MONSANTO CO, SC 14D1, 1997-04-07

MONSANTO CO
SC 14D1, 1997-04-07
CHEMICALS & ALLIED PRODUCTS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 1997
================================================================================
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
------------------------

SCHEDULE 14D-1
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)

SCHEDULE 13D
(AMENDMENT NO. 6)
(PURSUANT TO SECTION 13(D) OF THE SECURITIES EXCHANGE ACT OF 1934)

CALGENE, INC.
(NAME OF ISSUER)

MONSANTO ACQUISITION COMPANY, INC.
MONSANTO COMPANY
(NAME OF PERSONS FILING STATEMENT)

COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS OF SECURITIES)

129598 10 8
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------

R. WILLIAM IDE, III, ESQ.
MONSANTO COMPANY & MONSANTO ACQUISITION COMPANY, INC.
800 N. LINDBERGH BOULEVARD
ST. LOUIS, MISSOURI 63167
(314) 694-1000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF PERSONS FILING STATEMENT)

COPY TO:

ERIC S. ROBINSON, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000

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

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
CALCULATION OF FILING FEE
<S> <C>
- ------------------------------------------------------------------------------------------------------------------
TRANSACTION VALUATION AMOUNT OF FILING FEE
$242,759,368.00* $48,553.00**
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

* For purposes of fee calculation only. The total transaction value is based
on 66,741,035 Shares outstanding as of April 2, 1997 less 36,396,114 Shares
owned by Parent and Purchaser, multiplied by the offer price of $8.00 per
Share.

** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934 equals 1/50 of 1% of the
value of the shares to be purchased.

[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2).

Amount of Previously Paid: N/A Filing Parties: N/A
Form of Registration No.: N/A Date Filed: N/A
================================================================================
<PAGE> 2

14D-1
CUSIP NO. 129598 10 8

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. NAME OF REPORTING PERSONS
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MONSANTO COMPANY: 43-0420020
- --------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) [ ] (b) [ ] N/A
- --------------------------------------------------------------------------------------------------------
3. SEC USE ONLY

- --------------------------------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(e) OR 2(f)

N/A [ ]
- --------------------------------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,396,114
- --------------------------------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES

N/A [ ]
- --------------------------------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
54.5%
- --------------------------------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3

14D-1
CUSIP NO. 129598 10 8

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. NAME OF REPORTING PERSONS
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MONSANTO ACQUISITION COMPANY, INC.: PENDING
- --------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) [ ] (b) [ ] N/A
- --------------------------------------------------------------------------------------------------------
3. SEC USE ONLY

- --------------------------------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(e) OR 2(f)

INTRODUCTION

This Tender Offer Statement on Schedule 14D-1 and Amendment No. 6 to
Schedule 13D (this "Statement") relates to the offer by Monsanto Acquisition
Company, Inc. ("Purchaser"), a Delaware corporation and a wholly owned
subsidiary of Monsanto Company, a Delaware corporation ("Parent"), to purchase
all outstanding shares of common stock, par value $.001 per share (the
"Shares"), of Calgene, Inc., a Delaware corporation (the "Company"), at a price
of $8.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated as of April 7, 1997 (the
"Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively. The Offer is being made pursuant to an Agreement and
Plan of Merger, dated as of March 31, 1997, by and among Parent, Purchaser and
the Company, which provides, among other things, that as promptly as practicable
after the satisfaction or, if permissible, waiver of the conditions set forth
therein, Purchaser will be merged with and into the Company, with the Company
continuing as the surviving corporation, and each issued and outstanding Share
(other than any Shares held in the treasury of the Company or owned by
Purchaser, Parent or any subsidiary of Parent or the Company, and other than
Shares held by stockholders who shall not have voted in favor of the Merger or
consented thereto in writing and who shall have demanded properly in writing
appraisal for such Shares in accordance with Section 262 of the General
Corporation Law of the State of Delaware) will be converted into the right to
receive in cash, without interest, an amount equal to the price paid per Share
in the Offer.

The information contained in this Statement concerning the Company,
including, without limitation, information concerning the background of the
transaction, the deliberations, approvals and recommendations of the Special
Committee (as defined in the Offer to Purchase) and the Board of Directors of
the Company in connection with the transaction, the opinion of the Special
Committee's financial advisor, and the Company's capital structure and
historical and projected financial information, was supplied by the Company.
Parent and Purchaser take no responsibility for the accuracy of such
information.

ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.

(a) The name of the subject company is Calgene, Inc., a Delaware
corporation (the "Company"), which has its principal executive offices at 1920
Fifth Street, Davis, California 95616.

(b) The class of equity securities being sought is all the outstanding
shares of common stock, par value $.001 per share (the "Shares"), of the
Company. The information set forth in the Offer to Purchase under "INTRODUCTION"
is incorporated herein by reference.

(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in the Offer to Purchase under "THE OFFER -- Price Range of the
Shares" is incorporated herein by reference.

ITEM 2. IDENTITY AND BACKGROUND.

(a)-(d) and (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of each of Purchaser and Parent,
and the information concerning the name, business address, present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment or occupation is
conducted, material occupations, positions, offices or employments during the
last five years and citizenship of each of the executive officers and directors
of Purchaser and Parent are set forth in the Offer to Purchase under
"INTRODUCTION", "THE OFFER -- Certain Information Concerning Purchaser and
Parent" and in Schedule I and are incorporated herein by reference.

(e)-(f) During the last five years, none of Purchaser, Parent, nor, to the
best knowledge of Purchaser and Parent, any of the persons listed in Schedule I
of the Offer to Purchase has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is
<PAGE> 5

subject to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.

ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.

(a) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- The
Merger Agreement", "SPECIAL FACTORS -- Interests of Certain Persons in the Offer
and the Merger", "THE OFFER -- Certain Information Concerning Purchaser and
Parent" and "THE OFFER -- Intercompany Arrangements Between Parent and the
Company" is incorporated herein by reference.

(b) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS -- Purpose and Structure of the Offer and the Merger; Reasons
of Parent and Purchaser for the Offer and the Merger", "SPECIAL FACTORS -- Plans
for the Company After the Offer and the Merger; Certain Effects of the Offer",
"SPECIAL FACTORS -- The Merger Agreement", "THE OFFER -- Certain Information
Concerning the Company" and "THE OFFER -- Certain Information Concerning
Purchaser and Parent" is incorporated herein by reference.

ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a)-(b) The information set forth in the Offer to Purchase under "THE
OFFER -- Financing of the Offer and the Merger" is incorporated herein by
reference.

ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.

(a)-(e) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS -- Purpose and Structure of the Offer and the Merger; Reasons
of Parent and Purchaser for the Offer and the Merger", "SPECIAL FACTORS -- Plans
for the Company After the Offer and the Merger; Certain Effects of the Offer"
and "SPECIAL FACTORS -- The Merger Agreement" is incorporated herein by
reference.

(f)-(g) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- Plans for the Company After the Offer and the Merger; Certain Effects
of the Offer" and "THE OFFER -- Effect of the Offer on the Market for the
Shares, NASDAQ Quotation and Exchange Act Registration" is incorporated herein
by reference.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

(a) The information set forth in the Offer to Purchase under "THE
OFFER -- Certain Information Concerning Purchaser and Parent" is incorporated
herein by reference.

(b) Not applicable.

ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.

The information set forth in the Offer to Purchase under "INTRODUCTION",
"SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL
FACTORS -- Purpose and Structure of the Offer and the Merger; Reasons of Parent
and Purchaser for the Offer and the Merger", "SPECIAL FACTORS -- Plans for the
Company After the Offer and the Merger; Certain Effects of the Offer", "SPECIAL
FACTORS -- The Merger Agreement" and "THE OFFER -- Certain Information
Concerning Purchaser and Parent" and "THE OFFER -- Intercompany Agreements
between Parent and the Company" is incorporated herein by reference.
<PAGE> 6

ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

The information set forth in the Offer to Purchase under "THE OFFER -- Fees
and Expenses" is incorporated herein by reference.

ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.

Not applicable.

ITEM 10. ADDITIONAL INFORMATION.

(a) Not applicable.

(b)-(c) and (e) The information set forth in the Offer to Purchase under
"THE OFFER -- Certain Legal Matters" is incorporated herein by reference.

(d) The information set forth in the Offer to Purchase under "THE
OFFER -- Effect of the Offer on the Market for the Shares, NASDAQ Quotation and
Exchange Act Registration" is incorporated herein by reference.

(f) The information set forth in the Offer to Purchase, dated as of April
7, 1997, and the related Letter of Transmittal, and the Agreement and Plan of
Merger, dated as of March 31, 1997, by and among Parent, Purchaser and the
Company, copies of which are attached hereto as Exhibits (a)(1), (a)(2) and
(c)(1), respectively, is incorporated herein by reference.

ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

<TABLE>
<S> <C>
(a)(1) Form of Offer to Purchase, dated April 7, 1997.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees to Clients.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on April 7, 1997.
(a)(8) Text of Joint Press Release, dated April 1, 1997, issued by Calgene, Inc. and
Monsanto Company (incorporated herein by reference to Exhibit 3 to the Schedule
13D (Amendment No. 5) filed by Monsanto Company with the Securities and Exchange
Commission ("SEC") on April 2, 1997).
(a)(9) Text of Press Release, dated April 7, 1997, issued by Monsanto Company.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of March 31, 1997, by and among Monsanto
Company, Monsanto Acquisition Company, Inc. and Calgene, Inc. (incorporated
herein by reference to Exhibit 1 to the Schedule 13D (Amendment No. 5) filed by
Monsanto Company with the SEC on April 2, 1997).
(c)(2) Amendment to the Amended and Restated Stockholders Agreement, dated as of March
31, 1997, by and between Monsanto Company and Calgene, Inc. (incorporated herein
by reference to Exhibit 2 to the Schedule 13D (Amendment No. 5) filed by Monsanto
Company with the SEC on April 2, 1997).
</TABLE>
<PAGE> 7

<TABLE>
<S> <C>
(c)(3) Agreement and Plan of Reorganization, dated as of October 13, 1995, between
Monsanto Company and Calgene, Inc. (A)
(c)(4) Stock Purchase Agreement, dated as of September 27, 1996, between Monsanto
Company and Calgene, Inc. (B)
(c)(5) Amended and Restated Stockholders Agreement, dated as of November 12, 1996,
between Monsanto Company and Calgene, Inc. (B)
(c)(6) Stockholders Agreement, dated as of March 31, 1996, between Monsanto Company and
Calgene, Inc. (A)
(c)(7) Calgene Credit Facility Agreement, dated as of March 31, 1996, between Calgene,
Inc. and Monsanto Company. (A)
(c)(8) Gargiulo Credit Facility Agreement, dated as of March 31, 1996, between Calgene,
Inc. and Monsanto Company. (A)
(c)(9) Complaint filed January 29, 1997, in Obstfeld v. Salquist, et al.
(c)(10) Complaint filed January 29, 1997, in Siegel v. Calgene, Inc., et al.
(c)(11) Complaint filed January 29, 1997, in Susser v. Kunimoto, et al.
(c)(12) Complaint filed January 29, 1997, in Elstein v. Monsanto Company, et al.
(c)(13) Complaint filed January 29, 1997, in Manson v. Fortune, et al.
(c)(14) Complaint filed January 30, 1997, in Settle v. Monsanto Company, et al.
(c)(15) Complaint filed January 31, 1997, in Glickberg v. Monsanto Company, et al.
(c)(16) Complaint filed February 5, 1997, in Lewis v. Monsanto Company, et al.
(c)(17) Order of Consolidation, dated March 10, 1997.
(c)(18) Memorandum of Understanding, dated March 31, 1997.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>

- ---------------
(A) Incorporated herein by reference to the Registration Statement on Form S-4,
filed by the Company with the SEC on February 6, 1996.

(B) Incorporated herein by reference to the Transition Report on Form 10-K for
the six-month period ended December 31, 1996, filed by the Company with the
SEC on March 31, 1997.
<PAGE> 8

SIGNATURES

After due inquiry and to the best of his knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

MONSANTO COMPANY

By: /s/ HENDRIK A. VERFAILLIE
------------------------------------
Name: Hendrik A. Verfaillie
Title: Executive Vice President

MONSANTO ACQUISITION COMPANY, INC.

By: /s/ HENDRIK A. VERFAILLIE
------------------------------------
Name: Hendrik A. Verfaillie
Title: President
Dated: April 7, 1997
<PAGE> 9

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------------------------------------------------------------------------------
<S> <C>
(a)(1) Form of Offer to Purchase, dated April 7, 1997.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees to Clients.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on April 7, 1997.
(a)(8) Text of Joint Press Release, dated April 1, 1997, issued by Calgene, Inc. and
Monsanto Company (incorporated herein by reference to Exhibit 3 to the Schedule 13D
(Amendment No. 5) filed by Monsanto Company with the SEC on April 2, 1997).
(a)(9) Text of Press Release, dated April 7, 1997, issued by Monsanto Company.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of March 31, 1997, by and among Monsanto
Company, Monsanto Acquisition Company, Inc. and Calgene, Inc. (incorporated herein
by reference to Exhibit 1 to the Schedule 13D (Amendment No. 5) filed by Monsanto
Company with the SEC on April 2, 1997).
(c)(2) Amendment to the Amended and Restated Stockholders Agreement, dated as of March 31,
1997, by and between Monsanto Company and Calgene, Inc. (incorporated herein by
reference to Exhibit 2 to the Schedule 13D (Amendment No. 5) filed by Monsanto
Company with the SEC on April 2, 1997).
(c)(3) Agreement and Plan of Reorganization, dated as of October 13, 1995, between
Monsanto Company and Calgene, Inc. (A)
(c)(4) Stock Purchase Agreement, dated as of September 27, 1996, between Monsanto Company
and Calgene, Inc. (B)
(c)(5) Amended and Restated Stockholders Agreement, dated as of November 12, 1996, between
Monsanto Company and Calgene, Inc. (B)
(c)(6) Stockholders Agreement, dated as of March 31, 1996, between Monsanto Company and
Calgene, Inc. (A)
(c)(7) Calgene Credit Facility Agreement, dated as of March 31, 1996, between Calgene,
Inc. and Monsanto Company. (A)
(c)(8) Gargiulo Credit Facility Agreement, dated as of March 31, 1996, between Calgene,
Inc. and Monsanto Company. (A)
(c)(9) Complaint filed January 29, 1997, in Obstfeld v. Salquist, et al.
(c)(10) Complaint filed January 29, 1997, in Siegel v. Calgene, Inc., et al.
(c)(11) Complaint filed January 29, 1997, in Susser v. Kunimoto, et al.
(c)(12) Complaint filed January 29, 1997, in Elstein v. Monsanto Company, et al.
(c)(13) Complaint filed January 29, 1997, in Manson v. Fortune, et al.
(c)(14) Complaint filed January 30, 1997, in Settle v. Monsanto Company, et al.
(c)(15) Complaint filed January 31, 1997, in Glickberg v. Monsanto Company, et al.
(c)(16) Complaint filed February 5, 1997, in Lewis v. Monsanto Company, et al.
(c)(17) Order of Consolidation, dated March 10, 1997.
(c)(18) Memorandum of Understanding, dated March 31, 1997.
(d) Not applicable.
</TABLE>
<PAGE> 10

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------------------------------------------------------------------------------
<S> <C>
(e) Not applicable.
(f) Not applicable.
</TABLE>

- ---------------
(A) Incorporated herein by reference to the Registration Statement on Form S-4,
filed by the Company with the SEC on February 6, 1996.

(B) Incorporated herein by reference to the Transition Report on Form 10-K for
the six-month period ended December 31, 1996, filed by the Company with the
SEC on March 31, 1997.

<PAGE> 1

OFFER TO PURCHASE FOR CASH

ALL OUTSTANDING SHARES OF COMMON STOCK
OF

CALGENE, INC.
AT

$8.00 NET PER SHARE
BY

MONSANTO ACQUISITION COMPANY, INC.
A WHOLLY OWNED SUBSIDIARY OF

MONSANTO COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, MAY 2, 1997, UNLESS THE OFFER IS EXTENDED.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (I) NOT LESS
THAN A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK, PAR VALUE
$.001 PER SHARE (THE "SHARES"), OF CALGENE, INC. (THE "COMPANY") OTHER THAN
SHARES OWNED BY MONSANTO COMPANY ("PARENT") (THE "MAJORITY-OF-THE-MINORITY
CONDITION") AND (II) AT LEAST THE NUMBER OF SHARES THAT WHEN ADDED TO THE SHARES
OWNED BY PARENT SHALL CONSTITUTE 90% OF THE SHARES THEN OUTSTANDING ON A FULLY
DILUTED BASIS (AS DEFINED HEREIN) (THE "NINETY PERCENT CONDITION"). THE
MAJORITY-OF-THE-MINORITY CONDITION MAY NOT BE WAIVED WITHOUT THE CONSENT OF A
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF THE COMPANY. PURCHASER HAS AGREED
TO WAIVE THE NINETY PERCENT CONDITION UNDER CERTAIN CIRCUMSTANCES DESCRIBED
HEREIN. SEE THE INTRODUCTION AND "THE OFFER -- CERTAIN CONDITIONS OF THE OFFER".

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

THE BOARD OF DIRECTORS OF THE COMPANY, BY UNANIMOUS VOTE OF ALL DIRECTORS
PRESENT AND VOTING (WITH ALL DIRECTORS WHO ARE EMPLOYEES OF PARENT ABSTAINING),
BASED UPON, AMONG OTHER THINGS, THE UNANIMOUS RECOMMENDATION AND APPROVAL OF A
SPECIAL COMMITTEE OF THE DIRECTORS OF THE COMPANY WHO ARE NEITHER DESIGNEES OF
PARENT NOR OFFICERS OF THE COMPANY, HAS DETERMINED THAT EACH OF THE OFFER AND
THE MERGER (AS DEFINED HEREIN) IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY (OTHER THAN PARENT AND PURCHASER), AND RECOMMENDS
THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER. SEE "SPECIAL FACTORS -- RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND THE
COMPANY BOARD; FAIRNESS OF THE OFFER AND THE MERGER".

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

IMPORTANT

Stockholders who desire to tender all or any portion of their Shares should
either (i) complete and sign the Letter of Transmittal (or facsimile thereof)
that accompanies this Offer to Purchase in accordance with the instructions in
such Letter of Transmittal, have their signature thereon guaranteed if required
by Instruction 1 to such Letter of Transmittal, and mail or deliver the Letter
of Transmittal (or such facsimile) together with the certificates ("Share
Certificates") representing the tendered Shares and any other required documents
to The First National Bank of Boston (the "Depositary"), or tender their Shares
pursuant to the procedures for book-entry transfer set forth under "THE
OFFER -- Procedure for Accepting the Offer and Tendering Shares" or (ii) request
their broker, dealer, bank, trust company or other nominee to effect the
transaction for them. Stockholders having Shares registered in the name of a
broker, dealer, bank, trust company or other nominee must contact such broker,
dealer, bank, trust company or other nominee if they desire to tender such
Shares.

Stockholders who desire to tender their Shares and whose Share
Certificate(s) are not immediately available, or who cannot comply in a timely
manner with the procedures for book-entry transfer, or who cannot deliver all
required documents to the Depositary prior to the expiration of the Offer, may
tender such Shares by following the procedures for guaranteed delivery set forth
under "THE OFFER -- Procedure for Accepting the Offer and Tendering Shares".

Questions and requests for assistance may be directed to Georgeson & Company
Inc. (the "Information Agent") or Goldman, Sachs & Co. (the "Dealer Manager") at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter
of Transmittal and other related materials may be obtained from the Information
Agent or the Dealer Manager.
------------------------

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
------------------------

The Dealer Manager for the Offer is:

GOLDMAN, SACHS & CO.
The date of this Offer to Purchase is April 7, 1997.
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION.......................................................................... 1
SPECIAL FACTORS....................................................................... 4
1. Background of the Offer and the Merger.......................................... 4
2. Recommendations of the Special Committee and the Company Board; Fairness of the
Offer and the Merger............................................................ 8
3. Opinion of Financial Advisor to the Special Committee........................... 10
4. Position of Parent and Purchaser Regarding the Fairness of the Offer and the
Merger.......................................................................... 15
5. Purpose and Structure of the Offer and the Merger; Reasons of Parent and
Purchaser for the Offer and the Merger.......................................... 15
6. Plans for the Company After the Offer and the Merger; Certain Effects of the
Offer and the Merger............................................................ 17
7. Rights of Stockholders in the Merger............................................ 17
8. The Merger Agreement............................................................ 18
9. Interests of Certain Persons in the Offer and the Merger........................ 23
10. Share Ownership by Parent and Purchaser......................................... 24
11. Beneficial Ownership of Shares.................................................. 25
THE OFFER............................................................................. 26
1. Terms of the Offer.............................................................. 26
2. Procedure for Accepting the Offer and Tendering Shares.......................... 27
3. Withdrawal Rights............................................................... 29
4. Acceptance for Payment and Payment for Shares................................... 30
5. Certain Federal Income Tax Consequences......................................... 31
6. Price Range of the Shares....................................................... 32
7. Certain Information Concerning the Company...................................... 33
8. Certain Information Concerning Purchaser and Parent............................. 36
9. Financing of the Offer and the Merger........................................... 37
10. Intercompany Arrangements between Parent and the Company........................ 37
11. Dividends and Distributions..................................................... 43
12. Effect of the Offer on the Market for the Shares; NASDAQ Quotation and Exchange
Act Registration................................................................ 44
13. Certain Conditions of the Offer................................................. 45
14. Certain Legal Matters........................................................... 46
15. Fees and Expenses............................................................... 48
16. Miscellaneous................................................................... 49
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
SCHEDULE II DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
SCHEDULE III AUDITED FINANCIAL STATEMENTS (AND RELATED NOTES) FOR THE COMPANY FOR THE
SIX-MONTH TRANSITIONAL PERIOD ENDED DECEMBER 31, 1996 AND THE FISCAL YEARS
ENDED JUNE 30, 1996 AND JUNE 30, 1995

ANNEX A OPINION OF MONTGOMERY SECURITIES
ANNEX B RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE DGCL
</TABLE>
<PAGE> 3

TO THE STOCKHOLDERS OF CALGENE, INC.:

INTRODUCTION

Monsanto Acquisition Company, Inc. ("Purchaser"), a Delaware corporation
and a wholly owned subsidiary of Monsanto Company, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.001 per share (the "Shares"), of Calgene, Inc., a Delaware
corporation (the "Company"), at a price of $8.00 per Share, net to the seller in
cash, without interest (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and the related Letter of
Transmittal (this Offer to Purchase and the related Letter of Transmittal,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer").

Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer. Parent or Purchaser will pay all fees and expenses of
Goldman, Sachs & Co. ("Goldman Sachs"), as Dealer Manager (in such capacity, the
"Dealer Manager"), The First National Bank of Boston, as Depositary (the
"Depositary"), and Georgeson & Company Inc., as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See "THE
OFFER -- Fees and Expenses".

THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD"), BY UNANIMOUS
VOTE OF ALL DIRECTORS PRESENT AND VOTING (WITH ALL DIRECTORS WHO ARE EMPLOYEES
OF PARENT ABSTAINING), BASED UPON, AMONG OTHER THINGS, THE UNANIMOUS
RECOMMENDATION AND APPROVAL OF A SPECIAL COMMITTEE (THE "SPECIAL COMMITTEE") OF
DIRECTORS OF THE COMPANY WHO ARE NEITHER DESIGNEES OF PARENT NOR OFFICERS OF THE
COMPANY, HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED
HEREIN) IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY (OTHER THAN PARENT AND PURCHASER), AND RECOMMENDS THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. SEE "SPECIAL
FACTORS -- RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND THE COMPANY BOARD;
FAIRNESS OF THE OFFER AND THE MERGER".

MONTGOMERY SECURITIES ("MONTGOMERY SECURITIES"), FINANCIAL ADVISOR TO THE
SPECIAL COMMITTEE, HAS DELIVERED TO THE SPECIAL COMMITTEE AND TO THE COMPANY
BOARD ITS WRITTEN OPINION, DATED MARCH 31, 1997, THAT THE $8.00 PER SHARE
CONSIDERATION TO BE RECEIVED BY HOLDERS OF THE COMPANY'S COMMON STOCK (OTHER
THAN PARENT AND ITS AFFILIATES) PURSUANT TO THE OFFER AND THE MERGER WAS FAIR TO
SUCH STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW, AS OF THE DATE OF SUCH
OPINION.

The Company has filed with the Securities and Exchange Commission (the
"SEC") a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"), which is being mailed to stockholders herewith.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (I) NOT LESS
THAN A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OTHER THAN SHARES OWNED BY
PARENT (THE "MAJORITY-OF-THE-MINORITY CONDITION") AND (II) AT LEAST THE NUMBER
OF SHARES THAT WHEN ADDED TO THE SHARES OWNED BY PARENT SHALL CONSTITUTE 90% OF
THE SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (AS DEFINED HEREIN) (THE
"NINETY PERCENT CONDITION"). THE MAJORITY-OF-THE-MINORITY CONDITION MAY NOT BE
WAIVED WITHOUT THE CONSENT OF THE SPECIAL COMMITTEE. PURCHASER HAS AGREED TO
WAIVE THE NINETY PERCENT CONDITION UNDER CERTAIN CIRCUMSTANCES DESCRIBED IN THIS
OFFER TO PURCHASE. SEE "THE OFFER -- CERTAIN CONDITIONS OF THE OFFER". AS OF
APRIL 7, 1997, PARENT OWNS 36,396,114 SHARES, CONSTITUTING APPROXIMATELY 54.5%
OF THE CURRENTLY OUTSTANDING SHARES.

The Company has advised Purchaser that as of March 17, 1997, (i) 66,737,327
Shares were issued and outstanding, (ii) no Shares were held in the treasury of
the Company, (iii) 4,855,755 Shares were authorized and reserved for future
issuance pursuant to outstanding stock options granted pursuant to the Company's
stock option plans ("Company Options"), (iv) approximately 21,230 Shares were
authorized and reserved for
<PAGE> 4

future issuance pursuant to the Company's employee stock purchase plan and (v)
1,000 Preferred Shares, designated Series A Redeemable, Non-Voting Preferred
Stock, par value $.001 per share ("Series A Preferred Shares"), were issued and
outstanding, 499 of which are owned by Parent as of April 7, 1997. Pursuant to
the Merger Agreement (as defined herein), the Company has agreed to redeem all
the Series A Preferred Shares not later than the day prior to the initial
expiration date of the Offer. The Company has further advised Purchaser that as
of April 2, 1997, there were approximately 2,935 holders of record of the
Shares. Parent currently owns 36,396,114 Shares, (i) 30,161,114 of which Parent
acquired on March 31, 1996 in connection with the Reorganization Agreement (as
defined herein), less 15,000 Shares sold on May 17, 1996, and (ii) 6,250,000 of
which Parent acquired on November 12, 1996 pursuant to the Stock Purchase
Agreement (as defined herein). The remaining issued and outstanding Shares are
not held by Parent or Purchaser (the "Non-Affiliated Shares"). See "SPECIAL
FACTORS -- Background of the Offer and the Merger"). For purposes of the Offer,
"Fully Diluted Basis" means the number of Shares that would be outstanding
assuming the exercise of all outstanding Company Options and all options to
purchase Shares that were issued pursuant to the Company's employee stock
purchase plan in each case that are exercisable (or will be exercisable within
five business days) for less than the Offer Price (unless the holder has elected
to exchange such option for cash in the Merger). Accordingly, based on
information available as of the date hereof, the Majority-of-the-Minority
Condition will be satisfied if approximately 15.2 million Non-Affiliated Shares
are validly tendered in the Offer and not withdrawn, and the Ninety Percent
Condition will be satisfied if approximately 25.0 million Non-Affiliated Shares
are validly tendered in the Offer and not withdrawn (assuming that none of the
holders of options to purchase Shares included in the calculation of Fully
Diluted Basis elect to receive cash in exchange for the cancellation of such
options, as described under "SPECIAL FACTORS -- The Merger Agreement").

The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 31, 1997, by and among Parent, Purchaser and the Company (the
"Merger Agreement"). The Merger Agreement provides that as soon as practicable
after the purchase of Shares pursuant to the Offer and the satisfaction of the
other conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the General Corporation Law of the State of Delaware (the
"DGCL"), Purchaser will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and will become a wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share issued and outstanding immediately prior to the Effective
Time (other than Shares held in the treasury of the Company, Shares owned by
Parent, Purchaser or any subsidiary of Parent or the Company, or Shares held by
stockholders who shall have properly demanded and perfected appraisal rights
under Section 262 of the DGCL) will be cancelled and converted automatically
into the right to receive in cash, without interest, an amount equal to the
price paid per Share in the Offer (the "Merger Consideration"). The Merger
Agreement is more fully described under "SPECIAL FACTORS -- The Merger
Agreement".

The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, which, if the Ninety Percent Condition is waived and Parent
and Purchaser do not own at least 90% of the outstanding Shares upon
consummation of Offer, would include approval and adoption of the Merger
Agreement by the affirmative vote of holders of a majority of the outstanding
Shares in accordance with the Company's certificate of incorporation and the
DGCL. See "SPECIAL FACTORS -- The Merger Agreement". As of April 7, 1997, Parent
owns 36,396,114 Shares, representing approximately 54.5% of the outstanding
Shares. If the Offer is consummated, Parent and Purchaser will have sufficient
voting power to approve and adopt the Merger Agreement and the Merger without
the vote of any other stockholder. Consummation of the Offer is conditioned on,
among other things, satisfaction or waiver of the Majority-of-the-Minority
Condition, which cannot be waived by Purchaser without the consent of the
Special Committee. Pursuant to the Merger Agreement, the purchase by Purchaser
of all Shares validly tendered in the Offer and not withdrawn is a condition to
the Merger.

Under the DGCL, if after consummation of the Offer Purchaser owns at least
90% of the Shares then outstanding, Purchaser will be able to cause the Merger
to occur without a vote of the Company's stockholders. In such event, Parent,
Purchaser and the Company have agreed to take all necessary and appropriate
action to cause the Merger to become effective in accordance with the DGCL as
promptly as

2
<PAGE> 5

practicable after consummation of the Offer without a meeting of the
stockholders of the Company. If, however, after consummation of the Offer
Purchaser owns less than such number of Shares, a vote of the Company's
stockholders will be required under the DGCL to approve the Merger, and a
significantly longer period of time will be required to effect the Merger. See
"SPECIAL FACTORS -- Purpose and Structure of the Offer and the Merger; Reasons
of Parent and Purchaser for the Offer and the Merger", "SPECIAL FACTORS -- The
Merger Agreement" and "THE OFFER -- Certain Conditions of the Offer".

No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger regardless
of whether the Merger is consummated with or without a vote of the Company's
stockholders. See "SPECIAL FACTORS -- Rights of Stockholders in the Merger".

THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION ABOUT THE OFFER AND THE MERGER. STOCKHOLDERS ARE URGED TO
READ CAREFULLY THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL IN
THEIR ENTIRETY BEFORE MAKING ANY DECISION WITH RESPECT TO THE OFFER.

3
<PAGE> 6

SPECIAL FACTORS

1. BACKGROUND OF THE OFFER AND THE MERGER

The Company has advised Parent that, prior to October 1994, the Company
held discussions from time to time with various potential strategic partners in
an effort to gain access to new markets for its biotechnology products and to
license new technologies. In the course of such discussions, the Company
considered possible alliances, combinations and other transactions with various
companies, including companies both smaller and larger than the Company.

Reorganization Agreement. In October 1994, Roger H. Salquist, who was then
Chief Executive Officer of the Company, contacted Hendrik A. Verfaillie, an
Executive Vice President of Parent, and inquired as to Parent's interest in
exploring a strategic alliance with the Company. At subsequent meetings from
October 1994 through May 1995, Messrs. Salquist and Verfaillie, and their
respective financial advisors, discussed a variety of possible structures for
such an alliance, and in May 1995 the parties determined to focus on a structure
pursuant to which Parent would contribute cash, technology and its equity
interest in Tomato Investment Associates, Inc., a wholly owned subsidiary of
Monsanto, whose principal asset was the entire equity interest in Gargiulo L.P.
("Gargiulo") to the Company in exchange for an ownership interest in the
Company. Gargiulo is a grower, packager, marketer and distributor of tomatoes,
strawberries and other produce with operations in Florida, California, Puerto
Rico and Mexico. After negotiations that involved consideration of the specific
businesses, technologies and the amount of cash that would be contributed by
Parent, the parties determined that Parent would acquire approximately a 49%
interest in the Company.

Discussions continued, and on June 27, 1995, the Company and Parent entered
into a letter of intent with respect to the proposed reorganization. On October
5, 1995, acting on the recommendation of the Company's management and in view of
a fairness opinion delivered by Montgomery Securities, the Company Board
approved the Agreement and Plan of Reorganization (the "Reorganization
Agreement") and related Plan of Merger. Following approval of the Reorganization
Agreement by the Company's stockholders at a special meeting on March 25, 1996,
on March 31, 1996 Parent contributed its equity interest in Gargiulo, $30
million in cash and certain oils and produce related technology in exchange for
a 49.9% equity interest in the Company.

In connection with the Reorganization Agreement, a total of 30,161,114
Shares were issued to Parent having an aggregate value of approximately $144
million, or approximately $4.77 per Share, based on the $5.75 per Share closing
price on the day the Company's negotiations with Parent concluded but discounted
(based on an independent appraisal) to account for liquidity restrictions
imposed upon Parent in the transaction. On May 17, 1996, Parent sold 15,000
Shares to the revocable living trust of a director of Parent in consideration
for his services as a director of the Company, thereby reducing the number of
Shares held by Parent to 30,146,114.

Original Stockholders Agreement. In connection with the Reorganization
Agreement, the Company and Parent entered into a stockholders agreement, dated
as of March 31, 1996 (the "Original Stockholders Agreement"). The Original
Stockholders Agreement contained provisions relating to: (i) composition of the
boards of directors of the Company and Gargiulo; (ii) restrictions upon the
purchase of additional Shares by Parent; (iii) restrictions upon sales of Shares
by Parent; (iv) rights of Parent to require the registration of the Shares under
the Securities Act of 1933, as amended (the "Securities Act"); and (v) rights of
Parent to participate in future equity financings of the Company. The Original
Stockholders Agreement also required that certain actions of the Company be
approved by a majority of the Company Board, including (a) prior to the
occurrence of a "Trigger Event" (as defined therein), at least one Company
designee who is an "independent director" (as defined therein), and (b) after a
Trigger Event, at least two Company designees who are "independent directors";
however, fewer actions required such approval following a Trigger Event. The
Original Stockholders Agreement defined the term "Trigger Event" as the earlier
of any time that (x) Parent's equity ownership interest in the Company is at
least 55% or (y) the Company elects to convert certain borrowings made from
Parent into Shares and Parent's equity ownership interest is at least 50% after
such conversion.

4
<PAGE> 7

The restrictions upon the purchase of additional Shares by Parent contained
in the Original Stockholders Agreement contained an exception for, among other
things, a tender offer by Parent at a price approved by the disinterested
directors of the Company and based upon a fairness opinion delivered to the
Company Board by an investment banking firm. The Original Stockholders Agreement
did not contain any restrictions on Parent increasing its ownership of Shares
through open market purchases or otherwise after September 30, 1998.

Pursuant to the Original Stockholders Agreement, after consummation of the
Reorganization Agreement, the Company Board consisted of nine directors, of
which two were executive officers of the Company, three were designated by the
Company and four were designated by Parent.

Stock Purchase Agreement. On July 31, 1996, the Company and Parent
announced they had entered into a letter of intent ("Letter of Intent") pursuant
to which Parent agreed to purchase 6,250,000 newly issued Shares at a price of
$8.00 per Share. On September 27, 1996, the Company and Parent executed a
definitive Stock Purchase Agreement (the "Stock Purchase Agreement") with
respect to such transaction. Parent's purchase was conditioned upon, among other
things, (i) the approval by the holders of a majority of the Shares present or
represented at the Company's 1996 Annual Meeting of Stockholders, other than
Shares held by Parent, (ii) the execution of the Amended and Restated
Stockholders Agreement (described below) by the Company and Parent and (iii) the
execution and delivery of the Certificate of Amendment to the Restated
Certificate of Incorporation of the Company reflecting certain amendments to the
Original Stockholders Agreement.

In the Company's Proxy Statement relating to its 1996 Annual Meeting of
Stockholders (the "1996 Proxy Statement"), dated October 10, 1996, the Company
explained the reasons for entering into the Stock Purchase Agreement as follows:

In the year ended June 30, 1996, the Company incurred substantial
losses primarily in connection with the operation of its tomato business.
As of June 30, 1996, the Company had available cash and equivalents and
available for sale securities of $28.6 million and working capital of
negative $1.5 million.

The Company believes that significant additional funds are required to
pay down debt, fund its tomato operations, support the market introduction
of new cotton products and finance continued oils research and development.
The Board of Directors of Calgene believes that the proposed transaction
with Monsanto is on terms no less favorable to the Company than could be
obtained from an independent third party. The Board determined to seek
stockholder approval for the Monsanto Transaction because the transaction
will enable Monsanto to nominate a majority of the members of the Board of
Directors of Calgene. If the proposed transaction with Monsanto is not
approved at the Annual Meeting, Calgene is unable to predict whether it
will be able to obtain required financing on favorable terms, if at all.

The Company's stockholders approved the Stock Purchase Agreement at the
Annual Meeting on November 12, 1996, and Parent's purchase of 6,250,000 Shares
was consummated immediately thereafter.

Amended and Restated Stockholders Agreement. Pursuant to the Stock
Purchase Agreement, on November 12, 1996, following approval by the Company's
stockholders, the Company and Parent entered into an Amended and Restated
Stockholders Agreement (the "Restated Stockholders Agreement") which amended and
restated the Original Stockholders Agreement. Pursuant to the Restated
Stockholders Agreement, the composition of the Company Board changed to four
"independent directors" (three designated by the Company (collectively, the
"Company Directors") and one designated by Parent), the Chief Executive Officer
of the Company (designated by the Company Directors) and four additional
designees of Parent. Also, the definition of "Trigger Event" was amended so that
Parent's acquisition of Shares pursuant to the Stock Purchase Agreement
constituted a "Trigger Event", thereby significantly reducing the number of
Company actions requiring approval by two or more "independent directors" in
accordance with the otherwise unchanged provisions of the Original Stockholders
Agreement. Accordingly, actions requiring such approval following a Trigger
Event include (1) a merger, consolidation or acquisition constituting a
Substantial Part (defined as more than 10% of the Company's total consolidated
assets) of the Company, (2) sale, transfer, pledge or other disposal of a
Substantial Part of the Company (with certain exceptions); (3) establishment of
new committees of the Company Board or revision of delegation of authority to
existing committees; (4) election, appointment or removal of certain executive
officers; (5) approval of certain Company business plans; (6) any modification
of the agreements relating to the

5
<PAGE> 8

Reorganization Agreement; and (7) any transaction between the Company and Parent
(or their respective affiliates).

In connection with the execution of the Letter of Intent, Mr. Salquist
resigned as Chief Executive Officer of the Company and entered into an amendment
to his Change of Control Employment Agreement pursuant to which, among other
things, Mr. Salquist agreed to provide consulting services to the Company for a
12-month period. The Restated Stockholders Agreement amended the definition of
"independent director" to provide that, as long as Mr. Salquist continues to
otherwise qualify as an "independent director", Mr. Salquist would continue to
qualify as an "independent director" notwithstanding his previous employment by
the Company or his amended Change of Control Employment Agreement. See "SPECIAL
FACTORS -- Interests of Certain Persons in the Offer and the Merger".

Divestiture Discussions. From time to time over the past several months,
the Company's management has engaged in preliminary discussions with third
parties who have expressed an interest in acquiring the Company's Stoneville
Pedigreed Seed Company subsidiary ("Stoneville"), a cotton planting seed
company. In December 1996, a third party indicated an interest in acquiring
Stoneville for $50 million plus an unspecified royalty. Parent expressed its
view to members of the Company's management and the Company Board that
Stoneville was a valuable asset of the Company and should not be sold. In
January 1997, another third party expressed an interest in acquiring Stoneville
to the Company's management. At a meeting of the Company Board on March 6, 1997,
Parent's designees on the Company Board reiterated their view that it would not
be in the best interests of the Company or its stockholders to divest
Stoneville, and the Company Board did not authorize pursuing such discussions.
Following the announcement of the Acquisition Proposal (as defined herein),
Parent received inquiries regarding its willingness to sell assets of the
Company. Parent advised parties making such inquiries that it had no interest in
entering into negotiations with respect to any such sales at that time.

Acquisition Proposal. On January 24, 1997, representatives of Parent
discussed with Parent's Board of Directors strategic alternatives with respect
to Parent's investment in the Company, including the possibility of making a
proposal to the Company to acquire the Non-Affiliated Shares. On January 26, Mr.
Verfaillie contacted several directors of the Company to advise them of Parent's
consideration of a possible acquisition of the Non-Affiliated Shares. Mr.
Verfaillie also advised such directors, including Mr. Salquist, of Parent's
desire to enter into a non-competition agreement with Mr. Salquist in connection
with any such acquisition. No specific terms of a non-competition agreement were
discussed, no agreements or understandings were reached and discussions ceased
shortly after Parent's submission of its Acquisition Proposal.

On January 27, 1997, representatives of Parent advised the Company Board
that Parent was considering making a proposal to acquire the remaining Shares
not owned by Parent. On January 28, a special committee of the Board of
Directors of Parent authorized Parent to make a proposal (the "Acquisition
Proposal") to the Company Board to acquire all of the Shares for $7.25 per
Share. The Acquisition Proposal was conditioned upon the approval by a special
committee of disinterested directors of the Company Board. Parent advised the
Company of the Acquisition Proposal and issued a press release announcing the
Acquisition Proposal the same day.

Later that day, the Company announced that it had received the Acquisition
Proposal and that the Company Board had formed the Special Committee, consisting
of Messrs. Salquist, Howard D. Palefsky and Allen J. Vangelos (none of whom is a
designee of Parent or an officer of the Company), to consider the Acquisition
Proposal. The Company announced that the Special Committee had retained
Montgomery Securities to act as financial advisor and Venture Law Group to act
as legal counsel to the Special Committee.

On February 1, 1997, a representative of Montgomery Securities advised a
representative of Goldman Sachs, financial advisor to Parent, that the Special
Committee did not view $7.25 per Share to be an appropriate starting point for
negotiations in light of the $8.00 per Share paid by Parent in November 1996
pursuant to the Stock Purchase Agreement. Also in early February, legal counsel
to Parent, the Company and the Special Committee discussed certain legal issues
in connection with Parent's proposal.

6
<PAGE> 9

On February 14, 1997, a Montgomery Securities representative advised a
Goldman Sachs representative that the Special Committee believed a transaction
could be achieved at a price of $8.50 per Share. The representative stated that
it was the Special Committee's view that a price at or in excess of $8 per Share
would require approval or acceptance by holders of a majority of the Shares not
held by Parent, and that a transaction at a price below $8 per Share would
require approval or acceptance by holders of a supermajority of the Shares not
held by Parent.

During the week of February 24, 1997, a representative of Goldman Sachs
advised a representative of Montgomery Securities that Parent did not want to
subject a transaction to a stockholder vote that might delay consummation. The
Goldman Sachs representative stated that Parent was considering raising its bid
to a price below $8 per Share, but that the price it would be willing to pay in
a transaction with a stockholder vote would be less than in a transaction that
would not be subject to such contingency and delay.

On February 26 and 27, 1997, Mr. Salquist, Chairman of the Special
Committee, contacted Robert B. Shapiro, Chairman of the Board and Chief
Executive Officer of Parent, and Mr. Palefsky, another member of the Special
Committee, contacted John E. Robson, a director of Parent and one of Parent's
designees on the Company Board, to discuss Parent's willingness to increase the
price of its proposal.

On March 2, 1997, a representative of Goldman Sachs advised a
representative of Montgomery Securities that Parent could consider increasing
the price of its proposal to $8 per Share subject to at least a majority of the
Non-Affiliated Shares being tendered. The representative of Goldman Sachs
requested a prompt response, but indicated that the proposal would remain open
for a reasonable period in order to give the Special Committee adequate time in
which to properly evaluate it.

On March 6, 1997, the Special Committee met to consider Parent's proposal
and subsequently advised Parent that it would be prepared to recommend a
transaction at $8 per Share subject to agreement on the terms and conditions of
a definitive agreement. At this meeting, representatives of Montgomery
Securities indicated on a preliminary basis that they would be prepared to
deliver a fairness opinion with respect to the $8 per Share proposal.

On March 11, 1997, legal counsel for Parent delivered a draft merger
agreement and a proposed amendment to the Restated Stockholders Agreement to
legal counsel for the Special Committee, and over the following two weeks, the
parties and their representatives negotiated the terms of these agreements.
During this time, legal counsel for each of Parent, the Company and the Special
Committee also entered into discussions with legal counsel for the stockholder
plaintiffs with respect to a possible settlement of the putative class action
litigation that was commenced in the Delaware Court of Chancery following the
January 28, 1997 public announcement of the Acquisition Proposal. See "THE
OFFER -- Certain Legal Matters".

During the month of March, the members of the Special Committee had
numerous conversations with its legal counsel and financial advisor regarding
the progress of negotiations of the terms of the definitive agreements as well
as the settlement of the stockholder litigation. At the conclusion of this
process, the Special Committee reconfirmed its decision to recommend the
transaction to the Company Board.

On March 31, 1997, the defendants (including Parent, the Company, and
certain of their respective employees and/or directors) and the plaintiffs in
the putative class action litigation referred to above entered into a memorandum
of understanding reflecting their agreement in principle to settle the
litigation. The proposed settlement remains subject to drafting and execution,
and final court approval, of a definitive stipulation of settlement. See
"SPECIAL FACTORS -- Certain Legal Matters".

On March 31, 1997, the Company Board held a telephonic meeting to discuss
the Offer and the Merger and to receive any recommendation that the Special
Committee would be prepared to make to the Company Board. At this meeting,
Montgomery Securities summarized the presentation it had made to the Special
Committee at the Special Committee's March 6, 1997 meeting and rendered its
opinion, which it subsequently confirmed in writing, that the consideration to
be received by holders of the Company's common stock (other than Parent and its
affiliates) pursuant to the Offer and the Merger was fair to such stockholders
from a financial point of view, as of March 31, 1997. Following additional oral
presentations by representatives

7
<PAGE> 10

of legal counsel to the Special Committee regarding the terms and conditions of
the Merger Agreement, the Special Committee informed the Company Board that it
had unanimously determined that each of the Offer and the Merger is fair to, and
in the best interests of, the stockholders of the Company (other than Parent and
Purchaser), and that the Special Committee unanimously recommends that the
Company Board approve the Offer, the Merger, the Merger Agreement and the
amendment to the Restated Stockholders Agreement and that the Company's
stockholders accept the Offer and tender their Shares pursuant to the Offer.
Following discussion of the Special Committee's recommendation and further
discussion of the Offer, the Merger, the Merger Agreement and the amendment to
the Restated Stockholders Agreement, the Company Board, by unanimous vote of all
directors present and voting (with Messrs. Verfaillie, Fortune, Fraley and
Hogan, all of whom are employees of Parent, abstaining), (a) determined that
each of the Offer and the Merger is fair to, and in the best interests of, the
stockholders of the Company (other than Parent and Purchaser), (b) approved the
Offer and the Merger, (c) approved and adopted the Merger Agreement and the
amendment to the Restated Stockholders Agreement, and (d) recommended that the
stockholders of the Company (other than Parent or Purchaser) accept the Offer
and tender their Shares pursuant thereto.

At its meeting on March 31, a Special Committee of the Board of Directors
of Parent Regarding Agricultural Biotechnology Matters met to discuss the
proposed Offer and Merger and terms of the Merger Agreement and voted
unanimously to approve the Merger Agreement and the amendment to the Restated
Stockholders Agreement.

The Merger Agreement and the amendment to the Restated Stockholders
Agreement were executed on March 31, 1997, and Parent and the Company issued a
joint press release on April 1, 1997 announcing such execution.

On April 7, 1997, Purchaser commenced the Offer.

2. RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND THE COMPANY BOARD; FAIRNESS OF
THE OFFER AND THE MERGER

The Special Committee. The Special Committee has unanimously determined
that each of the Offer and the Merger is fair to, and in the best interests of,
the stockholders of the Company (other than Parent and Purchaser), and the
Special Committee unanimously recommends that the Company's stockholders accept
the Offer and tender their Shares pursuant to the Offer. In reaching these
determinations, the Special Committee considered the following factors, each of
which, in the view of the Special Committee, supported such determinations:

(i) the historical market prices and recent trading activity of the
Shares, including the fact that the $8.00 per Share cash consideration to
be received by the stockholders of the Company (other than Parent and
Purchaser) in the Offer and Merger represents a premium of approximately
45% over the reported closing price on the last full trading day preceding
the public announcement of the Acquisition Proposal by Parent, and a
premium of approximately 60% over the average closing price for both the
one-week and one-month period preceding such date;

(ii) the fact that the standstill provisions of the Restated
Stockholders Agreement that require the disinterested directors of the
Company to approve the acquisition of any additional Shares by Parent will
be in effect only until September 30, 1998, after which time Parent would
have the power under applicable state law to unilaterally cause a merger
between itself (or one of its subsidiaries) and the Company to be effected
without the consent of the disinterested directors of the Company or the
remaining stockholders of the Company (other than Parent and Purchaser);

(iii) the history of the negotiations between the Special Committee
and their representatives and Parent and its representatives, including (a)
the fact that the negotiations resulted in an increase in the price at
which Parent and Purchaser were prepared to acquire the Company's
outstanding Shares from $7.25 to $8.00 per Share, and (b) the Special
Committee's belief that Parent and Purchaser would not further increase the
Offer and that $8.00 per Share was the highest price that could be obtained
from Parent and Purchaser;

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<PAGE> 11

(iv) the opinion of Montgomery Securities that the consideration to be
received by holders of the Company's common stock (other than Parent and
its affiliates) pursuant to the Offer and the Merger was fair to such
stockholders from a financial point of view, as of March 31, 1997, and the
report and analysis presented by Montgomery Securities in connection
therewith;

(v) the effect of the Majority-of-the-Minority Condition that, without
the consent of the Special Committee, the Offer will not be consummated
unless at least a majority of the Non-Affiliated Shares are validly
tendered pursuant to the Offer and not properly withdrawn;

(vi) the availability of appraisal rights in the Merger for the
stockholders of the Company (other than Parent and Purchaser) under the
DGCL;

(vii) the possibility that, because of a decline in the Company's
business, the trading price of the Shares or the stock market in general,
the consideration that the stockholders of the Company (other than Parent
and Purchaser) would obtain in a future transaction might be less
advantageous than the consideration they would receive pursuant to the
Offer and the Merger;

(viii) the risk that the Company would suffer the loss of key
employees and other adverse consequences if the Company had not accepted
Parent's offer to engage in the transactions contemplated by the Merger
Agreement and had pursued other alternatives with the attendant delay;

(ix) the likelihood that the proposed acquisition would be
consummated, based in part on the financial condition of Parent and the
limited scope of conditions (other than the Majority-of-the-Minority
Condition) to be satisfied prior to the consummation of the Merger as
provided in the Merger Agreement;

(x) the terms and conditions of the Merger Agreement, including the
absence of a financing condition; and

(xi) the structure of the transaction, which is designed, among other
things, to result in receipt by the stockholders at the earliest
practicable time of the consideration to be paid in the Offer and the fact
that the per Share consideration to be paid in the Offer and the Merger is
the same.

The Company Board. At its March 31, 1997 meeting, the Company Board, by
unanimous vote of all directors present and voting (with all directors who are
employees of Parent abstaining), (a) determined that each of the Offer and the
Merger is fair to, and in the best interests of, the stockholders of the Company
(other than Parent and Purchaser), (b) approved the Offer and the Merger, (c)
approved and adopted the Merger Agreement and the amendment to the Restated
Stockholders Agreement and (d) recommended that the stockholders of the Company
(other than Parent and Purchaser) accept the Offer and tender their Shares
pursuant thereto. In reaching its determinations and in making its
recommendation, the Company Board considered the recommendation of the Special
Committee, as well as all of the factors considered by the Special Committee
described above.

Additional Considerations of the Special Committee and the Company
Board. The members of the Company Board, including the Special Committee,
evaluated the various factors listed above in light of their knowledge of the
business, financial condition and prospects of the Company, and based upon the
advice of financial and legal advisors. In light of the number and variety of
factors that the Company Board and the Special Committee considered in
connection with their evaluation of the Offer and the Merger, neither the
Company Board nor the Special Committee found it practicable to assign relative
weights to the foregoing factors and, accordingly, neither the Company Board nor
the Special Committee did so. In addition to the factors listed above, the
Company Board and the Special Committee each considered the fact that while
consummation of the Offer would result in the stockholders of the Company
receiving a premium for their Shares over the trading prices of the Shares prior
to the public announcement of the Acquisition Proposal, consummation of the
Offer and the Merger would eliminate any opportunity for stockholders of the
Company (other than Parent and Purchaser) to participate in the potential future
growth prospects of the Company. The Company Board and the Special Committee
determined, however, that (i) the loss of opportunity is reflected in the Offer
Price, and (ii) there is uncertainty as to the Company's long-term financial
prospects.

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<PAGE> 12

In addition, the Special Committee and the Company Board each determined
that the Offer and the Merger are procedurally fair to the stockholders of the
Company (other than Parent and Purchaser) because, among other things: (i) the
Special Committee, consisting of directors who are neither designees of Parent
nor officers of the Company, was appointed to represent the interests of the
stockholders of the Company (other than Parent and Purchaser); (ii) the Special
Committee retained and was advised by independent legal counsel; (iii) the
Special Committee retained Montgomery Securities as its independent financial
advisor to assist it in evaluating the Offer and the Merger; (iv) the
Majority-of-the-Minority Condition, which may not be waived without the consent
of the Special Committee, was made a condition to the Offer; (v) the
deliberations pursuant to which the Special Committee evaluated the Offer and
the Merger and alternatives thereto; and (vi) the fact that the $8.00 per Share
price and the other terms and conditions of the Merger Agreement resulted from
active arm's-length bargaining between representatives of the Special Committee,
on the one hand, and Parent, on the other.

Each of the Company Board and the Special Committee recognized that the
Merger is not structured to require the approval of a majority of the
stockholders of the Company (other than Parent or Purchaser), and that if the
Offer is consummated Parent and Purchaser will have sufficient voting power to
approve the Merger without the affirmative vote of any other stockholder of the
Company. Consummation of the Offer, however, is conditioned upon, among other
things, the Majority-of-the-Minority Condition, which may not be waived without
consent of the Special Committee. Pursuant to the Merger Agreement, the purchase
by Purchaser of all Shares validly tendered in the Offer and not withdrawn is a
condition to the Merger.

In making their respective determinations and recommendations, each of the
Company Board and the Special Committee was aware of the matters set forth under
"SPECIAL FACTORS -- Interests of Certain Persons in the Offer and Merger".

3. OPINION OF FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE

Pursuant to an engagement letter dated February 26, 1997 (the "Engagement
Letter"), the Special Committee retained Montgomery Securities as its financial
advisor in connection with its consideration of a possible acquisition by Parent
of the Non-Affiliated Shares. Montgomery Securities is a nationally recognized
firm and, as part of its investment banking activities, is regularly engaged in
the valuation of businesses and their securities in connection with merger
transactions and other types of acquisitions, negotiated underwritings,
secondary distributions of listed and unlisted securities, private placements
and valuations for corporate and other purposes. Montgomery Securities also has
performed certain investment banking services for the Company, including acting
as advisor to the Company in connection with the acquisition of 49.9% of the
Shares by Parent in March 1996 and acting as co-manager of an underwritten
public offering of Shares in January 1993 and as lead manager of an underwritten
public offering of Shares in October 1994. The Special Committee selected
Montgomery Securities as its financial advisor on the basis of its experience
and expertise in transactions similar to the Offer and the Merger, its
reputation in the biotechnology and investment communities and its knowledge of
and familiarity with the Company resulting from the investment banking services
it has previously provided to the Company. Montgomery Securities was not
retained to, nor did it, advise the Company or the Special Committee with
respect to alternatives to the Offer and the Merger or the Company's underlying
decision to proceed with or effect the Offer and the Merger. Furthermore,
Montgomery Securities was not requested to, nor did it, solicit or assist the
Company in soliciting indications of interest for all or part of the Company.

On March 31, 1997, Montgomery Securities rendered its oral opinion to the
Special Committee and the Company Board, subsequently confirmed in writing as of
such date, that the consideration to be received by the holders of the Company's
common stock (other than Parent and its affiliates) pursuant to the Offer and
the Merger was fair to such stockholders from a financial point of view, as of
the date thereof. No limitations were imposed by the Special Committee on the
scope of Montgomery Securities' investigation or the procedures to be followed
by Montgomery Securities in rendering its opinion. Montgomery Securities did not
determine the form or amount of consideration to be offered to stockholders in
the Offer or the Merger, which was agreed to as a result of negotiations between
the Special Committee and its financial and legal advisors (including Montgomery
Securities) and Parent and its financial and legal advisors.

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<PAGE> 13

THE FULL TEXT OF MONTGOMERY SECURITIES' WRITTEN OPINION TO THE SPECIAL
COMMITTEE AND THE COMPANY BOARD IS ATTACHED HERETO AS ANNEX A AND IS
INCORPORATED HEREIN BY REFERENCE. THE FOLLOWING SUMMARY OF MONTGOMERY
SECURITIES' OPINION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF SUCH OPINION. MONTGOMERY'S OPINION IS DIRECTED ONLY TO THE FAIRNESS OF THE
CONSIDERATION TO BE RECEIVED BY THE HOLDERS OF THE COMPANY'S COMMON STOCK (OTHER
THAN PARENT AND ITS AFFILIATES) FROM A FINANCIAL POINT OF VIEW, AND HAS BEEN
PROVIDED FOR THE USE OF THE SPECIAL COMMITTEE AND THE COMPANY BOARD IN THEIR
EVALUATION OF THE OFFER AND THE MERGER, AND DOES NOT ADDRESS ANY OTHER ASPECT OF
THE OFFER AND THE MERGER. MONTGOMERY SECURITIES' OPINION IS ADDRESSED TO THE
SPECIAL COMMITTEE AND THE COMPANY BOARD ONLY AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO ACCEPT THE CONSIDERATION
BEING OFFERED TO SUCH STOCKHOLDER PURSUANT TO THE OFFER OR AS TO HOW SUCH
STOCKHOLDER SHOULD VOTE WITH RESPECT TO THE MERGER, IF ANY VOTE IS REQUIRED.

In connection with its opinion, Montgomery Securities, among other things
(i) reviewed certain publicly available financial and other data with respect to
the Company, including the financial statements for recent years and interim
periods to September 30, 1996 and certain other relevant financial and operating
data relating to the Company made available to Montgomery Securities from
published sources and from the internal records of the Company; (ii) reviewed
the financial terms and conditions of the Merger Agreement in the form provided
to Montgomery Securities by the Company; (iii) reviewed certain publicly
available information concerning the trading of, and the trading market for, the
Shares; (iv) compared the Company from a financial point of view with certain
other companies which Montgomery Securities deemed to be relevant; (v)
considered the financial terms, to the extent publicly available, of selected
recent business combinations which Montgomery Securities deemed to be
comparable, in whole or in part, to the Offer and the Merger; (vi) reviewed and
discussed with representatives of the management of the Company certain
information of a business and financial nature furnished to Montgomery
Securities by the Company, including financial forecasts and related assumptions
of the Company; (vii) made inquiries regarding and discussed the Merger
Agreement and other matters related thereto with the Company's counsel; and
(viii) performed such other analyses and examinations as Montgomery Securities
deemed appropriate.

In connection with its review, Montgomery Securities did not assume any
obligation independently to verify the foregoing information and relied on its
being accurate and complete in all material respects. With respect to the
financial forecasts for the Company provided to Montgomery Securities by
management, as a result of discussions among Montgomery Securities,
representatives of management of the Company and the Special Committee, such
forecasts were adjusted to reflect more conservative assumptions regarding the
development and market penetration of certain products. Upon the advice and with
the consent of management of the Company and the Special Committee, Montgomery
Securities assumed for purposes of its opinion that the unadjusted forecasts
were reasonably prepared on bases reflecting the best available estimates and
judgments of the Company's management at the time of preparation as to the
future financial performance of the Company and that such forecasts, as
adjusted, provide a reasonable basis upon which Montgomery Securities could form
its opinion. Montgomery Securities also assumed that there were no material
changes in the Company's assets, financial condition, results of operations,
business or prospects since the date of its last financial statements available
to it. Although Montgomery Securities was aware of the asset write-downs and
restructuring expenses reflected in the Company's announcement of its financial
results for the quarter ended December 31, 1996, Montgomery Securities did not
revise its financial analyses to take into account developments (other than
Parent's $50 million investment in the Company) after September 30, 1996.
Montgomery Securities relied on advice of counsel to the Special Committee and
counsel and independent accountants to the Company as to all legal and financial
reporting matters with respect to the Special Committee, the Company, the
Agreement, the Offer and the Merger. Montgomery Securities assumed that the
Offer and the Merger will be consummated in a manner that complies in all
respects with the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and all other applicable federal and state statutes, rules and
regulations. In addition, Montgomery Securities did not assume responsibility
for making an independent evaluation, appraisal or physical inspection of any of
the assets or liabilities (contingent or otherwise) of the Company, nor was
Montgomery Securities furnished with any such appraisals. The Company informed
Montgomery Securities, and Montgomery Securities assumed, that the Merger will
be recorded as a purchase under generally accepted accounting principles.
Finally, Montgomery

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<PAGE> 14

Securities's opinion was based on economic, monetary and market and other
conditions as in effect on, and the information made available to Montgomery
Securities as of March 31, 1997. Accordingly, although subsequent developments
may affect its opinion, Montgomery Securities has not assumed any obligation to
update, revise or affirm its opinion.

The following is a summary of the report presented by Montgomery Securities
on March 31, 1997 in connection with its opinion. For the purposes of all the
analyses described below, Montgomery Securities made pro forma adjustments to
reflect Parent's $50 million investment in the Company at $8.00 per Share in
November 1996 and assumed 66.71 million outstanding Shares.

Discounted Cash Flow Analysis. Montgomery Securities performed a
discounted cash flow analysis on certain cash flow forecasts that were adjusted
from the initial financial forecasts provided to Montgomery Securities by the
management of the Company. As described above, these adjustments were made as a
result of discussions among Montgomery Securities, representatives of management
of the Company and the Special Committee and reflect more conservative
assumptions regarding the development and market penetration of certain
products.

In performing this analysis, Montgomery Securities discounted to present
value the projected stream of after-tax cash flows and the terminal year equity
value of each of the Company's business segments. The discounted cash flow
analysis of the Company's projections was based upon, among other things, a
range of terminal multiples of projected fiscal year earnings before interest
and taxes ("EBIT") of 11.0x to 20.0x. Montgomery Securities applied multiple
ranges to each business segment in accordance with Montgomery Securities'
assessment of the growth and operational prospects for each segment. In
addition, Montgomery Securities used discount rates ranging from 12.5% to 45.0%,
and assigned discount rates to each business segment in accordance with
Montgomery Securities' assessment of the development stage and risks associated
with the successful development of each business segment.

Utilizing these projections and assumptions, Montgomery Securities computed
a range of implied equity values for the Company from $4.81 to $7.62 per Share.

Comparable Transaction Analysis. Montgomery Securities compared the
financial terms of certain recent merger or alliance transactions which
Montgomery Securities considered relevant. Montgomery Securities divided the
comparable transactions (listed below by acquiror/target) into three categories:
(a) cash biotechnology control combination transactions, where the acquiror
previously had a substantial equity ownership interest in the target, including
Novartis, Inc./SyStemix, Inc., American Home Products Corp./Genetics Institute,
Inc., and Rhone-Poulenc Rorer, Inc./Applied Immune Sciences Inc.; (b) cash
biotechnology purchase transactions, where the acquiror previously had a less
than substantial equity ownership interest in the target, including Amgen, Inc./
Synergen, Inc., Glaxo Wellcome plc/Affymax N.V., Chiron Corp./Viagene, Inc. and
Sandoz AG/Genetic Therapy, Inc.; and (c) cash non-biotechnology minority
acquisition transactions where the acquiror owned less than 90% of the target
prior to the transaction, including Andrews Group Inc./Toy Biz, Inc., Renco
Group, Inc./WCI Steel Inc., Chemed Corp./Roto-Rooter Inc., Equity Holdings
Ltd./Great American Management & Investment, Inc., Societe Commerciale de
Reassurance/SCOR US Corp., Berkshire Hathaway, Inc./GEICO Corp., COBE
Laboratories, Inc./REN Corp.-USA, MCI Communications Corp./Nationwide Cellular
Service, Inc., BIC SA/Bic Corp., McCaw Cellular Communications, Inc./LIN
Broadcasting Corp., Club Mediterranee SA/Club Med Inc., Fleet Financial Group,
Inc./Fleet Mortgage Group, Inc., PacificCorp/Pacific Telecom, Inc., Dole Food
Co./Castle & Cooke Homes, Medco Containment Services/Medical Marketing Group
Inc., W.R. Grace & Co./Grace Energy Corp., BHP Holdings/Hamilton Oil, Academy
Merger Co., Inc./Academy Insurance, Caesar's World, Inc./Caesar New Jersey,
Inc., Paramount Communications, Inc./TVX Broadcast Group, Renault Vehicles
Industrials/Mack Trucks Inc., Kansas City Southern/DST Systems, Inc., and Imetal
SA/Copperweld Corp.

Montgomery Securities analyzed the price paid per share by the acquiror
(the "Merger/Purchase Price Per Share"). The Merger/Purchase Price Per Share for
each of these transactions was compared to the target stock price one day, one
week, and one month prior to the announcement of the transaction in order to
calculate the premium over such stock price. The average high and low premiums
were as follows: (i) 38.4% to 53.2% for the cash biotechnology control
combination transactions; (ii) 57.2% to 68.9% for the cash biotechnology
purchase transactions; and (iii) 20.2% to 29.4% for cash non-biotechnology
minority acquisition transactions. Montgomery Securities noted that the high and
low average premiums reflected an implied

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<PAGE> 15

equity value for the Company of (i) $7.01 to $8.43 per Share for the cash
biotechnology control combination transactions; (ii) $8.10 to $8.65 per share
for the cash purchase transactions; and (iii) and $6.24 to $6.61 for the cash
non-biotechnology minority acquisition transactions.

Montgomery Securities also analyzed selected bioagricultural acquisition
transactions, including Holden's Seed & Corn States/Parent, Asgrow Agronomics
(Division of Empresas La Moderna)/Parent, Plan Genetic Systems/Hoechst Schering
AgrEvo, Agracetus (Division of W.R. Grace & Co.)/Parent, Dekalb Genetics
Corp./Parent, United AgriSeeds (Division of DowElanco)/Mycogen Corp., Gargiulo
(Division of Parent)/Company, Asgrow Seed Co. (Division of Upjohn)/Empresas La
Moderna, Fresh World (joint venture with DuPont)/DNA Plant Technology Corp.,
Agrigenetics (Division of Lubizol)/Mycogen Corp. and Del Monte Fresh Fruit
Division/Polly Peck International plc. Montgomery Securities calculated an
aggregate value to latest 12 months ("LTM") revenue multiple for each of the
target companies as determined by the price per share paid by the acquiror.
These values were used to compute an average aggregate value to LTM revenue
multiple of 2.6x. Montgomery Securities noted that the application of this
multiple resulted in an implied equity value for the Company of $4.68 per Share.

Because the reasons for and the circumstances surrounding each of the
transactions analyzed were specific to each transaction, and because of the
inherent difference between the businesses, operations and prospects of the
Company and the businesses, operations and prospects of the selected acquired
companies analyzed, Montgomery Securities believed it was inappropriate to, and
therefore did not, rely solely on the quantitative results of the analysis, but
rather also made qualitative judgments concerning differences between the
characteristics of these transactions and the Offer and the Merger that would
affect the acquisition values of the Company and such acquired companies.

Common Stock Price Analysis. Montgomery Securities compared the Company's
common stock price performance from December 30, 1994 to January 28, 1997 and
from March 29, 1996 to January 28, 1997 against the offer of $8.00 per Share.
Montgomery Securities noted that the $8.00 offer per Share was above the closing
price for the Shares for all but nine trading days in the period from December
30, 1994 to January 28, 1997 and was above the closing price for the Shares for
all trading days in the period from March 29, 1996 to January 28, 1997.

Common Stock Trading Volume Analysis. Montgomery Securities analyzed the
historical daily trading volume of the Shares over various periods. Montgomery
Securities noted that of the Shares traded between January 1, 1995 and January
18, 1997, 7.2% of the Shares traded at or above $8.00 per Share; 20.5% of the
Shares traded between $7.00 and $7.99 per Share, 38.6% of the Shares traded
between $6.00 to $6.99 per Share; 23.6% of the Shares traded between $5.00 and
$5.99 per Share; and the remaining 10.1% of the Shares traded below $5.00 per
Share. Montgomery also noted that of the Shares traded between March 31, 1996
and January 28, 1997, no Shares traded at or above $7.00 per Share; 22.9% of the
Shares traded between $6.00 and $6.99 per Share; 57.4% of the Shares traded
between $5.00 and $5.99 per Share; and 19.7% of the Shares traded below $5.00
per Share.

Comparable Public Company Analysis. Montgomery Securities compared the
historical financial, operating and stock market performances of certain
publicly traded companies that it considered relevant with the historical
financial and operating performance of the Company, based upon publicly
available financial information.

Montgomery Securities examined the aggregate value to LTM revenue multiples
for Dekalb Genetics Corp., Delta & Pine Land Company, Pioneer Hi-Bred
International, Inc. and Mycogen Corp. Based on the aggregate value to LTM
revenue multiples for these companies, Montgomery Securities computed an average
aggregate value to LTM revenue multiple of 3.8x. Montgomery Securities noted
that the application of this multiple resulted in an implied valuation for the
Company of $7.08 per Share.

Montgomery Securities compared the price performance of the Shares from
December 30, 1994 to January 28, 1997 and from March 29, 1996 to January 28,
1997 to an index composed of three agricultural biotechnology companies: Mycogen
Corp., Ecogen, Inc. and DNA Plant Technology, Inc. (the "Agricultural
Biotechnology Index"). Using December 30, 1994 and March 29, 1996 as base
values, on January 28, 1997 the Share prices were 73.3% and 93.7% of their base
values on December 30, 1994 and March 29, 1996,

13
<PAGE> 16

respectively, as compared to the Agricultural Biotechnology Index whose values
were of 176.9% and 123.3% of their base values on December 30, 1994 and March
29, 1996, respectively.

Montgomery Securities also compared the price performance of the Shares
from December 30, 1994 to January 28, 1997 and from March 29, 1996 to January
28, 1997 to the AMEX Biotechnology Index, comprised of 15 biotechnology
companies listed on the American Stock Exchange. Using December 30, 1994 and
March 29, 1996 as base values, on January 28, 1997 the Share prices were 73.3%
and 95.7% of their base values on December 30, 1994 and March 29, 1995,
respectively, as compared to the AMEX Biotechnology Index whose values were
192.5% and 117.2% of their base values on December 30, 1994 and March 29, 1996,
respectively.

Because of the inherent differences between the business, operations and
prospects of the Company and the businesses, operations and prospects of the
comparable companies considered in this analysis, Montgomery Securities believed
that it was inappropriate to, and therefore did not, rely solely on the
quantitative results of the analysis, but rather also made qualitative judgments
concerning differences between the financial and operating characteristics and
prospects of the Company and the comparable companies that would affect the
public trading values of each.

The summary set forth above does not purport to be complete description of
the presentation by Montgomery Securities to the Special Committee or the
analyses performed by Montgomery Securities. The preparation of a fairness
opinion is not necessarily susceptible to partial analysis or summary
description. Montgomery Securities believes that its analyses and the summary
set forth above must be considered as a whole and that selecting portions of its
analyses and of the factors considered, without considering all analyses and
factors, would create incomplete view of the process underlying the analyses set
forth in its presentation to the Special Committee. In addition, Montgomery
Securities may have given various analyses more or less weight than other
analyses, and may have deemed various assumptions more or less probable than
other assumptions so that the ranges of valuations resulting from any particular
analysis described above should not be taken to be Montgomery Securities' view
of the actual value of the Company. The fact that any specific analysis has been
referred to in the summary above is not meant to indicate that such analysis was
given greater weight than any other analysis. In arriving at its opinion,
Montgomery Securities did not ascribe a specific range of values to the Company,
but rather made its determination as to the fairness, from a financial point of
view, of the consideration received by the holders of the Company's common stock
(other than Parent and its affiliates) in the Offer and the Merger on the basis
of the financial and comparative analyses described above.

In performing its analyses, Montgomery Securities made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters, many of which are beyond the control of the Company. The
analyses performed by Montgomery Securities are not necessarily indicative of
actual values or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely as
part of Montgomery Securities' analysis of the fairness of the transaction
contemplated by the Merger Agreement to the Company's stockholders and were
provided to the Special Committee in connection with the delivery of Montgomery
Securities' opinion. The analyses do not purport to be appraisals or to reflect
the prices at which a company might actually be sold or the prices at which any
securities may trade at the present time or at any time in the future.
Montgomery Securities used in its analyses various projections of future
performance prepared by the management of the Company. The projections are based
on numerous variables and assumptions which are inherently unpredictable and
must be considered not certain of occurrence as projected. Accordingly, actual
results could vary significantly from those set forth in such projections.

Pursuant to the Engagement Letter, the Special Committee engaged Montgomery
Securities to act as its financial advisor in connection with a possible
transaction with Parent or an affiliated entity. The Company has agreed to pay
Montgomery Securities a fee equal to 0.85% of the total consideration involved
in the contemplated transactions. Pursuant to the Engagement Letter, the Company
has agreed to pay Montgomery Securities $500,000 upon rendering its opinion to
the Special Committee as to the fairness of the Offer, and will be obligated to
pay Montgomery Securities the remainder of its fee upon the closing of the
Offer. The

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<PAGE> 17

Company has also agreed to reimburse Montgomery Securities for its reasonable
out-of-pocket expenses. Pursuant to a separate letter agreement, the Company had
agreed to indemnify Montgomery Securities, its affiliates, and their respective
partners, directors, officers, agents, consultants, employees and controlling
persons against certain liabilities, including liabilities under federal
securities laws.

In the ordinary course of business, Montgomery Securities actively trades
equity securities of the Company and Parent for its own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities. Montgomery Securities also has performed certain
investment banking services for the Company, as described above. Certain
partners of Montgomery Securities also own shares of Parent's common stock.

A copy of Montgomery Securities' report to the Special Committee and the
Company Board dated March 31, 1997 has been filed as an exhibit to the Rule
13e-3 Transaction Statement on Schedule 13E-3 filed with the SEC by Parent, the
Purchaser and the Company. Copies of Montgomery Securities' report and opinion
are available for inspection and copying at the principal executive offices of
the Company during regular business hours by any stockholder of the Company, or
a stockholder's representative who has been so designated in writing.

4. POSITION OF PARENT AND PURCHASER REGARDING THE FAIRNESS OF THE OFFER AND THE
MERGER

Parent and Purchaser believe that the consideration to be received by the
stockholders of the Company (other than Parent and Purchaser), pursuant to the
Offer and the Merger, is fair to such stockholders. Parent and Purchaser base
their belief on the following factors: (i) a Special Committee consisting of
directors who are neither designees of Parent nor officers of the Company was
appointed to represent the interests of the stockholders of the Company (other
than Parent and Purchaser); (ii) the Special Committee retained and was advised
by independent legal and financial advisors; (iii) the Special Committee and the
Company Board (with all directors who are employees of Parent abstaining) each
determined that the Offer and the Merger are fair to, and in the best interests
of, the stockholders of the Company (other than Parent and Purchaser), approved
the Merger Agreement and the transactions contemplated thereby and recommended
that the stockholders of the Company accept the Offer and the Merger; (iv) the
parties' awareness that, because the Restated Stockholders Agreement imposes
substantial restrictions on Parent's ability to acquire additional Shares,
Parent would generally be unable to acquire any additional Shares prior to
September 30, 1998 other than in a negotiated transaction approved by the
"independent directors" (as defined in the Restated Stockholders Agreement); (v)
the $8.00 per Share price to be paid in the Offer and the Merger and the other
terms and conditions of the Merger Agreement resulted from active arm's-length
bargaining between representatives of the Special Committee, on the one hand,
and Parent, on the other; (vi) the consideration to be paid in the Offer and the
Merger represents a premium of approximately 45.5% over the reported closing
price for the Shares on the last trading day prior to the public announcement of
the Acquisition Proposal; (vii) the historical financial performance of the
Company and its financial results, which include substantial accumulated losses;
and (viii) the presence of the Majority-of-the-Minority Condition, which may not
be waived without the consent of the Special Committee. Parent and Purchaser
have reviewed the factors considered by the Special Committee and the Company
Board in support of their decisions, as described in the
Solicitation/Recommendation Statement on Schedule 14D-9 and above, and have no
basis to question their consideration of or reliance on such factors. In
reaching their conclusions, Parent and Purchaser also considered generally the
current and historical market prices for the Shares. Neither Parent nor
Purchaser found it practicable to assign, nor did either of them assign,
relative weights to the individual factors considered in reaching their
conclusions as to fairness.

5. PURPOSE AND STRUCTURE OF THE OFFER AND THE MERGER; REASONS OF PARENT AND
PURCHASER FOR THE OFFER AND THE MERGER

Purpose and Structure. The purpose of the Offer is for Parent indirectly
to acquire the entire equity interest in the Company. The purpose of the Merger
is for Parent to acquire all of the equity interest in the Company not acquired
pursuant to the Offer. Upon consummation of the Merger, the Company will become
a wholly owned subsidiary of Parent. The acquisition of the entire equity
interest in the Company has been

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<PAGE> 18

structured as a cash tender offer followed by a cash merger in order to provide
a prompt and orderly transfer of ownership of the equity interest in the Company
held by stockholders of the Company (other than Parent and Purchaser) from such
stockholders to Parent and to provide the stockholders of the Company (other
than Parent and Purchaser) with cash for all of their Shares.

Under the DGCL and the Company's certificate of incorporation, the approval
of the Company Board and, under certain circumstances, the affirmative vote of
the holders of a majority of the outstanding Shares are required to approve and
adopt the Merger Agreement and the transactions contemplated thereby, including
the Merger. If the Offer is consummated, Parent and Purchaser will have
sufficient voting power to cause the approval and adoption of the Merger
Agreement and the transactions contemplated thereby without the affirmative vote
of any other stockholder of the Company. Consummation of the Offer, however, is
conditioned upon satisfaction or waiver of the Majority-of-the-Minority
Condition, which may not be waived without the consent of the Special Committee.
Pursuant to the Merger Agreement, the purchase by Purchaser of all Shares
validly tendered in the Offer and not withdrawn is a condition to the Merger.

In the Merger Agreement, the Company has agreed to take all action
necessary to convene a special meeting of its stockholders as promptly as
practicable after the consummation of the Offer for the purpose of considering
and taking action on the Merger Agreement and the transactions contemplated
thereby, if such action is required under the DGCL. Parent and Purchaser have
agreed that all Shares owned by them and their subsidiaries will be voted in
favor of the Merger Agreement and the transactions contemplated thereby.

Under the DGCL, if, following consummation of the Offer, Purchaser owns at
least 90% of the Shares then outstanding, Purchaser will be able to cause the
Merger to occur without a vote of the Company's stockholders. In such event,
Parent, Purchaser and the Company have agreed to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after consummation of the Offer without a meeting of the Company's
stockholders. In the event all of the conditions to the Offer set forth under
"The Offer -- Certain Conditions to the Offer" shall have been satisfied other
than the Majority-of-the-Minority Condition or the Ninety Percent Condition,
Purchaser may extend the Offer for a period or periods aggregating not more than
20 business days after the later of (i) the initial expiration date of the Offer
and (ii) the date on which all the other conditions to the Offer set forth under
"The Offer -- Certain Conditions to the Offer" other than the
Majority-of-the-Minority Condition or the Ninety Percent Condition have been
satisfied. If all of the conditions to the Offer have been satisfied or waived
other than the Ninety Percent Condition, then, on the later of (i) the initial
expiration date of the Offer and (ii) the latest expiration date of the Offer
permitted in accordance with the preceding sentence, Purchaser has agreed
pursuant to the Merger Agreement to waive the Ninety Percent Condition and
accept for payment all of the Shares validly tendered and not withdrawn as of
such date. If, following consummation of the Offer, Purchaser owns less than 90%
of the Shares then outstanding, a vote of the Company's stockholders will be
required under the DGCL to approve the Merger, and a significantly longer period
of time will be required to effect the Merger. See "THE OFFER -- Certain
Conditions of the Offer".

Parent's Reasons for the Offer and the Merger. Parent believes that a
closer working relationship and greater sharing of technologies between Parent
and the Company has the potential to enhance significantly the Company's ability
to develop and market commercially viable products more rapidly. Parent has
concluded, however, that (i) the current structure of the relationship does not
and is not likely to enable Parent to take full advantage of a variety of market
opportunities and to achieve the desired level of technology exchange and
cooperation and (ii) these benefits are more likely to be achieved if the
Company is under the full control of Parent so that the efforts of the two
companies could be jointly directed without the conflicts of interest that might
otherwise arise. Parent considered various means of expanding its collaboration
with the Company, including attempting to achieve an alignment or integration
through an expansion of the parties' commercial relationship without increasing
Parent's ownership of Shares. Parent has concluded, however, that these
approaches would not enable Parent to take full advantage of market
opportunities and to achieve the desired level of technology exchange and
cooperation. Consequently, Parent concluded that an acquisition by Parent of the
entire equity interest in the Company should be considered. Parent chose to
undertake the transaction at this time because the businesses in which Parent
and the Company operate are subject to rapid change and Parent wished to take
advantage of commercial opportunities that might not be available at a later
time.

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6. PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER; CERTAIN EFFECTS OF THE
OFFER AND THE MERGER

Pursuant to the Merger Agreement, promptly upon completion of the Offer,
Parent and Purchaser intend to effect the Merger in accordance with the terms of
the Merger Agreement. See "SPECIAL FACTORS -- The Merger Agreement".

Parent's management has begun, and intends to continue, a review of the
Company and its assets, corporate structure, capitalization, operations,
properties, policies, management and personnel to determine what changes, if
any, would be desirable in order best to organize and integrate the activities
of the Company and Parent. Parent expressly reserves the right to make any
changes that it deems necessary or appropriate in light of its review or in
light of future developments or that would be desirable to permit Parent to
manage the Company. Except as otherwise disclosed in this Offer to Purchase,
Parent has no present plans or proposals that would result in an extraordinary
corporate transaction involving the Company or any of its subsidiaries, such as
a merger, reorganization, liquidation, relocation of operations, or sale or
transfer of a material amount of assets.

As a result of the Offer, the interest of Parent in the Company's net book
value and net earnings will increase in proportion to the number of Shares
acquired in the Offer. If the Merger is consummated, Parent's interest in such
items and in the Company's equity generally will increase to 100% and Parent and
its subsidiaries will be entitled to all benefits resulting from that interest,
including all income generated by the Company's operations and any future
increase in the Company's value. Similarly, Parent will also bear the risk of
losses generated by the Company's operations and any decrease in the value of
the Company after the Merger. Subsequent to the Merger, current stockholders of
the Company (other than Parent and Purchaser) will cease to have any equity
interest in the Company, will not have the opportunity to participate in the
earnings and growth of the Company after the Merger and will not have any right
to vote on corporate matters. Similarly, stockholders will not face the risk of
losses generated by the Company's operations or decline in the value of the
Company after the Merger.

The Shares are currently traded on The Nasdaq Stock Market, Inc.'s National
Market ("NASDAQ"). See "THE OFFER -- Price Range of the Shares". Following the
consummation of the Merger, the Shares will no longer be quoted on NASDAQ and
the registration of the Shares under the Exchange Act will be terminated.
Accordingly, after the Merger there will be no publicly traded equity securities
of the Company outstanding and the Company will no longer be required to file
periodic reports with the SEC. See "THE OFFER -- Effect of the Offer on the
Market for the Shares; NASDAQ Quotation and Exchange Act Registration". It is
expected that if Shares are not accepted for payment by Purchaser pursuant to
the Offer and the Merger is not consummated, the Company's current management,
under the general direction of the Company Board, will continue to manage the
Company as an ongoing business.

7. RIGHTS OF STOCKHOLDERS IN THE MERGER

No appraisal rights are available in connection with the Offer. If the
Merger is consummated, however, stockholders of the Company who have not
tendered their Shares will have certain rights under the DGCL to dissent and
demand appraisal of, and to receive payment in cash of the fair value of, their
Shares. Stockholders who perfect such rights by complying with the procedures
set forth in Section 262 of the DGCL ("Section 262") will have the fair value of
their Shares (exclusive of any element of value arising from the accomplishment
or expectation of the Merger) determined by the Delaware Court of Chancery and
will be entitled to receive a cash payment equal to such fair value from the
Surviving Corporation. In addition, such dissenting stockholders would be
entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is required
to take into account all relevant factors. Accordingly, such determination could
be based upon considerations other than, or in addition to, the market value of
the Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated that "proof of value
by any techniques or methods which are generally considered acceptable in the
financial community and otherwise admissible in court" should be considered in
an appraisal proceeding. The Weinberger court also noted that under Section 262,
fair value is to be determined "exclusive

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<PAGE> 20

of any element of value arising from the accomplishment or expectation of the
merger." In Cede & Co. v. Technicolor, Inc., however, the Delaware Supreme Court
stated that, in the context of a two-step cash merger, "to the extent that value
has been added following a change in majority control before cash-out, it is
still value attributable to the going concern," to be included in the appraisal
process. As a consequence of the foregoing, the fair value determined in any
appraisal proceeding could be the same as or more or less than the Merger
Consideration. See Annex B attached hereto for a detailed description of
appraisal rights under the DGCL, as well as the text of Section 262.

Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the demand
for appraisal of, and payment in cash for the fair value of, the Shares. Parent
intends, however, to cause the Surviving Corporation to argue in an appraisal
proceeding that, for purposes of such proceeding, the fair value of each Share
is less than the Merger Consideration. In this regard, stockholders should be
aware that opinions of investment banking firms as to the fairness from a
financial point of view (including Montgomery Securities' opinion described
herein) are not necessarily opinions as to "fair value" under Section 262.

THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SECTION 262 INCLUDED
HEREWITH IN ANNEX B. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS ARE
CONDITIONED ON STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.

Several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has a
fiduciary duty to other stockholders that requires that the merger be "entirely
fair" to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and in Rabkin v. Philip A. Hunt Chemical Corp. that although the
remedy ordinarily available to minority stockholders in a cash-out merger that
is found to be not fair to the minority stockholders is the right to appraisal
described above, monetary damages, injunctive relief or such other relief as the
court may fashion may be available if a merger is found to be the product of
procedural unfairness, including fraud, misrepresentation or other misconduct.

If the settlement of the Consolidated Action (as defined herein) receives
final court approval and the Consolidated Action is dismissed with prejudice,
the ability of stockholders (other than stockholders who have properly perfected
appraisal rights under Section 262 in connection with the Merger) to obtain
monetary damages or other relief could be foreclosed by virtue of such dismissal
and the release provisions typically included in such settlements. See "THE
OFFER -- Certain Legal Matters".

8. THE MERGER AGREEMENT

The following is a summary of the material terms of the Merger Agreement, a
copy of which appears as an Exhibit to the Tender Offer Statement on Schedule
14D-1 filed by Purchaser and Parent with the SEC in connection with the Offer.
Such summary is qualified in its entirety by reference to the Merger Agreement.

The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable after the date thereof, but in no event
later than five business days after the initial public announcement of
Purchaser's intention to commence the Offer. The Merger Agreement further
provides that Purchaser shall not, without the consent of the Special Committee,
accept for payment any Shares tendered pursuant to the Offer unless at least a
majority of the then issued and outstanding Non-Affiliated Shares shall have
been validly tendered and not withdrawn prior to the expiration of the Offer,
thereby satisfying the Majority-of-the-Minority Condition. The obligation of
Purchaser to accept for payment and pay for Shares tendered pursuant to the
Offer is subject to the satisfaction or waiver of the Majority-of-the-Minority
Condition, the Ninety Percent Condition and certain other conditions that are
described in "THE OFFER -- Certain Conditions of the Offer". Purchaser and
Parent have agreed that no change in the Offer may be made which decreases the
Offer Price, changes the form of consideration payable in the Offer or

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<PAGE> 21

reduces the maximum number of Shares to be purchased in the Offer or which
imposes conditions to the Offer in addition to those described in "THE
OFFER -- Certain Conditions of the Offer". Pursuant to the Merger Agreement, in
the event all conditions set forth in the Merger Agreement shall have been
satisfied or waived other than either the Majority-of-the-Minority Condition or
the Ninety Percent Condition, Purchaser may extend the Offer for a period or
periods aggregating not more than 20 business days after the later of (i) the
initial expiration date of the Offer and (ii) the date on which all other
conditions to the Offer other than the Majority-of-the-Minority Condition or the
Ninety Percent Condition shall have been satisfied or waived. If all of the
conditions to the Offer have been satisfied or waived other than the Ninety
Percent Condition, then, on the latest expiration date of the Offer permitted in
accordance with the preceding sentence, Purchaser shall waive the Ninety Percent
Condition and consummate the Offer.

The Merger. The Merger Agreement provides that as soon as practicable
after the purchase of Shares pursuant to the Offer and the satisfaction of the
other conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the DGCL, Purchaser will be merged with and into the
Company. As a result of the Merger, the separate corporate existence of
Purchaser will cease and the Company will continue as the Surviving Corporation
and will become a wholly owned subsidiary of Parent. At the Effective Time, each
Share issued and outstanding immediately prior to the Effective Time (other than
Shares held in the treasury of the Company, Shares owned by Parent, Purchaser or
any subsidiary of Parent or the Company or Shares held by stockholders who shall
have properly demanded and perfected appraisal rights under Section 262) will be
cancelled and converted automatically into the right to receive the Merger
Consideration.

Purchaser or the designated paying agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to the Merger
Agreement to any holder of Shares such amounts that Purchaser or the paying
agent is required to deduct and withhold with respect to the making of such
payment under the United States Internal Revenue Code of 1986, as amended (the
"Code"), the rules and regulations promulgated thereunder or any provision of
state, local or foreign tax law.

Pursuant to the Merger Agreement, each share of common stock, par value
$.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive one validly issued,
fully paid and nonassessable share of common stock, par value $.01 per share, of
the Surviving Corporation. In addition, the Company is obligated under the
Merger Agreement to redeem all of the outstanding shares of its Series A
Preferred Shares not later than the day prior to the initial expiration date of
the Offer.

The Merger Agreement provides that the directors of Purchaser at the
Effective Time will be the initial directors of the Surviving Corporation and
that the officers of the Company at the Effective Time will be the initial
officers of the Surviving Corporation. The Merger Agreement provides that, at
the Effective Time, the certificate of incorporation of Purchaser will be the
certificate of incorporation of the Surviving Corporation; provided, however,
that, at the Effective Time, Article I of the certificate of incorporation of
the Surviving Corporation will be amended to read as follows: "The name of the
corporation is Calgene, Inc." The Merger Agreement also provides that the bylaws
of Purchaser will be the bylaws of the Surviving Corporation.

At the Effective Time, each holder of a Company Option issued pursuant to
the Company's 1981 Stock Option Plan, 1991 Stock Option Plan or 1996 Stock
Option Plan (each such plan, a "Company Stock Option Plan") shall become
entitled to receive from the Surviving Corporation, for each such Company
Option, an amount in cash equal to the product of (i) the excess, if any, of the
Merger Consideration over the applicable exercise price of each such Company
Option and (ii) the number of Shares such holder could have purchased had such
holder exercised such Company Option in full (without regard to exercisability)
immediately prior to the Effective Time, and thereafter each such Company Option
shall be cancelled; provided, however, that any holder of a Company Option may
instead have such Company Option assumed by the Surviving Corporation pursuant
to the terms of the Company Stock Option Plan pursuant to which such Company
Option was issued (each, an "Assumed Option"). After the Effective Time, each
Assumed Option shall (i) confer the right to receive from the Surviving
Corporation, for each Share subject to such Company Option immediately prior to
the Effective Time, and upon payment of the applicable exercise price per share

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<PAGE> 22

in effect with respect to such Company Option, the Merger Consideration, in
cash, and (ii) shall otherwise remain subject to all the terms and conditions
(including with respect to the exercisability thereof) applicable to such
Company Option pursuant to the option agreement related to such Company Option
and to the Company Stock Option Plan pursuant to which such Company Option was
issued. The Company has agreed to provide timely notification and an election
form to holders of Company Options as may be required by any Company Stock
Option Plan. After the Effective Time, no further Company Options shall be
granted pursuant to any Company Stock Option Plan; however, each Company Stock
Option Plan shall continue to govern any Assumed Option.

The Merger Agreement also provides that the Company shall take all such
action as may be necessary (i) to terminate the Company's Employee Stock
Purchase Plan established in March 1990 (the "Company Stock Purchase Plan") and
(ii) to cause the Shares entitled to be purchased pursuant to the Company Stock
Purchase Plan as of the Effective Time to be purchased and converted thereafter
in the Merger.

Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto, including
representations by the Company, Parent and Purchaser as to corporate status and
the enforceability of the Merger Agreement against each such party and by the
Company as to its capitalization, compliance with law, the accuracy of financial
statements and filings with the SEC and the absence of certain material adverse
changes or events concerning the Company's business from December 31, 1996 to
the date of the Merger Agreement.

Covenants of Parent, Purchaser and the Company. Pursuant to the Merger
Agreement, the Company shall, if required by applicable law in order to
consummate the Merger, duly call, give notice of, convene and hold a special
meeting of its stockholders as promptly as practicable following consummation of
the Offer for the purpose of considering and taking action on the Merger
Agreement and the transactions contemplated thereby (the "Stockholders'
Meeting"). At the Stockholders' Meeting, Parent and Purchaser shall cause all
Shares then owned by them to be voted in favor of the approval and adoption of
the Merger Agreement and the transactions contemplated thereby. Parent and
Purchaser currently have sufficient voting power to approve the Merger even if
no other stockholder votes in favor of the Merger. In the event that Purchaser
acquires such number of Shares that, when taken together with the Shares
previously owned by Parent and Purchaser, constitute at least 90% of the
outstanding Shares, the parties have agreed to take all necessary and
appropriate action to cause the Merger to become effective, in accordance with
Section 253 of the DGCL, as soon as reasonably practicable after such
acquisition, without a meeting of the stockholders of the Company.

The Merger Agreement provides that the Company shall, if required by
applicable law, as soon as practicable following consummation of the Offer, file
a proxy statement with the SEC under the Exchange Act (the "Proxy Statement"),
and shall use its best efforts to have the Proxy Statement cleared by the SEC.
Parent, Purchaser and the Company shall cooperate with each other in the
preparation of the Proxy Statement, and the Company shall notify Parent of the
receipt of any comments of the SEC with respect to the Proxy Statement and of
any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide promptly to Parent copies of all
correspondence between the Company or any representative of the Company and the
SEC. The Company shall give Parent and its counsel the opportunity to review and
comment upon the Proxy Statement prior to its being filed with the SEC and shall
give Parent and its counsel the opportunity to review and comment upon all
amendments and supplements to the Proxy Statement and participate in the
preparation of any written responses to requests for additional information and
replies to comments prior to their being filed with, or sent to, the SEC. The
Company and its counsel shall be given the opportunity to review and comment on
the Offer documents and any amendments thereto prior to the filing thereof with
the SEC. Parent and Purchaser shall provide the Company and its counsel with a
copy of any written comments or telephonic notification of any verbal comments
Parent or Purchaser may receive from the SEC or its staff with respect to the
Offer documents promptly after the receipt thereof and shall provide the Company
and its counsel with a copy of any written responses and telephonic notification
of any verbal responses of Parent, Purchaser or their counsel. Each of the
Company, Parent and Purchaser agrees to use its reasonable best efforts, after
consultation with the other parties, to respond promptly to all such comments of
and requests by the SEC and to cause the Proxy

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<PAGE> 23

Statement and all required amendments and supplements thereto to be mailed to
the holders of Shares entitled to vote at the Stockholders' Meeting at the
earliest practicable time.

Pursuant to the Merger Agreement, the Company has covenanted and agreed
that, between the date of the Merger Agreement and the Effective Time, unless
Parent shall otherwise agree in writing: the businesses of the Company and its
subsidiaries shall be conducted only in, and the Company shall not take any
action except in, the ordinary course of business and in a manner consistent
with past practice; the Company shall use its reasonable best efforts to
preserve substantially intact the business organization of the Company, to keep
available the services of the current officers and employees of the Company and
to preserve the current relationships of the Company with customers, suppliers
and other persons with which the Company has significant business relations; and
the Company shall not declare or pay dividends, split, combine or reclassify its
stock, issue convertible securities or issue rights, warrants or options to
purchase Shares other than shares issuable upon exercise of options issued
pursuant to Company Options or employee stock purchase plans outstanding as of
the date of the Merger Agreement.

Pursuant to the Merger Agreement, during the period prior to the purchase
of Shares pursuant to the Offer, Parent has covenanted to use its reasonable
best efforts not to interfere in any material respect with the Company's conduct
of its day-to-day operations except with respect to the rights and
responsibilities of Parent's designees on the Company Board or Parent's rights
and obligations under any contract or agreement with the Company.

The Company and Parent are each obligated under the Merger Agreement to
give each other prompt notice of (i) the occurrence, or non-occurrence, of any
event the occurrence, or non-occurrence, of which would be likely to cause any
representation or warranty contained in the Merger Agreement to be untrue or
inaccurate and (ii) any failure of the Company, Parent or Purchaser, as the case
may be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it thereunder.

It is understood and agreed that all rights to indemnification by the
Company existing as of the date of the Merger Agreement in favor of each present
and former director and officer of the Company as provided in the Company's
certificate of incorporation or bylaws or pursuant to any other agreements in
effect as of such date shall survive the Merger and shall continue in full force
and effect for a period of at least six years from the Effective Time.

The Merger Agreement provides that Parent will, for a period of six years
from and after the Effective Time, indemnify and hold harmless each such
director and officer of the Company with respect to all acts and omissions
occurring before the Effective Time that are based on or arise out of his
service as a director or officer, including all acts and omissions in connection
with the amendment to the Restated Stockholders Agreement, the Merger Agreement
and the transactions contemplated thereby, including the Offer and the Merger,
to the extent of the more favorable of (i) the Company's indemnification
arrangements with such directors and officers as of the date of the Merger
Agreement, (ii) the indemnification provisions of Parent's certificate of
incorporation or bylaws and (iii) any other indemnification arrangement that
Parent has with its directors.

Pursuant to the terms of the Merger Agreement and subject to the conditions
thereof, each of the parties thereto shall use its reasonable best efforts to
take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
the Merger Agreement, including, without limitation, using its reasonable best
efforts to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to contracts
with the Company and its subsidiaries as are necessary for the consummation of
the transactions and to fulfill the conditions to the Offer and the Merger. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of the Merger Agreement, the proper officers
and directors of each party to the Merger Agreement and the Surviving
Corporation shall use their reasonable best efforts to take all such action.

Under the Merger Agreement, Parent and the Company agree to consult with
one another before issuing any press release or otherwise making any public
statements with respect to the Merger Agreement or the

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<PAGE> 24

transactions contemplated thereby. Parent and the Company further agree not to
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange to which Parent or the Company is a party.

Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions: (a) to the extent
required by the DGCL and the Company's certificate of incorporation and bylaws,
the Merger Agreement, the Merger and the transactions contemplated thereby shall
have been approved and adopted by the affirmative vote or consent of the
stockholders of the Company; (b) no foreign, United States or state governmental
authority or other agency or commission or foreign, United States or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect and
has the effect of: (i) making the acquisition of Shares by Parent or Purchaser
or any affiliate of either of them illegal or otherwise restricting, preventing
or prohibiting consummation of the transactions contemplated by the Merger
Agreement, (ii) seeking to prohibit or limit materially the ownership or
operation by the Company, Parent or any of their respective subsidiaries of all
or any material portion of the business or assets of the Company, Parent or any
of their respective subsidiaries as a result of the transactions contemplated by
the Merger Agreement or (iii) compelling the Company, Parent, Purchaser or any
of their respective subsidiaries to dispose of or hold separate all or any
material portion of the business or assets of the Company, Parent or Purchaser
or any of their respective subsidiaries as a result of the transactions
contemplated by the Merger Agreement, provided, however, that each of the
parties shall have used its reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as practicable any
injunction or other order that may be entered; and (c) Purchaser shall have
purchased all Shares validly tendered and not withdrawn pursuant to the Offer;
provided, however, that condition (c) shall not be applicable to the obligations
of Parent and Purchaser if, in breach of the Merger Agreement or the terms of
the Offer, Purchaser fails to purchase any Shares validly tendered and not
withdrawn pursuant to the Offer.

Termination; Fees and Expenses. The Merger Agreement may be terminated and
the Merger and the other transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of the
Merger Agreement and the transactions contemplated thereby by the stockholders
of the Company: (a) by mutual written consent duly authorized by the Boards of
Directors of Parent and the Company, if such termination is also approved by the
Special Committee; (b) by either Parent or the Company if the Effective Time
shall not have occurred on or before December 31, 1997, provided, however, that
such right to terminate shall not be available to any party whose failure to
fulfill any obligation under the Merger Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such date;
(c) by either Parent or the Company if any court of competent jurisdiction or
other governmental authority shall have issued an order, decree, ruling or taken
any other action restraining, enjoining or otherwise prohibiting the Offer or
the Merger and such order, decree, ruling or other action shall have become
final and nonappealable; (d) by Parent if, due to an occurrence or circumstance
that would result in a failure of any condition set forth under "THE
OFFER" -- Certain Conditions of the Offer" to be satisfied, (i) Purchaser shall
not have commenced the Offer within 60 days following the date of the Merger
Agreement, (ii) the Offer shall have been terminated or expired in accordance
with its terms without Purchaser having accepted for payment any Shares pursuant
to the Offer or (iii) Purchaser shall have failed to pay for Shares pursuant to
the Offer within 90 days following the commencement of the Offer, unless, in the
case of clause (iii), such failure to pay for Shares shall have been caused by
or resulted from the failure of Parent or Purchaser to perform in any material
respect any material covenant or agreement of either of them contained in the
Merger Agreement or the material breach by Parent or Purchaser of any material
representation or warranty of either of them contained in the Merger Agreement;
(e) by the Company, upon approval of the Company Board and a majority of the
members of the Special Committee, if due to an occurrence or circumstance that
would result in a failure to satisfy any of the conditions set forth under "THE
OFFER" -- Certain Conditions of the Offer", Purchaser shall have (i) failed to
commence the Offer within 60 days following the date of the Merger Agreement,
(ii) terminated the Offer without having accepted any Shares for payment
thereunder or (iii) failed to pay for Shares pursuant to the Offer within 90
days following the commencement of the Offer, unless such failure to pay for
Shares shall have been caused by or resulted

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<PAGE> 25

from the failure of the Company to perform in any material respect any material
covenant or agreement of it contained in the Merger Agreement or the material
breach by the Company of any material representation or warranty of it contained
in the Merger Agreement; or (f) by the Company, upon approval of the Company
Board and a majority of the members of the Special Committee, if Parent shall
have breached in any material respect its covenant relating to Parent's
involvement in the day-to-day management of the Company prior to the
consummation of the Offer, and Parent continues such breach following written
notice by the Company to Parent thereof.

In the event of the termination of the Merger Agreement, the Merger
Agreement shall forthwith become void, and there shall be no liability on the
part of any party thereto, except nothing therein shall relieve any party
thereto from liability for any wilful breach thereof.

Except as set forth below, all costs and expenses incurred in connection
with the Merger Agreement and the transactions contemplated thereby shall be
paid by the party incurring such fees and expenses, whether or not the
transactions contemplated by the Merger Agreement are consummated. See "THE
OFFER -- Fees and Expenses".

9. INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER

In considering the recommendations of the Company Board and the Special
Committee with respect to the Offer and the Merger and the fairness of the
consideration to be received in the Offer and the Merger, stockholders should be
aware that certain officers and directors of the Company have interests in the
Offer and the Merger which are described below and which may be in addition to
their interests as stockholders of the Company. Stockholders also should be
aware that Parent and Purchaser have certain interests that present actual or
potential conflicts of interest in connection with the Offer and the Merger. As
a result of Parent's current ownership of approximately 54.5% of the outstanding
Shares and its designees constituting a majority of the Company's directors,
Parent may be deemed to control the Company. The Special Committee and the
Company Board were each aware of these actual and potential conflicts of
interest and considered them along with the other matters described under
"SPECIAL FACTORS -- Recommendations of the Special Committee and the Company
Board; Fairness of the Offer and the Merger".

Parent and Purchaser have not been advised by the executive officers or
directors of the Company whether any of such persons intends to tender Shares
owned by them pursuant to the Offer.

Robson Shares. Mr. John E. Robson, a director of Parent, serves on the
Company Board as one of Parent's designees. In consideration of such service,
pursuant to a letter agreement (the "Robson Agreement"), dated May 6, 1996,
Parent transferred to Mr. Robson 15,000 Shares (the "Robson Shares"), which are
subject to a three-year vesting period under which one-third of the Robson
Shares become non-forfeitable on March 31 of each year, commencing March 31,
1997. Mr. Robson also participates in the Company's standard director
compensation arrangements with its non-employee directors. The Robson Agreement
provides for, among other things, acceleration of the vesting of the Robson
Shares upon the occurrence of certain events, among which are (i) the cessation
of Mr. Robson's service as a non-employee director of the Company for any reason
other than his voluntary resignation or removal for Cause (as defined in the
Robson Agreement) or (ii) a "Change of Control," defined as either (x) the
acquisition by Parent of 90% of the then issued and outstanding Shares or (y)
the disposition by Parent of substantially all of the Shares then owned by
Parent.

In addition, the Company granted Mr. Robson two options to purchase Shares
under the Company's 1996 Stock Option Plan. The first option, which is for the
purchase of 10,000 Shares, was granted on March 31, 1996 at an exercise price of
$5.75 per Share and is fully exercisable. The second option, which is for the
purchase of 10,000 Shares, was granted on September 20, 1996 at an exercise
price of $5.25 per Share and becomes exercisable in equal 1/12th increments over
twelve months from the date of grant. Both options have a term of ten years.

Change of Control and Severance Agreements. Mr. Salquist has entered into
a Change of Control Employment Agreement with the Company, dated as of July 19,
1995. The agreement provided that, upon a

23
<PAGE> 26

Change of Control (as defined therein) of the Company, if Mr. Salquist's
employment were to be terminated thereafter by the Company without Cause (as
defined therein) or by Mr. Salquist for Good Reason (as defined therein) within
the three-year term of the agreement or if he were to resign upon the six-month
or three-year anniversary of the effective date of the agreement, he would
receive severance benefits that would include a payment equal to 2.99 times his
base salary and average bonus for the prior three fiscal years. For purposes of
such agreement, the closing of transactions in connection with the
Reorganization Agreement on March 31, 1996 constituted a Change of Control. See
"SPECIAL FACTORS -- Background of the Offer and the Merger".

In connection with his resignation as Chief Executive Officer in August
1996, Mr. Salquist and the Company entered into an amendment to his Change of
Control Employment Agreement pursuant to which Mr. Salquist agreed that payments
required to be made to him under such agreement would be paid over a 13 month
period rather than in a lump sum. The amended agreement provided for the payment
of $315,000 upon Mr. Salquist's resignation and monthly payments of $25,000
during a 12 month consulting period and an additional payment of $290,000 at the
end of the 12 month period.

Severance Arrangements. In connection with the Offer and the Merger,
Parent has agreed to make the following provisions for severance payments to be
made to certain eligible employees of the Company (including certain senior
level employees of the Company, but excluding the President and Acting Chief
Executive Officer of the Company, Lloyd M. Kunimoto) whose separation from the
Company results from the restructuring, consolidation and/or integration of the
operations of the Company with or into those of Parent (each such eligible
employee, a "Covered Person"). Each Covered Person who is currently a Vice
President of the Company shall receive (i) six months of base salary if such
Covered Person has up to five years of service or (ii) 12 months of base salary
if such Covered Person has more than five years of service.

With respect to Mr. Kunimoto, Parent has agreed to make the following
severance payments in the event of a separation occurring on or before December
31, 1997: 24 months of base salary if Mr. Kunimoto is not offered a position
with the Surviving Corporation, and 12 months of base salary if Mr. Kunimoto is
offered a position but subsequently elects to separate from the Surviving
Corporation; provided, however, that in either case no severance payments shall
result in the event Mr. Kunimoto is terminated for cause.

In all cases, severance payments shall be made by the Company, in the case
of separations occurring prior to the consummation of the Merger, and by Parent,
in the case of separations occurring thereafter until December 31, 1997.
Furthermore, in the case of all Covered Persons, the payment of severance as set
forth above is conditioned on each such Covered Person executing a release of
all claims against the Company and Parent, among others, and the failure to
execute such a release will result in severance payments of one-quarter of one
month's base salary for each year of service with the Company or Parent plus
one-quarter of one month's base salary in lieu of notice of termination.

10. SHARE OWNERSHIP BY PARENT AND PURCHASER

As of April 7, 1997, Parent owns (i) 30,146,114 Shares which were acquired
in connection with the Reorganization Agreement and (ii) 6,250,000 Shares which
were acquired in connection with the Stock Purchase Agreement, representing
approximately 54.5% of the Shares outstanding and approximately 53.3% of the
Shares outstanding on a Fully Diluted Basis. See "SPECIAL FACTORS -- Background
of the Offer and the Merger". Purchaser owns no Shares as of the date hereof.
Prior to the Effective Time, if necessary or desirable in connection with the
Merger, Parent will contribute all of its Shares to Purchaser.

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<PAGE> 27

11. BENEFICIAL OWNERSHIP OF SHARES

The following table sets forth certain information, as of February 28,
1997, regarding the ownership of Shares by each person known by the Company to
be the beneficial owner of more than 5% of the outstanding Shares, as well as
each director of the Company, the Acting Chief Executive Officer of the Company,
certain other officers of the Company, and all executive officers and directors
of the Company as a group:

<TABLE>
<CAPTION>
SHARES BENEFICIALLY APPROXIMATE PERCENT
OWNED(1) OWNED(2)
------------------- -------------------
<S> <C> <C>
Andrew M. Baum...................................... 57,780 *
Patrick J. Fortune.................................. -- --
Robert T. Fraley.................................... -- --
Jeffrey D. Gargiulo................................. 16,667 *
Michael R. Hogan.................................... -- --
Lloyd M. Kunimoto................................... 42,226 *
Christian Leleu..................................... 30,833 *
Howard D. Palefsky.................................. 17,000 *
John E. Robson...................................... 30,000 *
Roger H. Salquist................................... 248,340 *
Richard Stonard..................................... 23,333 *
Allen J. Vangelos................................... 21,600 *
Hendrik A. Verfaillie............................... -- --
All executive officers and directors as a group (16
persons).......................................... 598,654 *
Monsanto Company(3)................................. 36,396,114 54.5%
Travelers Group Inc. and Affiliates(4).............. 4,076,654 6.1%
</TABLE>

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

(1) The Company has advised Parent and Purchaser that it believes that all
beneficial owners named in the table have sole voting and investment power
with respect to the Shares they beneficially own. The Shares shown in the
table to be beneficially owned include any Shares that the person has the
right to acquire within 60 days of January 31, 1997, by the exercise of any
Company Option of which the Company has knowledge. The Shares subject to
such Company Options are as follows: Mr. Baum: 49,079; Mr. Gargiulo: 16,667;
Mr. Leleu: 20,833; Mr. Stonard: 23,333; Mr. Kunimoto: 35,329; Mr. Palefsky:
17,000; Mr. Robson: 15,000: Mr. Salquist: 224,762; Mr. Vangelos: 21,000; and
all executive officers and directors as a group: 531,804.

(2) Percent of the 66,741,035 Shares outstanding as of April 2, 1997, counting
as outstanding for each named person all Shares issuable to such person on
exercise of Company Options that are included in the first column.

(3) Percentage calculated without taking into account Shares issuable on
exercise of Company Options.

(4) Based on an Information Statement Pursuant to Rules 13d-1 and 13d-2 on
Schedule 13G filed by Travelers Group Inc. and Smith Barney Holdings Inc.
with the SEC on January 22, 1997 with respect to Shares beneficially owned
as of December 31, 1996.

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<PAGE> 28

THE OFFER

1. TERMS OF THE OFFER

The Offer is conditioned upon, among other things, satisfaction (or waiver
with approval of the Special Committee) of the Majority-of-the-Minority
Condition and satisfaction or waiver of the Ninety Percent Condition and the
other conditions to the Offer set forth under "THE OFFER -- Certain Conditions
of the Offer".

Subject to the applicable rules and regulations of the SEC, Purchaser
expressly reserves the right, in its sole discretion (but subject to the terms
and conditions of the Merger Agreement), at any time and from time to time, upon
the failure to be satisfied of any of the conditions to the Offer set forth
under "THE OFFER -- Certain Conditions of the Offer" (except that, under certain
circumstances Purchaser has agreed pursuant to the Merger Agreement to waive the
Ninety Percent Condition), to (i) terminate or amend the Offer, (ii) extend the
Offer and postpone acceptance for payment of any Shares, or (iii) waive any
condition (except, without the consent of the Special Committee, for the
Majority-of-the-Minority Condition), by giving oral or written notice of such
termination, amendment, extension or waiver to the Depositary and by making a
public announcement thereof. During any such extension, all Shares previously
tendered and not properly withdrawn will remain subject to any such extension,
and all Shares previously tendered and not properly withdrawn will remain
subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares. See "THE OFFER -- Withdrawal Rights". In the
event all conditions set forth under "THE OFFER -- Certain Conditions of the
Offer" shall have been satisfied other than the Majority-of-the-Minority
Condition or the Ninety Percent Condition, Purchaser may extend the Offer for a
period or periods aggregating not more than 20 business days after the later of
(i) the initial expiration date of the Offer and (ii) the date on which all
other conditions set forth under "THE OFFER -- Certain Conditions of the Offer"
other than the Majority-of-the-Minority Condition or the Ninety Percent
Condition shall have been satisfied. If all of the conditions to the Offer have
been satisfied or waived other than the Ninety Percent Condition, then, on the
latest expiration date of the Offer permitted in accordance with the preceding
sentence, Purchaser has agreed pursuant to the Merger Agreement to waive the
Ninety Percent Condition and accept for payment all of the Shares validly
tendered and not withdrawn as of such date. UNDER NO CIRCUMSTANCES WILL INTEREST
BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT PURCHASER
EXERCISES ITS RIGHT TO EXTEND THE OFFER.

Any termination, amendment, extension or waiver will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-1(d) under the Exchange Act requires that the announcement be made no
later than 9:00 a.m., Eastern time, on the next business day after the
previously scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which Purchaser may choose to make
any public announcements, Purchaser will not have any obligations to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a press release to the Dow Jones News Service. As used herein, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, Eastern
Time.

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<PAGE> 29

If Purchaser extends the Offer or if Purchaser (whether before or after its
acceptance for payment of the Shares) is delayed in its acceptance for payment
of or payment for any Shares validly tendered and not withdrawn in the Offer or
Purchaser is unable to accept for payment or pay for such Shares pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer, the Depositary may retain tendered Shares on behalf of Purchaser, and
such Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in "THE OFFER -- Withdrawal Rights".
The ability of Purchaser to delay the payment for the Shares that Purchaser has
accepted for payment, however, is limited by Rule 14e-1(c) under the Exchange
Act, which requires that a bidder pay the consideration offered or return the
securities deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.

If Purchaser or Parent makes a material change in the terms of the Offer or
the information concerning the Offer or waives a material condition of the
Offer, Purchaser will, or Parent will cause Purchaser to, disseminate additional
tender offer materials and extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer or information concerning the offer, other than a change in price or a
change in the percentage of securities sought, or a change in the dealer's
advisory fee, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. In the
SEC's view, an offer should remain open for a minimum of five business days from
the date a material change is first published, sent or given to securityholders,
and, if material changes are made with respect to information that approaches
the significance of price and share levels, a minimum of ten business days may
be required to allow for adequate dissemination and investor response. With
respect to a change in price or, subject to certain limitations, a change in the
percentage of securities sought or a change in a dealer's solicitation fee, a
minimum period of ten business days from the date of such change is generally
required under the applicable rules and regulations of the SEC to allow for
adequate dissemination to stockholders and investor response.

The Company has provided Purchaser with the Company's stockholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed by Purchaser to stockholders of record and
will be furnished by Purchaser to brokers, dealers, banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on such
stockholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.

2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES

Valid Tender. For a stockholder to validly tender Shares pursuant to the
Offer, either (i) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or an
Agent's Message (as defined below) in connection with a book-entry delivery of
Shares, and any other required documents, must be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase, and
Share Certificates for tendered Shares must be received by the Depositary at one
of such addresses or such Share Certificates must be delivered pursuant to the
procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation (as defined below) received by the Depositary), in each case on or
prior to the Expiration Date or (ii) the tendering stockholder must comply with
the guaranteed delivery procedures set forth below.

Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company ("DTC") and the Philadelphia
Depositary Trust Company ("PDTC") (DTC and PDTC, each, a "Book-Entry Transfer
Facility" and, collectively, the "Book-Entry Transfer Facilities") for purposes
of the Offer within two business days after the date of this Offer to Purchase.
Any financial institution that is a participant in a Book-Entry Transfer
Facility may make book-entry delivery of Shares by causing the book-entry
transfer system to transfer such Shares into the Depositary's account at a
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. Although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, the Letter of Transmittal, properly completed and
duly executed, with any required

27
<PAGE> 30

signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer, and any other required documents, must, in any case,
be transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase on or prior to the Expiration
Date, or the tendering stockholder must comply with the guaranteed delivery
procedures described below. The confirmation of a book-entry transfer of Shares
into the Depositary's account at a Book-Entry Transfer Facility as described
above is referred to herein as a "Book-Entry Confirmation". DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH ITS BOOK-ENTRY
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received the
Letter of Transmittal and agrees to be bound by the terms of the Letter of
Transmittal and that Purchaser may enforce such agreement against such
participant.

THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND SOLE RISK OF THE TENDERING STOCKHOLDER
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED AT THE DEPOSITARY.
IF DELIVERY IS BY MAIL, THEN INSURED OR REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.

Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this Section, includes any
participant in a Book-Entry Transfer Facility system whose name appears on a
security position listing as the owner of the Shares) tendered therewith and
such registered holder(s) has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
such Letter of Transmittal or (ii) such Shares are tendered for the account of a
bank, broker, dealer, credit union, savings association or other entity that is
a member in good standing of the Securities Transfer Agents Medallion Program
(an "Eligible Institution"). In all other cases, all signatures on the Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instructions 1
and 5 to the Letter of Transmittal. If the Share Certificates are registered in
the name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made or Share Certificates not validly tendered or not accepted
for payment or not purchased are to be issued or returned to a person other than
the registered holder of the Share Certificates, the tendered Share Certificates
must be endorsed in blank or accompanied by appropriate stock powers, signed
exactly as the name or names of the registered holder(s) appear on the Share
Certificates with the signatures on such Share Certificates or stock powers
guaranteed by an Eligible Institution. See Instructions 1 and 5 to the Letter of
Transmittal.

Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date, such Shares may nevertheless be
tendered provided that all of the following guaranteed delivery procedures are
duly complied with:

(1) such tender is made by or through an Eligible Institution;

(2) the Depositary receives (by hand, mail, telegram or facsimile
transmission) on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form
provided by Purchaser; and

(3) the Share Certificates representing all tendered Shares, in proper
form for transfer (or a Book-Entry Confirmation with respect to such
Shares), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees
(or in the case of Book-Entry Transfer, an Agent's Message) and any other
documents required by the Letter of Transmittal, are received by the
Depositary within three NASDAQ trading days after the date of execution of
such Notice of Guaranteed Delivery. A "NASDAQ trading day" is any day on
which NASDAQ is open for business.

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<PAGE> 31

The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or by mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.

Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) Share Certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof) for such Shares, properly completed and duly executed, with
any required signature guarantees, or, in the case of Book-Entry Transfer, an
Agent's Message, and (iii) any other documents required by the Letter of
Transmittal. Accordingly, tendering stockholders may be paid at different times
depending upon when Share Certificates, Book-Entry Confirmations and such other
documents are actually received by the Depositary. Under no circumstances will
interest be paid by Purchaser on the purchase price of the Shares to any
tendering stockholders, regardless of any extension of the Offer or any delay in
making such payment.

Purchaser's acceptance for payment of Shares validly tendered pursuant to
any of the procedures described above will constitute a binding agreement
between the tendering stockholder and Purchaser upon the terms and subject to
the conditions of the Offer.

Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding. Purchaser reserves the absolute right to reject any
or all tenders determined by it not to be in proper form or the acceptance for
payment of or payment for which may, in the opinion of Purchaser's counsel, be
unlawful. Purchaser also reserves the absolute right to waive any of the
conditions of the Offer (other than the Majority-of-the-Minority Condition,
which can only be waived with the consent of the Special Committee) or any
defect or irregularity in any tender with respect to any particular Shares, or
with respect to those Shares held by any particular stockholder, whether or not
similar conditions, defects or irregularities are waived in the case of other
Shares. No tender of Shares will be deemed to have been validly made until all
defects or irregularities relating thereto have been cured or waived. None of
Parent, Purchaser, any of its affiliates or assigns, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. Purchaser's interpretation
of the terms and conditions of the Offer (including the Letter of Transmittal
and the instructions thereto) will be final and binding.

Backup Withholding. In order to avoid backup withholding of Federal income
tax on payments of cash pursuant to the Offer, a stockholder tendering Shares in
the Offer must provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on a Substitute Form W-9 and certify under
penalties of perjury that such TIN is correct and that such stockholder is not
subject to backup withholding. Certain stockholders (including, among others,
all corporations and certain foreign individuals and entities) are not subject
to backup withholding. If a stockholder does not provide its correct TIN or
fails to provide the certification described above, under Federal income tax
laws, the Depositary will be required to withhold 31% of the amount of any
payment made to such stockholder pursuant to the Offer. All stockholders
tendering Shares pursuant to the Offer should complete and sign the Substitute
Form W-9 included as part of the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is provided in a manner satisfactory to
Purchaser and the Depositary). Noncorporate foreign stockholders should complete
and sign a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 11 to the Letter of Transmittal.

3. WITHDRAWAL RIGHTS

Except as otherwise provided in this Section 3, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date, and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after June 5, 1997. If
Purchaser extends the Offer, is

29
<PAGE> 32

delayed in its acceptance for payment of Shares or is unable to purchase Shares
validly tendered pursuant to the Offer for any reason, then without prejudice to
Purchaser's rights under the Offer, the Depositary may nevertheless, on behalf
of the Purchaser, retain tendered Shares and such Shares may not be withdrawn
except to the extent that tendering stockholders are entitled to withdrawal
rights as described in this section. Any such delay will be accompanied by an
extension of the Offer to the extent required by law.

For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn if Share Certificates have been tendered
and the name of the registered holder of the Shares to be withdrawn as set forth
on such Share Certificates if different from the name of the person who tendered
the Shares. If Share Certificates have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer as set forth under "THE OFFER -- Procedure for Accepting
the Offer and Tendering Shares", any notice of withdrawal must specify the name
and number of the account at the appropriate financial institution that is a
member of the system of a Book-Entry Transfer Facility to be credited with the
withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures for such withdrawal, in which case a notice of withdrawal will be
effective if delivered to the Depositary by any method of delivery described in
the first sentence of this paragraph. Withdrawals of tenders of Shares may not
be rescinded, and any Shares properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. Withdrawn Shares may be retendered
by again following one of the procedures described above under "THE
OFFER -- Procedure for Accepting the Offer and Tendering Shares" at any time on
or prior to the Expiration Date.

All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination shall be final and binding. None of Parent, Purchaser, any
of their affiliates or assigns, the Depositary, the Information Agent, the
Dealer Manager or any other person will be under any duty to give notification
of any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification.

4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES

Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will purchase, by accepting for payment, and will pay
for, all Shares validly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with the terms set forth under "THE
OFFER -- Withdrawal Rights" promptly after the later to occur of (i) the
Expiration Date or (ii) the satisfaction or waiver (where permissible) of the
terms and conditions set forth under "THE OFFER -- Certain Conditions of the
Offer". Any determination concerning the satisfaction or waiver of such terms
and conditions will be within the sole discretion of Purchaser, which
determination will be final and binding on all holders of Shares. See "THE
OFFER -- Terms of the Offer" and "THE OFFER -- Dividends and Distributions".
Subject to applicable rules of the SEC and the terms and conditions of the
Merger Agreement, Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of or payment for Shares in order to
comply in whole or in part with any applicable law. Any such delays will be
effected in compliance with Purchaser's obligation under Rule 14e-1(c) under the
Exchange Act to pay for or return tendered Shares promptly after the termination
or withdrawal of the Offer.

In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) Share
Certificates (or timely Book-Entry Confirmation of the book-entry transfer of
such Shares into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedures set forth under "THE OFFER -- Procedure for Accepting
the Offer and Tendering Shares"), (ii) the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, together with any

30
<PAGE> 33

required signature guarantees, or an Agent's Message in connection with a
book-entry transfer and (iii) any other documents required by the Letter of
Transmittal.

For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to Purchaser and not
properly withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to the
Offer. In all cases, upon the terms and subject to the conditions of the Offer,
payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from
Purchaser and transmitting payment to such validly tendering stockholders. UNDER
NO CIRCUMSTANCES WILL INTEREST BE PAID BY PURCHASER ON THE PURCHASE PRICE OF THE
SHARES TENDERED PURSUANT TO THE OFFER, REGARDLESS OF ANY EXTENSION OF THE OFFER
OR ANY DELAY IN MAKING SUCH PAYMENT. Upon the deposit of funds with the
Depositary for the purpose of making payments to tendering stockholders,
Purchaser's obligation to make such payments shall be satisfied and tendering
stockholders must thereafter look solely to the Depositary for payment of
amounts owed to them by reason of the acceptance for payment of Shares pursuant
to the Offer. Purchaser will pay any stock transfer taxes with respect to the
transfer and sale to it or its order pursuant to the Offer, except as otherwise
provided in Instruction 6 of the Letter of Transmittal, as well as any charges
and expenses of the Depositary and the Information Agent.

If Purchaser is delayed in its acceptance for payment of, or payment for
tendered Shares or is unable to accept for payment or pay for such Shares
pursuant to the Offer for any reason, then, without prejudice to Purchaser's
rights under the Offer (but subject to Purchaser's obligations under Rule
14e-1(c) under the Exchange Act to pay for or return the tendered Shares
promptly after the termination or withdrawal of the Offer), the Depositary may,
nevertheless, retain tendered Shares on behalf of Purchaser, and such Shares may
not be withdrawn except to the extent tendering stockholders are entitled to
exercise, and duly exercise, withdrawal rights as described under "THE
OFFER -- Withdrawal Rights".

If any tendered Shares are not purchased pursuant to the Offer because of
an invalid tender or for any reason, Share Certificates for any such Shares will
be returned, without expense, to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
under "THE OFFER -- Procedure for Accepting the Offer and Tendering Shares",
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration, termination or
withdrawal of the Offer.

Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of Purchaser's subsidiaries or affiliates, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Purchaser of its
obligations under the Offer or prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for purchase.

5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The summary of Federal income tax consequences set forth below is for
general information only and is based on Purchaser's understanding of the law as
currently in effect. The tax consequences to each stockholder will depend in
part upon such stockholder's particular situation. Special tax consequences not
described herein may be applicable to particular classes of taxpayers, such as
financial institutions, broker-dealers, persons who are not citizens or
residents of the United States and stockholders who acquired their Shares
through the exercise of an employee stock option or otherwise as compensation.
ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR
TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE
APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR
FOREIGN INCOME AND OTHER TAX LAWS AND OF CHANGES IN SUCH TAX LAWS.

The receipt of cash for Shares pursuant to the Offer will be a taxable
transaction for Federal income tax purposes under the Code, and may also be a
taxable transaction under applicable state, local or foreign income and other
tax laws. Generally, for Federal income tax purposes, a tendering stockholder
will recognize gain or

31
<PAGE> 34

loss in an amount equal to the difference between the cash received by the
stockholder pursuant to the Offer and the stockholder's adjusted tax basis in
the Shares tendered by the stockholder and purchased pursuant to the Offer. For
Federal income tax purposes, such gain or loss will be a capital gain or loss if
the Shares are a capital asset in the hands of the stockholder, and a long-term
capital gain or loss if the stockholder's holding period is more than one year.

Legislative proposals have been under consideration that would reduce the
rate of Federal income taxation of certain capital gains. Such legislation, if
enacted, might apply only to gain realized on sales occurring after a date
specified in the legislation. It cannot be predicted whether any such
legislation ultimately will be enacted and, if enacted, when its effective date
will be.

A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals and entities) that
tenders Shares may be subject to 31% backup withholding unless the stockholder
provides its TIN and certifies that such number is correct or properly certifies
that it is awaiting a TIN, or unless an exemption applies. A stockholder who
does not furnish its TIN may be subject to a penalty imposed by the IRS. See
"THE OFFER -- Procedure for Accepting the Offer and Tendering Shares".

If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an appropriate income tax return.

The receipt of cash by stockholders pursuant to the Merger should result in
similar Federal income tax consequences to such stockholders similar to those
described above.

6. PRICE RANGE OF THE SHARES

The Company's common stock is traded over the counter on NASDAQ under the
symbol CGNE. The following table sets forth for the periods indicated the high
and low sale prices of the common stock as reported by NASDAQ.

<TABLE>
<CAPTION>
CALGENE, INC.
------------------
HIGH LOW
------- ------
<S> <C> <C>
FISCAL 1995
Quarter ended September 30, 1994................................ $12.375 $8.625
Quarter ended December 31, 1994................................. 9.875 6.375
Quarter ended March 31, 1995.................................... 8.875 5.750
Quarter ended June 30, 1995..................................... 9.625 5.375

FISCAL 1996
Quarter ended September 30, 1995................................ 8.125 6.625
Quarter ended December 31, 1995................................. 7.250 4.250
Quarter ended March 31, 1996.................................... 7.375 4.500
Quarter ended June 30, 1996..................................... 6.875 5.375

SIX MONTHS ENDED DECEMBER 31, 1996
Quarter ended September 30, 1996................................ 6.875 4.250
Quarter ended December 31, 1996................................. 6.000 4.375

FISCAL 1997
Quarter ended March 31, 1997.................................... 7.563 4.875
Quarter ending June 30, 1997 (through April 4, 1997)............ 7.938 7.750
</TABLE>

On January 28, 1997, the last full day of trading prior to the public
announcement of the Acquisition Proposal, according to published sources, the
reported closing price of the Shares on NASDAQ was $5.500

32
<PAGE> 35

per Share. On March 31, 1997, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, according to published
sources, the closing price of the Shares on NASDAQ was $5.563 per Share. On
April 4, 1997, the last full day of trading before the commencement of the
Offer, according to published sources, the reported closing price of the Shares
on NASDAQ was $7.875 per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES.

The Company has never declared or paid cash dividends and the Company has
advised Purchaser that it does not intend to declare any dividend in the
foreseeable future. The ability of the Company to pay dividends is subject to
certain restrictions under certain indebtedness of the Company as well as the
terms of the Calgene Credit Facility Agreement (as defined below) and the
Gargiulo Credit Facility Agreement (as defined below) the Company has with
Parent.

7. CERTAIN INFORMATION CONCERNING THE COMPANY

General. The following description of the Company's business has been
taken from the Company's Transition Report on Form 10-K for the six-month period
ended December 31, 1996 (the "Transition 10-K"):

Calgene is a biotechnology company that is developing a portfolio of
genetically engineered plants and plant products for the food, seed and
oleochemical industries. The Company's research and business efforts are
focused in three core crop areas -- fresh produce (tomato and strawberry),
edible and industrial plant oils (canola) and cotton -- where Calgene
believes biotechnology can provide substantial added commercial value in
consumer, industrial and seed markets.

Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and, in accordance therewith, is
required to file periodic reports, proxy statements and other information with
the SEC relating to its business, financial condition and other matters. Certain
information as of particular dates concerning the Company's directors and
officers (including their remuneration and stock options granted to them),
Shares held by them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company and certain
other matters is required to be disclosed in proxy statements and annual reports
distributed to the Company's stockholders and filed with the SEC. Such reports,
proxy statements and other information are available for inspection and copying
at the public reference facilities of the SEC located at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the SEC located in the Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and in Seven World Trade Center, Suite 1300,
New York, New York 10048. Copies also may be obtained, by mail, upon payment of
the SEC's customary charges by writing to the SEC's principal office at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC
also maintains an Internet site on the World Wide Web at <http://www.sec.gov>
that contains reports, proxy statements and other information. The information
also should be available at The Nasdaq Stock Market, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.

Directors and Officers. The name, address, principal occupation or
employment, five-year employment history, and citizenship of each director and
executive officer of the Company is set forth in Schedule II hereto.

Results for Quarter Ended December 31, 1996. On March 13, 1997, the
Company issued the following press release with respect to its financial results
for the quarter ended December 31, 1996:

Calgene, Inc. today announced a pro forma net loss of $13,475,000
($0.21 per share) on revenues of $33,329,000 for the quarter ended December
31, 1996. This compares with a net loss of $5,730,000 ($0.19 per share) on
revenues of $11,678,000 during the same period last year. The pro forma net
loss is before non-cash asset write-downs, and other restructuring expenses
totaling $32,605,000 at Gargiulo, Inc., Calgene's produce company. The
$21,651,000 or 185% increase in revenues compared to the same period of the
prior year was due to the inclusion of operating results from Gargiulo,
which Calgene acquired in March, 1996. The pro forma net loss is $7,745,000
higher than the comparable period of the prior year primarily due to losses
at Gargiulo. Sales from Calgene's cotton seed subsidiary occur primarily in
the quarters ended March 31 and June 30.

33
<PAGE> 36

For the six months ended December 31, 1996, Calgene reported a pro
forma net loss of $31,329,000 ($0.50 per share) on revenues of $70,509,000,
compared to a net loss of $16,104,000 ($0.53 per share) on revenues of
$20,790,000 during the same period last year. After asset write-downs and
reserves, Calgene's net loss for the six-month period was $63,934,000
($1.03 per share). Effective January 1, 1997, Calgene changed its fiscal
year end from June 30 to December 31. The six month period ended December
31, 1996 is a transitional fiscal period.

"The operating results in the December, 1996 quarter were largely due
to low tomato prices," said Lloyd Kunimoto, President of Calgene. "In
response to these market conditions, we have consolidated and streamlined
operations, and significantly reduced expenses. As a result of these
measures, we believe our cost structure is now very competitive in today's
tomato market." said Mr. Kunimoto.

The non-cash asset write-downs, and other restructuring expenses
reflect the consolidation of redundant farming and packing operations,
which resulted from the merging of Collier Farms and Calgene Fresh
(Calgene's former fresh market tomato subsidiary) into Gargiulo's Southwest
Florida operations and the reduction of acreage. "The size of our Southwest
Florida operation now reflects the balance we are seeking between Florida
and Mexico. We intend to increase our production in Mexico, where we have
established partnerships with leading producers of vine-ripe tomatoes,"
said Mr. Kunimoto.

The Company also announced the establishment of a multi-year working
capital line of credit with Bank of America. The line of credit is $20
million in 1997, increasing to $30 million in 1998 and $40 million until
its expiration in December, 1999. "We are pleased that we have established
a relationship with Bank of America. Our partnership will help provide
Calgene, with the working capital needed for its produce operation and will
help to finance the scale-up of Calgene's transgenic product line,
including Laurical oil, BXN cotton and BXN/Bollgard cotton," said Mr.
Kunimoto.

Selected Consolidated Financial Data. The selected consolidated financial
information of the Company and its subsidiaries set forth below, and the
information set forth in Schedule III hereto, was excerpted and derived from the
Company's Transition 10-K, which included audited financial statements for the
six-month period ended December 31, 1996 and for the fiscal years ended June 30,
1995 and 1996, as filed by the Company with the SEC. More comprehensive
financial information is included in the Transition 10-K (including management's
discussion and analysis of results of operations and financial position) and
other documents filed with the SEC. The following summary financial information
is qualified in its entirety by reference to such documents and all other
reports and documents filed with the SEC and all of the financial statements and
related notes contained therein. Such reports and certain other reports may be
examined and copies may be obtained at the offices of the SEC in the manner set
forth in above. A copy of the financial statements set forth in the Transition
10-K is reproduced as Schedule III hereto.

34
<PAGE> 37

CALGENE, INC.

SELECTED CONSOLIDATED FINANCIAL DATA
($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
AT OR FOR THE
SIX MONTHS
ENDED
DECEMBER 31,(4) AT OR FOR THE YEARS ENDED JUNE 30,
-------------------- --------------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA(1)
Revenues:
Product sales.............. $ 69,780 $ 19,940 $ 95,723 $ 48,972 $ 35,408 $ 24,675 $ 18,211
Product development........ 729 850 9,272 6,459 3,025 2,562 3,666
-------- -------- -------- -------- -------- -------- --------
Total revenues........... $ 70,509 $ 20,790 $104,995 $ 55,431 $ 38,433 $ 27,237 $ 21,877
-------- -------- -------- -------- -------- -------- --------
Loss from continuing
operations................. $(63,934) $(16,104) $(97,014) $(30,602) $(42,801) $(25,223) $(18,616)
Net loss..................... $(63,934) $(16,104) $(97,014) $(30,602) $(42,801) $(25,623) $(19,916)
NET LOSS PER SHARE(2)
Loss from continuing
operations............... $ (1.03) $ (.53) $ (2.56) $ (1.04) $ (1.71) $ (1.11) $ (1.34)
Net loss................... $ (1.03) $ (.53) $ (2.56) $ (1.04) $ (1.71) $ (1.13) $ (1.42)
CONSOLIDATED BALANCE SHEET
DATA:
Total assets............... $173,880 $ 78,960 $233,302 $ 89,231 $ 78,312 $ 88,401 $ 85,223
Long-term obligations...... $ 54,727 $ 23,853 $ 57,912 $ 15,421 $ 5,704 $ 3,694 $ 4,378
Preferred Stock(3)......... $ -- $ -- $ -- $ -- $ -- $ -- $ 29,506
Common stock and additional
paid-in capital.......... $417,648 $223,329 $367,554 $223,191 $190,961 $169,506 $111,119
</TABLE>

- ---------------
(1) As described in the Transition 10-K, acquisitions during 1993 and 1996
affect the comparability of the selected financial data.

(2) Applicable to holders of common stock.

(3) Includes additional paid-in capital allocable to Preferred Stock.
Substantially all the Preferred Stock was converted to common stock in July
1992.

(4) Effective January 1, 1997, the Company changed its fiscal year end from June
30 to December 31.

Book value per Share was $1.19, $1.55 and $1.52 as of December 31, 1996,
June 30, 1996 and June 30, 1995, respectively. Because the Company has recorded
a net loss for the 1995 and 1996 fiscal years and for the six month period ended
December 31, 1996, the ratio of earnings to fixed charges for those periods is
not meaningful.

Certain Projections. In the ordinary course of the Company's business
planning and budgeting process, the Company's management develops and presents
to the Company Board projections of the future performance of the Company.

THE PROJECTIONS SET FORTH BELOW WERE DEVELOPED FOR PLANNING PURPOSES ONLY
AND ARE NOT TO BE REGARDED AS FACTS AND SHOULD NOT BE RELIED UPON AS ACCURATE
REPRESENTATIONS OF FUTURE RESULTS. SUCH PROJECTIONS ARE BASED ON NUMEROUS
ESTIMATES AND ASSUMPTIONS WHICH THEMSELVES ARE BASED UPON EVENTS AND
CIRCUMSTANCES THAT HAVE NOT TAKEN PLACE AND ARE INHERENTLY SUBJECT TO
SIGNIFICANT FINANCIAL, MARKET, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND
CONTINGENCIES WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND ARE
BEYOND PARENT'S AND THE COMPANY'S CONTROL, THEY ARE INHERENTLY IMPRECISE AND
THERE CAN BE NO ASSURANCE THAT THE PROJECTED RESULTS CAN BE REALIZED. THEREFORE,
IT IS EXPECTED THAT THERE WILL BE DIFFERENCES BETWEEN THE ACTUAL AND PROJECTED
RESULTS AND THAT THE ACTUAL RESULTS MAY BE MATERIALLY HIGHER OR LOWER THAN THOSE
PROJECTED. THE PROJECTIONS WERE NOT PREPARED IN CONTEMPLATION OF THE OFFER OR
THE MERGER AND, THEREFORE, DO NOT REFLECT ANY BENEFITS OR COSTS THAT COULD
RESULT AS A CONSEQUENCE OF CONSUMMATION OF THE OFFER OR THE MERGER. NONE OF THE

35
<PAGE> 38

COMPANY, PARENT NOR ANY OTHER PARTY ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY
OF SUCH INFORMATION. THE INCLUSION OF THE PROJECTIONS SET FORTH BELOW SHOULD NOT
BE REGARDED AS A REPRESENTATION BY PARENT OR ANY OF THEIR AFFILIATES OR
REPRESENTATIVES OR BY THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES
THAT THE PROJECTED RESULTS WILL BE ACHIEVED. THE PROJECTIONS SET FORTH BELOW
WERE NOT PREPARED WITH A VIEW TOWARDS PUBLIC DISCLOSURE OR COMPLYING WITH
PUBLISHED GUIDELINES OF THE COMMISSION OR GUIDELINES ESTABLISHED BY THE AMERICAN
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. THE PROJECTIONS HAVE NOT BEEN
EXAMINED, REVIEWED OR COMPILED BY THE COMPANY'S INDEPENDENT AUDITORS, AND
ACCORDINGLY THEY HAVE NOT EXPRESSED AN OPINION OR ANY OTHER ASSURANCE ON THEM.

CALGENE MANAGEMENT PROJECTIONS -- CONSOLIDATED
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PROJECTED
-------------------------------------------------------
YEARS ENDED DEC. 31, 1997 1998 1999 2000 2001
- ----------------------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Revenues................................. $200.3 $270.1 $335.9 $431.7 $554.7
Operating Profit......................... 3.3 22.2 32.1 52.3 72.6
Net Income............................... (0.2) 10.1 20.1 40.1 60.0
Earnings (loss) Per Share(a)............. $ (0.00) $ 0.15 $ 0.30 $ 0.61 $ 0.91
</TABLE>

- ---------------
(a) Assumes 66 million shares outstanding.

8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT

Purchaser. Purchaser is a Delaware corporation and has not carried on any
activities other than in connection with the Offer and the Merger. The principal
offices of Purchaser are located at 800 North Lindbergh Boulevard, St. Louis,
Missouri 63167. Purchaser is a wholly owned subsidiary of Parent.

Parent. Parent is a corporation organized under the State of Delaware. Its
principal offices are located at 800 North Lindbergh Boulevard, St. Louis,
Missouri 63167. Parent and its subsidiaries are engaged in the worldwide
manufacture and sale of a diversified line of agricultural products,
pharmaceuticals, food ingredients and chemical products. In December 1996,
Parent's Board of Directors approved a plan, subject to stockholder approval and
certain other conditions, to spin off Parent's chemical businesses to Parent's
stockholders.

The name, citizenship, business address, principal occupation or employment
and five-year employment history and certain other information for each of the
directors and executive officers of Purchaser and Parent are set forth in
Schedule I hereto.

As of April 7, 1997, Parent owned (i) 30,146,114 Shares which it acquired
in connection with the Reorganization Agreement and (ii) 6,250,000 Shares which
it acquired in connection with the Stock Purchase Agreement, representing
approximately 54.5% of the Shares outstanding. Prior to the Effective Time, if
necessary or desirable in connection with the Merger, Parent will contribute all
of its Shares to Purchaser. Except as described in this Offer to Purchase, (i)
none of Purchaser, Parent nor, to the best knowledge of Purchaser and Parent,
any of the persons listed in Schedule I to this Offer to Purchase or any
associate or majority-owned subsidiary of Purchaser, Parent or any of the
persons so listed beneficially owns or has any right to acquire, directly or
indirectly, any Shares and (ii) none of Purchaser, Parent nor, to the best
knowledge of Purchaser and Parent, any of the persons or entities referred to
above nor any director, executive officer or subsidiary of any of the foregoing
has effected any transaction in the Shares during the past 60 days.

Except as provided in the Merger Agreement or as otherwise described in
this Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or voting of such securities, finder's fees, joint ventures,

36
<PAGE> 39

loan or option arrangements, puts or calls, guarantees of loans, guarantees
against loss, guarantees of profits, division of profits or loss or the giving
or withholding of proxies. Except as set forth in this Offer to Purchase, since
July 1, 1993, neither Purchaser nor Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed on Schedule I hereto, has had
any business relationship or transaction with the Company or any of its
executive officers, directors or affiliates that is required to be reported
under the rules and regulations of the SEC applicable to the Offer. Except as
set forth in this Offer to Purchase, since July 1, 1993, there have been no
contacts, negotiations or transactions between any of Purchaser, Parent, or any
of their subsidiaries or, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I to this Offer to Purchase, on the one hand, and
the Company or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.

9. FINANCING OF THE OFFER AND THE MERGER

The total amount of funds required by Purchaser to consummate the Offer and
the Merger and to pay related fees and expenses is estimated to be approximately
$257 million. Parent will ensure that Purchaser has sufficient funds to acquire
all the outstanding Shares pursuant to the Offer and the Merger. Parent will
provide such funds initially through commercial paper borrowings at market rates
at the time of issuance.

Parent anticipates that any indebtedness incurred through borrowings will
be refinanced from time to time. Such decision will be made based on Parent's
review from time to time of the advisability of particular actions, as well as
on prevailing interest rates and financial and other economic conditions and
such other factors as Parent may deem appropriate.

10. INTERCOMPANY ARRANGEMENTS BETWEEN PARENT AND THE COMPANY

Commercial Contracts and Agreements. In addition to the Reorganization
Agreement, the Original Stockholders Agreement, the Stock Purchase Agreement,
the Restated Stockholders Agreement (each of which is described under "SPECIAL
FACTORS -- Background of the Offer and the Merger") and the Merger Agreement,
Parent and the Company have entered into a number of commercial contracts and
agreements. Following is a summary of certain of such arrangements.

Parent and the Company entered into an Interference Settlement and License
Agreement dated as of April 22, 1993 involving an invention relating to the use
of promoters from cauliflower mosaic virus in transgenic plants. Under the terms
of such agreement, the Company assigned certain patent rights to Parent and
Parent granted the Company a limited, royalty-free, non-exclusive license under
its U.S. patent rights and a royalty-bearing, non-exclusive license under its
foreign patent rights. Royalties paid by the Company to Parent totalled $50,290
in fiscal 1996 and $48,701 in fiscal 1995. No royalties were paid in fiscal 1993
or 1994.

Parent and the Company entered into an agreement dated as of April 22,
1993, pursuant to which Parent granted the Company a worldwide, non-exclusive,
royalty-bearing license under its patent rights relating to
Agrobacterium-mediated plant transformation. No royalties were paid by the
Company to Parent in fiscal 1993, 1994, 1995 or 1996.

Parent and the Company entered into a license agreement dated as of April
22, 1993 pursuant to which Parent granted the Company a worldwide,
non-exclusive, royalty-bearing license under its patent rights relating to
antibiotic marker genes. The Company paid Parent $12,573 in fiscal 1996 and
$12,175 in fiscal 1995 with respect to such license. No amounts were paid in
fiscal 1993 or 1994.

Parent and the Company entered into a license agreement dated as of April
22, 1993, under which Parent granted the Company a worldwide, non-exclusive,
royalty-bearing license under its U.S. patent rights relating to an
Agrobacterium-based method for soybean transformation. The Company did not pay
any amounts in fiscal 1993, 1994, 1995 or 1996, with respect to such license.

37
<PAGE> 40

to certain methods for transformation of Brassica and tomatoes. Parent did not
pay any royalties in fiscal 1993, 1994, 1995 or 1996.

Parent and the Company entered into a license agreement dated as of April
23, 1993, under which the Company granted Parent a non-exclusive,
royalty-bearing license under its U.S. Agrobacterium-related patent rights.
Parent did not pay any royalties to the Company in fiscal 1993, 1994, 1995 or
1996.

Parent and the Company entered into a license agreement dated as of April
22, 1993, under which the Company granted Parent a world-wide, non-exclusive,
royalty-bearing license under its patent rights relating to the use of
negative-strand RNA to control indigenous gene expression in plants. Parent did
not pay any royalties in fiscal 1993, 1994, 1995 or 1996.

Parent and the Company entered into an agreement dated as of April 22, 1993
pursuant to which each party granted the other a world-wide, non-exclusive,
royalty-bearing license under its respective patent rights relating to the use
of ACC-deaminase in plants to control ethylene production in certain fruits.
Neither Parent nor the Company paid any royalties pursuant to such agreement in
fiscal 1993, 1994, 1995 or 1996.

Parent and the Company entered into an Insect-Protected Cotton License and
Seed Services Agreement dated as of September 26, 1995, pursuant to which Parent
granted to the Company a non-exclusive license in the U.S. to make and sell
transgenic cotton seed containing Parent's B.t. technology to cotton farmers
licensed to use such seed by Parent. In return for providing such seed to
farmers licensed by Parent, Parent provides a seed services fee to the Company.

In December 1994, Parent and the Company, together with certain unrelated
third parties, entered into a settlement agreement regarding the Company's
patent rights relating to glyphosate resistant gene technology. Pursuant to the
terms of such settlement agreement, the Company granted Parent an exclusive
world-wide, paid-up license under its patent rights with respect to such
technology. Upon execution of the agreement, Parent paid $8 million jointly to
the Company and Rhone-Poulenc Agrochimie, an unrelated third party.

Parent and the Company executed an agreement effective as of September 26,
1995 pursuant to which Parent is to provide certain B.t. genes to the Company
for evaluation purposes only. Parent and the Company are under no obligation to
enter into a license agreement for commercial terms.

Financial Arrangements between the Company and Parent.

As a result of Parent's approximate 54.5% ownership interest in the
Company, the Company and Parent have a number of intercompany financial,
operating and other arrangements and have engaged in certain intercompany
transactions believed to be mutually beneficial. These arrangements include the
following:

Calgene Credit Facility Agreement. On March 31, 1996, Parent and the
Company entered into the Calgene Credit Facility Agreement pursuant to which
Parent shall, during the Commitment Period (as hereinafter defined), and subject
to the terms and conditions contained therein, make, at the request of the
Company, three consecutive one-year loans of up to $15 million each (each a
"Calgene Loan" and together the "Calgene Loans"), collectively totalling not
more than $45,000,000. At no time shall the outstanding principal of all Calgene
Loans exceed $15 million. Prior to the occurrence of an Event of Default (as
defined in the Calgene Credit Facility Agreement), the Company may borrow, repay
and reborrow under each Calgene Loan, each such borrowing or reborrowing being
an "Advance". The "Commitment Period" began on March 31, 1996 and ends on the
earlier of September 30, 1998, or such earlier time that Parent terminates its
obligations to make further Advances under the Calgene Credit Facility
Agreement. The Calgene Loans made pursuant to the Calgene Credit Facility
Agreement are to be secured by the joint and several guaranty of the
subsidiaries of the Company.

Prior to the occurrence of an Event of Default, the Calgene Loans bear
interest at the per annum rate equal to 2.00% above Citibank's published prime
rate (the "Calgene Base Rate"), and following an Event of Default at the per
annum rate equal to 3.00% above the Calgene Base Rate. During the continuance of
an Event of Default, the Company shall have no right to obtain any new Advances
under this Agreement. The

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Calgene Loans may be prepaid in whole or in part at any time after giving at
least three days prior written notice to Parent.

In lieu of repayment of outstanding principal and accrued interest on each
Calgene Loan, the Company, subject to Parent's right to require the Company to
sell Shares and pay cash, as provided below, may elect to convert all or any
portion of the principal and accrued interest due under the applicable Calgene
Loan (the "Conversion Amount") into Shares at the average of the closing market
price for such Shares during the thirty trading days immediately preceding the
applicable maturity date for such Calgene Loan.

Parent may, in its sole discretion and within five business days after its
receipt of notice from the Company that the Company intends to exercise the
Company's rights to convert the Conversion Amount, give written notice to the
Company stating that (i) all or any part of the Conversion Amount shall be
payable in cash (the "Alternative Conversion Amount"), (ii) the Company shall,
at its expense, sell publicly such number of Shares as Parent would have
received if the Alternative Conversion Amount had been converted as described
above and (iii) the net proceeds of such sale shall be paid by the Company to
Parent in full payment and satisfaction of such Alternative Conversion Amount.

Upon any such conversion, the Conversion Amount shall first be applied to
reduce the accrued interest due on the applicable Calgene Loan as of the
applicable maturity date, and any remaining portion of the Conversion Amount
shall be applied to reduce the principal due on such Calgene Loan. In any event,
on each annual Maturity Date (as defined in the Calgene Credit Facility
Agreement), all outstanding principal and accrued interest not converted by the
Company into Shares shall be repaid in full to Parent.

Upon the occurrence and during the continuation of an Event of Default, for
a period of thirty days from the occurrence of the Event of Default, the
Company, subject to Parent's right to require the Company to sell Shares and pay
cash, as described above, may similarly elect to convert all or any portion of
the principal and accrued interest under any outstanding Calgene Loan into
Shares. If the Company does not elect to exercise its conversion rights upon
such an Event of Default, Parent may, in addition to its other remedies, elect
to convert all or a portion of the remaining principal and accrued interest
under such Calgene Loan into Shares at the average of the closing market prices
for such Shares during the thirty days preceding such Event of Default. In no
event, however, shall Parent elect to convert principal and accrued interest
into more than 3,000,000 Shares (as such number is adjusted for stock dividends,
stock splits and similar events affecting holders of the Shares).

The obligation of Parent to provide Advances is subject to the fulfillment
of certain conditions, including, among others: (i) the continued accuracy of
all representations and warranties made by the Company and its subsidiaries;
(ii) the compliance with all covenants contained in the Calgene Credit Facility
Agreement; (iii) no event shall have occurred which would constitute an Event of
Default or Potential Event of Default (as defined in the Calgene Credit Facility
Agreement); or (iv) there shall not have occurred any circumstance which could
reasonably be expected to have a material adverse effect on (A) the business,
assets, operations or financial condition of the Company and its subsidiaries,
taken as a whole, or (B) the ability of the Company and its subsidiaries to
perform their obligations under the Calgene Credit Facility Agreement.

The covenants contained in the Calgene Credit Facility Agreement require
the Company to maintain a minimum consolidated net worth of not less than $10
million and a minimum consolidated working capital of not less than $5 million.
The Calgene Credit Facility Agreement also requires that the Company and its
subsidiaries meet certain specified financial ratios, including a ratio of total
long-term liabilities to net worth and a current ratio. In addition, the Calgene
Credit Facility Agreement imposes a number of limitations on the Company with
respect to future acquisitions, liens, mergers and the sale of assets, loans and
investments, guaranties, capital expenditures, the payment of dividends and the
incurrence of indebtedness. The existence of these covenants could limit the
Company's ability to finance the growth of its existing operations if cash flows
were to decrease substantially or if expenses were to increase substantially.
These covenants would also limit the Company's ability to engage in additional
acquisitions that would significantly increase the ratio of long-term
indebtedness to net worth following such acquisitions. The failure of the
Company to satisfy these covenants would cause an Event of Default which could
have a material adverse effect on its business and results of operations.

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<PAGE> 42

All of the Calgene Loans shall be subordinated and subject in right of
payment to the prior payment in full of a certain senior indebtedness of the
Company as more fully described in the Calgene Credit Facility Agreement. No
payment on account of principal or interest on the Calgene Loans shall be made
if at the time of such payment or immediately after giving the effect thereto:
(i) there shall exist a default in any payment with respect to any such senior
indebtedness or (ii) there shall have occurred an event of default (other than a
default in the payment of amounts due thereon) with respect to any such senior
indebtedness.

As of February 28, 1997, there was no outstanding balance of principal and
interest under the Calgene Credit Facility Agreement.

Gargiulo Credit Facility Agreement. On March 31, 1996, Parent and the
Company entered into the Gargiulo Credit Facility Agreement pursuant to which
Parent shall, during the Commitment Period (as hereinafter defined), and subject
to the terms and conditions contained therein, make available to the Company a
revolving credit facility of up to $40 million (the "Gargiulo Loan").

The Gargiulo Loan has been used to acquire Collier Farms and to support the
branded tomato strategy of Gargiulo as determined by the Gargiulo Board of
Directors (other than amounts used to finance the acquisition of Collier Farms).
Prior to the occurrence of an Event of Default (as defined in the Gargiulo
Credit Facility Agreement), Gargiulo may borrow, repay and reborrow, each such
borrowing or reborrowing being an "Advance". In order to obtain an Advance from
Parent under the Gargiulo Credit Facility Agreement, Gargiulo must provide
documentation reasonably acceptable to Parent verifying that Gargiulo has
reached certain milestones and achieved certain goals as set forth therein. The
maximum amount of each Advance is subject to certain limitations based upon such
milestones and goals. The "Commitment Period" began on March 31, 1996 and ends
on the earlier of the fourth anniversary or such earlier time that Parent
terminates its obligations to make further Advances. The Gargiulo Loan is
secured by the joint and several guaranty of the subsidiaries of the Company.

Prior to the occurrence of an Event of Default, the Gargiulo Loan shall
bear interest at the per annum rate equal to 2.00% above Citibank's published
prime rate (the "Gargiulo Base Rate"), and following an Event of Default at the
per annum rate equal to 3.00% above the Gargiulo Base Rate. During the
continuance of an Event of Default, the Company shall have no right to obtain
any new Advances. The Gargiulo Loan may be prepaid in whole or in part at any
time after giving at least three days prior written notice to Parent.

The Gargiulo Loan is payable, unless extended as described below, in one
payment on the fourth anniversary of the Effective Time (the "Maturity Date") in
an amount equal to the lesser of (i) the Repayment Portion of the Cumulative
Free Cash Flow (as defined in the Gargiulo Credit Facility Agreement) of
Gargiulo from the Effective Time to the Maturity Date and (ii) the amount of the
outstanding principal and accrued interest on the Gargiulo Loan. "Repayment
Portion" means the sum of 20% of the first $10 million of Cumulative Free Cash
Flow, 50% of the next $10 million and 80% of the remaining balance. In the event
that the Repayment Portion is not sufficient to pay all of the then outstanding
principal and accrued interest at the Maturity Date, the maturity date with
respect to the unpaid amount of outstanding principal and interest shall be
extended to the sixth anniversary of the Effective Time (the "Extended Maturity
Date"). In the event the Repayment Portion of the Cumulative Free Cash Flow
(less amounts previously paid) is not sufficient to pay the then outstanding
principal and accrued interest at the Extended Maturity Date, the Company shall
pay Parent such lesser amount and Parent, at its sole option, may do any one or
combination of the following: (i) convert all or any portion of the then
outstanding principal and accrued interest into Shares at the average of the
closing market prices for such Shares during the thirty trading days immediately
preceding the date of such conversion, (ii) further extend the Final Maturity
Date (as defined in the Gargiulo Credit Facility Agreement) upon the same terms
as are contained in the Gargiulo Credit Facility Agreement, or (iii) as to any
unpaid amount which is not converted under clause (i) or for which payment is
not extended pursuant to clause (ii), cause the Company to sell publicly that
number of Shares as Parent would have received if such amount has been converted
under clause (i) above with the net proceeds of such sale being delivered to
Parent in full payment and satisfaction of such amount.

Upon the occurrence and during the continuation of an Event of Default,
Parent may, in addition to its other remedies, similarly elect to convert all or
any portion of the principal and accrued interest under the

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<PAGE> 43

Gargiulo Loan (the "Gargiulo Conversion Amount") into Shares at the average of
the closing market prices for such Shares during the thirty days preceding such
Event of Default. In no event, however, shall Parent elect to convert principal
and accrued interest into more than 8,000,000 Shares (as such number is adjusted
for stock dividends, stock splits and similar events affecting holders of the
Shares). Upon any such conversion, the Gargiulo Conversion Amount shall first be
applied to reduce the accrued interest due on the Gargiulo Loan, and any
remaining portion of the Gargiulo Conversion Amount shall be applied to reduce
the principal due on such Gargiulo Loan.

The obligation of Parent to provide Advances is subject to the fulfillment
of certain conditions, including, among others: (i) the continued accuracy of
all representations and warranties made by the Company and its subsidiaries;
(ii) the compliance with all covenants contained in the Gargiulo Credit Facility
Agreement; (iii) no event shall have occurred which would constitute an Event of
Default or Potential Event of Default (as defined in the Gargiulo Credit
Facility Agreement); or (iv) there shall not have occurred any circumstance
which could reasonably be expected to have a material adverse effect on (A) the
business, assets, operations or financial condition of the Company and its
subsidiaries, taken as a whole or (B) the ability of the Company and its
subsidiaries to perform their obligations under the Gargiulo Credit Facility
Agreement.

The covenants contained in the Gargiulo Credit Facility Agreement require
the Company to maintain a minimum consolidated net worth of not less than $10
million and a minimum consolidated working capital of not less than $5 million.
The Gargiulo Credit Facility Agreement also requires that the Company and its
subsidiaries meet certain specified financial ratios, including a ratio of total
long-term liabilities to net worth and a current ratio. In addition, the
Gargiulo Credit Facility Agreement imposes a number of limitations on the
Company and each of its subsidiaries with respect to future acquisitions, liens,
mergers and the sale of assets, loans and investments, guaranties, capital
expenditures, the payment of dividends and the incurrence of indebtedness. The
existence of these covenants could limit the Company's ability to finance the
growth of its existing operations if cash flows were to decrease substantially
or if expenses were to increase substantially. These covenants would also limit
the Company's ability to engage in additional acquisitions that would
significantly increase the ratio of long-term indebtedness to net worth
following such acquisitions. The failure of the Company to satisfy these
covenants would cause an Event of Default which could have a material adverse
effect on its business and results of operations.

The Gargiulo Loan is to be subordinated and subject in right of payment to
the prior payment in full of certain senior indebtedness of the Company as more
fully described in the Gargiulo Credit Facility Agreement. No payment on account
of principal or interest on the Gargiulo Loan shall be made if at the time of
such payment or immediately after giving the effect thereto, (i) there shall
exist a default in any payment with respect to any such senior indebtedness or
(ii) there shall have occurred an event of default (other than a default in the
payment of amounts due thereon) with respect to any such senior indebtedness.

As of February 28, 1997, the outstanding balance of principal and interest
under the Gargiulo Credit Facility Agreement was $27.1 million.

Subordination Agreement. In February 1997, Parent and the Company entered
into a subordination agreement (the "Subordination Agreement") pursuant to which
Parent's claims against the Company, including claims under the Calgene Credit
Facility Agreement and the Gargiulo Credit Facility Agreement, but not including
certain trade receivables (such claims, the "Covered Claims") were subordinated
to the claims of Bank of America National Trust and Savings Association, a
national banking association ("Bank of America") under a business loan agreement
between the Company and Bank of America, entered into in February 1997 (the
"Business Loan"). Also pursuant to the Subordination Agreement, Parent agreed
not to take certain actions with respect to the collection, enforcement or
transfer of the Covered Claims without 45 days prior written notice to Bank of
America (except with respect to regularly scheduled payments of principal and
interest then due and owing under the Calgene Credit Facility Agreement or the
Gargiulo Credit Facility Agreement) or at any time there exists a default in
payment under the Business Loan; provided, however, that Parent shall in any
case maintain its rights to convert into Shares the indebtedness under the
Calgene Credit Facility Agreement and the Gargiulo Credit Facility Agreement.
The Subordination Agreement also provides

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that, in case of any (a) assignment for the benefit of creditors of the Company,
(b) proceeding under the Bankruptcy Code, (c) appointment of a receiver for the
Company's business or assets or (d) dissolution or winding up of the Company's
affairs, the Company will pay principal and interest to Bank of America under
the Business Loan in full prior to any making any payment to Parent of principal
and interest under a Covered Claim, as well as other matters, as more fully
described in the Subordination Agreement.

Technology Agreements between Parent and the Company.

License Agreements. As part of the transaction consummated in connection
with the Reorganization Agreement in March 1996, Parent contributed certain
technology licenses to the Company pursuant to various license agreements and
letter agreements. The technologies underlying the License Agreements are
summarized below.

ACC Synthase and ACC Deaminase. ACC is a precursor of ethylene, a
plant growth regulator that induces ripening in certain fruits. By reducing
the amount of ACC available for conversion into ethylene, the ripening
process can be delayed. Control of the ripening process may enable the
Company to improve the efficiency of its tomato production operations. The
Company has been granted non-exclusive, perpetual, royalty-free rights to
the ACC synthase and ACC deaminase genes for use in certain produce crops
and shall be able to practice under Parent's ACC Synthase license from the
USDA.

Fruit-specific Promoters. Promoters control the expression of genes
in each plant cell. In order for certain genes to function in a beneficial
manner, expression of these genes must be restricted to certain parts of
the plant. Fruit-specific promoters provide a means of limiting gene
expression to the fruit. For example, these promoters may be useful in
regulating carbohydrate metabolism (e.g., sugar content) in ripening fruits
such as tomatoes and strawberries. The Company has been granted
non-exclusive, perpetual, royalty-free rights to certain fruit-specific
promoters for use in certain produce crops.

Virus Resistance Genes. Virus infection is known to significantly
reduce the yields of certain crops, including tomatoes. Parent has
developed methods of interfering with viral replication in engineered
plants, which slows the rate and degree of infection, and reduces the yield
loss resulting from the infection. The Company has been granted
non-exclusive, perpetual, royalty-free or royalty-bearing rights to certain
aspects of Parent's patent estate related to the engineering of virus
resistance into certain produce crops.

FAD 3 Gene. The FAD 3 gene controls the relative amount of
polyunsaturated fatty acids found in plant oils, including canola oil. The
Company believes that reducing the expression of the FAD 3 gene in
engineered canola plants may result in an oil with reduced linoleic and
linolenic acid content. Such an oil would be a superior cooking oil, as
well as a superior raw material for the production of margarine and
shortening. The Company has been granted exclusive, perpetual,
royalty-bearing rights to the FAD 3 gene for use in certain oilseed crops.

Insect Resistance Gene. Parent has modified genes from a soil
microorganism called Bacillus thurengiensis ("B.t.") the encode proteins
that are toxic to certain insects. Use of insecticides to control insects
is a major cost in the production of tomatoes. The Company has been granted
non-exclusive, perpetual, royalty-free rights to Parent's B.t. patent
estate for use in certain produce crops.

ADP Glucose Pyrophosphorylase ("ADP GPP") Gene. The ADP GPP gene is a
bacterial gene involved in starch biosynthesis. By expression of this gene
in plants, the starch and/or sugar content of plants can be increased. This
may improve the flavor or sweetness of produce crops such as tomatoes or
strawberries. The Company has been granted non-exclusive, perpetual,
royalty-free rights to Parent's patent estate related to ADP GPP for use in
certain produce crops. Parent and the Company are parties to an
interference at the United States Patent and Trademark Office relating to
the ADP GPP gene.

Oil Modification Technology. Parent has certain patent rights and
know-how related to the production of plants with altered oil compositions.
By modifying oil composition it may be possible to provide temperate
sources of certain tropical oils and the production of novel oil
compositions. Parent oil modification genes include sucrose phosphorylase,
cytochrome b5 and PEP carboxylase. The Company

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has been granted non-exclusive, perpetual, royalty-free rights under
Parent's patents and know-how for use in certain oilseed crops.

Insect Protected Cotton Direct Grower Licensing Agreement. The Company has
entered into an agreement with Parent under which the Company will participate
in the direct licensing of Parent's B.t. technology to cotton growers. Parent
granted to the Company a non-exclusive license in the U.S. to make and sell
transgenic cotton seed containing Parent's B.t. technology to cotton farmers
licensed to use such seed by Parent. In return for providing such seed to
farmers licensed by Parent, Parent provides a seed services fee to the Company
which represents a specified portion of the license fee obtained from the cotton
grower. The material terms of the license fee to the Company's agreement shall
be modified to reflect any more favorable terms that may be granted to any other
cotton seed company that may participate in the direct licensing program.

Parent intends to enter into license agreements directly with cotton
growers. Under the terms of these agreements, cotton growers would obtain a
one-time right to purchase a specified number of units of cottonseed containing
Parent's B.t. gene in return for the payment of a license fee. Parent has agreed
to pay to the Company a specified percentage of the net license fees received
from licensed growers who subsequently purchase the Company's cottonseed
products containing Parent's B.t. gene. The material terms of the Company's
agreement shall be modified to reflect any more favorable terms that may be
granted to any other cottonseed company that may participate in the direct
licensing program.

Oilseed Development Agreement. In May 1996, the Company and Parent
executed a broad strategic cross-licensing agreement encompassing the two
companies' oilseed research programs. Under the agreement, the Company received
a royalty free license to current and future Parent agronomic technology for use
in combination with the Company's proprietary oils modification genes for use in
developing specialty canola oil product. Parent received a royalty bearing
license to the Company technology to develop agronomically superior corn,
soybean, canola and sunflower crops. In addition, Parent paid $7 million to the
Company and will pay royalties based on sales of insect resistant corn, soybean,
canola and sunflower seed with increased oil content and modified meal
composition utilizing the Company technology. Also as part of the agreement,
Parent paid the Company $10 million in cash to help fund oilseed research and
development. In exchange, Parent will receive a portion of the future profits
from the Company's specialty oils business.

Kelco Agreement. In January 1997, the Company and The Nutra Sweet Kelco
Company ("Kelco") entered into an agreement to collaborate on the development of
two specialty vegetable oil products. Kelco is a wholly owned subsidiary of
Parent. As part of the agreement, Kelco purchased from the Company a non-
exclusive license to certain Company technology for use in research purposes, an
option to expand the research license to include commercialization rights and
certain product distribution rights.

11. DIVIDENDS AND DISTRIBUTIONS

If, on or after March 31, 1997, the Company should declare or pay any
dividend on the Shares or make any other distribution (including the issuance of
additional shares of capital stock pursuant to a stock dividend or stock split,
the issuance of other securities or the issuance of rights for the purchase of
any securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of Purchaser
or its nominee or transferee on the Company's stock transfer records of the
Shares purchased pursuant to the Offer, then, without prejudice to Purchaser's
rights under "THE OFFER -- Certain Conditions of the Offer", (i) the Offer Price
per Share payable by Purchaser pursuant to the Offer will be reduced (subject to
the Merger Agreement) to the extent any such dividend or distribution is payable
in cash and (ii) any non-cash dividend, distribution or right shall be received
and held by the tendering stockholder for the account of Purchaser and will be
required to be promptly remitted and transferred by each tendering stockholder
to the Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, Purchaser will be entitled to all the rights and privileges as owner of any
such non-cash dividend, distribution or right and may withhold the entire
purchase price or deduct from the purchase price the amount or value thereof, as
determined by Purchaser in its sole discretion.

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12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ QUOTATION AND
EXCHANGE ACT REGISTRATION

The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly, will reduce the number of
holders of Shares and could thereby adversely affect the liquidity and market
value of the remaining publicly held Shares.

NASDAQ Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
in NASDAQ. According to NASDAQ's published guidelines, the Shares would not be
eligible to be included for listing if, among other things, the number of
publicly held Shares falls below 500,000, the number of holders of Shares falls
below 400 or the aggregate market value of such publicly held Shares falls below
$3,000,000. If these standards are not met, the Shares might continue to be
listed on The Nasdaq SmallCap Market, Inc., but if the number of holders of the
Shares falls below 300, or if the number of publicly held Shares falls below
100,000, or if the aggregate market value of such publicly held Shares falls
below $200,000 or there are not at least two registered and active market makers
(one of which may be a market maker entering a stabilizing bid), NASDAQ rules
provide that the securities would no longer qualify for inclusion in NASDAQ and
NASDAQ would cease to provide any quotations. Shares held directly or indirectly
by an officer or director of the Company or by a beneficial owner of more than
10% of the Shares will ordinarily not be considered as being publicly held for
purposes of these standards. In the event the Shares are no longer eligible for
NASDAQ quotation, quotations might still be available from other sources. The
extent of the public market for the Shares and the availability of such
quotations would, however, depend upon the number of holders of such Shares
remaining at such time, the interest in maintaining a market in such Shares on
the part of securities firms, the possible termination of registration of such
Shares under the Exchange Act as described below and other factors.

Purchaser has been advised by the Company that as of April 2, 1997, there
were approximately 2,935 holders of record of the Shares. The Company has
advised Purchaser that it believes that the number of beneficial owners of the
Shares as of April 2, 1997 is in excess of 31,000.

Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares for the purpose of
buying, carrying or trading in securities ("Purpose Loans"). Depending upon
factors similar to those described above regarding the continued listing, public
trading and market quotations of the Shares, it is possible that, following the
purchase of the Shares pursuant to the Offer, the Shares would no longer
constitute "margin securities" for the purposes of the margin regulations of the
Federal Reserve Board and therefore could no longer be used as collateral for
Purpose Loans made by brokers.

Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the SEC if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders. The termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Shares and to
the SEC and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with stockholders' meetings and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Shares. In addition,
"affiliates" of the Company and persons holding "restricted securities" of the
Company may be deprived of the ability to dispose of such securities pursuant to
Rule 144 under the Securities Act. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for NASDAQ reporting. Purchaser currently intends to seek to
cause the Company to terminate the registration of the Shares under the Exchange
Act as soon after consummation of the Offer as the requirements for termination
of registration are met.

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13. CERTAIN CONDITIONS OF THE OFFER

Any other provision of the Offer notwithstanding, Purchaser shall not be
required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of, and payment for, Shares tendered, if (i) the Majority-of-the-
Minority Condition shall not have been satisfied (or waived with approval of the
Special Committee) as of the expiration of the Offer (as it may be extended by
Purchaser from time to time), (ii) the Ninety Percent Condition shall not have
been satisfied or waived as of the expiration of the Offer (as it may be
extended by Purchaser from time to time, but subject to certain waiver
requirements), or (iii) at any time on or after March 31, 1997 and prior to the
acceptance for payment of Shares, any of the following conditions exist:

(a) there shall have occurred and be remaining in effect (i) any
general suspension of trading in, or limitation on prices for, securities
on NASDAQ (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any limitation
imposed by any government, governmental agency or authority on the
extension of credit by banks or other lending institutions in the United
States, or (iv) the commencement of a war or armed hostilities or other
international calamity directly or indirectly involving the United States;
or

(b) an order shall have been entered or an injunction shall have been
issued and remain in effect (i) restraining or prohibiting the making or
consummation of the Offer or the Merger, (ii) making the purchase of, or
payment for, some or all of the Shares illegal or (iii) imposing
limitations on the ability of Purchaser effectively to acquire or to hold
or to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by Purchaser on all
matters properly presented to the stockholders of the Company; or

(c) any statute, rule, regulation or referendum shall be enacted,
enforced, promulgated or deemed applicable to (i) Parent or any of its
affiliates or subsidiaries or the Company or any of its subsidiaries or
(ii) the Offer or the Merger, which could reasonably be expected, directly
or indirectly, to result in any of the consequences referred to in clauses
(i) through (iii) of paragraph (b) above; or

(d) the Merger Agreement shall have been terminated in accordance with
its terms or Parent and the Company shall have agreed that Parent shall
amend or terminate the Offer or postpone the payment for Shares pursuant
thereto; or

(e) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality or Material
Adverse Effect (as defined therein) on the Company shall not be true and
correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect; or

(f) the Company shall have failed to perform or comply with in any
material respect any of the agreements or covenants of the Company to be
performed or complied with by it under the Merger Agreement; or

(g) all of the Series A Preferred Shares shall not have been redeemed;

which in the reasonable judgment of Parent with respect to each and every matter
referred to above and regardless of the circumstance (including any action or
inaction by Parent) giving rise to any such condition, makes it inadvisable to
proceed with the Offer, the acceptance for payment or payment for the Shares in
the Offer, or the Merger.

The foregoing conditions are for the benefit of Purchaser and Parent only
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition. Each of the foregoing conditions may be
waived by Purchaser in whole or in part at any time from time to time, other
than the Majority-of-the-Minority Condition, which may not be waived without the
consent of the Special Committee. Purchaser has agreed to waive the Ninety
Percent Condition under certain circumstances. See "SPECIAL FACTORS -- The
Merger Agreement". The failure by Parent or Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.

45
<PAGE> 48

14. CERTAIN LEGAL MATTERS

General. Except as described in this section, based on its review of
publicly available filings of the Company with the SEC and other publicly
available information regarding the Company, Purchaser is not aware of any
license or regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely affected
by Purchaser's acquisition of Shares (and/or the indirect acquisition of the
stock of the Company's subsidiaries) as contemplated herein or of any approval
or other action by or with any domestic, foreign, or international government
authority or administrative or regulatory agency that would be required for the
acquisition or ownership of the Shares (and/or the indirect acquisition of the
stock of the Company's subsidiaries) by Purchaser. Should any such approval or
other action be required, Purchaser currently contemplates that such approval or
other action will be sought, except as described below under "State Takeover
Laws". While, except as otherwise expressly described in this section, Purchaser
does not presently intend to delay the acceptance for payment of or payment for
Shares tendered pursuant to the Offer pending the outcome of any such matter,
there can be no assurance that any such approval or other action, if needed,
would be obtained without substantial conditions or that failure to obtain any
such approval or other action might not result in consequences adverse to the
Company's business or that certain parts of the Company's business might not
have to be divested of if such approvals were not obtained or such other actions
were not taken, any of which could cause Purchaser to decline to accept for
payment or pay for any Shares tendered. Purchaser's obligations to accept for
payment or pay for the Shares tendered pursuant to the Offer is subject to the
certain conditions set forth in this Offer, including the conditions set forth
above in this paragraph and with respect to litigation and governmental action
as contemplated herein. See "THE OFFER -- Certain Conditions of the Offer".

Federal Regulatory Approval. No federal regulatory approval is required
for Purchaser to complete the Offer and consummate the Merger.

State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL prevents an "interested
stockholder" (generally, a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, prior to such date the board of directors of the
corporation approved either the business combination or the transaction in which
the interested stockholder became an interested stockholder. Parent became an
interested stockholder in 1995 (in connection with the Reorganization Agreement)
in a transaction approved by the Company Board. Accordingly, Section 203 is
inapplicable to the Offer and the Merger.

A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. In 1987, however, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.

Purchaser has not currently complied with any state takeover statute or
regulation. Purchaser reserves the right to challenge the applicability or
validity of any state law purportedly applicable to the Offer or the Merger and
nothing in this Offer to Purchase or any action taken in connection with the
Offer or the Merger is intended as a waiver of such right. If it is asserted
that any state takeover statute is applicable to the Offer or the Merger and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer or the Merger, Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state authorities,
and Purchaser might be unable to accept for payment or pay for Shares tendered

46
<PAGE> 49

pursuant to the Offer, or be delayed in consummating the Offer or the Merger.
See "THE OFFER -- Certain Conditions of the Offer".

Antitrust. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
and the rules that have been promulgated thereunder by the Federal Trade
Commission (the "FTC"), certain transactions (including certain transactions
involving the proposed acquisition of in excess of 15%, 25% and 50% of the
equity interest of a target corporation) may not be consummated unless certain
information has been furnished to the Antitrust Division of the Department of
Justice (the "Antitrust Division") and the FTC and certain waiting period
requirements have been satisfied (the "HSR Requirements"). Because Parent
complied with the applicable HSR Requirements in connection with its acquisition
of in excess of 50% of the outstanding equity of the Company, the HSR
Requirements are inapplicable to the acquisition of Shares in the Offer and to
the Merger.

The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Parent, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to Parent
relating to the businesses in which Parent, the Company and their respective
subsidiaries are engaged, Parent and Purchaser believe that neither the Offer
nor the Merger will violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, what the result would be. See "THE
OFFER -- Certain Conditions of the Offer".

Litigation. Shortly after the January 28, 1997 public announcement by
Parent that it proposed to acquire those Shares of the Company that it did not
already own, several putative class actions were filed in the Delaware Court of
Chancery challenging the fairness of the proposed transaction to the minority
stockholders: Obstfeld v. Salquist, et al. (Civ. Act. No. 15487 NC), Siegel v.
Calgene, Inc., et al. (Civ. Act. No. 15490 NC), Susser v. Kunimoto et al. (Civ.
Act. No. 15489 NC), Elstein v. Monsanto Company, et al., (Civ. Act. No. 15488
NC), Lewis v. Monsanto Company, et al. (Civ. Act. No. 15511 NC), Glickberg v.
Monsanto Company, et al. (Civ. Act. No. 15499 NC), Manson v. Fortune, et al.
(Civ. Act. No. 15491 NC), and Settle v. Monsanto Company, et al. (Civ. Act. No.
15493 NC). These actions have been consolidated for all purposes under the
caption In re Calgene, Inc. Shareholders Litigation,(Consolidated Civ. Act. No.
15487-NC) (the "Consolidated Action"). In substance, the complaints allege that
because of Parent's ownership of approximately 54.5% of the company and control
of its Board of Directors, no independent group of Company directors exists and
no independent advisor can be chosen to consider properly Parent's acquisition
proposal. The plaintiffs also claim that the defendants -- Parent, the Company,
and several individuals serving as directors of one or more of those
companies -- breached their fiduciary duties to the public stockholders of the
Company by failing to take adequate steps to determine the fair value of the
Shares or to condition the Offer on acceptance by holders of a majority of the
Non-Affiliated Shares. The relief sought by the plaintiffs includes an
injunction against the acquisition of Shares by Parent; a declaration that each
of the defendants have breached their fiduciary duties; compensatory and/or
rescissory damages plus costs, disbursements and attorneys' and experts' fees in
unspecified amounts.

Following commencement of the Consolidated Action, plaintiffs' counsel
retained a financial expert, obtained relevant documents from the Special
Committee and engaged in discussions with counsel for the Special Committee and
counsel for Parent with regard to resolution of the Consolidated Action.

On March 31, 1997, the parties to the Consolidated Action entered into a
memorandum of understanding reflecting their agreement in principle to settle
the Consolidated Action. To resolve the Consolidated Action, Parent will seek to
acquire the Company pursuant to the Offer and the Merger at the Offer Price of
$8.00 per Share. The consummation of the settlement is subject to a number of
conditions, including the completion by plaintiffs of any additional necessary
discovery satisfactory to plaintiffs, the drafting and execution of a definitive
stipulation of settlement, consummation of the Offer and the Merger and final
court approval of the

47
<PAGE> 50

settlement and dismissal of the Consolidated Action with prejudice. If such
conditions are met, plaintiffs' counsel intend to apply for court awarded
attorneys' fees and disbursements to be paid by Parent in an amount not to
exceed $795,000. Defendants will not oppose such application.

15. FEES AND EXPENSES

Except as set forth below, Purchaser will not pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares pursuant
to the Offer.

Goldman Sachs is acting as Dealer Manager in connection with the Offer and
has provided certain financial advisory services in connection with the
acquisition of the Non-Affiliated Shares. Parent has agreed to compensate
Goldman Sachs for its financial advisory services and to reimburse Goldman Sachs
for its reasonable out-of-pocket expenses, including those incurred in
connection with Goldman Sachs's activities as Dealer Manager and including the
fees and disbursements of its legal counsel, and to indemnify Goldman Sachs
against certain liabilities and expenses in connection with its financial
advisory services and its activities as Dealer Manager, including certain
liabilities under the federal securities laws. Goldman Sachs has agreed to act
as Dealer Manager without additional compensation, except as set forth in the
preceding sentence.

Purchaser and Parent have retained Georgeson & Company Inc. to be the
Information Agent and The First National Bank of Boston to be the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telecopy, telegraph and personal interview and may request
banks, brokers, dealers and other nominee stockholders to forward materials
relating to the Offer to beneficial owners.

As compensation for acting as Information Agent in connection with the
Offer, Georgeson & Company Inc. will be paid a fee of $15,000 and will also be
reimbursed for certain out-of-pocket expenses and may be indemnified against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws. Purchaser will pay the Depositary
reasonable and customary compensation for its services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including certain liabilities under federal securities laws. Brokers, dealers,
commercial banks and trust companies will be reimbursed by Purchaser for
customary handling and mailing expenses incurred by them in forwarding material
to their customers.

The following is an estimate of expenses to be incurred in connection with
the Offer and the Merger:

<TABLE>
<S> <C>
EXPENSES TO BE PAID BY PURCHASER AND ITS AFFILIATES:
Financial Advisor/Dealer Manager............................... $1,720,000
Legal Fees..................................................... 750,000
Printing and Mailing........................................... 150,000
Advertising.................................................... 70,000
Filing Fees.................................................... 49,000
Depositary Fees................................................ 40,000
Information Agent Fees......................................... 17,500
Miscellaneous.................................................. 25,000
----------
Total.................................................. $2,821,500
==========
EXPENSES TO BE PAID BY THE COMPANY:
Financial Advisor to Special Committee......................... $2,100,000
Legal Fees..................................................... 500,000
Printing and Mailing........................................... 50,000
Miscellaneous.................................................. 25,000
----------
Total.................................................. $2,675,000
==========
</TABLE>

48
<PAGE> 51

16. MISCELLANEOUS

The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. Purchaser may, in its discretion,
however, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Shares in any such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of Purchaser by Goldman Sachs or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.

No person has been authorized to give any information or to make any
representation on behalf of Purchaser not contained herein or in the Letter of
Transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized. Neither the delivery of this Offer to
Purchase nor any purchase pursuant to the Offer shall, under any circumstances,
create any implication that there has been no change in the affairs of Purchaser
or the Company since the date as of which information is furnished or the date
of this Offer to Purchase.

Parent and Purchaser have filed with the SEC a Tender Offer Statement on
Schedule 14D-1, together with the SEC exhibits, pursuant to Rule 14d-3 under the
Exchange Act, and Parent, Purchaser and the Company have filed with the SEC a
Rule 13e-3 Transaction Statement on Schedule 13E-3, together with exhibits,
pursuant to Rule 13e-3 under the Exchange Act, furnishing certain additional
information with respect to the Offer. In addition, the Company has filed with
the SEC a Solicitation/Recommendation Statement Schedule 14D-9, together with
exhibits, pursuant to Rule 14d-9 under the Exchange Act, setting forth the
recommendations of the Company Board and the Special Committee with respect to
the Offer and the reasons for such recommendations and furnishing certain
additional related information. Such Schedules and any amendments thereto,
including exhibits, may be inspected and copies may be obtained from the SEC in
the manner set forth under "THE OFFER -- Certain Information Concerning the
Company" (except that they will not be available at the regional offices of the
SEC).

MONSANTO ACQUISITION COMPANY, INC.
April 7, 1997

49
<PAGE> 52

SCHEDULE I

DIRECTORS AND THE EXECUTIVE OFFICERS
OF PURCHASER AND PARENT

DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name, business or residence address, principal occupation or employment at
the present time and during the last five years, and the name and business
address of any corporation or other organization in which such employment is
conducted or was conducted of each directors and executive officer of Parent.
Except as otherwise indicated, each of Parent's directors and officers is a
citizen of the United States. The business address of each executive officer of
Parent is 800 North Lindbergh Boulevard, St. Louis, Missouri 63167, unless
otherwise set forth below. Each occupation set forth opposite a person's name,
unless otherwise indicated, refers to employment with Parent. Directors are
indicated with an asterisk.

<TABLE>
<CAPTION>
NAME, AGE, ADDRESS AND YEAR
FIRST APPOINTED OR ELECTED PRESENT POSITION OTHER BUSINESS EXPERIENCE
- ------------------------------- ------------------------------ --------------------------------------
<S> <C> <C>
*Joan T. Bok, 67............... Chairman of the Board, New Chairman, New England Electric System,
One International Place, England Electric System since 1984-93; Chairman & CEO, New England
Suite 2115 1994. Electric System, 1988-89; Vice
Boston, MA 02110 Chairman, New England Electric System,
First became director: 1987 1979-84; Vice President, New England
Electric System, 1977-79. Director:
Avery Dennison Corporation; 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. Trustee: National
Osteoporosis Foundation; Woods Hole
Oceanographic Institution; Worcester
Foundation for Biomedical Research.

Richard U. De Schutter, 56..... Chairman, Chief Executive Chairman, International Operations,
5200 Old Orchard Road Officer and President, G.D. G.D. Searle & Co., 1989; President,
Skokie, IL 60077 Searle & Co. (a subsidiary of G.D. Searle & Co., 1991; President and
First appointed: 1995 Monsanto; Advisory Director, Chief Operating Officer, G.D. Searle &
Monsanto Company since 1995. Co., 1993.

Steven L. Engelberg, 54........ Senior Vice President Monsanto Partner, Keck, Mahin & Cate, 1986;
700 14th Street, N.W., Company since 1996. Partner-in-Charge, Keck, Mahin & Cate,
Suite 1100 Washington, D.C. office, 1986; Chief
Washington, D.C. 20005 of Staff of Officer of the United
First appointed: 1995 States Trade Representative (on leave
from Keck, Mahin & Cate until May
1993), 1993; Vice President, Worldwide
Government Affairs, Monsanto Company,
1994.

*Robert M. Heyssel, 68......... Consultant; President President and Chief Executive Officer,
R.D. 5, 4 Canal Lane Emeritus, The Johns Hopkins The Johns Hopkins Health System and
Secford, DE 19973. Health System since 1992. The Johns Hopkins Hospital, 1972-92.
First became director: 1988 Professor, The Johns Hopkins Schools
of Medicine and Public Health since
1971 and 1972, respectively. Director:
Signet Banking Corporation.

Michael R. Hogan, 43........... Vice President and Controller, Executive Vice President, General
First appointed: 1996 Monsanto Company since 1996. American Life Insurance Company,
1986-95.
</TABLE>

I-1
<PAGE> 53

Pierre Hochuli, 49............. Vice President, Monsanto Regional Director,
Avenue de Tetusen 270-272 Company; President, Growth Europe/Africa/Middle, Monsanto Europe,
1150 Brussels, Belgium Enterprises Business Unit; S.A., 1985; Vice President, Finance
First appointed: 1995 Chairman, Monsanto Europe- and Planning, The Agricultural Group,
Citizenship: Switzerland Africa since 1996. 1991; Vice President and General
Manager, New Products Division, The
Agricultural Group, 1992; Group Vice
President and General Manager, New
Products Division, The Agricultural
Group, 1993; Vice President, Corporate
Planning, Monsanto Company, 1993; Vice
President, Monsanto Company;
President, Growth Enterprises, 1995.

Robert B. Hoffman, 60.......... Senior Vice President and Vice President, FMC Corporation, 1990.
First appointed: 1994 Chief Financial Officer;
Advisory Director, Monsanto
Company since 1994.

John C. Hunter III, 50......... President, Fibers Business Vice President and General Manager,
First appointed: 1997 Unit, Monsanto Company since Asia- Pacific Monsanto Chemical
1995. Company, 1989; Vice President and
General Manager, Fibers Division and
Asia-Pacific, The Chemical Group,
1993.

R. William Ide, III, 56........ Senior Vice President, General Partner, Long, Aldridge & Norman 1993-
First appointed: 1996 Counsel and Secretary, 96; Partner Kutak & Rock 1989-93;
Monsanto Company since 1996. President, American Bar Association
1993-94.

Madonna A. Kindl, 39........... Vice President, Human Director, Human Resources Planning and
First appointed: 1996 Resources, Monsanto Company. Development, Clorox Corporation,
1990-93; Director of Human Resources,
Staff of the Vice Chairman, Monsanto
Company, 1993-95; Director, Human
Resources, Crop Protection Business
Unit, Monsanto Company, 1995-96.

*Gwendolyn S. King, 56......... Senior Vice President, Commissioner, Social Security
2301 Market St. Corporate and Public Affairs, Administration, 1989-92. Director:
Philadelphia, PA 19103 Peco Energy Company (formerly Adwin Equipment Co., Adwin Realty Co.;
First became director: 1993 Philadelphia Electric Company) Eastern Pennsylvania Development
since 1992. Corp., Lockheed Martin Corp.

*Philip Leder, 62.............. Chairman and Professor, John Emory Andrus Professor of
200 Longwood Ave. Department of Genetics, Genetics since 1980. Senior
Boston, MA 02115 Harvard Medical School since Investigator, Howard Hughes Medical
First became director: 1990 1980. Institute since 1986. Director: Genome
Therapeutics Corporation. Trustee: The
General Hospital Corporation; The
Hadassah Medical Organization;
Massachusetts General Hospital; The
Charles A. Revson Foundation; The
Rockefeller University.

*Howard M. Love, 66............ Retired Chief Executive Honorary Chairman, National Steel
500 Grant Street, Suite 2715 Officer, National Intergroup, Corporation, formerly a subsidiary of
Pittsburgh, PA 15219 Inc., 1981-91. National Intergroup, Inc., since 1990;
First became director: 1977 Chairman and Chief Executive Officer,
1984-90. Director: AEA Investors;
COMSAT Corp. Member: The Business
Council.
</TABLE>

I-2
<PAGE> 54

Philip Needleman, 58........... Senior Vice President, Vice President, Research and
First appointed: 1991 Research and Development and Development, Monsanto Company, 1989;
Chief Scientist; Advisory Vice President, Research and
Director, Monsanto Company; Development and Advisory Director,
President, Research and Monsanto Company, 1991; Vice
Development, G.D. Searle & Co. President, Research and Development
since 1993. and Advisory Director, Monsanto
Company; President, Research and
Development, G.D. Searle & Co., 1992.

*Jacobus F.M. Peters, 65....... Retired Chairman of the Director: Kleinwort Endowment Policy
Dennesloau 15 Executive Board and Chief Trust Plc. Member of Supervisory
2244 AK Wassenaor Executive Officer, AEGON N.V., Board: AEGON N.V.; Amsterdam Company
The Netherlands 1984-93. for Town Restoration Ltd.; DAF Trucks
First became director: 1993 N.V.; IBM International Centre for
Citizenship: The Netherlands Asset Management N.V.; Koninklijke
Pakhoed Holding N.V.; Randstad Holding
N.V.; SAMAS Group N.V.; United Flower
Auctions Aalsmeer.

Robert G. Potter, 57........... Executive Vice President and Executive Vice President and Advisory
First appointed: 1981 Advisory Director, Monsanto Director, Monsanto Company; President,
Company since 1995. The Chemical Group, 1990.

*Nicholas L. Reding, 62........ Vice Chairman of the Board, Executive Vice President, Environment,
First became director: 1993 Monsanto Company since 1993. Safety, Health and Manufacturing,
1990-93, and Advisory Director,
Monsanto Company, 1986-92. Director:
CPI Corp.; Meredith Corporation;
Multifoods Corporation; The Keystone
Center.

*John S. Reed, 58.............. Chairman and Chief Executive Director: Citicorp; Citibank, N.A.;
153 East 53rd Street Officer, Citicorp and Philip Morris Companies, Inc. Trustee:
New York, NY 10022 Citibank, N.A. since 1984. Rand Corporation. Member: The Business
First became director: 1985 Council; The Business Roundtable.

Robert W. Reynolds, 53......... Vice President, International Vice President and General Manager,
First appointed: 1994 Operations and Development, Crop Protection Products Division,
Monsanto Company since 1994. Monsanto Agricultural Company, 1990;
Vice President and Managing Director,
Latin America World Area, Monsanto
Company, 1991.

*John E. Robson, 66............ Senior Advisor, Robertson, Distinguished Faculty Fellow, Yale
555 California Street Stephens & Company since 1993. University School of Management, and
San Francisco, CA 94104 Visiting Fellow, The Heritage
First became director: 1996 Foundation, 1993; Deputy Secretary of
the U.S. Department of the Treasury,
1989-92; Dean, Emory University
Business School, 1986-89; President
and Chief Executive Officer, G.D.
Searle & Co., 1985-86; Executive Vice
President, G.D. Searle & Co., 1978-85.
Director: Northrop Grumman Corp.;
Calgene, Inc.; Security Capital
Industrial Trust (REIT).
</TABLE>

I-3
<PAGE> 55

*William D. Ruckelshaus, 64.... Chairman, Browning-Ferris Chief Executive Officer,
1000 Second Avenue, Industries, Inc. since 1995; Browning-Ferris Industries, Inc.,
Suite 3700 Principal, Madrona Investment 1988-95. Of Counsel, Perkins Coie
Seattle, WA 98104 Group, LLC since 1996. since 1985. Administrator,
First became director: 1985 Environmental Protection Agency,
1983-85. Director: Browning-Ferris
Industries, Inc.; Cummins Engine Co.,
Inc.; Gargoyles, Inc.; Nordstrom,
Inc.; Weyerhaeuser Company.

*Robert B. Shapiro, 58......... Chairman, President and Chief President and Chief Operating Officer,
First became director: 1993 Executive Officer, Monsanto Monsanto Company, 1993-95; Executive
Company since 1995. Vice President and Advisory Director,
Monsanto Company, and President, The
Agricultural Group of Monsanto
Company, 1990-93. Director: Citicorp;
Silicon Graphics, Inc.; Barnes-Jewish
Hospital. Trustee: Washington
University; Missouri Botanical Garden.
Member: The Business Council; The
Business Roundtable.

*John B. Slaughter, 62......... President, Occidental College Director, National Science Foundation,
1600 Campus Rd. since 1988. 1980-82. Director: Atlantic Richfield
Los Angeles, CA 90041 Company; Avery Dennison Corporation;
First became director: 1983 International Business Machines
Corporation; Northrop Grumman Corp.
Member: American Academy of Arts and
Sciences; National Academy of
Engineering. Fellow: American
Association for the Advancement of
Science; Institute of Electrical and
Electronic Engineers.

Hendrik A. Verfaillie, 51...... Executive Vice President and Vice President and General Manager,
First appointed: 1993 Advisory Director, Monsanto Roundup Division, The Agricultural
Company since 1995. Group, 1990; Vice President and
Advisory Director, Monsanto Company;
President, The Agricultural Group,
1993; Vice President and Advisory
Director, Monsanto Company, 1995.

Virginia V. Weldon, 61......... Senior Vice President, Public Vice President, Public Policy and
First appointed: 1990 Policy and Advisory Director, Advisory Director, Monsanto Company,
Monsanto Company since 1993. 1990.
</TABLE>

DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The directors of Purchaser
are Patrick J. Fortune, Robert T. Fraley, Michael R. Hogan and Hendrik A.
Verfaillie. Mr. Verfaillie is President of Purchaser and Mr. Hogan is its
Secretary and Treasurer. Each director and officer was appointed or elected in
March 1997. Each of such persons is an officer of Parent and a director of the
Company. Additional information regarding the directors and officers of
Purchaser is set forth in Schedule II.

I-4
<PAGE> 56

SCHEDULE II

DIRECTORS AND THE EXECUTIVE OFFICERS
OF THE COMPANY

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. The following table sets
forth the name, business or residence address, principal occupation or
employment at the present time and during the last five years, and the name and
business address of any corporation or other organization in which such
employment is conducted or was conducted of each director and executive officer
of the Company. Each of the Company's directors and officers is a citizen of the
United States. The business address of each executive officer of the Company is
1920 Fifth Street, Davis, California 95616, unless otherwise set forth below.
Each occupation set forth opposite a person's name, unless otherwise indicated,
refers to employment with the Company. Directors are indicated with an asterisk.

<TABLE>
<CAPTION>
NAME, AGE, ADDRESS AND YEAR
FIRST APPOINTED/ELECTED PRESENT POSITION OTHER BUSINESS EXPERIENCE
- ---------------------------- ------------------------ ---------------------------------------
<S> <C> <C>
Andrew M. Baum, 40.......... Vice President, Calgene, Mr. Baum joined Calgene as Director of
1987 and President of Oils Operations in 1981, became Vice
Division, Calgene, since President of Operations in 1987, and
1987 became Senior Vice President of
Operations in 1991. Since November
1992, Mr. Baum has been the President
of Calgene's Oils Division. Mr. Baum is
a founding member and is currently
Secretary of the U.S. Canola
Association.

*Patrick J. Fortune, 49..... Corporate Vice From 1989 to 1991, Mr. Fortune was
1996 President, Information Senior Vice President and General
and Chief Information Manager of Packaging Corporation of
Officer, Monsanto America. From 1991 to 1994, he served
Company since 1995. as Corporate Vice President,
Information Management for
Bristol-Meyers Squibb. From August 1994
to August 1995, Mr. Fortune was
President and Chief Operating Officer
of Coram-Healthcare Corporation, whose
business is home infusion therapy for
cancer and AIDS patients. Mr. Fortune
is also a member of the Board of
Directors of Parexel Corporation, a
clinical research organization, and
serves on the Board of Visitors of the
School of Physical Sciences at the
University of Chicago.

*Robert T. Fraley, 43....... President Ceregen (a From 1990 to 1993, Mr. Fraley was Vice
1996 business unit of President, Research and Development,
Monsanto Company) since New Products Division, of the Monsanto
1995. Agricultural Products Group, and from
1993 to 1995, was Vice President, New
Products Division, of the Monsanto
Agricultural Products Group. Mr. Fraley
is a director of Dekalb Genetics Corp.,
an agricultural products company.
</TABLE>

II-1
<PAGE> 57

<TABLE>
<CAPTION>
NAME, AGE, ADDRESS AND YEAR
FIRST APPOINTED/ELECTED PRESENT POSITION OTHER BUSINESS EXPERIENCE
- ---------------------------- ------------------------ ---------------------------------------
<S> <C> <C>
Jeffrey D. Gargiulo, 45..... Chief Executive Officer, Mr. Gargiulo served as Chairman and
1996 Gargiulo, Inc. Chief Executive Officer of Gargiulo
(successor to Gargiulo L.P. from 1981 until 1996.
L.P. and wholly owned
subsidiary of Calgene)
since 1996.

William Higgins, 57......... Vice President of Human From February 1982 through March 1988,
1994 Resources since 1994. Mr. Higgins served as Vice President of
Human Resources for Genentech, Inc.,
and from April 1988 through December
1991 he was President of Consultants in
Managing Change. Prior to joining
Calgene, Mr. Higgins served as Vice
President of Human Resources for
Tenera, L.P. from January 1992 through
December 1993. Mr. Higgins joined
Calgene in January 1994 as Human
Resources Director and was elected to
his present position in May 1994.

*Michael R. Hogan, 43....... Corporate Vice President From 1986 to 1995, Mr. Hogan served as
1996 and Corporate Executive Vice President of General
Controller, Monsanto American Life, during which time he
Company since 1996. also served as President and Director
of Gencare Health Systems, Inc. (and
its predecessor) from 1990 until 1994.

Thomas Hughes, 38........... President, Stoneville Mr. Hughes joined Stoneville Pedigreed
1992 Pedigreed Seed Co. since Seed Co. in 1988 as Plant Operations
1992. Manager and became President in 1992.
Mr. Hughes is Director of the
Mississippi Seedmen's Association,
President of the Mississippi Seed
Improvement Association and is an
active member of the Delta Council,
Cotton Foundation (National Cotton
Council), and the American Seed Trade
Association.

*Lloyd M. Kunimoto, 43...... President and Acting From November 1983 to June 1995, Mr.
1996 Chief Executive Officer Kunimoto served in several senior
since July 1996. management positions with Calgene. From
June 1995 to July 1996, Mr. Kunimoto
served as Vice President of Strategic
Planning and Business Development.

Christian Leleu, 43......... Senior Vice President Mr. Leleu worked in various positions
1996 and Chief Financial at Monsanto Company, most recently as
Officer since 1996. Director of Business Analysis for Crop
Protection.

Michael J. Motroni, 41...... Vice President of Mr. Motroni joined Calgene in August
1992 Finance and Secretary 1983 and became Controller in July
since May 1992. 1986.
</TABLE>

II-2
<PAGE> 58

<TABLE>
<CAPTION>
NAME, AGE, ADDRESS AND YEAR
FIRST APPOINTED/ELECTED PRESENT POSITION OTHER BUSINESS EXPERIENCE
- ---------------------------- ------------------------ ---------------------------------------
<S> <C> <C>
*Howard D. Palefsky, 49..... Chairman, Collagen Mr. Palefsky served as President and
2500 Faber Place Corporation since 1995. Chief Executive Officer of Collagen
Palo Alto, CA 94303 Corporation, a medical products
1986 company, from 1978 to 1997, and served
as President from 1978 to 1995. Mr.
Palefsky is also a director of Target
Therapeutics, Inc. and Innovasive
Devices, Inc., both medical products
companies.

*John E. Robson, 66......... Senior Advisor of Mr. Robson served as Deputy Secretary
555 California Street Robertson, Stephens & of the United States Treasury from 1989
San Francisco, CA 94104 Company since 1993. to 1992. Mr. Robson is also a director
1996 of Monsanto Company, Northrop Grumman
Corporation, an aerospace and defense
company, and Security Capital
Industrial Trust, a real estate
investment trust.

*Roger H. Salquist, 55...... Principal of the Craves Mr. Salquist served as an executive
One Bush Street Group since February officer of Calgene since September 1983
San Francisco, CA 94104 1997. and as its Chief Executive Officer from
1981 November 1985 until August 1996. Mr.
Salquist served as Chairman of the
Board of Directors from 1984 until
August 1996. Mr. Salquist is also a
director of Collagen Corporation, a
medical products company. Mr. Salquist
has been a principal of the Craves
Group, a private merchant bank, since
February 1997. He also serves as a
consultant for Calgene.

Richard J. Stonard, 42...... Senior Vice President Since 1982, Dr. Stonard worked in
1996 and Chief Technical various positions at Monsanto Company,
Officer since 1996. most recently as Director of Crop
Protection Research for Ceregen, a unit
of Monsanto Company.

*Allen J. Vangelos, 64...... President and Chief In 1993, Mr. Vangelos served as
15661 Red Hill Avenue Executive Officer, Chairman of the Board of Directors of
Tustin, CA 92680 Calavo Growers of the Agricultural Council of California.
1994 California since 1986. He has also served as Chairman of the
United Fresh Fruit and Vegetable
Association.

*Hendrik A. Verfaillie, Executive Vice From 1990 to 1993, Mr. Verfaillie was
51.......................... President, Monsanto Vice President and General Manager,
1996 Company since 1995. Roundup Division, The Agricultural
Group, and from 1993 to 1995 served as
President of The Agricultural Group,
Vice President and Advisory Director,
Monsanto Company.
</TABLE>

II-3
<PAGE> 59

SCHEDULE III

CALGENE, INC.

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
JUNE
DECEMBER 31, JUNE 30, 30,
1996 1996 1995
------------ -------- -------
<S> <C> <C> <C>
Current assets:
Cash and equivalents.................................... $ 1,908 $ 17,674 $11,753
Available-for-sale securities........................... 1,382 10,919 10,283
Accounts receivable, primarily trade, net of allowance
for doubtful accounts of $707, $487 and $346 at
December 31, 1996 and June 30, 1996 and 1995,
respectively......................................... 16,748 26,133 6,697
Inventories............................................. 37,272 23,865 8,148
Prepaid expenses and other current assets............... 1,327 2,174 1,699
-------- -------- -------
Total current assets............................ 58,637 80,765 38,580
Property, plant and equipment:
Land.................................................... 18,258 22,755 763
Buildings............................................... 18,418 23,083 3,743
Leasehold improvements.................................. 8,330 8,556 9,643
Furniture, fixtures and equipment....................... 33,971 40,398 22,436
Construction in progress................................ 1,411 1,676 1,459
-------- -------- -------
80,388 96,468 38,044
Less accumulated depreciation and amortization.......... 19,642 16,481 15,524
-------- -------- -------
Property, plant and equipment, net.............. 60,746 79,987 22,520
Product rights, patents and other intangible assets, less
accumulated amortization of $4,046, $3,060 and $2,507 at
December 31, 1996 and June 30, 1996 and 1995,
respectively............................................ 20,461 30,642 16,199
Costs in excess of fair values assigned to net assets
acquired, less accumulated amortization of $5,440,
$4,612 and $4,145 at December 31, 1996 and June 30, 1996
and 1995, respectively.................................. 25,680 36,219 10,025
Assets held for sale...................................... 5,185 963 --
Other non-current assets.................................. 3,171 4,726 1,907
-------- -------- -------
$173,880 $233,302 $89,231
======== ======== =======
</TABLE>

See accompanying notes.

III-1
<PAGE> 60

CALGENE, INC.

CONSOLIDATED BALANCE SHEETS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995
------------ -------- --------
<S> <C> <C> <C>
Current liabilities:
Notes payable.......................................... $ 9,402 $ 16,789 $ 7,761
Accounts payable....................................... 13,920 20,111 6,487
Accrued payroll and related expenses................... 3,470 3,252 2,049
License contract payable............................... -- 750 1,500
Accrued grower payments................................ 1,364 615 942
Amounts due customers.................................. 317 5,028 4,596
Accrued restructure expenses........................... 2,525 5,770 --
Other current liabilities.............................. 3,193 6,559 2,930
Current portion of long-term debt...................... 5,139 22,850 1,494
-------- -------- --------
Total current liabilities...................... 39,330 81,724 27,759
License contract payable, long-term...................... -- -- 750
Research and development advance from affiliate.......... 10,000 10,000 --
Note payable to affiliate................................ 24,760 24,760 --
Interest payable to affiliate............................ 1,912 509 --
Accrued restructure expenses, long-term.................. 3,860 -- --
Long-term debt........................................... 14,195 22,643 14,671
Commitments and contingencies (Note 9)
Minority interest........................................ 263 266 --
Shareholders' equity:
Preferred stock, $.001 par value; 5,000,000 authorized,
no shares issued and outstanding.................... -- -- --
Common stock, $.001 par value; 100,000,000 shares
authorized, 66,714,636, 60,443,115 and 30,244,226
shares issued and outstanding at December 31, 1996
and June 30, 1996 and 1995, respectively............ 67 60 30
Additional paid-in capital............................. 417,581 367,494 223,161
Accumulated deficit.................................... (338,088) (274,154) (177,140)
-------- -------- --------
Total shareholders' equity..................... 79,560 93,400 46,051
-------- -------- --------
$173,880 $233,302 $ 89,231
======== ======== ========
</TABLE>

See accompanying notes.

III-2
<PAGE> 61

CALGENE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ---------------------------------------
1996 1996 1995 1994
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Product sales, net........................ $ 69,780 $ 95,723 $ 48,972 $ 35,408
Product development revenues.............. 729 9,272 6,459 3,025
------------ ------------ ------------ ------------
70,509 104,995 55,431 38,433
Costs and expenses:
Cost of goods sold........................ 72,042 90,403 53,678 43,982
Research and development:
Contract............................... 1,672 4,222 3,436 2,721
Other.................................. 6,743 9,801 11,937 12,847
Selling, general and administrative....... 19,677 21,705 16,081 21,279
In-process research and development
acquired............................... -- 59,200 -- --
Write-off of assets and restructure
expenses............................... 32,605 15,574 1,098 --
------------ ------------ ------------ ------------
132,739 200,905 86,230 80,829
Interest expense............................ (3,822) (3,428) (924) (729)
Other income, net........................... 2,163 2,345 1,136 389
------------ ------------ ------------ ------------
Loss from operations before provision for
income taxes.............................. (63,889) (96,993) (30,587) (42,736)
Provision for income taxes.................. (45) (21) (15) (65)
------------ ------------ ------------ ------------
Net loss.................................... $ (63,934) $ (97,014) $ (30,602) $ (42,801)
============ ============ ============ ============
Net loss per share.......................... $ (1.03) $ (2.56) $ (1.04) $ (1.71)
============ ============ ============ ============
Shares used in per share calculations....... 62,155,384 37,883,871 29,439,008 24,987,513
</TABLE>

See accompanying notes.

III-3
<PAGE> 62

CALGENE, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED DECEMBER 31, 1996 AND YEARS ENDED JUNE 30, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------------- PAID-IN ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
---------- ------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1993.......... 24,411,782 $ 24 $ 169,482 $(103,737) $ 65,769
Net loss.......................... -- -- -- (42,801) (42,801)
Sale of common stock, net of
expenses........................ 1,845,000 2 19,150 -- 19,152
Options exercised................. 249,530 1 1,605 -- 1,606
Stock compensation................ -- -- 697 -- 697
---------- --- -------- --------- --------
Balance at June 30, 1994.......... 26,506,312 27 190,934 (146,538) 44,423
Net loss.......................... -- -- -- (30,602) (30,602)
Sale of common stock, net of
expenses........................ 3,683,262 3 31,419 -- 31,422
Options exercised................. 54,652 -- 340 -- 340
Stock compensation................ -- -- 452 -- 452
Unrealized gain on
available-for-sale securities... -- -- 16 -- 16
---------- --- -------- --------- --------
Balance at June 30, 1995.......... 30,244,226 30 223,161 (177,140) 46,051
Net loss.......................... -- -- -- (97,014) (97,014)
Sale of common stock, primarily
for acquisition of Gargiulo..... 30,192,707 30 144,343 -- 144,373
Options exercised................. 6,182 -- 40 -- 40
Unrealized loss on
available-for-sale securities... -- -- (50) -- (50)
---------- --- -------- --------- --------
Balance at June 30, 1996.......... 60,443,115 60 367,494 (274,154) 93,400
Net loss.......................... -- -- -- (63,934) (63,934)
Sale of common stock, net of
expenses........................ 6,271,521 7 50,071 -- 50,078
Unrealized gain on
available-for-sale securities... -- -- 16 -- 16
---------- --- -------- --------- --------
Balance at December 31, 1996...... 66,714,636 $ 67 $ 417,581 ($338,088) $ 79,560
========== === ======== ========= ========
</TABLE>

See accompanying notes.

III-4
<PAGE> 63

CALGENE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND EQUIVALENTS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------
1996 1996 1995 1994
---------------- -------- -------- --------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss................................ $(63,934) $(97,014) $(30,602) $(42,801)
Adjustments to reconcile net loss to net
cash used in operating activities:
Minority interest in net loss........ -- (787) (116) (46)
Depreciation and amortization........ 6,371 6,989 4,957 4,099
In-process research and development
acquired........................... -- 59,200 -- --
Gain on sale of assets............... (1,536) -- -- --
Write-off of assets and restructure
expenses........................... 28,039 15,574 1,098 --
Equity in net (gain) loss of
affiliate.......................... (3) 1 213 583
Stock compensation................... -- -- 452 697
Net changes in operating assets and
liabilities, excluding effect of
acquisition of subsidiaries:
Accounts receivable.................. 9,165 8,912 (1,992) (1,658)
Inventories.......................... (13,407) 6,455 (2,003) 1,320
Accounts payable..................... (6,191) (1,903) (1,429) 2,589
Amounts due customers................ (4,711) 432 1,268 1,740
Accrued restructure expenses......... 1,949 -- -- --
Other accrued liabilities............ (3,366) (6,736) 612 1,637
Interest payable to affiliate........ 1,403 509 -- --
Other................................ 1,284 2,614 146 279
-------- -------- -------- --------
Net cash used in operating
activities.................... (44,937) (5,754) (27,396) (31,561)
-------- -------- -------- --------
Cash flows from investing activities:
Proceeds from sales of
available-for-sale securities........ 10,515 11,787 22,904 24,904
Purchase of available-for-sale
securities........................... (955) (12,473) (17,714) (15,588)
Collection of notes receivable.......... -- -- -- 1,709
Investment in affiliate................. -- 19 (73) (579)
Capital expenditures for property, plant
and equipment........................ (3,800) (3,887) (5,649) (4,437)
Payment for purchase of subsidiaries,
net of cash and equivalents
acquired............................. -- (1,436) (90) (12)
Purchases of product rights, patents and
other intangible assets.............. (1,343) (1,397) (4,782) (4,843)
Proceeds from sale of assets............ 7,136 489 38 69
Other noncurrent assets................. 1,366 -- -- --
-------- -------- -------- --------
Net cash provided by (used in)
investing activities.......... 12,919 (6,898) (5,366) 1,223
-------- -------- -------- --------
</TABLE>

III-5
<PAGE> 64

<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, YEARS ENDED JUNE 30,
1996 1996 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Cash flows from financing activities:
Proceeds from notes payable............. 36,364 8,453 19,398 14,214
Payments on notes payable............... (43,751) (19,489) (20,322) (13,161)
Decrease in securities-pledged.......... 164 214 159 136
Increase in borrowings of long-term
debt................................. -- 25,057 10,000 --
Principal payments on long-term debt.... (26,603) (15,549) (1,768) (1,332)
Proceeds on notes payable to
affiliate............................ 15,000 2,680 -- --
Payments on notes payable to
affiliate............................ (15,000) -- -- --
Sale of common stock.................... 50,078 7,207 31,762 20,758
Research and development advance from
affiliate............................ -- 10,000 -- --
-------- -------- -------- --------
Net cash provided financing
activities.................... 16,252 18,573 39,229 20,615
-------- -------- -------- --------
Net increase (decrease) in cash and
equivalents............................. (15,766) 5,921 6,467 (9,723)
Cash and equivalents at beginning of
year.................................... 17,674 11,753 5,286 15,009
-------- -------- -------- --------
Cash and equivalents at end of year....... $ 1,908 $ 17,674 $ 11,753 $ 5,286
======== ======== ======== ========
</TABLE>

See accompanying notes.

III-6
<PAGE> 65

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND JUNE 30, 1996, 1995 AND 1994

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CHANGE IN FISCAL YEAR

The Company has changed its fiscal year end from June 30 to December 31,
beginning with the period ended December 31, 1996 to conform with the fiscal
year end of the Monsanto Company which holds an equity ownership in Calgene of
approximately 54.6% (Note 13).

Accordingly, the financial presentation in this report for 1996 is for the
six month period from July 1, 1996 to December 31, 1996. Prior fiscal year's
operations are as previously reported and cover twelve month periods ended June
30.

Unaudited comparative information for the six months ended December 31,
1995, is as follows (in thousands, except per share amounts):

<TABLE>
<S> <C>
Revenues.................................................................. $ 20,790
Gross profit (loss)....................................................... (1,309)
Net loss.................................................................. (16,104)
Net loss per share........................................................ (0.53)
</TABLE>

ORGANIZATION AND BUSINESS

Calgene is a biotechnology company that is developing a portfolio of
genetically engineered plants and plant products for the food, seed and
oleochemical industries. The Company's research and business efforts are focused
in three core crop areas -- fresh produce (tomato and strawberry), edible and
industrial plant oils (canola) and cotton -- where Calgene believes
biotechnology can provide substantial added commercial value in consumer,
industrial and seed markets.

CONSOLIDATION AND EQUITY ACCOUNTING

The consolidated financial statements include the accounts of Calgene, its
wholly-owned subsidiaries and its majority owned joint venture (together the
"Company"). All significant intercompany balances and transactions have been
eliminated in consolidation.

Calgene uses the equity method to account for its investments in its 50
percent or less owned joint ventures. Under the equity method, Calgene
recognizes its proportionate share of the net income or loss of these joint
ventures currently, rather than when realized through dividends or disposal.

CASH EQUIVALENTS AND AVAILABLE-FOR-SALE SECURITIES

Cash equivalents and available-for-sale securities, consisting principally
of certificates of deposit, bankers acceptances, commercial paper, U.S. treasury
and agency securities, and money market funds, are stated at fair market value,
and are adjusted for amortization of premiums and accretion of discounts, which
are recognized as adjustments to interest income. Unrealized gains and losses,
net of tax, on available-for-sale securities are reported in shareholders'
equity. Gross realized gains and losses on available-for-sale securities were
not material during the periods presented. The aggregate fair market value of
available-for-sale securities at December 31, 1996 is $1,960,000 of which
$578,000 is included in cash and equivalents. The aggregate fair market value of
available-for-sale securities at June 30, 1996 is $28,288,000 of which
$17,369,000 is included in cash and equivalents. The aggregate fair market value
of available-for-sale securities at June 30, 1995 is $20,276,000 of which
$9,993,000 is included in cash and equivalents. The contractual maturities of
available-for-sale securities at December 31, 1996 are as follows: $1,409,000 in
1997, $313,000 in 1998, and $238,000 in 2002.

III-7
<PAGE> 66

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVENTORIES

Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market value.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost and depreciated or
amortized on a straight-line basis over the estimated useful lives of the assets
or the capital lease term, whichever is less. The estimated useful lives range
from 3 to 30 years.

PRODUCT RIGHTS, PATENTS AND OTHER INTANGIBLE ASSETS

Product rights of approximately $3,939,000 at December 31, 1996; $3,042,000
at June 30, 1996 and $7,827,000 at June 30, 1995 are stated at cost and are
amortized on a straight-line basis over the lesser of their contractual lives or
their estimated useful lives (generally 10 to 20 years).

External costs incurred in obtaining patents are capitalized. The costs of
successful patent applications are amortized on a straight-line basis over the
lesser of their statutory lives or their estimated useful lives (generally 17
years). External costs incurred in defense of patents are capitalized and
amortized on a straight-line basis over the remaining life of the patent. The
costs of unsuccessful patent applications or patent defense are charged to
expense in the period in which the patent applications are denied or the patent
defense is unsuccessful. The net book value of capitalized patent related costs
is $7,950,000, $7,908,000 and $8,372,000 at December 31, 1996 and June 30, 1996
and 1995, respectively.

Other intangible assets consist primarily of the seed library acquired in
connection with the acquisition of Gargiulo (Note 4), which is being amortized
over its estimated useful life of 15 years. See write-off of other intangible
assets in Note 7.

Costs in excess of fair values assigned to net assets acquired are
capitalized and amortized on a straight-line basis over periods of 10 to 25
years.

REVENUE RECOGNITION AND PRODUCT DEVELOPMENT ARRANGEMENTS

Revenue from product sales is recognized primarily at the time of shipment
net of estimated product returns. The Company performs research under contracts
for the development of certain products for other entities. Revenue from product
development contracts is recognized according to the percentage of completion
method. Funding received in advance of research performed under these contracts
is recorded as deferred revenue. Related contract expenses are charged to
expense as incurred.

INCOME TAXES

The liability method is used to account for income taxes. Under this
method, deferred tax assets and liabilities are determined based on differences
between the financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. General business tax credits will be
accounted for as a reduction of federal income taxes payable under the
flow-through method.

NET LOSS PER SHARE

Net loss per share has been computed by dividing the net loss by the
weighted average number of common shares outstanding during each period. Common
equivalent shares related to stock options have been excluded from the
computation of net loss per share since their inclusion would be antidilutive.

III-8
<PAGE> 67

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STATEMENT OF CASH FLOWS

For purposes of the consolidated statement of cash flows, the Company
considers highly liquid investments with original maturities of three months or
less to be cash equivalents. During the six month period ended December 31, 1996
and fiscal year 1996, 1995 and 1994, the Company paid cash for interest and
income taxes as follows:

<TABLE>
<CAPTION>
1996
(SIX MONTHS) 1996 1995 1994
------------ ------ ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Interest................................... $3,282 $1,619 $895 $621
Income taxes............................... 17 83 91 53
</TABLE>

The Company maintains its cash and equivalents and short-term investments
in several different instruments. This diversification of risk is consistent
with the Company's policy to maintain liquidity and ensure the safety of
principal.

ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO
BE DISPOSED OF

During the quarter ended September 30, 1996, the Company adopted the
provisions of the Financial Accounting Standards Board Statement of Financial
Accounting No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" ("SFAS 121"). SFAS 121 requires impairment
losses to be recognized for long-lived assets and identifiable intangibles used
in operations when indicators of impairment are present and the estimated
undiscounted cash flows are not sufficient to recover the assets' carrying
amount. The impairment loss is measured by comparing the fair value of the asset
to its carrying amount. Costs in excess of fair values assigned to net assets
acquired in purchase business combinations are included in impairment
evaluations when events or circumstances exist that indicate the carrying amount
of the acquired assets may not be recoverable. SFAS 121 also requires that
assets held for disposal be valued at the lower of carrying amount or fair value
less cost to sell.

ACCOUNTING FOR STOCK BASED COMPENSATION

The Company accounts for its stock option plans and its employee stock
purchase plan in accordance with the provisions of the Accounting Principles
Board's Opinion No. 25 (APB 25), "Accounting for Stock Issued to Employees." In
1995, the Financial Accounting Standards Board released Statement of Financial
Accounting Standard No. 123 (SFAS 123), "Accounting for Stock Based
Compensation." SFAS 123 provides an alternative to APB 25 and is effective for
fiscal years beginning after December 15, 1995. The Company expects to continue
to account for its stock plans in accordance with APB 25. Accordingly, SFAS 123
is not expected to have a material impact on the Company's financial position or
results of operations.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet for cash and equivalents
and available-for-sale securities approximates their respective fair values. The
carrying amounts of the Company's borrowings under its debt agreements
approximate their fair value. The fair values of the Company's long-term debt
are estimated using discounted cash flow analysis, based on the Company's
current incremental borrowing rates for similar types of borrowing arrangements.

USE OF ESTIMATES AND CERTAIN RISKS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported to the financial

III-9
<PAGE> 68

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

statements and accompanying notes. Actual results could differ from those
estimates. Among other things, the Company is subject to risks from changes in
farm legislation, market price fluctuations for the Company's products, and
adverse weather conditions which may effect the ultimate realization of certain
of its inventories.

RECLASSIFICATIONS

Certain amounts reported for prior years have been reclassified to conform
with the presentation of the December 31, 1996 financial statements.

2. RECEIVABLES

Receivables consist of the following:

<TABLE>
<CAPTION>
JUNE
30,
DECEMBER 31, 1996 JUNE 30, 1996 1995
------------------------- ------------------------- ------
TRADE RELATED PARTY TRADE RELATED PARTY TRADE
------- ------------- ------- ------------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Customer............................ $13,771 $ -- $18,808 $ -- $6,708
Grower advances..................... 2,993 -- 5,917 -- --
Other............................... 452 239 923 972 335
------- ---- ------- ---- -------
Total..................... 17,216 239 25,648 972 7,043
Less allowance for doubtful
amounts........................... (707) -- (487) -- (346)
------- ---- ------- ---- -------
Total..................... $16,509 $ 239 $25,161 $ 972 $6,697
======= ==== ======= ==== =======
</TABLE>

3. INVENTORIES

Inventories consist of the following at December 31, 1996 and June 30, 1996
and 1995 (In thousands):

<TABLE>
<CAPTION>
DECEMBER 31, 1996 JUNE 30, 1996 JUNE 30, 1995
----------------- ------------- -------------
<S> <C> <C> <C>
Growing crops..................................... $17,958 $11,208 $ 2,368
Supplies and seeds inventories.................... 5,836 10,136 1,123
Finished goods.................................... 5,689 1,415 1,942
Work in progress.................................. 2,631 596 2,245
Raw materials..................................... 5,158 510 470
------- ------- ------
$37,272 $23,865 $ 8,148
======= ======= ======
</TABLE>

4. STRATEGIC ALLIANCE

On March 31, 1996, Calgene and Monsanto Company ("Monsanto") consummated an
Agreement and Plan of Reorganization (the "Reorganization Agreement") and
related Plan of Merger under which Monsanto contributed Gargiulo, Inc.
("Gargiulo"), $30 million and certain oils and produce related technology in
exchange for a 49.9% equity interest in Calgene. Gargiulo is a grower, packager,
marketer and distributor of tomatoes, strawberries and other produce with
operations in Florida, California, Puerto Rico and Mexico. The acquisition of
Gargiulo was accounted for as a purchase.

In connection with the Reorganization Agreement a total of 30,161,114
shares of Calgene common stock were issued with an aggregate fair value of
approximately $144,206,000. The per share value of Calgene common stock assigned
to the transaction was based on the last trade as reported on the National
Market System on the day the Company's negotiations with Monsanto concluded. The
common stock trade price was

III-10
<PAGE> 69

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

discounted to account for Monsanto's liquidity restrictions based on an
independent appraisal. The purchase price consists of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
30,161,114 shares of common stock.............................. $144,206
Acquisition costs, consisting primarily of financial advisory,
legal and accounting fees.................................... 1,530
Less cash received............................................. (30,000)
--------
$115,736
========
</TABLE>

A summary of the purchase price allocation is as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Net assets acquired............................................ $ 11,506
Identified intangible assets................................... 21,680
Excess purchase price over net assets acquired................. 23,350
In-process research and development............................ 59,200
-------
$115,736
=======
</TABLE>

Intangible assets include completed technology, assembled workforce and
costs in excess of fair values assigned to net assets acquired. The estimated
useful lives are expected to range from 5 to 15 years. Because the technological
feasibility of the acquired in-process research and development has not been
established and has no alternative future uses, the $59.2 million allocated to
in-process research and development has been expensed.

Between June 29, 1995 and March 19, 1996 Calgene received $23 million in
advances toward the $30 million proceeds in the form of a subordinated
promissory note. The subordinated note was converted to equity upon consummation
of the transaction. The additional $7 million was received on April 1, 1996.

On November 12, 1996, the Company entered into a Stock Purchase Agreement
with Monsanto (the "Stock Purchase Agreement"), pursuant to which (i) the
Company sold and issued to Monsanto, and Monsanto purchased 6,250,000 shares of
Common Stock of the Company (the "Additional Shares"), at $8.00 per share, for
an aggregate purchase price of $50 million, thereby increasing Monsanto's
ownership interest in shares of Calgene Common Stock from 49.9% to approximately
54.6% (without giving effect to the exercise of outstanding options and
warrants), (ii) Monsanto and Calgene agreed to enter into a Restated
Stockholders Agreement ("Restated Stockholders Agreement") amending and
restating the Stockholders Agreement dated March 31, 1996 ("Stockholders
Agreement"), and (iii) the Restated Certificate of Incorporation was amended to
reflect the amendments to the Stockholders Agreement contemplated by the
Restated Stockholders Agreement. As a consequence of the transaction, Monsanto
owned approximately 36,396,114 shares of Common Stock of the Company,
representing approximately 54.6% of the issued and outstanding shares of Common
Stock of the Company.

ACQUISITION OF COLLIER FARMS

On February 29, 1996, Gargiulo and Collier Enterprises consummated an asset
purchase agreement whereby Gargiulo acquired substantially all the assets,
subject to the assumption of certain specified liabilities, of the produce
business conducted by certain affiliates of Collier Enterprises under the trade
name Collier Farms ("Collier"). Collier is an agricultural producer of tomatoes
and other vegetables in Florida, and engages in the packaging, marketing and
distribution of those products in the commodity markets.

The purchase price consists of $10 million in cash and a $10 million
promissory note, plus an earn-out payment based upon achieving certain earnings
of the combined operations of Gargiulo and Collier in

III-11
<PAGE> 70

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Southwest Florida. Gargiulo also acquired Collier's 1995-1996 crop and assumed
liabilities related thereto, and committed to lease certain farmland from
affiliates of Collier. The acquisition was accounted for as a purchase. The
purchase price consists of the following:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Cash........................................................... $ 10,000
Promissory note................................................ 10,000
Investment in 1995-1996 crop................................... 12,127
Acquisition costs, consisting primarily of financial advisory,
legal and accounting fees.................................... 200
-------
$ 32,327
=======
</TABLE>

A summary of the purchase price allocation is as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Net assets acquired............................................ $ 23,500
Excess purchase price over net assets acquired................. 8,827
-------
$ 32,327
=======
</TABLE>

UNAUDITED PRO FORMA COMBINED RESULTS OF OPERATIONS

Unaudited pro forma combined results of operations for the year ended June
30, 1996, giving effect to certain adjustments as if the Gargiulo and Collier
acquisitions occurred on July 1, 1995 are displayed in the following table.
These unaudited proforma combined results have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which actually would have resulted had the acquisition been in effect on July 1,
1995 or which may result in the future.

<TABLE>
<CAPTION>
(IN THOUSANDS,
EXCEPT PER SHARE
AMOUNTS)
<S> <C>
Revenue........................................................ $ 182,041
Net loss....................................................... $ (128,115)
Net loss per share............................................. $ (2.12)
</TABLE>

5. OILSEED CROSS LICENSING AGREEMENT

In May 1996, the Company entered into a broad cross licensing agreement
with Monsanto encompassing the two companies' oilseed research programs. The
agreement has an initial term of 15 years.

Under the agreement Calgene received a royalty free license to current and
future Monsanto agronomic technology for use in combination with Calgene's
proprietary oils modification genes for development of specialty canola oil
products. Calgene also received $10 million from Monsanto for best-efforts
research and development activities to be performed by Calgene over a three year
period relating to further development of plant expression or oil modification
technologies. In exchange for the above, Calgene will pay royalties to Monsanto
based on a portion of the net profits of Calgene's oils division. The Company
recorded the $10 million research and development funding as a long-term
liability in the accompanying balance sheet. Royalties payable to Monsanto as
described above will be charged against the liability in the period incurred. In
the event the aggregate royalties to Monsanto exceeds $10 million, such amounts
will be charged to expense as incurred.

In exchange for a $7 million non-refundable license fee paid to Calgene,
Monsanto received a royalty bearing license to Calgene technology to develop
agronomically superior corn, soybean, canola and sunflower

III-12
<PAGE> 71

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

crops. The license fee was recorded as product development revenue in the
accompanying Statement of Operations.

6. PGI-KIRIN PARTNERSHIP

In March 1990 the Company and Kirin Brewery Co., Ltd. established PGI-Kirin
Partnership ("PGK"), a joint venture to develop and commercialize new potato
varieties. In January 1996 management decided to cease PGK operations and sell
its remaining assets. Consequently, Calgene recorded an estimated net write-off
of its investment in PGK of $982,000 in the third fiscal quarter of fiscal 1996.
PGK's revenues in fiscal 1996 and fiscal 1995 were $1.6 million and $1.5,
respectively.

7. WRITE-OFF OF ASSETS AND RESTRUCTURING EXPENSES

During the fiscal year ended June 30, 1996, the Company recorded a charge
of approximately $15.6 million for the write-off of assets, including $10.4
million primarily related to the merger of Calgene's tomato operations into
Gargiulo. The write-off of tomato assets primarily reflects a $5.4 million asset
impairment charge due to the consolidation of facilities and equipment and a
$2.5 million write-off of obsolete technology licenses. The Company also
recorded $1.5 million for the write-off of its investment in PG-K (before
minority interest), and $1.0 million for the write-off of an option to a
technology license the Company does not intend to exercise. As a consequence of
the Company's decision in the third quarter of fiscal 1996 to reduce its
emphasis on commodity distribution products at Calgene Chemical, the excess
purchase price of net assets acquired associated with the commodity distribution
business was written-down to net realizable value resulting in a $1.2 million
expense.

Pursuant to a plan approved by Calgene's Board of Directors in the quarter
ended December 31, 1996, Gargiulo intends to significantly reduce its produce
acreage in Southwest Florida. The reduction in acreage is in response to
increased competitive pressure from Mexico produce and is expected to be
accomplished over the next two to three years. As a consequence, during the
quarter ended December 31, 1996, the Company recorded a charge of approximately
$32.6 million for the write-off of assets, and other reserves. The write-offs
include $9.4 million for the write-down of tomato germplasm, an $8.3 million
asset impairment charge due to further consolidation of the Company's tomato
packing facilities, and a $10.4 million charge related to the excess purchase
price of net assets acquired allocated to the asset write-downs. The Company is
actively seeking buyers for the packing facilities. In addition, a reserve of
$4.5 million relating to other restructuring costs was recorded.

8. LONG-TERM DEBT AND NOTES PAYABLE

Long-term debt consists of the following at December 31, 1996 and June 30,
1996 and 1995:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995
------------ -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Note payable to bank; due in monthly installments of
approximately $3,000 including interest at 11.8% per annum,
through 2004; secured by a $220,000 certificate of deposit
and guaranteed by the Small Business Administration........ $ 213 $ 221 $ 235
Mortgage notes payable; due in quarterly installments of
approximately $31,000 including interest at 8.5% per annum,
through 1998; secured by land and buildings with a net book
value of approximately $531,400 at December 31, 1996....... 255 280 377
</TABLE>

III-13
<PAGE> 72

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Capitalized lease obligations; due in monthly installments
of approximately $86,000 including interest imputed at 5.4%
to 11% per annum, through 2001; secured by equipment with a
net book value of approximately $2,710,000 at December 31,
1996 and supported by a $150,000 which is secured by a
$150,000 certificate of deposit............................ 2,581 6,030 2,960
Note payable to the former owner of an acquired business;
due in an annual installment of $338,000 at July 17, 1997;
plus interest on the unpaid principal balance at the prime
rate (8.25% at December 31, 1996) over the term of the
loan; secured by a $338,000 certificate of deposit......... 338 592 705
Non-interest bearing note payable to the former owner of an
acquired business; due in monthly installments of $14,083
through June 30, 1997...................................... 84 169 338
Mortgage note payable; interest only payable in monthly
installments of approximately $3,800, current interest at
9.0% per annum. Interest is adjustable effective each
November 1 to prime plus 1%, rate not to exceed 9% or be
lower than 6% during the term of the note. Final payment of
$506,000 plus unpaid interest due November 1, 1999; secured
by land with a net book value of approximately $605,000 at
December 31, 1996.......................................... 506 506 506
Note payable to a bank; due in monthly installments of
approximately $2,200 including interest at 8.59% per annum,
through 2000; secured by equipment with a net book value of
approximately $195,500 at December 31, 1996................ 137 144 --
Note payable to a bank; due in monthly installments of
approximately $22,500 monthly including interest at prime
plus 1.25% (aggregating 9.50% at December 31, 1996) per
annum, through 2005, secured by buildings and equipment
with a net book value of approximately $2,372,000 at
December 31, 1996.......................................... 1,566 1,644 --
Mortgage loan payable to former owner of an acquired
business, payable in quarterly principal installments of
$280,966 plus interest at prime (8.25% at December 31,
1996) through February 28, 2001, secured by assets with a
net book value of approximately $11,537,000 at December 31,
1996....................................................... 4,688 5,338 --
Mortgage loan payable to former owner of an acquired
business, payable in quarterly principal installments of
$219,034 plus interest at prime (8.25% at December 31,
1996) through February 28, 2001, secured by assets with a
net book value of approximately $11,537,000 at December 31,
1996....................................................... 3,724 4,162 --
Mortgage loan, payable in monthly principal and interest
installments of $9,595 with interest at prime (8.25% at
December 31, 1996), secured by assets with a net book value
of approximately $753,000 at December 31, 1996............. 1,108 1,191 --
Mortgage loans payable in monthly principal and interest
installments of $40,237 with interest ranging from 6.63% to
prime (8.25% at December 31, 1996), secured by assets with
a net book value of approximately $1,184,000 at December
31, 1996................................................... 1,175 1,377 --
Term loan payable to former partner in acquired business,
monthly principal and interest payments of $37,981, with
interest at 10%............................................ 975 1,149 --
Note payable to a corporate lender, due in monthly
installments of $25,550 including interest at 10.38% per
annum, through 1999, secured by assets with a net book
value of approximately $481,000 at December 31, 1996....... 267 417 673
</TABLE>

III-14
<PAGE> 73

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Various term loans payable with interest at rates that
range from 8% to 12%. Maturity dates ranging from June 1998
through November 2001, secured by assets with a net book
value of approximately $541,000 at December 31, 1996....... 1,717 1,794 --
Note payable to a corporate lender, due in quarterly
installments of $30,938 including interest imputed at
22.29% per annum, through June 1, 1998..................... -- 279 371
Note payable to former owner of an acquired business for
the purchase of growing crops, principal due upon
collection of crop receivable, plus interest at 7%......... -- 9,070 --
Mortgage loan, payable in annual principal installments of
$1,000,000 through August 1999, with interest at prime..... -- 4,000 --
Mortgage loan, payable in annual principal installments of
$175,000, balance due November 30, 1996.................... -- 3,325 --
Mortgage loan, payable in annual principal installments of
$153,333, balance due November 30, 1996.................... -- 2,147 --
Mortgage loan, payable in annual principal installments of
$273,200, balance due on November 30, 1996................. -- 1,658 --
Convertible note payable to a corporate lender; converted
to equity on March 31, 1996 (Note 4)....................... -- -- 10,000
Note payable to affiliate consists of the following:
Advances under a $40,000,000 convertible term loan with a
balloon payment due March 31, 2000 interest at prime plus
2% (aggregating 10.25% at December 31, 1996)............... 24,760 24,760 --
------ ------ ------
44,094 70,253 16,165
Less note payable to affiliate............................. 24,760 24,760 --
Less amount due within one year............................ 5,139 22,850 1,494
------ ------ ------
Long-term debt............................................. $ 14,195 $ 22,643 $ 14,671
====== ====== ======
</TABLE>

The capitalized lease obligations listed above contain certain restrictive
covenants which, among other things, require the Company to maintain a specified
level of working capital. In addition, certain debt and capital lease
obligations prohibit the Company from paying dividends on common stock.

At December 31, 1996 aggregate future principal payments by year on
long-term debt and note payable to affiliate are due as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1997................................... $ 5,139
1998................................... 3,848
1999................................... 4,580
2000................................... 27,795
2001................................... 797
Thereafter............................. 1,935
-------
$ 44,094
</TABLE>

III-15
<PAGE> 74

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTES PAYABLE

A $13 million bank line of credit is used to help finance working capital
requirements for Calgene's subsidiaries, excluding Gargiulo. Borrowings under
the line bear interest at the greater of one quarter percent over the bank's
prime rate or two and one half percent over the federal funds rate. On December
31, 1996 the bank's prime rate was 8.25% and the federal funds rate was 6.26%.
The weighted average annual interest rate under the line of credit was 8.62%,
8.90%, and 8.92% for the six month period ended December 31, 1996 and for the
fiscal year ended June 30, 1996, and 1995, respectively. Borrowings are subject
to certain financial covenants which include prohibiting the Company from paying
cash dividends on its common stock. Borrowings are secured by qualifying
accounts receivable and inventory and must be repaid on a monthly basis to the
extent they exceed qualifying accounts receivable and inventory. As of December
31, 1996, and June 30, 1995 there was $6,500,000 and $5,973,000, respectively,
outstanding on the line of credit.

During fiscal year 1996 the Company entered into a credit facility
agreement with Monsanto. Monsanto is obligated, subject to certain terms and
conditions, to lend up to $15 million annually for a period of three years to
Calgene, although not more than $15 million may be outstanding at any one time.
The credit facility agreement contains various covenants precluding Calgene and
its subsidiaries from taking certain actions without the approval of Monsanto.
Also, in the event of a default by Calgene, Monsanto has certain rights to
convert the outstanding principal and interest under such agreement into
additional shares of Calgene Common Stock, not to exceed 3,000,000 shares. The
outstanding balance of this credit facility shall bear interest at two percent
above the prime rate (aggregating 10.25% at December 31, 1996). This credit
facility expires on September 30, 1998. As of December 31, 1996, the Company's
advances under this credit facility had been paid in full.

A $3.5 million line of credit with a bank is used to finance working
capital requirements at Gargiulo's Puerto Rico operations. Borrowings under the
line bear interest at prime. The credit line expires on September 30, 1997. On
December 31, 1996, the bank's prime rate was 8.25%. As of December 31, 1996,
there was $2,500,000 outstanding on the line of credit.

9. COMMITMENTS AND CONTINGENCIES

LEASING ARRANGEMENTS

The Company leases certain research and office equipment as well as office
and research space. These leases are accounted for as follows in the
accompanying consolidated financial statements:

CAPITAL LEASES

The following amounts are included in property, plant and equipment as
assets recorded under capital leases:

<TABLE>
<CAPTION>
DECEMBER 31, 1996 JUNE 30, 1996 JUNE 30, 1995
----------------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Cost.............................. $ 4,235 $ 6,847 $ 4,192
Less accumulated depreciation..... 1,525 1,245 1,113
------ ------ ------
$ 2,710 $ 5,602 $ 3,079
====== ====== ======
</TABLE>

Depreciation expense charged to operations pursuant to these capital leases
amounted to approximately $294,000, $482,000, $537,000 and $462,000 during the
six month period ended December 31, 1996 and the years ended June 30, 1996, 1995
and 1994 respectively.

During the six month period ended December 31, 1996 and the years ended
June 30, 1996, 1995 and 1994, the Company capitalized equipment of approximately
$334,000, $489,000, $1,506,000 and $773,000,

III-16
<PAGE> 75

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

respectively which represents the present value of the net minimum lease
payments of capital lease obligations entered into during such fiscal periods.

The future minimum lease payments by fiscal year under capital leases,
together with the present value of the net minimum lease payments are as follows
at December 31, 1996:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1997................................................... $ 1,322
1998................................................... 621
1999................................................... 445
2000................................................... 555
2001................................................... 71
-------
3,014
Less amount representing interest...................... 433
Present value of net minimum Lease payments (Note 8)... $ 2,581
=======
</TABLE>

OPERATING LEASES

Future minimum payments by fiscal year under non-cancelable operating
leases are as follows at December 31, 1996:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1997................................................... $ 6,379
1998................................................... 3,732
1999................................................... 3,153
2000................................................... 2,815
2001................................................... 1,436
Thereafter............................................. 637
-------
$ 18,152
=======
</TABLE>

Rental expense charged to operations for all operating leases was
approximately $3,445,000, $3,971,000, $3,259,000 and $1,761,000 for the six
month period ended December 31, 1996 and the years ended June 30, 1996, 1995 and
1994, respectively. Rent expense related to leases with related parties was
approximately $202,000 for the six month period ended December 31, 1996 and
$143,000 for the year ended June 30, 1996.

INVENTORY PURCHASE COMMITMENTS

In the normal course of business, the Company has entered into various
grower contracts with third party growers. Pursuant to these contracts, the
Company has agreed to purchase the resulting crop, subject to certain quality
standards, at the end of the growing cycle which is generally less than one
year. The amount of outstanding grower contract commitments is approximately
$4.4 million at December 31, 1996.

PATENTS

Certain institutions and companies have been issued patents, have patent
applications pending or have otherwise obtained proprietary rights to technology
necessary or potentially useful to Calgene. These patents or patent
applications, if patents are issued, could delay product introduction or
preclude Calgene from using this technology without a license. The extent to
which Calgene would be required to license such patents and cost and
availability of such licenses are currently unknown.

III-17
<PAGE> 76

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

LEGAL PROCEEDINGS AND OTHER CONTINGENCIES

On or about January 29, 1997, Hanna Obstfeld filed suit in Delaware
Chancery Court against the Company and certain of its directors alleging
unfairness in connection with the proposed acquisition by Monsanto Company of
those shares of the Company's common stock which Monsanto does not own. After
Ms. Obstfeld brought her suit, other essentially identical actions followed,
none of which have as yet been served upon the Company. It is anticipated that
the complaints will shortly be consolidated and the Company has no obligation to
answer, move or otherwise plead until such time as a consolidated complaint has
been filed and served. No discovery has occurred to date in this action. The
Company believes it has meritorious defenses to the allegations set forth in the
pending complaints.

On February 11, 1997, three named Plaintiffs filed a Class Action Complaint
against Gargiulo, Inc. in the United States District Court for the Northern
District of California, San Jose Division. The Complaint arose from the
employment relationship between the named and unnamed Plaintiffs and Gargiulo,
Inc. The Plaintiffs allege certain violations of the Migrant and Seasonal
Agricultural Worker Protection Act ("MSPA"), California's IWC Wage Order, the
California Labor Code and the California Business and Professions Code; and
Breach of Contract. The Plaintiffs seek damages including all unpaid wages,
statutory damages under the California Labor Code; a declaration that Gargiulo
violated MSPA, monetary damages pursuant to MSPA; and for an order enjoining
Gargiulo, Inc. from violations of MSPA. Gargiulo's insurance carriers were
contacted regarding this lawsuit. As of March 27, 1997, Gargiulo has answered
the Class Action Complaint, and is initiating discovery regarding class
certification. Gargiulo, Inc. is also waiting for the response from its
insurance carrier. While the results of the Class Action Complaint cannot be
predicted, the Company believes that the ultimate outcome will not have a
material adverse effect on the Company's consolidated financial position or
results of operations.

From 1992 through early 1996, Calgene was engaged in a litigation with Enzo
Biochem, Inc. ("Enzo") a company licensed under three related U.S. patents and
counterpart foreign patents (the "Enzo Patents") which purported to cover the
use of antisense technology in all cells, including plant cells. Some of
Calgene's products, including the FLAVR SAVR tomato, use antisense technology.
Enzo had claimed that Calgene infringed the Enzo Patents. Calgene denied
infringement and challenged the validity of the Enzo Patents. On February 2,
1996, the District Court ruled that the Enzo Patents are invalid. In addition,
the validity of a patent owned by Calgene directed to the use of antisense in
plant cells was upheld by the District Court. Calgene subsequently requested
that the court clarify certain aspects of the infringement portion of its
decision, and the court has agreed to reconsider on this basis. There is no
indication that the court would reverse any aspect of its original ruling.
Meanwhile, Enzo has indicated that it intends to appeal the decision.

Although the trial court has the option of altering any aspect of its
decision upon reconsideration, and Enzo may appeal the decision after its
publication, Calgene believes that further proceedings will not have a
materially adverse effect on its consolidated financial position or results of
operations, based on the trial court's determination that the SUNY/Enzo Patents
are invalid and not infringed by Calgene and that the Calgene Antisense Patent
is valid.

Nevertheless, if on reconsideration or as a result of an appeal a court
were to determine that one or more of the Enzo Patents validly covers plant
cells and that such patents are infringed by Calgene's sales of products
incorporating such antisense technology, Calgene could be held liable for
significant damages and could be precluded from producing and selling the FLAVR
SAVR tomato, as well as other products currently under development. There is no
assurance that a license, if necessary, could be obtained by Calgene on
commercially acceptable terms, if at all. If the court were to determine that
the Calgene Antisense Patent is invalid or unenforceable, Calgene would be
deprived of the competitive and licensing advantages afforded by its patent.
Moreover, the Company would have to expense the capitalized legal fees related
to the defense of the Calgene's Antisense Patent, which amounted to
approximately $5.7 million at December 31, 1996.

III-18
<PAGE> 77

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On October 18, 1995, two groups of Plaintiffs filed separate complaints
against various Defendants including Gargiulo & Associates in the United States
District Court for the Eastern District of California. Both complaints arose
from the same set of facts and allege the same three theories of recovery. These
actions were consolidated. The cases involve personal injury claims relating to
vehicle accident in which numerous migrant labor workers being transported to
the farm of Gargiulo & Dresick Associates (which was being farmed under contract
by Dresick Farms, Inc.) were killed or injured. The two cases, Albertano Alberto
Jimenez; et al. v. Gargiulo & Associates; Pat Kreger, Inc., Manuel Vegas; Robles
Rios; Jesus Loza and Samuel Santiago Vasquez, and Jose Vasquez; et al. v.
Gargiulo & Associates; Pat Kreger, Inc., Manuel Vegas; Robles Rios; Jesus Loza
and Samuel Santiago Vasquez, were both filed on October 18, 1995. The plaintiffs
sought general damages, including compensation for pain and suffering; special
damages, including past, present and future medical expenses; compensation for
the loss of past and future income; and punitive damages in an unspecified
amount. Gargiulo's insurance carriers have been contacted regarding these
lawsuits. As of March 12, 1997, Gargiulo was granted its Motion for Summary
Judgment as to all of the claims against it. This matter is now subject to
appeal which must be filed by no later than 30 days from entry of judgment which
will not occur for a few weeks.

The Company is party to other pending litigation incidental to its business
and has from time to time been notified of various claims that are not the
subject of pending litigation. While the results of litigation and claims cannot
be predicted with certainty, the Company believes that the final outcome of all
such other litigation matters and claims will not have a materially adverse
effect on its consolidated financial position or results of operations.

EMPLOYMENT AGREEMENTS

Calgene has various employment and consulting agreements with certain key
individuals. The aggregate fixed commitment under these agreements is
$2,125,000. In addition, one employment agreement provides for additional
compensation based on a percentage of the net profit of Gargiulo.

10. SHAREHOLDERS' EQUITY

STOCK OPTIONS

At December 31, 1996, the Company has three stock-based compensation plans,
which are described below. The Company applies APB 25 and related
interpretations in accounting for its stock options because, as discussed below,
the alternative fair value accounting provided for under SFAS 123 requires use
of option valuation models that were not developed for use in valuing the stock
options. Under APB 25, because the exercise price of the Company's stock options
equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

The Company established stock option plans in June 1991 (the "1991 Plan")
and March 1996 (the "1996 Plan"), under which all officers, employees and
directors of the Company may participate. Either incentive stock options or
non-qualified stock options can be granted under both plans. 2,500,000 and
5,000,000 shares of the Company's common stock have been reserved for issuance
under the 1991 Plan, and the 1996 Plan, respectively. Options granted under the
plans generally have a term of ten years from the date of grant. The exercise
price of incentive stock options granted under the plans may not be less that
100% of the fair market value of Calgene's common stock on the date of grant.

The administrative committee of the option plans has the authority to
provide that options issued may be exercised by either (1) cash, (2) surrender
by the optionee of other shares of common stock of the Company of a value equal
to the exercise price of the shares as to which the option is being exercised,
or (3) the optionee's issuance of an interest-bearing, full-recourse promissory
note.

III-19
<PAGE> 78

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company also has a 1981 Stock Option Plan having terms generally
similar to the 1991 Plan. The 1981 Plan has been terminated subject to the
rights of holders of outstanding options.

Pro forma information regarding net loss and net loss per share is required
by SFAS 123, which also requires that the information be determined as if the
Company has accounted for its employee stock options granted subsequent to June
30, 1995 under the fair value method of that Statement. The fair value of each
option grant is estimated on the date of grant using the Black-Scholes option
pricing model with the following weighted-average assumptions for the year ended
June 30, 1996, and the six month period ended December 31, 1996: dividend yield
of 0; volatility factors of the expected market price of the Company's common
stock of .44; risk-free interest rate of 6.6%; and a weighted-average expected
life of the options of 3.5 years for certain option holders and five years for
all other option holders.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information, which includes the stock option plans and the Employee
Stock Purchase Plan, follows (in thousands except for net loss per share
information):

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1996 JUNE 30, 1996
----------------- -------------
<S> <C> <C>
Net loss -- actual..................................... $ (63,934) $ (97,014)
Net loss -- pro forma.................................. (65,085) (97,564)
Net loss per share -- actual........................... (1.03) (2.56)
Net loss per share -- pro forma........................ (1.05) (2.58)
</TABLE>

Because SFAS 123 is applicable only to options granted subsequent to June
30, 1995, its pro forma effect will not be fully reflected until 1999.

III-20
<PAGE> 79

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the status of the Company's stock option plans and changes
during the periods is presented below:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Outstanding at June 30, 1993............................. 1,461,025
Granted................................................ 499,000
Canceled............................................... (13,759)
Exercised (at $5.25 to $12.375)........................ (268,588)
---------
Outstanding at June 30, 1994............................. 1,677,678
Granted................................................ 769,025
Canceled............................................... (119,968)
Exercised (at $5.875 to $12.375)....................... (61,457)
---------
Outstanding at June 30, 1995............................. 2,265,278 $ 7.57
Granted................................................ 2,000,929 5.72
Canceled............................................... (567,502) 7.47
Exercised (at $6.50)................................... (6,182) 6.50
---------
Outstanding at June 30, 1996............................. 3,692,523 6.56
Granted................................................ 1,386,350 5.25
Canceled............................................... (135,327) 6.63
---------
Outstanding at December 31, 1996......................... 4,943,546 6.18
=========
</TABLE>

The weighted-average fair value of options granted during the six month
period ended December 31, 1996, and the year ended June 30, 1996, was $2.37 and
$2.54, respectively.

The following table summarizes information about the stock options
outstanding at December 31, 1996:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------- ----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
NUMBER OF CONTRACTUAL EXERCISE NUMBER OF EXERCISE
RANGE OF EXERCISE PRICES OPTIONS LIFE PRICE OPTIONS PRICE
----------------------------- ---------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
$4.63 - $ 5.49............... 1,645,587 9.37 $ 5.23 225,147 $ 5.22
5.50 - 5.99............... 1,647,082 9.31 5.76 311,044 5.75
6.00 - 6.99............... 304,973 5.35 6.67 212,403 6.76
7.00 - 7.99............... 1,187,586 6.91 7.50 710,719 7.51
8.00 - 15.25............... 158,318 6.50 9.65 124,558 9.92
--------- ---------
4,943,546 6.18 1,583,871 6.93
========= =========
</TABLE>

At June 30, 1995, 814,421 options were exercisable at prices ranging from
$5.25 to $15.25 per share. At June 30, 1996, 1,088,775 options were exercisable
at prices ranging from $4.75 to $15.25 per share. At December 31, 1996, there
are 404,917 shares and 2,138,072 shares available for grant under the 1991 plan
and 1996 plan, respectively. Of the options outstanding at December 31, 1996,
options to purchase 1,583,871 shares were immediately exercisable at prices
ranging from $4.75 to $15.25 per share on dates ranging from 1996 to 2006.

In November 1994, the Board of Directors approved an amendment to all
outstanding options held by employees of the Company under the 1991 plan with
exercise prices in excess of $7.50 per share. The amendment allowed employees to
elect to reduce the option exercise price to $7.50 per share in exchange for

III-21
<PAGE> 80

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

an extended vesting period. A total of 1,268,081 options with option prices
ranging from $7.75 to $16.00 were repriced.

EMPLOYEE STOCK PURCHASE PLAN

The Company established a stock purchase plan in March 1990 (the "1990
Plan") under which most employees of the Company may participate. A total of
500,000 shares of the Company's common stock have been reserved for issuance
under the 1990 Plan. The 1990 Plan is administered by the Board of Directors or
by a committee appointed by the Board of Directors. Employees can elect to have
from two to ten percent of their monthly gross salary deducted during each
offering period and applied to the purchase of stock. The purchase price is an
amount equal to 85% of the fair market value of a share of common stock of the
Company on the enrollment date or on the purchase date, whichever is lower.
During the fiscal years ended December 31, 1996, June 30, 1996, 1995 and 1994,
the Company sold 21,521 shares of common stock for $91,464, 31,593 shares of
common stock for $166,183, 31,462 shares of common stock for $216,179, and
23,045 shares of common stock for $223,144, respectively. For purposes of
calculating the pro forma disclosures required by SFAS 123, the fair value of
the employees' purchase rights was estimated using the Black-Scholes option
pricing model with the following assumptions for the six month period ended
December 31, 1996 and the year ended June 30, 1996: dividend yield of 0;
expected life of 6 months; expected volatility of .33; and risk-free interest
rate of 5.81%. The weighted-average fair value of those purchase rights granted
during the six month period ended December 31, 1996 and the year ended June 30,
1996 was $1.60 and $1.97, respectively.

11. INCOME TAXES

The income tax provision for the six month period ended December 31, 1996
and years ended June 30, 1996, and 1995 is comprised of state franchise taxes.
Significant components of the Company's deferred tax assets and liabilities for
federal and state income taxes are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995
------------ -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards............................ $ 85,200 $70,600 $66,200
Research and other credits.................................. 3,800 3,800 3,800
Capitalized research and development........................ 400 400 400
Inventory reserves and allowances........................... 1,000 1,500 --
Facility writedowns and restructuring....................... 9,400 6,400 300
Development fee............................................. 4,000 4,000 --
Capitalized license fees.................................... 400 600 700
Increase in tax value of net assets from business
acquisition............................................... 15,000 4,200 --
Other, net.................................................. 800 1,800 1,600
--------- -------- --------
Total deferred tax assets................................... 120,000 93,300 73,000
Valuation allowance for deferred tax assets................. (118,400) (91,500) (72,800)
--------- -------- --------
Net deferred tax assets..................................... $ 1,600 $ 1,800 $ 200
========= ======== ========
Deferred tax liabilities:
Depreciation.............................................. $ 1,600 $ 1,800 $ --
Other, net................................................ -- -- 200
--------- -------- --------
Total deferred tax liabilities.............................. $ 1,600 $ 1,800 $ 200
========= ======== ========
</TABLE>

At June 30, 1994 the valuation allowance for deferred tax assets was $61.1
million.

III-22
<PAGE> 81

CALGENE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For federal income tax return purposes, as of December 31, 1996, the
Company has a net operating loss carryover of approximately $234 million which
expires between 1997 and 2012 and a general business tax credit carryover of
approximately $4 million which expires between 1997 and 2012. In addition, as of
December 31, 1996, the Company has a net operating loss carryover of
approximately $143 million for state income tax purposes which expires between
1997 and 2012.

Approximately $20 million and $3 million of the federal and state net
operating loss carryovers, respectively, and $700,000 of the general business
tax credit carryover, were generated by Plant Genetics prior to its merger with
Calgene. Such net operating loss and general business tax credit carryovers are
available only to offset the separate federal and state taxable income, if any,
of Calgene Fresh (Plant Genetics was renamed Calgene Fresh in January, 1992).
For financial reporting purposes, a valuation allowance of approximately $118.4
million has been recognized to offset the deferred tax assets related to all of
the aforementioned carryforwards.

Because of "change in ownership" provisions of the Tax Reform Act of 1986,
a portion of the Company's federal net operating loss and credit carryovers will
be subject to an annual limitation regarding their utilization against taxable
income in future periods. The Company expects that this annual limitation will
not have a material adverse effect on the Company's ability to utilize the net
operating loss and credit carryovers prior to the expiration of the carryover
periods.

12. TAX DEFERRED INVESTMENT PLAN

Substantially all full-time employees of the Company are eligible to
participate in a tax deferred investment plan (the "401(k) Plan"). The 401(k)
Plan permits each employee to contribute 2% to 15% of compensation on a pre-tax
basis, to a maximum amount per calendar year. For the six month period ended
December 31, 1996 and the years ended June 30, 1996, 1995 and 1994, matching
contributions by the Company were $118,000, $227,000, $179,000 and $151,000,
respectively.

13. SUBSEQUENT EVENTS

In January 1997, the Company received an unsolicited proposal from Monsanto
to acquire all of the outstanding shares of the Company's stock that Monsanto
does not already own at a price of $7.25 per share. Monsanto currently owns
approximately 54.6% of the Company's outstanding shares. The proposal is under
consideration by a special committee of three disinterested Calgene Directors.

In February 1997, the Company replaced its $13 million bank line of credit
with a $20 million bank line of credit with a different bank. The bank line is
used to help finance working capital requirements for Calgene. Borrowings are
secured by accounts receivable, inventory and equipment. The line of credit
expires on December 1, 1999. Available credit increases to $30 million after
December 31, 1997 and to $40 million after December 31, 1998.

III-23
<PAGE> 82

ANNEX A

[MONTGOMERY LOGO IN DTP]

March 31, 1997

Special Committee of the Board of Directors
Members of the Board of Directors
Calgene, Inc.
1920 Fifth Street
Davis, CA 95616

Gentlemen:

We understand that Calgene, Inc., a Delaware corporation (the "Company"),
Monsanto, a Delaware corporation ("Monsanto"), and Monsanto Acquisition Company,
Inc., a Delaware corporation and a wholly-owned subsidiary of Monsanto
("Purchaser") expect to enter into an Agreement and Plan of Merger (the
"Agreement") pursuant to which Purchaser will commence a tender offer to
purchase for cash all of the outstanding shares of the Company's common stock at
$8.00 per share (the "Offer"). Pursuant to the terms and subject to the
conditions of the Agreement, after consummation of the Offer, the Purchaser will
be merged with and into the Company, which will be the surviving entity (the
"Merger"). In the Merger, all shares of the Company's common stock (other than
(i) shares held by the Company as treasury stock; (ii) shares held by Monsanto,
Purchaser or any of their respective subsidiaries; and (iii) shares as to which
dissenters' rights have been perfected) will be exchanged for cash equal to the
amount per share paid in the Offer. The terms and conditions of the Offer and
the Merger are set forth in more detail in the Agreement.

We have been engaged as financial advisor to the Special Committee of the
Board of Directors of the Company (the "Special Committee") in its consideration
of a possible sale to Monsanto of the publicly traded shares of the Company's
common stock not already owned by Monsanto and its affiliates. In that capacity,
the Special Committee has asked for our opinion as investment bankers as to
whether the consideration to be received by the holders of the Company's common
stock (other than Monsanto and its affiliates) pursuant to the Offer and the
Merger is fair to such stockholders from a financial point of view, as of the
date hereof. As you are aware, we were not retained to, nor did we, advise the
Company or the Special Committee with respect to alternatives to the Offer and
the Merger or the Company's underlying decision to proceed with or effect the
Offer and the Merger. Further, we were not requested to, nor did we, solicit or
assist the Company in soliciting indications of interest from third parties for
all or any part of the Company.

In connection with our opinion, we have, among other things: (i) reviewed
certain publicly available financial and other data with respect to the Company,
including the financial statements for recent years and interim periods to
September 30, 1996 and certain other relevant financial and operating data
relating to the Company made available to us from published sources and from the
internal records of the Company; (ii) reviewed the financial terms and
conditions of the Agreement in the form provided to us by the Company; (iii)
reviewed certain publicly available information concerning the trading of, and
the trading market for, the Company's common stock; (iv) compared the Company
from a financial point of view with certain other companies which we deemed to
be relevant; (v) considered the financial terms, to the extent publicly
available, of selected recent business combinations which we deemed to be
comparable, in whole or in part, to

A-1
<PAGE> 83

Special Committee of the Board of Directors
Calgene, Inc.
March 31, 1997
Page 2
the Offer and the Merger; (vi) reviewed and discussed with representatives of
the management of the Company certain information of a business and financial
nature, furnished to us by the Company, including financial forecasts and
related assumptions of the Company; (vii) made inquiries regarding and discussed
the Agreement and other matters related thereto with the Company's counsel; and
(viii) performed such other analyses and examinations as we deemed appropriate.

In connection with our review, we have not assumed any obligation
independently to verify the foregoing information and have relied on its being
accurate and complete in all material respects. With respect to the financial
forecasts for the Company provided to us by management, as a result of
discussions among us, representatives of management of the Company and the
Special Committee, such forecasts were adjusted to reflect more conservative
assumptions regarding the development and market penetration of certain products
and to reflect Monsanto's $50 million investment in the Company at $8.00 per
share in November 1996. Upon the advice and with the consent of management of
the Company and the Special Committee, we have assumed for purposes of our
opinion that the unadjusted forecasts were reasonably prepared on bases
reflecting the best available estimates and judgments of the Company's
management at the time of preparation as to the future financial performance of
the Company and that such forecasts, as adjusted, provide a reasonable basis
upon which we can form our opinion. We have also assumed that there have been no
material changes in the Company's assets, financial condition, results of
operations, business or prospects since the date of its last financial
statements available to us. Although we were aware of the asset write-downs and
restructuring expenses reflected in the Company's announcement of its financial
results for the quarter ended December 31, 1996, we did not revise our financial
analyses to take into account developments (other than Monsanto's $50,000,000
investment in the Company) after September 30, 1996. We have relied on advice of
counsel to the Special Committee and counsel and independent accountants to the
Company as to all legal and financial reporting matters with respect to the
Special Committee, the Company, the Agreement, the Offer and the Merger. We have
assumed that the Offer and the Merger will be consummated in a manner that
complies in all respects with the applicable provisions of the Securities
Exchange Act of 1934, as amended, and all other applicable federal and state
statutes, rules and regulations. In addition, we have not assumed responsibility
for making an independent evaluation, appraisal or physical inspection of any of
the assets or liabilities (contingent or otherwise) of the Company, nor have we
been furnished with any such appraisals. The Company has informed us, and we
have assumed, that the Merger will be recorded as a purchase under generally
accepted accounting principles. Finally, our opinion is based on economic,
monetary and market and other conditions as in effect on, and the information
made available to us as of, the date hereof. Accordingly, although subsequent
developments may affect this opinion, we have not assumed any obligation to
update, revise or affirm this opinion.

We have further assumed with your consent that the transactions
contemplated by the Agreement will be consummated in accordance with the terms
described in the Agreement, without any further amendments thereto, and without
waiver by the Company of any of the conditions to its obligations thereunder.

We have acted as financial advisor to the Special Committee in connection
with the Offer and the Merger and will receive a fee for our services, including
rendering this opinion, a significant portion of which is contingent upon the
consummation of the Offer. In the ordinary course of business, we actively trade
the equity securities of the Company and Monsanto for our own account and for
the accounts of customers and, accordingly, may at any time hold a long or short
position in such securities. We have also performed various investment banking
services for the Company, including acting as advisor to the Company in
connection with the sale of 49.9% of the Company to Monsanto in March 1996, and
acting as co-manager of an underwritten public offering of Calgene Common Stock
in January 1993 and as lead manager of an underwritten public offering of
Calgene Common Stock in October 1994.

A-2
<PAGE> 84

Special Committee of the Board of Directors
Calgene, Inc.
March 31, 1997
Page 3
Based upon the foregoing and in reliance thereon, it is our opinion as
investment bankers that the consideration to be received by the holders of the
Company's common stock (other than Monsanto and its affiliates) pursuant to the
Offer and the Merger is fair to such stockholders from a financial point of
view, as of the date hereof.

This opinion is furnished pursuant to our engagement letter, dated February
26, 1997. This opinion is addressed to the Special Committee and the Company's
Board of Directors only and is not intended to be and shall not be deemed to be
a recommendation to any stockholder as to whether to accept the consideration to
be offered to such stockholder pursuant to the Offer or as to how such
stockholder should vote with respect to the Merger, if any vote is required.
Except as provided in such engagement letter, this opinion may not be used or
referred to by the Special Committee, the Company's Board of Directors or the
Company, or quoted or disclosed to any person in any manner, without our prior
written consent, which consent is hereby given to the inclusion of this opinion
in any Schedule 14D-1, Schedule 13E-3 or Schedule 14D-9 filed with the
Securities and Exchange Commission in connection with the Offer or the Merger.

Very truly yours,

/s/ MONTGOMERY SECURITIES

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

Montgomery Securities

A-3
<PAGE> 85

ANNEX B

RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE DGCL

IN VIEW OF THE COMPLEXITY OF THESE PROVISIONS OF THE DGCL, ANY
STOCKHOLDER WHO IS CONSIDERING EXERCISING DISSENTERS' RIGHTS SHOULD
CONSULT HIS OR HER LEGAL ADVISOR.

STATUTORY APPRAISAL PROCEDURES. The following is a brief summary of the
statutory procedures to be followed by a holder of Shares at the Effective Time
who does not wish to accept the per Share cash consideration pursuant to the
Merger (a "Remaining Stockholder") in order to dissent from the Merger and
perfect appraisal rights under Delaware law. THIS SUMMARY IS NOT INTENDED TO BE
COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SECTION 262 OF THE
DGCL, THE TEXT OF WHICH IS SET FORTH IN THIS ANNEX B HERETO. ANY REMAINING
STOCKHOLDER CONSIDERING DEMANDING APPRAISAL IS ADVISED TO CONSULT LEGAL COUNSEL.
APPRAISAL RIGHTS WILL NOT BE AVAILABLE UNLESS AND UNTIL THE MERGER (OR A SIMILAR
BUSINESS COMBINATION) IS CONSUMMATED.

Remaining Stockholders of record who desire to exercise their appraisal
rights must fully satisfy all of the following conditions. A written demand for
appraisal of Shares must be delivered to the Secretary of the Company (x) before
the taking of the vote on the approval and adoption of the Merger Agreement if
the Merger is not being effected as a "short-form" merger but, rather, is being
consummated following approval thereof at a meeting of the Company's
stockholders (a "long-form merger") or (y) within 20 days after the date that
the Surviving Corporation mails to the Remaining Stockholders a notice (the
"Notice of Merger") to the effect that the Merger is effective and that
appraisal rights are available (and includes in such notice a copy of Section
262 of the DGCL and any other information required thereby) if the Merger is
being effected as a "short-form" merger without a vote or meeting of the
Company's stockholders. If the Merger is effected as a "long-form" merger, this
written demand for appraisal of Shares must be in addition to and separate from
any proxy or vote abstaining from or against the approval and adoption of the
Merger Agreement, and neither voting against, abstaining from voting, nor
failing to vote on the Merger Agreement will constitute a demand for appraisal
within the meaning of Section 262 of the DGCL. In the case of a "long-form"
merger, any stockholder seeking appraisal rights must hold the Shares for which
appraisal is sought on the date of the making of the demand, continuously hold
such Shares through the Effective Time, and otherwise comply with the provisions
of Section 262 of the DGCL.

In the case of both a "short-form" and a "long-form" merger, a demand for
appraisal must be executed by or for the stockholder of record, fully and
correctly, as such stockholder's name appears on the stock certificates. If
Shares are owned of record in a fiduciary capacity, such as by a trustee,
guardian or custodian, such demand must be executed by the fiduciary. If Shares
are owned of record by more than one person, as in a joint tenancy or tenancy in
common, such demand must be executed by all joint owners. An authorized agent,
including an agent for two or more joint owners, may execute the demand for
appraisal for a stockholder of record; however, the agent must identify the
record owner and expressly disclose the fact that in exercising the demand, he
is acting as agent for the record owner.

A record owner, such as a broker, who holds Shares as a nominee for others,
may exercise appraisal rights with respect to the Shares held for all or less
than all beneficial owners of Shares as to which the holder is the record owner.
In such case the written demand must set forth the number of Shares covered by
such demand. Where the number of Shares is not expressly stated, the demand will
be presumed to cover all Shares outstanding in the name of such record owner.
Beneficial owners who are not record owners and who intend to exercise appraisal
rights should instruct the record owner to comply strictly with the statutory
requirements with respect to the exercise of appraisal rights before the date of
any meeting of stockholders of the Company called to approve the Merger in the
case of a "long-form" merger and within 20 days following the mailing of the
Notice of Merger in the case of a "short-form" merger.

Remaining stockholders who elect to exercise appraisal rights must mail or
deliver their written demands to: Secretary, Calgene, Inc., 1920 Fifth Street,
Davis, California 95616. The written demand for appraisal should specify the
stockholder's name and mailing address, the number of Shares covered by the
demand and

B-1
<PAGE> 86

that the stockholder is thereby demanding appraisal of such Shares. In the case
of a "long-form" merger, the Company must, within ten days after the Effective
Time, provide notice of the Effective Time to all stockholders who have complied
with Section 262 of the DGCL and have not voted for approval and adoption of the
Merger Agreement.

In the case of a "long-form" merger, Remaining Stockholders electing to
exercise their appraisal rights under Section 262 must not vote for the approval
and adoption of the Merger Agreement or consent thereto in writing. Voting in
favor of the approval and adoption of the Merger Agreement, or delivering a
proxy in connection with the stockholders meeting called to approve the Merger
Agreement (unless the proxy votes against, or expressly abstains from the vote
on, the approval and adoption of the Merger Agreement), will constitute a waiver
of the stockholder's right of appraisal and will nullify any written demand for
appraisal submitted by the stockholder.

Regardless of whether the Merger is effected as a "long-form" merger or a
"short-form" merger, within 120 days after the Effective Time, either the
Company or any stockholder who has complied with the required conditions of
Section 262 and who is otherwise entitled to appraisal rights may file a
petition in the Delaware Court of Chancery demanding a determination of the fair
value of the Shares of the dissenting stockholders. If a petition for an
appraisal is timely filed, after a hearing on such petition, the Delaware Court
of Chancery will determine which stockholders are entitled to appraisal rights
and thereafter will appraise the Shares owned by such stockholders, determining
the fair value of such Shares, exclusive of any element of value arising from
the accomplishment or expectation of the Merger, together with a fair rate of
interest to be paid, if any, upon the amount determined to be the fair value.

The cost of the appraisal proceeding may be determined by the Delaware
Court of Chancery and taxed upon the parties as the Delaware Court of Chancery
deems equitable in the circumstances. Upon application of a dissenting
stockholder, the Delaware Court of Chancery may order that all or a portion of
the expenses incurred by any dissenting stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable attorneys' fees
and the fees and expenses of experts, be charged pro rata against the value of
all Shares entitled to appraisal. In the absence of such determination or
assessment, each party bears its own expenses.

Any Remaining Stockholder who has duly demanded appraisal in compliance
with Section 262 of the DGCL will not, after the Effective Time, be entitled to
vote for any purpose the Shares subject to such demand or to receive payment of
dividends or other distributions on such Shares, except for dividends or other
distributions payable to stockholders of record at a date prior to the Effective
Time.

At any time within 60 days after the Effective Time, any former holder of
Shares shall have the right to withdraw his or her demand for appraisal and to
accept the per Share cash consideration pursuant to the Merger. After this
period, such holder may withdraw his or her demand for appraisal only with the
consent of the Surviving Corporation. If no petition for appraisal is filed with
the Delaware Court of Chancery within 120 days after the Effective Time,
stockholders' rights to appraisal shall cease and all stockholders shall be
entitled to receive the per Share cash consideration pursuant to the Merger.

Failure to take any required step in connection with the exercise of
appraisal rights may result in the termination or waiver of such rights.

APPRAISAL RIGHTS CANNOT BE EXERCISED AT THIS TIME. THE INFORMATION SET
FORTH ABOVE IS FOR INFORMATIONAL PURPOSES ONLY WITH RESPECT TO ALTERNATIVES
AVAILABLE TO STOCKHOLDERS IF THE MERGER (OR ANY SIMILAR BUSINESS COMBINATION) IS
CONSUMMATED. STOCKHOLDERS WHO WILL BE ENTITLED TO APPRAISAL RIGHTS IN CONNECTION
WITH THE MERGER WILL RECEIVE ADDITIONAL INFORMATION CONCERNING APPRAISAL RIGHTS
AND THE PROCEDURES TO BE FOLLOWED IN CONNECTION THEREWITH BEFORE SUCH
STOCKHOLDERS HAVE TO TAKE ANY ACTION RELATING THERETO.

B-2
<PAGE> 87

STOCKHOLDERS WHO SELL SHARES IN THE OFFER WILL NOT BE ENTITLED TO EXERCISE
APPRAISAL RIGHTS WITH RESPECT THERETO BUT, RATHER, WILL RECEIVE THE PRICE PAID
IN THE OFFER THEREFOR.

GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE

262. APPRAISAL RIGHTS.

(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to Section 228
of this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of his shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.

(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section 251 (other than a merger effected pursuant to
subsection (g) of Section 251, 252, 254, 257, 258, 263 or 264 of this title:

(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the holders of the surviving corporation as
provided in subsection (f) of Section 251 of this title.

(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
Sections 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:

a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;

b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock or depository receipts at the
effective date of the merger or consolidation will be either listed on a
national securities exchange or designated as a national market system
security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. or held of record by more than 2,000
holders;

c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or

d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.

B-3
<PAGE> 88

(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not owned by
the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.

(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.

(d) Appraisal rights shall be perfected as follows:

(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or

(2) If the merger or consolidation was approved pursuant to Section
228 or Section 253 of this title, each constituent corporation, either
before the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within twenty days after the date of
mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not

B-4
<PAGE> 89

more than 10 days prior to the date the notice is given; provided that, if
the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.

(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.

(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.

(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.

(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.

B-5
<PAGE> 90

(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.

(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.

(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.

(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.

B-6
<PAGE> 91

The related Letter of Transmittal and Share Certificates for your Shares
should be sent or delivered by you, your broker, dealer, commercial bank or
trust company to the Depositary at its addresses set forth below. Facsimile
copies of the Letters of Transmittal will be accepted.

The Depositary:
THE FIRST NATIONAL BANK OF BOSTON
------------------------

<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
BANK OF BOSTON BANK OF BOSTON STARS
Corporate Agency and Reorganization Corporate Agency and Reorganization SECURITIES TRANSFER AND REPORTING SERVICES, INC.
P.O. Box 1889 150 Royall Street One Exchange Place/55 Broadway, 3rd Floor
Mail Stop 45-02-53 Mail Stop 45-02-53 New York, New York 10006
Boston, Massachusetts 02105-1889 Canton, Massachusetts 02021
</TABLE>

By Facsimile:
(For Eligible Institutions Only)
(617) 575-2233

Confirm Facsimile by Telephone:
(800) 736-3001

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

Stockholders should contact the Information Agent, the Dealer Manager or
their broker, dealer, commercial bank or trust company for assistance concerning
the Offer. Requests for additional copies of the Offer to Purchase and Letters
of Transmittal may also be directed to the Information Agent.

The Information Agent:
(LOGO)

Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064

The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.

(800) 323-5678 (toll free)

<PAGE> 1

LETTER OF TRANSMITTAL

TO TENDER SHARES OF COMMON STOCK

CALGENE, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 7, 1997

MONSANTO ACQUISITION COMPANY, INC.
A WHOLLY OWNED SUBSIDIARY OF

MONSANTO COMPANY

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, MAY 2, 1997, UNLESS THE OFFER IS EXTENDED.

The Depositary:
THE FIRST NATIONAL BANK OF BOSTON
------------------------

<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Bank of Boston Bank of Boston STARS
Corporate Agency and Reorganization Corporate Agency and Reorganization Securities Transfer and Reporting
Services, Inc.
P.O. Box 1889 150 Royall Street One Exchange Place/55 Broadway, 3rd
Floor
Mail Stop 45-02-53 Mail Stop 45-02-53 New York, New York 10006
Boston, Massachusetts 02105-1889 Canton, Massachusetts 02021
</TABLE>

By Facsimile:
(For Eligible Institutions Only)
(617) 575-2233

Confirm Facsimile by Telephone:
(800) 736-3001

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

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER
THAN AS LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

This Letter of Transmittal is to be completed by stockholders of Calgene,
Inc. either if certificates ("Share Certificates") representing shares of common
stock, par value $.001 per share (the "Shares"), are to be forwarded herewith
or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized,
if delivery of Shares is to be made by book-entry transfer to an account
maintained by The First National Bank of Boston (the "Depositary") at The
Depository Trust Company ("DTC") or Philadelphia Depository Trust Company
("PDTC") (DTC and PDTC, each, a "Book-Entry Transfer Facility" and collectively,
the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under
"THE OFFER -- Procedures for Accepting the Offer and Tendering Shares" in the
Offer to Purchase dated April 7, 1997 (the "Offer to Purchase"). DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary on or prior to the expiration date of the Offer or who are unable to
complete the procedure for book-entry transfer prior to the expiration date of
the Offer may nevertheless tender their Shares pursuant to the guaranteed
delivery procedures set forth under "THE OFFER -- Procedures for Accepting the
Offer and Tendering Shares" in the Offer to Purchase. See Instruction 2 below.
<PAGE> 2

[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT A BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:

Name of Tendering Institution:
-----------------------------------------------------------------------------

Check Box of Applicable Book-Entry Transfer Facility and provide Account
Number and Transaction Code Number:

<TABLE>
<S> <C>
[ ] The Depository Trust Company Account Number:

[ ] Philadelphia Depository Trust Company Transaction Code Number: _______________
</TABLE>

[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY (PLEASE INCLUDE A
PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY) AND COMPLETE THE FOLLOWING:

Name(s) of Registered
Holder(s): __________________________________________________________

Window Ticket Number (if
any): ____________________________________________________________

Date of Execution of Notice of Guaranteed
Delivery: ____________________________________________

Name of Institution which Guaranteed
Delivery: ________________________________________________

If Delivered by Book-Entry Transfer to the Book-Entry Transfer Facility:

Check Box of Applicable Book-Entry Transfer Facility and provide Account
Number and Transaction Code Number:

<TABLE>
<S> <C>
[ ] The Depository Trust Company Account Number:

[ ] Philadelphia Depository Trust Company Transaction Code Number: _______________
</TABLE>
<PAGE> 3

- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES BEING TENDERED
(SEE INSTRUCTIONS 3 AND 4)

<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) TENDERED
(PLEASE FILL IN, IF BLANK) ATTACH ADDITIONAL LIST IF NECESSARY)
------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
CERTIFICATE NUMBER(S)* OF SHARES
APPEAR(S) ON SHARE REPRESENTED BY NUMBER OF SHARES
CERTIFICATE(S) CERTIFICATES TENDERED TENDERED**
------------------------------------------------------------------------

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

------------------------------------------------------------------------
TOTAL SHARES:
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Certificate numbers are not required if tender is made by book-entry
transfer.

** If you desire to tender fewer than all Shares represented by any
certificate listed above, please indicate in this column the number of
Shares you wish to tender. Otherwise, all Shares represented by such
certificate will be deemed to have been tendered. See Instruction 4.
================================================================================

NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
<PAGE> 4

LADIES AND GENTLEMEN:

The undersigned hereby tenders to Monsanto Acquisition Company, Inc.
("Purchaser"), a Delaware corporation and a wholly owned subsidiary of Monsanto
Company, a Delaware corporation ("Parent"), the above-described shares of common
stock, par value $.001 per share (the "Shares"), of Calgene, Inc., a Delaware
corporation (the "Company"), pursuant to Purchaser's offer to purchase all
outstanding Shares at $8.00 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated April 7,
1997 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which, together with the Offer to Purchase and any
amendments or supplements thereto or hereto, collectively constitute the
"Offer").

Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby and all dividends, distributions (including, without limitation,
distributions of additional Shares) and rights declared, paid or distributed in
respect of such Shares on or after March 31, 1997 (collectively,
"Distributions") and irrevocably appoints The First National Bank of Boston (the
"Depositary") the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and all Distributions, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver certificates representing Shares
("Share Certificates") and all Distributions, or transfer ownership of such
Shares and all Distributions on the account books maintained by a Book-Entry
Transfer Facility, together, in either case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Shares and all Distributions for transfer on the books of the Company and (iii)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares and all Distributions, all in accordance with the terms of the
Offer.

The undersigned hereby irrevocably appoints R. William Ide, III, Robert B.
Shapiro and Hendrik A. Verfaillie as attorneys and proxies of the undersigned,
each with full power of substitution, to vote in such manner as such attorney
and proxy or his substitute shall, in his sole discretion, deems proper and
otherwise act (by written consent or otherwise) with respect to all the Shares
tendered hereby which have been accepted for payment by Purchaser prior to the
time of such vote or other action and all Shares and other securities issued in
Distributions in respect of such Shares, which the undersigned is entitled to
vote at any meeting of stockholders of the Company (whether annual or special
and whether or not an adjourned or postponed meeting) or consent in lieu of any
such meeting or otherwise. This proxy and power of attorney is coupled with an
interest in the Shares tendered hereby, is irrevocable and is granted in
consideration of, and is effective upon, the acceptance for payment of such
Shares by Purchaser in accordance with the terms of the Offer. Such acceptance
for payment shall revoke all other proxies and powers of attorney granted by the
undersigned at any time with respect to such Shares (and all Shares and other
securities issued in Distributions in respect of such Shares), and no subsequent
proxy or power of attorney shall be given or written consent executed (and if
given or executed, shall not be effective) by the undersigned with respect
thereto. The undersigned understands that, in order for Shares to be deemed
validly tendered, immediately upon Purchaser's acceptance of such Shares for
payment, Purchaser must be able to exercise full voting and other rights with
respect to such Shares, including, without limitation, voting at any meeting of
the Company's stockholders then scheduled.

The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by Purchaser, Purchaser will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of Purchaser all Distributions in respect of the Shares tendered
hereby, accompanied by appropriate documentation of transfer, and pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the Shares tendered hereby, or deduct from
such purchase price, the amount or value of such Distribution as determined by
Purchaser in its sole discretion.
<PAGE> 5

No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable. See "THE
OFFER -- Withdrawal Rights" in the Offer to Purchase.

The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in the Offer to Purchase under "THE OFFER -- Procedures
for Accepting the Offer and Tendering Shares" and in the instructions hereto
will constitute the undersigned's acceptance of the terms and conditions of the
Offer. Purchaser's acceptance of such Shares for payment will constitute a
binding agreement between the undersigned and Purchaser upon the terms and
subject to the conditions of the Offer. Without limiting the foregoing, if the
price to be paid in the Offer is amended in accordance with the Offer, the price
to be paid to the undersigned will be the amended price notwithstanding the fact
that a different price is stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
Purchaser may not be required to accept for payment any of the Shares tendered
hereby.

Unless otherwise indicated herein in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates not purchased or not tendered in
the name(s) of the registered holder(s) appearing above under "Description of
Shares Tendered". Similarly, unless otherwise indicated in the box entitled
"Special Delivery Instructions", please mail the check for the purchase price of
all Shares purchased and all Share Certificates not tendered or not purchased
(and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing above under "Description of Shares Tendered". In
the event that the boxes entitled "Special Payment Instructions" and "Special
Delivery Instruction" are both completed, please issue the check for the
purchase price of all Shares purchased and return all Share Certificates not
purchased or not tendered in the name(s) of, and mail such check and Share
Certificates to, the person(s) so indicated. Unless otherwise indicated herein
in the box entitled "Special Payment Instructions", please credit any Shares
tendered hereby and delivered by book-entry transfer, but which are not
purchased, by crediting the account at the Book-Entry Transfer Facility
designated above. The undersigned recognizes that Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares from the
name of the registered holder(s) thereof if Purchaser does not purchase any of
the Shares tendered hereby.

The undersigned understands that Purchaser reserves the right to transfer
or assign, in whole at any time, or in part from time to time, to one or more of
its affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.

[ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 9.

Number of Shares represented by the lost or destroyed
certificates: ____________
<PAGE> 6

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

SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if Share Certificates not tendered or not
purchased and/or the check for the purchase price of the Shares
purchased are to be issued in the name of and sent to someone other
than the undersigned, or if Shares tendered by book-entry transfer
which are not purchased are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account
indicated above.

Issue:
[ ] Check [ ] Certificate(s)
To:

------------------------------------------------------------
NAME (PLEASE PRINT)

------------------------------------------------------------
ADDRESS

------------------------------------------------------------
ZIP CODE

------------------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER

(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)

Credit unpurchased Shares delivered by book-entry transfer to the
Book-Entry Transfer Facility account at:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company

------------------------------------------------------------
ACCOUNT NUMBER
============================================================

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)

To be completed ONLY if Share Certificates not tendered or not
purchased and/or the check for the purchase price of the Shares
purchased are to be sent to someone other than the undersigned, or to
the undersigned at an address other than that shown above.

Mail:
[ ] Check [ ] Certificate(s)
To:

------------------------------------------------------------
NAME (PLEASE PRINT)

------------------------------------------------------------
ADDRESS

------------------------------------------------------------
ZIP CODE

------------------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER

- ------------------------------------------------------------
<PAGE> 7

- --------------------------------------------------------------------------------
SIGN HERE
(AND COMPLETE SUBSTITUTE FORM W-9 BELOW)

X
--------------------------------------------------------------------------

X
--------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)

Dated: , 1997

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

(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by Share Certificates and
documents transmitted herewith. If a signature is by an officer on behalf
of a corporation or by an executor, administrator, trustee, guardian,
attorney-in-fact, agent or other person acting in a fiduciary or
representative capacity, please provide the following information. See
Instructions 1 and 5.)

--------------------------------------------------------------------------
NAME (PLEASE PRINT)

--------------------------------------------------------------------------
CAPACITY (FULL TITLE)

--------------------------------------------------------------------------
ADDRESS

--------------------------------------------------------------------------
ZIP CODE

<TABLE>
<S> <C>
--------------------------------------------------- ---------------------------------------------------
(AREA CODE) TELEPHONE NO. TAX IDENTIFICATION OR SOCIAL SECURITY NO.
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
</TABLE>

SIGNATURE GUARANTEE
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)

X
--------------------------------------------------------------------------
AUTHORIZED SIGNATURE

--------------------------------------------------------------------------
NAME (PLEASE PRINT)

<TABLE>
<S> <C>
--------------------------------------------------- ---------------------------------------------------
FULL TITLE NAME OF FIRM
</TABLE>

--------------------------------------------------------------------------
ADDRESS

--------------------------------------------------------------------------
ZIP CODE

---------------------------------------------------------
(AREA CODE) TELEPHONE NO.

Dated: , 1997

-----------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 8

INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

To complete the Letter of Transmittal, you must do the following:

- Fill in the box entitled "Description of Shares Being Tendered."

- Sign and date the Letter of Transmittal in the box entitled "Sign Here."

- Fill in and sign in the box entitled "Substitute Form W-9."

In completing the Letter of Transmittal, you may (but are not required to)
also do the following:

- If you want the payment for any Shares purchased issued in the name of
another person, complete the box entitled "Special Payment Instructions."

- If you want any certificate for Shares not tendered or Shares not
purchased issued in the name of another person, complete the box entitled
"Special Payment Instructions."

- If you want any payment for Shares or certificate for Shares not tendered
or purchased delivered to an address other than that appearing under your
signature, complete the box entitled "Special Delivery Instructions."

If you complete the box entitled "Special Payment Instructions" or "Special
Delivery Instructions," you must have your signature guaranteed by an Eligible
Institution (as defined in Instruction 1 below) unless the Letter of Transmittal
is signed by an Eligible Institution.

1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a bank, broker, dealer, credit union, savings association
or other entity that is a member in good standing of the Securities Transfer
Agents Medallion Program (an "Eligible Institution"), unless (i) this Letter of
Transmittal is signed by the registered holder(s) (which term, for purposes of
this document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares) of the
Shares tendered hereby and such holder(s) has not completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" herein or (ii) such Shares are tendered for the account of an
Eligible Institution. If a Share Certificate is registered in the name of a
person other than the person signing this Letter of Transmittal, or if payment
is to be made, or a Share Certificate not accepted for payment and not tendered
is to be returned to a person other than the registered holder(s), then such
Share Certificate must be endorsed or accompanied by appropriate stock powers,
in either case signed exactly as the name(s) of the registered holder(s) appear
on such Share Certificate, with the signatures on such Share Certificate or
stock powers guaranteed as described above. See Instruction 5.

2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message (as defined below) is used, if Shares are
to be delivered by book-entry transfer pursuant to the procedure set forth under
"THE OFFER -- Procedures for Accepting the Offer and Tendering Shares" in the
Offer to Purchase. Share Certificates representing all physically tendered
Shares, or confirmation of a book-entry transfer, if such procedure is
available, into the Depositary's account at one of the Book-Entry Transfer
Facilities ("Book-Entry Confirmation") of all Shares delivered by book-entry
transfer together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), or an Agent's Message in the case of
book-entry transfer, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the expiration date of the Offer. If Share Certificates
are forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
<PAGE> 9

Stockholders whose Share Certificates are not immediately available, who
cannot deliver their Share Certificates and all other required documents to the
Depositary prior to the expiration date of the Offer or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis may tender their
Shares pursuant to the guaranteed delivery procedure described under "THE
OFFER -- Procedures for Accepting the Offer and Tendering Shares" in the Offer
to Purchase. Pursuant to such procedure: (i) such tender must be made by or
through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by
Purchaser, must be received by the Depositary prior to the expiration date of
the Offer; and (iii) the Share Certificates representing all physically
delivered Shares in proper form for transfer by delivery, or Book-Entry
Confirmation of all Shares delivered by book-entry transfer, in each case
together with a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message), and any other documents required by
this Letter of Transmittal, must be received by the Depositary within three
NASDAQ trading days after the date of execution of such Notice of Guaranteed
Delivery, all as described under "THE OFFER -- Procedures for Accepting the
Offer and Tendering Shares" in the Offer to Purchase. A "NASDAQ trading day" is
any day on which The Nasdaq Stock Market, Inc.'s National Market ("NASDAQ") is
open for business.

The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participants in the Book-Entry
Transfer Facility tendering the Shares that such participant has received this
Letter of Transmittal and agrees to be bound by the terms of this Letter of
Transmittal and that Purchaser may enforce such agreement against such
participant.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or facsimile hereof), all tendering stockholders waive any right to receive any
notice of the acceptance of their Shares for payment.

3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers, the number of Shares
represented by such Share Certificates and the number of Shares tendered should
be listed on a separate schedule and attached hereto.

4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such cases, a new certificate representing the remainder of the
Shares that were represented by the Share Certificates delivered to the
Depositary herewith will be sent to each person signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" herein as soon as practicable after the expiration or termination
of the Offer. All Shares represented by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.

5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.

If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.

If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
<PAGE> 10

If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates not
tendered or not purchased are to be issued in the name of, a person other than
the registered holder(s), in which case, the Share Certificate(s) representing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear on such Share Certificate(s). Signatures on such Share Certificate(s) and
stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
representing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.

If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
Purchaser of such person's authority to so act must be submitted.

6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) representing Shares not tendered or not purchased are to be
issued in the name of, a person other than the registered holder(s), the amount
of any stock transfer taxes (whether imposed on the registered holder(s), such
other person or otherwise) payable on account of the transfer to such other
person will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted.

EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES REPRESENTING THE
SHARES TENDERED HEREBY.

7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
representing Shares not tendered or not purchased are to be issued, in the name
of a person other than the person(s) signing this Letter of Transmittal or if
such check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" herein, the appropriate boxes in this
Letter of Transmittal must be completed. Stockholders delivering Shares tendered
hereby by book-entry transfer may request that Shares not purchased be credited
to an account maintained at a Book-Entry Transfer Facility as such stockholder
may designate in the box entitled "Special Payment Instructions" herein. If no
such instructions are given, all such Shares not purchased will be returned by
crediting the same account at the Book-Entry Transfer Facility as the account
from which such Shares were delivered.

8. WAIVER OF CONDITIONS. The conditions of the Offer may be waived, in
whole or in part, by Purchaser, in its sole discretion (other than the
Majority-of-the Minority Condition (as defined in the Offer to Purchase), which
may not be waived without the consent of the Special Committee (as defined in
the Offer to Purchase)), at any time and from time to time, in the case of any
Shares tendered. In certain circumstances, Purchaser will be required to waive
the Ninety Percent Condition (as defined in the Offer to Purchase). See "THE
OFFER -- Certain Conditions to the Offer" in the Offer to Purchase.

9. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Share Certificate(s)
have been lost, destroyed or stolen, the stockholder should promptly notify the
Depositary by checking the box immediately preceding the special payment/special
delivery instructions, indicating the number of Shares lost and delivering the
Letter of Transmittal. The stockholder will then be contacted and provided with
instructions as to the procedures for replacing the Share Certificate(s). This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost, destroyed or stolen certificates have been
followed.

10. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Information Agent or the
Dealer Manager at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal,
the Notice of Guaranteed Delivery and the Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 may be obtained from the
Information Agent or the Dealer Manager or from brokers, dealers, commercial
banks or trust companies.
<PAGE> 11

11. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of Federal income tax. If
a tendering stockholder has been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding, such stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
stockholder has since been notified by the Internal Revenue Service that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
31% Federal income tax withholding on the payment of the purchase price of all
Shares purchased from such stockholder. If the tendering stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9 and the Certificate of Awaiting Taxpayer Identification
Number. If "Applied For" is written in Part I and the Depositary is not provided
with a TIN within 60 days, the Depositary will withhold 31% on all payments of
the purchase price to such stockholder until a TIN is provided to the
Depositary.

IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION OF THE OFFER, AND EITHER SHARE CERTIFICATES
FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE
DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR
TO THE EXPIRATION DATE OF THE OFFER, OR THE TENDERING STOCKHOLDER MUST COMPLY
WITH THE PROCEDURES FOR GUARANTEED DELIVERY.
<PAGE> 12

IMPORTANT TAX INFORMATION

Under the Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is such stockholder's social security
number. If the Depositary is not provided with the correct TIN, the stockholder
may be subject to a $50 penalty imposed by the Internal Revenue Service and
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding of 31%.

Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a Form W-8, signed under penalties of
perjury, attesting to such individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions. A stockholder should consult his or her tax advisor as to such
stockholder's qualification for an exemption from backup withholding and the
procedure for obtaining such exemption.

If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.

Purpose of Substitute Form W-9

To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying that (a) the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN) and (b) that
(i) such stockholder has not been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such stockholder that such stockholder is no longer subject to backup
withholding.

What Number to Give the Depositary

The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering stockholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9 and the Certificate of
Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I
and the Depositary is not provided with a TIN within 60 days, the Depositary
will withhold 31% of all payments of the purchase price to such stockholder
until a TIN is provided to the Depositary.
<PAGE> 13

<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
PAYER'S NAME: THE FIRST NATIONAL BANK OF BOSTON, AS DEPOSITARY
- ---------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN SOCIAL SECURITY OR
FORM W-9 THE BOX AT RIGHT AND CERTIFY BY SIGNING EMPLOYER IDENTIFICATION NUMBER
AND DATING BELOW. ---------------------------------
(If awaiting TIN write "Applied
For")
--------------------------------------------------------------------------------------------------------
PART 2 -- Check the box if you are NOT subject to backup withholding under
the [ ]
DEPARTMENT OF provisions of Section 3406(a)(1)(C) of the Internal Revenue Code because
THE TREASURY
INTERNAL REVENUE (1) you have not been notified that you are subject to backup withholding
SERVICE as a result of failure to report all interest or dividends or (2) the
Internal Revenue Service has notified you that you are no longer subject
to backup withholding.
---------------------------------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE
TAXPAYER IDENTIFICATION INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT, AND COMPLETE.
NUMBER ("TIN") Signature: __________________________________________ Dated: _____________
AND CERTIFICATION
--------------------------------------------------------------------------------------------------------
</TABLE>

NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. ADDITION, FAILURE TO
PROVIDE SUCH INFORMATION MAY RESULT IN A PENALTY IMPOSED BY THE INTERNAL
REVENUE SERVICE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR"
INSTEAD OF A TIN IN THE SUBSTITUTE FORM W-9

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld until I provide a number.

Signature: _________________________________ Dated: _________________
<PAGE> 14

Questions and requests for assistance or additional copies
of the Offer to Purchase, Letter of Transmittal and
other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below:

THE INFORMATION AGENT FOR THE OFFER IS:

(LOGO)
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT: (212) 440-9800
ALL OTHERS CALL TOLL FREE: (800) 223-2064

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

THE DEALER MANAGER FOR THE OFFER IS:

GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(800) 323-5678 (TOLL FREE)

<PAGE> 1

OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF

CALGENE, INC.
AT
$8.00 NET PER SHARE

MONSANTO ACQUISITION COMPANY, INC.
A WHOLLY OWNED SUBSIDIARY OF

MONSANTO COMPANY

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, MAY 2, 1997, UNLESS THE OFFER IS EXTENDED.

April 7, 1997

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

We have been appointed by Monsanto Acquisition Company, Inc. ("Purchaser"),
a Delaware corporation and a wholly owned subsidiary of Monsanto Company, a
Delaware corporation ("Parent"), to act as Dealer Manager in connection with
Purchaser's offer to purchase, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated April 7, 1997 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together constitute the "Offer"),
all of the outstanding shares of common stock, par value $.001 per share (the
"Shares"), of Calgene, Inc. (the "Company") at $8.00 per Share, net to the
seller in cash.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (I) NOT LESS
THAN A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OTHER THAN SHARES OWNED BY
PARENT (THE "MAJORITY-OF-THE-MINORITY CONDITION") AND (II) AT LEAST THE NUMBER
OF SHARES THAT WHEN ADDED TO THE SHARES OWNED BY PARENT SHALL CONSTITUTE 90% OF
THE SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (AS DEFINED IN THE OFFER TO
PURCHASE) (THE "NINETY PERCENT CONDITION"). THE MAJORITY-OF-THE-MINORITY
CONDITION MAY NOT BE WAIVED WITHOUT THE CONSENT OF THE SPECIAL COMMITTEE (AS
DEFINED IN THE OFFER TO PURCHASE) OF THE BOARD OF DIRECTORS OF THE COMPANY.
PURCHASER HAS AGREED TO WAIVE THE NINETY PERCENT CONDITION UNDER CERTAIN
CIRCUMSTANCES DESCRIBED IN THE OFFER TO PURCHASE.
<PAGE> 2

For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:

1. Offer to Purchase dated April 7, 1997;

2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares;

3. Notice of Guaranteed Delivery to be used to accept the Offer if (i)
certificates representing such Shares ("Share Certificates") are not
immediately available, (ii) time will not permit all required documents
to reach The First National Bank of Boston (the "Depositary"), on or
prior to the expiration date of the Offer or (iii) the procedure for
book-entry transfer, as set forth in the Offer to Purchase, cannot be
completed on a timely basis;

4. Letter to stockholders from Lloyd M. Kunimoto, President and Acting
Chief Executive Officer of the Company, together with the
Solicitation/Recommendation Statement on Schedule 14D-9 filed by the
Company with the Securities and Exchange Commission;

5. Letter to Clients which may be sent to your clients for whose accounts
you hold Shares in your name or the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the
Offer;

6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and

7. Return envelope addressed to the Depositary.

Upon the terms and subject to the conditions of the Offer, Purchaser will
purchase, by accepting for payment, and will pay for, all Shares validly
tendered on or prior to the expiration date promptly after the later to occur of
(i) the expiration date of the Offer and (ii) the satisfaction or waiver (where
permissible) of the conditions set forth under "THE OFFER -- Certain Conditions
of the Offer" in the Offer to Purchase. For purposes of the Offer, Purchaser
will be deemed to have accepted for payment, and thereby purchased, tendered
Shares if, as and when Purchaser gives oral or written notice to the Depositary
of Purchaser's acceptance of such Shares for payment. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) the Share Certificates or timely confirmation
of a book-entry transfer of such Shares, if such procedure is available, into
the Depositary's account at a Book-Entry Transfer Facility (as defined in the
Offer to Purchase) pursuant to the procedures set forth under "THE
OFFER -- Procedure for Accepting the Offer and Tendering Shares" in the Offer to
Purchase, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, or an Agent's Message (as defined under "THE
OFFER -- Procedure for Accepting the Offer and Tendering Shares" in the Offer to
Purchase) and (iii) any other documents required by the Letter of Transmittal.

Purchaser will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Manager, the Depositary and the
Information Agent, as described under "THE OFFER -- Fees and Expenses" in the
Offer to Purchase) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Purchaser will, however, reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients.

Purchaser will pay or cause to be paid any stock transfer taxes payable
incident to the transfer to it of validly tendered Shares, except as otherwise
provided in Instruction 6 of the Letter of Transmittal. Backup tax withholding
at a 31% rate may be required, however, unless the required tax identification
information is provided. See "Important Tax Information" contained in the Letter
of Transmittal.
<PAGE> 3

YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT
NEW YORK CITY TIME, ON FRIDAY, MAY 2, 1997, UNLESS THE OFFER IS EXTENDED.

In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and Share Certificates representing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and the
Offer to Purchase.

If holders of Shares wish to tender their Shares, but it is impracticable
for them to forward their Share Certificates or other required documents prior
to the desired date of tender, a tender may be effected by following the
guaranteed delivery procedure specified under "THE OFFER -- Procedures for
Accepting the Offer and Tendering Shares" in the Offer to Purchase.

Any inquiries you may have with respect to the Offer should be addressed to
the Dealer Manager or Georgeson & Company Inc. (the "Information Agent") at
their respective address and telephone number set forth on the back cover page
of the Offer to Purchase.

Additional copies of the enclosed material may be obtained from the Dealer
Manager by calling (800) 323-5678 (toll free) or from the Information Agent by
calling (212) 440-9800 (call collect), or from brokers, dealers, commercial
banks or trust companies.

Very truly yours,

GOLDMAN, SACHS & CO.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY OTHER PERSON AS AN AGENT OF PARENT, PURCHASER, THE
DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY
AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE
ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.

<PAGE> 1

OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF

CALGENE, INC.
AT

$8.00 NET PER SHARE
BY

MONSANTO ACQUISITION COMPANY, INC.
A WHOLLY OWNED SUBSIDIARY OF

MONSANTO COMPANY

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY MAY 2, 1997, UNLESS THE OFFER IS EXTENDED.

April 7, 1997

To Our Clients:

Enclosed for your consideration is an Offer to Purchase, dated April 7,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by Monsanto
Acquisition Company, Inc. ("Purchaser"), a Delaware corporation and a wholly
owned subsidiary of Monsanto Company, a Delaware corporation ("Parent"), to
purchase, upon the terms and subject to the conditions of the Offer, all of the
outstanding shares of common stock, par value $.001 per share (the "Shares"), of
Calgene, Inc. (the "Company") at $8.00 per Share, net to the seller in cash.

If you wish to tender Shares but (i) certificates representing such Shares
("Share Certificates") are not immediately available, (ii) time will not permit
such Share Certificates and all other documents required by the Letter of
Transmittal to reach The First National Bank of Boston (the "Depositary") on or
prior to the expiration date of the Offer or (iii) the procedure for book-entry
transfer, as set forth in the Offer to Purchase, cannot be completed on a timely
basis, you may nevertheless tender such Shares pursuant to the guaranteed
delivery procedure described under "THE OFFER -- Procedure for Accepting the
Offer and Tendering Shares" in the Offer to Purchase. See Instruction 2 of the
Letter of Transmittal. Delivery of documents to a Book-Entry Transfer Facility
(as defined in the Offer to Purchase) in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.

THE ENCLOSED MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF
SHARES HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE
HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES
CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION
ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
<PAGE> 2

We request instructions as to whether you wish us to tender on your behalf
any or all of the Shares held by us for your account, pursuant to the terms and
conditions set forth in the Offer.

Your attention is directed to the following:

1. The tender offer price is $8.00 per Share, net to the seller in cash
without interest.

2. The Offer is being made for all of the outstanding Shares.

3. A Special Committee of directors of the Company who are neither
designees of Parent nor officers of the Company, as well as the full
Board of Directors of the Company (with all directors who are
employees of Parent abstaining), each has unanimously determined that
each of the Offer and the Merger (as defined in the Offer to
Purchase) is fair to, and in the best interests of, the stockholders
of the Company (other than Parent and Purchaser), and each recommends
that stockholders accept the Offer and tender their Shares pursuant
to the Offer.

4. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Friday May 2, 1997, unless the Offer is extended.

5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the
Offer (i) not less than a majority of the issued and outstanding
Shares other than the Shares owned by Parent (the "Majority-of-the-
Minority Condition") and (ii) at least the number of Shares than when
added to the Shares owned by Parent shall constitute 90% of the
Shares then outstanding on a Fully Diluted Basis (as defined in the
Offer to Purchase) (the "Ninety Percent Condition"). The
Majority-of-the-Minority Condition may not be waived without the
consent of the Special Committee (as defined in the Offer to
Purchase) of the Board of Directors of the Company. Purchaser has
agreed to waive the Ninety Percent Condition under certain
circumstances described in the Offer to Purchase.

6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions, solicitation fees or, except as set forth in Instruction
6 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by Purchaser pursuant to the Offer.

The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. The Offer is not being
made to (nor will tenders be accepted from or on behalf of) holders of Shares in
any jurisdiction in which the making of the Offer or the acceptance thereof
would not be in compliance with the securities, blue sky or other laws of such
jurisdiction. Purchaser may, however, in its discretion, take such action as it
may deem necessary to make the Offer in any jurisdiction and extend the Offer to
holders of Shares in such jurisdiction. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by
Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under
the laws of such jurisdiction.

If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified on the instruction form contained in this
letter. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US
AMPLE TIME TO TENDER SHARES ON YOUR BEHALF PRIOR TO EXPIRATION OF THE OFFER.
<PAGE> 3

INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES
OF
CALGENE, INC.

The undersigned acknowledges receipt of your letter and the enclosed Offer
to Purchase, dated April 7, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer"), in connection
with the offer by Monsanto Acquisition Company, Inc. ("Purchaser"), a Delaware
corporation and a wholly owned subsidiary of Monsanto Company, a Delaware
corporation ("Parent"), to purchase, upon the terms and subject to the
conditions of the Offer, all of the outstanding shares of common stock, par
value $.001 per share (the "Shares"), of Calgene, Inc. (the "Company"), at $8.00
per Share, net to the undersigned in cash.

This will instruct you to tender to Purchaser on my behalf the number of
Shares indicated below (or if no number is indicated in either appropriate space
below, all Shares) held by you (or your nominee) for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.

Account Number: ______________________________________________________________

NUMBER OF SHARES TO BE TENDERED (check ONE box):
[ ] All Shares [ ] ____________ Shares

(UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES HELD BY US FOR
YOUR ACCOUNT ARE TO BE TENDERED)

SIGN HERE

X
- --------------------------------------------------------------------------------

X
- --------------------------------------------------------------------------------
SIGNATURE(S)

- --------------------------------------------------------------------------------
NAME(S) (PLEASE PRINT)

- --------------------------------------------------------------------------------
ADDRESS(ES)

- --------------------------------------------------------------------------------
ZIP CODE

<TABLE>
<S> <C>
- ---------------------------------------------------- ----------------------------------------------------
(AREA CODE) TELEPHONE NO. TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S)
</TABLE>

Dated: __________________________ , 1997

<PAGE> 1

NOTICE OF GUARANTEED DELIVERY

FOR TENDER OF SHARES OF COMMON STOCK
OF

CALGENE, INC.
TO

MONSANTO ACQUISITION COMPANY, INC.
A WHOLLY OWNED SUBSIDIARY OF

MONSANTO COMPANY
(NOT TO BE USED FOR SIGNATURE GUARANTEES)

This Notice of Guaranteed Delivery (or one substantially in the form
hereof) must be used to accept the Offer (as defined herein) if (i) certificates
("Share Certificates") representing shares of common stock, par value $.001 per
share (the "Shares"), of Calgene, Inc., a Delaware corporation, are not
immediately available, (ii) time will not permit all required documents to reach
The First National Bank of Boston (the "Depositary"), on or prior to the
expiration date of the Offer or (iii) the procedure for book-entry transfer, as
set forth in the Offer to Purchase, cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by
telegram or facsimile to the Depositary. See "THE OFFER -- Procedure for
Accepting the Offer and Tendering Shares" in the Offer to Purchase.

The Depositary:

THE FIRST NATIONAL BANK OF BOSTON

<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Bank of Boston Bank of Boston STARS
Corporate Agency and Corporate Agency and Securities Transfer and Reporting
Reorganization Reorganization Services, Inc.
P.O. Box 1889 150 Royall Street One Exchange Place/55 Broadway,
3rd Floor
Mail Stop 45-02-53 Mail Stop 45-02-53 New York, New York 10006
Boston, Massachusetts 02105-1889 Canton, Massachusetts 02021
</TABLE>

By Facsimile:
(For Eligible Institutions Only)
(617) 575-2233

Confirm Facsimile by Telephone:
(800) 736-3001

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER
THAN AS LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.

THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX IN THE LETTER OF TRANSMITTAL.
<PAGE> 2

Ladies and Gentlemen:

The undersigned hereby tenders to Monsanto Acquisition Company, Inc., a
Delaware corporation and a wholly owned subsidiary of Monsanto Company, a
Delaware corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated April 7, 1997 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer"), receipt
of each of which is hereby acknowledged, the number of Shares indicated below
pursuant to the guaranteed delivery procedures set forth under "THE
OFFER -- Procedure for Accepting the Offer and Tendering Shares" in the Offer to
Purchase:

<TABLE>
<S> <C>
________________________________________________ ________________________________________________
NAME(S) OF RECORD HOLDER(S) NUMBER OF SHARES

________________________________________________ ________________________________________________
CERTIFICATE NOS. (IF AVAILABLE)
________________________________________________ Check box (and indicate account number) if Shares
ADDRESS(ES) will be tendered by book-entry transfer effected by:
________________________________________________ [ ] The Depository Trust Company
ZIP CODE
[ ] Philadelphia Depository Trust Company

________________________________________________ ________________________________________________
(AREA CODE) TELEPHONE NO. ACCOUNT NUMBER
X ______________________________________________ Dated: ___________________________ , 1997
X ______________________________________________ Dated: ___________________________ , 1997
SIGNATURE(S) OF RECORD HOLDER(S)
</TABLE>

GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the
Securities Transfer Agents Medallion Program (an "Eligible Institution"),
hereby guarantees delivery to the Depositary, at one of its addresses set
forth above, of Share Certificates tendered hereby in proper form for
transfer, or confirmation of the book-entry transfer of Shares into the
Depositary's account at The Depository Trust Company or Philadelphia
Depository Trust Company, in either case together with delivery of a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantee, or an Agent's Message (as
defined in the Offer to Purchase), and any other documents required by the
Letter of Transmittal, within three NASDAQ trading days after the date of
execution of this Notice of Guaranteed Delivery.

The Eligible Institution that completes this form must communicate
the guarantee to the Depositary and must deliver the Letter of Transmittal
and Share Certificates to the Depositary within the time period indicated
herein. Failure to do so may result in financial loss to such Eligible
Institution.

<TABLE>
<S> <C>
________________________________________________ X ____________________________________
NAME OF FIRM AUTHORIZED SIGNATURE

________________________________________________ ________________________________________________
ADDRESS NAME (PLEASE PRINT)

________________________________________________ ________________________________________________
ZIP CODE TITLE
________________________________________________ Dated: ___________________________ , 1997
(AREA CODE) TELEPHONE NO.
</TABLE>

NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL

<PAGE> 1

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.

Social security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.

<TABLE>
<C> <S> <C>
- ---------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
=========================================================

1. An individual's account The individual

2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)

3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)

4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)

5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)

6. Account in the name of guardian The ward, minor, or
or committee for a designated incompetent
ward, minor, or incompetent person(3)
person

7. a. The usual revocable savings The grantor-
trust account (grantor is trustee(1)
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law

8. Sole proprietorship account The owner(4)
- ---------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ---------------------------------------------------------
9. A valid trust, estate or The legal entity
pension trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)

10. Corporate account The corporation

11. Religious, charitable, or The organization
educational organization
account

12. Partnership account held in the The partnership
name of the business

13. Association, in, or other tax- The organization
exempt organization

14. A broker or registered nominee The broker or
nominee

15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- ---------------------------------------------------------
</TABLE>

(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.

NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

PAGE 2

OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (the "IRS") and
apply for a number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:

- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.

Payments of dividends and patronage dividends not generally subject to backup
withholding including the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one non-resident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.

Payments of interest not generally subject to backup withholding include the
following:

- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).

- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.

Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.

Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.

PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Beginning January 1, 1984, payers
must generally withhold 20% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.

PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE

<PAGE> 1

This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase, dated April 7, 1997, and the related Letter of
Transmittal, and is being made to all holders of Shares. The Offer is not being
made to (nor will tenders be accepted from or on behalf of) holders of Shares in
any jurisdiction in which the making of the Offer or the acceptance thereof
would not be in compliance with the securities, blue sky or other laws of such
jurisdiction. Purchaser (as defined below) may, in its discretion, however, take
such action as it may deem necessary to make the Offer in any jurisdiction and
extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by Goldman, Sachs & Co. or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.

NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK

CALGENE, INC.

$8.00 NET PER SHARE

MONSANTO ACQUISITION COMPANY, INC.

A WHOLLY OWNED SUBSIDIARY OF

MONSANTO COMPANY

Monsanto Acquisition Company, Inc., a Delaware corporation ("Purchaser")
and a wholly owned subsidiary of Monsanto Company, a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of common stock, par
value $.001 per share (the "Shares"), of Calgene, Inc., a Delaware corporation
(the "Company"), at a price of $8.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated April 7, 1997 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer"). The
purpose of the Offer is to enable Parent to acquire all of the equity interest
in the Company that it does not currently own. As of April 7, 1997, Parent owns
36,396,114 Shares representing approximately 54.5% of the outstanding Shares.
Following consummation of the Offer, Purchaser intends to effect the Merger
described below.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, MAY 2, 1997, UNLESS THE OFFER IS EXTENDED.
<PAGE> 2

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER (I) NOT LESS
THAN A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OTHER THAN SHARES OWNED BY
PARENT OR PURCHASER (THE "MAJORITY-OF-THE-MINORITY CONDITION") AND (II) AT LEAST
THE NUMBER OF SHARES THAT WHEN ADDED TO THE SHARES OWNED BY PARENT AND PURCHASER
SHALL CONSTITUTE 90% OF THE SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (AS
DEFINED IN THE OFFER TO PURCHASE) (THE "NINETY PERCENT CONDITION"). THE
MAJORITY-OF-THE-MINORITY CONDITION MAY NOT BE WAIVED WITHOUT THE CONSENT OF THE
SPECIAL COMMITTEE (AS DEFINED IN THE OFFER TO PURCHASE) OF THE BOARD OF
DIRECTORS OF THE COMPANY. PURCHASER HAS AGREED TO WAIVE THE NINETY PERCENT
CONDITION UNDER CERTAIN CIRCUMSTANCES DESCRIBED BELOW.

The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 31, 1997 (the "Merger Agreement"), by and among Parent, Purchaser
and the Company. The Merger Agreement provides that, among other things, as soon
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement, and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware (the "DGCL"), Purchaser will be merged with and into the
Company (the "Merger"). Following consummation of the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and will
become a wholly owned subsidiary of Parent. At the effective time of the Merger
(the "Effective Time"), each Share issued and outstanding immediately prior to
the Effective Time (other than Shares held in the treasury of the Company or
owned by Purchaser, Parent or any subsidiary of Parent or the Company, and other
than Shares held by stockholders who shall have properly demanded and perfected
appraisal rights under Section 262 of the DGCL) will be cancelled and converted
automatically into the right to receive the price per Share paid pursuant to the
Offer, in cash, without interest.

THE BOARD OF DIRECTORS OF THE COMPANY, BY UNANIMOUS VOTE OF ALL DIRECTORS
PRESENT AND VOTING (WITH ALL DIRECTORS WHO ARE DESIGNEES OF PARENT ABSTAINING),
BASED UPON, AMONG OTHER THINGS, THE UNANIMOUS RECOMMENDATION AND APPROVAL OF A
SPECIAL COMMITTEE OF THE DIRECTORS OF THE COMPANY WHO ARE NOT DESIGNEES OF
PARENT OR OFFICERS OF THE COMPANY, HAS DETERMINED THAT EACH OF THE OFFER AND THE
MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY
(OTHER THAN PARENT AND PURCHASER), AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.

For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to Purchaser and not
properly withdrawn as, if and when Purchaser gives oral or written notice to The
First National Bank of Boston (the "Depositary") of Purchaser's acceptance for
payment of such Shares. In all cases, upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payments from Purchaser and transmitting payment to such validly
tendering stockholders. Under no circumstances will interest be paid by
Purchaser on the purchase price of the Shares tendered pursuant to the Offer,
regardless of any extension of the Offer or any delay in making such payment. In
all cases, payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the certificates
representing such Shares or timely confirmation of a book-entry transfer of such
Shares into the Depositary's account at a Book-Entry Transfer Facility (as
defined in the Offer to Purchase) pursuant to the procedures set forth in the
Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or,
in the case of a book-entry transfer, an Agent's Message (as defined in the
Offer to Purchase) and (iii) any other documents required pursuant to the Letter
of Transmittal.
<PAGE> 3

Subject to the applicable rules and regulations of the Securities and
Exchange Commission, Purchaser expressly reserves the right, in its sole
discretion (but subject to the terms and conditions of the Merger Agreement), at
any time and from time to time, upon the failure to be satisfied of any of the
conditions to the Offer set forth in the Offer to Purchase (except that, under
certain circumstances, Purchaser has agreed pursuant to the Merger Agreement to
waive the Ninety Percent Condition), to (i) terminate or amend the Offer, (ii)
extend the Offer and postpone acceptance for payment of any Shares, or (iii)
waive any condition (except, without the consent of the Special Committee, for
the Majority-of-the-Minority Condition), by giving oral or written notice of
such termination, amendment, extension or waiver to the Depositary and by making
a public announcement thereof. In the case of an extension, such public
announcement will be made no later than 9:00 a.m., Eastern time, on the next
business day after the previously scheduled expiration of the Offer. During any
such extension, all Shares previously tendered and not properly withdrawn will
remain subject to the Offer, subject to the right of a tendering stockholder to
withdraw such shareholder's Shares. In the event all conditions to the Offer set
forth in the Offer to Purchase shall have been satisfied other than the
Majority-of-the-Minority Condition or the Ninety Percent Condition, Purchaser
may extend the Offer for a period or periods aggregating not more than 20
business days after the later of (i) the initial expiration date of the Offer
and (ii) the date on which all other conditions to the Offer set forth in the
Offer to Purchase other than the Majority-of-the-Minority Condition and the
Ninety Percent Condition shall have been satisfied. If all of the conditions to
the Offer have been satisfied or waived other than the Ninety Percent Condition,
then, on the later of (i) the initial expiration date of the Offer and (ii) the
latest expiration date of the Offer permitted in accordance with the preceding
sentence, Purchaser has agreed pursuant to the Merger Agreement to waive the
Ninety Percent Condition and accept for payment all of the Shares validly
tendered and not withdrawn as of such date.

Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to 12:00 Midnight, New York City
time, on May 2, 1997 (or the latest time and date at which the Offer, if
extended by Purchaser, shall expire) and, unless theretofore accepted for
payment by Purchaser pursuant to the Offer, may also be withdrawn at any time
after June 5, 1997. For the withdrawal to be effective, a written, telegraphic
or facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn if Share certificates have
been tendered, and the name of the registered holder of such Shares to be
withdrawn as set forth on such Share certificates if different from the name of
the person who tendered such Shares. If certificates representing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such certificates, the serial numbers shown on
such certificates must be submitted to the Depositary and, unless such Shares
have been tendered by an Eligible Institution (as defined in the Offer to
Purchase), the signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer (as set forth in the Offer to Purchase), any notice of
withdrawal must specify the name and number of the account at a Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures for such withdrawal. All
questions as to the form and validity (including the time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding.

The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
<PAGE> 4

The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.

THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.

Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Manager as set
forth below, and copies will be furnished promptly at Purchaser's expense. No
fees or commissions will be paid to brokers, dealers or other persons (other
than the Information Agent, Depositary and Dealer Manager, as set forth in the
Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

(LOGO)
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect: (212) 440-9800
CALL TOLL-FREE: 1-800-223-2064

The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(800) 323-5678

APRIL 7, 1997

<PAGE> 1

EXHIBIT (a)(9)

CONTACT: Scarlett Lee Foster
314-694-2883
[email protected]

MONSANTO BEGINS PREVIOUSLY
ANNOUNCED TENDER OFFER OF $8 PER SHARE
FOR ALL REMAINING SHARES OF CALGENE

St. Louis, April 7, 1997 -- Monsanto Company's wholly owned
subsidiary, Monsanto Acquisition Company, Inc., has today begun its
$8 per share cash tender offer for all of the shares of Calgene, Inc.
that Monsanto does not already own.

On March 31, 1997, Monsanto announced that it had entered
into a definitive merger agreement with Calgene. Under this agreement,
following the completion of the tender offer, Monsanto will acquire
any remaining Calgene shares in a second-step merger at the same cash
price of $8 per share. Monsanto currently owns approximately 54.5
percent of the outstanding Calgene shares.

The terms and conditions of the tender offer are included in
offering documents being filed today with the Securities and Exchange
Commission, and will be sent to holders of Calgene shares. The tender
offer is conditioned upon, among other things, a majority of the
outstanding shares not currently owned by Monsanto being tendered by
Calgene's shareholders. Monsanto has agreed not to waive this
condition without the consent of a special committee composed of
members of the board of directors of Calgene who are neither designees
of Monsanto nor employees of Calgene.

The offer is also conditioned upon Monsanto owning not less
than 90 percent of the outstanding shares at the completion of the
tender offer. Monsanto has agreed to waive this condition 20
business days after the initial expiration date of the tender offer
if all other conditions (other than the condition that a majority of
the shares not currently owned by Monsanto are tendered) have been
satisfied as of the initial expiration date.

The tender offer will expire at midnight on Friday,
May 2, 1997, unless extended.

Monsanto is a global leader in agricultural
biotechnology and in the development and marketing of improved
food and fiber crops. Monsanto is in the process of creating a
new life sciences company that will combine its existing
agricultural, food and pharmaceutical businesses and seek to
develop new businesses that capture synergies among these
fields.

Calgene is an agricultural biotechnology company
based in Davis, California. Stoneville Pedigreed Seed Company
and N.T. Gargiulo, a produce company, are subsidiaries of
Calgene.

Goldman, Sachs & Co. is acting as dealer manager for the
tender offer.

<PAGE> 1
Exhibit (c)(9)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

HANNA OBSTFELD,
C.A. NO. 15487NC

Plaintiff, CLASS ACTION
-against- COMPLAINT

ROGER H. SALQUIST, HOWARD D. PALEFSKY,
ALLEN J. VANGELOS, LLOYD M. KUNIMOTO,
ROBERT FRALEY, JOHN E. ROBSON, HENDRIK A.
VERFAILLIE, PATRICK J. FORTUNE, MICHAEL R.
HOGAN, MONSANTO COMPANY and CALGENE, INC.,

Defendants.

Plaintiff, by and through her attorneys, alleges as

follows:

1. Plaintiff brings this action as a class action on

behalf of herself and all other stockholders of Calgene, Inc.

("Calgene" or the "Company") who are similarly situated,

against the directors of Calgene and the controlling share-

holder of Calgene, Monsanto Company ("Monsanto") to enjoin cer-

tain actions of the defendants related to the offer to acquire

the remaining outstanding shares of Calgene stock (the "Pur-

chase") by Monsanto.

THE PARTIES

2. Plaintiff is the owner of Calgene common stock

and has owned such stock at all times material hereto.
<PAGE> 2
3. (a) Defendant Calgene is a corporation organized

and existing under the laws of the State of Delaware and is

engaged in the development of genetically engineered plants and

plant products for seed, food and oleochemical industries. Its

principal executive offices are located at 1920 Fifth Street,

Davis, CA 95616. Calgene has approximately 60 million shares

of common stock outstanding which shares are traded on the

NASDAQ National Market System ("NASDAQ") under the symbol

"CGNE" and of which approximately 54.6% are held by Monsanto.

(b) Defendant Monsanto is a St. Louis based, diverse

company with subsidiaries which make and sell a diversified

line of agricultural products. In mid 1996 it brought its

holdings of Calgene up to 54.6%. Pursuant to the Stock Pur-

chase Agreement (defined below), by late 1996, Monsanto was

able to use its voting control of Calgene to place five

Monsanto officers or directors on Calgene's nine-member board

of directors -- Patrick J. Fortune ("Fortune"), Chief Informa-

tion Officer of Monsanto, Michael R. Hogan ("Hogan"), vice

president and corporate controller of Monsanto, Robert J.

Fraley ("Fraley"), President of Calgene, a business unit of

Monsanto, John E. Robson ("Robson"), a director of Monsanto and

Hendrik A. Verfaillie ("Verfaillie"), Executive Vice President

of Monsanto. Consequently, as a result of its current stock

ownership and its board nominees, Monsanto controls Calgene and

its Board of Directors.

- 2 -
<PAGE> 3
(c) Defendant Lloyd M. Kunimoto ("Kunimoto") is and

was at all relevant times hereto President and acting Chief

Executive Officer and a director of the Company.

(d) Defendants Howard D. Palefsky ("Palefsky"),

Roger H. Salquist ("Salquist") and Allen J. Vangelos

("Vangelos") are and were at all relevant times hereto direc-

tors of the Company. Salquist is also the Company's former

Chief Executive Officer and Chairman.

4. The foregoing individual defendants (collectively

referred to herein as the "Individual Defendants") are in a

fiduciary relationship with plaintiff and the public stockhold-

ers of Calgene, and owe plaintiff and the other Calgene public

stockholders the highest obligations of good faith, fair deal-

ing, due care, loyalty and full and candid disclosure.

5. Each of the Individual Defendants owes his posi-

tion as director of Calgene, and the resulting benefits there-

from, to Monsanto, the controlling shareholder of Calgene, and

as such cannot exercise the independent judgment required as a

director of Calgene.

6. As controlling shareholder of Calgene, Monsanto

is in a fiduciary relationship with plaintiff and the other

public stockholders of the Company, and owes to plaintiff and

the other members of the Class the highest obligations of good

faith and fair dealing.

- 3 -
<PAGE> 4

CLASS ACTION ALLEGATIONS

7. Plaintiff brings this action for declaratory,

injunctive and other relief on their own behalf and as a class

action, pursuant to Rule 23 of the Rules of the Court of Chan-

cery on behalf of all common stockholders of Calgene (except

defendants herein and any person, firm, trust, corporation or

other entity related to or affiliated with any of the defen-

dants) or their successors in interests, who are being deprived

of the opportunity to maximize the value of their Calgene

shares by the wrongful acts of the defendants as described

herein.

8. This action is properly maintainable as a class

action for the following reasons:

(a) The class of stockholders for whose benefit this

action is brought is so numerous that joinder of all Class mem-

bers is impracticable. There are more than 3,000 stockholders

of record, holding over 30 million shares of Calgene common

stock. Members of the Class are scattered throughout the

United States.

(b) There are questions of law and fact which are

common to members of the Class and which predominate over all

questions affecting only individual members, including whether

the defendants have breached the fiduciary duties owed by them

to plaintiff and members of the Class by reason of the acts

described herein.

- 4 -
<PAGE> 5
(c) The claims of plaintiff are typical of the

claims of the other members of the Class and plaintiff has no

interests that are adverse or antagonistic to the interests of

the Class.

(d) Plaintiff is committed to the vigorous prosecu-

tion of this action and has retained competent counsel experi-

enced in litigation of this nature. Accordingly, plaintiff is

an adequate representative of the Class and will fairly and

adequately protect the interests of the Class.

(e) The prosecution of separate actions by indi-

vidual members of the Class would create a risk of inconsistent

or varying adjudications with respect to individual members of

the Class and establish incompatible standards of conduct for

the party opposing the Class.

(f) Defendants have acted and are about to act on

grounds generally applicable to the Class, thereby making ap-

propriate final injunctive relief with respect to the Class as

a whole.

FACTUAL BACKGROUND

9. On September 27, 1996, the Company entered into a

stock purchase agreement (the "Stock Purchase Agreement") with

Monsanto, pursuant to which the Company agreed to increase Mon-

santo's ownership of the Company from 49.9% to approximately

54.6% (without giving effect to the exercise of outstanding

- 5 -
<PAGE> 6
options and warrants) for an aggregate purchase price of $50

million, among other things.

10. Consummation of the Stock Purchase Agreement by

Monsanto was conditioned upon, inter alia, the election of five

(out of nine, or a majority) of Monsanto designated directors

to the Company's board.

11. The Stock Purchase Agreement was only required

to be approved by, and was approved by, holders of a majority

of the shares of Calgene common stock present or represented at

the Annual Meeting, which was held in November 1996. It was

not required to be approved by a majority of the minority

stockholders.

12. The Stock Purchase Agreement further required

that if Monsanto tenders or seeks to acquire more than 70% of

Calgene's outstanding shares, the price at which the purchase

will occur must be approved by the disinterested directors of

the board and supported by a fairness opinion by an investment

banking firm.

13. On January 28, 1996, Calgene announced it had

received an unsolicited proposal from Monsanto to acquire all

of the outstanding Calgene shares it doesn't already own, for

$7.50 a share (the "Offer").

14. Calgene has indicated that it will form a spe-

cial committee of the board, which will hire independent coun-

sel, The Venture Law Group, and an investment advisor, Montgom-

ery Securities, to consider the Offer.

- 6 -
<PAGE> 7
15. However, because of Monsanto's ownership of more

than 54% of the Company, and its control of the board, no inde-

pendent group of directors exists nor can any independent in-

vestment advisor be chosen who could properly consider the

Offer. Moreover, no fair, arms-length market check to deter-

mine the fair value of Calgene's publicly held shares can be

conducted.

16. Moreover, defendants, through their actions,

have capped the price for which the remaining publicly held

shares of Calgene could ever be acquired without taking ad-

equate steps to determine the fair value of such shares. Fur-

thermore, contrary to the practices often followed in similar

transactions, Calgene has failed to condition the Offer upon

its acceptance by a majority of unaffiliated shares.

17. Monsanto is seeking to acquire Calgene at a

price which does not reflect its fair value.

18. As a result of the foregoing, Monsanto, the con-

trolling shareholder of Calgene, and the Individual Defendants

have breached their fiduciary obligations to the Class.

19. Plaintiff and other Class members are immedi-

ately threatened by the acts and transactions complained of

herein which have caused and will cause irreparable injury to

them.

20. Plaintiff and the Class have no adequate remedy

at law.

- 7 -
<PAGE> 8
WHEREFORE, plaintiff demands judgment and preliminary

and permanent relief, including injunctive relief, in her favor

and in favor of the Class and against defendants as follows:

A. Declaring that this action is properly maintain-

able as a class action, and certifying plaintiff as class rep-

resentative;

B. Declaring that defendants and each of them have

committed a gross abuse of trust and have breached their fidu-

ciary duties to plaintiff and the other members of the Class;

C. Granting injunctive relief with respect to the

Offer;

D. Awarding plaintiff and the Class compensatory

and/or rescissory damages;

E. Awarding plaintiff and the Class the costs and

disbursements of this action, including reasonable attorneys'

and experts' fees; and

F. Granting such other and further relief as this

Court may deem just and proper.

ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.

By: /s/
--------------------------------
Mellon Bank Center, Suite 1401
919 North Market Street
Wilmington, Delaware 18801
(302) 656-4433
Attorneys for Plaintiff

- 8 -
<PAGE> 9
OF COUNSEL:

GOODKIND LABATON RUDOFF
& SUCHAROW, LLP
100 Park Avenue, 12th Floor
New York, New York 10017
(212) 907-0700

- 9 -

<PAGE> 1
Exhibit (c)(10)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR THE NEW CASTLE COUNTY

ALVIN SIEGEL, ) Civil Action No. 15490NC
)
Plaintiff, )
)
-against- )
)
CALGENE, INC., LLOYD M. KUNIMOTO, )
PATRICK J. FORTUNE, ROBERT T. )
FRALEY, MICHAEL R. HOGAN, JOHN E. )
ROBSON, HENDRICK A. VERAFILLE, )
HOWARD D. PALEFSKY, ROGER H. )
SALQUIST and ALLEN J. VANGELOS, )
)
Defendants. )

CLASS ACTION COMPLAINT

Plaintiff, by his attorneys, alleges upon information

and belief, except as to paragraph 2 which plaintiff alleges

upon knowledge:

1. Plaintiff Alvin Siegel brings this action on be-

half of himself and all other public stockholders of defendant

Calgene, Inc. ("Calgene" or the "Company"), who are similarly

situated seeking to enjoin the proposed sale of Calgene to de-

fendant Monsanto Company ("Monsanto") for grossly inadequate

consideration or, alternatively, to seek rescission or reces-

sionary or compensatory damages in the event that the transac-

tion complained of is consummated. The proposed transaction,

if consummated, will eliminate the interests of Calgene's pub-

lic stockholders. Plaintiff and the class are entitled to the

relief sought herein because the transaction and the acts of
<PAGE> 2
defendants in connection therewith constitute self-dealing,

deception, overreaching and a breach of their fiduciary duties

owed to Calgene and its public stockholders by defendants.

2. Plaintiff is and has been a stockholder of

Calgene at all relevant times.

3. Defendant Calgene, is a Delaware corporation,

with its principal offices located at 1920 Fifth Street, Davis,

California, is an agricultural biotechnology company. At all

relevant times, Calgene common stock was listed and actively

traded on the NASDAQ under the CGNE symbol. Calgene has ap-

proximately 66.6 million shares of common stock outstanding.

Of the 66.6 million shares of outstanding Calgene common stock,

36.4 million shares (or 54.6%) are owned by defendant Monsanto.

4. Defendant Lloyd M. Kunimoto ("Kunimoto") is

President, Chief Executive Officer and a director of the Com-

pany. By virtue of his positions at the Company, Kunimoto owes

his continued employment and salary to the good graces of Mon-

santo.

5. Defendants Patrick J. Fortune ("Fortune"), Robert

T. Fraley ("Fraley"), Michael R. Hogan ("Hogan"), John E.

Robson ("Robson") and Hendrick A. Verafille ("Verafille") are

and were at all times hereto, members of the Boards of both

Calgene and Monsanto. They are sometimes referred to herein as

the "Interlocking Directors."

- 2 -
<PAGE> 3
6. Defendants Howard D. Palefsky ("Palefsky"), Roger

H. Salquist ("Salquist") and Allen J. Vangelos ("Vangelos") are

and were at all times relevant hereto, members of the board of

Calgene. They, together with the Interlocking Directors, are

sometimes referred to herein as the "Individual Defendants."

7. The Calgene nine-member board is now comprised of

five Interlocking Directors, three independent directors and

Kunimoto.

8. As directors, officers and/or controlling share-

holders of Calgene, defendants are in a fiduciary relationship

with plaintiff and the other public stockholders of Calgene and

owe to them the highest obligations of good faith, fair deal-

ing, loyalty and care.

CLASS ACTION ALLEGATIONS

9. Plaintiff brings this action on his own behalf

and as a class action, pursuant to Rule 23 of the Rules of the

Court of Chancery, on behalf of all stockholders of Calgene

(except the defendants herein and any person, firm, trust, cor-

poration, or other entity related to or affiliated with any of

the defendants) and their successors in interest, who are or

will be threatened with dilution of their equity interest in

Calgene through the wrongs complained of herein.

10. This actions is properly maintainable as a class

action for the following reasons:

- 3 -
<PAGE> 4
(a) The class is so numerous that joinder of all

members is impracticable. There are more than 66.6 million

shares of Calgene common stock outstanding with approximately

24.2 million shares in public hands held by more than three

thousands persons.

(b) There are questions of law and fact which are

common to the class including, inter alia, the following:

(1) whether defendants have engaged in a plan

and scheme to enrich Monsanto and the Individual Defendants at

the expense of Calgene and its public stockholders;

(2) whether defendants have breached their

fiduciary and other common law duties owed by them to plaintiff

and the other public shareholders by agreeing to the transac-

tion complained of; and

(3) whether plaintiff and the other members of

the class would be irreparably damaged if the transaction com-

plained of herein is consummated.

11. Plaintiff is committed to prosecuting this ac-

tion and has retained competent counsel experienced in litiga-

tion of this nature. The claims of plaintiff are typical of

the claims of other members of the class and plaintiff has the

same interests as the other members of the class. Plaintiff is

an adequate representative of the class and will fairly and

adequately protect the interest of the class.

- 4 -
<PAGE> 5
12. The likelihood that individual members of the

class will prosecute separate individual actions is remote due

to the burden and expense of prosecuting litigation of this

nature and magnitude. Plaintiff anticipates that there will

not be any difficulty in the management of this litigation.

13. For the reasons stated herein, a class action is

superior to other available methods for the fair and efficient

adjudication of the controversy and this action satisfies the

requirements of Rule 23 of the Chancery Court Rules.

SUBSTANTIVE ALLEGATIONS

14. The transaction complained of by plaintiff comes

at a time when Calgene has consistently reported improved pros-

pects and is poised to continue its growth in the future.

15. On October 30, 1996, Calgene received a U.S.

patent for a protein that will allow the company to harvest

canola that contains higher concentrations of laurate, a key

raw material used in the manufacture of soap, detergent and

personal care products. Calgene said the patent allows the

company to control the middle position, which will allow

Calgene to produce canola oil that has a 60% laurate content.

16. On November 13, 1996, Monsanto bought 6.25 mil-

lion newly issued common shares of Calgene at $8 a share for a

total of $50 million which brought Monsanto's equity interest

in Calgene to approximately 54.6%.

- 5 -
<PAGE> 6
17. On December 3, 1996 Calgene received a U.S.

patent for its method of controlling the concentration of genes

in plant plastids. This marks the third patent Calgene has

received involving the integration of foreign genes into plant

plastids.

18. On December 17, 1996, Calgene announced that

Saskatchewan Wheat Pool ("SWP") and Calgene plan to jointly

develop and produce "value-added genetically engineered" canola

oil products in Canada. Calgene said that, under the agree-

ment, SWP will combine its own breeding program with Calgene's

genetically engineered oils to develop "Canadian-adapted, spe-

cialty canola varieties."

19. Calgene is poised for growth and financial suc-

cess.

20. On January 28, 1997 Calgene announced that it

received an offer by Monsanto to acquire the 45% stake of

Calgene common stock it does not already own for $7.25 per

share (the "Monsanto Offer"). Calgene formed a special commit-

tee of outside directors to consider the bid which hired

Montgomery Securities to advise it and render a business opin-

ion on the Monsanto Offer.

21. The Monsanto Offer does not provide for the

value the Calgene shares are actually worth or will be worth

due to its future prospects. For example, Monsanto, itself as

- 6 -
<PAGE> 7
recently as November 13, 1996, 2 1/2 months prior to the Mon-

santo Offer paid $8 per Calgene share. The price paid by Mon-

santo preceded positive information which has raised the pros-

pects of Calgene's value. The $8 per share paid is $0.75 or

more than 10% more Monsanto is paying Calgene shareholders pur-

suant to the Monsanto Offer.

22. Although the press release announcing the pro-

posed transaction indicated that Calgene would form a special

committee of "independent" directors, Monsanto's domination and

control over Monsanto is so extreme that any formulation of a

special committee is a pure fiction.

23. The approval of the transaction is a foregone

conclusion because Monsanto dominates and controls Calgene.

24. Defendants have timed the announcement of the

proposed transaction to place an artificial lid on the market

price of Calgene's common stock to justify a price that is un-

fair to Calgene's public stockholders and to send a signal to

any other bidders that any other offer will be a hostile one.

Moreover, defendants have timed the proposed transaction to

obtain for themselves the benefits flowing from Calgene's

dramatically improving financial prospects and continuing suc-

cess.

25. The proposed transaction is wrongful, unfair and

harmful to Calgene and its public stockholders, and represents

an attempt by Monsanto and the defendants to increase their own

- 7 -
<PAGE> 8
personal and financial position and interest at the expense of,

and the detriment of, Calgene and its public stockholders. The

transaction will eliminate the ownership of Calgene common

stock by class members.

26. By virtue of Monsanto dominance and control over

Calgene, Monsanto, together with the Individual Defendants, has

engaged in a plan involving acts which are grossly unfair to

plaintiff and the other members of the class. The purpose of

the plan is to enable Monsanto to acquire 100% equity ownership

of Calgene and its assets for its own benefit, and at the ex-

pense of the other Calgene stockholders who will be deprived of

their equity investment and the benefits to accrue thereafter,

for a grossly inadequate price.

27. Because defendants dominate and control the

business and corporate affairs of Calgene, and possesses pri-

vate corporate information concerning Calgene's assets, busi-

ness and future prospects, there exists an imbalance and dis-

parity of knowledge and economic power between defendants and

Calgene's public stockholders which makes it inherently unfair

for Monsanto to pursue the transaction at the expense of

Calgene and class members.

28. Because of Monsanto's overwhelming control over

Calgene, all of Calgene's directors who will be considering the

transaction, and the entire Board of Directors, no third party,

as a practical matter, can attempt any bid for Calgene, as the

- 8 -
<PAGE> 9
success of any such bid would require the consent and coopera-

tion of Monsanto. In fact, because of such control by Mon-

santo, it is a foregone conclusion that the offer will be

accepted.

29. Defendants have failed to expose Calgene to a

market check to ascertain the full market value of the Com-

pany's assets and future prospects. The proposed transaction

consideration does not reflect the value of Calgene's valuable

assets or its improving financial performance.

30. The proposed transaction serves no legitimate

business purpose of Calgene but rather is an attempt by defen-

dants to unfairly benefit Monsanto from the transaction at the

expense of Calgene's public stockholders. The proposed trans-

action will, for a grossly inadequate consideration, deny

plaintiff and the other members of the class their right to

share proportionately in the future success of Calgene and its

valuable assets, while permitting defendants to reap huge ben-

efits from the transaction.

31. Unless enjoined by this Court, defendants will

continue to breach their fiduciary duties owed to plaintiff and

the class, and will consummate and close the transaction and

Monsanto will succeed in its plan to enrich itself by paying

Calgene shareholders inadequate consideration for their shares

of Calgene common stock.

- 9 -
<PAGE> 10
32. Plaintiff has no adequate remedy at law.

WHEREFORE, plaintiff prays for judgment and relief as

follows:

(1) Preliminarily and permanently enjoining defen-

dants and their counsel, agents, servants, employees and all

persons acting under, in concert with, or for them, from pro-

ceeding with, consummating or closing the transaction com-

plained of;

(2) In the event the transaction is consummated,

awarding rescission or rescissory damages to Calgene and the

class as their interests may appear;

(3) Awarding compensatory damages to Calgene and the

class as their interests may appear;

(4) Awarding plaintiff the costs and expenses of

this action, including reasonable counsel and expert fees; and

- 10 -
<PAGE> 11
(5) Awarding such other and further relief as may be

necessary and appropriate.

ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.

/s/
------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
Attorneys for Plaintiff

OF COUNSEL:

ABBEY, GARDY & SQUITIERI, LLP
212 East 39th Street
New York, New York 10016
(212) 889-3700

FARUQI & FARUQI, LLP
415 Madison Avenue
New York, New York 10017
(212) 986-1074

- 11 -

<PAGE> 1
Exhibit (c)(11)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR THE NEW CASTLE COUNTY

LESLIE SUSSER, ) Civil Action No. 15489NC
)
Plaintiff, )
-against- )
)
LLOYD M. KUNIMOTO, PATRICK J. )
FORTUNE, ROBERT T. FRALEY, MICHAEL )
R. HOGAN, JOHN E. ROBSON, HENDRICK )
A. VERAFILLE, HOWARD D. PALEFSKY, )
ROGER H. SALQUIST, ALLEN J. )
VANGELOS, MONSANTO COMPANY and )
CALGENE, INC., )
)
Defendants. )

CLASS ACTION COMPLAINT

Plaintiff, by his attorneys, alleges upon information

and belief, except as to paragraph 2 which plaintiff alleges

upon knowledge:

1. Plaintiff Leslie Susser brings this action on

behalf of himself and all other public stockholders of defen-

dant Calgene, Inc. ("Calgene" or the "Company"), who are simi-

larly situated seeking to enjoin the proposed freeze out of

Calgene's public shareholders by defendant Monsanto Company

("Monsanto") for grossly inadequate consideration or, alterna-

tively, seeking rescission or rescissory damages in the event

that the transaction complained of is consummated. The pro-

posed transaction, if consummated, will eliminate the equity

interests of Calgene's public stockholders. Plaintiff and the

class are entitled to the relief sought herein because the
<PAGE> 2
transaction and the acts of defendants in connection therewith

constitute self-dealing, deception, overreaching and a breach

of their fiduciary duties owed to Calgene and its public stock-

holders by defendants.

2. Plaintiff is and has been a stockholder of

Calgene at all relevant times.

3. Defendant Calgene, is a Delaware corporation,

with its principal offices located at 1920 Fifth Street, Davis,

California, is an agricultural biotechnology company. Calgene

has approximately 66.6 million shares of common stock outstand-

ing. Of the 66.6 million shares of outstanding Calgene common

stock, 36.4 million shares (or 54.6%) are owned by defendant

Monsanto.

4. Defendant Lloyd M. Kunimoto ("Kunimoto") is

President, Chief Executive Officer and a director of the Com-

pany. By virtue of his positions at the Company, Kunimoto owes

his continued employment and salary to the good graces of Mon-

santo.

5. Defendants Patrick J. Fortune ("Fortune"), Robert

T. Fraley ("Fraley"), Michael R. Hogan ("Hogan"), John E.

Robson ("Robson") and Hendrick A. Verafille ("Verafille") are

and were at all times relevant hereto, members of the Boards of

both Calgene and Monsanto. They are sometimes referred to

herein as the "Interlocking Directors."

- 2 -
<PAGE> 3
6. Defendants Howard D. Palefsky ("Palefsky"), Roger

H. Salquist ("Salquist") and Allen J. Vangelos ("Vangelos") are

and were at all times relevant hereto, members of the board of

Calgene.

7. As directors, officers and/or controlling share-

holder of Calgene, defendants are in a fiduciary relationship

with plaintiff and the other public stockholders of Calgene and

owe to them the highest obligations of good faith, fair deal-

ing, loyalty and care.

CLASS ACTION ALLEGATIONS

8. Plaintiff brings this action on his own behalf

and as a class action, pursuant to Rule 23 of the Rules of the

Court of Chancery, on behalf of all stockholders of Calgene

(except the defendants herein and any person, firm, trust, cor-

poration, or other entity related to or affiliated with any of

the defendants) and their successors in interest, who are or

will be threatened with loss of their equity interest in Cal-

gene through the wrongs complained of herein.

9. This action is properly maintainable as a class

action for the following reasons:

(a) The class is so numerous that joinder of all

members is impracticable. The shares of Calgene in public

hands are held of record by more than three thousand persons.

(b) There are questions of law and fact which are

common to the class including, inter alia, the following:

- 3 -
<PAGE> 4
(c) whether defendants have engaged in a plan and

scheme to enrich Monsanto and the Individual Defendants at the

expense of Calgene and its public stockholders;

(1) whether defendants have breached their

fiduciary and other common law duties owed by them to plaintiff

and the other public shareholders by agreeing to the transac-

tion complained of; and

(2) whether plaintiff and the other members of

the class would be irreparably damaged if the transaction com-

plained of herein is consummated.

10. Plaintiff is committed to prosecuting this ac-

tion and has retained competent counsel experienced in litiga-

tion of this nature. The claims of plaintiff are typical of

the claims of other members of the class and plaintiff has the

same interests as the other members of the class. Plaintiff is

an adequate representative of the class and will fairly and

adequately protect the interest of the class.

SUBSTANTIVE ALLEGATIONS

11. The transaction complained of by plaintiff comes

at a time when Calgene has consistently reported improved pros-

pects and is poised to continue its growth in the future.

12. On October 30, 1996, Calgene received a U.S.

patent for a protein that will allow the company to harvest

canola that contains higher concentrations of laurate, a key

raw material used in the manufacture of soap, detergent and

- 4 -
<PAGE> 5
personal care products. Calgene said the patent allows the

company to control the middle position, which will allow

Calgene to produce canola oil that has a 60% laurate content.

13. On November 13, 1996, Monsanto bought 6.25 mil-

lion newly issued common shares of Calgene at $8 a share for a

total of $50 million which brought Monsanto's equity interest

in Calgene to approximately 54.6%.

14. On December 3, 1996 Calgene received a U.S.

patent for its method of controlling the concentration of genes

in plant plastids. This marks the third patent Calgene has

received involving the integration of foreign genes into plant

plastids.

15. On December 17, 1996, Calgene announced that

Saskatchewan Wheat Pool ("SWP") and Calgene plan to jointly

develop and produce "value-added genetically engineered" canola

oil products in Canada. Calgene said that, under the agree-

ment, SWP will combine its own breeding program with Calgene's

genetically engineered oils to develop "Canadian-adapted, spe-

cialty canola varieties."

16. On January 28, 1997 Calgene announced that it

received an offer by Monsanto to acquire the 45% stake of

Calgene common stock it does not already own for $7.25 per

share (the "Monsanto Offer").

17. The Monsanto Offer does not provide for the

value the Calgene shares are actually worth or will be worth

- 5 -
<PAGE> 6
due to its future prospects. For example, Monsanto, itself as

recently as November 13, 1996, 2 1/2 months prior to the

Monsanto Offer paid $8 per Calgene share. The price paid by

Monsanto preceded positive information which have improved

Calgene's prospects.

18. Monsanto timed the announcement of the proposed

transaction to place an artificial lid on the market price of

Calgene's common stock to justify a price that is unfair to

Calgene's public stockholders.

19. The proposed transaction is wrongful, unfair and

harmful to Calgene and its public stockholders, and represents

an attempt by Monsanto to promote its own financial position

and interest at the expense of, and the detriment of, Calgene's

public stockholders. The transaction will eliminate the owner-

ship of Calgene common stock by class members.

20. By virtue of Monsanto's dominance and control

over Calgene, Monsanto has engaged in a plan involving acts

which are grossly unfair to plaintiff and the other members of

the class. The purpose of the plan is to enable Monsanto to

acquire 100% equity ownership of Calgene and its assets for its

own benefit, and at the expense of the other Calgene stock-

holders who will be deprived of their equity investment and the

benefits to accrue thereafter, for a grossly inadequate price.

21. Because defendants dominate and control the

business and corporate affairs of Calgene, and possess private

- 6 -
<PAGE> 7
corporate information concerning Calgene's assets, business and

future prospects, there exists an imbalance and disparity of

knowledge and economic power between defendants and Calgene's

public stockholders which makes it inherently unfair for

Monsanto to pursue the transaction at the expense of Calgene

and class members.

22. Because of Monsanto's overwhelming control over

Calgene, all of Calgene's directors who will be considering the

transaction, and the entire Board of Directors, no third party,

as a practical matter, can attempt any bid for Calgene, as the

success of any such bid would require the consent and coopera-

tion of Monsanto. Thus, Calgene will not be exposed to a mar-

ket check to ascertain the fair value of the Company's assets

and future prospects or its improving financial performance.

23. The proposed transaction serves no legitimate

business purpose of Calgene but rather is an attempt by defen-

dants to unfairly benefit Monsanto from the transaction at the

expense of Calgene's public stockholders. The proposed trans-

action will, for a grossly inadequate consideration, deny

plaintiff and the other members of the class their right to

share proportionately in the future success of Calgene and its

valuable assets, while permitting Monsanto to benefit from the

transaction.

24. Unless enjoined by this Court, defendants will

continue to breach their fiduciary duties owed to plaintiff and

- 7 -
<PAGE> 8
the class, and will consummate and close the transaction and

Monsanto will succeed in its plan to enrich itself by paying

Calgene shareholders inadequate consideration for their shares

of Calgene common stock.

25. Plaintiff has no adequate remedy at law.

WHEREFORE, plaintiff prays for judgment and relief as

follows:

(1) Preliminarily and permanently enjoining

defendants and their counsel, agents, servants, employees and

all persons acting under, in concert with, or for them, from

proceeding with, consummating or closing the transaction

complained of;

(2) In the event the transaction is consummated,

awarding rescission or rescissory damages to the class;

(3) Awarding compensatory damages to the class;

(4) Awarding plaintiff the costs and expenses of

this action, including reasonable counsel and expert fees; and

(5) Awarding such other and further relief as may be

necessary and appropriate.

ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.

/s/
------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433

Attorneys for Plaintiff

- 8 -
<PAGE> 9
OF COUNSEL:

ABBEY, GARDY & SQUITIERI, LLP
212 East 39th Street
New York, New York 10016
(212) 889-3700

- 9 -

<PAGE> 1
Exhibit (c)(12)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

------------------------------------x
:
MARGIE ELSTEIN, custodian for :
GARY ELSTEIN, UGMA, :
:

Plaintiff, : Civil Action No. 15488NC
:
- against - :
: CLASS ACTION COMPLAINT
MONSANTO COMPANY, LLOYD KUNIMOTO, :
JOHN ROBSON, HENDRIK VERFAILLIE, :
ROBERT FRALEY, PATRICK FORTUNE, :
MICHAEL HOGAN, HOWARD PALEFSKY, :
ALLEN VANGELOS, ROGER SALQUIST, :
and CALGENE, INC. :
:
Defendants.:
:
------------------------------------x

Plaintiff, by her attorneys, alleges the following

upon information and belief, except for those allegations which

pertain to plaintiff, which allegations are based upon personal

knowledge:

1. This action arises out of an unlawful scheme and

plan to enable Monsanto Company ("Monsanto") to acquire the

remaining approximately 45.4% ownership of Calgene, Inc.

("Calgene" or the "Company") which Monsanto does not already

own for grossly inadequate consideration and in breach of

defendants' fiduciary duties. Plaintiff alleges that she and

the other public stockholders of Calgene common stock are
<PAGE> 2
entitled to enjoin the proposed transaction, or alternatively,

recover damages in the event the transaction is consummated.

THE PARTIES

2. Plaintiff is and at all relevant times was the

owner of Calgene common stock.

3. Defendant Calgene is a corporation organized and

existing under the laws of the State of Delaware with its prin-

cipal executive offices located at 1920 Fifth Street, Davis,

California 95616. Calgene is the developer of genetically

engineered plants and plant products for the seed, food and

oleochemical industries, using recombinant-DNA technology. The

Company developed the first genetically engineered tomato and

is in the process of developing other bio-engineered products,

such as canola oil and cottonseed.

4. Defendant Monsanto is a Delaware corporation with

its principal headquarters located at 800 North Lindbergh

Blvd., St. Louis, Missouri 63167. Monsanto is the largest

shareholder of Calgene. It owns approximately 54.6% of the

Company's common stock. As such, Monsanto has effective con-

trol over the Company.

5. Defendant Lloyd Kunimoto is President of Calgene

and a director of the Company.

6. Defendant Hendrik Verfaillie is a director of the

Company. He is also the Executive Vice President of Monsanto.

- 2 -
<PAGE> 3
7. Defendant Robert Fraley is a director of the Com-

pany. He is also President of Ceregen, a Monsanto business

unit.

8. Defendant Patrick Fortune is a director of the

Company. He is also Chief Information Officer for Monsanto.

9. Defendant Michael Hogan is a director of the Com-

pany. He is also Vice President and Corporate Controller of

Monsanto.

10. Defendant Roger Salquist is a director of the

Company. Mr. Salquist was the Chairman of the Board and Chief

Executive officer of Calgene until his resignation in July

1996.

11. Defendants John Robson, Howard Palefsky, and

Allen Vangelos are directors of the Company.

12. The above-named individual defendants (collec-

tively the "Individual Defendants") as officers and/or direc-

tors of the Company, owe fiduciary duties of good faith, loy-

alty, fair dealing, due care, and candor to plaintiff and the

other members of the Class (as defined below).

CLASS ACTION ALLEGATIONS

13. Plaintiff brings this action pursuant to Rule 23

of the Rules of this Court, on behalf of himself and all other

stockholders of the Company as of January 29, 1997 (the

"Class"), and their successors in interest, who are or will be

- 3 -
<PAGE> 4
threatened with injury arising from defendants' actions. Ex-

cluded from the Class are the defendants herein, members of

their immediate families, and any subsidiary, firm, trust, cor-

poration, or other entity related to or affiliated with any of

the defendants.

14. This action is properly maintainable as a class

action for the following reasons:

(a) the Class is so numerous that joinder of all

members is impracticable. There are more than 26 million

shares of Calgene common stock outstanding held by hundreds of

shareholders of record. Calgene common stock is listed and

actively traded on the NASDAQ Exchange;

(b) there are questions of law and fact which are

common to members of the Class and which predominate over any

questions affecting only individual members. The common ques-

tions include, inter alia, the following:

(i) whether defendants have engaged and are

continuing to engage in a plan and scheme to benefit Monsanto

at the expense of the members of the Class;

(ii) whether the Individual Defendants, as

directors and/or officers of the Company, have breached their

fiduciary duties owed to plaintiff and the other members of the

Class, including their duties of entire fairness, loyalty, due

care, and candor;

- 4 -
<PAGE> 5
(iii) whether defendants have disclosed all

material facts in connection with the challenged transaction;

and

(iv) whether plaintiff and the other members

of the Class would be irreparably damaged were defendants not

enjoined from the conduct described herein;

claims of the other members of the Class and plaintiff has no

interest that are adverse or antagonistic to the interests of

the Class; and

(d) the plaintiff is committed to prosecuting this

action and has retained counsel competent and experienced in

litigation of this nature. Plaintiff is an adequate represen-

tative of the Class and will fairly and adequately protect the

interests of the Class.

SUBSTANTIVE ALLEGATIONS

15. On January 28, 1997, it was reported over the

Bloomberg Business Wire that Monsanto would acquire the remain-

ing shares of Calgene that it does not already own. Pursuant

to the proposed transaction, each of Calgene's minority owned

common shares will be purchased for $7.25 per share in cash

(the "Buyout Transaction").

16. The purpose of the Buyout Transaction is to en-

able Monsanto to acquire one hundred (100%) percent equity

- 5 -
<PAGE> 6
ownership of Calgene and its valuable assets for its own ben-

efit at the expense of Calgene's public stockholders who will

be deprived of their equity investment and the benefits thereof

including, among other things, the expected growth in the Com-

pany's profitability.

17. The Buyout Transaction is the product of unfair

dealing, and the price of $7.25 cash per share to be paid to

class members is unfair and grossly inadequate because, among

other things:

(a) the announcement of the proposed Buyout Transac-

tion was made to take advantage of the fact that the Company

has recently experienced some poor operating results, which has

caused the market to undervalue its shares. Monsanto recently

purchased 6.25 million shares of the Company at $8 a share;

(b) because Monsanto has an overwhelming controlling

interest in the Company's common stock, no third party will

likely bid for Calgene. Thus, defendants will be able to pro-

ceed with the Buyout Transaction without an auction or other

type of market check to maximize value for Calgene's public

shareholders; and

Transaction to place an artificial lid or cap on the market

price for Calgene's stock to enable Monsanto to acquire the

minority stock at the lowest possible price.

- 6 -
<PAGE> 7
18. By reason of their positions with Calgene and

Monsanto's controlling ownership of the Company, defendants are

in possession of non-public information concerning the finan-

cial condition and prospects of Calgene, and especially the

true value and expected increased future value of Calgene and

its assets, which they have not disclosed to Calgene's public

stockholders.

19. The proposed Buyout Transaction is wrongful,

unfair and harmful to Calgene's minority public stockholders,

and represents an effort by defendants to aggrandize Monsanto's

financial position and interests at the expense of and to the

detriment of class members. The Buyout Transaction is an at-

tempt to deny plaintiff and the other members of the Class

their right to share proportionately in the true value of Cal-

gene's valuable technology, future growth in profits, earnings

and dividends, while usurping the same for the benefit of

Monsanto on unfair and inadequate terms.

20. Defendants, in failing to disclose the material

non-public information in their possession as to the value of

Calgene's technology, the full extent of the future earnings

potential of Calgene and its expected increase in profitabil-

ity, have breached and are breaching their fiduciary duties to

the members of the Class.

21. As a result of defendants' unlawful actions,

plaintiff and the other members of the Class will be damaged in

- 7 -
<PAGE> 8
that they will not receive their fair portion of the value of

Calgene assets and business and will be prevented from obtain-

ing the real value of their equity ownership of the Company.

22. Unless the proposed Buyout Transaction is en-

joined by the Court, defendants will continue to breach their

fiduciary duties owed to the plaintiff and the members of the

Class, will not engage in arm's-length negotiations on the

merger terms, and will consummate and close the proposed merger

complained of and succeed in their plan described above, all to

the irreparable harm of the members of the Class.

23. Plaintiff and the other members of the Class

have no adequate remedy at law.

WHEREFORE, plaintiff demands judgment as follows:

(a) declaring this action to be a proper class ac-

tion and certifying plaintiff as the representative of the

Class;

(b) ordering defendants to carry out their fiduciary

duties to plaintiff and the other members of the Class, includ-

ing those duties of care, loyalty, candor and fair dealing;

relief against the consummation of the Buyout Transaction as

described herein;

(d) in the event the Buyout Transaction is consum-

mated, rescinding the Buyout Transaction effected by defendants

and/or awarding rescissory damages to the Class;

- 8 -
<PAGE> 9
(e) ordering defendants, jointly and severally, to

account to plaintiff and other members of the Class for all

damages suffered and to be suffered by them as the result of

the acts and transactions alleged herein;

(f) awarding plaintiff the costs and disbursements

of the action including allowances for plaintiff's reasonable

attorneys' and experts' fees; and

(g) granting such other and further relief as the

Court may deem just and proper.

ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.

By: /s/
--------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff

OF COUNSEL:

WOLF POPPER LLP
845 Third Avenue
New York, New York 10022
(212) 759-4600

- 9 -

<PAGE> 1
Exhibit (c)(13)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

- - - - - - - - - - - - - - - - - - x
F. RICHARD MANSON and ERNEST HACK, :
Individually And On Behalf Of All :
Others Similarly Situated, :
:
Plaintiffs, : C.A. No. 15491
v. :
:
PATRICK J. FORTUNE, ROBERT T. :
FRALEY, MICHAEL R. HOGAN, LLOYD M. :
KUNIMOTO, HOWARD D. PALEFSKY, :
JOHN E. ROBSON, ROGER H. SALQUIST, :
ALLEN J. VANGELOS, HENDRIK A. :
VERFAILLIE AND MONSANTO CO. :
:
Defendants.:
- - - - - - - - - - - - - - - - - - x

CLASS ACTION AND DERIVATIVE COMPLAINT

Plaintiffs, by their attorneys, allege on information

and belief, except for the allegations herein relating to

plaintiffs and their counsel, which allegations are made on the

basis of knowledge, as follows:

SUMMARY OF ACTION

1. This Action is brought as a class action on be-

half of the public holders of the common stock Calgene, Inc.

("Calgene" or the "Company"). Plaintiffs seek damages and in-

junctive relief against the Calgene Board of Directors and de-

fendant Monsanto Co. ("Monsanto"), Calgene's controlling share-

holder, in connection with a proposed acquisition by Monsanto

of the remaining public shares of Calgene.
<PAGE> 2
THE PARTIES

2. Plaintiffs own shares of the common stock of

Calgene.

3. Calgene, Inc. is a Delaware corporation with ex-

ecutive offices at 1920 Fifth Street, Davis, California 95616.

Calgene develops genetically engineered plants and plant prod-

ucts. As of October 31, 1996, Calgene had approximately

60,464,636 shares of common stock outstanding held by approxi-

mately 3,244 shareholders of record.

4. Defendant Patrick J. Fortune is a Director of

Calgene.

5. Defendant Robert T. Fraley is a Director of

Calgene.

6. Defendant Michael R. Hogan is a Director of

Calgene.

7. Defendant Lloyd M. Kunimoto is President, Chief

Executive Officer and a Director of Calgene.

8. Defendant Howard D. Palefsky is a Director of

Calgene.

9. Defendant John E. Robson is a Director of

Calgene.

10. Defendant Roger H. Salquist is a Director of

Calgene. Salquist is also the former Chairman and Chief Execu-

tive Officer of Calgene, and is a current consultant to Cal-

gene.

- 2 -
<PAGE> 3
11. Defendant Allen J. Vangelos is a Director of

Calgene.

12. Defendant Hendrik A. Verfaillie is a Director of

Calgene.

13. Each of the foregoing individuals owes the Com-

pany a fiduciary duty to exercise due care and diligence in the

administration of the affairs of the Company and the highest

obligations of good faith and fair dealing. By reason of their

positions as Directors and/or officers of the Company, the Di-

rector Defendants owe the Company and its shareholders fidu-

ciary obligations of trust, loyalty and due care, and were and

are required to use their utmost ability to act in furtherance

of the best interests of the Company and its shareholders so as

to benefit all shareholders proportionately and not one group

of common shareholders at the expense of another, and to pro-

vide full and complete information concerning the affairs of

the Company to the shareholders.

14. Monsanto Co. is a Delaware corporation with

executive Offices at 800 North Lindbergh Boulevard, St. Louis,

Missouri 63167-0001. Monsanto manufactures and sells agricul-

tural products, manufactures and markets chemical products,

develops, manufactures and markets medical products, and Manu-

factures and markets "Nutrasweet" brand sweetener. Monsanto

currently owns approximately 54.6 percent of Calgene's

outstanding shares. As such, Monsanto is the controlling

- 3 -
<PAGE> 4
shareholder of Calgene. By virtue of its status as controlling

shareholder and its domination and control of the Calgene

Board, Monsanto owes fiduciary duties to Calgene's public

shareholders.

15. Pursuant to the Restated Stockholders Agreement.

defendants Fortune, Fraley, Hogan, Robson and Verfaillie are

Monsanto designees on the Calgene Board of Directors.

CLASS ACTION ALLEGATIONS

16. Plaintiffs bring this action an behalf of a

class (the "Class") consisting of all public holders of Calgene

common stock, excluding defendants, members of the immediate

families of each of the individual defendants, any entity con-

trolled by any defendants, and the heirs, successors, assigns,

partners or principals of any of the defendants.

17. As of October 31, 1996, there were over 60 mil-

lion shares of Calgene common stock held by thousands of share-

holders. Therefore, the members of the Class are so numerous

that joinder of all members is impracticable.

18. Plaintiffs' claims are typical of the claims of

the Class. They and all other members of the class who own

Calgene common stock have sustained and will sustain damages as

a result of defendants' wrongful conduct as herein alleged.

19. Plaintiffs will fairly and adequately protect

and represent the interests of the members of the Class and

have retained counsel competent and experienced in shareholder

class action litigation. Plaintiffs are members of the Class

- 4 -
<PAGE> 5
and their claims are typical of the claims of the Class mem-

bers. Plaintiffs do not have interests antagonistic to, or in

conflict with, the interests of those they represent.

20. A class action is superior to other available

methods for the fair and efficient adjudication of this contro-

versy. Since the damages suffered by individual Class members

may be relatively small, the expense and burden of individual

litigation makes it impossible for the Class members individu-

ally to seek redress for the wrongful conduct herein alleged.

Absent a class action, defendants will likely retain the ben-

efits of their wrongdoing.

21. Common questions of law and fact exist as to all

members of the Class and predominate over any questions affect-

ing solely individual members of the Class. Among the ques-

tions of law and fact common to the Class are:

a. Whether defendants are capable of fulfilling

their fiduciary duties to the class;

b. Whether the Calgene public shareholders will be

irreparably harmed; and

c. Whether the members of the Class has or will sus-

tain damages and, if so, the proper measure of damages.

SUBSTANTIVE ALLEGATIONS

22. Pursuant to a stock purchase agreement dated as

of September 27, 1996, Monsanto purchased 6.25 million newly

- 5 -
<PAGE> 6
issued Calgene shares for $8 per share, increasing its owner-

ship from 49.9% to 54.6%.

23. On January 29, 1997, Monsanto publicly announced

a proposal to acquire the outstanding shares of Calgene which

did not already own for $7.25 per share (the "Transaction").

On January 28, 1997, the last trading date prior to announce-

ment of the Transaction, calgene stock closed at $5.50 per

share. However, the Transaction price is $.75 below the price

at which Monsanto acquired the new Calgene shares.

24. It has been announced that a panel of three pur-

portedly disinterested directors was formed to consider the

Transaction. However, these directors cannot be expected to

adequately represent, protect and advocate the interests of the

public shareholders and ensure that the Transaction is entirely

fair to the Class, as a result of Monsanto's ownership and

domination and control of the Calgene Board.

25. Unless enjoined by this Court, defendants will

continue to breach their fiduciary duties owed to Calgene and

its public shareholders unjustly enriching Monsanto at the ex-

pense the Class, all to the irreparable harm of the Class.

26. The Transaction is a self-dealing transaction in

breach of fiduciary duties owed to Calgene and the public hold-

ers of Calgene common stock.

- 6 -
<PAGE> 7
27. As a result of defendants' wrongful course of

conduct, Calgene and its shareholders have sustained and will

continue to sustain injury.

28. Plaintiffs seek, inter alia, to preliminarily

and permanently enjoin implementation of the Transaction.

Plaintiffs further seek damages for defendants' wrongful con-

duct.

WHEREFORE, Plaintiffs demand judgment as follows:

A. That the Court declare that the defendants, and

each of them, have committed a gross abuse of trust and have

breached fiduciary duties to Calgene and Calgene's public

shareholders;

B. Preliminarily, and permanently enjoining defen-

dants from continuing their actions and breaches of fiduciary

duties;

C. Declaring this action to be a class action;

D. Awarding money damages against all defendants,

jointly and severally, in favor of the Company, Plaintiffs and

members of the class for all losses and damages suffered as a

result of the conduct complained of herein, together with in-

terest;

E. Enjoining defendants from exercising any rights

or benefits granted or received as part of the Transaction;

- 7 -
<PAGE> 8
F. Awarding Plaintiffs the costs and disbursements

of this action, including reasonable attorneys' and expert's

fees; and

G. Granting such other and further relief as this

court may deem just and proper.

- 8 -
<PAGE> 9
Dated: January 29, 1997 CHIMICLES, JACOBSEN & TIKELLIS

/s/ Pamela S. Tikellis
-----------------------------------
Pamela S. Tikellis
James C. Strum
Robert J. Kriner, Jr.
Daniel P. O'Brien
One Rodney Square
P.O. Box 1035
Wilmington, DE 19899
(302) 656-2500

Attorneys for Plaintiffs

OF COUNSEL:

WOLF HALDENSTEIN ADLER FREEMAN
& HERZ LLP
270 Madison Avenue
New York, New York 10016

LAW OFFICES OF CHARLES J. PIVEN
111 S. Calvert Street
Suite 2700
Baltimore, MD 21202

- 9 -

<PAGE> 1
Exhibit (c)(14)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

------------------------------------x
:
JERE SETTLE, :
:
Plaintiff, :
: Civil Action No. 15493NC
:
against :
: CLASS ACTION COMPLAINT
MONSANTO COMPANY, LLOYD KUNIMOTO, :
JOHN ROBSON, HENDRIK VERFAILLIE, :
ROBERT FRALEY, PATRICK FORTUNE, :
MICHAEL HOGAN, HOWARD PALEFSKY, :
ALLEN VANGELOS, ROGER SALQUIST, :
and CALGENE, INC. :
:
Defendants.:
------------------------------------x

Plaintiff, by his attorneys, alleges the following

upon information and belief, except for those allegations which

pertain to plaintiff, which allegations are based upon personal

knowledge:

1. This action arises out of an unlawful scheme and

plan to enable Monsanto Company ("Monsanto") to acquire the

remaining approximately 45.4% ownership of Calgene, Inc.

("Calgene" or the "Company") which Monsanto does not already

own for grossly inadequate consideration and in breach of de-

fendants' fiduciary duties. Plaintiff alleges that he and the

other public stockholders of Calgene common stock are entitled

to enjoin the proposed transaction, or alternatively, recover

damages in the event the transaction is consummated.
<PAGE> 2
THE PARTIES

2. Plaintiff is and at all relevant times was the

owner of Calgene common stock.

3. Defendant Calgene is a corporation organized and

existing under the laws of the State of Delaware with its prin-

cipal executive offices located at 1920 Fifth Street, Davis,

California 95616. Calgene is the developer of genetically en-

gineered plants and plant products for the seed, food and

oleochemical industries, using recombinant-DNA technology. The

Company developed the first genetically engineered tomato and

is in the process of developing other bio-engineered products,

such as canola oil and cottonseed.

4. Defendant Monsanto is a Delaware corporation with

its principal headquarters located at 800 North Lindbergh

Blvd., St. Louis, Missouri 63167. Monsanto is the largest

shareholder of Calgene. It owns approximately 54.6% of the

Company's common stock. As such, Monsanto has effective con-

trol over the Company.

5. Defendant Lloyd Kunimoto is President of Calgene

and director of the Company.

6. Defendant Hendrik Verfaillie is a director of the

Company. He is also the Executive Vice President of Monsanto.

7. Defendant Robert Fraley is a director of the Com-

pany. He is also President of Ceregen, a Monsanto business

unit.

- 2 -
<PAGE> 3
8. Defendant Patrick Fortune is a director of the

Company. He is also Chief Information Officer for Monsanto.

9. Defendant Michael Hogan is a director of the Com-

pany. He is also Vice President and Corporate Controller of

Monsanto.

10. Defendant Roger Salquist is a director of the

Company. Mr. Salquist was the Chairman of the Board and Chief

Executive Officer of Calgene until his resignation in July

1996.

11. Defendants John Robson, Howard Palefsky, and

Allen Vangelos are directors of the Company.

12. The above-named individual defendants (collec-

tively the "Individual Defendants") as officers and/or direc-

tors of the Company, owe fiduciary duties of good faith,

loyalty, fair dealing, due care, and candor to plaintiff and

the other members of the Class (as defined below).

CLASS ACTION ALLEGATIONS

13. Plaintiff brings this action pursuant to Rule 23

of the Rules of this Court, on behalf of herself and all other

stockholders of the Company as of January 29, 1997 (the

"Class"), and their successors in interest, who are or will be

threatened with injury arising from defendants' actions. Ex-

cluded from the Class are the defendants herein, members of

- 3 -
<PAGE> 4
their immediate families, and any subsidiary, firm, trust, cor-

poration, or other entity related to or affiliated with any of

the defendants.

14. This action is properly maintainable as a class

action for the following reasons:

(a) the Class is so numerous that joinder of all

members is impracticable. There are more than 26 million

shares of Calgene common stock outstanding held by hundreds of

shareholders of record. Calgene common stock is listed and

actively traded on the NASDAQ Exchange;

(b) there are questions of law and fact which are

common to members of the Class and which predominate over any

questions affecting only individual members. The common ques-

tions include, inter alia, the following:

(i) whether defendants have engaged and are

continuing to engage in a plan and scheme to benefit Monsanto

at the expense of the members of the Class;

(ii) whether the Individual Defendants, as di-

rectors and/or officers of the Company, have breached their

fiduciary duties owed to plaintiff and the other members of the

Class, including their duties of entire fairness, loyalty, due

care, and candor;

(iii) whether defendants have disclosed all mate-

rial facts in connection with the challenged transaction; and

- 4 -
<PAGE> 5
(iv) whether plaintiff and the other members of

the Class would be irreparably damaged were defendants not

enjoined from the conduct described herein;

claims of the other members of the Class and plaintiff has no

interests that are adverse or antagonistic to the interests of

the Class; and

(d) plaintiff is committed to prosecuting this ac-

tion and has retained counsel competent and experienced in

litigation of this nature. Plaintiff is an adequate representa-

tive of the Class and will fairly and adequately protect the

interests of the Class.

SUBSTANTIVE ALLEGATIONS

15. On January 28, 1997, it was reported over the

Bloomberg Business Wire that Monsanto would acquire the remain-

ing shares of Calgene that it does not already own. Pursuant

to the proposed transaction, each of Calgene's minority owned

common shares will be purchased for $7.25 per share in cash

(the "Buyout Transaction").

16. The purpose of the Buyout Transaction is to en-

able Monsanto to acquire one hundred (100%) percent equity

ownership of Calgene and its valuable assets for its own ben-

efit at the expense of Calgene's public stockholders who will

be deprived of their equity investment and the benefits thereof

- 5 -
<PAGE> 6
including, among other things, the expected growth in the Com-

pany's profitability.

17. The Buyout Transaction is the product of unfair

dealing, and the price of $7.25 cash per share to be paid to

class members is unfair and grossly inadequate because, among

other things:

(a) the announcement of the proposed Buyout Transac-

tion was made to take advantage of the fact that the Company

has recently experienced some poor operating results, which has

caused the market to undervalue its shares. Monsanto recently

purchased 6.25 million shares of the Company at $8 a share;

(b) because Monsanto has an overwhelming controlling

interest in the Company's common stock, no third party will

likely bid for Calgene. Thus, defendants will be able to pro-

ceed with the Buyout Transaction without an auction or other

type of market check to maximize value for Calgene's public

shareholders; and

Transaction to place an artificial lid or cap on the market

price for Calgene's stock to enable Monsanto to acquire the

minority stock at the lowest possible price.

18. By reason of their positions with Calgene and

Monsanto's controlling ownership of the Company, defendants are

in possession of non-public information concerning the finan-

cial condition and prospects of Calgene, and especially the

- 6 -
<PAGE> 7
true value and expected increased future value of Calgene and

its assets, which they have not disclosed to Calgene's public

stockholders.

19. The proposed Buyout Transaction is wrongful,

unfair and harmful to Calgene's minority public stockholders,

and represents an effort by defendants to aggrandize Monsanto's

financial position and interests at the expense of and to the

detriment of class members. The Buyout Transaction is an at-

tempt to deny plaintiff and the other members of the Class

their right to share proportionately in the true value of Cal-

gene's valuable technology, future growth in profits, earnings

and dividends, while usurping the same for the benefit of

Monsanto on unfair and inadequate terms.

20. Defendants, in failing to disclose the material

non-public information in their possession as to the value of

Calgene's technology, the full extent of the future earnings

potential of Calgene and its expected increase in profitabil-

ity, have breached and are breaching their fiduciary duties to

the members of the Class.

21. As a result of defendants, unlawful actions,

plaintiff and the other members of the Class will be damaged in

that they will not receive their fair portion of the value of

Calgene assets and business and will be prevented from obtain-

ing the real value of their equity ownership of the Company.

22. Unless the proposed Buyout Transaction is en-

joined by the Court, defendants will continue to breach their

- 7 -
<PAGE> 8
fiduciary duties owed to plaintiff and the members of the

Class, will not engage in arm's-length negotiations on the

merger terms, and will consummate and close the proposed merger

complained of and succeed in their plan described above, all to

the irreparable harm of the members of the Class.

23. Plaintiff and the other members of the Class

have no adequate remedy at law.

WHEREFORE, plaintiff demands judgment as follows:

(a) declaring this action to be a proper class

action and certifying plaintiff as the representative of the

Class;

(b) ordering defendants to carry out their fiduciary

duties to plaintiff and the other members of the Class, includ-

ing those duties of care, loyalty, candor and fair dealing;

relief against the consummation of the Buyout Transaction as

described herein;

(d) in the event the Buyout Transaction is consum-

mated, rescinding the Buyout Transaction effected by defendants

and/or awarding rescissory damages to the Class;

(e) ordering defendants, jointly and severally, to

account to plaintiff and other members of the Class for all

damages suffered and to be suffered by them as the result of

the acts and transactions alleged herein;

- 8 -
<PAGE> 9
(f) awarding plaintiff the costs and disbursements

of the action including allowances for plaintiff's reasonable

attorneys' and experts' fees; and

(g) granting such other and further relief as the

Court may deem just and proper.

ROSENTHAL, MONHAIT, GROSS &
& GODDESS, P.A.

By: /s/
------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff

OF COUNSEL:

GILMAN AND PASTOR
One Boston Place
28th Floor
Boston, MA 02108

- 9 -

<PAGE> 1
Exhibit (c)(15)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

------------------------------------x
:
HOWARD GLICKBERG, :
:
Plaintiff, : Civil Action No. 15499NC
:
- against - :
: CLASS ACTION COMPLAINT
:
MONSANTO COMPANY, LLOYD KUNIMOTO, :
JOHN ROBSON, HENDRIK VERFAILLIE, :
ROBERT FRALEY, PATRICK FORTUNE, :
MICHAEL HOGAN, HOWARD PALEFSKY, :
ALLEN VANGELOS, ROGER SALQUIST, :
and CALGENE, INC. :
:
Defendants.:
:
------------------------------------x

Plaintiff, by his attorneys, alleges the following

upon information and belief, except for those allegations which

pertain to plaintiff, which allegations are based upon personal

knowledge:

1. This action arises out of an unlawful scheme and

plan to enable Monsanto Company ("Monsanto") to acquire the

remaining approximately 45.4% ownership of Calgene, Inc.

("Calgene" or the "Company") which Monsanto does not already

own for grossly inadequate consideration and in breach of de-

fendants' fiduciary duties. Plaintiff alleges that he and the

other public stockholders of Calgene common stock are entitled
<PAGE> 2
to enjoin the proposed transaction, or alternatively, recover

damages in the event the transaction is consummated.

THE PARTIES

2. Plaintiff is and at all relevant times was the

owner of Calgene common stock.

3. Defendant Calgene is a corporation organized and

existing under the laws of the State of Delaware with its prin-

cipal executive offices located at 1920 Fifth Street, Davis,

California 95616. Calgene is the developer of genetically en-

gineered plants and plant products for the seed, food and

oleochemical industries, using recombinant-DNA technology. The

Company developed the first genetically engineered tomato and

is in the process of developing other bio-engineered products,

such as canola oil and cottonseed.

4. Defendant Monsanto is a Delaware corporation with

its principal headquarters located at 800 North Lindbergh

Blvd., St. Louis, Missouri 63167. Monsanto is the largest

shareholder of Calgene. It owns approximately 54.6% of the

Company's common stock. As such, Monsanto has effective con-

trol over the Company.

5. Defendant Lloyd Kunimoto is President of Calgene

and a director of the Company.

6. Defendant Hendrik Verfaillie is a director of the

Company. He is also the Executive Vice President of Monsanto.

- 2 -
<PAGE> 3
7. Defendant Robert Fraley is a director of the Com-

pany. He is also President of Ceregen, a Monsanto business

unit.

8. Defendant Patrick Fortune is a director of the

Company. He is also Chief Information Officer for Monsanto.

9. Defendant Michael Hogan is a director of the Com-

pany. He is also Vice President and Corporate Controller of

Monsanto.

10. Defendant Roger Salquist is a director of the

Company. Mr. Salquist was the Chairman of the Board and Chief

Executive Officer of Calgene until his resignation in July

1996.

11. Defendants John Robson, Howard Palefsky, and

Allen Vangelos are directors of the Company.

12. The above-named individual defendants (collec-

tively the "Individual Defendants") as officers and/or direc-

tors of the Company, owe fiduciary duties of good faith, loy-

alty, fair dealing, due care, and candor to plaintiff and the

other members of the Class (as defined below).

CLASS ACTION ALLEGATIONS

13. Plaintiff brings this action pursuant to Rule 23

of the Rules of this Court, on behalf of herself and all other

stockholders of the Company as of January 29, 1997 (the

"Class"), and their successors in interest, who are or will be

- 3 -
<PAGE> 4
threatened with injury arising from defendants' actions. Ex-

cluded from the Class are the defendants herein, members of

their immediate families, and any subsidiary, firm, trust, cor-

poration, or other entity related to or affiliated with any of

the defendants.

14. This action is properly maintainable as a class

action for the following reasons:

(a) the Class is so numerous that joinder of all

members is impracticable. There are more than 26 million

shares of Calgene common stock outstanding held by hundreds of

shareholders of record. Calgene common stock is listed and

actively traded on the NASDAQ Exchange;

(b) there are questions of law and fact which are

common to members of the Class and which predominate over any

questions affecting only individual members. The common ques-

tions include, inter alia, the following:

(i) whether defendants have engaged and are con-

tinuing to engage in a plan and scheme to benefit Monsanto at

the expense of the members of the Class;

(ii) whether the Individual Defendants, as direc-

tors and/or officers of the Company, have breached their fidu-

ciary duties owed to plaintiff and the other members of the

Class, including their duties of entire fairness, loyalty, due

care, and candor;

- 4 -
<PAGE> 5
(iii) whether defendants have disclosed all mate-

rial facts in connection with the challenged transaction; and

(iv) whether plaintiff and the other members of

the Class would be irreparably damaged were defendants not en-

joined from the conduct described herein;

claims of the other members of the Class and plaintiff has no

interests that are adverse or antagonistic to the interests of

the Class; and

(d) plaintiff is committed to prosecuting this ac-

tion and has retained counsel competent and experienced in

litigation of this nature. Plaintiff is an adequate represen-

tative of the Class and will fairly and adequately protect the

interests of the Class.

SUBSTANTIVE ALLEGATIONS

15. On January 28, 1997, it was reported over the

Bloomberg Business Wire that Monsanto would acquire the remain-

ing shares of Calgene that it does not already own. Pursuant

to the proposed transaction, each of Calgene's minority owned

common shares will be purchased for $7.25 per share in cash

(the "Buyout Transaction").

16. The purpose of the Buyout Transaction is to en-

able Monsanto to acquire one hundred (100%) percent equity own-

ership of Calgene and its valuable assets for its own benefit

at the expense of Calgene's public stockholders who will be

- 5 -
<PAGE> 6
deprived of their equity investment and the benefits thereof

including, among other things, the expected growth in the Com-

pany's profitability.

17. The Buyout Transaction is the product of unfair

dealing, and the price of $7.25 cash per share to be paid to

class members is unfair and grossly inadequate because, among

other things:

(a) the announcement of the proposed Buyout Transac-

tion was made to take advantage of the fact that the Company

has recently experienced some poor operating results, which has

caused the market to undervalue its shares. Monsanto recently

purchased 6.25 million shares of the Company at $8 a share;

(b) because Monsanto has an overwhelming controlling

interest in the Company's common stock, no third party will

likely bid for Calgene. Thus, defendants will be able to pro-

ceed with the Buyout Transaction without an auction or other

type of market check to maximize value for Calgene's public

shareholders; and

Transaction to place an artificial lid or cap on the market

price for Calgene's stock to enable Monsanto to acquire the

minority stock at the lowest possible price.

18. By reason of their positions with Calgene and

Monsanto's controlling ownership of the Company, defendants are

- 6 -
<PAGE> 7
in possession of non-public information concerning the finan-

cial condition and prospects of Calgene, and especially the

true value and expected increased future value of Calgene and

its assets, which they have not disclosed to Calgene's public

stockholders.

19. The proposed Buyout Transaction is wrongful,

unfair and harmful to Calgene's minority public stockholders,

and represents an effort by defendants to aggrandize Monsanto's

financial position and interests at the expense of and to the

detriment of class members. The Buyout Transaction is an at-

tempt to deny plaintiff and the other members of the Class

their right to share proportionately in the true value of

Calgene's valuable technology, future growth in profits, earn-

ings and dividends, while usurping the same for the benefit of

Monsanto on unfair and inadequate terms.

20. Defendants, in failing to disclose the material

non-public information in their possession as to the value of

Calgene's technology, the full extent of the future earnings

potential of Calgene and its expected increase in profitabil-

ity, have breached and are breaching their fiduciary duties to

the members of the Class.

21. As a result of defendants' unlawful actions,

plaintiff and the other members of the Class will be damaged in

that they will not receive their fair portion of the value of

- 7 -
<PAGE> 8
Calgene assets and business and will be prevented from obtain-

ing the real value of their equity ownership of the Company.

22. Unless the proposed Buyout Transaction is en-

joined by the Court, defendants will continue to breach their

fiduciary duties owed to plaintiff and the members of the

Class, will not engage in arm's-length negotiations on the

merger terms, and will consummate and close the proposed merger

complained of and succeed in their plan described above, all to

the irreparable harm of the members of the Class.

23. Plaintiff and the other members of the Class

have no adequate remedy at law.

WHEREFORE, plaintiff demands judgment as follows:

(a) declaring this action to be a proper class ac-

tion and certifying plaintiff as the representative of the

Class;

(b) ordering defendants to carry out their fiduciary

duties to plaintiff and the other members of the Class, includ-

ing those duties of care, loyalty, candor and fair dealing;

relief against the consummation of the Buyout Transaction as

described herein;

(d) in the event the Buyout Transaction is consum-

mated, rescinding the Buyout Transaction effected by defendants

and/or awarding rescissory damages to the Class;

- 8 -
<PAGE> 9
(e) ordering defendants, jointly and severally, to

account to plaintiff and other members of the Class for all

damages suffered and to be suffered by them as the result of

the acts and transactions alleged herein;

(f) awarding plaintiff the costs and disbursements

of the action including allowances for plaintiff's reasonable

attorneys' and experts' fees; and

(g) granting such other and further relief as the

Court may deem just and proper.

ROSENTHAL, MONHAIT, GROSS &
& GODDESS, P.A.

By: /s/
-------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff

OF COUNSEL:

BEIGEL LASKY RIFKIND FERTIK
GELBER & WHITE
750 Lexington Avenue, 30th Floor
New York, NY 10022

- 9 -

<PAGE> 1
Exhibit (c)(16)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

-----------------------------------x
:
ROBERT LEWIS, :
:
Plaintiff, :
: Civil Action No. 15511-NC
v. :
: CLASS ACTION COMPLAINT
:
MONSANTO COMPANY, LLOYD KUNIMOTO, :
JOHN ROBSON, HENDRIK VERFAILLIE, :
ROBERT FRALEY, PATRICK FORTUNE, :
MICHAEL HOGAN, HOWARD PALEFSKY, :
ALLEN VANGELOS, ROGER SALQUIST, :
and CALGENE, INC. :
:
Defendants. :
-----------------------------------x

Plaintiff, by his attorneys, alleges the following

upon information and belief, except for those allegations which

pertain to plaintiff, which allegations are based upon personal

knowledge:

1. This action arises out of an unlawful scheme and

plan to enable Monsanto Company ("Monsanto") to acquire the

remaining approximately 45.40% ownership of Calgene, Inc.

("Calgene" or the "Company") which Monsanto does not already

own for grossly inadequate consideration and in breach of de-

fendants' fiduciary duties. Plaintiff alleges that he and the

other public stockholders of Calgene common stock are entitled

to enjoin the proposed transaction, or alternatively, recover

damages in the event the transaction is consummated.
<PAGE> 2
THE PARTIES

2. Plaintiff is and at all relevant times was the

owner of Calgene common stock.

3. Defendant Calgene is a corporation organized and

existing under the laws of the State of Delaware with its prin-

cipal executive offices located at 1920 Fifth Street, Davis,

California 95616. Calgene is the developer of genetically en-

gineered plants and plant products for the seed, food and

oleochemical industries, using recombinant-DNA technology. The

Company developed the first genetically engineered tomato and

is in the process of developing other bio-engineered products,

such as canola oil and cottonseed.

4. Defendant Monsanto is a Delaware corporation with

its principal headquarters located at 800 North Lindbergh

Blvd., St. Louis, Missouri 63167. Monsanto is the largest

shareholder of Calgene. It owns approximately 54.6% of the

Company's common stock. As such, Monsanto has effective con-

trol over the Company.

5. Defendant Lloyd Kunimoto is President of Calgene

and director of the Company.

6. Defendant Hendrik Verfaillie is a director of the

Company. He is also the Executive Vice President of Monsanto.

7. Defendant Robert Fraley is a director of the Com-

pany. He is also President of Ceregen, a Monsanto business

unit.

- 2 -
<PAGE> 3
8. Defendant Patrick Fortune is a director of the

Company. He is also Chief Information Officer for Monsanto.

9. Defendant Michael Hogan is a director of the Com-

pany. He is also Vice President and Corporate Controller of

Monsanto.

10. Defendant Roger Salquist is a director of the

Company. Mr. Salquist was the Chairman of the Board and Chief

Executive Officer of Calgene until his resignation in July

1996.

11. Defendants John Robson, Howard Palefsky, and

Allen Vangelos are directors of the Company.

12. The above-named individual defendants (collec-

tively the "Individual Defendants") as officers and/or direc-

tors of the Company, owe fiduciary duties of good faith, loy-

alty, fair dealing, due care, and candor to plaintiff and the

other members of the Class (as defined below).

CLASS ACTION ALLEGATIONS

13. Plaintiff brings this action pursuant to Rule 23

of the Rules of this Court, on behalf of herself and all other

stockholders of the Company as of January 29, 1997 (the

"Class"), and their successors in interest, who are or will be

threatened with injury arising from defendants' actions. Ex-

cluded from the Class are the defendants herein, members of

- 3 -
<PAGE> 4
their immediate families, and any subsidiary, firm, trust, cor-

poration, or other entity related to or affiliated with any of

the defendants.

14. This action is properly maintainable as a class

action for the following reasons:

(a) the Class is so numerous that joinder of all

members is impracticable. There are more than 26 million

shares of Calgene common stock outstanding held by hundreds of

shareholders of record. Calgene common stock is listed and

actively traded on the NASDAQ Exchange;

(b) there are questions of law and fact which are

common to members of the Class and which predominate over any

questions affecting only individual members. The common ques-

tions include, inter alia, the following:

(i) whether defendants have engaged and are

continuing to engage in a plan and scheme to benefit Monsanto

at the expense of the members of the Class;

(ii) whether the Individual Defendants, as di-

rectors and/or officers of the Company, have breached their

fiduciary duties owed to plaintiff and the other members of the

Class, including their duties of entire fairness, loyalty, due

care, and candor;

(iii) whether defendants have disclosed all mate-

rial facts in connection with the challenged transaction; and

- 4 -
<PAGE> 5
(iv) whether plaintiff and the other members of

the Class would be irreparably damaged were defendants not en-

joined from the conduct described herein;

claims of the other members of the Class and plaintiff has no

interests that are adverse or antagonistic to the interests of

the Class; and

(d) plaintiff is committed to prosecuting this ac-

tion and has retained counsel competent and experienced in

litigation of this nature. Plaintiff is an adequate represen-

tative of the Class and will fairly and adequately protect the

interests of the Class.

SUBSTANTIVE ALLEGATIONS

15. On January 28, 1997, it was reported over the

Bloomberg Business Wire that Monsanto would acquire the remain-

ing shares of Calgene that it does not already own. Pursuant

to the proposed transaction, each of Calgene's minority owned

common shares will be purchased for $7.25 per share in cash

(the "Buyout Transaction").

16. The purpose of the Buyout Transaction is to en-

able Monsanto to acquire one hundred (100%) percent equity own-

ership of Calgene and its valuable assets for its own benefit

at the expense of Calgene's public stockholders who will be

deprived of their equity investment and the benefits thereof

- 5 -
<PAGE> 6

including, among other things, the expected growth in the Com-

pany's profitability.

17. The Buyout Transaction is the product of unfair

dealing, and the price of $7.25 cash per share to be paid to

class members is unfair and grossly inadequate because, among

other things:

(a) the announcement of the proposed Buyout Transac-

tion was made to take advantage of the fact that the Company

has recently experienced some poor operating results, which has

caused the market to undervalue its shares. Monsanto recently

purchased 6.25 million shares of the Company at $8 a share;

(b) because Monsanto has an overwhelming controlling

interest in the Company's common stock, no third party will

likely bid for Calgene. Thus, defendants will be able to pro-

ceed with the Buyout Transaction without an auction or other

type of market check to maximize value for Calgene's public

shareholders; and

Transaction to place an artificial lid or cap on the market

price for Calgene's stock to enable Monsanto to acquire the

minority stock at the lowest possible price.

18. By reason of their positions with Calgene and

Monsanto's controlling ownership of the Company, defendants are

in possession of non-public information concerning the finan-

cial condition and prospects of Calgene, and especially the

- 6 -
<PAGE> 7
true value and expected increased future value of Calgene and

its assets, which they have not disclosed to Calgene's public

stockholders.

19. The proposed Buyout Transaction is wrongful,

unfair and harmful to Calgene's minority public stockholders,

and represents an effort by defendants to aggrandize Monsanto's

financial position and interests at the expense of and to the

detriment of class members. The Buyout Transaction is an at-

tempt to deny plaintiff and the other members of the Class

their right to share proportionately in the true value of Cal-

gene's valuable technology, future growth in profits, earnings

and dividends, while usurping the same for the benefit of

Monsanto on unfair and inadequate terms.

20. Defendants, in failing to disclose the material

non-public information in their possession as to the value of

Calgene's technology, the full extent of the future earnings

potential of Calgene and its expected increase in profitabil-

ity, have breached and are breaching their fiduciary duties to

the members of the Class.

21. As a result of defendants' unlawful actions,

plaintiff and the other members of the class will be damaged in

that they will not receive their fair portion of the value of

Calgene assets and business and will be prevented from obtain-

ing the real value of their equity ownership of the Company.

- 7 -
<PAGE> 8
22. Unless the proposed Buyout Transaction is en-

joined by the Court, defendants will continue to breach their

fiduciary duties owed to the plaintiff and the members of the

Class, will not engage in arm's-length negotiations on the

merger terms, and will consummate and close the proposed merger

complained of and succeed in their plan described above, all to

the irreparable harm of the members of the Class.

23. Plaintiff and the other members of the Class

have no adequate remedy at law.

WHEREFORE, plaintiff demands judgment as follows:

(a) declaring this action to be a proper class

action and certifying plaintiff as the representative of the

Class;

(b) ordering defendants to carry out their fiduciary

duties to plaintiff and the other members of the Class, includ-

ing those duties of care, loyalty, candor and fair dealing;

relief against the consummation of the Buyout Transaction as

described herein;

(d) in the event the Buyout Transaction is consum-

mated, rescinding the Buyout Transaction effected by defendants

and/or awarding rescissory damages to the Class;

(e) ordering defendants, jointly and severally, to

account to plaintiff and other members of the Class for all

- 8 -
<PAGE> 9
damages suffered and to be suffered by them as the result of

the acts and transactions alleged herein;

(f) awarding plaintiff the costs and disbursements

of the action including allowances for plaintiff's reasonable

attorneys' and experts, fees; and

(g) granting such other and further relief as the

Court may deem just and proper.

ROSENTHAL, MONHAIT, GROSS &
& GODDESS, P.A.

By: /s/
-------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff

OF COUNSEL:

HAROLD B. OBSTFELD, P.C.
500 Fifth Avenue, 56th Floor
New York, NY 10110-0002
(212) 391-4150

- 9 -

<PAGE> 1

EXHIBIT (c)(17)

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY

-----------------------------------x
HANNA OBSTFELD, :
:
Plaintiff, :
:
v. : C.A. No. 15487-NC
:
ROGER H. SALQUIST et al., :
:
Defendants. :
-----------------------------------x
MARGIE ELSTEIN, custodian for :
GARY ELSTEIN, UGMA, :
:
Plaintiff, :
:
v. : C.A. No. 15488-NC
:
MONSANTO COMPANY et al., :
:
Defendants. :
-----------------------------------x
LESLIE SUSSER, :
:
Plaintiff, :
:
v. : C.A. No. 15489-NC
:
LLOYD M. KUNIMOTO et al., :
:
Defendants. :
-----------------------------------x
ALVIN SIEGEL, :
:
Plaintiff, :
:
v. : C.A. No. 15490-NC
:
CALGENE, INC. et al., :
:
Defendants. :
-----------------------------------x

<PAGE> 2

-----------------------------------x
:
F. RICHARD MANSON and ERNEST HACK, :
:
Plaintiffs, :
:
v. : C.A. No, 15491-NC
:
PATRICK J. FORTUNE at al., :
:
Defendants. :
-----------------------------------x
JERE SETTLE, :
:
Plaintiff, :
:
v. : C.A. No. 15493-NC
:
MONSANTO COMPANY et al., :
:
Defendants. :
-----------------------------------x
HOWARD GLICKBERG, :
:
Plaintiff, :
:
v. : C.A. No. 15499-NC
:
MONSANTO COMPANY et al., :
:
Defendants. :
-----------------------------------x
ROBERT LEWIS, :
:
Plaintiff, :
:
v. : C.A. No. 15511-NC
:
MONSANTO COMPANY et al., :
:
Defendants. :
-----------------------------------x

ORDER OF CONSOLIDATION
----------------------

-2-
<PAGE> 3

It appearing that the above-captioned actions involve

the same subject matter, and that the administration of justice

would be best served by consolidating the actions,

IT IS, this 10th day of March, 1997, ORDERED AS

FOLLOWS:

1. The above-captioned actions are hereby consoli-

dated for all purposes.

2. Hereafter, papers need only be filed in Civil

Action No. 15487-NC.

3. The caption of the consolidated action shall be

as follows:

-----------------------------------x
IN RE CALGENE, INC. : CONSOLIDATED
SHAREHOLDERS LITIGATION : C.A. No. 15487-NC
-----------------------------------x

4. The law firms of ABBEY, GARDY & SQUITIERI, LLP,

212 East 39th Street, New York, NY 10016; BEIGEL LASKY RIFKIND

FERTIK GELBER & WHITE, 750 Lexington Avenue, 30th Floor, New

York, NY 10022; CHIMICLES, JACOBSEN & TIKELLIS, One Rodney

Square, P.O. Box 1035, Wilmington, DE 19899; FARUQI & FARUQI,

LLP, 415 Madison Avenue, New York, NY 10017; GILMAN AND PASTOR,

One Boston Place, 28th Floor, Boston, MA 02108; GOODKIND

LABATON RUDOFF & SUCHAROW, LLP, 100 Park Avenue, 12th Floor,

New York, NY 10017; HAROLD B. OBSTFELD, P.C., 500 Fifth Avenue,

56th Floor, New York, NY 10110-0002; LAW OFFICES OF CHARLES J.

-3-

<PAGE> 4

PIVEN, 111 S. Calvert Street, Suite 2700, Baltimore, MD 21202;

WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP, 270 Madison Avenue,

New York, NY 10016; and WOLF POPPER LLP, 845 Third Avenue, New

York, NY 10022 shall constitute plaintiffs' Committee of the

Whole. The law firms of ABBEY, GARDY & SQUITIERI, LLP;

GOODKIND LABATON RUDOFF & SUCHAROW, LLP; and WOLF POPPER LLP

shall constitute plaintiffs' Co-Lead Counsel. The law firms of

CHIMICLES, JACOBSEN & TIKELLIS and ROSENTHAL, MONHAIT, GROSS &

GODDESS, P.A., Suite 1401, Mellon Bank Center, P.0. Box 1070,

Wilmington, DE 19899 are hereby designated as plaintiffs'

Delaware Co-Liaison Counsel.

5. All documents previous served and filed to date

in any of the cases consolidated herein are deemed a part of

the record in the consolidated action. As soon as practicable,

plaintiffs shall file a consolidated amended complaint. Defen-

dants need not respond to the complaints heretofore filed in

any of the constituent actions.

6. Plaintiffs' Co-Lead Counsel shall set policy for

plaintiffs for the prosecution of this litigation, delegate and

monitor the work performed by the plaintiffs' attorneys to en-

sure that there is no duplication of effort or unnecessary ex-

pense, coordinate on behalf of plaintiffs the initiation and

-4-
<PAGE> 5

conduct of discovery proceedings, conduct settlement negotia-

tions, and provide supervision and coordination of the activi-

ties of plaintiffs' counsel.

/s/ William T. Allen
----------------------------
Chancellor

-5-

<PAGE> 1
EXHIBIT (c)(19)

MEMORANDUM OF UNDERSTANDING

The parties to the consolidated action entitled In re Calgene, Inc.

Shareholders Litigation, Civil Action No. 15487-NC (the "Action"), pending in

the Court of Chancery for the State of Delaware in and for New Castle County

(the "Chancery Court"), by their respective attorneys, have reached an

agreement in principle providing for the settlement of the Action on the terms

and subject to the conditions set forth below.

1. Monsanto Company ("Monsanto") currently owns approximately 54.55%

of the outstanding common stock of Calgene, Inc. ("Calgene"). On January 28,

1997, Monsanto announced that it had offered to buy all of the remaining

outstanding shares of Calgene not owned by Monsanto (the "Minority Shares") for

$7.25 per share. Following commencement of the Action, plaintiffs' counsel

retained a financial expert, obtained relevant documents from defendants and

engaged in discussions with counsel for the Special Committee of Calgene's

Board of Directors and counsel for Monsanto with regard to resolution of the

Action. To resolve the Action, Monsanto will seek to acquire the Minority

Shares by means of a first-step tender offer and a second-step merger at a

price, in each step, of $8.00 per share in cash in lieu of the $7.25 per share

proposal made by Monsanto. Monsanto will not, without the consent of the

Special Committee of Calgene Board of Directors, accept for payment any shares

tendered pursuant to the tender
<PAGE> 2

offer unless at least a majority of the Minority Shares are tendered

and not withdrawn prior to the expiration of the tender offer.

2. The parties to the Action will attempt in good

faith to agree upon and execute a definitive Stipulation of

Settlement and such other documentation as may be required in

order to obtain approval by the Chancery Court of the settle-

ment upon the terms set forth in this Memorandum of Understand-

ing. The Stipulation of Settlement will expressly provide,

inter alia, that defendants have denied, and continue to deny,
----- ----
that they have committed or have threatened to commit any vio-

lations of law and that they are entering into the Stipulation

because the proposed settlement would eliminate the burden and

expense of further litigation and would facilitate the consum-

mation of a transaction which is in the best interests of Cal-

gene and all of its shareholders. The Stipulation of Settle-

ment will further provide that the defendants considered the

Action, the allegations made by plaintiffs therein and the dis-

cussions with plaintiffs' counsel, in agreeing to the increased

consideration to be offered by Monsanto for the Minority

Shares.

3. The parties to the Action will present the set-

tlement to the Chancery Court for approval as soon as practi-

cable following appropriate notice to the Calgene shareholders

on whose behalf the Action was instituted, and will use

-2-
<PAGE> 3

their best efforts to obtain final Court approval of the settlement

and the dismissal of the Action with prejudice as to all claims

asserted in the Action an against the named plaintiffs and the

class of Calgene shareholders on whose behalf the Action was

brought and without costs to any party (except as provided for

in paragraph 6 below).

4. The consummation of the settlement is subject to

the completion by plaintiffs of any additional necessary dis-

covery satisfactory to plaintiffs, the drafting and execution

of a definitive Stipulation of Settlement and such other docu-

mentation as may be required to obtain final Court approval of

the settlement, and the dismissal of the Action with prejudice

and without costs to any party (except as provided for in para-

graph 6 below).

5. The settlement contemplated by this Memorandum

of Understanding will not be binding upon any party until the

transaction referred to in paragraph 1 has been consummated,

discovery referred to in paragraph 4 above has been completed,

a definitive Stipulation of Settlement has been signed and

final Court approval of the settlement and the dismissal of the

Action with prejudice and without costs (except as provided for

in paragraph 6 below) has been obtained. This Memorandum of

Understanding shall be null and void and of no force and effect

should any of these conditions not be met or should counsel for

any of the parties determine that, based upon discovery or sub-

-3-
<PAGE> 4

sequent events, the settlement is not fair and reasonable and,

in that event, this Memorandum of Understanding shall not be

deemed to prejudice in any way the positions of the parties

with respect to the Action.

6. Plaintiffs' counsel intend to apply to the Court

for an award of attorneys' fees and reasonable disbursements,

including expert fees, in an amount not to exceed $795,000.

Defendants will not oppose such application. Subject to the

terms and conditions of this Memorandum of Understanding, the

consummation of the transaction and the Stipulation of Settle-

ment contemplated by paragraphs 2 and 5 above, Monsanto will

pay plaintiffs' counsel such amounts within such limit as may

be awarded by the Chancery Court. Monsanto shall pay the costs

-4-
<PAGE> 5

and expenses related to providing notice of the settlement to

Calgene shareholders.

Dated: New York, New York
March 31, 1997

ABBEY, GARDY & SQUITIERI, LLP
-and-

GOODKIND LABATON RUDOFF &
SUCHAROW, LLP
-and-

WOLF POPPER LLP

By: /s/ Arthur Abbey
---------------------------
Arthur Abbey
Plaintiffs' Co-Lead Counsel

-5-