<PAGE> 1
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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-2516
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MONSANTO COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-0420020
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
800 NORTH LINDBERGH BLVD., ST. LOUIS, MISSOURI 63167
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
(314) 694-1000
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING TWELVE MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
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INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
OUTSTANDING AT
CLASS SEPTEMBER 30, 1997
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COMMON STOCK, $2 PAR VALUE 592,986,510 SHARES
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<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Statement of Consolidated Income of Monsanto Company and subsidiaries
for the three months and nine months ended September 30, 1997 and 1996, the
Statement of Consolidated Financial Position as of September 30, 1997 and
December 31, 1996, the Statement of Consolidated Cash Flow for the nine months
ended September 30, 1997 and 1996 and related Notes to Financial Statements
follow. In the opinion of management, these unaudited consolidated financial
statements contain all adjustments necessary to present fairly the financial
position, results of operations and cash flows for the interim periods
reported.
Unless otherwise indicated by the context, "Monsanto" means Monsanto
Company and consolidated subsidiaries, and "the Company" means Monsanto
Company only.
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME
(DOLLARS IN MILLIONS, EXCEPT PER SHARE)
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------- ----------------
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net Sales................................................................. $1,724 $1,442 $5,694 $4,901
Costs and Expenses:
Cost of Goods Sold........................................................ 685 613 2,342 2,007
Selling, General and Administrative Expenses.............................. 512 429 1,466 1,355
Technological Expenses.................................................... 264 192 718 494
Acquired In-Process Research & Development................................ 436 609
Amortization of Intangible Assets......................................... 43 32 114 94
------ ------ ------ ------
Operating Income (Loss)................................................... (216) 176 445 951
Interest Expense.......................................................... (42) (29) (111) (94)
Interest Income........................................................... 13 14 36 39
Other Income (Expense)--Net............................................... (28) (27) (1) 1
------ ------ ------ ------
Income (Loss) from Continuing Operations Before Income Taxes.............. (273) 134 369 897
Income Taxes.............................................................. (106) 27 80 252
------ ------ ------ ------
Income (Loss) from Continuing Operations.................................. (167) 107 289 645
Income from Discontinued Operations....................................... 34 63 176 150
------ ------ ------ ------
Net Income (Loss)......................................................... $ (133) $ 170 $ 465 $ 795
------ ------ ------ ------
Earnings (Loss) per Share:
Continuing Operations................................................... $(0.28) $ 0.18 $ 0.47 $ 1.08
Discontinued Operations................................................. 0.05 0.10 0.29 0.25
------ ------ ------ ------
Total................................................................. $(0.23) $ 0.28 $ 0.76 $ 1.33
------ ------ ------ ------
Dividends per Share....................................................... $0.160 $0.150 $0.470 $0.438
------ ------ ------ ------
Weighted Average Number of Common and Common Equivalent Shares (in
millions)............................................................... 609.6 597.9
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</TABLE>
1
<PAGE> 3
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(DOLLARS IN MILLIONS, EXCEPT PER SHARE)
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.................................................. $ 184 $ 166
Trade receivables, net of allowances of $52 in 1997 and $47 in 1996........ 2,176 1,515
Miscellaneous receivables and prepaid expenses............................. 488 286
Deferred income tax benefit................................................ 306 282
Inventories................................................................ 1,187 1,183
Chemicals Discontinued Operations.......................................... 908
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Total Current Assets............................................... 4,341 4,340
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Property, Plant and Equipment.................................................. 4,570 4,428
Less Accumulated Depreciation.................................................. 2,307 2,333
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Net Property, Plant and Equipment.......................................... 2,263 2,095
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Investments in Affiliates...................................................... 319 257
Intangible Assets, net of accumulated amortization............................. 2,685 2,166
Other Assets................................................................... 767 664
Non-Current Assets--Chemicals Discontinued Operations.......................... 1,715
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Total Assets................................................................... $10,375 $11,237
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LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities:
Accounts payable........................................................... $ 420 $ 479
Accrued liabilities........................................................ 1,268 1,431
Short-term debt............................................................ 2,060 654
Chemicals Discontinued Operations.......................................... 837
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Total Current Liabilities.......................................... 3,748 3,401
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Long-Term Debt................................................................. 1,507 1,608
Deferred Income Taxes.......................................................... 149 102
Postretirement Liabilities..................................................... 668 594
Other Liabilities.............................................................. 340 509
Non-Current Liabilities--Chemicals Discontinued Operations..................... 1,333
Shareowners' Equity:
Common stock (authorized, 850,000,000 shares, par value $2)
Issued, 821,970,970 shares in 1997 and 1996............................ 1,644 1,644
Additional contributed capital......................................... 199 65
Treasury stock, at cost (228,984,460 shares in 1997
and 237,594,831 shares in 1996)...................................... (2,584) (2,661)
Reserve for ESOP debt retirement........................................... (123) (174)
Net unrealized investment holding gains.................................... 9 11
Accumulated currency adjustment............................................ (166) 10
Reinvested earnings........................................................ 4,984 4,795
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Total Shareowners' Equity.......................................... 3,963 3,690
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Total Liabilities and Shareowners' Equity...................................... $10,375 $11,237
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</TABLE>
2
<PAGE> 4
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOW
(DOLLARS IN MILLIONS)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1997 1996
---- ----
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Operating Activities:
Income from Continuing Operations...................................................... $ 289 $ 645
Add income taxes--continuing operations................................................ 80 252
------ ------
Income from continuing operations before income taxes.................................. 369 897
Adjustments to reconcile to Cash Provided by Continuing Operations:
Income tax payments................................................................ (109) (244)
Items that did not use (provide) cash:
Depreciation and amortization expense.......................................... 350 296
Acquired in-process research and development expense........................... 609
Other.......................................................................... (104) 20
Working capital changes that provided (used) cash:
Accounts receivable............................................................ (662) (566)
Inventories.................................................................... 50 6
Accounts payable and accrued liabilities....................................... (166) (20)
Other.......................................................................... (63) 29
Other items........................................................................ (173) 51
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Cash Provided by Continuing Operations..................................................... 101 469
Cash Provided by (Used in) Discontinued Operations......................................... (109) 141
------ ------
Total Cash Provided by (Used in) Operations................................................ (8) 610
Investing Activities:
Property, plant and equipment purchases................................................ (458) (308)
Seed company acquisitions and investments.............................................. (1,237) (163)
Other acquisitions and investments..................................................... (358) (463)
Investments and property disposal proceeds............................................. 16 150
Discontinued Operations................................................................ (44) (148)
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Cash Used in Investing Activities.......................................................... (2,081) (932)
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Financing Activities:
Net change in short-term financing..................................................... 2,406 489
Long-term debt proceeds................................................................ 13 115
Long-term debt reductions.............................................................. (97) (164)
Treasury stock purchases............................................................... (253)
Dividend payments...................................................................... (276) (255)
Common stock issued under employee stock plans......................................... 97 123
Cash transferred to Solutia............................................................ (75)
Other financing activities............................................................. 39 92
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Cash Provided by Financing Activities...................................................... 2,107 147
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Increase (Decrease) in Cash and Cash Equivalents........................................... 18 (175)
Cash and Cash Equivalents:
Beginning of year...................................................................... 166 297
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End of period.......................................................................... $ 184 $ 122
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The effect of exchange rate changes on cash and cash equivalents was not material.
</TABLE>
3
<PAGE> 5
MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS)
1. In December 1996, the Board of Directors ("Board") approved a plan to
spin off the company's chemicals business to shareowners by means of the
distribution of shares of a newly-formed, wholly-owned subsidiary, later named
Solutia Inc. ("Solutia"). Effective August 12, 1997, the Board declared a
dividend on September 1, 1997, to shareowners of record on August 20, 1997 of
one share of Solutia common stock and one preferred share purchase right of
Solutia for every five shares of Monsanto common stock, subject to certain
conditions, including shareholder approval. Shareowners approved the spin off
at a special meeting held August 18, 1997, and the spin off became effective
September 1, 1997.
As a result of the spin off, Monsanto's financial statements have been
restated to present the results of operations, cash flows and financial
position of the chemicals business as discontinued operations. Discontinued
operations also include certain other operations of the company's chemicals
business which have been sold. Operating results for discontinued operations
were:
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------- -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales...................... $487 $734 $1,943 $2,158
---- ---- ------ ------
Income Before Income Taxes..... $ 50 $ 97 $ 266 $ 239
Income Taxes................... 16 34 90 89
---- ---- ------ ------
Net Income..................... $ 34 $ 63 $ 176 $ 150
</TABLE>
Interest expense of $10 million and $14 million for the third quarter of
1997 and 1996, respectively, and $39 million and $40 million for the nine
months ended September 30, 1997 and 1996, respectively, has been allocated to
the operating results of Solutia based on debt assumed by Solutia.
To consummate the spin off, Monsanto contributed certain assets to Solutia,
and Solutia assumed certain liabilities of Monsanto beginning June 1, 1997. In
addition to the assets and liabilities reported in the Statement of Consolidated
Financial Position as discontinued operations as of December 31, 1996, the
assets contributed to Solutia and liabilities assumed by Solutia included a
joint venture interest in Monsanto's elemental phosphorus business, cash of $75
million, short-term debt of $1,000 million, and long-term ESOP notes and
debentures of $29 million. The excess of the liabilities assumed by Solutia over
the assets contributed to Solutia as of September 1, 1997 of approximately $120
million increased Monsanto's shareowners' equity. The amount may be adjusted
based upon the final determination of the net liabilities assumed.
In connection with the spin off, various agreements entered into by the
Company and Solutia allocated responsibility between them for various debts,
liabilities and obligations. These agreements provide that Solutia will
indemnify the Company for the liabilities assumed by Solutia pursuant to such
agreements.
2. In the first quarter of 1997, Monsanto completed the acquisitions of the
Asgrow Agronomics ("Asgrow") seed business from Empresas La Moderna S. A. and
acquired the remaining interest in a Brazilian foundation seed company for a
combined purchase price of approximately $250 million. The acquisitions were
accounted for as purchases and, accordingly, the results of operations for
these companies were included in the Statement of Consolidated Income from the
dates of acquisition. The estimated fair value of assets acquired and
liabilities assumed totaled approximately $310 million and $60 million,
respectively. The purchase price allocations are based upon preliminary
assumptions and are subject to revision. Monsanto recorded an aftertax charge
of $63 million, or $0.11 per share, in the first quarter of 1997, principally
related to the write-off of acquired research from Asgrow. The amount of this
write-off was determined by an independent valuation. Management believes that
the technological
4
<PAGE> 6
MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
feasibility of the acquired in-process technology has not been established and
that it has no alternative future uses. Accordingly, the amounts allocated to
in-process research and technology are required to be expensed immediately under
generally accepted accounting principles.
In May 1997, Monsanto completed its acquisition of the remaining shares of
Calgene, Inc. ("Calgene") that Monsanto did not already own for $8.00 per
share in cash, or approximately $267 million. In conjunction with this
acquisition, Monsanto recorded a $72 million aftertax charge ($72 million
pretax), or $0.11 per share, in the second quarter of 1997 for acquired
in-process research and development. This charge was not tax effected because
the transaction was a stock acquisition rather than an asset purchase. The
estimated fair value of the assets acquired and liabilities assumed totaled
approximately $300 million and $33 million, respectively. The purchase price
allocations are based upon preliminary assumptions and are subject to revision.
The amount of this write-off was determined by an independent valuation.
Management believes that the technological feasibility of the acquired
in-process technology has not been established and that it has no alternative
future uses. Accordingly, the amounts allocated to in-process research and
technology are required to be expensed immediately under generally accepted
accounting principles.
In September 1997, Monsanto completed the acquisitions of Holden's
Foundation Seeds, Inc. ("Holden's") and Corn States Hybrid Service, Inc.
("Corn States") for a combined purchase price of approximately $1.0 billion.
The acquisitions were accounted for as purchases and, accordingly, the results
of operations for these companies were included in the Statement of
Consolidated Income from the dates of acquisition. The estimated fair value of
assets acquired totaled approximately $1.0 billion. The purchase price
allocations are based upon preliminary assumptions and are subject to revision.
In conjunction with the acquisition, Monsanto recorded an aftertax charge of
$270 million, or $0.45 per share, in the third quarter of 1997 for the write-off
of acquired in-process research and development. The amount of this write-off
was determined by an independent valuation. Management believes that the
technological feasibility of the acquired in-process technology has not been
established and that it has no alternative future uses. Accordingly, the
amounts allocated to in-process research and development are required to be
expensed immediately under generally accepted accounting principles.
3. Earnings per share were computed using the weighted average number of
common shares and common share equivalents outstanding each period (609,574,104
and 597,931,214 in 1997 and 1996, respectively). Common share equivalents
(20,898,878 and 17,642,386 in 1997 and 1996, respectively) consist of common
stock issuable upon exercise of outstanding stock options. Earnings per share
assuming full dilution were not significantly different from the primary
amounts.
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 128, "Earnings per Share" ("FAS 128").
Under this new standard, the presentation of primary and fully diluted earnings
per share required by current standards is replaced by basic and diluted
earnings per share. Basic earnings per share measures operating performance
assuming no dilution from securities or contracts to issue common stock.
Diluted earnings per share measures operating performance giving effect to the
dilution that would occur when securities or contracts to issue common stock
are exercised or converted. This statement is effective for Monsanto for
financial statements issued after December 15, 1997. Pro forma earnings per
share computed under the provisions of FAS 128 would have been:
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic earnings (loss) per share
from continuing operations.............. $(0.29) $0.18 $0.49 $1.11
Diluted earnings (loss) per share
from continuing operations.............. $(0.28) $0.18 $0.47 $1.08
</TABLE>
5
<PAGE> 7
MONSANTO COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Components of inventories at September 30, 1997 and December 31, 1996
were as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
Finished goods................................ $ 575 $ 630
Goods in process.............................. 268 287
Raw materials and supplies.................... 389 333
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Inventories, at FIFO cost..................... 1,232 1,250
Excess of FIFO over LIFO cost................. (45) (67)
------ ------
Total..................................... $1,187 $1,183
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</TABLE>
5. Monsanto is a party to a number of lawsuits and claims, which it is
vigorously defending. Such matters arise out of the normal course of business
and relate to a variety of issues. Certain of the lawsuits and claims seek
damages in very large amounts, or seek to restrict the Company's business
activities. While the results of litigation cannot be predicted with certainty,
management believes, based upon the advice of Company counsel, that the final
outcome of such litigation will not have a material adverse effect on Monsanto's
consolidated financial position, profitability or liquidity in any one year, as
applicable.
6. Segment data for the three months and nine months ended September 30,
1997 and 1996 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------------
1997 1996
------------------------ ------------------------
OPERATING OPERATING
NET INCOME NET INCOME
SALES (LOSS) SALES (LOSS)
----- --------- ----- ---------
<S> <C> <C> <C> <C>
Segment:
Agricultural Products...................... $ 672 $(295) $ 556 $100
Nutrition & Consumer....................... 342 37 336 55
Pharmaceuticals............................ 605 77 498 48
Corporate & Other.......................... 105 (35) 52 (27)
------ ------ ------ ----
Total.......................................... $1,724 $(216) $1,442 $176
------ ------ ------ ----
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------------
1997 1996
------------------------ ------------------------
OPERATING OPERATING
NET INCOME NET INCOME
SALES (LOSS) SALES (LOSS)
----- --------- ----- ---------
<S> <C> <C> <C> <C>
Segment:
Agricultural Products...................... $2,603 $ 268 $2,128 $674
Nutrition & Consumer....................... 1,148 139 1,182 214
Pharmaceuticals............................ 1,633 147 1,430 145
Corporate & Other.......................... 310 (109) 161 (82)
------ ----- ------ ----
Total.......................................... $5,694 $ 445 $4,901 $951
------ ----- ------ ----
</TABLE>
In 1997, Monsanto created a new organizational structure that transferred
various businesses among segments. After the spin off of Solutia on September 1,
1997, the company is reporting under the new organizational structure. Segment
information for 1997 and 1996 has been reclassified to conform to the current
presentation.
Financial information for the first nine months of 1997 and 1996 should not
be annualized. Monsanto's sales and operating income are historically higher
during the first half of the year, primarily because of the concentration of
generally more profitable sales from the Agricultural Products segment in the
first half of the year.
6
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Note 6 of the Notes to Financial Statements indicates operating results by
operating unit, including the concentration of the generally more profitable
sales of Agricultural Products in the first half of the year.
RESULTS OF OPERATIONS--THIRD QUARTER 1997 COMPARED WITH THIRD QUARTER 1996
Monsanto recorded a net loss for the third quarter of 1997 of $133 million,
or $0.23 per share, compared with net income of $170 million, or $0.28 per
share, in the year-ago quarter. The loss from continuing operations for the
third quarter of 1997 was $167 million, or $0.28 per share, compared to income
from continuing operations of $107 million, or $0.18 per share, in the third
quarter of last year. As further discussed in Note 2, third quarter results for
1997 included an aftertax charge of $270 million, or $0.45 per share, for
acquired in-process research and development related to the acquisitions of
Holden's and Corn States. Net sales of $1,724 million were 20 percent higher
than the comparable figure in 1996.
Net sales for Agricultural Products increased 21 percent versus sales for
the same period last year to $672 million. Net sales in the third quarter of
1997 benefited from higher sales volumes of the family of Roundup(R)
herbicides. The increased sales reflected continued strong worldwide demand,
with significant gains in Brazil, Argentina and the United States. The
higher sales in the United States reflected increased applications of
Roundup(R) herbicides on Roundup Ready(R) soybeans and cotton, and the
effect of a sales rebate program targeting fall Roundup(R) applications in
selected markets. In addition, quarterly sales benefited from
the inclusion of Asgrow sales. Operating income for the segment declined $395
million from the prior year. However, as further discussed in Note 2, operating
income included a $436 million pretax charge for acquired in-process research
and development associated with the acquisitions of Holden's and Corn States. If
this charge was excluded, operating income in the third quarter of 1997 would
have increased 41 percent compared to operating income in the third quarter of
1996, primarily due to higher sales and lower manufacturing costs.
Nutrition & Consumer sales of $342 million increased 2 percent versus the
prior-year third quarter as a result of higher aspartame, biogum and algin
sales volumes, partially offset by lower lawn and garden and tabletop sweetener
sales volumes. Operating income for the third quarter of 1997 decreased 33
percent to $37 million primarily as a result of increased technology spending
on new product development and reduced sales of tabletop sweeteners.
Pharmaceutical net sales for the quarter increased $107 million, or 21
percent, versus the third quarter of 1996 to $605 million. The increase in net
sales was primarily the result of sales of certain product rights totaling $49
million and higher sales volumes for key products. Combined third quarter sales
of Ambien(R), a short-term treatment for insomnia, Daypro(R) and Arthrotec(R)
arthritis treatments, and Covera-HS(R) cardiovascular treatment increased 26
percent versus sales of these products in the third quarter of last year.
Operating income in the third quarter of 1997 of $77 million increased $29
million versus the third quarter of 1996, due to higher sales partially offset
by increased technology and marketing expenses. Research and development
spending increased versus the prior-year third quarter as four additional new
product candidates have moved into the later, more expensive phase III clinical
trials. In addition, marketing expenses rose due to preparations for launching
new products in 1998.
Third-quarter 1997 sales for the Corporate & Other segment increased
significantly versus the prior-year quarter primarily due to the inclusion of
sales from Calgene's tomato business in the 1997 period. Monsanto acquired a
controlling interest in Calgene in November 1996. Prior to that time, Calgene
was accounted for as an equity affiliate, and its results were not consolidated.
The segment recorded a third-quarter operating loss of $35 million in 1997
compared to a loss of $27 million in the 1996 third quarter. The increased
operating loss in quarter-to-quarter comparisons was primarily due to increased
spending on growth initiatives.
For Monsanto, technological expenses for the third quarter of 1997 were
higher than the comparable period in 1996, primarily due to the aforementioned
increases in research and development expenses in the Nutrition & Consumer and
Pharmaceuticals segments. The increase in selling, general, and administrative
expenses for Monsanto in the third quarter of 1997 over those in the third
quarter of last year resulted, in part, because of the addition of
administrative expenses associated with Asgrow and Calgene. Expenses for these
businesses were not part of Monsanto's consolidated administrative expense
totals in 1996. In addition, selling, general and administrative expenses
increased due to the aforementioned increase in marketing expenses in the
Pharmaceuticals segment.
7
<PAGE> 9
Interest expense increased $13 million in quarter-to-quarter comparisons due to
a greater amount of short-term debt outstanding. The effective tax rate of 39
percent for the third quarter of 1997 was higher than the comparable period last
year primarily because of the effect of the Holden's acquisition and increased
benefits from the reinstatement of the research and development tax credit.
RESULTS OF OPERATIONS--FIRST NINE MONTHS 1997 COMPARED WITH FIRST NINE MONTHS
1996
Net income for the first nine months of 1997 was $465 million, or $0.76 per
share, versus net income of $795 million, or $1.33 per share, for the
comparable prior-year period. Year-to-date 1997 income from continuing
operations totaled $289 million, or $0.47 per share, compared with income from
continuing operations of $645 million, or $1.08 per share, in the first nine
months of last year. As further discussed in Note 2, results for the first nine
months of 1997 included aftertax charges totaling $405 million, or $0.67 per
share, for acquired in-process research and development, principally related to
the Asgrow, Calgene, Holden's and Corn States acquisitions. Net sales of $5,694
million were 16 percent higher than the comparable figure in 1996.
Net sales for Agricultural Products increased 22 percent to $2,603 million
during the first nine months of 1997 compared to the same period in 1996. The
increase in net sales was primarily the result of higher worldwide sales
volumes of Roundup(R) herbicide. The sales increase also reflected higher sales
of crops developed through biotechnology including Roundup Ready(R) soybeans
and cotton, Bollgard(R) insect-protected cotton and Yieldgard(R) corn. In
addition, year-to-date sales benefited from the inclusion of Asgrow sales.
Year-to-date 1997 operating income decreased $406 million versus results for
the first nine months of 1996. However, as further described in Note 2,
operating income included $558 million of pretax charges for acquired
in-process research and development, primarily associated with the acquisitions
of Asgrow, Calgene's cotton business, Holden's and Corn States. If these
charges were excluded, operating income for the first nine months of 1997 would
have increased $152 million, or 23 percent, compared to the same 1996 period,
primarily due to higher sales and lower manufacturing costs.
Nutrition & Consumer net sales decreased 3 percent in the first nine months
of 1997 versus the comparable 1996 period primarily due to lower sales volumes
of tabletop sweeteners. These decreases were partially offset by higher sales
volumes of biogum products. Year-to-date 1997 operating income decreased $75
million, or 35 percent, compared to the same period last year. However, as
further described in Note 2, operating income included $51 million of pretax
charges for acquired in-process research and development associated with the
acquisition of Calgene's oils business. Operating income for the first nine
months of 1997 was also negatively affected by lower sales volumes and
increased technology spending associated with new product development.
Pharmaceuticals' net sales for the first nine months of 1997 increased $203
million, or 14 percent, over net sales in the same period last year. The
increase is primarily attributable to higher sales volumes of Ambien(R),
Daypro(R) and Arthrotec(R). In the first nine months of 1997, sales of these
products increased 22 percent over sales for the same period in 1996. Sales
also benefited from the sale of certain product rights totaling $49 million.
Operating income for the first nine months of 1997 was essentially flat. The
effect of higher sales was offset by increased research and development
expenses, associated with new product candidates advancing to later and more
expensive phases of development, and higher marketing expenses, related to
preparations for launching new products in 1998. In addition, operating income
in the first nine months of last year benefited from cost-sharing alliances.
Year-to-date 1997 sales for the Corporate & Other segment increased
significantly versus the first nine months of 1996 primarily due to the
inclusion of sales from Calgene's tomato business in the 1997 period. Monsanto
acquired a controlling interest in Calgene in November 1996. Prior to that
time, Calgene was accounted for as an equity affiliate, and its results were
not consolidated. The segment recorded an operating loss of $109 million for
the nine months ending September 30, 1997, compared to a loss of $82 million in
the year-ago period. The increased operating loss was primarily due to
increased spending on growth initiatives.
For Monsanto, technological expenses for the first nine months of 1997 were
higher than the comparable period in 1996, primarily because of increased
research and development expenses in all segments, particularly Pharmaceuticals.
Year-to-date 1997 interest expense increased $17 million versus the year-ago
nine-month period due to a greater amount of short-term debt outstanding. The
effective tax rate of 22 percent for the first nine months of 1997 was lower
than the same period last year primarily due to the reinstatement of the
research and development tax credit.
8
<PAGE> 10
CHANGES IN FINANCIAL CONDITION--SEPTEMBER 30, 1997 COMPARED WITH DECEMBER 31,
1996
Working capital at September 30, 1997 decreased to $593 million from $939
million at December 31, 1996, primarily because of an increase in short-term
debt partially offset by a seasonal increase in trade receivables. The current
ratio was 1.2 at September 30, 1997 and 1.3 at year-end 1996. The percent of
total debt to total capitalization increased to 47 percent at September 30,
1997 versus 38 percent at year-end 1996, primarily because of the increase in
short-term debt. The increase in intangible assets at September 30, 1997 was
primarily due to the Holden's acquisition.
Cash provided by continuing operations totaled a net $101 million for the
nine months ended September 30, 1997, compared with $469 million for the same
1996 period. The decrease in cash flow from continuing operations resulted
primarily from higher sales-related working capital requirements for
Agricultural Products and significantly higher payouts associated with employee
incentive programs. The increased incentive payouts included the final payment
of certain deferred amounts related to the third year of a three-year incentive
plan. Investing activities in 1997 used $2.1 billion, principally for the
acquisitions of Asgrow, Calgene, Holden's and Corn States. The increase in
short-term financing was primarily used to finance acquisition activity and
higher working capital levels for Agricultural Products.
9
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company's Report on Form 10-K for the year ended December 31, 1996, and
the Company's Report on Form 10-Q for the quarter ended March 31, 1997,
described a number of product liability lawsuits arising out of sales by G. D.
Searle & Co. ("Searle"), a subsidiary of the Company acquired in 1985, of the
Cu-7(R), an intrauterine device. As of May 1, 1997, there were approximately
seven cases pending in various U.S. state and federal courts and approximately
400 cases filed outside the United States (the vast majority in Australia).
The Company's Report on Form 10-K for the year ended December 31, 1996,
described a number of related actions brought in federal and/or state court,
against Searle and numerous other defendants, based on the practice of
providing discounts or rebates to managed-care organizations and certain other
large purchasers. An agreement reached by several defendants, not including
Searle, to settle the federal class action case, was approved by the trial
judge on June 21, 1996. Though certain members of the class objected to the
settlement and appealed, the U.S. Court of Appeals for the Seventh Circuit
denied the appeal and finalized the settlement on May 30, 1997.
The Company's Report on Form 10-Q for the quarter ended March 31, 1997,
described a Notice of Violation issued by the Georgia Environmental Protection
Division ("EPD") alleging certain violations by the Company. EPD originally
proposed a penalty in the amount of $615,000, but has since reduced the amount
to $220,000. The parties are still in the process of negotiating a final
settlement.
The Company's Report on Form 10-K for the year ended December 31, 1996, and
its report on Form 10-Q for the quarter ended June 30, 1997, described a number
of lawsuits relating to the Brio Superfund site near Houston, Texas, and to the
Company's former plant site in Anniston, Alabama. In connection with the
spin off of the Company's chemicals business as described in Note 1 of the Notes
to Financial Statements, Solutia has assumed the liabilities for these legal
proceedings. As a result, although the Company remains the named defendant,
Solutia is now responsible for these proceedings and will indemnify the Company
for costs, expenses and judgments arising from this litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Special Meeting of stockholders on August 18, 1997, four
matters were submitted to a vote of stockholders.
1. A proposal to approve the spin off of the Company's chemicals business
was submitted to a vote of stockholders. The Board recommended a vote for the
proposal. A total of 412,705,860 votes were cast in favor of this proposal, a
total of 12,069,851 votes were cast against it, 3,552,008 votes were counted as
abstentions, and 47,091,462 were counted as broker non-votes.
2. A proposal to amend the Company's Restated Certificate of Incorporation
was submitted to a vote of stockholders. The Board recommended a vote for the
proposal. A total of 316,849,705 votes were cast in favor of this proposal, a
total of 106,008,812 votes were cast against it, 5,453,304 votes were counted
as abstentions, and 47,107,360 were counted as broker non-votes.
10
<PAGE> 12
3. The following directors were elected to the following classified terms
(or until a successor is elected and has qualified):
<TABLE>
<CAPTION>
VOTES
VOTES "WITHHOLD
NAME "FOR" AUTHORITY"
<S> <C> <C>
FOR TERM EXPIRING AT THE 1999 ANNUAL MEETING:
Robert B. Shapiro 432,932,801 42,486,380
Robert M. Heyssel 433,131,734 42,287,447
Philip Leder 431,589,292 43,829,889
Jacobus F. M. Peters 433,081,826 42,337,355
FOR TERM EXPIRING AT THE 2000 ANNUAL MEETING:
Michael Kantor 431,524,573 43,894,608
Gwendolyn S. King 432,859,399 42,559,782
John S. Reed 398,922,511 76,496,670
</TABLE>
The following directors are continuing current terms expiring at the 1998
Annual Meeting: Nicholas L. Reding, John E. Robson and William D. Ruckelshaus.
4. A proposal to amend the Monsanto Management Incentive Plan of 1996 was
submitted to a vote of stockholders. The Board recommended a vote for the
proposal. A total of 365,682,473 votes were cast in favor of this proposal, a
total of 102,527,543 votes were cast against it, 7,209,165 votes were counted
as abstentions.
Brokers were permitted to vote on the election of directors and on the
proposal to amend the Monsanto Management Incentive Plan of 1996 in the absence
of instructions from street-name holders; therefore there were no broker
non-votes with respect to those matters.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits--See the Exhibit Index at page 13 of this report.
(b) Report on Form 8-K during the quarter ended September 30, 1997:
A Form 8-K as of September 1, 1997, was filed by the Company regarding the
spin off of the Company's chemicals business to its stockholders, by means of
the distribution of shares of a newly-formed, wholly-owned subsidiary named
Solutia Inc.
11
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONSANTO COMPANY
-------------------------------------
(Registrant)
MICHAEL R. HOGAN
-------------------------------------
Vice President and Controller
(On behalf of the Registrant and
as Principal Accounting Officer)
Date: November 14, 1997
12
<PAGE> 14
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<C> <S>
2 1. Distribution Agreement by and between Monsanto Company and Solutia Inc., as of September 1,
1997, plus identification of contents of omitted schedules and exhibits and agreement to furnish
supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission
upon request (incorporated herein by reference to Exhibit 2.1 of the Company's Form 8-K filed
September 16, 1997)
3(i) Restated Certificate of Incorporation of Monsanto Company, as of October 28, 1997
(ii) Monsanto Company By-Laws, as amended September 26, 1997
4 Omitted--Inapplicable
10 1. Employee Benefits and Compensation Allocation Agreement between Monsanto Company and Solutia
Inc., dated as of September 1, 1997 (incorporated herein by reference to Exhibit 99.1 of the
Company's Form 8-K filed September 16, 1997)
2. Tax Sharing and Indemnification Agreement dated as of September 1, 1997, by and between Monsanto
Company and Solutia Inc. (incorporated herein by reference to Exhibit 99.2 of the Company's Form
8-K filed September 16, 1997)
3. Monsanto Company Non-Employee Director Deferred Compensation Plan
4. Monsanto Company Non-Employee Director Equity Incentive Compensation Plan
5. Excerpt of Resolutions of Monsanto Company Board of Directors Regarding Directors' Compensation,
adopted by Unanimous Consent effective August 4, 1997
6. Monsanto Management Incentive Plan of 1996 as amended April 25, 1997, July 25, 1997 and August
18, 1997
7. Form of Employment Agreement for Executive Officers
11 Omitted--Inapplicable; see Note 3 of Notes to Financial Statements on page 5
15 Omitted--Inapplicable
18 Omitted--Inapplicable
19 Omitted--Inapplicable
22 Omitted--Inapplicable
23 Consent of Company Counsel
24 Omitted--Inapplicable
27 Financial Data Schedule
99 Computation of the Ratio of Earnings to Fixed Charges for Monsanto Company and Subsidiaries
</TABLE>
13
<PAGE> 1
RESTATED
CERTIFICATE OF INCORPORATION
OF
MONSANTO COMPANY
Monsanto Company, a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:
1. The name of the Corporation is Monsanto Company and the name
under which the Corporation was originally incorporated was Monsanto Chemical
Company. The date of filing its original Certificate of Incorporation with
the Secretary of State was April 19, 1933.
2. This Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the Certificate of
Incorporation of this Corporation as heretofore amended or supplemented and
there is no discrepancy between those provisions and the provisions of this
Restated Certificate of Incorporation.
3. The text of the Certificate of Incorporation, as amended or
supplemented heretofore, is hereby restated without further amendments or
changes to read as herein set forth in full:
ARTICLE I: NAME
The name of the Corporation shall be Monsanto Company.
ARTICLE II: PRINCIPAL OFFICE AND AGENT
The principal office of the Corporation in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle, and the name and address of its resident agent
is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware.
ARTICLE III: OBJECTS AND PURPOSES
The nature of the business of the Corporation or objects or purposes
proposed to be transacted, promoted or carried on by the Corporation are as
follows:
To manufacture, compound, refine, buy, sell and in every other way deal
in the following: chemicals and allied products, petroleum, electronics,
nucleonics, textiles and compounds and products of all types produced from
any of the foregoing, either alone or in conjunction with other materials; to
conduct scientific
<PAGE> 2
and technological research; and to perform other activities and functions
related to any of the foregoing.
To refine, market, distribute and transport crude oil, or petroleum and
all of its products; to locate, purchase, lease, sublease, develop, or
otherwise acquire, and to sell, mortgage or otherwise dispose of, lands
containing or believed to contain petroleum, oil, natural gas, and any other
mineral, whether similar or dissimilar, or any one or more of them, and to
drill or prospect for or produce the same; to purchase, lease, or otherwise
acquire, and to sell, mortgage or otherwise dispose of, developed or
producing oil, gas and other mineral properties or the products of such oil,
gas and other minerals; to purchase, produce, refine, sell and distribute
petroleum, gas and other minerals, and all of the products and by-products
thereof; to buy, sell or otherwise dispose of, and manufacture all kinds of
illuminating, burning and heating oils, and gasoline, naphtha, lubricants,
greases, waxes and all other products and by-products of petroleum; to act as
broker or agent for others in all of said acts.
To construct, build, purchase, acquire, own, equip, maintain, operate,
mortgage, or create liens upon, turn to account, lease, sell, convey or
otherwise dispose of, any and all real estate, houses, factories, refineries,
mills, smelters, buildings or construction of any nature, plants,
manufactories machinery works, tanks, tank cars, reservoirs, docks, piers,
wharves, bulkheads, heat, light and power installations, roads, trams,
railroads, spur tracks, loading racks, ditches, flumes, steamboats, vessels,
pipelines, pumping stations and any other means or methods of land or water
transportation, bridges, canals, storage works, water works and
appurtenances, appliances and conveniences thereto of every kind and
character whatsoever, to the extent that the same are or may be authorized by
the statutes under which this Corporation is incorporated and by the laws of
any jurisdiction wherein any such works are located.
To manufacture, refine, reduce, treat, separate, convert, store,
transport, buy, sell, distribute, trade and deal in, and otherwise turn to
account, all grades and kinds of asphaltum, petroleum and petroleum
distillates, natural and artificial gas, casinghead gasoline, sulphur,
paints, oils, dyes, varnishes, carbon and hydrocarbon products and all other
substances of every nature whatsoever, whether the same be by-products of the
business specified herein, or otherwise, and whether the same be in crude or
in manufactured or refined forms, which the Corporation may advantageously
manufacture, trade, or otherwise deal in, in connection with the conduct of
the business as specified herein.
To design, construct, build, purchase, equip, own, control, operate,
maintain, sell, lease and otherwise acquire or dispose of filling stations of
every kind, nature and description, and in connection therewith to purchase,
sell, vend, distribute and generally deal in and with, either at wholesale or
retail, or both, gasoline, kerosene, fuel oil, lubricating oils, greases and
automobile supplies and accessories of all kinds.
2
<PAGE> 3
To manufacture fuel, power producing, illuminating, and all other kinds
of gas from coal, petroleum, maltha, asphaltum and from any other substances
of any nature from which gas may be produced either under any existing
process or any process hereafter discovered, and to supply the same for fuel,
power, lighting and any and all other purposes of every nature whatsoever
both to public and private consumers.
To acquire, own and operate such machinery, apparatus and appliances as
may be necessary, proper or incidental to the mining, production and
development of lands for petroleum, oil, natural gas and other minerals, or
for any of the purposes for which this Corporation is organized.
To manufacture, purchase or otherwise acquire, own, mortgage, pledge,
sell, assign and transfer, or otherwise dispose of, to invest, trade, deal in
and deal with goods, wares and merchandise and real and personal property of
every class and description.
To acquire, and pay for in cash, stock or bonds of this Corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of, letters patent of the United States or
any foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trade marks and trade names, relating
to or useful in connection with any business of this Corporation.
To guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge
or otherwise dispose of shares of the capital stock of, or any bonds,
securities or evidences of indebtedness created by any other corporation or
corporations organized under the laws of this state or any other state,
country, nation or government, and while the owner thereof to exercise all
the rights, powers and privileges of ownership, including the right vote
thereon.
To enter into, make and perform contracts of every kind and description
with any person, firm, association, corporation, municipality, county, state,
body politic or government or colony or dependency thereof.
To borrow or raise moneys for any of the purposes of the Corporation
and, from time to time, without limit as to amount, to draw, make, accept,
endorse,
3
<PAGE> 4
execute and issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures and other negotiable or non-negotiable instruments and evidences of
indebtedness, and to secure the payment of any thereof and of the interest
thereon by mortgage upon or pledge, conveyance or assignment in trust of the
whole or any part of the property of the Corporation, whether at the time owned,
or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds
or other obligations of the Corporation for its corporate purposes.
To purchase, hold, sell, and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the purchase of
its own shares of capital stock when such use would cause any impairment of
its capital except as otherwise permitted by law, and provided further that
shares of its own capital stock belonging to it shall not be voted upon
directly or indirectly.
To make donations for the public welfare or for charitable, scientific
or educational purposes.
To have one or more offices, to carry on all or any of its operations
and business and without restriction or limit as to amount to purchase or
otherwise acquire, hold, own, mortgage, sell, convey, or otherwise dispose of
real and personal property of every class and description in any of the
States, Districts, Territories or Colonies of the United States, and in any
and all foreign countries, subject to the laws of such State, District,
Territory, Colony or Country.
In general, to carry on the foregoing or any other business in
connection with the foregoing, directly in the name of this Corporation or
indirectly through subsidiaries or affiliates, and to have and exercise all
the powers conferred by the laws of Delaware upon corporations formed under
the act herein referred to, and to do any or all of the things hereinbefore
set forth to the same extent as natural persons might or could do.
The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
Certificate of Incorporation, but the objects and purposes specified in each
of the foregoing clauses of this article shall be regarded as independent
objects and purposes.
ARTICLE IV: CAPITAL STOCK
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1,010,000,000 shares, to be
divided into two classes consisting of (a) ten million (10,000,000) shares of
preferred stock without par value (hereinafter designated "Preferred Stock"),
and (b) one billion (1,000,000,000)
4
<PAGE> 5
shares of common stock of a par value of $2 per share (hereinafter designated
"Common Stock").
SECTION I
PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more
series with such distinctive serial designations, at such price or prices and
for such other consideration as may be fixed by the Board of Directors. The
Preferred Stock of all series shall be in all respects entitled to the same
preferences, rights and privileges and subject to the same qualifications,
limitations and restrictions, except that different series of Preferred Stock
may vary with respect to those provisions as shall be determined and fixed by
the Board of Directors as hereinafter provided in this Section I. All the
shares of any one series shall be alike in every particular. In no event
shall any share of any series of Preferred Stock be entitled to more than one
vote.
The Board of Directors is hereby expressly empowered, subject to the
other provisions of this Article IV, to determine and fix by resolution or
resolutions providing for the issuance of such series:
(a) The number of shares to constitute each such series and the
designation thereof;
(b) The voting powers, full, limited or contingent, if any, to which
holders of shares of any series of Preferred Stock shall be entitled;
(c) The dividend rate or rates, the conditions and dates upon which
such dividends shall be payable, the relation which such dividends shall bear
to the dividends payable on any other class or classes or series of stock,
and whether such dividends shall be cumulative or non-cumulative;
(d) Whether or not the shares of such series shall be redeemable and,
if redeemable, the redemption price and the terms and conditions thereof;
(e) The amount, if any, which the shares of any such series shall be
entitled to receive before any distribution or payment shall be made to
holders of the Common Stock, in the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or
involuntary, or of any proceedings resulting in any distribution of all, or
substantially all, of its assets to its stockholders; provided, however, that
the sale of all, or substantially all, of the property and assets of the
Corporation to, or the merger or consolidation of the Corporation into or
with, any other company shall not be deemed to be a
5
<PAGE> 6
liquidation, dissolution or winding up within the meaning of this subdivision
(e);
(f) Whether or not the shares of such series shall be subject to the
operation of retirement or sinking funds to be applied to the purchase or
redemption of such shares and, if such funds are established, the annual
amount thereof and the terms and provisions relative to the operation
thereof;
(g) Whether or not the shares of such series shall be convertible into,
or exchangeable for, shares of any other class or classes or of any other
series of the same or any other class of stock of the Corporation and, if
convertible or exchangeable, the conversion price or prices or rate or rates
of conversion or exchange and such other terms and conditions of conversion
or exchange as shall be stated in said resolution or resolutions; and
(h) Such other designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions thereof as it may deem advisable and as shall be stated in said
resolution or resolutions.
SECTION II
PROVISIONS APPLICABLE TO ALL CLASSES OF STOCK
Each holder of Common Stock shall have one vote on all matters voted
upon by stockholders for each share of such stock held by him. Except as
otherwise expressly provided by law or by the Board of Directors pursuant to
Section I of this Article IV, the holders of Common Stock shall have the sole
voting power. No holder of any of the shares of the capital stock of the
Corporation shall be entitled as of right to purchase or subscribe for any
unissued or reacquired stock of any class, or any additional shares of any
class to be issued by reason of any increase of any class of the authorized
capital stock of the Corporation, or any securities convertible into stock of
any class, but any such unissued or reacquired stock or such additional
authorized issue of any stock or issue of convertible securities may be
issued and disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, and upon such terms as may
be deemed advisable by the Board of Directors in the exercise of its
discretion.
If it seems desirable so to do, the Board of Directors of the
Corporation may from time to time issue scrip for fractional shares of stock.
Such scrip shall not confer upon the holder thereof any right to dividends or
any voting or other rights of a stockholder of the Corporation; but the
Corporation shall from time to time, within such time as the Board of
Directors may determine, or without limit of time if the Board of Directors
so determines issue one or more whole shares of stock upon the surrender of
scrip for fractional shares aggregating the number of whole shares issuable
in respect of the scrip so surrendered provided that the scrip so
6
<PAGE> 7
surrendered shall be properly endorsed for transfer if in registered form.
The scrip may also, at the option of the Board of Directors, provide
that at the option of the Board of Directors there may be sold by the
Corporation at public or private sale at any time on or after any determined
date, in such manner and on such terms as the Board of Directors may in its
absolute discretion determine, the number of shares of stock of the
Corporation in respect of which such scrip certificates are then outstanding,
and thereafter and until an expiration date fixed by the Board of Directors
the bearers of such scrip certificates, upon surrender thereof at the office
or agency of the Corporation, shall be entitled to receive their proper
proportion of the net proceeds of such sale but without interest, and on and
after the date of such sale shall be entitled to no other rights in respect
of such scrip certificates.
The Board of Directors shall have the power at any time or from time to
time (without any action by the stockholders of the Corporation) to create
and issue, whether or not in connection with the issue and sale of any shares
of stock or other securities of the Corporation, rights or options entitling
the holders thereof to purchase from the Corporation any shares of its
capital stock of any class or classes or of any series of any class or
classes, such rights or options to be evidenced by or in such instrument or
instruments as shall be approved by the Board of Directors. The terms upon
which, the time or times (which may be limited or unlimited in duration), at
or within which and the price or prices at which any such shares may be
purchased from the Corporation upon the exercise of any such right or option,
shall be such as shall be fixed and stated in the resolution or resolutions
adopted by the Board of Directors providing for the creation and issue of
such rights or options, and, in every case, set forth or incorporated by
reference in the instrument or instruments evidencing such rights or options.
In the absence of actual fraud in the transaction, the judgment of the Board
of Directors as to the consideration for the issuance of such rights or
options and the sufficiency thereof shall be conclusive.
Shares of capital stock of the Corporation of any class or classes
hereby or hereafter authorized, and any rights or options entitling the
holders thereof to purchase from the Corporation any shares of its capital
stock of any class or classes or of any series of any class or classes, may
be issued by the Corporation from time to time for such consideration (but if
the same be par value stock then at not less than the par value thereof) as
may be fixed from time to time by the Board of Directors. The Board of
Directors shall have authority as provided by statute, to determine that only
a part of the consideration which shall be received by the Corporation for
any of the shares of its capital stock which it shall issue from time to time
shall be capital.
The Corporation shall be entitled to treat the person in whose name any
7
<PAGE> 8
share, right or option is registered as the owner thereof for all purposes,
and shall not be bound to recognize any equitable or other claim to or
interest in such share, right or option on the part of any other person,
whether or not the Corporation shall have notice thereof, save as may be
expressly provided by the laws of the State of Delaware.
Pursuant to authority granted by this Article IV, the Board
of Directors adopted a resolution creating a series of Preferred
Stock, without par value, and stated the designation and number of
shares, and fixed the preferences, rights and privileges of the
shares of such series, and the qualifications, limitations or
restrictions thereof, as set forth in a Certificate of
Designations of Series A Junior Participating Preferred Stock of
Monsanto Company filed with the Secretary of State of the State of
Delaware, which is attached hereto as Exhibit A and incorporated
herein by reference.
ARTICLE V: CAPITAL
The amount of capital with which the Corporation will commence business
is One Thousand Dollars ($1,000.00).
ARTICLE VI: DURATION
The Corporation is to have perpetual existence.
ARTICLE VII: LIABILITY OF STOCKHOLDERS
The private property of the stockholders of the Corporation shall not
be subject to the payment of corporate debts to any extent whatever.
ARTICLE VIII: DIRECTORS
Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, the number of
directors of the Corporation which shall constitute the whole Board shall be
not less than 5 nor more than 20. The exact number of directors within the
minimum and maximum limitations specified in the preceding sentence shall be
fixed from time to time by resolution of a majority of the whole Board.
The directors, other than those who may be elected by the holders of
any series of Preferred Stock, shall be divided into three classes, as nearly
equal in number as possible. One class of directors shall have a term
expiring at the annual meeting of stockholders to be held in 1998, another
class shall have a term expiring at the annual meeting of stockholders to be
held in 1999, and another class shall have a term expiring at the annual
meeting of stockholders to be held in 2000.
8
<PAGE> 9
Members of each class shall hold office until their successors are elected and
qualified. At each annual meeting of the stockholders of the Corporation,
commencing with the 1998 annual meeting, (a) directors elected to succeed those
directors whose terms then expire shall be elected at such meeting to hold
office for a term expiring at the third succeeding annual meeting of
stockholders after their election, with each director to hold office until his
or her successor shall have been duly elected and qualified, and (b) only if
authorized by a resolution of the Board of Directors, directors may be elected
to fill any vacancy on the Board of Directors, regardless of how such vacancy
shall have been created. Directors need not be stockholders.
Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, and unless the
Board of Directors otherwise determines, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or other
cause, and newly created directorships resulting from any increase in the
authorized number of directors, may be filled only by the affirmative vote of
a majority of the remaining directors, though less than a quorum of the Board
of Directors, or by a sole remaining director, and directors so chosen shall
hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which they have been elected expires
and until such director's successor shall have been duly elected and
qualified. No decrease in the number of authorized directors constituting
the Board of Directors shall shorten the term of any incumbent director.
Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, any director may
be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least 80 percent of the voting power of
the then outstanding Voting Stock, voting together as a single class.
Notwithstanding anything contained in this Certificate of Incorporation
to the contrary, and in addition to approval by the Board of Directors, the
affirmative vote of the holders of at least 80 percent of the voting power of
the then outstanding Voting Stock, voting together as a single class, shall
be required to amend, repeal or adopt any provision inconsistent with this
Article VIII. For purposes of the Certificate of Incorporation, "Voting
Stock" shall mean the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors.
ARTICLE IX: LIABILITY OF DIRECTORS
A director of this Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted
9
<PAGE> 10
under the Delaware General Corporation Law as the same exists or may hereafter
be amended. Any repeal or modification of the foregoing provisions of this
Article IX shall not adversely affect any right or protection of a director of
the Corporation existing hereunder with respect to any act or omission occurring
prior to or at the time of such repeal or modification.
ARTICLE X: POWERS OF BOARD OF DIRECTORS
In furtherance, and not in limitation of the powers conferred by
statute, the Board of Directors of the Corporation is expressly authorized:
To make, alter or repeal the By-Laws of the Corporation, subject to the
power of the stockholders of the Corporation to adopt, amend or repeal
the By-Laws; provided, however, that with respect to the powers of the
stockholders to adopt, amend and repeal the By-Laws, notwithstanding
any other provision of this Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote,
but in addition to any affirmative vote of the holders of any series of
Preferred Stock required by law, this Certificate of Incorporation or
any Preferred Stock designation, the affirmative vote of the holders of
at least 80 percent of the voting power of all of the then outstanding
Voting Stock, voting together as a single class, shall be required for
stockholders to adopt, amend or repeal any provision of the By-Laws.
Notwithstanding anything contained in this Certificate of Incorporation
to the contrary, and in addition to approval by the Board of Directors,
the affirmative vote of the holders of at least 80 percent of the
voting power of the then outstanding Voting Stock, voting together as a
single class, shall be required to amend, repeal or adopt any provision
inconsistent with the preceding sentence.
To authorize and cause to be executed mortgages and liens upon the real
and personal property of the Corporation.
To set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any proper purpose or to abolish
any such reserve in the manner in which it was created.
By resolution or resolutions, passed by a majority of the whole Board,
to designate one or more committees, each committee to consist of two
or more of the directors of the Corporation, which, to the extent
provided in said resolution or resolutions or in the By-Laws of the
Corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. Such
10
<PAGE> 11
committee or committees shall have such name or names as may be stated
in the By-Laws of the Corporation, or as may be determined from time to
time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, the Board of Directors
shall have power and authority to sell, lease or exchange all of the property
and assets of the Corporation, including its good will and its corporate
franchises, upon such terms and conditions and for such consideration, which
may be in whole or in part shares of stock in, and/or other securities of,
any other corporation or corporations, as the Board of Directors shall deem
expedient and for the best interests of the Corporation.
The Corporation may in its By-Laws confer powers upon its Board of
Directors in addition to the foregoing, and in addition to the powers and
authorities expressly conferred upon it by statute.
A director and a member of any committee designated by the Board of
Directors shall, in the performance of his duties, be fully protected in
relying in good faith upon the books of account or reports made to the
Corporation by any of its officials, or by an independent certified public
accountant, or by an appraiser selected with reasonable care by the Board of
Directors or by any committee thereof, or in relying in good faith upon other
records of the Corporation.
No contract or other transaction of the Corporation shall be affected
by the fact that any of the directors of the Corporation are in any way
interested in or connected with any other party to such contract or
transaction, or are themselves parties to such contract or transaction,
provided that at the meeting of the Board of Directors or of the committee
thereof authorizing or confirming such contract or transaction there shall be
present a quorum of directors not so interested or connected, and such
contract or transaction shall be approved by a majority of such quorum, which
majority shall consist of directors not so interested or connected.
Any contract or act that shall be approved or ratified by the vote of
the holders of a majority of the capital stock of the Corporation having
voting power which is represented in person or by proxy at any annual meeting
of stockholders or at any special meeting called for that purpose, among
others, of considering the approval or ratification of the acts of officers
and/or directors (provided that a lawful quorum of stockholders be there
represented in person or by proxy) shall be as valid and as binding upon the
Corporation and upon all of its stockholders as though it had been approved
or ratified by every stockholder of the Corporation.
11
<PAGE> 12
ARTICLE XI: ACTION BY STOCKHOLDERS
Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by any consent in
writing in lieu of a meeting of such stockholders. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, and in
addition to approval by the Board of Directors, the affirmative vote of at
least 80 percent of the voting power of the then outstanding Voting Stock,
voting together as a single class, shall be required to amend, repeal or
adopt any provision inconsistent with this Article XI.
ARTICLE XII: MISCELLANEOUS PROVISIONS
Both stockholders and directors shall have power, if the By-Laws so
provide, to hold their meetings, and to have one or more offices within or
without the State of Delaware, and to keep the books of this Corporation
(subject to the provisions of the statutes), outside of the State of Delaware
at such places as may be from time to time designated by the Board of
Directors, or as provided in the By-Laws.
The amount of the authorized stock of any class or classes of the
Corporation may be increased or decreased at any time by the affirmative vote
of the holders of a majority of the stock entitled to vote. The Corporation
reserves the right to create and issue one or more kinds or classes or series
of stock with such designations, preferences, redemption or dividend
provisions and voting powers or restrictions or qualifications thereof or
other such differences as shall be stated or expressed in any certificate,
amendatory of its Certificate of Incorporation, duly authorized, executed,
recorded and filed in the manner now or hereafter prescribed by the laws of
the State of Delaware, and further reserves the right to amend, alter, change
or repeal any provision contained in this Certificate, in the manner now or
hereafter prescribed by the laws of the State of Delaware, and all rights
herein conferred upon the stockholders except as otherwise herein expressly
provided are granted subject to this reservation.
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof, or
on the application of any receiver or receivers appointed for this
Corporation under the provisions of Section 291 to Title 8 of the Delaware
Code, or on the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of Section 279
of Title 8 of the Delaware Code, order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a
12
<PAGE> 13
majority in number representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders of this Corporation, as the case may be,
and also on this Corporation.
4. This Restated Certificate of Incorporation was duly adopted by
the Board of Directors in accordance with Section 245 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Monsanto Company has caused this Certificate
to be signed by R. William Ide, III, its Senior Vice President, General
Counsel and Corporate Secretary this 28th day of October, 1997.
MONSANTO COMPANY
By: /s/ R. William Ide, III
-----------------------
R. William Ide, III
Senior Vice President, General
Counsel and Secretary
13
<PAGE> 14
EXHIBIT A
THIS CERTIFICATE OF DESIGNATIONS, FILED WITH THE DELAWARE SECRETARY OF STATE
ON FEBRUARY 5, 1990, RELATES TO THE COMPANY'S PREFERRED STOCK PURCHASE
RIGHTS PLAN AND HAS THE EFFECT OF AMENDING THE CERTIFICATE OF INCORPORATION.
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
MONSANTO COMPANY
(Pursuant to Section 151 of the Delaware General Corporation Law)
_______________________________________________________
Monsanto Company, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolution was adopted by the
Board of Directors of the Company as required by Section 151 of the General
Corporation Law at a meeting duly called and held on January 26, 1990:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of this Company (hereinafter called the
"Board of Directors" or the "Board") by the provisions of the Certificate of
Incorporation, as amended, the Board of Directors hereby creates a series of
Preferred Stock, without par value (the "Preferred Stock"), of the Company
and hereby states the designation and number of shares, and fixes the
preferences, rights and privileges of the shares of such series, and the
qualifications, limitations or restrictions thereof (in addition to the
preferences, rights and privileges and the qualifications, limitations and
restrictions set forth in the Certificate of Incorporation, as amended, which
are applicable to Preferred Stock of all series and to all classes of stock
of the Company) as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 700,000. Such number of shares may be increased or
decreased by resolution of the
A-1
<PAGE> 15
Board of Directors; provided, that no decrease shall reduce the number of
--------
shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Company convertible into Series A
Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock of par
value of $2 per share (the "Common Stock"), of the Company, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the twelfth day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Company shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
A-2
<PAGE> 16
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
-------------
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the stockholders of the
Company. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event;
provided, however, that in no event shall any share of Series A Preferred
Stock have more than one vote per share.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Company having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
A-3
<PAGE> 17
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock
of the Company ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series
A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
A-4
<PAGE> 18
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------
liquidation, dissolution or winding up of the Company, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company shall
--------------------------
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
each share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the
A-5
<PAGE> 19
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
-------------
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
----
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Company's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the Company
---------
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred Stock so as
to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its Vice President and attested by its Assistant
Secretary this 29th day of January, 1990.
/s/ J. H. Hinshaw
----------------------------------------
J. H. Hinshaw, Vice President
Attest:
/s/ J. R. Bley, Jr.
- -----------------------------
Assistant Secretary
A-6
<PAGE> 1
MONSANTO COMPANY
BY-LAWS
As adopted September 26, 1997
OFFICES
-------
1. Registered
The name of the registered agent of the Company is The Corporation
Trust Company and the registered office of the Company shall be located in
the City of Wilmington, County of New Castle, State of Delaware.
2. Other
The Company shall have its General Offices in the County of St. Louis,
State of Missouri, and may also have offices at such other places both within
or without the State of Delaware as the Board of Directors may from time to
time designate or the business of the Company may require.
STOCKHOLDERS' MEETINGS
----------------------
3. Annual Meeting
An annual meeting of stockholders shall be held on such day and at such
time as may be designated by the Board of Directors for the purpose of
electing Directors and for the transaction of such other business as properly
may come before such meeting. Any previously scheduled annual meeting of the
stockholders may be postponed by resolution of the Board of Directors upon
public notice given on or prior to the date previously scheduled for such
annual meeting of stockholders.
4. Business to be Conducted at Annual Meeting
(a) At an annual meeting of stockholders, only such business shall be
conducted as shall have been brought before the meeting (i) pursuant to the
Company's notice of the meeting, (ii) by or at the direction of the Board of
Directors or (iii) by any stockholder of the Company who is a stockholder of
record at the time of giving of the notice provided for in this By-Law, who
shall be entitled to vote at such meeting and who shall have complied with
the notice procedures set forth in this By-Law.
(b) For business to be properly brought before an annual meeting by a
stockholder pursuant to Section (a)(iii) of this By-Law, notice in writing
must be delivered or mailed to the Secretary and received at the General
Offices of the Company, not less than 60 days nor more than 90 days prior to
the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the meeting is advanced by more
than 30 days or delayed by more than 60 days from such anniversary date,
notice by the stockholder must be received not earlier than the 90th day
prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the tenth day following
the day on which public announcement of the date of the annual meeting is
<PAGE> 2
first made. Such stockholder's notice shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (i) a brief
description of the business to be brought before the annual meeting and the
reasons for conducting such business at such meeting; (ii) the name and
address, as they appear on the Company's books, of the stockholder proposing
such business, and the name and address of the beneficial owner, if any, on
whose behalf the proposal is made; (iii) the class and number of shares of
the Company's stock which are beneficially owned by the stockholder, and by
the beneficial owner, if any, on whose behalf the proposal is made; and (iv)
any material interest of the stockholder, and of the beneficial owner, if
any, on whose behalf the proposal is made, in such business. For purposes of
these By-Laws, "public announcement" shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated Press or comparable news
service or in a document publicly filed by the Company with the Securities
and Exchange Commission pursuant to Section 13, 14 or 15(b) of the Exchange
Act.
(c) Notwithstanding anything in these By-Laws to the contrary, no
business shall be conducted at an annual meeting except in accordance with
the procedures set forth in this By-Law. The chairman of the meeting may, if
the facts warrant, determine that the business was not properly brought
before the meeting in accordance with the provisions of this By-Law; and if
the chairman should so determine, the chairman shall so declare to the
meeting, and any such business not properly brought before the meeting shall
not be transacted. Notwithstanding the foregoing provisions of this By-Law,
a stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") and the
rules and regulations thereunder with respect to the matters set forth in
this By-Law. Nothing in this By-Law shall be deemed to affect any rights of
stockholders to request inclusion of proposals in the Company's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
5. Special Meetings
Special meetings of stockholders for any proper purpose or purposes,
unless otherwise provided by the law of Delaware, may be called by the
Chairman of the Board or the President, or pursuant to resolution of the
Board of Directors. Business transacted at a special meeting of stockholders
shall be confined to the purpose or purposes of the meeting as stated in the
notice of the meeting. Any previously scheduled special meeting of the
stockholders may be postponed by resolution of the Board of Directors upon
notice by public announcement given on or prior to the date previously
scheduled for such special meeting of stockholders.
6. Place of Meetings
All meetings of stockholders shall be held at the General Offices of
the Company in the County of St. Louis, State of Missouri, unless otherwise
determined by resolution of the Board of Directors.
7. Notice of Meetings
Except as otherwise required by the law of Delaware, notice of each
meeting of the stockholders, whether annual or special, shall, at least ten
days but not more
2
<PAGE> 3
than sixty days before the date of the meeting, be given to each stockholder of
record entitled to vote at the meeting by mailing such notice in the United
States mail, postage prepaid, addressed to such stockholder at such
stockholder's address as the same appears on the records of the Company. Such
notice shall state the place, date and hour of the meeting, and in the case of a
special meeting, shall also state the purpose or purposes thereof.
8. Nominations of Directors
(a) Only persons who are nominated in accordance with the procedures
set forth in these By-Laws shall be eligible for election as Directors.
Nominations of persons for election to the Board of Directors may be made at
a meeting of stockholders (i) by or at the direction of the Board of
Directors or (ii) by any stockholder of the Company who is a stockholder of
record at the time of giving of the notice provided for in this By-Law, who
shall be entitled to vote for the election of Directors at the meeting and
who complies with the notice procedures set forth in this By-Law.
(b) Nominations by stockholders shall be made pursuant to notice in
writing, delivered or mailed to the Secretary and received at the General
Offices of the Company (i) in the case of an annual meeting, not less than 60
days nor more than 90 days prior to the first anniversary of the preceding
year's annual meeting, provided, however, that in the event that the date of
the meeting is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice by the stockholder must be received not
earlier than the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting
or the tenth day following the day on which public announcement of the date
of the meeting is first made; or (ii) in the case of a special meeting at
which directors are to be elected, not earlier than the 90th day prior to
such special meeting and not later than the close of business on the later of
the 60th day prior to such special meeting or the tenth day following the day
on which public announcement of the date of the meeting and of the nominees
proposed by the Board of Directors to be elected at such meeting is first
made. In the case of a special meeting of stockholders at which Directors
are to be elected, stockholders may nominate a person or persons (as the case
may be) for election only to such position(s) as are specified in the
Company's notice of meeting as being up for election at such meeting. Such
stockholder's notice shall set forth (i) as to each person whom the
stockholder proposes to nominate for election or reelection as a Director,
all information relating to such person that would be required to be
disclosed in solicitations of proxies for election of Directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including such person's written
consent to being named as a nominee and to serving as a Director if elected);
(ii) as to the stockholder giving the notice, the name and address, as they
appear on the Company's books, of such stockholder and the class and number
of shares of the Company's stock which are beneficially owned by such
stockholder; and (iii) as to any beneficial owner on whose behalf the
nomination is made, the name and address of such person and the class and
number of shares of the Company's stock which are beneficially owned by such
person. At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a Director shall furnish to the
Secretary that information required to be set forth in a
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stockholder's notice of nomination which pertains to the nominee.
Notwithstanding anything in this By-Law to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the Company is
increased and there is no public statement naming all the nominees for Director
or specifying the size of the increased Board of Directors made by the Company
at least 70 days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this By-Law shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the General Offices of
the Company not later than the close of business on the 10th day following
the day on which such public announcement is first made by the Company.
(c) No person shall be eligible for election as a Director of the
Company unless nominated in accordance with the procedures set forth in these
By-Laws. The chairman of the meeting may, if the facts warrant, determine
that a nomination was not made in accordance with the procedures prescribed
in this By-Law; and if the chairman should so determine, the chairman shall
so declare to the meeting, and the defective nomination shall be disregarded.
Notwithstanding the foregoing provisions of this By-Law, a stockholder shall
also comply with all applicable requirements of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder with respect to
the matters set forth in this By-Law.
9. List of Stockholders
(a) The Secretary of the Company shall prepare, at least ten days
before each meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing
the address of each stockholder and the number of shares registered in the
name of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
(b) The stock ledger of the Company shall be the only evidence as to
the identity of the stockholders entitled (i) to vote in person or by proxy
at any meeting of stockholders, or (ii) to exercise the rights in accordance
with Delaware law to examine the stock ledger, the list required by this
By-Law or the books and records of the Company.
10. Quorum
The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum for the transaction of any business at all meetings of
the stockholders, except as otherwise provided by the law of Delaware, by the
Certificate of Incorporation or by these By-Laws. The stockholders present at
any duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of sufficient stockholders to
render the remaining stockholders less than a quorum.
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Whether or not a quorum is present, either the Chairman of the meeting or a
majority of the stockholders entitled to vote thereat, present in person or by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. At such adjourned
meeting at which the requisite amount of voting stock shall be present or
represented, any business may be transacted which might have been transacted
at the meeting as originally noticed.
11. Voting and Required Vote
Subject to the provisions of the Certificate of Incorporation, each
stockholder shall, at every meeting of stockholders, be entitled to one vote
for each share of capital stock held by such stockholder. Subject to the
provisions of the Certificate of Incorporation and Delaware law, Directors
shall be chosen by the vote of a plurality of the shares present in person or
represented by proxy at the meeting; and all other questions shall be
determined by the affirmative vote of the majority of shares present in
person or represented by proxy at the meeting. Elections of Directors shall
be by written ballot.
12. Proxies
Each stockholder entitled to vote at a meeting of stockholders may
authorize another person or persons to act for such stockholder by proxy,
provided the instrument authorizing such proxy to act shall have been
executed in writing in the manner prescribed by law. No proxy shall be voted
or acted upon after three years from its date, unless the proxy provides for
a longer period.
13. Inspectors of Election; Polls
Before each meeting of stockholders, the Chairman of the Board or
another officer of the Company designated by resolution of the Board of
Directors shall appoint one or more inspectors of election for the meeting
and may appoint one or more inspectors to replace any inspector unable to
act. If any of the inspectors appointed shall fail to attend, or refuse or
be unable to serve, substitutes shall be appointed by the Chairman of the
meeting. Each inspector shall have such duties as are provided by law, and
shall take and sign an oath faithfully to execute the duties of inspector
with strict impartiality and according to the best of such person's ability.
The Chairman of the meeting shall fix and announce at the meeting the date
and time of the opening and closing of the polls for each matter upon which
the stockholders will vote at the meeting.
14. Organization
The Chairman of the Board of Directors, or in the Chairman's absence, (i)
the President, if a member of the Board of Directors, (ii) one of the Vice
Chairmen of the Board who is a member of the Board of Directors, if any, in such
order as may be designated by the Chairman of the Board, in that order, or (iii)
in the absence of each of them, a chairman chosen by a majority of the Directors
present, shall act as
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chairman of the meetings of the stockholders. The order of business and the
procedure at any meeting of stockholders shall be determined by the chairman of
the meeting.
15. No Stockholder Action by Written Consent
Any action required or permitted to be taken by the stockholders of the
Company must be effected at a duly called annual or special meeting of
stockholders of the Company and may not be effected by any consent in writing
in lieu of a meeting of such stockholders.
BOARD OF DIRECTORS
------------------
16. General Powers, Number, Term of Office
The business of the Company shall be managed under the direction of its
Board of Directors. Subject to the rights of the holders of any series of
preferred stock, without par value, of the Company ("Preferred Stock") to
elect additional directors under specified circumstances, the number of
directors of the Company which shall constitute the whole Board shall be not
less than five nor more than 20. The exact number of directors within the
minimum and maximum limitation specified in the preceding sentence shall be
fixed from time to time exclusively by resolution of a majority of the whole
Board. The Directors, other than those who may be elected by the holders of
any series of Preferred Stock, shall be divided into three classes, as nearly
equal in number as possible. One class of directors shall have a term
expiring at the annual meeting of stockholders to be held in 1998, another
class shall have a term expiring at the annual meeting of stockholders to be
held in 1999, and another class shall have a term expiring at the annual
meeting of stockholders to be held in 2000. Members of each class shall hold
office until their successors are elected and qualified. At each annual
meeting of the stockholders of the Company commencing with the 1998 annual
meeting, (1) directors elected to succeed those directors whose terms then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office until his or her successor shall have been duly
elected and qualified, and (2) only if authorized by a resolution of the
Board of Directors, directors may be elected to fill any vacancy on the Board
of Directors, regardless of how such vacancy shall have been created.
Directors need not be stockholders of the Company or residents of the State
of Delaware.
17. Vacancies
Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, and unless the
Board of Directors otherwise determines, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or other
cause, and newly created directorships resulting from any increase in the
authorized number of directors, may be filled only by the affirmative vote of
a majority of the remaining directors, though less than a quorum of the Board
of Directors, or by a sole remaining director, and directors so chosen shall
hold office for a term expiring at the annual meeting of stockholders at
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which the term of office of the class to which they have been elected expires
and until such director's successor shall have been duly elected and
qualified. No decrease in the number of authorized directors constituting
the Board of Directors shall shorten the term of any incumbent director.
18. Regular Meetings
Following the annual meeting of stockholders, the first meeting of each
newly elected Board of Directors may be held, without notice, on the same day
and at the same place as such stockholders' meeting. The Board of Directors
by resolution may provide for the holding of regular meetings and may fix the
times and places at which such meetings shall be held. Notice of regular
meetings shall not be required provided that whenever the time or place of
regular meetings shall be fixed or changed, notice of such action shall be
given promptly to each director, as provided in Section 19 below, who was not
present at the meeting at which such action was taken.
19. Special Meetings
Special meetings of the Board of Directors shall be held whenever
called by the Chairman of the Board of Directors or the President, or in the
absence of each of them, by any Vice Chairman of the Board, in such order as
may be designated by the Chairman of the Board, or by the Secretary at the
written request of a majority of the Directors.
20. Notices
Notice of any special meeting of the Board of Directors shall be
addressed to each Director at such Director's residence or business address
and shall be sent to such Director by mail, electronic mail, telecopier,
telegram or telex or telephoned or delivered to such Director personally. If
such notice is sent by mail, it shall be sent not later than three days
before the day on which the meeting is to be held. If such notice is sent by
electronic mail, telecopier, telegram or telex, it shall be sent not later
than 12 hours before the time at which the meeting is to be held. If such
notice is telephoned or delivered personally, it shall be received not later
than 12 hours before the time at which the meeting is to be held. Such
notice shall state the time, place and purpose or purposes of the meeting.
21. Quorum
One-third of the total number of Directors constituting the whole
Board, but not less than two, shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors, but if less than such
required number of Directors for a quorum is present at a meeting, a majority
of the Directors present may adjourn the meeting from time to time without
further notice. Except as otherwise specifically provided by the law of
Delaware, the Certificate of Incorporation or these By-Laws, the act of a
majority of the Directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
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22. Organization
At each meeting of the Board of Directors, the Chairman of the Board
or, in the Chairman's absence, (i) the President, if a member of the Board of
Directors, (ii) one of the Vice Chairmen of the Board who is a member of the
Board of Directors, if any, in such order as may be designated by the
Chairman of the Board, in that order, or (iii) in the absence of each of
them, a chairman chosen by a majority of the Directors present, shall act as
chairman of the meeting, and the Secretary or, in the Secretary's absence, an
Assistant Secretary or any employee of the Company appointed by the chairman
of the meeting, shall act as secretary of the meeting.
23. Resignations
Any Director may resign at any time by giving written notice to the
Chairman of the Board, the President or the Secretary of the Company. Such
resignation shall take effect upon receipt thereof or at any later time
specified therein; and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
24. Removal
Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, any director may
be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least 80 percent of the voting power of
the then outstanding Voting Stock, voting together as a single class. For
purposes of these By-Laws, "Voting Stock" shall mean the outstanding shares
of capital stock of the Company entitled to vote generally in the election of
directors.
25. Action Without a Meeting
Unless otherwise restricted by the Certificate of Incorporation or
these By-Laws, any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken without a
meeting if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
26. Location of Books
Except as otherwise provided by resolution of the Board of Directors
and subject to the law of Delaware, the books of the Company may be kept at
the General Offices of the Company and at such other places as may be
necessary or convenient for the business of the Company.
27. Dividends
Subject to the provisions of the Certificate of Incorporation and the
law of Delaware, dividends upon the capital stock of the Company may be
declared by the Board of Directors at any regular or special meeting.
Dividends may be paid in cash,
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in property, or in shares of the Company's capital stock.
28. Compensation of Directors
Directors shall receive such compensation and benefits as may be
determined by resolution of the Board for their services as members of the
Board and committees. Directors shall also be reimbursed for their expenses
of attending Board and committee meetings. Nothing contained herein shall
preclude any Director from serving the Company in any other capacity and
receiving compensation therefor.
29. Additional Powers
In addition to the powers and authorities by these By-Laws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
Company and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these By-Laws directed or required to
be exercised or done by the stockholders.
COMMITTEES OF DIRECTORS
-----------------------
30. Designation, Power, Alternate Members
The Board of Directors may, by resolution or resolutions passed by a
majority of the whole Board, designate an Executive Committee and one or more
additional committees, each committee to consist of two or more of the
Directors of the Company. Any such committee, to the extent provided in said
resolution or resolutions and subject to any limitations provided by law,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Company. The Board of Directors
may designate one or more Directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. If at a meeting of any committee one or more of the members
thereof is absent or disqualified, and if either the Board of Directors has
not so designated any alternate member or members, or the number of absent or
disqualified members exceeds the number of alternate members who are present
at such meeting, then the member or members of such committee (including
alternates) present at any meeting and not disqualified from voting, whether
or not they constitute a quorum, may unanimously appoint another Director to
act at the meeting in the place of such absent or disqualified member. The
term of office of the members of each committee shall be as fixed from time
to time by the Board; provided, however, that any committee member who ceases
to be a member of the Board shall automatically cease to be a committee
member.
31. Quorum, Manner of Acting
At any meeting of a committee, the presence of one-third, but not less
than two, of its members then in office shall constitute a quorum for the
transaction of business; and the act of a majority of the members present at
a meeting at which a quorum is present shall be the act of the committee.
Each committee may provide for the holding of regular meetings, make
provision for the calling of special meetings and,
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except as otherwise provided in these By-Laws or by resolution of the Board of
Directors, make rules for the conduct of its business.
32. Minutes
The committees shall keep minutes of their proceedings and report the
same to the Board of Directors when required; but failure to keep such
minutes shall not affect the validity of any acts of the committee or
committees.
ADVISORY DIRECTORS
------------------
33. Advisory Directors
The Board of Directors may, by resolution adopted by a majority of the
whole Board, appoint such number of senior executives of the Company as
Advisory Directors as the Board may from time to time determine. The
Advisory Directors shall have such advisory responsibilities as the Chairman
of the Board may designate and the term of office of such Advisory Directors
shall be as fixed by the Board.
OFFICERS
--------
34. Designation
The officers of the Company shall be a Chairman of the Board, and a
President, one of whom shall be designated by the Board of Directors as the
Chief Executive Officer, one or more Vice Presidents, a Secretary, a
Treasurer and a Controller. The Board of Directors may also elect one or
more Vice Chairmen of the Board, one or more Vice Chairmen, one or more
Executive Vice Presidents, Senior Vice Presidents, Group Vice Presidents,
Deputy and Assistant Secretaries, Deputy and Assistant Treasurers, Deputy and
Assistant Controllers and such other officers as it shall deem necessary.
Any number of offices may be held by the same person. The Chairman of the
Board of Directors shall be chosen from among the Directors.
35. Election and Term
At its first meeting after each annual meeting of stockholders, the
Board of Directors shall elect the officers of the Company and at any time
thereafter the Board may elect additional officers of the Company, and each
such officer shall hold office until the officer's successor is elected and
qualified or until the officer's earlier death, resignation or removal.
Alternatively, at the last regular meeting of the Board of Directors prior to
an annual meeting of stockholders, the Board of Directors may elect the
officers of the Company, contingent upon the election of the persons
nominated to be directors by the Board of Directors; and each such officer so
elected shall hold office until the officer's successor is elected and
qualified or until the officer's earlier death, resignation or removal.
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36. Removal
Any officer shall be subject to removal or suspension at any time, for
or without cause, by the affirmative vote of a majority of the whole Board of
Directors.
37. Resignations
Any officer may resign at any time by giving written notice to the
Chairman of the Board, the President or to the Secretary. Such resignation
shall take effect upon receipt thereof or at any later time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
38. Vacancies
A vacancy in any office because of death, resignation, removal or any
other cause may be filled for the unexpired portion of the term by the Board
of Directors.
39. Compensation
The People Committee of the Board of Directors shall fix the salaries
of all employees of the Company who are subject to the reporting requirements
of Section 16(a) of the Securities Exchange Act of 1934 or any successor
statute, rule or provision, and other members of executive management
designated by such committee.
40. Chairman of the Board
The Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors, except as may be otherwise
required under the law of Delaware. The Chairman shall act in an advisory
capacity with respect to matters of policy and other matters of importance
pertaining to the affairs of the Company. The Chairman, alone or with the
President, one or more of the Vice Chairmen of the Board, and/or the
Secretary shall sign and send out reports and other messages which are to be
sent to stockholders from time to time. The Chairman shall also perform such
other duties as may be assigned to the Chairman by these By-Laws, the Board
of Directors or, if applicable, the Chief Executive Officer.
41. President
The President, if a member of the Board of Directors, shall, in the
absence of the Chairman of the Board, preside at all meetings of the
stockholders and of the Board of Directors. The President shall perform such
other duties as may be assigned to the President by these By-Laws, the Board
of Directors or, if applicable, the Chief Executive Officer.
42. Chief Executive Officer
The Chief Executive Officer shall have the general and active
management and supervision of the business of the Company. The Chief
Executive Officer shall
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see that all orders and resolutions of the Board of Directors are carried into
effect. The Chief Executive Officer shall also perform such other duties as may
be assigned to the Chief Executive Officer by these By-Laws or the Board of
Directors. The Chief Executive Officer shall designate who shall perform the
duties of the Chief Executive Officer in the Chief Executive Officer's absence.
43. Vice Chairmen of the Board
The Vice Chairmen of the Board, if a member of the Board of Directors,
shall, in the absence of the Chairman of the Board and the President, and in
such order as may be designated by the Chairman of the Board, preside at all
meetings of the stockholders and of the Board of Directors. They shall
perform such other duties as may be assigned to them by these By-Laws, the
Board of Directors or the Chief Executive Officer.
44. Executive, Senior, Group and other Vice Presidents
Each Executive Vice President, Senior Vice President, Group Vice
President and each other Vice President shall perform the duties and
functions and exercise the powers assigned to such officer by the Board of
Directors or the Chief Executive Officer.
45. Secretary
The Secretary shall attend all meetings of the Board of Directors and
of the stockholders and record all votes and the minutes of all proceedings
in a book to be kept for that purpose. The Secretary shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of
the Board of Directors and, when appropriate, shall cause the corporate seal
to be affixed to any instruments executed on behalf of the Company. The
Secretary shall also perform all duties incident to the office of Secretary
and such other duties as may be assigned to the Secretary by these By-Laws,
the Board of Directors, the Chairman of the Board or the Chief Executive
Officer.
46. Assistant Secretaries
The Assistant Secretaries shall, during the absence of the Secretary,
perform the duties and functions and exercise the powers of the Secretary.
Each Assistant Secretary shall perform such other duties as may be assigned
to such Assistant Secretary by the Board of Directors, the Chairman of the
Board, the Chief Executive Officer or the Secretary.
47. Treasurer
The Treasurer shall have the custody of the funds and securities of the
Company and shall deposit them in the name and to the credit of the Company
in such depositories as may be designated by the Board of Directors or by any
officer or officers authorized by the Board of Directors to designate such
depositories; disburse funds of the Company when properly authorized by
vouchers prepared and approved by the Controller; and invest funds of the
Company when authorized by the Board of
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Directors or a committee thereof. The Treasurer shall render to the Board of
Directors, the Chief Executive Officer, the Senior Vice President-Finance or the
Vice President-Finance, whenever requested, an account of all transactions as
Treasurer and shall also perform all duties incident to the office of Treasurer
and such other duties as may be assigned to the Treasurer by these By-Laws, the
Board of Directors, the Chief Executive Officer, the Senior Vice
President-Finance or the Vice President-Finance.
48. Assistant Treasurers
The Assistant Treasurers shall, during the absence of the Treasurer,
perform the duties and functions and exercise the powers of the Treasurer.
Each Assistant Treasurer shall perform such other duties as may be assigned
to the Assistant Treasurer by the Board of Directors, the Chief Executive
Officer, the Senior Vice President-Finance, the Vice President-Finance or the
Treasurer.
49. Controller
The Controller shall serve as the principal accounting officer of the
Company and shall keep full and accurate account of receipts and
disbursements in books of the Company and render to the Board of Directors,
the Chief Executive Officer, the Senior Vice President-Finance or the Vice
President-Finance, whenever requested, an account of all transactions as
Controller and of the financial condition of the Company. The Controller
shall also perform all duties incident to the office of Controller and such
other duties as may be assigned to the Controller by these By-Laws, the Board
of Directors, the Chief Executive Officer, the Senior Vice President-Finance
or the Vice President-Finance.
50. Assistant Controllers
The Assistant Controllers shall, during the absence of the Controller,
perform the duties and functions and exercise the powers of the Controller.
Each Assistant Controller shall perform such other duties as may be assigned
to such officer by the Board of Directors, the Chief Executive Officer, the
Senior Vice President-Finance, the Vice President-Finance or the Controller.
COMPANY CHECKS, DRAFTS AND PROXIES
----------------------------------
51. Checks, Drafts
All checks, drafts or other orders for the payment of money by the
Company shall be signed by such person or persons as from time to time may be
designated by the Board of Directors or by any officer or officers authorized
by the Board of Directors to designate such signers; and the Board of
Directors or such officer or officers may determine that the signature of any
such authorized signer may be facsimile.
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52. Proxies
Except as otherwise provided by resolution of the Board of Directors,
the Chairman of the Board, the President, any Vice Chairman of the Board, any
Vice President, the Treasurer and any Assistant Treasurer, the Controller and
any Assistant Controller, the Secretary and any Assistant Secretary of the
Company, shall each have full power and authority, in behalf of the Company,
to exercise any and all rights of the Company with respect to any meeting of
stockholders of any corporation in which the Company holds stock, including
the execution and delivery of proxies therefor, and to consent in writing to
action by such corporation without a meeting.
CAPITAL STOCK
-------------
53. Stock Certificates
Each holder of stock in the Company shall be entitled to have a
certificate signed by, or in the name of the Company by, the Chairman of the
Board, the President, any Vice Chairman of the Board, any Executive Vice
President, any Senior Vice President, any Group Vice President or any other
Vice President, and by the Secretary or any Assistant Secretary of the
Company, certifying the number of shares owned by such holder in the Company.
Any of or all the signatures on the certificate may be a facsimile. In case
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Company with the same effect as if such person were such
officer, transfer agent or registrar at the date of issue.
54. Record Ownership
The Company shall be entitled to treat the person in whose name any
share, right or option is registered as the owner thereof, for all purposes,
and shall not be bound to recognize any equitable or other claim to or
interest in such share, right or option on the part of any other person,
whether or not the Company shall have notice thereof, except as otherwise
provided by the law of Delaware.
55. Record Dates
In order that the Company may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which shall not
precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors and which shall not be more than sixty nor less
than ten days before the date of such meeting, nor more than sixty days prior
to any other action.
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56. Transfer of Stock
Transfers of shares of stock of the Company shall be made only on the
books of the Company by the registered holder thereof, or by the registered
holder's attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary or a transfer agent of the Company, and on surrender
of the certificate or certificates for such shares properly endorsed and the
payment of all taxes thereon.
57. Lost, Stolen or Destroyed Certificates
The Board of Directors may authorize a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued
by the Company alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of the fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of
such lost, stolen or destroyed certificate or certificates, or the owner's
legal representative, to give the Company a bond sufficient to indemnify it
against any claim that may be made against the Company on account of the
alleged loss, theft or destruction of such certificate or the issuance of
such new certificate.
58. Terms of Preferred Stock
The provisions of these By-Laws, including those pertaining to voting
rights, election of Directors and calling of special meetings of
stockholders, are subject to the terms, preferences, rights and privileges of
any then outstanding class or series of Preferred Stock as set forth in the
Certificate of Incorporation and in any resolutions of the Board of Directors
providing for the issuance of such class or series of Preferred Stock;
provided, however, that the provisions of any such Preferred Stock shall not
affect or limit the authority of the Board of Directors to fix, from time to
time, the number of Directors which shall constitute the whole Board as
provided in Section 16 above, subject to the right of the holders of any
class or series of Preferred Stock to elect additional Directors as and to
the extent specifically provided by the provisions of such Preferred Stock.
INDEMNIFICATION
---------------
59. Indemnification
(a) The Company shall indemnify and hold harmless, to the fullest
extent permitted by applicable law as it presently exists or may hereafter be
amended, any person who was or is made or is threatened to be made a party or
is otherwise involved in any claim, action, suit, or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason
of the fact that the person, or a person for whom he or she is the legal
representative, is or was a Director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee, fiduciary or agent of another corporation or of a
partnership, joint venture, trust, non-profit entity, or other enterprise,
including service with respect to employee benefit plans, against all
expense, liability and loss
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<PAGE> 16
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person. The right to indemnification conferred in this By-Law shall be a
contract right. Except as provided in paragraph (c) of this By-Law with respect
to proceedings seeking to enforce rights to indemnification, the Company shall
indemnify a person in connection with a proceeding initiated by such person or a
claim made by such person against the Company only if such proceeding or claim
was authorized by the Board of Directors of the Company.
(b) The Company shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that
-------- -------
if and to the extent required by law the payment of expenses incurred by any
person covered hereunder in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by or on behalf
of the affected person to repay all amounts advanced if it should ultimately
be determined that such person is not entitled to be indemnified under this
By-Law or otherwise.
(c) If a claim for indemnification or payment of expenses under this
By-Law is not paid in full within thirty days, or such other period as might
be provided pursuant to contract, after a written claim therefor has been
received by the Company, the claimant may file suit to recover the unpaid
amount of such claim or may seek whatever other remedy might be provided
pursuant to contract. In any such action the Company shall have the burden
of proving that the claimant was not entitled to the requested
indemnification or payment of expenses under applicable law. If successful
in whole or in part, claimant shall be entitled to be paid the expense of
prosecuting such claim. Neither the failure of the Company (including its
Board of Directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of such action that indemnification
of the claimant is proper in the circumstances because the claimant has met
the applicable standard of conduct set forth in the General Corporation Law
of the State of Delaware, nor an actual determination by the Company
(including its Board of Directors, independent legal counsel or stockholders)
that the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not met
the applicable standard of conduct.
(d) Any determination regarding whether indemnification of any person
is proper in the circumstances because such person has met the applicable
standard of conduct set forth in the General Corporation Law of the State of
Delaware shall be made by independent legal counsel selected by such person
with the consent of the Company (which consent shall not unreasonably be
withheld).
(e) The rights conferred on any person by this By-Law shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(f) Any repeal or modification of the foregoing provisions of this
By-Law 59 shall not adversely affect any right or protection hereunder of any
person with respect to any act or omission occurring prior to or at the time
of such repeal or modification.
16
<PAGE> 17
MISCELLANEOUS
-------------
60. Corporate Seal
The seal of the Company shall be circular in form, containing the words
"Monsanto Company" and the word "Delaware" on the circumference surrounding
the word "Seal". Said seal may be used by causing it or a facsimile thereof
to be impressed or affixed or in any other manner reproduced.
61. Fiscal Year
The fiscal year of the Company shall begin on the first day of January
in each year.
62. Auditors
The Board of Directors shall select certified public accountants to
audit the books of account and other appropriate corporate records of the
Company annually and at such other times as the Board shall determine by
resolution.
63. Waiver of Notice
Whenever notice is required to be given pursuant to the law of
Delaware, the Certificate of Incorporation or these By-Laws, a written waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting of stockholders or the Board of Directors or a committee
thereof shall constitute a waiver of notice of such meeting, except when the
stockholder or Director attends such meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special
meeting of the stockholders or the Board of Directors or committee thereof
need be specified in any written waiver of notice unless so required by the
Certificate of Incorporation or by these By-Laws.
AMENDMENT TO BY-LAWS
--------------------
64. Amendments
Notwithstanding any provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the
holders of any series of Preferred Stock of the Corporation required by law,
the Certificate of Incorporation or any Preferred Stock designation, the
affirmative vote of the holders of at least 80 percent of the voting power of
all of the then-outstanding Voting Stock (as defined in the Certificate of
Incorporation), voting together as a single class, shall be required for the
stockholders to amend or repeal the By-Laws or to adopt new By-Laws. The
By-Laws may also be amended or repealed and new By-Laws may be adopted by the
affirmative vote of a majority of the whole Board of Directors at any regular
or special
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<PAGE> 18
meeting of the Board of Directors.
----------------------------
EMERGENCY BY-LAWS
-----------------
These Emergency By-Laws, notwithstanding any different provision in the
Certificate of Incorporation or By-Laws, shall be operative during any
emergency resulting from an attack on the United States or on a locality in
which the Company conducts its business or customarily holds meetings of the
Board of Directors or its stockholders, or during any nuclear or atomic
disaster, or during the existence of any catastrophe, or other similar
emergency condition, as a result of which a quorum of the Board of Directors
or a committee thereof cannot be readily convened for action. These Emergency
By-Laws shall cease to be operative upon termination of such emergency.
During any such emergency:
(a) A meeting of the Board of Directors or a committee thereof may be
called by any officer or Director. Notice of the time and place of the
meeting shall be given by the person calling the meeting to only such of the
Directors as it may be feasible to reach at the time and by such means as may
be feasible at the time. Such notice shall be given at such time in advance
of the meeting as circumstances permit in the judgment of the person calling
the meeting.
(b) The officers or other persons designated on a list approved by
the Board of Directors before the emergency, all in such order or priority
and subject to such conditions and for such period of time (not longer than
reasonably necessary after the termination of the emergency) as may be
provided in the resolution approving the list, shall, to the extent required
to constitute a quorum at any meeting of the Board of Directors during the
emergency, be deemed Directors for such meeting. If at the time of the
emergency the Board of Directors has not approved such a list of persons,
then to the extent required to constitute a quorum at any meeting of the
Board of Directors during the emergency, the officers of the Company who are
present shall be deemed, in order of rank and within the same rank in order
of seniority, Directors for such meeting. Two Directors (including persons
deemed to be Directors) in attendance at the meeting shall constitute a
quorum.
(c) The Board of Directors, either before or during any such
emergency, may provide, and from time to time modify, lines of succession in
the event that during such an emergency any or all officers or agents of the
Company shall for any reason be rendered incapable of discharging their
duties.
(d) The Board of Directors, either before or during any such
emergency, may, effective in the emergency, change the General Offices or
designate several alternative General Offices or regional offices, or
authorize an officer, or officers, so to do.
No officer, Director or employee acting in accordance with these
Emergency
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<PAGE> 19
By-Laws shall be liable except for willful misconduct.
These Emergency By-Laws shall be subject to repeal or change by further
action of the Board of Directors or by action of the stockholders, but no
such repeal or change shall modify the provisions of the next preceding
paragraph with regard to action taken prior to the time of such repeal or
change. Any amendment of these Emergency By-Laws may make any further or
different provision that may be practical and necessary for the circumstances
of the emergency.
19
<PAGE> 1
THE MONSANTO COMPANY
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
1. NAME OF PLAN. This plan shall be known as the "The Monsanto
Company Non-Employee Director Deferred Compensation Plan" and is hereinafter
referred to as the "Plan."
2. PURPOSES OF PLAN. The purposes of the Plan are to enable
Monsanto Company, a Delaware corporation (the "Company"), to retain qualified
persons to serve as Directors, and to replace the vested benefits of
currently active Directors under the Monsanto Company Non-Employee Directors
Retirement Plan (the "Retirement Plan") with interests in the equity of the
Company or in a deferred cash account.
3. EFFECTIVE DATE AND TERM. The Plan shall be effective as of
the date of the Chemicals Distribution (as defined in Section 4 below) (the
"Effective Date"). The Plan shall remain in effect until terminated by
action of the Board, or until all Participants have received all amounts to
which they are entitled hereunder, if earlier.
4. DEFINITIONS. The following terms shall have the meanings set
forth below:
"Annual Meeting" means an annual meeting of the shareholders of the
Company.
"Beneficiary" has the meaning set forth in Section 7(d).
<PAGE> 2
"Cash Account" has the meaning set forth in Section 6(a).
"Change of Control" means any of the following events:
(a) The acquisition (other than from the Company) by any person,
entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act") (a "Person"), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more
of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that, for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of
this definition; or
(b) Individuals who, as of the date hereof, constitute the Board of
Directors (as of the date hereof the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
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<PAGE> 3
(c) Approval by the stockholders of the Company of a reorganization,
merger, consolidation, or sale or other disposition of all or
substantially all of the assets of the Company or the acquisition
of assets or stock of another corporation (a "Business
Combination"), or, if consummation of such Business Combination
is subject, at the time of such approval by shareholders, to the
consent of any government or governmental agency, the obtaining
of such consent (either explicitly or implicitly by
consummation), in each case unless, following such Business
Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii)
no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the
initial
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<PAGE> 4
agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
"Change of Control Consideration" means (i) the amount of any cash, plus
the value of any securities and other noncash consideration, constituting
the most valuable consideration per share of Common Stock paid to any
shareholder in the transaction or series of transactions that results in a
Change of Control or (ii) if no consideration per share of Common Stock is
paid to any shareholder in the transaction or series of transactions that
results in a Change of Control, the highest reported sales price, regular
way, of a share of Common Stock in any transaction reported on the New
York Stock Exchange Composite Tape or other national exchange on which
such shares are listed or on NASDAQ during the 60-day period prior to and
including the date of a Change of Control. To the extent that such
consideration consists all or in part of securities or other noncash
consideration, the value of such securities or other noncash consideration
shall be determined by the Committee in good faith.
"Chemicals" means the Company's newly formed chemicals subsidiary.
"Chemicals Distribution" means the distribution to the holders of Common
Stock of the stock of Chemicals.
The "Committee" means the committee that administers the Plan, as more
fully defined in Section 13.
"Common Stock" means the Company's common stock, par value $2.00 per
share.
"Common Stock Value" means the excess of (i) the average of the daily high
and low trading prices on the New York Stock Exchange for the Monsanto
Common Stock with due bills on each of the five trading days prior to the
date of the Chemicals Distribution over (ii) one-fifth of the average of
the daily high and low trading prices on the New York Stock Exchange for
the common stock of Chemicals on a when-issued basis on each of such five
trading days.
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<PAGE> 5
The "Company" has the meaning set forth in Section 2.
"Deferral Account" means a bookkeeping account maintained by the Company
for a Director representing the Director's interest in the stock units or
cash credited to such account pursuant to Section 6.
"Deferred Delivery Election" has the meaning set forth in Section 7(a).
"Delivery Election" has the meaning set forth in Section 7(a).
"Director" means an individual who is a non-employee member of the Board
of Directors of the Company.
The "Dividend Equivalent" for a given dividend or distribution means a
number of shares of Common Stock having a Value, as of the date such
Dividend Equivalent is credited to a Stock Unit Account, equal to the
amount of cash, plus the fair market value on the date of distribution
of any property, that is distributed with respect to one share of Common
Stock pursuant to such dividend or distribution; such fair market value
to be determined by the Committee in good faith.
The "Effective Date" has the meaning set forth in Section 3.
"Immediate Payment Election" has the meaning set forth in Section 7(a).
The "Initial Amount" has the meaning set forth in Section 6(a).
The "Interest Rate" means Moody's Baa Bond Index Rate, as in effect from
time to time.
"IRA Election" means an election to receive distributions under the Plan
in annual installments beginning on the Starting Date, over a period of
years equal to the life expectancy of the Participant or joint life
expectancy of the Participant and his or her spouse (if any), as elected
by the Participant, such life expectancy to be determined as of the
Starting Date.
"Keogh Election" means an election to receive distributions under the Plan
in annual installments beginning on the Starting Date, over a period of
years equal to the life expectancy of the Participant or joint life
-5-
<PAGE> 6
expectancy of the Participant and his or her spouse (if any), as elected
by the Participant, such life expectancy to be determined as of the
Starting Date and redetermined as of each anniversary thereof.
"Participant" has the meaning set forth in Section 5.
"Retirement Plan" has the meaning set forth in Section 2.
"Single Sum Election" means an election to receive distributions under
the Plan in a single payment on the Starting Date.
"Stock Unit Account" has the meaning set forth in Section 6(a).
"Starting Date" has the meaning set forth in Section 7(a).
"Term Certain Election" means an election to receive distributions under
the Plan in annual installments over a specified number of years beginning
on the Starting Date, provided, that in the case of a Stock Unit Account,
--------
such number of years may not exceed ten, and in the case of a Cash
Account, such number of years may not exceed the Participant's life
expectancy determined as of the Starting Date.
The "Termination Date" for a Participant is the date his or her service as
a Director terminates for any reason.
The "Value" of a share of Common Stock as of the last day of a given Plan
Year shall mean the average (rounded to the nearest cent) of the monthly
average for each of the full calendar months during such Plan Year of the
means between the reported high and low sale prices of a share of Common
Stock on the New York Stock Exchange composite tape (or, if the Common
Stock is not listed on such exchange, on any other national securities
exchange on which the Common Stock is listed) for each trading day during
each such calendar month. If the Common Stock is not traded on any
national securities exchange, the Value of the Common Stock shall be
determined by the Committee in good faith.
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<PAGE> 7
"Vested Benefit" has the meaning set forth in Section 6(a).
5. ELIGIBLE PARTICIPANTS; INITIAL ELECTIONS. Each individual
who is a Director on the last business day before the Effective Date and has
a vested benefit in the Retirement Plan as of that date shall be a
participant ("Participant") in the Plan.
6. ACCOUNTS; CREDITS. (a) Except as provided in Section 7(b)
below, the Company shall maintain a Deferral Account for each Participant,
which shall be a "Stock Unit Account" or a "Cash Account," as elected by the
Participant on or before August 15, 1997, in accordance with procedures
established by the Committee. Each Participant's Deferral Account shall
initially be credited with an amount (the "Initial Amount") having a value on
the last business day before the Effective Date equal to the amount of the
Participant's vested benefit under the Retirement Plan as of the Effective
Date (the "Vested Benefit"). The amounts of such Vested Benefits shall be
determined by Towers Perrin based upon information supplied by the Company.
(b) If a Participant's Deferral Account is a Cash Account the Initial
Amount shall be a cash amount, and shall accrue interest on the balance
therein at the Interest Rate, such interest to be credited at least monthly.
(c) If a Participant's Deferral Account is a Stock Unit Account, the
Initial Amount credited to such account pur-
-7-
<PAGE> 8
suant to such account pursuant to Section 6(a) shall take the form of stock
units representing shares of Common Stock determined by dividing (i) the amount
of the Participant's Vested Benefit by (ii) the Common Stock Value. Whenever a
dividend is paid or other distribution made with respect to the Common Stock,
each Stock Unit Account shall be credited with a number of shares of Common
Stock having a Value equal to (i) the number of stock units in such Stock Unit
Account as of the record date for such dividend or distribution multiplied by
(ii) the Dividend Equivalent for such dividend or other distribution.
Notwithstanding the foregoing, no amounts shall be credited to any Stock Unit
Account as a result of the Chemicals Distribution, because the amounts
initially credited to the Stock Unit Accounts are being determined based upon
the ex-dividend trading value of the Common Stock with respect to the Chemicals
Distribution. The stock units credited to the Stock Unit Accounts pursuant to
this Section 6 may represent fractional as well as whole shares of Common
Stock.
(d) As soon as practicable after the Effective Date, the Committee
shall cause each Participant to be notified in writing of the value of his or
her Vested Benefit and, in the case of Participants who have elected Stock
Unit Accounts, the average price described in clause (ii) of the preceding
sentence,
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<PAGE> 9
and the number of stock units credited to his or her Stock Unit Account.
7. DELIVERY OF ACCOUNT BALANCES. (a) Each Participant shall
be provided the opportunity to elect, in accordance with procedures
established by the Committee, the manner in which his or her interest in the
Plan will be distributed on or after his or her Termination Date (each such
election, a "Delivery Election"). Such Delivery Election may call for
delivery in a single sum or in installments on or beginning on the later of
(i) the Termination Date or (ii) the date which is six months after the
Delivery Election is made (an "Immediate Payment Election") or for deferred
delivery in a single sum or in installments (a "Deferred Delivery Election" on
or beginning on a specified date (in either case, the date on which delivery
is to be made or is to begin is referred to as the "Starting Date"). The
Starting Date for a Deferred Delivery Election must be on or after the third
anniversary of the Termination Date; provided, that in no event shall the
--------
Starting Date for a Deferred Delivery Election be later than the later of (i)
the Participant's 73rd birthday and (ii) the third anniversary of the
Termination Date. Each Delivery Election shall specify whether it is a Single
Sum Election, a Term Certain Election, a Keogh Election, or an IRA Election;
provided, that Keogh Elections and IRA Elections may only be made in
- --------
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<PAGE> 10
connection with Deferred Delivery Elections made with respect to Cash
Accounts.
(b) Notwithstanding any other provision of this Plan, a Participant
who makes an Immediate Payment Election and who ceases to be a Director and
becomes a director of Chemicals in connection with the Chemicals Distribution
shall not be credited with a Deferral Account, but shall receive a cash lump
sum payment equal to the value of his or her Vested Benefit as soon as
practicable after the Effective Date.
(c) The stock units in a Participant's Stock Unit Account or the cash
in a Participant's Cash Account, as applicable, shall be delivered on or
beginning on the Starting Date in accordance with the Participant's Delivery
Election. If the Participant's Deferral Account is a Stock Unit Account,
such delivery shall be made in the form of stock representing a number of
Common Shares equal to the number of stock units as and when they are to be
delivered. If any such stock units or cash are to be delivered after the
Participant has died or become legally incompetent, they shall be delivered
to the Participant's Beneficiary or legal guardian, as the case may be, in
accordance with the foregoing; provided, that if a Participant who has made
--------
a Keogh Election dies before beginning to receive or receiving all of his or
her distributions, the entire balance in his or her Deferral Account shall be
distributed to his or her Beneficiary immedi-
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<PAGE> 11
ately. References to a Participant in this Plan shall be deemed to refer to the
Participant's Beneficiary or legal guardian, where appropriate.
(d) Participants shall be provided with the opportunity to designate,
in accordance with procedures to be established by the Committee, the person
or persons ("Beneficiaries") who will receive distributions of his or her
interests in the Plan upon the death of the Participant (a "Beneficiary
Designation"). Once made, a Beneficiary Designation or Delivery Election may
be superseded by another Beneficiary Designation or Delivery Election (as
applicable) or revoked in writing by the Participant. However, in order for
any initial or superseding Delivery Election or revocation thereof to be
valid, it must be received by the Committee before the Participant's
Termination Date. In the case of multiple Beneficiary Designations, Delivery
Elections and/or revocations by any Participant, the most recent valid
Beneficiary Designation, Delivery Election or revocation (as applicable) in
effect as of the date of death or Termination Date, as applicable, shall be
controlling. If a Participant does not have a valid Beneficiary Designation
in effect as of the date of his or her death, his or her Beneficiary shall be
his or her estate. If a Participant does not have a valid Delivery Election
in effect as of his or her Termination Date, he or she shall be deemed to
have made an Immediate Payment Election.
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<PAGE> 12
8. SHARE CERTIFICATES; VOTING AND OTHER RIGHTS. The shares
delivered to a Participant pursuant to Section 7 above shall be issued in the
name of the Participant, and the Participant shall be entitled to all rights
of a shareholder with respect to Common Stock for all such shares issued in
his or her name, including the right to vote the shares, and the Participant
shall receive all dividends and other distributions paid or made with respect
thereto.
9. GENERAL RESTRICTIONS. (a) Notwithstanding any other
provision of the Plan or agreements made pursuant thereto, the Company shall
not be required to issue or deliver any shares of Common Stock under the Plan
prior to fulfillment of all of the following conditions:
(i) Listing or approval for listing upon official notice of issuance
of such shares on the New York Stock Exchange, Inc., or such other
securities exchange as may at the time be a market for the Common Stock;
(ii) Any registration or other qualification of such shares under any
state or federal law or regulation, or the maintaining in effect of any
such registration or other qualification which the Committee shall, in its
absolute discretion upon the advice of counsel, deem necessary or
advisable; and
(iii) Obtaining any other consent, approval, or permit from any state
or federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be
necessary or advisable.
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<PAGE> 13
(b) Nothing contained in the Plan shall prevent the Company from
adopting other or additional compensation arrangements for the Participants.
10. NUMBER AND SOURCE OF SHARES AVAILABLE. Subject to
adjustment pursuant to Section 11 below, 75,000 shares of Common Stock may be
issued under the Plan. Shares of Common Stock issuable under the Plan shall
be taken from treasury shares of the Company or purchased on the open market.
11. CHANGE IN CAPITAL STRUCTURE; CHANGE OF CONTROL. (a) In
the event that there is, at any time after the Board adopts the Plan, any
change in the Common Stock by reason of any stock dividend, stock split,
combination of shares, exchange of shares, warrants or rights offering to
purchase Common Stock at a price below its fair market value,
reclassification, recapitalization, merger, consolidation, spin-off or other
change in capitalization of the Company, other than the Chemicals
Distribution, appropriate adjustment shall be made in the number and kind of
shares or other property subject to the Plan and the number and kind of
shares or other property held in the Stock Unit Accounts (taking into account
whether any Dividend Equivalent is credited to the Stock Unit Accounts in
connection therewith), and any other relevant provisions of the Plan by the
Committee, whose determination shall be binding and conclusive on all
persons.
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<PAGE> 14
(b) Without limiting the generality of the foregoing, and
notwithstanding any other provision of this Plan, in the event of a Change of
Control, the Company shall immediately pay to each Participant in a cash lump
sum (i) the Change of Control Consideration multiplied by the number of stock
units in such Participant's Stock Unit Account immediately before such Change
of Control, or (ii) the cash balance in such Participant's Cash Account, as
applicable, and the Plan shall be terminated. Notwithstanding the foregoing,
if the payment of cash with respect to Stock Unit Accounts pursuant to the
preceding sentence would make a Change in Control transaction ineligible for
pooling-of-interests accounting under APB No. 16 that but for the nature of
such grant would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute for such cash Common Stock or
other equity securities with a Value equal to the amount of such cash.
(c) If the shares of Common Stock credited to the Stock Unit Accounts
are converted pursuant to this Section 11 into another form of property,
references in the Plan to the Common Stock shall be deemed, where
appropriate, to refer to such other form of property, with such other
modifications as may be required for the Plan to operate in accordance with
its purposes. Without limiting the generality of the foregoing, references
to delivery of certificates for shares of Common Shares shall be
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<PAGE> 15
deemed to refer to delivery of cash and the incidents of ownership of any other
property held in the Stock Unit Accounts.
12. ADMINISTRATION; AMENDMENT. (a) The Plan shall be
administered by a committee consisting of the Chief Financial Officer, the
General Counsel and the Corporate Vice President -- Human Resources of the
Company (or the holder of any successor officer position thereto) (the
"Committee"), which shall have full authority to construe and interpret the
Plan, to establish, amend and rescind rules and regulations relating to the
Plan, and to take all such actions and make all such determinations in
connection with the Plan as it may deem necessary or desirable, including
without limitation the determination of life expectancies and other
assumptions and information to be used in determining the effect of
Installment Delivery Elections.
(b) The Board may from time to time make such amendments to the Plan
as it may deem proper and in the best interest of the Company, and it may
terminate the Plan at any time.
13. MISCELLANEOUS. (a) Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any Director for
reelection by the Company's shareholders or to limit the rights of the
shareholders to remove any Director.
(b) The Company shall have the right to require, prior to the
issuance or delivery of any cash or shares of Common Stock pursuant to the
Plan, that a Director make arrangements satisfac-
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<PAGE> 16
tory to the Committee for the withholding of any taxes required by law to be
withheld with respect to the issuance or delivery of such cash or shares,
including without limitation by the withholding of shares that would otherwise
be so issued or delivered, by withholding from any other payment due to the
Director, or by a cash payment to the Company by the Director.
14. GOVERNING LAW. The Plan and all actions taken thereunder
shall be governed by and construed in accordance with the laws of the State
of Delaware.
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<PAGE> 1
THE MONSANTO COMPANY
NON-EMPLOYEE DIRECTOR EQUITY INCENTIVE COMPENSATION PLAN
1. NAME OF PLAN. This plan shall be known as the "The Monsanto
Company Non-Employee Director Equity Incentive Compensation Plan" and
is hereinafter referred to as the "Plan."
2. PURPOSES OF PLAN. The purposes of the Plan are to enable
Monsanto Company, a Delaware corporation (the "Company"), to retain
qualified persons to serve as Directors by providing for their
compensation and permitting them to elect to defer a portion thereof, and
to further align the interests of Directors with the interests of
shareholders of the Company by providing them with equity-based
compensation.
3. EFFECTIVE DATE AND TERM. The Plan shall be effective as of
September 1, 1997 (the "Effective Date"). The Plan shall remain in effect
until terminated by action of the Board, or until all Participants have
received all amounts to which they are entitled hereunder, if earlier.
4. DEFINITIONS. The following terms shall have the meanings set
forth below:
"Annual Meeting" means an annual meeting of the shareholders of the
Company.
"Annual Retainer Amount" has the meaning set forth in Section 6(a).
"Beneficiaries" has the meaning set forth in Section 7(b)(iii).
<PAGE> 2
"Beneficiary Designation" has the meaning set forth in Section
7(b)(iii).
"Board" means the Board of Directors of the Company.
"Cash Account" has the meaning set forth in Section 7(a).
The "Committee" means the committee that administers the Plan, as
more fully defined in Section 12.
"Common Stock" means the Company's common stock, par value $2.00
per share.
The "Company" has the meaning set forth in Section 2.
"Current Cash" has the meaning set forth in Section 6(a).
"Deferral Account" means a bookkeeping account maintained by the
Company for a Director representing the Director's interest in the
stock units or cash credited to such account pursuant to Sections 6
and 7.
"Deferred Cash" has the meaning set forth in Section 6(a).
"Deferred Delivery Election" has the meaning set forth in Section
7(b)(i).
"Deferred Stock" means shares of Common Stock credited to a Stock
Unit Account pursuant to Section 6(d)(iii) and Section 7 and later
delivered pursuant to Section 7.
"Delivery Election" has the meaning set forth in Section 7(b)(i).
"Director" means an individual who is a non-employee member of the
Board.
The "Dividend Equivalent" for a given dividend or distribution means
a number of shares (or fractions of a share) of Common Stock having
a Value, as of the date such Dividend Equivalent is credited to a
Stock Unit Account, equal to the amount of cash, plus the fair
market value on the date of distribution of any property, that is
distributed with respect to one share of Common Stock pursuant to
such dividend or distribution;
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<PAGE> 3
such fair market value to be determined by the Committee in good faith.
The "Effective Date" has the meaning set forth in Section 3.
"Elective Amount" has the meaning set forth in Section 6(a).
"Exchange Act" means the Securities Exchange Act of 1934.
"Grant Date" has the meaning set forth in Section 6(b).
"Immediate Payment Election" has the meaning set forth in Section
7(b)(i).
The "Interest Rate" for a calendar year means the average Moody's
Baa Bond Index Rate, as in effect from time to time.
"IRA Election" means an election to receive distributions from a
Deferral Account in annual installments beginning on the Starting
Date, over a period of years equal to the life expectancy of the
Participant or joint life expectancy of the Participant and his or
her spouse (if any), as elected by the Participant, such life
expectancy to be determined as of the Starting Date.
"Keogh Election" means an election to receive distributions from a
Deferral Account in annual installments beginning on the Starting
Date, over a period of years equal to the life expectancy of the
Participant or joint life expectancy of the Participant and his or
her spouse (if any), as elected by the Participant, such life
expectancy to be determined as of the Starting Date and
redetermined as of each anniversary thereof.
"Options" has the meaning set forth in Section 6(a).
"Participant" has the meaning set forth in Section 5.
"Periodic Election" has the meaning set forth in Section 6(a).
"Plan" has the meaning set forth in Section 1.
"Plan Year" means the period from the Effective Date through the day
before the date of the Company's 1998
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<PAGE> 4
Annual Meeting and each subsequent period beginning on the date of an
Annual Meeting and ending on the day before the date of the next Annual
Meeting.
"Required Option Amount" has the meaning set forth in Section 6(a).
"Restricted Stock" means shares of Common Stock granted in
accordance with Section 6(d)(ii).
"Section" means a section of the Plan except where otherwise
specifically indicated.
"Single Sum Election" means an election to receive distributions
under the Plan in a single payment on the Starting Date.
"Starting Date" has the meaning set forth in Section 7(b)(i).
"Stock Unit Account" has the meaning set forth in Section 7(a).
"Tax Withholding Election" has the meaning set forth in Section
7(e).
"Tax Withholding Percentage" has the meaning set forth in Section
7(e).
"Term" means the term of years for which a Participant has been
elected a Director.
"Term Certain Election" means an election to receive distributions
from a Deferral Account in annual installments over a specified
number of years beginning on the Starting Date, provided, that in
--------
the case of a Stock Unit Account, such number of years may not
exceed ten, and in the case of a Cash Account, such number of years
may not exceed the Participant's life expectancy determined as of
the Starting Date.
The "Termination Date" for a Participant is the date his or her
service as a Director terminates for any reason.
The "Value" of a share of Common Stock as of a particular date shall
mean the average (rounded to the nearest cent) of the means
between the reported high and low sale prices of a share of Common
Stock on the New York Stock Exchange Composite Tape (or, if the
Common Stock
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<PAGE> 5
is not listed on such exchange, on any other national securities
exchange on which the Common Stock is listed) on that date or, if that
date is not a trading day, on the most recent trading day preceding
such date. If the Common Stock is not traded on any national
securities exchange, the Value of the Common Stock shall
be determined by the Committee in good faith.
5. ELIGIBLE PARTICIPANTS. Each individual who is a Director
on the Effective Date or becomes a Director thereafter while the Plan is in
effect shall be a participant ("Participant") in the Plan.
6. DIRECTOR COMPENSATION. (a) GENERAL. In consideration
for his or her services as a Director, each Participant shall receive
compensation having a total annual value (the "Annual Retainer Amount")
equal to $100,000 in the case of a Participant who serves as the Chair of
a committee of the Board and $90,000 for all other Participants (which
amount shall be pro-rated for partial years, as applicable); provided, that
--------
the Annual Retainer Amount for the Participants listed on Schedule I
hereto for the Terms indicated on Schedule I shall be reduced as set forth
on Schedule I to take account of the previously granted restricted stock
being earned by such Participants; and provided, further, that the Board
-------- -------
may specify different Annual Retainer Amounts from time to time. Such
compensation for each Term shall be provided as follows: (i) half of such
compensation (the "Required Option Amount") shall take the form of options to
purchase Common Stock ("Options"), as more fully set forth in Sec-
-5-
<PAGE> 6
tion 6(b); and (ii) the other half of the Annual Retainer Amount (the
"Elective Amount") shall take the form of (A) additional Options, as more
fully set forth in Section 6(b), (B) cash paid currently ("Current Cash") or
deferred cash ("Deferred Cash"), as more fully set forth in Sec tion 6(c), or
(C) Restricted Stock or Deferred Stock, as more fully set forth in Section
6(d), or a combination thereof. Each Participant shall be provided with
the opportunity, in accordance with procedures established by the Committee
from time to time, to make an election with respect to each Term during
which he or she is a Participant (a"Periodic Election") specifying what
percentages, in increments of one percentage point, of the Elective
Amount for such Term will be provided to the Participant in the form of
Options, Current Cash, Deferred Cash, Restricted Stock and Deferred Stock.
Each Periodic Election for a particular Term shall be filed with the
Committee at least 30 days before the beginning of such Term; provided,
--------
that the Periodic Elections for Terms beginning before the Effective Date
shall be made on or before November 20, 1997 (and such Periodic
Elections shall relate only to the Annual Retainer Amounts paid with
respect to service after the Effective Date); and provided, further, that,
-------- -------
with respect to an individual who becomes a Participant after the
Effective Date, the Periodic Election for such Participant's first Term
shall be filed with the Committee no later than 30 days after the first day
of such Term. If a Participant fails to make a timely Periodic Election
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<PAGE> 7
with respect to any Term, he or she shall be deemed to have elected to
receive the entire Elective Amount in the form of Current Cash.
(b) OPTIONS. (i) Each Participant shall be granted, for each of
his or her Terms ending after the Effective Date, Options having a value on
the applicable Grant Date (as defined below) determined by the Committee
in accordance with the Black-Scholes option valuation method, equal to the
sum of (A) the Required Option Amount for the Term and (B) the portion of
the Elective Amount for the Term that the Participant has elected to
receive in the form of Options. The effective date of each such grant (the
"Grant Date") shall be the first day of the applicable Term; provided, that
--------
in the case of the first grant to those individuals who are Participants on
the Effective Date, the Grant Date shall be November 21, 1997. Each
Option shall be evidenced by an agreement, shall have a per-share exercise
price equal to the Value of a share of Common Stock on the Grant Date and
shall have the other terms and conditions set forth below in this Section
6(b).
(ii) The Options granted to a Participant on a particular
Grant Date shall vest in installments on the last day of each Plan Year
ending during the Term for which they were granted, pro rata based upon
the percentage of the Term that is included in such Plan Year, but in each
case only if the Partici-
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<PAGE> 8
pant remains a Director on the last day of such Plan Year; provided, that if a
--------
Participant's Termination Date occurs other than on the last day of a Plan Year,
a pro rata portion of the installment of the Participant's then-unvested Options
that would otherwise have vested as of the last day of the Plan Year during
which such Termination Date occurs, based on the percentage of such Plan Year
that occurs on or before such Termination Date, shall instead vest on the
Termination Date; and provided, further, that the number of shares with respect
-------- -------
to which Options vest on a particular day shall be rounded to the nearest whole
number of shares, if necessary to avoid vesting with respect to a fractional
share.
(iii) Each Option that vests in accordance with the foregoing
shall be exercisable from and after the later of the date of such vesting
and the first anniversary of the Grant Date, through the earlier of (A) the
tenth anniversary of the Grant Date and (B) in the case of the Participant's
death during or after his or her service as a Director, the first anniversary
of the date of death, in the case of the Participant's removal from the
Board before the end of any Term, the Termination Date, and in all other
cases, the fifth anniversary of the Participant's Termination Date. Any
Options held by a Participant that have not become vested as of the
Participant's Termination Date shall terminate on the Termination Date.
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<PAGE> 9
(iv) Subject to the limitations of this Section 6(b),
Options may be exercised, in whole or in part, by giving written notice of
exercise to the Company specifying the number of shares of Common Stock
subject to the Option to be purchased. Such notice shall be accompanied
by payment in full of the purchase price by certified or bank check or such
other instrument as the Company may accept. Payment, in full or in part,
may also be made in the form of unrestricted Common Stock already
owned by the Participant, based on the Value of the Common Stock on the
date the Option is exercised; provided, that such already owned shares
--------
have been held by the Participant for at least six months at the time of
exercise. Payment for any shares subject to a Stock Option may also be
made by delivering a properly executed exercise notice to the Company,
together with a copy of irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds necessary to
pay the purchase price. To facilitate the foregoing, the Company may
enter into agreements for coordinated procedures with one or more
brokerage firms. No shares of Common Stock shall be issued pursuant to
the exercise of Options until full payment therefor has been made.
(v) No Option shall be transferable by the Participant
other than by will or by the laws of descent and distribution. All Options
shall be exercisable, subject to the terms of this Section 6(b), only by the
Participant, the guardian or
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<PAGE> 10
legal representative of the Participant, or any person to whom such Option is
transferred pursuant to the preceding sentence, it being understood that
references to the Participant shall be deemed, where appropriate, to refer to
such guardian, legal representative or other transferee.
(c) CASH. The portion, if any, of the Elective Amount for a
particular Term that the Participant elects to have paid in Current Cash
shall be paid, and the portion, if any, of the Elective Amount for a
particular Term that the Participant elects to have paid in Deferred Cash
shall be credited to a Cash Account maintained by the Company pursuant to
Section 7 below, in each case in installments on the last day of each Plan
Year that ends during the Term for which it is paid or credited (as
applicable), pro rata based upon the percentage of the Term that is
included in such Plan Year, but in each case only if the Participant remains
a Director on that day. If a Participant's Termination Date occurs other
than on the last day of a Plan Year, a pro rata portion of the installment of
any Current Cash and any Deferred Cash that would otherwise have been
paid or credited, as applicable, as of the last day of the Plan Year during
which such Termination Date occurs, based upon the percentage of such
Plan Year that occurs on or before such Termination Date, shall instead be
paid or credited, as applicable, on the Termination Date.
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<PAGE> 11
(d) STOCK. (i) The portion, if any, of the Elective Amount for a
particular Term that the Participant elects to have provided in Restricted
Stock, shall be issued as of the first day of such Term in the name of the
Participant in the form of a number of shares of Common Stock having a
Value, as of the first day of such Term, equal to the amount of such
portion. Such shares shall be forfeitable and nontransferable, and shall be
held in escrow for the Participant, until they vest in accordance with the
provisions of Section 6(d)(iii). Dividends and other distributions with
respect to Restricted Stock that has not yet vested as of the record date
therefor shall be held in escrow, and shall vest and be delivered, together
with the related Restricted Stock.
(ii) The portion, if any, of the Elective Amount for a
particular Term that the Participant elects to have provided in Deferred
Stock shall be provided by crediting to a Stock Unit Account maintained by
the Company pursuant to Section 7, a number of stock units representing
hypothetical shares of Common Stock having a Value, as of the first day of
such Term, equal to the amount of such portion. Such Deferred Stock shall
vest as set forth in Section 6(d)(iii).
(iii) Any Restricted Stock and Deferred Stock provided to a
Participant for a particular Term shall vest in installments on the last
day of each Plan Year that ends during the
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<PAGE> 12
Term for which they were granted, pro rata based upon the percentage of the Term
that is included in such Plan Year, but only if the Participant remains a
Director on such day; provided, that if a Participant's Termination Date occurs
--------
other than on the last day of a Plan Year, a pro rata portion of the installment
of the Participant's then-unvested Restricted Stock and Deferred Stock that
would otherwise have vested as of the last day of the Plan Year during
which such Termination Date occurs, based on the percentage of such Plan
Year that occurs on or before such Termination Date, shall instead vest on
the Termination Date; and provided, further, that the number of shares
-------- -------
with respect to which Restricted Stock and/or Deferred Stock vests on a
particular day shall be rounded to the nearest whole number of shares, if
necessary to avoid vesting with respect to a fractional share.
(e) Notwithstanding any other provision of the Plan, each
Participant shall be permitted to make an election (a "Tax Withholding
Election") in connection with each Periodic Election to have a percentage
of (i) the shares of Common Stock delivered to him pursuant to the
exercise of Options, (ii) any Restricted Stock, and/or (iii) any Deferred
Stock, as applicable, delivered in the form of cash to enable him or her to
pay the taxes due with respect thereto. If a Participant makes a Tax
Withholding Election with respect to Options, then as and when such
Options are exercised, a percentage of the Common Stock purchased in
such
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<PAGE> 13
exercise, equal to the "Tax Withholding Percentage" (as defined
below), shall be withheld by the Company, and the Company shall instead
pay to such Participant any amount of cash equal to the Value, as of the
date of exercise, of the withheld Common Stock. If a Participant makes a
Tax Withholding Election with respect to Restricted Stock, then as and
when such Restricted Stock vests, a percentage of such Restricted Stock,
equal to the Tax Withholding Percentage, shall be withheld by the
Company, and the Company shall instead pay to such Participant an amount
of cash equal to the Value, as of the date of vesting, of the withheld
Restricted Stock. If a Participant makes a Tax Withholding Election with
respect to Deferred Stock, then as and when such Deferred Stock is
delivered to the Participant (or the Participant's Beneficiary) pursuant
to Section 7, a percentage of such Deferred Stock, equal to the Tax
Withholding Percentage, shall be withheld by the Company, and the
Company shall instead pay to such Participant (or such Beneficiary) an
amount of cash equal to the Value, as of the date of delivery, of the
withheld Deferred Stock. The "Tax Withholding Percentage" means the
percentage of the value of the Common Stock, Restricted Stock or
Deferred Stock, as applicable, that would be required to be withheld by the
Company under all applicable federal, state, local and other tax laws, if
the Participant were an employee of the Company.
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<PAGE> 14
7. (a) DEFERRAL ACCOUNTS. The Company shall maintain one
or two Deferral Accounts for each Participant who makes a Periodic
Election to receive Deferred Cash or Deferred Stock, consisting of a "Stock
Unit Account" and/or a "Cash Account," as applicable, and shall make
credits thereto as provided in Section 6 and this Section 7. Whenever a
dividend is paid or other distribution made with respect to the Common
Stock, each Stock Unit Account shall be credited with a number of shares
of Common Stock having a Value, as of the date such dividend is paid or
such distribution is made, equal to (i) the number of stock units in such
Stock Unit Account as of the record date for such dividend or distribution
multiplied by (ii) the Dividend Equivalent for such dividend or other
distribution. The shares so credited with respect to Deferred Stock that
has not vested as of the record date for the dividend or distribution shall
vest as and when such Deferred Stock vests. Each Cash Account shall
accrue interest on the balance therein at the Interest Rate, to be credited
and compounded monthly.
(b) DELIVERY OF ACCOUNT BALANCES. (i) Each Participant shall
be provided the opportunity to elect, in accordance with procedures
established by the Committee, the manner in which his or her Deferral
Account balances will be distributed on or after his or her Termination
Date (each such election, a "Delivery Election"). A separate Delivery
Election may be made
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<PAGE> 15
with respect to each amount of cash credited to a Cash Account pursuant to a
single Periodic Election and each amount of stock units credited to a Stock Unit
Account pursuant to a single Periodic Election. Each such Delivery Election may
call for delivery in a single sum or in installments on or beginning on the
later of (i) the Termination Date or (ii) the date which is six months after the
Delivery Election is made (an "Immediate Payment Election") or for deferred
delivery in a single sum or in installments (a "Deferred Delivery Election") on
or beginning on a specified date (in either case, the date on which delivery is
to be made or is to begin is referred to as the "Starting Date"). The Starting
Date for a Deferred Delivery Election must be on or after the third anniversary
of the Termination Date; provided, that in no event shall the Starting Date for
--------
a Deferred Delivery Election be later than the later of (i) the Participant's
73rd birthday and (ii) the third anniversary of the Termination Date. Each
Delivery Election shall specify whether it is a Single Sum Election, a Term
Certain Election, a Keogh Election, or an IRA Election; provided, that Keogh
--------
Elections and IRA Elections may only be made in connection with Deferred
Delivery Elections made with respect to amounts credited to Cash Accounts.
(ii) The stock units in a Participant's Stock Unit Account
and/or the cash in a Participant's Cash Account, as applicable, shall be
delivered on or beginning on the Starting Date in accordance with the
Participant's applicable Delivery
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<PAGE> 16
Elections. In the case of deliveries from a Stock Unit Account, except as
provided in Section 6(e), such delivery shall be made in the form of stock
representing a number of shares of Common Stock equal to the number of stock
units as and when they are to be delivered; provided, that if the number of
--------
shares to be delivered on any particular date included a fractional share, such
number of shares shall be rounded down to the nearest whole number, and if such
delivery is the last to be made to the Participant, the Company shall pay the
Participant cash in an amount equal to the Value of such fractional share on the
date of delivery. If any such stock units or cash are to be delivered after the
Participant has died or become legally incompetent, they shall be delivered to
the Participant's Beneficiary or legal guardian, as the case may be, in
accordance with the foregoing; provided, that if a Participant who has made a
--------
Keogh Election dies before beginning to receive or receiving all of his or her
distributions, the entire balance in his or her Deferral Account to which such
Keogh Election applies shall be distributed to his or her Beneficiary
immediately. References to a Participant in this Plan shall be deemed to refer
to the Participant's Beneficiary or legal guardian, where appropriate.
(iii) Participants shall be provided with the opportunity to
designate, in accordance with procedures to be established by the
Committee, the person or persons ("Beneficiar-
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<PAGE> 17
ies") who will receive distributions of his or her interests in the Plan upon
the death of the Participant (a "Beneficiary Designation"). Once made, a
Beneficiary Designation or Delivery Election may be superseded by another
Beneficiary Designation or Delivery Election (as applicable) or revoked in
writing by the Participant. However, in order for any initial or superseding
Delivery Election or revocation thereof to be valid, it must be received by the
Committee before the Participant's Termination Date, and it shall in any
event be subject to the approval of the Board or of a committee of the
Board if the Committee determines that such approval is required in order
for such Delivery Election and/or transactions resulting therefrom to be
exempt under Rule 16b-3 under Section 16 of the Exchange Act. In the
case of multiple Beneficiary Designations, Delivery Elections and/or
revocations by any Participant, the most recent valid Beneficiary
Designation, Delivery Election or revocation (as applicable) in effect as of
the date of death or Termination Date, as applicable, shall be controlling.
If a Participant does not have a valid Beneficiary Designation in effect as
of the date of his or her death, his or her Beneficiary shall be his or her
estate. If a Participant does not have a valid Delivery Election in effect
as of his or her Termination Date with respect to any portion of his or her
Cash Account or Stock Unit Account, he or she shall be deemed to have
made an Immediate Payment Election with respect to such portion.
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<PAGE> 18
8. DELIVERY OF SHARES; VOTING AND OTHER RIGHTS. The
shares delivered to a Participant pursuant to Section 6 or 7 above shall be
issued in the name of the Participant, and the Participant shall be entitled
to all rights of a shareholder with respect to Common Stock for all such
shares issued in his or her name, including the right to vote the shares,
and the Participant shall receive all dividends and other distributions paid
or made with respect thereto from and after the date of such issuance,
except as specifically provided in Section 6(d)(i).
9. GENERAL RESTRICTIONS. (a) Notwithstanding any other
provision of the Plan or agreements made pursuant thereto, the Company
shall not be required to issue or deliver any shares of Common Stock under
the Plan prior to fulfillment of all of the following conditions:
(i) Listing or approval for listing upon official notice of
issuance of such shares on the New York Stock Exchange, Inc., or
such other securities exchange as may at the time be a market for
the Common Stock;
(ii) Any registration or other qualification of such shares
under any state or federal law or regulation, or the maintaining in
effect of any such registration or other qualification which the
Committee shall, in its absolute discretion upon the advice of
counsel, deem necessary or advisable; and
(iii) Obtaining any other consent, approval, or permit from
any state or federal governmental agency which the Committee
shall, in its absolute discretion after receiving the advice of
counsel, determine to be necessary or advisable.
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<PAGE> 19
(b) Nothing contained in the Plan shall prevent the Company from
adopting other or additional compensation arrangements for the
Participants.
(c) Except as specifically provided in the Plan with respect to
Beneficiary Designations, no Participant or Beneficiary shall have the
right to assign, pledge or otherwise dispose of his or her interest in any
Deferral Account, nor shall the interest of a Participant or Beneficiary
therein be subject to garnishment, attachment, transfer by operations of
law, or any legal process.
(d) The Plan is intended to constitute an unfunded plan for
incentive and deferred compensation of Directors, and the rights of
Directors with respect to Deferral Accounts under the Plan shall be those
of general creditors of the Company. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created
under the Plan to deliver Common Stock or make payments, so long as the
existence of such trusts or other arrangements is consistent with the
unfunded status of the Plan.
10. NUMBER AND SOURCE OF SHARES AVAILABLE. Subject to
adjustment pursuant to Section 11, 500,000 shares of Common Stock may
be issued under the Plan. Shares of Common Stock issuable under the Plan
shall be taken from treasury shares of the Company or purchased on the
open market. If any shares of Restricted
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<PAGE> 20
Stock or Deferred Stock are forfeited, or if any Option terminates without
having been exercised, the shares subject thereto shall again be available under
the Plan.
11. CHANGE IN CAPITAL STRUCTURE; CHANGE OF CONTROL. (a) In the event
that there is, at any time after the Board adopts the Plan, any change in the
Common Stock by reason of any stock dividend, stock split, combination of
shares, exchange of shares, warrants or rights offering to purchase Common Stock
at a price below its fair market value, reclassification, recapitalization,
merger, consolidation, spin-off or other change in capitalization of the
Company, appropriate adjustment shall be made in the number and kind of shares
or other property subject to the Plan and the number and kind of shares or other
property held in the Stock Unit Accounts (taking into account whether any
Dividend Equivalent is credited to the Stock Unit Accounts in connection
therewith), and any other relevant provisions of the Plan by the Committee,
whose determination shall be binding and conclusive on all persons. Without
limiting the generality of the foregoing, the Committee shall, to the
greatest extent possible, make such adjustments so that Deferred Stock in
Stock Unit Accounts under the Plan is treated in the same manner as
actual shares of Common Stock.
(b) If the shares of Common Stock credited to the Stock Unit
Accounts are converted pursuant to this Section 11
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<PAGE> 21
into cash or another form of property, references in the Plan to the Common
Stock shall be deemed, where appropriate, to refer to such cash or other form of
property, with such other modifications as may be required for the Plan to
operate in accordance with its purposes. Without limiting the generality
of the foregoing, references to delivery of certificates for shares of
Common Stock shall be deemed to refer to delivery of cash and the
incidents of ownership of any other property held in the Stock Unit
Accounts.
12. ADMINISTRATION; AMENDMENT. (a) The Plan shall be
administered by a committee consisting of the Chief Financial Officer, the
General Counsel and the Corporate Vice President -- Human Resources of
the Company (or the holder of any successor officer position thereto) (the
"Committee"), which shall have full authority to construe and interpret
the Plan, to establish, amend and rescind rules and regulations relating to
the Plan, and to take all such actions and make all such determinations in
connection with the Plan as it may deem necessary or desirable, including
without limitation the determination of life expectancies and other
assumptions and information to be used in determining the effect of
Delivery Elections.
(b) The Board may from time to time make such amendments to the
Plan as it may deem proper and in the best interest of the Company, and it
may terminate the Plan at any time.
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<PAGE> 22
13. MISCELLANEOUS. (a) Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any Director for
reelection by the Company's shareholders or to limit the rights of the
shareholders to remove any Director.
(b) The Company shall have the right to require, prior to the
issuance or delivery of any cash or shares of Common Stock pursuant to
the Plan, that a Director make arrangements satisfactory to the
Committee for the withholding of any taxes required by law to be withheld
with respect to the issuance or delivery of such cash or shares, including
without limitation by the withholding of shares that would otherwise be
so issued or delivered, by withholding from any other payment due to the
Director, or by a cash payment to the Company by the Director.
14. GOVERNING LAW. The Plan and all actions taken thereunder
shall be governed by and construed in accordance with the laws of the
State of Delaware.
-22-
<PAGE> 23
THE MONSANTO COMPANY
NON-EMPLOYEE DIRECTOR EQUITY INCENTIVE PLAN
SCHEDULE I
----------------------------------------------------------
As provided in Section 6(a) of the Plan, the Annual Retainer Amount for the
following Participants shall be reduced in the amounts set forth below to take
account of the previously granted restricted stock being earned by such
Participants:
<TABLE>
<CAPTION>
Annual Retainer for year(s) ending at
Director Amount reduction the Annual Meeting in
- ---------------------------------------------------------------------------------
<S> <C> <C>
Robert M. Heyssel $10,000 1998
Gwendolyn S. King $10,000 1998
Philip Leder $10,000 1998 and 1999
John S. Reed $ 5,000 1998, 1999 and 2000
John E. Robson $ 5,000 1998, 1999, 2000 and 2001
William D. Ruckelshaus $ 5,000 1998, 1999 and 2000
</TABLE>
-23-
<PAGE> 1
EXCERPT OF
RESOLUTIONS OF MONSANTO COMPANY BOARD OF DIRECTORS
ADOPTED BY UNANIMOUS CONSENT EFFECTIVE AUGUST 4, 1997
WHEREAS, the Board has determined that it is in the best interests of the
Company and its shareholders to terminate the Monsanto Company Non-Employee
Directors Retirement Plan (the "Directors Retirement Plan") with respect to
currently active non-employee directors, to close the Charitable Contribution
Program established by resolution of the Board of Directors effective April
1, 1992 (the "Charitable Contribution Program") to new participants, and to
provide compensation to certain non-employee directors for their Board
service during the period from April 25, 1997 to the date of the distribution
("Distribution") to the holders of shares of the Company's common stock,
$2.00 par value ("Common Stock") of the outstanding stock in the Company's
newly formed Chemicals subsidiary ("Chemicals") (the date of such
distribution herein referred to as the "Distribution Date") because of the
suspension to such directors in April 1997 of grants of restricted stock that
normally would have constituted a portion of their annual retainer and/or the
forfeiture of restricted stock that will not be earned out by them because of
their resignation from the Company's Board of Directors effective as of the
Distribution Date; and
WHEREAS, in connection with such termination of the Directors Retirement
Plan it is necessary to make provision for the vested benefits of active
non-employee directors under such plan on terms and conditions substantially
as presented to this Board at its meeting on July 25, 1997;
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby adopts, subject to the
Distribution, the Monsanto Company Non-Employee Director Deferred
Compensation Plan (the "Deferred Compensation Plan") substantially in the
form set forth in Exhibit A attached hereto.
..........
FURTHER RESOLVED, that, subject to the Distribution, the Charitable
Contribution Program be amended, effective as of the Distribution Date, such
that from and after the Distribution Date, no non-employee director who is
not, as of such date, a participant in the Charitable Contribution Program,
and no individual who becomes a non-employee director after such date, shall
be entitled to become a participant therein.
FURTHER RESOLVED, that, subject to, and as soon as practicable following, the
Distribution Date, the Company will make to each of the seven directors...
whose grant of restricted stock was suspended in April 1997
<PAGE> 2
2
because of the anticipated Distribution a cash payment equal to the sum of
(a) the dollar amount of the portion of the restricted stock which the
director would have normally received in April 1997 but for the suspension
and which would have been earned out on the date of the 1998 Annual Meeting
of Shareholders (the "Dollar Amount") divided by a fraction the numerator of
which is the number of months of Board service (to the nearest whole month)
during the period from April 25, 1997 to the Distribution Date (the "Service
Period") and the denominator of which is twelve; (b) the number of shares of
Common Stock that is equal to the Dollar Amount divided by the Fair Market
Value of a share of Common Stock on April 25, 1997 (with any resulting
fractional shares rounded up to the next higher whole number) multiplied by a
fraction the numerator of which is the number of months (to the nearest whole
month) during the Service Period and the denominator of which is twelve (the
product of such calculation hereinafter referred to as the "Service Period
Shares") times the increase in Fair Market Value in one share of Common Stock
during the Service Period; and (c) the cash dividends to which a holder of
record of the number of Service Period Shares would have become entitled
during the Service Period. "Fair Market Value" with respect to any given day
means the average of the highest and lowest sales prices of the Common Stock
reported as the New York Stock Exchange-Composite Transactions for such day
by The Wall Street Journal.
FURTHER RESOLVED, that, subject to, and as soon as practicable following, the
Distribution Date, the Company will make to each of the four directors who
will resign from the Company's Board effective as of the Distribution Date to
become directors of Chemicals ... a cash payment equal to the Fair Market Value
of a share of Common Stock on the last trading day immediately prior to the
Distribution Date times the number of shares of previously granted restricted
stock which such director would have earned out during the period from the
1997 Annual Meeting of Shareholders to the 1998 Annual Meeting of
Shareholders multiplied by a fraction the numerator of which is the number of
months of Board service (to the nearest whole month) during the Service
Period and the denominator of which is twelve.
FURTHER RESOLVED, that the appropriate officers and assistant officers of the
Company be, and each of them acting alone, is hereby further authorized and
empowered to do or cause to be done any and all further acts and things,
including the execution and delivery in the name and on behalf of the Company
and under its corporate seal of any agreements, certificates, instruments and
documents, as such officer may, with the advice of counsel, deem necessary or
desirable to carry out the purpose and intent of these resolutions and to
comply with all legal requirements relating thereto.
<PAGE> 1
MONSANTO MANAGEMENT INCENTIVE PLAN OF 1996
As Amended April 25, 1997, July 25, 1997 and August 18, 1997 and
As Adjusted to Reflect Stock Split as of May 15, 1996
and Spin-off as of September 1, 1997
I. GENERAL PROVISIONS
1. PURPOSES
The Monsanto Management Incentive Plan of 1996 is designed to:
* focus management on business performance that creates
stockholder value,
* encourage innovative approaches to the business of the
Company,
* reward for results,
* encourage ownership of Monsanto common stock by management,
and
* encourage taking higher risks with an opportunity for higher
reward.
This Incentive Plan shall be effective April 15, 1996 ("Effective
Date"), subject to the approval of this Incentive Plan by the
stockholders of the Company.
2. DEFINITIONS
Except where the context otherwise indicates, the following
definitions apply:
"Associated Company" means any corporation (or partnership, joint
venture, or other enterprise), of which the Company owns or
controls, directly or indirectly, 10% or more, but less than 50%
of the outstanding shares of stock normally entitled to vote for
the election of directors (or comparable equity participation and
voting power).
"Award" means any Stock Option, Stock Appreciation Right,
Restricted Share, unrestricted Share, dividend equivalent unit or
other award granted under this Incentive Plan.
"Board" means Board of Directors of the Company.
"Committee" means the ECDC, or its permitted delegate.
"Compensation Committee" means one or more committees appointed
by the ECDC composed of one or more senior managers of the
Company or a Subsidiary to whom the ECDC may delegate its powers
(or a portion thereof) to administer this Incentive Plan pursuant
to Section 3(a) of this Article I.
"ECDC" means the Executive Compensation and Development Committee
or such other committee consisting of two or more members of the
Board as may be appointed by the Board to administer this
Incentive Plan pursuant to Section 3(a) of this Article I.
"Company" means Monsanto Company, a Delaware corporation.
"Eligible Participant" means any officer or other salaried
employee (including a director who is a salaried employee) of the
Company, a Subsidiary, or an Associated Company.
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<PAGE> 2
"Incentive Plan" means the Monsanto Management Incentive Plan of
1996, set forth herein.
"Fair Market Value" shall mean, with respect to any given day,
the average of the highest and lowest sales prices of the Shares
reported as the New York Stock Exchange-Composite Transactions
for such day, or if the Shares were not traded on the New York
Stock Exchange on such day, then on the next preceding day on
which the Shares were traded, all as reported by The Wall Street
Journal, mid-west edition, under the heading New York Stock
Exchange-Composite Transactions or by such other source as the
Committee may select.
"Incentive Stock Option" or "Incentive Option" means an option
meeting the definition of that term as set forth in Section 3 of
Article II of this Incentive Plan.
"1984 Plan" means the Monsanto Management Incentive Plan of 1984,
as amended.
"1986 Plan" means the Searle Monsanto Stock Option Plan of 1986,
as amended.
"1988/I Plan" means the Monsanto Management Incentive Plan of
1988/I, as amended.
"1988/II Plan" means the Monsanto Management Incentive Plan of
1988/II, as amended.
"1991 Plan" means the NutraSweet/Monsanto Stock Plan of 1991, as
amended.
"1994 NutraSweet/Monsanto Plan" means the NutraSweet/Monsanto
Stock Plan of 1994, as amended.
"1994 Plan" means the Monsanto Management Incentive Plan of 1994,
as amended.
"1994 Searle/Monsanto Plan" means the Searle/Monsanto Stock Plan
of 1994, as amended.
"Non-Qualified Stock Option" or "Non-Qualified Option" means an
option referred to in Section 4 of Article II of this Incentive
Plan.
"Participant" means an Eligible Participant to whom a Stock
Option or a Stock Appreciation Right has been granted, a bonus
commitment made or a bonus awarded pursuant to this Incentive
Plan.
"Reporting Person" means a person subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of
1934 (or any law, rule, regulation or other provision that may
replace such statute) with respect to Shares.
"Restricted Shares" means Shares that were made subject to
restrictions in accordance with Section 6 of Article II of this
Incentive Plan.
"Shares" means shares of common stock of the Company and any
shares of stock or other securities received as a result of a
Share adjustment as set forth in Section 4 of this Article I.
"Stock Appreciation Right" means a right referred to in Section 5
of Article II of this Incentive Plan.
"Stock Appreciation Right Fair Market Value" or "SAR Fair Market
Value" shall mean a value established by the Committee for the
exercise of a Stock Appreciation Right. If such exercise occurs
during any quarterly "window period" as specified by Rule 16b-3
of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended from time to time, or any law,
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<PAGE> 3
rule, regulation or other provision that may hereafter replace
such Rule, the Committee may establish a common value for
exercises during such window period.
"Stock Option" or "Option" shall mean Incentive Stock Options
and/or Non-Qualified Stock Options.
"Subsidiary" means: (i) for the purpose of an Incentive Stock
Option, any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain;
and (ii) for the purposes of a Non-Qualified Stock Option, a
Stock Appreciation Right or an Award of Shares (restricted or
not), any corporation (or partnership, joint venture, or other
enterprise) of which the Company owns or controls, directly or
indirectly, 50% or more of the outstanding shares of stock
normally entitled to vote for the election of directors (or
comparable equity participation and voting power).
"Termination of Employment" means the discontinuance of
employment of a Participant for any reason other than a Transfer.
"Transfer" means: (i) for the purpose of an Incentive Stock
Option, a change of employment of a Participant within the group
consisting of the Company and its Subsidiaries; and (ii) for the
purpose of a Non-Qualified Stock Option, a Stock Appreciation
Right or an Award of Shares (restricted or not), a change of
employment of a Participant within the group consisting of the
Company and its Subsidiaries, or, if the Committee so determines,
a change of employment of a Participant within the group
consisting of the Company, its Subsidiaries and Associated
Companies.
3. ADMINISTRATION
(a) This Incentive Plan shall be administered by the ECDC,
except to the extent the ECDC delegates administration
pursuant to this paragraph. The ECDC may delegate all or a
portion of the administration of this Incentive Plan to one
or more Compensation Committees and may authorize further
delegation by the Compensation Committees to senior managers
of the Company or its Subsidiaries; provided that
determinations regarding the timing, pricing, amount and
terms of any Award to a Reporting Person shall be made only
by the ECDC. No person shall be eligible or continue to
serve as a member of the ECDC unless such person is (i) a
"disinterested person" within the meaning of Rule 16b-3 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended from time to time, or any
law, rule, regulation or other provision that may hereafter
replace such Rule and (ii) an "outside director" within the
meaning of Section 162(m) of the Internal Revenue Code of
1986, as may be amended from time to time, and no person
shall be eligible for the grant of an Award under this
Incentive Plan while serving as a member of the ECDC.
(b) The Committee shall have the exclusive right to interpret
this Incentive Plan, to select the persons who are to
receive Awards, and to act in all matters pertaining to the
granting of Awards under this Incentive Plan including,
without limitation, the timing, pricing, amount and terms of
any Award and the amendment thereof consistent with the
provisions of this Incentive Plan. No Eligible Participant
shall have any right to be considered for or to receive any
Awards. All acts and decisions of the Committee with respect
to any questions arising in connection with the
administration and interpretation of this Incentive Plan,
including the
A-3
<PAGE> 4
severability of any and all of the provisions
thereof, shall be conclusive, final and binding upon all
Eligible Participants.
(c) The Committee may adopt and amend from time to time rules
and regulations of general application for the
administration of this Incentive Plan.
(d) Without limiting the foregoing Sections 3(a), (b) and (c) of
this Article I (and notwithstanding any other provisions of
this Incentive Plan), the Committee is authorized to take
such action as it determines to be necessary or advisable,
and fair and equitable to Participants, with respect to
Awards in the event of: a merger of the Company with,
consolidation of the Company into, or the acquisition of the
Company by, another corporation; a sale or transfer of all
or substantially all of the assets of the Company to another
corporation or any other person or entity; a separation from
the Company, including any spin-off or other distribution to
stockholders other than an ordinary cash dividend; a tender
or exchange offer for Shares made by any corporation, person
or entity (other than the Company); or other reorganization
in which the Company will not survive as an independent,
publicly-owned corporation. Such action may include (but
shall not be limited to) establishing, amending or waiving
the forms, terms, conditions and duration of Stock Options,
Stock Appreciation Rights, Awards of Restricted Shares and
other Awards so as to provide for earlier, later, extended
or additional times for exercise or payments, differing
methods for calculating payments, alternate forms and
amounts of payment, accelerated release of restrictions or
other modifications. The Committee may take such actions
pursuant to this Section 3(d) by adopting rules and
regulations of general applicability to all Participants or
to certain categories of Participants, by including,
amending or waiving terms and conditions in Awards
(including, without limitation, agreements with respect to
Restricted Shares), or by taking action with respect to
individual Participants. The Committee may take such actions
as part of the Awards, or before or after the public
announcement of any such merger, consolidation, acquisition,
sale or transfer of assets, separation, tender or exchange
offer or other reorganization.
4. SHARE ADJUSTMENTS
In the event that at any time or from time to time a stock
dividend, stock split, recapitalization, merger, consolidation,
or other change in capitalization, or a sale by the Company of
all or part of its assets, or a separation from the Company,
including any spin-off or other distribution to stockholders
other than an ordinary cash dividend, results in (a) the
outstanding Shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number
or class of shares of stock or other securities of the Company,
or for shares of stock or other securities of any other
corporation; or (b) new, different or additional shares or other
securities of the Company or of any other corporation being
received by the holders of outstanding Shares, then:
(i) the total number of Shares authorized for Awards under
this Incentive Plan;
(ii) the number and class of Shares (A) that may be subject
to Stock Options or Stock Appreciation Rights, (B)
which have not been issued or transferred under
outstanding Stock Options or Stock Appreciation Rights,
and (C) which have been awarded but are undelivered
under this Incentive Plan; and
A-4
<PAGE> 5
(iii) the purchase price to be paid per Share under
outstanding Stock Options and the number of Shares to
be transferred in settlement of outstanding Stock
Appreciation Rights;
shall in each case be appropriately adjusted by the Committee in
its discretion; provided, however, that all adjustments made as
the result of the foregoing in respect of each Stock Option which
is granted as an Incentive Stock Option shall be made so that
such Stock Option shall continue to be an Incentive Stock Option
as defined in Section 422 of the Internal Revenue Code of 1986,
as may be amended from time to time.
5. SHARES AUTHORIZED
The total number of Shares for which awards may be granted under
this Incentive Plan shall not exceed 71,605,350 Shares.
Notwithstanding the foregoing, the total number of Shares that
shall be available for Awards of Restricted or unrestricted
Shares shall be 1/2 of 1% of the total number of Shares
outstanding. The limitations in this Section 5 are subject to the
adjustments provided for in Section 4 of this Article I; the
provisions of Section 1(b) of Article II of this Incentive Plan;
and the provisions of Section 3(d) of Article III of this
Incentive Plan.
The total number of Shares for which Awards may be granted under
this Incentive Plan to any one Eligible Participant shall not
exceed in any three-year period 15% of the total number of Shares
for which Awards may be made under this Incentive Plan, subject
to the adjustments provided for in Section 4 of this Article I.
II. AWARDS
1. SHARES USED FOR AWARDS
(a) The Shares for which Options may be granted under this
Option Plan may be authorized but unissued Shares, or
treasury Shares, or both.
(b) In the event that any unexercised Stock Option granted
hereunder lapses or ceases to be exercisable for any reason
other than a surrender of the Option pursuant to Section
l(c) of this Article II or the exercise of a Stock
Appreciation Right under Section 5 of this Article II, the
Shares subject to such Option shall again be available for
Option grants under this Option Plan without again being
charged against the authorized Shares set forth in Section 5
of Article I if not prohibited by Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor rule or
provision). Any amendment of any Option or Stock
Appreciation Right by the Committee pursuant to Article I,
Section 3 of this Incentive Plan shall not be considered the
grant of a new Option for the purpose of Section 5 of
Article I.
(c) In the event of death or total and permanent disability as
determined by the Committee, the Committee may, with the
consent of the Participant, his legal representative, or in
the event of death, a beneficiary designated in writing by
the Participant during his lifetime, authorize payment, in
cash or in Shares, or partly in cash and partly in Shares,
as the Committee may direct, of an amount equal to the
difference at the time between the Fair Market Value of the
Shares subject to an Option and the Option price in
consideration of the surrender of the Option. In such an
event the Shares subject to the Option so surrendered shall
be charged against the limitations set forth in Section 5 of
Article I.
(d) In the event that any Award or installment thereof ceases to
be payable for any reason, the Shares subject to such Award
shall again be available for Award without again being
charged against the limitations
A-5
<PAGE> 6
on the number of Shares set forth in Section 5 of Article I
if not prohibited by Rule 16b-3 under the Securities Exchange
Act of 1934 (or any successor rule or provision).
2. INCIDENTS OF OPTIONS AND STOCK APPRECIATION RIGHTS
(a) An Award of Stock Options or Stock Appreciation Rights may
be made at such time or times determined by the Committee
following the Effective Date to any Eligible Participant,
except that Incentive Options may not be awarded to
employees of Associated Companies. Each Stock Option and
Stock Appreciation Right shall be granted subject to such
terms and conditions, if any, not inconsistent with this
Incentive Plan, as shall be determined by the Committee,
including any provisions as to continued employment as
consideration for the grant or exercise of such Option or
Stock Appreciation Right, provisions as to performance
conditions and any provisions which may be advisable to
comply with applicable laws, regulations or rulings of any
governmental authority.
(b) An Incentive Stock Option or Stock Appreciation Right shall
not be transferable by the Participant otherwise than by
will, by the laws of descent and distribution, or pursuant
to a written beneficiary designation, and shall be
exercisable during the lifetime of the Participant only by
him or by his guardian or legal representative. A Non-
Qualified Stock Option or Stock Appreciation Right shall not
be transferable except by will, by the laws of descent and
distribution, pursuant to a written beneficiary designation,
pursuant to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986, as amended, or Title I
of the Employee Retirement Income Security Act or the rules
thereunder, or in such circumstances as would not result in
the failure to comply with Rule 16b-3 under the Securities
Exchange Act of 1934 (or any successor rule or provision) if
the transferor were a Reporting Person.
(c) Shares purchased upon exercise of a Stock Option shall be
paid for in such amounts, at such times and upon such terms
as shall be determined by the Committee and specified in the
grant of the Option. Without limiting the foregoing, the
Committee may establish payment terms for the exercise of
Stock Options which permit the Participant to deliver Shares
(or other evidence of ownership of Shares satisfactory to
the Company), including, at the Committee's option,
Restricted Shares, with a Fair Market Value equal to the
Option price as payment.
(d) The Option price per share shall be established by the grant
and shall not be decreased thereafter except pursuant to
Section 4 of Article I of this Incentive Plan.
(e) The Committee, in its discretion, may provide for the
escalation of the Option price per Share over all or part of
the term of the Option.
(f) The Committee, in its discretion, may offer Participants the
opportunity to elect to receive an Option grant in lieu of a
salary increase or a bonus or may offer Participants the
opportunity to purchase Options for cash or such other
consideration as the Committee in its discretion determines.
3. INCENTIVE OPTIONS
An Incentive Option shall be an "Incentive Stock Option" as that
term is defined in Section 422 of the Internal Revenue Code of
1986, as may be amended from time to time, as in effect at the
time of the grant of any such Option, or any statutory provision
that may be enacted to replace such Section. Each provision of
this Incentive Plan and of each Incentive Stock Option granted
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<PAGE> 7
hereunder shall be construed so that each such Option shall be an
Incentive Stock Option, and any provision thereof that cannot be
so construed shall be disregarded. Incentive Stock Options shall
be granted only to purchase unrestricted Shares and only to
Eligible Participants, each of whom may be granted one or more
such Options at such time or times determined by the Committee
following the Effective Date until April 14, 2006, subject to the
following conditions:
(a) The Option price per Share shall be set by the grant but
shall not be less than 100% of the Fair Market Value at the
time of the grant.
(b) The Option and its related Stock Appreciation Right, if any,
may be exercised in full or in part from time to time within
ten (10) years from the date of the grant, or such shorter
period as may be specified by the Committee in the grant,
provided that in any event each shall lapse and cease to be
exercisable upon, or within such period following,
Termination of Employment as shall have been determined by
the Committee and as specified in the Option or Stock
Appreciation Right; provided, however, that such period
following Termination of Employment shall not exceed twelve
months unless employment shall have terminated:
(i) as a result of retirement as defined by the Committee
or total and permanent disability as determined by the
Committee, in which event such period shall not exceed--
(A) in the case of an Option, the original term of the
Option; and
(B) in the case of a Stock Appreciation Right, one
year after such retirement or disability or after
resignation as an officer or director of the
Company, whichever shall last occur (unless
earlier terminated pursuant to Section 5(b) of
this Article II);
or
(ii) as a result of death, or death shall have occurred
following Termination of Employment and while the
Option or Stock Appreciation Right was still
exercisable; and
provided, further, that such period following Termination of
Employment shall in no event extend the original exercise
period of the Option or related Stock Appreciation Right, if
any.
(c) The aggregate Fair Market Value (determined at the time the
Option is granted) of the Shares with respect to which
Incentive Stock Options are first exercisable during any
calendar year by any Eligible Participant shall not exceed
$100,000; however, if the Fair Market Value of Incentive
Stock Option Shares (at date of grant) exceeds $100,000 in
the calendar year in which Incentive Stock Options are first
exercisable, Shares with a Fair Market Value at date of
grant exceeding $100,000 shall not be deemed to be Incentive
Stock Options.
(d) Incentive Stock Options shall be granted only to an Eligible
Participant who, at the time the Option is granted, does not
own stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company.
(e) Any other terms and conditions which the Committee
determines, upon advice of counsel, should be imposed for
the Option to qualify as an Incentive Stock Option and any
other terms and conditions not inconsistent with this
Incentive Plan as determined by the Committee;
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including provisions making the Shares subject to such Option
Restricted Shares or provisions making vesting or the
ability to exercise subject to performance conditions.
4. NON-QUALIFIED OPTIONS
One or more Options may be granted as Non-Qualified Options to
purchase unrestricted Shares or Restricted Shares to an Eligible
Participant at such time or times determined by the Committee,
following the Effective Date, subject to the following terms and
conditions:
(a) The Option price per Share shall be established by the grant
but shall not be less than 100% of the Fair Market Value at
the time of the grant (or such later date as the Committee
shall determine to be the grant date).
(b) The Option and its related Stock Appreciation Right, if any,
may be exercised in full or in part from time to time within
ten (10) years from the date of the grant, or such shorter
period as may be specified by the Committee in the grant,
provided that in any event each shall lapse and cease to be
exercisable upon, or within such period following
Termination of Employment as shall have been determined by
the Committee and as specified in the Option or Stock
Appreciation Right; provided, however, that such period
following Termination of Employment shall not exceed twelve
months unless employment shall have terminated:
(i) as a result of retirement as defined by the
Committee or total and permanent disability as
determined by the Committee, in which event such
period shall not exceed--
(A) in the case of an Option, the original term
of the Option; and
(B) in the case of a Stock Appreciation Right,
one year after such retirement or disability
or after resignation as an officer or
director of the Company, whichever shall last
occur (unless earlier terminated pursuant to
Section 5(b) of this Article II);
or
(ii) as a result of death, or death shall have occurred
following Termination of Employment and while the
Option or Stock Appreciation Right was still
exercisable; and
provided, further, that such period following
Termination of Employment shall in no event extend the
original exercise period of the Option or related Stock
Appreciation Right, if any.
(c) The Option grant may include any other terms and conditions
not inconsistent with this Incentive Plan as determined by
the Committee, including provisions making the Shares
subject to such Option Restricted Shares or provisions
making vesting or the ability to exercise subject to the
satisfaction of performance conditions.
5. STOCK APPRECIATION RIGHTS
A Stock Appreciation Right may be granted to an Eligible
Participant in connection with (and only in connection with) an
Incentive Stock Option or a Non-Qualified Option granted under
this Incentive Plan, or under any other incentive plan of the
Company or its Subsidiaries which was approved by the
stockholders, subject to the following terms and conditions:
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(a) Such Stock Appreciation Right shall entitle a holder of an
Option within the period specified for the exercise of the
Option in the related Option grant to surrender the
unexercised Option (or a portion thereof) and to receive in
exchange therefor a payment in cash or Shares having an
aggregate value equal to the product of (i) the amount by
which (A) the SAR Fair Market Value of each Share exceeds
(B) the Option price per Share, times (ii) the number of
Shares under the Option, or portion thereof, which is
surrendered.
(b) Except as expressly provided herein, each Stock Appreciation
Right granted hereunder shall be subject to the same terms
and conditions as the related Option. It shall be
exercisable only to the extent such Option is exercisable
and shall terminate or lapse and cease to be exercisable
when the related Option terminates or lapses. The Committee
may grant Stock Appreciation Rights concurrently with grants
of Options or in connection with previously granted Options
under this Incentive Plan, or under any other incentive plan
of the Company or its Subsidiaries which was approved by the
stockholders, which are unexercised and have not terminated
or lapsed. With respect to Stock Appreciation Rights granted
in connection with such previously granted Options, the
Committee shall provide that such Stock Appreciation Rights
shall not be exercisable until the holder completes six (6)
months (or such longer period as the Committee shall
determine) of service with the Company, a Subsidiary, or an
Associated Company immediately following the date of the
grant of such Stock Appreciation Rights.
(c) The Committee shall have sole discretion to determine in
each case whether the payment will be in the form of all
cash, all Shares (which may, at the Committee's discretion,
be Restricted Shares), or any combination thereof. If
payment is to be made in Shares, the number of Shares shall
be determined as follows: the amount payable in Shares shall
be divided by the SAR Fair Market Value of Shares. The
payments to be made, in whole or in part, in cash upon the
exercise of Stock Appreciation Rights by any officer of the
Company shall be made in accordance with the provisions
relating to the exercise of stock appreciation rights of
Rule 16b-3 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect at the time of
such exercise, or any law, rule, regulation or other
provision that may hereafter replace such Rule.
(d) Upon exercise of a Stock Appreciation Right, the number of
Shares subject to exercise under the related Option shall
automatically be reduced by the number of Shares represented
by the Option or portion thereof which is surrendered. To
the extent that a Stock Appreciation Right shall be
exercised, any Shares transferred upon such exercise shall
not be charged against the maximum limitations upon the
grant of Options set forth in this Incentive Plan under
which such Option shall have been granted but the Option in
connection with which a Stock Appreciation Right shall have
been granted shall be deemed to have been exercised for the
purpose of such maximum limitations.
(e) The Committee shall have sole discretion as to the timing of
any payment made in cash, Shares, or a combination thereof
upon exercise of Stock Appreciation Rights hereunder,
whether in a lump sum, in annual installments or otherwise
deferred and the Committee shall have sole discretion to
determine whether such payments may bear amounts equivalent
to interest or cash dividends.
(f) For purposes of this paragraph 5(f) of Article II:
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<PAGE> 10
(i) "Unrelated Party" means any party or group of
parties acting together other than (A) the
Company, its directors and officers, or (B) any
nominee holder for any stock exchange;
(ii) "Offer" means any tender or exchange offer made by
an Unrelated Party for the Shares and shall be
deemed to occur upon the first purchase or
exchange of such Shares;
(iii) "Change of Control" means any acquisition,
beneficially or otherwise, by any Unrelated Party
of 25% or more of the combined voting power of the
common and preferred stock of the Company and
shall be deemed to occur upon the date that the
Unrelated Party attains control of said 25% or
more of the combined voting power;
(iv) "Change of Control Market Value" of the Shares
means the higher of--
(A) the value for which such Shares may be
exchanged or offered under any Offer pursuant
to which Shares are actually exchanged or
purchased; or
(B) the Fair Market Value of such Shares on the
date of exercise of a Stock Appreciation
Right.
Notwithstanding the foregoing provisions of this Section 5
of Article II and without limiting the provisions of Section
3 of Article I of this Incentive Plan, in the event of an
Offer or Change of Control, a Participant holding an
unexercised Stock Appreciation Right may exercise such Stock
Appreciation Right and elect to be paid solely in cash in an
amount equal to the difference between the Option price and
the Change of Control Market Value of the Shares, unless
within five (5) business days after receipt of notification
of such election by the Secretary of the Company, the
Committee acts to disapprove the cash election. Unless it
acts to disapprove, the Committee's consent shall be deemed
to be given at the close of business on the fifth business
day after the Secretary's receipt of notification of such
election and payment shall be made as soon as practicable
after expiration of such five (5) business day period. The
election provided herein shall apply only: (x) during the
thirty (30) day period following the first exchange or
purchase of Shares pursuant to an Offer; or (y) during the
thirty (30) day period following the date on which
sufficient Shares are acquired to constitute a Change of
Control.
(g) For purposes of this paragraph 5(g) of Article II:
(i) "Unrelated Party" means any party or group of
parties acting together other than (A) the
Company, its directors and officers, or (B) any
nominee holder for any stock exchange;
(ii) "Alternate Change of Control" means any
acquisition, beneficially or otherwise, by any
Unrelated Party of a percentage of the combined
voting power of the common and preferred stock
of the Company specified by the Committee (but
not less than 10%) and shall be deemed to occur
upon the date that the Unrelated Party attains
control of said percentage of the combined
voting power;
(iii) "Change of Control Termination of Employment"
means the termination of employment of a
Participant by the Company, the Subsidiaries or
the Associated Companies without cause (as
defined by the Committee) or by the Participant
for good reason (as defined by the Committee)
within a period of time
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<PAGE> 11
specified by the Committee following an Alternate
Change of Control;
(iv) "Alternate Change of Control Market Value" of
the Shares means the Fair Market Value of such
Shares on the date of exercise of a Stock
Appreciation Right.
Notwithstanding the foregoing provisions of this Section 5
of Article II and without limiting the provisions of Section
3 of Article I of this Incentive Plan, in the event of an
Alternate Change of Control and a Change of Control
Termination of Employment, a Participant holding an
unexercised Stock Appreciation Right who is selected by the
Committee may exercise such Stock Appreciation Right and
elect to be paid solely in cash in an amount equal to the
difference between the Option price and the Alternate Change
of Control Market Value of the Shares, unless within five
(5) business days after receipt of notification of such
election by the Secretary of the Company, the Committee acts
to disapprove the cash election. Unless it acts to
disapprove, the Committee's consent shall be deemed to be
given at the close of business on the fifth business day
after the Secretary's receipt of notification of such
election and payment shall be made as soon as practicable
after expiration of such five (5) business day period. The
election provided herein shall apply only during the thirty
(30) day period following a Change of Control Termination of
Employment.
6. BONUS SHARES AND RESTRICTED SHARES
(a) An Award of Shares or Restricted Shares may be made at such
time or times determined by the Committee following the
Effective Date to any person who is an Eligible Participant.
The Committee shall have full discretion to determine the
terms and conditions of payment of any Award, including
without limitation, what part of such Award shall be paid in
unrestricted Shares or Restricted Shares, the time or times
of payment of any Award, and the time or times of the lapse
of the restrictions on Restricted Shares.
(b) For the purpose of determining the number of Shares to be
used in payment of an Award, the amount of the Award payable
in Shares shall be divided by the Fair Market Value of the
Shares on the date of the determination of the amount of the
Award by the Committee, or if the Committee so directs, the
date immediately preceding the date the Award is paid.
(c) The portion of an Award payable in Restricted Shares shall
be paid at the time of the Award either by book-entry
registration or by delivering to the Participant, or a
custodian or escrow designated by the Committee and the
Participant, a certificate or certificates for such
Restricted Shares, registered in the name of such
Participant. The Participant shall have all of the rights of
a stockholder with respect to such Shares, subject to such
terms and conditions, including withholding of dividends,
forfeitures or resale to the Company, if any, as may be
determined by the Committee. The Committee and the
Participant may designate the Company or one or more of its
employees to act as custodian or escrow for the
certificates.
(d) Restricted Shares shall be subject to such terms and
conditions, including forfeiture, if any, and to such
restrictions against sale, transfer or other disposition as
may be determined by the Committee at the time a Non-
Qualified Option for the purchase of Restricted Shares is
granted, at the time a Stock Appreciation Right to be
settled with Restricted Shares is granted or at the time of
making a bonus award of Restricted Shares. Any new or
additional or different Shares or other
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<PAGE> 12
securities resulting from any adjustment of such Shares of the
type described in Section 4 of Article I shall be subject to the
same terms, conditions, and restrictions as the Restricted Shares
prior to such adjustment. The Committee may, in its discretion,
remove, modify or accelerate the release of restrictions on
any Restricted Shares in the event of hardship or disability
of the Participant while employed, in the event that the
Participant ceases to be an employee of the Company, a
Subsidiary or Associated Company, as the result of death or
otherwise, in the event of a relocation of a Participant to
another country or for such other reasons as the Committee
may deem appropriate. In the event of the death of a
Participant following the transfer of Restricted Shares to
him, the legal representative of the Participant, the
beneficiary designated in writing by the Participant during
his lifetime, or the person receiving such Shares under his
will or under the laws of descent and distribution shall
take such Shares subject to the same restrictions,
conditions and provisions in effect at the time of his
death, to the extent applicable.
7. DIVIDENDS, DIVIDEND EQUIVALENTS AND INTEREST EQUIVALENTS
(a) No cash dividends shall be paid on Shares which have been
awarded but not registered or delivered. The Committee may
provide, however, that a Participant to whom an Option has
been awarded which is exercisable in whole or in part at a
future time for Shares or a Participant who has been awarded
Shares payable in whole or in part at a future time, shall
be entitled to receive an amount per Share, equal in value
to the cash dividends, if any, paid per Share on issued and
outstanding Shares, as of the dividend record dates
occurring during the period between the date of the award
and the time each such Share is delivered. Such amounts
(herein called "dividend equivalents") may, in the
discretion of the Committee, be:
(i) paid in cash or Shares either from time to time
prior to or at the time of the delivery of such
Shares or upon expiration of the Option if it
shall not have been fully exercised (except
that payment of the dividend equivalents on
Incentive Options may not be made prior to
exercise); or
(ii) converted into contingently credited Shares
(with respect to which dividend equivalents
shall accrue) in such manner, at such value,
and deliverable at such time or times, as may
be determined by the Committee.
Such Shares (whether delivered or contingently
credited) shall be charged against the limitations set
forth in Section 5 of Article I.
(b) The Committee, in its discretion, may authorize payment of
interest equivalents on any portion of any Award payable at
a future time in cash, and interest equivalents on dividend
equivalents which are payable in cash at a future time.
(c) The Committee, in its discretion, may provide that dividends
paid on restricted Shares shall, during the applicable
restricted period, be held by the Company to be paid upon
the lapse of restrictions or to be forfeited upon forfeiture
of the Shares.
III. MISCELLANEOUS PROVISIONS
1. Neither a Stock Option nor a Stock Appreciation Right
shall be transferable except as provided for herein. If
any Participant makes such a transfer in violation
hereof, any obligation of the
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<PAGE> 13
Company with respect to such Stock Option or Stock
Appreciation Right shall forthwith terminate.
2. Nothing in this Incentive Plan or any booklet or other
document describing or referring to this Incentive Plan
shall be deemed to confer on any employee or
Participant the right to continue in the employ of his
employer or affect the right of his employer to
terminate the employment of any such person with or
without cause.
3. Nothing contained herein shall require the Company to
segregate any monies from its general funds, or to
create any trusts, or to make any special deposits for
any immediate or deferred amounts payable to any
Participant.
4. This Incentive Plan and all actions taken hereunder
shall be governed by the laws of the State of Delaware.
5. The Company may make such provisions and take such
steps as it may deem necessary or appropriate for the
withholding of any taxes which the Company is required
by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign,
to withhold in connection with any Stock Option or the
exercise thereof, any Stock Appreciation Right or the
exercise thereof, or the payment of any bonus award,
including, but not limited to, the withholding of cash
or Shares which would be paid or delivered pursuant to
such exercise or award or another exercise or award
under this Incentive Plan until the Participant
reimburses the Company for the amount the Company is
required to withhold with respect to such taxes, or
cancelling any portion of such award or another award
under this Incentive Plan in an amount sufficient to
reimburse itself for the amount it is required to so
withhold, or selling any property contingently credited
by the Company for the purpose of paying such award or
another award under this Incentive Plan, in order to
withhold or reimburse itself for the amount it is
required to so withhold. The Committee may permit a
Participant (or any beneficiary or other person
authorized to act) to elect to pay a portion or all of
any amounts required or permitted to be withheld to
satisfy federal, state, local or foreign tax
obligations by directing the Company to withhold a
number of whole Shares which would otherwise be
distributed and which have a fair market value
sufficient to cover the amount of such required or
permitted withholding taxes.
6. Notwithstanding any other provision of this Incentive
Plan, for purposes of any Award that is outstanding as
of the date that the Company spins off the Company's
chemical businesses into a new publicly traded company
("Chemicals") and is held by a Participant who in
connection with such spin off becomes an employee of
Chemicals (or a subsidiary or associated company of
Chemicals) rather than an employee of the Company (or a
Subsidiary or Associated Company of the Company), such
change of employment shall not constitute a Termination
of Employment. With respect to any such Award held by
such a Participant, Termination of Employment shall
mean such Participant's termination of employment with
Chemicals other than a Transfer, with Transfer defined
as a change of employment of a Participant within the
group consisting of Chemicals and its subsidiaries, or,
if the Committee so determines, a change of employment
of a Participant within the group consisting of
Chemicals, its subsidiaries, and its associated
companies. For purposes of this section, a subsidiary
of Chemicals means any corporation (or partnership,
joint venture, or other enterprise) of which Chemicals
owns or controls, directly
A-13
<PAGE> 14
or indirectly, 50% or more of the outstanding shares of stock
normally entitled to vote for the election of directors (or
comparable equity participation and voting power) and an
associated company of Chemicals means any corporation
(or partnership, joint venture, or other enterprise),
of which Chemicals owns or controls, directly or
indirectly, 10% or more, but less than 50% of the
outstanding shares of stock normally entitled to vote
for the election of directors (or comparable equity
participation and voting power).
IV. AMENDMENTS
1. The Board, upon recommendation of the Committee but not
otherwise, may from time to time amend or modify this
Incentive Plan, including, but not limited to, an
amendment which would authorize the Committee to make
Awards payable in other securities or other forms of
property of a kind to be determined by the Committee,
and such other amendments as may be necessary or
desirable to implement such Awards, or discontinue this
Incentive Plan or any provision thereof, provided that
no amendments or modifications to this Incentive Plan
shall, without the prior approval of the stockholders
normally entitled to vote for the election of directors
of the Company:
(a) permit the Company to decrease the Option price
on any outstanding Option;
(b) permit any change which would require the
approval of stockholders under Section 16 of
the Securities Exchange Act of 1934 or the
rules thereunder or under Section 422 of the
Internal Revenue Code of 1986, or the rules
thereunder (or any law, rule, regulation or
other provision that may replace such statutes
or rules); or
(c) change any of the provisions of this Article
IV.
2. No amendment to or discontinuance of this Incentive
Plan or any provision thereof by the Board or the
stockholders of the Company shall, without the written
consent of the Participant, adversely affect any Stock
Option or Stock Appreciation Right theretofore granted
or bonus commitment or bonus award theretofore made to
such Participant under this Incentive Plan.
V. INTERPRETATION
1. This Incentive Plan is not intended to and shall not
affect any option or stock appreciation right grant or
bonus commitment or award under the 1984 Plan, the 1986
Plan, the 1988/I Plan, the 1988/II Plan, the 1991 Plan,
the 1994 Plan, the 1994 Searle/Monsanto Plan, or the
1994 NutraSweet/Monsanto Plan (or any other incentive
plan of the Company, its Subsidiaries, and Associated
Companies). No stock options or stock appreciation
rights or Awards of Restricted or unrestricted Shares
shall be granted under the 1994 Plan, the 1994
Searle/Monsanto Plan, or the 1994 NutraSweet/Monsanto
Plan after April 14, 1996.
2. This Incentive Plan is not intended to and shall not
preclude the establishment or operation by the Company
or any Subsidiary of (a) any thrift, savings and
investment, achievement award, stock purchase, employee
recognition or other benefit plan or arrangement for
any group of employees, or (b) any other incentive or
bonus plan or arrangement for any employees
(hereinafter "Other
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<PAGE> 15
Plan"), and any such Other Plan may be authorized and
payments made thereunder independently of this Incentive
Plan; provided, however, that no such Other Plan shall provide
for the granting of options or stock appreciation rights to
purchase or receive the appreciation on the shares of
any class of stock of the Company, or the making of
bonus commitments or bonus awards payable in any class
of stock of the Company, which in either form or
substance are comparable to those authorized under this
Incentive Plan, unless (i) such Other Plan is
established or operated in connection with the
assumption by the Company or a Subsidiary of the plans,
options, stock appreciation rights, bonus commitments
or bonus awards of another corporation, or the
substitution of an Other Plan or options, stock
appreciation rights, bonus commitments or bonus awards
under such Other Plan in lieu of the plans, options,
stock appreciation rights, bonus commitments or bonus
awards of such other corporation, arising out of a
merger or consolidation with, or the acquisition of
assets or stock of, such other corporation, or other
transaction described in Section 424(a) of the Internal
Revenue Code of 1986, as may be amended from time to
time, as in effect at the time, or (ii) such Other Plan
provides for grants of options, stock appreciation
rights, bonus commitments or bonus awards to employees
substantially all of whom are not Participants.
A-15
<PAGE> 1
Form of Employment Agreement for Executive Officers, Pursuant to
Resolutions Adopted by Monsanto Company Board of Directors on April 25, 1997
EMPLOYMENT AGREEMENT
AGREEMENT by and between Monsanto Company, a Delaware corporation (the
"Company"), and ------------------------- (the "Executive"), dated as of the
--- day of -------, 1997.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened Change of
Control and to encourage the Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change of Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into
this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date" shall mean the
-------------------
first date during the Change of Control Period (as defined in Section 1(b))
on which a Change of Control (as defined in Section 2) occurs. Anything in
this Agreement to the contrary notwithstanding, if a Change of Control occurs
and if the Executive's employment with the Company is terminated by the
Company prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect a Change of Control or (ii) otherwise arose in
connection with or anticipation of a Change of Control, then for all purposes
of this Agreement the "Effective Date" shall mean the date immediately prior
to the date of such termination of employment.
(b) The "Change of Control Period" shall mean the period commencing
on the date hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the date one year after the date
hereof, and on each
<PAGE> 2
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date"), unless previously
terminated, the Change of Control Period shall be automatically extended so as
to terminate three years from such Renewal Date, unless at least 60 days prior
to the Renewal Date the Company shall give notice to the Executive that the
Change of Control Period shall not be so extended.
(c) An "Alternative Change of Control" shall mean a Change of Control
as defined in Section 2, except that the references in such definition to
"20%" shall be deemed to be references to "50%."
2. Change of Control. For the purpose of this Agreement, a "Change
-----------------
of Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of either (i) the then outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that, for
purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
2
<PAGE> 3
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(c) Consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets or stock of another
corporation (a "Business Combination"), in each case, unless, following
such Business Combination, (i) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly
or indirectly, more than 60% of, respectively, the then outstanding shares
of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting from
such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
3
<PAGE> 4
3. Employment Period. The Company hereby agrees to continue the
-----------------
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period (the "Employment Period") commencing on the Effective Date and
ending on the earlier of the third anniversary of such date and the first day
of the month following the month in which the executive attains age 65 (the
Executive's "Normal Retirement Date").
4. Terms of Employment. (a) Position and Duties. (i) During the
------------------- -------------------
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned to the Executive at any
time during the 120-day period immediately preceding the Effective Date and
(B) the Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or any office
or location less than 35 miles from such location, unless the Executive is on
international assignment on the Effective Date and is relocated as a result
of the Executive's being repatriated pursuant to the terms of his
international assignment agreement as in effect before the Effective Date.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use
the Executive's reasonable best efforts to perform faithfully and efficiently
such responsibilities. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) serve on corporate,
civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued conduct
of such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive's responsibilities to the
Company.
4
<PAGE> 5
(b) Compensation. (i) Base Salary. During the Employment Period,
------------ -----------
the Executive shall receive an annual base salary ("Annual Base Salary"),
which shall be paid at a monthly rate, at least equal to twelve times the
highest monthly base salary paid or payable, including any base salary which
has been earned but deferred, to the Executive by the Company and its
affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the
Employment Period, the Annual Base Salary shall be reviewed no more than 12
months after the last salary increase awarded to the Executive prior to the
Effective Date and thereafter at least annually. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" shall include any company
controlled by, controlling or under common control with the Company.
(ii) Bonuses. In addition to Annual Base Salary, the Executive
-------
shall be awarded the following bonuses. For each fiscal year ending during
the Employment Period, the Executive shall be awarded an annual bonus (the
"Annual Bonus") in cash at least equal to the average of the Executive's
bonuses under the Company's Annual Incentive Program, or any comparable bonus
under any predecessor or successor plan(s), for the last three full fiscal
years prior to the Effective Date (annualized in the event that the Executive
was not employed by the Company for the whole of such fiscal year) (the
"Recent Annual Bonus"). Each such Annual Bonus shall be paid no later than
the end of the third month of the fiscal year next following the fiscal year
for which the Annual Bonus is awarded, unless the Executive shall elect to
defer the receipt of such Annual Bonus. In addition, during the Employment
Period, the Executive shall be entitled to participate in all long-term and
other incentive plans, practices, policies and programs applicable generally
to other peer executives of the Company and its affiliated companies, but in
no event shall such plans, practices, policies and programs provide the
Executive with incentive opportunities (measured with respect to both regular
and special incentive opportunities, to the extent, if any, that such
distinction is applicable) less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for
the Executive under such plans, practices, policies and programs as in effect
at any time during the 120-day period immediately preceding the Effective
Date or if more favorable to the Executive, those provided generally at any
time after the Effective Date to
5
<PAGE> 6
other peer executives of the Company and its affiliated companies.
(iii) Savings and Retirement Plans. During the Employment
----------------------------
Period, the Executive shall be entitled to participate in all savings and
retirement plans, practices, policies and programs applicable generally to
other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the
Executive with savings opportunities and retirement benefit opportunities, in
each case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies. Without limiting the generality of the foregoing, the Company and
its affiliated companies shall continue to honor any individual agreements
between any of them and the Executive regarding the provision of supplemental
retirement benefits such as (but not limited to) post-retirement income
and/or welfare benefits (each of which is hereafter referred to as an
"Individual SERP"). [INSERT REFERENCES TO SPECIFIC AGREEMENTS WHERE
APPLICABLE.]
(iv) Welfare Benefit Plans. During the Employment Period, the
---------------------
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and programs) to
the extent applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such plans,
practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and its affiliated
companies.
(v) Expenses. During the Employment Period, the Executive
--------
shall be entitled to receive prompt reimbursement
6
<PAGE> 7
for all reasonable expenses incurred by the Executive in accordance with the
most favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the
---------------
Executive shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, payment of club dues, and,
if applicable, use of an automobile and payment of related expenses, in
accordance with the most favorable plans, practices, programs and policies of
the Company and its affiliated companies in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(vii) Office and Support Staff. During the Employment Period,
------------------------
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(viii) Vacation. During the Employment Period, the Executive shall
--------
be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its affiliated
companies as in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The
------------------------- -------------------
Executive's employment shall terminate automatically upon the Executive's
death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment
Period (pursuant to the definition of Disability set forth below), it may
7
<PAGE> 8
give to the Executive written notice in accordance with Section 12(b) of this
Agreement of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective
on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time performance of
the Executive's duties. For purposes of this Agreement, "Disability" shall
mean the Executive's long-term disability for purposes of any reasonable
occupation as determined under the Company's disability plan that is
applicable to the Executive.
(b) Cause. The Company may terminate the Executive's employment
-----
during the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of
its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the manner
in which the Board or Chief Executive Officer believes that the Executive
has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable notice is
8
<PAGE> 9
provided to the Executive and the Executive is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof in
detail.
(c) Good Reason. The Executive's employment may be terminated by the
-----------
Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties
or responsibilities, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is remedied
by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be based at any office
or location other than as provided in Section 4(a)(i)(B) hereof or the
Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the
Effective Date, unless the Executive is on international assignment on the
Effective Date and the relocation is as a result of the Executive's being
repatriated pursuant to the terms of his international assignment
agreement as in effect before the Effective Date;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
9
<PAGE> 10
Anything in this Agreement to the contrary notwithstanding, a termination by the
Executive for any reason during the 30-day period immediately following the
first anniversary of an Alternative Change of Control shall be deemed to be a
termination for Good Reason for all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
---------------------
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b)
of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated
and (iii) if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date (which date
shall be not more than thirty days after the giving of such notice). The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
-------------------
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a) Good Reason;
------------------------------------------- -----------
Other Than for Cause, Death or Disability. If, during the Employment Period,
- -----------------------------------------
the Company shall terminate the Executive's employment other than for Cause
or Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:
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<PAGE> 11
A. the sum of (1) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, (2) the product of
(x) the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus
paid or payable, including any bonus or portion thereof which has been
earned but deferred (and annualized for any fiscal year consisting of less
than twelve full months or during which the Executive was employed for
less than twelve full months), for the most recently completed fiscal year
during the Employment Period, if any (such higher amount being referred to
as the "Highest Annual Bonus") and (y) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, and (3) any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1), (2) and (3) shall be hereinafter
referred to as the "Accrued Obligations"); and
B. the amount equal to the product of (1) the lesser of three and
the number of years and fractions thereof remaining between the Date of
Termination and the Executive's Normal Retirement Date (such lesser
number, the "Multiplier") and (2) the sum of (x) the Executive's Annual
Base Salary and (y) the Highest Annual Bonus; and
C. an amount equal to the difference between (a) the aggregate
benefit under the Monsanto Pension Plan and any successor thereto, and any
other qualified defined benefit retirement plans of the Company and its
affiliated companies in which the Executive participates (collectively,
the "Retirement Plan") and the Monsanto Company ERISA Parity Pension Plan,
the Monsanto Company Supplemental Retirement Plan, and any successors
thereto, any other "top hat," excess or supplemental defined benefit
retirement plans of the Company and its affiliated companies in which the
Executive participates, and any Individual SERP (collectively, the "SERP")
which the Executive would have accrued (whether or not vested) if the
Executive's employment had continued for a number of years after the Date
of Termination equal to the Multiplier, and (b) the actual vested benefit,
if any, of the Executive under the Retirement Plan and the SERP,
determined as of the Date of Termination (with the foregoing amounts to be
computed on an actuarial present value basis, based on the assumption that
the
11
<PAGE> 12
Executive's compensation during such period of deemed continued employment
after the Date of Termination was that required by Section 4(b)(i) and
Section 4(b)(ii), and using actuarial assumptions no less favorable to the
Executive than the most favorable of those in effect for purposes of
computing benefit entitlements under the Retirement Plan and the SERP at
any time from the day before the Effective Date) through the Date of
Termination;
(ii) for a number of years after the Executive's Date of Termination
equal to the Multiplier, or such longer period as may be provided by the
terms of the appropriate plan, program, practice or policy, the Company shall
continue benefits to the Executive and/or the Executive's family at least
equal to those which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been terminated or, if more
favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies and their families, provided, however, that if the Executive
becomes reemployed with another employer and is eligible to receive medical
or other welfare benefits under another employer provided plan, the medical
and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility;
and for purposes of determining eligibility of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until the end of a
number of years after the Date of Termination equal to the Multiplier and to
have retired on the last day of such period;
(iii) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services the scope and provider of which shall be
selected by the Executive in the Executive's sole discretion; and
(iv) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required
to be paid or provided or which the Executive is eligible to receive under
any plan, program, policy or practice or contract or agreement of the Company
and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
12
<PAGE> 13
(b) Death. If the Executive's employment is terminated by reason of
-----
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 6(b) shall include, without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the
Company and affiliated companies to the estates and beneficiaries of peer
executives of the Company and such affiliated companies under such plans,
programs, practices and policies relating to death benefits, if any, as in
effect with respect to other peer executives and their beneficiaries at any
time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive's estate and/or the Executive's
beneficiaries, as in effect on the date of the Executive's death with respect
to other peer executives of the Company and its affiliated companies and
their beneficiaries.
(c) Disability. If the Executive's employment is terminated by
----------
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision
of Other Benefits. Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this
Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and
its affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time thereafter
generally with respect to other peer executives of the Company and its
affiliated companies and their families.
(d) Cause; Other than for Good Reason. If the Executive's employment
---------------------------------
shall be terminated for Cause during the
13
<PAGE> 14
Employment Period, this Agreement shall terminate without further obligations to
the Executive other than the obligation to pay to the Executive (x) the Annual
Base Salary through the Date of Termination, (y) the amount of any compensation
previously deferred by the Executive, and (z) Other Benefits, in each case to
the extent theretofore unpaid. If the Executive voluntarily terminates
employment during the Employment Period, excluding a termination for Good
Reason, this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations and the timely payment or
provision of Other Benefits. In such case, all Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
-------------------------
prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies for which the Executive may qualify, nor, subject to
Section 12(f), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or
any of its affiliated companies. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any
of its affiliated companies at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
Notwithstanding the foregoing, from and after the Effective Date, the
compensation and benefits provided for pursuant to Sections 5, 8 and 9 hereof
shall be in lieu of any severance or separation pay or benefits to which the
Executive might otherwise be entitled under any plan, program, policy or
arrangement of the Company and its affiliates.
8. Full Settlement; Legal Fees. The Company's obligation to make
---------------------------
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and except as specifically provided in Section
6(a)(ii), such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of
14
<PAGE> 15
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (whether such contest is
between the Company and the Executive or between either of them and any third
party, and including as a result of any contest by the Executive about the
amount of any payment pursuant to this Agreement), plus in each case interest on
any delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
9. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 9) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 9(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount (the "Reduced Amount") that could be paid to the Executive such that
the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by Ernst & Young or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within
15 business days of the receipt
15
<PAGE> 16
of notice from the Executive that there has been a Payment, or such earlier time
as is requested by the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the
Company to the Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which the Executive gives such notice to
the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires
to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
16
<PAGE> 17
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 9(c)) promptly
pay to the Company the amount of such refund (together with any
17
<PAGE> 18
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 9(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
10. Confidential Information. As used herein, "Confidential
------------------------
Information" means all technical and business information of the Company and
its Subsidiaries, whether patentable or not, which is of a confidential,
trade secret and/or proprietary character and which is either developed by
the Executive (alone or with others) or to which the Executive has had access
during the Executive's employment. "Confidential Information" shall also
include confidential evaluations of, and the confidential use or non-use by
the Company or any Subsidiary of, technical or business information in the
public domain.
The Executive shall use the Executive's best efforts and diligence both
during and after employment by the Company to protect the confidential, trade
secret and/or proprietary character of all Confidential Information. The
Executive shall not, directly or indirectly, use (for the Executive or
another) or disclose any Confidential Information, for so long as it shall
remain proprietary or protectible as confidential or trade secret
information, except as may be necessary for the performance of the
Executive's duties with the Company.
The Executive shall deliver promptly to the Company, at the termination
of the Executive's employment, or at any other time at the Company's request,
without retaining any copies, all documents and other material in the
Executive's possession relating, directly or indirectly, to any Confidential
Information.
Each of the Executive's obligations in this Section shall also apply to
the confidential, trade secret and proprietary information learned or
acquired by the Executive during the Executive's employment from others with
whom the Company or any Subsidiary has a business relationship.
The Executive understands that the Executive is not to disclose to the
Company or any Subsidiary, or use for its benefit, any of the confidential,
trade secret or proprietary information of others, including any of the
Executive's former
18
<PAGE> 19
employers. In no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and
----------
without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
-------------------
19
<PAGE> 20
If to the Company:
-----------------
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which
case the Executive shall have no further rights under this Agreement. Upon
its execution by both parties hereto, this Agreement shall supersede the Key
Executive Employment Agreement previously entered into by the Executive and
the Company. From and after the Effective Date this Agreement shall
supersede any prior employment agreement between the parties, but shall have
no effect on any Individual SERP or on the Executive's rights under any plan,
program, policy or practice provided by the Company or any of its affiliated
companies except as specifically provided in Section 7 above.
20
<PAGE> 21
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
-----------------------------------
[Executive]
MONSANTO COMPANY
By
---------------------------------
21
<PAGE> 1
EXHIBIT 23
CONSENT OF COMPANY COUNSEL
I hereby consent to the incorporation by reference in Monsanto Company's
Registration Statements on Form S-8 (Nos. 2-36636, 2-76696, 2-90152, 33-13197,
33-21030, 33-39704, 33-39705, 33-39706, 33-39707, 33-49717, 33-53363, 33-53365,
33-53367, 333-02783, 333-02961, 333-02963, 333-33531, and 333-38599) and on Form
S-3 (No. 33-60189) of the reference to Company counsel in Note 5 to the Notes to
Financial Statements in the Company's Form 10-Q Report for the quarter ended
September 30, 1997. In giving this consent I do not thereby admit that I am
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933.
R. WILLIAM IDE III
General Counsel
Monsanto Company
Saint Louis, Missouri
November 14, 1997
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF CONSOLIDATED INCOME OF MONSANTO COMPANY AND SUBSIDIARIES FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1997, AND THE STATEMENT OF CONSOLIDATED
FINANCIAL POSITION AS OF SEPTEMBER 30, 1997. SUCH INFORMATION IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 184
<SECURITIES> 0
<RECEIVABLES> 2,176
<ALLOWANCES> 0
<INVENTORY> 1,187
<CURRENT-ASSETS> 4,341
<PP&E> 4,570
<DEPRECIATION> 2,307
<TOTAL-ASSETS> 10,375
<CURRENT-LIABILITIES> 3,748
<BONDS> 1,507
<COMMON> 1,644
0
0
<OTHER-SE> 2,319
<TOTAL-LIABILITY-AND-EQUITY> 10,375
<SALES> 5,694
<TOTAL-REVENUES> 5,694
<CGS> 2,342
<TOTAL-COSTS> 2,342
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 111
<INCOME-PRETAX> 369
<INCOME-TAX> 80
<INCOME-CONTINUING> 289
<DISCONTINUED> 176
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 465
<EPS-PRIMARY> 0.76
<EPS-DILUTED> 0
<FN>
RECEIVABLES ARE STATED NET OF ALLOWANCES OF $52.
</TABLE>
<PAGE> 1
EXHIBIT 99
<TABLE>
MONSANTO COMPANY AND SUBSIDIARIES
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------- ----------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing
operations before provision
for income taxes.............. $369<FB> $ 897 $553<FB> $645 $636 $427 $(213)<FB>
Add
Fixed charges................. 159 134 175 181 145 151 197
Less capitalized interest..... (13) (7) (9) (5) (4) (7) (11)
Dividends from
affiliated companies........ 2 6 14 9 2 5 5
Less equity income (add equity
loss) of affiliated
companies..................... (18) (4) 24 (17) (21) (20) (1)
---- ------ ---- ---- ---- ---- -----
Income as adjusted.......... $499 $1,026 $757 $813 $758 $556 $ (23)
==== ====== ==== ==== ==== ==== =====
Fixed charges
Interest expense.............. $111 $ 94 $119 $132 $100 $101 $ 140
Capitalized interest.......... 13 7 9 5 4 7 11
Portion of rents
representative of interest
factor...................... 35 33 47 44 41 43 46
---- ------ ---- ---- ---- ---- -----
Fixed charges............... $159 $ 134 $175 $181 $145 $151 $ 197
==== ====== ==== ==== ==== ==== =====
Ratio of earnings to fixed
charges....................... 3.14 7.67 4.33 4.49 5.23 3.68 <FA>
==== ====== ==== ==== ==== ==== =====
<FN>
- -------
<FA> Earnings were inadequate to cover fixed charges by $220 million.
<FB> Includes charges for acquired in-process research and development,
restructuring and other unusual items of $609 million for the nine months
ended September 30, 1997, and $376 million and $579 million for the years
ended December 31, 1996 and 1992, respectively. Excluding these unusual
items, the ratio of earnings to fixed charges would have been 6.97, 6.47,
and 2.82 in 1997, 1996 and 1992, respectively. The ratio was not materially
affected by the restructuring and other unusual items in 1995, 1994 and
1993.
</TABLE>
15
