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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-2516
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MONSANTO COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-0420020
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
800 NORTH LINDBERGH BLVD., ST. LOUIS, MISSOURI 63167
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
(314) 694-1000
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 DURING THE PRECEDING TWELVE MONTHS (OR FOR SUCH
SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90
DAYS. YES X NO
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INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
OUTSTANDING AT
CLASS MARCH 31, 1996
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COMMON STOCK, $2 PAR VALUE 117,185,882 SHARES
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<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Statement of Consolidated Income of Monsanto Company and
subsidiaries for the three months ended March 31, 1996 and 1995, the
Statement of Consolidated Financial Position as of March 31, 1996 and
December 31, 1995, the Statement of Consolidated Cash Flow for the
three months ended March 31, 1996 and 1995 and related Notes to
Financial Statements follow. In the opinion of management, these
unaudited consolidated financial statements contain all adjustments
necessary to present fairly the financial position, results of
operations and cash flows for the interim periods reported.
Unless otherwise indicated by the context, "Monsanto" means Monsanto
Company and consolidated subsidiaries, and "the Company" means Monsanto
Company only.
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME
(DOLLARS IN MILLIONS, EXCEPT PER SHARE)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------
1996 1995
---- ----
<S> <C> <C>
Net Sales...................................... $2,304 $2,318
Cost of Goods Sold............................. 1,187 1,324
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Gross Profit................................... 1,117 994
Marketing Expenses............................. 327 296
Administrative Expenses........................ 196 158
Technological Expenses......................... 158 154
Amortization of Intangible Assets.............. 31 25
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Operating Income............................... 405 361
Interest Expense............................... (40) (42)
Interest Income................................ 11 11
Other Income (Expense)-Net..................... 6 7
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Income Before Income Taxes..................... 382 337
Income Taxes................................... 122 108
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Net Income..................................... $ 260 $ 229
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Earnings per Share............................. $ 2.17 $ 2.02
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Dividends per Share............................ $ 0.69 $ 0.63
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Weighted Average Number of Common and
Common Equivalent Shares (in millions)........ 119.7 113.7
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</TABLE>
1
<PAGE> 3
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(DOLLARS IN MILLIONS, EXCEPT PER SHARE)
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
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ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents............................................. $ 145 $ 297
Receivables, net of allowances of $56 in 1996 and $57 in 1995......... 2,172 1,629
Miscellaneous receivables and prepaid expenses........................ 592 596
Deferred income tax benefit........................................... 336 415
Inventories........................................................... 1,355 1,368
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Total Current Assets.............................................. 4,600 4,305
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Property, Plant and Equipment........................................... 7,317 7,237
Less Accumulated Depreciation........................................... 4,468 4,405
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Net Property, Plant and Equipment..................................... 2,849 2,832
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Investments in Affiliates............................................... 740 544
Intangible Assets, net of accumulated amortization of $672 in 1996 and
$638 in 1995........................................................... 1,968 1,964
Other Assets............................................................ 905 966
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Total Assets............................................................ $11,062 $10,611
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<CAPTION>
LIABILITIES AND SHAREOWNERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable...................................................... $ 693 $ 648
Accrued liabilities................................................... 1,721 1,799
Short-term debt....................................................... 971 365
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Total Current Liabilities......................................... 3,385 2,812
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Long-Term Debt.......................................................... 1,630 1,667
Deferred Income Taxes................................................... 85 85
Postretirement Liabilities.............................................. 1,441 1,415
Other Liabilities....................................................... 701 900
Shareowners' Equity:
Common stock (authorized, 200,000,000 shares, par value $2)
Issued, 164,394,194 shares in 1996 and 1995......................... 329 329
Additional contributed capital...................................... 947 902
Treasury stock, at cost (48,493,004 shares in 1996 and
48,923,899 shares in 1995)......................................... (2,644) (2,550)
Reserve for ESOP debt retirement...................................... (181) (181)
Net unrealized investment holding gains............................... 22 34
Accumulated currency adjustment....................................... 71 101
Reinvested earnings................................................... 5,276 5,097
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Total Shareowners' Equity......................................... 3,820 3,732
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Total Liabilities and Shareowners' Equity............................... $11,062 $10,611
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</TABLE>
2
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<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOW
(DOLLARS IN MILLIONS)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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1996 1995
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<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Operating Activities:
Net income........................................................... $ 260 $ 229
Add income taxes..................................................... 122 108
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Income before income taxes........................................... 382 337
Adjustments to reconcile to Cash Used in Continuing Operations:
Income tax payments................................................ (103) (36)
Items that did not use (provide) cash:
Depreciation and amortization.................................... 146 146
Other............................................................ (7) (9)
Working capital changes that provided (used) cash:
Accounts receivable.............................................. (528) (552)
Inventories...................................................... 14 (107)
Accounts payable and accrued liabilities......................... 19 (26)
Other............................................................ (48) 56
Other items........................................................ (128) 76
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Total Cash Used in Operations.......................................... (253) (115)
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Investing Activities:
Property, plant and equipment purchases.............................. (133) (88)
Acquisition of Kelco................................................. (1,062)
Acquisition and investment payments.................................. (319) (17)
Investment and property disposal proceeds............................ 102 6
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Cash Used in Investing Activities...................................... (350) (1,161)
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Financing Activities:
Net change in short-term financing................................... 606 1,116
Long-term debt proceeds.............................................. 109
Long-term debt reductions............................................ (133) (33)
Treasury stock purchases............................................. (171)
Dividend payments.................................................... (81) (72)
Common stock issued under employee stock plans....................... 76 13
Other financing activities........................................... 45 4
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Cash Provided by Financing Activities.................................. 451 1,028
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Decrease in Cash and Cash Equivalents.................................. (152) (248)
Cash and Cash Equivalents:
Beginning of year.................................................... 297 507
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End of period........................................................ $ 145 $ 259
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<FN>
The effect of exchange rate changes on cash and cash equivalents was not material.
Cash payments for interest (net of amounts capitalized) were $40 million in 1996 and $42 million in 1995.
</TABLE>
3
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MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS)
1. Effective January 1, 1996, Monsanto adopted SFAS No. 123,
"Accounting for Stock-Based Compensation," and, as permitted by the
standard, has elected to continue following the guidance of APB Opinion
No. 25, "Accounting for Stock Issued to Employees," for measurement and
recognition of stock-based transactions with employees. Adoption of
this new accounting standard will require additional disclosures. It
will not have a material effect on the Company's financial position or
results of operations.
2. In March 1996, Monsanto acquired significant equity positions in
Calgene, Inc. ("Calgene") and DeKalb Genetics Corporation ("DeKalb").
The combined investment in these biotechnology businesses totaled
approximately $270 million. In April 1996, Monsanto announced that it
had signed a definitive agreement to acquire the plant-biotechnology
assets of Agracetus from W. R. Grace & Co. for approximately $150
million. The transaction is expected to close in the second quarter of
1996.
3. At the Company's annual meeting on April 26, 1996, the shareowners
approved an increase in the number of authorized shares of common stock
from 200,000,000 to 850,000,000. In conjunction with this action, the
Company's board of directors approved a five-for-one stock split to be
effected in the form of a stock dividend, payable in shares of Company
common stock to shareowners of record on May 15, 1996. The amount of
outstanding shares and related per share amounts for the current and
prior period presented in the accompanying consolidated financial
statements have not been adjusted retroactively to reflect the stock
split.
4. Earnings per share were computed using the weighted average number
of common shares and common share equivalents outstanding each period
(119,682,037 and 113,689,795 in 1996 and 1995, respectively). Common
share equivalents (3,541,948 and 2,013,308 in 1996 and 1995,
respectively) consist of common stock issuable upon exercise of
outstanding stock options. Earnings per share assuming full dilution
were not significantly different from the primary amounts.
<TABLE>
5. Components of inventories at March 31, 1996 and December 31, 1995
were as follows:
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
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<S> <C> <C>
Finished goods............................................. $ 842 $ 874
Goods in process........................................... 309 305
Raw materials and supplies................................. 434 434
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Inventories, at FIFO cost.................................. 1,585 1,613
Excess of FIFO over LIFO cost.............................. (230) (245)
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Total.................................................... $1,355 $1,368
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</TABLE>
6. Monsanto is a party to a number of lawsuits and claims, which it
is vigorously defending. Such matters arise out of the normal course of
business and relate to product liability, government regulation,
including environmental issues, and other issues. Certain of the
lawsuits and claims seek damages in very large amounts. While the
results of litigation cannot be predicted with certainty, management
believes, based upon the advice of Company counsel, that the final
outcome of such litigation will not have a material adverse effect on
Monsanto's consolidated financial position, profitability or liquidity
in any one year, as applicable.
4
<PAGE> 6
MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
7. Segment data for the three months ended March 31, 1996 and 1995
were as follows:
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------------------------------
1996 1995
-------------------------- --------------------------
OPERATING OPERATING
NET INCOME NET INCOME
SALES (LOSS) SALES (LOSS)
----- -------- ----- --------
<S> <C> <C> <C> <C>
Segment:
Agricultural Products...................................... $ 825 $272 $ 746 $236
Chemicals.................................................. 736 64 970 92
Pharmaceuticals............................................ 477 60 386 17
Food Ingredients........................................... 266 25 216 31
Corporate.................................................. (16) (15)
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Total........................................................ $2,304 $405 $2,318 $361
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</TABLE>
As of January 1, 1996, the industrial business of the Food
Ingredients segment was transferred to Chemicals and Chemicals' food
phosphate business was transferred to Food Ingredients. In addition, a
small agricultural business was transferred to Chemicals. Segment
information for prior periods has been reclassified to conform to the
current presentation.
Financial information for the first quarter of 1996 should not be
annualized. Monsanto's sales and operating income are historically
higher during the first half of the year, primarily because of the
concentration of generally more profitable sales from the Agricultural
Products segment in the first half of the year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Note 7 of the Notes to Financial Statements indicates operating
results by operating unit, including the concentration of the generally
more profitable sales of Agricultural Products in the first half of the
year.
RESULTS OF OPERATIONS-FIRST QUARTER 1996 COMPARED WITH THE FIRST
QUARTER 1995
Net income for the first quarter of 1996 was $260 million, or $2.17
per share, compared with net income of $229 million, or $2.02 per
share, in the first quarter of last year. Net sales of $2,304 million
were essentially even with sales for the same period last year. The
Company's gross profit percentage improved to 48 percent in 1996
compared to 43 percent in the first quarter of last year. This increase
can be primarily attributed to an improved sales mix, as current year
operations no longer include the styrenics plastics and rubber
chemicals businesses that were part of the Chemicals segment last year.
Net sales for Agricultural Products were 11 percent higher compared
with those in the first quarter of 1995. The increase in net sales was
driven by significantly higher worldwide sales volumes of the family of
Roundup(R) herbicides, with particularly strong volume gains in
Australia, Canada and Europe. The increased volume can be attributed to
continued global expansion of conservation tillage techniques, as well
as sales of new products such as Roundup(R) Ultra. The sales increase
also benefited from higher sales of the Solaris lawn-and-garden unit
primarily because of the implementation of a new distribution strategy
in the U.S. which more closely aligns product delivery with retail
customer demand. However, unfavorable weather conditions in certain
world areas and uncertainties surrounding the passage of the Farm Bill
affected the timing of sales of other key agricultural products.
Operating income for Agricultural Products increased 15 percent over
first quarter operating income in 1995, primarily on the strength of
higher sales volumes and lower manufacturing and other costs. This
increase was partially offset by higher marketing expenditures used to
support new product launches.
5
<PAGE> 7
MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
Net sales and operating income for Chemicals decreased $234 million
and $28 million, respectively, compared with net sales and operating
income in the same period in 1995. However, prior year operations
reflect sales and operating income from the Company's styrenics
plastics business which was divested at the end of 1995 and the
Company's rubber chemicals business which was contributed to the
formation of a joint venture in May of 1995. Excluding the sales and
operating income of these businesses and other nonrecurring items in
the first quarter of 1995, Chemicals' sales would have increased $42
million, while operating income would have decreased $22 million. The
sales increase can be attributed to higher sales volumes, partially
offset by lower average selling prices. The decrease in operating
income was primarily the result of higher spending on growth
initiatives and higher manufacturing costs associated with downtime for
maintenance and capacity expansion projects. These higher costs were
partially offset by lower raw material costs and the effect of the
higher net sales.
Pharmaceuticals' net sales and operating income for the first quarter
of 1996 increased $91 million and $43 million, respectively, over net
sales and operating income in the same period last year. These
increases were primarily because of continued strong performances from
key growth products: Ambien(R) short-term treatment for insomnia and
Daypro(R) and Arthrotec(R) arthritis treatments. Combined first quarter
sales of Daypro(R) and Arthrotec(R) increased 40 percent over sales in
the first quarter of 1995, while first quarter sales of Ambien(R)
nearly doubled over the comparable period in 1995. Sales and operating
income from the women's health care product lines, acquired from Syntex
in July of 1995, also contributed to the improved sales and operating
performance. In addition, cost-sharing alliances in 1996 benefited
operating results. The increase in operating income was partially
offset by increased marketing expenses related to new product launches,
higher research and development expenses associated with new product
candidates advancing to later and more expensive phases of development,
and higher administrative expenses related to employee incentive
programs.
Net sales for Food Ingredients increased 23 percent in the first
quarter of 1996 over sales for the comparable period in 1995, primarily
on higher aspartame sales volumes and the addition of sales from Kelco
which was acquired in February 1995. Sales of tabletop sweeteners were
essentially even with last year, despite significant competitive
pressures. First quarter operating income in 1996 decreased $6 million versus
operating income in the first quarter of 1995. This decrease can be
primarily attributed to the timing of and increases in advertising and
promotion costs for tabletop sweeteners.
For Monsanto, administrative expenses for the first quarter of 1996
were higher than those in the comparable period in 1995 primarily because of
higher costs associated with various employee incentive programs, as
well as increased spending on growth initiatives and other programs.
Included in "Other Income (Expense) - Net" is an aftertax charge of
approximately $8 million for Monsanto's share of the purchased research
and development costs resulting from the Calgene and DeKalb
investments. "Other Income (Expense) - Net" benefited from higher
currency gains, but was partially offset by lower earnings from equity
affiliates. As the Company increases its investments in agricultural
biotechnology businesses, such as Calgene and DeKalb, the short-term
impact on earnings is expected to be somewhat dilutive.
CHANGES IN FINANCIAL CONDITION-MARCH 31, 1996 COMPARED WITH
DECEMBER 31, 1995
Working capital at March 31, 1996 decreased to $1,215 million from
$1,493 million at December 31, 1995, primarily due to a seasonal
increase in Agricultural Products' trade receivables offset by higher
short-term debt. The current ratio was 1.4 at March 31, 1995 compared
to 1.5 at year-end 1995. The percent of total debt to total
capitalization increased to 41 percent at quarter-end compared with 35
percent at year-end 1995, primarily because of the increase in short-
term debt. The increase in Investments in Affiliates at March 31, 1996
was primarily the result of the equity positions taken in Calgene and
DeKalb which totaled approximately $270 million.
6
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MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Continued)
Operating activities used a net $253 million of cash in 1996,
compared with $115 million of net cash used by operations in 1995. The
increase in cash used in operations resulted primarily from higher
seasonal working capital levels for Agricultural Products, higher
income tax payments and higher payouts associated with employee
incentive programs. Investing activities in 1996 used $350 million,
principally for the equity investments in Calgene and DeKalb. The
increase in short-term financing was primarily used to fund
Agricultural Products' higher seasonal working capital levels.
Throughout the first three months of 1996, Monsanto purchased in the
market 1.1 million shares of its stock for $171 million, the market
value on the dates of the purchases.
7
<PAGE> 9
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company's Report on Form 10-K for the year ended December 31,
1995, described a number of related actions brought in federal and/or
state court, based on the practice of providing discounts or rebates to
managed-care organizations and certain other large purchasers. The
tentative agreement that had been reached by several defendants, not
including Searle, to settle the class action, was rejected by the judge
on April 4, 1996. On May 8, 1996, the judge preliminarily approved a
new settlement, which will be the subject of a fairness hearing on
June 11, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits-See the Exhibit Index at page 9 of this report.
(b) No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1996.
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 thereunto duly authorized.
MONSANTO COMPANY
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(Registrant)
/s/ MICHAEL R. HOGAN
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Michael R. Hogan
Vice President and Controller
(On behalf of the Registrant and
as Principal Accounting Officer)
Date: May 14, 1996
8
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<TABLE>
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of
Item 601 of Regulation S-K.
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S>
2 Omitted - Inapplicable
3.(i) Restated Certificate of Incorporation of the Company, as amended, effective April 29, 1996
3.(ii) Omitted - Inapplicable
4 Omitted - Inapplicable
10 Omitted - Inapplicable
11 Omitted - Inapplicable; see Note 4 of Notes to Financial Statements on page 4
15 Omitted - Inapplicable
18 Omitted - Inapplicable
19 Omitted - Inapplicable
22 Omitted - Inapplicable
23 Consent of Company Counsel
24 Omitted - Inapplicable
27 Financial Data Schedule
99 Computation of the Ratio of Earnings to Fixed Charges for Monsanto Company and Subsidiaries
</TABLE>
9
<PAGE> 1
Exhibit 3.(i)
CERTIFICATE OF INCORPORATION
OF
MONSANTO COMPANY
ARTICLE I: NAME
The name of the Corporation shall be Monsanto Company.
ARTICLE II: PRINCIPAL OFFICE AND AGENT
The principal office of the Corporation in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle, and the name and address of its resident
agent is The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware.
ARTICLE III: OBJECTS AND PURPOSES
The nature of the business of the Corporation or objects or purposes
proposed to be transacted, promoted or carried on by the Corporation are as
follows:
To manufacture, compound, refine, buy, sell and in every other
way deal in the following: chemicals and allied products, petroleum,
electronics, nucleonics, textiles and compounds and products of all
types produced from any of the foregoing, either alone or in
conjunction with other materials; to conduct scientific and technological
research; and to perform other activities and functions related to any
of the foregoing.
To refine, market, distribute and transport crude oil, or
petroleum and all of its products; to locate, purchase, lease,
sublease, develop, or otherwise acquire, and to sell, mortgage
or otherwise dispose of, lands containing or believed to contain
petroleum, oil, natural gas, and any other mineral, whether similar or
dissimilar, or any one or more of them, and to drill or prospect
for or produce the same; to purchase, lease, or otherwise acquire,
and to sell, mortgage or otherwise dispose of, developed or
producing oil, gas and other mineral properties or the products of
such oil, gas and other minerals; to purchase, produce, refine, sell
and distribute petroleum, gas and other minerals, and all of the
products and by-products thereof; to buy, sell or otherwise dispose
of, and manufacture all kinds of illuminating, burning and heating
oils, and gasoline, naphtha, lubricants, greases, waxes and all other
products and by-products of petroleum; to act as broker or agent for
others in all of said acts.
To construct, build, purchase, acquire, own, equip, maintain,
operate, mortgage, or create liens upon, turn to account, lease,
sell, convey or otherwise dispose of, any and all real estate, houses,
factories, refineries, mills, smelters, buildings or construction of
any nature, plants, manufactories, machinery works, tanks, tank cars,
reservoirs, docks, piers, wharves, bulkheads, heat, light and power
installations, roads, trams, railroads, spur tracks, loading racks,
ditches, flumes, steamboats, vessels, pipelines, pumping stations
and any other means or methods of land or water transportation,
bridges, canals, storage works, water works and appurtenances,
appliances and conveniences thereto of every kind and character
whatsoever, to the extent that the same are or may be authorized
by the statutes under which this Corporation is incorporated and by
the laws of any jurisdiction wherein any such works are located.
1
<PAGE> 2
To manufacture, refine, reduce, treat, separate, convert, store,
transport, buy, sell, distribute, trade and deal in, and otherwise
turn to account, all grades and kinds of asphaltum, petroleum and
petroleum distillates, natural and artificial gas, casinghead
gasoline, sulphur, paints, oils, dyes, varnishes, carbon and
hydrocarbon products and all other substances of every nature
whatsoever, whether the same be by-products of the business specified
herein, or otherwise, and whether the same be in crude or in
manufactured or refined forms, which the Corporation may advantageously
manufacture, trade, or otherwise deal in, in connection with the
conduct of the business as specified herein.
To design, construct, build, purchase, equip, own, control,
operate, maintain, sell, lease and otherwise acquire or dispose
of filling stations of every kind, nature and description, and in
connection therewith to purchase, sell, vend, distribute and generally
deal in and with, either at wholesale or retail, or both, gasoline,
kerosene, fuel oil, lubricating oils, greases and automobile supplies
and accessories of all kinds.
To manufacture fuel, power producing, illuminating, and all other
kinds of gas from coal, petroleum, maltha, asphaltum and from any other
substances of any nature from which gas may be produced either under
any existing process or any process hereafter discovered, and to
supply the same for fuel, power, lighting and any and all other
purposes of every nature whatsoever both to public and private
consumers.
To acquire, own and operate such machinery, apparatus and
appliances as may be necessary, proper or incidental to the mining,
production and development of lands for petroleum, oil, natural gas
and other minerals, or for any of the purposes for which this
Corporation is organized.
To manufacture, purchase or otherwise acquire, own, mortgage,
pledge, sell, assign and transfer, or otherwise dispose of, to invest,
trade, deal in and deal with goods, wares and merchandise and real and
personal property of every class and description.
To acquire, and pay for in cash, stock or bonds of this Corporation
or otherwise, the good will, rights, assets and property, and to under-
take or assume the whole or any part of the obligations or liabilities
of any person, firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage or otherwise dispose of, letters patent of the
United States or any foreign country, patent rights, licenses and
privileges, inventions, improvements and processes, copyrights, trade
marks and trade names, relating to or useful in connection with any
business of this Corporation.
To guarantee, purchase, hold, sell, assign, transfer, mortgage,
pledge or otherwise dispose of shares of the capital stock of, or any
bonds, securities or evidences of indebtedness created by any other
corporation or corporations organized under the laws of this state
or any other state, country, nation or government, and while the
owner thereof to exercise all the rights, powers and privileges of
ownership, including the right to vote thereon.
To enter into, make and perform contracts of every kind and
description with any person, firm, association, corporation,
municipality, county, state, body politic or government or colony
or dependency thereof.
2
<PAGE> 3
To borrow or raise moneys for any of the purposes of the
Corporation and, from time to time, without limit as to amount, to
draw, make, accept, endorse, execute and issue promissory notes, drafts,
bills of exchange, warrants, bonds, debentures and other negotiable or
non-negotiable instruments and evidences of indebtedness, and to secure
the payment of any thereof and of the interest thereon by mortgage upon
or pledge, conveyance or assignment in trust of the whole or any part
of the property of the Corporation, whether at the time owned, or there-
after acquired, and to sell, pledge or otherwise dispose of such bonds
or other obligations of the Corporation for its corporate purposes.
To purchase, hold, sell, and transfer the shares of its own
capital stock; provided it shall not use its funds or property for
the purchase of its own shares of capital stock when such use would
cause any impairment of its capital except as otherwise permitted by
law, and provided further that shares of its own capital stock belonging
to it shall not be voted upon directly or indirectly.
To make donations for the public welfare or for charitable,
scientific or educational purposes.
To have one or more offices, to carry on all or any of its
operations and business and without restriction or limit as to amount
to purchase or otherwise acquire, hold, own, mortgage, sell, convey,
or otherwise dispose of real and personal property of every class and
description in any of the States, Districts, Territories or Colonies
of the United States, and in any and all foreign countries, subject
to the laws of such State, District, Territory, Colony or Country.
In general, to carry on the foregoing or any other business in
connection with the foregoing, directly in the name of this Corporation
or indirectly through subsidiaries or affiliates, and to have and
exercise all the powers conferred by the laws of Delaware upon
corporations formed under the act herein referred to, and to do any
or all of the things hereinbefore set forth to the same extent as
natural persons might or could do.
The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted
by reference to, or inference from, the terms of any other clause
in this Certificate of Incorporation, but the objects and purposes
specified in each of the foregoing clauses of this article shall be
regarded as independent objects and purposes.
ARTICLE IV: CAPITAL STOCK
The total number of shares of all classes of stock which the Corporation
shall have authority to issue is Eight Hundred Sixty Million (860,000,000)
shares, to be divided into two classes consisting of (a) Ten Million
(10,000,000) shares of preferred stock without par value (hereinafter
designated "Preferred Stock"), and (b) Eight Hundred Fifty Million
(850,000,000) shares of common stock of par value of $2 per share (hereinafter
designated "Common Stock").
Section I
Preferred Stock
The Preferred Stock may be issued from time to time in one or more series
with such distinctive serial designations, at such price or prices and for
such other consideration as
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<PAGE> 4
may be fixed by the Board of Directors. The Preferred Stock of all series
shall be in all respects entitled to the same preferences, rights and
privileges and subject to the same qualifications, limitations and
restrictions, except that different series of Preferred Stock may vary with
respect to those provisions as shall be determined and fixed by the Board of
Directors as hereinafter provided in this Section I. All the shares of any
one series shall be alike in every particular. In no event shall any share of
any series of Preferred Stock be entitled to more than one vote.
The Board of Directors is hereby expressly empowered, subject to the
other provisions of this Article IV, to determine and fix by resolution or
resolutions providing for the issuance of such series:
(a) The number of shares to constitute each such series and the
designation thereof;
(b) The voting powers, full, limited or contingent, if any, to which
holders of shares of any series of Preferred Stock shall be entitled;
(c) The dividend rate or rates, the conditions and dates upon
which such dividends shall be payable, the relation which such
dividends shall bear to the dividends payable on any other class or
classes or series of stock, and whether such dividends shall be
cumulative or non-cumulative;
(d) Whether or not the shares of such series shall be redeemable
and, if redeemable, the redemption price and the terms and conditions
thereof;
(e) The amount, if any, which the shares of any such series
shall be entitled to receive before any distribution or payment shall be
made to holders of the Common Stock, in the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether
voluntary or involuntary, or of any proceedings resulting in any
distribution of all, or substantially all, of its assets to its
stockholders; provided, however, that the sale of all, or substantially
all, of the property and assets of the Corporation to, or the merger or
consolidation of the Corporation into or with, any other company shall
not be deemed to be a liquidation, dissolution or winding up within
the meaning of this subdivision (e);
(f) Whether or not the shares of such series shall be subject to
the operation of retirement or sinking funds to be applied to the
purchase or redemption of such shares and, if such funds are
established, the annual amount thereof and the terms and provisions
relative to the operation thereof;
(g) Whether or not the shares of such series shall be convertible
into, or exchangeable for, shares of any other class or classes or of
any other series of the same or any other class of stock of the
Corporation and, if convertible or exchangeable, the conversion
price or prices or rate or rates of conversion or exchange and such other
terms and conditions of conversion or exchange as shall be stated in
said resolution or resolutions; and
(h) Such other designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions thereof as it may deem advisable and as shall be stated in
said resolution or resolutions.
4
<PAGE> 5
Section II
Provisions Applicable to All Classes of Stock
Each holder of Common Stock shall have one vote on all matters voted upon
by stockholders for each share of such stock held by him. Except as otherwise
expressly provided by law or by the Board of Directors pursuant to Section I
of this Article IV, the holders of Common Stock shall have the sole voting
power. No holder of any of the shares of the capital stock of the Corporation
shall be entitled as of right to purchase or subscribe for any unissued or
reacquired stock of any class, or any additional shares of any class to be
issued by reason of any increase of any class of the authorized capital
stock of the Corporation, or any securities convertible into stock of any
class, but any such unissued or reacquired stock or such additional
authorized issue of any stock or issue of convertible securities may be
issued and disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its
discretion.
If it seems desirable so to do, the Board of Directors of the Corporation
may from time to time issue scrip for fractional shares of stock. Such scrip
shall not confer upon the holder thereof any right to dividends or any voting
or other rights of a stockholder of the Corporation; but the Corporation
shall from time to time, within such time as the Board of Directors may
determine, or without limit of time if the Board of Directors so determines,
issue one or more whole shares of stock upon the surrender of scrip for
fractional shares aggregating the number of whole shares issuable in respect
of the scrip so surrendered, provided that the scrip so surrendered shall be
properly endorsed for transfer if in registered form.
The scrip may also, at the option of the Board of Directors, provide
that at the option of the Board of Directors there may be sold by the
Corporation at public or private sale at any time on or after any determined
date, in such manner and on such terms as the Board of Directors may in its
absolute discretion determine, the number of shares of stock of the
Corporation in respect of which such scrip certificates are then outstanding,
and thereafter and until an expiration date fixed by the Board of Directors
the bearers of such scrip certificates, upon surrender thereof at the office
or agency of the Corporation, shall be entitled to receive their proper
proportion of the net proceeds of such sale but without interest, and on
and after the date of such sale shall be entitled to no other rights in
respect of such scrip certificates.
The Board of Directors shall have power at any time or from time to time
(without any action by the stockholders of the Corporation) to create and
issue, whether or not in connection with the issue and sale of any shares of
stock or other securities of the Corporation, rights or options entitling
the holders thereof to purchase from the Corporation any shares of its
capital stock of any class or classes or of any series of any class or
classes, such rights or options to be evidenced by or in such instrument or
instruments as shall be approved by the Board of Directors. The terms upon
which, the time or times (which may be limited or unlimited in duration), at
or within which and the price or prices at which any such shares may be
purchased from the Corporation upon the exercise of any such right or option,
shall be such as shall be fixed and stated in the resolution or resolutions
adopted by the Board of Directors providing for the creation and issue of such
rights or options, and, in every case, set forth or incorporated by reference
in the instrument or instruments evidencing such rights or options. In the
absence of actual fraud in the transaction, the judgment of the Board of
Directors as to the consideration for the issuance of such rights or options
and the sufficiency thereof shall be conclusive.
5
<PAGE> 6
Shares of capital stock of the Corporation of any class or classes hereby
or hereafter authorized, and any rights or options entitling the holders
thereof to purchase from the Corporation any shares of its capital stock of
any class or classes or of any series of any class or classes, may be
issued by the Corporation from time to time for such consideration (but if
the same be par value stock then at not less than the par value thereof) as
may be fixed from time to time by the Board of Directors. The Board of
Directors shall have authority, as provided by statute, to determine that
only a part of the consideration which shall be received by the Corporation
for any of the shares of its capital stock which it shall issue from time to
time shall be capital.
The Corporation shall be entitled to treat the person in whose name any
share, right or option is registered as the owner thereof for all purposes,
and shall not be bound to recognize any equitable or other claim to or
interest in such share, right or option on the part of any other person,
whether or not the Corporation shall have notice thereof, save as may be
expressly provided by the laws of the State of Delaware.
ARTICLE V: CAPITAL
The amount of capital with which the Corporation will commence business
is One Thousand Dollars ($1,000.00).
ARTICLE VI: DURATION
The Corporation is to have perpetual existence.
ARTICLE VII: LIABILITY OF STOCKHOLDERS
The private property of the stockholders of the Corporation shall not be
subject to the payment of corporate debts to any extent whatever.
ARTICLE VIII: DIRECTORS
The number of directors of the Corporation which shall constitute the
whole Board shall be such as from time to time shall be fixed by or in the
manner provided in the by-laws, and such number may be altered from time to
time in the manner provided in such by-laws, or by amendment thereof, adopted
by the Board of Directors or by the stockholders in the manner provided
therein, but such number shall in no case be less than three. Vacancies caused
by an increase in the number of directors or otherwise, may be filled by the
Board of Directors in the manner provided in the by-laws. Directors need not
be stockholders. Any director may be removed at any time with or without cause
upon the affirmative vote of the holders of a majority of the stock of the
Corporation at any time entitled to vote for directors.
ARTICLE IX: LIABILITY OF DIRECTORS
A director of this Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the Delaware General Corporation Law as the
same exists or may hereafter be amended. Any repeal or modification of the
foregoing provisions of this Article IX shall not adversely affect any right
or protection of a director of the Corporation existing hereunder with respect
to any act or omission occurring prior to or at the time of such repeal or
modification.
6
<PAGE> 7
ARTICLE X: POWERS OF BOARD OF DIRECTORS
In furtherance, and not in limitation of the powers conferred by statute,
the Board of Directors of the Corporation is expressly authorized:
To make, alter or repeal the by-laws of the Corporation.
To authorize and cause to be executed mortgages and liens upon the real
and personal property of the Corporation.
To set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any proper purpose or to abolish any
such reserve in the manner in which it was created.
By resolution or resolutions, passed by a majority of the whole Board, to
designate one or more committees, each committee to consist of two or more
of the directors of the Corporation, which, to the extent provided in said
resolution or resolutions or in the by-laws of the Corporation, shall have
and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation, and may have power to authorize the
seal of the Corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be stated
in the by-laws of the Corporation, or as may be determined from time to time
by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, the Board of Directors shall have power and authority to sell,
lease or exchange all of the property and assets of the Corporation, including
its good will and its corporate franchises, upon such terms and conditions
and for such consideration, which may be in whole or in part shares of stock
in, and/or other securities of, any other corporation or corporations, as the
Board of Directors shall deem expedient and for the best interests of the
Corporation.
The Corporation may in its by-laws confer powers upon its Board of
Directors in addition to the foregoing, and in addition to the powers and
authorities expressly conferred upon it by statute.
A director and a member of any committee designated by the Board of
Directors shall, in the performance of his duties, be fully protected in
relying in good faith upon the books of account or reports made to the
Corporation by any of its officials, or by an independent certified public
accountant, or by an appraiser selected with reasonable care by the Board
of Directors or by any committee thereof, or in relying in good faith upon
other records of the Corporation.
No contract or other transaction of the Corporation shall be affected by
the fact that any of the directors of the Corporation are in any way
interested in or connected with any other party to such contract or
transaction, or are themselves parties to such contract or transaction,
provided that at the meeting of the Board of Directors or of the committee
thereof authorizing or confirming such contract or transaction there shall be
present a quorum of directors not so interested or connected, and such
contract or transaction shall be approved by a majority of such quorum, which
majority shall consist of directors not so interested or connected.
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<PAGE> 8
Any contract or act that shall be approved or ratified by the vote of
the holders of a majority of the capital stock of the Corporation having
voting power which is represented in person or by proxy at any annual meeting
of stockholders or at any special meeting called for that purpose, among
others, of considering the approval or ratification of the acts of officers
and/or directors (provided that a lawful quorum of stockholders be there
represented in person or by proxy) shall be as valid and as binding upon the
Corporation and upon all of its stockholders as though it had been approved or
ratified by every stockholder of the Corporation.
ARTICLE XI: MISCELLANEOUS PROVISIONS
Both stockholders and directors shall have power, if the by-laws so
provide, to hold their meetings, and to have one or more offices within or
without the State of Delaware, and to keep the books of this Corporation
(subject to the provisions of the statutes), outside of the State of Delaware
at such places as may be from time to time designated by the Board of
Directors, or as provided in the by-laws.
The amount of the authorized stock of any class or classes of the
Corporation may be increased or decreased at any time by the affirmative vote
of the holders of a majority of the stock entitled to vote. The Corporation
reserves the right to create and issue one or more kinds or classes or series
of stock with such designations, preferences, redemption or dividend
provisions and voting powers or restrictions or qualifications thereof or
other such differences as shall be stated or expressed in any certificate,
amendatory of its Certificate of Incorporation, duly authorized, executed,
recorded and filed in the manner now or hereafter prescribed by the laws of
the State of Delaware, and further reserves the right to amend, alter, change
or repeal any provision contained in this Certificate, in the manner now or
hereafter prescribed by the laws of the State of Delaware, and all rights
herein conferred upon the stockholders except as otherwise herein expressly
provided are granted subject to this reservation.
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof, or on the application
of any receiver or receivers appointed for this Corporation under the
provisions of Section 291 to Title 8 of the Delaware Code, or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of Title 8
of the Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as
the case may be, to be summoned in such manner as the said court directs.
If a majority in number representing three-fourths in value of the creditors
or class of creditors, and/or of the stockholders or class of stockholders of
this Corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this Corporation as a consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders of this
Corporation, as the case may be, and also on this Corporation.
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<PAGE> 9
This Certificate of Designations, filed with the Delaware Secretary
of State on February 5, 1990, relates to the Company's Preferred
Stock Purchase Rights Plan and has the effect of amending the
Certificate of Incorporation.
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
MONSANTO COMPANY
(Pursuant to Section 151 of the
Delaware General Corporation Law)
--------------------------
Monsanto Company, a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called
the "Company"), hereby certifies that the following resolution was adopted
by the Board of Directors of the Company as required by Section 151 of
the General Corporation Law at a meeting duly called and held on
January 26, 1990:
RESOLVED, that pursuant to the authority expressly granted to
and vested in the Board of Directors of this Company (hereinafter called
the "Board of Directors" or the "Board") by the provisions of the
Certificate of Incorporation, as amended, the Board of Directors hereby
creates a series of Preferred Stock, without par value (the "Preferred
Stock"), of the Company and hereby states the designation and number of shares,
and fixes the preferences, rights and privileges of the shares of such series,
and the qualifications, limitations or restrictions thereof (in addition to the
preferences, rights and privileges and the qualifications, limitations and
restrictions set forth in the Certificate of Incorporation, as amended, which
are applicable to Preferred Stock of all series and to all classes of stock of
the Company) as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series
----------------------
shall be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and
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<PAGE> 10
the number of shares constituting the Series A Preferred Stock shall
be 700,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall
--------
reduce the number of shares of Series A Preferred Stock to a number
less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights
or warrants or upon the conversion of any outstanding securities issued
by the Company convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock of par value of $2 per share (the "Common
Stock"), of the Company, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the twelfth day of March, June,
September and December in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of
(a) $1 or (b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. In the event the Company shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which
A-2
<PAGE> 11
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.
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<PAGE> 12
Section 3. Voting Rights. The holders of shares of Series A
-------------
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the
stockholders of the Company. In the event the Company shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event; provided, however, that in no event
shall any share of Series A Preferred Stock have more than one vote
per share.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital stock
of the Company having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares
A-4
<PAGE> 13
of Series A Preferred Stock outstanding shall have been paid in full,
the Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Company may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of
the Company unless the Company could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and
in such manner.
A-5
<PAGE> 14
Section 5. Reacquired Shares. Any shares of Series A Preferred
-----------------
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Certificate of Incorporation, or in any
other Certificate of Designations creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------
liquidation, dissolution or winding up of the Company, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the
holders of shares of Series A Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Company shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
A-6
<PAGE> 15
Section 7. Consolidation, Merger, etc. In case the Company shall
--------------------------
enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
each share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Company shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
-------------
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
----
respect to the payment of dividends and the distribution of assets, junior
to all series of any other class of the Company's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the
---------
Company shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
A-7
<PAGE> 16
IN WITNESS WHEREOF, this Certificate of Designations is executed
on behalf of the Company by its Vice President and attested by its
--------------
Assistant Secretary this 29th day of January , 1990.
---- ------------
/s/ J.H. Hinshaw JRB
--------------------------------------
J. H. Hinshaw, Vice President
Attest:
/s/ J.R. Bley, Jr.
- - ---------------------------
Assistant Secretary
A-8
<PAGE> 1
EXHIBIT 23
CONSENT OF COMPANY COUNSEL
I hereby consent to the incorporation by reference in Monsanto
Company's Registration Statements on Form S-8 (Nos. 2-36636, 2-76696,
2-90152, 33-13197, 33-21030, 33-39704, 33-39705, 33-39706, 33-39707,
33-49717, 33-53363, 33-53365, 33-53367, 333-02783, 333-02961, and
333-02963) and on Form S-3 (No. 33-60189) of the reference to Company
counsel in Note 6 to the Notes to Financial Statements in the Company's
Form 10-Q Report for the quarter ended March 31, 1996. In giving this
consent I do not thereby admit that I am within the category of persons
whose consent is required under Section 7 of the Securities Act of
1933.
/s/ KARL R. BARNICKOL
KARL R. BARNICKOL
Associate General Counsel
Monsanto Company
Saint Louis, Missouri
May 14, 1996
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF CONSOLIDATED INCOME OF MONSANTO COMPANY AND SUBSIDIARIES FOR THE
THREE MONTHS ENDED MARCH 31, 1996, AND THE STATEMENT OF CONSOLIDATED
FINANCIAL POSITION AS OF MARCH 31, 1996. SUCH INFORMATION IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 145
<SECURITIES> 0
<RECEIVABLES> 2,172
<ALLOWANCES> 0
<INVENTORY> 1,355
<CURRENT-ASSETS> 4,600
<PP&E> 7,317
<DEPRECIATION> 4,468
<TOTAL-ASSETS> 11,062
<CURRENT-LIABILITIES> 3,385
<BONDS> 1,630
<COMMON> 329
0
0
<OTHER-SE> 3,491
<TOTAL-LIABILITY-AND-EQUITY> 11,062
<SALES> 2,304
<TOTAL-REVENUES> 2,304
<CGS> 1,187
<TOTAL-COSTS> 1,187
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40
<INCOME-PRETAX> 382
<INCOME-TAX> 122
<INCOME-CONTINUING> 260
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 260
<EPS-PRIMARY> 2.17
<EPS-DILUTED> 0
<FN>
RECEIVABLES ARE STATED NET OF ALLOWANCES OF $56.
</TABLE>
<PAGE> 1
EXHIBIT 99
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
---------------- ----------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before provision for income
taxes........................... $382 $337 $1,087 $ 895 $729 $(174)<F*> $354<F*>
Add
Fixed charges.................. 52 54 245 182 184 231 233
Less capitalized interest...... (1) (2) (11) (10) (12) (16) (24)
Dividends from affiliated
companies..................... 2 - 9 2 5 5 5
Less equity income (add equity
loss) of affiliated companies... (9) (11) (17) (21) (20) (1) (3)
---- ---- ------ ------ ---- ----- ----
Income as adjusted........... $444 $378 $1,313 $1,048 $886 $ 45 $565
---- ---- ------ ------ ---- ----- ----
Fixed charges
Interest expense............... $ 40 $ 42 $ 190 $ 131 $129 $ 169 $166
Capitalized interest........... 1 2 11 10 12 16 24
Portion of rents representative
of interest factor............ 11 10 44 41 43 46 43
---- ---- ------ ------ ---- ----- ----
Fixed charges................ $ 52 $ 54 $ 245 $ 182 $184 $ 231 $233
---- ---- ------ ------ ---- ----- ----
Ratio of earnings to fixed
charges......................... 8.54 7.00 5.36 5.76 4.82 0.19 2.42
---- ---- ---- ---- ---- ---- ----
<FN>
- - -----
<F*>Includes restructuring and other unusual items of $699 million and $457
million in 1992 and 1991, respectively. Excluding restructuring and other
unusual items, the ratio of earnings to fixed charges would have been
3.22 and 4.39, in 1992 and 1993, respectively. The ratio was not
materially affected by the restructuring and other unusual items in
1995, 1994 and 1993.
</TABLE>
