<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)
DEKALB GENETICS CORPORATION
(NAME OF SUBJECT COMPANY)
------------------------
CORN ACQUISITION CORPORATION
MONSANTO COMPANY
(BIDDERS)
CLASS A COMMON STOCK, WITHOUT PAR VALUE
CLASS B COMMON STOCK, WITHOUT PAR VALUE
(TITLE OF CLASS OF SECURITIES)
244878104
244878203
(CUSIP NUMBER OF CLASS OF SECURITIES)
BARBARA BLACKFORD, ESQ.
CORN ACQUISITION CORPORATION
C/O MONSANTO COMPANY
800 N. LINDBERGH BLVD.
ST. LOUIS, MISSOURI 63167
(314) 694-2594
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF BIDDER)
COPIES TO:
RICHARD D. KATCHER, ESQ.
DAVID M. SILK, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
=======================================================================================================
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
- -------------------------------------------------------------------------------------------------------
<S> <C>
$2,326,878,700 $465,375.74
=======================================================================================================
</TABLE>
* For purposes of calculating the filing fee only. Based upon (i) 7,100,097
shares of Class A Common Stock, without par value (the "Class A Shares"), and
(ii) 29,975,568 shares of Class B Common Stock, without par value (the "Class
B Shares" and, collectively with the Class A Shares, the "Shares"), of DEKALB
Genetics Corporation (the "Company") outstanding on May 8, 1998 or issuable
in accordance with the Merger Agreement (as defined herein), minus the
485,442 Class A Shares and the 13,321,436 Class B Shares owned by Monsanto
Company ("Parent").
** The fee, calculated in accordance with Rule 0-11(d) of the Securities
Exchange Act of 1934, is 1/50th of one percent of the aggregate Transaction
Valuation.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid None
Form of Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
</TABLE>
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<PAGE> 2
CUSIP No. 244878104
CUSIP No. 244878203 14D-1
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1. Name of Reporting Person, S.S. or I.R.S. Identification No.
of Above Person CORN ACQUISITION CORPORATION, 52-2099481
- ---------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------
3. SEC Use Only
- ---------------------------------------------------------------------------
4. Sources of Funds AF
- ---------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) [ ]
- ---------------------------------------------------------------------------
6. Citizenship or Place of Organization DELAWARE
- ---------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
3,157,092 CLASS A SHARES*
- ---------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row (7) Excludes Certain
Shares [X]**
- ---------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7) 67.9%
CLASS A SHARES*
- ---------------------------------------------------------------------------
10. Type of Reporting Person CO
- ---------------------------------------------------------------------------
</TABLE>
- ---------------
* On May 8, 1998, Parent entered into a Stockholders Agreement (the
"Stockholders Agreement") with the voting trustees (the "Voting Trustees")
under the Roberts Family Voting Trust Agreement, dated January 31, 1996 (the
"Voting Trust Agreement") and the registered holders (the "Registered
Holders") of trust certificates pursuant to the Voting Trust Agreement.
Pursuant to the Stockholders Agreement, such Voting Trustees and Registered
Holders have agreed, among other things, to tender, in accordance with the
terms of the tender offer (the "Offer") described in this Statement on
Schedule 14D-1 (this "Schedule 14D-1"), and not withdraw, subject to the
terms of the Stockholders Agreement, all of the 2,671,650 of the Class A
Shares held of record by the Voting Trustees pursuant to the Voting Trust
Agreement (the "Voting Trust Shares"). Pursuant to the Stockholders
Agreement, the Voting Trustees have also granted to Parent an irrevocable
proxy to vote the Voting Trust Shares in favor of the merger of Corn
Acquisition Corporation (the "Purchaser") with and into the Company. The
Voting Trust Shares are reflected in Rows 7 and 9 of the cover pages of this
Schedule 14D-1. The Stockholders Agreement is described in more detail in
Section 11 of the Offer to Purchase, dated May 15, 1998, included as Exhibit
(a)(1) to this Schedule 14D-1 (the "Offer to Purchase").
** Excludes an aggregate of 100,380 Class A Shares purchasable upon exercise of
options held by Douglas C. Roberts, Virginia R. Holt and John T. Roberts.
2
<PAGE> 3
CUSIP No. 244878104
CUSIP No. 244878203 14D-1
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1. Name of Reporting Person, S.S. or I.R.S. Identification No.
of Above Person MONSANTO COMPANY, 43-0420020
- ---------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------
3. SEC Use Only
- ---------------------------------------------------------------------------
4. Sources of Funds BK, WC, OO
- ---------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) [ ]
- ---------------------------------------------------------------------------
6. Citizenship or Place of Organization DELAWARE
- ---------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
3,157,092 CLASS A SHARES*
- ---------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row (7) Excludes Certain
Shares [X]**
- ---------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7) 67.9%
CLASS A SHARES*
- ---------------------------------------------------------------------------
10. Type of Reporting Person CO
- ---------------------------------------------------------------------------
</TABLE>
- ---------------
* On May 8, 1998, Parent entered into the Stockholders Agreement with the
Voting Trustees under the Voting Trust Agreement and the Registered Holders
of trust certificates pursuant to the Voting Trust Agreement. Pursuant to the
Stockholders Agreement, such Voting Trustees and Registered Holders have
agreed, among other things, to tender, in accordance with the terms of the
Offer described in this Schedule 14D-1, and not withdraw, subject to the
terms of the Stockholders Agreement, all of the 2,671,650 of the Class A
Shares held of record by the Voting Trustees pursuant to the Voting Trust
Agreement. Pursuant to the Stockholders Agreement, the Voting Trustees have
also granted to Parent an irrevocable proxy to vote the Voting Trust Shares
in favor of the merger of the Purchaser with and into the Company. The Voting
Trust Shares are reflected in Rows 7 and 9 of the cover pages of this
Schedule 14D-1. The Stockholders Agreement is described in more detail in
Section 11 of the Offer to Purchase, included as Exhibit (a)(1) to this
Schedule 14D-1.
** Excludes an aggregate of 100,380 Class A Shares purchasable upon exercise of
options held by Douglas C. Roberts, Virginia R. Holt and John T. Roberts.
3
<PAGE> 4
This Tender Offer Statement on Schedule 14D-1 (this "Schedule 14D-1")
relates to the offer by Corn Acquisition Corporation (the "Purchaser"), a
Delaware corporation and a wholly-owned subsidiary of Monsanto Company, a
Delaware corporation ("Parent"), to purchase all outstanding shares of (i) Class
A Common Stock, without par value (the "Class A Shares") and (ii) Class B Common
Stock, without par value (the "Class B Shares" and, collectively with the Class
A Shares, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation
(the "Company"), at a purchase price of $100.00 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), which are annexed to and filed with this Schedule 14D-1 as Exhibits
(a)(1) and (a)(2), respectively. This Schedule 14D-1 is being filed on behalf of
the Purchaser and Parent. This Schedule 14D-1 is also Amendment No. 5 to the
Schedule 13D filed by Parent with respect to the Class A Shares.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is DEKALB Genetics Corporation. The
address of its principal executive offices is 3100 Sycamore Road, DeKalb,
Illinois 60115.
(b) Reference is hereby made to the information set forth in the
"Introduction," Section 1 ("Terms of the Offer") and Section 11 ("Purpose of the
Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans
for the Company") of the Offer to Purchase, which is incorporated herein by
reference.
(c) Reference is hereby made to the information set forth in Section 6
("Price Range of Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) This Schedule 14D-1 is being filed on behalf of Parent and the
Purchaser. Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser") and Schedule A ("Directors and Executive Officers of Parent and the
Purchaser") of the Offer to Purchase, which is incorporated herein by reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor,
to the best of their knowledge, any of their respective executive officers and
directors listed in Schedule A ("Directors and Executive Officers of Parent and
the Purchaser") of the Offer to Purchase, which is incorporated herein by
reference, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
(g) Reference is hereby made to the information set forth in Schedule A
("Directors and Executive Officers of Parent and the Purchaser") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company;
Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of
the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights;
Plans for the Company") and Section 12 ("Investment Agreement; Certain
Agreements with Respect to the Company's Securities; Other Agreements") of the
Offer to Purchase, which is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is made to the information set forth in Section 13
("Source and Amount of Funds") of the Offer to Purchase, which is incorporated
herein by reference.
(c) Not applicable.
4
<PAGE> 5
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; NYSE Listing; Exchange Act Registration; Margin Regulations"), Section
10 ("Background of the Offer; Contacts with the Company; Recommendation of the
Company's Board of Directors"), Section 11 ("Purpose of the Offer; the Merger
Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the
Company"), Section 12 ("Investment Agreement; Certain Agreements with Respect to
the Company's Securities; Other Agreements"), Section 15 ("Certain Legal
Matters; Required Regulatory Approvals") and Section 16 ("Dividends and
Distributions") of the Offer to Purchase, which is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company;
Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of
the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights;
Plans for the Company"), Section 12 ("Investment Agreement; Certain Agreements
with Respect to the Company's Securities; Other Agreements") and Schedule A
("Directors and Executive Directors of Parent and the Purchaser") of the Offer
to Purchase, which is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company;
Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of
the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights;
Plans for the Company") and Section 12 ("Investment Agreement; Certain
Agreements with Respect to the Company's Securities; Other Agreements") of the
Offer to Purchase, which is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in Section 17 ("Fees
and Expenses") of the Offer to Purchase, which is incorporated herein by
reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Parent and the Purchaser") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Reference is hereby made to the information set forth in the
"Introduction," Section 10 ("Background of the Offer; Contacts with the Company;
Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of
the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights;
Plans for the Company") and Section 12 ("Investment Agreement; Certain
Agreements with Respect to the Company's Securities; Other Agreements") of the
Offer to Purchase, which is incorporated herein by reference.
(b)-(c) Reference is hereby made to the information set forth in the
"Introduction," Section 11 ("Purpose of the Offer; the Merger Agreement; the
Stockholders Agreement; Appraisal Rights; Plans for the Company") and Section 15
("Certain Legal Matters; Required Regulatory Approvals") of the Offer to
Purchase, which is incorporated herein by reference.
(d) Reference is hereby made to the information set forth in Section 7
("Possible Effects of the Offer on Market for the Shares; NYSE Listing; Exchange
Act Registration; Margin Regulations") of the Offer to Purchase, which is
incorporated herein by reference.
(e) To the best knowledge of Parent and the Purchaser, no such proceedings
are pending or have been instituted.
(f) Reference is hereby made to the entire texts of the Offer to Purchase
and the related Letter of Transmittal, which are incorporated herein by
reference.
5
<PAGE> 6
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated May 15, 1998.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(4) -- Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Text of press release issued by Parent and the Company on
May 11, 1998.
(a)(8) -- Form of Summary Advertisement, dated May 15, 1998.
(b) -- Not applicable.
(c)(1) -- Agreement and Plan of Merger, dated as of May 8, 1998, by
and among the Company, the Purchaser and Parent.
(c)(2) -- Stockholders Agreement, dated May 8, 1998, among Parent, the
Voting Trustees and the Registered Holders.
(c)(3) -- Investment Agreement, dated as of January 31, 1996, between
the Company and Parent.
(c)(4) -- Stockholders' Agreement, dated as of January 31, 1996,
between Parent and the other holders of Class A Shares of
the Company.
(c)(5) -- Registration Rights Agreement, dated as of January 31, 1996,
between the Company and Parent.
(c)(6) -- Collaboration Agreement and License, dated as of January 31,
1996, between the Company and Parent.*
(c)(7) -- Corn Borer-Protected Corn License Agreement, dated as of
January 31, 1996, between the Company and Parent.*
(c)(8) -- Glyphosate-Protected Corn License Agreement, dated as of
January 31, 1996, between the Company and Parent.*
(c)(9) -- CaMV Promoter License Agreement (Glufosinate-Protected
Corn), dated as of January 31, 1996, between the Company and
Parent.*
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
- ---------------
* Incorporated by reference to the Schedule 13D filed by Parent with respect to
the Class A Shares.
6
<PAGE> 7
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: May 15, 1998
MONSANTO COMPANY
By: /s/ DEREK K. RAPP
------------------------------------
Name: Derek K. Rapp
Title: Director, Mergers &
Acquisitions
CORN ACQUISITION CORPORATION
By: /s/ BARBARA L. BLACKFORD
------------------------------------
Name: Barbara L. Blackford
Title: President, Secretary,
Treasurer
and Director
7
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated May 15, 1998.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(4) -- Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Text of press release issued by Parent and the Company on
May 11, 1998.
(a)(8) -- Form of Summary Advertisement, dated May 15, 1998.
(b) -- Not applicable.
(c)(1) -- Agreement and Plan of Merger, dated as of May 8, 1998, by
and among the Company, the Purchaser and Parent.
(c)(2) -- Stockholders Agreement, dated May 8, 1998, among Parent, the
Voting Trustees and the Registered Holders.
(c)(3) -- Investment Agreement, dated as of January 31, 1996, between
the Company and Parent.
(c)(4) -- Stockholders' Agreement, dated as of January 31, 1996,
between Parent and the other holders of Class A Shares of
the Company.
(c)(5) -- Registration Rights Agreement, dated as of January 31, 1996,
between the Company and Parent.
(c)(6) -- Collaboration Agreement and License, dated as of January 31,
1996, between the Company and Parent.*
(c)(7) -- Corn Borer-Protected Corn License Agreement, dated as of
January 31, 1996, between the Company and Parent.*
(c)(8) -- Glyphosate-Protected Corn License Agreement, dated as of
January 31, 1996, between the Company and Parent.*
(c)(9) -- CaMV Promoter License Agreement (Glufosinate-Protected
Corn), dated as of January 31, 1996, between the Company and
Parent.*
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
- ---------------
* Incorporated by reference to the Schedule 13D filed by Parent with respect to
the Class A Shares.
<PAGE> 1
Exhibit (A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
AND CLASS B COMMON STOCK
OF
DEKALB GENETICS CORPORATION
AT
$100 NET PER SHARE
BY
CORN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
MONSANTO COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF
MERGER, DATED AS OF MAY 8, 1998 (THE "MERGER AGREEMENT"), AMONG MONSANTO COMPANY
("PARENT"), CORN ACQUISITION CORPORATION (THE "PURCHASER") AND DEKALB GENETICS
CORPORATION (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY HAS
UNANIMOUSLY (WITHOUT THE PARTICIPATION OF THE TWO DIRECTORS NOMINATED BY PARENT)
DETERMINED THAT THE OFFER AND THE MERGER (AS DEFINED HEREIN) ARE FAIR TO AND IN
THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE OFFER,
THE MERGER AGREEMENT AND THE MERGER AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
THE OFFER IS CONDITIONED UPON THERE HAVING BEEN VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF SHARES OF CLASS A
COMMON STOCK THAT (TOGETHER WITH THE SHARES OF CLASS A COMMON STOCK THEN HELD BY
PARENT OR ANY OF ITS SUBSIDIARIES (AS DEFINED HEREIN)) WOULD CONSTITUTE A
MAJORITY OF THE OUTSTANDING SHARES OF CLASS A COMMON STOCK (ASSUMING THE
EXERCISE OF ALL OPTIONS TO PURCHASE, AND THE CONVERSION OR EXCHANGE OF ALL
SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO, SHARES OF CLASS A COMMON STOCK)
OUTSTANDING AT THE EXPIRATION DATE OF THE OFFER, THE EXPIRATION OR TERMINATION
PRIOR TO THE EXPIRATION OF THE OFFER OF ANY WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED APPLICABLE TO
THE PURCHASE OF SHARES PURSUANT TO THE OFFER (THE "HSR CONDITION"), AND CERTAIN
OTHER TERMS AND CONDITIONS. SEE SECTION 14.
Holders of 2,671,650 shares of Class A Common Stock, or approximately 57.5%
of the outstanding Class A Common Stock as of April 30, 1998, have agreed to
tender such Shares pursuant to the Offer. See "Introduction" and Section 11.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal (or a
manually signed facsimile thereof) in accordance with the instructions in the
Letter of Transmittal, have such stockholder's signature thereon guaranteed if
required by Instruction 1 or 5 of the Letter of Transmittal, and mail or deliver
the Letter of Transmittal, or such facsimile, with the certificate(s)
representing tendered Shares and any other required documents to the Depositary
(as defined herein), or tender such Shares pursuant to the procedures for
book-entry transfer set forth in Section 3, or (2) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect such
transaction for such stockholder. Stockholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee if
they desire to tender Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply with the procedures
for book-entry transfer on a timely basis may tender such Shares by following
the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Managers (as such terms are defined herein) at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase and
the Letter of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies and other nominees.
------------------------
The Dealer Managers for the Offer are:
BANCAMERICA ROBERTSON STEPHENS GOLDMAN, SACHS & CO.
May 15, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
1. Terms of the Offer.......................................... 3
2. Acceptance for Payment and Payment for Shares............... 5
3. Procedures for Tendering Shares............................. 6
4. Withdrawal Rights........................................... 9
5. Certain Federal Income Tax Consequences..................... 10
6. Price Range of Shares; Dividends............................ 10
7. Possible Effects of the Offer on Market for the Shares; NYSE
Listing; Exchange Act Registration; Margin Regulations...... 11
8. Certain Information Concerning the Company.................. 13
9. Certain Information Concerning Parent and the Purchaser..... 16
10. Background of the Offer; Contacts with the Company;
Recommendation of the Company's Board of Directors.......... 17
11. Purpose of the Offer; the Merger Agreement; the Stockholders
Agreement; Appraisal Rights; Plans for the Company.......... 20
12. Investment Agreement; Certain Agreements with Respect to the
Company's Securities; Other Agreements...................... 34
13. Source and Amount of Funds.................................. 38
14. Certain Conditions of the Offer............................. 38
15. Certain Legal Matters; Required Regulatory Approvals........ 40
16. Dividends and Distributions................................. 42
17. Fees and Expenses........................................... 43
18. Miscellaneous............................................... 43
SCHEDULE A....................................................... A-1
</TABLE>
<PAGE> 3
To: All Holders of Class A Common Stock and All Holders of Class B Common Stock
of DEKALB Genetics Corporation:
INTRODUCTION
Corn Acquisition Corporation, a Delaware corporation (the "Purchaser") and
a wholly-owned subsidiary of Monsanto Company, a Delaware corporation
("Parent"), hereby offers to purchase all of the outstanding shares of Class A
Common Stock, without par value (the "Class A Common Stock"), and all of the
outstanding shares of Class B Common Stock, without par value (the "Class B
Common Stock" and, together with the Class A Common Stock, the "Shares"), of
DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a
purchase price of $100 per Share, net to the seller in cash, without interest
thereon (as such price may be increased, the "Offer Price"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer"). If Shares are not accepted for
purchase pursuant to the Offer on or prior to May 9, 1999, the Offer Price will
be increased by $0.50 per Share on May 10, 1999, and on the tenth day of each
subsequent month until Shares are so accepted, unless the Offer is earlier
terminated. Subject to the terms and conditions of the Merger Agreement, Parent
may terminate the Offer if it has not paid for Shares pursuant thereto prior to
November 9, 1999 (the "Outside Date"). See Section 11. Tendering stockholders
will not be obligated to pay brokerage fees or commissions or, subject to
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of
Shares by the Purchaser pursuant to the Offer. The Purchaser or Parent will pay
all charges and expenses of First Chicago Trust Company of New York (the
"Depositary"), Georgeson & Company Inc. (the "Information Agent") and
BancAmerica Robertson Stephens ("BancAmerica Robertson Stephens") and Goldman,
Sachs & Co. ("Goldman Sachs" and, together with BancAmerica Robertson Stephens,
the "Dealer Managers"). See Section 17. Parent currently owns 485,442 Shares of
Class A Common Stock, or approximately 10.4% of the outstanding Class A Common
Stock as of April 30, 1998, and 13,321,436 Shares of Class B Common Stock, or
approximately 44.4% of the outstanding Class B Common Stock as of April 30,
1998, and in the aggregate approximately 39.9% of the outstanding Shares as of
April 30, 1998.
THE OFFER IS CONDITIONED UPON THERE HAVING BEEN VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF SHARES OF CLASS A
COMMON STOCK THAT (TOGETHER WITH THE SHARES OF CLASS A COMMON STOCK THEN HELD BY
PARENT OR ANY OF ITS SUBSIDIARIES (AS DEFINED HEREIN)) WOULD CONSTITUTE A
MAJORITY OF THE SHARES OF CLASS A COMMON STOCK (ASSUMING THE EXERCISE OF ALL
OPTIONS TO PURCHASE, AND THE CONVERSION OR EXCHANGE OF ALL SECURITIES
CONVERTIBLE OR EXCHANGEABLE INTO, SHARES OF CLASS A COMMON STOCK) OUTSTANDING AT
THE EXPIRATION DATE OF THE OFFER (THE "MINIMUM CONDITION") AND THE EXPIRATION OR
TERMINATION PRIOR TO THE EXPIRATION OF THE OFFER OF ANY WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT")
APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER (THE "HSR
CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12,
1998, UNLESS EXTENDED. SEE SECTIONS 1 AND 14.
The Offer is being made pursuant to the terms of an Agreement and Plan of
Merger, dated as of May 8, 1998, among Parent, the Purchaser and the Company
(the "Merger Agreement"), pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser will
be merged with and into the Company (the "Merger"), with the Company continuing
as the surviving corporation (the "Surviving Corporation"). As of the effective
time of the Merger (the "Effective Time"), each issued and outstanding Share
(other than Shares owned by the Company or by any Subsidiary of the Company or
by Parent, the Purchaser or any other Subsidiary of Parent, which Shares will be
canceled with no consideration delivered in exchange therefor, and other than
Shares, if any, held by stockholders who are entitled to and who properly
exercise appraisal rights under Delaware law ("Dissenting Shares")) will, by
virtue of the Merger and without any action by the holder thereof, be converted
into the right to receive from the Surviving Corporation in cash the price per
Share paid in the Offer (the "Merger Consideration"), payable to the holder
thereof, without interest or dividends thereon, upon the surrender of the
certificate formerly representing such Share. The Merger Agreement is more fully
described in Section 11. Certain
<PAGE> 4
federal income tax consequences of the sale of Shares pursuant to the Offer and
the Merger, as the case may be, are described in Section 5.
Concurrently with the execution of the Merger Agreement, Parent entered
into a Stockholders Agreement (the "Stockholders Agreement") with the voting
trustees, individually and in his or her capacity as such voting trustee (the
"Voting Trustees") under the Roberts Family Voting Trust Agreement, dated
January 31, 1996 (the "Voting Trust Agreement"), and the registered holders of
trust certificates, individually and in his or her capacity as such registered
holder (the "Registered Holders" and, together with the Voting Trustees, the
"Roberts Family Stockholders") under the Voting Trust Agreement. Pursuant to the
Stockholders Agreement, the Voting Trustees and Registered Holders have agreed,
and the Registered Holders have instructed the Voting Trustees, among other
things, to tender pursuant to the Offer and not withdraw, pursuant to the
Stockholders Agreement, all of the 2,671,650 Shares of Class A Common Stock held
of record by the Voting Trustees pursuant to the Voting Trust Agreement (the
"Voting Trust Shares"), or approximately 57.5% of the outstanding Shares of
Class A Common Stock as of April 30, 1998. For a more detailed description of
the terms and conditions of the Stockholders Agreement, see Section 11.
The Merger Agreement provides that, promptly after the Purchaser purchases
Shares pursuant to the Offer, the Purchaser will be entitled to designate up to
such number of directors, rounded to the next highest whole number, of the
Company, subject to compliance with Section 14(f) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as will make the percentage of the
Company's directors so designated by the Purchaser equal to the aggregate voting
power of the Shares of Company Class A Common Stock held by Parent and any of
its Subsidiaries, and the Company shall, at such time, cause the Purchaser's
designees to be so elected by its existing Board of Directors. These designees
will be in addition to the two current Monsanto Nominees (as defined herein).
However, until the Effective Time, the Board of Directors of the Company shall
have at least three directors who were directors on the date of the Merger
Agreement or were designated by a majority of such directors, in each case
excluding the Monsanto Nominees. The Company has agreed, at the option of
Parent, either to increase the size of the Board of Directors of the Company
and/or obtain the resignation of such number of directors as is necessary to
enable the Purchaser's designees to be elected or appointed to the Board of
Directors of the Company. The Merger Agreement is more fully described in
Section 11.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (WITHOUT THE
PARTICIPATION OF THE MONSANTO NOMINEES) HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE OFFER, THE MERGER AGREEMENT AND THE MERGER AND
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") has
delivered to the Board of Directors of the Company a written opinion dated May
8, 1998 to the effect that, based upon and subject to various considerations and
assumptions set forth in such opinion, the consideration to be received by the
holders of Shares in connection with the Offer and the Merger is fair from a
financial point of view to the holders of such Shares (other than Parent and its
affiliates). A copy of Merrill Lynch's written opinion dated May 8, 1998 is
included with the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders concurrently
herewith, and stockholders are urged to read such opinion carefully in its
entirety for a description of the assumptions made, matters considered and
limitations of the review undertaken by Merrill Lynch.
If the Minimum Condition and the other conditions to the Offer are
satisfied and the Offer is consummated, the Purchaser will own a sufficient
number of Shares to ensure that the Merger will be approved. Under the Delaware
General Corporation Law (the "DGCL"), if after consummation of the Offer the
Purchaser owns at least 90% of the Shares of each of the Class A Common Stock
and Class B Common Stock then outstanding, the Purchaser will be able to cause
the Merger to occur without a vote of the Company's stockholders. If, however,
after consummation of the Offer, the Purchaser owns less than 90% of the then
outstanding Shares of either the Class A Common Stock or the Class B Common
Stock, a vote of the holders of the Class A Common Stock will be required under
the DGCL to adopt the Merger Agreement,
2
<PAGE> 5
and, since stockholders of the Company cannot act by written consent, a
significantly longer period of time will be required to effect the Merger. See
Section 11.
The Company has informed the Purchaser that, as of April 30, 1998, there
were 4,646,911 Shares of Class A Common Stock (of which Parent is the beneficial
owner of 485,442 Shares) and 29,975,568 Shares of Class B Common Stock (of which
Parent is the beneficial owner of 13,321,436 Shares) issued and outstanding and
2,339,249 Shares of Class A Common Stock and no Shares of Class B Common Stock
reserved for issuance pursuant to outstanding stock options ("Options") or other
rights to purchase Shares under the Company's Long Term Incentive Plan, Savings
and Investment Plan and Director Stock Option Plan (the "Company Stock Plans").
In addition, the Company has informed the Purchaser that there are an additional
1,692,397 Shares of Class A Common Stock reserved for issuance pursuant to
future grants of purchase rights under the Company Option Plans, of which
113,937 may be granted (and related Shares issued) in accordance with the Merger
Agreement. Pursuant to the Merger Agreement, immediately prior to the
consummation of the Offer, all of the Options will become fully vested and
exercisable, and upon consummation of the Offer such Options will be canceled
and the holders thereof will be entitled to receive, in respect of each Share
theretofore issuable upon exercise of such Option, the excess of the Offer Price
over the exercise price related thereto, minus any applicable taxes required to
be withheld in connection therewith.
Based on the foregoing and assuming that no additional Shares of Class A
Common Stock (or warrants, options or rights exercisable for, or securities
convertible into, Shares of Class A Common Stock) have been or are issued, the
Minimum Condition would be satisfied if the Purchaser were to acquire 1,838,014
Shares of Class A Common Stock, and the number of Shares of Class A Common Stock
to be tendered pursuant to the Stockholders Agreement would be sufficient to
satisfy the Minimum Condition.
Based on the foregoing and assuming that all outstanding Options are
exercised (other than Options held by certain signatories to the Voting
Agreement, with respect to which the holders thereof have agreed that any Shares
acquired upon exercise thereof will be tendered and voted in accordance with the
Stockholder Agreement), and assuming that all other Options or other rights to
purchase Shares of Class A Common Stock that may be issued in accordance with
the Merger Agreement are issued and exercised, and assuming that no Shares of
Class A Common Stock are converted into Class B Common Stock, the Minimum
Condition would be satisfied if the Purchaser were to acquire 3,499,859 Shares
of Class A Common Stock pursuant to the Offer (or 342,767 Shares of Class A
Common Stock in addition to the 2,671,650 Shares of Class A Common Stock to be
tendered pursuant to the Stockholder Agreement and the 485,442 Shares of Class A
Common Stock beneficially owned by Parent).
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger regardless
of whether the Merger is consummated with or without a vote of the Company's
stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and thereby purchase all
Shares validly tendered prior to 12:00 midnight, New York City time, or such
other time as the Purchaser may announce in connection with any extension of the
Offer, on the Expiration Date (as defined herein) and not withdrawn as permitted
by Section 4.
The term "Expiration Date" means June 12, 1998, unless and until the
Purchaser shall, as described below, have extended the period of time for which
the Offer is open, in which event the term "Expiration Date" will mean the
latest date on which the Offer, as so extended by the Purchaser, will expire.
The Offer is subject to the conditions set forth under Section 14 (the
"Offer Conditions"), including the satisfaction of the Minimum Condition and the
HSR Condition. Subject to the applicable rules and
3
<PAGE> 6
regulations of the Securities and Exchange Commission (the "Commission"), the
Purchaser expressly reserves the right (but is not obligated) at any time and
from time to time to waive any of the Offer Conditions in whole or in part in
its sole discretion, provided that, without the prior written consent of the
Company, the Merger Agreement provides that the Purchaser cannot waive the
Minimum Condition. Subject to the applicable rules and regulations of the
Commission, the Purchaser also expressly reserves the right at any time and from
time to time to modify or amend the terms of the Offer; provided that under the
Merger Agreement the Purchaser may not, without the prior written consent of the
Company, (a) reduce the number of Shares to be purchased in the Offer, (b)
reduce the Offer Price, (c) impose any conditions to the Offer in addition to
the Offer Conditions or modify the Offer Conditions (other than to waive any
Offer Conditions to the extent not prohibited by the Merger Agreement), (d)
except as described below, extend the Offer, (e) change the form of
consideration payable in the Offer or (f) make any other change or modification
in any of the terms of the Offer in any manner that is adverse to the holders of
Shares.
Unless the Purchaser extends the Offer, the Offer will expire at 12:00
midnight, New York City time, on June 12, 1998. The Merger Agreement provides
that the Purchaser may, without the consent of the Company, (a) extend the
Offer, if at the scheduled or extended Expiration Date any of the Offer
Conditions have not been satisfied or waived, until such time as such conditions
are satisfied or waived, (b) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Commission or the staff
thereof applicable to the Offer and (c) on one or more occasions, extend the
Offer for a period of up to an aggregate of 15 business days if, on a scheduled
Expiration Date on which the Offer Conditions have been satisfied or waived, the
number of Shares of Class A Common Stock (together with any Shares of Class A
Common Stock held by Parent or any of its Subsidiaries) that have been validly
tendered and not withdrawn represent more than 70% of the then issued and
outstanding Shares of Class A Common Stock, but less than 90% of the then issued
and outstanding Shares of Class A Common Stock, and the number of Shares of
Class B Common Stock (together with any Shares of Class B Common Stock held by
Parent or any of its Subsidiaries) that have been validly tendered and not
withdrawn represent more than 70% of the then issued and outstanding Shares of
Class B Common Stock, but less than 90% of the then issued and outstanding
Shares of Class B Common Stock. The Merger Agreement provides that the Purchaser
may not terminate the Offer between scheduled Expiration Dates (except in the
event that the Merger Agreement is terminated), and, in the event that the
Purchaser would otherwise be entitled to terminate the Offer at any scheduled
Expiration Date due to the failure of one or more of the Offer Conditions,
unless the Merger Agreement has been terminated, the Purchaser is required to
extend the Offer until such date as the Offer Conditions have been satisfied or
such later date as required by applicable law; provided, however, that the
Purchaser is not required to extend the Offer beyond the Outside Date. If Shares
are not accepted for purchase pursuant to the Offer on or prior to May 9, 1999,
the Offer Price will be increased by $0.50 per Share on May 10, 1999 and on the
tenth day of each subsequent month until Shares are so accepted, unless the
Offer is earlier terminated. During any extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer and subject to the
right of a tendering stockholder to withdraw such stockholder's Shares. See
Section 4. Under no circumstances will interest be paid on the purchase price
for tendered Shares, whether or not the Offer is extended. Any extension of the
Offer may be effected by the Purchaser giving oral or written notice of such
extension to the Depositary. Subject to the terms and conditions of the Merger
Agreement, Parent may terminate the Offer if it has not paid for Shares pursuant
thereto prior to the Outside Date.
Pursuant to the Merger Agreement, the Merger Agreement and the Offer may be
terminated by the Purchaser and Parent if certain events occur. See Section 11.
Subject to the applicable regulations of the Commission, and to the
provisions of the Merger Agreement, the Purchaser expressly reserves the right
to delay acceptance for payment of or payment for any Shares, to extend the
Offer, or to terminate the Offer and not to accept for payment or pay for any
Shares not theretofore accepted for payment or paid for, upon the occurrence of
any of the conditions specified in paragraphs (a) through (g) of Section 14, and
at any time or from time to time, to amend the Offer or to waive any conditions
to the Offer in any respect consistent with the provisions of the Merger
Agreement described above, as such provisions may be amended from time to time,
in each case by giving oral or written notice of such delay,
4
<PAGE> 7
extension, termination, amendment or waiver to the Depositary. These rights
reserved by the Purchaser are in addition to the Purchaser's rights described in
Section 14.
Any such delay, extension, termination, amendment or waiver will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-l under the Exchange Act, which require that material changes be
promptly disseminated to stockholders in a manner reasonably designed to inform
them of such changes) and without limiting the manner in which the Purchaser may
choose to make any public announcement, the Purchaser shall have no obligation
to publish, advertise or otherwise communicate any such public announcement
other than by issuing a press release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances, including the materiality
of the changes. In the Commission's view, an offer should generally remain open
for a minimum of five business days from the date the material change is first
published, sent or given to stockholders, and, if material changes are made with
respect to information that approaches the significance of price and the
percentage of securities sought, a minimum of ten business days may be required
to allow for adequate dissemination and investor response. With respect to a
change in price, a minimum ten business day period from the date of such change
is generally required under applicable Commission rules and regulations to allow
for adequate dissemination to stockholders.
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or a federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and, if required, other relevant materials will be mailed by the Purchaser to
record holders of Shares and will be furnished by the Purchaser to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the stockholder lists or, if applicable,
who are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares when such lists or
listings are received.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the expiration of the Offer (and not properly withdrawn in
accordance with Section 4) as soon as practicable on or after the Expiration
Date (and, in any event within three business days after the later of the
Expiration Date and the receipt by the Depositary of the certificates for
tendered Shares). Any determination concerning the satisfaction of such terms
and conditions is within the sole discretion of the Purchaser and such
determination will be final and binding on all tendering stockholders. See
Section 14. The Purchaser expressly reserves the right to delay acceptance for
payment of, or payment for, Shares in order to comply in whole or in part with
any applicable law, including the HSR Act. See Sections 1 and 15. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of certificates for such Shares (or a
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility, as described in
Section 3), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof), with any required signature guarantees, or
an Agent's Message (as defined herein) in connection with a book-entry transfer
and any other documents required by the Letter of Transmittal.
5
<PAGE> 8
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
book-entry confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of such book-entry
confirmation that such participant has received and agrees to be bound by the
Letter of Transmittal and that the Purchaser may enforce such agreement against
such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment and thereby purchased Shares validly tendered and not withdrawn if,
as and when the Purchaser gives oral or written notice to the Depositary of its
acceptance for payment of such Shares pursuant to the Offer. In all cases, upon
the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for the
tendering stockholders for purposes of receiving payments from the Purchaser and
transmitting such payments to the tendering stockholders. Although the Offer
Price may be increased as described herein, no interest will be paid by the
Purchaser on the Offer Price for the Shares to be paid by the Purchaser,
regardless of any delay in making such payment. If any tendered Shares are not
accepted for payment pursuant to the terms and conditions of the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned, without
expense to the tendering stockholder (or, in the case of Shares tendered by
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3, such Shares will be credited to an account
maintained within the Book-Entry Transfer Facility), as soon as practicable
following expiration or termination of the Offer.
If, prior to the expiration of the Offer, the Purchaser increases the
consideration offered to a holder of Shares pursuant to the Offer, such
increased consideration will be paid to all holders of Shares that are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
The Purchaser reserves the right, at any time, to assign to one or more
corporations directly or indirectly wholly-owned by Parent the right to purchase
all or any portion of the Shares tendered pursuant to the Offer, but any such
assignment will not relieve the Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer. In
addition, pursuant to the Merger Agreement, Parent has the right to assign all
of its and Purchaser's rights and obligations under the Merger Agreement to
another person that is capable of acquiring a majority of the Class A Common
Stock by the Outside Date subject in any case to Parent's guarantee of the
performance by such other person of all of Parent's and the Purchaser's
obligations thereunder. See Section 11.
The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-1(c)
under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of stockholders promptly
after the termination or withdrawal of the Offer.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender. For a stockholder validly to tender Shares pursuant to the
Offer, a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), together with any required signature
guarantees or an Agent's Message in connection with a book-entry delivery of
Shares and any other required documents, must be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior
to the expiration of the Offer and either (a) certificates evidencing tendered
Shares must be received by the Depositary at such address or such Shares must be
tendered pursuant to the procedures for book-entry tender set forth below (and a
confirmation of receipt of such tender received), in each case, prior to the
expiration of the Offer, or (b) such stockholder must comply with the guaranteed
delivery procedure set forth below. No alternate, conditional or contingent
tenders will be accepted.
6
<PAGE> 9
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other required documents, must, in any case, be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the expiration of the Offer, or the tendering
stockholder must comply with the guaranteed delivery procedure described below.
DELIVERY OF A DOCUMENT TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Securities Transfer Agents
Medallion Program or by any other "Eligible Guarantor Institution" as such term
is defined in Rule 17Ad-15 under the Exchange Act (collectively, "Eligible
Institutions") except in cases where Shares are tendered (a) by a registered
holder of Shares who has not completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or (b) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal. If a certificate evidencing Shares
is registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made or a certificate evidencing Shares not
accepted for payment or not tendered is to be issued or returned, to a person
other than the registered holder(s), then such certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear on such certificate, with the
signature(s) on such stock powers guaranteed by an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
If certificates evidencing Shares are forwarded separately to the
Depositary, a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING ON PAYMENTS MADE TO
CERTAIN STOCKHOLDERS WITH RESPECT TO THE PURCHASE PRICE OF SHARES PURCHASED
PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH
HIS, HER OR ITS CORRECT TAXPAYER IDENTIFICATION NUMBER BY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates are not immediately available or
such stockholder cannot deliver the certificates and all other required
documents to the Depositary prior to the expiration of the Offer or the
procedures for book-
7
<PAGE> 10
entry transfer cannot be completed on a timely basis, such Shares may
nevertheless be tendered, provided that all of the following conditions are
satisfied:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, prior to the expiration of
the Offer; and
(c) the certificates (or a confirmation of a book-entry transfer of
such Shares into the Depositary's account at the Book Entry Transfer
Facility as described above) evidencing all tendered Shares, in proper form
for transfer, together with a properly completed and duly executed Letter
of Transmittal (or a manually signed facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and all other documents required by the Letter of
Transmittal are received by the Depositary within three trading days after
the date of such Notice of Guaranteed Delivery. The term "trading day" is
any day on which The New York Stock Exchange, Inc. (the "NYSE") is open for
business.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery and a representation that the stockholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within the
meaning of Rule 14e-4 under the Exchange Act.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof), together with any required
signature guarantees (or, in the case of a book entry transfer, an Agent's
Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time, and will depend upon when Share certificates are received by the
Depositary or Book-Entry Confirmations of such Shares are received into the
Depositary's account at the Book-Entry Transfer Facility.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, the tendering stockholder irrevocably appoints designees of the Purchaser
as such stockholder's agents, attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's right with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after the date of this Offer to Purchase. All such powers
of attorney and proxies will be considered irrevocable and coupled with an
interest in the tendered Shares. Such appointment is effective upon the
Purchaser's acceptance for payment of such Shares deposited with the Depositary.
Upon such appointment, all prior proxies given by such stockholder with respect
to such Shares and such other securities or rights will be revoked, without
further action, and no subsequent powers of attorney or proxies may be given by
such stockholder (and, if given, will not be effective). The Purchaser's
designees will be empowered, among other things, to exercise all voting and
other rights of such stockholder as they in their sole discretion may deem
proper at any annual, special or adjourned meeting of the stockholders of the
Company or otherwise. The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment, the Purchaser must be able to exercise full voting and
other rights with respect to such Shares, including voting at any meeting of
stockholders (whether annual or special or whether or not adjourned) in respect
of such Shares (to the extent that such Shares have such rights).
Determination of Validity. All questions as to the form of documents and
the validity, form, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding on all parties. The
Purchaser
8
<PAGE> 11
reserves the absolute right to reject any and all tenders determined by it not
to be in proper form or the acceptance for payment of which may, in the opinion
of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
absolute right to waive any of the conditions of the Offer to the extent
permitted by applicable law and the Merger Agreement or any defect or
irregularity in the tender of any Shares of any particular stockholder whether
or not similar defects or irregularities are waived in the case of other
stockholders. Neither the Purchaser, the Depositary, the Information Agent, the
Dealer Manager nor any other person will be under any duty to give notification
of any defects or irregularities in tenders or shall incur any liability for
failure to give any such notification. The Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and
instructions thereto) will be final and binding. No tender of Shares shall be
deemed to have been validly made until all defects or irregularities with
respect to such tender have been expressly cured or waived by the Purchaser.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering stockholder's representation and warranty to
the Purchaser that (a) such stockholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
Shares or other securities issued or issuable in respect of such Shares), and
(b) when the same are accepted for payment by the Purchaser, the Purchaser will
acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The acceptance for payment by the Purchaser of tenders of Shares pursuant
to any one of the procedures described above will constitute a binding agreement
between the tendering stockholder and the Purchaser in accordance with the terms
and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise stated in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date (which is initially June
12, 1998) and, unless theretofore accepted for payment by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after July 13, 1998.
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover of this Offer to Purchase. Any notice of withdrawal must specify
the name of the tendering stockholder, the number of Shares to be withdrawn and
(if certificates for Shares have been tendered) the names in which the
certificate(s) evidencing the Shares to be withdrawn are registered, if
different from that of the tendering stockholder. If the certificate(s) have
been delivered to the Depositary, then, prior to the physical release of such
certificate(s), the tendering stockholder must submit the serial numbers shown
on the particular certificate(s) evidencing the Shares to be withdrawn and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution, unless such Shares have been tendered for the account of any
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry tender as set forth in Section 3, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares, in which case a notice of withdrawal
will be effective if delivered to the Depositary by any method of delivery
described in the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of Parent, the
Purchaser or any of their respective affiliates or assigns, the Depositary, the
Information Agent or any other person or entity will be under any duty to give
any notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not validly tendered for any purposes of the Offer,
but withdrawn Shares may be retendered at any subsequent time, by again
following one of the procedures for tendering described in Section 3 at any time
prior to the Expiration Date.
9
<PAGE> 12
If the Purchaser is delayed in its acceptance for payment of any Shares
tendered pursuant to the Offer, or is unable to accept for payment or pay for
Shares tendered pursuant to the Offer for any reason, then, without prejudice to
the Purchaser's rights under this Offer, the Depositary may, nevertheless, on
behalf of the Purchaser, retain tendered Shares until the expiration or
termination of the Offer, and such Shares may not be withdrawn except to the
extent that tendering stockholders are entitled to and duly exercise withdrawal
rights as set forth in this Section 4 subject to Rule 14e-1(c) under the
Exchange Act, which provides that no person who makes a tender offer may fail to
pay the consideration offered or return the securities deposited by or on behalf
of securityholders promptly after the termination or withdrawal of the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer will be a taxable
transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. In general, a
stockholder will recognize gain or loss for federal income tax purposes equal to
the difference between the amount of cash received in exchange for the Shares
sold and such stockholder's adjusted tax basis in such Shares. Assuming the
Shares constitute capital assets in the hands of the stockholder, such gain or
loss will be capital gain or loss and will be long term capital gain or loss if
the holder will have held the Shares for more than one year at the time of the
sale. Gain or loss will be calculated separately for each block of Shares
tendered pursuant to the Offer.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF
STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS WHO
ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN CORPORATIONS.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE TAX, AND
STATE, LOCAL AND FOREIGN TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS.
On June 16, 1997, the Class B Common Stock began trading on the NYSE under
the symbol "DKB". Previously, the Class B Common Stock was traded in the
over-the-counter market and prices were quoted on the Nasdaq National Market
under the symbol "SEEDB". There is no established public trading market for the
Class A Common Stock. The following table sets forth, for the quarters
indicated, dividends per Share on the Class A Common Stock and the Class B
Common Stock and the high and low sales prices per Share of Class B Common Stock
as reported by the Nasdaq National Market and by the NYSE, as applicable for the
periods indicated. All dividend amounts and Share prices have been adjusted to
reflect the two-for-one split of
10
<PAGE> 13
the Shares to holders of record on July 25, 1997, and the three-for-one split of
the Shares to the holders of record on May 10, 1996 (together, the "Stock
Splits").
DEKALB GENETICS CORPORATION
<TABLE>
<CAPTION>
DIVIDENDS HIGH LOW
--------- ------ ------
<S> <C> <C> <C>
Fiscal 1996:
First Quarter......................................... $ .0333 $ 8.33 $ 6.63
Second Quarter........................................ .0333 11.63 7.38
Third Quarter......................................... .035 15.00 10.79
Fourth Quarter........................................ .035 16.88 12.13
Fiscal 1997:
First Quarter......................................... .035 21.38 16.25
Second Quarter........................................ .035 33.88 18.13
Third Quarter......................................... .035 35.63 25.38
Fourth Quarter........................................ .035 42.75 35.13
Fiscal 1998:
First Quarter......................................... .035 47.13 33.00
Second Quarter........................................ .035 70.50 23.00
Third Quarter (through May 14, 1998).................. -- 98.00 65.75
</TABLE>
On February 10, 1998, the last full trading day before the Board of
Directors of the Company announced its determination to pursue a possible
business combination, as more fully described in Section 10, the reported
closing price of the Class B Common Stock on the NYSE was $33.13. On May 8,
1998, the last full trading day prior to the announcement of the Offer and the
Merger Agreement and related transactions, the reported closing price of the
Class B Common Stock on the NYSE was $77.00 per Share. On May 14, 1998, the last
full trading day prior to commencement of the Offer, the reported closing price
of the Class B Common Stock on the NYSE was $93.19 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES
OF CLASS B COMMON STOCK.
7. POSSIBLE EFFECTS OF THE OFFER ON MARKET FOR THE SHARES; NYSE LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Possible Effects of the Offer on the Market for the Shares. The purchase
of Shares pursuant to the Offer will reduce the number of Shares of Class B
Common Stock that might otherwise trade publicly and could adversely affect the
liquidity and market value of the remaining Shares of Class B Common Stock held
by the public. The purchase of Shares of Class B Common Stock pursuant to the
Offer can also be expected to reduce the number of holders of Shares of Class B
Common Stock. The Purchaser cannot predict with certainty whether the reduction
in the number of Shares of Class B Common Stock that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares of Class B Common Stock or whether it would cause
future market prices to be greater or less than the Offer price therefor. As
described above, there is no public market for Shares of Class A Common Stock.
NYSE Listing. Depending upon the number of Shares of Class B Common Stock
purchased pursuant to the Offer, the Shares of Class B Common Stock may no
longer meet the standards for continued listing on the NYSE. According to the
NYSE's published guidelines, the NYSE could consider delisting the Shares of
Class B Common Stock if, among other things, the number of publicly held Shares
of Class B Common Stock falls below 600,000, the number of holders of Shares of
Class B Common Stock falls below 400, the number of holders of Shares of Class B
Common Stock falls below 1,200 and the average monthly trading volume is less
than 100,000 Shares of Class B Common Stock, or the aggregate market value of
such publicly held Shares of Class B Common Stock falls below $5,000,000. Shares
of Class B Common Stock held by officers or directors
11
<PAGE> 14
of the Company or their immediate families, and other concentrated holdings of
10% or more of such Shares, ordinarily will not be considered as being publicly
held for this purpose.
In the event the Shares of Class B Common Stock are no longer eligible for
NYSE listing, quotations might still be available from other sources. The extent
of the public market for the Shares of Class B Common Stock and the availability
of such quotations would, however, depend upon the number of holders of such
Shares of Class B Common Stock remaining at such time, the interest in
maintaining a market in such Shares of Class B Common Stock on the part of
securities firms, the possible termination of registration of such Shares of
Class B Common Stock under the Exchange Act as described below and other
factors.
Exchange Act Registration. Both the Class A Common Stock and the Class B
Common Stock are currently registered under the Exchange Act. The purchase of
the Class A Common Stock or the Class B Common Stock pursuant to the Offer may
result in such Class A Common Stock or Class B Common Stock, respectively,
becoming eligible for deregistration under the Exchange Act. Registration of the
Class A Common Stock or the Class B Common Stock may be terminated upon
application by the Company to the Commission if the Shares of such class are not
listed on a "national securities exchange" and there are fewer than 300 record
holders. Termination of registration of both of the Class A Common Stock and the
Class B Common Stock under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act and
the requirements of furnishing a proxy statement in connection with
stockholders' meetings pursuant to Section 14(a) or 14(c) of the Exchange Act
and the related requirement of an annual report, no longer applicable to the
Company. If both of the Class A Common Stock and the Class B Common Stock are no
longer registered under the Exchange Act, the requirements of Rule 13e-3 under
the Exchange Act with respect to "going private" transactions would no longer be
applicable to the Company. Furthermore, the ability of "affiliates" of the
Company and persons holding "restricted securities" of the Company to dispose of
such securities pursuant to Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"), may be impaired or, with respect to certain
persons, eliminated. If registration of the Class A Common Stock or the Class B
Common Stock under the Exchange Act were terminated, such Class A Common Stock
or Class B Common Stock, respectively, would no longer be eligible for stock
exchange listing or Nasdaq reporting. The Purchaser believes that the purchase
of the Class A Common Stock or the Class B Common Stock pursuant to the Offer
may result in such Class A Common Stock or Class B Common Stock, respectively,
becoming eligible for deregistration under the Exchange Act, and it would be the
intention of the Purchaser to cause the Company to make an application for
termination of registration of the Class A Common Stock or the Class B Common
Stock as soon as possible after successful completion of the Offer if the Class
A Common Stock or the Class B Common Stock, respectively, is then eligible for
such termination.
If the registration of the Class A Common Stock or the Class B Common Stock
is not terminated prior to the Merger, then the Class A Common Stock or the
Class B Common Stock will no longer be eligible for NYSE listing and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
Margin Regulations. The Shares of Class B Common Stock are currently
"margin securities" under the regulations of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), which has the effect,
among other things, of allowing brokers to extend credit on the collateral of
such Shares for the purpose of buying, carrying or trading in securities
("Purpose Loans"). Depending upon factors such as the number of record holders
of the Shares of Class B Common Stock and the number and market value of
publicly held Shares of Class B Common Stock, following the purchase of Shares
of Class B Common Stock pursuant to the Offer, the Shares of Class B Common
Stock might no longer constitute "margin securities" for purposes of the Federal
Reserve Board's margin regulations and, therefore, could no longer be used as
collateral for Purpose Loans made by brokers. In addition, if registration of
the Class B Common Stock under the Exchange Act were terminated, the Shares of
Class B Common Stock would no longer constitute "margin securities." The Shares
of Class A Common Stock are not "margin securities."
12
<PAGE> 15
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 3100 Sycamore Road, DeKalb, Illinois 60115.
The Company engages in the development of products of major importance to
two segments of modern agriculture -- seed and technology (corn, soybeans,
sorghum, alfalfa and sunflower) and hybrid swine breeding stock. The Company
operates two business segments, a seed segment and a swine breeding segment,
through the Company's wholly owned subsidiary, DEKALB Swine Breeders, Inc. In
fiscal 1997, the seed segment had revenues of approximately $394,800,000 and the
swine breeding segment had revenues of approximately $56,600,000.
The Company conducts major research and development programs on those
genetically determined traits which are of primary importance to the producer's
profitability. The Company develops primary or inbred lines through a process of
observation, evaluation and selection for further breeding of those plants or
swine which exhibit superior performance in certain traits. These primary or
inbred lines, when mated or crossed to other primary or inbred lines, will pass
on to their progeny the superior performance in those traits for which the
primary or inbred lines were selected. Additionally, a fundamental genetic
principle -- called heterosis, or hybrid vigor -- is generally utilized.
Heterosis occurs when the progeny of genetically dissimilar parents have certain
performance characteristics which are superior to those of either parent.
The Company uses these principles of genetic selection and heterosis to
provide products for the modern day agricultural industry. The Company also
develops production and management techniques to complement the performance
potential which resides in the genetic composition of its products.
As part of its research and development, the Company uses biotechnology to
improve hybrid performance in seed. For example, using gene cloning and
transformation techniques in the seed business, researchers are able to
incorporate genes from various sources to create new, value-added traits such as
herbicide resistance, insect resistance, and improved nutritional quality.
Further, DNA marker techniques enable researchers to correlate field performance
with genetic makeup thereby giving them an improved ability to breed for desired
product characteristics.
The selected financial information of the Company and its consolidated
subsidiaries for the years ended August 31, 1997, 1996 and 1995 set forth below
has been taken from the audited financial statements contained in the Company's
Annual Report on Form 10-K for the fiscal year ended August 31, 1997 (except as
set forth in footnote 4 below), and such information is qualified in its
entirety by reference to such document and all of the financial statements and
related notes contained therein. The selected financial information for the
quarter ended February 28, 1998 set forth below has been taken from unaudited
financial information contained in the Company's Quarterly Report on Form 10-Q
for the quarter ended February 28, 1998. Such Form 10-K and Form 10-Q are each
incorporated by reference herein. More comprehensive financial information is
included in such reports and other documents filed by the Company with the
Commission, and the following summary is qualified in its entirety by reference
to such reports and such other documents and all the financial information
(including the related notes) contained therein. Such reports and
13
<PAGE> 16
other documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below.
DEKALB GENETICS CORPORATION
SELECTED FINANCIAL INFORMATION
(DOLLARS IN MILLIONS,
EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS FOR THE YEAR ENDED OR AT
ENDED AUGUST 31,
FEBRUARY 28, --------------------------
1998 1997 1996 1995
------------ ------ ------ ------
<S> <C> <C> <C> <C>
OPERATIONS DATA
Total operating revenues............................. $276.6 $451.4 $387.5 $319.4
Earnings before income taxes and discontinued
operations......................................... 32.3 46.4 28.1 15.1
Net earnings......................................... 22.0 28.8 17.0 10.7
====== ====== ====== ======
Basic net earnings per Share(1)(4)................... $ 0.64 $ 0.84 $ 0.52 $ 0.35
Diluted net earnings per Share(2)(4)................. 0.61 0.81 0.51 0.34
Dividends per Share.................................. 0.14 0.137 0.133
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED AT AUGUST 31,
FEBRUARY 28, ----------------
1998 1997 1996
------------ ------ ------
<S> <C> <C> <C>
FINANCIAL DATA
Total assets................................................ $598.2 $449.6 $363.3
Long-term debt.............................................. 104.0 90.0 85.0
Shareholders' equity(3)..................................... 223.0 $196.1 $168.6
</TABLE>
- ---------------
(1) Basic net earnings per Share are calculated by dividing net earnings by the
average number of common shares outstanding during the relevant periods.
(2) Diluted net earnings per Share are calculated by dividing net earnings by
the average number of common and common equivalent (stock options) Shares
outstanding during the relevant periods.
(3) Gains and losses resulting from translation (except in foreign countries
experiencing hyperinflation) are reflected as an adjustment to shareholders'
equity.
(4) The Company adopted Financial Accounting Standards Board Statement No. 28,
"Earnings per Share" effective February 28, 1998. Per Share amounts have
been restated by the Company for prior periods.
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Information as of particular
dates concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements distributed to the Company's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and also should be available for inspection at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048 and the Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials may also be obtained by
mail, upon payment of the Commission's customary fees, by writing to its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
material may be obtained electronically by visiting the Commission's web site on
the internet at http://www.sec.gov. The information should also be available for
inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
Except as otherwise noted in this Offer to Purchase, all of the information
with respect to the Company set forth in this Offer to Purchase has been
provided by the Company or derived from publicly available information. Although
neither the Purchaser nor Parent has any knowledge that any such information is
14
<PAGE> 17
untrue, neither the Purchaser nor Parent takes any responsibility for the
accuracy or completeness of information contained in this Offer to Purchase with
respect to the Company or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information.
Prior to entering into the Merger Agreement, Parent and the Purchaser
conducted a due diligence review of the Company and in connection with such
review, received certain non-public information from the Company. The non-public
information included, among other things, projected financial information (the
"Financial Plan") for fiscal years ending August 31, 1998, August 31, 1999 and
August 31, 2002. The Company has advised Parent and the Purchaser that the
Financial Plan was prepared by the Company's management based on numerous
assumptions, including among others, projections of revenue, net gross profit,
operating expenses, depreciation and amortization, capital expenditures and
working capital requirements. No assurances can be given with respect to any
such assumptions. Set forth below is a summary of certain projected income
statement items for fiscal years ending August 31, 1998, August 31, 1999 and
August 31, 2002. None of the assumptions in the Financial Plan give effect to
the Offer, the Merger or financing thereof or the potential combined operations
of the Parent and the Company after consummation of such transactions.
THE COMPANY HAS ADVISED THE PURCHASER THAT IT DOES NOT AS A MATTER OF
COURSE DISCLOSE PROJECTIONS AS TO FUTURE REVENUES OR EARNINGS, AND THE
PROJECTIONS DISCUSSED IN THE FINANCIAL PLAN WERE NOT INTENDED TO FORECAST LIKELY
OR ANTICIPATED OPERATING RESULTS, BUT INSTEAD WERE MERELY ONE SCENARIO PREPARED
IN THE COURSE OF THE COMPANY'S ANNUAL STRATEGIC PLANNING PROCESS TO AID THE
COMPANY IN SETTING INTERNAL GOALS AND ILLUSTRATING CAPITAL NEEDS. THE
PROJECTIONS DISCUSSED IN THE FINANCIAL PLAN WERE NOT PREPARED WITH A VIEW TO
PUBLIC DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE COMMISSION OR
THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FOR PROJECTIONS. THE
FINANCIAL PLAN HAS NOT BEEN EXAMINED, REVIEWED OR COMPILED BY THE COMPANY'S
INDEPENDENT AUDITORS, AND ACCORDINGLY THEY HAVE NOT EXPRESSED AN OPINION OR ANY
OTHER ASSURANCE ON IT. THE FORECASTED INFORMATION IS INCLUDED HEREIN SOLELY
BECAUSE SUCH INFORMATION WAS FURNISHED TO PARENT AND THE PURCHASER OR ITS
FINANCIAL ADVISORS. ACCORDINGLY, THE INCLUSION OF THE PROJECTIONS IN THIS OFFER
SHOULD NOT BE REGARDED AS AN INDICATION THAT PARENT OR PURCHASER OR THE COMPANY
OR THEIR RESPECTIVE FINANCIAL ADVISORS OR THEIR RESPECTIVE OFFICERS AND
DIRECTORS CONSIDER SUCH INFORMATION TO BE ACCURATE OR RELIABLE, AND NONE OF SUCH
PERSONS ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY THEREOF. THE FINANCIAL PLAN
WAS PREPARED FOR INTERNAL USE AND IS SUBJECTIVE IN MANY RESPECTS AND THUS
SUSCEPTIBLE TO VARIOUS INTERPRETATIONS AND PERIODIC REVISION BASED UPON ACTUAL
EXPERIENCE AND BUSINESS DEVELOPMENT. IN ADDITION, BECAUSE THE ESTIMATES AND
ASSUMPTIONS UNDERLYING THE FINANCIAL PLAN ARE INHERENTLY SUBJECT TO SIGNIFICANT
ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, WHICH ARE DIFFICULT OR
IMPOSSIBLE TO PREDICT ACCURATELY AND ARE BEYOND THE CONTROL OF THE COMPANY,
PARENT AND THE PURCHASER, THERE CAN BE NO ASSURANCE THAT THE FINANCIAL PLAN WILL
BE REALIZED. IN PARTICULAR, THE FINANCIAL PLAN ASSUMED THAT THE COMPANY WOULD BE
TOTALLY SUCCESSFULLY IN ASSERTING ITS INTELLECTUAL PROPERTY RIGHTS IN PENDING
LITIGATION AND THAT THE COMPANY WOULD COLLECT ROYALTIES FROM ALL PARTIES TO SUCH
LITIGATION ON ALL SALES OF RELATED PRODUCTS IN THE YEAR IN WHICH THE PRODUCTS
ARE SOLD, BEGINNING IN 1998. NO ASSURANCES CAN BE GIVEN WITH RESPECT TO SUCH
ASSUMPTIONS, PARTICULARLY IN LIGHT OF THE FACT THAT NO TRIALS IN SUCH LITIGATION
ARE SCHEDULED IN 1998. ACCORDINGLY, IT IS EXPECTED THAT THERE WILL BE
DIFFERENCES BETWEEN ACTUAL AND PROJECTED RESULTS, AND ACTUAL RESULTS MAY BE
MATERIALLY HIGHER OR LOWER THAN THOSE SET FORTH BELOW. THE INFORMATION SET FORTH
BELOW DOES NOT INCLUDE THE RESULTS OF THE SWINE BREEDING SEGMENT.
EXCERPT FROM DEKALB GENETICS CORPORATION FINANCIAL PLAN -- CONSOLIDATED
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDING AUGUST 31,
-----------------------
1998 1999 2002
----- ----- -----
<S> <C> <C> <C>
Operating Revenues.......................................... $ 504 $ 574 $ 772
----- ----- -----
Pre-tax Earnings............................................ 94 116 234
Net earnings................................................ $ 60 $ 71 $ 143
----- ----- -----
Net earnings per Share...................................... $1.65 $1.94 $3.92
</TABLE>
15
<PAGE> 18
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
The Purchaser is a newly incorporated Delaware corporation. To date, the
Purchaser has not conducted any business other than that incident to its
formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer. Accordingly, no meaningful financial information with
respect to the Purchaser is available. The Purchaser is a wholly-owned
subsidiary of Parent. The principal executive office of the Purchaser is located
at 800 North Lindbergh Blvd., St. Louis, Missouri 63167.
Parent is a corporation organized and existing under the laws of the State
of Delaware, with its principal executive offices located at 800 North Lindbergh
Blvd., St. Louis, Missouri 63167. Parent and its subsidiaries are engaged in the
worldwide manufacture and sale of a widely diversified line of agricultural
products; nutrition and consumer products; pharmaceuticals; and other products.
The agricultural products segment of Parent is a leading worldwide
developer, producer and marketer of crop protection products. This group also
develops and markets products enhanced by biotechnology. These products improve
the efficiency of food production and preserve environmental quality for
agricultural and industrial uses. The nutrition and consumer products segment
manufactures and markets sweeteners (including Nutrasweet(R) brand sweetener and
Equal(R) and Canderel(R) tabletop sweeteners), alginates, biogums and other food
ingredients. It also develops, produces and markets Ortho(R) brand
lawn-and-garden products, and RoundUp(R) herbicide for residential use. The
pharmaceuticals segment reflects the operations of G.D. Searle ("Searle").
Searle develops, produces and markets prescription pharmaceuticals. Its major
products include medications to relieve the symptoms of arthritis, to control
high blood pressure, to relieve insomnia, to prevent the formation of ulcers,
and to provide better health care for women.
During 1997, Parent acquired several seed companies specializing in various
stages of seed production. These acquisitions included the Asgrow Agronomics
seed business, a global leader in soybean research and seeds; Holden's
Foundation Seeds Inc., a global leader in the development and growth of corn
germplasm and a supplier of parent seed to retail seed companies; Corn States
Hybrid Service Inc., the exclusive marketer and distributor for Holden's
products; and Sementes Agroceres S.A., the leading seed corn company in Brazil.
Parent also acquired the remaining interest in Calgene Inc., which has done
significant biotechnology research in oils, cotton and produce.
The name, business address, present principal occupation, material
positions held in the past five years and citizenship of each of the directors
and executive officers of Parent and the Purchaser are set forth in Schedule A
to this Offer to Purchase.
At December 31, 1997, Parent employed approximately 21,900 persons in its
worldwide operations.
There is set forth below certain consolidated summary financial information
of Parent's last three fiscal years and the three months ended March 31, 1998
and 1997 as contained in Parent's Annual Report on Form 10-K for the year ended
December 31, 1997 and Form 10-Q for the quarter ended March 31, 1998 as filed
with the Commission. More comprehensive financial information is included in
such reports and other documents filed by Parent with the Commission, and the
following summary is qualified in its entirety by reference to such reports and
other documents and all of the financial information and notes contained
therein. Copies of such reports and other documents may be examined at or
obtained from the Commission in the manner set forth in Section 8.
MONSANTO COMPANY
SELECTED FINANCIAL INFORMATION
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
Net Sales................................................... $7,514 $6,348 $5,410
Operating Income............................................ 499 595 698
------ ------ ------
Net Income (Loss)................................. $ 470 $ 385 $ 739
</TABLE>
16
<PAGE> 19
BALANCE SHEET DATA
<TABLE>
<CAPTION>
AT DECEMBER 31,
------------------
1997 1996
------- -------
<S> <C> <C>
Total Assets................................................ $10,774 $11,237
Long-Term Debt.............................................. 1,979 1,608
Shareowners' Equity......................................... 4,104 3,690
</TABLE>
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports and other
information with the Commission under the Exchange Act relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning Parent's directors and officers, their remuneration, options granted
to them, the principal holders of Parent's securities and any material interest
of such persons in transactions with Parent is disclosed in proxy statements
distributed to Parent's stockholders and filed with the Commission. Such
reports, proxy statements and other information may be examined, and copies may
be obtained at the same places and in the same manner set forth with respect to
the information concerning the Company in Section 8.
Except as set forth in Sections 11 and 12, neither Parent nor the
Purchaser, nor, to the best knowledge of both Parent and the Purchaser, any of
the persons listed in Schedule A hereto nor any associate or majority owned
subsidiary of any of the foregoing, beneficially owns or has a right to acquire
any equity securities of the Company. Neither Parent nor the Purchaser, nor, to
the best knowledge of both Parent and the Purchaser, any of the persons or
entities referred to above, nor any director, executive officer or subsidiary of
any of the foregoing, has effected any transaction in such equity securities
during the past 60 days.
Except as set forth in Sections 10, 11 and 12, neither Parent nor the
Purchaser, nor, to the best knowledge of both Parent and the Purchaser, any of
the persons listed in Schedule A hereto, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or withholding
of proxies. Except as set forth in Sections 10, 11 and 12, there have been no
contacts, negotiations or transactions since September 1, 1994 between Parent or
the Purchaser, or, to the best knowledge of both Parent and the Purchaser, any
of the persons listed in Schedule A hereto, on the one hand, and the Company or
its affiliates, on the other hand, concerning a merger, consolidation or
acquisition, a tender offer or other acquisition of securities, an election of
directors, or a sale or other transfer of a material amount of assets. Except as
described in Sections 10, 11 and 12, neither Parent, the Purchaser nor any other
subsidiary of Parent, nor, to the best knowledge of both Parent and the
Purchaser, any of the persons listed in Schedule A hereto, has since September
1, 1994 had any transaction with the Company or any of its executive officers
and directors or affiliates that would require disclosure under the rules and
regulations of the Commission applicable to the Offer.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; RECOMMENDATION OF THE
COMPANY'S BOARD OF DIRECTORS.
Beginning in April 1992, Parent and the Company entered into various
research and similar agreements for the joint development of various products.
In early 1995, Robert Shapiro, Chief Executive Officer of Parent, suggested,
first, through representatives, then, in March 1995, directly to Bruce P.
Bickner, Chief Executive Officer of the Company, that a business relationship
between the companies could be beneficial to both companies. In April 1995, Mr.
Shapiro, Mr. Bickner and other members of the senior management of both
companies met to discuss the range of possible future relationships between the
companies. At this meeting, Parent's representatives described their vision for
Parent's agriculture business and indicated that a relationship with a company
in the seed corn business, a major element of the Company's business, was a part
of that vision. The Company's representatives indicated at that time that the
Company was only interested in a collaboration. Representatives of the companies
decided to continue discussions of a possible future relationship into which the
companies might enter. Over the next several months members of both companies'
managements met to assess potential opportunities for collaboration.
17
<PAGE> 20
In October 1995, members of management and the representatives of both
companies began discussing a possible structure for an investment by Parent in
the Company as well as continuing to discuss and develop the nature of the
collaboration of the companies in the development and marketing of products.
During the succeeding months, representatives of the companies' management and
advisors worked to develop possible structures for the investment and the
collaboration. As a result of these negotiations, and with the approval of their
respective Boards of Directors, on January 31, 1996 Parent and the Company
entered into an investment agreement (the "Investment Agreement"), which
provided for Parent to commence an offer to purchase up to 10,800,000 shares of
Class B Common Stock at $11.83 per Share (the "1996 Offer") and to purchase from
the Company (a) a number of newly issued Shares of Class A Common Stock, at a
price per share of $10.83, equal to 10% of the outstanding shares of Class A
Common Stock immediately after the expiration of such offer and the issuance of
Class A Common Stock and (b) 2,268,000 newly issued shares of Class B Common
Stock at a price per share of $10.83. The 1996 Offer was concluded on March 6,
1996 and Parent accepted for payment 10,342,428 Shares of Class B Common Stock.
On March 8, 1996, pursuant to the terms of the Investment Agreement, Parent
acquired 485,442 Shares of Class A Common Stock and 2,268,000 Shares of Class B
Common Stock. After giving effect to all of these transactions, Parent held 10%
of the outstanding Class A Common Stock and approximately 43.2% of the Class B
Common Stock. Pursuant to the Investment Agreement, Parent also had the right,
until March 8, 1997, to purchase an additional numbers of Shares of Class B
Common Stock in the open market, but subject to a maximum ownership cap of 45%
of the outstanding Shares. In accordance with these provisions, Parent purchased
an aggregate of 516,200 Shares of Class B Common Stock at an average price of
$12.38 per Share, in open market purchases between March 21, 1996 and July 9,
1996. (All such stock amounts and stock prices have been adjusted to reflect the
Stock Splits.) For a more detailed discussion of the Investment Agreement and
certain purchases of additional Shares pursuant thereto, see Section 12.
The above acquisition of Shares is referred to herein as the "1996
Investment."
In conjunction with the 1996 Investment, Parent and the Roberts Family
Stockholders entered into a stockholders' agreement dated as of January 31, 1996
(the "1996 Stockholders' Agreement") and Parent and the Company entered into a
registration rights agreement, dated as of June 31, 1996 (the "Registration
Rights Agreement"). See Section 12. At the same time the Roberts Family
Stockholders entered into the Voting Trust Agreement and a stockholders'
agreement among themselves.
Pursuant to the Investment Agreement, in April of 1996, Parent's designee,
Robert T. Fraley, Ph.D., Co-President, Ag. Sector of Monsanto, was appointed to
the Board of Directors of the Company, and a second Parent designee, William M.
Ziegler, Special Projects Director in the Ag. Sector of Monsanto, was nominated
by the Board and elected by the stockholders of the Company on January 13, 1997.
Dr. Fraley and Mr. Ziegler are referred to herein as the "Monsanto Nominees."
Concurrently with entering into the Investment Agreement, on January 31,
1996, Parent and the Company entered into an agreement (the "Collaboration
Agreement") which provides the framework for a long-term research and
development collaboration between Parent and the Company in the field of
agricultural biotechnology, particularly corn seed. Parent and the Company also
entered into cross-licensing agreements covering insect-resistant and
herbicide-tolerant corn products. The two companies share the royalties received
from third parties relating to the patents covered by such cross-licensing
agreements. These agreements (collectively, the "Collaboration") are described
in more detail in Section 12.
The Collaboration Agreement contemplated the possibility of additional
collaborations between the parties. Early in 1997, representatives of Parent and
the Company began meeting to discuss the nature and scope of certain additional
collaborations. These discussions continued up until February 11, 1998. In
addition, in 1997, representatives of Parent discussed with representatives of
the Company the possibility of the sale by Parent to the Company of certain row
crop businesses. These discussions terminated without any transaction occurring.
On February 10, 1998, after being informed by the Roberts Family
Stockholders that the Roberts family had determined that it was an appropriate
time to evaluate opportunities for a business combination, the Company's Board
of Directors appointed a special committee consisting of Paul H. Hatfield, John
T. Roberts,
18
<PAGE> 21
Douglas C. Roberts and H. Blair White (the "Special Committee") to establish a
procedure for consideration of a possible business combination, and authorized
the retention of Merrill Lynch as the Company's financial advisor in connection
with a business combination. The Monsanto Nominees were recused from the portion
of the Board meeting at which Merrill Lynch made a presentation to the
directors.
On February 11, 1998, the Company announced publicly the Board's
determination to pursue a possible business combination in order to maximize
stockholder value. Later that day, Parent issued a press release announcing that
it had advised the Board of Directors of the Company that Parent was actively
considering making an offer to acquire all of the Shares that it did not then
own.
During the following weeks there were conversations between Parent and the
Company and between Parent's and the Company's advisers in which representatives
of the Company or its advisers advised representatives of Parent or its advisers
of the procedures that the Company would require to be followed in the auction
process. On February 26, 1998, the Board of Directors of the Company determined
that the bidding process would be confidential, and that accordingly, the
Monsanto Nominees would be excluded from all Board deliberations on the matter
and would not receive any reports about the indications of interest, bids,
bidders or the sale process generally. The Monsanto Nominees abstained from
voting on such determinations, and were recused from the portion of the meeting
at which Merrill Lynch addressed the directors concerning valuation and certain
other items.
Parent and the Company entered into a confidentiality agreement on March
12, 1998 (the "Confidentiality Agreement"). Subsequently, Merrill Lynch provided
the Parent and its advisors a package containing certain public and non-public
information concerning the Company. On March 26, 1998, the Company's senior
management made a presentation to Parent's management and representatives of
Parent's advisers with respect to the business of the Company.
On April 2, 1998, in response to a request from Merrill Lynch, Parent
submitted a preliminary indication of interest in a potential acquisition of the
Company in the range of $65 to $72 per Share.
During the week of April 6, 1998, Merrill Lynch informed Parent that Parent
would be invited to continue its participation in the auction process. On April
16, 1998, Parent commenced a detailed due diligence investigation of the Company
which included meetings with Company personnel, data review, presentations, site
tours and question and answer sessions. The due diligence investigations
included personnel from Parent, as well as its investment banking, accounting,
legal, technical and other advisors. Parent and its representatives met with
senior technology and breeding managers and other senior management of the
Company and with advisors to the Company.
In April, Parent received from the Company draft forms of merger agreement
and from counsel to the Roberts Family Stockholders a draft form of stockholders
agreement which provided for an irrevocable agreement to vote for the merger and
to tender Shares into a cash tender offer.
On April 27, 1998, Parent received a letter from Merrill Lynch outlining
the specific procedures to be followed in connection with submission of final
bids, and informing Parent that interested parties would be required to submit
firm and final offers on May 7, 1998.
On April 30, 1998, the Company's senior management and Merrill Lynch held a
further due diligence question-and-answer session attended by Parent and its
advisors. Representatives of Parent also met with executives of the Company to
discuss the interest of such executives in continuing their employment with the
Company (or in the combined business of Parent and the Company) following an
acquisition of the Company by Parent.
In accordance with the April 27 letter, Parent submitted written comments
on the draft agreements on May 1, 1998. Subsequently, legal counsel for the
Company and Parent had various conversations with respect to a form of merger
agreement, and legal counsel for Parent and the Roberts Family Stockholders had
similar conversations with respect to a form of stockholders agreement.
On May 7, 1998, Parent's Board of Directors authorized Parent to submit an
offer to acquire the Company. In accordance with instructions that were provided
to bidders by Merrill Lynch, during the
19
<PAGE> 22
afternoon of May 7, 1998, Parent communicated to the Company that it was
prepared to acquire the Company at a price of $100 per Share. Concurrently with
this communication, Parent's legal advisors submitted further proposed changes
to the forms of merger agreement and stockholders agreement. Beginning on
Friday, May 8, 1998, and continuing through Saturday, May 9, 1998,
representatives of Parent and the Company negotiated the definitive form of the
Merger Agreement, and representatives of the Roberts Family Stockholders and
representatives of Parent negotiated the definitive form of the Stockholders
Agreement.
On May 8, 1998, the Company's Board unanimously (without the participation
of the Monsanto Nominees) approved the Offer, the Merger, the Merger Agreement,
the Stockholders Agreement and the transactions contemplated by the Merger
Agreement and the Stockholders Agreement for purposes of rendering (a) Section
203 of the DGCL, (b) Article EIGHTH of the Company's Restated Certificate of
Incorporation, as amended (the "Company Charter") and (c) Article 11 of the
Investment Agreement irrevocably inapplicable to the Offer, the Merger, the
Merger Agreement and the Stockholders Agreement, the transactions contemplated
by the Merger Agreement and/or the Stockholders Agreement and any other
transaction (except a transaction in which Parent acquires beneficial ownership
of Shares other than pursuant to the Merger) between Parent and any of its
affiliates on the one hand, and the Company and any of its affiliates, on the
other hand, consummated after the date that the Purchaser acquires Shares
pursuant to the Offer that could be defined as a "Business Combination" under
Section 203 of the DGCL or Article EIGHTH of the Company Charter. The Company's
Board of Directors also adopted resolutions (i) determining that the Offer and
the Merger are in the best interests of the Company and its shareholders, and
(ii) recommending the Company's stockholders accept the Offer and that holders
of Shares of Class A Common Stock approve and adopt the Merger Agreement and the
Merger. The Monsanto Nominees were not present at and did not participate in the
meeting of the Company's Board at which the actions referred to in this
paragraph were taken. For a more detailed discussion of Section 203 of the DGCL
and Article Eighth of the Company Charter, see Section 15. For a more detailed
discussion of Section 11 of the Investment Agreement, see Section 12.
On May 9, 1998, the Stockholders Agreement was executed by Parent and the
other parties thereto, and the Merger Agreement was executed by Parent, the
Purchaser and the Company. On May 11, 1998, press releases announcing the
execution of the definitive agreements were issued by both Parent and the
Company.
Reference is made to the Company's Statement on Schedule 14D-9 for a
description of the matters considered by the Board in connection with its
actions.
11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE STOCKHOLDERS AGREEMENT;
APPRAISAL RIGHTS; PLANS FOR THE COMPANY.
(a) Purpose.
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in, the Company. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all the
Shares. The purpose of the Merger is to acquire all capital stock of the Company
not purchased pursuant to the Offer or otherwise.
(b) The Merger Agreement.
The following is a summary of certain provisions of the Merger Agreement.
This summary is qualified in its entirety by reference to the Merger Agreement
which is incorporated herein by reference and a copy or form of which has been
filed with the Commission as an exhibit to the Schedule 14D-1 (the "Schedule
14D-1"). The Merger Agreement may be examined and copies may be obtained at the
places set forth in Section 8. Defined terms used herein and not defined herein
shall have the respective meanings assigned to those terms in the Merger
Agreement.
THE OFFER. The Merger Agreement provides that, so long as the Merger
Agreement has not been terminated pursuant to its terms, as promptly as
practicable but in no event later than five business days after the date of the
public announcement by Parent and the Company of the Merger Agreement, the
Purchaser
20
<PAGE> 23
will, and Parent will cause Purchaser to, commence the Offer. In the Merger
Agreement, Parent and the Purchaser agree that the Purchaser will not terminate
the Offer between scheduled expiration dates (except in the event that the
Merger Agreement is terminated) and that, in the event that the Purchaser would
otherwise be entitled to terminate the Offer at any scheduled expiration date
due to the failure of one or more of the Offer Conditions, unless the Merger
Agreement has been terminated, the Purchaser will, and Parent will cause the
Purchaser to, extend the Offer until such date as the Offer Conditions have been
satisfied or such later date as required by applicable law; provided, however,
that the Purchaser is not required to extend the Offer beyond the Outside Date.
If the Merger Agreement is terminated by either Parent or the Purchaser or by
the Company, the Purchaser will, and Parent will cause the Purchaser to,
terminate promptly the Offer, except that if the Merger Agreement is terminated
by Parent or Purchaser in the event that the Board of Directors of the Company
withdraws or modifies in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, the Merger or the Merger Agreement,
Parent or the Purchaser may terminate the Offer. The Purchaser may, at any time,
transfer or assign to one or more corporations directly or indirectly
wholly-owned by Parent the right to purchase all or any portion of the Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the rights
of tendering stockholders to receive payment for Shares validly tendered and
accepted for payment.
RECOMMENDATION. In the Merger Agreement, the Company represents and
warrants that the Board of Directors of the Company, at a meeting duly called
and held, duly adopted (by unanimous vote, with the Monsanto Nominees not
participating) resolutions approving the Offer, the Merger Agreement, the Merger
and the Stockholders Agreement, determining that the Offer and the Merger are
fair to, and in the best interests of, the Company's stockholders and
recommending that the Company's stockholders accept the Offer and approve and
adopt the Merger Agreement and the Merger. The Company further represents and
warrants that the action of the Board of Directors of the Company in approving
the Offer (including the purchase of Shares pursuant to the Offer), the Merger,
the Merger Agreement, the Stockholders Agreement and the transactions
contemplated by the Merger Agreement and the Stockholders Agreement, is
sufficient to render (i) Section 203 of the DGCL, (ii) Article EIGHTH of the
Company's Restated Certificate of Incorporation and (iii) Article 11 of the
Investment Agreement irrevocably inapplicable to the Offer, the Merger, the
Merger Agreement and the Stockholders Agreement, the transactions contemplated
by the Merger Agreement and/or the Stockholders Agreement and any other
transaction (except a transaction in which Parent acquires beneficial ownership
of Shares other than pursuant to the Merger) between Parent and any of its
affiliates on the one hand, and the Company and any of its affiliates, on the
other hand, consummated after the date that the Purchaser acquires Shares
pursuant to the Offer that could be defined as a "Business Combination" under
Section 203 of the DGCL or Article EIGHTH of the Company's Restated Certificate
of Incorporation.
THE MERGER. The Merger Agreement provides that upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL,
Purchaser will be merged with and into the Company at the Effective Time.
Following the Effective Time, the separate corporate existence of the Purchaser
will cease and the Company will continue as the Surviving Corporation and will
succeed to and assume all the rights and obligations of the Purchaser and the
Company in accordance with the DGCL.
CHARTER, BY-LAWS, DIRECTORS AND OFFICERS. The Restated Certificate of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, will be amended and restated in its entirety as of the Effective Time as
set forth in the Merger Agreement and will be the Restated Certificate of
Incorporation of the Surviving Corporation, and the By-Laws of the Company will
be amended as of the Effective Time to read in their entirety as the By-Laws of
the Purchaser, as in effect immediately prior to the Effective Time. The
directors of the Purchaser immediately prior to the Effective Time will be the
directors of the Surviving Corporation, and the officers of the Company
immediately prior to the Effective Time will be the officers of the Surviving
Corporation.
CONVERSION OF SECURITIES. As of the Effective Time, by virtue of the
Merger and without any action on the part of any of the Purchaser, the Company
or the holders of any securities of the Purchaser or the Company: each Share
issued and outstanding (other than Shares owned by the Company or by any
Subsidiary
21
<PAGE> 24
of the Company or by Parent, the Purchaser or any other Subsidiary of Parent
which will automatically be cancelled and retired, or by stockholders who
properly exercise appraisal rights under the DGCL) will be cancelled and be
converted into the right to receive from the Surviving Corporation in cash the
Merger Consideration, and each issued and outstanding share of capital stock of
the Purchaser will be converted into and become one validly issued, fully paid
and nonassessable share of common stock, $0.01 par value, of the Surviving
Corporation.
For purposes of the Merger Agreement, "Subsidiary" of any person means
another person, an amount of the voting securities, other voting ownership or
voting partnership interests of which is sufficient to elect at least a majority
of its Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first person.
BEST EFFORTS. Subject to fiduciary responsibilities, each of the Company,
Parent and the Purchaser agreed in the Merger Agreement to use best efforts to
cause the purchase of Shares pursuant to the Offer prior to the Outside Date,
and consummation of the Merger to occur as soon as practicable after such
purchase of Shares. Without limiting the foregoing, (a) each of the Company,
Parent and the Purchaser agreed to use best efforts to take, or cause to be
taken, all actions necessary to comply promptly with all legal requirements that
may be imposed on itself with respect to the Offer and the Merger (which actions
include making all filings and furnishing all information required under the HSR
Act and in connection with approvals of or filings with any other Governmental
Entity) and to promptly cooperate with and furnish information (including all
correspondence with any Governmental Entity) to each other in connection with
any such requirements imposed upon any of them or any of their Subsidiaries in
connection with the Offer and the Merger; (b) each of the Company, Parent and
the Purchaser agreed to, and to cause its Subsidiaries to, use best efforts to
obtain prior to the Outside Date (and to cooperate with each other in obtaining)
any consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, the Purchaser, the Company or any of their
Subsidiaries in connection with the Offer and the Merger or the taking of any
action contemplated thereby or by the Merger Agreement; and (c) Parent agreed
that if necessary to cause the purchase of Shares pursuant to the Offer prior to
the Outside Date, Parent will, and will cause its Subsidiaries to, divest or
hold separate or otherwise take or commit to take any action that limits its
freedom of action with respect to, or its ability to retain, any of the
businesses, product lines or assets of Parent, the Company or any of their
respective Subsidiaries. The Company agreed, at the request of Parent, to agree
to divest, hold separate or otherwise take or commit to take any action that
limits its freedom of action with respect to, or its ability to retain, any of
the businesses, product lines or assets of the Company or any of its
Subsidiaries, provided that any such action may be conditioned upon the purchase
of Shares pursuant to the Offer. Notwithstanding anything to the contrary
contained in the Merger Agreement, in connection with any filing or submission
required or action to be taken by Parent, the Company or any of its respective
Subsidiaries to consummate the Offer, the Merger or the other transactions
contemplated in the Merger Agreement, the Company agreed that it will not,
without Parent's prior written consent, commit to any divestiture of assets or
businesses of the Company and its Subsidiaries. The foregoing provisions of the
Merger Agreement are referred to herein as the "Best Efforts Provision."
NO SOLICITATION. The Merger Agreement provides that the Company will, and
will cause its executive officers, directors, authorized representatives and
authorized agents to, immediately cease any discussions or negotiations with any
parties that may be ongoing with respect to any Takeover Proposal. The Company
may not, nor may it permit any of its Subsidiaries to, nor may it permit any of
its executive officers, directors, authorized representatives or authorized
agents to, directly or indirectly, (a) solicit, initiate or knowingly encourage
(including by way of furnishing non-public information) any inquiries or the
making of any proposal which constitutes, or may reasonably be expected to lead
to, any Takeover Proposal or (b) participate in any discussions or negotiations
regarding any Takeover Proposal. For purposes of the Merger Agreement, "Takeover
Proposal" means (i) any inquiry, proposal or offer from any person relating to
any direct or indirect acquisition or purchase of any of the assets of the
Company or its Subsidiaries (other than the purchase of inventory or other
assets in the ordinary course of business) or any of the Shares then
outstanding, any tender offer or exchange offer for any of the Shares then
outstanding, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of
22
<PAGE> 25
its Subsidiaries, other than the transactions contemplated by the Merger
Agreement or (ii) any other transaction the consummation of which could
reasonably be expected to impede, interfere with, prevent or materially delay
the Offer and/or the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated by the Merger
Agreement and the Stockholders Agreement. Notwithstanding the foregoing,
proposals solely relating to the sale of all or a portion of the Company's
business relating solely to the research and development of swine breeding stock
and the marketing of such hybrid breeding swine and related management services
to hog producers in domestic or international markets will not be considered
Takeover Proposals, so long as the terms and conditions of any such proposal
described in this sentence do not have any of the effects described in clause
(ii) of the preceding sentence.
The Merger Agreement provides further that except as otherwise provided in
the section of the Merger Agreement described herein under "-- No Solicitation",
neither the Board of Directors of the Company nor any committee thereof may (a)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by such Board of Directors or
such committee of the Offer, the Merger or the Merger Agreement (or any
transaction contemplated thereby); provided that, the Board of Directors may,
(i) in response to any Takeover Proposal, suspend such recommendation for a
period of up to 24 hours pending its analysis of such Takeover Proposal or (ii)
at any time prior to the consummation of the Offer, modify or withdraw such
recommendation, but only if the Board of Directors of the Company determines in
good faith, based on a written opinion of Morris, Nichols, Arsht & Tunnell,
which written opinion specifically takes into account the Stockholders Agreement
and all the terms thereof, including the obligations and agreements therein of
the Voting Trustees and Registered Holders with respect to tendering Shares and
voting for the Merger and against any Takeover Proposal other than the Merger (a
"Written Opinion"), that it would be a breach of its fiduciary duties not to so
modify or withdraw such recommendation; provided further that, unless the Merger
Agreement has been terminated, any such suspension, modification or withdrawal
will not prevent Parent and the Purchaser, in its or their discretion, from
consummating the Offer and in any event will be subject to the provisions
described in the last paragraph of this section, (b) approve or recommend, or
propose publicly to approve or recommend, any Takeover Proposal or (c) cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement related to any Takeover Proposal.
In addition to the obligations of the Company described in the two
preceding paragraphs the Merger Agreement provides that the Company will
immediately advise Parent orally and in writing of any request for information
or of any Takeover Proposal, the material terms and conditions of such request
or Takeover Proposal and the identity of the person making such request or
Takeover Proposal. The Merger Agreement also provides that subject to the
provisions described in the next paragraph, nothing contained in the section of
the Merger Agreement described herein under "-- No Solicitation" will prohibit
the Company from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2 under the Exchange Act or from making any
disclosure to the Company's stockholders if, in the good faith judgment of the
Board of Directors of the Company, based on a Written Opinion, such disclosure
is required under applicable law.
Finally, the Merger Agreement provides that none of the provisions
described in the preceding three paragraphs (including with respect to any
modified or withdrawn recommendation) will be deemed to prevent or impede Parent
and the Purchaser, in its or their discretion, from consummating the Offer, or
to limit or affect any of the actions taken by the Company as described under
"-- Recommendation" above. In addition, the Merger Agreement provides that if
the Purchaser purchases Shares pursuant to the Offer, the Company and its Board
of Directors will take all actions legally permitted to permit the Merger to
occur.
THIRD PARTY STANDSTILL AGREEMENTS. During the period from the date of the
Merger Agreement through the Effective Time, the Company has agreed to enforce
and not to terminate, amend, modify or waive any standstill or other provision
of, any confidentiality, nonsolicitation or standstill agreement to which the
Company or any of its Subsidiaries is a party (other than any involving Parent),
including, without limitation, any such agreement entered into with any party in
connection with the process conducted by the Company to solicit acquisition
proposals for the Company.
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REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and the Purchaser. The
representations and warranties of the Company relate, among other things, to:
its organization and qualification; subsidiaries; capital structure; authority
to enter into the Merger Agreement and to consummate the transactions
contemplated thereby; required consents and approvals; filings made by the
Company with the Commission under the Securities Act or the Exchange Act
(including financial statements included in the documents filed by the Company
under those acts); absence of any material adverse change; information to be
included in the Schedule 14D-1 and related documents, the Schedule 14D-9 and the
proxy statement (if required) in connection with the Merger; compliance with
laws; tax matters; liabilities; benefit plans and employees and employment
practices; litigation; environmental matters; certain provisions of the
Company's Restated Certificate of Incorporation and related matters; matters
related to intellectual property; brokers; and contracts and indebtedness.
COVENANTS. The Merger Agreement provides that, during the period from the
date of the Merger Agreement until the earlier of the Effective Time or such
time as Parent's designees constitute a majority of the Board of Directors of
the Company, the Company will, and will cause each of its Subsidiaries to, in
all material respects, except as contemplated by the Merger Agreement, carry on
its business in the ordinary course as currently conducted and, to the extent
consistent therewith, with no less diligence and effort than would be applied in
the absence of the Merger Agreement, seek to preserve intact their current
business organizations, keep available the services of their current officers
and employees and preserve their relationships with customers, suppliers and
others having business dealings with them to the end that goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing, and except as otherwise contemplated by the Merger
Agreement (including, without limitation, as permitted or required by the Best
Efforts Provision), during such period, the Company has agreed that it will not,
and will not permit any of its Subsidiaries to, without the prior written
consent of Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock or otherwise make any
payment to stockholders in their capacity as such, other than dividends on
Shares to be declared and paid only at the customary times at a quarterly
rate not in excess of $0.035 per Share, except for dividends by a
wholly-owned domestic Subsidiary of the Company to its parent, (ii) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (iii) redeem, purchase or
otherwise acquire any of its securities;
(b) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe
for, or any rights, warrants, options or any other agreements of any
character to acquire, any such shares, voting securities or convertible or
exchangeable securities or rights, or securities or rights evidencing the
right to subscribe, other than (i) the issuance, in the ordinary course, to
new employees or promoted employees, of options to purchase not more than
an aggregate of 40,000 Shares or the issuance of Shares pursuant to options
outstanding under existing Stock Plans, (ii) the issuance of shares of
Class B Common Stock in exchange for shares of Class A Common Stock in
accordance with the Company's Restated Certificate of Incorporation, (iii)
the issuance of Shares upon exercise of rights outstanding on the date of
the Merger Agreement (including, without limitation, under the Investment
Agreement) and (iv) the issuance of Shares pursuant to the Company's
Savings and Investment Plan, in accordance with its terms;
(c) amend its Restated Certificate of Incorporation or By-laws or
other similar organizational documents;
(d) acquire, or agree to acquire, in a single transaction or in a
series of related transactions, any business or assets (other than
materials and supplies purchased in the ordinary course, consistent with
past practice), other than transactions which involve assets having a
purchase price not in excess of $5,000,000 individually;
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(e) make or agree to make any new capital expenditure in excess of
$1,000,000 other than expenditures contemplated by the Company's capital
budget for fiscal 1998 or fiscal 1999 as previously provided to Parent in
writing;
(f) sell, lease, encumber or otherwise dispose of, or agree to sell,
lease, encumber or otherwise dispose of, any of its assets, other than (i)
sales of inventory in the ordinary course of business and (ii) transactions
which involve assets having a current value not in excess of $5,000,000
individually or $20,000,000 in the aggregate; provided that,
notwithstanding this clause (f), neither the Company nor any of its
Subsidiaries may sell, lease, encumber or otherwise dispose of, or agree to
sell, lease, encumber or otherwise dispose of, any germplasm, recombinant
DNA technology or Intellectual Property Rights, except with respect to
Intellectual Property Rights as specifically permitted by clause (j) below;
(g) except as disclosed by the Company to Parent as of the date of the
Merger Agreement, (i) increase the salary or wages payable or to become
payable to its directors, officers or employees, except for increases
required under employment agreements existing on the date of the Merger
Agreement, and except for increases for officers and employees in the
ordinary course of business, consistent with past practice; (ii) pay or
agree to pay any pension, retirement allowance or employee benefit not
required or contemplated by any existing benefit, severance, pension or
employment plans, agreements or arrangements; or (iii) enter into any
employment or severance agreement with, or establish, adopt, enter into or
amend any bonus, profit sharing, thrift, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination or
severance plan, agreement, policy or arrangement for the benefit of, any
director, officer or employee, except, in each case, as may be expressly
required by the terms of any such plan, agreement, policy or arrangement or
to comply with applicable law;
(h) except as is required as a result of a change in law or in
generally accepted accounting principles, make any material change in its
method of accounting;
(i) enter into, modify in any material respect, amend in any material
respect or terminate any material contract or agreement (including without
limitation any contract or agreement which (i) cannot by its terms be
terminated without liability or continuing obligation by the Company on
less than one year's notice or (ii) may require a cash expenditure by the
Company in excess of $5,000,000 in any fiscal year) to which the Company or
any of its Subsidiaries is a party, or waive, release or assign any
material rights or claims, in each case, in any manner adverse to the
Company or any of its Subsidiaries and, in each case, except for (A)
customary operational contracts not involving payments in excess of
$5,000,000 individually over the term of such contract, (B) hedging and
similar futures contracts with a term not in excess of one year or which
can, by their terms, be terminated without liability or continuing
obligation by the Company on not more than one year's notice and (C) seed
production contracts, in each of cases (A), (B) and (C) above entered into
in the ordinary course of business consistent with past practice;
(j) (i) acquire a license or right to use from a third party for
consideration (including without limitation cash, human or other resources
or other assets or commitments, including out-licenses) in excess of
$1,000,000 per year or $10,000,000 over the course of the agreement
governing such license or right, or which by its terms cannot be terminated
without liability or continued obligation by the Company on less than six
months' notice or (ii) grant any license or sublicense other than (v)
licenses to contract growers in the ordinary course of business consistent
with past practice, (w) licenses granted under and in accordance with the
Corn Borer-Protected License Agreement dated as of January 31, 1996 between
Parent and the Company, the Glyphosate-Protected Corn License Agreement
dated as of January 31, 1996 between Parent and the Company or the CaMV
Promoter License Agreement dated as of January 31, 1996 between Parent and
the Company, in each case, in the ordinary course of business consistent
with past practice (and provided that this will not prohibit the granting
by the Company in accordance with such licenses of sublicenses to the
entities described with respect to this clause (j) by the Company to Parent
as of the date of the Merger Agreement), (x) licenses of swine in the
ordinary course of business consistent with past practice, (y) licenses
included in "material transfer agreements" entered into solely for the
purposes of research in the ordinary course of business consistent with
past practice,
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and (z) licenses required to be granted pursuant to the terms of agreements
to which the Company or any of its Subsidiaries is a party (as such terms
are in effect on the date of the Merger Agreement);
(k) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries not constituting
an inactive Subsidiary (other than the Merger);
(l) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any
wholly-owned subsidiary of the Company;
(m) settle or agree to dismiss any litigation with respect to
Intellectual Property Rights or material litigation with respect to other
matters;
(n) pay, discharge, settle or satisfy any other claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction,
in the ordinary course of business consistent with past practice or in
accordance with their terms, of claims, liabilities or obligations (in each
case not related to pending or threatened litigation) reflected or
disclosed in the most recent consolidated financial statements (or the
notes thereto) of the Company included in the Company Filed SEC Documents
or incurred since the date of such financial statements in the ordinary
course of business consistent with past practice;
(o) enter into any contract, license, agreement or arrangement of any
kind without including confidentiality agreements consistent with past
practice; or
(p) authorize, recommend, propose or announce an intention to do any
of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
Notwithstanding anything else in the Merger Agreement to the contrary, the
Company and its Subsidiaries may, during the period from the date of the Merger
Agreement until the earlier of the Effective Time or such time as Parent's
designees constitute a majority of the Board of Directors of the Company, sell
all or a portion of the Company's business solely relating to the research and
development of swine breeding stock and the marketing of such hybrid breeding
swine and related management services to hog producers in domestic or
international markets, so long as Parent is reasonably satisfied with the terms
and conditions of such sale.
For purposes of the Merger Agreement, "Intellectual Property Rights" means
any right to use, all patents, patent rights, certificates of plant variety
protection, trademarks, trade names, service marks, copyrights, know how and
other proprietary intellectual property rights and computer programs held by the
Company or any of its Subsidiaries.
EMPLOYEE BENEFIT ARRANGEMENTS. In the Merger Agreement, Parent has agreed
to take all necessary action so that each person who is an employee of the
Company or any of its Subsidiaries upon the consummation of the Offer (including
each such person who is on vacation, temporary layoff, approved leave of
absence, sick leave or short-term disability) will be permitted to remain an
employee of the Company or the Surviving Corporation or a Subsidiary of the
Company or of the Surviving Corporation, as the case may be, immediately
following such time with wages or salary, as applicable, no less favorable than
as in effect immediately preceding such time, and so that each person receiving,
or who but for any waiting period would be receiving, long-term disability
benefits under a plan of the Company or any of its Subsidiaries upon the
consummation of the Offer will retain the right to continue or begin receiving
such long-term disability benefits, so long as they remain disabled. Parent has
agreed to take all necessary action so that until the first anniversary of the
consummation of the Offer, the Company, the Surviving Corporation and their
Subsidiaries maintain for each employee of the Company and its Subsidiaries who
is employed by the Company or the Surviving Corporation or a Subsidiary of the
Company or the Surviving Corporation upon the consummation of the Offer
(collectively, the "Retained Employees") wages and other compensation levels,
and benefits of the types provided under the employee benefit plans, policies,
arrangements and understandings (the "Benefit
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Plans") of the Company, Parent, Surviving Corporation or any of their
subsidiaries, not less favorable than those wages and other compensation levels,
and benefits provided under the Company's Benefit Plans, as in effect as of the
consummation of the Offer. Parent has also agreed to take all necessary action
so that each Retained Employee shall after the consummation of the Offer
continue to be credited with the unused vacation and sick leave credited to such
employee through the consummation of the Offer under the applicable vacation and
sick leave policies of the Company and its Subsidiaries, and to permit or cause
the Company, the Surviving Corporation and their Subsidiaries to permit such
employees to use such vacation and sick leave, and to take all necessary action
so that, for all purposes under each Benefit Plan maintained or otherwise
provided by the Company, the Surviving Corporation or any of their Subsidiaries
in which employees or former employees of the Company and its Subsidiaries or
the spouses, dependents or other beneficiaries of such persons become eligible
to participate after the consummation of the Offer, each such person shall be
credited with all years of service to the extent such service would be taken
into account under the Company's Benefit Plan providing benefits of a similar
type in effect at the consummation of the Offer.
Parent has also agreed that neither it, the Company, the Surviving
Corporation, nor any of their Subsidiaries will during the one-year period
commencing with the consummation of the Offer (a) terminate the employment of
any Retained Employee other than for Cause (as defined in the Merger Agreement)
or (b) relocate the site of any such person's employment or reassign any such
person to a different location without such person's consent. Parent has also
agreed to maintain, for a period of not less than twelve months from the
consummation of the Offer, for the benefit of the Retained Employees, the
Company's Severance Pay Plan as in effect as of the date of the Merger
Agreement, and to honor all employment agreements with the persons who are
directors, officers and employees of the Company and its Subsidiaries. In the
Merger Agreement, Parent also agrees to maintain the DEKALB Genetics Corporation
Policy and Procedure Regarding Reimbursement of Employees for Parachute Payment
Taxes and Expenses to the extent required by the terms thereof.
Without limitation of Parent's or the Company's obligations under any
existing employment agreement, Parent has agreed to maintain, or to cause the
Company and the Surviving Corporation to maintain, the Company's bonus programs
set forth in the documents made available by the Company to Parent through the
end of the twelve-month period beginning on the most recent September 1
preceding the consummation of the Offer, with bonuses to be paid to each
Retained Employee participating thereunder in accordance with the performance
goals previously established for such period (the "Existing Goals"), if (a) the
achievement of the Existing Goals can still reasonably be measured despite the
consummation of the transactions contemplated by the Merger Agreement, and (b)
such achievement has not become unreasonably more difficult or easier than it
would have been absent such consummation. If either of clause (a) or clause (b)
of the preceding sentence is not satisfied with respect to the Existing Goals
applicable to a particular Retained Employee, then the Existing Goals shall be
reasonably adjusted, if possible, so that both such clauses are satisfied as to
the adjusted Existing Goals, and if no such adjustment is possible, such
Retained Employee's bonus shall be paid at his or her target bonus level
(subject to all terms and conditions of such bonus except for the Existing Goals
that cannot be so adjusted).
The Merger Agreement also provides for (a) the waiver of all limitations as
to preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Retained Employees and
former employees of the Company and its Subsidiaries and the spouses, dependents
and other beneficiaries of such persons under any welfare or fringe benefit plan
that any such persons may be eligible to participate in after the consummation
of the Offer, other than limitations or waiting periods that are in effect prior
to the consummation of the Offer, and (b) credit for any co-payments and
deductibles paid by such person for the applicable plan year prior to the
consummation of the Offer. The Merger Agreement also requires Parent to or to
cause the Company and the Surviving Corporation to provide retiree health
benefits to persons who are, immediately prior to the consummation of the Offer,
eligible for such benefits, or who would immediately prior to the consummation
of the Offer be eligible therefor but for the fact that they, or the person with
respect to whom they are a dependent, had not yet terminated employment with the
Company and its Subsidiaries, or who will within twelve months after the
consummation of the Offer be so eligible therefor, and medical and other health
benefits to persons who incur or are dependents of persons who incur an illness
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or other disability or leave of absence, or are dependents of persons who die,
prior to the consummation of the Offer and who are at such time, or would be
after such time, eligible for benefits under such medical or other health
benefits plan due to such illness or other disability or leave of absence or
death.
For a period of not less than twelve months from the consummation of the
Offer, Parent has also agreed to (a) maintain, or cause to be maintained, for
the benefit of the Retained Employees the Company's Savings and Investment Plan
(the "Retirement Plan") as in effect prior to the consummation of the Offer and
(b) contribute, or cause to be contributed, to the Retirement Plan, on behalf of
each Retained Employee who is or becomes a participant therein, matching
contributions in amounts determined in accordance with the terms of the
Retirement Plan as in effect as of the date of the Merger Agreement, and a
"Compensation Based Contribution" as defined therein equal to 2% of compensation
as described in the Retirement Plan.
OPTIONS; RESTRICTED STOCK AWARDS. The Merger Agreement provides that prior
to the execution of the Merger Agreement, the Board of Directors of the Company
or the Long-Term Incentive Plan Administrative Committee of the Board of
Directors of the Company has adopted such resolutions or has taken such other
actions as are required (a) to provide that each Stock Option theretofore
granted under any Stock Plan (other than the Company's Director Stock Option
Plan) outstanding immediately prior to the consummation of the Offer, whether or
not then exercisable, will become fully exercisable immediately prior to the
consummation of the Offer, (b) to provide that all restrictions applicable to
any restricted stock award heretofore granted under any Stock Plan outstanding
immediately prior to the Offer will lapse immediately prior to the consummation
of the Offer, (c) to provide that upon the consummation of the Offer each Stock
Option then outstanding will be cancelled in consideration for the cash payment
described below and (d) with respect to Stock Options held by persons subject to
the reporting requirements of Section 16 of the Exchange Act, to specifically
approve such transactions. The Company has agreed to use reasonable efforts to
obtain any necessary consents of the holders of such Stock Options to effect
these provisions.
Pursuant to the Merger Agreement, the Company has agreed to use reasonable
efforts to ensure that, upon the consummation of the Offer each Stock Option
then outstanding is cancelled by the Company in consideration for which the
holder thereof will thereupon be entitled to receive promptly (but in no event
later than five days) after the consummation of the Offer, a cash payment in
respect of such cancellation from the Company in an amount (if any) equal to (a)
the product of (i) the number of shares of Company Common Stock subject or
related to such Stock Option and (ii) the excess, if any, of the Offer Price
over the exercise or purchase price per share of Company Common Stock subject or
related to such Option, minus (b) all applicable federal, state and local taxes
required to be withheld by the Company.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. The Merger Agreement
provides that all rights to indemnification or exculpation, existing in favor of
a director, officer, employee or agent (an "Indemnified Person") of the Company
or any of its Subsidiaries as provided in the Restated Certificate of
Incorporation of the Company, the By-Laws of the Company or any indemnification
agreement, in each case, as in effect on the date of the Merger Agreement, and
relating to actions or events through the Effective Time, will survive the
Merger and will continue in full force and effect, without any amendment
thereto; provided that any determination required to be made with respect to
whether an Indemnified Person's conduct complies with the standards set forth
under the DGCL, the Restated Certificate of Incorporation of the Company, the
By-laws of the Company or any such agreement, as the case may be, must be made
by independent legal counsel selected by such Indemnified Person and reasonably
acceptable to Parent.
The Merger Agreement also provides that prior to the Effective Time, the
Company may obtain and pay for in full a "tail" coverage directors' and
officers' liability insurance policy ("D&O Insurance") covering a period of not
less than six years after the Effective Time and providing coverage in amounts
and on terms consistent with the Company's existing D&O Insurance. In the event
the Company is unable to obtain such insurance, Parent will cause the Surviving
Corporation to maintain the Company's D&O Insurance for a period of not less
than six years after the Effective Time; provided, that the Surviving
Corporation may substitute therefor policies of substantially similar coverage
and amounts containing terms no less advantageous to such former directors or
officers; provided further that if the existing D&O Insurance expires or is
cancelled during such period, Parent or the Surviving Corporation will use its
best efforts to obtain
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substantially similar D&O Insurance; and provided further that the Company may
not, without Parent's consent (but after consultation with Parent), expend an
amount in excess of 350% of the last annual premium paid prior to the date
hereof to procure the above described "tail" coverage and neither Parent nor the
Surviving Corporation will be required to expend, in order to maintain or
procure an annual D&O Insurance policy, in lieu of a tail policy, an amount in
excess of 250% of the last annual premium paid prior to the date of the Merger
Agreement, but in such case will purchase as much coverage as possible for such
amount.
ACCESS TO INFORMATION. Upon reasonable notice and subject to restrictions
contained in confidentiality agreements to which the Company is subject and
subject to the terms of the Confidentiality Agreement, as the same may be
amended, supplemented or modified, the Company will, and will cause each of its
Subsidiaries to, afford to Parent and to the officers, employees, accountants,
counsel and other representatives of Parent all reasonable access, during normal
business hours during the period prior to the Effective Time, to all their
respective properties, books, contracts, commitments and records and, during
such period, the Company will (and will cause each of its Subsidiaries to)
furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period pursuant
to the requirements of the Federal or state securities laws or the Federal tax
laws and (b) all other information concerning its business, properties and
personnel as Parent may reasonably request, provided, that until the earlier of
the Effective Time or such time as Parent's designees constitute a majority of
the Board of Directors of the Company, none of the foregoing persons will have
access to the respective properties, books, contracts, commitments and records
of the Company or its Subsidiaries with respect to (i) pricing or pricing
strategy or (ii) Intellectual Property Rights, except that the independent
person who reviewed the Company's patent applications on behalf of Parent during
the due diligence process conducted in connection with the negotiation of the
Merger Agreement will be permitted to review the Company's Intellectual Property
Rights other than access to germplasm pedigree and basic research, and, in any
event, subject to confidentiality and disclosure limitations comparable to those
previously applicable to such independent person's review of patent
applications, and any representative of Parent will be entitled to review
material relating to the Company's Intellectual Property Rights that is
otherwise publicly available. Notwithstanding anything to the contrary in the
Merger Agreement or any other agreement to which the Company and Parent are a
party, the Confidentiality Agreement will terminate and be of no further force
and effect from and after the date upon which the Offer is consummated. The
Confidentiality Agreement contains customary terms concerning confidentiality of
information.
PUBLIC ANNOUNCEMENTS. In the Merger Agreement, Parent and the Company have
agreed to consult with each other before issuing any press release or otherwise
making any public statements with respect to the transactions contemplated by
the Merger Agreement and not to issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable law, fiduciary duties or by obligations pursuant to any listing
agreement with any national securities exchange.
NOTIFICATION OF CERTAIN MATTERS. In the Merger Agreement, Parent and the
Company have agreed to give prompt notice to the other of: (a) the occurrence,
or non-occurrence, in each case, to the knowledge of the Company or Parent, as
the case may be, of any event the occurrence, or non-occurrence, of which
results in the executive officers of the Company or Parent, as the case may be,
having a good faith belief that such change or event would be reasonably likely
to cause (i) any representation or warranty of such entity contained in the
Merger Agreement that is not qualified as to materiality to be untrue or
inaccurate in any material respect, (ii) any representation or warranty of such
entity contained in the Merger Agreement that is qualified as to materiality to
be untrue or inaccurate in any respect, or (iii) any covenant, condition or
agreement of such entity contained in the Merger Agreement not to be complied
with or satisfied in all material respects; and (b) the executive officers of
the Company or Parent, as the case may be, believing in good faith that the
Company or Parent, as the case may be, has, to the knowledge of the Company or
Parent, as the case may be, failed to comply with in all material respects or
satisfy in all material respects any covenant, condition or agreement of such
entity to be complied with or satisfied by it under the Merger Agreement.
BOARD OF DIRECTORS. Pursuant to the Merger Agreement, promptly after such
time as the Purchaser purchases Shares pursuant to the Offer, the Purchaser will
be entitled, to the fullest extent permitted by law,
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to designate at its option up to that number of directors, rounded to the next
highest whole number, of the Company's Board of Directors, subject to compliance
with Section 14(f) of the Exchange Act, as will make the percentage of the
Company's directors designated by the Purchaser pursuant to this sentence equal
to the aggregate voting power of the shares of Class A Common Stock held by
Parent or any of its Subsidiaries; provided, however, that in the event that the
Purchaser's designees are elected to the Board of Directors of the Company,
until the Effective Time, such Board of Directors must have (a) at least three
directors who are directors on the date of the Merger Agreement or are
designated by a majority of the directors of the Company who were directors on
the date of the Merger Agreement, in each case excluding the Monsanto Nominees
(the "Independent Directors") and (b) the number of Monsanto Nominees required
by the Investment Agreement which will be in addition to the number of directors
designated by the Purchaser pursuant to the Merger Agreement; and provided
further that, in such event, if the number of Independent Directors is reduced
below three for any reason whatsoever, the remaining Independent Directors will,
to the fullest extent permitted by law, designate a person to fill such vacancy
who will be deemed to be an Independent Director for purposes of the Merger
Agreement or, if no Independent Directors then remain, the other directors will
designate three persons to fill such vacancies who are not officers or
affiliates of the Company or any of its Subsidiaries, or officers or affiliates
of Parent or any of its Subsidiaries or of any other entity in which Parent
owns, directly or indirectly, any material amount of capital stock or other
significant ownership interest, and such persons will be deemed to be
Independent Directors for purposes of the Merger Agreement.
The Merger Agreement further provides that, following the election or
appointment of the Purchaser's designees, as described above, and prior to the
Effective Time, any termination or amendment of the Merger Agreement by the
Company, any extension by the Company of the time for the performance of any of
the obligations or other acts of the Purchaser or waiver or assertion of any of
the Company's rights under the Merger Agreement, and any other consent or action
by the Board of Directors of the Company with respect to the Merger Agreement
(other than recommending or reconfirming the recommendation that the holders of
the Class A Common Stock approve and adopt the Merger Agreement and the Merger,
and making determinations in connection therewith, which recommendations and
determinations may be made by a majority of the Board of Directors as
constituted at any time after such election or appointment of the Purchaser's
designees) will require the concurrence of a majority of the Independent
Directors and, to the extent permitted by law, no other action by the Company,
including any action by any other director of the Company, shall be required to
approve such actions. To the fullest extent permitted by applicable law, the
Company agrees to take all actions requested by Parent which are reasonably
necessary to effect the election of any such designee.
STATE TAKEOVER LAWS. The Merger Agreement provides that if any "fair
price" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby,
Parent and the Company and their respective Boards of Directors shall use all
reasonable efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
minimize the effects of any such statute or regulation on the transactions
contemplated hereby.
CONDITIONS TO CONSUMMATION OF THE MERGER. The respective obligations of
each party to effect the Merger is subject to the fulfillment at or prior to the
Effective Time of the following conditions: (a) if required by applicable law,
the approval of the Merger Agreement and the Merger by the holders of a majority
of the outstanding Shares of the Class A Common Stock (the "Company Stockholder
Approval") shall have been obtained; provided, however, that Parent and the
Purchaser agree to vote all of their shares of capital stock of the Company
entitled to vote thereon in favor of the Merger; (b) no statute, rule,
regulation, executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other Governmental Entity preventing the consummation of the
Merger shall be in effect; provided, however, that each of the parties has used
their best efforts to prevent the entry of any such temporary restraining order,
injunction or other order, including, without limitation, taking such action as
is required to comply with the Best Efforts Provision, and to appeal promptly
any injunction or other order that
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may be entered; (c) the Purchaser shall have previously accepted for payment and
paid for Shares pursuant to the Offer; and (d) any waiting period (and any
extension thereof) under the HSR Act applicable to the Merger shall have expired
or been terminated.
TERMINATION. The Merger Agreement provides that it may be terminated at
any time prior to the Effective Time, whether before or after the Company
Stockholder Approval (if required by applicable law): (a) by mutual written
consent of Parent, the Purchaser and the Company; (b) by either Parent or the
Company: (i) if (x) as a result of the failure of any of the Offer Conditions
(see Section 14) (other than the Minimum Condition) the Offer has terminated or
expired in accordance with its terms without the Purchaser having accepted for
payment any Shares pursuant to the Offer or (y) the Purchaser has, consistent
with its obligations hereunder, failed to pay for the Shares prior to the
Outside Date; provided, however, that the right to terminate the Merger
Agreement described in this clause (b)(i) will not be available to any party
whose failure to perform any of its obligations under the Merger Agreement
results in the failure of any such Offer Condition or if the failure of such
condition results from facts or circumstances that constitute a breach of any
representation or warranty under the Merger Agreement by such party; or (ii) if
any Governmental Entity has issued an order, decree or ruling or taken any other
action permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by the Merger Agreement and such order, decree or
ruling or other action has become final and nonappealable; provided, however,
that the right to terminate the Merger Agreement described in this clause
(b)(ii) will not be available to any party who has not used its best efforts to
cause such order to be lifted or otherwise taken such action as is required to
comply with its obligation under the Best Efforts Provision; (c) by Parent or
the Purchaser prior to the election of the Purchaser's designees to the Board of
Directors of the Company in the event of a breach by the Company of any
representation, warranty, covenant or other agreement contained in the Merger
Agreement which (i) would give rise to the failure of a condition described in
paragraph (d) or (e) of Section 14 below and (ii) cannot be or has not been
cured within 30 days after the giving of written notice to the Company; (d) by
Parent or the Purchaser if either Parent or the Purchaser is entitled to
terminate the Offer as a result of the occurrence of any event described in
paragraph (c) of Section 14 below, provided that the temporary suspension of the
recommendation of the Company's Board of Directors as described above under
"-- No Solicitation" does not give rise to a right of termination under the
Merger Agreement; (e) by the Company, if the Purchaser or Parent has breached in
any material respect any of their respective representations, warranties,
covenants or other agreements contained in the Merger Agreement, which breach or
failure to perform cannot be or has not been cured within 30 days after the
giving of written notice to Parent or the Purchaser, as applicable; or (f) by
the Company, if the Offer has not been timely commenced.
FEES AND EXPENSES. The Merger Agreement provides that all fees and
expenses incurred in connection with the Offer, the Merger, the Merger Agreement
and the transactions contemplated thereby will be paid by the party incurring
such fees or expenses, whether or not the Offer or the Merger is consummated.
ASSIGNMENT. Neither the Merger Agreement nor any of the rights, interests
or obligations hereunder may be assigned by any of the parties thereto without
the prior written consent of the other parties except that the Purchaser has the
right to assign the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, as described above under " -- The Offer" and that Parent
will be able without the consent of the Company to assign all of its and the
Purchaser's rights and obligations under the Merger Agreement to another Person
that is capable of acquiring a majority of the Class A Common Stock by the
Outside Date, subject in any case to Parent's guarantee of the performance by
such other Person of all of Parent's and the Purchaser's obligations hereunder,
including without limitation the obligation to pay the Offer Price and the
Merger Consideration, and the Company agrees to take all action necessary to
permit such assignee to consummate the Merger after the purchase of Shares.
Subject to the preceding sentence, the Merger Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
AMENDMENT. The Merger Agreement provides that, subject to the restrictions
described above under "-- Board of Directors," the Merger Agreement may be
amended by the parties thereto, by action taken or authorized by their
respective Boards of Directors at any time before or after obtaining the Company
Stockholder Approval (if required by law), but if the Company Stockholder
Approval has been obtained,
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thereafter no amendment may be made which by law requires further approval by
the Company's stockholders without obtaining such further approval.
(c) The Stockholders Agreement.
The following is a summary of certain provisions of the Stockholders
Agreement. This summary is qualified in its entirety by reference to the
Stockholders Agreement, which is incorporated herein by reference and a copy or
form of which has been filed with the Commission as an exhibit to the Schedule
14D-1. The Stockholders Agreement may be examined and copies may be obtained at
the places set forth in Section 8.
VOTING AND TENDER. Concurrently with the execution and delivery of the
Merger Agreement, and as a condition to Parent's willingness to enter into the
Merger Agreement, Parent entered into the Stockholders Agreement with the Voting
Trustees under the Voting Trust Agreement and the Registered Holders of trust
certificates pursuant to the Voting Trust Agreement (in each case, individually
and in his or her respective capacity as Voting Trustee and/or Registered
Holder). Contemporaneously with the execution and delivery of the Stockholders
Agreement, each Registered Holder provided certain written instructions to the
Voting Trustees (the "Voting and Tendering Instructions"). The Voting and
Tendering Instructions instruct the Voting Trustees, in accordance with the
provisions of the Voting Trust Agreement, to take the following actions on
behalf of the Registered Holders: (a) at any duly noticed meeting of the
stockholders of the Company called to vote upon the Merger Agreement and the
transactions contemplated thereby or at any adjournment thereof (or in any other
circumstances under which a vote, consent or approval with respect to the Merger
Agreement and the transactions contemplated thereby is sought), to vote all of
the Voting Trust Shares in favor of the approval and adoption of the Merger
Agreement and the transactions contemplated thereby; (b) to be present (in
person or by proxy) at any duly noticed meeting of the stockholders of the
Company or at any adjournment thereof (or in any other circumstances under which
a vote, consent or approval is sought) with respect to any Business Combination
(as such term is defined in the Stockholders Agreement) other than the Merger
and to vote (or cause to be voted) all of the Voting Trust Shares against any
such Business Combination; and (c) to tender as soon as practicable (and in any
event not later than two business days prior to the first scheduled expiration
date of the Offer all of the Voting Trust Shares pursuant to the Offer and not
to withdraw such tendered shares. The Voting and Tendering Instructions are
irrevocable.
Pursuant to the Stockholders Agreement, the Voting Trustees and Registered
Holders have agreed, among other things, that so long as the Stockholders
Agreement is in effect, the Voting Trustees will cast such votes, consents or
other approvals and take or cause such actions in accordance with the Voting and
Tendering Instructions. In addition, pursuant to the Stockholders Agreement, the
Voting Trustees have agreed not to take any action inconsistent with the Voting
and Tendering Instruction, and each Registered Holder has agreed not to take any
action that would amend or nullify the Voting and Tendering Instructions or in
any way restrict or limit the performance of such Registered Holder's
obligations under the Stockholders Agreement or the consummation of the
transactions contemplated by the Merger Agreement.
The Stockholders Agreement further provides for, among other things, during
the term of the Stockholders Agreement: (i) restrictions on the transfer of any
Voting Trust Shares or the taking of certain actions with respect to such Voting
Trust Shares, other than pursuant to the Offer, the Merger or the Stockholders
Agreement; (ii) the prompt deposit of Shares acquired upon exercise of options
held by certain of the Registered Holders (the "Voting Trust Option Shares")
into the trust governed by the Voting Trust Agreement such that, thereafter, the
Voting Trust Option Shares shall be deemed Voting Trust Shares for purposes of
the Stockholders Agreement; (iii) with respect to certain other agreements
governing the relationship among the Voting Trustees and the Registered Holders
(as such agreements are collectively defined in the Stockholders Agreement, the
"Family Shareholder Agreements"), further assurances by the Voting Trustees and
the Registered Holders to amend the Family Shareholder Agreements to the extent
necessary (and not to otherwise amend such Family Shareholder Agreements) so
that each Registered Holder and Voting Trustee can fully perform its obligations
under the Stockholders Agreement; and (iv) the taking of certain actions by the
Voting Trustees and Registered Holders in order to effectuate the terms of the
Stockholders Agreement. The Stockholders Agreement also provides, among other
things, for the making of certain representations by each of the Registered
Holders, the Voting Trustees and Parent.
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IRREVOCABLE PROXY. The Voting Trustees have also granted to Parent an
irrevocable proxy to vote the Voting Trust Shares in favor of the adoption of
the Merger Agreement and the transactions contemplated thereby and against (i)
actions or proposals that could reasonably be expected to result in (x) any
material breach of the Merger Agreement or (y) any of the closing conditions set
forth in the Merger Agreement not being fulfilled, (ii) any Business Combination
(other than the Merger and the transactions contemplated by the Merger
Agreement) and (iii) other extraordinary corporate transactions which would
prevent or delay the Merger or the transactions contemplated by the Merger
Agreement.
NO SOLICITATION. The Voting Trustees and the Registered Holders have
agreed in the Stockholders Agreement not to (a) solicit, initiate or knowingly
encourage the submission of any Takeover Proposal or (b) participate in any
discussions or negotiations regarding, or furnish to any person information with
respect to, or take any action that could reasonably be expected to lead to, any
Takeover Proposal.
TERMINATION. The Stockholders Agreement will terminate at the Effective
Time of the Merger. In addition, the Stockholders Agreement may be terminated:
(a) by mutual written consent of Parent and a majority of the Voting Trustees;
(b) by Parent if (i) the Merger Agreement has terminated in accordance with its
terms or (ii) in the event that (x) any of the representations and warranties of
the Voting Trustees or the Registered Holders in the Stockholders Agreement
shall not be true and correct in all material respects or (y) any of the Voting
Trustees or the Registered Holders shall have failed to perform in any material
respect any material covenant to be performed by any Voting Trustee or
Registered Holder under the Stockholders Agreement and in the case of (x) or (y)
such untruth or incorrectness or such failure cannot be or has not been cured
within thirty days after notice thereof; or (c) by a majority of the Voting
Trustees, if none of the Voting Trustees or Registered Holders are in violation
of their respective obligations under the Stockholders Agreement and (i) Parent
or the Purchaser shall not have completed payment for all Shares tendered
pursuant to the Offer and not withdrawn by the Outside Date (as defined in the
Stockholders Agreement), (ii) in the event that (x) any of the representations
and warranties of Parent in the Stockholders Agreement shall not be true and
correct in all material respects or (y) Parent shall have failed to perform in
any material respect any material covenant to be performed by it under the
Stockholders Agreement and in the case of (x) or (y) such untruth or
incorrectness or such failure cannot be or has not been cured within thirty days
after notice thereof, (iii) subject to the compliance by the Company with its
obligations under the Best Efforts Provision, any Governmental Entity (as
defined in the Merger Agreement) has issued an order enjoining or prohibiting
the Offer or the consummation of the transactions contemplated by the
Stockholders Agreement or the Merger Agreement and such order has become final
and nonappealable, and (iv) the Merger Agreement has terminated in accordance
with its terms.
(d) Appraisal Rights.
No appraisal rights are available in connection with the Offer. If the
Merger is consummated, however, stockholders of the Company who have not
tendered their Shares will have certain rights under the DGCL to dissent and
demand appraisal of, and to receive payment in cash of the fair value of, their
Shares. Stockholders who perfect such rights by complying with the procedures
set forth in Section 262 of the DGCL ("Section 262") will have the "fair value"
of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) determined by the Delaware Court of
Chancery and will be entitled to receive a cash payment equal to such fair value
from the Surviving Corporation. In addition, such dissenting stockholders may be
entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is required
to take into account all relevant factors. Accordingly, such determination could
be based upon considerations other than, or in addition to, the market value of
the Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated that "proof of value
by any techniques or methods which are generally considered acceptable in the
financial community and otherwise admissible in court" should be considered in
an appraisal proceeding. The Weinberger court also noted that under Section 262,
fair value is to be determined "exclusive of any element of value arising from
the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor,
Inc., however, the Delaware Supreme Court stated that, in the context of a
two-step cash merger,
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"to the extent that value has been added following a change in majority control
before cash-out, it is still value attributable to the going concern," to be
included in the appraisal process. As a consequence, the fair value determined
in any appraisal proceeding could be more or less than (or the same as) the
consideration to be paid in the Offer and the Merger.
Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the demand
for appraisal of, and payment in cash for the fair value of, the Shares. Parent
intends, however, to cause the Surviving Corporation to argue in an appraisal
proceeding that, for purposes of such proceeding, the fair value of each Share
is less than the price paid in the Merger. In this regard, stockholders should
be aware that opinions of investment banking firms as to the fairness from a
financial point of view (including Merrill Lynch's opinion described herein) are
not necessarily opinions as to "fair value" under Section 262.
THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT
ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.
(e) Plans for the Company.
In connection with the Offer, Parent and the Purchaser have reviewed, and
will continue to review, various possible business strategies that they might
consider in the event that the Purchaser acquires control of the Company
pursuant to this Offer. Such strategies could include, among other things,
changes in the Company's business, corporate structure, capitalization or
management.
"GOING PRIVATE" TRANSACTIONS. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger. However, Rule
13e-3 would be inapplicable if (i) both the Class A Common Stock and the Class B
Common Stock are deregistered under the Exchange Act prior to the Merger or
other business combination or (ii) the Merger or other business combination is
consummated within one year after the purchase of the Shares pursuant to the
Offer and the amount paid per Share in the Merger or other business combination
is at least equal to the amount paid per Share in the Offer. If applicable, Rule
13e-3 requires, among other things, that certain financial information
concerning the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction be filed with the
Commission and disclosed to stockholders prior to the consummation of the
transaction.
Except as otherwise described in this Offer to Purchase, the Purchaser does
not have any present plans or proposals which relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of any operations of the Company or sale or transfer of
a material amount of assets, involving the Company or any of its subsidiaries,
or any changes in the Company's present capitalization or any other change in
the Company's corporate structure or business or the composition of its Board of
Directors or management.
12. INVESTMENT AGREEMENT; CERTAIN AGREEMENTS WITH RESPECT TO THE COMPANY'S
SECURITIES; OTHER AGREEMENTS.
The agreements summarized below have all been filed as exhibits to the
Schedule 14D-1 and the summaries below are qualified in their entirety by
reference to the text of the agreements as so filed which are incorporated
herein by reference.
(a) Investment Agreement.
The Investment Agreement includes certain provisions governing the rights
and obligations of Parent and the Company following the 1996 Investment.
Pursuant to the Investment Agreement, the By-Laws of the Company were
amended to define the primary business of the Company as the research-based
production, marketing, licensing and sale of agronomic seed, to establish a
maximum amount of 10% of the voting securities of the Company then outstanding
to be issued to facilitate any one strategic collaboration and to prohibit the
Company from
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acquiring any business or assets outside of such primary business that would
constitute in excess of 25% of the total consolidated assets of the Company,
provided that the Company can engage in transactions inconsistent with these
provisions unless at least three directors object. Such By-Laws may not be
amended over the objection of two of the members of the Board. Pursuant to the
Merger Agreement, the Company has agreed that the By-Law provisions described in
this paragraph will be eliminated in their entirety immediately upon the
acquisition of Shares in the Offer.
The Investment Agreement provides that so long as Parent beneficially owns
either 5% of the Class A Common Stock or 20% of the Class B Common Stock, if the
Company proposes to issue for cash (subject to specified limitations) any
Shares, securities convertible into such Shares or options, warrants or rights
to acquire such Shares, Parent has the right to purchase all or any portion of
its pro rata share of such securities on the terms set forth in the Investment
Agreement. Pursuant to these provisions, Monsanto purchased from the Company
24,102 newly issued Shares of Class B Common Stock during the second quarter of
fiscal 1997 and 156,024 newly issued Shares of Class B Common Stock during the
first quarter of fiscal 1998, at prices of $24.51 per Share and $40.38 per
Share, respectively (after taking into account the Stock Splits).
With respect to Shares issued upon the exercise of options, these
provisions require the Company to notify Parent, within twenty business days
after the end of each fiscal year, of the number of Shares of Class A Common
Stock or Class B Common Stock that Parent is entitled thereunder to purchase in
respect of such year. If exercised, Parent has the right to acquire all or any
portion of the Shares of Class A Common Stock or Class B Common Stock which it
is so entitled to purchase at a price equal to the "current market value"
(which, as defined in the Investment Agreement, is based on the market value of
the Class B Common Stock) of such Shares on the date that Parent advises the
Company that it intends to exercise such rights. It is Parent's current
intention to exercise any and all such rights to purchase Shares of Class A
Common Stock, as they become available, effective upon or immediately after the
expiration of the Offer. Exercise of any such rights will increase the number of
Shares of Class A Common Stock that Parent holds on the expiration date of the
Offer, and thus decrease the number of Shares required to be tendered for the
Minimum Condition to be satisfied. See Introduction.
The Investment Agreement also prohibits the transfer or other disposition
of any of the Shares owned by Parent, subject to certain exceptions, prior to
the earliest of (a) March 8, 1999, (b) the termination or expiration of the
Collaboration Agreement (except by reason of material breach by Parent), (c) the
issuance of a non-appealable governmental order requiring Parent to divest its
equity interest in the Company, or (d) the agreement by the Company to enter
into a business combination with a person other than Parent or its affiliates.
During this initial period, Parent is permitted to make certain transfers,
including pursuant to a merger of the Company recommended by the Board of
Directors of the Company and pursuant to a third party tender or exchange offer
recommended by the Board or pursuant to which the Roberts Family Stockholders
tender or exchange their majority interest.
After the initial period described above, Parent may also make transfers of
Class B Common Stock in bona fide open market brokers' transactions, or, subject
to certain restrictions, for cash in private sales to financial or institutional
buyers not purchasing on behalf of a competitor of the Company or in a bona fide
public offering pursuant to the Registration Rights Agreement. Until March 8,
2006, the Company (or an assignee of the Company) has a right of first refusal
with respect to certain of the transfers Parent is permitted to make under the
Investment Agreement, including with respect to certain third party tender
offers, private sales to financial or institutional buyers and public offerings.
Article 11 of the Investment Agreement contains certain standstill
provisions generally restricting Parent and its affiliates from owning or
acquiring direct or indirect beneficial ownership of any additional equity of
the Company aggregating more than (x) 10% of the total number of votes that may
be cast generally in the election of directors (the "Total Voting Power") of the
Company, (y) 45% of the outstanding Shares of Class B Common Stock, or (z) 40%
of the outstanding Shares of the Company. Notwithstanding such restrictions,
Parent is permitted to acquire beneficial ownership of additional Shares of
Class A Common Stock from the Roberts Family Stockholders provided that, no
later than sixty days after an acquisition of a majority of the Total Voting
Power, Parent makes a tender or exchange offer or proposal with respect to a
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business combination which meets certain requirements, including in any event
that it be subject to the prior approval of the majority of independent
directors and that it would result in the acquisition of 100% of the outstanding
capital stock of the Company at a price per share not less than the highest
price at which Parent acquired shares from any Roberts Family Stockholder in the
preceding two years, in cash and/or the same form of consideration offered to
such Roberts Family Stockholders. During the period in which Parent has acquired
a majority of the Total Voting Power, but not 100% of the outstanding capital
stock, Article 11 of the Investment Agreement requires Parent to use reasonable
efforts to keep three independent directors on the Board of Directors and the
approval of a majority of the independent directors is required for certain
transactions, including the acquisition of additional capital stock (other than
from the Roberts Family Stockholders) and entry into an acquisition proposal
with regard to the Company.
Article 11 of the Investment Agreement also requires the Company promptly
to notify Parent if it receives an unsolicited acquisition proposal (including
indications of interest) regarding a business combination from a third party,
and sets forth certain procedures to be followed by the Board of Directors of
the Company in the event that the Board of Directors determines to enter into a
sale process with respect to the Company.
Chapter 11 of the Investment Agreement also prohibits, until the earliest
of March 8, 2006 and Parent's acquisition of a majority of the Total Voting
Power, Parent and its affiliates generally from, without the consent of the
Company, seeking to control or influence the Company, having the Company waive,
amend or modify any of the restrictions described above, its Certificate of
Incorporation or its By-Laws, making any acquisition proposal with respect to a
business combination with the Company, taking any action with respect to the
Company that would require the Company to make a public announcement with
respect to an acquisition proposal, becoming a member of a "group" within the
meaning of Section 13(d) of the Exchange Act, or soliciting, or encouraging any
other person to solicit, proxies or become a participant or otherwise engage in
a solicitation in opposition to a recommendation of a majority of the Company's
directors or seek to advise or influence any person with respect to the voting
of the Company's securities or execute any written consent in lieu of a meeting
of stockholders, among other things.
Pursuant to the Merger Agreement, the Board of Directors of the Company has
taken action in approving the Offer, the Merger, the Merger Agreement and the
Stockholders Agreement sufficient to render Article 11 of the Investment
Agreement irrevocably inapplicable to the Offer, the Merger, the Merger
Agreement, the Stockholders Agreement and the transactions contemplated thereby.
The Company has also agreed that Article 11 of the Investment Agreement will be
eliminated in its entirety upon the acquisition of Shares in the Offer and the
entire Investment Agreement will terminate at the Effective Time.
(b) 1996 Stockholders' Agreement.
The 1996 Stockholders' Agreement provides that each Roberts Family
Stockholder will use best efforts to attend each meeting of stockholders of the
Company for purposes of establishing a quorum and will vote all of its shares of
any voting stock of the Company ("Voting Stock") in favor of any Monsanto
Nominee recommended by the Board of Directors of the Company. In addition, the
1996 Stockholders' Agreement provides that each Roberts Family Stockholder will
not, without the consent of Parent, initiate any action that would result in the
amendment of the By-Law provisions described above under "-- Investment
Agreement" and that each Roberts Family Stockholder will vote its Voting Stock
in favor of any proposed amendment to the Restated Certificate of Incorporation
of the Company to increase the Company's authorized capital stock, which
amendment is required in order for the Company to comply with Parent's rights to
purchase equity under the Investment Agreement.
The 1996 Stockholders' Agreement also provides that except for certain
permitted transfers, no Roberts Family Stockholder may transfer any interest in
its Voting Stock except as provided in such agreement, and that, with limited
exceptions, no Roberts Family Stockholder will convert any Class A Common Stock
to Class B Common Stock until such time as such Roberts Family Stockholder has
entered into a binding agreement to sell or convey such Class B Common Stock to
a third party.
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If any Roberts Family Stockholder desires to transfer any interest in its
Voting Stock (other than certain permitted transfers) such Roberts Family
Stockholder is required to offer to sell such Voting Stock to Parent. If Parent
decides not to purchase all of such Voting Stock for the price and upon the
terms upon which such Roberts Family Stockholder proposes to transfer such
Voting Stock, Parent has the exclusive right for a period of time to propose
alternative terms for such purchase. If Parent does not accept the offer and
Parent and such Roberts Family Stockholder have not otherwise reached an
agreement regarding such purchase within such time period, then such Roberts
Family Stockholder may offer and sell such Voting Stock to any person or entity
on terms that are at least as favorable to such Roberts Family Stockholder as
those set forth in the offer or those offered by Parent in any counteroffer. In
the event of any involuntary transfer of any Voting Stock (other than certain
permitted transfers), Parent will have an exclusive option to purchase all but
not less than all of the Voting Stock subject to the involuntary transfer.
The 1996 Stockholders' Agreement is effective until the earlier of (i) the
termination of the Collaboration Agreement (except if it is terminated by reason
of a material breach by the Company or by reason of a governmental decree caused
by voluntary action of the Company), (ii) Parent owning less than 5% of the
outstanding Class A Common Stock or less than 50% of the highest percent of the
outstanding Shares beneficially owned by Parent and acquired in the 1996
Investment, (iii) the termination of the Investment Agreement or (iv) March 8,
2007 or any subsequent anniversary of such date upon notice by Parent or a
majority in interest of the Voting Stock held by persons who are then Roberts
Family Stockholders.
(c) Registration Rights Agreement.
The Registration Rights Agreement provides Parent with certain rights to
require the Company to register the Class B Common Stock acquired by Parent, and
upon conversion of the Class A Common Stock acquired by Parent, pursuant to the
Investment Agreement and to participate in certain of the Company's
registrations, subject to certain restrictions, at any time on or after the
earlier of March 8, 1999 and the date as of which Parent is permitted to make
certain transfers of shares of Class B Stock pursuant to the Investment
Agreement.
(d) Collaboration Agreement and License Agreements.
In conjunction with the 1996 Investment, Parent and the Company also
entered into the Collaboration Agreement, in which the two companies agreed to a
long-term research and development collaboration for development of new
transgenic products in the field of agricultural biotechnology. A variety of
crops is contemplated under the Collaboration Agreement, including corn, soybean
and others. Concurrently with the Collaboration Agreement, Parent and the
Company also entered into the Corn Borer-Protected Corn License Agreement dated
January 31, 1996; the Glyphosate-Protected Corn License Agreement dated January
31, 1996, and the CaMV Promoter License Agreement dated January 31, 1996
(collectively, the "License Agreements") to commercialize genetically engineered
corn hybrids incorporating Bacillus thuringiensis tolerance to lepidopteran
insects such as the European Corn Borer (YIELDGARD(TM) Bt insect-resistant
corn), corn hybrids that are tolerant of glyphosate herbicide (ROUNDUP READY(TM)
glyphosate-tolerant corn), and corn hybrids that are tolerant of glufosinate
herbicides, respectively. The License Agreements define specific areas of
commercial interest between Parent and the Company in Bt corn and in herbicide
tolerant corn, while the Collaboration Agreement covers broadly all other fields
of agricultural biotechnology in a spectrum of crops. The Collaboration
Agreement and each of the License Agreements contemplates a worldwide territory.
The Collaboration Agreement is the mechanism by which Parent and the
Company share their respective technologies and intellectual property rights,
for research and in the development of new products in the field of agricultural
biotechnology. The initial term of the Collaboration Agreement is 10 years, with
any extensions to be renegotiated in good faith and includes a series of cash
payments from Parent to the Company originally aggregating $19,500,000 over the
initial term of the Collaboration Agreement. In 1998, the Collaboration
Agreement was amended to accelerate the payments into earlier years and to
reduce the aggregate amount, but without materially changing the net present
value of the payments.
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<PAGE> 40
Pursuant to the terms of the Collaboration Agreement and the License
Agreement, if the Investment Agreement were to terminate prior to the
Collaboration Agreement as the result of actions of either party that result in
a government order requiring Parent to dispose of its shares or terminate the
Collaboration Agreement, or if Parent were to terminate the Investment Agreement
other than for cause, then the division of value for products of any
Collaborative Effort under the Collaboration Agreement and under each of the
License Agreements would be adjusted in favor of the non-terminating party, and
against the terminating party. Any change of control of the Company, other than
one where Parent becomes the controlling party, would result in a similar shift
in the ratios in Parent's favor; any change of control of Parent would result in
a shift in the Company's favor.
During fiscal 1997, Parent paid $3,000,000 to the Company under the
Collaboration Agreement. As part of the License Agreements, each party has an
obligation to share with the other certain royalties and technology fees it
receives that are related to seed corn that contains the applicable insect
resistance or herbicide tolerance. The Company received a payment from Parent of
approximately $2,700,000 under the License Agreements for sales occurring during
fiscal 1997, net of certain fees. In the Company's fiscal 1998, the Company paid
Parent approximately $200,000 in fees related to glufosinate tolerant corn.
Parent expects that the Collaboration Agreement and the Licenses will be
terminated or revised on or after the Effective Time.
In addition, Parent may seek, prior to the acquisition of Shares pursuant
to the Offer, to enter into further or additional collaboration agreements
concerning research related to development of new products. Any such agreements
may require the consent of the Company's Board of Directors in accordance with
Article 11 of the Investment Agreement or Article EIGHTH of the Company's
Restated Certificate of Incorporation. See Section 15.
(e) Other Transactions.
In fiscal 1997, the Company sold soybean products for which the Company
collected a royalty or technology fee on behalf of Parent from the ultimate
purchaser of the products, but was not entitled to share the net proceeds with
Parent. For sales occurring during fiscal 1997, the Company paid Parent
approximately $1,500,000 for such products, net of certain services fees the
Company was permitted to retain. The Company also paid a subsidiary of Parent
approximately $450,000 as royalties or fees for germplasm and specialty corn
products. In an effort to increase available supplies of certain seeds to
farmers in fiscal year 1997, Parent paid to the Company approximately $1,200,000
to help cover the Company's incremental winter production costs. In fiscal year
1998, Parent also paid the Company $2.05 million, and has agreed to make
additional payments estimated to be an additional $2.5 million for additional
seed production. All references in the preceding paragraphs to fiscal years are
to the fiscal years of the Company.
13. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required to purchase
the outstanding Shares and to pay related fees and expenses will be
approximately $2.5 billion. The Purchaser plans to obtain all funds needed for
the Offer and the Merger through a capital contribution from Parent. Parent
expects to obtain funds for its capital contribution from working capital, by
borrowing on an unsecured basis, by the issuance of commercial paper, from other
sources which might be available to Parent, or under some combination of the
foregoing. As of the date of this Offer to Purchase, Parent has not made
specific plans or arrangements with respect to the financing of the Offer and
the Merger, or with respect to the repayment of any borrowings in respect
thereof. The Offer is not conditioned on obtaining financing.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other term of the Offer, but subject, in all cases, to
Parent's and the Purchaser's obligations set forth under the Merger Agreement,
including, without limitation, under the Best Efforts Provision, the Purchaser
will not be required to accept for payment or, subject to any applicable rules
and regulations of the Commission, including Rule 14e-l(c) under the Exchange
Act (relating to the Purchaser's
38
<PAGE> 41
obligation to pay for or return tendered Shares after the termination or
withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer
unless (i) there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer such number of Shares of Class A Common Stock that
(together with the Shares of Class A Common Stock then held by Parent or any of
its Subsidiaries) would constitute a majority of the outstanding Shares of Class
A Common Stock (assuming the exercise of all options to purchase, and the
conversion or exchange of all securities convertible or exchangeable into,
Shares of Class A Common Stock) outstanding at the expiration date of the Offer
and (ii) any waiting period under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall have expired or been terminated prior to the
expiration of the Offer. Furthermore, notwithstanding any other term of the
Offer, but subject, in all cases, to certain of Parent's and the Purchaser's
obligations set forth in the Merger Agreement, the Purchaser will not be
required to accept for payment or, subject as aforesaid, to pay for any Shares
not theretofore accepted for payment or paid for, and may terminate the Offer at
any time if, at any time on or after the date of the Merger Agreement and before
the acceptance of such Shares for payment or the payment therefor, any of the
following conditions exists (other than as a result of any action or inaction of
Parent or any of its Subsidiaries that constitutes a breach of the Merger
Agreement):
(a) there shall be threatened or pending by any Governmental Entity
any suit, action or proceeding (i) challenging the acquisition by Parent or
the Purchaser of any Shares under the Offer, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by the Merger
Agreement or the Stockholders Agreement or seeking to obtain from the
Company, Parent or the Purchaser any damages that are material in relation
to the Company and its subsidiaries taken as a whole, (ii) seeking to
prohibit or materially limit the ownership or operation by the Company,
Parent or any of their respective Subsidiaries of a material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole,
or Parent and its Subsidiaries, taken as a whole, or to compel the Company
or Parent to dispose of or hold separate any material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole,
or Parent and its Subsidiaries, taken as a whole, as a result of the Offer
or any of the other transactions contemplated by the Merger Agreement or
the Stockholders Agreement, (iii) seeking to impose material limitations on
the ability of Parent or the Purchaser to acquire or hold, or exercise full
rights of ownership of, any Shares to be accepted for payment pursuant to
the Offer including, without limitation, the right to vote such Shares on
all matters properly presented to the stockholders of the Company, (iv)
seeking to prohibit Parent or any of its Subsidiaries from effectively
controlling in any material respect any material portion of the business or
operations of the Company or its Subsidiaries or (v) which otherwise is
reasonably likely to have a material adverse effect on the business,
properties, assets, financial condition or results of operations of the
Company and its Subsidiaries taken as a whole; provided that the right of
the Purchaser to not accept for payment or pay for, any Shares not
theretofore accepted for payment or paid for, or to terminate the Offer,
pursuant to this subparagraph (a) shall not be available if Parent or the
Purchaser has not taken such action as is required to comply with the Best
Efforts Provision;
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger by any Governmental Entity any
statute, rule, regulation, judgment, order or injunction, other than the
application to the Offer or the Merger of applicable waiting periods under
the HSR Act, that is reasonably likely to result, directly or indirectly,
in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above; provided that the right of the Purchaser to not accept
for payment or pay for, any Shares not theretofore accepted for payment or
paid for, or to terminate the Offer pursuant to this subparagraph (b) shall
not be available to Parent or the Purchaser if Parent or the Purchaser has
not taken such action as is required to comply with the Best Efforts
Provision;
(c) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or the
Purchaser its approval or recommendation of the Offer, the Merger or the
Merger Agreement or (ii) the Board of Directors of the Company or any
committee thereof shall have resolved to take any of the foregoing actions;
(d) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality shall not be
true and correct in any respect or any such representations
39
<PAGE> 42
and warranties that are not so qualified shall not be true and correct in
any material respect, in each case, at the date of the Merger Agreement and
as if such representations and warranties were made as of such time of
determination (except that (i) representations and warranties that speak as
of a specified date shall be true and correct to such extent only as of
such date and (ii) no representation or warranty of the Company shall be
deemed to be untrue in any respect as a result of any event or circumstance
that occurred after (and did not occur on or before) the first anniversary
of the date hereof);
(e) the Company shall have, and be continuing to have, failed to
perform in any material respect any material obligation or to comply in any
material respect with any material agreement or covenant of the Company to
be performed or complied with by it under the Merger Agreement;
(f) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on a national securities
exchange in the United States (excluding any coordinated trading halt
triggered solely as a result of a specified decrease in a market index),
(ii) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) any limitation (whether or not
mandatory) by any Governmental Entity on, or other event that materially
adversely affects, the extension of credit by banks or other lending
institutions, (iv) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
United States which in any case is reasonably expected to have a material
adverse effect on the Company or to materially adversely affect Parent's or
the Purchaser's ability to complete the Offer and/or the Merger or
materially delay the consummation of the Offer and/or the Merger; or
(g) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may, subject to the terms of the Merger Agreement, be waived by
Parent and the Purchaser in whole or in part at any time and from time to time
in their sole discretion. The failure by Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time. Defined terms used but not defined
in this Section 14 shall have the respective meanings assigned to those terms in
the Merger Agreement.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
General. Except as otherwise disclosed herein, based upon an examination
of publicly available filings with respect to the Company and discussions
between representatives of the Purchaser and the Company, the Purchaser is not
aware of (a) any licenses or other regulatory permits that appear to be material
to the business of the Company and that might be adversely affected by the
acquisition of Shares by the Purchaser pursuant to the Offer or (b) of any
approval or other action by any governmental, administrative or regulatory
agency or authority that would be required for the acquisition or ownership of
Shares by the Purchaser as contemplated herein. Should any such approval or
other action be required, it is currently contemplated that such approval or
action would be sought except as otherwise described below under "State Takeover
Laws." While the Purchaser does not presently intend to delay the acceptance for
payment of or payment for Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
other action, if needed, would be obtained or would be obtained without
substantial conditions or that failure to obtain any such approval or other
action might not result in consequences adverse to the Company's business or
that certain parts of the Company's business might not have to be disposed of if
such approvals were not obtained or such other actions were not taken or in
order to obtain any such approval or other action. See Section 14 for certain
conditions of the Offer.
Antitrust Issues. Under the provisions of the HSR Act applicable to the
Offer, the acquisition of Shares under the Offer may be consummated following
the expiration of a 15-day waiting period following the filing of a Premerger
Notification and Report Form with respect to the Offer, unless Parent receives a
request for additional information or documentary material from the Department
of Justice, Antitrust Division (the "Antitrust Division") or the Federal Trade
Commission ("FTC") or unless early termination of the waiting
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<PAGE> 43
period is granted. Parent expects to make such a filing on May 15, 1998. If,
within the initial 15-day waiting period, either the Antitrust Division or the
FTC requests additional information or documentary material concerning the
Offer, the waiting period will be extended through the tenth day after the date
of substantial compliance by all parties receiving such requests. Complying with
a request for additional information or documentary material can take a
significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take such
action under the antitrust laws as either deems necessary or desirable in the
public interest, including seeking to enjoin the purchase of Shares pursuant to
the Offer, or the consummation of the Merger, or seeking the divestiture of
Shares acquired by the Purchaser or the divestiture of substantial assets of the
Company or its subsidiaries or Parent or its subsidiaries. Private parties may
also bring legal action under the antitrust laws under certain circumstances.
There can be no assurance that a challenge to the Offer or the consummation of
the Merger on antitrust grounds will not be made, or, if such a challenge is
made, of the result thereof. Pursuant to the Best Efforts Provision, Parent and
the Company have agreed to take certain actions in order to permit the
consummation of the Offer and the Merger. See Section 11.
If any applicable waiting period under the HSR Act applicable to the Offer
has not expired or been terminated prior to the Expiration Date, the Purchaser
will not be obligated to proceed with the Offer or the purchase of any Shares
not theretofore purchased pursuant to the Offer. See Section 14.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. However, Section 203 of the DGCL, which generally prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an affiliate
or associate thereof) from engaging in a "business combination" (defined to
include mergers and certain other transactions) with a Delaware corporation for
a period of three years following the date such person became an interested
stockholder), does not apply to the Company because the Company does not have a
class of voting stock listed on a national securities exchange, authorized for
quotation on the Nasdaq stock market or held of record by more than 2,000
stockholders. In any event, the Board of directors of the Company has resolved
to make Section 203 of the DGCL inapplicable to the Offer, the Merger, the
Merger Agreement, the Stockholders Agreement and the transactions contemplated
by the Merger Agreement and the Stockholders Agreement. See Sections 10 and 11.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations that are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company conducts business in a number of states throughout the United
States, some of which have enacted takeover laws. The Purchaser does not know
whether any of these laws will, by their terms, apply to the Offer and has not
complied with any such laws. In the Merger Agreement, Parent and the Company and
their respective Boards of Directors have agreed that, if any such state
takeover law becomes applicable to the Merger Agreement and the transactions
contemplated thereby, each of them will use all reasonable efforts to grant such
approvals and take such actions as are necessary so that the transactions
contemplated thereby may be consummated as promptly as practicable on the terms
contemplated thereby and otherwise act to minimize the effects of any such
statute or regulation on the transactions contemplated thereby. Should any
person seek to apply any state takeover law, Purchaser will take such action as
then appears reasonable, which may include
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challenging the validity or applicability of any such statute in appropriate
court proceedings. In the event it is asserted that one or more state takeover
laws is applicable to the Offer, and an appropriate court does not determine
that it is inapplicable or invalid as applied to the Offer, the Purchaser might
be required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, the Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for payment any Shares tendered. See Section 14.
Certain Provisions of the Company Charter. Article Eighth of the Company
Charter provides in relevant part that any merger or consolidation of the
Company with any "Interested Stockholder" or affiliate of an Interested
Stockholder will require the affirmative vote of at least 80% of the voting
power of all the then outstanding voting power of the Company, voting together
as a single class, unless (a) the transaction is approved by a majority of the
"Continuing Directors" and there are at least five Continuing Directors or (b)
certain requirements as to the consideration to be paid in the transaction are
met and the Company has not taken certain actions or failed to take certain
actions, including certain transactions with the Interested Stockholder, while
there is an Interested Stockholder (including the acquisition by the Interested
Stockholder of additional shares of the capital stock of the Company entitled to
vote generally in the election of directors ("Voting Capital Stock")). The
definition of Interested Stockholder for purposes of Article Eighth includes any
person (other than the Company and controlled subsidiaries of the Company) who
is the beneficial owner of 10% or more of the outstanding Voting Capital Stock.
Under this definition, Parent became an Interested Stockholder as a result of
the 1996 Investment. A Continuing Director, for purposes of this Article Eighth,
is a director who is unaffiliated with the Interested Stockholder and was a
member of the Board of Directors of the Company prior to the time the Interested
Stockholder became an Interested Stockholder, and any subsequent director who is
both unaffiliated with the Interested Stockholder and who is recommended by a
majority of the Continuing Directors then on the Board.
As described above in Section 10, at its meeting of May 8, 1998, the
Company's Board of Directors approved the Offer, the Merger, the Merger
Agreement, the Stockholders Agreement and the transactions contemplated by the
Merger Agreement and the Stockholders Agreement for purposes of rendering
Article EIGHTH of the Company's Restated Certificate of Incorporation
irrevocably inapplicable to the Offer, the Merger, the Merger Agreement and the
Stockholders Agreement, the transactions contemplated by the Merger Agreement
and/or the Stockholders Agreement and any other transaction (except a
transaction in which Parent acquires beneficial ownership of Shares other than
pursuant to the Merger) between Parent and any of its affiliates on the one
hand, and the Company and any of its affiliates, on the other hand, consummated
after the date that the Purchaser acquires Shares pursuant to the Offer that
could be defined as a "Business Combination" under Article EIGHTH of the
Company's Restated Certificate of Incorporation.
Other Laws and Legal Matters. According to the Company's Annual Report on
Form 10-K for the fiscal year ended August 31, 1997, the Company conducts
operations in a number of foreign countries. In the event that one or more
foreign laws is deemed to be applicable to the Offer, the Purchaser and/or the
Company may be required to file certain information or to receive the approval
of the relevant foreign authorities. Such government may also attempt to impose
additional conditions on the Company's operations conducted in such countries.
After completion of the Offer, the Purchaser will seek further information
regarding the applicability of any such laws and presently intends to take such
actions as they may require.
16. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
Subsidiaries will, among other things, from the date of the Merger Agreement
until the time that Parent's designees will constitute a majority of the Board
of Directors of the Company, (a) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its capital stock or
otherwise make any payment to stockholders in their capacity as such, other than
dividends on Shares to be declared and paid only at the customary times at a
quarterly rate not in excess of $0.035 per Share, except for dividends by a
wholly owned domestic Subsidiary of the Company to its parent, (b) split,
combine or reclassify any of its capital stock or issue or authorize the
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issuance of any other securities in respect of, in lieu of, or in substitution
for, shares of its capital stock or (iii) redeem, purchase or otherwise acquire
any of its securities.
17. FEES AND EXPENSES.
BancAmerica Robertson Stephens and Goldman Sachs are acting as Dealer
Managers for the Offer and have provided certain financial advisory services to
Parent in connection with the Offer and the Merger. As compensation for such
services, Parent has agreed to pay BancAmerica Robertson Stephens and Goldman
Sachs $7,250,000 each. The Purchaser has agreed to reimburse both Dealer
Managers for their reasonable out-of-pocket expenses, including the fees and
expenses of their counsel, in connection with the Offer and has agreed to
indemnify the Dealer Managers against certain liabilities and expenses in
connection with the Offer, including liabilities under the federal securities
laws.
Parent has also retained Georgeson & Company Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interviews and may
request brokers, dealers and other nominee stockholders to forward the Offer
materials to beneficial owners of Shares. The Information Agent will receive
reasonable and customary compensation for such services, plus reimbursement of
out-of-pocket expenses.
Parent will pay the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-pocket
expenses and will indemnify the Depositary against certain liabilities and
expenses in connection therewith, including liabilities under the federal
securities laws. Brokers, dealers, commercial banks and trust companies will be
reimbursed by Parent for customary mailing and handling expenses incurred by
them in forwarding material to their customers.
18. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, the Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction
the securities laws or blue sky laws of which require the Offer to be made by a
licensed broker or dealer, the Offer shall be made on behalf of the Purchaser by
the Dealer Managers or one or more brokers or dealers licensed under the laws of
such jurisdiction.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, the Purchaser has filed with the Commission the Schedule 14D-1,
together with exhibits, furnishing additional information with respect to the
Offer and may file amendments thereto. Pursuant to Rule 14d-9 promulgated under
the Exchange Act, the Company has filed with the Commission the Schedule 14D-9
with respect to the Offer and may file amendments thereto. Such statements,
including exhibits and any amendments thereto, that furnish certain additional
information with respect to the Offer may be inspected at, and copies may be
obtained from, the same places and in the same manner as set forth in Section 8,
"Certain Information Concerning the Company" (except that they will not be
available at the regional offices of the Commission).
No person has been authorized to give any information or make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
CORN ACQUISITION CORPORATION
May 15, 1998
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SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND THE PURCHASER
MONSANTO COMPANY
The following table sets forth the name, current business address, present
principal occupation or employment, and material occupations, positions, offices
or employments and business addresses thereof for the past five years of each
director and executive officer of Monsanto Company. Except for Jacobus F.M.
Peters, who is a citizen of The Netherlands, Pierre Hochuli, who is a citizen of
Switzerland, and Hendrik A. Verfaillie, who is a citizen of Belgium, each such
person is a citizen of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Robert B. Shapiro (59)....................... Chairman and Chief Executive Officer of
Monsanto Company Monsanto Company since 1997. Director of
800 North Lindbergh Blvd. Monsanto Company since 1993. Chairman,
St. Louis, Missouri 63167 President and Chief Executive Officer of
Monsanto Company, from 1995 to 1997.
President and Chief Operating Officer of
Monsanto Company, from 1993 to 1995.
Executive Vice President and Advisory
Director, Monsanto Company and President, The
Agricultural Group, from 1990 to 1993.
Director of Citicorp, New York, New York, and
Silicon Graphics, Inc., Mountainview,
California.
Robert M. Heyssel (69)....................... Director of Monsanto Company since 1988.
The Johns Hopkins Health System and Consultant and President Emeritus of The
The Johns Hopkins Hospital Johns Hopkins Health System since 1992.
600 North Wolfe Street President and Chief Executive Officer of The
Baltimore, Maryland 21287 Johns Hopkins Health System and The Johns
Hopkins Hospital, from 1972 to 1992.
Michael Kantor (58).......................... Director of Monsanto Company since 1997.
Mayer, Brown & Platt Partner, Mayer, Brown & Platt, since 1997.
2000 Pennsylvania Avenue, N.W. United States Secretary of Commerce,
Washington, D.C. 20006 Department of Commerce, Constitution Avenue,
N.W., Washington, D.C. 20230, from 1996 to
1997. United States Trade Representative,
Executive Offices of the President, 600 17th
Street, N.W., Washington, D.C. 20508, from
1993 to 1996. National Chairman for the
Clinton/Gore Campaign in 1992. Partner,
Manatt, Phelps, Phillips and Kantor, from
1975 to 1992.
Gwendolyn S. King (55)....................... Director of Monsanto Company since 1993.
PECO Energy Company Senior Vice President, Corporate and Public
2301 Market Street Affairs, of PECO Energy Company from 1992 to
Philadelphia, Pennsylvania 19101-8699 1998. Commissioner, Social Security
Administration, from 1989 to 1992. Director
of Adwin Equipment Co., Lester, Pennsylvania;
Adwin Realty Co., Lester, Pennsylvania;
Eastern Pennsylvania Development Corp.,
Lester, Pennsylvania; and Lockheed Martin
Corp., Bethesda, Maryland.
</TABLE>
A-1
<PAGE> 47
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Philip Leder (63)............................ Director of Monsanto Company since 1990.
Harvard Medical School Senior Investigator, Howard Hughes Medical
200 Longwood Avenue Institute, 300 Longwood Avenue, Boston,
Boston, Massachusetts 02115 Massachusetts 02115, since 1986. Chairman,
Department of Genetics, and John Emory Andrus
Professor of Genetics, at Harvard Medical
School, since 1980. Director of Genome
Therapeutics Corporation, Waltham,
Massachusetts.
Jacobus F.M. Peters (66)..................... Director of Monsanto Company since 1993.
AEGON N.V. Retired Chairman of the Executive Board and
50 Mariahoeveplein, 2501 CE, Chief Executive Officer of AEGON N.V., from
The Hague, The Netherlands 1984 to 1993. Member of the Supervisory Board
of AEGON, N.V.; DAF Trucks, N.V.; IBM
International Centre for Asset Management
N.V.; and Randstad Holding N.V., all located
in The Netherlands.
Nicholas L. Reding (63)...................... Vice Chairman of the Board of Monsanto
Monsanto Company Company since 1993. Executive Vice President,
800 North Lindbergh Blvd. Environment, Safety, Health and
St. Louis, Missouri 63167 Manufacturing, of Monsanto Company, from 1990
to 1992. Advisory Director of Monsanto
Company, from 1986 to 1992. Director of CPI
Corp., St. Louis, Missouri; Meredith
Corporation, Des Moines, Iowa; Multifoods
Corporation, Minneapolis, Minnesota; and The
Keystone Center, Keystone, Colorado.
John S. Reed (58)............................ Director of Monsanto Company since 1985.
Citibank N.A. Chairman and Chief Executive Officer of
153 East 53rd Street Citicorp and Citibank, N.A. since 1984.
Citicorp Center, 23rd Floor Director of Phillip Morris Companies, Inc.,
New York, New York 10022 New York, New York and CitiCorp and Citibank,
N.A., New York, New York.
John E. Robson (67).......................... Director of Monsanto Company since 1996.
BancAmerica Robertson Stephens Senior Advisor, BancAmerica Robertson
555 California Street Stephens, since 1993. Distinguished Faculty
San Francisco, CA 94104 Fellow, Yale University School of Management,
and Visiting Fellow, The Heritage Foundation
in 1993. Deputy Secretary of the United
States Department of the Treasury, from 1989
to 1992. Dean, Emory University Business
School, from 1986 to 1989. President and
Chief Executive Officer, G.D. Searle & Co.,
from 1985 to 1986. Executive Vice President,
G.D. Searle & Co., from 1978 to 1985.
Director of Northrop Corp., Security Capital
Industrial Trust (REIT).
William D. Ruckelshaus (65).................. Director of Monsanto Company since 1985.
Browning-Ferris Industries, Inc. Chairman of Browning-Ferris Industries, Inc.,
757 North Eldridge, since 1995. Principal, Madrona Investment
Houston, Texas 77079 Group L.L.C., since 1996. Chairman and Chief
Executive Officer of Browning-Ferris
Industries, Inc., from 1988 to 1995. Director
of Cummins Engine Co., Inc., Columbus,
Indiana; Nordstrom, Inc., Seattle,
Washington; and Weyerhaeuser Company, Tacoma,
Washington.
</TABLE>
A-2
<PAGE> 48
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Richard U. De Schutter (57).................. Vice Chairman of Monsanto Company and
G.D. Searle & Co. Chairman, Chief Executive Officer and
5200 Old Orchard Road President of G.D. Searle & Co. since 1997.
Skokie, Illinois 60077 Chairman and Chief Executive Officer of G.D.
Searle & Co. and Advisory Director of
Monsanto Company from 1995 to 1997. President
and Chief Operating Officer of G.D. Searle &
Co., from 1993 to 1995. President, G.D.
Searle & Co., from 1991 to 1993. Chairman,
International Operations of G.D. Searle &
Co., from 1989 to 1991.
Arnold W. Donald (43)........................ Senior Vice President of Monsanto Company
Monsanto Company since 1998. President, Agricultural Sector of
800 North Lindbergh Blvd. Monsanto Company, from 1995 to 1998. Group
St. Louis, Missouri 63167 Vice President and General Manager of
Monsanto Company, from 1994 to 1995. Group
Vice President, North America Division of
Monsanto Company, from 1993 to 1994.
Steven L. Engelberg (55)..................... Senior Vice President of Monsanto Company
Monsanto Company since 1996. Vice President, Worldwide
700 14th Street, NW, Suite 1100 Government Affairs, of Monsanto Company, from
Washington, DC 20005 1994 to 1996. Partner in Charge of Keck,
Mahin & Cate Washington, D.C. office, 1201
New York Avenue, NW, Washington DC
20005-3919, from 1986 to 1993. Chief of Staff
of Office of the United States Trade
Representative, 600 17th Street, NW,
Washington, DC 20506, from January 1993 to
May 1993.
Patrick J. Fortune (50)...................... Vice President and Chief Information Officer
Monsanto Company of Monsanto Company since 1995. President and
800 North Lindbergh Blvd. Chief Operating Officer of Coram Health Care,
St. Louis, Missouri 63167 1125 Seventeenth Street, Suite 2100, Denver,
Colorado 80202, from 1994 to 1995. Corporate
Vice President, Information Management of
Bristol-Myers Squibb, 345 Park Avenue, New
York, N.Y. 10154, from 1991 to 1994.
Pierre Hochuli (50).......................... Executive Vice President of Monsanto Company
Monsanto Europe S. A. since 1997. Vice President of Monsanto
Avenue de Tervuren 270-272 Company and Chairman, Monsanto Europe-Africa,
P. O. Box 1 B-1150 from 1996 to 1997. Vice President of Monsanto
Brussels, Belgium Company and President, Growth Enterprises of
Monsanto Company, from 1995 to 1996. Vice
President, Corporate Planning, of Monsanto
Company, from 1993 to 1995. Group Vice
President and General Manager, New Products
Division, The Agricultural Group of Monsanto
Company in 1993. Vice President and General
Manager, New Products Division, The
Agricultural Group of Monsanto Company in
1992. Vice President, Finance and Planning,
The Agricultural Group of Monsanto Company in
1991. Regional Director, Europe/
Africa/Middle East of Monsanto Europe, S.A.,
from 1985 to 1991.
</TABLE>
A-3
<PAGE> 49
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Robert B. Hoffman (61)....................... Vice Chairman and Chief Financial Officer of
Monsanto Company Monsanto Company since 1997. Senior Vice
800 North Lindbergh Blvd. President and Chief Financial Officer and
St. Louis, Missouri 63167 Advisory Director of Monsanto Company, from
1994 to 1997. Vice President of FMC
Corporation, 200 East Randolph Drive,
Chicago, Illinois 60601, from 1990 to 1994.
Director of Harnishfeger Industries, Inc.,
Milwaukee, Wisconsin and all mutual funds of
The Kemper Group, Chicago, Illinois.
R. William Ide III (57)...................... Senior Vice President, General Counsel and
Monsanto Company Secretary of Monsanto Company since 1996.
800 North Lindbergh Blvd. Partner, Long, Aldridge & Norman, One
St. Louis, Missouri 63167 Peachtree Center, Suite 5300, 303 Peachtree
Street, N.E., Atlanta, GA 30308, from 1993 to
1996. President, American Bar Association,
750 North Lake Shore Drive, Chicago, IL
60611, from 1993 to 1994. Partner, Kutak
Rock, 225 Peachtree Street, N.E., Suite 2100,
Atlanta, GA 30303, from 1989 to 1993.
Donna A. Kindl (40).......................... Vice President, Human Resources of Monsanto
Monsanto Company Company since 1996. Director, Human Resources
800 North Lindbergh Blvd. of Monsanto Company, from 1993 to 1996.
St. Louis, Missouri 63167 Director of Human Resources Planning and
Development, Clorox Corporation, 1221
Broadway, Oakland, CA 94612 in 1990.
David L. Morley (41)......................... Senior Vice President of Monsanto Company
Monsanto Company since 1998. President, Nutrition and Consumer
800 North Lindbergh Blvd. Products of Monsanto Company, from 1997 to
St. Louis, Missouri 63167 1998. Group Vice President and General
Manager, Americas Division, Crop Protection
Business Unit of Monsanto Company from 1995
to 1997. Group Vice President and General
Manager, Global Strategies and Operations, of
The Agricultural Group of Monsanto Company,
from 1993 to 1995. Vice President, Finance
and Planning of The Agricultural Group of
Monsanto Company in 1992.
Philip Needleman (59)........................ Senior Vice President, Research and
Monsanto Company Development and Advisory Director, of
800 North Lindbergh Blvd. Monsanto Company and President, Searle
St. Louis, Missouri 63167 Research and Development, of G.D. Searle &
Co. since 1993. Vice President, Research and
Development, and Advisory Director, of
Monsanto Company and President, Research and
Development, of G.D. Searle & Co. in 1992.
Vice President, Research and Development, and
Advisory Director, of Monsanto Company, from
1991 to 1992. Vice President, Research and
Development, of Monsanto Company, from 1989
to 1991.
Robert W. Reynolds (54)...................... Vice Chairman of Monsanto Company, since
Monsanto Company 1997. Vice President, International
800 North Lindbergh Blvd. Operations and Development, of Monsanto
St. Louis, Missouri 63167 Company, from 1994 to 1997. Vice President
and Managing Director, Latin America World
Area, of Monsanto Company, from 1992 to 1994.
Vice President and General Manager, Crop
Protection Products Division, Monsanto
Agricultural Company, from 1990 to 1992.
</TABLE>
A-4
<PAGE> 50
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Hendrik A. Verfaillie (52)................... President of Monsanto Company since 1997.
Monsanto Company Executive Vice President and Advisory
800 North Lindbergh Blvd. Director of Monsanto Company from 1995 to
St. Louis, Missouri 63167 1997. Vice President and Advisory Director of
Monsanto Company and President, The
Agricultural Group of Monsanto Company, from
1993 to 1995. Vice President and General
Manager, Roundup Division, The Agricultural
Group, of Monsanto Company from 1990 to 1993.
</TABLE>
A-5
<PAGE> 51
CORN ACQUISITION CORPORATION
The following table sets forth the name, current business address, present
principal occupation or employment, and material occupations, positions, offices
or employments and business addresses thereof for the past five years of each
director and executive officer of Corn Acquisition Corporation. Each such person
is a citizen of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE, AND DURING PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Barbara Blackford (41)....................... President, Secretary, Treasurer and Director
Monsanto Company of Corn Acquisition Corporation. Associate
800 North Lindbergh Blvd. General Counsel, Corporate Governance and
St. Louis, Missouri 63167 Mergers & Acquisitions of Monsanto Company
from October 1997. Partner, Long Aldridge &
Norman, One Peachtree Center, Suite 5300, 303
Peachtree Street, N.E., Atlanta, G.A. 30308,
from 1992 to 1997.
Eric Fencl (35).............................. Vice President and Assistant Secretary of
Monsanto Company Corn Acquisition Company. Corporate Counsel,
800 North Lindbergh Blvd. Corporate Governance of Monsanto Company from
St. Louis, Missouri 63167 September 1997. Counsel of McDonnell Douglas
Corporation, Airport Road & McDonnell
Boulevard, St. Louis, Missouri 63134, from
1993 to 1996. Counsel and Assistant Secretary
of McDonnell Douglas Corporation from 1996 to
1997.
</TABLE>
A-6
<PAGE> 52
Facsimiles of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates evidencing
Shares and any other required documents should be sent or delivered by each
stockholder or such stockholder's broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges
P.O. Box 2569, Suite 4660-DGC Suite 4680-DGC c/o THE DEPOSITORY TRUST
Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor COMPANY
New York, NY 10005 55 Water Street, DTC TAD
Vietnam Veterans Memorial Plaza
New York, NY 10041
</TABLE>
By Facsimile Transmission:
(201) 222-4720
or
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Questions or requests for assistance may be directed to the Dealer Managers
or Information Agent at their respective addresses and telephone numbers listed
below. Additional copies of this Offer to Purchase, the Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Dealer Managers
or Information Agent. A stockholder may also contact brokers, dealers,
commercial banks or trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
(LOGO)
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect (212) 440-9800
CALL TOLL FREE 1-800-223-2064
The Dealer Managers for the Offer are:
<TABLE>
<S> <C>
BANCAMERICA ROBERTSON STEPHENS GOLDMAN, SACHS & CO.
555 California Street 85 Broad Street
San Francisco, California 94104 New York, New York 10004
(800) 288-7726 (800) 323-5678
</TABLE>
<PAGE> 1
Exhibit (A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK
OF
DEKALB GENETICS CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED MAY 15, 1998
BY
CORN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
MONSANTO COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges
P.O. Box 2569, Suite 4660-DGC Suite 4680-DGC c/o THE DEPOSITORY
Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor TRUST COMPANY
New York, NY 10005 55 Water Street, DTC TAD
Vietnam Veterans Memorial Plaza
New York, NY 10041
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING
THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates for Shares (as defined in the Offer to Purchase, dated May 15, 1998
(the "Offer to Purchase")) are to be forwarded herewith or, unless an Agent's
Message (as defined in the Offer to Purchase) is utilized, if tenders of Shares
are to be made by book-entry transfer to an account maintained by First Chicago
Trust Company of New York (the "Depositary") at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase. Stockholders who tender Shares by book-entry
transfer are referred to herein as "Book-Entry Stockholders."
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date (as defined in the Offer to Purchase) or who cannot complete
the procedures for book-entry transfer on a timely basis, must tender their
Shares according to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase. See Instruction 2.
<PAGE> 2
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
-----------------------------------------------------------------------------
Account Number:
------------------------------------------ Transaction Code Number:
------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
-----------------------------------------------------------------------------
Window Ticket Number (if any):
-------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-------------------------------------------------------------------
Name of Institution which Guaranteed Delivery:
------------------------------------------------------------------------
<PAGE> 3
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -----------------------------------------------------------------------------------------------------------------------------
NAMES(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR AND SHARE(S) TENDERED
ON SHARE CERTIFICATE(S) TENDERED) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED NUMBER
CLASS CERTIFICATE BY SHARE OF SHARES
(A OR B) NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
TOTAL SHARES
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated it will be assumed that all Shares represented by Share Certificates delivered
to the Depositary are being tendered. See Instruction 4.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Ladies and Gentlemen:
The undersigned hereby tenders to Corn Acquisition Corporation (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Monsanto
Company, a Delaware corporation ("Parent"), the above described shares of Class
A Common Stock, without par value, and Class B Common Stock, without par value
(collectively, the "Shares"), of DEKALB Genetics Corporation, a Delaware
corporation (the "Company"), pursuant to the Purchaser's offer to purchase all
outstanding Shares at a purchase price of $100 per Share, net to the seller in
cash, without interest thereon (as such price may be increased, the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer to
Purchase, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together with any amendments or supplements thereto
collectively constitute the "Offer"). The undersigned understands that the
Purchaser reserves the right, at any time, to assign to one or more corporations
directly or indirectly wholly-owned by Parent the right to purchase all or any
portion of the Shares tendered pursuant to the Offer, but any such assignment
will not relieve the Purchaser of its obligations under the Offer and will in no
way prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer. As used herein,
the term "Purchaser" shall, if applicable, include any such corporation.
<PAGE> 4
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered hereby in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby and any and all dividends on
the Shares (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities,
the issuance of rights for the purchase of any securities, or any cash dividends
that are declared or paid by the Company on or after the date of the Offer to
Purchase and are payable or distributable to stockholders of record on a date
prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares purchased
pursuant to the Offer (collectively, "Distributions"), other than regular cash
dividends that may be declared by the Company in the ordinary course, not in
excess of $0.035 per Share per quarter), and constitutes and irrevocably
appoints the Depositary the true and lawful agent, attorney-in-fact and proxy of
the undersigned to the full extent of the undersigned's rights with respect to
such Shares (and Distributions) with full power of substitution (such power of
attorney and proxy being deemed to be irrevocable and coupled with an interest),
to (a) deliver Share Certificates (and Distributions), or transfer ownership of
such Shares on the account books maintained by the Book-Entry Transfer Facility,
together in either such case with all accompanying evidences of transfer and
authenticity, to or upon the order of the Purchaser upon receipt by the
Depositary, as the undersigned's agent, of the purchase price, (b) present such
Shares (and Distributions) for transfer on the books of the Company and (c)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and Distributions), all in accordance with the terms of the
Offer.
The undersigned hereby irrevocably appoints designees of the Purchaser, and
each of them, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to vote in such manner as each such attorney and
proxy or his or her substitute shall, in his or her sole discretion, deem
proper, and otherwise act (including pursuant to written consent) with respect
to all of the Shares tendered hereby which have been accepted for payment by the
Purchaser prior to the time of such vote or action (and Distributions) which the
undersigned is entitled to vote at any meeting of stockholders of the Company
(whether annual or special and whether or not an adjourned meeting), or by
written consent in lieu of such meeting, or otherwise. This power of attorney
and proxy is coupled with an interest in the Shares and is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares by the Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall revoke, without further action, any other power of
attorney or proxy granted by the undersigned at any time with respect to such
Shares (and Distributions) and no subsequent powers of attorney or proxies will
be given (and if given will be deemed not to be effective) with respect thereto
by the undersigned. The undersigned understands that the Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares, the
Purchaser is able to exercise full voting rights with respect to such Shares
(and Distributions), to the extent that such Shares (or Distributions) have such
rights.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and Distributions), that the undersigned own(s) the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that such
tender of Shares complies with Rule 14e-4 under the Exchange Act and that when
the same are accepted for payment by the Purchaser, the Purchaser will acquire
good, marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and the same will not be subject to any
adverse claim. The undersigned, upon request, will execute and deliver any
additional documents deemed by the Depositary or the Purchaser to be necessary
or desirable to complete the sale, assignment and transfer of the Shares
tendered hereby (and Distributions). In addition, the undersigned shall promptly
remit and transfer to the Depositary for the account of the Purchaser any and
all other Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as owner of such Distributions and may withhold the entire purchase
price or deduct from the purchase price of Shares tendered hereby the amount or
value thereof, as determined by the Purchaser in its sole discretion.
<PAGE> 5
All authority herein conferred or herein agreed to be conferred shall not
be affected by, and shall survive, the death or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, tenders of Shares
pursuant to the Offer are irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates not tendered or accepted for payment (and accompanying
documents as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that both the "Special Delivery
Instructions" and the "Special Payment Instructions" are completed, please issue
the check for the purchase price and/or return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return such Share Certificates to, the person or persons so indicated.
The undersigned recognizes that the Purchaser has no obligation pursuant to the
"Special Payment Instructions" to transfer any Shares from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
<PAGE> 6
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not
purchased and/or the check for the purchase price of Shares purchased are
to be issued in the name of someone other than the undersigned.
Issue check and/or certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
============================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not
purchased and/or the check for the purchase price of Shares purchased are
to be sent to someone other than the undersigned, or to the undersigned at
an address other than that shown on the front cover.
Mail check and/or certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
------------------------------------------------------------
<PAGE> 7
IMPORTANT -- SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Dated:
- ---------------------------
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the necessary information.
See Instruction 5.)
Name(s) ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
----------------------------------------------------------------
Address-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
-----------------------------------------------------
Tax Identification or Social Security No.:
-------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
----------------------------------------------------------------
Name --------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm:
---------------------------------------------------------------------
Address:
-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
-----------------------------------------------------
Dated:
- ---------------------------
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of the Shares tendered
herewith, unless such holder(s) has completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on the
inside front cover hereof or (ii) if such Shares are tendered for the account of
a firm that is a bank, broker, dealer, credit union, savings association or
other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or by any other "Eligible Guarantor Institution" as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended (collectively, "Eligible Institutions"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in
Section 3 of the Offer to Purchase. Share Certificates, or timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at the Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a manually signed facsimile hereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message in
the case of a book-entry transfer, and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein prior to the expiration of the Offer. Stockholders
whose Share Certificates are not immediately available or who cannot deliver
their Share Certificates and all other required documents to the Depositary
prior to the expiration of the Offer or who cannot complete the procedures for
delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser,
must be received by the Depositary on or prior to the expiration of the Offer;
and (iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all
tendered Shares, in proper form for transfer, together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile hereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and all other documents required by this Letter of
Transmittal, must be received by the Depositary within three NYSE trading days
after the date of execution of such Notice of Guaranteed Delivery. A "NYSE
trading day" is any day on which The New York Stock Exchange, Inc. is open for
business. If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile hereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY A BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a manually signed facsimile hereof), waive any
right to receive any notice of the acceptance of their Shares for payment.
<PAGE> 9
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any certificate
submitted are to be tendered, fill in the number of Shares which are to be
tendered in the box entitled "Number of Shares Tendered." In such case, new
certificate(s) for the remainder of the Shares that were evidenced by your old
certificate(s) will be sent to you, unless otherwise provided in the appropriate
box marked "Special Payment Instructions" and/or "Special Delivery Instructions"
on this Letter of Transmittal, as soon as practicable after the expiration of
the Offer. All Shares represented by certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
other change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of
the Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or purchased are to be issued in the name
of a person other than the registered holder(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holder(s) appear(s) on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price received
by such person(s) pursuant to this Offer (i.e., such purchase price will be
reduced) unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates listed in this
Letter of Transmittal.
<PAGE> 10
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for unpurchased Shares are to be returned
to, a person other than the person(s) signing this Letter of Transmittal or if a
check is to be sent and/or such certificates are to be returned to someone other
than the person(s) signing this Letter of Transmittal or to an address other
than that shown on the front cover hereof, the appropriate boxes on this Letter
of Transmittal should be completed. Book-Entry Stockholders may request that
Shares not purchased be credited to such account maintained at the Book-Entry
Transfer Facility as such Book-Entry Stockholder may designate hereon. If no
such instructions are given, such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above. See
Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to either the Information Agent or the Dealer Managers at their
respective addresses and telephone numbers set forth below. Requests for
additional copies of the Offer to Purchase and this Letter of Transmittal, the
Notice of Guaranteed Delivery and other related materials may be directed to the
Information Agent or to brokers, dealers, commercial banks or trust companies
and other nominees.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty, and payments that are made to such
stockholder or other payee with respect to Shares purchased pursuant to the
Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, it must submit a Form W-8, signed under penalties of perjury,
attesting to that individual's exempt status. A Form W-8 can be obtained from
the Depositary. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing a Substitute Form W-9 certifying (i) that the TIN provided on
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and
(ii) that (a) such stockholder is exempt from backup withholding, (b) such
stockholder has not been notified by the Internal Revenue Service that such
stockholder is subject to backup withholding as a result of a failure to report
all interest or dividends or (c) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN but has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN of the record
holder of the Shares or of the last transferee appearing on the transfers
attached to, or endorsed on, the Shares. If the Shares are in more than one name
or are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
<PAGE> 11
10. LOST, DESTROYED, MUTILATED, OR STOLEN CERTIFICATES. If any
certificate(s) representing Shares has been lost, destroyed, mutilated, or
stolen, the stockholder should promptly notify the Depositary. The stockholder
will then be instructed as to the steps that must be taken in order to replace
the certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, mutilated, or destroyed
certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF) OR AN AGENT'S
MESSAGE, TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER
OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND ALL
OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION OF THE OFFER.
<PAGE> 12
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C>
PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- Please provide your name, address
FORM W-9 and TIN and certify by signing and dating PART 3 -- Social Security Number
DEPARTMENT OF THE TREASURY below or Employer ID Number
INTERNAL REVENUE SERVICE
Name: ----------------------------------
-------------------------------------------- Awaiting TIN [ ]
Address:
--------------------------------------------
--------------------------------------------
------------------------------------------------------------------------------------
PART 2 -- CERTIFICATIONS -- Under penalties of perjury, I certify that:
PAYER'S REQUEST FOR (1) The number shown on this form is my correct Taxpayer Identification Number (or
TAXPAYER IDENTIFICATION I am waiting for a number to be issued to me and have checked the box in Part 3)
NUMBER ("TIN") and
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, (b) I have not been notified by the
Internal Revenue Service (the "IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup withholding.
- -----------------------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) of Part II above if you have been notified by the IRS that
you are currently subject to backup withholding because of underreporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were subject to backup withholding you received another
notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2).
- -----------------------------------------------------------------------------------------------------------------------
Signature Date ----------------------------
- -----------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS. YOU MUST COMPLETE
THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE
FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Center or Social Security Administration Office, or (2) I
intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld.
<TABLE>
<S> <C>
- ----------------------------------------------- -----------------------------------------------
Signature Date
</TABLE>
<PAGE> 13
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, Share Certificates and
any other required documents should be sent or delivered by each stockholder of
the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges
P.O. Box 2569, Suite 4660-DGC Suite 4680-DGC c/o THE DEPOSITORY TRUST
Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor COMPANY
New York, NY 10005 55 Water Street, DTC TAD
Vietnam Veterans Memorial
Plaza
New York, NY 10041
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
listed below. Requests for additional copies of the Offer to Purchase and the
Letter of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be directed to the Information Agent as set forth below, and will
be furnished promptly at the Purchaser's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
(LOGO)
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
ALL OTHERS CALL TOLL-FREE: (800) 223-2064
The Dealer Managers for the Offer are:
<TABLE>
<S> <C>
BANCAMERICA ROBERTSON STEPHENS GOLDMAN, SACHS & CO.
555 California Street 85 Broad Street
San Francisco, California 94104 New York, New York 10004
(800) 288-7726 (800) 323-5678
</TABLE>
<PAGE> 1
Exhibit (A)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
AND CLASS B COMMON STOCK
OF
DEKALB GENETICS CORPORATION
AT
$100 NET PER SHARE
BY
CORN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
MONSANTO COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED.
May 15, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Corn Acquisition Corporation, a Delaware
corporation (the "Purchaser"), and Monsanto Company, a Delaware corporation
("Parent"), to act as Information Agent in connection with the Purchaser's offer
to purchase all outstanding shares of Class A Common Stock, without par value,
and Class B Common Stock, without par value (collectively, the "Shares"), of
DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a
purchase price of $100 per Share, net to the seller in cash, without interest
thereon (as such price may be increased, the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated May 15, 1998
(the "Offer to Purchase"), and in the related Letter of Transmittal (which
together with any amendments or supplements thereto collectively constitute the
"Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
The Offer is conditioned upon there having been validly tendered and not
withdrawn prior to the expiration of the Offer such number of Shares of Class A
Common Stock that (together with the Shares of Class A Common Stock then held by
Parent or any of its Subsidiaries) would constitute a majority of the Shares of
Class A Common Stock (assuming the exercise of all options to purchase, and the
conversion or exchange of all securities convertible or exchangeable into,
Shares of Class A Common Stock) outstanding at the expiration date of the Offer
and the expiration or termination prior to the expiration of the Offer of any
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, applicable to the purchase of Shares pursuant to the Offer. The
Offer is also subject to certain other terms and conditions as set forth in the
Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer
to Purchase.
As described in the Offer to Purchase, if Shares are not accepted for
purchase pursuant to the Offer on or prior to May 9, 1999, the Offer Price will
be increased by $0.50 per Share on May 10, 1999 and on the tenth day of each
subsequent month until Shares are so accepted, unless the Offer is earlier
terminated.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated May 15, 1998.
2. The Letter of Transmittal for your use to tender Shares and for
the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares.
3. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
<PAGE> 2
4. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if certificates for Shares ("Share Certificates") and all other
required documents are not immediately available or cannot be delivered to
First Chicago Trust Company of New York (the "Depositary") by the
Expiration Date (as defined in the Offer to Purchase) or if the procedure
for book-entry transfer cannot be completed by the Expiration Date.
5. A letter to stockholders from the Chairman of the Board and Chief
Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS
EXTENDED.
In order to accept the Offer, a properly completed and duly executed Letter
of Transmittal (or manually signed facsimile thereof), with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer, and any other documents
required by the Letter of Transmittal should be sent to the Depositary and
either Share Certificates representing the tendered Shares should be delivered
to the Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at the Book Entry Transfer Facility (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents prior to the
expiration of the Offer or to comply with the book-entry transfer procedures on
a timely basis, a tender may be effected by following the guaranteed delivery
procedures specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Managers and the Information Agent, as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. The Purchaser will, however, upon request, reimburse you for
customary clerical and mailing expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Purchaser will pay or cause to be paid
any stock transfer taxes payable on the transfer of Shares to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
listed on the back cover of the Offer to Purchase. Requests for additional
copies of the Offer to Purchase and the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be directed to the
Information Agent.
Very truly yours,
GEORGESON & COMPANY INC.
as Information Agent
Wall Street Plaza
New York, New York 10005
(212) 440-9800
(Call Collect)
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE
DEPOSITARY, THE DEALER MANAGERS OR THE INFORMATION AGENT, OR ANY AFFILIATE OF
ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE
ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
Exhibit (A)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
AND CLASS B COMMON STOCK
OF
DEKALB GENETICS CORPORATION
AT
$100 NET PER SHARE
BY
CORN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
MONSANTO COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED.
May 15, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 15,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together with any amendments or supplements thereto collectively constitute the
"Offer") relating to the offer by Corn Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Monsanto Company,
a Delaware corporation ("Parent"), to purchase all outstanding shares of Class A
Common Stock, without par value, and Class B Common Stock, without par value
(collectively, the "Shares"), of DEKALB Genetics Corporation, a Delaware
corporation (the "Company"), at a purchase price of $100 per Share, net to the
seller in cash, without interest thereon (as such price may be increased, the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase and in the related Letter of Transmittal enclosed herewith.
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available, or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
expiration of the Offer or who cannot complete the procedures for delivery by
book-entry transfer on a timely basis must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer. Please note the following:
1. The tender price is $100 per Share, net to you in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer. As described in the Offer to Purchase, if Shares are not
accepted for Purchase pursuant to the Offer on or prior to May 9, 1999, the
Offer Price will be increased by $0.50 per Share on May 10, 1999 and on the
tenth day of each subsequent month until Shares are so accepted, unless
earlier terminated.
2. The Offer is being made for all outstanding Shares.
<PAGE> 2
3. The Offer is conditioned upon there having been validly tendered
and not withdrawn prior to the expiration of the Offer such number of
Shares of Class A Common Stock that (together with the Shares of Class A
Common Stock then held by Parent or any of its subsidiaries) would
constitute a majority of the Shares of Class A Common Stock (assuming the
exercise of all options to purchase, and the conversion or exchange of all
securities convertible or exchangeable into, shares of Class A Common
Stock) outstanding at the expiration date of the Offer and the expiration
or termination prior to the expiration of the Offer of any waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
applicable to purchase of Shares pursuant to the Offer. The Offer is also
subject to certain other terms and conditions as set forth in the Offer to
Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to
Purchase.
4. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by
the Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, June 12, 1998, unless extended.
6. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by First Chicago Trust Company of
New York (the "Depositary") of (i) Share Certificates or timely
confirmation of the book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry
Transfer Facility"), pursuant to the procedures set forth in Section 3 of
the Offer to Purchase, (ii) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry transfer, and (iii) any
other documents required by the Letter of Transmittal. Accordingly, payment
might not be made to all tendering stockholders at the same time, and will
depend upon when Share Certificates or confirmations of book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer
Facility are actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer. The Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Shares held by us for your
account.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any such jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by the Dealer Managers or one or more other registered
brokers or dealers that are licensed under the laws of such jurisdiction.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
AND CLASS B COMMON STOCK
OF
DEKALB GENETICS CORPORATION
BY
CORN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
MONSANTO COMPANY
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase, dated May 15, 1998 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together with any amendments or supplements thereto
collectively constitute the "Offer") relating to the offer by Corn Acquisition
Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned
subsidiary of Monsanto Company, a Delaware corporation, to purchase all
outstanding shares of Class A Common Stock, without par value, and Class B
Common Stock, without par value (collectively, the "Shares"), of DEKALB Genetics
Corporation, a Delaware corporation, at a purchase price of $100 per Share, net
to the seller in cash, without interest thereon (as such price may be increased
as described in the Offer to Purchase), upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: Shares of Class A Common Stock*
--------------
Shares of Class B Common Stock*
--------------
- --------------------------------------------------------------------------------
SIGN BELOW
Account
Number: Signature(s)
--------------------------- ---------------------------
Dated:
---------------------------------
- --------------------------------------------------------------------------------
PLEASE TYPE OR PRINT NAME(S)
- --------------------------------------------------------------------------------
PLEASE TYPE OR PRINT ADDRESS(ES) HERE
- --------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
- --------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER(S)
* Unless otherwise indicated, it will be assumed that you instruct us to tender
all Shares held by us for your account.
<PAGE> 1
Exhibit (A)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF CLASS A COMMON STOCK
AND CLASS B COMMON STOCK
OF
DEKALB GENETICS CORPORATION
TO
CORN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
MONSANTO COMPANY
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
As set forth in Section 3 of the Offer to Purchase, dated May 15, 1998 (the
"Offer to Purchase"), this Notice of Guaranteed Delivery or one substantially
equivalent hereto must be used to accept the Offer (as defined below) if
certificates ("Share Certificates") representing shares of Class A Common Stock,
without par value, or Class B Common Stock, without par value (collectively, the
"Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the
"Company"), are not immediately available, if time will not permit all required
documents to reach First Chicago Trust Company of New York (the "Depositary") on
or prior to the expiration of the Offer (as defined in the Offer to Purchase),
or if the procedures for delivery by book-entry transfer cannot be completed on
a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
sent by facsimile transmission or mail to the Depositary.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges
P.O. Box 2569, Suite 4660-UTP Suite 4680-UTP c/o THE DEPOSITORY
Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor TRUST COMPANY
New York, NY 10005 55 Water Street, DTC TAD
Vietnam Veterans Memorial Plaza
New York, NY 10041
</TABLE>
By Facsimile Transmission:
(201) 222-4720
or
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of instructions via a facsimile transmission to
a number other than as set forth above will not constitute a valid delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto (see
Instructions 1 and 5 of the Letter of Transmittal), such signature guarantee
must appear in the applicable space provided in the signature box on the Letter
of Transmittal.
<PAGE> 2
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------
Ladies and Gentlemen:
The undersigned hereby tenders to Corn Acquisition Corporation, a Delaware corporation (the "Purchaser")
and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 15, 1998 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together with any amendments or supplements thereto collectively constitute the
"Offer"), receipt of each of which is hereby acknowledged, the number of Shares indicated below pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
- -----------------------------------------------------------------------------------------------------------------
Number of Shares of Class A Common Stock Name(s) of Record Holder(s):
--------------------------------------------- ---------------------------------------------------
---------------------------------------------------
Number of Shares of Class B Common Stock PLEASE PRINT
---------------------------------------------
Address(es):------------------------------------
Certificate Nos. (if available) ---------------------------------------------------
INCLUDE ZIP CODE
- -----------------------------------------------------
Area Code and Tel. No.: -----------------------
Check box if Shares will be tendered by book-entry
transfer: Signature(s): -----------------------------------
---------------------------------------------------
[ ] The Depository Trust Company ---------------------------------------------------
Dated:
Account Number: --------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of the Securities Transfer Agents Medallion Program, hereby guarantees to
deliver to the Depositary at one of its addresses set forth above either the certificates representing all
tendered Shares, in proper form for transfer, a Book-Entry Confirmation (as defined in the Offer to Purchase),
together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), with any required signature guarantees, or, in the case of book-entry transfer of Shares, an Agent's
Message (as defined in the Offer to Purchase), and all other documents required by the Letter of Transmittal,
all within three NYSE trading days after the date of execution of this Notice of Guaranteed Delivery. A "NYSE
trading day" is any day on which The New York Stock Exchange, Inc. is open for business.
- -----------------------------------------------------------------------------------------------------------------
---------------------------------------------------
Name of Firm ------------------------------------ AUTHORIZED SIGNATURE
Address------------------------------------------- Name:------------------------------------------
PLEASE PRINT
- -----------------------------------------------------
INCLUDE ZIP CODE Title:--------------------------------------------
Area Code and Tel. No.: ------------------------- Date:
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
Exhibit (A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e., 00-0000000. The table below will help
determine the number to give the payor.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: TAXPAYER
IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent
incompetent minor or incompetent person(3)
person
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under state law
8. Sole proprietorship account The owner(4)
============================================================
GIVE THE TAXPAYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
9. A valid trust, estate or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your social security number or your employer identification
number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisers Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under Sections 6041 and 6041A of the Internal Revenue Code of 1986, as amended
(the "Code") are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except a corporation that provides medical
and health care services or bills and collects payments for such services is not
exempt from backup withholding or information reporting. Only payees described
in items (2) through (6) are exempt from backup withholding for barter exchange
transactions, patronage dividends and payments by certain fishing boat
operators.
(1) A corporation.
(2) An organization exempt from tax under Section 501(a) of the Code, an IRA
or a custodial account under Section 403(b)(7) of the Code.
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under Section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc. Nominee List.
(15) A trust exempt from tax under Section 664 or described in Section 4947 of
the Code.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under Section 1441 of
the Code.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payor's trade or business and you have not provided
your correct taxpayer identification number to the payor.
- Payments of tax-exempt interest (including exempt-interest dividends under
Section 852 of the Code).
- Payments described in Section 6049(b)(5) of the Code to non-resident aliens.
- Payments on tax-free covenant bonds under Section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
- Payments made to an appropriate nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYOR. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYOR A COMPLETED
INTERNAL REVENUE SERVICE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, 6050A and 6050N of
the Code and the regulations promulgated thereunder.
PRIVACY ACT NOTICE.--Section 6109 of the Code requires most recipients of
dividend, interest or other payments to give taxpayer identification numbers to
payors who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payors must be given the numbers whether or not
recipients are required to file tax returns. Payors must generally withhold 31%
of taxable interest, dividend and certain other payments to a payee who does not
furnish a taxpayer identification number to a payor. Certain penalties may
apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payor, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE IRS.
<PAGE> 1
Exhibit (a)(7)
Immediately
Scarlett L. Foster (314-694-2883) [email protected]
MONSANTO ACQUIRES TWO SEED COMPANIES TO BROADEN
AVAILABILITY OF AGRICULTURAL BIOTECHNOLOGY
ST. LOUIS, May 11, 1998 - Monsanto Company announced today that it has
reached agreements to acquire two seed companies - DEKALB Genetics Corporation,
headquartered in DeKalb, Illinois, and Delta & Pine Land Company, based in
Scott, Mississippi. These companies will play an important role in Monsanto's
life sciences strategy, which is designed to enhance the sustainable production
of food and feed and create new possibilities for better nutrition and health by
linking Monsanto's expertise in agriculture, food and pharmaceuticals.
These acquisitions will broaden the availability of agronomic traits -
the first wave of traits developed through biotechnology - and give more
farmers around the world access to the yield and productivity benefits of crops
enhanced through this technology. They also pave the way for the rapid
introduction of the second wave of biotechnology traits, which improve the
composition of fibers, the nutritional composition of food and feed, and offer
food processors new tools to enhance the value of grains and oil seed crops.
"As we have implemented our life sciences strategy in the last three
years, we have created a network of alliances to provide the depth and breadth
necessary to rapidly develop and commercialize new technologies and to create
new markets for the products of this research," said Monsanto Chairman and
Chief Executive Officer Robert B. Shapiro. "The acquisitions of DEKALB and
Delta & Pine Land provide both technology and global reach
- more -
<PAGE> 2
- 2 -
by creating broader seed platforms that enable us to better connect our traits
to the needs of growers and processors, and allow us to more quickly anticipate
new markets or marketplace trends."
DEKALB is a global leader in agricultural genetics and a top hybrid
seed corn company in the United States. It also has a strong presence in Latin
America, plus seed interests in Europe and Southeast Asia. DEKALB currently
offers its customers Monsanto traits for YieldGard insect-protected corn and
Roundup Ready herbicide-tolerant corn.
Delta & Pine Land is leading breeder, producer and marketer of cotton
seed. It currently sells Monsanto's Bollgard and Ingard insect-protected cotton
in the United States, Mexico, Australia and China, and Roundup Ready cotton in
the United States. Delta & Pine Land's international experience in
commercializing crops developed through biotechnology has allowed it to quickly
bring these new seeds to global markets. Regulatory approvals are pending to
see Bollgard in Argentina and South Africa.
"Monsanto has worked closely with DEKALB and Delta & Pine Land for a
number of years to research new products and bring the economic and
environmental benefits of agricultural biotechnology to growers worldwide,"
Shapiro added. "These acquisitions focus and accelerate those efforts. The
employees of both companies will play an important role in implementing our
life sciences strategy and creating value for growers, processors, and,
ultimately, consumers."
Under terms of the agreement with DEKALB, a Monsanto subsidiary set
up specifically for this transaction will make a tender offer to acquire all of
the common stock of DEKALB for $100 per share. This offer will be followed by a
merger in which any remaining stock of DEKALB will be exchanged for cash at the
same price per share paid in the tender offer. If the tender offer is not
completed by May 9, 1999, the offer price will increase by 50 cents per share
on the 10th day of each month, starting on May 10, 1999. Because Monsanto
already holds approximately 45 percent of DEKALB's shares, the weighted average
price per share of the acquisition is $67.41, or a total cost to Monsanto of
approximately $2.5 billion.
- more -
<PAGE> 3
- 3 -
The DEKALB tender offer is conditional on the receipt of the majority
of the voting common stock of DEKALB, as well as other customary conditions.
Trusts for the benefit of the Roberts family, which owns a majority of DEKALB's
voting common stock, have agreed to tender their shares in the offer.
Under a separate agreement, Delta & Pine Land will merge into
Monsanto, subject to the approval of Delta & Pine Land's shareowners. Its
shareowners would be entitled to receive 0.8625 shares of Monsanto's common
stock in exchange for each share of Delta & Pine Land stock they hold. Monsanto
currently owns 4.7 percent of Delta & Pine Land's common shares and 800,000
shares of nonvoting preferred stock. The exchange ratio may be adjusted if
Monsanto's average stock price rises or falls by more than 25 percent during
the period from signing until either Delta & Pine Land shareowners meet to act
on the merger or 90 days pass from the time of the signing, whichever comes
first.
The acquisitions will be closed as soon as practical.
PRODUCT BACKGROUND
__________________
In 1998, Monsanto's technology is expected to be used on
approximately 50 million acres worldwide. Approximately 30 million acres are
expected to be planted with Roundup Ready soybeans, 2 million with Roundup
Ready canola and 50,000 with NewLeaf insect-protected potatoes.
Corn acreage in 1998 is projected to include more than 10 million
acres planted in YieldGard corn and 750,000 acres planted in Roundup Ready
corn. This acreage is more than triple the 3 million acres planted in 1997, the
introductory year for YieldGard.
For cotton this year, U.S. growers are purchasing Bollgard and
Roundup Ready cotton in varieties produced by Delta & Pine Land, and Bollgard
cotton in varieties by Stoneville Pedigreed Seed Co., a Monsanto subsidiary.
Global acreage of Bollgard and Roundup Ready cotton is expected to increase to
more than 5 million from 3 million in 1997.
- more -
<PAGE> 4
- 4 -
As a life sciences company, Monsanto is committed to finding
solutions to the growing global needs for food and health by sharing common
forms of science and technology among agriculture, nutrition and health. The
company's 21,900 employees worldwide make and market high-value agricultural
products, pharmaceuticals and food ingredients.
-oOo-
Note to editors: YieldGard, Roundup Ready, Bollgard, Ingard and NewLeaf are
trademarks or Monsanto Company and its subsidiaries.
<PAGE> 1
EXHIBIT (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated May 15,
1998, and the related Letter of Transmittal, and is being made to all holders of
Shares. The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Corn Acquisition Corporation by BancAmerica
Robertson Stephens or Goldman, Sachs & Co. (the "Dealer Managers") or one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Class A Common Stock
and Class B Common Stock
of DEKALB Genetics Corporation
at $100 Net Per Share
by
Corn Acquisition Corporation
a wholly-owned subsidiary of
Monsanto Company
Corn Acquisition Corporation (the "Purchaser"), a Delaware corporation
and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of Class A Common
Stock, without par value (the "Class A Common Stock") and all outstanding shares
of Class B Common Stock, without par value (the "Class B Common Stock" and,
together with the Class A Common Stock, the "Shares"), of DEKALB Genetics
Corporation, a Delaware corporation (the "Company"), at a purchase price of $100
per Share, net to the seller in cash, without interest thereon (as such price
may be increased, the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 15, 1998 (the "Offer to
Purchase") and in the related Letter of Transmittal (which together with any
amendments or supplements thereto, collectively constitute the "Offer"). If
Shares are not accepted for purchase pursuant to the Offer on or prior to May 9,
1999, the Offer Price will be increased by $0.50 per Share on May 10, 1999 and
on the tenth day of each subsequent month until Shares are so accepted, unless
the Offer is earlier terminated.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT NEW YORK CITY
TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED.
The Board of Directors of the Company unanimously (without the participation of
the two directors nominated by Parent) has determined that the Offer and the
Merger are fair to and in the best interests of the Company and its
stockholders, has approved the Offer, the Merger Agreement and the Merger and
recommends that the Company's stockholders accept the Offer and tender their
Shares pursuant to the Offer.
The Offer is being made pursuant to the terms of an Agreement and Plan of
Merger, dated as of May 8, 1998 (the "Merger Agreement"), among Parent, the
Purchaser and the Company, pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser will
be merged with and into the Company (the "Merger"), with the Company continuing
as the surviving corporation. As of the effective time of the Merger, each
issued and outstanding Share (other than Shares owned by the Company or by any
Subsidiary (as defined in the Merger Agreement) of the Company, or by Parent,
the Purchaser, or any other Subsidiary of Parent, which Shares will be canceled
with no consideration delivered in exchange therefor, and other than Shares, if
any, held by stockholders who are entitled to and who properly exercise
appraisal rights under Delaware law) will, by virtue of the Merger and without
any action by the holder thereof, be converted into the right to receive from
the surviving corporation in cash the price per Share paid in the Offer, payable
to the holder thereof,
<PAGE> 2
without interest or dividends thereon, upon surrender of the certificate
formerly representing such Share.
The Offer is conditioned upon there having been validly tendered and not
withdrawn prior to the expiration of the Offer such number of Shares of Class A
Common Stock that (together with the Shares of Class A Common Stock then held by
Parent or any of its Subsidiaries) would constitute a majority of the Shares of
Class A Common Stock (assuming the exercise of all options to purchase, and the
conversion or exchange of all securities convertible or exchangeable into,
Shares of Class A Common Stock) outstanding at the expiration date of the Offer
and the expiration or termination prior to the expiration of the Offer of any
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, applicable to the purchase of Shares pursuant to the Offer. The
Offer is also subject to certain other terms and conditions as set forth in the
Offer to Purchase. The Offer will expire at 12:00 midnight, New York City time,
on Friday, June 12, 1998, unless extended.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment and thereby purchased Shares validly tendered and not withdrawn if, as
and when the Purchaser gives oral or written notice to the Depositary (as
defined in the Offer to Purchase) of its acceptance for payment of such Shares
pursuant to the Offer.
In all cases, upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for purposes of receiving payments from the Purchaser and
transmitting such payments to the tendering stockholders. Although the Offer
Price may be increased as described herein, no interest will be paid by the
Purchaser on the Offer Price of the Shares to be paid by the Purchaser,
regardless of any delay in making such payment. In all cases, payment for Shares
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for such Shares (or a timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 3 of the Offer to Purchase), a
properly completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof), together with any required signature guarantees (or in the
case of a book-entry transfer, an Agent's Message (as defined in the Offer to
Purchase)) and any other documents required by the Letter of Transmittal.
The Offer may be extended by the Purchaser by giving oral or written notice of
such extension to the Depositary. The Merger Agreement provides that the
Purchaser may, without the consent of the Company, (i) extend the Offer, if at
the scheduled or extended Expiration Date (as defined below) any of the
conditions to the Offer set forth under Section 14 of the Offer to Purchase (the
"Offer Conditions") have not been satisfied or waived, until such time as such
conditions are satisfied or waived, (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the Securities
and Exchange Commission or the staff thereof applicable to the Offer and (iii)
on one or more occasions, extend the Offer for a period of up to an aggregate of
15 business days if, on a scheduled Expiration Date on which the Offer
Conditions have been satisfied or waived, the number of Shares of Class A Common
Stock (together with any Shares of Class A Common Stock held by Parent or any of
its Subsidiaries) that have been validly tendered and not withdrawn represent
more than 70% of the then issued and outstanding Shares of Class A Common Stock,
but less than 90% of the then issued and outstanding Shares of Class A Common
Stock, and the number of Shares of Class B Common Stock (together with any
Shares of Class B Common Stock held by Parent or any of its Subsidiaries) that
have been validly tendered and not withdrawn represent more than 70% of the then
issued and outstanding Shares of Class B Common Stock, but less than 90% of the
then issued and outstanding Shares of Class B Common Stock. The Purchaser may
not terminate the Offer between scheduled Expiration Dates (except in the event
that the Merger Agreement is terminated), and, in the event that the Purchaser
would otherwise be entitled to terminate the Offer at any scheduled Expiration
Date due to the
<PAGE> 3
failure of one or more of the Offer Conditions, unless the Merger Agreement has
been terminated, the Purchaser is required to extend the Offer until such date
as the Offer Conditions have been satisfied or such later date as required by
applicable law; provided, however, that the Purchaser is not required to extend
the Offer beyond November 9, 1999. During any extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer and subject to the
right of a tendering stockholder to withdraw such stockholder's Shares. Subject
to the applicable regulations of the Securities and Exchange Commission, and to
the provisions of the Merger Agreement, the Purchaser expressly reserves the
right to delay acceptance for payment of or payment for any Shares, to extend
the Offer, or to terminate the Offer and not to accept for payment or pay for
any Shares not theretofore accepted for payment or paid for upon the occurrence
of certain conditions specified in Section 14 of the Offer to Purchase, and at
any time or from time to time, to amend the Offer or to waive any conditions to
the Offer in any respect consistent with the provisions of the Merger Agreement
as such provisions may be amended from time to time, in each case by giving oral
or written notice of such delay, extension, termination, amendment or waiver to
the Depositary. Any such delay, extension, termination, amendment or waiver will
be followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date.
Except as otherwise stated in the Offer to Purchase, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time on or prior to 12:00 midnight, New York City time, or
such other time as the Purchaser may announce in connection with any extension
of the Offer, on the Expiration Date and, unless theretofore accepted for
payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after July 13, 1998. The term "Expiration Date" means Friday, June 12,
1998, unless and until the Purchaser shall, as described in the Offer to
Purchase, have extended the period of time for which the Offer is open, in which
event the term "Expiration Date" will mean the latest date on which the Offer,
as so extended by the Purchaser, will expire. To be effective, a written or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any notice of withdrawal must specify the name of the tendering
stockholder, the number of Shares to be withdrawn and (if certificates for
Shares have been tendered) the names in which the certificate(s) evidencing the
Shares to be withdrawn are registered, if different from that of the tendering
stockholder. If the certificate(s) have been delivered to the Depositary, then,
prior to the physical release of such certificate(s), the tendering stockholder
must submit the serial numbers shown on the particular certificate(s) evidencing
the Shares to be withdrawn and the signature(s) on the notice of withdrawal must
be guaranteed by a firm which is a member of the Securities Transfer Agents
Medallion Program or by any other "Eligible Guarantor Institution" as such term
is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (collectively, "Eligible Institutions"), unless such Shares
have been tendered for the account of any Eligible Institution. If Shares have
been tendered pursuant to the procedures for book-entry tender as set forth in
Section 3 of the Offer to Purchase, any notice of withdrawal must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares, in which case a notice of withdrawal will be
effective if delivered to the Depositary by any method of delivery described in
this paragraph. All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination shall be final and binding. Withdrawals of
Shares may not be rescinded. Any Shares properly withdrawn will thereafter be
deemed not validly tendered for any purposes of the Offer, but withdrawn Shares
may be retendered at any subsequent time by again following one of the
procedures for tendering described in Section 3 of the Offer to Purchase at any
time prior to the Expiration Date.
<PAGE> 4
The information required to be disclosed pursuant to Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Exchange Act, is contained in the
Offer to Purchase, and is incorporated herein by reference.
The Company is providing the Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares in accordance with Exchange Act Rule 14d-5(c). The Offer to Purchase
and the related Letter of Transmittal and, if required, other relevant materials
will be mailed by the Purchaser to record holders of Shares and will be
furnished by the Purchaser to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares when such lists or listings are
received.
The Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Managers at their respective addresses and telephone numbers
listed below or as set forth on the back cover of the Offer to Purchase.
Requests for additional copies of the Offer to Purchase and the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be directed to the Information Agent or to brokers, dealers, commercial banks or
trust companies and other nominees. Neither Parent nor the Purchaser will pay
any fees or commissions to any broker, dealer or other person (other than the
Dealer Managers and the Information Agent) for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
[Georgeson Logo]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: 1-800-223-2064
The Dealer Managers for the Offer are:
BancAmerica Robertson Stephens Goldman, Sachs & Co.
555 California Street 85 Broad St
San Francisco, California 94104 New York, New York 10004
(800) 288-7726 (800) 323-5678
May 15, 1998
<PAGE> 1
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 8, 1998
AMONG
MONSANTO COMPANY,
CORN ACQUISITION CORPORATION
AND
DEKALB GENETICS CORPORATION
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I - THE OFFER.......................................................2
Section 1.1 The Offer.............................................2
Section 1.2 Company Actions.......................................3
Section 1.3 Investment Agreement..................................5
Section 1.4 Adjustment to Offer Price.............................5
ARTICLE II - THE MERGER.....................................................5
Section 2.1 The Merger............................................5
Section 2.2 Closing...............................................5
Section 2.3 Effective Time........................................5
Section 2.4 Effects of the Merger.................................5
Section 2.5 Restated Certificate of Incorporation
and By-laws; Officers and Directors...................5
ARTICLE III - EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT
CORPORATIONS; SURRENDER OF CERTIFICATES.......................6
Section 3.1 Effect on Stock.......................................6
Section 3.2 Surrender of Certificates.............................7
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................8
Section 4.1 Organization..........................................8
Section 4.2 Subsidiaries..........................................9
Section 4.3 Capital Structure.....................................9
Section 4.4 Authority............................................10
Section 4.5 Consents and Approvals; No Violations................10
Section 4.6 SEC Documents and Other Reports......................11
Section 4.7 Absence of Material Adverse Change...................11
Section 4.8 Information Supplied.................................12
Section 4.9 Compliance with Laws.................................12
Section 4.10 Tax Matters.........................................13
Section 4.11 Liabilities.........................................13
Section 4.12 Benefit Plans; Employees and Employment
Practices...........................................13
Section 4.13 Litigation..........................................16
Section 4.14 Environmental Matters...............................16
Section 4.15 Charter Provisions..................................17
Section 4.16 Intellectual Property...............................17
Section 4.17 Brokers.............................................18
Section 4.18 Contracts; Indebtedness.............................18
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB...............19
Section 5.1 Organization.........................................19
Section 5.2 Authority............................................19
Section 5.3 Consents and Approvals; No Violations................19
Section 5.4 Information Supplied.................................20
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<PAGE> 3
Section 5.5 Interim Operations of Sub............................20
Section 5.6 Brokers..............................................20
Section 5.7 Financing............................................20
ARTICLE VI - COVENANTS RELATING TO CONDUCT OF BUSINESS.....................20
Section 6.1 Conduct of Business by the Company
Pending the Merger...................................20
Section 6.2 No Solicitation......................................24
Section 6.3 Third Party Standstill Agreements....................25
Section 6.4 Disclosure to Parent; Delivery of
Certain Filings......................................25
ARTICLE VII - ADDITIONAL AGREEMENTS........................................25
Section 7.1 Employee Benefits....................................25
Section 7.2 Severance Policy and Other Agreements................27
Section 7.3 Bonus Programs.......................................27
Section 7.4 Welfare Plans........................................28
Section 7.5 Retirement Plan......................................29
Section 7.6 Options; Restricted Stock Awards.....................29
Section 7.7 Stockholder Approval; Preparation of
Proxy Statement......................................29
Section 7.8 Access to Information................................30
Section 7.9 Fees and Expenses....................................31
Section 7.10 Public Announcements................................31
Section 7.11 Real Estate Transfer Tax............................31
Section 7.12 State Takeover Laws.................................32
Section 7.13 Indemnification; Directors and
Officers Insurance..................................32
Section 7.14 Notification of Certain Matters.....................33
Section 7.15 Board of Directors..................................34
Section 7.16 Best Efforts........................................35
Section 7.17 Certain Litigation..................................35
Section 7.18 Return of Confidential Information..................36
ARTICLE VIII - CONDITIONS PRECEDENT........................................36
Section 8.1 Conditions to Each Party's Obligation
to Effect the Merger.................................36
ARTICLE IX - TERMINATION AND AMENDMENT....................................36
Section 9.1 Termination..........................................36
Section 9.2 Effect of Termination................................37
Section 9.3 Amendment............................................38
Section 9.4 Extension; Waiver....................................38
ARTICLE X - GENERAL PROVISIONS.............................................38
Section 10.1 Non-Survival of Representations and
Warranties and Agreements...........................38
Section 10.2 Notices.............................................38
Section 10.3 Interpretation; Definitions.........................40
Section 10.4 Counterparts........................................45
Section 10.5 Entire Agreement; No Third-Party Beneficiaries......45
-ii-
<PAGE> 4
Section 10.6 Governing Law.......................................46
Section 10.7 Assignment..........................................46
Section 10.8 Severability........................................46
Section 10.9 Enforcement of this Agreement.......................46
Section 10.10 Obligations of Subsidiaries.........................47
Section 10.11 Merger of the Company into Sub......................47
Exhibit A - Conditions of the Offer
Exhibit B - Amended and Restated Certificate of Incorporation of the Company
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 8, 1998 (this "Agreement")
among Monsanto Company, Delaware corporation ("Parent"), Corn Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent
("Sub"), and DEKALB Genetics Corporation, a Delaware corporation (the "Company")
(Sub and the Company being hereinafter collectively referred to as the
"Constituent Corporations"). Except as otherwise set forth herein, capitalized
(and certain other) terms used herein shall have the meanings set forth in
Section 10.3.
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause Sub
to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "Offer") to purchase all of the shares of Class A
Common Stock, without par value, of the Company (the "Company Class A Common
Stock") and all of the shares of Class B Common Stock, without par value, of the
Company (the "Company Class B Common Stock" and together with the Company Class
A Common Stock, the "Shares") at a purchase price of $100 per Share (such
purchase price, as it may be increased pursuant to Section 1.4, being referred
to as the "Offer Price"), net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in this Agreement; and
the Board of Directors of the Company has adopted resolutions approving the
Offer, this Agreement and the Merger and recommending that the Company's
stockholders accept the Offer and that the holders of the Company Class A Common
Stock adopt this Agreement;
WHEREAS, the respective Boards of Directors of Sub and the Company have
each approved the merger of Sub with and into the Company (the "Merger"), upon
the terms and subject to the conditions set forth in this Agreement, whereby
each of the Shares, other than Shares owned directly or indirectly by Parent or
the Company and Dissenting Shares, will be converted into the right to receive
the price per Share paid in the Offer;
WHEREAS, the Board of Directors of the Company or the Long-Term Incentive
Plan Administrative Committee of the Board of Directors of the Company has
approved the cancellation of Company Stock Options in consideration for the cash
payments to be made pursuant to this Agreement;
WHEREAS, the Board of Directors of the Company has approved the terms of
the Stockholders Agreement (the "Stockholders Agreement") to be entered into by
Parent, Sub and certain holders of Company Class A Common Stock, pursuant to
which such holders of Company Class A Common Stock have, among other things,
agreed to vote such shares of Company Class A Common Stock in favor of the
Merger and tender such shares of Company Class A Common Stock pursuant to the
Offer; and
1
<PAGE> 6
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Sub and the Company hereby agree as follows:
ARTICLE I - THE OFFER
Section 1.1 The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Section 9.1 and subject to the provisions of this
Agreement, as promptly as practicable but in no event later than five business
days after the date of the public announcement by Parent and the Company of this
Agreement, Sub shall, and Parent shall cause Sub to, commence the Offer. The
obligation of Sub to, and of Parent to cause Sub to, commence the Offer and
accept for payment, and pay for, any Shares tendered pursuant to the Offer shall
be subject only to the conditions set forth in Exhibit A (the "Offer
Conditions") (any of which may be waived in whole or in part by Sub in its sole
discretion, provided that, without the prior written consent of the Company, Sub
shall not waive the Minimum Condition (as defined in Exhibit A)). Sub expressly
reserves the right to modify the terms of the Offer, except that, without the
prior written consent of the Company, Sub shall not (i) reduce the number of
Shares to be purchased in the Offer, (ii) reduce the Offer Price, (iii) impose
any conditions to the Offer in addition to the Offer Conditions or modify the
Offer Conditions (other than to waive any Offer Conditions to the extent not
prohibited by this Agreement), (iv) except as provided in the next sentence,
extend the Offer, (v) change the form of consideration payable in the Offer or
(vi) make any other change or modification in any of the terms of the Offer in
any manner that is adverse to the holders of Shares. Notwithstanding the
foregoing, Sub may, without the consent of the Company, (i) extend the Offer, if
at the scheduled or extended expiration date of the Offer any of the Offer
Conditions shall not be satisfied or waived, until such time as such conditions
are satisfied or waived, (ii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer and (iii) on one or more occasions, extend the Offer for
a period of up to an aggregate of 15 business days if, on a scheduled expiration
date on which the Offer Conditions shall have been satisfied or waived, the
number of shares of Company Class A Common Stock (together with any shares of
Company Class A Common Stock held by Parent or any of its Subsidiaries) that
have been validly tendered and not withdrawn represent more than 70% of the then
issued and outstanding shares of Company Class A Common Stock, but less than 90%
of the then issued and outstanding shares of Company Class A Common Stock, and
the number of shares of Company Class B Common Stock (together with any shares
of Company Class B Common Stock held by Parent or any of its Subsidiaries) that
have been validly tendered and not withdrawn represent more than 70% of the then
issued and outstanding shares of Company Class B Common Stock, but less than 90%
of the then issued and outstanding shares of Company Class B Common Stock.
Parent and Sub agree that Sub will not terminate the Offer between scheduled
expiration dates (except in the event that this Agreement is terminated pursuant
to Section 9.1) and that, in the event that Sub would otherwise be entitled to
terminate the Offer at any scheduled expiration date thereof due to the failure
of one or more of the Offer Conditions, unless this Agreement shall have been
terminated pursuant to Section 9.1, Sub shall, and
2
<PAGE> 7
Parent shall cause Sub to, extend the Offer until such date as the Offer
Conditions have been satisfied or such later date as required by applicable law;
provided, however, that nothing herein shall require Sub to extend the Offer
beyond the Outside Date. Subject to the terms and conditions of the Offer and
this Agreement, Sub shall, and Parent shall cause Sub to, accept for payment and
pay for, all Shares validly tendered and not withdrawn pursuant to the Offer
that Sub is permitted to accept for payment and pay for under applicable law, as
soon as practicable (and, in any event, within three business days after the
later of the expiration of the Offer and the receipt by the depository for the
Offer of the certificates representing such tendered shares). If this Agreement
is terminated by either Parent or Sub or by the Company, other than pursuant to
Section 9.1(d), Sub shall, and Parent shall cause Sub to, terminate promptly the
Offer. If this Agreement is terminated pursuant to Section 9.1(d), Parent or Sub
may terminate the Offer. Sub may, at any time, transfer or assign to one or more
corporations directly or indirectly wholly-owned by Parent the right to purchase
all or any portion of the Shares tendered pursuant to the Offer, but any such
transfer or assignment shall not relieve Sub of its obligations under the Offer
or prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment.
(b) On the date of commencement of the Offer, Parent and Sub shall file
with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1 and
the documents included therein pursuant to which the Offer will be made,
together with any supplements or amendments thereto, the "Offer Documents"), and
Parent and Sub shall cause the Offer Documents to be disseminated to holders of
Shares as and to the extent required by applicable federal securities laws.
Parent, Sub and the Company each agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect, and
Parent and Sub further agree to take all steps necessary to cause the Schedule
14D-1 as so corrected to be filed with the SEC and the other Offer Documents as
so corrected to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given reasonable opportunity to review and comment upon the
Offer Documents prior to their filing with the SEC or dissemination to the
Company's stockholders. Parent and Sub agree to provide the Company and its
counsel any comments Parent, Sub or their counsel may receive from the SEC or
its staff with respect to the Offer Documents promptly after the receipt of such
comments and to cooperate with the Company and its counsel in responding to such
comments.
(c) Parent shall provide or cause to be provided to Sub on a timely basis
all funds necessary to accept for payment, and pay for, any Shares that are
validly tendered and not withdrawn pursuant to the Offer and that Sub is
permitted to accept for payment under applicable law and pay for, pursuant to
the Offer.
Section 1.2 Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents and warrants that the Board of Directors of
the Company, at a meeting duly called and held, duly adopted (by unanimous vote,
with the Investor Nominees (as defined in the Investment Agreement) not
participating) resolutions approving the Offer, this Agreement, the Merger and
the Stockholders Agreement, determining that the Offer and the Merger are fair
to, and in the best interests of, the Company's stockholders and recommending
that the Company's
3
<PAGE> 8
stockholders accept the Offer and approve and adopt this Agreement and the
Merger (it being understood that, notwithstanding anything in this Agreement to
the contrary, if the Company's Board of Directors modifies or withdraws its
recommendation in accordance with the terms of Section 6.2(b), such modification
or withdrawal shall not constitute a breach of this Agreement). The Company
represents and warrants that its Board of Directors has received the written
opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
that, as of the date hereof, the proposed consideration to be received by the
Company's stockholders pursuant to the Offer and the Merger is fair to the
Company's stockholders from a financial point of view. The Company hereby
consents to the inclusion in the Offer Documents of the recommendations of the
Company's Board of Directors described in this Section 1.2.
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9") containing the recommendation described in Section
1.2(a) (subject to the right of the Board of Directors of the Company to modify
or withdraw such recommendation in accordance with Section 6.2(b)) and shall
cause the Schedule 14D-9 to be disseminated to the Company's stockholders as and
to the extent required by applicable federal securities laws. Each of the
Company, Parent and Sub agrees promptly to correct any information provided by
it for use in the Schedule 14D-9 if and to the extent that such information
shall have become false or misleading in any material respect, and the Company
further agrees to take all steps necessary to amend or supplement the Schedule
14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed
with the SEC and disseminated to the Company's stockholders, in each case as and
to the extent required by applicable federal securities laws. Parent and its
counsel shall be given reasonable opportunity to review and comment upon the
Schedule 14D-9 prior to its filing with the SEC or dissemination to the
Company's stockholders. The Company agrees to provide Parent and its counsel any
comments the Company or its counsel may receive from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments and to
cooperate with Parent, Sub and their counsel in responding to such comments.
(c) In connection with the Offer and the Merger, the Company shall cause
its transfer agent to furnish Sub promptly with mailing labels containing the
names and addresses of the record holders of Shares as of a recent date and of
those persons becoming record holders subsequent to such date, together with
copies of all lists of stockholders, security position listings and computer
files and all other information in the Company's possession or control regarding
the beneficial owners of Shares and any securities convertible into Shares, and
shall furnish to Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Parent or Sub
may reasonably request in communicating the Offer to the record and beneficial
holders of Shares. Subject to the requirements of applicable law, and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Parent and Sub and their
affiliates, associates and agents shall hold in confidence the information
contained in any such labels, listings and files, will use such information only
in connection with the Offer and the Merger and, if this Agreement shall be
terminated, will promptly, upon request, deliver, and will use reasonable
efforts to cause their affiliates, associates and agents to deliver, to the
Company all copies of such information then in their possession or control.
4
<PAGE> 9
Section 1.3 Investment Agreement. Effective upon the acquisition of Shares
pursuant to the Offer, Section 11 (Standstill) of the Investment Agreement shall
be eliminated in its entirety and Sections 9.3 through 9.7 of the By-laws of the
Company shall be eliminated in their entirety. At the Effective Time of the
Merger, the Investment Agreement shall terminate in its entirety.
Section 1.4 Adjustment to Offer Price. Notwithstanding anything else to the
contrary contained herein, on the tenth day of each calendar month, commencing
with May 10, 1999, the Offer Price as in effect on the ninth day of such
calendar month shall be increased by an amount equal to $.50 per Share. All
references to the Offer Price in this Agreement shall be deemed to be to the
Offer Price as so adjusted.
ARTICLE II - THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the DGCL, Sub shall be merged with and into the
Company at the Effective Time. Following the Effective Time, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Sub and the Company in accordance with
the DGCL.
Section 2.2 Closing. The closing of the Merger will take place at 10:00
a.m. on a date mutually agreed to by Parent and the Company, which shall be no
later than the second business day after satisfaction or waiver of the
conditions set forth in Article VIII (the "Closing Date"), at the offices of
Sidley & Austin, One First National Plaza, Chicago, Illinois 60603, unless
another date, time or place is agreed to in writing by the parties hereto.
Section 2.3 Effective Time. The Merger shall become effective when a
Certificate of Merger or, if applicable, a Certificate of Ownership and Merger
(each, the "Certificate of Merger"), executed in accordance with the relevant
provisions of the DGCL, is duly filed with the Secretary of State of the State
of Delaware, or at such other time as Sub and the Company shall agree should be
specified in the Certificate of Merger. When used in this Agreement, the term
"Effective Time" shall mean the later of the date and time at which the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware or such later time established by the Certificate of Merger. The filing
of the Certificate of Merger shall be made as soon as practicable after the
satisfaction or waiver of the conditions to the Merger set forth herein.
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL.
Section 2.5 Restated Certificate of Incorporation and By-laws; Officers and
Directors.
(a) If the Merger is effected in accordance with Section 251 of the DGCL,
the Restated Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be amended and restated in its
entirety as of the Effective Time as set forth in Exhibit B hereto. As so
amended, such Restated Certificate of Incorporation shall be the Restated
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
5
<PAGE> 10
(b) The By-laws of the Company shall be amended as of the Effective Time to
read in their entirety as the By-laws of Sub, as in effect immediately prior to
the Effective Time, until thereafter changed or amended as provided by the
Restated Certificate of Incorporation of the Surviving Corporation or by
applicable law.
(c) The directors of Sub immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, until the next annual meeting of
stockholders (or the earlier of their resignation or removal) and until their
respective successors are duly elected and qualified, as the case may be.
(d) The officers of the Company immediately prior to the Effective Time
shall be the officers of the Surviving Corporation until the earlier of their
resignation or removal and until their respective successors are duly elected
and qualified, as the case may be.
ARTICLE III - EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT
CORPORATIONS; SURRENDER OF CERTIFICATES
Section 3.1 Effect on Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of any of Sub, the Company or the
holders of any securities of the Constituent Corporations:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one validly issued, fully paid
and nonassessable share of common stock, $.01 par value, of the Surviving
Corporation.
(b) Treasury Stock and Parent Owned Stock. Each Share that is owned by the
Company or by any Subsidiary of the Company and each Share that is owned by
Parent, Sub or any other Subsidiary of Parent shall automatically be cancelled
and retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor.
(c) Conversion of Shares. Subject to Section 3.1(d), each Share issued and
outstanding (other than shares to be cancelled in accordance with Section
3.1(b)), shall be cancelled and be converted into the right to receive from the
Surviving Corporation in cash, without interest or dividends, the price per
Share paid in the Offer (the "Merger Consideration"). As of the Effective Time,
all such Shares shall be cancelled in accordance with this paragraph, and when
so cancelled, shall no longer be outstanding and shall automatically be retired
and shall cease to exist, and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration for each such Share, without interest or
dividends.
(d) Shares of Dissenting Stockholders. Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding Shares held by a person (a
"Dissenting Stockholder") who has not voted in favor of or consented to the
Merger and complies with all the provisions of the DGCL concerning the right of
holders of Shares to require appraisal of their Shares ("Dissenting Shares")
6
<PAGE> 11
shall not be converted as described in Section 3.1(c), but shall become the
right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to the DGCL. If, after the Effective Time, such
Dissenting Stockholder withdraws his demand for appraisal or fails to perfect or
otherwise loses his right of appraisal, in any case pursuant to the DGCL, his
Shares shall be deemed to be converted as of the Effective Time into the right
to receive the Merger Consideration for each such Share, without interest or
dividends. The Company shall give Parent prompt notice of any demands for
appraisal of Shares received by the Company. The Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
Section 3.2 Surrender of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall designate a bank or trust company who shall be
reasonably satisfactory to the Company to act as paying agent in the Merger (the
"Paying Agent"), and from time to time, on, prior to or after the Effective
Time, Parent shall make available, or cause the Surviving Corporation to make
available, to the Paying Agent cash in the amounts necessary for the payment of
the Merger Consideration as provided in Section 3.1 upon surrender of
certificates representing Shares as part of the Merger. Funds made available to
the Paying Agent shall be invested by the Paying Agent as directed by Parent,
provided that such investments shall only be in obligations of or guaranteed by
the United States of America, in commercial paper obligations rated A-1 or P-1
or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker's acceptances of commercial banks with capital exceeding $1 billion (it
being understood that any and all interest or income earned on funds made
available to the Paying Agent pursuant to this Agreement shall be turned over to
Parent).
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall cause the Paying Agent to mail
to each holder of record of a certificate or certificates that immediately prior
to the Effective Time represented Shares (the "Certificates"), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in a form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration as provided in Section 3.1. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor the
amount of cash, without interest or dividends, into which the Shares theretofore
represented by such Certificate shall have been converted pursuant to Section
3.1, and the Certificate so surrendered shall forthwith be cancelled. In the
event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 3.2, each Certificate (other than Certificates
representing Dissenting Shares) shall be deemed at any time after the Effective
Time
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to represent only the right to receive upon such surrender the amount of cash,
without interest, into which the shares of stock theretofore represented by such
Certificate shall have been converted pursuant to Section 3.1. No interest will
be paid or will accrue on the cash payable upon the surrender of any
Certificate. Parent or the Paying Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of Shares such amounts as Parent or the Paying Agent is required to
deduct and withhold with respect to the making of such payment under the Code or
under any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Parent or the Paying Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which such deduction and withholding was made
by the Parent or the Paying Agent.
(c) No Further Ownership Rights in Shares. All cash paid upon the surrender
of Certificates in accordance with the terms of this Article III shall be deemed
to have been paid in full satisfaction of all rights pertaining to the Shares
theretofore represented by such Certificates. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, they shall be
cancelled and exchanged as provided in this Article III.
(d) Termination of Payment Fund. Any portion of the funds made available to
Paying Agent to pay the Merger Consideration which remains undistributed to the
holders of Shares for twelve months after the Effective Time shall be delivered
to Parent, upon demand, and any holders of Shares who have not theretofore
complied with this Article III and the instructions set forth in the letter of
transmittal mailed to such holders after the Effective Time shall thereafter
look only to the Surviving Corporation (subject to abandoned property, escheat
or other similar laws) for payment of the Merger Consideration to which they are
entitled, without interest or dividends.
(e) No Liability. None of Parent, Sub, the Company or the Paying Agent
shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
Section 4.1 Organization. The Company and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has requisite corporate power and
authority to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power
and authority would not reasonably be expected to have a Material Adverse Effect
on the Company. The Company and each of its Subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be
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<PAGE> 13
so duly qualified or licensed and in good standing would not reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Offer and/or the Merger. The Company
has delivered to Parent complete and correct copies of its Restated Certificate
of Incorporation and By-laws and has made available to Parent the Certificate of
Incorporation and By-laws (or similar organizational documents) of each of its
Subsidiaries designated in Item 4.1 of the Company Letter as being a Significant
Subsidiary of the Company (collectively, the "Significant Subsidiaries").
Section 4.2 Subsidiaries. Item 4.2 of the Company Letter lists each
Subsidiary of the Company. All of the outstanding shares of capital stock of
each Subsidiary that is a corporation have been validly issued and are fully
paid and nonassessable. Except as set forth in Item 4.2 of the Company Letter,
all of the outstanding shares of capital stock of each Subsidiary of the Company
are owned by the Company, by another Subsidiary of the Company or by the Company
and another Subsidiary of the Company, free and clear of all Liens. Except as
set forth in Item 4.2 of the Company Letter and except for the capital stock of
its Subsidiaries, the Company does not own, directly or indirectly, any capital
stock or other ownership interest in any corporation, partnership, joint
venture, limited liability company or other entity which is material to the
business or financial position of the Company and its Subsidiaries, taken as a
whole.
Section 4.3 Capital Structure. The authorized capital stock of the Company
consists of 500,000 shares of Preferred Stock, $1.00 par value (the "Company
Preferred Stock") and 165,000,000 shares of Common Stock, without par value,
divided into two classes, consisting of 35,000,000 shares of Company Class A
Common Stock and 130,000,000 shares of Company Class B Common Stock. At the
close of business on April 30, 1998, (i) no shares of Company Preferred Stock
were outstanding, (ii) 4,646,911 shares of Company Class A Common Stock and
29,975,568 shares of Company Class B Common Stock were issued and outstanding,
(iii) 287,182 shares of Company Class A Common Stock and no shares of Company
Class B Common Stock were held by the Company in treasury and (iv) 2,339,249
shares of Company Class A Common Stock and no shares of Company Class B Common
Stock were reserved for issuance pursuant to outstanding stock options (the
"Company Stock Options") or other rights to purchase Shares under the Company's
Long Term Incentive Plan, the Company's Savings and Investment Plan and the
Company's Director Stock Option Plan (the "Company Stock Plans") and an
additional 1,692,397 shares of Company Class A Common Stock were reserved for
the grant of additional purchase rights thereunder (including 73,937 shares
reserved for the grant of purchase rights under the Company's Savings and
Investment Plan). Except (i) as set forth above, (ii) as provided in the
Investment Agreement between Parent and the Company dated as of January 31, 1996
(the "Investment Agreement"), (iii) the issuance of Shares pursuant to options
granted under the Company Stock Plans and outstanding on April 30, 1998 and (iv)
the issuance of shares of Company Class B Common Stock in exchange for shares of
Company Class A Common Stock in accordance with the Company's Restated
Certificate of Incorporation, as of the date hereof, no Shares were issued,
reserved for issuance or outstanding and there are not any phantom stock or
other contractual rights the value of which is determined in whole or in part by
the value of any capital stock of the Company ("Stock Equivalents"). There are
no outstanding stock appreciation rights with respect to the capital stock of
the Company. Each outstanding Share is, and each Share which may be issued
pursuant to the Company Stock Plans and the other agreements and instruments
listed above will be, when issued,
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<PAGE> 14
duly authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no outstanding bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matter on which
the Company's stockholders may vote. Except as set forth above or in Item 4.3 of
the Company Letter, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to issue, deliver or sell or
create, or cause to be issued, delivered or sold or created, additional shares
of capital stock or other voting securities or Stock Equivalents of the Company
or of any of its Subsidiaries or obligating the Company or any of its
Subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking.
There are no outstanding contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its Subsidiaries except pursuant to
existing employee arrangements described in Item 4.3 of the Company Letter.
Section 4.4 Authority. The Company has requisite corporate power and
authority to execute and deliver this Agreement and, subject to approval of this
Agreement and the Merger by the holders of a majority of the outstanding shares
of the Company Class A Common Stock (the "Company Stockholder Approval") (if
required), to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the Merger and of the other transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Company, and no other corporate proceedings on the part of the Company or its
Board of Directors are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby, other than the Company
Stockholder Approval (if required). This Agreement has been duly executed and
delivered by the Company and (assuming the valid authorization, execution and
delivery of this Agreement by Parent and Sub) constitutes the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
Section 4.5 Consents and Approvals; No Violations. Except as set forth in
Item 4.5 of the Company Letter, except for filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the Exchange Act, the HSR Act, the DGCL, state takeover laws
and foreign and supranational laws relating to antitrust and anticompetition
clearances, neither the execution, delivery or performance of this Agreement by
the Company nor the consummation by the Company of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of the
Restated Certificate of Incorporation or By-laws of the Company or of the
similar organizational documents of any of its Subsidiaries, (ii) require any
filing with, or permit, authorization, consent or approval of, any Governmental
Entity (except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not reasonably be expected
to have a Material Adverse Effect on the Company or prevent or
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<PAGE> 15
materially delay the consummation of the Offer and/or the Merger), (iii) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party or by which any of them or any of their properties or assets may be
bound or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, any of its Subsidiaries or any of their
properties or assets, except in the case of clauses (iii) or (iv) for matters
that would not reasonably be expected to have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Offer and/or the
Merger; provided, however, that the contracts, agreements and other instruments
and obligations to which clause (iii) refers shall for purposes of the second
parenthetical phrase of clause (iii) not include (A) any employee benefit plan,
policy, arrangement or understanding (whether or not in writing) providing
benefits to any current or former employee, officer or director of the Company
or any of its Subsidiaries or (B) any employment, consulting, bonus,
non-competition, severance or termination agreement between the Company or any
of its Subsidiaries and any current or former employee, officer or director of
the Company or any of its Subsidiaries.
Section 4.6 SEC Documents and Other Reports. The Company has filed with the
SEC all documents required to be filed by it since August 31, 1995 under the
Securities Act or the Exchange Act (the "Company SEC Documents"). As of their
respective filing dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, each as in effect on the date so filed, and at the time filed with
the SEC none of the Company SEC Documents including the financial statements of
the Company and the notes thereto contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the Company
(including the notes thereto) included in the Company SEC Documents comply as of
their respective dates as to form in all material respects with the then
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except in the case of the unaudited statements,
as permitted by Form 10-Q under the Exchange Act) applied on a consistent basis
during the periods involved (except as may be indicated therein or in the notes
thereto) and fairly present the consolidated financial position of the Company
and its consolidated Subsidiaries as at the dates thereof and the consolidated
results of their operations and their consolidated cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments and to any other adjustments described therein none of which
were or will be material in amount or effect).
Section 4.7 Absence of Material Adverse Change. Except as disclosed in Item
4.7 of the Company Letter or in the documents filed by the Company with the SEC
and publicly available prior to the date of this Agreement (the "Company Filed
SEC Documents"), since August 31, 1997 the Company and its Subsidiaries have
conducted their respective businesses in all material respects only in the
ordinary course, and there has not been (i) any Material Adverse Change with
respect to the Company, (ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to its capital stock (other than
regular quarterly cash dividends not in excess of $.035 per
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Share) or any redemption, purchase or other acquisition of any of its capital
stock, (iii) any split, combination or reclassification of any of its capital
stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (iv) any change in accounting methods, principles or practices by
the Company materially affecting its assets, liabilities, business or results of
operations, (v) any grant by the Company or its Subsidiaries to any officer of
the Company or its Subsidiaries of any increase in compensation, except as was
required under employment agreements in effect as of August 31, 1997 or as were
made in the ordinary course of business consistent with past practice, (vi) any
grant by the Company or its Subsidiaries to any such officer of any increase in
severance or termination pay, except as part of a standard employment package to
any person promoted or hired, or as was required under employment, severance or
termination agreements in effect as of August 31, 1997, (vii) any revaluation by
the Company of any of its material assets or (viii) any other action or omission
of the type described in subparagraphs (a), (c), (f), (g), (h), (k), (l), (m),
(n) or (o) of Section 6.1 or, except as previously disclosed to Parent in
writing, subparagraphs (b), (e) or (j) of Section 6.1. The representations made
in clauses (v) and (vi) of this Section 4.7 shall, to the extent made with
respect to officers of the Company's foreign Subsidiaries, be deemed to be made
to the knowledge of the executive officers of the Company.
Section 4.8 Information Supplied. None of the information supplied or to be
supplied by the Company specifically for inclusion or incorporation by reference
in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the information to be
filed by the Company in connection with the Offer pursuant to Rule 14f-1
promulgated under the Exchange Act (the "Information Statement") or (iv) the
proxy statement (together with any amendments or supplements thereto, the "Proxy
Statement") relating to the Stockholders Meeting, will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Stockholders
Meeting which has become false or misleading. The Schedule 14D-9, the
Information Statement and the Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by the
Company with respect to statements made or incorporated by reference therein
based on information supplied by Parent or Sub specifically for inclusion or
incorporation by reference therein.
Section 4.9 Compliance with Laws. The businesses of the Company and its
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except for possible violations that would
not reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer and/or the Merger.
Except as disclosed in Item 4.9 of the Company Letter, the Company and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses as presently conducted (the "Company
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<PAGE> 17
Permits"), except for failures to hold such permits, licenses, variances,
exemptions, orders and approvals that would not reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Offer and/or the Merger. The Company and its Subsidiaries
are in compliance with the terms of the Company Permits, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect on the Company or prevent or materially delay the consummation of the
Offer and/or the Merger. Except as disclosed in Item 4.9 of the Company Letter,
to the knowledge of the Company, except as set forth in the Company Filed SEC
Documents, as of the date of this Agreement, no investigation or review by any
Governmental Entity with respect to the Company or any of its Subsidiaries is
pending or threatened, other than, in each case, those the outcome of which
would not be reasonably expected to have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Offer and/or the
Merger. All representations made in this Section 4.9 shall, to the extent made
with respect to any foreign law, ordinance, regulation or foreign Company
Permit, be deemed to be made to the knowledge of the Company.
Section 4.10 Tax Matters. The Company and each of its Subsidiaries has
timely filed (after taking into account any extensions to file) all Tax Returns
required to be filed by them either on a separate or combined or consolidated
basis, except where the failure to timely file would not reasonably be expected
to have a Material Adverse Effect on the Company. All such Tax Returns are
complete and accurate, except where the failure to be complete or accurate would
not reasonably be expected to have a Material Adverse Effect on the Company.
Each of the Company and its Subsidiaries has paid or caused to be paid all Taxes
as shown as due on such Tax Returns and all material Taxes for which no return
was filed, except where the failure to do so would not reasonably be expected to
have a Material Adverse Effect on the Company. No deficiencies for any Taxes
have been asserted, proposed or assessed against the Company or any of its
Subsidiaries that have not been paid or otherwise settled or are not otherwise
being challenged under appropriate procedures, except for deficiencies the
assertion, proposing or assessment of which would not reasonably be expected to
have a Material Adverse Effect on the Company, and no requests for waivers of
the time to assess any such Taxes are pending.
Section 4.11 Liabilities. Except as disclosed in Item 4.11 of the Company
Letter or as set forth in the Company Filed SEC Documents, to the knowledge of
the Company, neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by generally accepted accounting principles to be set forth
on a consolidated balance sheet of the Company and its Subsidiaries or in the
notes thereto, other than liabilities and obligations incurred in the ordinary
course of business since August 31, 1997 and liabilities which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
Section 4.12 Benefit Plans; Employees and Employment Practices. (a) With
respect to each material bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical, fringe benefit, employee stock purchase, stock
appreciation, restricted stock or other material employee benefit plan, policy,
arrangement or understanding (whether or not in writing) providing benefits to
any current or former employee, officer or director
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<PAGE> 18
of, and maintained or contributed to as of the date of this Agreement by, the
Company or any of its Subsidiaries, including but not limited to the health care
plan (the "EMWA Plan") operated by the Employees' Mutual Welfare Association
(the "EMWA"), and excluding any Employee Agreements (as defined below)
(collectively, excluding such Employee Agreements, the "Benefit Plans"), other
than any such plan, policy, arrangement or understanding under which most of the
current or former employees, officers or directors of the Company or any of its
Subsidiaries provided benefits thereunder are provided benefits with respect to
employment outside of the United States of America (the Benefit Plans, excluding
those under which most of the current or former employees, officers or directors
of the Company or any of its Subsidiaries provided benefits thereunder are
provided benefits with respect to employment outside of the United States of
America, collectively the "U.S. Benefit Plans"), such U.S. Benefit Plan has not
since August 31, 1997 and prior to the date of this Agreement been adopted or
amended in any material respect by the Company or any of its Subsidiaries except
as disclosed in the Company Filed SEC Documents or Item 4.12(a) of the Company
Letter or as required by law. The Company has with respect to each material
employment, consulting, bonus, non-competition, severance and termination
agreement in effect as of the date of this Agreement between the Company or any
of its Subsidiaries other than any foreign Subsidiary and any current or former
employee, officer or director of the Company or any of its Subsidiaries other
than any foreign Subsidiary (collectively, the "Employee Agreements") disclosed
such agreement in Item 4.12(a) of the Company Letter or in the Company filed SEC
Documents or made available to Parent a copy of such agreement.
(b) Item 4.12(b) of the Company Letter contains a list of all U.S. Benefit
Plans which are "employee pension benefit plans" (as defined in Section 3(2) of
ERISA) or "employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
(collectively, the "ERISA Benefit Plans"). With respect to each U.S. Benefit
Plan, except as disclosed in Item 4.12(b) of the Company Letter, the Company has
made available to Parent true, complete and correct copies, where applicable and
to the extent that they exist as of the date of this Agreement, of (i) the
current plan document (including all amendments adopted on or before the date
hereof that are still applicable) (or, in the case of any unwritten U.S. Benefit
Plan, a description thereof), (ii) the most recent annual report on Form 5500
filed with the Internal Revenue Service, (iii) the most recent actuarial report,
(iv) the most recent summary plan description and (v) the most recent
determination letter issued by the Internal Revenue Service. The Company has
made available to Parent or filed in the Company Filed SEC Documents a true,
complete and correct copy of each Employee Agreement as in effect as of the date
of the Agreement. The Company has made available to Parent a true, complete and
correct copy of the three employment agreements as in effect as of the date
hereof pursuant to which the most senior officer in each of the Company's three
foreign Subsidiaries located in Argentina, Italy and Canada are employed by such
foreign Subsidiaries.
(c) Except as disclosed in Item 4.12(c) of the Company Letter, none of the
Company or any of its Subsidiaries, or any other person or entity that together
with the Company is treated as a single employer under Section 414 of the Code
(an "ERISA Affiliate"), has, with respect to any ERISA Benefit Plan, or any
other plan subject to the minimum funding requirements of Section 302 of ERISA,
incurred or could reasonably be expected to incur (i) any material liability
under Title IV of ERISA or to the Pension Benefit Guaranty Corporation (other
than for contributions and premiums in the ordinary course) that has not been
fully paid as of the date hereof , (ii) any accumulated funding
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<PAGE> 19
deficiency under Section 302 of ERISA or Section 412 of the Code of a material
amount that has not been fully paid as of the date hereof, or (iii) any
requirement under ERISA or the Code to post security of a material amount under
such plan that is still outstanding as of the date hereof. To the Company's
knowledge, none of the Company, any of its Subsidiaries, any officer of the
Company or any of its Subsidiaries or any of the ERISA Benefit Plans, or any of
the other plans maintained by the Company or any Subsidiary of the Company and
subject to Section 406 of ERISA (an "Other ERISA Benefit Plan"), has on or
before the date of this Agreement engaged in a "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) with respect to any
ERISA Benefit Plan or Other ERISA Benefit Plan that could reasonably be expected
to subject the Company, any of its Subsidiaries or any officer of the Company or
any of its Subsidiaries to any material tax on prohibited transactions imposed
by Section 4975 of the Code or to any material liability under Section 502(i) or
(l) of ERISA. Except as disclosed in Item 4.12(c) of the Company Letter, none of
the Company, its Subsidiaries or ERISA Affiliates has at any time during the
five-year period preceding the date hereof contributed to any ERISA Benefit Plan
that is a "multiemployer plan" (as defined in Section 3(37) of ERISA) except for
any such plan maintained outside of the United States.
(d) Except as disclosed in Item 4.12(d) of the Company Letter, as of the
date of this Agreement there is no pending dispute, arbitration, claim, suit or
grievance involving a Benefit Plan (other than routine claims for benefits
payable under any such Benefit Plan) that would reasonably be expected to give
rise to a material liability of the Company or any Subsidiary of the Company.
All material contributions already required to be made to any Benefit Plan have
been made. Notwithstanding the foregoing, to the extent the representations and
warranties set forth in this paragraph are provided with respect to a Benefit
Plan that is not a U.S. Benefit Plan, they are provided only to the knowledge of
the Company.
(e) Except as disclosed in Item 4.12(e) of the Company Letter, as of the
date of this Agreement there are no material controversies, strikes, work
stoppages or disputes pending between the Company or any of its Subsidiaries and
any current or former employees, and, to the Company's knowledge, no material
organizational effort by any labor union or other collective bargaining unit
currently is under way with respect to any employee. None of the Company or any
its Subsidiaries other than a foreign Subsidiary, and to the Company's knowledge
no foreign Subsidiary of the Company, is a party to a collective bargaining
agreement.
(f) To the knowledge of the Company, all Benefit Plans that are not U.S.
Benefit Plans and are subject to the laws of any jurisdiction outside of the
United States have been maintained in material compliance with all applicable
requirements and, if they are intended to be funded or book reserved, are
appropriately funded or book reserved.
(g) Except as set forth in the Company Filed SEC Documents, as expressly
contemplated by this Agreement, or with respect to U.S. Benefit Plans and
Employee Agreements copies of which have been made available by the Company to
Parent, neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (either alone or in
conjunction with any other event) result in, cause the accelerated vesting or
payment of, or increase the amount or value of, any payment or benefit to any
employee, officer or director of the Company or any of its Subsidiaries under
any U.S. Benefit Plan or Employment Agreement. No executive
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officer of the Company or of any Subsidiary of the Company that is not a foreign
Subsidiary is aware of any provision in an employment agreement to which a
foreign Subsidiary of the Company is a party, or in a plan maintained by a
foreign Subsidiary of the Company, pursuant to which the execution and delivery
of this Agreement, or the consummation of the transactions contemplated hereby,
will (either alone or in conjunction with any other event) result in, cause the
accelerated vesting or payment of, or increase the amount or value of, any
material payment or benefit to any employee, officer or director of such foreign
Subsidiary except for any such plan or agreement a copy of which has been made
available by the Company to the Parent. The aggregate amount of the after-tax
cost to the Company and its Subsidiaries of "parachute payments" within the
meaning of Section 280G of the Code that could become payable to individuals who
would be subject to the excise tax on "excess parachute payments" as a result of
receiving such parachute payments is not more than $50,000,000 (assuming that
such aggregate amount is calculated based upon the same assumptions as to
"Change-in-Control Date," stock price, discount rate, individual income tax rate
and corporate tax rates as were used to prepare the Towers Perrin
Change-in-Control Analysis revised as of May 8, 1998 that has been delivered to
Parent by the Company, to determine the amount shown under the column heading
"Gross-Up/After-Tax Cost to Company" in such Analysis).
(h) The Internal Revenue Service has issued a favorable determination
letter with respect to each Benefit Plan that is intended to be qualified under
Section 401(a) of the Code (although such letter does not pertain to the Code as
in effect as of the date hereof), and, except as disclosed in Item 4.12(h) of
the Company Letter, to the knowledge of the Company as of the date of this
Agreement, such qualified status is not reasonably likely to be adversely
affected by any circumstances that exist, or events that have occurred, on or
prior to the date of this Agreement.
Section 4.13 Litigation. Except as disclosed in Item 4.13 of the Company
Letter or in the Company Filed SEC Documents, as of the date of this Agreement,
there is no suit, action, proceeding or investigation pending or to the
knowledge of the Company threatened against the Company or any of its
Subsidiaries that would reasonably be expected to have a Material Adverse Effect
on the Company or prevent or materially delay the consummation of the Offer
and/or the Merger. Except as disclosed in Item 4.13 of the Company Letter or in
the Company Filed SEC Documents, neither the Company nor any of its Subsidiaries
is subject to any outstanding judgment, order, writ, injunction or decree that
would reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer and/or the Merger.
Section 4.14 Environmental Matters. Except as set forth in the Company
Filed SEC Documents or in Item 4.14 of the Company Letter, neither the Company
nor any of its Subsidiaries has (i) any knowledge that the Company or any of its
Subsidiaries (or their predecessors) has stored, released, disposed or arranged
for the disposal of any Hazardous Substances on, under or at any of the
Company's or any of its Subsidiaries' properties or any other properties, or
exposed any employee or other individual to any Hazardous Substance other than
in a manner that would not, in all such cases taken individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on the
Company, (ii) any knowledge of the presence of any Hazardous Substance on, under
or at any of the Company's or any of its Subsidiaries' owned or leased
properties other than that which would not reasonably be expected to result in a
Material Adverse Effect on the Company, (iii) received any written notice or has
knowledge of any facts which could reasonably be expected
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to give rise to such notice (A) of any actual or alleged violation of or
liability (whether accrued, contingent, known or unknown) arising under any
Environmental Law that has not been resolved or settled with the relevant
Governmental Entity or third party, (B) of the threat, institution or pendency
of any suit, action, claim, proceeding or investigation by any Governmental
Entity or any third party in connection with any such violation or liability,
(C) by any Governmental Entity requiring response to or remediation of Hazardous
Substances at or arising from any of the Company's or any of its Subsidiaries'
properties or any other properties, (D) alleging noncompliance by the Company or
any of its Subsidiaries with the terms of any permit, license, approval or other
authorization required under any Environmental Law in any manner reasonably
likely to require material expenditures or to result in material liability that
has not been resolved or settled or in the revocation or denial of a permit or
(E) demanding payment for, response to or remediation of Hazardous Substances at
or arising from any of the Company's or any of its Subsidiaries' properties or
any other properties, (iv) any knowledge of the storage of PCBs on the Company's
or any of its Subsidiaries' owned or leased properties, (v) any knowledge of the
existence of underground storage tanks on the Company's or any of its
Subsidiaries' owned or leased properties located within the United States or
(vi) any knowledge of the existence of asbestos-containing material in any of
the buildings on the Company's or any of its Subsidiaries' owned or leased
properties located within the United States, except in each case for the notices
set forth in Item 4.14 of the Company Letter and except in each case for notices
that would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect on the Company.
Section 4.15 Charter Provisions. The action of the Board of Directors of
the Company in approving the Offer (including the purchase of Shares pursuant to
the Offer), the Merger, this Agreement, the Stockholders Agreement and the
transactions contemplated by this Agreement and the Stockholders Agreement, is
sufficient to render (i) Section 203 of the DGCL, (ii) Article EIGHTH of the
Company's Restated Certificate of Incorporation and (iii) Article 11 of the
Investment Agreement irrevocably inapplicable to the Offer, the Merger, this
Agreement and the Stockholders Agreement, the transactions contemplated by this
Agreement and/or the Stockholders Agreement and any other transaction (except a
transaction in which Parent acquires beneficial ownership of Shares other than
pursuant to the Merger) between Parent and any of its affiliates on the one
hand, and the Company and any of its affiliates, on the other hand, consummated
after the date that Sub acquires Shares pursuant to the Offer that could be
defined as a "Business Combination" under Section 203 of the DGCL or Article
EIGHTH of the Company's Restated Certificate of Incorporation. The Board of
Directors has, in conjunction with the matters contemplated by this Agreement,
considered all of the factors required by Article TENTH of the Company's
Restated Certificate of Incorporation.
Section 4.16 Intellectual Property. (a) Except as set forth in the Company
Filed SEC Documents or in Item 4.16 of the Company Letter, the Company and its
Subsidiaries own, or are validly licensed or otherwise have the right to use or
practice, all Intellectual Property Rights that are material to the conduct of
the business of the Company and its Subsidiaries taken as a whole, free and
clear of all Liens (except with respect to recombinant DNA technology, for
failures to own or possess the rights to freely use or practice such technology
that would not, individually or in the aggregate, reasonably be expected to have
a material adverse effect on the business, properties, assets, financial
condition, results of operations or prospects of the Company and its
Subsidiaries, taken as a whole).
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Except as set forth in the Company Filed SEC Documents or in Item 4.16 of the
Company Letter, no claims are pending or to the knowledge of the Company
threatened that the Company or any of its Subsidiaries is infringing or
otherwise adversely affecting the rights of any person with regard to any
Intellectual Property Right so as to materially adversely affect the Company's
ability to use or practice any of its material Intellectual Property Rights. To
the knowledge of the Company, except as set forth in the Company Filed SEC
Documents or in Item 4.16 of the Company Letter, no person is infringing the
rights of the Company or any of its Subsidiaries with respect to any material
Intellectual Property Right.
(b) Except as set forth in Item 4.16 of the Company Letter, (i) the Company
owns and possesses all right, title and interest in and to, or possesses the
valid right to use, all germplasm and all recombinant DNA technology used in the
conduct of the Company's business (except with respect to recombinant DNA
technology, for failures to own or possess the rights to freely use or practice
such technology that would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, properties, assets,
financial condition, results of operations or prospects of the Company and its
Subsidiaries, taken as a whole); and (ii) the Company has not received any
notice of, and the Company has no knowledge of any potential claim of any,
infringement of any patent, certificate of plant variety protection or other
intellectual property right or misappropriation from any third party with
respect to any such technology or right.
(c) Notwithstanding the foregoing, the representations and warranties
contained in this Section 4.16 shall not be untrue or incorrect as a result of,
or otherwise be affected by, the issuance to any Person of any patent after the
date of this Agreement.
Section 4.17 Brokers. No broker, investment banker, financial advisor or
other person, other than Merrill Lynch, the fees and expenses of which will be
paid by the Company (and are reflected in an agreement between Merrill Lynch and
the Company, a complete copy of which has been furnished to Parent), is entitled
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
Section 4.18 Contracts; Indebtedness. Except as disclosed in the Company
Filed SEC Documents or as listed under Item 4.18 or other Items of the Company
Letter, there are no contracts or agreements that are material to the business,
properties, assets, financial condition or results of operations of the Company
and its Subsidiaries taken as a whole; provided, however, that such contracts
and agreements shall not include (i) any employee benefit plan, policy,
arrangement or understanding (whether oral or written) providing benefits to any
current or former employee, officer or director of the Company or any of its
Subsidiaries or (ii) any employment, consulting, bonus, non-competition,
severance or termination agreement between the Company or any of its
Subsidiaries and any current or former employee, officer or director of the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice would cause
such a violation of or default under) any loan or credit agreement, note, bond,
mortgage, indenture, lease, permit, concession, franchise, license or any other
contract, agreement, arrangement or understanding, to which it is a party or by
which it or any of its properties or assets is bound, except
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for violations or defaults that could not reasonably be expected to result in a
Material Adverse Effect on the Company.
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
Section 5.1 Organization. Each of Parent and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has requisite corporate power and
authority to carry on its business as now being conducted.
Section 5.2 Authority. Parent and Sub have the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and Sub, and the consummation by Parent and Sub of the
Merger and of the other transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Sub, and
no other corporate proceedings on the part of Parent or Sub or their respective
Boards of Directors are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Sub and (assuming the valid authorization,
execution and delivery of this Agreement by the Company) constitutes the valid
and binding obligation of each of Parent and Sub enforceable against each of
them in accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity.
Section 5.3 Consents and Approvals; No Violations. Except as set forth in
Item 5.3 of the Parent Letter, except for filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the Exchange Act, the HSR Act, the DGCL, state takeover laws
and foreign and supranational laws relating to antitrust and anticompetition
clearances, neither the execution, delivery or performance of this Agreement by
Parent and Sub nor the consummation by Parent and Sub of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the respective certificate of incorporation or By-laws of Parent
and Sub, (ii) require any filing with, or permit, authorization, consent or
approval of, any Governmental Entity (except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings would not
reasonably be expected to have a Material Adverse Effect on Parent or prevent or
materially delay the consummation of the Offer and/or the Merger), (iii) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its Subsidiaries or any of their properties or
assets, except in the case of clauses (iii) or (iv) for violations,
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breaches or defaults that would not reasonably be expected to have a Material
Adverse Effect on Parent or prevent or materially delay the consummation of the
Offer and/or the Merger.
Section 5.4 Information Supplied. None of the information supplied or to be
supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Stockholders
Meeting which has become false or misleading, except that no representation or
warranty is made by Parent or Sub in connection with any of the foregoing with
respect to statements made or incorporated by reference therein based on
information supplied by the Company or any of its representatives specifically
for inclusion or incorporation by reference therein. The Offer Documents will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, except that no representation or
warranty is made by Parent or Sub in connection with any of the foregoing with
respect to statements made or incorporated by reference therein based on
information supplied by the Company or any of its representatives specifically
for inclusion or incorporation by reference therein.
Section 5.5 Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
Section 5.6 Brokers. No broker, investment banker, financial advisor or
other person, other than BancAmerica Robertson Stephens and Goldman, Sachs &
Co., the fees and expenses of which will be paid by Parent, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub.
Section 5.7 Financing. Parent has or will have, and shall provide Sub with,
the funds necessary to consummate the Offer and the Merger and the transactions
contemplated hereby in accordance with the terms hereof.
ARTICLE VI - COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 6.1 Conduct of Business by the Company Pending the Merger. During
the period from the date of this Agreement until the earlier of the Effective
Time or such time as Parent's designees shall constitute a majority of the Board
of Directors of the Company, the Company shall, and shall cause each of its
Subsidiaries to, in all material respects, except as contemplated by this
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Agreement, carry on its business in the ordinary course as currently conducted
and, to the extent consistent therewith, with no less diligence and effort than
would be applied in the absence of this Agreement, seek to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers and others having business dealings with them to the end that goodwill
and ongoing businesses shall be unimpaired at the Effective Time. Without
limiting the generality of the foregoing, and except as otherwise contemplated
by this Agreement (including, without limitation, as permitted or required by
Section 7.16), during such period, the Company shall not, and shall not permit
any of its Subsidiaries to, without the prior written consent of Parent (which
consent shall not be unreasonably withheld or delayed):
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock or otherwise make any
payment to stockholders in their capacity as such, other than dividends on
Shares to be declared and paid only at the customary times at a quarterly rate
not in excess of $0.035 per Share, except for dividends by a wholly-owned
domestic Subsidiary of the Company to its parent, (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock or (iii) redeem, purchase or otherwise acquire any of its
securities;
(b) issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for, or
any rights, warrants, options or any other agreements of any character to
acquire, any such shares, voting securities or convertible or exchangeable
securities or rights, or securities or rights evidencing the right to subscribe,
other than (i) the issuance, in the ordinary course, to new employees or
promoted employees, of options to purchase not more than an aggregate of 40,000
Shares (as described in Item 6.1 of the Company Letter) or the issuance of
Shares pursuant to options outstanding under existing Company Stock Plans, (ii)
the issuance of shares of Company Class B Common Stock in exchange for shares of
Company Class A Common Stock in accordance with the Company's Restated
Certificate of Incorporation, (iii) the issuance of Shares upon exercise of
rights outstanding on the date of this Agreement (including, without limitation,
under the Investment Agreement) and (iv) the issuance of Shares pursuant to the
Company's Savings and Investment Plan, in accordance with its terms;
(c) amend its Restated Certificate of Incorporation or By-laws or other
similar organizational documents;
(d) acquire, or agree to acquire, in a single transaction or in a series of
related transactions, any business or assets (other than materials and supplies
purchased in the ordinary course, consistent with past practice), other than
transactions which involve assets having a purchase price not in excess of
$5,000,000 individually;
(e) make or agree to make any new capital expenditure in excess of
$1,000,000 other than expenditures contemplated by the Company's capital budget
for fiscal 1998 or fiscal 1999 as previously provided to Parent in writing;
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(f) sell, lease, encumber or otherwise dispose of, or agree to sell, lease,
encumber or otherwise dispose of, any of its assets, other than (i) sales of
inventory in the ordinary course of business and (ii) transactions which involve
assets having a current value not in excess of $5,000,000 individually or
$20,000,000 in the aggregate; provided that notwithstanding this Section 6.1(f),
neither the Company nor any of its Subsidiaries shall sell, lease, encumber or
otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of,
any germplasm, recombinant DNA technology or Intellectual Property Rights,
except with respect to Intellectual Property Rights as specifically permitted by
Section 6.1(j);
(g) except as disclosed in Item 4.12(a) of the Company Letter, (i) increase
the salary or wages payable or to become payable to its directors, officers or
employees, except for increases required under employment agreements existing on
the date hereof, and except for increases for officers and employees in the
ordinary course of business, consistent with past practice; (ii) pay or agree to
pay any pension, retirement allowance or employee benefit not required or
contemplated by any existing benefit, severance, pension or employment plans,
agreements or arrangements; or (iii) enter into any employment or severance
agreement with, or establish, adopt, enter into or amend any bonus, profit
sharing, thrift, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination or severance plan, agreement, policy or
arrangement for the benefit of, any director, officer or employee, except, in
each case, as may be expressly required by the terms of any such plan,
agreement, policy or arrangement or to comply with applicable law;
(h) except as is required as a result of a change in law or in generally
accepted accounting principles, make any material change in its method of
accounting;
(i) enter into, modify in any material respect, amend in any material
respect or terminate any material contract or agreement (including without
limitation any contract or agreement which (i) cannot by its terms be terminated
without liability or continuing obligation by the Company on less than one
year's notice or (ii) may require a cash expenditure by the Company in excess of
$5,000,000 in any fiscal year) to which the Company or any of its Subsidiaries
is a party, or waive, release or assign any material rights or claims, in each
case, in any manner adverse to the Company or any of its Subsidiaries and, in
each case, except for (A) customary operational contracts not involving payments
in excess of $5,000,000 individually over the term of such contract, (B) hedging
and similar futures contracts with a term not in excess of one year or which
can, by their terms, be terminated without liability or continuing obligation by
the Company on not more than one year's notice and (C) seed production
contracts, in each of cases (A), (B) and (C) above entered into in the ordinary
course of business consistent with past practice;
(j) (i) acquire a license or right to use from a third party for
consideration (including without limitation cash, human or other resources or
other assets or commitments, including out-licenses) in excess of $1,000,000 per
year or $10,000,000 over the course of the agreement governing such license or
right, or which by its terms cannot be terminated without liability or continued
obligation by the Company on less than six months' notice or (ii) grant any
license or sublicense other than (v) licenses to contract growers in the
ordinary course of business consistent with past practice, (w) licenses granted
under and in accordance with the Corn Borer-Protected License Agreement dated as
of January 31, 1996 between Parent and the Company, the Glyphosate-Protected
Corn License
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Agreement dated as of January 31, 1996 between Parent and the Company or the
CaMV Promoter License Agreement dated as of January 31, 1996 between Parent and
the Company, in each case, in the ordinary course of business consistent with
past practice (and provided that this Section 6.1 shall not prohibit the
granting by the Company in accordance with such licenses of sublicenses to the
entities described with respect to this Section 6.1(j) in Item 6.1 of the
Company letter), (x) licenses of swine in the ordinary course of business
consistent with past practice, (y) licenses included in "material transfer
agreements" entered into solely for the purposes of research in the ordinary
course of business consistent with past practice, and (z) licenses required to
be granted pursuant to the terms of agreements to which the Company or any of
its Subsidiaries is a party (as such terms are in effect on the date hereof);
(k) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any of its Subsidiaries not constituting an inactive Subsidiary
(other than the Merger);
(l) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any wholly-owned
subsidiary of the Company;
(m) settle or agree to dismiss any litigation with respect to Intellectual
Property Rights or material litigation with respect to other matters;
(n) pay, discharge, settle or satisfy any other claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction, in
the ordinary course of business consistent with past practice or in accordance
with their terms, of claims, liabilities or obligations (in each case not
related to pending or threatened litigation) reflected or disclosed in the most
recent consolidated financial statements (or the notes thereto) of the Company
included in the Company Filed SEC Documents or incurred since the date of such
financial statements in the ordinary course of business consistent with past
practice;
(o) enter into any contract, license, agreement or arrangement of any kind
without including confidentiality agreements consistent with past practice; or
(p) authorize, recommend, propose or announce an intention to do any of the
foregoing, or enter into any contract, agreement, commitment or arrangement to
do any of the foregoing.
Notwithstanding anything else in this Agreement to the contrary, the
Company and its Subsidiaries may, during the period from the date of this
Agreement until the earlier of the Effective Time or such time as Parent's
designees shall constitute a majority of the Board of Directors of the Company,
(i) sell all or a portion of the Company's business solely relating to the
research and development of swine breeding stock and the marketing of such
hybrid breeding swine and related management services to hog producers in
domestic or international markets, so long as Parent is reasonably satisfied
with the terms and conditions of such sale, and (ii) take any action set forth
in Item 6.1 of the Company Letter.
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Section 6.2 No Solicitation. (a) The Company shall, and shall cause its
executive officers, directors, authorized representatives and authorized agents
to, immediately cease any discussions or negotiations with any parties that may
be ongoing with respect to any Takeover Proposal. The Company shall not, nor
shall it permit any of its Subsidiaries to, nor shall it permit any of its
executive officers, directors, authorized representatives or authorized agents
to, directly or indirectly, (i) solicit, initiate or knowingly encourage
(including by way of furnishing non-public information) any inquiries or the
making of any proposal which constitutes, or may reasonably be expected to lead
to, any Takeover Proposal or (ii) participate in any discussions or negotiations
regarding any Takeover Proposal. For purposes of this Agreement, "Takeover
Proposal" means (x) any inquiry, proposal or offer from any person relating to
any direct or indirect acquisition or purchase of any of the assets of the
Company or its Subsidiaries (other than the purchase of inventory or other
assets in the ordinary course of business) or any of the Shares then
outstanding, any tender offer or exchange offer for any of the Shares then
outstanding, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, other than the transactions contemplated by
this Agreement or (y) any other transaction the consummation of which could
reasonably be expected to impede, interfere with, prevent or materially delay
the Offer and/or the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated by this
Agreement and the Stockholders Agreement. Notwithstanding the foregoing,
proposals solely relating to the sale of all or a portion of the Company's
business relating solely to the research and development of swine breeding stock
and the marketing of such hybrid breeding swine and related management services
to hog producers in domestic or international markets shall not be considered
Takeover Proposals, so long as the terms and conditions of any such proposal
described in this sentence do not have any of the effects described in clause
(y) of the preceding sentence.
(b) Except as otherwise provided in this Section 6.2, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose publicly to withdraw or modify, in a manner adverse to Parent, the
approval or recommendation by such Board of Directors or such committee of the
Offer, the Merger or this Agreement (or any transaction contemplated thereby);
provided that, the Board of Directors may, (A) in response to any Takeover
Proposal, suspend such recommendation for a period of up to 24 hours pending its
analysis of such Takeover Proposal or (B) at any time prior to the consummation
of the Offer, modify or withdraw such recommendation, but only if the Board of
Directors of the Company determines in good faith, based on a written opinion of
Morris, Nichols, Arsht & Tunnell, which written opinion shall specifically take
into account the Stockholders Agreement and all the terms thereof, including the
obligations and agreements therein of the Voting Trustees and Registered Holders
with respect to tendering Shares and voting for the Merger and against any
Takeover Proposal other than the Merger (a "Written Opinion"), that it would be
a breach of its fiduciary duties not to so modify or withdraw such
recommendation; provided further that, unless this Agreement shall have been
terminated, any such suspension, modification or withdrawal shall not prevent
Parent and Sub, in its or their discretion, from consummating the Offer and in
any event shall be subject to Section 6.2(e) of this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any Takeover Proposal or
(iii) cause the Company to enter into any letter of intent, agreement in
principle,
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acquisition agreement or other similar agreement (each, an "Acquisition
Agreement") related to any Takeover Proposal.
(c) In addition to the obligations of the Company contained in paragraphs
(a) and (b) of this Section 6.2, the Company shall immediately advise Parent
orally and in writing of any request for information or of any Takeover
Proposal, the material terms and conditions of such request or Takeover Proposal
and the identity of the person making such request or Takeover Proposal.
(d) Subject to Section 6.2(e), nothing contained in this Section 6.2 shall
prohibit the Company from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act or from
making any disclosure to the Company's stockholders if, in the good faith
judgment of the Board of Directors of the Company, based on a Written Opinion,
such disclosure is required under applicable law.
(e) Nothing in this Section 6.2 (including any modified or withdrawn
recommendation contemplated by paragraphs (b) or (c) of Section 6.2) shall be
deemed to prevent or impede Parent and Sub, in its or their discretion, from
consummating the Offer, or to limit or affect any of the actions taken by the
Company and described in Section 4.15 of this Agreement. In addition, if Sub
purchases Shares pursuant to the Offer, the Company and its Board of Directors
shall take all actions legally permitted to permit the Merger to occur.
Section 6.3 Third Party Standstill Agreements. During the period from the
date of this Agreement through the Effective Time, the Company shall enforce and
shall not terminate, amend, modify or waive any standstill or other provision
of, any confidentiality, nonsolicitation or standstill agreement to which the
Company or any of its Subsidiaries is a party (other than any involving Parent),
including, without limitation, any such agreement entered into with any party in
connection with the process conducted by the Company to solicit acquisition
proposals for the Company.
Section 6.4 Disclosure to Parent; Delivery of Certain Filings. The Company
shall promptly advise Parent orally and in writing if there occurs, to the
knowledge of the Company, any change or event which results in the executive
officers of the Company having a good faith belief that such change or event has
resulted in or is reasonably likely to result in a Material Adverse Effect on
the Company or that such change or event could materially delay the consummation
of the Offer and/or the Merger. The Company shall provide to Parent, and Parent
shall provide to the Company, copies of all filings made by the Company or
Parent, as the case may be, with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII - ADDITIONAL AGREEMENTS
Section 7.1 Employee Benefits. (a) Parent shall take all necessary action
so that each person who is an employee of the Company or any of its Subsidiaries
upon the consummation of the Offer (including each such person who is on
vacation, temporary layoff, approved leave of absence, sick leave or short-term
disability) shall be permitted to remain an employee of the Company or the
Surviving Corporation or a Subsidiary of the Company or of the Surviving
Corporation, as the case
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may be, immediately following such time with wages or salary, as applicable, no
less favorable than as in effect immediately preceding such time. Parent shall
take all necessary action so that each person receiving, or but for any waiting
period would be receiving, long-term disability benefits under a plan of the
Company or any of its Subsidiaries upon the consummation of the Offer shall
retain after such time the right to continue or begin receiving such long-term
disability benefits, so long as they remain disabled. Until the first
anniversary of the consummation of the Offer, Parent shall take all necessary
action so that the Company, the Surviving Corporation and their Subsidiaries
maintain for each employee of the Company and its Subsidiaries who is employed
by the Company or the Surviving Corporation or a Subsidiary of the Company or
the Surviving Corporation upon the consummation of the Offer (collectively, the
"Retained Employees") wages and other compensation levels, and benefits
(including without limitation benefits thereunder for the spouses, dependents
and other beneficiaries of Retained Employees, if applicable) of the types
provided under the Benefit Plans, and under all other employee benefit plans,
policies, arrangements and understandings that would be Benefit Plans but for
their not being material (the "Other Benefit Plans"), as in effect as of the
consummation of the Offer which are not and have eligibility requirements that
are not less favorable than those wages and other compensation levels, and
benefits provided under the Benefit Plans and the Other Benefit Plans, as in
effect as of the consummation of the Offer. Parent shall take all necessary
action so that each Retained Employee shall after the consummation of the Offer
continue to be credited with the unused vacation and sick leave credited to such
employee through the consummation of the Offer under the applicable vacation and
sick leave policies of the Company and its Subsidiaries, and Parent shall permit
or cause the Company, the Surviving Corporation and their Subsidiaries to permit
such employees to use such vacation and sick leave. Parent shall take all
necessary action so that, for all purposes under each benefit plan maintained or
otherwise provided by the Company, the Surviving Corporation or any of their
Subsidiaries in which employees or former employees of the Company and its
Subsidiaries or the spouses, dependents or other beneficiaries of such persons
become eligible to participate after the consummation of the Offer, each such
person shall be credited with all years of service to the extent such service
would be taken into account under the Benefit Plan or Other Benefit Plan
providing benefits of a similar type in effect at the consummation of the Offer.
(b) Parent shall take all necessary action so that neither it, the Company,
the Surviving Corporation, nor any of their Subsidiaries will during the
one-year period commencing with the consummation of the Offer (i) terminate the
employment of any Retained Employee other than for Cause or (ii) relocate the
site of any such person's employment or reassign any such person to a different
location without such person's consent. Following such one-year period,
employment of any of the Retained Employees will be "at will" and may be
terminated at any time for any reason (subject to any legally binding agreement
other than this Agreement, and subject to any applicable laws or collective
bargaining agreement). Except as otherwise specifically provided in Sections 7.1
through 7.6, nothing in this Agreement shall be interpreted as limiting the
power of the Surviving Corporation, Parent, or any of their respective
Subsidiaries to amend or terminate any particular Benefit Plan or any other
particular employee benefit plan, program, agreement or policy or as requiring
the Surviving Corporation to offer to continue (other than as required by its
terms) any written employment contract, provided, however, that no such
termination or amendment may impair the rights of any person with respect to
benefits or any other payments already accrued as of the time of such
termination or amendment without the consent of such person. As used in this
Section 7.1(b),
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"Cause" shall mean the willful failure to substantially perform the duties
reasonably assigned by Parent or its Subsidiaries (including the Surviving
Corporation), as the case may be (other than a failure resulting from
disability), any act of dishonesty, the commission of a felony, or a significant
violation of any statutory or common law duty of loyalty to Parent and its
Subsidiaries (including the Surviving Corporation).
Section 7.2 Severance Policy and Other Agreements. (a) For a period of not
less than twelve months from the consummation of the Offer, Parent shall
maintain, and shall cause to be maintained by the Company, the Surviving
Corporation and their Subsidiaries, for the benefit of the Retained Employees
the Company's Severance Pay Plan as in effect as of the date hereof.
(b) Parent shall honor or cause to be honored by the Company, the Surviving
Corporation and their Subsidiaries all Employment Agreements, copies of which
have been made available by the Company to Parent, with the persons who are
directors, officers and employees of the Company and its Subsidiaries (it being
understood that nothing herein shall be deemed to mean that the Company, the
Surviving Corporation and their Subsidiaries shall not be required to honor
their obligations under any legally binding employment, bonus, severance,
consulting, termination or non-competition agreement to which they are a party).
Parent acknowledges and agrees that anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by, or any other amount resulting from compensation, benefits or
any other remuneration provided by, Parent, the Company, the Surviving
Corporation or any of their Subsidiaries to or for the benefit of any person
employed by the Company or any of its Subsidiaries at any time before the
consummation of the Offer (a "Payment") is or will be subject to the excise tax
imposed by Section 4999 of the Code as a result of the consummation of the Offer
or the Merger, or any interest or penalties or expenses (including any attorney
fees or other professional expenses incurred in challenging the application of
any such tax) are incurred by such person with respect to such excise tax (such
excise tax, together with any such interest and penalties and expenses, are
hereinafter collectively referred to as the "Excise Tax"), then such person
shall be entitled to receive from Parent, the Company or the Surviving
Corporation, and Parent shall cause the Company or the Surviving Corporation to
make, an additional payment pursuant to the terms of the DEKALB Genetics
Corporation Policy and Procedure Regarding Reimbursement of Employees for
Parachute Payment Taxes and Expenses (the "Policy and Procedure"). Parent shall
maintain, and shall cause to be maintained by the Company, the Surviving
Corporation and their Subsidiaries such Policy and Procedure to the extent
required pursuant to the terms thereof.
Section 7.3 Bonus Programs. Without limitation of Parent's or the Company's
obligations under any existing Employment Agreement, Parent shall maintain, or
shall cause the Company and the Surviving Corporation to maintain, the Company's
bonus programs set forth in the documents made available by the Company to
Parent through the end of the twelve-month period beginning on the most recent
September 1 preceding the consummation of the Offer, with bonuses to be paid to
each Retained Employee participating thereunder in accordance with the
performance goals previously established for such period (the "Existing Goals"),
if (i) the achievement of the Existing Goals can still reasonably be measured
despite the consummation of the transactions contemplated hereby, and (ii) such
achievement has not become unreasonably more difficult or easier than it would
have been absent such consummation. If either of clause (i) or clause (ii) of
the preceding sentence
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is not satisfied with respect to the Existing Goals applicable to a particular
Retained Employee, then the Existing Goals shall be reasonably adjusted, if
possible, so that both such clauses are satisfied as to the adjusted Existing
Goals, and if no such adjustment is possible, such Retained Employee's bonus
shall be paid at his or her target bonus level (subject to all terms and
conditions of such bonus except for the Existing Goals that cannot be so
adjusted).
Section 7.4 Welfare Plans. Parent shall, or shall cause the Company and the
Surviving Corporation to, take all necessary action so that there shall be (i)
waived all limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Retained Employees and former employees of the Company and its Subsidiaries
and the spouses, dependents and other beneficiaries of such persons under any
welfare or fringe benefit plan that any such persons may be eligible to
participate in after the consummation of the Offer, other than limitations or
waiting periods that are in effect with respect to such persons and that have
not been satisfied as of the consummation of the Offer under the corresponding
welfare or fringe benefit plan maintained for such persons immediately prior to
the consummation of the Offer and are not satisfied thereafter and (ii) provided
each such person credit for any co-payments and deductibles paid by such person
for the applicable plan year prior to the consummation of the Offer in
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans that such person is eligible to participate in after the
consummation of the Offer. Parent shall, or shall cause the Company and the
Surviving Corporation to, provide or continue to provide (and never terminate),
pursuant to the DEKALB Genetics Corporation Retiree Health Care Plan as in
effect on the date hereof, retiree medical and other retiree health benefits to
persons who are immediately prior to the consummation of the Offer eligible for
such benefits under the EMWA Plan as in effect immediately prior to the
consummation of the Offer, or who would immediately prior to the consummation of
the Offer be eligible therefor but for the fact that they, or the person with
respect to whom they are a dependent, had not yet terminated employment with the
Company and its Subsidiaries, or who will or would within twelve months after
the consummation of the Offer be so eligible therefor (such eligibility to be
determined based on the terms of the EMWA Plan as in effect immediately prior to
the date of this Agreement). Parent shall, or shall cause the Company and the
Surviving Corporation to, provide or continue to provide (and never terminate),
pursuant to the DEKALB Genetics Corporation Retiree Health Care Plan as in
effect on the date hereof, medical and other health benefits to persons who
incur or are dependents of persons who incur an illness or other disability or
leave of absence, or are dependents of persons who die, prior to the
consummation of the Offer and who are at such time, or would be after such time,
according to the terms of the EMWA Plan as in effect immediately prior to such
time, eligible for benefits under such plan due to such illness or other
disability or leave of absence or death. Parent shall take all necessary action
so that no amount held at any particular time by the trustee pursuant to the
terms of EMWA Trust Agreement entered into between First National Bank in DeKalb
and the Company (the "EMWA Trust") shall be used for the benefit of any persons
other than the group of employees and former employees (and their spouses,
dependents and beneficiaries) who contributed, or with respect to whom the
Company, the Surviving Corporation and their Subsidiaries contributed, such
amounts. In particular, if after the consummation of the Offer any action is
taken to change the group of employees and former employees covered by the EMWA
Plan, the assets of the EMWA Trust at such time shall only be used for the
benefit of the group of employees and former employees (and their
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spouses, dependents and beneficiaries) covered by the EMWA Plan prior the
effective time of such action.
Section 7.5 Retirement Plan. For a period of not less than twelve months
from the consummation of the Offer, Parent shall (i) maintain, or cause to be
maintained, for the benefit of the Retained Employees the Company's Savings and
Investment Plan (the "Retirement Plan") as in effect prior to the consummation
of the Offer and (ii) contribute, or cause to be contributed, to the Retirement
Plan, on behalf of each Retained Employee who is or becomes a participant
therein, matching contributions in amounts determined in accordance with the
terms of the Retirement Plan as in effect as of the date hereof, such
contributions to be made on at least a bi-weekly basis, and a "Compensation
Based Contribution" as defined therein equal to 2% of compensation as described
in the Retirement Plan.
Section 7.6 Options; Restricted Stock Awards. (a) Prior to the execution of
this Agreement, the Board of Directors of the Company or the Long-Term Incentive
Plan Administrative Committee of the Board of Directors of the Company has
adopted such resolutions or has taken such other actions as are required (i) to
provide that each Company Stock Option heretofore granted under any Company
Stock Plan (other than the Company's Director Stock Option Plan) outstanding
immediately prior to the consummation of the Offer, whether or not then
exercisable, shall become fully exercisable immediately prior to the
consummation of the Offer, (ii) to provide that all restrictions applicable to
any restricted stock award heretofore granted under any Company Stock Plan
outstanding immediately prior to the Offer shall lapse immediately prior to the
consummation of the Offer, (iii) to provide that upon the consummation of the
Offer each Company Stock Option then outstanding shall be cancelled in
consideration for the cash payment described in Section 7.6(b) and (iv) with
respect to Company Stock Options held by persons subject to the reporting
requirements of Section 16 of the Exchange Act, to specifically approve the
transactions contemplated by this Section 7.6. The Company shall use reasonable
efforts to obtain any necessary consents of the holders of such Company Stock
Options to effect this Section 7.6.
(b) The Company shall use reasonable efforts to ensure that, upon the
consummation of the Offer each Company Stock Option then outstanding shall be
cancelled by the Company in consideration for which the holder thereof shall
thereupon be entitled to receive promptly (but in no event later than five days)
after the consummation of the Offer, a cash payment in respect of such
cancellation from the Company in an amount (if any) equal to (i) the product of
(x) the number of shares of Company Common Stock subject or related to such
Company Stock Option and (y) the excess, if any, of the Offer Price over the
exercise or purchase price per share of Company Common Stock subject or related
to such Option, minus (ii) all applicable federal, state and local taxes
required to be withheld by the Company. The Company shall use reasonable efforts
to ensure that, after giving effect to the foregoing, no Company Stock Option
shall be exercisable for Company Common Stock following the consummation of the
Offer.
Section 7.7 Stockholder Approval; Preparation of Proxy Statement. (a) If
the Company Stockholder Approval is required by law, the Company shall, at
Parent's request, as soon as practicable following the expiration of the Offer
in accordance with the terms of Section 1.1 of this Agreement, so long as
permitted by law, duly call, give notice of, convene and hold a meeting of its
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stockholders (the "Stockholders Meeting") for the purpose of obtaining the
Company Stockholder Approval. The Company shall, through its Board of Directors
(but subject to the right of the Company's Board of Directors to withdraw or
modify its approval or recommendation of the Offer, the Merger and this
Agreement as set forth in Section 6.2(b)), recommend to its stockholders that
the Company Stockholder Approval be given. Notwithstanding the foregoing, if Sub
or any other Subsidiary of Parent shall acquire 90% or more of the outstanding
shares of Company Class A Common Stock and 90% or more of the outstanding shares
of Company Class B Common Stock, the parties shall, at the request of Parent,
take all necessary and appropriate action to cause the Merger to become
effective as soon as reasonably practicable after the expiration of the Offer
without a Stockholders Meeting in accordance with Section 253 of the DGCL.
(b) If the Company Stockholder Approval is required by law, the Company
shall, at Parent's request, as soon as practicable following the expiration of
the Offer in accordance with the terms of Section 1.1, and to the extent
permitted by law, prepare and file a preliminary Proxy Statement with the SEC
and shall use all reasonable efforts to respond to any comments of the SEC or
its staff, and, to the extent permitted by law, to cause the Proxy Statement to
be mailed to the Company's stockholders as promptly as practicable after
responding to all such comments to the satisfaction of the staff. The Company
shall notify Parent promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to the Proxy Statement or for additional information and will supply Parent with
copies of all correspondence between the Company or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand, with respect to
the Proxy Statement or the Merger. If at any time prior to the Stockholders
Meeting there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly prepare and mail
to its stockholders such an amendment or supplement. Parent shall cooperate with
the Company in the preparation of the Proxy Statement or any amendment or
supplement thereto. Parent and its counsel shall be given a reasonable
opportunity to review and comment upon the Proxy Statement and any such
correspondence prior to its filing with the SEC or dissemination to the
Company's stockholders, and the Company shall not so file or disseminate any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects.
(c) Parent agrees to cause all Shares purchased pursuant to the Offer and
all other Shares of the Company entitled to vote on the Merger owned by Parent
or any Subsidiary of Parent to be voted in favor of the Merger.
Section 7.8 Access to Information. Upon reasonable notice and subject to
restrictions contained in confidentiality agreements to which the Company is
subject and subject to the terms of the Confidentiality Agreement, dated March
12, 1998, between the Company and Parent, as the same may be amended,
supplemented or modified (the "Confidentiality Agreement"), the Company shall,
and shall cause each of its Subsidiaries to, afford to Parent and to the
officers, employees, accountants, counsel and other representatives of Parent
all reasonable access, during normal business hours during the period prior to
the Effective Time, to all their respective personnel, properties, books,
contracts, commitments and records and, during such period, the Company shall
and shall cause each of its Subsidiaries to furnish promptly to Parent (a) a
copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to the
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requirements of the Federal or state securities laws or the Federal tax laws and
(b) all other information concerning its business, properties and personnel as
Parent may reasonably request, provided, that until the earlier of the Effective
Time or such time as Parent's designees shall constitute a majority of the Board
of Directors of the Company, none of the foregoing persons shall have access to
the respective properties, books, contracts, commitments and records of the
Company or its Subsidiaries with respect to (i) pricing or pricing strategy or
(ii) Intellectual Property Rights, except that the independent person who
reviewed the Company's patent applications on behalf of Parent during the due
diligence process conducted in connection with the negotiation of this Agreement
shall be permitted to review the Company's Intellectual Property Rights other
than access to germplasm pedigree and basic research, and in any event, subject
to confidentiality and disclosure limitations comparable to those previously
applicable to such independent person's review of patent applications, and any
representative of Parent shall be entitled to review material relating to the
Company's Intellectual Property Rights that is otherwise publicly available.
Notwithstanding anything to the contrary in this Agreement or any other
agreement to which the Company and Parent are a party, the Confidentiality
Agreement shall terminate and be of no further force and effect from and after
the date upon which the Offer is consummated.
Section 7.9 Fees and Expenses. (a) All fees and expenses incurred in
connection with the Offer, the Merger, this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated.
(b) The Company may pay the fees and expenses of Merrill Lynch described in
Section 4.17 on or prior to the Effective Time.
Section 7.10 Public Announcements. Parent and the Company will consult with
each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law, fiduciary
duties or by obligations pursuant to any listing agreement with any national
securities exchange.
Section 7.11 Real Estate Transfer Tax. Parent and the Company agree that
either the Surviving Corporation or Parent (without any liability to any of the
Company's stockholders) will pay any state or local tax which is attributable to
the transfer of the beneficial ownership of the Company's or its Subsidiaries'
real property, if any (collectively, the "Transfer Taxes"), and any penalties or
interest with respect to the Transfer Taxes, payable in connection with the
consummation of the Offer and the Merger. The Company agrees to cooperate with
Parent in the filing of any returns with respect to the Transfer Taxes,
including supplying in a timely manner a complete list of all real property
interests held by the Company and its Subsidiaries and any information with
respect to such property that is reasonably necessary to complete such returns.
The portion of the consideration allocable to the real property of the Company
and its Subsidiaries shall be determined by Parent in its reasonable discretion.
To the extent permitted by law, the Company's stockholders shall be deemed to
have agreed to be bound by the allocation established pursuant to this Section
7.11 in the preparation of any return with respect to the Transfer Taxes.
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Section 7.12 State Takeover Laws. If any "fair price" or "control share
acquisition" statute or other similar statute or regulation shall become
applicable to the transactions contemplated hereby, Parent and the Company and
their respective Boards of Directors shall use all reasonable efforts to grant
such approvals and take such actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to minimize the effects of any such
statute or regulation on the transactions contemplated hereby.
Section 7.13 Indemnification; Directors and Officers Insurance. (a) All
rights to indemnification or exculpation, existing in favor of a director,
officer, employee or agent (an "Indemnified Person") of the Company or any of
its Subsidiaries (including, without limitation, rights relating to advancement
of expenses and indemnification rights to which such persons are entitled
because they are serving as a director, officer, agent or employee of another
entity at the request of the Company or any of its Subsidiaries), as provided in
the Restated Certificate of Incorporation of the Company, the By-laws of the
Company or any indemnification agreement, in each case, as in effect on the date
of this Agreement, and relating to actions or events through the Effective Time,
shall survive the Merger and shall continue in full force and effect, without
any amendment thereto; provided, however, that the Surviving Corporation shall
not be required to indemnify any Indemnified Person in connection with any
proceeding (or portion thereof) to the extent involving any claim initiated by
such Indemnified Person unless the initiation of such proceeding (or portion
thereof) was authorized by the Board of Directors of the Company or unless such
proceeding is brought by an Indemnified Person to enforce rights under this
Section 7.13; provided further that any determination required to be made with
respect to whether an Indemnified Person's conduct complies with the standards
set forth under the DGCL, the Restated Certificate of Incorporation of the
Company, the By-laws of the Company or any such agreement, as the case may be,
shall be made by independent legal counsel selected by such Indemnified Person
and reasonably acceptable to Parent; and provided further that nothing in this
Section 7.13 shall impair any rights of any Indemnified Person. Without limiting
the generality of the preceding sentence, in the event that any Indemnified
Person becomes involved in any actual or threatened action, suit, claim,
proceeding or investigation after the Effective Time, Parent shall, or shall
cause the Surviving Corporation to, promptly advance to such Indemnified Person
his or her legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the providing by such
Indemnified Person of an undertaking to reimburse all amounts so advanced in the
event of a non-appealable determination of a court of competent jurisdiction
that such Indemnified Person is not entitled thereto.
(b) In the event that, from and after the Effective Time, a third person
asserts any claim against any Indemnified Person with respect to any matter to
which the foregoing indemnities apply, the Indemnified Person shall give prompt
written notice to the Surviving Corporation, and the Surviving Corporation shall
have the right, at its election, to take over the defense or settlement of such
claim at its own expense by giving prompt written notice to the Indemnified
Person; provided, however, that, (i) if the Surviving Corporation does not give
such notice and does not proceed diligently to defend the claim within thirty
(30) days (or such shorter period as is necessary to permit the Indemnified
Person to respond) after receipt of such notice of the claim, then the
Indemnified Person may employ separate counsel to represent it and defend it
against such claim and (ii) if the Surviving Corporation elects to defend the
claim then the Surviving Corporation shall employ counsel
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reasonably satisfactory to the Indemnified Person and the Indemnified Person
shall be entitled to participate in (but not control) the defense of such claim
and to employ separate counsel at its own expense to assist in the handling of
such claim. The Indemnified Person and the Surviving Corporation shall cooperate
in defending any such third person's claim. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Indemnified Person may settle or
compromise any such claim without the prior written consent of the other, which
consent shall not be unreasonably withheld, unless, after consultation between
such parties, the terms of such settlement or compromise release such
Indemnified Person from any and all liability with respect to such claim and do
not in any manner adversely affect the future operations or activities of such
Indemnified Person.
(c) Prior to the Effective Time, the Company shall have the right to obtain
and pay for in full a "tail" coverage directors' and officers' liability
insurance policy ("D&O Insurance") covering a period of not less than six years
after the Effective Time and providing coverage in amounts and on terms
consistent with the Company's existing D&O Insurance. In the event the Company
is unable to obtain such insurance, Parent shall cause the Surviving Corporation
to maintain the Company's D&O Insurance for a period of not less than six years
after the Effective Time; provided, that the Surviving Corporation may
substitute therefor policies of substantially similar coverage and amounts
containing terms no less advantageous to such former directors or officers;
provided further that if the existing D&O Insurance expires or is cancelled
during such period, Parent or the Surviving Corporation shall use its best
efforts to obtain substantially similar D&O Insurance; and provided further that
the Company shall not, without Parent's consent (but after consultation with
Parent), expend an amount in excess of 350% of the last annual premium paid
prior to the date hereof to procure the above described "tail" coverage and
neither Parent nor the Surviving Corporation shall be required to expend, in
order to maintain or procure an annual D&O Insurance policy, in lieu of a tail
policy, an amount in excess of 250% of the last annual premium paid prior to the
date hereof, but in such case shall purchase as much coverage as possible for
such amount.
Section 7.14 Notification of Certain Matters. Parent shall give prompt
notice to the Company, and the Company shall give prompt notice to Parent, of:
(i) the occurrence, or non-occurrence, in each case, to the knowledge of the
Company or Parent, as the case may be, of any event the occurrence, or
non-occurrence, of which results in the executive officers of the Company or
Parent, as the case may be, having a good faith belief that such change or event
would be reasonably likely to cause (x) any representation or warranty of such
entity contained in this Agreement that is not qualified as to materiality to be
untrue or inaccurate in any material respect, (y) any representation or warranty
of such entity contained in this Agreement that is qualified as to materiality
to be untrue or inaccurate in any respect, or (z) any covenant, condition or
agreement of such entity contained in this Agreement not to be complied with or
satisfied in all material respects; and (ii) the executive officers of the
Company or Parent, as the case may be, believing in good faith that the Company
or Parent, as the case may be, has, to the knowledge of the Company or Parent,
as the case may be, failed to comply with in all material respects or satisfy in
all material respects any covenant, condition or agreement of such entity to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 7.14 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice. Each of the
Company, Parent and Sub shall give prompt notice to the other parties hereof of
any notice or other
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communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement.
Section 7.15 Board of Directors. Promptly after such time as Sub purchases
Shares pursuant to the Offer (but subject to the satisfaction of the Minimum
Condition), Sub shall be entitled, to the fullest extent permitted by law, to
designate at its option up to that number of directors, rounded to the next
highest whole number, of the Company's Board of Directors, subject to compliance
with Section 14(f) of the Exchange Act, as will make the percentage of the
Company's directors designated by Sub pursuant to this sentence equal to the
aggregate voting power of the shares of Company Class A Common Stock held by
Parent or any of its Subsidiaries; provided, however, that in the event that
Sub's designees are elected to the Board of Directors of the Company, until the
Effective Time, such Board of Directors shall have (i) at least three directors
who are directors on the date of this Agreement or are designated by a majority
of the directors of the Company who were directors on the date hereof, in each
case excluding the Investor Nominees (as defined in the Investment Agreement)
(the "Independent Directors") and (ii) the number of Investor Nominees required
by the Investment Agreement which shall be in addition to the number of
directors designated by Sub pursuant to this Section 7.15; and provided, further
that, in such event, if the number of Independent Directors shall be reduced
below three for any reason whatsoever, the remaining Independent Directors
shall, to the fullest extent permitted by law, designate a person to fill such
vacancy who shall be deemed to be an Independent Director for purposes of this
Agreement or, if no Independent Directors then remain, the other directors shall
designate three persons to fill such vacancies who shall not be officers or
affiliates of the Company or any of its Subsidiaries, or officers or affiliates
of Parent, of any of its Subsidiaries or of any other entity in which Parent
owns, directly or indirectly, any material amount of capital stock or other
significant ownership interest, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement.
Following the election or appointment of Sub's designees pursuant to this
Section 7.15 and prior to the Effective Time, any termination or amendment of
this Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Sub or waiver or
assertion of any of the Company's rights hereunder, and any other consent or
action by the Board of Directors of the Company with respect to this Agreement
(other than recommending or reconfirming the recommendation that the holders of
the Company Class A Common Stock approve and adopt this Agreement and the
Merger, and making determinations in connection therewith, which recommendations
and determinations may be made by a majority of the Board of Directors as
constituted at any time after such election or appointment of Sub's designees
pursuant to this Section) will require the concurrence of a majority of the
Independent Directors and, to the extent permitted by law, no other action by
the Company, including any action by any other director of the Company, shall be
required to approve such actions. To the fullest extent permitted by applicable
law, the Company shall take all actions requested by Parent which are reasonably
necessary to effect the election of any such designee, including mailing to its
stockholders the Information Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the
Company agrees to make such mailing with the mailing of the Schedule 14D-9
(provided that Sub shall have provided to the Company on a timely basis all
information required to be included in the Information Statement with respect to
Sub's designees). Parent and Sub will be solely responsible for any information
with respect to either of them and their
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nominees, officers, directors and affiliates required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. In connection with the
foregoing, the Company will promptly, at the option of Parent, to the fullest
extent permitted by law, either increase the size of the Company's Board of
Directors and/or obtain the resignation of such number of its current directors
as is necessary to enable Sub's designees to be elected or appointed to the
Company's Board of Directors as provided above.
Section 7.16 Best Efforts. Subject to fiduciary responsibilities, each of
the Company, Parent and Sub agrees to use best efforts to cause the purchase of
Shares pursuant to the Offer prior to the Outside Date, and consummation of the
Merger to occur as soon as practicable after such purchase of Shares. Without
limiting the foregoing, (a) each of the Company, Parent and Sub agrees to use
best efforts to take, or cause to be taken, all actions necessary to comply
promptly with all legal requirements that may be imposed on itself with respect
to the Offer and the Merger (which actions shall include making all filings and
furnishing all information required under the HSR Act and in connection with
approvals of or filings with any other Governmental Entity) and shall promptly
cooperate with and furnish information (including all correspondence with any
Governmental Entity) to each other in connection with any such requirements
imposed upon any of them or any of their Subsidiaries in connection with the
Offer and the Merger (b) each of the Company, Parent and Sub shall, and shall
cause its Subsidiaries to, use best efforts to obtain prior to the Outside Date
(and shall cooperate with each other in obtaining) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity or other
public or private third party required to be obtained or made by Parent, Sub,
the Company or any of their Subsidiaries in connection with the Offer and the
Merger or the taking of any action contemplated thereby or by this Agreement and
(c) if necessary to cause the purchase of Shares pursuant to the Offer prior to
the Outside Date, Parent shall, and shall cause its Subsidiaries to, divest or
hold separate or otherwise take or commit to take any action that limits its
freedom of action with respect to, or its ability to retain, any of the
businesses, product lines or assets of Parent, the Company or any of their
respective Subsidiaries. At the request of Parent, the Company shall agree to
divest, hold separate or otherwise take or commit to take any action that limits
its freedom of action with respect to, or its ability to retain, any of the
businesses, product lines or assets of the Company or any of its Subsidiaries,
provided that any such action may be conditioned upon the purchase of Shares
pursuant to the Offer. Notwithstanding anything to the contrary contained in
this Agreement, in connection with any filing or submission required or action
to be taken by Parent, the Company or any of its respective Subsidiaries to
consummate the Offer, the Merger or the other transactions contemplated in this
Agreement, the Company shall not, without Parent's prior written consent, commit
to any divestiture of assets or businesses of the Company and its Subsidiaries.
Section 7.17 Certain Litigation. The Company agrees that it shall not
settle any litigation commenced after the date hereof against the Company or any
of its directors by any stockholder of the Company relating to the Offer, the
Merger, this Agreement or the Stockholders Agreement without the prior written
consent of Parent. In addition, the Company shall not voluntarily cooperate with
any third party that may hereafter seek to restrain or prohibit or otherwise
oppose the Offer or the Merger and shall cooperate with Parent and Sub to resist
any such effort to restrain or prohibit or otherwise oppose the Offer or the
Merger.
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Section 7.18 Return of Confidential Information. No later than five (5)
business days following the date hereof, the Company shall take all reasonable
actions necessary to cause all third parties who have received any confidential
information in connection with any discussions of potential acquisition or
business combination proposals relating to the Company during the previous
twelve months, to return such confidential information to the Company or to
destroy all copies and records of such confidential information.
ARTICLE VIII - CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) Company Stockholder Approval. If required by applicable law, the
Company Stockholder Approval shall have been obtained; provided, however, that
Parent and Sub shall vote all of their shares of capital stock of the Company
entitled to vote thereon in favor of the Merger.
(b) No Injunction or Restraint. No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other
Governmental Entity preventing the consummation of the Merger shall be in
effect; provided, however, that each of the parties shall have used their best
efforts to prevent the entry of any such temporary restraining order, injunction
or other order, including, without limitation, taking such action as is required
to comply with Section 7.16, and to appeal promptly any injunction or other
order that may be entered.
(c) Purchase of Shares. Sub shall have previously accepted for payment and
paid for Shares pursuant to the Offer.
(d) HSR Act. Any waiting period (and any extension thereof) under the HSR
Act applicable to the Merger shall have expired or been terminated.
ARTICLE IX - TERMINATION AND AMENDMENT
Section 9.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after the Company Stockholder Approval
(if required by applicable law):
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if (x) as a result of the failure of any of the Offer
Conditions set forth in Exhibit A, (other than the Minimum Condition)
the Offer shall have terminated or expired in accordance
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with its terms without Sub having accepted for payment any Shares
pursuant to the Offer or (y) Sub shall have, consistent with its
obligations hereunder, failed to pay for the Shares prior to November
9, 1999 (the "Outside Date"); provided, however, that the right to
terminate this Agreement pursuant to this Section 9.1(b)(i) shall not
be available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of any such
Offer Condition or if the failure of such condition results from facts
or circumstances that constitute a breach of any representation or
warranty under this Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree or ruling or other action shall
have become final and nonappealable; provided, however, that the right
to terminate this Agreement pursuant to this Section 9.1(b)(ii) shall
not be available to any party who has not used its best efforts to
cause such order to be lifted or otherwise taken such action as is
required to comply with its obligation under Section 7.16;
(c) by Parent or Sub prior to the election of Sub's designees to the Board
of Directors of the Company in the event of a breach by the Company of any
representation, warranty, covenant or other agreement contained in this
Agreement which (i) would give rise to the failure of a condition set forth in
paragraph (d) or (e) of Exhibit A and (ii) cannot be or has not been cured
within 30 days after the giving of written notice to the Company;
(d) by Parent or Sub if either Parent or Sub is entitled to terminate the
Offer as a result of the occurrence of any event set forth in paragraph (c) of
Exhibit A; provided that the temporary suspension of the recommendation of the
Company's Board of Directors referred to herein in accordance with Section
6.2(b) shall not give rise to a right of termination pursuant to this Section
9.1(d);
(e) by the Company, if Sub or Parent shall have breached in any material
respect any of their respective representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
cannot be or has not been cured within 30 days after the giving of written
notice to Parent or Sub, as applicable; or
(f) by the Company, if the Offer has not been timely commenced in
accordance with Section 1.1.
Section 9.2 Effect of Termination. In the event of a termination of this
Agreement by either the Company or Parent as provided in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to Section 4.17, Section 5.6, Section
7.9, this Section 9.2 Article X, the penultimate sentence of Section 1.1(a) and
the last sentence of Section 1.2(c); provided, however, that (a) nothing herein
shall relieve any party for liability for any breach hereof and (b) the periods
of limitation with respect to Proprietary Information provided in the second
paragraph of the Confidentiality Agreement shall not expire.
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Section 9.3 Amendment. Subject to Section 7.15, this Agreement may be
amended by the parties hereto, by action taken or authorized by their respective
Boards of Directors at any time before or after obtaining the Company
Stockholder Approval (if required by law), but if the Company Stockholder
Approval shall have been obtained, thereafter no amendment shall be made which
by law requires further approval by the Company's stockholders without obtaining
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
Section 9.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) subject to the provisions of
Section 7.15, extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) subject to the provisions of
Section 7.15, waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) subject
to the provisions of Section 7.15, waive compliance with any of the agreements
or conditions contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
ARTICLE X - GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations and Warranties and Agreements.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 10.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time of the
Merger.
Section 10.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by overnight courier (providing proof of delivery)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
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(a) if to Parent or Sub, to:
Monsanto Company
700 Chesterfield Parkway North
BB3N
St. Louis, Missouri 63198
Attn: Robert T. Fraley, Ph. D.
Telecopy: 314 737-7037
with copies to:
Monsanto Company
800 N. Lindbergh Blvd.
E2ND
St. Louis, Missouri 63167
Attn: Barbara Blackford, Esq.
Telecopy: 314 694-2594
and:
Wachtell Lipton Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attn: Richard D. Katcher, Esq.
David M. Silk, Esq.
Telecopy: 212 403-2000
(b) if to the Company, to:
DEKALB Genetics Corporation
3100 Sycamore Road
DeKalb, Illinois 60115
Attn: Richard O. Ryan, President and
Chief Operating Officer
Telecopy: 815 758-3711
with copies to:
DEKALB Genetics Corporation
3100 Sycamore Road
DeKalb, Illinois 60115
Attn: John H. Witmer, Jr., Esq.
Senior Vice President and General Counsel
Telecopy: 815 895-4862
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Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attn: Thomas A. Cole, Esq.
Telecopy: 312 853-7036
and:
Sidley & Austin
875 Third Avenue
New York, New York 10022
Attn: James G. Archer, Esq.
Telecopy: 212 906-2021
Section 10.3 Interpretation; Definitions. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or a
Section of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." As used in
this Agreement, the phrase "made available" shall mean that the information
referred to has been made available if requested by the party to whom such
information is to be made available.
As used in this Agreement, the following terms have the meanings specified
or referred to in this Section 10.3 and shall be equally applicable to both the
singular and plural forms. Any agreement referred to below shall mean such
agreement as amended, supplemented or modified from time to time to the extent
permitted by the applicable provisions thereof and by this Agreement.
"ACQUISITION AGREEMENT" shall have the meaning set forth in Section 6.2(b).
"AGREEMENT" means this Agreement and Plan of Merger, dated as of May 8,
1998 among Parent, Sub and the Company.
"BENEFIT PLANS" shall have the meaning set forth in Section 4.12(a).
"CAUSE" shall have the meaning set forth in Section 7.1(b).
"CERTIFICATE OF MERGER" shall have the meaning set forth in Section 2.3.
"CLOSING DATE" shall have the meaning set forth in Section 2.2.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"COMPANY CLASS A COMMON STOCK" shall have the meaning set forth in the
second Whereas provision of this Agreement.
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"COMPANY CLASS B COMMON STOCK" shall have the meaning set forth in the
second Whereas provision of this Agreement.
"COMPANY FILED SEC DOCUMENTS" shall have the meaning set forth in Section
4.7.
"COMPANY LETTER" means the letter from the Company to Parent dated the date
hereof, which letter relates to this Agreement and is designated therein as the
Company Letter.
"COMPANY PREFERRED STOCK" shall have the meaning set forth in Section 4.3.
"COMPANY SEC DOCUMENTS" shall have the meaning set forth in Section 4.6.
"COMPANY STOCKHOLDER APPROVAL" shall have the meaning set forth in Section
4.4.
"COMPANY STOCK OPTIONS" shall have the meaning set forth in Section 4.3.
"COMPANY STOCK PLANS" shall have the meaning set forth in Section 4.3.
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section
7.8.
"CONSTITUENT CORPORATIONS" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"CONSUMMATION OF THE OFFER" means the purchase of Shares pursuant to the
Offer.
"D&O INSURANCE" shall have the meaning set forth in Section 7.13(b).
"DGCL" means the General Corporation Law of the State of Delaware.
"DISSENTING SHARES" shall have the meaning set forth in Section 3.1(d).
"DISSENTING STOCKHOLDER" shall have the meaning set forth in Section
3.1(d).
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.3.
"EMWA" shall have the meaning set forth in Section 4.12.
"EMWA PLAN" shall have the meaning set forth in Section 4.12.
"EMWA TRUST" shall have the meaning set forth in Section 7.4.
"ENVIRONMENTAL LAWS" means any applicable statute, law, ordinance,
regulation, rule, judgment, decree or order of any Governmental Entity relating
to any matter of pollution, protection of the environment or environmental
regulation or control or regarding Hazardous Substances.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, together with the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" shall have the meaning set forth in Section 4.12(c).
"ERISA BENEFIT PLANS" shall have the meaning set forth in Section 4.12(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
"EXCISE TAX" shall have the meaning set forth in Section 7.2(b).
"EXISTING GOALS" shall have the meaning set forth in Section 7.4.
"EXPENSES" means documented and reasonable out-of-pocket fees and expenses
incurred or paid by or on behalf of Parent in connection with the Offer, the
Merger or the consummation of any of the transactions contemplated by this
Agreement, including all fees and expenses of law firms, commercial banks,
investment banking firms, accountants, experts and consultants to Parent.
"GOVERNMENTAL ENTITY" means any Federal, state, local or foreign government
or any court, tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, domestic, foreign or
supranational.
"HAZARDOUS SUBSTANCE" means any material defined as toxic or hazardous,
including any petroleum and petroleum products, under any applicable
Environmental Law.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"INDEMNIFIED PERSON" shall have the meaning set forth in Section 7.13(a).
"INDEPENDENT DIRECTORS" shall have the meaning set forth in Section 7.15.
"INFORMATION STATEMENT" shall have the meaning set forth in Section 4.8.
"INTELLECTUAL PROPERTY RIGHTS" means any right to use, all patents, patent
rights, certificates of plant variety protection, trademarks, trade names,
service marks, copyrights, know how and other proprietary intellectual property
rights and computer programs held by the Company or any of its Subsidiaries.
"INVESTMENT AGREEMENT" shall have the meaning set forth in Section 4.3.
"INVESTOR NOMINEES" shall have the meaning set forth in the Investment
Agreement.
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"KNOWLEDGE" shall mean, with respect to the Company, the actual knowledge
of its executive officers and the actual knowledge of the senior officer of each
of its foreign Subsidiaries and, with respect to Parent, the actual knowledge of
its executive officers of Parent.
"LIENS" means any pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when used in
connection with the Company or Parent, as the case may be, any change or effect
(or any development that, insofar as can reasonably be foreseen, is likely to
result in any change or effect) or fact or condition (or any development that,
insofar as can reasonably be foreseen, is likely to result in any fact or
condition) that is materially adverse to the business, properties, assets,
financial condition or results of operations of the Company and its Subsidiaries
taken as a whole, or Parent and its Subsidiaries taken as a whole, as the case
may be, provided, however, that (i) any adverse change, effect or development
that is primarily caused by conditions affecting the United States economy
generally or the economy of any nation or region in which the Company or Parent,
as the case may be, or its Subsidiaries conducts business that is material to
the business of the Company or Parent, as the case may be, and its Subsidiaries,
taken as a whole, shall not be taken into account in determining whether there
has been (or whether there could reasonably be foreseen) a "Material Adverse
Change" or "Material Adverse Effect" with respect to the Company or Parent, as
the case may be, (ii) any adverse change, effect or development that is
primarily caused by conditions generally affecting the industries in which the
Company or Parent, as the case may be, conducts its business shall not be taken
into account in determining whether there has been (or whether there could
reasonably be foreseen) a "Material Adverse Change" or "Material Adverse Effect"
with respect to the Company or Parent, as the case may be, and (iii) any adverse
change, effect or development that is primarily caused by the announcement or
pendency of this Agreement, the Offer, the Merger or the transactions
contemplated hereby shall not be taken into account in determining whether there
has been (or whether there could reasonably be foreseen) a "Material Adverse
Change" or "Material Adverse Effect" with respect to the Company or Parent, as
the case may be.
"MERGER" shall have the meaning set forth in the third Whereas provision of
this Agreement.
"MERGER CONSIDERATION" shall have the meaning set forth in Section 3.1(c).
"MERRILL LYNCH" shall have the meaning set forth in Section 1.2(a).
"MINIMUM CONDITION" shall have the meaning set forth in Exhibit A of this
Agreement.
"OFFER" shall have the meaning set forth in the second Whereas provision of
this Agreement.
"OFFER CONDITIONS" shall have the meaning set forth in Section 1.1(a).
"OFFER DOCUMENTS" shall have the meaning set forth in Section 1.1(b).
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"OFFER PRICE" shall have the meaning set forth in the second Whereas
provision of this Agreement.
"OTHER BENEFIT PLANS" shall have the meaning set forth in Section 7.1(a).
"OUTSIDE DATE" shall have the meaning set forth in Section 9.1(b).
"PARENT" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"PARENT LETTER" means the letter from Parent to the Company dated the date
hereof, which letter relates to this Agreement and is designated therein as the
Parent Letter.
"PAYING AGENT" shall have the meaning set forth in Section 3.2(a).
"PAYMENT" shall have the meaning set forth in Section 7.2(b).
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"POLICY AND PROCEDURE" shall have the meaning set forth in Section 7.2.
"PROXY STATEMENT" shall have the meaning set forth in Section 4.8.
"REGISTERED HOLDER" shall have the meaning set forth in the Stockholders
Agreement.
"RETAINED EMPLOYEES" shall have the meaning set forth in Section 7.1(a).
"RETIREMENT PLAN" shall have the meaning set forth in Section 7.5.
"SCHEDULE 14D-1" shall have the meaning set forth in Section 1.1(b).
"Schedule 14D-9" shall have the meaning set forth in Section 1.2(b).
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"SHARES" shall have the meaning set forth in the second Whereas provision
of this Agreement.
"SIGNIFICANT SUBSIDIARY" shall have the meaning set forth in Section 4.1.
"STOCK EQUIVALENTS" shall have the meaning set forth in Section 4.3.
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"STOCKHOLDERS AGREEMENT" shall have the meaning set forth in the fifth
Whereas provision of this Agreement.
"STOCKHOLDERS MEETING" shall have the meaning set forth in Section 7.7(a).
"SUB" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"SUBSIDIARY" or "SUBSIDIARY" of any person means another person, an amount
of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
"SURVIVING CORPORATION" shall have the meaning set forth in Section 2.1.
"TAKEOVER PROPOSAL" shall have the meaning set forth in Section 6.2(a).
"TAX" AND "TAXES" means any federal, state, local or foreign net income,
gross income, gross receipts, windfall profit, severance, property, production,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum or any other tax, custom, duty, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed by any
Governmental Entity.
"TAX RETURN" means any return, report or similar statement required to be
filed with respect to any tax including, without limitation, any information
return, claim for refund, amended return or declaration of estimated tax.
"TRANSFER TAXES" shall have the meaning set forth in Section 7.11.
"U.S. BENEFIT PLANS" shall have the meaning set forth in Section 4.12(a).
"VOTING TRUST AGREEMENT" shall have the meaning set forth in the
Stockholders Agreement.
"VOTING TRUSTEE" shall have the meaning set forth in the Stockholders
Agreement.
Section 10.4 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
Section 10.5 Entire Agreement; No Third-Party Beneficiaries. Except for the
Confidentiality Agreement and the Investment Agreement (including the
confidentiality agreement dated May 16, 1995 referenced therein) this Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. To the extent there is any inconsistency between the
terms of this Agreement and the Confidentiality Agreement and/or the Investment
Agreement, the provisions of this Agreement shall
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govern. This Agreement, except for the provisions of Section 7.13 and the second
and third sentences of Section 7.2(b), is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
Section 10.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. In addition, each of the parties hereto (i) consents to submit
itself to the personal jurisdiction of any Federal or state court located in the
State of Delaware in the event any dispute arises out of this Agreement or any
of the transactions contemplated by this Agreement, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (iii) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a Federal or state court sitting in the State
of Delaware.
Section 10.7 Assignment. Except as otherwise provided in Section 1.1(a)
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior written consent
of the other parties except that Parent shall be able without the consent of the
Company to assign all of its and Sub's rights and obligations under this
Agreement to another Person that is capable of acquiring a majority of the Class
A Common Stock by the Outside Date, subject in any case to Parent's guarantee of
the performance by such other Person of all of Parent's and Sub's obligations
hereunder, including without limitation the obligation to pay the Offer Price
and the Merger Consideration, and the Company shall take all action necessary to
permit such assignee to consummate the Merger after the purchase of Shares.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
Section 10.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
Section 10.9 Enforcement of this Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, such remedy being in addition to any
other remedy to which any party is entitled at law or in equity.
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<PAGE> 51
Section 10.10 Obligations of Subsidiaries. Whenever this Agreement requires
any Subsidiary of Parent (including Sub) or of the Company to take any action,
such requirement shall be deemed to include an undertaking on the part of Parent
or the Company, as the case may be, to cause such Subsidiary to take such
action.
Section 10.11. Merger of the Company into Sub. If at any time prior to the
Closing Date Parent notifies the Company that it desires for the Company to be
merged with and into Sub (in lieu of Sub merging with and into the Company), the
Company, Parent and Sub will promptly negotiate in good faith an amendment to
and restatement of this Agreement which provides for such changes to this
Agreement as are necessary or appropriate to effectuate such merger (and upon
finalization thereof, the parties will promptly enter into such amendment and
restatement).
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized all as of
the date first written above.
MONSANTO COMPANY
By:/s/ Derek K. Rapp
--------------------------------
Derek Rapp
Director, Mergers & Acquisitions
CORN ACQUISITION CORPORATION
By:/s/ Barbara L. Blackford
-------------------------------
Barbara Blackford
President
DEKALB GENETICS CORPORATION
By:/s/ Bruce P. Bickner
------------------------------
Bruce P. Bickner
Chairman and Chief Executive
Officer
47
<PAGE> 52
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer, but subject, in all cases, to
Parent's and Sub's obligations set forth under the Merger Agreement, including,
without limitation, under Section 1.1 and Section 7.16, Sub shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer), to pay for any Shares tendered pursuant to the
Offer unless (i) there shall have been validly tendered and not withdrawn prior
to the expiration of the Offer such number of shares of Company Class A Common
Stock (together with the shares of Company Class A Common Stock then held by
Parent or any of its Subsidiaries) that would constitute a majority of the
outstanding shares of Company Class A Common Stock (assuming the exercise of all
options to purchase, and the conversion or exchange of all securities
convertible or exchangeable into, shares of Company Class A Common Stock)
outstanding at the expiration date of the Offer (the "Minimum Condition") and
(ii) any waiting period under the HSR Act applicable to the purchase of Shares
pursuant to the Offer shall have expired or been terminated prior to the
expiration of the Offer. Furthermore, notwithstanding any other term of the
Offer, but subject, in all cases, to Parent's and Sub's obligations set forth in
the Merger Agreement under Section 1.1, Sub shall not be required to accept for
payment or, subject as aforesaid, to pay for any Shares not theretofore accepted
for payment or paid for, and may terminate the Offer at any time if, at any time
on or after the date of this Agreement and before the acceptance of such Shares
for payment or the payment therefor, any of the following conditions exists
(other than as a result of any action or inaction of Parent or any of its
Subsidiaries that constitutes a breach of this Agreement):
(a) there shall be threatened or pending by any Governmental
Entity any suit, action or proceeding (i) challenging the acquisition
by Parent or Sub of any Shares under the Offer, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by this
Agreement or the Stockholders Agreement or seeking to obtain from the
Company, Parent or Sub any damages that are material in relation to
the Company and its subsidiaries taken as a whole, (ii) seeking to
prohibit or materially limit the ownership or operation by the
Company, Parent or any of their respective Subsidiaries of a material
portion of the business or assets of the Company and its Subsidiaries,
taken as a whole, or Parent and its Subsidiaries, taken as a whole, or
to compel the Company or Parent to dispose of or hold separate any
material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken
as a whole, as a result of the Offer or any of the other transactions
contemplated by this Agreement or the Stockholders Agreement, (iii)
seeking to impose material limitations on the ability of Parent or Sub
to acquire or hold, or exercise full rights of ownership of, any
Shares to be accepted for payment pursuant to the Offer including,
without limitation, the right to vote such Shares on all matters
properly presented to the stockholders of the Company, (iv) seeking to
prohibit
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<PAGE> 53
Parent or any of its Subsidiaries from effectively controlling in any
material respect any material portion of the business or operations of
the Company or its Subsidiaries or (v) which otherwise is reasonably
likely to have a material adverse effect on the business, properties,
assets, financial condition or results of operations of the Company
and its Subsidiaries taken as a whole; provided that the right of Sub
to not accept for payment or pay for, any Shares not theretofore
accepted for payment or paid for, or to terminate the Offer, pursuant
to this subparagraph (a) shall not be available if Parent or Sub has
not taken such action as is required to comply with Section 7.16;
(b) there shall be enacted, entered, enforced, promulgated or
deemed applicable to the Offer or the Merger by any Governmental
Entity any statute, rule, regulation, judgment, order or injunction,
other than the application to the Offer or the Merger of applicable
waiting periods under the HSR Act, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above; provided that the
right of Sub to not accept for payment or pay for, any Shares not
theretofore accepted for payment or paid for, or to terminate the
Offer pursuant to this subparagraph (b) shall not be available to
Parent or Sub if Parent or Sub has not taken such action as is
required to comply with Section 7.16;
(c) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent
or Sub its approval or recommendation of the Offer, the Merger or this
Agreement or (ii) the Board of Directors of the Company or any
committee thereof shall have resolved to take any of the foregoing
actions;
(d) any of the representations and warranties of the Company set
forth in this Agreement that are qualified as to materiality shall not
be true and correct in any respect or any such representations and
warranties that are not so qualified shall not be true and correct in
any material respect, in each case, at the date of this Agreement and
as if such representations and warranties were made as of such time of
determination (except that (i) representations and warranties that
speak as of a specified date shall only be true and correct to such
extent as of such date and (ii) no representation or warranty of the
Company shall be deemed to be untrue in any respect as a result of any
event or circumstance that occurred after (and did not occur on or
before) the first anniversary of the date hereof);
(e) the Company shall have and be continuing to have failed to
perform in any material respect any material obligation or to comply
in any material respect with any material agreement or covenant of the
Company to be performed or complied with by it under this Agreement;
or
A-2
<PAGE> 54
(f) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on a national
securities exchange in the United States (excluding any coordinated
trading halt triggered solely as a result of a specified decrease in a
market index), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iii)
any limitation (whether or not mandatory) by any Governmental Entity
on, or other event that materially adversely affects, the extension of
credit by banks or other lending institutions, (iv) a commencement of
a war or armed hostilities or other national or international calamity
directly or indirectly involving the United States which in any case
is reasonably expected to have a material adverse effect on the
Company or to materially adversely affect Parent's or Sub's ability to
complete the Offer and/or the Merger or materially delay the
consummation of the Offer and/or the Merger; or
(g) this Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of Parent and Sub and
may, subject to the terms of this Agreement, be waived by Parent and Sub in
whole or in part at any time and from time to time in their sole discretion. The
failure by Parent or Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
Terms used but not defined herein shall have the meanings assigned to such terms
in the Agreement to which this Exhibit A is a part.
A-3
<PAGE> 55
EXHIBIT B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
DEKALB GENETICS CORPORATION
ARTICLE I
----------
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
DEKALB Genetics Corporation
ARTICLE II
----------
The address of the Corporation's registered office in the State of Delaware
is The Corporation Trust Center, 1209 Orange Street in the City of Wilmington,
County of New Castle. The name of the Corporation's registered agent at such
address is The Corporation Trust Company.
ARTICLE III
-----------
The purpose of the Corporation shall be to engage in any lawful act or
activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.
ARTICLE IV
----------
Section 1. The Corporation shall be authorized to issue 2,000 shares of
capital stock, of which 1,000 shares shall be shares of Common Stock, $0.01 par
value ("Common Stock"), and 1,000
B-1
<PAGE> 56
shares shall be shares of Preferred stock, $0.01 par value ("Preferred Stock").
Section 2. Shares of Preferred Stock may be issued from time to time in one
or more series. The Board (as defined below) is hereby authorized to fix the
voting rights, if any, designations, powers, preferences and the relative,
participation, optional or other rights, if any, and the qualifications,
limitations or restrictions thereof, of any unissued series of Preferred Stock;
and to fix the number of shares constituting such series, and to increase or
decrease the number of shares of any such series (but not below the number of
shares thereof then outstanding).
Section 3. Except as otherwise provided by law or by the resolution or
resolutions adopted by the Board designating the rights, powers and preferences
of any series of Preferred Stock, the Common Stock shall have the exclusive
right to vote for the election of directors and for all other purposes. Each
share of Common Stock shall have one vote, and the Common Stock shall vote
together as a single class.
ARTICLE V
----------
Unless and except to the extent that the By-Laws of the Corporation shall
so require, the election of directors of the Corporation need not be by written
ballot.
ARTICLE VI
----------
In furtherance and not in limitation of the powers conferred by law, the
Board of Directors of the Corporation (the "Board") is expressly authorized and
empowered to make, alter and repeal, the By-Laws of the Corporation by a
majority vote at any regular or special meeting of the Board or by written
consent, subject to the power of the stockholders of the Corporation to alter or
repeal any
B-2
<PAGE> 57
By-Laws made by the Board.
ARTICLE VII
-----------
The Corporation reserves the right at any time from time to time to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation, and any other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the right reserved in this
Article.
ARTICLE VIII
------------
Section 1. Elimination of Certain Liability of Directors. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation thereof is not
permitted under the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended.
Any appeal or modification of the foregoing paragraph 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 such repeal or
modification.
Section 2. Indemnification and Insurance.
(a) Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative
B-3
<PAGE> 58
or investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director or officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, to the fullest extent permitted by law, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
said law permitted the Corporation to provide prior to such amendment), against
all expense, liability and loss (including attorneys' fees, judgments, fines,
amounts paid or to be paid in settlement, and excise taxes or penalties arising
under the Employee Retirement Income Security Act of 1974) reasonably incurred
or suffered by such person in connection therewith and such indemnification
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in paragraph (b)
hereof, the Corporation shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the General Corporation Law of the State of Delaware requires,
the payment of such expenses incurred by a director or officer in his or her
capacity as a
B-4
<PAGE> 59
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Section or
otherwise. The Corporation may, by action of the Board, provide indemnification
to employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of this
Section is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law of the State of Delaware for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she 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 Corporation (including its Board, independent legal counsel, or its
stockholders) that the claimant
B-5
<PAGE> 60
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.
(c) Non-Exclusivity of Rights. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, By-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the General Corporation Law of the State of Delaware.
B-6
<PAGE> 1
Exhibit (c)(2)
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT, dated as of May 8, 1998 (this
"Agreement"), among Monsanto Company, a Delaware corporation ("Parent"), and the
voting trustees, individually and in his or her capacity as such voting trustee
(the "Voting Trustees"), and the registered holders of voting trust
certificates, individually and in his or her capacity as such registered holder
(the "Registered Holders"), under that certain Roberts Family Voting Trust
Agreement, dated as of January 31, 1996 (the "Voting Trust Agreement"), relating
to shares of Class A Common Stock ("Voting Common Stock") of DEKALB Genetics
Corporation, a Delaware corporation (the "Company"),
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Agreement
by the parties hereto, the Company, Parent and Corn Acquisition Corporation, a
Delaware corporation ("Sub"), are entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to which Parent
has agreed to make or cause Sub to make a cash tender offer (the "Offer") for
all outstanding shares of Voting Common Stock and Class B Common Stock of the
Company (collectively, "Company Common Shares") at the Offer Price (as defined
in the Merger Agreement), the completion of such tender offer to be followed by
a merger of Sub with and into the Company (the "Merger");
WHEREAS, Parent and Sub are entering into the Merger Agreement and
pursuing the transactions contemplated thereby in reliance on the
representations and warranties of the Voting Trustees and the Registered Holders
contained herein;
WHEREAS, the Voting Trustees possess record title to the shares of
Voting Common Stock subject to the Voting Trust Agreement as set forth on
Schedule I attached hereto (the "Subject Shares") and are entitled, upon the
written instruction of the Registered Holders, to vote in favor of the Merger
Agreement and the transactions contemplated thereby, and to tender and sell to
Parent pursuant to the Offer, all of the Subject Shares;
WHEREAS, each Registered Holder set forth on Schedule II hereto is the
holder of Trust Certificates, as defined in the Voting Trust Agreement, with
respect to, and beneficially owns, the number of Subject Shares set forth
opposite such Registered Holder's name on Schedule II; and
WHEREAS, as a condition to the willingness of Parent to enter into the
Merger Agreement, Parent has required that each Voting Trustee and each
Registered Holder agree,
1
<PAGE> 2
and in order to induce Parent to enter into the Merger Agreement, each Voting
Trustee and each Registered Holder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE I
VOTING OF SHARES
SECTION 1.1 Instructions to Voting Trustees. Contemporaneously with the
execution and delivery of this Agreement by the parties hereto, each Registered
Holder has provided written instructions to the Voting Trustees in the form
attached hereto as Exhibit A (the "Voting and Tendering Instructions") to (a) at
any duly noticed meeting of the stockholders of the Company called to vote upon
the Merger Agreement and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, vote the Subject Shares set
forth opposite such Registered Holder's name on Schedule II hereto in favor of
the approval and adoption of the Merger Agreement and the transactions
contemplated thereby, and (b) be present (in person or by proxy) at any duly
noticed meeting of stockholders of the Company or any adjournment thereof or in
any other circumstances under which the vote, consent or other approval of the
stockholders of the Company is sought with respect to any Business Combination
(as such term is defined in the Monsanto Agreement (as hereinafter defined))
other than the Merger, and vote (or cause to be voted) such Subject Shares
against any such Business Combination, in either such case during the time this
Agreement is in effect. Each Registered Holder agrees not to amend or modify or
take any action that would nullify the Voting and Tendering Instructions, so
long as this Agreement is in effect. Each Voting Trustee and each Registered
Holder acknowledges and agrees that the instructions contained in the Voting and
Tendering Instructions are sufficient to authorize the Voting Trustees to vote
the Subject Shares in accordance with the terms thereof.
SECTION 1.2 Voting Agreement. At any duly noticed meeting of
stockholders of the Company called to vote upon the Merger Agreement and the
transactions contemplated thereby or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval (including by written
consent) with respect to the Merger Agreement and the transactions contemplated
thereby is sought, the Voting Trustees shall vote (or cause to be voted) the
Subject Shares in accordance with the Voting and Tendering Instructions. At any
duly noticed meeting of stockholders of the Company or any adjournment thereof
or in any other circumstances upon which the stockholders' vote, consent or
other approval is sought, the Voting Trustees shall be present (in person or by
proxy) and shall vote (or cause to be voted) the Subject Shares against: (a) any
action, proposal or agreement that could reasonably be expected to result in a
breach in any material respect of any covenant, representation or warranty or
any other obligation of the Company
2
<PAGE> 3
under the Merger Agreement, or which could reasonably be expected to result in
any of the conditions set forth in Article VIII or Exhibit A of the Merger
Agreement not being fulfilled; (b) any Business Combination or any Takeover
Proposal (as hereinafter defined), in either case other than the Merger, the
Merger Agreement and the transactions contemplated thereby; and (c) (i) any
other extraordinary corporate transaction other than the Merger, the Merger
Agreement and the transactions contemplated thereby, such as a merger,
consolidation, business combination, reorganization, recapitalization or
liquidation involving the Company or any of its subsidiaries, or a sale or
transfer of a material amount of the assets of the Company or any of its
subsidiaries or (ii) any other proposal or transaction not covered by the
foregoing which would in any manner impede, frustrate, prevent, delay or nullify
the Merger, the Merger Agreement or the transactions contemplated thereby.
SECTION 1.3 Irrevocable Proxy.
(a) In furtherance of the transactions contemplated hereby,
concurrently with the execution of this Agreement, the Voting Trustees shall
execute and deliver to Parent a proxy in the form attached hereto as Exhibit B
(the "Proxy"). THE PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST.
(b) Each Voting Trustee hereby revokes all other proxies and powers of
attorney with respect to the Subject Shares which such Voting Trustee may have
heretofore appointed or granted, and no subsequent proxy or power of attorney
shall be given or written consent executed (and if given or executed, such proxy
or power of attorney shall not be effective) by such Voting Trustee with respect
thereto.
SECTION 1.4 No Inconsistent Agreements. Each Voting Trustee hereby
covenants and agrees that, except as contemplated by this Agreement and the
Proxy, such Voting Trustee shall not enter into any agreement or arrangement or
grant a proxy or power of attorney or other authorization with respect to the
Subject Shares or take any other action, including, without limitation, by
terminating the Voting Trust Agreement, that would in any way restrict, limit or
interfere with the performance of any Voting Trustee's obligations hereunder or
the consummation of the transactions contemplated by the Merger Agreement.
ARTICLE II
TENDER OFFER; TENDER OF SUBJECT SHARES
SECTION 2.1 Parent's Obligations Regarding the Offer. So long as this
Agreement is in effect, Parent agrees: (a) that it shall not and that it shall
cause Sub not to (i) reduce the number of Company Common Shares to be purchased
in the Offer, (ii) reduce the Offer Price (as defined in the Merger Agreement),
(iii) impose any conditions to the Offer in addition to the Offer Conditions (as
defined in the Merger Agreement) or modify the Offer Conditions (other than to
waive any Offer Conditions to the extent not prohibited by the Merger
Agreement), (iv) change the form of consideration payable in the Offer or (v)
make any other change or modification in any of the terms of the Offer in any
manner that is
3
<PAGE> 4
adverse to the holders of Company Common Shares; (b) that it shall and shall
cause Sub to use its best efforts to cause the Offer Conditions to be satisfied
no later than the Outside Date (as defined in the Merger Agreement); (c) that it
shall extend the Offer until such date as the Offer Conditions have been
satisfied or such later date as required by applicable law; and (d) that it
shall accept and pay for or cause Sub to accept and pay for all of the Company
Common Shares validly tendered and not withdrawn pursuant to the Offer as
promptly as practicable after satisfaction of the Offer Conditions, subject to
compliance with applicable law and subject to the right of Parent or Sub to
extend the Offer for up to an aggregate of fifteen business days under the
circumstances described in Section 1.1(a) of the Merger Agreement. Whether or
not the Merger Agreement is terminated, Parent shall and shall cause Sub to
comply with all covenants of Parent relating to the Offer as set forth in the
Merger Agreement, so long as this Agreement remains in effect.
SECTION 2.2 Instructions to Voting Trustees. Contemporaneously with the
execution and delivery of this Agreement by the parties hereto, each Registered
Holder has provided written instructions to the Voting Trustees in the form of
the Voting and Tendering Instructions attached hereto as Exhibit A to tender as
soon as practicable (and in any event not later than two business days prior to
the first scheduled expiration date of the Offer) the Subject Shares set forth
opposite such Registered Holders' name on Schedule II hereto pursuant to the
Offer, and not to withdraw such tender of the Subject Shares so long as this
Agreement is in effect. Each Registered Holder agrees not to amend or modify or
take any action that would nullify the Voting and Tendering Instructions or in
any way restrict, limit or interfere with the performance of such Registered
Holder's obligations hereunder or the consummation of the transactions
contemplated by the Merger Agreement, including without limitation by
withdrawing any of the Subject Shares from the Voting Trust Agreement, in any
such case as long as this Agreement is in effect.
SECTION 2.3 Tendering of Subject Shares. As promptly as practicable
after the execution and delivery of this Agreement by the parties hereto and in
any event not later than two business days prior to the first scheduled
expiration date of the Offer, the Voting Trustees shall tender the Subject
Shares pursuant to the Offer by delivering to the depository for the Offer a
fully executed letter of transmittal together with the certificates for the
Subject Shares and any other documents that may be reasonably requested by
Parent or such depository to give effect to the tender of the Subject Shares
pursuant to the Offer, and the Voting Trustees further agree not to withdraw
such tender of the Subject Shares so long as this Agreement is in effect. The
Voting Trustees agree not to take any action inconsistent with the Voting and
Tendering Instructions.
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<PAGE> 5
ARTICLE III
RESTRICTIONS ON TRANSFER; CERTAIN
ADDITIONAL COVENANTS
SECTION 3.1 Transfer of Title.
(a) Each Voting Trustee and each Registered Holder covenants and agrees
not to directly or indirectly sell, assign, pledge, hypothecate, transfer,
exchange, convert (including, without limitation, converting any of the Subject
Shares into shares of Class B Common Stock of the Company) or withdraw from the
trust created by the Voting Trust Agreement (the "Voting Trust") or dispose of,
including by tendering into any tender or exchange offer by any third party
(collectively, "Transfer"), or enter into any contract, option or other
arrangement with respect to the Transfer of, any of the Subject Shares or any
interest therein (including, without limitation, any Trust Certificates with
respect to such Subject Shares) or deposit any of the Subject Shares into a
voting trust or enter into a voting trust agreement or arrangement with respect
to the Subject Shares (it being acknowledged by the parties hereto that the
Subject Shares are held subject to the Voting Trust Agreement, the Roberts
Family Shareholder Agreement dated as of January 31, 1996, among the Registered
Holders (the "Family Shareholder Agreement" and, together with the Voting Trust
Agreement, the "Family Agreements") and the Monsanto Agreement), or to take any
other action with respect to such Subject Shares or such Trust Certificates, or
otherwise permit or authorize any of the foregoing actions, other than pursuant
to the Offer, the Merger or this Agreement, without the prior written consent of
Parent, so long as this Agreement is in effect.
(b) Each Voting Trustee and each Registered Holder hereby agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of any Subject Shares, consistent with the terms of
Section 3.1(a). Each Voting Trustee further agrees that such Voting Trustee
shall not permit any transfer of Trust Certificates to be recorded on the books
maintained by the Voting Trustees for such purpose pursuant to the Voting Trust
Agreement, except as expressly permitted by this Agreement.
(c) Each Voting Trustee and each Registered Holder represents and
warrants that the legend set forth in Section 3.3 of the Monsanto Agreement has
been placed pursuant to such Section 3.3 on each of the certificates
representing Subject Shares. Each Voting Trustee and each Registered Holder
further agrees to use best efforts to place or cause to be placed on such
certificates and the Trust Certificates any additional legends with respect to
this Agreement and the transactions contemplated hereby as Parent may reasonably
request in order to effectuate the terms hereof.
(d) Douglas C. Roberts, Virginia R. Holt and John T. Roberts
(collectively, the "Optionees") hold options to purchase the number of shares of
Voting Common Stock set forth on Schedule III hereto. Without the prior written
consent of Parent, none of the Optionees shall Transfer such options or enter
into any contract or other arrangement to
5
<PAGE> 6
transfer such options. Further, the Optionees shall, upon any exercise of such
options, promptly deposit the shares of Voting Common Stock so purchased with
the Voting Trustees under the Voting Trust Agreement and thereafter such shares
shall be deemed Subject Shares for purposes of this Agreement.
SECTION 3.2 Nonrecognition of Certain Transfers.
(a) Any transfer, acquisition, withdrawal from the Voting Trust or
conversion of Subject Shares or transfer of Trust Certificates in violation of
this Agreement shall be null and void. Each Voting Trustee and Registered Holder
agrees that any such transfer, acquisition withdrawal or conversion may and
should be enjoined.
(b) If any involuntary transfer of any of the Subject Shares shall
occur (such as, but not limited to, a sale by a Registered Holder's trustee in
bankruptcy, or a sale to a purchaser at any creditor's or court sale) the
transferee (which term, as used herein, shall include any and all transferees
and subsequent transferees of the initial transferee) shall take and hold such
Subject Shares subject to all of the restrictions, liabilities and rights under
this Agreement, which shall continue in full force and effect.
SECTION 3.3 Existing Agreements. To the extent that this Agreement is
inconsistent with any provision of the Family Agreements, the Registered Holders
and the Voting Trustees agree that such provision of such Family Agreement or
Family Agreements is hereby amended to the extent necessary so that each
Registered Holder and Voting Trustee can and must fully perform its obligations
under this Agreement. Each Registered Holder and each Voting Trustee agrees not
to otherwise amend any of the Family Agreements during the term of this
Agreement without the prior written consent of Parent. Without limiting the
first sentence of this Section 3.3, each Voting Trustee and each Registered
Holder agrees that the Offer is a tender offer meeting the requirements of the
fourth paragraph of Section 7 of the Voting Trust Agreement and that,
notwithstanding anything to the contrary therein, the Voting Trustees may agree
to tender and tender the Subject Shares prior to the publication by the Company
to security holders of the Company of a statement pursuant to Rule 14e-2 (or any
successor rule) under the Securities Exchange Act of 1934, as amended, and that
none of the Voting and Tendering Instructions, the Proxy or the tender of the
Subject Shares by the Voting Trustees are or will be subject to the restrictions
on transfer included in Section 2 of the Family Shareholder Agreement. At the
request of Parent, each Voting Trustee and Registered Holder also agrees to use
all reasonable efforts to cause any legends to be removed from any certificates
representing the Subject Shares and any stop transfer orders with respect
thereto to be rescinded to the extent necessary to permit the consummation of
the transactions contemplated by this Agreement.
SECTION 3.4 Successor Voting Trustees. The Voting Trustees agree not to
resign as Voting Trustees during the term of this Agreement. The Voting Trustees
and the Registered Holders agree that no successor or additional Trustee shall
be appointed unless required by law or the Voting Trust Agreement and that,
should it become necessary to appoint any such successor or additional Voting
Trustee, the remaining Voting Trustees shall
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<PAGE> 7
promptly designate such successor or additional Voting Trustee pursuant to the
terms of the Voting Trust Agreement, provided however, that the terms of this
Agreement shall be binding upon any successor or additional Voting Trustee.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE VOTING TRUSTEES
Each Voting Trustee hereby represents and warrants to Parent as
follows:
SECTION 4.1 Authority Relative to This Agreement. Such Voting Trustee
has all requisite power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement, the Monsanto Agreement and each of the
Family Agreements has been duly and validly executed and delivered by such
Voting Trustee and constitutes a valid and binding obligation of such Voting
Trustee, enforceable against such Voting Trustee in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors rights generally and to general principles of equity.
SECTION 4.2 No Conflict. Except for such filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the HSR Act (as defined in the Merger Agreement) and
foreign and supranational laws relating to antitrust and anticompetition
clearances, the execution and delivery of this Agreement by such Voting Trustee
does not, and the performance of this Agreement by such Voting Trustee will not,
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the Subject Shares pursuant to,
the Family Agreements, the Monsanto Agreement or any note, bond, mortgage,
indenture, contract, agreement, lease, instrument, license, permit, franchise,
judgment, order, decree, statute, law, rule or regulation applicable to such
Voting Trustee or by which such Voting Trustee or the Subject Shares are bound
or affected the effect of which, in any case, would be to prevent or delay in
any material respect the ability of such Voting Trustee to comply with the terms
hereof.
SECTION 4.3 The Subject Shares. The Voting Trustees are the record
holders of the Subject Shares set forth on Schedule I hereto, free and clear of
any claims, liens, encumbrances and security interests whatsoever, other than
the encumbrance represented by the Monsanto Agreement, the Family Agreements and
as contemplated by this Agreement. The Voting Trustees have the sole right to
take the actions required to be taken by the Voting Trustees under Articles I
and II of this Agreement.
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<PAGE> 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE REGISTERED HOLDERS
Each Registered Holder hereby represents and warrants to Parent as
follows:
SECTION 5.1 Authority Relative to This Agreement. Such Registered
Holder has all requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement, the Monsanto Agreement and
each of the Family Agreements has been duly and validly executed and delivered
by such Registered Holder and constitutes a valid and binding obligation of such
Registered Holder, enforceable against such Registered Holder in accordance with
its terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors rights generally and to general principles of equity.
SECTION 5.2 No Conflict. Except for such filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the HSR Act and foreign and supranational laws
relating to antitrust and anticompetition clearances, the execution and delivery
of this Agreement by such Registered Holder does not, and the performance of
this Agreement by such Registered Holder will not, result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the Subject Shares pursuant to, the Family Agreements,
the Monsanto Agreement or any note, bond, mortgage, indenture, contract,
agreement, lease, instrument, license, permit, franchise, judgment, order,
decree, statute, law, rule or regulation applicable to such Registered Holder or
by which such Registered Holder or the Subject Shares or the Trust Certificates
with respect thereto are bound or affected the effect of which, in any case,
would be to prevent or delay in any material respect the ability of such
Registered Holder to comply with the terms hereof.
SECTION 5.3 The Subject Shares. Such Registered Holder is the
beneficial owner of, and the record holder of Trust Certificates with respect
to, the number of Subject Shares set forth opposite such Registered Holder's
name on Schedule II hereto (and, except as provided in Section 3.1(d), is
neither the record nor beneficial owner of any other shares of Voting Common
Stock or Trust Certificates), free and clear of any claims, liens, encumbrances
and security interests whatsoever, other than the encumbrance represented by the
Monsanto Agreement, the Family Agreements and as contemplated by this Agreement.
8
<PAGE> 9
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Voting Trustees and the
Registered Holders as follows:
SECTION 6.1 Authority Relative to This Agreement. Parent has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Parent and constitutes a valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, subject to the effect
of any applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors rights
generally and to general principles of equity.
SECTION 6.2 No Conflict. Except for such filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the HSR Act and foreign and supranational laws
relating to antitrust and anticompetition clearances and compliance with the
requirements of any federal or state securities laws applicable to the Offer,
the execution and delivery of this Agreement by Parent does not, and the
performance of this Agreement by Parent will not, (a) conflict with or violate
the certificate of incorporation, bylaws or other similar organizational
documents of Parent or (b) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any
property or asset of Parent pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, instrument, license, permit, franchise, judgment,
order or decree, or, to the best knowledge of Parent, any statute, law, rule or
regulation applicable to Parent or by which Parent or any property or asset of
Parent is bound or affected the effect of which, in any case, would be to
prevent or delay in any material respect the ability of Parent to comply with
the terms hereof.
SECTION 6.3 Securities Law Compliance. Neither Parent nor Sub will
effect any offer or sale of Subject Shares which offer or sale would cause any
Registered Holder or Voting Trustee to violate the registration requirements of
the Securities Act of 1933, as amended, or the registration or qualification
requirements of the securities laws of any other jurisdiction.
9
<PAGE> 10
ARTICLE VII
TERMINATION
SECTION 7.1 Termination of Agreement. This Agreement shall terminate
immediately upon the Effective Time (as defined in the Merger Agreement). This
Agreement may be terminated:
(a) by mutual written consent of Parent and a majority of the
Voting Trustees, on behalf the Voting Trustees and the Registered
Holders;
(b) by Parent if:
(i) the Merger Agreement shall have been terminated in
accordance with Section 9.1 thereof; or
(ii) at the time of termination of this Agreement by Parent
(A) any of the representations and warranties of the Voting
Trustees or the Registered Holders set forth in this Agreement
shall not be true and correct in all material respects or (B) any
of the Voting Trustees or the Registered Holders shall have
failed to perform in any material respect any material covenant
to be performed by any Voting Trustee or Registered Holder under
this Agreement, and in the case of (A) or (B) such untruth or
incorrectness or such failure cannot be or has not been cured
within thirty (30) days after the giving of written notice to the
Voting Trustees and the Registered Holders by Parent.
(c) by a majority of the Voting Trustees, on behalf of the Voting
Trustees and the Registered Holders, if none of the Voting Trustees or
Registered Holders are in violation of their respective obligations
under this Agreement and if:
(i) Parent or Sub shall not have completed payment for all
Company Common Shares tendered pursuant to the Offer and not
withdrawn by the Outside Date;
(ii) at the time of termination of this Agreement by the
Voting Trustees (A) any of the representations and warranties of
Parent set forth in this Agreement shall not be true and correct
in all material respects or (B) Parent shall have failed to
perform in any material respect any material covenant to be
performed by Parent under this Agreement, and in the case of (A)
or (B) such untruth or incorrectness or such failure cannot be or
has not been cured within thirty (30) days after the giving of
written notice to Parent by any Voting Trustee;
(iii) any Governmental Entity (as defined in the Merger
Agreement) shall have issued an order, decree or ruling or taken
any other action
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<PAGE> 11
permanently restraining, enjoining or otherwise prohibiting the
Offer or the consummation of the transactions contemplated hereby
or by the Merger Agreement and such order, decree, ruling or
other action shall have become final and nonappealable; provided
that the Voting Trustees shall not have the right to terminate
this Agreement pursuant to this clause (iii) if the Company has
not taken such action as is necessary to comply with Section 7.16
of the Merger Agreement; or
(iv) the Merger Agreement shall have been terminated in
accordance with Section 9.1 thereof.
SECTION 7.2 No Effect of Termination of Merger Agreement. Except as
provided in Section 7.1(b)(i) or Section 7.1(c)(iv), the termination of the
Merger Agreement shall have no effect on the obligations of the parties hereto.
SECTION 7.3 Effect of Termination. In the event of termination of this
Agreement pursuant to Section 7.1, this Agreement shall become void and of no
effect with no liability on the part of any party hereto; provided, however, no
such termination shall relieve any party hereto from any liability for any
breach of this Agreement occurring prior to such termination.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 No Solicitation. During the term of this Agreement, the
Voting Trustees and Registered Holders shall not, nor shall they permit any of
their affiliates or any director, officer, employee, investment banker, attorney
or other advisor or representative of any of the foregoing to, (a) directly or
indirectly, solicit, initiate or knowingly encourage (including by way of
furnishing non-public information) the submission of (i) any inquiry, proposal
or offer from any person relating to any direct or indirect acquisition or
purchase of any of the assets of the Company or its Subsidiaries (as such term
is defined in the Merger Agreement) (other than the purchase of inventory or
other assets in the ordinary course of the Company's business) or any of the
Company Common Shares then outstanding, any tender offer or exchange offer for
any of the Company Common Shares then outstanding, or any merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its Subsidiaries, other than the
transactions contemplated by the Merger Agreement, or (ii) any other transaction
the consummation of which would reasonably be expected to impede, interfere
with, prevent or materially delay the purchase of Company Common Shares pursuant
to the Offer and/or the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated by this
Agreement and the Merger Agreement ("Takeover Proposal") or (b) directly or
indirectly participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or knowingly take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or could
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<PAGE> 12
reasonably be expected to lead to, any Takeover Proposal. Notwithstanding the
foregoing, proposals solely relating to the sale of all or a portion of the
Company's business relating solely to the research and development of swine
breeding stock and the marketing of such hybrid breeding swine and related
management services to hog producers in domestic or international markets shall
not be considered Takeover Proposals, so long as the terms and conditions of
such proposals do not have any of the effects described in clause (ii) of the
preceding sentence.
SECTION 8.2 Voting Trustee and Registered Holder Capacity. By executing
this Agreement no person who is or becomes during the term hereof a director or
officer of the Company makes any agreement or understanding in his or her
capacity as such officer or director. Each Voting Trustee and Registered Holder
signs solely in his or her capacity as the record holder and beneficial owner,
respectively, of the number of Subject Shares set forth opposite his or her name
on Schedules I and II hereto, respectively, and nothing herein shall limit or
affect any actions taken by a Voting Trustee or Registered Holder in his or her
capacity as an officer or director of the Company. Nothing in this Section 8.2
shall be construed to permit any party hereto to take any action which would
violate any provision of the Merger Agreement.
SECTION 8.3 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached and that monetary damages will not provide an adequate
remedy. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to specific
performance of the terms and provisions hereof in addition to any other remedy
to which they are entitled at law or in equity. In addition, each of the parties
hereto (i) consents to submit itself to the personal jurisdiction of any Federal
or state court located in the State of Delaware in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this Agreement;
(ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (iii)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of Delaware, and appoints The
Corporation Trust Company, The Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware as its agent for service of process in connection with this
Agreement.
SECTION 8.4 Successors and Assigns. This Agreement shall inure to the
benefit of and shall be binding upon the parties hereto and their respective
heirs, legal representatives, successors and assigns. Each Voting Trustee and
each Registered Holder specifically agrees that the obligations of such Voting
Trustee and/or Registered Holder hereunder shall not be terminated by operation
of law, whether by the death or incapacity of the Voting Trustee and/or
Registered Holder or otherwise.
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<PAGE> 13
SECTION 8.5 Entire Agreement. This Agreement constitutes the entire
agreement between Parent, the Voting Trustees and the Registered Holders with
respect to the subject matter hereof.
SECTION 8.6 Amendment. This Agreement may not be amended except by an
instrument in writing signed by Parent and a majority of the Voting Trustees.
SECTION 8.7 Extension; Waiver. A majority of the Voting Trustees, on
behalf of the Voting Trustees and Registered Holders, or Parent may, by a
writing signed by such Voting Trustees or Parent, (i) extend the time to perform
any obligation or other act of the other, (ii) waive any inaccuracy in any
representation or warranty of the other or (iii) waive compliance by the other
with any agreement or condition in this Agreement. The failure of any party
hereto to assert any right under this Agreement shall not constitute a waiver of
such right.
SECTION 8.8 Further Assurances. Each of the Voting Trustees and
Registered Holders shall upon the request of Parent execute and deliver any
additional documents and take such further actions as may reasonably be deemed
by Parent to be necessary or desirable to carry out the provisions hereof.
SECTION 8.9 Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 8.10 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the fullest
extent possible.
SECTION 8.11 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made and shall be effective upon receipt, if delivered personally or
sent by overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice) or electronically transmitted (provided that a confirmation copy
is sent by another approved means) to the facsimile number specified below:
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<PAGE> 14
If to any Voting Trustee or Registered Holder:
c/o Douglas C. Roberts
DeKalb Genetics Corporation
3100 Sycamore Road
DeKalb, IL 60115
Attention: [name of Voting Trustee or Registered Holder]
Telephone: (815) 758-9195
Facsimile: (815) 758-9403
with a copy to:
Pillsbury Madison & Sutro LLP
235 Montgomery Street
San Francisco, CA 94104
Attention: Blair W. White, Esq.
Telephone: (415) 983-7480
Facsimile: (415) 983-1200
If to Parent, at:
Monsanto Company
700 Chesterfield Parkway N BB3N
St. Louis, MO 63198
Attention: Robert T. Fraley, Ph.D.
Telephone: (314) 737-6204
Facsimile: (314) 737-7037
with copies to:
Monsanto Company
800 N. Lindbergh Blvd.
E2ND
St. Louis, MO 63167
Attention: Barbara Blackford, Esq.
Telephone: (314) 694-2860
Facsimile: (314) 694-2594
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<PAGE> 15
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019-6150
Attention: Richard D. Katcher, Esq.
David M. Silk, Esq.
Telephone: (212) 403-1000
Facsimile: (212) 403-2000
SECTION 8.12 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
SECTION 8.13 Definition. The term "Monsanto Agreement" means that
certain Stockholders Agreement, dated as of January 31, 1996, among Monsanto
Company and the Registered Holders.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed on the date hereof.
MONSANTO COMPANY
By:/s/ Derek K. Rapp
------------------------------------
Name: Derek K. Rapp
Title: Director, Mergers & Acquisitions
DOUGLAS C. ROBERTS
/s/ Douglas C. Roberts
----------------------------------------
Douglas C. Roberts, individually and as
Voting Trustee under the Voting Trust
Agreement and as Trustee of (i) the Douglas
C. Roberts Trust dated 1/28/72, (ii) the
David Kim Roberts 1989 Trust, (iii) the
Steven Suh Roberts 1989 Trust, and (iv) the
Jeffrey King Roberts 1989 Trust
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<PAGE> 16
VIRGINIA R. HOLT
/s/ Virginia R. Holt
--------------------------------------
Virginia R. Holt, individually and as
Voting Trustee under the Voting Trust
Agreement and as Trustee of (i) the
Virginia R. Holt Trust dated 8/22/73, (ii)
the Amanda Mary Holt 1989 Trust, (iii) the
Laura Elizabeth Holt 1989 Trust, (iv) the
Jenna Christine Holt 1997 Trust dated
7/23/97 and (v) the John Douglas Holt 1997
Trust dated 7/23/97
JOHN T. ROBERTS
/s/ John T. Roberts
--------------------------------------
John T. Roberts, individually and as Voting
Trustee under the Voting Trust Agreement
and as Trustee of (i) the John T. Roberts
Trust dated 4/9/76, (ii) the Allison
Elizabeth Roberts 1989 Trust, and (iii) the
Katherine Elsie Roberts 1990 Trust #1
ROBIN R. ROBERTS
/s/ Robin R. Roberts
--------------------------------------
Robin R. Roberts, individually and as
Trustee of (i) the Allison Elizabeth
Roberts Trust dated 8/6/86, (ii) the
Katherine Elsie Roberts Trust dated
3/13/90, (iii) the Charles David Roberts
Trust dated 2/28/94, and (iv) the John T.
Roberts 1998 Annuity Trust dated 2/9/98.
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<PAGE> 17
TERRANCE K. HOLT
/s/ Terrance K. Holt
-------------------------------------------
Terrance K. Holt, individually and as
Trustee of (i) the Amanda Mary Holt Trust
dated 12/6/85 and (ii) the Virginia Roberts
Holt 1998 Annuity Trust
CHARLES C. ROBERTS AND MARY R. ROBERTS
/s/ Charles C. Roberts
-------------------------------------------
/s/ Mary R. Roberts
-------------------------------------------
Charles C. Roberts and Mary R. Roberts,
individually and as Voting Trustees under
the Voting Trust Agreement and as
Trustees of (i) the Charles C. and Mary
R. Roberts Living Trust dated 10/15/91,
(ii) the Trust F/B/O Douglas C. Roberts
under Eleanor T. Roberts Charitable Trust
Agreement dated 12/21/67, (iii) the Trust
F/B/O Virginia R. Holt under Eleanor T.
Roberts Charitable Trust Agreement
dated 12/21/67, and (iv) the Trust F/B/O
John T. Roberts under Eleanor T. Roberts
Charitable Trust Agreement dated 12/21/67
LYNNE KING ROBERTS
/s/ Lynne King Roberts
------------------------------------------
Lynne King Roberts, individually and as
Trustee of the David Kim Roberts Trust
dated 10/14/87
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EXHIBIT A
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as
of January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
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<PAGE> 19
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under the Voting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
--------------------------------
[name of Registered Holder]
[signing capacity]
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EXHIBIT B
IRREVOCABLE PROXY
to Vote
CLASS A COMMON STOCK
of
DEKALB GENETICS CORPORATION
The undersigned are the Voting Trustees under the Roberts Family Voting
Trust Agreement, dated as of January 31, 1996 (the "Voting Trust Agreement"),
and as such are the record owners of shares of Class A Common Stock of DEKALB
Genetics Corporation, a Delaware corporation (the "Company"). The undersigned,
in their capacities as such Voting Trustees, hereby irrevocably (to the fullest
extent permitted by the General Corporation Law of the State of Delaware),
appoint R. William Ide, III, Hendrick A. Verfaillie and the members of the Board
of Directors of Monsanto Company, a Delaware corporation ("Parent"), and each of
them, as the sole and exclusive attorneys and proxies of the undersigned, with
full power of substitution and resubstitution, to vote and exercise all voting
and related rights (to the full extent that the undersigned is entitled to do
so) with respect to all of the Subject Shares (as such term is defined in the
Stockholders Agreement (as defined below)) in accordance with the terms of this
Proxy. Upon the execution of this Proxy by the undersigned, any and all prior
proxies given by the undersigned with respect to any Subject Shares are hereby
revoked and the undersigned agree not to grant any subsequent proxies with
respect to the Subject Shares until after the Expiration Date (as defined
below).
This Proxy is irrevocable and coupled with an interest, is granted
pursuant to that certain Stockholders Agreement, dated as of the date hereof,
among Parent, the undersigned and the Registered Holders named therein (the
"Stockholders Agreement"), and is granted in consideration of the Company, Corn
Acquisition Corporation, a Delaware corporation ("Sub"), and Parent entering
into that certain Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"). The Merger Agreement provides, among other things, for the
merger (the "Merger") of Sub with and into the Company, with the Company
becoming a wholly-owned subsidiary of Parent, all in accordance with the terms
of the Merger Agreement. As used herein, the term "Expiration Date" shall mean
the earlier to occur of (i) the termination of the Stockholders Agreement in
accordance with its terms, or (ii) such date and time as the Merger shall have
become effective in accordance with the terms and provisions of the Merger
Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned stockholders, at any time prior to
the Expiration Date, to act as the attorney and proxy of the undersigned to vote
the Subject Shares (including, without
20
<PAGE> 21
limitation, the power to execute and deliver written consents) at every annual,
special or adjourned meeting of the stockholders of the Company and in every
written consent in lieu of such meeting and in any other circumstances under
which a vote, consent or approval (including by written consent) of the
stockholders of the Company is sought: (a) in favor of the adoption of the
Merger Agreement and the transactions contemplated by the Merger Agreement; (b)
against any action, proposal or agreement that could reasonably be expected to
result in a breach in any material respect of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement, or
which could reasonably be expected to result in any of the conditions set forth
in Article VIII or Exhibit A of the Merger Agreement not being fulfilled; (c)
against any Business Combination (as defined in the Stockholders Agreement) or
any Takeover Proposal (as defined in the Merger Agreement), in either case other
than the Merger, the Merger Agreement and the transactions contemplated thereby;
and (d) against (i) any other extraordinary corporate transaction other than the
Merger, the Merger Agreement and the transactions contemplated thereby, such as
a merger, consolidation, business combination, reorganization, recapitalization
or liquidation involving the Company or any of its subsidiaries, or a sale or
transfer of a material amount of the assets of the Company or any of its
subsidiaries or (ii) any other proposal or transaction not covered by the
foregoing which would in any manner impede, frustrate, prevent, delay or nullify
the Merger, the Merger Agreement or the transactions contemplated thereby. The
attorneys and proxies named above may not exercise this Proxy on any other
matter except as provided in clauses (a), (b), (c) and (d) above.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: May 8, 1998
----------------------------------------------
Douglas C. Roberts, as Voting Trustee under the
Voting Trust Agreement
----------------------------------------------
John T. Roberts, as Voting Trustee under the
Voting Trust Agreement
----------------------------------------------
Virginia R. Holt, as Voting Trustee under the
Voting Trust Agreement
21
<PAGE> 22
----------------------------------------------
Mary R. Roberts, as Voting Trustee under the
Voting Trust Agreement
----------------------------------------------
Charles C. Roberts, as Voting Trustee under the
Voting Trust Agreement
22
<PAGE> 23
SCHEDULE I
Record Holder Shares of Class A Common Stock
Douglas C. Roberts, Virginia R. Holt, 2,671,650
John T. Roberts, Charles C. Roberts &
Mary R. Roberts as Voting Trustees of the
Roberts Family Voting TR Agmt 1/31/96.
23
<PAGE> 24
SCHEDULE II
Registered Holder Shares of Class A Common Stock
Douglas C. Roberts, as Trustee of the 700,614
Douglas C. Roberts Trust dated 1/28/72
Douglas C. Roberts, as Trustee of the 42,000
David Kim Roberts 1989 Trust
Douglas C. Roberts, as Trustee of the 42,000
Steven Suh Roberts 1989 Trust
Douglas C. Roberts, as Trustee of the 42,000
Jeffrey King Roberts 1989 Trust
Virginia R. Holt, as Trustee of the 417,032
Virginia R. Holt Trust dated 8/22/73
Virginia R. Holt, as Trustee of the 42,000
Amanda Mary Holt 1989 Trust
Virginia R. Holt, as Trustee of the 42,000
Laura Elizabeth Holt 1989 Trust
John T. Roberts, as Trustee of the 534,484
John T. Roberts Trust dated 4/9/76
John T. Roberts, as Trustee of the 42,000
Allison Elizabeth Roberts 1989 Trust
John T. Roberts, as Trustee of the 42,000
Katherine Elsie Roberts 1990 Trust #1
Robin R. Roberts, as Trustee of the 22,434
Allison Elizabeth Roberts Trust dated 8/6/86
Robin R. Roberts, as Trustee of the 2,880
Katherine Elsie Roberts Trust dated 3/13/90
Robin R. Roberts, as Trustee of the 2,880
Charles David Roberts Trust dated 2/28/94
24
<PAGE> 25
Registered Holder Shares of Class A Common Stock
Terrance K. Holt, as Trustee of the 21,588
Amanda Mary Holt Trust dated 12/6/85
Charles C. Roberts and Mary R. Roberts, as Trustees 48,082
of the Charles C. and Mary R. Roberts Living Trust
dated 10/15/91
Charles C. Roberts and Mary R. Roberts, 34,002
as Trustees of the Trust F/B/O Douglas C.
Roberts under Eleanor T. Roberts
Charitable Trust Agreement dated 12/21/67
Charles C. Roberts and Mary R. Roberts, 22,704
as Trustees of the Trust F/B/O Virginia R.
Holt under Eleanor T. Roberts Charitable
Trust Agreement dated 12/21/67
Charles C. Roberts and Mary R. Roberts, 23,646
as Trustees of the Trust F/B/O John T.
Roberts under Eleanor T. Roberts
Charitable Trust Agreement dated
12/21/67
Lynne King Roberts, as Trustee of the 9,708
David Kim Roberts Trust dated 10/14/87
Virginia R. Holt, as Trustee of the Jenna 6,298
Christine Holt 1997 Trust dated 7/23/97
Virginia R. Holt, as Trustee of the John 6,298
Douglas Holt 1997 Trust dated 7/23/97
Terrance K. Holt, as Trustee of the 325,000
Virginia Roberts Holt 1998 Annuity Trust
Robin Richey Roberts, as Trustee of the 200,000
John T. Roberts 1998 Annuity Trust dated
2/9/98
25
<PAGE> 26
SCHEDULE III
Shares of
Class A Common Stock
Name Underlying Options
Douglas C. Roberts 36,000
Virginia R. Holt 16,247
John T. Roberts 48,133
26
<PAGE> 27
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as of
January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
<PAGE> 28
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under the Voting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
DOUGLAS C. ROBERTS
/s/ Douglas C. Roberts
--------------------------------------------------
Douglas C. Roberts, individually and as Voting
Trustee under the Voting Trust Agreement and as
Trustee of (i) the Douglas C. Roberts Trust dated
1/28/72, (ii) the David Kim Roberts 1989 Trust,
(iii) the Steven Suh Roberts 1989 Trust, and (iv)
the Jeffrey King Roberts 1989 Trust
2
<PAGE> 29
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as of
January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
<PAGE> 30
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under theVoting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
LYNNE KING ROBERTS
/s/ Lynne King Roberts
-----------------------------------------------
Lynne King Roberts, individually and as Trustee
of the David Kim Roberts Trust dated 10/14/87
2
<PAGE> 31
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as
of January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
<PAGE> 32
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under the Voting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
JOHN T. ROBERTS
/s/ John T. Roberts
----------------------------------------------------
John T. Roberts, individually and as Voting Trustee
under the Voting Trust Agreement and as Trustee of
(i) the John T. Roberts Trust dated 4/9/76, (ii) the
Allison Elizabeth Roberts 1989 Trust, and (iii) the
Katherine Elsie Roberts 1990 Trust #1
2
<PAGE> 33
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as
of January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
<PAGE> 34
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under the Voting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
ROBIN R. ROBERTS
/s/ Robin R. Roberts
----------------------------------------------------
Robin R. Roberts, individually and as Trustee of (i)
the Allison Elizabeth Roberts Trust dated 8/6/86,
(ii) the Katherine Elsie Roberts Trust dated
3/13/90, (iii) the Charles David Roberts Trust dated
2/28/94, and (iv) the John T. Roberts 1998 Annuity
Trust dated 2/9/98.
2
<PAGE> 35
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as
of January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
<PAGE> 36
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under the Voting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
VIRGINIA R. HOLT
/s/ Virginia R. Holt
----------------------------------------------------
Virginia R. Holt, individually and as Voting Trustee
under the Voting Trust Agreement and as Trustee of
(i) the Virginia R. Holt Trust dated 8/22/73, (ii)
the Amanda Mary Holt 1989 Trust, (iii) the Laura
Elizabeth Holt 1989 Trust, (iv) the Jenna Christine
Holt 1997 Trust dated 7/23/97 and (v) the John
Douglas Holt 1997 Trust dated 7/23/97
2
<PAGE> 37
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as
of January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
<PAGE> 38
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under the Voting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
TERRANCE K. HOLT
/s/ Terrance K. Holt
----------------------------------------------------
Terrance K. Holt, individually and as Trustee of (i)
the Amanda Mary Holt Trust dated 12/6/85 and (ii)
the Virginia Roberts Holt 1998 Annuity Trust
2
<PAGE> 39
ROBERTS FAMILY VOTING TRUST AGREEMENT
VOTING AND TENDERING INSTRUCTIONS
TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt
and John T. Roberts, as Voting Trustees (and any successor or additional
voting trustees) under the Roberts Family Voting Trust Agreement dated as of
January 31, 1996 (the "Voting Trust Agreement")
Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are
hereby instructed as follows with respect to all shares of Class A Common Stock
of DEKALB Genetics Corporation (the "Company") held by you on behalf of the
undersigned on the date hereof under the Voting Trust Agreement (the "Subject
Shares"): (a) at any duly noticed meeting of the stockholders of the Company
called to vote upon the Merger Agreement, dated as of the date hereof, by and
among the Company, Monsanto Company and Corn Acquisition Corporation (the
"Merger Agreement") and the transactions contemplated thereby or at any
adjournment thereof or in any other circumstances under which a vote, consent or
approval (including by written consent) with respect to the Merger Agreement and
the transactions contemplated thereby is sought, to vote all of the Subject
Shares in favor of the approval and adoption of the Merger Agreement and the
transactions contemplated thereby; (b) to be present (in person or by proxy) at
any duly noticed meeting of stockholders of the Company or any adjournment
thereof or in any other circumstances under which the vote, consent or other
approval of the stockholders of the Company is sought with respect to any
Business Combination (as defined in the Stockholders Agreement (as defined
below)) other than the Merger (as defined in the Merger Agreement) and to vote
(or cause to be voted) all of the Subject Shares against any such Business
Combination; and (c) to tender as soon as practicable (and in any event not
later than two business days prior to the first scheduled expiration date of the
Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant
to the Offer and not to withdraw such tender of the Subject Shares.
These Instructions are the instructions of the undersigned referred to
in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date
hereof (the "Stockholders
<PAGE> 40
Agreement"), among Monsanto Company, the undersigned, the other holders of trust
certificates under the Voting Trust Agreement and the Voting Trustees under the
Voting Trust Agreement.
These instructions are irrevocable and are binding upon the successors
and assigns of the undersigned.
Dated: May 8, 1998.
CHARLES C. ROBERTS AND MARY R. ROBERTS
/s/ Charles C. Roberts
-------------------------------------------------
/s/ Mary R. Roberts
-------------------------------------------------
Charles C. Roberts and Mary R. Roberts,
individually and as Voting Trustees under the
Voting Trust Agreement and as Trustees of (i)
the Charles C. and Mary R. Roberts Living Trust
dated 10/15/91, (ii) the Trust F/B/O Douglas C.
Roberts under Eleanor T. Roberts Charitable
Trust Agreement dated 12/21/67, (iii) the Trust
F/B/O Virginia R. Holt under Eleanor T. Roberts
Charitable Trust Agreement dated 12/21/67, and
(iv) the Trust F/B/O John T. Roberts under
Eleanor T. Roberts Charitable Trust Agreement
dated 12/21/67
2
<PAGE> 41
IRREVOCABLE PROXY
to Vote
CLASS A COMMON STOCK
of
DEKALB GENETICS CORPORATION
The undersigned are the Voting Trustees under the Roberts Family Voting
Trust Agreement, dated as of January 31, 1996 (the "Voting Trust Agreement"),
and as such are the record owners of shares of Class A Common Stock of DEKALB
Genetics Corporation, a Delaware corporation (the "Company"). The undersigned,
in their capacities as such Voting Trustees, hereby irrevocably (to the fullest
extent permitted by the General Corporation Law of the State of Delaware),
appoint R. William Ide, III, Hendrick A. Verfaillie and the members of the Board
of Directors of Monsanto Company, a Delaware corporation ("Parent"), and each of
them, as the sole and exclusive attorneys and proxies of the undersigned, with
full power of substitution and resubstitution, to vote and exercise all voting
and related rights (to the full extent that the undersigned is entitled to do
so) with respect to all of the Subject Shares (as such term is defined in the
Stockholders Agreement (as defined below)) in accordance with the terms of this
Proxy. Upon the execution of this Proxy by the undersigned, any and all prior
proxies given by the undersigned with respect to any Subject Shares are hereby
revoked and the undersigned agree not to grant any subsequent proxies with
respect to the Subject Shares until after the Expiration Date (as defined
below).
This Proxy is irrevocable and coupled with an interest, is granted
pursuant to that certain Stockholders Agreement, dated as of the date hereof,
among Parent, the undersigned and the Registered Holders named therein (the
"Stockholders Agreement"), and is granted in consideration of the Company, Corn
Acquisition Corporation, a Delaware corporation ("Sub"), and Parent entering
into that certain Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"). The Merger Agreement provides, among other things, for the
merger (the "Merger") of Sub with and into the Company, with the Company
becoming a wholly-owned subsidiary of Parent, all in accordance with the terms
of the Merger Agreement. As used herein, the term "Expiration Date" shall mean
the earlier to occur of (i) the termination of the Stockholders Agreement in
accordance with its terms, or (ii) such date and time as the Merger shall have
become effective in accordance with the terms and provisions of the Merger
Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned stockholders, at any time prior to
the Expiration Date, to act as the attorney and proxy of the undersigned to vote
the Subject Shares (including, without limitation, the power to execute and
deliver written consents) at every annual, special or adjourned meeting of the
stockholders of the Company and in every written consent in lieu of
<PAGE> 42
such meeting and in any other circumstances under which a vote, consent or
approval (including by written consent) of the stockholders of the Company is
sought: (a) in favor of the adoption of the Merger Agreement and the
transactions contemplated by the Merger Agreement; (b) against any action,
proposal or agreement that could reasonably be expected to result in a breach in
any material respect of any covenant, representation or warranty or any other
obligation of the Company under the Merger Agreement, or which could reasonably
be expected to result in any of the conditions set forth in Article VIII or
Exhibit A of the Merger Agreement not being fulfilled; (c) against any Business
Combination (as defined in the Stockholders Agreement) or any Takeover Proposal
(as defined in the Merger Agreement), in either case other than the Merger, the
Merger Agreement and the transactions contemplated thereby; and (d) against (i)
any other extraordinary corporate transaction other than the Merger, the Merger
Agreement and the transactions contemplated thereby, such as a merger,
consolidation, business combination, reorganization, recapitalization or
liquidation involving the Company or any of its subsidiaries, or a sale or
transfer of a material amount of the assets of the Company or any of its
subsidiaries or (ii) any other proposal or transaction not covered by the
foregoing which would in any manner impede, frustrate, prevent, delay or nullify
the Merger, the Merger Agreement or the transactions contemplated thereby. The
attorneys and proxies named above may not exercise this Proxy on any other
matter except as provided in clauses (a), (b), (c) and (d) above.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: May 8, 1998
/s/ Douglas C. Roberts
-------------------------------------------------
Douglas C. Roberts, as Voting Trustee under the
Voting Trust Agreement
/s/ John T. Roberts
-------------------------------------------------
John T. Roberts, as Voting Trustee under the
Voting Trust Agreement
/s/ Virginia R. Holt
-------------------------------------------------
Virginia R. Holt, as Voting Trustee under the
Voting Trust Agreement
2
<PAGE> 43
/s/ Mary R. Roberts
-------------------------------------------------
Mary R. Roberts, as Voting Trustee under the
Voting Trust Agreement
/s/ Charles C. Roberts
-------------------------------------------------
Charles C. Roberts, as Voting Trustee under the
Voting Trust Agreement
<PAGE> 1
Exhibit (c)(3)
Execution Copy
================================================================================
INVESTMENT AGREEMENT
Between
MONSANTO COMPANY,
a Delaware corporation
and
DEKALB GENETICS CORPORATION,
a Delaware corporation
Dated as of January 31, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . 2
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2
SALE AND PURCHASE OF THE NEWLY ISSUED SHARES . . . . . . . . 11
2.1. Sale and Purchase of the Newly Issued Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2. Closing and Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3
THE OFFER . . . . . . . . . . . . . . . . . 12
3.1. Commencement of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2. Changes to the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.3. Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.4. Schedule 14D-1 and Other Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.5. Actions by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.6. Acquisition of Additional Class B Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . 17
4.1. Organization, Standing and Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3. Capital Structure; New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.4. Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.5. SEC Reports; Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.6. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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<TABLE>
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4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.9. Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.10. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.11. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.12. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.13. No Untrue Statement or Omission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF INVESTOR . . . . . . . . 24
5.1. Organization; Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.2. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.3. Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.4. Acquisition for Investment and Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.5. Legal Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.6. Purchase Entirely for Own Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.7. Current Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 6
COVENANTS OF THE COMPANY . . . . . . . . . . . . . 27
6.1. Conduct of Business by the Company Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 7
CONDITIONS TO CLOSING . . . . . . . . . . . . . . 28
7.1. Obligations of Investor with respect to the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2. Obligations of the Company with respect to the Closing. . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 8
CERTAIN ADDITIONAL AGREEMENTS . . . . . . . . . . . . 31
8.1. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.2. Reasonable Efforts; Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
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8.4. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.5. Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.6. Nonrecognition of Certain Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.7. Independent Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 9
RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS . . . . . . . . 35
9.1. Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.2. Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.3. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.4. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets . . . . . . . . . . . 44
9.5. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 10
EQUITY PURCHASE RIGHTS . . . . . . . . . . . . . 44
10.1. Equity Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.2. Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.3. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 11
STANDSTILL . . . . . . . . . . . . . . . . 48
11.1. Restriction on Acquisition by Investor of Company Securities . . . . . . . . . . . . . . . . . . . . . 48
11.2. Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 12
TERMINATION . . . . . . . . . . . . . . . . 53
12.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.2. Termination After Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
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<PAGE> 5
<TABLE>
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12.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 13
INDEMNIFICATION . . . . . . . . . . . . . . . 54
13.1. Investor's Indemnification Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13.2. Company's Indemnification Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13.3. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 14
GENERAL PROVISIONS . . . . . . . . . . . . . . 56
14.1. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
14.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
14.3. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
14.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
14.5. Entire Agreement; No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
14.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
14.7. Corporate Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
14.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
14.9. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
14.10. Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
14.11. Accounting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
14.12. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Exhibit A Offer Conditions
Exhibit B By-law Amendments
Exhibit C Opinion of John H. Witmer, Jr.
Exhibit D Opinion of Frank E. Vigus
</TABLE>
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<PAGE> 6
INVESTMENT AGREEMENT
dated as of January 31, 1996 (this "Agreement"), between MONSANTO COMPANY,
a Delaware corporation ("Investor") and DEKALB GENETICS CORPORATION, a
Delaware corporation (the "Company").
WHEREAS, the respective managements of Investor and the Company have
negotiated and the Boards of Directors of Investor and the Company have approved
a strategic alliance under which the two companies will enter into various
collaborations, the Company will remain an autonomous and entrepreneurial
business and Investor will make a substantial investment in the Company;
WHEREAS, Investor proposes to make a tender offer (as it may be
amended from time to time as permitted under this Agreement with the Company's
consent if required hereby, the "Offer") to purchase any or all up to a maximum
of 1,800,000 shares of Class B Common Stock, without par value, of the Company
(the "Class B Stock"), at a price per share of Class B Stock of $71.00 net to
the seller in cash (such price, as may hereafter be increased, the "Tender Offer
Price") (such 1,800,000 shares representing approximately 37% of the outstanding
shares of Class B Stock, after giving effect to the transactions contemplated by
this Agreement), upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, Investor further proposes to purchase from the Company in
accordance with the terms and conditions hereof newly issued shares of the
Company's Class A Common Stock, without par value (the "Class A Stock") at a
price per share of $65.00 (such shares representing 10% of the outstanding
shares of Class A Stock after expiration of the Offer and after giving effect to
the issuance thereof) (the "Newly Issued Class A Shares") and 378,000 newly
issued shares of Class B Stock at a price per share of $65.00 (the "Newly Issued
Class B Shares") (such Newly Issued Class A Shares and Newly Issued Class B
Shares collectively referred to as the "Newly Issued Shares");
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<PAGE> 7
WHEREAS Investor and the Company desire to make certain
representations, warranties, covenants and agreements and also to prescribe
various conditions in connection with the transactions contemplated hereby; and
WHEREAS, contemporaneously herewith, Investor and the Company and
Investor and the Major A Stockholders, as applicable, have entered into the
Ancillary Agreements described herein, which Ancillary Agreements will be
effective upon the consummation of the Closing.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and in the Ancillary
Agreements, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
1.1. Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings set forth below.
"Acquisition Proposal" shall mean any tender offer or exchange offer
or proposal (including without limitation any proposal or offer to shareholders
of the Company) with respect to a Business Combination or a sale of 10% or more
of the outstanding capital stock of the Company.
"Affiliate" of a party means any person or entity controlling,
controlled by, or under common control with such party. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any person, shall mean the possession, directly or
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<PAGE> 8
indirectly, of the power to direct or cause the direction of the management or
policies of such person, whether through the ownership of voting securities, by
agreement or otherwise.
"Amended Bylaws" means the Bylaws of the Company, which Bylaws include
the amendments provided in Exhibit B hereto, to be adopted by the Company prior
to the Closing.
"Ancillary Agreements" means the Stockholders' Agreement, the
Registration Rights Agreement, the Collaboration Agreement, the Corn
Borer-Protected Corn License Agreement; the Glyphosate-Protected Corn License
Agreement and the CaMV Promoter License Agreement each of which is dated as of
the date hereof and effective upon the consummation of the Closing.
"beneficially owned", "beneficially own" and "beneficial ownership"
shall have the meaning provided in Rule 13d-3 under the Exchange Act, including
subsection (d)(1)(i) thereof, without giving effect to whether or not such
beneficial ownership may be acquired within 60 days as required by such
subsection, provided, however, that "beneficial ownership" shall not be deemed
to include any right of Investor conferred by (i) the Stockholders' Agreement
until such time as Investor shall become legally bound (whether or not subject
to conditions) to purchase any Equity pursuant to such agreement or otherwise or
(ii) Section 10.1 until such time as the Company shall give Investor an Issuance
Notice (unless Investor shall have waived its right thereunder by failure to
provide a Response Notice and as reduced in accordance with Section 10.1.4) or
(iii) Section 10.3 until the Company shall notify Investor that it is entitled
to purchase shares of Common Stock pursuant to such section (unless Investor
shall waive or be deemed to have waived its rights thereunder).
"Board" means the Board of Directors of the Company.
"Business Combination" shall mean a merger or consolidation in which
the Company is a constituent corporation and pursuant to which the Common Stock
is convertible into or exchanged for cash, securities or other property or a
sale of all or
-3-
<PAGE> 9
substantially all of the assets of the Company and its subsidiaries taken as a
whole, or a sale of all or substantially all the assets of the Company's United
States seed corn business; provided that a transaction in which the beneficial
ownership of the capital stock of the Company or of the sole surviving
corporation to the transaction (or of the ultimate parent of the Company or of
such sole surviving corporation) immediately after the consummation of such
transaction is substantially the same as the beneficial ownership of the
Company's capital stock immediately prior to the consummation thereof shall not
be deemed a Business Combination unless such transaction shall result in the
sale of all or substantially all the assets of the Company and its subsidiaries
taken as a whole or all or substantially all the assets of the Company's United
States seed corn business.
"Business Day" means any day other than a Saturday, a Sunday, or a
bank holiday in the States of Illinois, New York or Missouri.
"CaMV Promoter License Agreement" means the CaMV Promoter License
Agreement dated as of the date hereof between Investor and the Company.
"Class A Stock" means the Class A Common Stock, without par value, of
the Company.
"Class B Percentage Limitation" means the percentage of the Class B
Stock determined by dividing (i) the number of shares of Class B Stock
beneficially owned by Investor after (a) acquisition of the Newly Issued Shares,
(b) acquisition of Class B Stock pursuant to the Offer and (c) acquisition of
any additional Class B Stock actually acquired pursuant to Section 3.6 by (ii)
the total number of outstanding shares of Class B Stock outstanding on the first
anniversary of the Closing Date.
"Class B Stock" means the Class B Common Stock, without par value, of
the Company.
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<PAGE> 10
"Closing" means the closing of the purchase and sale of the Newly
Issued Shares pursuant to Section 2.1.
"Closing Date" means the date the Closing is consummated.
"Collaboration Agreement" shall mean the Collaboration Agreement and
License between Investor and the Company dated as of the date hereof.
"Common Stock" means the Class A Stock and Class B Stock of the
Company.
"Company" has the meaning set forth at the beginning of this
Agreement.
"Company Indemnified Parties" has the meaning set forth in Section
13.1.
"Company Letter" means the letter, dated as of the date hereof, from
the Company to Investor regarding certain matters related to this Agreement.
"Competitor" means a person who either (i) sells seed for growing
corn, sorghum, soybean, sunflower or alfalfa and who is estimated by Doane's
(or, if such information is not provided by Doane's another independent source
generally considered reliable) to have, or who has publicly stated that it does
have, at least 2% of the United States or Argentine market for any such seed for
any of the most recent two years for which such market share is reported or
claimed or (ii) is primarily engaged in the business of selling foundation seed.
"Confidentiality Agreement" means that certain letter agreement
between Investor and the Company, dated May 16, 1995.
"Corn Borer-Protected Corn License Agreement" shall mean the Corn
Borer-Protected Corn License Agreement dated as of the date hereof between
Investor and the Company.
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<PAGE> 11
"Current Market Value" shall mean, with respect to any security, the
average of the daily closing prices on the NASDAQ National Market (or such
principal exchange on which such security may be listed) for such security for
the 20 consecutive trading days commencing on the 22nd trading day prior to the
date with respect to which the Current Market Value is being determined. The
closing price for each day shall be the closing price, if reported, or if the
closing price is not reported, the average of the closing bid and asked prices
as reported by NASDAQ or a similar source selected from time to time by the
Company for such purpose.
"Director Representation Period" has the meaning set forth in Section
8.5.
"Doane's" shall mean the U.S. Farm Corn Seed Study by Doane Marketing
Research Inc., or if such information is not provided by Doane's, another
independent source generally considered reliable.
"Environmental Laws" has the meaning set forth in Section 4.11.2.
"Equity" shall mean any and all shares of Common Stock of the Company,
securities of the Company convertible into such shares, and options, warrants or
other rights to acquire such shares.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Fair Market Value" shall mean, as to any shares or other property,
the cash price at which a willing seller would sell and a willing buyer would
buy such shares or property in an arms'-length negotiated transaction without
time constraints.
"Final Governmental Order" has the meaning set forth in Section
9.1.1.
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<PAGE> 12
"GAAP" means generally accepted accounting principles as in effect in
the United States of America (as such principles may change from time to time).
"Glyphosate-Protected Corn License Agreement" shall mean the
Glyphosate-Protected Corn License Agreement dated as of the date hereof between
Investor and the Company.
"Governmental Authority" means any governmental, quasi-governmental,
judicial, self-regulatory or regulatory agency or entity or subdivision thereof
with jurisdiction over the Company or Investor or any of their subsidiaries or
any of the transactions contemplated by this Agreement.
"Hazardous Material" means any substance: (i) the presence of which
requires investigation or remediation under any federal, state or local statute,
regulation, ordinance, order, action policy or common law; (ii) which is defined
and regulated as a "hazardous waste," "hazardous substance," pollutant or
contaminant under any federal, state or local statute, regulation, rule or
ordinance or amendments thereto; (iii) which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is regulated by any governmental authority, agency, department,
commission, board, agency or instrumentality of the United States, the state in
which such substance is located or any political subdivision thereof; or (iv)
the presence of which poses or threatens to pose a hazard to the health or
safety of persons or the environment on or about the property on which such
substance is located or adjacent properties. Hazardous Material shall include,
without limitation, petroleum, including crude oil and any fraction thereof,
asbestos and polychlorinated biphenyls (PCBs).
"Indemnified Party" has the meaning set forth in Section 13.3.
"Indemnifying Party" has the meaning set forth in Section 13.3.
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<PAGE> 13
"Independent Director" means an individual who is not (apart from such
directorship) (i) an officer or employee of the Company or any Affiliate of the
Company, (ii) a director, officer or employee of Investor or any Affiliate of
Investor, (iii) a Major A Stockholder, an Affiliate of a Major A Stockholder or
a Permitted Transferee (as defined in the Stockholders' Agreement) of a Major A
Stockholder, (iv) did not in either of the last two completed calendar years
receive, and is not an officer, director, employee, stockholder holding more
than 10% of the voting interest of, partner or Affiliate of any person
("Entity") that in either of such Entity's two most recent fiscal years,
received, more than (A) $350,000 in revenues or other compensation or (B) 20% of
such person's total revenues from the Company, the Investor, a Major A
Stockholder or a Permitted Transferee or an Affiliate of any of the foregoing;
provided no person who is serving as a director of the Company as of the date of
this Agreement shall be excluded pusuant to this clause (iv) unless such person
is also excluded pursuant to clauses (i), (ii), (iii) or (v) of this definition;
or (v) any voting trustee under the Voting Trust Agreement among the Major A
Stockholders and certain voting trustees dated as of January 31, 1996, but shall
not include any Investor Nominee.
"Interest Rate" shall mean the interest rate per annum publicly
announced by Citibank N.A. as its "base rate" as in effect from time to time.
"Issue Price" means $65.00 per share of Class A Stock and $65.00 per
share of Class B Stock.
"Investor" has the meaning set forth at the beginning of this
Agreement.
"Investor Indemnified Parties" has the meaning set forth in Section
13.2.
"Investor Nominee" has the meaning set forth in Section 8.5.
"Knowledge", when used in reference to the Company, means the
knowledge of those officers and managerial employees of the Company identified
in the Company
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Letter and limited as to scope with respect to certain individuals as specified
in the Company Letter.
"Liabilities, Actions and Damages" has the meaning set forth in
Section 13.1.
"Licenses" shall mean the European Corn Borer-Protected License
Agreement, the Glyphosate-Protected Corn License Agreement and the CaMV
Promoter License Agreement.
"Lien" means any mortgage, lien, security interest, pledge, lease or
other charge or encumbrance of any kind, including, without limitation, the lien
or retained security title of a purchase money creditor or conditional vendor,
and any easement, right of way or other encumbrance on title to real property,
and any agreement to give any of the foregoing.
"Major A Stockholder" shall have the meaning set forth in the
Stockholders' Agreement.
"Material Adverse Effect" means a material adverse effect, or the
occurrence or existence of facts or circumstances reasonably expected to result
in a material adverse effect, on the business, assets, results of operations,
properties, financial or operating condition of the Company and its subsidiaries
taken as a whole (without including economic or other matters affecting business
or the seed industry generally) or the ability of the Company (and, to the
extent applicable, its subsidiaries) to perform its (or their) obligations under
this Agreement or consummate the transactions contemplated hereby or by the
Ancillary Agreements.
"Merrill Lynch" has the meaning set forth in Section 3.5.1
"Newly Issued Shares" has the meaning set forth in the third Whereas
clause.
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"Newly Issued Class A Shares" has the meaning set forth in the third
Whereas clause.
"Newly Issued Class B Shares" has the meaning set forth in the third
Whereas clause.
"Offer" has the meaning set forth in the second Whereas clause.
"Offer Conditions" has the meaning set forth in Section 3.1.
"Offer Documents" has the meaning set forth in Section 3.4.
"Offer Notice" shall have the meaning specified in Section 9.3.1.
"Offer Price" has the meaning set forth in Section 9.3.2.
"Offer Shares" means those shares of Class B Stock, if any, purchased
by Investor pursuant to the Offer.
"Outstanding Interest" shall mean the respective aggregate percentages
of the outstanding shares of Class A Stock or Class B Stock beneficially owned
(without regard to any rights Investor may have to acquire shares pursuant to
Section 10.3) from time to time by Investor and its United States subsidiaries,
including (for purposes of determining the outstanding shares of Class A Stock
and Class B Stock) as Class A Stock any Equity convertible into or entitling the
holder to acquire Class A Stock and as Class B Stock any Equity convertible into
or entitling the holder to acquire Class B Stock (except by virtue of converting
Class A Stock into Class B Stock), but excluding in each case stock options or
other rights to acquire Class A Stock or Class B Stock granted under Stock Plans
or under any stock option plan or any stock-based incentive compensation plan
adopted in the future and Investor's rights described in Section 10.3 with
respect thereto.
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"Percentage Limitation" shall have the meaning specified in Section
11.1.
"Permitted Acquisition Proposal" shall have the meaning specified in
Section 11.1.
"Permitted Offering" shall have the meaning specified in Section
9.1.2 (ii).
"person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Primary Business" means the research-based production, marketing,
licensing and sale of agronomic seed, including both technology related thereto
and products derived therefrom.
"Reasonable Solicitation Efforts" shall have the meaning set forth in
Section 8.5(i).
"Registration Rights Agreement" shall have the meaning specified in
Section 9.5.
"Schedule 14D-1" has the meaning set forth in Section 3.4.
"Schedule 14D-9" has the meaning set forth in Section 3.5.2.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" has the meaning set forth in Section 4.5.
"Securities Act" means the Securities Act of 1933, as amended and the
rules and regulations promulgated thereunder.
"Shares" means issued and outstanding shares of Common Stock.
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<PAGE> 17
"Significant Subsidiary" means any subsidiary of the Company or
Investor, as the case may be, that constitutes a significant subsidiary within
the meaning of Rule 1-02 of Regulation S-X of the SEC.
"Small Offering" shall have the meaning specified in Section 10.2.2.
"Stockholders' Agreement" shall mean the Stockholders' Agreement dated
as of the date hereof by and among Investor and the Major A Stockholders.
"Stock Plans" shall have the meaning specified in Section 4.3.
"subsidiary" of any person means another person whose voting
securities, other voting ownership or voting partnership interests are owned
directly or indirectly by such first person in an amount sufficient to elect at
least a majority of the board of directors or other governing body of such other
person (or, if there are no such voting interests, more than 50% of the equity
interests of such other person).
"taxes" has the meaning set forth in Section 4.8.
"Tender Offer Price" has the meaning specified in the second Whereas
clause.
"third party" means any person (including a "person" as defined in
Section 13(d)(3) of the Exchange Act) or entity other than, or group not
including, Investor or any Affiliate of Investor or the Company.
"Total Voting Power" means, at any date, the total number of votes
that may be cast in the election of directors of the Company at any meeting of
stockholders of the Company held on such date, assuming all shares of Voting
Stock were present and voted at such meeting, other than votes that may be cast
only by one class or series of stock (other than Class A Stock) or upon the
happening of a contingency.
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"Transfer" shall have the meaning set forth in Section 9.1.1.
"United States subsidiary" means a direct or indirect subsidiary of
Investor which is a corporation organized and existing under the laws of the
United States and with its principal place of business in the United States.
"Voting Stock" means Class A Stock and all other securities of the
Company, if any, entitled to vote generally in the election of directors.
ARTICLE 2
SALE AND PURCHASE OF THE NEWLY ISSUED SHARES
2.1. Sale and Purchase of the Newly Issued Shares. Upon the terms and
subject to the satisfaction or waiver of all of the conditions set forth in
Article 7, the Company shall issue and sell to Investor, and Investor shall
purchase from the Company, in exchange for the Issue Prices thereof, the Newly
Issued Shares at the Closing. Investor shall pay the Issue Prices with respect
to the Newly Issued Shares to the Company at the Closing by bank wire transfer
of immediately available funds to an account designated by the Company, or by
such other means as is acceptable to the Company and Investor.
2.2. Closing and Deliveries. Subject to the satisfaction or waiver of
all of the conditions set forth in Article 7, the Closing shall take place as
promptly as practicable after the expiration of the Offer, or on such later date
and time as may be mutually agreed by the parties within five Business Days
after the last to occur of satisfaction or waiver of the respective conditions
set forth in Article 7. Such Closing shall occur at the offices of Sidley &
Austin, One First National Plaza, Chicago, Illinois 60603, or at such other
place and time as Investor and the Company agree in writing.
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<PAGE> 19
2.2.1. Deliveries by Investor. At the Closing, Investor shall
deliver to the Company the following:
(i) the Issue Price for each of the Newly Issued Shares;
and
(ii) such other documents and instruments, duly executed to the
extent required, as may be reasonably requested by the Company in order to
consummate the transactions contemplated hereby.
2.2.2. Deliveries by the Company. At the Closing, the Company shall
deliver to Investor the following:
(i) stock certificates in such denominations as may be
reasonably requested by Investor evidencing the Newly Issued Shares; and
(ii) such other documents and instruments, duly executed to the
extent required, as may reasonably requested by Investor in order to consummate
the transactions contemplated hereby.
ARTICLE 3
THE OFFER
3.1. Commencement of the Offer. As promptly as practicable, but no
later than the fifth Business Day following the public announcement of this
Agreement, Purchaser shall commence the Offer within the meaning of Rule 14d-2
under the Exchange Act. The obligations of Investor to accept for payment, and
pay for, any Offer Shares tendered pursuant to the Offer shall be subject to
(the following being referred to as the "Offer Conditions") the satisfaction or
waiver of the conditions set forth in Exhibit A attached hereto.
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<PAGE> 20
3.2. Changes to the Offer. Investor may increase the Tender Offer
Price and may make any other changes in the terms and conditions of the Offer,
provided that, unless previously approved by the Company in writing, Investor
may not (i) decrease the Tender Offer Price, (ii) change the form of
consideration payable in the Offer, (iii) increase or decrease the maximum
number of Shares sought pursuant to the Offer, (iv) add to or modify the Offer
Conditions (v) amend the Offer in a manner which would require the extension of
the originally scheduled expiration date to a date later than 50 business days
from the date of the commencement of the Offer, as required by any rule,
regulation, interpretation or position of the SEC or the staff or (vi) otherwise
amend the Offer in any manner adverse to the interests of the Company or its
stockholders. Subject to the terms and conditions thereof, the Offer shall
expire at midnight, New York City time, on the date that is not more than 30
business days from the date the Offer is first published or sent to holders of
Class B Stock. Investor shall be required to extend the Offer for at least ten
business days from the originally scheduled expiration date and shall be
entitled to extend the Offer for up to 20 business days from such original
expiration date (A) if at the scheduled expiration date of the Offer any of the
Offer Conditions shall not have been satisfied or waived, until such time as
such Offer Conditions are satisfied or waived and (B) for any period required by
any rule, regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer, provided, however, that Investor shall terminate the
Offer if this Agreement is terminated.
3.3. Purchase. Provided that this Agreement shall not have been
terminated in accordance with Article 12 and provided that all Offer Conditions
shall have been satisfied or waived by Investor in accordance with this Article
3, Investor shall accept for payment and purchase, in accordance with the terms
of the Offer, shares of Class B Stock validly tendered and not withdrawn
pursuant to the Offer (up to the amount sought pursuant to the Offer). The Offer
Conditions are for the sole benefit of Investor and may be asserted by Investor
regardless of the circumstances giving rise to any such condition or may be
waived by Investor, in whole or in part at any time and from time to time, in
Investor's sole discretion. The failure by Investor at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right, the
waiver of any such right with respect to
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<PAGE> 21
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time. Any determination
(which shall be made in good faith) by Investor with respect to any of the
foregoing conditions (including without limitation the satisfaction of such
conditions) shall be final and binding on the parties. The Offer Price (to the
extent, if any, adjusted pursuant to the Offer) shall be paid net to the seller
in cash, less any required withholding of taxes, upon the terms and subject to
the conditions of the Offer as soon as practicable after expiration of the
Offer. It is the intention of Investor and the Company that the purchase by
Investor of the Offer Shares shall not be a condition to the purchase by
Investor of the Newly Issued Shares.
3.4. Schedule 14D-1 and Other Offer Documents. On the date the Offer
is commenced, Investor shall file with the SEC a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer. The Schedule 14D-1 shall contain as
an exhibit or incorporate by reference the Offer to Purchase (or portions
thereof) and form of the related letter of transmittal and summary advertisement
to be used in connection with the Offer (the Schedule 14D-1 and such other
documents, together with any supplements thereto or amendments thereof, being
referred to herein collectively as the "Offer Documents"). The Company shall
provide to Investor in writing all information regarding the Company necessary
for the preparation of the Offer Documents, which information shall be accurate
and shall not contain any material misstatement of fact or omit to state any
material fact necessary to make the statements included in such information, in
light of the circumstances under which they are made, not misleading. The
Company and its counsel shall be given a reasonable opportunity to review and
comment on the Offer Documents prior to the filing thereof with the SEC and the
distribution thereof to the Company's stockholders. Investor shall provide to
the Company and its counsel any comments that Investor receives (directly or
through its counsel) from the SEC or its staff with respect to the Offer
Documents promptly after receipt of such comments. The Offer Documents shall
comply in all material respects with the provisions of applicable federal
securities laws and shall not, on the date the Offer Documents are filed with
the SEC and on the date first published, sent or given to the Company's
stockholders,
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<PAGE> 22
as the case may be, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Investor with
respect to information supplied by the Company in writing specifically for
inclusion in the Offer Documents. If any event relating to the Company or any of
its Affiliates, officers or directors shall be discovered by the Company which
causes the information previously supplied by the Company to Investor for use in
the Offer Documents to contain any untrue statements of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, the Company shall promptly inform
Investor. Investor and the Company shall each promptly correct any information
provided by it for use in the Offer Documents if and to the extent that it shall
have become false or misleading in any material respect, and Investor shall
promptly amend and supplement the Offer Documents if and to the extent that they
shall have become false or misleading in any material respect and shall promptly
cause the Offer Documents as so amended and supplemented to be filed with the
SEC and to be disseminated to the Company's stockholders, in each case as and to
the extent required by applicable federal securities laws.
3.5. Actions by the Company.
3.5.1. Approval and Recommendation of Offer. On January 31, 1996, the
Company's Board of Directors, at a meeting duly called, unanimously adopted
resolutions by which the Board (i) determined that this Agreement and the
transactions contemplated hereby, including the Offer, are fair to and in the
best interest of the Company and the Company's stockholders, (ii) approved this
Agreement and the transactions contemplated hereby, including the Offer, and
(iii) resolved to recommend that the stockholders of the Company accept the
Offer and tender their Shares thereunder to Investor. In connection with such
approval by the Board, Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") delivered to the Board its written opinion dated the date of
such meeting to the effect that, as of the date of such opinion, the proposed
consideration to be received by the Company and the holders of Class B Common
Stock is fair to the Company and such
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<PAGE> 23
holders from a financial point of view. The Company is authorized by Merrill
Lynch to permit the inclusion of such fairness opinion in the Offer Documents
and the Schedule 14D-9 referred to below. The Company hereby consents to the
inclusion in the Offer Documents of the recommendations of the Board described
in this Section 3.5.1.
3.5.2. Schedule 14D-9. As promptly as practicable, but no later than
the tenth Business Day following the commencement of the Offer, the Company
shall file with the SEC a solicitation/recommendation statement on Schedule
14D-9 pertaining to the Offer (together with any amendments or supplements
thereto, the "Schedule 14D-9") containing the Board's recommendation described
in Section 3.5.1. The Company shall promptly mail the Schedule 14D-9 to the
Company's stockholders. Investor and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 prior to the filing
thereof with the SEC and its dissemination to the Company's stockholders. The
Company shall provide to Investor and its counsel any comments that the Company
receives (directly or through its counsel) from the SEC or its staff with
respect to the Schedule 14D-9 promptly after receipt of such comments. The
Schedule 14D-9 shall comply in all material respects with the provisions of
applicable federal securities laws and shall not, on the date filed with the SEC
and on the date first published, sent or given to the Company's stockholders,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representations are made by the Company with respect
to information supplied by Investor in writing specifically for inclusion in the
Schedule 14D-9. If any event relating to Investor or any of its Affiliates,
officers or directors shall be discovered by Investor which causes the
information previously supplied by Investor to the Company for use in the
Schedule 14D-9 to contain any untrue statements of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, Investor shall promptly inform the
Company. Investor and the Company shall each promptly correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it shall
have become false or misleading in any material respect, and the Company shall
promptly amend and supplement the Schedule 14D-9 if and to the extent
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<PAGE> 24
that it shall have become false or misleading in any material respect and shall
promptly cause the Schedule 14D-9 as so amended and supplemented to be filed
with the SEC and disseminated to the Company's stockholders in each case as and
to the extent required by applicable federal securities laws.
3.5.3. Stockholder Information. In connection with the Offer the
Company shall promptly furnish Investor with mailing labels, security position
listings and any available listing or computer files containing the names and
addresses of the record holders of the Shares as of a recent date and shall
furnish Investor with such additional information and assistance (including,
without limitation, updated lists of stockholders, mailing labels and list of
securities positions) as Investor or its agents may reasonably request for the
purpose of communicating the Offer to the record and beneficial holders of
Shares. Subject to the requirements of applicable law, and except for such steps
as are necessary to disseminate the Offer Documents and any other documents
necessary to consummate the transactions contemplated by this Agreement,
Investor shall and shall cause its Affiliates, associates, agents and advisors
to, hold the information contained in any such labels, listings and files
confidential and use such information only in connection with the Offer, and, if
this Agreement shall be terminated, shall deliver to the Company all copies of
such information and any extracts or summaries thereof then in their possession
or control.
3.6. Acquisition of Additional Class B Shares. If Investor shall
beneficially own less than 40% of the outstanding Common Stock on the first day
after completion of the Offer and the Closing, then Investor shall have the
right, at any time during the period ending on the first anniversary of the
Closing Date to acquire in the market at prices prevailing from time to time up
to an additional number of shares of Class B Stock such that after completion of
all such purchases, the total Common Stock beneficially owned by Investor and
its Affiliates does not exceed 40% of the Common Stock outstanding at such time.
The Investor may from time to time request that the Company provide information
as to the number of shares of Common Stock of each class outstanding as of the
most recent conveniently available date, provided, the Investor shall be
entitled to rely on the number of outstanding shares of Common Stock, Class A
Stock and Class B Stock as most recently
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reported by a filing of the Company pursuant to the Exchange Act unless the
Company shall advise the Investor in writing of more recent information.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Investor as follows:
4.1. Organization, Standing and Corporate Power. Each of the Company
and its Significant Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to carry on its
business as now being conducted. The Company and each of its Significant
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) could not reasonably be expected
to have a Material Adverse Effect on the Company.
4.2. Subsidiaries. Schedule 4.2 to the Company Letter lists each
subsidiary of the Company. All the outstanding shares of capital stock of each
Significant Subsidiary that is a corporation have been validly issued and are
fully paid and nonassessable. Except as set forth in Schedule 4.2 to the Company
Letter, the entire equity interest in each subsidiary of the Company is owned by
the Company, by another subsidiary of the Company or by the Company and another
such subsidiary, free and clear of all Liens.
4.3. Capital Structure; New Shares. The authorized capital stock of
the Company consists of 500,000 shares of Preferred Stock, par value $1.00 per
share ("Preferred Stock"), and 20,000,000 shares of Common Stock, without par
value, divided into two classes, consisting of 5,000,000 shares of Class A
Stock and 15,000,000 shares of Class B Stock. At
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the close of business on January 16, 1996, (i) no shares of Preferred Stock were
outstanding, (ii) 763,799 shares of Class A Stock and 4,431,327 shares of Class
B Stock were issued and outstanding, (iv) no shares of Class A Stock and 73,201
shares of Class B Stock were held by the Company in treasury, and (v) 349,689
shares of Class A Stock were reserved for issuance pursuant to outstanding stock
options or other rights to purchase shares of Class A Stock under the Company's
Long Term Incentive Plan, the Company's Savings and Investment Plan and the
Company's Director Stock Option Plan (the "Stock Plans") and an additional
417,340 shares of Common Stock were reserved for the grant of additional
purchase rights thereunder. Except as set forth above or as otherwise expressly
provided herein, and except for conversions of Class A Stock to Class B Stock
and the issuance of shares pursuant to options granted under the Stock Plans, as
of the date hereof, no shares of capital stock or other voting securities of the
Company were issued, reserved for issuance or outstanding and there are not any
phantom stock or other contractual rights the value of which is determined in
whole or in part by the value of any capital stock of the Company ("Stock
Equivalents"). There are no outstanding stock appreciation rights ("SARs") with
respect to Common Stock. Upon issuance pursuant to the terms of this Agreement,
the Newly Issued Shares will be duly authorized and no further approval of the
stockholders or the directors of the Company will be required by the Company for
the issuance and sale of the Newly Issued Shares as contemplated by this
Agreement. When issued and sold to Investor upon payment of the Issue Price, the
Newly Issued Shares will be duly authorized, validly issued, fully paid and
non-assessable. Other than this Agreement, the Newly Issued Shares are not
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any such agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting or
disposition of the Newly Issued Shares. All outstanding shares of capital stock
of the Company are, and all shares that may be issued pursuant to the Stock
Plans and the other agreements and instruments listed above will be, when
issued, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. There are not any outstanding bonds, debentures,
notes or other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matter on which stockholders of the Company may vote. Except as set forth
above and in Schedule
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4.3 of the Company Letter, and as otherwise expressly set forth in this
Agreement, as of the date of this Agreement, there are not any securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its Significant
Subsidiaries is a party or by which any of them is bound obligating the Company
or any of its Significant Subsidiaries to issue, deliver or sell or create, or
cause to be issued, delivered or sold or created, additional shares of capital
stock or other voting securities or Stock Equivalents of the Company or of any
of its Significant Subsidiaries or obligating the Company or any of its
Significant Subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the date of this Agreement, there are not any outstanding
contractual obligations of the Company or any of its Significant Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its Significant Subsidiaries except pursuant to existing
employee arrangements.
4.4. Authority; Noncontravention. The Company has requisite corporate
power and authority to enter into this Agreement and the Ancillary Agreements to
which it is a party and to consummate the transactions contemplated by this
Agreement and such Ancillary Agreements. The execution and delivery by the
Company of this Agreement and each Ancillary Agreement to which it is a party
and the consummation by the Company of the transactions contemplated by this
Agreement and such Ancillary Agreements have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement and the
Ancillary Agreements to which it is a party have been duly executed and
delivered by the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms. Except as set forth on Schedule 4.4 to the Company Letter, the execution
and delivery of this Agreement and the Ancillary Agreements to which it is a
party by the Company did not, and the consummation of the transactions
contemplated by this Agreement and such Ancillary Agreements and compliance with
the provisions of this Agreement and such Ancillary Agreements without obtaining
the consent of any third party will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right to termination, cancellation or acceleration of
any obligation or to loss
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by the Company or any of its Significant Subsidiaries of a material benefit
under, or the creation of any material additional benefit to any third party
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any of its subsidiaries under, (i) the Certificate of
Incorporation or Bylaws of the Company or the comparable charter or
organizational documents of any of its Significant Subsidiaries, (ii) any loan
or credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit or license applicable to the Company or any of its
subsidiaries or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, defaults, rights or Liens that individually or in
the aggregate could not reasonably be expected to (x) have a Material Adverse
Effect on the Company, (y) materially impair the ability of the Company to
perform its obligations under this Agreement or any Ancillary Agreement to which
it is a party or (z) prevent the consummation of any of the transactions
contemplated by this Agreement or any of such Ancillary Agreements. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority or any party to a Material Contract (as defined
in Section 4.12 is required by or with respect to the Company or any of its
Significant Subsidiaries or its subsidiaries that are parties to such a Material
Contract in connection with the execution and delivery of this Agreement and the
Ancillary Agreements to which it is a party or the consummation by the Company
of the transactions contemplated by this Agreement and such Ancillary
Agreements, except for (A) any filings required pursuant to foreign antitrust
and competition law statutes and regulations, (B) the filing with the SEC of (x)
a solicitation/recommendation statement on Schedule 14D-9 and (y) such reports
under Sections 12 and 13(a) of the Exchange Act as may be required in connection
with this Agreement, such Ancillary Agreements and the transactions contemplated
by this Agreement and such Ancillary Agreements, and (C) such other consents,
approvals, orders, authorizations, registrations, declarations and filings as
are set forth on Schedule 4.4 to the Company Letter.
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4.5. SEC Reports; Undisclosed Liabilities. The Company has timely
filed all required reports, schedules, forms, statements and other documents
with the SEC since December 31, 1994 (the "SEC Reports"). As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Reports,
and none of the SEC Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Company and its subsidiaries as of
the dates thereof and their consolidated statements of operations, stockholders'
equity and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set forth
in the SEC Reports, to the Company's knowledge neither the Company nor any of
its subsidiaries has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by generally accepted
accounting principles to be set forth on a consolidated balance sheet of the
Company and its subsidiaries or in the notes thereto, other than liabilities and
obligations incurred in the ordinary course of business consistent with prior
practice and experience since August 31, 1995 and liabilities which would not,
individually or in the aggregate, have a Material Adverse Effect.
4.6. Absence of Certain Changes or Events. Except as set forth on
Schedule 4.6 to the Company Letter, since August 31, 1995, the Company and each
of its subsidiaries has conducted its business only in the ordinary course, and
there has not been (i) one or more events or occurrences which individually or
in the aggregate has had or would reasonably be expected to result in a Material
Adverse Effect, (ii) any declaration, setting
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aside or payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any of the Company's capital stock, except for
declaration and payment to holders of record of Common Stock of normal quarterly
dividends consistent with existing practice, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of the Company's capital stock, or (iv) any change
in accounting methods, principles or practices by the Company materially
affecting its assets, liabilities or business, except insofar as may have been
required by a change in generally accepted accounting principles.
4.7. Litigation. Except as set forth on Schedule 4.7 to the Company
Letter, there is no suit, action or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of its subsidiaries that,
individually or in the aggregate, could reasonably be expected to (i) have a
Material Adverse Effect, (ii) materially impair the ability of the Company to
perform its obligations under this Agreement or any Ancillary Agreement to which
it is a party or (iii) prevent the consummation of any of the transactions
contemplated by this Agreement or any such Ancillary Agreement, nor is there any
judgment, decree, injunction, rule or order of any Governmental Authority or
arbitrator outstanding against the Company or any of its subsidiaries having, or
that could reasonably be expected to have, a Material Adverse Effect.
4.8. Taxes. The Company and each of its subsidiaries has timely filed
all tax returns and reports required to be filed by them either on a separate or
combined or consolidated basis except where failure to timely file could not
reasonably be expected to have a Material Adverse Effect. All such returns are
complete and accurate except where the failure to be complete or accurate could
not reasonably be expected to have a Material Adverse Effect. Each of the
Company and its subsidiaries has paid or caused to be paid all taxes shown as
due on such returns and all material taxes for which no return was filed except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect. No deficiencies for any taxes have been asserted, proposed or
assessed against the Company or any of its subsidiaries that have not been paid
or otherwise settled
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or are not otherwise being challenged under appropriate procedures except for
deficiencies the assertion, proposing or assessment of which could not
reasonably be expected to have a Material Adverse Effect, and no requests for
waivers of the time to assess any such taxes are pending. As used in this
Agreement, "taxes" shall include all Federal, state, local and foreign income,
property, sales, excise, employment, withholding and other taxes, tariffs or
governmental charges of any nature whatsoever.
4.9. Voting Requirements. No vote of the holders of any class or
series of the Company's capital stock is necessary to approve this Agreement,
the Ancillary Agreements to which the Company is a party or the transactions
contemplated by this Agreement and such Ancillary Agreements.
4.10. Brokers. No broker, investment banker, financial advisor or
other person, other than Merrill Lynch, the fees and expenses of which will be
paid by the Company, is entitled to any broker's, finder's, financial advisor's
or other similar fee in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements based upon arrangements made by or on
behalf of the Company and its subsidiaries.
4.11. Compliance with Laws.
4.11.1. The Company and each of its subsidiaries has in effect all
Federal, state, local and foreign governmental approvals, authorizations,
certificates, filings, franchises, licenses, notices, permits and rights
("Permits") necessary for it to own, lease or operate its properties and assets
and to carry on its business as now conducted, and there has not occurred any
default under any Permit, except for absence of Permits and for defaults under
Permits which absence or defaults, individually or in the aggregate, have not
had and could not reasonably be expected to have a Material Adverse Effect.
Except as disclosed in Section 4.11.1 to the Company Letter, the Company and its
subsidiaries are in compliance with all applicable statues, laws, ordinances,
regulations, rules, judgments, decrees or orders of any Governmental Authority
except where failures to so comply,
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individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
4.11.2. Except as set forth in Schedule 4.11.2 to the Company Letter,
(i) neither the Company nor any of its subsidiaries has received any written
communication from a Governmental Authority that alleges that the Company or any
subsidiary thereto is not in compliance with any Environmental Law (as defined
below) if such non-compliance could reasonably be expected to have a Material
Adverse Effect and (ii) the Company has no knowledge of any environmental
materials or information, other than as listed in the Schedule 4.11.2 to the
Company Letter, including on-site or off-site storage, disposal or releases of
Hazardous Materials, that could reasonably be expected to have a Material
Adverse Effect on the Company. As used in this Agreement, the term
"Environmental Laws" means any applicable treaties, laws, regulations,
enforceable requirements, orders, decrees or judgments issued, promulgated or
entered into by any Governmental Authority, which relate to (A) pollution or
protection of the environment or (B) the generation, storage, use, handling,
disposal or transportation of or exposure to Hazardous Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section Section 9601, et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section Section 6901 et
seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
Section 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C. Section
Section 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
Section Section 2601 et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Section Section 1801 et seq., and any similar or implementing state or
local law, and all amendments or regulations promulgated thereunder.
4.12. Material Contracts. All contracts, leases and other agreements
to which the Company or any of its subsidiaries is a party that would be
required to be filed as Exhibits to the SEC Documents (the "Material Contracts")
have been filed as Exhibits to the SEC Documents. Except as disclosed in
Schedule 4.12 to the Company Letter, (i) each Material Contract is in full force
and effect except as the same may have expired in accordance with its terms;
(ii) the Company and its subsidiaries have performed all the material
obligations required to be performed thereby under each Material Contract; (iii)
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neither the Company nor any of its subsidiaries has received any written
assertion of default under any Material Contract; (iv) neither the Company nor
any of its subsidiaries expects or has received any notice related to any
termination or material change to, or proposal with respect to, any of the
Material Contracts as a result of the transactions contemplated by this
Agreement and the Ancillary Agreements to which it is a party; and (v) the
Company has no knowledge of any material breach or anticipated material breach
by any other party to any Material Contract; in each case except where the
result of a failure of a representation contained in clauses (i), (ii), (iii),
(iv) or (v) above would not reasonably be expected to have a Material Adverse
Effect.
4.13. No Untrue Statement or Omission. Neither this Agreement nor any
Ancillary Agreement to which the Company is a party nor any exhibit or schedule
hereto or thereto, nor any statement, list or certificate delivered to Investor
pursuant to this Agreement or any such Ancillary Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF INVESTOR
5.1. Organization; Authority; Noncontravention. Investor is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is incorporated. Investor has all requisite
corporate power and authority to enter into this Agreement and the Ancillary
Agreements to which it is a party and to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements. The execution and
delivery by Investor of this Agreement and each Ancillary Agreement to which it
is a party and the consummation by Investor of the transactions contemplated by
this Agreement and the Ancillary Agreements have been duly authorized by all
necessary corporate action on the part of Investor. This Agreement and the
Ancillary Agreements to which it is a party
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have been duly executed and delivered by Investor, and constitute valid and
binding obligations of Investor, enforceable against Investor in accordance with
their respective terms. The execution and delivery by Investor of this Agreement
and the Ancillary Agreements to which it is a party did not, and the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements and compliance with the provisions of this Agreement and
the Ancillary Agreements to which it is a party without obtaining the consent of
any third party will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
loss by Investor or any of its Significant Subsidiaries of a material benefit
under, or the creation of any material additional benefit to any third party
under, or result in the creation of any Lien upon any of the properties or
assets of Investor or any of its Significant Subsidiaries under, (i) the
certificate of incorporation or bylaws of Investor, (ii) any loan or credit
agreement, note, bond, mortgage indenture, lease or other agreement, instrument,
permit or license applicable to Investor or its subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Investor, or its
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflict, violations, defaults, rights or Liens that individually or in the
aggregate could not reasonably be expected to impair the ability of Investor to
perform its obligations under this Agreement and the Ancillary Agreements or
prevent the consummation of any of the transactions contemplated by this
Agreement and the Ancillary Agreements. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Authority or any other third party is required by or with respect to Investor in
connection with the execution and delivery of this Agreement and the Ancillary
Agreements to which it is a party or the consummation by Investor of any
transaction contemplated by this Agreement or any Ancillary Agreement, except
for (i) any filings required pursuant to the foreign antitrust and competition
law statutes and regulations, (ii) the filing with the SEC of the Offer
Documents, and such statements and reports under Sections 12, 13 and 16(a) of
the Exchange Act as may be required in connection with this Agreement, the
Ancillary Agreements and the transactions contemplated by this Agreement
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and the Ancillary Agreements, and (iii) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
the "takeover" or "blue sky" laws of various states.
5.2. Brokers. No broker, investment banker, financial advisor or other
person, other than Robertson, Stephens & Company LLC, the fees and expenses of
which will be paid by Investor, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement and the Ancillary Agreements based upon
arrangements made by or on behalf of Investor and its subsidiaries.
5.3. Investment Intent. Investor is purchasing or acquiring the Newly
Issued Shares for its own account for investment and not with a present view to,
or for sale in connection with, any distribution thereof in violation of the
Securities Act. The certificates evidencing the Newly Issued Shares and any
other Shares issued to Investor pursuant to this Agreement shall bear
substantially the following legend until such time as the same is no longer
required under the applicable requirements of the Securities Act or applicable
state securities or blue sky laws and under this Agreement and the Ancillary
Agreements:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. THE TRANSFER OF SUCH SHARES IS SUBJECT TO THE
CONDITIONS SPECIFIED IN THE INVESTMENT AGREEMENT DATED AS OF JANUARY
31, 1996, BETWEEN THE COMPANY AND INVESTOR, AND THE COMPANY RESERVES
THE RIGHT TO REFUSE THE TRANSFER OF SUCH SHARES UNTIL SUCH CONDITIONS
HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH
CONDITIONS WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST AND WITHOUT CHARGE. THESE SECURITIES HAVE NOT BEEN
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REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT IN
ACCORDANCE THEREWITH."
5.4. Acquisition for Investment and Rule 144. Investor understands that
the Newly Issued Shares will not be registered under the Securities Act by
reason of a specific exemption from the registration provision of the Securities
Act which depends upon, among other things, the bona fide nature of Investor's
investment intent as expressed herein. Investor acknowledges that the Newly
Issued Shares must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Investor has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions. Investor is
aware that the certificates representing the Newly Issued Shares will bear such
legends relating to restrictions on resale under the Securities Act as provided
in Section 5.3 and the Company under certain conditions may issue stop transfer
instructions to its stock transfer agent with respect to the Newly Issued
Shares.
5.5. Legal Investment. The purchase of the Newly Issued Shares by
Investor hereunder is legally permitted by all laws and regulations to which
Investor is subject and all consents, approvals, authorizations of or
designations, declarations or filings in connection with the valid execution and
delivery of this Agreement by Investor and the purchase of the Newly Issued
Shares by Investor have been obtained, or will be obtained prior to the Closing
Date.
5.6. Purchase Entirely for Own Account. The Newly Issued Shares will be
acquired for investment for Investor's own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell,
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transfer or grant participations to such person or to any third person, with
respect to any of the Newly Issued Shares.
5.7. Current Ownership. Except for it rights to acquire Newly Issued
Shares pursuant to this Agreement, neither Investor nor any of its Affiliates
beneficially owns any shares of Class A Stock or Class B Stock; provided, with
respect to any Affiliate of Investor which is not incorporated or otherwise
organized in the United States, Investor shall be entitled to correct this
representation by advising the Company in writing at any time within 90 days of
the date of this Agreement of the beneficial ownership of any shares of Class A
or Class B Stock by any such Affiliate, including the amount thereof, nature of
ownership, identity of the beneficial owner, and nature of its relationship with
Investor, in such detail as the Company shall reasonably request. Investor shall
cause any Affiliate which is not a United States subsidiary of Investor to
divest such beneficial ownership within 30 days after Investor becomes aware of
such ownership, but only in the manner permitted by Section 9.1.2 (without
regard to the time limitations thereof and excluding Transfers permitted
pursuant to 9.1.2(i)) and shall promptly advise the Company upon completion of
any such divestitures.
ARTICLE 6
COVENANTS OF THE COMPANY
6.1. Conduct of Business by the Company Prior to Closing. During the
period from the date of this Agreement until the Closing, the Company shall, and
shall cause its subsidiaries to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted. Without limiting the generality of the foregoing, the
Company will not (and as to Section 6.1.3, or Section 6.1.5 as applicable to
Section 6.1.3, neither the Company nor any subsidiary shall) take any of the
following actions:
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6.1.1. (i) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than
dividends on its Common Stock to be declared and paid only at the customary
rates and times, or (ii) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock;
6.1.2. issue, deliver, sell, pledge or otherwise encumber any shares of
capital stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities (other than (i) the issuance of
new options or Common Stock under existing Stock Plans or Common Stock upon
the exercise or conversion of rights outstanding on the date of this
Agreement and in accordance with their present terms, (ii) the purchase of
Common Stock pursuant to such Stock Plans, in accordance with their terms
and (iii) the issuance and sale of the Newly Issued Shares in accordance
with the terms hereof);
6.1.3. acquire, in a single transaction or in a series of related
transactions, any business or assets outside the Primary Business of the
Company that would be equal in amount to more than 25% of the total
consolidated assets of the Company as shown on the Company's consolidated
balance sheet as of the end of the most recent fiscal quarter ending prior
to the time the determination is made whether such acquisition be by merger
or consolidation or the purchase of stock or assets or otherwise;
6.1.4 amend its certificate of incorporation or bylaws except for the
adoption of Amended Bylaws by the Company; or
6.1.5 authorize, or commit or agree to take, any of the foregoing
actions.
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ARTICLE 7
CONDITIONS TO CLOSING
7.1. Obligations of Investor with respect to the Closing. The
obligation of Investor to consummate the transactions contemplated to occur at
the Closing is subject to the satisfaction (or waiver by Investor) as of the
Closing of the following conditions:
7.1.1. The representations and warranties of the Company set forth in
this Agreement and in the Ancillary Agreements to which it is a party
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the
date hereof and as of the time of the Closing as though made as of such
time, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and
warranties qualified as to materiality shall be true and correct, and those
not so qualified shall be true and correct in all material respects, on and
as of such earlier date) and Investor shall have received a certificate to
such effect dated the Closing Date and executed by a duly authorized
officer of the Company. The Company shall have performed or complied in all
material respects with all obligations and covenants required by this
Agreement and the Ancillary Agreements to which it is a party to be
performed or complied with by the Company by the time of the Closing.
7.1.2. There shall not be threatened or pending by any Governmental
Authority any suit, action or proceeding, and there shall not be pending by
any other person any suit, action or proceeding, which has a substantial
likelihood of success, (i) seeking to restrain or prohibit the purchase and
sale of the Newly Issued Shares or the Class B Stock pursuant to the Offer,
(ii) seeking to compel the Company to dispose of or hold separate any
material portion of the business or
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assets of the Company and its subsidiaries, taken as a whole, or to compel
Investor or its subsidiaries to dispose of or hold separate any material
portion of the business or assets of Investor and its subsidiaries, as a
result of any of the transactions contemplated by this Agreement or the
Ancillary Agreements or (iii) seeking to prohibit Investor from effectively
exercising any of its material rights under this Agreement or any Ancillary
Agreement.
7.1.3. No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order
enacted, entered, promulgated, enforced or issued by any Governmental
Authority or other legal restraint or prohibition preventing the
consummation of any of the transactions contemplated hereby or by the
Ancillary Agreements or having any of the other consequences described in
Section 7.1.2 shall be in effect.
7.1.4. The Amended Bylaws shall have been duly authorized, approved
and effected.
7.1.5. The Company shall have furnished to Investor an opinion of John
H. Witmer, Jr., Senior Vice President and General Counsel of the Company,
in the form attached hereto as Exhibit C.
7.1.6. During the period from the date of this Agreement until the
Closing Date, neither the Company nor any subsidiary shall have sold or
otherwise disposed of (or authorized, committed or agreed to sell or
otherwise dispose of), in a single transaction or in a series of
transactions, excluding sales of inventory or other assets in the normal
course of business, any business or assets relating to the Primary Business
of the Company that constitute more than five percent of the total
consolidated assets of the Company as shown on the Company's consolidated
balance sheet as of the end of the most recent fiscal quarter ending prior
to the time the determination is made, whether such sale or disposition be
by merger or consolidation or the sale of stock or assets or otherwise.
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7.2. Obligations of the Company with respect to the Closing. The obligation
of the Company to consummate the transactions contemplated to occur at the
Closing is subject to the satisfaction (or waiver by the Company) as of the
Closing of the following conditions:
7.2.1. The representations and warranties of Investor set forth in this
Agreement and in the Ancillary Agreements qualified as to materiality shall
be true and correct, and those not so qualified shall be true and correct
in all material respects, as of the date hereof and as of the time of the
Closing as though made as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in
which case such representations and warranties qualified as to materiality
shall be true and correct, and those not so qualified shall be true and
correct in all material respects, on and as of such earlier date) and the
Company shall have received a certificate to such effect dated the Closing
Date and executed by a duly authorized officer of Investor. Investor shall
have performed or complied in all material respects with all obligations
and covenants required by this Agreement and the Ancillary Agreements to be
performed or complied with by Investor by the time of the Closing.
7.2.2. There shall not be threatened or pending by any Governmental
Authority any suit, action or proceeding and there shall not be pending by
any other person any suit, action or proceeding, which has a substantial
likelihood of success, (i) seeking to restrain or prohibit the purchase and
sale of the Newly Issued Shares or the Class B Stock pursuant to the Offer,
(ii) seeking to compel the Company to dispose of or hold separate any
material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or to compel Investor or its subsidiaries
to dispose of or hold separate any material portion of the business or
assets of Investor and its subsidiaries, as a result of any of the
transactions contemplated by this Agreement or the Ancillary Agreements or
(iii) seeking to prohibit the Company from effectively exercising any of
its material rights under this Agreement or any Ancillary Agreement.
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7.2.3. No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent inunction or other order
enacted, entered, promulgated, enforced or issued by any Governmental
Authority or other legal restraint or prohibition preventing the
consummation of any of the transactions contemplated hereby or by the
Ancillary Agreements or having any of the other consequences described in
Section 7.2.2 shall be in effect.
7.2.4. The Offer shall have expired and Investor shall have purchased
or accepted for payment and purchase any Class B Stock which it will
acquire pursuant to the Offer.
7.2.5. Investor shall have furnished to the Company an opinion of
Frank E. Vigus, Assistant General Counsel of Investor, in the form
attached hereto as Exhibit D.
ARTICLE 8
CERTAIN ADDITIONAL AGREEMENTS
8.1. Confidentiality. Except as required by law, each of the Company
and Investor shall hold, and shall cause its respective officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, in confidence any nonpublic information obtained from the
other pursuant to the Confidentiality Agreement or from time to time hereafter
as may be disclosed to the Company, the Investor or any Investor Nominee until
such time as such information becomes publicly available (otherwise than through
the wrongful act of any such person) and shall use all reasonable efforts to
cause such persons not to disclose such information to others without the prior
written consent of the Company or Investor, as the case may be. In the event of
the termination of this Agreement for any reason, the Company and Investor shall
promptly return or destroy all documents containing nonpublic information so
obtained from the other party or any of its subsidiaries and any copies made of
such documents.
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8.2. Reasonable Efforts; Notification.
8.2.1. Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement and the Ancillary
Agreements to which they are parties, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Authorities and the making of all necessary registrations and
filings (including filings with Governmental Authorities, if any) and the taking
of all reasonable steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Authority, (ii)
the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or any of such Ancillary
Agreements or the consummation of the transactions contemplated by this
Agreement or such Ancillary Agreements; including seeking to have any stay or
temporary restraining order entered by any court or other Governmental
Authorities vacated or reversed, and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement and such Ancillary
Agreements.
8.2.2. The Company shall give prompt notice to Investor, and Investor
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement or any Ancillary Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue and
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement or any Ancillary
Agreement; provided, however, that no such notification shall affect the
representations, warranties,
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covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement or the Ancillary Agreements.
8.3. Fees and Expenses. All fees and expenses incurred in connection
with the Offer, this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees or expenses, whether or not the Offer or
the sale of the Newly Issued Shares on the terms contemplated hereby is
consummated.
8.4. Public Announcements. Investor and the Company shall consult with
each other before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement and the Ancillary Agreements and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law, court process
or by obligations pursuant to any listing agreement with any national securities
exchange.
8.5. Election of Directors.
(i) No later than 20 Business Days after the Closing Date, subject
to occurrence of the Closing, the Board of Directors of the Company shall be
increased in number so that Investor may nominate one director whose term shall
expire at the Company's 1999 annual meeting of stockholders. In addition,
subject to the occurrence of the Closing, if Investor shall have acquired
beneficial ownership of at least 20% of the outstanding Common Stock in
accordance with the terms hereof (including, without limitation, pursuant to
Section 3.6), Investor may nominate an additional director who shall be placed
on the ballot for election at the Company's annual meeting of stockholders to be
held in January, 1997 and whose term shall expire at the Company's 2000 annual
meeting (each such director and any other persons nominated from time to time by
Investor pursuant to this Section 8.5 being referred to herein as an "Investor
Nominee"). Any Investor Nominee may be an employee, officer or director of
Investor or any of its subsidiaries and each Investor Nominee shall be
reasonably satisfactory to the Company. The Company shall use all reasonable
efforts at all times thereafter during which (x) Investor shall retain
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beneficial ownership of at least 7.5% of the Class A Stock and that number of
shares of Common Stock (the "75% Limitation") as is equal to at least 75% of the
highest percentage of the outstanding Common Stock as is beneficially owned by
Investor after completion of the Offer, the Closing and the acquisition of any
additional shares of Class B Stock acquired by Investor pursuant to Section 3.6,
and (y) the Collaboration Agreement shall remain in full force and effect
(except if terminated by reason of material breach of its terms by the Company),
to cause the Investor Nominees to be elected to the Board of Directors (such
efforts shall include the same efforts to solicit from the stockholders of the
Company eligible to vote for the election of Directors proxies in favor of
Investor Nominees as the Company devotes to election of the other
management-recommended nominees (such efforts being hereafter described as
"Reasonable Solicitation Efforts"); provided, if Investor shall retain
beneficial ownership of less than 7.5% of the Class A Stock and the 75%
Limitation but at least 5% of the outstanding Class A Stock and that number of
shares of Common Stock as is equal to at least 50% of the highest percentage of
the outstanding Common Stock as is beneficially owned by Investor after
completion of the Offer, the Closing and the acquisition of any additional
shares of Class B Stock acquired by Investor pursuant to Section 3.6, and the
Collaboration Agreement shall remain in full force and effect as aforesaid, the
Investor Nominees shall be limited to one director. The period in which Investor
is entitled to one or more Investor Nominees is referred to as the "Director
Representation Period". If, at any time, the conditions entitling the Investor
to elect one or two Investor Nominees, as the case may be, shall not be met,
Investor shall at the request of the Company use all reasonable efforts to cause
such Investor Nominee(s) who shall then be serving as a director to resign and
shall thereafter have no further rights under this Section 8.5 with respect to
election of one or two Investor Nominees, as the case may be. During any
Director Representation Period in which two Investor Nominees shall serve as
directors, one such Nominee shall be a member of the Executive Committee and the
other shall be a member of the Audit Committee; provided, if only one such
Nominee shall serve as a director, such Nominee shall serve as a member of the
Executive Committee. Investor Nominees will not be paid director fees or meeting
fees but will be reimbursed for reasonable expenses of attending meetings.
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(ii) During the Director Representation Period, Investor shall
have the right to designate any replacement for an Investor Nominee upon the
death, resignation, retirement, disqualification or removal from office for
cause of such Investor Nominee, such replacement to be reasonably satisfactory
to the Company. The Company shall use all reasonable efforts, including
Reasonable Solicitation Efforts to cause each person so designated by Investor
pursuant to this paragraph (ii) to be promptly appointed or elected to the
Board. During any period in which Investor is entitled to designate an Investor
Nominee to the Board but no Investor Nominee is then serving on the Board (if
Investor shall have designated such a person within a reasonable period of
time), the Board shall not amend Sections 9.3, 9.4, 9.5, 9.6 or 9.7 of the
Bylaws without Investor's consent.
8.6. Nonrecognition of Certain Transfers. The Company shall promptly
notify Investor in writing of all requests for transfers and conversions of
shares of Common Stock held subject to the Stockholders' Agreement to anyone who
has received such shares in a transfer or conversion made other than in
accordance with the terms of the Stockholders' Agreement of which the Company
has knowledge. The Company shall not recognize any transfer or conversion, or
issue any certificate representing such shares in writing for at least 15 days
after giving Investor such notice, unless prior or during such 15 days, it shall
have received notice from Investor that it has no objection to such transfer. In
addition, the Company agrees that it shall not in any manner, whether directly
or indirectly, redeem any such shares from a Major A Stockholder if within 15
days after having been given notice of a proposed redemption, the Investor shall
object in writing that such stockholder has not complied with the provisions of
the Stockholders' Agreement, stating the reasons therefor, until the Investor
shall have withdrawn such objection in writing or as otherwise ordered by a
court having competent jurisdiction.
8.7. Independent Directors. The Company shall use all reasonable
efforts including Reasonable Solicitation Efforts to assure that at all times
during the Director Representation Period there will be at least three
Independent Directors on the Board.
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ARTICLE 9
RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS
9.1. Restrictions on Transfer.
9.1.1. Investor covenants and agrees with the Company that, prior to
the earliest of (a) the third anniversary of the Closing Date, (b) the
termination or expiration of the Collaboration Agreement (except if the same is
terminated by reason of material breach of its terms by Investor), (c) the
issuance by any Governmental Authority having competent jurisdiction of a final,
non-appealable order requiring Investor to divest its Equity, ("Final
Governmental Order") or (d) the agreement of the Company to enter into a
Business Combination with a person other than Investor or any Affiliate of
Investor, neither Investor nor any of its United States subsidiaries will,
directly or indirectly, offer, sell, transfer, assign, pledge, hypothecate or
otherwise dispose of the beneficial ownership of (any such act, a "Transfer")
any Equity except for
(i) a Transfer by Investor to a United States subsidiary of Investor,
provided that prior to such Transfer each such transferee consents in
writing with the Company to be bound by the restrictions set forth in this
Section 9.1 and assumes all other rights and obligations of Investor under
this Agreement and the Registration Rights Agreement, provided further that
Investor (A) shall remain liable for the performance by any such subsidiary
of its obligations under this Agreement, (B) shall act as agent for any and
all such subsidiaries in connection with the receipt or giving of any and
all notices under this Agreement and (C) shall not cause or permit any such
subsidiary to be other than United States subsidiary of Investor,
(ii) a Transfer to the Company or to a subsidiary of the Company
pursuant to a self-tender offer or otherwise,
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(iii) a Transfer pursuant to a merger or consolidation that is
recommended by the Board of Directors of the Company in which the Company
is a constituent corporation,
(iv) a Transfer pursuant to a bona fide third party tender offer or
exchange offer, which was not induced directly or indirectly by Investor or
any of its Affiliates, that is recommended by the Board of Directors of the
Company or pursuant to which Major A Stockholders tender or exchange shares
equal to a majority of the Total Voting Power of the Company and do not
withdraw the same on or before the Business Day immediately prior to the
expiration date of such offer, subject to the Company's right of first
refusal set forth in Section 9.3, or
(v) a Transfer of Class B Stock tendered on the expiration date of a
bona fide third party tender offer or exchange offer, which was not induced
directly or indirectly by Investor or any of its Affiliates, of a number of
shares of Class B Stock equal to the aggregate number of shares of Common
Stock tendered by all Major A Stockholders and not withdrawn by such Major
A Stockholders prior to the close of business on the Business Day
immediately prior to such expiration date; provided Investor shall have
received (and shall be entitled to rely for such purposes on) written
notice from the third party making such tender or exchange offer certifying
that such Major A Stockholders shall have tendered and not withdrawn such
shares as of the close of business on the Business Day prior to such
expiration date, subject to the Company's right of first refusal set forth
in Section 9.3.
The certificate or certificates representing any such Equity transferred as
provided above shall bear the legend or legends described in Section 9.2 to the
extent required by such Section 9.2.
9.1.2. After the earliest to occur of the events described in clauses
(a) through (d) of Section 9.1.1, neither Investor nor any of its United States
subsidiaries will, directly or indirectly, Transfer any Equity except for,
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(i) a Transfer permitted pursuant to Section 9.1.1, or
(ii) a Transfer by Investor or any of its United States subsidiaries of
Class B Stock for cash (A) in private sales to financial or institutional
buyers who shall not be or purchase on behalf of any Competitor of the
Company, (B) in bona fide open market "brokers' transactions" as permitted
by the provisions of Rule 144 under the Securities Act or (C) in a bona
fide public offering pursuant to the Registration Rights Agreement (such a
public offering being hereafter referred to as a "Permitted Offering"),
provided that in the case of a Transfer described in (A) or (C) the Company
has waived its right of first refusal set forth in Section 9.3, and
provided further that Investor or such subsidiaries, as the case may be,
will take all reasonable steps to assure that, in connection with any such
open market transactions or Permitted Offering, Transfers shall not be made
to any Person or "group" (as defined in Section 13(d) of the Exchange Act)
that would, following such Transfer, beneficially own more than 5% of the
outstanding Voting Stock or more than 5% of the outstanding Class B Stock
or in the case of a private sale described in (A) more than 7.5% of the
outstanding Voting Stock or more than 7.5% of the outstanding Class B
Stock; and provided further, in the case of a Permitted Offering which is
not made pursuant to a firm underwriting commitment, such Transfers are
completed within 60 days from the date such shares are first made available
for public sale.
The certificate or certificates representing any such Equity transferred as
provided above (other than pursuant to clause (ii) in the preceding sentence)
shall bear the legend or legends described in Section 9.2 to the extent required
by such Section 9.2.
9.1.3. No Transfer of any Equity in violation of this Section 9 shall
be made or recorded on the books of the Company and any such Transfer shall be
void and of no effect.
9.1.4. Subject to the provisions of the Registration Rights Agreement
and except as otherwise provided in Sections 9.1.5, 9.1.6 or 9.1.7, the
expenses incurred by the
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transferor and/or transferee in connection with any Transfer permitted under
this Section 9.1 shall be borne by the purchaser and/or seller party to such
sale.
9.1.5. In the event that prior to the tenth anniversary of the Closing
Date, Investor shall dispose of beneficial ownership of any Equity pursuant to
the terms of Section 9.1.2 as a result of a Final Governmental Order which
arises out of or results from the acquisition or attempted acquisition by
Investor (by merger, consolidation, purchase of stock or assets, contract or
otherwise) of assets or businesses not owned by Investor or its Affiliates on
the date hereof other than the transaction contemplated by this Agreement (the
"Acquisition"), then the terms of the Collaboration Agreement and the Licenses
shall be amended as provided in Subsection 9.05(d) of the Collaboration
Agreement and Subsections 4.08(a) of the CaMV Promoter License Agreement,
4.09(a) of the Corn Borer-Protected Corn License Agreement and 4.12(a) of the
Glyphosate-Protected Corn License Agreement. In addition, (i) Investor shall be
required to reimburse the Company for all reasonable costs and expenses incurred
by the Company in connection with any registrations effected by the Company to
permit such disposition of Equity whether or not required to be borne by the
Company in accordance with the Registration Rights Agreement and (ii) Investor
shall only be entitled to dispose of that amount of Equity required to be
disposed of pursuant to the Final Governmental Order.
9.1.6. In the event Investor shall dispose of beneficial ownership of
any Equity after the third anniversary of the Closing Date and prior to the
tenth anniversary of the Closing Date other than in (i) Transfers permitted
pursuant to Section 9.1.1, (ii) dispositions required after the issuance of a
Final Government Order (such dispositions being covered by Sections 9.1.5 and
9.1.7, whichever is applicable), (iii) dispositions following the termination or
expiration of the Collaboration Agreement (except if the same is terminated by
reason of a material breach of its terms by Investor), (iv) dispositions for
Cause (as hereafter defined), or (v) dispositions following the agreement of the
Company to enter into a Business Combination with a person other than Investor
or any Affiliate of Investor, then the terms of the Collaboration Agreement and
the Licenses shall be amended as provided in Subsection 9.05(d) of the
Collaboration Agreement and Subsections 4.08(a) of the CaMV
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Promoter License Agreement, 4.09(a) of the Corn Borer-Protected Corn License
Agreement and 4.12(a) of the Glyphosate-Protected Corn License Agreement. In
addition, Investor shall be required to reimburse the Company for all reasonable
costs and expenses incurred by the Company in connection with any registrations
effected by the Company to permit such disposition of Equity whether or not
required to be borne by the Company in accordance with the Registration Rights
Agreement. For purposes of this Section 9.1.6, "Cause" shall mean (a) a decrease
in the Company's share of the United States seed corn market as reported by
Doane's to less than seven per cent as determined by annual gross units sold or
licensed in any two consecutive fiscal years or (b) the incurrence by the
Company of net operating losses in any two consecutive fiscal years.
9.1.7. In the event that prior to the tenth anniversary of the Closing
Date, the Investor shall dispose of beneficial ownership of any Equity pursuant
to the terms of Section 9.1.2 as a result of a Final Governmental Order which
arises out of or results from the acquisition or attempted acquisition by the
Company (by merger, consolidation, purchase of stock or assets, contract or
otherwise) of assets or business not owned by the Company or its Affiliates on
the date hereof other than as contemplated by this Agreement, then the terms of
the Collaboration Agreement and the Licenses shall be amended as provided in
Subsection 9.05(e) of the Collaboration Agreement and Subsections 4.08(b) of the
CaMV Promoter License Agreement, 4.09(b) of the Corn Borer-Protected Corn
License Agreement and 4.12(b) of the Glyphosate-Protected Corn License
Agreement. In addition, the Company shall be required to reimburse Investor for
all reasonable costs and expenses, excluding underwriting discounts and
commissions, incurred by Investor in connection with any registrations effected
by the Company on behalf of Investor to permit such disposition of Equity
whether or not required to be borne by Investor in accordance with the
Registration Rights Agreement.
9.2. Legends.
9.2.1. Upon original issuance thereof and until such time as the same
is no longer required hereunder or under the applicable requirements of the
Securities Act or
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applicable state securities or blue sky laws, any certificate issued
representing any of the Newly Issued Shares and any Common Stock issued pursuant
to Section 10 (including, without limitation, all certificates issued upon
transfer or in exchange thereof or in substitution therefor) shall bear the
legend set forth in Section 5.3. If at any time the legend set forth in Section
5.3 is not required, and until such time as the same is no longer required
pursuant to the provisions of Section 9.3, any certificate issued representing
Shares described in the preceding sentence and any of the Class B Stock acquired
pursuant to the Offer (including without limitation all certificates issued upon
transfer or in exchange thereof or in substitution therefor) shall bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED
PURSUANT TO THE PROVISIONS OF ARTICLE 9 OF A CERTAIN INVESTMENT
AGREEMENT DATED AS OF JANUARY 31, 1996 BETWEEN INVESTOR AND THE
COMPANY, COPIES OF WHICH INVESTMENT AGREEMENT ARE ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY. A COPY OF ARTICLE 9 WILL BE FURNISHED
BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE"
A similar legend shall be placed upon any certificates described in the first
sentence of this Section 9.2.1 in the event such shares are no longer subject to
the applicable requirements of the Securities Act or applicable state securities
or blue sky laws, but continue to be beneficially owned by Investor or its
United States subsidiaries.
9.2.2. The Company may make a notation on its records or give
instructions to any transfer agents or registrars for the Class A Stock or the
Class B Stock in order to implement the restrictions on transfer set forth in
this Section 9.2.
9.2.3. Investor shall submit any and all certificates representing
Equity beneficially owned by Investor or any of its United States subsidiaries
to the Company so that the legend or legends required by this Section 9.2 may
be placed thereon. All Equity
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beneficially owned by Investor or any of such subsidiaries that is neither Class
A Stock or Class B Stock shall be treated in the same manner as Common Stock for
purposes of this Section 9.2.
9.2.4. In connection with any Transfer of Equity, the transferor shall
provide the Company with such customary certificates, opinions and other
documents as the Company may reasonably request to assure that such Transfer
complies fully with applicable securities and other laws.
9.2.5. The Company shall not incur any liability for any delay in
recognizing any Transfer of Equity if the Company in good faith reasonably
believes that such Transfer may have been or would be in violation in any
material respect of the provisions of the Securities Act, applicable state
securities or blue sky laws, or this Agreement.
9.2.6. After such time as any of the legends described by this Section
9.2 are no longer required on any certificate or certificates representing the
Common Stock, upon the request of Investor the Company will cause such
certificate or certificates to be exchanged for a certificate or certificates
that do not bear such legend.
9.3. Right of First Refusal.
9.3.1. Until the tenth anniversary of the Closing, prior to any
Transfer described in clause (ii) (A) or (C) of Section 9.1.2 or any Transfer
described in clauses (iv) or (v) of Section 9.1.1 pursuant to a tender or
exchange offer not recommended by the Board, Investor shall deliver a written
notice (the "Offer Notice") to the Company, which Offer Notice shall specify (i)
the number and amount and description of Equity to be sold or otherwise
transferred, including the method of proposed distribution, (ii) the Offer Price
(as defined in Section 9.3.2), (iii) in the case of a privately negotiated
transaction described in clause (ii) (A) of Section 9.1.2, any other proposed
terms of the Transfer including the identity of the proposed transferees and a
description of the nature of their respective businesses and (iv) in the case of
a tender or exchange offer (A) shall be conditional upon
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tender by one or more Major A Stockholders of the requisite number of shares of
Common Stock described in clause (iv) or (v) of Section 9.1.1 (without
subsequent withdrawal of any such shares on or before the close of business on
the Business Day immediately prior to the expiration date) and (B) in the case
of such clause (v) shall relate only to the Class B Stock permitted to be
tendered thereunder. The Offer Notice shall constitute an irrevocable offer to
the Company or its designee, for the period of time described below, to purchase
such securities upon the same terms specified in the Offer Notice, subject to
Section 9.3.6.
9.3.2. For purposes of this Section 9.3, "Offer Price" shall be defined
to mean on a per share or other amount of Equity basis (i) in the case of a
Permitted Offering, the market value per share or other amount of Equity
determined as provided below (the "Market Value" ) as of the date that the
Investor publicly announces its intention to dispose of such equity (a "Public
Notice"), less the cost and expenses, including underwriting commissions,
reasonably expected to be incurred by Investor and any of its United States
subsidiaries in connection with such Permitted Offering on a per share or other
amount of Equity basis (ii) in the case of a privately negotiated transaction
the proposed sales price per share or other amount of Equity and (iii) in the
case of a third party tender offer or exchange offer, the tender offer or
exchange offer price per share. For purposes of determination of the Offer Price
in the case of a Permitted Offering, (A) the Market Value shall mean with
respect to any security, the average of the daily closing prices on the NASDAQ
National Market (or such principal exchange on which such security may be
listed) for such security for the 40 consecutive trading days commencing on the
20th consecutive trading day prior to the date of the Public Notice, and (B) in
the event Investor shall intend to sell in the Permitted Offering (by conversion
to Class B Stock) any Class A Stock, such Class A Stock shall be valued as if it
had been converted into Class B Stock as of the beginning of the 20th
consecutive trading day prior to the date of the Public Notice. The closing
price for each day shall be the closing price, if reported, or if the closing
price is not reported, the average of the closing bid and asked prices, as
reported by NASDAQ or a similar source selected from time to time by the Company
for such purpose. (If Investor does not exercise its right of first refusal as
provided herein, transfers of such Equity shall be made only in compliance with
Article 9.)
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9.3.3. The Company may elect to purchase all or in the case of a
Permitted Offering, any portion of the securities at the Offer Price and upon
the terms and conditions specified in the Offer Notice, provided that, if in the
case of a Permitted Offering the Company elects to purchase less than all of the
offered securities in connection with a Permitted Offering, the number of shares
or other amount of such offered securities that the Company has elected to
purchase shall be subject to a reduction (determined by the managing underwriter
after consultation with a financial advisor selected by Investor) to the extent
the managing underwriter (after consultation with Investor's financial advisor)
determines that the full number of shares or other amount of such offered
securities that the Company has elected to purchase would so reduce the number
of shares or other amount of Equity to be sold pursuant to the Permitted
Offering as to have a material adverse effect on such offering as contemplated
by Investor (including the price at which Investor proposes to sell such
securities), provided further that if the managing underwriter determines that
the number of shares or other amount of such offered securities that the Company
has elected to purchase hereunder should be reduced in accordance with the
criteria set forth in the preceding proviso in this sentence, then the Company
shall be given the opportunity to make a further election either (i) to purchase
the number of shares or other amount of such offered securities as so reduced
(or, at the Company's sole option, a lesser number of shares or other amount of
such offered securities), (ii) to purchase all of such offered securities or
(iii) to withdraw its earlier election and to be released from any obligation to
purchase any of such offered securities, provided that such election shall be
made within five Business Days of notice to the Company of the managing
underwriter's determination.
9.3.4. If the Company elects to purchase the offered securities, it
shall give notice to Investor within 90 days of its receipt of the Offer Notice
(or in the case of a third party tender offer or exchange offer, not later than
the close of business on the second Business Day prior to the expiration date of
such offer, provided that the Offer Notice shall have been provided at least ten
Business Days prior to the initial expiration date of such offer and provided
further that such purchase shall be rescinded and be of no effect if shares are
not actually taken up pursuant to the tender offer or to the extent Investor is
not
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entitled to tender or exchange shares pursuant to clauses (iv) or (v) of Section
9.1.1) of its election, which shall constitute a binding obligation, subject to
standard terms and conditions for a stock purchase contract between an issuer
and a significant stockholder, to purchase the offered securities, which notice
shall include the date set for the closing of such purchase, which date shall be
no later than 30 days (or in the case of a third party tender or exchange offer
90 days) following the delivery of such election notice. Notwithstanding the
foregoing, such time periods shall not be deemed to commence with respect to,
and the Company shall not be obligated to respond to, any purported notice that
does not comply in all material respects with the requirements of this Section
9.3, which purported notice shall not be deemed to be an Offer Notice for
purposes of this Agreement and shall be null and void under this Agreement,
provided that if such purported notice is actually received by the Company and
the Company does not within five Business Days of such receipt notify Investor
that such purported notice does not comply in all material respects with such
requirements, such purported notice shall be deemed not to be defective in any
material respect with regard to such requirements.
9.3.5. The Company may assign its rights to purchase under this Section
9.3 to any person. If the Company does not respond to the Offer Notice within
the required response time period or elects not to purchase the offered
securities, Investor or its United States subsidiary, as the case may be, shall
be free to complete the proposed Transfer in accordance with the terms of this
Article 9 (including to the same proposed transferees in the case of a privately
negotiated transaction, unless in the case of a previously undesignated
transferee which is a financial not a strategic buyer Investor shall certify to
the Company that after reasonable investigation Investor does not believe that
any transferee identified for the first time may be considered to be a
Competitor or to have purchased on behalf of a Competitor), on terms no less
favorable to Investor or such subsidiary, as the case may be, than those set
forth in the Offer Notice, provided that (i) such Transfer is closed within 120
days of the latest of (x) the expiration of the foregoing required response time
period, or (y) in the case of a Permitted Offering within 90 days of the
declaration by the SEC of the effectiveness of a registration statement filed
with the SEC pursuant to the Registration Rights Agreement and (ii) the price at
which the securities are transferred must be equal
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to or higher than the Offer Price (except in the case of a Permitted Offering,
in which case the price may be equal to, higher than or less than the Offer
Price), provided, however, that such periods within which such Transfer must be
closed shall be extended to the extent necessary to obtain required governmental
approvals and Investor shall use all reasonable efforts to obtain such
approvals, provided further that the terms and conditions of the Transfer other
than the financial terms thereof may be varied in non-material respects from
those set forth in the Offer Notice if Investor gives notice to the Company of
the nature of such variations at least five Business Days prior to the
consummation of the Transfer, provided that compliance with such five Business
Day period shall not operate to terminate any of the Company's rights under this
Section 9.3.
9.3.6. In the case of a Permitted Offering, Investor shall provide the
Company with a good faith estimate of the costs and expenses, including
underwriting commissions, reasonably expected to be incurred by Investor and any
of its United States subsidiaries in connection with such Permitted Offering.
9.4. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. The provisions of this Section 9 shall apply, to the full
extent set forth herein with respect to the Equity of the Company, to any and
all Equity or other securities of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) that may
be issued in respect of, in exchange for, or in substitution of such Equity,
including, without limitation, in connection with any stock dividends, splits,
reverse splits, combinations, reclassifications, recapitalizations, mergers,
consolidations and the like occurring after the date hereof.
9.5. Registration Rights. The Company and Investor have entered into an
agreement (the "Registration Rights Agreement") providing for registration
rights with respect to shares of Class B Stock issued or acquired hereunder or
issuable upon the conversion of any shares of Class A Stock issued or acquired
hereunder to the extent provided under such agreement. The registration rights
provided to Investor under the Registration Rights
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Agreement shall not be transferrable to any Person other than a transferee to
which Investor has transferred Equity pursuant to clause (i) of the first
sentence of Section 9.1.1.
ARTICLE 10
EQUITY PURCHASE RIGHTS
10.1. Equity Purchase Rights.
10.1.1. From the Closing Date and for so long as Investor shall
beneficially own either 5% of the Class A Stock or 20% of the Class B Stock, if
the Company proposes to issue for cash (excluding (i) grants of any options or
any other rights to acquire Common Stock pursuant to Stock Plans or as otherwise
described in Section 10.3 and issuance of Common Stock pursuant to any such
options or other rights (as to which Investor will have the benefit of Section
10.3), (ii) issuance of shares of Common Stock upon the exercise of any options
exercisable for Common Stock that are outstanding as of the Closing Date, (iii)
issuance of shares of Common Stock upon the conversion or exercise of any
options, warrants, rights or other securities convertible into or exercisable
for Common Stock the issuance of which was subject to the provisions of this
Section 10.1, (iv) issuance of shares of Common Stock in a Small Offering and
(v) the reissuance of Common Stock purchased by the Company subsequent to the
Closing Date) any Equity ("Additional Equity") it shall give Investor at least
ten days prior written notice (the "Issuance Notice") of such intention,
describing the type of Equity, the estimated price and the other terms upon
which the Company proposes to issue the Additional Equity and the estimated date
of such issuance. If the Company intends to issue Additional Equity in a public
offering, then the Issuance Notice may state both the minimum and maximum amount
of Additional Equity that the Company intends to issue ("Issuance Range")
together with both the minimum and maximum prices ("Price Range") that
correspond with the Issuance Range. It is agreed that Investor shall have no
more than 20 days from the date the Issuance Notice is received to agree to
purchase all or any portion of its Pro Rata Share (as defined below) of the
Additional
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Equity by giving written notice to the Company of its desire to purchase the
Additional Equity (the "Response Notice"), subject to obtaining regulatory
approval for such purchase and completion of the issuance of the Additional
Equity as contemplated in the applicable Issuance Notice, and stating therein
the amount of Additional Equity to be purchased. Investor shall use all
reasonable efforts to obtain such regulatory approval. Such Response Notice
shall constitute the irrevocable agreement of Investor to purchase the amount of
Additional Equity indicated in the Response Notice at the price and upon the
terms stated in the Issuance Notice. Any purchase by Investor of Additional
Equity shall be consummated on or prior to the date on which all other
Additional Equity described in the applicable Issuance Notice is issued, except
that such purchase may be up to 90 days later than such date if Investor cannot
consummate such purchase due solely to the failure of Investor to obtain
regulatory approval.
"Pro Rata Share" means the amount of Additional Equity necessary to
permit Investor to maintain Investor's Outstanding Interest immediately prior to
issuance of Additional Equity (without regard to any rights Investor may have to
acquire shares pursuant to the application of Section 10.1 for which Pro Rata
Share is then being determined or Section 10.3) for the price and upon the other
terms and conditions upon which the Company actually effects such issuance;
provided, however, that in the case of a public offering of Additional Equity,
then the price to be paid by Investor shall be net of underwriting discounts or
commissions.
10.1.2. (i) If the Equity issued or proposed to be issued in respect of
which Investor is entitled to a purchase right under Section 10.1 consists of
shares of Class A Stock, Investor's right to acquire Equity under Section 10.1
shall be the right to acquire the number of shares of Class A Stock determined
in all other respects in accordance with the provisions of Section 10.1.1
(except to the extent subject to clause (iii) of this sentence), (ii) if the
Equity issued or proposed to be issued in respect of which Investor is entitled
to a purchase right under this Section 10.1 consists of shares of Class B Stock,
Investor's right to acquire Equity under Section 10.1.1 shall be the right to
acquire the number of shares of Class B Stock determined in all other respects
in accordance with the provisions of this
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Section 10.1 (except to the extent subject to clause (iii) of this sentence),
and (iii) if the Equity issued or proposed to be issued in respect of which
Investor is entitled to a purchase right under this Section 10.1 consists of
securities of the Company convertible into shares of Common Stock or options,
warrants or other rights to acquire shares of Common Stock (collectively,
"Option Securities"), Investor's right to acquire Equity under Section 10.1
shall be the right to acquire Equity convertible into shares of the class of
Common Stock or options, warrants or other rights to acquire shares of the class
of Common Stock, in each case upon the same terms as the Option Securities;
provided, Investor's rights with respect to Option Securities giving the holder
the right to acquire Common Stock shall be determined pursuant to Section 10.1.1
according to the then Outstanding Interest of Investor and its United States
subsidiaries in Class A Stock or Class B Stock, as the case may be, without
regard to any outstanding Equity convertible into or entitling the holder to
acquire such Common Stock.
10.1.3. If there have been issuances of the Company's Equity in respect
of which Investor has a purchase right under this Section 10.1 in Small
Offerings as to which Investor's rights to acquire Equity hereunder have not yet
become exercisable (the "Small Offering Shares"), then, as of and in connection
with the immediately following issuance of Equity of the same class that is
subject to the purchase rights of this Section 10.1, Investor shall also have a
right to acquire (on the same terms and conditions applicable herein to such
issuance, including, without limitation, price) additional shares or other
amounts of a class of Equity equal to the number of shares or other amounts
Investor would have been entitled to acquire at the time or times of issuance of
the Small Offering Shares but for the inapplicability of its purchase rights to
such issuances.
10.1.4. To the extent that, after Investor's election to acquire Equity
pursuant to its purchase right under Section 10.1.1, the number of shares or
other amount of Equity to be issued to Persons other than Investor and any of
its United States subsidiaries that gave rise to Investor's purchase right under
this Section 10 shall be reduced (whether at the discretion of the Company or
otherwise), then the number of shares or other amount of Equity that Investor
has the right to acquire under Section 10.1.1 shall be reduced pro rata
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and Investor's election shall be deemed to have been its irrevocable commitment
to purchase such reduced number of shares or other amount of such Equity.
10.2. Limitations.
10.2.1. Notwithstanding anything to the contrary contained in this
Section 10, Investor shall not be entitled to purchase any securities pursuant
to Section 10.1 or, in the case of clause (iii), to convert any Equity
convertible into, or exercise any rights to acquire, any Class A Stock, (i)
unless and until the Company actually issues the securities that gave rise to
Investor's purchase right under Section 10.1 (and the Company may in its sole
discretion elect at any time to abandon any such issuance) or (ii) in connection
with any pro rata stock split, stock dividend or other combination or
reclassification of any capital stock of the Company or (iii) in the case of
Class A Stock, to the extent that the percentage of Class A Stock then permitted
to be held by Investor pursuant to Section 11.1 exceeds 10% in which event
Investor shall only have the right to acquire sufficient shares of Class A Stock
to maintain the percentage of Class A Stock beneficially owned by Investor at
10% or in case a higher percentage of Class A Stock shall then be permitted to
be beneficially owned pursuant to Section 11.1(i), such higher percentage.
10.2.2. Notwithstanding anything to the contrary contained in this
Section 10, Investor shall not be entitled to purchase any securities pursuant
to Section 10.1 in connection with the issuance of a number of shares or other
amounts of Equity representing less than 1% of the total number of shares of the
relevant class of Common Stock of the Company outstanding as of the date of such
issuance (a "Small Offering"), except as otherwise provided in Section 10.1.3,
unless the Company elects to otherwise provide Investor with Equity purchase
rights in connection therewith on the terms and conditions set forth in Section
10.1.1.
10.3. Stock Options. From the Closing Date and for so long as
Investor shall beneficially own either 5% of the Class A Stock or 20% of the
Class B Stock, with respect to the issuance of shares of Class A Stock or Class
B Stock pursuant to the exercise of stock
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options or other rights to acquire Class A Stock or Class B Stock granted under
the Stock Plans, or under any other stock option plan or any stock-based
incentive compensation plan that the Company may adopt in the future, Investor
shall have the right, in respect of each fiscal year of the Company beginning
with its fiscal year ending August 31, 1996, to purchase from the Company all or
any portion of the number of shares of Class A Stock or Class B Stock which it
would be necessary for Investor to purchase in order to maintain the same
percentage of ownership of issued and outstanding shares of Class A Stock and
Class B Stock that Investor owned as of the last day of that fiscal year without
regard to shares of Class A Stock and Class B Stock issued pursuant to the
exercise of stock options during that fiscal year (or in the case of the
Company's fiscal year ending August 31, 1996, after the Closing Date); provided,
that no share issued pursuant to exercise of such options shall be considered
Class A Stock if prior to the time the Company is required to give the notice
described in the following sentence with regard to such fiscal year, such share
has been converted to Class B Stock (in which event such share shall be
considered Class B Stock). The Company shall notify Investor no later than 20
Business Days after the end of each fiscal year of the Company of the shares of
the Class A Stock or Class B Stock which Investor is entitled to purchase under
this Section 10.3 in respect of that fiscal year. Investor shall have 20
Business Days from the date of receipt of the Company's notice in which to
advise the Company whether or to what extent Investor elects to exercise its
rights under this Section 10.3. If Investor does not respond, or if Investor
indicates in writing that it will not exercise its rights, then Investor shall
be considered irrevocably to have waived its rights under this Section 10.3 with
respect to the fiscal year in question. If Investor timely advises the Company
that Investor will exercise its rights, then Investor shall have the right to
acquire all or any portion of the number of shares of Class A Stock or Class B
Stock which it is entitled to purchase at a price per share equal to the Current
Market Value on the date Investor advises the Company that it will exercise its
rights under this Section 10.3. For purposes of determination of the Current
Market Value, any Class A Stock shall be deemed to have been converted into
Class B Stock as of the beginning of the 22nd trading day prior to the date with
respect to which the determination of Current Market Value is to be made. At the
closing of such purchase, the Company and Investor shall provide customary and
appropriate representations to one another regarding the purchase and sale
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of the Common Stock being purchased by Investor and shall also provide any
additional documentation reasonably requested by the other party.
ARTICLE 11
STANDSTILL
11.1. Restriction on Acquisition by Investor of Company Securities.
Investor covenants and agrees with the Company that prior to the tenth
anniversary of the Closing Date (I) none of Investor's Affiliates except for
United States subsidiaries of Investor shall beneficially own (subject to
Section 5.7) any Equity of the Company, (II) neither Investor nor its Affiliates
shall acquire directly or indirectly any beneficial ownership of any Equity of
the Company except as permitted by Articles 2, 3 or 10 of this Agreement and
(III) neither Investor nor any of its Affiliates will acquire directly or
indirectly beneficial ownership of any additional Equity of the Company such
that the Equity beneficially owned by Investor and its Affiliates would
represent in the aggregate more than any of the foregoing (x) 10% of the Total
Voting Power of the Company, or (y) the Class B Percentage Limitation, or (z)
40% of the outstanding Common Stock (each such percentage described herein as a
"Percentage Limitation") unless (i) Investor shall receive from a Major A
Stockholder an offer to purchase shares of Class A Stock beneficially owned by
such Major A Stockholder pursuant to any rights granted by such Major A
Stockholder to Investor in the Stockholders' Agreement, in which event Investor
shall be entitled to acquire beneficial ownership from such Major A Stockholder
of such additional shares of Class A Stock, and (ii) no later than 60 days after
acquisition of beneficial ownership of a majority of the Total Voting Power of
the Company in accordance with the terms hereof, Investor shall be required to
make a Permitted Acquisition Proposal. A "Permitted Acquisition Proposal" shall
be an Acquisition Proposal (including any proposed tender offer) which:
(A) is made to the Board and, unless and until approved in accordance with
clause (B), not made directly to stockholders;
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(B) is subject to the approval of a majority of the Independent Directors
prior to execution of any definitive agreement in connection with a transaction
involving the Company or the making of any tender or other offer to purchase
Common Stock from any stockholders who are not Major A Stockholders; and
(C) would result, if successful, in the acquisition by Investor of
beneficial ownership of not less than 100% of the outstanding capital stock of
the Company at a price per share not less than the highest price at which
Investor has acquired (or proposes to acquire in connection with the
transaction) beneficial ownership of any Common Stock from a Major A Stockholder
within the preceding two years and for cash and/or the same form of
consideration if other than cash as paid or offered to be paid the Major A
Stockholders.
11.1.1. If Investor shall have acquired a majority of the Total Voting
Power of the Company, but Investor has not acquired 100% of the outstanding
capital stock of the Company, Investor shall:
(i) use all reasonable efforts to assure that at all times thereafter
there will be three Independent Directors on the Board of the Company until
such time as Investor has acquired 100% of the outstanding capital stock of
the Company, and
(ii) not acquire additional capital stock of the Company (other than
from a Major A Stockholder) or implement any Acquisition Proposal with
regard to the Company or enter into any commercial transaction with the
Company (not previously in existence) involving a value to the Company as
approved in good faith by a majority of the Independent Directors of less
than $1,000,000 unless such offer, Acquisition Proposal or commercial
transaction is approved by a majority of the Independent Directors of the
Company.
11.1.2. Neither Investor nor any of its Affiliates shall be deemed in
violation of the foregoing limitations in Section 11.1 if their beneficial
ownership of Equity exceeds such limitation solely as a result of (i) an
acquisition of Common Stock by the Company
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that, by reducing the number of securities outstanding, increases the
proportionate amount of Common Stock beneficially owned by Investor and its
Affiliates in the aggregate to more than the respective Percentage Limitations
of Total Voting Power, Class B Percentage Limitation or Common Stock or (ii) the
exercise by third parties of the right to convert Class A Stock into Class B
Stock, provided that in each case such limitation shall be deemed crossed if
Investor or any of its Affiliates thereafter becomes the beneficial owner of any
additional Equity unless (i) Investor shall be permitted to acquire such Common
Stock pursuant to Subsection 11.1(i) or (ii), or (ii) upon the consummation of
the acquisition of such additional Equity Investor and its Affiliates do not
beneficially own in the aggregate more than the applicable respective Percentage
Limitations of Total Voting Power, Class B Percentage Limitation or Common Stock
outstanding.
11.1.3. (i) In the event the Company receives an Acquisition Proposal
(including an indication of interest in making such a proposal) from a third
party which has not been solicited by the Board and which, if consummated, would
result in a Business Combination (an "Unsolicited Proposal"), the Company shall
promptly notify Investor in writing (the "Company Notice") of the material terms
of such Unsolicited Proposal, including without limitation any specified
consideration.
(ii) In the event (A) the Board determines to enter into negotiations
with regard to an Unsolicited Proposal and the Investor shall not have advised
the Company subsequent to the receipt of the Company Notice that it is not
interested in submitting an Investor Proposal (as hereinafter defined), or (B)
in the absence of receipt of an Unsolicited Proposal, the Company invites any
third party to make an Acquisition Proposal which if consummated would lead to a
Business Combination (the "Company Proposal"), then the Company shall also
promptly invite the Investor to submit a proposal (an "Investor Proposal") for a
Business Combination which would result in the acquisition of an equal or
greater amount of assets or shares of Common Stock than the Unsolicited Offer or
the Company Proposal (which may include all or substantially all the assets or
all of the Common Stock of the Company). Thereafter, if Investor shall have
submitted an Investor Proposal, the Company shall conduct the solicitation and
negotiation process as an open process available to all bidders, including
provision to the Investor and other interested parties of further
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information with regard to the terms of any offers received and the opportunity
to submit further offers in accordance with procedures approved by a committee
of directors consisting of an equal number of (A) non-employee or officer Major
A Stockholder directors (if such directors agree to serve on such committee)
including the Chairman of the Board and (B) Independent Directors; provided
however, that the Board shall not be required to conduct such process in a
manner which, after advice of special independent outside counsel and its
financial advisors, the Board determines is inconsistent with its fiduciary
duties. If Investor shall not have submitted an Investor Proposal or shall
withdraw any such proposal and advise the Company that it is not interested in
submitting a further proposal, the Company shall conduct the negotiation and
sale process in such manner as the Board determines.
(iii) Solely for purposes of this Section 11.1.3, a Business
Combination shall include a transaction with respect to which the Company
receives or solicits from a third party or enters into negotiations with respect
to, a proposal (the "Limited Proposal") which (A) contemplates the acquisition
of a portion of the Company's international seed business or the Company's North
American seed business that would be equal to or greater in amount than 25% of
the average revenues derived from such international or North American seed
business, respectively, in the Company's most recently completed two fiscal
years, and (B) would not otherwise be described by Section 11.1.3 (i) or (ii),
provided, that Investor shall not in such case be entitled to make a proposal
which would involve the acquisition of a greater amount of assets or ownership
interest than the Limited Proposal.
11.2. Other Restrictions. Prior to the earliest of (a) the tenth
anniversary of the Closing Date or (b) such date as Investor and its
subsidiaries acquire a majority of the Total Voting Power, in accordance with
the terms of this Agreement, neither Investor nor any of its Affiliates shall
(i) seek to have the Company waive, amend or modify any of the restrictions
contained in this Article 11, the Certificate of Incorporation or the bylaws
(other than the amendment described on Exhibit B hereto) of the Company, (ii)
make any Acquisition Proposal or proposal with respect to a Business
Combination, (iii) take any initiatives involving the Company that would
otherwise require the Company to make a public announcement, or make any public
comment or proposal with respect to any
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Acquisition Proposal, (iv) become a member of a "group" within the meaning of
Section 13(d) of the Exchange Act (other than a group composed solely of
Investor and any of its wholly owned direct or indirect subsidiaries), (v)
solicit, or encourage any other person to solicit, "proxies" or become a
"participant" or otherwise engage in an "solicitation" (as such terms are
defined or used in Regulation 14A under the Exchange Act) in opposition to a
recommendation of a majority of the directors of the Company with respect to any
matter; seek to advise or influence any person (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to the voting of any securities of
the Company; or execute any written consent in lieu of a meeting of holders of
securities of the Company or any class thereof, (vi) initiate, propose or
otherwise solicit stockholders for the approval of one or more stockholder
proposals with respect to the Company, as described in Rule 14a-8 under the
Exchange Act, (vii) deposit any of the Equity into a voting trust, or subject
any of the Equity to any agreement or arrangement other than the Stockholders'
Agreement with respect to the voting of the Shares or any agreement having
similar effect to any of the foregoing in this Section 11.2; or (viii) enter
into any discussions, negotiations, arrangements or understandings with any
third party with respect to any of the foregoing ("Contacts") or otherwise seek
to control or influence the Company other than Contacts with one or more Major A
Stockholder(s) if such Major A Stockholder(s) shall have given Investor a
Transfer Notice pursuant to Section 3.2(b) of the Stockholders' Agreement or has
otherwise actively initiated such Contact, provided, however, that (A) Investor
shall be permitted to make any proposal which Investor is permitted to make
pursuant to Sections 11.1 or 11.1.3, as the case may be, (B) if Investor shall
in good faith determine to accept any offer from a Major A Stockholder to
purchase shares of Class A Stock beneficially owned by such Major A Stockholder
or to make a counter proposal to such Major A Stockholder as permitted by and in
accordance with the terms of the Stockholders' Agreement, as a result of which
Investor would acquire beneficial ownership of a majority of the Total Voting
Power of the Company, Investor shall be entitled to make any Permitted
Acquisition Proposal to the Board which it is permitted or required to make
pursuant to Section 11.1, and (C) actions taken by any representative of
Investor on the Board, acting solely in his or her capacity as such a director,
shall not violate this Section 11.2.
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ARTICLE 12
TERMINATION
12.1. Termination. Prior to the Closing Date, this Agreement and the
transactions contemplated hereby may be terminated at any time:
12.1.1. Mutual Consent. By mutual consent of the Company and
Investor;
12.1.2. Expiration Date. By the Company or Investor by written notice
to the other party at any time after June 30, 1996 if any condition is not
waived or satisfied within such period; provided, however, that if any condition
shall not have been waived or satisfied within such period due to the willful
act or omission of one of the parties, that party may not terminate this
Agreement;
12.1.3. Permanent Injunction. By the Company or Investor if
consummation of the issuance and sale by the Company of the Newly Issued Shares
contemplated by this Agreement shall violate any final non-appealable order,
decree or judgment of any court or governmental body having competent
jurisdiction; or
12.1.4. Failure to Honor Agreements. By the Company or Investor if the
other party shall have failed to perform or comply in any material respect with
any agreement or covenant contained herein that is required to be performed or
complied with by it on or before the Closing Date after having been provided by
the other party written notice of, and a reasonable opportunity to cure, such
failure.
12.2. Termination After Closing Date. This Agreement, with the
exception of Article 11, shall terminate at any time after the Closing Date in
the event that the Investor and its Affiliates beneficially own less than (a)
five percent of the Total Voting Power of the Company and (b) less than ten
percent of the outstanding Common Stock of the Company.
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The Investor shall promptly notify the Company in writing at any time that it
believes it no longer owns such amounts.
12.3. Effect of Termination. If this Agreement is terminated pursuant
to this Section 12, this Agreement shall forthwith become wholly void and of no
further force and effect, except as provided in Section 12.2, and all further
obligations of the Company and Investor or their respective officers or
directors with respect to any obligation under this Agreement shall terminate
without further liability except, (i) for the obligations of the Company and
Investor under Sections 8.1 and 8.3 and (ii) that to the extent that such
termination results from the material breach by a party of any representations,
warranties, or covenants herein contained such termination shall not constitute
a waiver or bar by any party of any rights or remedies at law or in equity it
may have by reason of a breach of this Agreement by the other party.
ARTICLE 13
INDEMNIFICATION
13.1. Investor's Indemnification Agreement. Subject to Sections 13.3
and 14.1, Investor shall indemnify and hold the Company and its directors,
officers, employees and agents (collectively, the "Company Indemnified Parties")
harmless from and against any and all claims, liabilities, fines, penalties,
demands, causes of action, suits, judgments, losses, injuries, damages
(including costs of defense, settlement and reasonable attorneys' fees) (all of
the foregoing hereinafter collectively called "Liabilities, Actions and
Damages") suffered or incurred by said Company Indemnified Parties with respect
to (i) any inaccuracy of representations and warranties made herein including
without limitation pursuant to Article 5 by Investor, and (ii) breaches of
covenants made herein by Investor, which breaches, if curable, are not cured
within 60 days after written notice thereof from the Company.
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13.2. Company's Indemnification Agreement. Subject to Sections 13.3 and
14.1, the Company shall indemnify and hold Investor and its directors, officers,
employees and agents (collectively, the "Investor Indemnified Parties") harmless
from and against any and all Liabilities, Actions and Damages suffered or
incurred by said Investor Indemnified Parties with respect to (i) any inaccuracy
of representations and warranties made herein, including but not limited to,
pursuant to Article 4 hereof by the Company, or (ii) breaches of covenants made
herein by the Company, which breaches, if curable, are not cured within 60 days
after written notice thereof from Investor.
13.3. Procedure. In the event that, from and after the Closing Date, a
third party asserts any claim against any Company Indemnified Party or any
Investor Indemnified Party with respect to any matter to which the foregoing
indemnities apply, the party against whom the claim is asserted (the
"Indemnified Party") shall give prompt written notice to the indemnifying party
(the "Indemnifying Party"), and the Indemnifying Party shall have the right, at
its election, to take over the defense or settlement of such claim at its own
expense by giving prompt written notice to the Indemnified Party; provided,
however, that, if the Indemnifying Party does not give such notice and does not
proceed diligently to defend the claim within 30 days after receipt of such
notice of the claim, the Indemnifying Party shall be bound by any defense or
settlement that the Indemnified Party may make as to such claim and shall
reimburse the Indemnified Party for any and all losses and expenses resulting
therefrom. The Indemnified Party and the Indemnifying Party shall cooperate in
defending any such third party's claim, and the Indemnifying Party, to the
extent the Indemnifying Party elects to defend such claim, shall have reasonable
access to records, information and personnel in the possession or control of any
other party hereto which are applicable to the subject matter of any claim or
which are otherwise pertinent to the defense of such claim and the Indemnified
Party shall otherwise cooperate with the Indemnifying Party in all respects in
connection therewith. The Indemnifying Party shall reimburse the Indemnified
Party for all of the Indemnified Party's reasonable out-of-pocket costs incurred
in connection with the activities set forth in the immediately preceding
sentence and in enforcing this indemnification. Each party hereto shall have an
obligation to retain all relevant records until the period ending on December 31
of the seventh full calendar year
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following the Closing Date unless such records relate to actions, claims or
proceedings known to such party to be pending at the time such records are
scheduled not to be retained or unless such records are required to be
maintained for longer periods of time under applicable laws, rules or
regulations or unless such records relate to taxes, in which case each party
hereto shall have an obligation to retain such records for the term of the
applicable statute of limitations, as the same may be extended or tolled.
Notwithstanding the foregoing, the Indemnifying Party shall not settle or
compromise any such claim without the prior written consent of the Indemnified
Party, (such consent not to be unreasonably withheld) unless, after consultation
between such parties, the terms of such settlement or compromise release such
Indemnified Party from any and all liability with respect to such claim and do
not in any manner adversely affect the future operations or activities of such
Indemnified Party.
ARTICLE 14
GENERAL PROVISIONS
14.1. Survival of Representations and Warranties. The representations
and warranties in this Agreement and in the instruments delivered pursuant to
this Agreement (without regard to the Ancillary Agreements) shall survive the
Closing for a period of 24 months. Notwithstanding the foregoing, (i) the
representations and warranties set forth in Sections 4.3 and 4.4, to the extent
applicable to the issuance of the Newly Issued Shares to Investor at Closing,
shall survive the Closing indefinitely and (ii) the representations and
warranties set forth in Section 4.8 shall survive until the expiration of the
applicable statute of limitations (as such statute of limitations may be
extended). This Section 14.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Closing.
14.2. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to
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have been duly given upon receipt) by delivery in person, by facsimile
transmission or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 14.2):
If to Investor, to:
Monsanto Company
800 N. Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: Chief Financial Officer
Fax: 314-694-3001
with a copy to:
General Counsel and Secretary
Fax: 314-694-3001
If to Company, to:
DEKALB Genetics Corporation
3100 Sycamore Road
Dekalb, IL 60115
Attention: Senior Vice President and General Counsel
Fax: 815-758-6953
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with a copy to:
James G. Archer
c/o Sidley & Austin
875 Third Avenue
New York, NY 10022
Fax: 212-906-2021
14.3. Interpretation. References in this Agreement to any gender
include all genders and references to the singular include the plural and vice
versa. When a reference is made in this Agreement to a Section, Exhibit or
Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to,
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The words "hereof,"
"hereby" and "herein" and words of similar meaning where used in this Agreement
or any exhibit or schedule refer to such agreement, exhibit or schedule in its
entirety and not to any particular article, section or paragraph unless
otherwise specifically indicated.
14.4. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
14.5. Entire Agreement; No Third-Party Beneficiaries. This Agreement,
the Ancillary Agreements and the Confidentiality Agreement between Investor and
the Company (i) constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement and such Ancillary Agreements
and (ii) are not intended to confer upon
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any person other than the parties and their permitted successors and assigns any
rights or remedies.
14.6. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
14.7. Corporate Powers. Nothing herein shall be construed to relieve
the directors and officers of the Company or its subsidiaries from the
performance of their respective fiduciary duties or limit the exercise of their
powers in performance of their duties hereunder and the obligations of the
Company herein shall be subject to such fiduciary duties.
14.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or transferred,
in whole or in part, by any of the parties without the prior written consent of
the other party, except that Investor may, without the prior written consent of
the Company, assign all or any of its rights, interests, and obligations under
this Agreement (other than under Articles 8, 9 and 11) to a wholly owned, direct
or indirect, United States subsidiary of Investor, provided that Investor (i)
shall remain liable for the performance by any such subsidiary of its
obligations under this Agreement, (ii) shall act as agent for any and all such
subsidiaries in connection with the receipt and giving of notices under this
Agreement and (iii) shall not cause or permit any such subsidiary to be other
than a wholly owned direct or indirect subsidiary of Investor, and Investor may
assign its rights under the Registration Rights Agreement to the extent provided
therein. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the parties and their respective
successors and permitted assigns. Any attempted assignment in violation of this
Section 14.8 shall be void.
14.9. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement or any of the
Ancillary Agreements
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<PAGE> 75
between Investor and the Company were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and such Ancillary Agreements and to enforce specifically the
terms and provisions of this Agreement and such Ancillary agreements in any
Federal or state court located in the State of Delaware, this being in addition
to any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit itself to the personal
jurisdiction of any Federal or state court located in the State of Delaware in
the event any dispute arises out of this Agreement, any of such Ancillary
Agreements, or any of the transactions contemplated by this Agreement or any of
such Ancillary Agreements, (ii) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (iii) agrees that it will not bring any action relating to this
Agreement, any of such Ancillary Agreements or any of the transactions
contemplated by this Agreement or any of such Ancillary Agreements in any court
other than a Federal or state court sitting in the State of Delaware. All rights
and remedies existing hereunder are cumulative to and not exclusive of any
rights or remedies otherwise available.
14.10. Amendment and Waiver. No amendment to this Agreement or waiver
of any provision hereof shall be effective unless such amendment or waiver is in
writing and signed by each party to this Agreement. Any failure of a party to
comply with any obligation, covenant, agreement or condition contained in this
Agreement may be waived by the parties entitled to the benefits thereof only by
a written instrument duly executed and delivered by the parties granting such
waiver. Any waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure of compliance.
14.11. Accounting Information. As soon as reasonably practicable but in
any event within 25 days after the end of each calendar month after the Closing
Date, the Company shall provide Investor with such accounting and financial
information as is reasonably requested by Investor in order for Investor to
implement equity accounting for its investment in the Company.
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<PAGE> 76
14.12. Severability. In the event any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
IN WITNESS WHEREOF, Investor and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
MONSANTO COMPANY
By Robert T. Fraley
-----------------------------
Name: Robert T. Fraley
Title: President, Ceregen
DEKALB GENETICS CORPORATION
By Bruce P. Bickner
-----------------------------
Name: Bruce P. Bickner
Title: Chairman and CEO
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<PAGE> 77
EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or this Agreement,
Investor shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Investor's obligation to pay for or return tendered
shares of Class B Stock after the termination or withdrawal of the Offer), to
pay for any shares of Class B Stock tendered pursuant to the Offer and may
terminate or amend the Offer, with the consent of the Company or if, at any time
on or after the date of this Agreement and before the acceptance of such shares
for payment or the payment therefor, any of the following conditions exists:
(a) there shall be threatened or pending by any Governmental Authority
any suit, action or proceeding, or there shall be pending by any other
person any suit, action or proceeding, which has a substantial likelihood
of success, (i) challenging the acquisition by Investor of any shares of
Common Stock, seeking to restrain or prohibit the making or consummation
of the Offer or the share issuances as contemplated by the Agreement or
the performance of any of the other transactions contemplated by the
Agreement or the Ancillary Agreements, or seeking to obtain from the
Company or Investor any damages that are material in relation to the
Company and its subsidiaries taken as a whole, (ii) seeking to prohibit
or limit the ownership or operation by the Company, Investor or any of
their respective subsidiaries of the business or assets of the Company
and its subsidiaries, taken as a whole, or Investor and its subsidiaries,
taken as a whole, or to compel the Company to dispose of or hold separate
any material portion of the business or assets of the Company and its
subsidiaries, taken as a whole or Investor and its subsidiaries, taken as
a whole, as a result of the Offer or any of the other transactions
contemplated by this Agreement or the Ancillary Agreements, (iii) seeking
to impose limitations on the ability of Investor to acquire or hold, or
exercise full rights of ownership of, any shares of Common Stock to be
accepted for payment pursuant to the Offer or any
<PAGE> 78
Newly Issued Shares including, without limitation, the right to vote such
Newly Issued Shares on all matters properly presented to the stockholders
of the Company, (iv) seeking to prohibit Investor or any of its
subsidiaries from exercising any of their respective material rights
under this Agreement or any Ancillary Agreement;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or applicable to the
Offer or the share issuances, or any other action shall be taken by any
Governmental Authority or court, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses
(i) through (iv) of paragraph (a) above;
(c) there shall have occurred any event which constitutes a
Material Adverse Effect;
(d) any of the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality shall not be true
and correct and any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case as of the date of the Agreement and as of the Expiration Date as
though made on and as of the Expiration Date (or any other date as of
which such representations and warranties expressly speak);
(e) the Company shall have failed to furnish to Investor an opinion of
John H. Witmer, Jr., Senior Vice President and General Counsel of the
Company, in the form attached hereto as Exhibit C, dated as of the
Closing Date if it occurs on or before the Expiration Date, or if the
Closing Date shall not have occurred, speaking in future tense as relates
to issuance of the Newly Issued Shares;
(f) during the period from the date of this Agreement until the
Expiration Date, neither the Company nor any subsidiary shall have sold
or otherwise disposed of (or authorized, committed or agreed to sell or
otherwise dispose of), in a single transaction or in a series of
transactions, excluding sales of inventory or other assets
-2-
<PAGE> 79
in the normal course of business, any business or assets relating to the
Primary Business of the Company that constitute more than five percent of
the total consolidated assets of the Company as shown on the Company's
consolidated balance sheet as of the end of the most recent fiscal
quarter ending prior to the time the determination is made, whether such
sale or disposition be by merger or consolidation or the sale of stock or
assets or otherwise;
(g) there shall have occurred (i) any general suspension or trading
in, or limitation on prices for, securities (excluding any coordinated
trading halt triggered solely as a result of a specified decrease in a
market index), (ii) any extraordinary change in the financial markets in
the United States, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iv) any
limitation (whether or not mandatory) by any Governmental Authority on,
or other event that materially affects, the extension of credit by banks
or other lending institutions, (v) a commencement of a war directly
involving the armed forces of the United States, or (vi) in case of any
of the foregoing existing on the date of this Agreement, material
acceleration or worsening thereof;
(h) the Board of Directors of the Company shall have failed to give,
withdrawn or modified in a manner adverse to Investor its approval or
recommendation of the Offer or the other transactions contemplated by
this Agreement or the Ancillary Agreements;
(i) the Amended Bylaws shall not be authorized, approved and
effected; or
-3-
<PAGE> 80
(j) the Agreement shall have terminated in accordance with
its terms;
which, in the reasonable good faith judgment of Investor, and regardless of the
circumstances giving rise to any such condition (other than any action or
inaction by Investor or any of its subsidiaries which constitutes a breach of
the Agreement), makes it inadvisable to proceed with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of Investor and may be
asserted by Investor regardless of the circumstances giving rise to any such
condition or may be waived by Investor in whole or in part at any time and from
time to time in its sole discretion. The failure by Investor or any other
subsidiary of Investor at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a waiver with
respect to any other facts and circumstances and each such right shall be deemed
an ongoing right that may be asserted at any time and from time to time. Any
determination (which shall be made in good faith by the Investor) with respect
to the foregoing conditions shall be final and binding on the parties.
-4-
<PAGE> 81
EXHIBIT B
AMENDED BYLAWS OF THE COMPANY TO CONTAIN THE FOLLOWING BY-
LAW PROVISIONS:
-- Section 9.3 Primary Business. The Primary Business of the Corporation
shall be the research-based production, marketing, licensing and sale of
agronomic seed, including both technology related thereto and products
derived therefrom.
-- Section 9.4 Use of Voting Securities.
i) The use of the Corporation's Voting Securities to
facilitate strategic collaborations is in the Corporation's
interest, but as to any one strategic collaboration, the
maximum amount of Voting Securities to be issued to any
Person or Group shall not exceed 10 percent of Voting
Securities of the Corporation outstanding at the time of
issuance.
(ii) As used in this Section 9.4, the following terms shall have
the meanings set forth: "Voting Securities" means any
shares of capital stock or other securities of the
Corporation entitled to vote generally in the election of
directors, (including the right to elect one or more
directors as a class unless such right is only exercisable
during the continuance of a defined event.)
"Person" means any individual, limited partnership, general
partnership, trust, corporation or other firm or entity.
<PAGE> 82
"Group" shall have the meaning ascribed in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended, or any
successor provision thereto.
-- Section 9.5 Acquisitions. The Corporation shall not acquire, in a
single transaction or in series of related transactions, any business or
assets outside of the Primary Business of the Corporation that would be
equal to or greater in amount than twenty-five percent (25%) of the total
consolidated assets of the Corporation as shown on the Corporation's
consolidated balance sheet as of the end of the most recent fiscal
quarter ending prior to the time the determination is made whether such
acquisition be by merger or consolidation or the purchase of stock or
assets or otherwise;
-- Section 9.6 "Permitted Transactions". No transaction which would
result in the change of the Primary Business of the Corporation as set
forth in Section 9.3, no issuance of Voting Securities to facilitate a
strategic collaboration in contravention of Section 9.4 and no
acquisition of any business or assets outside the Primary Business of the
Corporation in contravention of Section 9.5 shall be approved by the
Board of Directors if the resolution regarding such transaction receives
the negative vote of at least three directors after the 1997 annual
meeting of stockholders and at least two directors prior to the 1997
annual meeting of stockholders.
-- Section 9.7 Certain Amendments. The Corporation shall not amend
Sections 9.3, 9.4, 9.5, 9.6 or 9.7 hereof if the resolution regarding
such amendment receives the negative vote of at least one director, or
two directors after the 1997 annual meeting of stockholders.
-6-
<PAGE> 83
EXHIBIT C
Opinion of John H. Witmer
Subject to appropriate qualifications, limitations, conditions and
assumptions, which are reasonably acceptable to Investor:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has corporate power
and authority to own the properties it purports to own and conduct its business
as described in the SEC Reports (as defined in the Investment Agreement) and has
corporate power and authority to execute, deliver and perform its obligations
under the Investment Agreement and the Ancillary Agreements to which it is a
party (collectively, the "Transaction Documents").
2. The Transaction Documents have been duly authorized, executed and
delivered by the Company and (assuming the due authorization, execution and
delivery thereof by the Investor) constitute the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with
their respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws of general applicability relating to or affecting the enforcement
of creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
3. Neither the execution and delivery by the Company of the Transaction
Documents or the consummation of the transactions contemplated thereby, nor
compliance by the Company with the terms and conditions thereof, does or will
result in any breach of or constitute a default under the Restated Certificate
of Incorporation of the Company, or the By-laws of the Company, or, to my
knowledge, any agreement, instrument or judgment which is applicable to the
Company or any of its subsidiaries or any court injunction or decree or any
valid and enforceable order of a governmental entity having jurisdiction over
the Company or any of its subsidiaries.
-7-
<PAGE> 84
4. To my knowledge, after due inquiry, there are no actions, suits or
proceedings or claims pending against the Company seeking to restrain or
prohibit (or questioning the validity or legality of) the consummation of the
transactions contemplated by the Transaction Documents.
5. The authorized, issued and outstanding shares of capital stock of the
Company are as set forth in Section 4.3 of the Investment Agreement; all of the
issued and outstanding shares of Common Stock (as defined in the Investment
Agreement) have been duly authorized and validly issued, are fully paid and
non-assessable; and the Newly Issued Shares (as defined in the Investment
Agreement) to be issued in connection with the Investment Agreement, when
certificates therefor have been duly executed, countersigned and registered and
delivered against payment of the agreed consideration therefor in accordance
with the terms of the Investment Agreement, will constitute shares of Common
Stock which have been duly authorized and validly issued, are fully paid and
non-assessable and have not been issued in violation of the preemptive rights of
any stockholder of the Company.
-8-
<PAGE> 85
EXHIBIT D
Opinion of Frank E. Vigus
Subject to appropriate qualifications, limitations, conditions and
assumptions, which are reasonably acceptable to the Company:
1. Investor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has corporate power and
authority to execute, deliver and perform its obligations under the Investment
Agreement and the Ancillary Agreements (collectively, the "Transaction
Documents").
2. The Transaction Documents have been duly authorized, executed and
delivered by Investor and (assuming the due authorization, execution and
delivery thereof by the other parties thereto) constitute the legal, valid and
binding obligation of Investor enforceable against Investor in accordance with
their respective terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws of general applicability relating to or affecting the enforcement
of creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
3. Neither the execution and delivery by Investor of the Transaction
Documents or the consummation of the transactions contemplated thereby, nor
compliance by Investor with the terms and conditions thereof, does or will
result in any breach of or constitute a default under the Certificate of
Incorporation, as amended, of Investor, or the By-Laws of Investor, or, to my
knowledge, any agreement, instrument or judgment which is applicable to Investor
or any of its subsidiaries or any court injunction or decree or any valid and
enforceable order of a governmental entity having jurisdiction over Investor or
its subsidiaries.
-9-
<PAGE> 86
4. To my knowledge, after due inquiry, there are no actions, suits or
proceedings or claims pending against Investor or any subsidiary seeking to
restrain or prohibit (or questioning the validity or legality of) the
consummation of the transactions contemplated by the Transaction Documents.
-10-
<PAGE> 1
Exhibit (c)(4)
STOCKHOLDERS' AGREEMENT
dated as of January 31, 1996
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE 1 Definitions . . . . . . . . . . . . . . . . . . . . . 3
1.1 "Affiliate. . . . . . . . . . . . . . . . . . . . . . 3
1.2 "Board of Directors . . . . . . . . . . . . . . . . . 3
1.3 "Business Combination . . . . . . . . . . . . . . . . 3
1.4 "Bylaws . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 "Class A Common Stock . . . . . . . . . . . . . . . . 4
1.6 "Class B Common Stock . . . . . . . . . . . . . . . . 4
1.7 "Closing Date . . . . . . . . . . . . . . . . . . . . 4
1.8 "Common Stock . . . . . . . . . . . . . . . . . . . . 4
1.9 "Company. . . . . . . . . . . . . . . . . . . . . . . 4
1.10 "Director . . . . . . . . . . . . . . . . . . . . . . 4
1.11 "Depositor. . . . . . . . . . . . . . . . . . . . . . 4
1.12 "Exchange Act . . . . . . . . . . . . . . . . . . . . 4
1.13 "Monsanto . . . . . . . . . . . . . . . . . . . . . . 4
1.14 "Monsanto Director. . . . . . . . . . . . . . . . . . 4
1.15 "hereto", "hereunder", "herein", "hereof. . . . . . . 4
1.16 "Involuntary Transfer Notice. . . . . . . . . . . . . 4
1.17 "Involuntary Transfer Stock . . . . . . . . . . . . . 5
1.18 "Indemnified Person . . . . . . . . . . . . . . . . . 5
1.19 "Investment Agreement . . . . . . . . . . . . . . . . 5
1.20 "Losses . . . . . . . . . . . . . . . . . . . . . . . 5
1.21 "Major A Stockholder. . . . . . . . . . . . . . . . . 5
1.22 "Offer Period . . . . . . . . . . . . . . . . . . . . 5
1.23 "Offered Stock. . . . . . . . . . . . . . . . . . . . 5
1.24 "Permitted Transferee . . . . . . . . . . . . . . . . 5
1.25 "Person . . . . . . . . . . . . . . . . . . . . . . . 6
1.26 "Pledge . . . . . . . . . . . . . . . . . . . . . . . 6
1.27 "Roberts Family Shareholder Agreement . . . . . . . . 6
1.28 "Roberts Family Voting Trust Agreement. . . . . . . . 6
1.29 "Selling Stockholder. . . . . . . . . . . . . . . . . 6
1.30 "Stock. . . . . . . . . . . . . . . . . . . . . . . . 6
1.31 "Transfer Notice. . . . . . . . . . . . . . . . . . . 6
1.32 "Transferring Stockholder . . . . . . . . . . . . . . 7
1.33 "Voting Trust . . . . . . . . . . . . . . . . . . . . 7
i
<PAGE> 3
ARTICLE 2 Election of Monsanto Directors;
Corporate Governance Provisions
in Certificate of Incorporation and Bylaws. . . 7
2.1 Monsanto Directors. . . . . . . . . . . . . . . . . 7
2.2 Amendment of Bylaws . . . . . . . . . . . . . . . . 7
2.3 Solicitation and Voting of Shares . . . . . . . . . 7
2.4 Amendment of Bylaws . . . . . . . . . . . . . . . . 8
2.5 Implementation of Investment Agreement. . . . . . . 8
2.6 Injunctive Relief . . . . . . . . . . . . . . . . . 8
2.7 Indemnification of Major A Stockholders . . . . . . 9
ARTICLE 3 Limitation on Certain Transfers . . . . . . . . . . . 11
3.1 General Limitations on Certain Transfers. . . . . . 11
3.2 Limitation on Certain Conversions and Transfers . . 11
3.3 Legend. . . . . . . . . . . . . . . . . . . . . . . 20
3.4 Nonrecognition of Certain Transfers . . . . . . . . 20
3.5 Exceptions. . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 4 Miscellaneous . . . . . . . . . . . . . . . . . . . . 22
4.1 Governing Law . . . . . . . . . . . . . . . . . . . 22
4.2 Successors and Assigns. . . . . . . . . . . . . . . 22
4.3 Entire Agreement. . . . . . . . . . . . . . . . . . 22
4.4 Notice. . . . . . . . . . . . . . . . . . . . . . . 23
4.5 Delays or Omissions . . . . . . . . . . . . . . . . 26
4.6 Counterparts. . . . . . . . . . . . . . . . . . . . 26
4.7 Severability. . . . . . . . . . . . . . . . . . . . 26
4.8 Sections and Articles . . . . . . . . . . . . . . . 26
4.9 Headings. . . . . . . . . . . . . . . . . . . . . . 26
4.10 Term. . . . . . . . . . . . . . . . . . . . . . . . 27
4.11 Effective Date. . . . . . . . . . . . . . . . . . . 27
Exhibits
Exhibit "A"
Exhibit "B"
Exhibit "C"
Exhibit "D"
ii
<PAGE> 4
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS AGREEMENT is made as of the 31st day of January, 1996,
by and among Douglas C. Roberts, individually and as Trustee of (i) the Douglas
C. Roberts Trust dated January 28, 1972, (ii) the David Kim Roberts 1989 Trust,
(iii) the Steven Suh Roberts 1989 Trust, and (iv) the Jeffrey King Roberts 1989
Trust ("Douglas C. Roberts"); Virginia R. Holt, individually and as Trustee of
(i) the Virginia R. Holt Trust dated August 22, 1973, (ii) the Amanda Mary Holt
1989 Trust, and (iii) the Laura Elizabeth Holt 1989 Trust ("Virginia R. Holt");
John T. Roberts, individually and as Trustee of (i) the John T. Roberts Trust
dated April 9, 1976, (ii) the Allison Elizabeth Roberts 1989 Trust, and (iii)
the Katherine Elsie Roberts 1990 Trust Number 1 ("John T. Roberts"); Charles C.
Roberts and Mary R. Roberts, as Trustees of (i) the Charles C. and Mary
R. Roberts Living Trust dated October 15, 1991, (ii) the Trust F/B/O
Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated
December 21, 1967, (iii) the Trust F/B/O Virginia R. Holt under Eleanor T.
Roberts Charitable Trust Agreement dated December 21, 1967, and (iv) the
Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust
Agreement dated December 21, 1967 ("Charles C. Roberts and Mary R. Roberts");
Lynne King Roberts, as Trustee of the David Kim Roberts Trust dated October
14, 1987 ("Lynne King Roberts"); Terrance K. Holt, as Trustee of the Amanda
Mary Holt Trust dated December 6, 1985 ("Terrance K. Holt"); and Robin R.
Roberts, as Trustee of (I) the Allison Elizabeth Roberts Trust dated August
6, 1986, (ii) the Katherine Elsie Roberts Trust dated March 13, 1990, and
(iii) the Charles David Roberts Trust dated February 28, 1994 ("Robin R.
Roberts"), and Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts,
Virginia R. Holt and John T. Roberts, as Voting Trustees under the Roberts
Family Voting Trust Agreement (collectively referred to as the "Major A
Stockholders" and individually as a "Major A Stockholder") and Monsanto
Company, a Delaware corporation, having its principal place of business at
800 N. Lindbergh Blvd., St. Louis, Missouri 63167, ("Monsanto").
<PAGE> 5
RECITALS
WHEREAS, DEKALB Genetics Corporation, a Delaware corporation, having its
principal place of business at 3100 Sycamore Road, DeKalb, Illinois 60115 (the
"Company") and Monsanto have entered into an Investment Agreement, dated as of
January 31, 1996 (the "Investment Agreement"), and certain other related
agreements whereby Monsanto will acquire shares of the Company's Class A Common
Stock, no par value ("Class A Common Stock") and shares of the Company's Class B
Common Stock, no par value ("Class B Common Stock" and, together with the Class
A Common Stock, the "Common Stock");
WHEREAS, the Major A Stockholders own shares of Class A Common Stock as
indicated on Exhibit "A" to this Agreement;
WHEREAS, pursuant to the Investment Agreement, the Company has agreed
that under certain circumstances Monsanto shall have the right to designate up
to two (2) directors on the Company's Board of Directors;
WHEREAS, pursuant to the Investment Agreement, the Company has agreed to
amend its Bylaws (as amended, the "Bylaws") and to provide notification to
Monsanto in the event the Company is considering certain business combination
transactions; and
WHEREAS, the Major A Stockholders have entered into the Roberts Family
Voting Trust Agreement in the form attached hereto as Exhibit B and the Roberts
Family Shareholder Agreement in the form attached hereto as Exhibit C.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Major A Stockholders and Monsanto
hereby agree as follows:
2
<PAGE> 6
ARTICLE 1
Definitions
As used in this Agreement, the following terms shall have the following
respective meanings (all terms defined in this Article 1 or in other provisions
of this Agreement in the singular shall have the same meaning when used in the
plural and vice versa):
1.1 "Affiliate" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act.
1.2 "Board of Directors" means the Board of Directors of the
Company.
1.3 "Business Combination" shall mean a merger or consolidation in
which the Company is a constituent corporation and pursuant to which
the Common Stock is converted into or exchanged for cash, securities or
other property or a sale of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole, or a sale of all or
substantially all the assets of the Company's United States seed corn
business; provided that a transaction in which the beneficial ownership
of the capital stock of the Company or of the sole surviving
corporation to the transaction (or of the ultimate parent of the
Company or of such sole surviving corporation) immediately after the
consummation of such transaction is substantially the same as the
beneficial ownership of the Company's capital stock immediately prior
to the consummation thereof shall not be deemed a Business Combination
unless such transaction shall result in the sale of all or
substantially all the assets of the Company and its subsidiaries taken
as a whole or all or substantially all of the assets of the Company's
United States seed corn business.
1.4 "Bylaws" has the meaning set forth in the recitals hereto.
3
<PAGE> 7
1.5 "Class A Common Stock" has the meaning set forth in the
recitals hereto.
1.6 "Class B Common Stock" has the meaning set forth in the
recitals hereto.
1.7 "Closing Date" means the closing of the purchase of Common Stock by
Monsanto from the Company pursuant to the terms of the Investment
Agreement.
1.8 "Common Stock" has the meaning set forth in the recitals
hereto.
1.9 "Company" has the meaning set forth in the first paragraph
hereof.
1.10 "Director" means a member of the Board of Directors.
1.11 "Depositor" means a depositor of shares of Common Stock under the
Voting Trust Agreement.
1.12 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
1.13 "Monsanto" has the meaning set forth in the first
paragraph hereof.
1.14 "Monsanto Director" has the meaning set forth in Section
2.1.
1.15 "hereto", "hereunder", "herein", "hereof" and the like mean and
refer to this Agreement as a whole and not merely to the specific
article, section, paragraph or clause in which the respective word
appears.
1.16 "Involuntary Transfer Notice" has the meaning set forth in
Section 3.2(e).
4
<PAGE> 8
1.17 "Involuntary Transfer Stock" has the meaning set forth in
Section 3.2(e).
1.18 "Indemnified Person" has the meaning set forth in Section
2.7(b).
1.19 "Investment Agreement" means that certain Investment Agreement,
dated as of January 31, 1996 between the Company and Monsanto.
1.20 "Losses" has the meaning as set forth in Section 2.7(a).
1.21 "Major A Stockholder" has the meaning set forth in the first
paragraph hereof, together with any pledgees and Permitted Transferees
who become parties to this Agreement pursuant to Section 3.5 (a) and
(b).
1.22 "Offer Period" has the meaning set forth in Section 3.2(b).
1.23 "Offered Stock" has the meaning set forth in Section 3.2(b).
1.24 "Permitted Transferee" means (i) Douglas C. Roberts, Virginia
Roberts Holt, John T. Roberts, or their parents, (ii) any Depositor,
(iii) any spouse, lineal descendant (including adopted descendants), or
spouse of a lineal descendant (including adopted descendants) of
Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts, (iv) any
trust or other entity the sole beneficiaries or owners of which are
Persons referred to in this definition, (v) any Person receiving any
interest in shares of Stock pursuant to a Major A Stockholder's last
will and testament or by distribution at a Major A Stockholder's death
from a trust established by a Major A Stockholder or according to the
laws of intestate succession, or (vi) any ex-spouse of Douglas C.
Roberts, Virginia Roberts Holt or John T. Roberts or any ex-spouse of a
lineal descendant (including adopted descendants) of Douglas C.
Roberts, Virginia Roberts Holt or John T. Roberts,
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to the extent (and only to the extent) that any such ex-spouse receives
any interest in Stock pursuant to a court order entered in connection
with a divorce proceeding.
1.25 "Person" means a corporation, association, partnership, joint
venture, limited liability company, individual, trust, unincorporated
organization, a government agency or political subdivision thereof and
any other entity.
1.26 "Pledge" when used as a verb means to pledge, hypothecate,
mortgage, create any security interests in or otherwise encumber and
when used as a noun means any resulting pledge, hypothecation,
mortgage, security interest or other encumbrance.
1.27 "Roberts Family Shareholder Agreement" means the agreement
attached hereto as Exhibit C.
1.28 "Roberts Family Voting Trust Agreement" means the agreement
attached hereto as Exhibit B.
1.29 "Selling Stockholder" has the meaning set forth in Section 3.2(b).
1.30 "Stock" means the following securities: (i) the Class A Common
Stock of the Company and any other common or preferred stock of the
Company entitled to vote generally in the election of directors whether
presently issued or hereafter authorized, designated and issued, now
owned or hereafter acquired by each Major A Stockholder, (ii) any
option, warrant or right to acquire Class A Common Stock (or any
security or other instrument referred to in this definition) and (iii)
any security or other instrument exchangeable for, or convertible into,
Class A Common Stock (or any security or other instrument referred to
in this definition).
1.31 "Transfer Notice" has the meaning set forth in Section 3.2(b).
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1.32 "Transferring Stockholder" has the meaning set forth in
Section 3.2(e).
1.33 "Voting Trust" means the trust established under the Roberts
Family Voting Trust Agreement.
ARTICLE 2
Election of Monsanto Directors; Corporate Governance Provisions
in Certificate of Incorporation and Bylaws
2.1 Monsanto Directors. As set forth in the Investment Agreement, depending
on its ownership percentage of the Company's Common Stock, Monsanto
shall have the right to nominate up to two (2) directors (together, the
"Monsanto Directors" and, individually, a "Monsanto Director") to the
Board of Directors. Initially, one Monsanto Director shall be nominated
by Monsanto within twenty (20) business days after the Closing Date and
shall have a term expiring at the Company's 1999 annual meeting of
stockholders. If Monsanto is entitled to nominate a second director,
then such second Monsanto Director shall be nominated for election at
the Company's 1997 annual meeting of stockholder and shall have a term
expiring at the Company's 2000 annual meeting of stockholders.
2.2 Amendment of Bylaws. As set forth in the Investment Agreement, prior to
the Closing, the Company has agreed to cause Article IX of the Bylaws
to be amended as provided in Exhibit "D" hereto.
2.3 Solicitation and Voting of Shares. In any election of Directors, each
Major A Stockholder shall use best efforts to attend such stockholder
meeting (in person or by proxy) for purposes of establishing a quorum
and shall vote (in person or by proxy) all its shares of Stock in favor
of any Monsanto Director nominated by Monsanto and
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<PAGE> 11
recommended by the Board of Directors; provided that such Monsanto
Director is reasonably satisfactory to the Company.
2.4 Amendment of Bylaws. During the term of this Agreement and after the
adoption by the Company of the amendments to the Bylaws described in
Exhibit "D" hereto, without the prior written consent of Monsanto, the
Major A Stockholders shall not directly or indirectly initiate any
action that would result in the amendment of Section 9.3, 9.4, 9.5, 9.6
or 9.7 of the Bylaws.
2.5 Implementation of Investment Agreement. During the term of this
Agreement, each Major A Stockholder shall vote its shares of Stock in
favor of any proposed amendment to the Company's Certificate of
Incorporation increasing the Company's authorized capital stock, which
amendment is required in order for the Company to comply with the
provisions of Article 10 of the Investment Agreement.
2.6 Injunctive Relief. In the event of a breach of the provisions of this
Article 2 by any of the Major A Stockholders, Monsanto will suffer
irreparable harm and the total amount of monetary damages will be
impossible to calculate and will therefore be an inadequate remedy.
Accordingly, in such event, Monsanto shall be entitled to temporary and
permanent injunctive relief against the breaching party and to any
other rights and remedies to which Monsanto may be entitled to at law
or in equity.
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2.7 Indemnification of Major A Stockholders.
(a) Monsanto's Indemnification Agreement. Subject to
paragraph (b) below, Monsanto shall indemnify and hold the
Major A Stockholders and their respective affiliates,
trustees, trust beneficiaries, directors, officers,
stockholders, employees, agents, successors and assigns
(each an "Indemnified Person") harmless from and against any
and all claims, liabilities, fines, penalties, demands,
causes of action, suits, judgments, losses, injuries,
damages (including costs of defense, settlement and
reasonable attorneys' fees) (all of the foregoing
hereinafter collectively called "Losses") suffered or
incurred by any Indemnified Person which arise from or in
connection with actions or inactions of any Indemnified
Person in the performance of the obligations of any Major A
Stockholder under this Article 2.
(b) Procedure. In the event that, from and after the
Closing, a third person asserts any claim against any
Indemnified Person with respect to any matter to which the
foregoing indemnities apply, the Indemnified Person shall
give prompt written notice to Monsanto, and Monsanto shall
have the right, at its election, to take over the defense or
settlement of such claim at its own expense by giving prompt
written notice to the Indemnified Person; provided, however,
that, (i) if Monsanto does not give such notice and does not
proceed diligently to defend the claim within thirty (30)
days after receipt of such notice of the claim, then the
Indemnified Person may employ separate counsel to represent
it and defend it against such claim and Monsanto shall be
bound by any defense or settlement that the Indemnified
Person may make as to such claim and shall reimburse the
Indemnified Person for any and all Losses resulting
therefrom as such Losses are incurred and (ii) if Monsanto
elects to defend the claim, then Monsanto shall employ
counsel reasonably satisfactory to the Indemnified Person
and the
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<PAGE> 13
Indemnified Person shall be entitled to participate in (but
not control) the defense of such claim and to employ separate
counsel at its own expense to assist in the handling of such
claim, unless the common counsel determines, in compliance
with the canons of ethics of the legal profession, that a
conflict of interest exists between Monsanto and an
Indemnified Person, in which event the Indemnified Person may
appoint separate counsel to represent or defend it against
the claim and Monsanto shall reimburse such Indemnified
Person for all Losses resulting therefrom as such Losses are
incurred. The Indemnified Person and Monsanto shall cooperate
in defending any such third person's claim, and Monsanto, to
the extent Monsanto elects to defend such claim, shall have
reasonable access to records, information and personnel in
the possession or control of any other party hereto which are
applicable to the subject matter of any claim or which are
otherwise pertinent to the defense of such claim and the
Indemnified Person shall otherwise cooperate with Monsanto in
all respects in connection therewith. Monsanto shall
reimburse the Indemnified Person for all of the Indemnified
Person's reasonable out-of-pocket costs as they are incurred
in connection with the activities set forth in the
immediately preceding sentence and in enforcing this
indemnification. Notwithstanding the foregoing, Monsanto
shall not settle or compromise any such claim without the
prior written consent of the Indemnified Person, such consent
not to be unreasonably withheld, unless, after consultation
between such parties, the terms of such settlement or
compromise release such Indemnified Person from any and all
liability with respect to such claim and do not in any manner
adversely affect the future operations or activities of such
Indemnified Person.
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<PAGE> 14
ARTICLE 3
Limitation on Certain Transfers
3.1 General Limitations on Certain Transfers.
(a) Subject to Section 3.5, during the term of this
Agreement, no Major A Stockholder shall in any manner,
whether directly or indirectly, voluntarily or by operation
of law, sell, convey, transfer, assign, or otherwise
dispose of ("transfer") any interest in its Stock to any
Person or convert any of its Class A Common Stock to Class
B Common Stock except as provided under the terms of this
Agreement after complying with the provisions of this
Article 3.
(b) Notwithstanding any other provision of this Agreement
including this Article 3, in no event shall any Major A
Stockholder tender any of its shares of Stock in the tender
offer to purchase shares of Class B Common Stock to be made
by Monsanto pursuant to the terms described in the Investment
Agreement.
3.2 Limitation on Certain Conversions and Transfers.
(a) Limitation on Conversions. Except pursuant to a court
order entered in connection with a divorce proceeding to an
ex-spouse of Douglas C. Roberts, Virginia Roberts Holt or
John T. Roberts or to an ex-spouse of a lineal descendant of
Douglas C. Roberts, Virginia Roberts Holt or John T.
Roberts, no Major A Stockholder shall convert any of its
Class A Common Stock to Class B Common Stock until such
time as such Major A Stockholder has entered into a binding
agreement to sell or otherwise convey such Class B Common
Stock to a third party.
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<PAGE> 15
(b) Limitations on Voluntary Transfers. Subject to Section
3.5, in the event that any Major A Stockholder desires to
transfer any interest in its Stock, including, without
limitation, a redemption of such Stock by the Company, such
Major A Stockholder (the "Selling Stockholder") shall make a
written offer (the "Transfer Notice") to Monsanto stating
(i) the number of shares of Stock proposed to be so
transferred (the "Offered Stock") and (ii) the price, form
of consideration and other material terms upon which the
Offered Stock are being offered; provided, however, that in
the event the Transfer Notice shall state that the Major A
Stockholder intends to dispose of such Offered Stock by
means of an underwritten public offering (a "Public
Offering"), in lieu of stating a price at which the Offered
Stock is being offered, the Major A Stockholder may state an
estimated price (less estimated underwriting discounts and
expenses of sale) at which the Major A Stockholder is
advised in writing by the managing underwriter as its good
faith estimate of the average between the estimated minimum
and maximum amounts at which such Offered Stock may be sold
in the Public Offering (the "Average Price"). For a period
of twenty-five (25) days (if the form of consideration
specified in the Transfer Notice only includes cash and/or
shares of stock traded in the NASDAQ National Market System
or on a U.S. securities exchange ("traded stock")), or
ninety (90) days (if the form of consideration specified in
the Transfer Notice includes property other than cash or
traded stock) following the date of the Transfer Notice (the
"Offer Period"), Monsanto shall have the irrevocable and
exclusive option (but not obligation) to purchase all (but
not less than all) of the Offered Stock in cash for the
price per share and upon the other terms specified in the
Transfer Notice; provided, however, in the event the
Transfer Notice shall have stated that the Major A
Stockholder intends to dispose of the Offered Stock in a
Public Offering, Monsanto may purchase the Offered Stock at
the Average Price (less the estimated amount of underwriting
discounts and expenses of offering) stated in the Transfer
Notice; provided, further, that if the proposed
consideration specified in the Transfer Notice includes
property
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<PAGE> 16
other than cash, then Monsanto shall have the option to
purchase the Offered Stock for consideration other than cash
that is equal in value to the non-cash property specified in
the Transfer Notice; and provided, further, that if the
consummation of the transfer described in the Transfer Notice
would cause the Selling Stockholder to recognize less gain
for income tax purposes than the amount of taxable gain which
the Selling Stockholder would recognize as a result of a cash
sale to Monsanto, then the aggregate purchase price for the
Offered Stock payable by Monsanto shall be increased by an
amount equal to (A) the gain which would not have otherwise
been recognized for income tax purposes multiplied by a
fraction, the numerator of which is one and the denominator
of which is one minus the highest marginal income tax rate on
capital gains for individuals in effect at such time, minus
(B) the gain which would not have otherwise been recognized
for income tax purposes. The gain which would not have
otherwise been recognized for income tax purposes shall be
computed using the Selling Stockholder's actual tax basis in
the Offered Stock based upon (i) such records as Monsanto
shall reasonably request and (ii) as are certified by such
Selling Stockholder as true, complete, and correct.
Monsanto's option to purchase the shares of Offered Stock
shall be exercised by giving written notice to the Selling
Stockholder within the Offer Period. Alternatively, if
Monsanto rejects the Selling Shareholder's offer to sell the
Offered Stock for the price per share and upon the terms
specified in the Transfer Notice, then, for the remainder of
the Offer Period, Monsanto shall have the exclusive right to
propose alternative terms to the Selling Stockholder for the
purchase of the Offered Stock at such price per share and
upon such terms as the parties may agree upon.
Subject to Section 3.5, in the event a Selling
Stockholder proposes to dispose of Offered Stock in a
transaction subject to Article 3 hereof for consideration
that includes non-cash consideration other than traded stock,
such Selling Stockholder shall stipulate the value of such
property in the Transfer
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<PAGE> 17
Notice and shall, at the request of Monsanto, provide to
Monsanto, at the Selling Stockholder's expense, a written
valuation of such property prepared by a
nationally-recognized firm experienced in appraising the
specified type of property , which sets forth the value of
such property. In the event that Monsanto does not agree with
such valuation, Monsanto shall deliver a written notice of
such disagreement to the Selling Stockholder within fifteen
(15) days of the receipt of the written valuation and shall
thereafter deliver to the Selling Stockholder within thirty
(30) days following delivery of such disagreement, at
Monsanto's expense, a written valuation of such property
prepared on the same basis by another nationally-recognized
firm experienced in appraising the specified type of
property, which sets forth the value of such property. The
Selling Stockholder may either accept such subsequent
valuation or deliver written notice of its disagreement with
such valuation to such Selling Stockholder. In the latter
event, the Selling Stockholder and Monsanto shall agree to
the appointment of a third nationally-recognized firm
experienced in appraising the specified type of property, who
shall be selected by mutual agreement of their respective
nationally-recognized firms, whose valuation shall establish
conclusively the price for purposes of the Transfer Notice.
The expense of such third firm shall be borne equally by the
parties.
If property to be received by a Selling
Stockholder includes shares of stock that are traded on the
NASDAQ National Market System or any other system then in
use, then the value of a share of such stock shall be deemed
to be the last reported sale price (or, if not available, the
average of the closing bid and ask price) per share during
the 30-day period immediately preceding the date of the
Transfer Notice. If the property to be received by a Selling
Stockholder includes shares of a stock that is listed on a
United States securities exchange registered under the
Exchange Act, then the value of a share of such stock shall
be deemed to be the average of the closing sale price per
share of such stock
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<PAGE> 18
during the 30-day period immediately preceding the date of
the Transfer Notice on the principal United States securities
exchange registered under the Exchange Act on which such
stock is listed.
(c) Acceptance of Offer. If, during the Offer Period,
Monsanto exercises its right to purchase the Offered Stock
at the price per share and upon the terms specified in the
Transfer Notice or if the parties otherwise reach an
agreement regarding the price, terms and conditions of the
sale, then the Selling Stockholder shall sell the shares of
Offered Stock to Monsanto in accordance with the price per
share and terms specified in the Transfer Notice or pursuant
to such price, terms and conditions otherwise agreed upon by
the parties, including standard terms and conditions for a
stock purchase agreement. The closing of any such purchase
shall take place no later than twenty-five (25) days (if the
form of consideration specified in the Transfer Notice only
includes cash or traded stock) or ninety (90) days (if the
form of consideration specified in the Transfer Notice
includes property other than cash or traded stock) following
the expiration of the Offer Period.
(d) Nonacceptance of Offer. If, at the end of the Offer
Period, Monsanto has not exercised its right to purchase
the Offered Stock at the price per share and upon the terms
specified in the Transfer Notice and the parties have not
otherwise reached an agreement regarding the price, terms
and conditions of the Sale, then such Selling Stockholder
shall be entitled to offer and sell such shares of Offered
Stock to any Person (free and clear of any rights of
Monsanto) provided that the price, terms and conditions of
such sale, considered as a whole, are at least as favorable
to the Selling Stockholder as either (i) those set forth in
the Transfer Notice or (ii) those offered by Monsanto in any
counter offer, if any; provided, in the event the Transfer
Notice shall have stated an Average Price, the Offered Stock
may be disposed of in a Public Offering at a price no less
than the minimum
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<PAGE> 19
amount used as a basis to calculate the Average Price (less
actual underwriting discounts and expenses). Notwithstanding
the foregoing, if the Selling Stockholder shall not have
signed a definitive agreement to sell the Offered Stock
within one hundred eighty (180) days immediately following
the expiration of the Offer Period, then the shares of
Offered Stock shall again be subject to the terms and
conditions of this Agreement in the same manner as if the
Transfer Notice had not been given.
(e) Limitations on Involuntary Transfers. Subject to Section 3.5,
if any involuntary transfer of any of the Stock owned by a
Major A Stockholder (a "Transferring Stockholder") shall
occur (such as, but not limited to, a sale by a Major A
Stockholder's trustee in bankruptcy, or a sale to a purchaser
at any creditor's or court sale) other than an involuntary
transfer to a Permitted Transferee:
(i) Transferee Takes Subject Hereto. The transferee
(which term, as used herein, shall include any and
all transferees and subsequent transferees of the
initial transferee) shall take and hold such Stock
subject to all of the restrictions, liabilities and
rights under this Agreement, which shall continue
in full force and effect.
(ii) Involuntary Transfer Notice. The Transferring
Stockholder (or, if it fails to do so, the
transferee) shall promptly give written notice
(the "Involuntary Transfer Notice") to Monsanto
and the Company stating (a) when the involuntary
transfer occurred or is to occur, (b) the
circumstances alleged to require such transfer,
(c) the number of shares of Stock involved and (d)
the name, address and capacity of the transferee.
If both the Transferring Stockholder and the
transferee shall fail to give the Involuntary
Transfer Notice, then the Involuntary Transfer
Notice may be given by the Company or by any other
stockholder of the Company and
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the Involuntary Transfer Notice so given may
contain only such portion of the information set
forth in the preceding sentence as shall be known
to the Person so giving the Involuntary Transfer
Notice.
(iii) Purchase Option. Monsanto shall have the
irrevocable and exclusive option (but not the
obligation) for a period of forty-five (45) days
immediately following receipt of the Involuntary
Transfer Notice to purchase all but not less than
all of the shares of Stock included in the
Involuntary Transfer Notice (the "Involuntary
Transfer Stock") in cash for the price per share
and upon the terms and conditions set forth in
this Section 3.2(e). An election to exercise
Monsanto's option shall be made by Monsanto by
giving written notice to the Company, the
transferee and the Transferring Stockholder.
(iv) Failure to Give Notice. Failure by Monsanto to give
the notice provided for in paragraph (e)(iii)
within the time period provided for therein shall
be deemed an election by Monsanto not to purchase
any shares of the Involuntary Transfer Stock.
(v) Closing. If the shares of Involuntary Transfer
Stock are to be purchased by Monsanto pursuant to
this Section 3.2(e), then such purchase shall,
unless the parties thereto otherwise agree, be
completed at the principal office of Monsanto on
the thirtieth (30th) day following the giving of
notice by Monsanto pursuant to paragraph (e)(iii)
of its election to exercise its option to purchase
the Involuntary Transfer Stock.
(vi) Purchase Price. The price per share of the
Involuntary Transfer Stock to be paid by Monsanto
upon exercise of its option to purchase such
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<PAGE> 21
Involuntary Transfer Stock pursuant to paragraph
(e)(iii) shall be as follows:
(a) With respect to shares of Class A
Common Stock, if the shares of the
Company's Class B Common Stock are then
traded in the NASDAQ National Market
System or on a United States securities
exchange registered under the Exchange
Act, the price per share shall be the
average of the last reported sales price
(or, if not available, the average of
the closing bid and ask price) per
share of the Company's Class B Common
Stock on the NASDAQ National Market
System (or such other securities
exchange on which the Company's Class B
Common Stock is then listed) on each of
the thirty (30) trading days immediately
preceding the closing of the purchase of
such Class A Common Stock; and
(b) With respect to shares of any
Involuntary Transfer Stock other than
Class A Common Stock, or, with respect
to shares of Class A Common Stock if the
Company's Class B Common Stock is not
then listed on the NASDAQ National
Market System or on a United States
securities exchange registered under the
Exchange Act, the price per share shall
be the fair market value per share as
determined by an investment banking firm
of recognized standing selected by
mutual agreement of the transferee or
Transferring Stockholder, as the case
may be (depending on who is the legal
owner of the Involuntary Transfer
Stock), and Monsanto. If the transferee
or the Transferring Stockholder, as the
case may be, and Monsanto are unable to
agree upon an investment banking firm to
perform the valuation, then both
Monsanto and the transferee or the
Transferring Stockholder, as the case
may be, shall select an
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investment banking firm and the two investment
banking firms so selected shall select a third
investment banking firm to perform the valuation.
The determination of the third investment banking
firm as to the fair market value per share shall be
final and binding on the parties. If the parties
are unable to mutually agree upon an investment
banking firm to perform the valuation, then
Monsanto and the transferee or the Transferring
Stockholder, as the case may be, shall pay the fees
of the investment banking firm selected by each
such party. The fees of any investment banking firm
mutually agreed upon by the parties and the fees of
any third investment banking firm performing the
valuation in connection with the services provided
pursuant to this paragraph (e)(vi) shall be
paid fifty percent (50%) by Monsanto and fifty
percent (50%) by the transferee or the
Transferring Stockholder, as the case may be.
(vii) Delivery of Certificates. At the closing of the
purchase and sale of Involuntary Transfer Stock
pursuant to the exercise of options granted under
this Section 3.2, the Transferring Stockholder or
the transferee, as the case may be, shall deliver
to Monsanto duly endorsed for transfer, with all
required state or federal documentary tax stamps
affixed thereto, certificates representing all of
the shares of Involuntary Transfer Stock being
purchased and sold at such closing against payment
therefor in cash or certified or bank cashier's
check. In addition, the Transferring Stockholder
or the transferee, as the case may be, shall
deliver to Monsanto such signature guarantees and
other documents and certificates as may be
reasonably requested by Monsanto in order to
confirm the Transferring Stockholder's or the
transferee's, as the case may be,
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<PAGE> 23
title to such Involuntary Transfer Stock and its
authority to act in connection with the sale
thereof.
3.3 Legend. A copy of this Agreement shall be filed with the Secretary of
the Company and shall be kept at its principal executive office. Upon
the execution of this Agreement, each of the Major A Stockholders shall
cause each certificate representing shares of Stock owned by such Major
A Stockholder to carry a legend as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, CONVEYED, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED,
MORTGAGED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER
COMPLIES WITH THE PROVISIONS OF A STOCKHOLDERS' AGREEMENT
DATED AS OF JANUARY 31, 1996, A COPY OF WHICH IS ON FILE AT
THE OFFICES OF THE COMPANY.
Upon the acquisition of additional shares of Stock after the date
hereof, each Major A Stockholder shall cause each certificate
representing such additional shares of Stock to carry the above legend.
3.4 Nonrecognition of Certain Transfers. Any transfer, acquisition or
conversion of shares of Stock in violation of this Agreement shall be
null and void. Each Major A Stockholder agrees that any such transfer,
acquisition or conversion may and should be enjoined.
3.5 Exceptions. The provisions of this Article 3 shall not apply to:
(a) a Pledge of Stock or any interest therein to a bank or other
reputable lending institution in a bona fide loan transaction and not
made in bad faith to avoid the provisions of this Article 3; provided,
however, if the pledgee is not a party to this
20
<PAGE> 24
Agreement it shall execute a counterpart of this Agreement
acknowledging that it has become a party to this Agreement with respect
to the shares of Stock so pledged, after which such pledgee shall be
deemed a Major A Stockholder;
(b) a transfer, directly or indirectly, voluntarily or involuntarily,
of any interest in Stock to a Permitted Transferee (including transfers
of Voting Trust Certificates or interests in Stock pursuant to the
Roberts Family Voting Trust Agreement and the Roberts Family
Shareholder Agreement); provided, however, that the Permitted
Transferee, if not then a party to this Agreement, shall execute a
counterpart to this Agreement acknowledging that it has become a party
to this Agreement with respect to the shares of Stock so transferred,
after which such Permitted Transferee shall be deemed a Major A
Stockholder;
(c) the appointment of or transfer of any interest in Stock to any
trustee, guardian, executor, administrator, Voting Trustee of the
Voting Trust or other fiduciary acting solely for the benefit of one or
more Permitted Transferees;
(d) the granting of a proxy with respect to Stock solicited by the
Board of Directors;
(e) any exchange, conversion or transfer of Stock in connection with a
Business Combination; provided, however, that this clause (e) shall not
permit any agreement to sell or otherwise transfer any interest in
Stock (including the granting of any proxy to the acquiror) by any
Major A Stockholder prior to the Company's execution of an agreement
with respect to such Business Combination; or
(f) any tender or exchange of Stock in accordance with the terms of any
tender or exchange offer, which tender or exchange offer would result,
if consummated in accordance with its terms, in the beneficial
ownership by any Person or group (within the meaning of Rule 13d-3 of
the Exchange Act) of all of the Class A Common Stock and
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<PAGE> 25
Class B Common Stock; provided, however, that this clause (f) shall not
permit any Major A Stockholder to surrender (or enter into a binding
agreement to sell or surrender) any Stock or interest therein in
connection with such tender or exchange offer unless the Company has
previously published to security holders of the Company a statement
pursuant to Rule 14e-2 (or any successor rule) under the Exchange Act.
ARTICLE 4
Miscellaneous
4.1 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of Delaware (exclusive of such state's choice
of laws rules).
4.2 Successors and Assigns. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or
transferred, in whole or in part, by any of the parties without the
prior written consent of the other parties hereto, except that Monsanto
may, without the prior written consent of the other parties hereto,
assign all or any of its rights, interests, and obligations under this
Agreement to a wholly owned, direct or indirect, United States
subsidiary of Monsanto, provided that Monsanto (i) shall remain liable
for the performance by any such subsidiary of its obligations under
this Agreement, (ii) shall act as agent for any and all such
subsidiaries in connection with the receipt and giving of notices under
this Agreement and (iii) shall not cause or permit any such subsidiary
to be other than a wholly owned direct or indirect subsidiary of
Monsanto. Subject to the preceding sentence and as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, permitted assigns, heirs, executors, and
administrators of the parties hereto.
4.3 Entire Agreement. This Agreement constitutes the complete,
exclusive and final understanding and agreement between the parties
with regard to the subjects hereof.
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<PAGE> 26
4.4 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, and shall be deemed sufficiently given
when delivered in person or transmitted by telegram or telecopier
(confirmed by mail) or by a national overnight delivery service,
addressed as follows:
If to Monsanto: Monsanto Company
800 N. Lindbergh Blvd.
St. Louis, MO 63167
Attention: Chief Financial Officer
Telecopy Number: (314) 694-3001
with a copy to:
Monsanto Company
800 N. Lindbergh Blvd.
St. Louis, MO 63167
Attention: General Counsel and Secretary
Telecopy Number: (314) 694-3001
If to Douglas C. Douglas C. Roberts
Roberts: DEKALB Genetics Corporation
3100 Sycamore Road
DeKalb, IL 60115
Telecopy Number: (815) 758-3711
23
<PAGE> 27
with a copy to:
Frank H. Roberts, Esq.
Pillsbury, Madison & Sutro LLP
225 Bush Street
San Francisco, CA 94104
Telecopy Number: (415) 983-1200
If to Lynne King Roberts:
Lynne King Roberts
c/o Douglas C. Roberts
DEKALB Genetics Corporation
3100 Sycamore Road
DeKalb, IL 60115
Telecopy Number: (815) 758-3711
with a copy to:
Frank H. Roberts, Esq.
Pillsbury, Madison & Sutro LLP
225 Bush Street
San Francisco, CA 94104
Telecopy Number: (415) 983-1200
If to Terrance K. Holt:
Terrance K. Holt
2329 Clover Lane
Northfield, IL 60093
Telecopy Number: (708) 572-1818
with a copy to:
Frank H. Roberts, Esq.
Pillsbury, Madison & Sutro LLP
225 Bush Street
San Francisco, CA 94104
Telecopy Number: (415) 983-1200
If to Virginia R. Holt:
Virginia R. Holt
2329 Clover Lane
Northfield, IL 60093
Telecopy Number: (708) 572-1818
24
<PAGE> 28
with a copy to:
Frank H. Roberts, Esq.
Pillsbury, Madison & Sutro LLP
225 Bush Street
San Francisco, CA 94104
Telecopy Number: (415) 983-1200
If to John T. Roberts: John T. Roberts
2090 Mulsanne Drive
Zionsville, IN 46077
Telecopy Number: (317) 594-4501
with a copy to:
Frank H. Roberts, Esq.
Pillsbury, Madison & Sutro LLP
225 Bush Street
San Francisco, CA 94104
Telecopy Number: (415) 983-1200
If to Robin R. Robin R. Roberts
Roberts: 2090 Mulsanne Drive
Zionsville, IN 46077
Telecopy Number: (317) 594-4501
with a copy to:
Frank H. Roberts, Esq.
Pillsbury, Madison & Sutro LLP
225 Bush Street
San Francisco, CA 94104
Telecopy Number: (415) 983-1200
or to such other address as may be specified from time to time in a
notice given by such party. The parties agree to acknowledge in writing
the receipt of any such notice delivered in person.
25
<PAGE> 29
4.5 Delays or Omissions. Except as otherwise provided in this Agreement, no
delay or omission to exercise any right, power or remedy accruing to
Monsanto, upon any breach or default of or any Major A Stockholder
under this Agreement, shall impair any such right, power or remedy of
Monsanto nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring. Any waiver, permit, consent or approval
of any kind or character on the part of any party or any waiver on the
part of any party of any provisions or conditions of this Agreement
must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, at law, in equity or otherwise afforded to any party, shall
be cumulative and not alternative.
4.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
4.7 Severability. In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided, however, that no such
severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
4.8 Sections and Articles. All sections and articles referred to
herein are sections and articles of this Agreement.
4.9 Headings. Headings as to the contents of particular articles and
sections are for convenience only and are in no way to be construed as
part of this Agreement or as a limitation of the scope of the
particular articles or sections to which they refer.
26
<PAGE> 30
4.10 Term. The provisions of this Agreement shall be effective from the date
hereof until the earlier of (i) the termination of the Collaboration
Agreement and License between Monsanto and the Company dated of even
date herewith (except if the same is terminated by reason of a material
breach thereof by the Company or by reason of a governmental decree
caused by the voluntary action of the Company), (ii) such time as
Monsanto owns less than (A) five percent (5%) of the outstanding Class
A Common Stock or (B) less than fifty percent (50%) of the highest
percent of the outstanding Common Stock as is beneficially owned by
Monsanto after completion of the tender offer contemplated by the
Investment Agreement, the Closing and any purchases in the market of
Class B Common Stock by Monsanto as permitted under the Investment
Agreement during the one year period after the Closing, (iii) the date
on which the Investment Agreement is terminated and (iv) on the
eleventh anniversary of the Closing or any subsequent anniversary of
the Closing if either Monsanto on the one hand or a majority in
interest of Stock beneficially owned by the Persons who are then Major
A Stockholders on the other gives written notice to all other parties
hereto that this Agreement shall terminate on any such anniversary
which is more than 60 days after the date of such notice.
4.11 Effective Date. The provisions of this Agreement shall be effective as
of the consummation of the Closing. If the Investment Agreement is
terminated prior to the consummation of the Closing, then the
provisions of this Agreement shall be null and void and of no further
force or effect and this Agreement shall be deemed to be terminated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
Monsanto Company
/s/ Robert T. Fraley
-------------------------------
Robert T. Fraley
President, Ceregen
27
<PAGE> 31
Douglas C. Roberts
/s/ Douglas C. Roberts
---------------------
Douglas C. Roberts, individually and as
Trustee of (i) the Douglas C. Roberts
Trust dated January 28, 1972, (ii) the
David Kim Roberts 1989 Trust, (iii) the
Steven Suh Roberts 1989 Trust, and (iv)
the Jeffrey King Roberts 1989 Trust
28
<PAGE> 32
Virginia R. Holt
/s/ Virginia R. Holt
---------------------
Virginia R. Holt, individually and as
Trustee of (i) the Virginia R. Holt
Trust dated August 22, 1973, (ii) the
Amanda Mary Holt 1989 Trust, and (iii)
the Laura Elizabeth Holt 1989 Trust
29
<PAGE> 33
John T. Roberts
/s/ John T. Roberts
-------------------
John T. Roberts, individually
and as Trustee of (i) the John T.
Roberts Trust dated April 9, 1976, (ii)
the Allison Elizabeth Roberts 1989
Trust, and (iii) the Katherine Elsie
Roberts 1990 Trust Number 1
30
<PAGE> 34
Robin R. Roberts
/s/ Robin R. Roberts
--------------------
Robin R. Roberts, as Trustee of (i)
the Allison Elizabeth Roberts Trust
dated August 6, 1986, (ii) the
Katherine Elsie Roberts Trust dated
March 13, 1990, and (iii) the Charles
David Roberts Trust dated February 28,
1994
31
<PAGE> 35
Terrance K. Holt
/s/ Terrance K. Holt
--------------------
Terrance K. Holt, as Trustee of
the Amanda Mary Holt Trust dated
December 6, 1985
32
<PAGE> 36
Charles C. Roberts and Mary R. ROBERTS
/s/ Charles C. Roberts
----------------------
/s/ Mary R. Roberts
-------------------
CHARLES C. Roberts and Mary
R. Roberts, as Trustees of (i) the
Charles C.and Mary R. Roberts Living
Trust dated October 15, 1991, (ii) the
Trust F/B/O Douglas C. Roberts under
Eleanor T. Roberts Charitable Trust
Agreement dated December 21, 1967,
(iii) the Trust F/B/O Virginia R. Holt
under Eleanor T. Roberts Charitable
Trust Agreement dated December 21,
1967, and (iv) the Trust F/B/O John T.
Roberts under Eleanor T. Roberts
Charitable Trust Agreement dated
December 21, 1967
33
<PAGE> 37
Lynne King Roberts
/s/ Lynne King Roberts
----------------------
Lynne King Roberts, as Trustee
of the David Kim Roberts Trust dated
October 14, 1987
<PAGE> 1
Exhibit (c)(5)
Execution Copy
================================================================================
REGISTRATION RIGHTS AGREEMENT
dated as of January 31, 1996
between
DEKALB GENETICS CORPORATION
and
MONSANTO COMPANY
================================================================================
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
January 31, 1996 between DEKALB GENETICS CORPORATION, a Delaware corporation
(the "Company"), and MONSANTO COMPANY, a Delaware corporation ("Holder").
RECITALS
WHEREAS, the Holder has agreed to purchase from the Company in
accordance with the terms and conditions of an Investment Agreement between the
Company and the Holder dated the date hereof (the "Investment Agreement")
certain newly issued shares of the Company's Class B Stock and Class A Stock and
may acquire additional shares of outstanding Class B Stock pursuant to a tender
offer as described in the Investment Agreement;
WHEREAS, the parties hereto desire to set forth the Holder's
rights and the Company's obligations to cause the registration of the
Registrable Securities pursuant to the Securities Act;
NOW, THEREFORE, in consideration of the covenants and
agreements of the Holder and the Company contained herein and in the Investment
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Definitions and Usage.
As used in this Agreement:
1.1. Definitions.
Agent. "Agent" shall mean the principal placement
agent on an agented placement of Registrable Securities.
Board. "Board" shall mean the Board of Directors of
the Company.
Class A Stock. "Class A Stock" shall mean (i)
the Class A Common Stock, without par value, of the Company; and (ii) shares of
capital stock of the Company issued by the Company in respect of or in exchange
for shares of such Class A Stock in connection with any stock dividend or
distribution, stock split-up, recapitalization, recombination or exchange by the
Company generally of shares of such Class A Stock.
Class B Stock. "Class B Stock" shall mean (i) the
Class B Common Stock, without par value, of the Company, and (ii) shares of
capital stock of the Company issued by the Company in respect of or in exchange
for shares of such Class B Stock in
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<PAGE> 3
connection with any stock dividend or distribution, stock split-up,
recapitalization, recombination or exchange by the Company generally of shares
of such Class B Stock.
Closing. "Closing" shall mean the closing for
the issuance and purchase of the Class A Stock and the Class B Stock as defined
in and pursuant to the Investment Agreement.
Closing Date. "Closing Date" shall mean the date of
the Closing.
Commission. "Commission" shall mean the Securities
and Exchange Commission.
Continuously Effective. "Continuously Effective",
with respect to a specified registration statement, shall mean that such
registration statement shall not cease to be effective and available for
Transfers of Registrable Securities thereunder for longer than either (i) any
ten (10) consecutive business days, or (ii) an aggregate of fifteen (15)
business days during the period specified in the relevant provision of this
Agreement.
Demand Registration. "Demand Registration" shall
have the meaning set forth in Section 2.1(i).
Exchange Act. "Exchange Act" shall mean the
Securities Exchange Act of 1934.
Holder. "Holder" shall mean HERB COMPANY.
Investment Agreement. "Investment Agreement" shall
have the meaning set forth in the first Recital to this Agreement.
Person. "Person" shall mean any individual,
corporation, partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
Piggyback Registration. "Piggyback Registration"
shall have the meaning set forth in Section 3.
Register, Registered and Registration. "Register",
"registered", and "registration" shall refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.
-2-
<PAGE> 4
Registrable Securities. "Registrable Securities"
shall mean the Class B Stock which the Holder acquires pursuant to the
Investment Agreement (including by way of the tender offer described therein and
any open market purchases permitted thereunder) and any Class B Stock which the
holder acquires upon exchange of Class A Stock acquired by the Holder pursuant
to the Investment Agreement, in either case owned by the Holder on the date of
determination; provided, however, that Registrable Securities shall not include
any security of the Company acquired by the Holder in violation of an express
covenant of the Holder contained in the Investment Agreement, and, provided
further, the Company shall have no obligation under Sections 2 and 3 to register
any Registrable Securities of the Holder if the Company shall deliver to the
Holder an opinion of counsel reasonably satisfactory to such Holder and its
counsel to the effect that the proposed sale or disposition of all of the
Registrable Securities for which registration was requested does not require
registration under the Securities Act for a sale or disposition in a single
public sale, and offers to remove any and all legends restricting transfer from
the certificates evidencing such Registrable Securities, subject to prior
compliance by the Holder with the provisions of Article 9 of the Investment
Agreement.
Registration Expenses. "Registration Expenses" shall
have the meaning set forth in Section 6.1.
Securities Act. "Securities Act" shall mean the
Securities Act of 1933.
Transfer. "Transfer" shall mean and include the act
of selling, giving, transferring, creating a trust (voting or otherwise),
assigning or otherwise disposing of (other than pledging, hypothecating or
otherwise transferring as security) (and correlative words shall have
correlative meanings); provided however, that any transfer or other disposition
upon foreclosure or other exercise of remedies of a secured creditor after an
event of default under or with respect to a pledge, hypothecation or other
transfer as security shall constitute a "Transfer".
Underwriters' Representative. "Underwriters'
Representative" shall mean the managing underwriter, or, in the case of a
co-managed underwriting, the managing underwriter designated as the
Underwriters' Representative by the co-managers.
Violation. "Violation" shall have the meaning set
forth in Section 7.1.
1.2. Usage.
(i) References to a Person are also
references to its successors in interest (by means of merger, consolidation or
sale of all or substantially all the assets of such Person or otherwise, as the
case may be) and permitted assigns.
(ii) References to a document are to it as
amended, waived and otherwise modified from time to time and references to a
statute or other governmental rule are to it as amended and otherwise modified
from time to time (and references to any provision thereof shall include
references to any successor provision).
-3-
<PAGE> 5
(iii) References to Sections or to Schedules
or Exhibits are to sections hereof or schedules or exhibits hereto, unless the
context otherwise requires.
(iv) The definitions set forth herein are
equally applicable both to the singular and plural forms and the feminine,
masculine and neuter forms of the terms defined.
(v) The term "including" and correlative
terms shall be deemed to be followed by "without limitation" whether or not
followed by such words or words of like import.
(vi) The term "hereof" and similar terms refer
to this Agreement as a whole.
(vii) The "date of" any notice or request given
pursuant to this Agreement shall be determined in accordance with Section 11.
Section 2. Demand Registration.
2.1.
(i) At any time on or after the third
anniversary of the Closing Date, or after such earlier date as the Holder shall
be entitled to transfer shares of Class B Stock pursuant to the provisions of
Section 9.1.2 of the Investment Agreement, if the Holder shall make a written
request to the Company, the Company shall cause to be filed with the Commission
a registration statement meeting the requirements of the Securities Act (a
"Demand Registration"), and the Holder shall be entitled to have included
therein all or such number of Holder's Registrable Securities, as the Holder
shall request in writing; provided, however, that no request may be made
pursuant to this Section 2.1 if within twelve (12) months prior to the date of
such request a Demand Registration Statement pursuant to this Section 2.1 shall
have been declared effective by the Commission. Any request made pursuant to
this Section 2.1 shall be addressed to the attention of the Secretary of the
Company, and shall specify the number of Registrable Securities to be
registered, the intended methods of disposition thereof and that the request is
for a Demand Registration pursuant to this Section 2.1(i).
(ii) The Company shall be entitled to
postpone for up to 180 days the filing of any Demand Registration statement
otherwise required to be prepared and filed pursuant to this Section 2.1 (or
delay seeking effectiveness of a Registration Statement which has been filed),
if the Board determines, in its good faith reasonable judgment, that such
registration would materially interfere with, or require premature disclosure
of, any financing, acquisition, reorganization or other material matter
involving the Company or any of its subsidiaries and the Company promptly gives
the Holder notice of such determination; provided, however, that the Company
shall not have postponed pursuant to this Section 2.1(ii) the filing of any
other Demand Registration statement otherwise required to be
-4-
<PAGE> 6
prepared and filed pursuant to this Section 2.1 during the 180-day period ended
on the date of the relevant request pursuant to Section 2.1(i).
2.2. Following receipt of a request for a
Demand Registration, the Company shall:
(i) File the registration statement with the
Commission as promptly as practicable, and, subject to Section 2.1(ii), shall
use the Company's reasonable efforts to have the registration declared effective
under the Securities Act as soon as reasonably practicable, in each instance
giving due regard to the need to prepare current financial statements, conduct
due diligence and complete other actions that are reasonably necessary to effect
a registered public offering.
(ii) Use the Company's reasonable efforts to
keep the relevant registration statement Continuously Effective, if a Demand
Registration, for up to 60 days or until such earlier date as of which all the
Registrable Securities under the Demand Registration statement shall have been
disposed of in the manner described in the Registration Statement.
Notwithstanding the foregoing, if for any reason the effectiveness of a
registration pursuant to this Section 2 is suspended or, in the case of a Demand
Registration, filing of the Registration Statement or seeking effectiveness
thereof is postponed as permitted by Section 2.1(ii), the foregoing period shall
be extended by the aggregate number of days of such suspension or postponement.
2.3. The Company shall be obligated to effect
no more than two Demand Registrations. For purposes of the preceding sentence,
registration shall not be deemed to have been effected (i) unless a registration
statement with respect thereto has become effective, (ii) if after such
registration statement has become effective, such registration or the related
offer, sale or distribution of Registrable Securities thereunder is interfered
with by any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason not attributable
to the Holder and such interference is not thereafter eliminated, or (iii) if
the conditions to closing specified in the underwriting agreement, if any,
entered into in connection with such registration are not satisfied or waived,
other than by reason of a failure on the part of the Holder. If the Company
shall have complied with its obligations under this Agreement, a right to demand
a registration pursuant to this Section 2 shall be deemed to have been satisfied
upon the earlier of (x) the date as of which all of the Registrable Securities
included therein shall have been disposed of pursuant to the Registration
Statement, and (y) the date as of which such Demand Registration shall have been
Continuously Effective for a period of [90] days, provided no stop order or
similar order, or proceedings for such an order, is thereafter entered or
initiated.
-5-
<PAGE> 7
2.4. A registration pursuant to this Section
2 shall be on such appropriate registration form of the Commission as shall (i)
be selected by the Company and be reasonably acceptable to the Holder, and (ii)
permit the disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the request pursuant to
Section 2.1(i).
2.5. If any registration pursuant to Section
2 involves an underwritten offering (whether on a "firm", "best efforts" or "all
reasonable efforts" basis or otherwise), or an agented offering, the Holder,
shall have the right to select the underwriter or underwriters and manager or
managers to administer such underwritten offering or the placement agent or
agents for such agented offering; provided, however, that each Person so
selected shall be reasonably acceptable to the Company.
Section 3. Piggyback Registration.
3.1. If at any time after the third
anniversary of the Closing Date, or after such earlier date as the Holder shall
be entitled to transfer shares of Class B Stock pursuant to the provisions of
Section 9.1.2 of the Investment Agreement, the Company proposes to register
(including for this purpose a registration effected by the Company for
shareholders of the Company other than the Holder) securities under the
Securities Act in connection with the public offering solely for cash on Form
S-1, S-2 or S-3 (or any replacement or successor forms), the Company shall
promptly give the Holder written notice of such registration (a "Piggyback
Registration"). Upon the written request of the Holder given within 20 days
following the date of such notice, the Company shall cause to be included in
such registration statement and use its reasonable efforts to be registered
under the Securities Act all the Registrable Securities that the Holder shall
have requested to be registered; provided, however, that such right of inclusion
shall not apply to any registration statement covering an underwritten offering
of convertible debt securities. The Company shall have the absolute right to
withdraw or cease to prepare or file any registration statement for any offering
referred to in this Section 3 without any obligation or liability to the Holder.
3.2. If the Underwriters' Representative or
Agent shall advise the Company in writing (with a copy to the Holder) that, in
its opinion, the amount of Registrable Securities requested to be included in
such registration would materially adversely affect such offering, or the timing
thereof, then the Company will include in such registration, to the extent of
the amount and class which the Company is so advised can be sold without such
material adverse effect in such offering: First, all securities proposed to be
sold by the Company for its own account; and second, the Registrable Securities
requested to be included in such registration by the Holder pursuant to this
Section 3 and third, any other securities being registered other than on behalf
of the Company or the Holder.
3.3. The Holder shall be entitled to have its
Registrable Securities included in up to five (5) Piggyback Registrations
pursuant to this Section 3.
-6-
<PAGE> 8
Section 4. Registration Procedures. Whenever required
under Section 2 or Section 3 to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as practicable:
4.1. Prepare and file with the Commission a
registration statement with respect to such Registrable Securities and, subject
to Section 3.1, use the Company's reasonable efforts to cause such registration
statement to become effective; provided, however, that before filing a
registration statement or prospectus or any amendments or supplements thereto,
including documents incorporated by reference after the initial filing of the
registration statement and prior to effectiveness thereof, the Company shall
furnish to counsel for the Holder, copies of all such documents in the form
substantially as proposed to be filed with the Commission prior to filing for
review and comment by such counsel.
4.2. Prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act and rules
thereunder with respect to the disposition of all securities covered by such
registration statement. If the registration is for an underwritten offering, the
Company shall amend the registration statement or supplement the prospectus
whenever required by the terms of the underwriting agreement entered into
pursuant to Section 5.2. Pending such amendment or supplement the Holder shall
cease making offers or Transfers of Registerable Shares pursuant to the prior
prospectus. In the event that any Registrable Securities included in a
registration statement subject to, or required by, this Agreement remain unsold
at the end of the period during which the Company is obligated to use its
reasonable efforts to maintain the effectiveness of such registration statement,
the Company may file a post-effective amendment to the registration statement
for the purpose of removing such Securities from registered status.
4.3. Furnish to the Holder, without charge,
such numbers of copies of the registration statement, any pre-effective or
post-effective amendment thereto, the prospectus, including each preliminary
prospectus and any amendments or supplements thereto, in each case in conformity
with the requirements of the Securities Act and the rules thereunder, and such
other related documents as the Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by the Holder.
4.4. Use the Company's reasonable efforts (i)
to register and qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such states or jurisdictions as
shall be reasonably requested by the Underwriters' Representative or Agent (as
applicable, or if inapplicable, in up to ten states designated by the Holder),
and (ii) to obtain the withdrawal of any order suspending the effectiveness of a
registration statement, or the lifting of any suspension of the qualification
(or exemption from qualification) of the offer and transfer of any of the
Registrable Securities in any jurisdiction, at the earliest possible moment;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify
-7-
<PAGE> 9
to do business or to file a general consent to service of process in any such
states or jurisdictions.
4.5. In the event of any underwritten or
agented offering, enter into and perform the Company's obligations under an
underwriting or agency agreement (including indemnification and contribution
obligations of underwriters or agents in the form set forth in Section 7), in
usual and customary form, with the managing underwriter or underwriters of or
agents for such offering. The Company shall also cooperate with the Holder, and
the Underwriters' Representative or Agent for such offering in the marketing of
the Registrable Securities.
4.6. Promptly notify the Holder of any stop
order issued or threatened to be issued by the Commission in connection
therewith and take all reasonable actions required to prevent the entry of such
stop order or to remove it if entered.
4.7. Make available for inspection by the
Holder, any underwriter participating in such offering and the representatives
of the Holder and Underwriter all financial and other information as shall be
reasonably requested by them, and provide the Holder, any underwriter
participating in such offering and the representatives of the Holder and such
Underwriter the reasonable opportunity to discuss the business affairs of the
Company with its principal executives and independent public accountants who
have certified the audited financial statements included in such registration
statement, in each case all as necessary to enable them to exercise their due
diligence responsibility under the Securities Act; provided, however, that
information that the Company determines, in good faith, to be confidential and
which the Company advises such Person in writing, is confidential shall not be
disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company or the Holder of Registrable Securities agrees to be
responsible for such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.
4.8. Use the Company's reasonable efforts to
obtain a so-called "comfort letter" from its independent public accountants, and
legal opinions of counsel to the Company addressed to the Holder, in customary
form and covering such matters of the type customarily covered by such letters,
and in a form that shall be reasonably satisfactory to the Holder. The Company
shall furnish to the Holder a signed counterpart of any such comfort letter or
legal opinion. Delivery of any such opinion or comfort letter shall be subject
to the recipient furnishing such written representations or acknowledgements as
are customarily provided by selling shareholders who receive such comfort
letters or opinions.
4.9. Provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement.
4.10. Use reasonable efforts to cause the
Registrable Securities covered by such registration statement (i) if the Class B
Stock is then listed on a securities exchange or included for quotation in a
recognized trading market, to continue to be so listed or
-8-
<PAGE> 10
included for a reasonable period of time after the offering, and (ii) to be
registered with or approved by such other United States or state governmental
agencies or authorities as may be necessary by virtue of the business and
operations of the Company to enable the Holder to consummate the disposition of
the Registrable Securities which are included in such registration.
4.11. Take such other actions as are reasonably
required in order to expedite or facilitate the disposition of Registrable
Securities included in such registration
Section 5. Holder's Obligations. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement with respect to the Registrable Securities which are included in such
registration that the Holder shall:
5.1. Furnish to the Company such information
regarding the Holder, the number of the Registrable Securities owned by it, and
the intended method of disposition of such Registrable Securities as shall be
required to effect the registration of the Holder's Registrable Securities, and
to cooperate with the Company in preparing such registration.
Section 6. Expenses of Registration. Expenses in
connection with registrations pursuant to this Agreement shall be allocated and
paid as follows:
6.1. With respect to each Demand Registration
(except as otherwise provided in Sections 9.1.5, 9.1.6 and 9.1.7 of the
Investment Agreement), the Company shall bear and pay all expenses incurred in
connection with any registration, filing, or qualification of Registrable
Securities with respect to such Demand Registrations, including all
registration, filing and National Association of Securities Dealers, Inc. fees,
all fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
and the reasonable fees and disbursements of counsel for the Company, and of the
Company's independent public accountants, including the expenses of "cold
comfort" letters required by or incident to such performance and compliance (the
"Registration Expenses"), but excluding underwriting discounts and commissions
relating to Registrable Securities or fees and expenses of Holder's counsel
(which shall be paid by the Holder) provided, however, that the Company shall
not be required to pay for any expenses of any registration begun pursuant to
Section 2 if the registration is subsequently withdrawn at the request of the
Holder (in which case the Holder shall bear such expense), unless the Holder
agrees that such withdrawn registration shall constitute one of the demand
registrations under Section 2 hereof.
6.2. The Company shall bear and pay all
Registration Expenses incurred in connection with any Piggyback Registrations
pursuant to Section 3 for the Holder, but excluding, except as otherwise
provided in Sections 9.1.5, 9.1.6 and 9.1.7 of the Investment Agreement,
underwriting discounts and commissions relating to Registrable Securities or
fees and expenses of the Holder's counsel (each of which shall be paid by the
Holder).
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6.3. Any failure of the Company to pay any
Registration Expenses as required by this Section 6 shall not relieve the
Company of its obligations under this Agreement.
Section 7. Indemnification; Contribution. If any
Registrable Securities are included in a registration statement under this
Agreement:
7.1. To the extent permitted by applicable
law, the Company shall indemnify and hold harmless the Holder, each Person, if
any, who controls such Holder within the meaning of the Securities Act, and each
officer, director, partner, and employee of the Holder and such controlling
Person, against any and all losses, claims, damages, liabilities and expenses
(joint or several), including reasonable attorneys' fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may become subject under the Securities Act, the Exchange Act
or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"):
(i) Any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein, or any
amendments or supplements thereto;
(ii) The omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; or
(iii) Any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any applicable state securities
law or any rule or regulation promulgated under the Securities Act, the Exchange
Act or any applicable state securities law;
provided, however, that the indemnification required by this Section 7.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or expense to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished to the Company by the indemnified party expressly for use in
connection with such registration; provided, further, that the indemnity
agreement contained in this Section 7 shall not apply to any underwriter to the
extent that any such loss is based on or arises out of an untrue statement or
alleged untrue statement of a material fact, or an omission or alleged omission
to state a material fact, contained in or omitted from any preliminary
prospectus if the final prospectus shall correct such untrue statement or
alleged untrue statement, or such omission or alleged omission, and a copy of
the final prospectus has not been sent or given to such person at or prior to
the confirmation of sale to such person if such
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underwriter was under an obligation to deliver such final prospectus and failed
to do so. The Company shall also indemnify underwriters and selling or placement
agents participating in the distribution, their officers, directors, agents and
employees and each person who controls such persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of the Holder
provided, however that no such underwriter or agent shall be entitled to
indemnification under this Agreement if such person shall have entered into a
separate underwriting agency or indemnification agreement with the Company.
7.2. To the extent permitted by applicable
law, the Holder shall indemnify and hold harmless the Company, each of its
directors, each of its officers who shall have signed the registration
statement, each Person, if any, who controls the Company within the meaning of
the Securities Act, and each officer, director, partner, and employee of the
Company and such controlling Person, against any and all losses, claims,
damages, liabilities and expenses (joint and several), including attorneys' fees
and disbursements and expenses of investigation, incurred by such party pursuant
to any actual or threatened action, suit, proceeding or investigation, or to
which any of the foregoing may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by the Holder expressly for use in connection with such registration;
provided, however, that the indemnification required by this Section 7.2 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld.
7.3. Promptly after receipt by an indemnified
party under this Section 7 of notice of the commencement of any action, suit,
proceeding, investigation or threat thereof made in writing for which such
indemnified party may make a claim under this Section 7, such indemnified party
shall deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; subject to the rights of an indemnified
party to retain its own counsel as hereinafter provided. The failure to deliver
written notice to the indemnifying party within a reasonable time following the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 7 but shall not relieve the indemnifying
party of any liability that it may have to any indemnified party otherwise than
pursuant to this Section 7. Any fees and expenses incurred by the indemnified
party (including any fees and expenses incurred in connection with investigating
or preparing to defend such action or proceeding) owed by the indemnifying party
hereunder shall be paid to the indemnified party, as incurred, within thirty
(30) days of written notice thereof to the indemnifying party (subject to refund
if it is ultimately determined that an indemnified party is not entitled to
indemnification hereunder). Any such indemnified party shall have the right to
employ separate counsel in any such action, claim or proceeding and to
participate in the defense
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<PAGE> 13
thereof, but the fees and expenses of such counsel shall be the expenses of such
indemnified party unless (i) the indemnifying party has agreed to pay such fees
and expenses or (ii) the indemnifying party shall have failed to promptly assume
the defense of such action, claim or proceeding or (iii) the named parties to
any such action, claim or proceeding (including any impleaded parties) include
both such indemnified party and the indemnifying party, and such indemnified
party shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to those
available to the indemnifying party and that the assertion of such defenses
would create a conflict of interest such that counsel employed by the
indemnifying party could not faithfully represent the indemnified party (in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels).
7.4. If the indemnification required by this
Section 7 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to in this Section 7:
(i) The indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any Violation has been committed by,
or relates to information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such Violation. The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 7.1 and Section 7.2, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(ii) The parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 7.4 were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in Section
7.4(i). No Person guilty of fraudulent
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<PAGE> 14
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
7.5. If indemnification is available under
this Section 7, the indemnifying parties shall indemnify each indemnified party
to the full extent provided in this Section 7 without regard to the relative
fault of such indemnifying party or indemnified party or any other equitable
consideration referred to in Section 7.4.
7.6. The obligations of the Company and the
Holder under this Section 7 shall survive the completion of any offering of
Registrable Securities pursuant to a registration statement under this
Agreement, and otherwise.
Section 8. Holdback. If so requested by the Underwriters'
Representative or Agent in connection with an offering of any securities covered
by a registration statement filed by the Company, whether or not Holder's
securities are included therein, the Holder shall agree not to effect any sale
or distribution of shares of Class B Stock or any securities convertible into or
exchangeable or exercisable for shares of Class B Stock, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
underwritten or agented registration), during the 30-day period prior to, and
during the 150-day period beginning on, the date such registration statement is
declared effective under the Securities Act by the Commission, provided that the
Holder is timely notified of such effective date in writing by the Company or
such Underwriters' Representative or Agent. In order to enforce the foregoing
covenant, the Company shall be entitled to impose stop-transfer instructions
with respect to the Registrable Securities of the Holder until the end of such
period.
Section 9. Amendment, Modification and Waivers; Further
Assurances.
(i) This Agreement may be amended with the
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent of the Holder to such amendment,
action or omission to act.
(ii) No waiver of any terms or conditions of
this Agreement shall operate as a waiver of any other breach of such terms and
conditions or any other term or condition, nor shall any failure to enforce any
provision hereof operate as a waiver of such provision or of any other provision
hereof. No written waiver hereunder, unless it by its own terms explicitly
provides to the contrary, shall be construed to effect a continuing waiver of
the provisions being waived and no such waiver in any instance shall constitute
a waiver in any other instance or for any other purpose or impair the right of
the party against whom such waiver is claimed in all other instances or for all
other purposes to require full compliance with such provision.
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<PAGE> 15
(iii) Each of the parties hereto shall execute all
such further instruments and documents and take all such further action as any
other party hereto may reasonably require in order to effectuate the terms and
purposes of this Agreement.
Section 10. Assignment; Benefit. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns; provided,
however, that neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned or delegated by the Holder to any Person
except a wholly owned direct or indirect subsidiary of the Holder to whom the
Holder shall have transferred all of the Registrable Securities then owned by
the Holder as permitted by, and subject to the terms of, Sections 9.1.1 or 9.1.2
of the Investment Agreement.
Section 11. Miscellaneous.
11.1. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
11.2. Notices. All notices and requests given
pursuant to this Agreement shall be in writing and shall be made by
hand-delivery, first-class mail (registered or certified, return receipt
requested), confirmed facsimile or overnight air courier guaranteeing next
business day delivery to the relevant address specified below:
If to Investor, to:
Monsanto Company
800 N. Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: Chief Financial Officer
Fax: 314-694-3001
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<PAGE> 16
with a copy to:
General Counsel and Secretary
Fax: 314-694-3001
If to Company, to:
DEKALB Genetics Corporation
3100 Sycamore Road
Dekalb, IL 60115
Attention: Senior Vice President and General Counsel
Fax: 815-758-6953
with a copy to:
James G. Archer
c/o Sidley & Austin
875 Third Avenue
New York, NY 10022
Fax: 212-906-2021
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<PAGE> 17
Except as otherwise provided in this Agreement, the date of each such notice and
request shall be deemed to be, and the date on which each such notice and
request shall be deemed given shall be: at the time delivered, if personally
delivered or mailed; when receipt is acknowledged, if sent by facsimile; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next business day delivery.
11.3. Entire Agreement; Integration. This
Agreement supersedes all prior agreements between or among any of the parties
hereto with respect to the subject matter contained herein and therein, and such
agreements embody the entire understanding among the parties relating to such
subject matter.
11.4. Injunctive Relief. Each of the parties
hereto acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that in the event of such a
breach hereof the aggrieved party may elect to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach hereof. By seeking or obtaining
any such relief, the aggrieved party shall not be precluded from seeking or
obtaining any other relief to which it may be entitled.
11.5. Section Headings. Section headings are for
convenience of reference only and shall not affect the meaning of any provision
of this Agreement.
11.6. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be an original, and all of
which shall together constitute one and the same instrument. All signatures need
not be on the same counterpart.
11.7. Severability. If any provision of this
Agreement shall be invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity and enforceability of the remaining provisions of
this Agreement, unless the result thereof would be unreasonable, in which case
the parties hereto shall negotiate in good faith as to appropriate amendments
hereto.
11.8. Filing. A copy of this Agreement and of all
amendments thereto shall be filed at the principal executive office of the
Company with the corporate records of the Company.
11.9. Termination. If for any reason the Closing
does not occur and the Investment Agreement shall be terminated, this Agreement
shall terminate and be of no further force and effect. This Agreement may be
terminated at any time by a written instrument signed by the parties hereto.
Unless sooner terminated in accordance with the preceding sentences, this
Agreement (other than Section 7 hereof) shall terminate in its entirety on such
date as there shall be no Registrable Securities outstanding, provided that any
shares of Class B Stock previously subject to this Agreement shall not be
Registrable Securities following the sale of any such shares in an offering
registered pursuant to this Agreement.
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<PAGE> 18
11.10. Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement, or where any provision
hereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorneys' fees (including any fees incurred in any
appeal) in addition to its costs and expenses and any other available remedy.
11.11. No Third Party Beneficiaries. Nothing herein
expressed or implied is intended to confer upon any person, other than the
parties hereto or their respective permitted assigns, successors, heirs and
legal representatives, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the date first written above.
MONSANTO COMPANY
By: Robert T. Fraley
-------------------------
Robert T. Fraley
President, Ceregen
DEKALB GENETICS CORPORATION
By: Bruce P. Bickner
-------------------------
Bruce P. Bickner
Chairman and CEO
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