<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MONSANTO COMPANY
----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
---------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
5) Total fee paid:
---------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
THIS PROXY MATERIAL IS SENT TO YOU FOR YOUR INFORMATION AS THE
HOLDER OF A MONSANTO STOCK OPTION OR AS A PARTICIPANT IN THE
MONSANTO EMPLOYEE STOCK PURCHASE PLAN. YOU ARE NOT ENTITLED,
HOWEVER, TO VOTE ANY OPTIONED SHARES OR SHARES UNDER CONTRACT. IF
YOU WERE A RECORD HOLDER ON FEBRUARY 27, 1995, AS THE RESULT OF
YOUR HAVING EXERCISED YOUR OPTION OR COMPLETED YOUR PAYMENT FOR
SHARES UNDER CONTRACT, YOU WILL RECEIVE A PROXY CARD FOR THOSE
SHARES.
MONSANTO
------------------------------------
Monsanto Company
800 N. Lindbergh Boulevard
St. Louis, Missouri 63167
(314) 694-1000
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1995
You are invited, as a stockholder of Monsanto Company, to be
present or represented by proxy at the Annual Meeting of
Stockholders to be held in K Building at the Company's World
Headquarters, 800 North Lindbergh Boulevard, St. Louis
County, Missouri, on Friday, April 28, 1995, at 1:30 p.m.
for the following purposes:
1. To elect fourteen directors.
2. To ratify the appointment of Deloitte & Touche LLP as
principal independent auditors for the year 1995.
3. To transact such other business as may properly come
before the meeting.
Stockholders of the Company of record at the close of
business on February 27, 1995, are entitled to vote at the
Annual Meeting of Stockholders and all adjournments thereof.
Since a majority of the outstanding shares of stock of the
Company which are entitled to vote at the meeting must be
represented to constitute a quorum, all stockholders are
urged either to attend the meeting or to be represented by
proxy.
If you do not expect to attend the meeting in person, please
mark, sign, date, and return the accompanying proxy in the
enclosed business reply envelope. If you later find that you
can be present or for any other reason desire to revoke your
proxy, you may do so at any time before the voting.
Richard W. Duesenberg
Secretary
St. Louis, Missouri
March 16, 1995
<PAGE> 3
<TABLE>
TABLE OF CONTENTS TO THE PROXY STATEMENT
<CAPTION>
PAGE NO.
--------
<S> <C>
Election of Directors (Proxy Item No. 1)............................................................ 2
Stock Ownership of Management and Certain Beneficial Owners....................................... 5
Board Meetings and Committees; Compensation of Directors.......................................... 6
Executive Compensation............................................................................ 10
Ratification of Independent Auditors (Proxy Item No. 2)............................................. 19
General Information................................................................................. 19
</TABLE>
<PAGE> 4
MONSANTO COMPANY
800 N. LINDBERGH BOULEVARD
ST. LOUIS, MISSOURI 63167
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Monsanto Company of
proxies to be voted at the Annual Meeting of Stockholders on April
28, 1995, and at all adjournments thereof. Only stockholders of
record at the close of business on February 27, 1995, will be
eligible to vote at the meeting. Except for shares owned by the
Company, each share of Common Stock, $2 par value, outstanding on
such record date will be entitled to one vote. As of February 27,
1995, 114,084,909 shares of such Common Stock were outstanding and
entitled to vote. This Proxy Statement and the accompanying form
of proxy were first forwarded to stockholders on March 16, 1995.
Unless you indicate to the contrary, the persons named in the
accompanying proxy will vote for
(1) the election as directors of the nominees named below; and
(2) the ratification of the appointment of Deloitte & Touche LLP
as principal independent auditors for the year 1995.
A plurality of the shares present at the meeting in person or by
proxy is required for the election of directors, and the
affirmative vote of a majority of the shares present at the
meeting in person or by proxy is required for ratification of the
appointment of auditors. Pursuant to the Company's By-Laws,
abstentions have the same effect as votes cast against a
particular proposal.
The proxy of a stockholder who is a participant in the Company's
Dividend Reinvestment Plan will also serve as an instruction to
vote the shares held for the account of the participant under this
plan in the same manner as the shares registered in the
participant's name. If a stockholder's proxy is not received, the
shares held in that account in the Dividend Reinvestment Plan will
not be voted.
The Company's Savings and Investment Plan (SIP) and the Payroll
Related Employee Stock Ownership Plan (PAYSOP) permit plan
participants to direct the plan trustees how to vote the Common
Stock of the Company allocated to their accounts. Under the terms
of the SIP trust agreement, the trustee will vote unallocated and
uninstructed shares in proportion to the shares with respect to
which instructions have been received. As to shares held in
PAYSOP, the trustee will not vote those shares of Common Stock for
which participant voting instructions have not been received.
1
<PAGE> 5
ELECTION OF DIRECTORS (PROXY ITEM NO. 1)
Fourteen persons have been nominated to serve on the Board of
Directors, each to hold office until the next Annual Meeting or
until a successor is elected and has qualified or until his or her
earlier death, resignation or removal. All nominees are now
directors of the Company and were elected by the stockholders at
the last Annual Meeting. The Board has elected Robert B. Shapiro
Chairman of the Board, President, and Chief Executive Officer,
effective April 1, 1995. He succeeds Richard J. Mahoney, who will
retire from employment with the Company after more than 32 years
of service.
<TABLE>
<C> <S> <C>
[PHOTO] RICHARD J. MAHONEY PRINCIPAL OCCUPATION: CHAIRMAN AND CHIEF
EXECUTIVE OFFICER, MONSANTO COMPANY,
UNTIL APRIL 1, 1995
FIRST BECAME DIRECTOR: 1979
AGE: 61
Chairman, Monsanto Company, 1986-95; Chief
Executive Officer, 1983-95. Director: Metropolitan
Life Insurance Company; Union Pacific Corporation.
Member: The Business Council; The Business
Roundtable.
[PHOTO] ROBERT B. SHAPIRO PRINCIPAL OCCUPATION: CHAIRMAN, PRESIDENT, AND
CHIEF EXECUTIVE OFFICER, MONSANTO COMPANY,
EFFECTIVE APRIL 1, 1995
FIRST BECAME DIRECTOR: 1993
AGE: 56
President and Chief Operating Officer, Monsanto Company,
1993-95; Executive Vice President and Advisory Director,
Monsanto Company, and President, The Agricultural Group
of Monsanto Company, 1990-93; Chairman and Chief
Executive Officer, The NutraSweet Company, a subsidiary
of Monsanto Company,1986-90. Director: Citicorp; Liposome
Technology, Inc.
[PHOTO] JOAN T. BOK PRINCIPAL OCCUPATION: CHAIRMAN OF THE BOARD,
NEW ENGLAND ELECTRIC SYSTEM
FIRST BECAME DIRECTOR: 1987
AGE: 65
Chairman of the Board, New England Electric System
since 1984. Director: Avery Dennison Corporation;
Federal Reserve Bank of Boston; John Hancock
Mutual Life Insurance Company; New England
Electric System and its subsidiaries Massachusetts
Electric Company, The Narragansett Electric
Company, and New England Power Company.
[PHOTO] ROBERT M. HEYSSEL PRINCIPAL OCCUPATION: CONSULTANT; PRESIDENT
EMERITUS, THE JOHNS HOPKINS HEALTH SYSTEM
FIRST BECAME DIRECTOR: 1988
AGE: 66
Consultant; President Emeritus, The Johns Hopkins
Health System since 1992; President and Chief
Executive Officer, The Johns Hopkins Health System
and The Johns Hopkins Hospital, 1972-92.
Professor, The Johns Hopkins Schools of Medicine
and Public Health since 1971 and 1972,
respectively. Director: Signet Banking
Corporation.
2
<PAGE> 6
[PHOTO] GWENDOLYN S. KING PRINCIPAL OCCUPATION: SENIOR VICE PRESIDENT,
CORPORATE AND PUBLIC AFFAIRS, PECO ENERGY
COMPANY
FIRST BECAME DIRECTOR: 1993
AGE: 54
Senior Vice President, Corporate and Public
Affairs, PECO Energy Company (formerly
Philadelphia Electric Company) since 1992.
Commissioner, Social Security Administration,
1989-92. Director: Central Philadelphia
Development Corporation; Martin Marietta Corp.;
PECO Power Company.
[PHOTO] PHILIP LEDER PRINCIPAL OCCUPATION: CHAIRMAN, DEPARTMENT OF GENETICS,
HARVARD MEDICAL SCHOOL, AND SENIOR INVESTIGATOR,
HOWARD HUGHES MEDICAL INSTITUTE
FIRST BECAME DIRECTOR: 1990
AGE: 60
Chairman, Department of Genetics, Harvard Medical
School since 1980; John Emory Andrus Professor of
Genetics since 1980. Senior Investigator, Howard
Hughes Medical Institute since 1986. Director:
Genome Therapeutics Corporation. Trustee: The
General Hospital Corporation; Massachusetts
General Hospital; The Charles A. Revson
Foundation; The Rockefeller University.
[PHOTO] HOWARD M. LOVE PRINCIPAL OCCUPATION: RETIRED CHIEF EXECUTIVE
OFFICER, NATIONAL INTERGROUP, INC.
FIRST BECAME DIRECTOR: 1977
AGE: 64
Chief Executive Officer, National Intergroup,
Inc., 1981-91; Chairman, 1981-90. Honorary
Chairman, National Steel Corporation, formerly a
subsidiary of National Intergroup, Inc., since
1990; Chairman and Chief Executive Officer,
1984-90. Director: AEA Investors; Communications
Satellite Corporation. Member: The Business
Council.
[PHOTO] FRANK A. METZ, JR. PRINCIPAL OCCUPATION: RETIRED SENIOR VICE
PRESIDENT, FINANCE AND PLANNING, AND CHIEF
FINANCIAL OFFICER, INTERNATIONAL BUSINESS
MACHINES CORPORATION
FIRST BECAME DIRECTOR: 1990
AGE: 61
Senior Vice President, Finance and Planning; Chief
Financial Officer; and Director, International
Business Machines Corporation, 1986-93. Director:
Allegheny Power System, Inc.; Norrell Corporation.
Trustee and Chairman: St. Luke's Roosevelt
Hospital. Trustee: American Museum of Natural
History.
[PHOTO] BUCK MICKEL PRINCIPAL OCCUPATION: CHAIRMAN AND CHIEF
EXECUTIVE OFFICER, R.S.I. HOLDINGS, INC.
FIRST BECAME DIRECTOR: 1975
AGE: 69
Chairman and Chief Executive Officer, R.S.I.
Holdings, Inc. since 1989. Director: Delta
Woodside Industries, Inc.; Duke Power Company;
Emergent Group, Inc.; Fluor Corporation; Insignia
Financial Group, Inc.; The Liberty Corporation;
NationsBank Corporation; R.S.I. Holdings, Inc.;
Textile Hall Corporation. Member: The Business
Council. Life Trustee: Clemson University;
Converse College.
3
<PAGE> 7
[PHOTO] JACOBUS F. M. PETERS PRINCIPAL OCCUPATION: RETIRED CHAIRMAN OF THE
EXECUTIVE BOARD AND CHIEF EXECUTIVE OFFICER,
AEGON N.V.
FIRST BECAME DIRECTOR: 1993
AGE: 63
Chairman of the Executive Board and Chief
Executive Officer, AEGON N.V., 1984-93. Director:
Kleinwort Endowment Policy Trust Plc. Member of
Supervisory Board: AEGON N.V.; Amsterdam Company
for Town Restoration Ltd.; DAF Trucks N.V.; IBM
International Centre for Asset Management N.V.;
Koninklijke Pakhoed Holding N.V.; Randstad Holding
N.V.; SAMAS Group N.V.; United Flower Auctions
Aalsmeer.
[PHOTO] NICHOLAS L. REDING PRINCIPAL OCCUPATION: VICE CHAIRMAN OF THE
BOARD, MONSANTO COMPANY
FIRST BECAME DIRECTOR: 1993
AGE: 60
Vice Chairman of the Board, Monsanto Company since
1993; Advisory Director, 1986-92; Executive Vice
President, Environment, Safety, Health and
Manufacturing, 1990-93; Executive Vice President,
Monsanto Company, and President, Monsanto
Agricultural Company, 1986-90. Director: CPI
Corp.; Meredith Corporation; Multifoods
Corporation; The Keystone Center.
[PHOTO] JOHN S. REED PRINCIPAL OCCUPATION: CHAIRMAN, CITICORP AND
CITIBANK, N.A.
FIRST BECAME DIRECTOR: 1985
AGE: 56
Chairman and Chief Executive Officer, Citicorp and
Citibank, N.A. since 1984. Director: Citicorp;
Citibank, N.A.; Philip Morris Companies, Inc.
Trustee: Rand Corporation. Member: The Business
Council; The Business Roundtable.
[PHOTO] WILLIAM D. RUCKELSHAUS PRINCIPAL OCCUPATION: CHAIRMAN AND CHIEF
EXECUTIVE OFFICER, BROWNING-FERRIS
INDUSTRIES, INC.
FIRST BECAME DIRECTOR: 1985
AGE: 62
Chairman and Chief Executive Officer, Browning-
Ferris Industries, Inc. since 1988. Of Counsel,
Perkins Coie since 1985. Administrator,
Environmental Protection Agency, 1983-85.
Director: Browning-Ferris Industries, Inc.;
Cummins Engine Co., Inc.; Nordstrom, Inc.; Texas
Commerce Bancshares, Inc.; Weyerhaeuser Company.
[PHOTO] JOHN B. SLAUGHTER PRINCIPAL OCCUPATION: PRESIDENT, OCCIDENTAL
COLLEGE
FIRST BECAME DIRECTOR: 1983
AGE: 61
President, Occidental College since 1988.
Director, National Science Foundation, 1980-82.
Director: Atlantic Richfield Company; Avery
Dennison Corporation; International Business
Machines Corporation; Northrop Grumman Corp.
Member: American Academy of Arts and Sciences;
National Academy of Engineering. Fellow: Institute
of Electrical and Electronic Engineers.
</TABLE>
4
<PAGE> 8
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Information is set forth below regarding beneficial ownership of
Common Stock of the Company by (i) each person who is a director
and nominee; (ii) each executive officer named in the Summary
Compensation Table on page 13; and (iii) all directors and
executive officers as a group. Except as otherwise noted, each
person has sole voting and investment power as to his or her
shares. All information is as of December 31, 1994.
<TABLE>
<CAPTION>
Shares of Shares Underlying
Common Stock Options Exercisable
Owned Directly Within 60
Name or Indirectly <Fa><Fb> Days <Fc> Total
---- ---------------------- ------------------- -----
<S> <C> <C> <C>
Joan T. Bok 2,421 - 2,421
Sheldon G. Gilgore 26,195 178,500 204,695
Robert M. Heyssel 2,691<Fd> - 2,691
Gwendolyn S. King 852 - 852
Philip Leder 1,690 - 1,690
Howard M. Love 3,957<Fe> - 3,957
Richard J. Mahoney 168,542<Ff> 842,000 1,010,542
Frank A. Metz, Jr. 1,741 - 1,741
Buck Mickel 20,130 - 20,130
Jacobus F. M. Peters 941 - 941
Robert G. Potter 31,833<Fg> 135,600 167,433
Nicholas L. Reding 43,627<Fh> 303,200 346,827
John S. Reed 6,961 - 6,961
William D. Ruckelshaus 2,622<Fi> - 2,622
Robert B. Shapiro 58,078 308,267 366,345
John B. Slaughter 1,872<Fj> - 1,872
24 directors and executive
officers as a group 463,836<Fk> 2,528,486 2,992,322
<FN>
<Fa> Includes shares held under incentive and benefit plans: Dr.
Gilgore, 16,000; Mr. Mahoney, 9,422; Mr. Potter, 6,074; Mr.
Reding, 7,336; Mr. Shapiro, 50,547; and directors and
executive officers as a group, 127,558. With respect to shares
held under incentive and benefit plans, employee directors and
officers have sole voting power and no current investment
power.
<Fb> Includes the following shares received on varying dates as a
portion of the non-employee director annual retainer and
restricted against sale as described on page 8: Mrs. Bok, 767
shares; Dr. Heyssel, 911 shares; Mrs. King, 845 shares; Dr.
Leder, 649 shares; Mr. Love, 693 shares; Mr. Metz, 649 shares;
Mr. Mickel, 425 shares; Mr. Peters, 941 shares; Mr. Reed, 860
shares; Mr. Ruckelshaus, 860 shares; and Dr. Slaughter, 693
shares. With respect to such shares, non-employee directors
have sole voting power and no current investment power.
<Fc> The Securities and Exchange Commission deems a person to have
beneficial ownership of all shares which that person has the
right to acquire within 60 days. The shares indicated
represent stock options granted under incentive plans.
<Fd> Includes 300 shares owned by Dr. Heyssel's wife.
<Fe> Includes 1,200 shares held in trusts in which Mr. Love has an
income interest as to which he expressly disclaims beneficial
ownership.
<Ff> Includes 4,000 shares owned by Mr. Mahoney's wife.
<Fg> Includes 3,000 shares owned by Mr. Potter's wife as to which
he expressly disclaims beneficial ownership and 599 shares
jointly owned by Mr. Potter and his wife.
5
<PAGE> 9
<Fh> Includes 1 share owned by Mr. Reding's son.
<Fi> Includes 200 shares owned jointly by Mr. Ruckelshaus and his
wife.
<Fj> Includes 79 shares owned by Dr. Slaughter's wife as to which
he expressly disclaims beneficial ownership.
<Fk> Includes 8,802 shares as to which certain executive officers
not named above have shared voting and investment power; 6,846
shares beneficially owned by trusts or by members of the
households of such executive officers; and 279 shares under
contract pursuant to the Company's Employee Stock Purchase
Plan.
</TABLE>
The percentage of shares of outstanding Common Stock, including
options exercisable within 60 days of December 31, 1994,
beneficially owned by all directors and executive officers as a
group is 2.62%. The percentage beneficially owned by any director
or nominee does not exceed 1%.
--------
The following table sets forth certain information regarding the
only known beneficial owner of more than 5% of the Company's
Common Stock.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Class
------------------- ----------------------- --------
<S> <C> <C>
Oppenheimer Group, Inc. 6,652,155<Fa> 5.72%
Oppenheimer Tower
World Financial Center
New York, New York 10281
<FN>
<Fa> Based on a Schedule 13G filed with the Securities and Exchange
Commission by Oppenheimer Group, Inc., on behalf of itself and
related companies and certain investment advisory clients;
power to vote and dispose of all 6,652,155 shares, including
6,333,866 shares (5.45%) held by Oppenheimer Capital, is
shared. Oppenheimer Group, Inc. and the related companies and
investment advisory clients disclaim beneficial ownership and
shared voting and dispositive power with respect to all
6,652,155 shares.
</TABLE>
BOARD MEETINGS AND COMMITTEES; COMPENSATION OF DIRECTORS
The Board of Directors met eight times during 1994. To assist the
Board in carrying out its duties, the Board has established an
Executive Committee and six functional committees with
responsibilities in specific areas of Board activity. All nominees
attended 75% or more of the aggregate meetings of the Board and of
the Board Committees on which they served in 1994 except that, due
to unavoidable circumstances, Mr. Reed attended one meeting less
than 75% of such meetings. A description of each Committee and its
current membership follows.
AUDIT COMMITTEE
Members: Mr. Mickel, Chair; Mmes. Bok and King, Dr. Heyssel, Mr.
Ruckelshaus, and Dr. Slaughter
The Audit Committee is composed of non-employee directors and met
four times in 1994. The Committee reviews and monitors the
Company's internal accounting controls, financial reports,
accounting practices, and the scope and effectiveness of the
audits performed by the independent auditors and internal
auditors. The Committee also recommends to the full Board the
appointment
6
<PAGE> 10
of the Company's principal independent auditors and approves in
advance all significant audit and non-audit services provided by
such auditors. The Committee discusses audit and financial
reporting matters with representatives of the Company's financial
management, its internal auditors, and its principal independent
auditors. The internal auditors and the principal independent
auditors meet with the Committee, with and without management
representatives present, to discuss the results of their
examinations, the adequacy of the Company's internal accounting
controls, and the quality of the Company's financial reporting.
The Committee encourages the internal auditors and the principal
independent auditors to communicate directly with the Committee.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Members: Mrs. Bok, Chair; Mrs. King, Mr. Ruckelshaus, and Dr.
Slaughter
The Corporate Social Responsibility Committee met five times in
1994. The Committee reviews and monitors the Company's performance
as it affects employees, communities, customers, and the
environment and recommends Company policies for consideration when
appropriate. The Committee also identifies and investigates
emerging issues.
EXECUTIVE COMMITTEE
Members: Mr. Mahoney, Chair; Drs. Leder and Slaughter
The Executive Committee has the powers of the Board in directing
the management of the business and affairs of the Company in the
intervals between meetings of the Board (except for certain
matters reserved for the Board). The matters acted upon by the
Executive Committee are typically of a routine nature; thus, the
Committee meets infrequently. During 1994 all actions were taken
by unanimous written consent after the Committee's review of
proposals circulated to the members. Actions of the Committee are
reported at the Board's next regular meeting.
EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE
Members: Mr. Love, Chair; Dr. Heyssel, Messrs. Metz and Mickel
The Executive Compensation and Development Committee is composed
of non-employee directors and met five times in 1994. The
Committee recommends to the Board amendments to the Company's
management incentive plans and approval or amendment of other
executive incentive plans providing for payments to participants
in the form of securities. The Committee also administers and
interprets the Company's management incentive plans and approves
the establishment, modification, and termination of other
executive compensation plans and agreements. The Committee has
delegated authority to unit compensation committees composed of
senior management to make grants and awards under the incentive
plans and to approve and administer other compensation plans for
all employees except executive officers. The Committee also
reviews plans for executive succession and determines the salary
plans of all executive officers of the Company.
FINANCE COMMITTEE
Members: Mr. Reed, Chair; Messrs. Love, Mahoney, and Metz
The Finance Committee met one time in 1994. The Committee reviews
and monitors the Company's financial planning and structure to
insure compatibility with the Company's requirements for growth
and sound operation. The Committee assists with the domestic
financing program of the Company
7
<PAGE> 11
and also reviews the financing plans of the Company's ex-U.S.
subsidiaries. The Committee makes recommendations to the Board of
Directors concerning the increase or retirement of debt, issuance
and repurchase of capital stock, foreign currency management,
dividend policy, and commercial and investment banking
relationships.
NOMINATING COMMITTEE
Members: Mr. Mickel, Chair; Dr. Heyssel, Messrs. Love and Metz
The Nominating Committee is composed of non-employee directors and
met twice in 1994. At its meeting in January 1995, it approved the
slate of director nominees in this Proxy Statement for submission
to the Board. In addition, the Committee considers candidates for
the Board in case of retirements or other vacancies. The Committee
also develops internal criteria for the selection of non-employee
directors and criteria by which an evaluation of all directors is
made. In performing its responsibilities, the Committee consults
with the Chairman of the Board. This Committee will consider
stockholder nominations, which should be submitted in writing by
year-end to the Company's Secretary, Richard W. Duesenberg.
PENSION AND SAVINGS FUNDS COMMITTEE
Members: Dr. Heyssel, Chair; Dr. Leder, Messrs. Peters and
Shapiro
The Pension and Savings Funds Committee met four times in 1994.
The Committee's specific responsibilities include approving the
actuarial assumptions and annual contributions for certain pension
and benefit plans (Plans), selecting trustees and investment
managers for the Plans, and establishing policies for the approval
of related pension trust agreements and other funding instruments.
Although the professional trustees and investment managers have
primary investment responsibility with respect to these funds, the
Committee monitors the investment performance of the Plans and the
investment managers.
DIRECTORS' FEES AND OTHER ARRANGEMENTS
Employee directors receive neither retainers nor fees for
attendance at Board or Board Committee meetings. Non-employee
directors receive an annual retainer of $30,000 plus $1,300 per
Board meeting attended. In addition, non-employee chairmen of the
Executive and the Nominating Committees receive $4,000 per year,
and non-employee chairmen of all other Board Committees receive
$5,000 per year. Each other non-employee director serving as a
member of Board Committees receives $3,000 per year for each Board
Committee on which such director serves. Committee members,
including the chairmen, receive a fee of $1,300 per meeting
attended, except that this fee is paid for attendance at only one
Committee meeting on the day of a Board meeting. Each non-employee
director receives $20,000 of the annual retainer in cash and the
$10,000 balance in Common Stock of the Company. The shares
representing the Common Stock portion of the annual retainer for a
five-year period are transferred to each director at the beginning
of the period. These shares are, however, subject to forfeiture to
the Company unless "earned out" by the director through continued
service on the Company's Board during the five years. Thus, the
forfeiture condition is removed on one-fifth of the shares on the
respective dates of the five Annual Meetings following transfer of
the shares if the director is still serving on the Company's
Board. Although the directors have voting and dividend rights,
none of the shares may be sold prior to the date of the fifth such
Annual Meeting so long as the director continues serving on the
Company's Board. Appropriate adjustments are made for directors
whose retirement will occur in less than five years.
8
<PAGE> 12
The Board has adopted a guideline which provides that non-employee
directors should own Common Stock of the Company having a value of
three times the Board annual retainer by the fifth anniversary of
their election to the Board. The stock component of the Board
annual retainer will allow that stock ownership target to be
achieved.
Non-employee directors do not participate in any of the Company's
incentive, stock option, pension, or benefit plans. The normal
retirement date for non-employee directors is the Annual Meeting
following their 70th birthday. Non-employee directors who retire
with five or more years of service receive an annual retirement
benefit for life paid in cash and equal to the annual retainer at
the time of retirement. If the director dies within fifteen years
after retirement, a designated beneficiary will be entitled to
receive the annual benefit for the remainder of the fifteen-year
period. Reduced benefits will be paid to a director who ceases for
any reason to be a director with fewer than five years of service
and to a director who commences receiving benefits prior to normal
retirement. The Company purchases Company-owned life insurance
contracts on the lives of the non-employee directors. Thus, the
cost of this retirement benefit program, including a factor for
use of money, should be substantially recoverable through the
proceeds of such insurance, depending on realization of the
assumptions as to mortality experience, policy dividends, and
other factors.
The Company has established a Directors' Charitable Contribution
Program for all non-employee directors of the Company which will
be funded through the purchase of life insurance policies on each
of the directors. Upon the death of a director with five or more
years of service, the Company will contribute a total of
$1,000,000 to one or more qualifying charitable institutions
recommended by the director. A reduced contribution will be made
upon the death of a director with fewer years of service.
Directors derive no direct financial benefit from this program
since all charitable deductions accrue to the Company.
The Company has a consulting agreement with Dr. Philip Leder, a
director of the Company, who provides consulting services and the
benefit of his considerable professional skills, knowledge,
experience, and judgment in areas of interest to the Company,
particularly in the field of biological sciences. In 1994 Dr.
Leder received $122,000 under this contract.
--------
There were no reportable business relationships or transactions
with any director or executive officer. Consistent with applicable
regulations, no information has been solicited or provided
regarding transactions between the Company and any individual for
the period during which the individual did not serve as a director
or executive officer.
9
<PAGE> 13
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE
Policies and Objectives
As explained at page 7 above, the Executive Compensation and
Development Committee of the Board of Directors sets pay for
executive officers, administers the Company's incentive plans, and
makes awards to executive officers under these incentive plans.
The purpose of these plans and the objectives of the Committee are
to:
* pay for performance, motivating both long- and short-term
performance on behalf of the stockholders;
* provide a total compensation program which is competitive with
those of companies with which Monsanto competes for top
management talent;
* place greater emphasis on variable incentive compensation
versus fixed or base pay, particularly for the senior
executives;
* reward business unit executives primarily for the performance
of their units, while including a component which recognizes
corporate performance as well; and
* most importantly, join stockholder and management interests.
In order to further these objectives, the compensation programs
for all Monsanto executives include three components: (1) base
pay, (2) an annual incentive program, and (3) a long-term
incentive program. Salaries and target annual incentives for the
executives named in the Summary Compensation Table on page 13 are
at about the median level for competitive companies, while target
long-term incentive compensation is above median levels. Median
levels are derived from compensation surveys provided by
independent consultants covering several hundred chemical,
pharmaceutical, food, and other manufacturing companies (adjusted
for company size differentials). For several years, it has been
the Committee's policy to increase the pay-at-risk component of
compensation. The portion of total executive compensation
represented by annual and long-term incentives that relate
directly to performance has grown significantly for the named
executives. Currently, 19% (approximately 2,700) of Monsanto's
management and professional employees participate in the annual
incentive plans described below, and 8% (approximately 1,200)
participate in the stock option plans.
A leading compensation consulting firm, engaged to review the
Company's compensation programs, provided its independent
assessment to the Committee. The consulting firm supported the
Committee's current policies, objectives, and incentive programs.
Current Incentive Programs
Annual Incentive Program. The annual incentive program adopted for
the years 1994-1996 provides for cash awards to be determined
shortly after the year being measured. The awards vary
significantly from year to year. The amount of the award, if any,
is a function of the achievement of goals set at the beginning of
the year for the corporation (for corporate executives) and for
the respective business units (for unit executives), the
individual's level of responsibility, and the individual's
personal performance.
For corporate executives, including the Chief Executive Officer,
the principal goal is set in terms of net income, with its
critical importance to cash flow and return on equity. A target
award is set based on the net income goal; the actual award is
increased or decreased based on actual net income, subject to
discretionary adjustment for non-recurring events. The Committee
may also increase or decrease the award in its discretion based on
downward or upward deviations from a
10
<PAGE> 14
secondary goal set in terms of year-end capital employed. "Capital
employed" consists of stockholders' equity and debt and is
measured by the relevant cost of capital. The Committee may also
adjust the award in its discretion based on four factors which do
not have pre-set numerical scales: performance compared to
competitors (measured by such criteria as total stockholder
return, earnings per share, and return on equity), the impact of
the general economy, the balance achieved between long- and short-
term objectives, and the motivational impact of the award. A
comparable procedure based on unit net income and allocated
capital employed is used for awards to business unit executives.
The major portion of the annual awards for 1994 and 1995 will be
payable in cash shortly after the year being measured, but, to
encourage sustained performance, a percentage of the awards will
be withheld (15% for 1994 and 30% for 1995) and remain at risk for
up to two years. Amounts withheld in 1994 and 1995, together with
30% of the award for 1996, may be adjusted upward or downward by
pre-established percentages depending on sustained performance
over consecutive years. Total amounts at risk are scheduled to be
paid, as adjusted, no later than March 1997.
For each year of the 1994-1996 cycle in which the Company achieves
20% or better return on equity, funding for annual incentive
awards will be increased by an amount equal to 40% of the target
awards described above. Awards attributable to this additional
funding will generally be payable as part of the annual incentive
program. No portion of the awards attributable to this additional
funding will be withheld.
Long-term Compensation. For the Chief Executive Officer and the
other corporate executives, long-term compensation consists of
non-qualified stock options, generally granted at three-year
intervals. Business unit executives normally receive stock options
annually. The current practice is to link all of these options to
a specific performance goal. Options granted in 1994, along with
an accelerated grant of options in 1993, were linked to the
Company's 20% return on equity goal. Because the Company achieved
its 20% return on equity goal for 1994, these options became
exercisable in February 1995 (provided they had been held for one
year). Grants of options by the Committee in 1995 become
exercisable upon achievement of 20% return on equity a second
time.
Business unit executives also participate in cash-based long-term
incentive programs focused on sustained performance against
targets for their units over the 1994-1996 cycle. For the
Agricultural and Chemical groups and NutraSweet, performance is
measured annually, primarily by the net income of the unit, but
also based on the other criteria used by the Committee in
determining annual incentive awards. Amounts provisionally
determined remain at risk until 1997 and may be adjusted for
sustained performance in the same manner as the annual incentive
amounts withheld. Awards are paid at the end of the three-year
period. The Searle long-term plan uses annual grants of options on
"phantom" shares of Searle which are valued annually.
The Committee also makes infrequent grants of restricted stock to
individual executives to motivate achievement of particular
business objectives or to retain those individuals. None were made
to the named executives in 1994.
1994 Compensation
The Committee increased Mr. Mahoney's salary in April 1994 to an
annual rate of $950,000. The increase was based upon the Company's
progress since the last increase effective January 1, 1993, the
interval between increases, and the substantial gains by the
Company and its stockholders during Mr. Mahoney's tenure as Chief
Executive Officer. Also considered were base salary increases to
chief executive officers at comparable corporations.
The Committee approved an annual incentive award of $1,680,000 for
Mr. Mahoney for 1994. This award includes $280,000 in recognition
of the Company's achievement of its 20% return on equity goal
which, as noted above, increased funding for annual awards. In
accordance with the annual incentive program, the Committee
withheld from his total award $210,000 which will remain at risk
11
<PAGE> 15
until the year following Mr. Mahoney's retirement. This award is
higher than the target award for 1994 because the Company's 1994
net income was substantially in excess of the net income goal set
by the Committee. Each of the Company's four operating units
substantially exceeded its net income goal. The Agricultural Group
successfully launched new herbicides, achieved another year of
record Roundup(R) herbicide growth, and began commercialization of
its biotechnology research. Chemicals had significant sales volume
increases across all major product lines, NutraSweet significantly
reduced costs, and Searle increased new product sales. In making
the award, the Committee also considered capital employed,
performance against competitors, and the fact that earnings per
share and return on equity were the highest in the Company's
history as a public company.
The awards to the other two named corporate executives were also
above target, based on this strong net income performance as well
as achievement of the 20% return on equity goal. For the business
unit executives, Dr. Gilgore's award recognizes that sales for
Searle reached an all-time high, operating earnings exceeded
target, and both net income and capital employed were
significantly better than target. Mr. Potter's award reflects net
income substantially above target, redesign savings, substantial
cost reductions, and capital employed better than targeted for The
Chemical Group.
All grants of options in 1994 were consistent with a grade level
schedule based on job responsibilities. The Committee had
previously approved this schedule after considering data from
competitive companies and its policy of targeting long-term
incentive compensation at above median levels. The Committee's
grants of options to Mr. Mahoney and the other corporate
executives were for a three-year period while business unit
executives received annual grants. However, all of the 1994 grants
were adjusted downward or omitted to reflect the number of options
in the accelerated grant in 1993 (except for the grant to Mr.
Mahoney who received no options in 1993). Both the 1994 and the
accelerated 1993 grants were contingent on achieving 20% return on
equity.
The Committee also awarded Dr. Gilgore units in the Searle long-
term incentive plan described on page 16. The number of units was
50% greater than normally called for by the grant schedule based
on job responsibilities because the regular annual grants were
delayed in order to align their timing with the Company's grant
schedule for other long-term plans.
Deductibility of Compensation
The Committee is complying with the requirements of Section 162(m)
of the Internal Revenue Code with respect to options and annual
and long-term incentive programs in order to avoid losing the
deduction for compensation in excess of $1,000,000 paid to one or
more of the executive officers named in the Summary Compensation
Table.
Management Stock Ownership Guidelines
The Committee and management also believe that an important
adjunct to an incentive program is significant stock ownership by
the senior executives as demonstrated by Mr. Mahoney's stock
ownership as shown on page 5. Accordingly, the Committee has
implemented stock ownership guidelines for approximately 100
executives. Unexercised stock options and shares held in the
Company's benefit plans are not counted in satisfying the
guidelines. The Board has adopted a stock ownership guideline for
non-employee members of the Board of Directors, which is described
on page 9.
EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE
Howard M. Love, Chairman
Robert M. Heyssel
Frank A. Metz, Jr.
Buck Mickel
12
<PAGE> 16
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
----------------------------------------------
Annual Compensation Awards Payouts
-----------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Under- All Other
Name and Compen- Stock lying LTIP Compen-
Principal sation Awards Options Payouts sation
Position<F1> Year Salary ($) Bonus ($)<F2> ($)<F3> ($)<F4> (#)<F5> ($)<F5> ($)<F6>
------------ ---- ---------- ------------- ------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. J. Mahoney 1994 933,333 1,470,000 -0- -0- 275,000 -0- 103,887
Chairman and CEO 1993 900,000 1,188,000 -0- -0- -0- -0- 119,629
and Director 1992 845,000 500,000 5,698 -0- -0- -0- 121,510
S. G. Gilgore 1994 716,667 1,035,350 14,850<F7> -0- 16,500 -0- 96,988
Chairman and CEO, 1993 695,000 550,000 137,392 511,880 66,000 -0- 92,817
G. D. Searle & Co. 1992 663,333 250,000 -0- -0- -0- -0- 96,504
R. G. Potter 1994 456,667 645,720 -0- -0- -0- 785,000 52,778
Executive Vice Presi- 1993 440,833 550,000 -0- -0- 43,200 -0- 52,943
dent; President, The 1992 420,000 111,300 -0- -0- 10,800 -0- 53,804
Chemical Group
N. L. Reding 1994 504,583 741,825 -0- -0- 93,333 -0- 56,421
Vice Chairman of the 1993 485,833 600,000 -0- -0- 56,667 -0- 63,287
Board and Director 1992 440,000 235,000 1,136 -0- -0- -0- 63,785
R. B. Shapiro 1994 567,500 893,905 -0- -0- 123,333 560,000 42,956
President and COO 1993 536,667 750,000 -0- 2,621,900 123,334 -0- 44,514
and Director 1992 426,250 340,000 -0- -0- 10,800 161,670 56,478
<FN>
<F1> Positions shown are as of December 31, 1994. Mr. Mahoney will
retire effective March 31, 1995. Effective April 1, 1995, Mr.
Shapiro has been elected Chairman of the Board, President, and
CEO. Effective April 26, 1995, Dr. Gilgore will retire as
Chairman and CEO of Searle.
<F2> Because the Securities and Exchange Commission (SEC) requires
awards that are determined by performance over a period longer
than one year to be reported as long-term incentive
compensation, the amounts at risk pursuant to the annual
incentive program appear in the footnotes to the long-term
incentive plan table on pages 15 and 16 rather than in the
Bonus column above.
<F3> Applicable regulations set reporting levels for certain non-
cash compensation.
<F4> The values shown are as of the grant date. Dividends are paid
or accrued on restricted stock awards at the same rate as paid
to all stockholders.
* Dr. Gilgore held a total of 16,000 restricted shares
having a value on December 31, 1994, of $1,117,008. Of
these, 10,000 shares having a value at grant of $511,880,
were awarded to Dr. Gilgore on February 26, 1993. Under
the terms of this award, the shares and dividends thereon
were scheduled to vest in February 1996 if certain unit
performance goals, which are confidential for competitive
reasons, were achieved. Because of Dr. Gilgore's announced
retirement, the Executive Compensation and Development
Committee will consider pro rata vesting, based on the
number of months served by Dr. Gilgore during the period
covered by this award and the degree to which unit
performance goals are achieved. The other 6,000 shares are
the remaining restricted shares from an award of 15,000
shares made to Dr. Gilgore on March 1, 1991. Under the
terms of this 1991 award, restrictions lapse on one-fifth
of the shares on the first through the fifth anniversary
dates of award, and dividends are paid currently. Upon Dr.
Gilgore's announced retirement, the last fifth of these
shares will be forfeited.
* On January 22, 1993, Mr. Shapiro received a grant of
50,000 restricted shares having a value at grant of
$2,621,900 and a value on December 31, 1994, of
$3,490,650. Release of these shares is contingent upon
achievement of 20% return on equity (ROE) in the years
1994-1997. The first
13
<PAGE> 17
12,500 of these shares and the related dividends vested in
February 1995 because the Company achieved this ROE goal
for 1994. An additional one-fourth of the restricted
shares vest each year through 1997 in which the Company
consecutively achieves its 20% ROE goal. Failure to
achieve 20% ROE in any given year results in forfeiture of
12,500 shares then and of 6,500 shares in the subsequent
year in which 20% ROE is achieved. Any shares that fail to
vest within five years from the date of the grant are
forfeited along with any related dividends.
* On December 31, 1994, no restricted shares were held by
Mr. Mahoney, Mr. Potter, or Mr. Reding.
<F5> These columns reflect grants and payouts made under various
option programs and long-term incentive plans (LTIPs),
respectively. Amounts shown in column (h) for 1994 reflect
awards for performance during the 1991-1993 period.
<F6> Amounts shown for 1994 include contributions to thrift/savings
plans as follows: Mr. Mahoney, $38,281; Dr. Gilgore, $40,200;
Mr. Potter, $19,180; Mr. Reding, $21,533; and Mr. Shapiro,
$23,090; split dollar life insurance premiums paid as follows:
Mr. Mahoney, $65,406; Dr. Gilgore, $45,202; Mr. Potter,
$33,598; Mr. Reding, $34,537; and Mr. Shapiro, $19,866; costs
for supplemental medical plans as follows: Mr. Mahoney, $200;
Dr. Gilgore, $6,611; and Mr. Reding, $351; and costs for
executive disability and executive travel accident plans,
respectively, as follows: Dr. Gilgore, $4,868 and $107.
<F7> Amount for 1994 represents reimbursement of certain tax
expenses. The bulk of the amount for 1993 was for a one-time
club initiation fee.
</TABLE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term<F1>
------------------------------------------------------------------------ ----------------------------------------------
(a) (b) (c) (d) (e) (f ) (g)
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name/Group Granted (#)<F2> Fiscal Year ($/Share) Date 0% ($) 5% ($) 10% ($)
---------- --------------- ------------ --------- ---------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
R. J. Mahoney 275,000 10.8% 77.750 02/24/04<F3> -0- 7,269,625<F3> 16,463,563<F3>
S. G. Gilgore 16,500 0.6% 77.750 02/24/04<F3> -0- 436,178<F3> 987,814<F3>
R. G. Potter -0- -0-% N/A* N/A -0- N/A N/A
N. L. Reding 93,333 3.7% 77.750 02/24/04 -0- 4,571,684 11,538,059
R. B. Shapiro 123,333 4.8% 77.750 02/24/04 -0- 6,041,159 15,246,734
----------
All Stockholders<F4> N/A N/A N/A N/A -0- 5,809,075,032 14,660,998,891
All Optionees
(approx. 1,200) 2,544,994 100% 77.750 <F5> -0- 124,660,169 314,618,521
Optionees' Gain as
% of All Stock-
holders' Gain N/A N/A N/A N/A -0- 2.1% 2.1%
<FN>
*Not applicable
<F1> The dollar amounts under these columns are the result of
calculations at 0% and at the 5% and 10% rates set by the SEC
and therefore are not intended to forecast possible future
appreciation, if any, of the stock price of the Company. The
Company did not use an alternative formula for a grant date
valuation, as the Company is not aware of any formula which
will determine with reasonable accuracy a present value based
on future unknown factors.
<F2> Exercisability of these options was conditioned upon
attainment of the Company's goal of 20% ROE, which was
achieved for 1994.
14
<PAGE> 18
<F3> While the option term is normally 10 years, for these
individuals the options expire in the year 2000 as a result of
their retirement in 1995, and the possible future appreciation
has been calculated to reflect this shorter period.
<F4> Gain for all stockholders was determined based on the
approximate number of shares outstanding as of February 25,
1994, the date when substantially all of the options were
granted, at a price per share of $77.750.
<F5> Options expire on the tenth anniversary of the grant date.
</TABLE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<CAPTION>
(a) (b) (c) (d) (e)
--------------- ------------ ------------ --------------- -------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#)<F1> FY-End ($)<F1>
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
R. J. Mahoney 71,618 4,189,589<F2> 567,000/275,000 10,297,442/-0-
S. G. Gilgore -0- -0- 110,000/75,500 2,168,950/1,066,507
R. G. Potter -0- -0- 96,000/43,200 2,442,249/747,227
N. L. Reding 10,000 573,440<F2> 163,200/140,000 1,888,433/869,173
R. B. Shapiro -0- -0- 119,667/208,600 2,397,278/1,513,225
<FN>
<F1> Unexercised options shown in columns (d) and (e) reflect
grants received over an extended period of time.
<F2> Substantially all of the amounts in column (c) reflect the
value of shares received on the exercises of portions of the
options granted in 1984 and 1985 and expiring in 1994 and 1995
and the increase in value of Monsanto stock from $23.16 and
$22.812, respectively, at the time of the grants. Messrs.
Mahoney and Reding continue to hold all of the shares received
from these option exercises.
</TABLE>
<TABLE>
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<CAPTION>
Estimated future payouts under non-stock
price-based plans
----------------------------------------------------
Number of Performance
shares, or other
units or period until
other rights maturation Threshold Target Maximum
Name (#) or payout ($)
(a) (b) (c) (d) (e) (f)
------------- ---------------- ------------ --------- -------------------------- -------
<S> <C> <C> <C> <C> <C>
R. J. Mahoney N/A<F1> 2 years 210,000 294,000 294,000
S. G. Gilgore 75,000 "options" Up to N/A -0- (0%) N/A
for units<F2> 6 years 637,500 (5%)
1,443,750 (10%)
N/A<F1> 2 years 152,250 197,925 197,925
R. G. Potter N/A<F3> 3 years 676,495 1,098,331 1,098,331
N. L. Reding N/A<F1> 3 years 63,585 222,548 222,548
R. B. Shapiro N/A<F1> 3 years 76,617 268,160 268,160
<FN>
<F1> Fifteen percent of the cash annual incentive awards made to
Mr. Reding and Mr. Shapiro for the performance year 1994 under
the annual incentive program for executive officers ($105,975
and $127,695, respectively) has been withheld and remains at
risk for an additional two years. The amount withheld may be
increased to reward sustained performance by a performance
adjustment of 40% following the end of the 1995 performance
year and the amount (including any adjustments) increased by
50% or decreased by 40% following the end of the 1996
performance
15
<PAGE> 19
year. Whether the amount withheld is increased or decreased
depends on performance in terms of net income and capital
employed objectives in the 1994, 1995, and 1996 performance
years. To achieve both target and maximum payout amounts shown
above, performance targets must be met or exceeded in both
1995 and 1996. Threshold payment in the table above assumes
failure to meet performance targets in 1995 and 1996. Payment
of any award is subject to final review by the Executive
Compensation and Development Committee (ECDC) and, if
approved, will be made in March 1997.
Fifteen percent has also been withheld from Mr. Mahoney's and
Dr. Gilgore's awards ($210,000 and $152,250, respectively).
Because of their retirement, the amounts withheld may be
adjusted only for 1995's performance. The adjustment factor is
40% for Mr. Mahoney and 30% for Dr. Gilgore. Any payment will
be in March 1996.
<F2> Dr. Gilgore's "options" were awarded under the Searle Phantom
Stock Option Plan of 1986, pursuant to which participants may
receive the appreciation in the value of a hypothetical share
of Searle stock in cash. Such "shares" represent units of
valuation created solely for purposes of measuring the
increase, if any, in the value of Searle. The current value
for each unit held by Dr. Gilgore is established annually by
the ECDC, using such factors and methods as it deems
appropriate. Analyses by independent investment bankers have
been used in establishing this value. Options to receive the
appreciation on the value of these units were granted for a
ten-year period and became exercisable upon Searle's
achievement of its annual net income target for 1994. Such
options are of indeterminate value. The target values shown
are representative amounts based on the value of the units on
the grant date and assuming annual rates of appreciation of
0%, 5%, and 10% until the year 2000, when these options expire
as a result of Dr. Gilgore's retirement.
<F3> Fifteen percent of the cash annual incentive award to Mr.
Potter for the performance year 1994 under the annual
incentive program for executive officers ($92,580) has been
withheld and remains at risk for an additional two years. In
addition, the ECDC has provisionally awarded $685,000 to Mr.
Potter under the 1994-1996 long-term incentive program in
recognition of his performance in 1994. Sustained performance
adjustments of 13% and 25% may be applied to the cumulative
balances at the end of the second and third performance years,
respectively, depending on actual performance, as described in
footnote (1) above. Payment of the adjusted cumulative
balances for both the annual and long-term programs is subject
to the ECDC's final review and, if approved, will be in March
1997.
</TABLE>
PENSION PLANS
The following table illustrates the annual normal retirement
benefits payable under the Company's defined benefit pension plans
applicable to Messrs. Mahoney, Potter, Reding, and Shapiro. The
benefit levels in the table assume retirement at age 65 and
payment in the form of a single life annuity.
<TABLE>
<CAPTION>
Remuneration Years of Service
------------ --------------------------------------------------------------------------------------------------------
5 10 15 20 25 30 35 40
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 600,000 $ 42,000 $ 84,000 $128,118 $173,118 $218,118 $263,118 $ 308,118 $ 353,118
800,000 56,000 113,118 173,118 233,118 293,118 353,118 413,118 473,118
1,000,000 70,000 143,118 218,118 293,118 368,118 443,118 518,118 593,118
1,200,000 84,000 173,118 263,118 353,118 443,118 533,118 623,118 713,118
1,400,000 98,118 203,118 308,118 413,118 518,118 623,118 728,118 833,118
1,600,000 113,118 233,118 353,118 473,118 593,118 713,118 833,118 953,118
1,800,000 128,118 263,118 398,118 533,118 668,118 803,118 938,118 1,073,118
2,000,000 143,118 293,118 443,118 593,118 743,118 893,118 1,043,118 1,193,118
2,200,000 158,118 323,118 488,118 653,118 818,118 983,118 1,148,118 1,313,118
</TABLE>
Generally, compensation utilized for pension formula purposes
includes salary and annual bonus reported in columns (c) and (d)
of the Summary Compensation Table, plus the amount withheld from
16
<PAGE> 20
the annual bonus as described on page 11. However, the portion of
the annual bonus attributable to achievement of 20% ROE is not
included in the pension formula.
The annual normal retirement benefits payable under the pension
plans to the executive officers employed by the Company who are
named in the Summary Compensation Table are the greater of 1.4% of
average final compensation multiplied by years of service, without
reduction for Social Security or other offset amounts, or 1.5% of
average final compensation multiplied by years of service, less a
50% Social Security offset. Average final compensation for
purposes of these plans is the greater of (a) average compensation
received during the final 36 months of employment or (b) average
compensation received during the highest three of the final five
calendar years of employment.
Average final compensation under the pension formula and the
respective years of service at Monsanto as of December 31, 1994,
for the employees named in the Summary Compensation Table are as
follows: Mr. Mahoney, $1,697,111 (32.5 years); Mr. Potter,
$749,345 (29.1 years); Mr. Reding, $858,319 (39.3 years); and Mr.
Shapiro, $1,049,696 (4.6 years). Mr. Shapiro also accrues a
benefit under the NutraSweet defined benefit pension plan
described below which will be based on his years of service at
NutraSweet and his average final compensation at the Company.
The following table illustrates the annual normal retirement
benefits payable under the Searle and NutraSweet defined benefit
pension plans applicable to Dr. Gilgore and Mr. Shapiro. The
benefit levels in the table assume retirement at age 65 and
payment in the form of a single life annuity.
<TABLE>
<CAPTION>
Remuneration Years of Service
------------ -------------------------------------------------------------------------------------------------
5 10 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C> <C>
$ 600,000 $ 52,741 $105,483 $158,224 $210,966 $263,707 $316,449 $316,449
800,000 70,741 141,483 212,224 282,966 353,707 424,449 424,449
1,000,000 88,741 177,483 266,224 354,966 443,707 532,449 532,449
1,200,000 106,741 213,483 320,224 426,966 533,707 640,449 640,449
1,400,000 124,741 249,483 374,224 498,966 623,707 748,449 748,449
</TABLE>
The annual normal retirement benefits payable to Dr. Gilgore and
Mr. Shapiro under the Searle and NutraSweet pension plans are (i)
1.8% of average final compensation (the average compensation for
the highest consecutive 60 of the last 120 months of employment
preceding retirement) multiplied by years of service (up to a
maximum of 30 years) less (ii) 1.67% of estimated annual Social
Security benefits at age 65 multiplied by years of service (up to
a maximum of 30 years). Generally, compensation utilized for
pension formula purposes includes salary and bonus reported in
columns (c) and (d) of the Summary Compensation Table, plus the
amount withheld from the annual bonus as described on page 11.
However, the portion of the annual bonus attributable to
achievement of 20% ROE is not included in the pension formula.
Average final compensation under the pension formula and years of
service at Searle or NutraSweet as of December 31, 1994, for Dr.
Gilgore and Mr. Shapiro are as follows: Dr. Gilgore, $1,028,460
(9.0 years) and Mr. Shapiro, $848,154 (11.5 years).
Mr. Shapiro will be provided supplemental retirement benefits
which recognize his experience prior to employment by the Company.
Subject to certain service requirements, the Company will provide
Mr. Shapiro with supplemental retirement benefits equal to 12% of
average final compensation. The supplemental retirement benefits
become vested in the event of a change of control of the Company.
Supplemental retirement benefits will also be provided to Dr.
Gilgore to recognize his experience prior to employment with
Searle. Under his agreement with Searle, Dr. Gilgore is to be paid
a supplemental amount so that his total retirement income from his
prior employer and Searle will be comparable to the benefit he
would have received under the terms of the Searle pension plans if
his total service at retirement had been with Searle. The
estimated annual supplemental benefits payable upon retirement at
normal retirement age to Mr. Shapiro are $173,020. The annual
estimated supplemental benefits payable to Dr. Gilgore upon his
retirement are $239,748.
17
<PAGE> 21
CERTAIN AGREEMENTS
The Board has authorized agreements with the executive officers
employed by the Company who are named in the Summary Compensation
Table regarding a change of control of the Company. Under these
agreements, the Company will make an additional cash payment if,
within three years following a change in control of the Company
(as defined in those agreements), the individual's employment is
terminated (other than for cause) or the individual resigns for
good reason such as a change in responsibilities, compensation, or
conditions of continued employment. Each of these individuals will
receive an amount up to two times annual base pay and, subject to
certain adjustments, two times his or her target annual bonus. A
similar agreement has been authorized by the Searle Board for Dr.
Gilgore. The Company's Board has also authorized a supplemental
agreement to provide supplemental retirement benefits to be
applicable under the same change of control conditions to Mr.
Shapiro, who is not yet eligible for unreduced early retirement
benefits. These supplemental benefits will equal the difference
between what he would have received under the Company's pension
plans at the time of termination or resignation (without reduction
for early commencement of benefits) less actual payments received
under these plans. A cash medical allowance of $15,000 for payment
of medical insurance premiums will also be provided if he does not
qualify for retiree medical coverage.
All benefits under these change of control agreements and
supplemental agreements will be reduced as necessary to be exempt
from the excise tax and the non-deductibility provision imposed by
the Internal Revenue Code on certain change of control payments
except in those cases in which, notwithstanding the Code, such
reduction would be disadvantageous to the individual.
STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total stockholder return
(assuming reinvestment of dividends) with the cumulative total
return of the Standard & Poor's 500 Stock Index and the Standard &
Poor's Chemical Index, both of which include the Company.
<TABLE>
TOTAL RETURN TO STOCKHOLDERS
<CAPTION>
Measurement Period Monsanto Company S&P 500 S&P Chemical Index
- ------------------ ---------------- ------- ------------------
(Fiscal Year Covered)
- ---------------------
<S> <C> <C> <C>
Measurement Pt - 12/31/89 $100.0 $100.0 $100.0
FYE 12/31/90 86.9 96.9 84.9
FYE 12/31/91 126.0 126.3 110.8
FYE 12/31/92 111.0 135.9 121.4
FYE 12/31/93 146.9 149.5 135.8
FYE 12/31/94 144.5 151.5 157.3
</TABLE>
18
<PAGE> 22
RATIFICATION OF INDEPENDENT AUDITORS (PROXY ITEM NO. 2)
The Board of Directors, upon the recommendation of the Audit
Committee, has appointed Deloitte & Touche LLP as the principal
independent auditors to examine the consolidated financial
statements of the Company and its subsidiaries for the year 1995.
Deloitte has acted in this capacity since 1932, is knowledgeable
about the Company's operations and accounting practices, and is
well qualified to act in the capacity of auditor.
Although this appointment is not required to be submitted to a
vote of the stockholders, the Board continues to believe it
appropriate as a matter of policy to request that the stockholders
ratify the appointment of Deloitte as principal independent
auditors. If the stockholders should not ratify, the Audit
Committee will investigate the reasons for stockholder rejection
and the Board will reconsider the appointment.
A formal statement by representatives of Deloitte is not planned
for the Annual Meeting. However, as in past years, they are
expected to be present at the meeting and available to respond to
appropriate questions.
--------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF DELOITTE AS PRINCIPAL INDEPENDENT AUDITORS FOR
THE YEAR 1995.
The affirmative vote of the majority of the shares present in
person or represented by proxy at the Annual Meeting is required
for ratification of this appointment.
GENERAL INFORMATION
For inclusion in the Company's Proxy Statement and form of proxy,
any proposals of stockholders intended to be presented at the 1996
Annual Meeting must be received by the Company no later than
November 17, 1995.
To nominate one or more directors and/or propose proper business
from the floor for consideration at the 1996 Annual Meeting, other
than by inclusion in the Proxy Statement and form of proxy
pursuant to the preceding paragraph, stockholders must provide
written notice. Such notice should be addressed to the Secretary
and be received at the Company's World Headquarters not earlier
than January 29, 1996, and not later than February 28, 1996. The
Company's By-Laws set out specific requirements which such written
notices must satisfy. Copies of those requirements will be
forwarded to any stockholder upon written request.
The Board of Directors knows of no matter, other than those
referred to in this Proxy Statement, which will be presented at
the meeting. However, if any other matters properly come before
the meeting or any of its adjournments, the person or persons
voting the proxies will vote in accordance with their best
judgment on such matters. Should any nominee for director be
unwilling or unable to serve at the time of the meeting or any
adjournments thereof, the persons named in the proxy will vote for
the election of such other person for such directorship as the
Board of Directors may recommend, unless, prior to the meeting,
the Board has eliminated that directorship by reducing the size of
the Board. The Board is not aware that any nominee herein will be
unwilling or unable to serve as a director.
A stockholder who wishes to give a proxy to someone other than the
Board's proxy committee may strike out the names appearing on the
enclosed form of proxy, write in the name of any other person,
sign the proxy, and deliver it to the person whose name has been
substituted.
19
<PAGE> 23
The Company will bear the expense of preparing, printing, and
mailing this proxy material, as well as the cost of any required
solicitation. The Company has engaged Georgeson & Co., a proxy
solicitation firm, to assist by mail or telephone, in person, or
otherwise in the solicitation of proxies. Georgeson's fee is
expected to be approximately $15,000 plus expenses. A few regular
employees may also participate in the solicitation, without
additional compensation. In addition, the Company will reimburse
banks, brokerage firms, and other custodians, nominees, and
fiduciaries for reasonable expenses incurred in forwarding proxy
materials to beneficial owners of the Company's stock and
obtaining their proxies.
You are urged to mark, sign, date, and return your proxy promptly.
You may revoke your proxy at any time before it is voted; and if
you attend the meeting, as we hope you will, you may vote your
shares in person.
RICHARD W. DUESENBERG
Secretary
March 16, 1995
20
<PAGE> 24
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY STATEMENT
MONSANTO
<PAGE> 25
MONSANTO
PLACE: World Headquarters
800 N. Lindbergh Blvd.
St. Louis County, Mo.
Common Stock
PROXY
Annual
Meeting
1:30 P.M.
April 28, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Robert B. Shapiro, Nicholas L. Reding,
and Richard W. Duesenberg, and each of them, with full power of
substitution, proxies to vote all shares of Common Stock of Monsanto
Company which the undersigned is entitled to vote at the 1995 Annual
Meeting of Stockholders, and any adjournments thereof, as specified
upon the matters indicated on the reverse side and in their discretion
upon such other matters as may properly come before the meeting.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE REQUIRED IF MAILED IN U.S.A.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
PLEASE
- -----------, 1995 ------------------------------------------------- SIGN
Date Please sign your name or names exactly as printed
hereon. When shares are held by joint tenants, both
should sign. Trustees and other fiduciaries should
so indicate when signing.
<PAGE> 26
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
1. Election of Directors / / FOR all nominees listed / / WITHHOLD AUTHORITY
below (except as written to vote for all
to the contrary below) nominees listed
below
R. J. Mahoney, R. B. Shapiro, J. T. Bok, R. M. Heyssel, G. S. King,
P. Leder, H. M. Love, F. A. Metz, Jr., B. Mickel, J. F. M. Peters,
N. L. Reding, J. S. Reed, W. D. Ruckelshaus, and J. B. Slaughter.
(Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name in this space.)
2. Ratification of Deloitte & Touche LLP as principal independent
auditors for 1995. / / FOR / / AGAINST / / ABSTAIN
PLEASE SIGN ON REVERSE SIDE.
<PAGE> 27
TO PARTICIPANTS IN: SAVINGS AND INVESTMENT PLAN (SIP) AND
PAYROLL RELATED EMPLOYEE STOCK OWNERSHIP PLAN
Participants may instruct the Trustee as to the manner in which
Monsanto stock held for their accounts and entitled to vote shall be
voted at Stockholders' meetings. The enclosed Notice of Annual Meeting
of Stockholders and Proxy Statement for Monsanto Company's 1995 Annual
Meeting are being provided to you by the Trustee. If you desire to
instruct the Trustee in the voting of your plan shares, you should fill
in the reverse side of this voting form, date, sign, and return this
form in the enclosed envelope. No postage is required if mailed in the
U.S.A. The shares will be voted at the Annual Meeting to be held at the
Company's World Headquarters, 800 North Lindbergh Blvd., St. Louis
County, Missouri, on April 28, 1995, at 1:30 p.m., or at any
adjournment thereof.
THE TRUSTEE MUST RECEIVE THIS FORM ON OR PRIOR TO APRIL 24, 1995. THE
TRUSTEE WILL VOTE YOUR SHARES AS YOU DIRECT ONLY IF THE SIGNED FORM IS
RECEIVED ON OR PRIOR TO APRIL 24, 1995, AND YOU HAVE SPECIFIED YOUR
DIRECTIONS HEREIN. OTHERWISE, THE TRUSTEE WILL VOTE YOUR SIP SHARES IN
PROPORTION TO THE VOTES OF THE OTHER SIP PARTICIPANTS.
MONSANTO
---------, 1995 --------------------------
Date Signature
<PAGE> 28
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2 AND TO
"GRANT AUTHORITY" FOR ITEM 3.
1. Election of Directors / / FOR all nominees listed / / WITHHOLD AUTHORITY
below (except as written to vote for all
to the contrary below) nominees listed
below
R. J. Mahoney, R. B. Shapiro, J. T. Bok, R. M. Heyssel, G. S. King,
P. Leder, H. M. Love, F. A. Metz, Jr., B. Mickel, J. F. M. Peters,
N. L. Reding, J. S. Reed, W. D. Ruckelshaus, and J. B. Slaughter.
(Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name in this space.)
2. Ratification of Deloitte & Touche LLP as principal independent
auditors for 1995. / / FOR / / AGAINST / / ABSTAIN
- -------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO "GRANT AUTHORITY" FOR ITEM 3.
3. In the Trustee's discretion, upon such other matters as may
properly come before the meeting.
/ / GRANT AUTHORITY / / WITHHOLD AUTHORITY
THE PROXY FOR WHICH YOUR INSTRUCTIONS ARE REQUESTED IS SOLICITED ON
BEHALF OF THE COMPANY'S BOARD OF DIRECTORS.
(Please sign on reverse side.)
<PAGE> 29
APPENDIX
1. The legend appearing at the top of the Notice of Annual Meeting of
Stockholders in the EDGAR filing appears in the printed document
vertically in red along the left side of the Notice. The printed
documents containing this legend will be distributed only to
participants in Monsanto's stock option plans and Employee Stock
Purchase Plan. The legend will not appear on documents delivered
to other stockholders.
2. On printed pages 2 through 4 of the proxy statement, the blank spaces
to the left of each director's biography designated by the word
"[PHOTO]", contain a 1-1/8 by 1-5/16 inch black and white
photograph of the respective director.
3. The bullets on printed pages 10, 13 and 14 are represented by
asterisks in the EDGAR document.
4. On printed page 12, the trademark is designated by the superscript
letter "R" in a circle.
5. The Stock Price Performance Graph on printed page 18 of the proxy
statement is being transmitted in a format which can be processed
by EDGAR. As instructed, a paper copy of the proxy statement
containing this graph is being mailed to William L. Tolbert, Jr.,
Branch Chief.
6. On printed page 19 of the proxy statement, "The Board of Directors
recommends a vote "FOR" the ratification of the appointment of
Deloitte as principal independent auditors for the year 1995."
is in bold-face type.
7. On the back of the proxy card, "The Board of Directors
recommends a vote "FOR" items 1 and 2." is in bold-face type.
8. On the back of the voting instruction card, "The Board of Directors
recommends a vote "FOR" items 1 and 2 and to "GRANT AUTHORITY" for
item 3." and "The Board of Directors recommends a vote to "GRANT
AUTHORITY" for item 3." are in bold-face type.
