taxing, importing or other governmental or
quasi-governmental authority (a "Governmental Entity"), is
required by or with respect to AHP or any Subsidiary of AHP in
connection with the execution and delivery of this Agreement
by AHP or the consummation of the Merger and the other
transactions contemplated hereby, except for those required
under or in relation to (A) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B)
state securities or "blue sky" laws (the "Blue Sky Laws"), (C)
the Securities Act, (D) the Exchange Act, (E) the DGCL with
respect to the filing of the Certificate of Merger, (F) rules
and regulations of the NYSE, (G) antitrust or other
competition laws of other jurisdictions, and (H) such
consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or
obtain would not reasonably be expected to have a Material
Adverse Effect on AHP. Consents, approvals, orders,
authorizations, registrations, declarations and filings
required under or in relation to any of the foregoing clauses
(A) through (G) are hereinafter referred to as "Necessary
Consents".
(d) Reports and Financial Statements.
(i) AHP has filed all required registration
statements, prospectuses, reports, schedules, forms,
statements and other documents required to be filed by it with
the SEC since January 1, 1997 (collectively, including all
exhibits thereto, the "AHP SEC Reports"). No Subsidiary of
AHP is required to file any form, report, registration
statement, prospectus or other document with the SEC. None of
the AHP SEC Reports, as of their respective dates (and, if
amended or superseded by a filing prior to the date of this
Agreement or the Closing Date, then on the date of such
filing), contained or will contain any untrue statement of a
material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The AHP SEC Reports together
with any public announcements in a news release issued by the
Dow Jones news service or any equivalent service (a "Dow Jones
News Release") made by AHP after the date hereof, taken as a
whole, as of the Effective Time will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances existing as
of the Effective Time, not misleading. Each of the financial
statements (including the related notes) included in the AHP
SEC Reports presents fairly, in all material respects, the
consolidated financial position and consolidated results of
operations and cash flows of AHP and its Subsidiaries as of
the respective dates or for the respective periods set forth
therein, all in conformity with GAAP consistently applied
during the periods involved except as otherwise noted therein,
and subject, in the case of the unaudited interim financial
statements, to normal and recurring year-end adjustments that
have not been and are not expected to be material in amount.
All of such AHP SEC Reports, as of their respective dates (and
as of the date of any amendment to the respective AHP SEC
Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange
Act and the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the AHP SEC Reports
filed prior to the date hereof, since December 31, 1997, AHP
and its Subsidiaries have not incurred any liabilities that
are of a nature that would be required to be disclosed on a
balance sheet of AHP and its Subsidiaries or the footnotes
thereto prepared in conformity with GAAP, other than
(A) liabilities incurred in the ordinary course of business or
(B) liabilities that would not reasonably be expected to have
a Material Adverse Effect on AHP.
(e) Information Supplied.
(i) None of the information supplied or to be
supplied by AHP for inclusion or incorporation by reference in
(A) the Form S-4 (as defined in Section 5.1) will, at the time
the Form S-4 is filed with the SEC, at any time it is amended
or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading and (B) the Joint Proxy Statement/Prospectus (as
defined in Section 5.1) will, on the date it is first mailed
to Monsanto stockholders or AHP stockholders or at the time of
the Monsanto Stockholders Meeting or the AHP Stockholders
Meeting (each as defined in Section 5.1), contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading. The Form S-4 and
the Joint Proxy Statement/Prospectus will comply as to form in
all material respects with the requirements of the Exchange
Act and the Securities Act and the rules and regulations of
the SEC thereunder.
(ii) Notwithstanding the foregoing provisions
of this Section 3.1(e), no representation or warranty is made
by AHP with respect to statements made or incorporated by
reference in the Form S-4 or the Joint Proxy
Statement/Prospectus based on information supplied by Monsanto
for inclusion or incorporation by reference therein.
(f) Board Approval. The Board of Directors of AHP, by
resolutions duly adopted by unanimous vote at a meeting duly called
and held and not subsequently rescinded or modified in any way (the
"AHP Board Approval"), has duly (i) determined that this Agreement
and the Merger are fair to and in the best interests of AHP and its
stockholders, (ii) approved this Agreement, the Merger and the
Share Issuance and (iii) recommended that the stockholders of AHP
approve the Share Issuance and directed that the Share Issuance be
submitted for consideration by AHP's stockholders at the AHP
Stockholders Meeting. The AHP Board Approval constitutes approval
of this Agreement and the Merger for purposes of Section 203 of the
DGCL. To the knowledge of AHP, except for Section 203 of the DGCL
(which has been rendered inapplicable), no state takeover statute
is applicable to the Merger or the other transactions contemplated
hereby.
(g) Vote Required. The affirmative vote of holders of
shares of AHP Common Stock and shares of $2 Convertible Preferred
Stock, voting together as a single class, representing a majority
of the total votes cast at a meeting of the holders of outstanding
shares of AHP Common Stock and outstanding shares of $2 Convertible
Preferred Stock (the "Required AHP Vote"), is the only vote of the
holders of any class or series of AHP capital stock necessary to
approve the transactions contemplated by the Merger Agreement and
the Merger and the Share Issuance.
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the AHP SEC Reports
filed prior to the date of this Agreement, there is no suit,
action or proceeding pending or, to the knowledge of AHP,
threatened, against or affecting AHP or any Subsidiary of AHP
having, or which would reasonably be expected to have a
Material Adverse Effect on AHP, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity
or arbitrator outstanding against AHP or any Subsidiary of AHP
having, or which reasonably would be expected to have a
Material Adverse Effect on AHP.
(ii) Except as disclosed in the AHP SEC Reports
filed prior to the date of this Agreement and except as would
not reasonably be expected to have a Material Adverse Effect
on AHP, AHP and its Subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all
Governmental Entities which are necessary for the operation of
the businesses of AHP and its Subsidiaries, taken as a whole
(the "AHP Permits"). AHP and its Subsidiaries are in
compliance with the terms of the AHP Permits, except where the
failure so to comply would not reasonably be expected to have
a Material Adverse Effect on AHP. Except as disclosed in the
AHP SEC Reports filed prior to the date of this Agreement, the
businesses of AHP and its Subsidiaries are not being conducted
in violation of, and AHP has not received any notices of
violations with respect to, any law, ordinance or regulation
of any Governmental Entity, except for possible violations
which would not reasonably be expected to have a Material
Adverse Effect on AHP.
(i) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the
transactions contemplated hereby, except as disclosed in the AHP
SEC Reports filed prior to the date of this Agreement, and except
as permitted by Section 4.1, since December 31, 1997, AHP and its
Subsidiaries have conducted their business only in the ordinary
course and there has not been (i) any change, circumstance or event
which has had, or would reasonably be expected to have, a Material
Adverse Effect on AHP or (ii) any action taken by AHP or any of its
Subsidiaries during the period from December 31, 1997 through the
date of this Agreement that, if taken during the period from the
date of this Agreement through the Effective Time, would constitute
a breach of Section 4.1.
(j) Environmental Matters. Except as would not
reasonably be expected to have a Material Adverse Effect on AHP and
except as disclosed in the AHP SEC Reports filed prior to the date
of this Agreement (i) the operations of AHP and its Subsidiaries
have been and are in compliance with all Environmental Laws and
with all licenses required by Environmental Laws (as defined
below), (ii) there are no pending or, to the knowledge of AHP,
threatened, actions, suits, claims, investigations or other
proceedings (collectively, "Actions") under or pursuant to
Environmental Laws against AHP or its Subsidiaries or involving any
real property currently or, to the knowledge of AHP, formerly
owned, operated or leased by AHP or its Subsidiaries, (iii) AHP and
its Subsidiaries are not subject to any Environmental Liabilities
(as defined below), and, to the knowledge of AHP, no facts,
circumstances or conditions relating to, arising from, associated
with or attributable to any real property currently or, to the
knowledge of AHP, formerly owned, operated or leased by AHP or its
Subsidiaries or operations thereon would reasonably be expected to
result in Environmental Liabilities, (iv) all real property owned
and to the knowledge of AHP all real property operated or leased by
AHP or its Subsidiaries is free of contamination from Hazardous
Material (as defined below) that would have an adverse effect on
human health or the environment and (v) there is not now, nor, to
the knowledge of AHP, has there been in the past, on, in or under
any real property owned, leased or operated by AHP or any of its
predecessors (a) any underground storage tanks regulated pursuant
to 40 C.F.R. Part 280 or delegated state programs, dikes or
impoundments containing more than a reportable quantity of
Hazardous Materials, (b) any friable asbestos-containing materials
or (c) any polychlorinated biphenyls.
As used in this Agreement, "Environmental Laws" means any
and all federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decisions, injunctions,
orders, decrees, requirements of any Governmental Entity, any and
all common law requirements, rules and bases of liability
regulating, relating to or imposing liability or standards of
conduct concerning pollution, Hazardous Materials or protection of
human health, safety or the environment, as currently in effect and
includes the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the
Clean Air Act, 33 U.S.C. Section 2601 et seq., the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C., Section 136
et seq., Occupational Safety and Health Act 29 U.S.C. Section 651
et seq. and the Oil Pollution Act of 1990, 33 U.S.C. Section 2701
et seq., as such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous state
or local statutes. As used in this Agreement, "Environmental
Liabilities" with respect to any person means any and all
liabilities of or relating to such person or any of its
Subsidiaries (including any entity which is, in whole or in part,
a predecessor of such person or any of such Subsidiaries), whether
vested or unvested, contingent or fixed, actual or potential, known
or unknown, which (i) arise under or relate to matters covered by
Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Closing Date. As used in
this Agreement, "Hazardous Materials" means any hazardous or toxic
substances, materials or wastes, defined, listed, classified or
regulated as such in or under any Environmental Laws which includes
petroleum, petroleum products, friable asbestos, urea formaldehyde
and polychlorinated biphenyls.
(k) Intellectual Property. Except as would not
reasonably be expected to have a Material Adverse Effect on AHP and
except as disclosed in the AHP SEC Reports filed prior to the date
of the Agreement: (a) AHP and each of its Subsidiaries owns, or is
licensed to use (in each case, free and clear of any liens), all
Intellectual Property (as defined below) used in or necessary for
the conduct of its business as currently conducted; (b) the use of
any Intellectual Property by AHP and its Subsidiaries does not
infringe on or otherwise violate the rights of any Person and is in
accordance with any applicable license pursuant to which AHP or any
Subsidiary acquired the right to use any Intellectual Property; (c)
to the knowledge of AHP, no Person is challenging, infringing on or
otherwise violating any right of AHP or any of its Subsidiaries
with respect to any Intellectual Property owned by and/or licensed
to AHP or its Subsidiaries; and (d) neither AHP nor any of its
Subsidiaries has received any written notice of any pending claim
with respect to any Intellectual Property used by AHP and its
Subsidiaries and to its knowledge no Intellectual Property owned
and/or licensed by AHP or its Subsidiaries is being used or
enforced in a manner that would result in the abandonment,
cancellation or unenforceability of such Intellectual Property.
For purposes of this Agreement, "Intellectual Property" shall mean
trademarks, service marks, brand names, certification marks, trade
dress and other indications of origin, the goodwill associated with
the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing,
including any extension, modification or renewal of any such
registration or application; inventions, discoveries and ideas,
whether patentable or not, in any jurisdiction; patents,
applications for patents (including, without limitation, divisions,
continuations, continuations in part and renewal applications), and
any renewals, extensions or reissues thereof, in any jurisdiction;
nonpublic information, trade secrets and confidential information
and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works, whether
copyrightable or not, in any jurisdiction; registrations or
applications for registration of copyrights in any jurisdiction,
and any renewals or extensions thereof; any similar intellectual
property or proprietary rights; and any claims or causes of action
arising out of or relating to any infringement or misappropriation
of any of the foregoing.
(l) Brokers or Finders. No agent, broker, investment
banker, financial advisor or other firm or Person is or will be
entitled to any broker's or finder's fee or any other similar
commission or fee in connection with any of the transactions
contemplated by this Agreement based upon arrangements made by or
on behalf of AHP, except Bear, Stearns & Co. Inc. (the "AHP
Financial Advisor"), whose fees and expenses will be paid by AHP in
accordance with AHP's agreement with such firm, a copy of which has
been provided to Monsanto.
(m) Opinion of AHP Financial Advisor. AHP has received
the opinion of the AHP Financial Advisor, dated the date of this
Agreement, to the effect that, as of such date, the Exchange Ratio
is fair, from a financial point of view, to AHP and its
stockholders, a copy of which opinion has been made available to
Monsanto.
(n) Accounting Matters. To the knowledge of AHP,
neither AHP nor any of its affiliates has taken or agreed to take
any action that would prevent AHP from accounting for the Merger as
a "pooling of interests". At or prior to the date hereof, AHP has
received a letter from its independent public accountants addressed
to AHP, with a copy to Monsanto, to the effect that, based upon
representations provided by AHP and Monsanto and a poolability
letter from the independent public accountants of Monsanto,
accounting for the Merger as a pooling of interests under Opinion
16 of the Accounting Principles Board and applicable SEC rules and
regulations is appropriate if the Merger is consummated and closed
as contemplated by this Agreement.
(o) Taxes. Each of AHP and its Subsidiaries has filed
all Tax Returns required to have been filed (or extensions have
been duly obtained) and has paid all Taxes required to have been
paid by it, except where failure to file such Tax Returns or pay
such Taxes would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect on AHP. For purposes of this
Agreement: (i) "Tax" (and, with correlative meaning, "Taxes") means
any federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add on minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, imposed by any
governmental authority and (ii) "Tax Return" means any return,
report or similar statement required to be filed with respect to
any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
(p) Certain Contracts. As of the date hereof, except as
set forth in the AHP SEC Reports filed prior to the date of this
Agreement, neither AHP nor any of its Subsidiaries is a party to or
bound by (i) any "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC) or (ii) any non-
competition agreement or any other agreement or arrangement that
limits or otherwise restricts AHP or any of its Subsidiaries or any
of their respective affiliates or any successor thereto, or that
would, after the Effective Time, to the Knowledge of AHP, limit or
restrict Newco or any of its affiliates (including the Surviving
Corporation) or any successor thereto, from engaging or competing
in any line of business or in any geographic area, which agreement
or arrangement would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together, after
giving effect to the Merger.
(q) Specified Litigation. As of the date hereof, AHP
has provided to Monsanto prior to the execution of this Agreement
all information Known to AHP which is relevant and material to an
assessment of the liability exposure of AHP and its Subsidiaries
with respect to litigation matters disclosed in the AHP SEC Reports
or included on the AHP Disclosure Schedule as to which Monsanto has
requested such information (the "AHP Specified Litigation
Matters"). As of the date hereof, there is no information relating
to the AHP Specified Litigation Matters in the possession of AHP,
its Subsidiaries or their counsel not heretofore provided to
Monsanto which would reasonably be expected to have a Material
Adverse Effect on AHP.
3.2 Representations and Warranties of Monsanto. Except
as set forth in the Monsanto Disclosure Schedule delivered by
Monsanto to AHP prior to the execution of this Agreement (the
"Monsanto Disclosure Schedule") (each section of which qualifies
the correspondingly numbered representation and warranty or
covenant to the extent specified therein), Monsanto represents and
warrants to AHP as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of Monsanto and each of its Subsidiaries
is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of
incorporation or organization, has the requisite power
and authority to own, lease and operate its properties
and to carry on its business as now being conducted,
except where the failure to be so organized, existing and
in good standing or to have such power and authority
would not reasonably be expected to have a Material
Adverse Effect on Monsanto and is duly qualified and in
good standing to do business in each jurisdiction in
which the nature of its business or the ownership or
leasing of its properties makes such qualification
necessary other than in such jurisdictions where the
failure so to qualify or to be in good standing would not
reasonably be expected to have a Material Adverse Effect
on Monsanto. The copies of the certificate of
incorporation and by-laws of Monsanto which were
previously furnished or made available to AHP are true,
complete and correct copies of such documents as in
effect on the date of this Agreement.
(ii) Exhibit 21 to Monsanto's Annual Report on
Form 10-K for the year ended December 31, 1997 includes
all the Subsidiaries of Monsanto which as of the date of
this Agreement are Significant Subsidiaries (as defined
in Rule 1-02 of Regulation S-X of the SEC). All the
outstanding shares of capital stock of, or other equity
interests in, each such Significant Subsidiary have been
validly issued and are fully paid and nonassessable and
are owned directly or indirectly by Monsanto, free and
clear of all Liens and free of any other restriction
(including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other
ownership interests). Except as set forth in the
Monsanto SEC Reports, neither Monsanto nor any of its
Subsidiaries directly or indirectly owns any equity or
similar interest in, or any interest convertible into or
exchangeable or exercisable for, any corporation,
partnership, joint venture or other business association
or entity, that is or would reasonably be expected to be
material to Monsanto and its Subsidiaries taken as a
whole.
(b) Capital Structure.
(i) As of May 15, 1998, the authorized capital
stock of Monsanto consisted of (A) 1,000,000,000 shares of
Monsanto Common Stock, of which 599,938,734 shares were
outstanding and 222,032,236 shares were held in the treasury
of Monsanto (of which 263,075 shares were held in the treasury
pursuant to the Monsanto Employee Stock Purchase Plan) and (B)
10,000,000 shares of Preferred Stock, without par value, none
of which were outstanding and 700,000 shares of which have
been designated Series A Junior Participating Preferred Stock
and reserved for issuance upon exercise of the rights (the
"Rights") distributed to the holders of Monsanto Common Stock
pursuant to the Rights Agreement dated as of January 26, 1990,
between Monsanto and First National Bank of Boston, as Rights
Agent, as amended (the "Rights Agreement"). Since May 15,
1998 to the date of this Agreement, there have been no
issuances of shares of the capital stock of Monsanto or any
other securities of Monsanto other than issuances of shares
(and accompanying Rights) pursuant to options or rights
outstanding as of May 14, 1998 under the Benefit Plans of
Monsanto or up to 50,000 shares of restricted stock granted
under the Monsanto Management Incentive Plan of 1996, as
amended. All issued and outstanding shares of the capital
stock of Monsanto are duly authorized, validly issued, fully
paid and nonassessable, and no class of capital stock is
entitled to preemptive rights. There were outstanding as of
May 26, 1998 no options, warrants or other rights to acquire
capital stock from Monsanto other than (x) the Rights and (y)
options representing in the aggregate the right to purchase no
more than 108,484,911 shares of Monsanto Common Stock
(collectively, the "Monsanto Stock Options") under the
Monsanto Company Non-Employee Director Equity Incentive
Compensation Plan, Monsanto Management Incentive Plan of 1984,
the Searle Monsanto Stock Option Plan of 1986, the Monsanto
Management Incentive Plan of 1988/II, the Monsanto Management
Incentive Plan of 1988/I, the NutraSweet/Monsanto Stock Plan
of 1991, the Monsanto Management Incentive Plan of 1994, the
Searle/Monsanto Stock Plan of 1994, the NutraSweet/Monsanto
Stock Plan of 1994, and the Monsanto Management Incentive Plan
of 1996, as each such plan has been amended (collectively, the
"Monsanto Stock Option Plans"). Section 3.2(b) of the
Monsanto Disclosure Schedule sets forth a complete and correct
list, as of May 26, 1998, of the number of shares of Monsanto
Common Stock subject to Monsanto Stock Options or other rights
to purchase or receive Monsanto Common Stock granted under the
Monsanto Benefit Plans or otherwise, the dates of grant and
the exercise prices thereof. No options or warrants or other
rights to acquire capital stock from Monsanto have been issued
or granted since May 26, 1998 to the date of this Agreement.
(ii) No bonds, debentures, notes or other
indebtedness of Monsanto having the right to vote on any
matters on which stockholders may vote ("Monsanto Voting
Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this
Section 3.2(b), as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which
Monsanto or any of its Subsidiaries is a party or by which any
of them is bound obligating Monsanto or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other
voting securities of Monsanto or any of its Subsidiaries or
obligating Monsanto or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the date of this Agreement, there are no
outstanding obligations of Monsanto, any of its Subsidiaries
or to the knowledge of Monsanto, any of its Majority Owned
Affiliates to repurchase, redeem or otherwise acquire any
shares of capital stock of Monsanto, any of its Subsidiaries
or, to the knowledge of Monsanto, any of its Majority Owned
Affiliates.
(c) Authority; No Conflicts.
(i) Monsanto has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject in the case of the
consummation of the Merger to the adoption of this Agreement
by the Required Monsanto Vote (as defined in Section 3.2(g)).
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part
of Monsanto, subject in the case of the consummation of the
Merger to the adoption of this Agreement by the Required
Monsanto Vote. This Agreement has been duly executed and
delivered by Monsanto and constitutes a valid and binding
agreement of Monsanto, enforceable against it in accordance
with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and
similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(ii) The execution and delivery of this
Agreement by Monsanto does not or will not, as the case may
be, and the consummation by Monsanto of the Merger and the
other transactions contemplated hereby will not, conflict
with, or result in a Violation pursuant to: (A) any provision
of the certificate of incorporation or by-laws of Monsanto,
any material Subsidiary of Monsanto or, to the knowledge of
Monsanto, any of its Majority Owned Affiliates or (B) except
as would not reasonably be expected to have a Material Adverse
Effect on Monsanto or, to the knowledge of Monsanto, Newco
following the Merger, subject to obtaining or making the
consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii) below,
any loan or credit agreement, note, mortgage, bond, indenture,
lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to Monsanto, any Subsidiary of Monsanto or, to the
knowledge of Monsanto, any of its Majority Owned Affiliates or
their respective properties or assets.
(iii) No consent, approval, order or
authorization of, or registration, declaration or filing with,
any Governmental Entity is required by or with respect to
Monsanto or any Subsidiary of Monsanto in connection with the
execution and delivery of this Agreement by Monsanto or the
consummation of the Merger and the other transactions
contemplated hereby, except the Necessary Consents and such
consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or
obtain would not reasonably be expected to have a Material
Adverse Effect on Monsanto.
(d) Reports and Financial Statements.
(i) Monsanto has filed all required registration
statements, prospectuses, reports, schedules, forms,
statements and other documents required to be filed by it with
the SEC since January 1, 1997 (collectively, including all
exhibits thereto, the "Monsanto SEC Reports"). No Subsidiary
of Monsanto is required to file any form, report, registration
statement or prospectus or other document with the SEC. None
of the Monsanto SEC Reports, as of their respective dates
(and, if amended or superseded by a filing prior to the date
of this Agreement or the Closing Date, then on the date of
such filing), contained or will contain any untrue statement
of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The Monsanto SEC Reports
together with any public announcements in a Dow Jones News
Release made by Monsanto after the date hereof, taken as a
whole, as of the Effective Time will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances existing as
of the Effective Time, not misleading. Each of the financial
statements (including the related notes) included in the
Monsanto SEC Reports presents fairly, in all material
respects, the consolidated financial position and consolidated
results of operations and cash flows of Monsanto and its
Subsidiaries as of the respective dates or for the respective
periods set forth therein, all in conformity with GAAP
consistently applied during the periods involved except as
otherwise noted therein, and subject, in the case of the
unaudited interim financial statements, to normal and
recurring year-end adjustments that have not been and are not
expected to be material in amount. All of such Monsanto SEC
Reports, as of their respective dates (and as of the date of
any amendment to the respective Monsanto SEC Report), complied
as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the Monsanto SEC
Reports filed prior to the date hereof, since December 31,
1997, Monsanto and its Subsidiaries have not incurred any
liabilities that are of a nature that would be required to be
disclosed on a balance sheet of Monsanto and its Subsidiaries
or the footnotes thereto prepared in conformity with GAAP,
other than (A) liabilities incurred in the ordinary course of
business or (B) liabilities that would not, either
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Monsanto.
(e) Information Supplied.
(i) None of the information supplied or to be
supplied by Monsanto for inclusion or incorporation by
reference in (A) the Form S-4 will, at the time the Form S-4
is filed with the SEC, at any time it is amended or
supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) the Joint Proxy Statement/Prospectus will,
on the date it is first mailed to Monsanto stockholders or AHP
stockholders or at the time of the Monsanto Stockholders
Meeting or the AHP Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading. The Form S-4 and
the Joint Proxy Statement/Prospectus will comply as to form in
all material respects with the requirements of the Exchange
Act and the Securities Act and the rules and regulations of
the SEC thereunder.
(ii) Notwithstanding the foregoing provisions
of this Section 3.2(e), no representation or warranty is made
by Monsanto with respect to statements made or incorporated by
reference in the Form S-4 or the Joint Proxy
Statement/Prospectus based on information supplied by AHP or
Merger Sub for inclusion or incorporation by reference
therein.
(f) Board Approval. The Board of Directors of Monsanto,
by resolutions duly adopted by unanimous vote of those voting at a
meeting duly called and held and not subsequently rescinded or
modified in any way (the "Monsanto Board Approval"), has duly (i)
determined that this Agreement and the Merger are fair to and in
the best interests of Monsanto and its stockholders, (ii) approved
this Agreement and the Merger and (iii) recommended that the
stockholders of Monsanto adopt this Agreement and approve the
Merger and directed that this Agreement and the transactions
contemplated hereby be submitted for consideration by Monsanto's
stockholders at the Monsanto Stockholders Meeting. The Monsanto
Board Approval constitutes approval of this Agreement and the
Merger for purposes of Section 203 of the DGCL. To the knowledge
of Monsanto, except for Section 203 of the DGCL (which has been
rendered inapplicable), no state takeover statute is applicable to
the Merger or the other transactions contemplated hereby.
(g) Vote Required. The affirmative vote of the holders
of a majority of the outstanding shares of Monsanto Common Stock to
approve the Merger (the "Required Monsanto Vote") is the only vote
of the holders of any class or series of Monsanto capital stock
necessary to adopt this Agreement and approve the Merger and the
other transactions contemplated hereby (assuming that AHP is not an
"interested stockholder" of Monsanto under Section 203 of the DGCL
immediately before the execution and delivery of this Agreement).
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the Monsanto SEC Reports
filed prior to the date of this Agreement, there is no suit,
action or proceeding pending or, to the knowledge of Monsanto,
threatened, against or affecting Monsanto or any Subsidiary of
Monsanto having, or which would reasonably be expected to have
a Material Adverse Effect on Monsanto, nor is there any
judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Monsanto
or any Subsidiary of Monsanto having, or which reasonably
would be expected to have a Material Adverse Effect on
Monsanto.
(ii) Except as disclosed in the Monsanto SEC
Reports filed prior to the date of the Agreement and except as
would not reasonably be expected to have a Material Adverse
Effect on Monsanto, Monsanto and its Subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals
of all Governmental Entities necessary for the operation of
the businesses of Monsanto and its Subsidiaries, taken as a
whole (the "Monsanto Permits"). Monsanto and its Subsidiaries
are in compliance with the terms of the Monsanto Permits,
except where the failure so to comply would not reasonably be
expected to have a Material Adverse Effect on Monsanto.
Except as disclosed in the Monsanto SEC Reports filed prior to
the date of this Agreement, the businesses of Monsanto and its
Subsidiaries are not being conducted in violation of, and
Monsanto has not received any notices of violations with
respect to, any law, ordinance or regulation of any
Governmental Entity, except for possible violations which
would not reasonably be expected to have a Material Adverse
Effect on Monsanto.
(i) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the
transactions contemplated hereby, except as disclosed in the
Monsanto SEC Reports filed prior to the date of this Agreement, and
except as permitted by Section 4.2, since December 31, 1997,
Monsanto and its Subsidiaries have conducted their business only in
the ordinary course and there has not been (i) any change,
circumstance or event which has had, or would reasonably be
expected to have, a Material Adverse Effect on Monsanto or (ii) any
action taken by Monsanto or any of its Subsidiaries during the
period from December 31, 1997 through the date of this Agreement
that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section
4.2.
(j) Environmental Matters. Except as would not
reasonably be expected to have a Material Adverse Effect on
Monsanto and except as disclosed in the Monsanto SEC Reports filed
prior to the date of this Agreement, (i) the operations of Monsanto
and its Subsidiaries have been and are in compliance with all
Environmental Laws and with all licenses required by Environmental
Laws (ii) there are no pending or, to the knowledge of Monsanto,
threatened, Actions under or pursuant to Environmental Laws against
Monsanto or its Subsidiaries or involving any real property
currently or, to the knowledge of Monsanto, formerly owned,
operated or leased by Monsanto or its Subsidiaries, (iii) Monsanto
and its Subsidiaries are not subject to any Environmental
Liabilities and, to the knowledge of Monsanto, no facts,
circumstances or conditions relating to, arising from, associated
with or attributable to any real property currently or, to the
knowledge of Monsanto, formerly owned, operated or leased by
Monsanto or its Subsidiaries or operations thereon would reasonably
be expected to result in Environmental Liabilities, (iv) all real
property owned and to the knowledge of Monsanto all real property
operated or leased by Monsanto or its Subsidiaries is free of
contamination from Hazardous Material that would have an adverse
effect on human health or the environment and (v) there is not now,
nor, to the knowledge of Monsanto, has there been in the past, on,
in or under any real property owned, leased or operated by Monsanto
or any of its predecessors (a) any underground storage tanks,
regulated pursuant to 40 C.F.R. Part 280 or delegated state
programs, dikes or impoundments containing more than a reportable
quantity of Hazardous Materials, (b) any friable
asbestos-containing materials or (c) any polychlorinated biphenyls.
(k) Intellectual Property. Except as would not
reasonably be expected to have a Material Adverse Effect on
Monsanto and except as disclosed in the Monsanto SEC Reports filed
prior to the date of this Agreement, (a) Monsanto and each of its
Subsidiaries owns, or is licensed to use (in each case, free and
clear of any liens), all Intellectual Property used in or necessary
for the conduct of its business as currently conducted; (b) the use
of any Intellectual Property by Monsanto and its Subsidiaries does
not infringe on or otherwise violate the rights of any Person and
is in accordance with any applicable license pursuant to which
Monsanto or any Subsidiary acquired the right to use any
Intellectual Property; (c) to the knowledge of Monsanto, no Person
is challenging, infringing on or otherwise violating any right of
Monsanto or any of its Subsidiaries with respect to any
Intellectual Property owned by and/or licensed to Monsanto or its
Subsidiaries; and (d) neither Monsanto nor any of its Subsidiaries
has received any written notice of any pending claim with respect
to any Intellectual Property used by Monsanto and its Subsidiaries
and to its knowledge no Intellectual Property owned and/or licensed
by Monsanto or its Subsidiaries is being used or enforced in a
manner that would result in the abandonment, cancellation or
unenforceability of such Intellectual Property.
(l) Rights Agreement. The Board of Directors of
Monsanto has approved an amendment to the Rights Agreement to the
effect that none of AHP, Merger Sub or any of their respective
affiliates shall become an "Acquiring Person", and that no "Share
Acquisition Date" or "Distribution Date" (as such terms are defined
in the Rights Agreement) will occur by reason of the approval,
execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(m) Brokers or Finders. No agent, broker, investment
banker, financial advisor or other firm or Person is or will be
entitled to any broker's or finder's fee or any other similar
commission or fee in connection with any of the transactions
contemplated by this Agreement, based upon arrangements made by or
on behalf of Monsanto except Goldman, Sachs & Co. and BancAmerica
Robertson Stephens (the "Monsanto Financial Advisors"), whose fees
and expenses will be paid by Monsanto in accordance with Monsanto's
agreements with such firms, copies of which have been provided to
AHP.
(n) Opinions of Monsanto Financial Advisors. Monsanto
has received the opinion of the Monsanto Financial Advisors, dated
the date of this Agreement, to the effect that, as of such date,
the Exchange Ratio is fair, from a financial point of view, to the
holders of Monsanto Common Stock, copies of which opinions have
been made available to AHP.
(o) Accounting Matters. To the knowledge of Monsanto,
neither Monsanto nor any of its affiliates has taken or agreed to
take any action that would prevent AHP from accounting for the
Merger as a "pooling of interests". At or prior to the date
hereof, Monsanto has received a letter from its independent public
accountants addressed to Monsanto, with a copy to AHP and AHP's
independent public accountants, stating that they concur with
Monsanto's conclusion that, as of the date of their report, no
conditions exist that would preclude Monsanto's ability to be a
party in a business combination to be accounted for as a pooling of
interests.
(p) Taxes. Each of Monsanto and its Subsidiaries has
filed all Tax Returns required to have been filed (or extensions
have been duly obtained) and has paid all Taxes required to have
been paid by it, except where failure to file such Tax Returns or
pay such Taxes would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect on Monsanto. Monsanto has
provided AHP with a true and correct copy of the ruling issued by
the Internal Revenue Service in connection with the spin-off of
Solutia, Inc. and, to Monsanto's knowledge, the representations and
warranties of Monsanto contained in such ruling were true and
correct in all material respects as of the time made.
(q) Certain Contracts. As of the date hereof, except as
set forth in the Monsanto SEC Reports filed prior to the date of
this Agreement, neither Monsanto nor any of its Subsidiaries is a
party to or bound by (i) any "material contract" (as such term is
defined in Item 601(b)(10) of Regulation S-K of the SEC) or (ii)
any non-competition agreement or any other agreement or arrangement
that limits or otherwise restricts Monsanto or any of its
Subsidiaries or any of their respective affiliates or any successor
thereto or that would, after the Effective Time, to the Knowledge
of Monsanto, limit or restrict Newco or any of its affiliates
(including the Surviving Corporation) or any successor thereto,
from engaging or competing in any line of business or in any
geographic area, which agreement or arrangement would reasonably be
expected to have a Material Adverse Effect on Newco and its
Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together, after giving effect to the Merger.
(r) Specified Litigation. As of the date hereof,
Monsanto has provided to AHP prior to the execution of this
Agreement all information Known to Monsanto which is relevant and
material to an assessment of the liability exposure of Monsanto and
its Subsidiaries with respect to litigation matters disclosed in
the Monsanto SEC Reports or included on the Monsanto Disclosure
Schedule as to which AHP has requested such information (the
"Monsanto Specified Litigation Matters"). As of the date hereof,
there is no information relating to the Monsanto Specified
Litigation Matters in the possession of Monsanto, its Subsidiaries
or their counsel not heretofore provided to AHP which would
reasonably be expected to have a Material Adverse Effect on
Monsanto.
3.3 Representations and Warranties of AHP and Merger
Sub. AHP and Merger Sub represent and warrant to Monsanto as
follows:
(a) Organization. Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the laws
of Delaware. Merger Sub is a direct wholly-owned subsidiary of
AHP.
(b) Corporate Authorization. Merger Sub has all
requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance by Merger Sub of this
Agreement and the consummation by Merger Sub of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has
been duly executed and delivered by Merger Sub and constitutes a
valid and binding agreement of Merger Sub, enforceable against it
in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
or by an implied covenant of good faith and fair dealing.
(c) Non-Contravention. The execution, delivery and
performance by Merger Sub of this Agreement and the consummation by
Merger Sub of the transactions contemplated hereby do not and will
not contravene or conflict with the certificate of incorporation or
by-laws of Merger Sub.
(d) No Business Activities. Merger Sub has not
conducted any activities other than in connection with the
organization of Merger Sub, the negotiation and execution of this
Agreement and the consummation of the transactions contemplated
hereby. Merger Sub has no Subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of AHP. During the period from the date
of this Agreement and continuing until the Effective Time, AHP
agrees as to itself and its Subsidiaries that (except as expressly
contemplated or permitted by this Agreement or the AHP Disclosure
Schedule or as required by a Governmental Entity of competent
jurisdiction or to the extent that Monsanto shall otherwise consent
in writing, which consent shall not be unreasonably withheld or
delayed):
(a) Ordinary Course.
(i) AHP and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary
course in all material respects, in substantially the same
manner as heretofore conducted, and shall use all reasonable
efforts to preserve intact their present lines of business,
maintain their rights and franchises and preserve their
relationships with customers, suppliers and others having
business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at
the Effective Time; provided, however, that no action by AHP
or its Subsidiaries with respect to matters specifically
addressed by any other provision of this Section 4.1 shall be
deemed a breach of this Section 4.1(a)(i) unless such action
would constitute a breach of one or more of such other
provisions.
(ii) Other than in connection with acquisitions
permitted by Section 4.1(e), AHP shall not, and shall not
permit any of its Subsidiaries to, (A) enter into any new
material line of business or (B) incur or commit to any
capital expenditures or any obligations or liabilities in
connection therewith other than capital expenditures and
obligations or liabilities in connection therewith incurred or
committed to in the ordinary course of business consistent
with past practice and which, together with all such
expenditures incurred or committed since January 1, 1998, are
not in excess of the amounts set forth in Section 4.1(a) of
the AHP Disclosure Schedule.
(b) Dividends; Changes in Share Capital. AHP shall not,
and shall not permit any of its Subsidiaries to, and shall not
propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, except (A)
the declaration and payment of regular quarterly cash dividends not
in excess of $.215 per share of AHP Common Stock with usual record
and payment dates for such dividends in accordance with past
dividend practice, (B) the declaration and payment of regular
quarterly cash dividends not in excess of $.50 per share on the $2
Convertible Preferred Stock with usual record and payment dates for
such dividends in accordance with past dividend practice and (C)
for dividends by wholly owned Subsidiaries of AHP, (ii) split,
combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for, shares of its
capital stock, except for any such transaction by a wholly owned
Subsidiary of AHP which remains a wholly owned Subsidiary after
consummation of such transaction or (iii) repurchase, redeem or
otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock
except for the purchase from time to time by AHP of AHP Common
Stock in the ordinary course of business consistent with past
practice in connection with the AHP Benefit Plans.
(c) Issuance of Securities. AHP shall not, and shall
not permit any of its Subsidiaries to, issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares
of its capital stock of any class, any AHP Voting Debt or any
securities convertible into or exercisable for, or any rights,
warrants or options to acquire, any such shares or AHP Voting Debt,
or enter into any agreement with respect to any of the foregoing,
other than (i) the issuance of AHP Common Stock upon the exercise
of AHP Stock Options or in connection with other stock-based
benefit plans outstanding on the date hereof, in each case in
accordance with their present terms, (ii) the granting of AHP Stock
Options in the ordinary course of business consistent with past
practice not in excess of the amounts set forth in Section 4.1(c)
of the AHP Disclosure Schedule, (iii) issuances by a wholly owned
Subsidiary of AHP of capital stock to such Subsidiary's parent or
another wholly owned Subsidiary of AHP or (iv) pursuant to
acquisitions set forth on the AHP Disclosure Schedule or the
financings therefor.
(d) Governing Documents. Except to the extent required
to comply with their respective obligations hereunder, required by
law or required by the rules and regulations of the NYSE, AHP and
Merger Sub shall not amend or propose to so amend their respective
certificates of incorporation, by-laws or other governing
documents, except that Merger Sub may amend its certificate of
incorporation to increase the number of authorized shares of its
common stock.
(e) No Acquisitions. Other than (i) acquisitions
disclosed on the AHP Disclosure Schedule and (ii) acquisitions for
cash in existing or related lines of business of AHP the fair
market value of the total consideration (including the value of
indebtedness acquired or assumed) for which does not exceed the
amount specified in the aggregate for all such acquisitions in
Section 4.1(e) of the AHP Disclosure Schedule, AHP shall not, and
shall not permit any of its Subsidiaries to, acquire or agree to
acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets (other
than the acquisition of assets used in the operations of the
business of AHP and its Subsidiaries in the ordinary course);
provided, however, that the foregoing shall not prohibit (x)
internal reorganizations or consolidations involving existing
Subsidiaries of AHP or (y) the creation of new Subsidiaries of AHP
organized to conduct or continue activities otherwise permitted by
this Agreement.
(f) No Dispositions. Other than (i) internal
reorganizations or consolidations involving existing Subsidiaries
of AHP, (ii) dispositions referred to in AHP SEC Reports filed
prior to the date of this Agreement or (iii) as may be required by
or in conformance with law or regulation in order to permit or
facilitate the consummation of the transactions contemplated hereby
or the transactions disclosed in the AHP Disclosure Schedule, AHP
shall not, and shall not permit any of its Subsidiaries to, sell,
lease, encumber or otherwise dispose of, or agree to sell, lease,
encumber or otherwise dispose of, any of its assets (including
capital stock of Subsidiaries of AHP but excluding inventory in the
ordinary course of business) the fair market value of the total
consideration (including the value of the indebtedness acquired or
assumed) for which does not exceed the amount specified in the
aggregate for all such dispositions in Section 4.1(f) of the AHP
Disclosure Schedule.
(g) Investments; Indebtedness. AHP shall not, and shall
not permit any of its Subsidiaries to, other than in connection
with actions permitted by Section 4.1(e), (i) make any loans,
advances or capital contributions to, or investments in, any other
Person, other than (x) by AHP or a Subsidiary of AHP to or in AHP
or any Subsidiary of AHP, (y) pursuant to any contract or other
legal obligation of AHP or any of its Subsidiaries existing at the
date of this Agreement or (z) in the ordinary course of business
consistent with past practice in an aggregate amount not in excess
of the aggregate amount specified in Section 4.1(g) of the AHP
Disclosure Schedule or (ii) create, incur, assume or suffer to
exist any indebtedness, issuances of debt securities, guarantees,
loans or advances not in existence as of the date of this Agreement
except pursuant to the credit facilities, indentures and other
arrangements in existence on the date of this Agreement or in the
ordinary course of business consistent with past practice, in each
case as such credit facilities, indentures and other arrangements
may be amended, extended, modified, refunded, renewed or refinanced
after the date of this Agreement.
(h) Pooling; Tax-Free Qualification. AHP shall use its
reasonable best efforts not to, and shall use its reasonable best
efforts not to permit any of its Subsidiaries to, take any action
(including any action otherwise permitted by this Section 4.1) that
would prevent or impede the Merger from qualifying as a "pooling of
interests" for accounting purposes or as a "reorganization" under
Section 368 of the Code.
(i) Compensation. Other than as contemplated by Section
5.6 or by Section 4.1(c) or 4.1(i) of the AHP Disclosure Schedule,
AHP shall not increase the amount of compensation of any director
or executive officer except in the ordinary course of business
consistent with past practice or as required by an existing
agreement, make any increase in or commitment to increase any
employee benefits, issue any additional AHP Stock Options, adopt or
make any commitment to adopt any additional employee benefit plan
or make any contribution, other than regularly scheduled
contributions, to any AHP Benefit Plan.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in AHP SEC Reports filed prior to the date of this
Agreement, or as required by a Governmental Entity, AHP shall not
change its methods of accounting in effect at December 31, 1997,
except as required by changes in GAAP as concurred in by AHP's
independent public accountants. AHP shall not (i) change its
fiscal year or (ii) make any material tax election, other than in
the ordinary course of business consistent with past practice.
(k) Certain Agreements. AHP shall not, and shall not
permit any of its Subsidiaries to, enter into any agreement or
arrangement that limits or otherwise restricts AHP or any of its
Subsidiaries or any of their respective affiliates or any successor
thereto or that could, after the Effective Time, limit or restrict
Newco or any of its affiliates (including the Surviving
Corporation) or any successor thereto, from engaging or competing
in any line of business or in any geographic area which agreement
or arrangement would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together, after
giving effect to the Merger.
4.2 Covenants of Monsanto. During the period from the
date of this Agreement and continuing until the Effective Time,
Monsanto agrees as to itself and its Subsidiaries that (except as
expressly contemplated or permitted by this Agreement or the
Monsanto Disclosure Schedule or as required by a Governmental
Entity of competent jurisdiction or to the extent that AHP shall
otherwise consent in writing, which consent shall not be
unreasonably withheld or delayed):
(a) Ordinary Course.
(i) Monsanto and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary
course in all material respects, in substantially the same
manner as heretofore conducted, and shall use all reasonable
efforts to preserve intact their present lines of business,
maintain their rights and franchises and preserve their
relationships with customers, suppliers and others having
business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at
the Effective Time; provided, however, that no action by
Monsanto or its Subsidiaries with respect to matters
specifically addressed by any other provision of this Section
4.2 shall be deemed a breach of this Section 4.2(a)(i) unless
such action would constitute a breach of one or more of such
other provisions.
(ii) Other than in connection with acquisitions
permitted by Section 4.2(e), Monsanto shall not, and shall not
permit any of its Subsidiaries to, (A) enter into any new
material line of business or (B) incur or commit to any
capital expenditures or any obligations or liabilities in
connection therewith other than capital expenditures and
obligations or liabilities in connection therewith incurred or
committed to in the ordinary course of business consistent
with past practice and which, together with all such
expenditures incurred or committed since January 1, 1998, are
not in excess of the amounts set forth in Section 4.2(a) of
the Monsanto Disclosure Schedule.
(b) Dividends; Changes in Share Capital. Monsanto shall
not, and shall not permit any of its Subsidiaries to, and shall not
propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, except (A)
the declaration and payment of regular quarterly cash dividends not
in excess of $.03 per share of Monsanto Common Stock with usual
record and payment dates for such dividends in accordance with past
dividend practice and (B) for dividends by wholly owned
Subsidiaries of Monsanto, (ii) split, combine or reclassify any of
its capital stock or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock, except for any such transaction
by a wholly owned Subsidiary of Monsanto which remains a wholly
owned Subsidiary after consummation of such transaction, or (iii)
repurchase, redeem or otherwise acquire any shares of its capital
stock or any securities convertible into or exercisable for any
shares of its capital stock except for the purchase from time to
time by Monsanto of Monsanto Common Stock (and the associated
Rights) in the ordinary course of business consistent with past
practice in connection with the Monsanto Benefit Plans. Monsanto
shall not redeem the Monsanto Rights.
(c) Issuance of Securities. Monsanto shall not, and
shall not permit any of its Subsidiaries to, issue, deliver or
sell, or authorize or propose the issuance, delivery or sale of,
any shares of its capital stock of any class, any Monsanto Voting
Debt or any securities convertible into or exercisable for, or any
rights, warrants or options to acquire, any such shares or Monsanto
Voting Debt, or enter into any agreement with respect to any of the
foregoing, other than (i) the issuance of Monsanto Common Stock
(and the associated Rights) upon the exercise of Monsanto Stock
Options or in connection with other stock-based benefits plans
outstanding on the date hereof, in each case in accordance with
their present terms, (ii) issuances by a wholly owned Subsidiary of
Monsanto of capital stock to such Subsidiary's parent or another
wholly owned subsidiary of Monsanto, (iii) the granting of Monsanto
Stock Options in the ordinary course of business consistent with
past practice not in excess of the amounts set forth in Section
4.2(c) of the Monsanto Disclosure Schedule, (iv) pursuant to
acquisitions set forth on the Monsanto Disclosure Schedule or the
financings therefor or (v) issuances in accordance with the Rights
Agreement.
(d) Governing Documents. Except to the extent required
to comply with their respective obligations hereunder, required by
law or required by the rules and regulations of the NYSE, Monsanto
shall not amend or propose to so amend their respective
certificates of incorporation, by-laws or other governing
documents.
(e) No Acquisitions. Other than (i) acquisitions
disclosed on the Monsanto Disclosure Schedule and (ii) acquisitions
for cash in existing or related lines of business of Monsanto the
fair market value of the total consideration (including the value
of indebtedness acquired or assumed) for which does not exceed the
amount specified in the aggregate for all such acquisitions in
Section 4.2(e) of the Monsanto Disclosure Schedule, Monsanto shall
not, and shall not permit any of its Subsidiaries to, acquire or
agree to acquire by merging or consolidating with, or by purchasing
a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets (other
than the acquisition of assets used in the operations of the
business of Monsanto and its Subsidiaries in the ordinary course);
provided, however, that the foregoing shall not prohibit (x)
internal reorganizations or consolidations involving existing
Subsidiaries of Monsanto or (y) the creation of new Subsidiaries of
Monsanto organized to conduct or continue activities otherwise
permitted by this Agreement.
(f) No Dispositions. Other than (i) internal
reorganizations or consolidations involving existing Subsidiaries
of Monsanto, (ii) dispositions referred to in Monsanto SEC Reports
filed prior to the date of this Agreement or (iii) as may be
required by or in conformance with law or regulation in order to
permit or facilitate the consummation of the transactions
contemplated hereby or the transactions disclosed in the Monsanto
Disclosure Schedule, Monsanto shall not, and shall not permit any
of its Subsidiaries to, sell, lease, encumber or otherwise dispose
of, or agree to sell, lease, encumber or otherwise dispose of, any
of its assets (including capital stock of Subsidiaries of Monsanto
but excluding inventory in the ordinary course of business) the
fair market value of the total consideration (including the value
of the indebtedness acquired or assumed) for which does not exceed
the amount specified in the aggregate for all such dispositions in
Section 4.2(f) of the Monsanto Disclosure Schedule.
(g) Investments; Indebtedness. Monsanto shall not, and
shall not permit any of its Subsidiaries to, other than in
connection with actions permitted by Section 4.2(e), (i) make any
loans, advances or capital contributions to, or investments in, any
other Person, other than (x) by Monsanto or a Subsidiary of
Monsanto to or in Monsanto or any Subsidiary of Monsanto,
(y) pursuant to any contract or other legal obligation of Monsanto
or any of its Subsidiaries existing at the date of this Agreement
or (z) in the ordinary course of business consistent with past
practice in an aggregate amount not in excess of the aggregate
amount specified in Section 4.2(g) of the Monsanto Disclosure
Schedule or (ii) create, incur, assume or suffer to exist any
indebtedness, issuances of debt securities, guarantees, loans or
advances not in existence as of the date of this Agreement and
except pursuant to the credit facilities, indentures and other
arrangements in existence on the date of this Agreement or in the
ordinary course of business consistent with past practice, in each
case as such credit facilities, indentures and other arrangements
and other existing indebtedness may be amended, extended, modified,
refunded, renewed or refinanced after the date of this Agreement.
(h) Pooling; Tax-Free Qualification. Monsanto shall use
its reasonable best efforts not to, and shall use its reasonable
best efforts not to permit any of its Subsidiaries to, take any
action (including any action otherwise permitted by this Section
4.2) that would prevent or impede the Merger from qualifying as a
"pooling of interests" for accounting purposes or as a
"reorganization" under Section 368 of the Code.
(i) Compensation. Other than as contemplated by Section
5.6 or by Sections 4.2(c) or 4.2(i) of the Monsanto Disclosure
Schedule, Monsanto shall not increase the amount of compensation of
any director or executive officer except in the ordinary course of
business consistent with past practice or as required by an
existing agreement, make any increase in or commitment to increase
any employee benefits, issue any additional Monsanto Stock Options,
adopt or make any commitment to adopt any additional employee
benefit plan or make any contribution, other than regularly
scheduled contributions, to any Monsanto Benefit Plan.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in Monsanto SEC Reports filed prior to the date of this
Agreement, or as required by a Governmental Entity, Monsanto shall
not change its methods of accounting in effect at December 31,
1997, except as required by changes in GAAP as concurred in by
Monsanto's independent auditors. Monsanto shall not (i) change its
fiscal year or (ii) make any material tax election, other than in
the ordinary course of business consistent with past practice.
(k) Certain Agreements. Monsanto shall not, and shall
not permit any of its Subsidiaries to, enter into any agreement or
arrangement that limits or otherwise restricts Monsanto or any of
its Subsidiaries or any of their respective affiliates or any
successor thereto, or that could, after the Effective Time, limit
or restrict Newco or any of its affiliates (including the Surviving
Corporation) or any successor thereto, from engaging or competing
in any line of business or in any geographic area which agreement
or arrangement would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together, after
giving effect to the Merger.
(l) Rights Agreement. Monsanto shall not amend, modify
or waive any provision of the Rights Agreement, and shall not take
any action to redeem the Rights or render the Rights inapplicable
to any transaction, other than to permit another transaction that
the Monsanto Board has determined is a Superior Proposal (as
defined in Section 8.11), to be consummated after termination of
this Agreement.
4.3 Governmental Filings. Each party shall (a) confer
on a regular and frequent basis with the other and (b) report (to
the extent permitted by law or regulation or any applicable
confidentiality agreement) on operational matters. Monsanto and
AHP shall file all reports required to be filed by each of them
with the SEC (and all other Governmental Entities) between the date
of this Agreement and the Effective Time and shall (to the extent
permitted by law or regulation or any applicable confidentiality
agreement) deliver to the other party copies of all such reports,
announcements and publications promptly after the same are filed.
4.4 Control of Other Party's Business. Nothing
contained in this Agreement shall give Monsanto, directly or
indirectly, the right to control or direct AHP's operations prior
to the Effective Time. Nothing contained in this Agreement shall
give AHP, directly or indirectly, the right to control or direct
Monsanto's operations prior to the Effective Time. Prior to the
Effective Time, each of Monsanto and AHP shall exercise, consistent
with the terms and conditions of this Agreement, complete control
and supervision over its respective operations.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of Proxy Statement; Stockholders
Meetings.
(a) As promptly as reasonably practicable following the
date hereof, AHP and Monsanto shall prepare and file with the SEC
proxy materials which shall constitute the Joint Proxy
Statement/Prospectus (such proxy statement/prospectus, and any
amendments or supplements thereto, the "Joint Proxy
Statement/Prospectus") and AHP shall prepare and file a
registration statement on Form S-4 with respect to the issuance of
AHP Common Stock in the Merger (the "Form S-4"). The Joint Proxy
Statement/Prospectus will be included in and will constitute a part
of the Form S-4 as AHP's prospectus. The Form S-4 and the Joint
Proxy Statement/Prospectus shall comply as to form in all material
respects with the applicable provisions of the Securities Act and
the Exchange Act and the rules and regulations thereunder. Each of
AHP and Monsanto shall use reasonable best efforts to have the Form
S-4 declared effective by the SEC as promptly as reasonably
practicable after filing with the SEC and to keep the Form S-4
effective as long as is necessary to consummate the Merger and the
transactions contemplated thereby. AHP and Monsanto shall, as
promptly as practicable after receipt thereof, provide the other
party copies of any written comments and advise the other party of
any oral comments, with respect to the Joint Proxy
Statement/Prospectus received from the SEC. AHP will provide
Monsanto with a reasonable opportunity to review and comment on any
amendment or supplement to the Form S-4 prior to filing such with
the SEC, and will provide Monsanto with a copy of all such filings
made with the SEC. Notwithstanding any other provision herein to
the contrary, no amendment or supplement (including by
incorporation by reference) to the Joint Proxy Statement/Prospectus
or the Form S-4 shall be made without the approval of both parties,
which approval shall not be unreasonably withheld or delayed;
provided, that with respect to documents filed by a party which are
incorporated by reference in the Form S-4 or Joint Proxy
Statement/Prospectus, this right of approval shall apply only with
respect to information relating to the other party or its business,
financial condition or results of operations. AHP will use
reasonable best efforts to cause the Joint Proxy
Statements/Prospectus to be mailed to AHP stockholders, and
Monsanto will use reasonable best efforts to cause the Joint Proxy
Statement/Prospectus to be mailed to Monsanto's stockholders, in
each case as promptly as practicable after the Form S-4 is declared
effective under the Securities Act. AHP shall also take any action
(other than qualifying to do business in any jurisdiction in which
it is not now so qualified or to file a general consent to service
of process) required to be taken under any applicable state
securities laws in connection with the Share Issuance and Monsanto
shall furnish all information concerning Monsanto and the holders
of Monsanto Common Stock as may be reasonably requested in
connection with any such action. Each party will advise the other
party, promptly after it receives notice thereof, of the time when
the Form S-4 has become effective, the issuance of any stop order,
the suspension of the qualification of the AHP Common Stock
issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Joint
Proxy Statement/Prospectus or the Form S-4. If at any time prior
to the Effective Time any information relating to AHP or Monsanto,
or any of their respective affiliates, officers or directors,
should be discovered by AHP or Monsanto which should be set forth
in an amendment or supplement to any of the Form S-4 or the Joint
Proxy Statement/Prospectus so that any of such documents would not
include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, the
party which discovers such information shall promptly notify the
other party hereto and, to the extent required by law, rules or
regulations, an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and disseminated
to the stockholders of AHP and Monsanto.
(b) Subject to Section 5.5, Monsanto shall, as promptly
as reasonably practicable following the execution of this
Agreement, duly take (subject to compliance with the provisions of
Section 3.1(e) and Section 3.2(e) (provided that Monsanto shall
have used reasonable best efforts to ensure that such
representation is true and correct)), all lawful action to call,
give notice of, convene and hold a meeting of its stockholders (the
"Monsanto Stockholders Meeting") (which meeting the parties intend
to be held no later than October 1, 1998) for the purpose of
obtaining the Required Monsanto Vote with respect to the
transactions contemplated by this Agreement, shall take all lawful
action to solicit the adoption of this Agreement by the Required
Monsanto Vote; and the Board of Directors of Monsanto shall
recommend adoption of this Agreement by the stockholders of
Monsanto to the effect as set forth in Section 3.2(f), and shall
not withdraw, modify or materially qualify in any manner adverse to
AHP such recommendation or take any action or make any statement in
connection with the Monsanto Stockholders Meeting materially
inconsistent with such recommendation (collectively, an "Adverse
Change in the Monsanto Recommendation"); provided the foregoing
shall not prohibit accurate disclosure (and such disclosure shall
not be deemed to be an Adverse Change in the Monsanto
Recommendation) of factual information regarding the business,
financial condition or results of operations of AHP or Monsanto or
the fact that an Acquisition Proposal has been made, the identity
of the party making such proposal or the material terms of such
proposal (provided, that the Board of Directors of Monsanto does
not withdraw, modify or materially qualify in any manner adverse to
AHP its recommendation) in the Form S-4 or the Joint Proxy
Statement/Prospectus, to the extent such information, facts,
identity or terms is required to be disclosed therein under
applicable law; provided further that the Board of Directors of
Monsanto may make an Adverse Change in the Monsanto Recommendation
prior to the Monsanto Stockholders Meeting if (i) after the date
of this Agreement, Monsanto acquires Knowledge of facts or
circumstances that the Board of Directors of Monsanto determines in
good faith constitute a material adverse development with respect
to AHP and (ii) the Board of Directors of Monsanto determines in
good faith that because of such material adverse development, based
upon the advice of outside legal counsel to Monsanto, the failure
to effect such Adverse Change in the Monsanto Recommendation would
violate the fiduciary duties of the Monsanto Board of Directors
under applicable law.
(c) Subject to Section 5.5, AHP shall, as promptly as
reasonably practicable following the execution of this Agreement,
duly take (subject to compliance with the provisions of Section
3.2(e) and Section 3.1(e) (provided that AHP shall have used
reasonable best efforts to ensure that such representation is true
and correct) all lawful action to call, give notice of, convene and
hold a meeting of its stockholders (the "AHP Stockholders Meeting")
(which meeting the parties intend to be held no later than October
1, 1998) for the purpose of obtaining the Required AHP Vote with
respect to the Share Issuance, shall take all lawful action to
solicit the approval of the Share Issuance by the Required AHP
Vote; and the Board of Directors of AHP shall recommend approval of
the Share Issuance by the stockholders of AHP to the effect as set
forth in Section 3.1(f), and shall not withdraw, modify or
materially qualify in any manner adverse to Monsanto such
recommendation or take any action or make any statement in
connection with the AHP Stockholders Meeting materially
inconsistent with such recommendation (collectively, an "Adverse
Change in the AHP Recommendation"); provided the foregoing shall
not prohibit accurate disclosure (and such disclosure shall not be
deemed to be an Adverse Change in the AHP Recommendation) of
factual information regarding the business, financial condition or
operations of AHP or Monsanto or the fact that an Acquisition
Proposal has been made, the identity of the party making such
proposal or the material terms of such proposal (provided, that the
Board of Directors of AHP does not withdraw, modify or materially
qualify in any manner adverse to Monsanto its recommendation) in
the Form S-4 or the Joint Proxy Statement/Prospectus, to the extent
such information, facts, identity or terms is required to be
disclosed therein under applicable law; provided further that the
Board of Directors of AHP may make an Adverse Change in the AHP
Recommendation prior to the AHP Stockholders Meeting if (i) after
the date of this Agreement, AHP acquires Knowledge of facts or
circumstances that the Board of Directors of AHP determines in good
faith constitute a material adverse development with respect to
Monsanto and (ii) the Board of Directors of AHP determines in good
faith that because of such material adverse development, based upon
the advice of outside legal counsel to AHP, the failure to effect
such Adverse Change in the AHP Recommendation would violate the
fiduciary duties of the AHP Board of Directors under applicable
law.
5.2 Newco Board of Directors; Office of the Chairman;
Name.
(a) At or prior to the Effective Time, AHP will take all
action necessary to (i) reconstitute the Board of Directors of
Newco as of the Effective Time in accordance with Exhibit 5.2(a)
hereto, (ii) cause Mr. John R. Stafford and Mr. Robert B. Shapiro
to be appointed Co-Chairmen and Co-Chief Executive Officers of
Newco as of the Effective Time and establish an "Office of the
Chairmen" as of the Effective Time, each in accordance with Exhibit
5.2(a) hereto.
(b) AHP shall change its name as of the Effective Time
to a new name to be mutually agreed upon by Monsanto and AHP prior
to the Effective Time.
5.3 Access to Information. Upon reasonable notice, each
party shall (and shall cause its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financial advisors and
other representatives of the other party reasonable access during
normal business hours, during the period prior to the Effective
Time, to all its properties, books, contracts, commitments,
records, officers and employees and, during such period, such party
shall (and shall cause its Subsidiaries to) furnish promptly to the
other party (a) a copy of each report, schedule, registration
statement and other document filed, published, announced or
received by it during such period pursuant to the requirements of
Federal or state securities laws, as applicable (other than
documents which such party is not permitted to disclose under
applicable law), and (b) consistent with its legal obligations, all
other information concerning it and its business, properties and
personnel as such other party may reasonably request (including
consultation on a regular basis with respect to the AHP Specified
Litigation Matters or the Monsanto Specified Litigation Matters, as
the case may be); provided, however, that either party may restrict
the foregoing access to the extent that any law, treaty, rule or
regulation of any Governmental Entity applicable to such party
requires such party or its Subsidiaries to restrict access to any
properties or information. The parties will hold any such
information which is non-public in confidence to the extent
required by, and in accordance with, the provisions of the letters
dated March 4, 1998 and May 28, 1998 between Monsanto and AHP (the
"Confidentiality Agreements"). Any investigation by AHP or
Monsanto shall not affect the representations and warranties of
Monsanto or AHP, as the case may be.
5.4 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this
Agreement, each party will use its reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate the Merger and the other transactions
contemplated by this Agreement as soon as practicable after the
date hereof, including (i) preparing and filing as promptly as
practicable all documentation to effect all necessary applications,
notices, petitions, filings, tax ruling requests and other
documents and to obtain as promptly as practicable all consents,
waivers, licenses, orders, registrations, approvals, permits, tax
rulings and authorizations necessary or advisable to be obtained
from any third party and/or any Governmental Entity in order to
consummate the Merger or any of the other transactions contemplated
by this Agreement and (ii) taking all reasonable steps as may be
necessary to obtain all such material consents, waivers, licenses,
registrations, permits, authorizations, tax rulings, orders and
approvals. In furtherance and not in limitation of the foregoing,
each party hereto agrees to make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act and any other
Regulatory Law (as defined below) with respect to the transactions
contemplated hereby as promptly as practicable after the date
hereof and to supply as promptly as practicable any additional
information and documentary material that may be requested pursuant
to the HSR Act and any other Regulatory Law and to take all other
actions necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act as soon as
practicable. Nothing in this Section 5.4(a) shall require any of
AHP and its Subsidiaries or Monsanto and its Subsidiaries to sell,
hold separate or otherwise dispose of or conduct their business in
a specified manner, or agree to sell, hold separate or otherwise
dispose of or conduct their business in a specified manner, or
permit the sale, holding separate or other disposition of, any
assets of AHP, Monsanto or their respective Subsidiaries or the
conduct of their business in a specified manner, whether as a
condition to obtaining any approval from a Governmental Entity or
any other Person or for any other reason, if such sale, holding
separate or other disposition or the conduct of their business in
a specified manner is not conditioned on the Closing or would
reasonably be expected to have a Material Adverse Effect on Newco
and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together, after giving effect to the Merger.
(b) Each of AHP and Monsanto shall, in connection with
the efforts referenced in Section 5.4(a) to obtain all requisite
material approvals and authorizations for the transactions
contemplated by this Agreement under the HSR Act or any other
Regulatory Law, use its reasonable best efforts to (i) cooperate in
all respects with each other in connection with any filing or
submission and in connection with any investigation or other
inquiry, including any proceeding initiated by a private party,
(ii) promptly inform the other party of any communication received
by such party from, or given by such party to, the Antitrust
Division of the Department of Justice (the "DOJ") or any other
Governmental Entity and of any material communication received or
given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby, and
(iii) permit the other party to review any communication given by
it to, and consult with each other in advance of any meeting or
conference with, the DOJ or any such other Governmental Entity or,
in connection with any proceeding by a private party, with any
other Person, and to the extent permitted by the DOJ or such other
applicable Governmental Entity or other Person, give the other
party the opportunity to attend and participate in such meetings
and conferences. For purposes of this Agreement, "Regulatory Law"
means the Sherman Act, as amended, the Clayton Act, as amended, the
HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign, if any, statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines
and other laws that are designed or intended to prohibit, restrict
or regulate actions having the purpose or effect of monopolization
or restraint of trade or lessening of competition.
(c) Subject to the terms and conditions of this
Agreement, in furtherance and not in limitation of the covenants of
the parties contained in Sections 5.4(a) and 5.4(b), if any
administrative or judicial action or proceeding, including any
proceeding by a private party, is instituted (or threatened to be
instituted) challenging any transaction contemplated by this
Agreement as violative of any Regulatory Law, each of AHP and
Monsanto shall cooperate in all respects with each other and use
its respective reasonable best efforts to contest and resist any
such action or proceeding and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that
prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement. Notwithstanding the foregoing or
any other provision of this Agreement, nothing in this Section 5.4
shall limit a party's right to terminate this Agreement pursuant to
Article VII.
(d) If any objections are asserted with respect to the
transactions contemplated hereby under any Regulatory Law or if any
suit is instituted by any Governmental Entity or any private party
challenging any of the transactions contemplated hereby as
violative of any Regulatory Law, each of AHP and Monsanto shall use
its reasonable best efforts to resolve any such objections or
challenge as such Governmental Entity or private party may have to
such transactions under such Regulatory Law so as to permit
consummation of the transactions contemplated by this Agreement.
5.5 Acquisition Proposals. Without limitation on any of
such party's other obligations under this Agreement (including
under Article IV hereof), but except to the extent specifically
permitted to such party pursuant to its Disclosure Schedules under
subsections (e) and (f) of Sections 4.1 or 4.2, as the case may be,
each of AHP and Monsanto agrees that neither it nor any of its
Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall use its reasonable best
efforts to cause its and its Subsidiaries' employees, agents and
representatives (including any investment banker, attorney or
accountant retained by it or any of its Subsidiaries) not to,
directly or indirectly, initiate, solicit, encourage or knowingly
facilitate (including by way of furnishing information) any
inquiries or the making of any proposal or offer with respect to a
merger, reorganization, share exchange, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving it, or any purchase or sale of the
consolidated assets (including without limitation stock of
Subsidiaries and Majority Owned Affiliates) of such party and its
Subsidiaries, taken as a whole, having an aggregate value equal to
10% or more of the market capitalization of such party, or any
purchase or sale of, or tender or exchange offer for, 10% or more
of the equity securities of such party (any such proposal or offer
(other than a proposal or offer made by the other party or an
affiliate thereof) being hereinafter referred to as an "Acquisition
Proposal"). Each of AHP and Monsanto further agrees that neither
it nor any of its Subsidiaries nor any of the officers and
directors of it or its Subsidiaries shall, and that it shall use
its reasonable best efforts to cause its and its Subsidiaries'
employees, agents and representatives (including any investment
banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, have any discussion
with or provide any confidential information or data to any Person
relating to an Acquisition Proposal, or engage in any negotiations
concerning an Acquisition Proposal, or knowingly facilitate any
effort or attempt to make or implement an Acquisition Proposal or
accept an Acquisition Proposal. Notwithstanding anything herein to
the contrary, each of AHP and Monsanto or its respective Board of
Directors shall be permitted to (A) to the extent applicable,
comply with Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal, (B) in
response to an unsolicited bona fide written Acquisition Proposal
by any Person, recommend approval of such an unsolicited bona fide
written Acquisition Proposal to its stockholders or effect an
Adverse Change in the AHP or Monsanto Recommendation, as the case
may be, or (C) engage in any discussions or negotiations with, or
provide any information to, any Person in response to an
unsolicited bona fide written Acquisition Proposal by any such
Person, if and only to the extent that, in any such case as is
referred to in clause (B) or (C), (i) its Stockholders Meeting
shall not have occurred, (ii) its Board of Directors (x) in the
case of clause (B) above, concludes in good faith that such
Acquisition Proposal constitutes a Superior Proposal (as defined in
Section 8.11) and provides written notice of termination of this
Agreement pursuant to Section 7.1(f) or (y) in the case of clause
(C) above concludes in good faith that such Acquisition Proposal
could reasonably be expected to result in a Superior Proposal,
(iii) prior to providing any information or data to any Person in
connection with an Acquisition Proposal by any such Person, its
Board of Directors receives from such Person an executed
confidentiality agreement containing confidentiality terms at least
as stringent as those contained in the March 4, 1998
confidentiality agreement between Monsanto and AHP, and (iv) prior
to providing any information or data to any Person or entering into
discussions or negotiations with any Person, its Board of Directors
notifies the other party promptly of such inquiries, proposals or
offers received by, any such information requested from, or any
such discussions or negotiations sought to be initiated or
continued with, any of its representatives indicating, in
connection with such notice, the name of such Person and the
material terms and conditions of any inquiries, proposals or
offers. Each of AHP and Monsanto agrees that it will promptly keep
the other party informed of the status and terms of any such
proposals or offers and the status and terms of any such
discussions or negotiations. Each of AHP and Monsanto agrees that
it will, and will cause its officers, directors and representatives
to, immediately cease and cause to be terminated any activities,
discussions or negotiations existing as of the date of this
Agreement with any parties conducted heretofore with respect to any
Acquisition Proposal. Each of AHP and Monsanto agrees that it will
use reasonable best efforts to promptly inform its directors,
officers, key employees, agents and representatives of the
obligations undertaken in this Section 5.5. Nothing in this
Section 5.5 shall (x) permit AHP or Monsanto to terminate this
Agreement (except as specifically provided in Article VII hereof)
or (y) affect any other obligation of AHP or Monsanto under this
Agreement.
5.6 Employee Benefits Matters.
(a) Continuation and Comparability of Benefits. From
the Effective Time until December 31, 1999, Newco shall provide
compensation and employee benefits under Benefit Plans (as defined
in Section 8.11) to the employees and former employees of AHP and
Monsanto and their respective Subsidiaries (the "Newco Employees")
that are in the aggregate no less favorable than those provided to
such persons pursuant to the Benefit Plans in effect on the date
hereof. Without limiting the generality of the foregoing, Newco
shall continue through December 31, 1999 the Monsanto Separation
Plan (effective January 1, 1998) in effect for Newco Employees who
are employed by Monsanto or any of its Subsidiaries as of the
Effective Time, and, to the extent AHP adopts a severance plan (as
provided for in Section 4.1(i) of the AHP Disclosure Schedule), for
those Newco Employees who are employed by AHP or any of its
Subsidiaries as of the Effective Time, any such AHP severance plan,
in each case without any amendment adverse to such Newco Employees,
other than as required by law. Nothing herein shall prohibit any
changes to the Benefit Plans that may be (i) required by law
(including, without limitation, any applicable qualification
requirements of Section 401(a) of the Code), (ii) necessary as a
technical matter to reflect the transactions contemplated hereby or
(iii) required for Newco to provide or permit investment in its
securities. Furthermore, nothing herein shall require Newco to
continue any particular Benefit Plan or prevent the amendment or
termination thereof (subject to the maintenance, in the aggregate,
of the benefits as provided in the preceding sentence).
(b) Pre-Existing Limitations; Deductibles; Service
Credit. With respect to any Benefit Plans in which any Newco
Employees first become eligible to participate, on or after the
Effective Time, and in which are plans that the Newco Employees did
not participate prior to the Effective Time (the "New Newco
Plans"), Newco shall: (A) waive all pre-existing conditions
exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Newco Employees under any
New Newco Plans in which such employees may be eligible to
participate after the Effective Time; (B) provide each Newco
Employee with credit for any co-payments and deductibles paid prior
to the Effective Time (to the same extent such credit was given
under the analogous Benefit Plan prior to the Effective Time) in
satisfying any applicable deductible or out-of-pocket requirements
under any New Newco Plans in which such employees may be eligible
to participate after the Effective Time, and (C) recognize all
service of the Newco Employees with AHP and Monsanto, respectively,
for all purposes (including, without limitation, purposes of
eligibility to participate, vesting credit, entitlement to
benefits, and benefit accrual) in any New Newco Plan in which such
employees may be eligible to participate after the Effective Time,
to the extent such service is taken into account under the
applicable New Newco Plan; provided, that the foregoing shall not
apply to the extent it would result in duplication of benefits, nor
shall it apply with respect to benefit accrual under any New Newco
Plan that is a cash balance pension plan.
(c) Treatment of Equity and Equity - Based Benefit
Plans. With respect to any AHP and Monsanto Benefit Plan in which
Newco Employees participated immediately prior to the Effective
Time that provides incentive compensation or bonuses relating to
the equity securities (or any equivalent thereof) of either AHP or
Monsanto (the "Equity Benefit Plans"), AHP and Monsanto shall, as
soon as reasonably practicable after the date hereof, create a task
force comprised of key executive officers and other employees
designated by the Compensation Committee or the Board of Directors
of each of AHP and Monsanto (half of whom shall be employed by AHP
and half of whom shall be employed by Monsanto) (the "Task Force")
which shall review all Equity Benefit Plans and recommend
appropriate equity incentive plans for Newco. In so doing, the
Task Force shall fully and fairly take into account the past
practices of both AHP and Monsanto and shall in good faith consider
appropriate methods by which Newco Employees may be fairly
compensated through the use of Equity Benefit Plans and the
relationship such use bears to cash compensation.
5.7 Fees and Expenses. Whether or not the Merger is
consummated, all Expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by
the party incurring such Expenses, except (a) if the Merger is
consummated, the Surviving Corporation shall pay, or cause to be
paid, any and all property or transfer taxes imposed on Monsanto or
its Subsidiaries and (b) Expenses incurred in connection with the
filing, printing and mailing of the Joint Proxy
Statement/Prospectus, which shall be shared equally by AHP and
Monsanto and (c) if applicable, as provided in Section 7.2. As
used in this Agreement, "Expenses" includes all out-of-pocket
expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants
to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this
Agreement and the transactions contemplated hereby, including the
preparation, printing, filing and mailing of the Joint Proxy
Statement/Prospectus and the solicitation of stockholder approvals
and all other matters related to the transactions contemplated
hereby.
5.8 Directors' and Officers' Indemnification and
Insurance. The Surviving Corporation shall, and Newco shall cause
the Surviving Corporation to, (i) indemnify and hold harmless, and
provide advancement of expenses to, all past and present directors,
officers and employees of Monsanto and its Subsidiaries to the same
extent such persons are indemnified or have the right to
advancement of expenses as of the date of this Agreement by
Monsanto pursuant to Monsanto's certificate of incorporation,
by-laws and indemnification agreements, if any, in existence on the
date hereof with any directors, officers and employees of Monsanto
and its Subsidiaries for acts or omissions occurring at or prior to
the Effective Time (including for acts or omissions occurring in
connection with the approval of this Agreement and the consummation
of the transactions contemplated hereby), (ii) include and cause to
be maintained in effect in the Surviving Corporation's (or any
successor's) certificate of incorporation and by-laws for a period
of six years after the Effective Time, the current provisions
regarding elimination of liability of directors, indemnification of
officers, directors and employees and advancement of expenses
contained in the certificate of incorporation and by-laws of
Monsanto and (iii) cause to be maintained for a period of six years
after the Effective Time the current policies of directors' and
officers' liability insurance and fiduciary liability insurance
maintained by Monsanto (provided that the Surviving Corporation (or
any successor) may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which
are, in the aggregate, no less advantageous to the insured) with
respect to claims arising from facts or events that occurred on or
before the Effective Time; provided, however, that in no event
shall the Surviving Corporation be required to expend in any one
year an amount in excess of 200% of the annual premiums currently
paid by Monsanto for such insurance; and, provided, further, that
if the annual premiums of such insurance coverage exceed such
amount, the Surviving Corporation shall be obligated to obtain a
policy with the greatest coverage available for a cost not
exceeding such amount.
5.9 Specified Litigation. (a) From the date hereof to
the Closing Date, AHP shall promptly advise Monsanto of all
developments, and provide Monsanto all additional information not
otherwise provided pursuant to Section 3.1(q), Known to AHP from
time to time which is relevant and material to an assessment of the
liability exposure of AHP and its Subsidiaries with respect to the
AHP Specified Litigation Matters.
(b) From the date hereof to the Closing Date, Monsanto
shall promptly advise AHP of all developments, and provide AHP all
additional information not otherwise provided pursuant to Section
3.2(r), Known to Monsanto from time to time which is relevant and
material to an assessment of the liability exposure of Monsanto and
its Subsidiaries with respect to the Monsanto Specified Litigation
Matters.
5.10 Public Announcements. AHP and Monsanto shall
use reasonable best efforts to develop a joint communications plan
and each party shall use reasonable best efforts (i) to ensure that
all press releases and other public statements with respect to the
transactions contemplated hereby shall be consistent with such
joint communications plan, and (ii) unless otherwise required by
applicable law or by obligations pursuant to any listing agreement
with or rules of any securities exchange, to consult with each
other before issuing any press release or otherwise making any
public statement with respect to this Agreement or the transactions
contemplated hereby. In addition to the foregoing, except to the
extent disclosed in or consistent with the Joint Proxy
Statement/Prospectus in accordance with the provisions of Section
5.1, neither AHP nor Monsanto shall issue any press release or
otherwise make any public statement or disclosure concerning the
other party or the other party's business, financial condition or
results of operations without the consent of the other party, which
consent shall not be unreasonably withheld or delayed.
5.11 Accountant's Letters. (a) AHP shall use
reasonable best efforts to cause to be delivered to Monsanto two
letters from AHP's independent public accountants, one dated the
date on which the Form S-4 shall become effective and one dated the
Closing Date, each addressed to AHP and Monsanto, in form and
substance reasonably satisfactory to Monsanto and customary in
scope and substance for comfort letters delivered by independent
public accountants in connection with registration statements
similar to the Form S-4. AHP shall use reasonable best efforts to
cause to be delivered to Monsanto a letter from AHP's independent
accountants dated as of the date the Form S-4 is declared effective
and as of the Closing Date, stating that accounting for the Merger
as a pooling of interests under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations is
appropriate if the Merger is closed and consummated as contemplated
by this Agreement.
(b) Monsanto shall use reasonable best efforts to cause
to be delivered to AHP two letters from Monsanto's independent
public accountants, one dated the date on which the Form S-4 shall
become effective and one dated the Closing Date, each addressed to
Monsanto and AHP, in form and substance reasonably satisfactory to
AHP and customary in scope and substance for comfort letters
delivered by independent public accountants in connection with
registration statements similar to the Form S-4. Monsanto shall
use reasonable best efforts to cause to be delivered to AHP a
letter from Monsanto's independent public accountants, addressed to
Monsanto and AHP, dated as of the date the Form S-4 is declared
effective and as of the Closing Date, stating that they concur with
Monsanto's conclusion that, as of the date of their report, no
conditions exist that would preclude Monsanto's ability to be a
party in a business combination to be accounted for as a pooling of
interests.
(c) Each of AHP and Monsanto shall use reasonable best
efforts to cause the transactions contemplated by this Agreement,
including the Merger, to be accounted for as a pooling of interests
under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations, and such accounting treatment to be
accepted by the SEC.
5.12 Listing of Shares of AHP Common Stock. AHP
shall use its reasonable best efforts to cause the shares of AHP
Common Stock to be issued in the Merger and the shares of AHP
Common Stock to be reserved for issuance upon exercise of the
Monsanto Stock Options to be approved for listing on the NYSE,
subject to official notice of issuance, prior to the Closing Date.
5.13 Dividends. After the date of this Agreement,
each of AHP and Monsanto shall coordinate with the other the
payment of dividends with respect to the AHP Common Stock and
Monsanto Common Stock and the record dates and payment dates
relating thereto, it being the intention of the parties hereto that
holders of AHP Common Stock and Monsanto Common Stock shall not
receive two dividends, or fail to receive one dividend, for any
single calendar quarter with respect to their shares of AHP Common
Stock and/or Monsanto Common Stock or any shares of AHP Common
Stock that any such holder receives in exchange for such shares of
Monsanto Common Stock in the Merger.
5.14 Affiliates. (a) Not less than 45 days prior
to the Effective Time, Monsanto shall deliver to AHP a letter
identifying all persons who, in the opinion of Monsanto, may be
deemed at the time this Agreement is submitted for adoption by the
stockholders of Monsanto, "affiliates" of Monsanto for purposes of
Rule 145 under the Securities Act or for purposes of qualifying the
Merger for pooling of interests accounting treatment under Opinion
16 of the Accounting Principles Board and applicable SEC rules and
regulations, and such list shall be updated as necessary to reflect
changes from the date thereof. Monsanto shall use reasonable best
efforts to cause each person identified on such list to deliver to
AHP not less than 30 days prior to the Effective Time, a written
agreement substantially in the form attached as Exhibit 5.14 hereto
(an "Affiliate Agreement"). Not less than 45 days prior to the
Effective Time, AHP shall deliver to Monsanto a letter identifying
all persons who, in the opinion of AHP, may be deemed "affiliates"
of AHP for purposes of qualifying the Merger for pooling of
interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, and such
list shall be updated as necessary to reflect changes from the date
hereof. AHP shall use reasonable best efforts to cause each person
identified on such list to deliver to Monsanto not less than 30
days prior to the Effective Time, a written agreement including the
substance of paragraphs (C), (D) and E of Exhibit 5.14 hereto.
(b) Newco shall use its reasonable best efforts to
publish no later than 90 days after the end of the first month
after the Effective Time in which there are at least 30 days of
post-Merger combined operations (which month may be the month in
which the Effective Time occurs), combined sales and net income
figures as contemplated by and in accordance with the terms of SEC
Accounting Series Release No. 135.
5.15 Employment Agreements. As promptly as
practicable after the date of this Agreement, AHP shall offer to
enter into an employment agreement with John R. Stafford and an
amended and restated employment agreement with Robert B. Shapiro,
to become effective as of the Effective Time, which shall be
substantially consistent with the terms and principles set forth in
Section 5.15 of each of the AHP Disclosure Schedule and the
Monsanto Disclosure Schedule.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of Monsanto, AHP and Merger Sub
to effect the Merger are subject to the satisfaction or waiver on
or prior to the Closing Date of the following conditions:
(a) Stockholder Approval. (i) Monsanto shall have
obtained the Required Monsanto Vote in connection with the adoption
of this Agreement by the stockholders of Monsanto and (ii) AHP
shall have obtained the Required AHP Vote in connection with the
approval of the Share Issuance by the stockholders of AHP.
(b) No Injunctions or Restraints, Illegality. No Laws
shall have been adopted or promulgated, and no temporary
restraining order, preliminary or permanent injunction or other
order issued by a court or other Governmental Entity of competent
jurisdiction shall be in effect, (i) having the effect of making
the Merger illegal or otherwise prohibiting consummation of the
Merger or (ii) which otherwise would reasonably be expected to have
a Material Adverse Effect on Newco and its Subsidiaries (including
the Surviving Corporation and its Subsidiaries), taken together
after giving effect to the Merger; provided, however, that the
provisions of this Section 6.1(b) shall not be available to any
party whose failure to fulfill its obligations pursuant to Section
5.4 shall have been the cause of, or shall have resulted in, such
order or injunction.
(c) HSR Act. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired.
(d) Governmental and Regulatory Approvals. Other than
the filing provided for under Section 1.3 and filings pursuant to
the HSR Act (which are addressed in Section 6.1(c)), all consents,
approvals and actions of, filings with and notices to any
Governmental Entity required of AHP, Monsanto or any of their
Subsidiaries to consummate the Merger, the Share Issuance and the
other transactions contemplated hereby, the failure of which to be
obtained or taken would reasonably be expected to have a Material
Adverse Effect on Newco and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together after
giving effect to the Merger, shall have been obtained; provided
however, that the provisions of this Section 6.1(d) shall not be
available to any party whose failure to fulfill its obligations
pursuant to Section 5.4 shall have been the cause of, or shall have
resulted in, the failure to obtain such consent or approval.
(e) NYSE Listing. The shares of AHP Common Stock to be
issued in the Merger and such other shares to be reserved for
issuance in connection with the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance.
(f) Effectiveness of the Form S-4. The Form S-4 shall
have been declared effective by the SEC under the Securities Act.
No stop order suspending the effectiveness of the Form S-4 shall
have been issued by the SEC and no proceedings for that purpose
shall have been initiated or threatened by the SEC.
(g) Pooling. Monsanto shall have received and delivered
to AHP and AHP's independent public accountants, a letter from its
independent public accountants, dated as of the date the Form S-4
is declared effective and as of the Closing Date, stating that
Monsanto qualifies as a "combining company" in accordance with the
criteria set forth in Opinion 16 of the Accounting Principles Board
and accordingly is a poolable entity. AHP shall received and
delivered to Monsanto, a letter from its independent public
accountants, dated as of the date the Form S-4 is declared
effective and as of the Closing Date, stating that accounting for
the Merger as a pooling of interests under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and
regulations is appropriate if the Merger is closed and consummated
as contemplated by this Agreement. Notwithstanding the foregoing,
the satisfaction of this Section 6.1(g) shall not be a condition to
the obligations of a party to effect the Merger if the failure to
satisfy this condition results from any action taken or agreed to
be taken by or on behalf of such party.
6.2 Additional Conditions to Obligations of AHP and
Merger Sub. The obligations of AHP and Merger Sub to effect the
Merger are subject to the satisfaction of, or waiver by AHP, on or
prior to the Closing Date of the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Monsanto set forth in this
Agreement that is qualified as to Material Adverse Effect shall be
true and correct, and each of the representations and warranties of
Monsanto set forth in this Agreement that is not so qualified shall
be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date (except to the extent in either
case that such representations and warranties speak as of another
date) (provided, that the foregoing condition shall not apply to
the representation and warranty set forth in the second sentence of
Section 3.2(r) except with respect to any breaches thereof as to
which AHP has notified Monsanto prior to the AHP Stockholders
Meeting), and AHP shall have received a certificate of the chief
executive officer and the chief financial officer of Monsanto to
such effect.
(b) Performance of Obligations of Monsanto. Monsanto
shall have performed or complied with all agreements and covenants
required to be performed by it under this Agreement at or prior to
the Closing Date that are qualified as to Material Adverse Effect
and shall have performed or complied in all material respects with
all other agreements and covenants required to be performed by it
under this Agreement at or prior to the Closing Date that are not
so qualified, and AHP shall have received a certificate of the
chief executive officer and the chief financial officer of Monsanto
to such effect.
(c) Tax Opinion. AHP shall have received from Simpson
Thacher & Bartlett, counsel to AHP, on or before the Form S-4 shall
become effective and, subsequently, on the Closing Date, a written
opinion dated as of such dates substantially in the form of Exhibit
6.2(c)(1). In rendering such opinion, counsel to AHP shall be
entitled to rely upon information, representations and assumptions
provided by AHP and Monsanto substantially in the form of Exhibits
6.2(c)(2) and 6.2(c)(3) (allowing for such amendments to the
representations as counsel to AHP deems necessary).
(d) Rights Agreement. No Share Acquisition Date or
Distribution Date shall have occurred pursuant to the Rights
Agreement.
6.3 Additional Conditions to Obligations of Monsanto.
The obligations of Monsanto to effect the Merger are subject to the
satisfaction of, or waiver by Monsanto, on or prior to the Closing
Date of the following additional conditions:
(a) Representations and Warranties. Each of the
representations and warranties of AHP set forth in this Agreement
that is qualified as to Material Adverse Effect shall be true and
correct, and each of the representations and warranties of AHP set
forth in this Agreement that is not so qualified shall be true and
correct in all material respects, in each case as of the date of
this Agreement and as of the Closing Date as though made on and as
of the Closing Date (except to the extent in either case that such
representations and warranties speak as of another date) (provided,
that the foregoing condition shall not apply to the representation
and warranty set forth in the second sentence of Section 3.1(q)
except with respect to any breaches thereof as to which Monsanto
has notified AHP prior to the Monsanto Stockholders Meeting), and
Monsanto shall have received a certificate of the chief executive
officer and the chief financial officer of AHP to such effect.
(b) Performance of Obligations of AHP. AHP shall have
performed or complied with all agreements and covenants required to
be performed by it under this Agreement at or prior to the Closing
Date that are qualified as to Material Adverse Effect and shall
have performed or complied in all material respects with all other
agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are not so
qualified, and Monsanto shall have received a certificate of the
chief executive officer and the chief financial officer of AHP to
such effect.
(c) Tax Opinion. Monsanto shall have received from
Arnold & Porter, special tax counsel to Monsanto, on or before the
Form S-4 shall become effective and, subsequently, on the Closing
Date, a written opinion dated as of such dates substantially in the
form of Exhibit 6.3(c)(1). In rendering such opinion, counsel to
Monsanto shall be entitled to rely upon information,
representations and assumptions provided by AHP and Monsanto
substantially in the form of Exhibits 6.2(c)(2) and 6.2(c)(3)
(allowing for such amendments to the representations as counsel to
Monsanto deems necessary).
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, by action taken or authorized
by the Board of Directors of the terminating party or parties, and
except as provided below, whether before or after approval of the
matters presented in connection with the Merger by the stockholders
of Monsanto or AHP:
(a) By mutual written consent of AHP and Monsanto (which
consent shall not be unreasonably withheld (i) in the case of AHP,
if the conditions set forth in Sections 6.3(a) or 6.3(b) would not
reasonably be expected to be satisfied prior to the Termination
Date (as defined in Section 7.1(b)) through the exercise of AHP's
reasonable best efforts or (ii) in the case of Monsanto, if the
conditions set forth in Section 6.2(a) or 6.2(b) would not
reasonably be expected to be satisfied prior to the Termination
Date through the exercise of Monsanto's reasonable best efforts);
(b) By either Monsanto or AHP if the Effective Time
shall not have occurred on or before May 31, 1999 (the "Termination
Date"); provided, however, that the right to terminate this
Agreement under this Section 7.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement
(including without limitation such party's obligations set forth in
Section 5.4) has been the cause of, or resulted in, the failure of
the Effective Time to occur on or before the Termination Date;
(c) By either Monsanto or AHP if any Governmental Entity
(i) shall have issued an order, decree or ruling or taken any other
action (which the parties shall have used their reasonable best
efforts to resist, resolve or lift, as applicable, in accordance
with Section 5.4) permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final
and nonappealable or (ii) shall have failed to issue an order,
decree or ruling or to take any other action (which order, decree,
ruling or other action the parties shall have used their reasonable
best efforts to obtain, in accordance with Section 5.4), in the
case of each of (i) and (ii) which is necessary to fulfill the
conditions set forth in subsections 6.1(c) and (d), as applicable,
and such denial of a request to issue such order, decree, ruling or
take such other action shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement under
this Section 7.1(c) shall not be available to any party whose
failure to comply with Section 5.4 has been the cause of such
action or inaction;
(d) By either Monsanto or AHP if (i) the approval by the
stockholders of Monsanto required for the consummation of the
Merger shall not have been obtained by reason of the failure to
obtain the Required Monsanto Vote or (ii) the approval by the
stockholders of AHP required for the Share Issuance shall not have
been obtained by reason of the failure to obtain the Required AHP
Vote, in each case upon the taking of such vote at a duly held
meeting of stockholders of Monsanto or AHP, as the case may be, or
at any adjournment thereof;
(e) By AHP or Monsanto, as the case may be, if the Board
of Directors of the other party, prior to the other party's
required stockholders approval, shall approve or recommend a
Superior Proposal pursuant to Section 5.5 or shall resolve to take
any of such actions;
(f) By AHP or Monsanto, as the case may be, at any time
prior to its required stockholders approval, upon three Business
Days' prior notice to the other party, if its Board of Directors
shall have determined as of the date of such notice that an
Acquisition Proposal is a Superior Proposal; provided, however,
that (i) the terminating party shall have complied with Section
5.5, (ii) prior to any such termination, the terminating party
shall, if requested by the other party in connection with a revised
proposal by it, negotiate in good faith for such three Business Day
period with the other party and (iii) the Board of Directors of the
terminating party shall have concluded in good faith, as of the
effective date of such termination, after taking into account any
revised proposal by the other party during such three Business Day
period, that an Acquisition Proposal is a Superior Proposal and ;
provided, further, that it shall be a condition to termination by
the terminating party pursuant to this Section 7.l(f) that the
terminating party shall have made the payment of the fee to the
other party required by Section 7.2(b)(i)(A) or Section
7.2(c)(i)(A), as the case may be;
(g) By either party, if (A) the Board of Directors of
AHP shall have effected an Adverse Change in the AHP Recommendation
(or resolved to take such action) or (B) the Board of Directors of
Monsanto shall have effected an Adverse Change in the Monsanto
Recommendation (or resolved to take such action);
(h) By Monsanto, if the Monsanto Board of Directors so
determines at any time during the five-day period commencing with
the Determination Date, if both of the following conditions are
satisfied:
(1) The Average AHP Closing Price on the Determination
Date of shares of AHP Common Stock shall be less than the
product of $48 5/16 (the "AHP Starting Price") and 0.825; and
(2) (A) The number obtained by dividing the Average AHP
Closing Price on the Determination Date by the AHP Starting
Price shall be less than (B) the number obtained by dividing
the Average Index Price on the Determination Date by the
Average Index Price on May 29, 1998 and subtracting 0.175 (the
satisfaction of such conditions (1) and (2) being hereinafter
referred to as the "AHP Stock Decline").
For purposes of this Section 7.1(h), the following term
shall have the following meanings:
"Average AHP Closing Price on the Determination Date"
means the average of the daily closing prices of AHP Common Stock
as reported on the NYSE Composite Transactions Reporting System (as
reported in The Wall Street Journal or, if not reported therein, in
another authoritative source) for the fifteen consecutive NYSE full
trading days (in which such shares are traded on the NYSE) ending
at the close of trading on the Determination Date (the "AHP Stock
Measurement Period").
For purposes of Section 7.1(h) and Section 7.1(i), the
following terms shall have the following meanings:
"Average Index Price" means, as of May 29, 1998 or the
Determination Date, the weighted average (weighted in accordance
with the market capitalization of such companies on May 29, 1998)
of the average of the daily closing prices of the common stocks of
the companies composing the Index Group as reported on the NYSE
Composite Transactions Reporting System (as reported in The Wall
Street Journal or, if not reported therein, in another
authoritative source) on May 29, 1998 or for the fifteen
consecutive NYSE full trading days (in which such shares are traded
on the NYSE) ending at the close of trading on the Determination
Date, as the case may be.
"Determination Date" means the trading day immediately
preceding the date on which all the conditions to Closing (other
than conditions that, by their terms, cannot be satisfied until the
Closing Date) set forth in Article VI shall have been satisfied or
waived, subject to change as provided in Section 7.1(h) or 7.1(i).
"Index Group" means the group of the eight (8) companies
listed in Section 7.1(h) of the AHP Disclosure Schedule. In the
event that the common stock of any such company ceases to be
publicly traded, such company will be removed from the Index Group,
and the weights (which have been determined as set forth in Average
Index Price based on market capitalization) redistributed
proportionately for purposes of determining the Average Index
Price.
Notwithstanding the foregoing provisions of this Section
7.1(h), if (i) the AHP Stock Price Decline would not be deemed to
have occurred pursuant to Section 7.1(h) if the Determination Date
is not changed as described in this paragraph; (ii) at any time
after the commencement of the AHP Stock Measurement Period and on
or prior to the Closing Date, any change, circumstance or event is
publicly disclosed by AHP in a SEC Report or a Dow Jones New
Release which relates to the AHP Specified Litigation Matters and
which is, or would reasonably be expected to be, adverse to the
business, financial condition or results of operations of AHP or
its Subsidiaries (the "AHP Public Disclosure"), and (iii) the
material event, change or circumstance constituting the AHP Public
Disclosure was (A) Known to AHP prior to the commencement of the
AHP Stock Measurement Period or (B) became Known to AHP during the
AHP Stock Measurement Period but was not disclosed by AHP within
three Business Days of becoming Known to AHP (such third Business
Day is hereinafter referred to as the "Specified AHP Disclosure
Date"), the Determination Date shall be deemed not to have occurred
(x) in the case of clause (iii)(A) of this sentence, until fifteen
Business Days after the AHP Public Disclosure or (y) in the case of
clause (iii)(B) of this sentence, until the number of Business Days
following the AHP Public Disclosure is equal to the number of
Business Days, if any, in the period between the Specified AHP
Disclosure Date and to and including the date of the originally
scheduled Determination Date; provided, that the Determination Date
shall not be delayed, if at all, in the case of each of clause (x)
and (y) beyond the later of the originally scheduled Determination
Date or the fifth Business Day following the date of the AHP Public
Disclosure (such later date being referred to as the "Interim
Date") unless, during the period (the "Interim Measurement Period")
commencing with the first Business Day following the date of the
AHP Public Disclosure and ending on the Interim Date, an AHP Stock
Decline would have occurred pursuant to the provisions of this
Section 7.1(h) if the Interim Date and the Interim Measurement
Period were used for purposes of such determination. The foregoing
provisions of this Section 7.1(h) relating to the potential delay
of the Determination Date may be waived by Monsanto.
If between the date of this Agreement and the
Determination Date, the outstanding shares of AHP Common Stock,
Monsanto Common Stock or any security in the Index Group shall have
been changed into a different number of shares or a different class
by reason of any reclassification, recapitalization, stock split,
split-up, combination or exchange of shares or a stock dividend or
dividend payable in any other securities or extraordinary cash
dividend shall be declared with a record date within such period,
or any similar event shall have occurred, appropriate adjustments
shall be made to the Average AHP Closing Price on the Determination
Date, the Average Monsanto Closing Price on the Determination Date
(as defined in Section 7.1(i)) or the Average Index Price, as the
case may be, for purposes of this Agreement.
(i) By AHP, if the AHP Board of Directors so determines,
at any time during the five-day period commencing with the
Determination Date, if both of the following conditions are
satisfied:
(1) The Average Monsanto Closing Price on the
Determination Date of shares of Monsanto Common Stock shall be
less than the product of $55 3/8 (the "Monsanto Starting
Price") and 0.825; and
(2) (A) The number obtained by dividing the Average
Monsanto Closing Price on the Determination Date by the
Monsanto Starting Price shall be less than (B) the number
obtained by dividing the Average Index Price on the
Determination Date by the Average Index Price on May 29, 1998
and subtracting 0.175 (the satisfaction of such conditions (1)
and (2) being hereinafter referred to as the "Monsanto Stock
Decline").
For purposes of this Section 7.1(i), the following term
shall have the following meanings:
"Average Monsanto Closing Price on the Determination
Date" means the average of the daily closing prices of Monsanto
Common Stock as reported on the NYSE Composite Transactions
Reporting System (as reported in The Wall Street Journal or, if not
reported therein, in another authoritative source) for the fifteen
consecutive NYSE full trading days (in which such shares are traded
on the NYSE) ending at the close of trading on the Determination
Date (the "Monsanto Stock Measurement period").
Notwithstanding the foregoing provisions of this Section
7.1(i), if (i) the Monsanto Stock Price Decline would not be deemed
to have occurred pursuant to Section 7.1(i) if the Determination
Date is not changed as described in this paragraph; (ii) at any
time after the commencement of the Monsanto Stock Measurement
Period and on or prior to the Closing Date, any change,
circumstance or event is publicly disclosed by Monsanto in a SEC
Report or a Dow Jones News Release which relates to the Monsanto
Specified Litigation Matters and which is, or would reasonably be
expected to be, adverse to the business, financial condition or
results of operations of Monsanto or its Subsidiaries (the
"Monsanto Public Disclosure") and (iii) the material event, change
or circumstance constituting the Monsanto Public Disclosure was (A)
Known to Monsanto prior to the commencement of the Monsanto Stock
Measurement Period or (B) became Known to Monsanto during the
Monsanto Stock Measurement Period but was not disclosed by Monsanto
within three Business Days of becoming Known to Monsanto (such
third Business Day is hereinafter referred to as the "Specified
Monsanto Disclosure Date"), the Determination Date shall be deemed
not to have occurred (x) in the case of clause (iii)(A) of this
sentence, until fifteen Business Days after the Monsanto Public
Disclosure or (y) in the case of clause (iii)(B) of this sentence,
until the number of Business Days following the Monsanto Public
Disclosure is equal to the number of Business Days, if any, in the
period between the Specified Monsanto Disclosure Date to and
including the date of the originally scheduled Determination Date;
provided, that the Determination Date shall not be delayed, if at
all, in the case of each of clause (x) and (y) beyond the later of
the originally scheduled Determination Date or the fifth Business
Day following the date of the Monsanto Public Disclosure (such
later date being referred to as the "Interim Date") unless, during
the period (the "Interim Measurement Period") commencing with the
first Business Day following the date of the Monsanto Public
Disclosure and ending on the Interim Date, a Monsanto Stock Decline
would have occurred pursuant to the provisions of this Section
7.1(i) if the Interim Date and the Interim Measurement Period were
used for purposes of such determination. The foregoing provisions
of this Section 7.1(i) relating to the potential delay of the
Determination Date may be waived by AHP.
(j) By Monsanto, if any Person shall have acquired
beneficial ownership of 30% or more of the outstanding shares of
AHP Common Stock and such Person or its affiliates shall be
required under the rules and regulations of the SEC to file a
Schedule 13D (or any successor form) with respect to such
acquisition or ownership; or
(k) By AHP, if a Share Acquisition Date shall have
occurred pursuant to the Rights Agreement.
7.2 Effect of Termination.
(a) In the event of termination of this Agreement by
either Monsanto or AHP as provided in Section 7.1, this Agreement
shall forthwith become void and there shall be no liability or
obligation on the part of AHP or Monsanto or their respective
officers or directors except with respect to Section 3.1(l),
Section 3.2(m), the second sentence of Section 5.3, Section 5.7,
this Section 7.2 and Article VIII, which provisions shall survive
such termination, and except that, notwithstanding anything to the
contrary contained in this Agreement, neither AHP nor Monsanto
shall be relieved or released from any liabilities or damages
arising out of its willful material breach of this Agreement.
(b) (i) AHP shall pay Monsanto the sum of $700 million
(the "AHP Alternative Transaction Fee") if this Agreement is
terminated solely as follows: (A) if AHP shall terminate this
Agreement pursuant to Section 7.1(f), (B) if (I) either party shall
terminate this Agreement pursuant to Section 7.1(d)(ii) due to the
failure of AHP's stockholders to approve the Share Issuance, (II)
at any time after the date of this Agreement and at or before the
date of the AHP Stockholders Meeting a Business Combination (as
defined in Section 7.2(d)) proposal with respect to AHP shall have
been publicly announced or otherwise communicated to the AHP Board
of Directors, and (III) within twelve months of the termination of
this Agreement, AHP enters into a definitive agreement with any
third party with respect to a Business Combination or a Business
Combination with respect to AHP is consummated, (C) if Monsanto
shall terminate this Agreement pursuant to Section 7.1(e) or
7.1(j), (D) if (I) either party shall terminate this Agreement
pursuant to Section 7.1(b), (II) at any time after the date of this
Agreement and at or before the Termination Date there shall exist
a Business Combination proposal with respect to AHP,
(III) following the existence of such Business Combination proposal
and prior to any such termination, AHP shall have intentionally
breached (and not cured after notice thereof) any of its covenants
or agreements set forth in this Agreement in any material respect,
which breach shall have materially contributed to the failure of
the Effective Time to occur on or before the Termination Date and
(IV) within twelve months of any such termination of this
Agreement, AHP shall enter into a definitive agreement with any
third party with respect to a Business Combination or a Business
Combination with respect to AHP is consummated, or (E)(I) if either
party shall terminate this Agreement pursuant to 7.1(g)(A), (II) at
any time after the date of this Agreement and at or before the
Adverse Change in the AHP Recommendation a Business Combination
proposal with respect to AHP shall have been publicly announced or
otherwise communicated to the AHP Board of Directors, and (III)
within twelve months of any such termination of this Agreement, AHP
shall enter into a definitive agreement with any third party with
respect to a Business Combination or a Business Combination with
respect to AHP is consummated, provided that, in the case of this
subclause (E) of Section 7.2(b)(i), if the AHP Termination Fee (as
defined in Section 7.2(b)(ii)) has previously been paid in
connection with the termination of this Agreement pursuant to
Section 7.1(g)(A), then the amount of such fee shall be credited to
the AHP Alternative Transaction Fee.
(ii) AHP shall pay Monsanto the amount of $250 million
(the "AHP Termination Fee") if this Agreement is terminated by
either party pursuant to Section 7.1(g)(A) in circumstances in
which the AHP Alternative Transaction Fee is not then payable;
provided, however, that the AHP Termination Fee shall equal the
amount of $75 million in the event that (a) the date on which the
Board of Directors of AHP effects an Adverse Change in the AHP
Recommendation occurs within five (5) Business Days prior to the
scheduled date of the AHP Stockholders Meeting and (b) prior to the
Adverse Change in the AHP Recommendation a Monsanto Stock Decline
would be deemed to have occurred pursuant to the provisions of
Section 7.1(i) if "Determination Date" for purposes of such
calculation was deemed to be the trading day immediately preceding
the date on which the AHP Board effected an Adverse Change in the
AHP Recommendation (the valuation period ending at the close of
trading on such deemed Determination Date is hereinafter referred
to as the "Alternative Monsanto Stock Measurement Period").
Notwithstanding the foregoing, if (x) a Monsanto Public Disclosure
is made during the Alternative Monsanto Stock Measurement Period
and (y) during the remaining portion of the Alternative Monsanto
Stock Measurement Period commencing with the first Business Day
following the date of the Monsanto Public Disclosure, a Monsanto
Stock Decline would be deemed to have occurred pursuant to the
provisions of Section 7.1(i) but (z) a Monsanto Stock Decline would
not be deemed to have occurred pursuant to the provisions of
Section 7.1(i) if the entire Alternative Monsanto Stock Measurement
Period were used for purposes of such calculation, then AHP shall
be entitled to delay the date of its scheduled AHP Stockholders
Meeting to the 20th Business Day after the Monsanto Public
Disclosure and the Alternative Monsanto Stock Measurement Period
shall commence with the first Business Day following the date of
the Monsanto Public Disclosure, for purposes of determining the
relevant AHP Termination Fee.
(iii) AHP shall pay Monsanto the fixed amount of $75
million as an expense and displacement payment if this Agreement is
terminated by AHP pursuant to Section 7.1(i).
(c) (i) Monsanto shall pay AHP the sum of $700 million
(the "Monsanto Alternative Transaction Fee") if this Agreement is
terminated solely as follows: (A) if Monsanto shall terminate this
Agreement pursuant to Section 7.1(f), (B) if (I) either party shall
terminate this Agreement pursuant to Section 7.1(d)(i) due to the
failure of Monsanto's stockholders to adopt this Agreement and
approve the Merger, (II) at any time after the date of this
Agreement and at or before the date of the Monsanto Stockholders
Meeting a Business Combination proposal with respect to Monsanto
shall have been publicly announced or otherwise communicated to the
Monsanto Board of Directors and (III) within twelve months of the
termination of this Agreement, Monsanto enters into a definitive
agreement with any third party with respect to a Business
Combination proposal or a Business Combination with respect to
Monsanto is consummated, (C) if AHP shall terminate this Agreement
pursuant to Section 7.1(e) or 7.1(k), (D) if (I) either party shall
terminate this Agreement pursuant to Section 7.1(b), (II) at any
time after the date of this Agreement and at or before the
Termination Date there shall exist a Business Combination proposal
with respect to Monsanto, (III) following the existence of such a
Business Combination proposal and prior to any such termination,
Monsanto shall have intentionally breached (and not cured after
notice thereof) any of its covenants or agreements set forth in
this Agreement in any material respect which breach shall have
materially contributed to the failure of the Effective Time to
occur on or before the Termination Date and (IV) within twelve
months of any such termination of this Agreement, Monsanto shall
enter into a definitive agreement with any third party with respect
to a Business Combination proposal or a Business Combination with
respect to Monsanto is consummated, or (E)(I) if either party shall
terminate this Agreement pursuant to 7.1(g)(B), (II) at any time
after the date of this Agreement and at or before the termination
of this Agreement relating to the Adverse Change in the Monsanto
Recommendation a Business Combination proposal with respect to
Monsanto, shall have been publicly announced or otherwise
communicated to the Monsanto Board of Directors and (III) within
twelve months of any such termination of this Agreement, Monsanto
shall enter into a definitive agreement with any third party with
respect to a Business Combination or a Business Combination with
respect to Monsanto is consummated, provided that, in the case of
this subclause (E) of Section 7.2(c)(i), if the Monsanto
Termination Fee (as defined in section 7.2(c)(ii)) has previously
been paid in connection with the termination of this Agreement
pursuant to Section 7.1(g)(B), then the amount of such fee shall be
credited to the Monsanto Alternative Transaction Fee.
(ii) Monsanto shall pay AHP the amount of $250 million
(the "Monsanto Termination Fee") if this Agreement is terminated by
either party pursuant to Section 7.1(g)(B) in circumstances in
which the Monsanto Alternative Transaction Fee is not then payable;
provided, however, that the Monsanto Termination Fee shall equal
the amount of $75 million in the event that (a) the date on which
the Board of Directors of Monsanto effects an Adverse Change in the
Monsanto Recommendation occurs within five (5) Business Days prior
to the scheduled date of the Monsanto Stockholders Meeting and (b)
prior to the Adverse Change in the Monsanto Recommendation an AHP
Stock Decline would be deemed to have occurred pursuant to the
provisions of Section 7.1(h) if "Determination Date" for purposes
of such calculation was deemed to be the trading day immediately
preceding the date on which the Monsanto Board effected an Adverse
Change in the Monsanto Recommendation (the valuation period ending
at the close of trading on such deemed Determination Date is
hereinafter referred to as the "Alternative AHP Stock Measurement
Period"). Notwithstanding the foregoing, if (x) an AHP Public
Disclosure is made during the Alternative AHP Stock Measurement
Period and (y) during the remaining portion of the Alternative AHP
Stock Measurement Period commencing with the first Business Day
following the date of the AHP Public Disclosure, an AHP Stock
Decline would be deemed to have occurred pursuant to the provisions
of Section 7.1(h) but (z) an AHP Stock Decline would not be deemed
to have occurred pursuant to the provisions of Section 7.1(h) if
the entire Alternative AHP Stock Measurement Period were used for
purposes of such calculation, then Monsanto shall be entitled to
delay the date of its scheduled Monsanto Stockholders Meeting for
such number of Business Days as would permit a fifteen Business Day
Alternative AHP Stock Measurement Period commencing with the date
of the AHP Public Disclosure, for purposes of determining the
applicable Monsanto Termination Fee.
(iii) Monsanto shall pay AHP the fixed amount of $75
million as an expense and displacement payment if this Agreement is
terminated by Monsanto pursuant to Section 7.1(h).
(d) For the purposes of this Section 7.2, "Business
Combination" means with respect to AHP or Monsanto, as the case may
be, (i) a merger, reorganization, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or
similar transaction involving such party as a result of which
either (A) such party's stockholders prior to such transaction (by
virtue of their ownership of such party's shares) in the aggregate
cease to own at least 60% of the voting securities of the entity
surviving or resulting from such transaction (or the ultimate
parent entity thereof) or, regardless of the percentage of voting
securities held by such stockholders, if any Person shall
beneficially own, directly or indirectly, at least 30% of the
voting securities of such ultimate parent entity, or (B) the
individuals comprising the board of directors of such party prior
to such transaction do not constitute a majority of the board of
directors of such ultimate parent entity, (ii) a sale, lease,
exchange, transfer or other disposition of at least 50% of the
assets of such party and its Subsidiaries, taken as whole, in a
single transaction or a series of related transactions, or (iii)
the acquisition, directly or indirectly, by a Person of beneficial
ownership of 30% or more of the common stock of such party whether
by merger, consolidation, share exchange, business combination,
tender or exchange offer or otherwise.
(e) The AHP Alternative Transaction Fee and the Monsanto
Alternative Transaction Fee required to be paid pursuant to Section
7.2(b)(i) or 7.2(c)(i), as the case may be, shall be paid prior to,
and shall be a pre-condition to the effectiveness of, termination
of this Agreement pursuant to Section 7.1(f). Any other payment
required to be made pursuant to Section 7.2(b) or 7.2(c) shall be
made not later than two Business Days after the entering into of a
definitive agreement with respect to, or the consummation of, a
Business Combination, as applicable, or a termination pursuant to
Section 7.1(e), Section 7.1(g), Section 7.1(h), Section 7.1(i)
Section 7.1(j) or Section 7.1(k). In no event shall more than one
AHP Alternative Transaction Fee or Monsanto Alternative Transaction
Fee be made. No AHP Termination Fee or Monsanto Termination Fee
will be payable to Monsanto or AHP, as the case may be, if (A) the
receiving party was at the time of the termination giving rise to
such fee in breach of its covenants, agreements or representations
to the extent that would reasonably be expected to have a Material
Adverse Effect on the receiving party, or on the benefits
reasonably expected to be received by the paying party's
stockholders from the Merger; (B) the paying party has on or prior
to the action giving rise to such termination in good faith
asserted such breach with reasonable specificity to the receiving
party and, unless such breach is incurable, has given the receiving
party a reasonable opportunity to cure such breach; and (C) the
existence of such breach was either (i) the sole basis for the
Adverse Change in the AHP Recommendation or the Adverse Change in
the Monsanto Recommendation, as the case may be, or (ii) the
primary basis for such change, but only (in the case of (ii)) if
the existence of such breach or breaches on their own constituted
a sufficient basis for the Board of Directors' good faith
determination pursuant to the second proviso of Section 5.1(b) or
Section 5.1(c), as the case may be. All payments under this
Section 7.2 shall be made by wire transfer of immediately available
funds to an account designated by the party entitled to receive
payment.
7.3 Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective
Boards of Directors, at any time before or after approval of the
matters presented in connection with the Merger by the stockholders
of Monsanto and AHP, but, after any such approval, no amendment
shall be made which by law or in accordance with the rules of any
relevant stock exchange requires further approval by such
stockholders without such further approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of
each of the parties hereto.
7.4 Extension; Waiver. At any time prior to the
Effective Time, the parties hereto, by action taken or authorized
by their respective Boards of Directors, may, to the extent legally
allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive
any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of those
rights.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and
other agreements in this Agreement or in any instrument delivered
pursuant to this Agreement, including any rights arising out of any
breach of such representations, warranties, covenants and other
agreements, shall survive the Effective Time, except for those
covenants and agreements contained herein and therein that by their
terms apply or are to be performed in whole or in part after the
Effective Time and this Article VIII.
8.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on
the date of delivery if delivered personally, or by telecopy or
telefacsimile, upon confirmation of receipt, (b) on the first
Business Day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the tenth Business
Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing
by the party to receive such notice:
(a) if to AHP or Merger Sub, to
American Home Products Corporation
Five Giralda Farms
Madison, New Jersey 07940
Fax: (973) 660-7156
Attention: Louis L. Hoynes, Esq.
with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Fax: (212) 455-2502
Attention: Charles I. Cogut, Esq.
Robert E. Spatt, Esq.
(b) if to Monsanto to
Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Fax: (314) 694-6399
Attention: R. William Ide, III, Esq.
with a copy to
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Fax: (212) 403-2000
Attention: Richard D. Katcher, Esq.
Eric S. Robinson, Esq.
8.3 Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall
be to a Section of or Exhibit or Schedule to this Agreement unless
otherwise indicated. The table of contents and headings contained
in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words
"without limitation".
8.4 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered
to the other party, it being understood that both parties need not
sign the same counterpart.
8.5 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement and the Confidentiality Agreements
constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon
any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Section
5.8 (which is intended to be for the benefit of the Persons covered
thereby and may be enforced by such Persons).
8.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware
(without giving effect to choice of law principles thereof).
8.7 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced
by any law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
8.8 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any
of the parties hereto, in whole or in part (whether by operation of
law or otherwise), without the prior written consent of the other
party, and any attempt to make any such assignment without such
consent shall be null and void, except that Merger Sub may assign,
in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any direct wholly owned
Subsidiary of AHP without the consent of Monsanto, but no such
assignment shall relieve Merger Sub of any of its obligations under
this Agreement. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
8.9 Submission to Jurisdiction; Waivers. Each of AHP
and Monsanto irrevocably agrees that any legal action or proceeding
with respect to this Agreement or for recognition and enforcement
of any judgment in respect hereof brought by the other party hereto
or its successors or assigns may be brought and determined in the
Chancery or other Courts of the State of Delaware, and each of AHP
and Monsanto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect to its property,
generally and unconditionally, to the nonexclusive jurisdiction of
the aforesaid courts. Each of AHP and Monsanto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect
to this Agreement, (a) any claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other
than the failure to lawfully serve process (b) that it or its
property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid
of execution of judgment, execution of judgment or otherwise), and
(c) to the fullest extent permitted by applicable law, that (i) the
suit, action or proceeding in any such court is brought in an
inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper and (iii) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts.
8.10 Enforcement. The parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms. It is accordingly agreed that the parties
shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at
law or in equity.
8.11 Definitions. As used in this Agreement:
(a) "beneficial ownership" or "beneficially own" shall
have the meaning under Section 13(d) of the Exchange Act and the
rules and regulations thereunder.
(b) "Benefit Plans" means, with respect to any Person,
each employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan," as
defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and any bonus, deferred
compensation, stock bonus, stock purchase, restricted stock, stock
option, employment, termination, stay agreement or bonus, change in
control and severance plan, program, arrangement and contract) in
effect on the date of this Agreement or disclosed on the Monsanto
Disclosure Schedule or the AHP Disclosure Schedule, as the case may
be, to which such Person or its Subsidiary is a party, which is
maintained or contributed to by such Person, or with respect to
which such Person could incur material liability under Section
4069, 4201 or 4212(c) of ERISA.
(c) "Board of Directors" means the Board of Directors of
any specified Person and any committees thereof.
(d) "Business Day" means any day on which banks are not
required or authorized to close in the City of New York.
(e) "Known or "Knowledge" means, with respect to any
party, the knowledge of such party's executive officers after
reasonable inquiry, including reasonable inquiry of such party's
counsel.
(f) "Majority Owned Affiliate" when used with respect to
any party means any corporation or other organization, whether
incorporated or unincorporated, at least a majority of the
securities or other interests of which having by their terms
ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such
corporation or other organization, is directly or indirectly owned
or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries,
and with respect to which such party is prevented, by virtue of
contractual limitations or limitations imposed in organizational
documents, from electing a majority of the Board of Directors or
others
performing similar functions.
(g) "Material Adverse Effect" means, with respect to any
entity, any change, circumstance or effect that, individually or in
the aggregate with all other changes, circumstances and effects, is
or is reasonably likely to be materially adverse to (i) the
business, financial condition or results of operations of such
entity and its Subsidiaries taken as a whole, other than any
change, circumstance or effect relating (x) to the economy or
financial markets in general or (y) in general to the industries in
which AHP or Monsanto operate and not specifically relating to AHP
or Monsanto or (ii) the ability of such party to consummate the
transactions contemplated by this Agreement; provided, however, for
purposes of satisfying the conditions set forth in Sections 6.2(a)
and 6.3(a) with respect to the representations made in Sections
3.1(h) and 3.1(i) and Sections 3.2(h) and 3.2(i) as of the Closing
Date, "Material Adverse Effect" shall also exclude any change,
circumstance or effect relating to the AHP Specified Litigation
Matters and the Monsanto Specified Litigation Matters, as the case
may be.
(h) "the other party" means, with respect to Monsanto,
AHP and means, with respect to AHP, Monsanto.
(i) "Person" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated
organization, other entity or group (as defined in the Exchange
Act).
(j) "Subsidiary" when used with respect to any party
means any corporation or other organization, whether incorporated
or unincorporated, (i) of which such party or any other Subsidiary
of such party is a general partner (excluding partnerships, the
general partnership interests of which held by such party or any
Subsidiary of such party do not have a majority of the voting
interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms
ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned
or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries,
except for any Majority Owned Affiliates.
(k) "Superior Proposal" means with respect to AHP or
Monsanto, as the case may be, a written proposal made by a Person
other than either such party which is for (I) (i) a merger,
reorganization, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving such party as a result of which either (A)
such party's stockholders prior to such transaction (by virtue of
their ownership of such party's shares) in the aggregate cease to
own at least 50% of the voting securities of the entity surviving
or resulting from such transaction (or the ultimate parent entity
thereof) or (B) the individuals comprising the board of directors
of such party prior to such transaction do not constitute a
majority of the board of directors of such ultimate parent entity,
(ii) a sale, lease, exchange, transfer or other disposition of at
least 50% of the assets of such party and its Subsidiaries, taken
as a whole, in a single transaction or a series of related
transactions, or (iii) the acquisition, directly or indirectly, by
a Person of beneficial ownership of 50% or more of the common stock
of such party whether by merger, consolidation, share exchange,
business combination, tender or exchange offer or otherwise, and
which is (II) otherwise on terms which the Board of Directors of
such party in good faith concludes (after consultation with its
financial advisors and outside counsel), taking into account, among
other things, all legal, financial, regulatory and other aspects of
the proposal and the Person making the proposal, (i) would, if
consummated, result in a transaction that is more favorable to its
stockholders (in their capacities as stockholders), from a
financial point of view, than the transactions contemplated by this
Agreement (after giving effect, for purposes of clause (iii) of
Section 7.1(f), to any revised proposal made by the other party
prior to the end of the three business-day period referred to in
clause (ii) of Section 7.1(f)) and (ii) is reasonably capable of
being completed.
______________________________
[Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, AHP, Merger Sub and Monsanto have
caused this Agreement to be signed by their respective officers
thereunto duly authorized, all as of the date first written above.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ John R. Stafford
Name: John R. Stafford
Title: Chairman, President
and Chief
Executive Officer
MA SUB, INC.
By: /s/ John R. Stafford
Name: John R. Stafford
Title: Chairman, President
and Chief
Executive Officer
MONSANTO COMPANY
By: /s/ Robert B. Shapiro
Name: Robert B. Shapiro
Title: Chairman and Chief
Executive Officer
AMERICAN HOME PRODUCTS AND MONSANTO ANNOUNCE PLAN TO COMBINE TO
CREATE $96 BILLION LIFE SCIENCES COMPANY
MADISON, N.J., AND ST. LOUIS, MO., June 1, 1998 -- Monsanto
Company (NYSE: MTC) and American Home Products Corporation (NYSE:
AHP) today have announced that they have entered into a
definitive agreement to combine the two companies in a merger of
equals transaction. The combined company would have a market
capitalization in excess of $96 billion based on current market
prices. The combined life sciences company will have a new name
and strong global businesses in pharmaceuticals, agriculture,
animal health, consumer health care and nutrition, with combined
expected sales in 1998 of approximately $23 billion.
AHP shareowners will retain their shares. Monsanto
shareowners will receive 1.15 shares in the new company for each
share of Monsanto that they currently own. Monsanto shareowners
would own approximately 35 percent of the combined company's
shares.
The combined company's board of directors will consist of 22
members, with representation equally divided between AHP and
Monsanto. Monsanto Chairman and Chief Executive Officer Robert
B. Shapiro and AHP Chairman, President and Chief Executive
Officer John R. Stafford will be co-chairmen and co-CEOs. They
will head an office of the chairmen. Members of that group and
their current positions are Robert G. Blount, AHP senior
executive vice president and chief financial officer; Richard U.
De Schutter, Monsanto vice chairman; Robert Essner, AHP executive
vice president; and Hendrik A. Verfaillie, Monsanto president.
Mr. Essner will head the new company's pharmaceutical
business; Mr. De Schutter its consumer health care and nutrition
businesses; and Mr. Verfaillie its agricultural and animal health
businesses. Mr. Blount will be the new company's chief financial
officer. Corporate headquarters will be located in Madison, New
Jersey. The new company's agricultural business will be
headquartered in St. Louis, Missouri; the pharmaceutical business
headquartered in Radnor, Pennsylvania; and the consumer health
care and nutrition businesses headquartered in Chicago, Illinois.
"This new company is based on growth and opportunity. We're
committed to cutting edge science, to developing and marketing
great products, and to a philosophy of growth and value," said
Mr. Stafford.
Mr. Shapiro stated, "Our new company is designed to be
successful in the face of continued consolidation and increasing
worldwide competition in the life sciences. We will have the
scientific depth, global marketing capabilities and financial
resources to take greater advantage of the opportunities before
us and to bring innovative new products to market faster."
As a result of the merger, the companies expect to realize
on an annual basis between $1.25 billion and $1.5 billion in cost
savings from synergies and cost avoidance within three years from
the closing. From the standpoint of AHP's earnings, assuming the
merger is consummated by year end 1998 and after synergies and
cost savings, earnings per share are anticipated to be diluted by
up to 15 percent in the first year, by a lesser amount in 2000,
and accretive thereafter.
The transaction is subject to approval by both companies'
shareowners, normal governmental reviews and other customary
conditions. The merger is intended to qualify as a tax-free
reorganization and to be accounted for on a pooling of interests
basis.
Monsanto is a life sciences company, committed to finding
solutions to the growing global needs for food and health by
applying advanced bioscience and biotechnology to agriculture,
nutrition and health. It makes and manufactures high-value
agricultural products, pharmaceuticals and food ingredients.
AHP is one of the world's largest research-based
pharmaceutical and health care products companies. It is a
leader in the discovery, development, manufacturing and marketing
of prescription drugs and over-the-counter medications. It is
also a global leader in vaccines, biotechnology, agricultural
products and animal health care.
This news release contains certain forward-looking
statements, including, among other things, statements regarding
each company's results of operations and expected cost savings
and earnings per share effects. These forward-looking statements
are based on current expectations, but actual results may differ
materially from anticipated future events or results. Certain
factors which could cause each company's actual results to differ
materially from expected and historical results are described in
AHP's and Monsanto's periodic reports filed with the Securities
and Exchange Commission, including Monsanto's and AHP's 1997
annual reports and Forms 10-K and Exhibits 99 thereto,
respectively.
This announcement is not an offer to sell nor a solicitation
to buy any securities. The offering with respect to the proposed
merger will be made only by the proxy statement/prospectus that
will be distributed to shareowners in connection with their
consideration of the transaction.
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