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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
MONSANTO COMPANY
(Name of Issuer)
COMMON STOCK
$2.00 PAR VALUE
(Title of Class of Securities)
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6116621
(Cusip Number)
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Don W. Schmitz
100 Route 206 North
Peapack, New Jersey 07977
Tel No.: (888) 768-5501
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
With a copy to:
Peter R. Douglas
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
December 19, 1999
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this statement because of ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box: o
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
(Page 1 of 10 Pages)
Exhibit Index on Page 10
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<PAGE>
SCHEDULE 13D
CUSIP No. 6116621 Page 2 of 10 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pharmacia & Upjohn, Inc.
I.R.S. Employer Identification No. 98-0155411
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 94,774,810 Shares
8 SHARED VOTING POWER
-0-
9 SOLE DISPOSITIVE POWER
94,774,810 Shares
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
94,774,810 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.0%
14 TYPE OF REPORTING PERSON*
CO
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SEC 1746 (9-88) 2 of 10
<PAGE>
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is the
common stock, $2.00 par value per share (the "Shares"), of Monsanto Company, a
Delaware corporation (the "Issuer" or "Monsanto"). The principal executive
offices of the Issuer are located at 800 North Lindbergh Blvd., St. Louis,
Missouri 63167.
Item 2. Identity and Background.
The name of the person filing this statement is Pharmacia & Upjohn, Inc.,
a Delaware corporation (the "Company"). The Company is a global pharmaceutical
group engaged in the research, development, manufacture and sale of
pharmaceutical and healthcare products. The address of the principal business
and the principal office of the Company is 100 Route 206 North, Peapack, New
Jersey 07977. The name, business address, present principal occupation or
employment, and citizenship of each director and executive officer of the
Company is set forth on Schedule A.
During the last five years, neither the Company, nor to the best of
its knowledge, any of the persons listed on Schedule A attached hereto nor any
other person controlling the Company, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or has been 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 or
mandating activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
As more fully described in Item 4 hereof, the Company has entered into the
Monsanto Stock Option Agreement (as defined in Item 4 below) with the Issuer.
Pursuant to the Monsanto Stock Option Agreement, Issuer has, among other things,
granted the Company an option to acquire the Shares as described below. If the
conditions precedent were satisfied to permit the Company to exercise its option
to purchase the Shares pursuant to the Monsanto Stock Option Agreement and the
Company so exercised that option, the Company currently anticipates that funds
for such exercise would be generated by available working capital.
No monetary consideration was paid by the Company to the Issuer in
connection with entering into the Merger Agreement (as defined in Item 4 below)
or the Monsanto Stock Option Agreement.
Item 4. Purpose of Transaction.
On December 19, 1999, Monsanto and the Company entered into a Stock Option
Agreement, dated as of December 19, 1999 (the "Monsanto Stock Option Agreement")
pursuant to which the Issuer granted the Company an option (the "Option") to
purchase up to 94,774,810 Shares (the "Option Shares") at a price of $41.75 per
Option Share (the "Purchase Price"). The number of Option Shares are subject to
adjustment in certain circumstances, provided that the aggregate number of
Shares purchasable by the Company upon the exercise of the Option may not exceed
14.9% of the total outstanding Shares immediately prior to the time of such
exercise. The Option will, subject to certain limitations, become exercisable
upon the occurrence of an event the result of which is that the total fee or
fees required to be paid by the Issuer to the Company pursuant to Section 7.2(c)
of the Merger Agreement equals $575 million (a "Purchase Event"), as more fully
described in the Monsanto Stock Option Agreement and the Merger Agreement. The
Monsanto Stock Option Agreement provides that the Issuer may, after the
occurrence of a Purchase Event, repurchase all or a portion of the Option for a
specified price in cash. In no event may the "Total Profit" (as defined in the
Monsanto Stock Option Agreement) of the Company under the Monsanto Stock Option
Agreement or Merger Agreement exceed $635 million. No Purchase Event has
occurred at the time of this filing.
The Company has granted to Monsanto a substantially similar option to
purchase up to 77,388,932 shares of the Company's common stock, par value $0.01
per share, at an exercise price of $50.25 per share pursuant to a Stock Option
Agreement (the "PNU Stock Option Agreement"), the provisions of which
substantially correspond to the
Page 3 of 10
<PAGE>
related provisions of the Monsanto Stock Option Agreement. Reference is hereby
made to the Monsanto Stock Option Agreement and the PNU Stock Option Agreement
(together, the "Stock Option Agreements"), which are included as Exhibits 2.2
and 2.3 respectively to the Current Report on Form 8-K filed by the Company on
December 29, 1999, for the full text of their terms, including the conditions
upon which they may be exercised. The Stock Option Agreements are incorporated
herein by reference in their entirety.
The Option was granted by the Issuer as an inducement to the Company to
enter into the Agreement and Plan of Merger (the "Merger Agreement") dated as of
December 19, 1999, among the Issuer, MP Sub, Incorporated ("Merger Sub") and the
Company. Pursuant to the Merger Agreement and subject to the terms and
conditions set forth therein (including approval by the stockholders of the
Company and the Issuer and various regulatory agencies), Merger Sub will merge
with and into the Company (the "Merger") with the Company continuing as the
surviving corporation (the "Surviving Corporation") and becoming a wholly-owned
subsidiary of the Issuer, and each issued and outstanding share of the Company's
common stock (other than those shares owned by the Company or the Issuer) will
be converted into the right to receive 1.19 Shares. If the Merger is
consummated, the Option cannot be exercised.
At the effective time of the Merger, Issuer will amend its Articles of
Incorporation to (i) reflect a name mutually agreed upon by the Company and the
Issuer for the newly combined company ("Newco"), (ii) increase the number of
shares of authorized common stock of Newco to 3 billion, (iii) change the par
value of Newco's preferred stock to $.01 and (iv) eliminate the requirement that
Newco's preferred stock have no more than one vote per share. Newco will also
amend and restate its bylaws at the effective time of the Merger.
If the Merger is consummated, the Board of Directors of Newco will consist
of 20 members, with representation equally divided between Issuer and the
Company. At the effective time of the Merger, all committees of the Newco Board
of Directors will be comprised of an equal number of persons designated by each
of the Issuer and the Company. The bylaws of Newco will provide that a person
will be eligible to be elected as a director only if nominated by the
nominations committee of the Newco Board of Directors or by a shareholder in
accordance with the procedures specified in the bylaws.
At the effective time of the Merger, Issuer's Chairman and Chief Executive
Officer, Robert B. Shapiro, will be non-executive Chairman of the Board of
Newco and the Company's President and Chief Executive Officer, Fred Hassan,
will be Chief Executive Officer of Newco. The bylaws of Newco will provide that
if Mr. Hassan is the Chief Executive Officer of Newco 18 months after the
effective time of the Merger, Mr. Hassan will at that time become the Chairman
and Chief Executive Officer of Newco, unless otherwise determined by 80% of the
members of Newco's Board of Directors. The Company and the Issuer intend that
the twenty most senior officers of Newco and its subsidiaries shall consist of
an equal number of officers from both the Company and the Issuer. Planned key
appointments include that of the Issuer's Richard U. De Schutter, as Senior
Executive Vice President; the Company's Christopher Coughlin, as Executive Vice
President and Chief Financial Officer; the Issuer's Philip Needleman, Ph.D as
Chief Scientific Officer; and the Issuer's Hendrik A. Verfaillie as CEO of the
agricultural business.
The Issuer and the Company intend, as promptly as practicable following
the effective time of the Merger, that Newco would reorganize the Issuer's
agribusiness unit as a direct or indirect subsidiary of Newco and sell up to
19.9% of such subsidiary by means of an initial public offering on the New York
Stock Exchange. The Issuer and the Company intend that such subsidiary would
have a board of directors at the time of such public offering consisting of
three members designated by directors of Newco who are former members of the
Board of Directors of the Issuer, three members designated by directors of Newco
who are former members of the Board of Directors of the Company and two members
who are independent directors and designated by the entire Board of Directors of
Newco.
Item 5. Interest in Securities of the Issuer.
Neither the Company nor, to the best knowledge of the Company, any of the
persons listed on Schedule A hereto beneficially owns any Shares other than as
set forth herein or as listed on Schedule B hereto. Prior to the Option becoming
exercisable and being exercised, the Company expressly disclaims beneficial
ownership of the Shares which are purchasable by the Company upon the Option
becoming exercisable and being exercised. Neither the filing of this
Page 4 of 10
<PAGE>
Schedule 13D nor any of its contents shall be deemed to constitute an admission
that the Company is the beneficial owner of the Shares subject to the Option for
purposes of Section 13(d) or 16 of the Securities Exchange Act of 1934, as
amended, or for any other purpose and such beneficial ownership is expressly
disclaimed.
(a) Pursuant to the Option, the Company has an option to purchase up
to 94,774,810 Shares at the Purchase Price; provided that in no
event will the number of shares for which the Option is
exercisable exceed 14.9% of the Shares issued and outstanding at
the time of exercise (without giving effect to the Shares issued
or issuable under the Option). The Option becomes exercisable
under certain conditions described in this Schedule 13D. Based
on the number of outstanding Shares on December 16, 1999, as
represented by Monsanto in the Merger Agreement, the Company
would beneficially own up to 13.0% of the Shares following
exercise of the Option.
(b) The Company would have sole voting and dispositive power with
respect to any Shares acquired upon exercise of the Option.
(c) Except as described in Item 4 hereof or as listed on Schedule B
hereto, no transactions in the Shares were effected by the
Company, or, to the best knowledge of the Company, any of the
persons listed on Schedule A hereto, during the preceding 60
days.
(d) Until the Option is exercised (if at all), the Company has no
right to receive dividends from, or the proceeds from the sale
of, the Shares subject to the Option. If the Option is exercised
by the Company, the Company or its designee, if any, would have
the sole right to receive dividends on the Shares acquired
pursuant thereto.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Except for the Merger Agreement and the Stock Option Agreements, to the
best knowledge of the Company, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) between the persons
enumerated in Item 2, and any other person, with respect to any securities of
the Issuer, including, but not limited to, transfer or voting of any of the
Issuer's securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Agreement and Plan of Merger, dated as of December 19, 1999 by
and among Monsanto, Merger Sub, and the Company (incorporated
by reference to Exhibit 2.1 to the Current Report on Form 8-K
of the Company dated December 29, 1999).
Exhibit 2: Stock Option Agreement, dated as of December 19, 1999, between
Monsanto, as issuer, and the Company, as grantee (incorporated
by reference to Exhibit 2.2 to the Current Report on Form 8-K
of the Company dated December 29, 1999).
Exhibit 3: Stock Option Agreement, dated as of December 19, 1999, between
the Company, as issuer, and Monsanto, as grantee (incorporated
by reference to Exhibit 2.3 to the Current Report on Form 8-K
of the Company dated December 29, 1999).
Page 5 of 10
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December 29, 1999
PHARMACIA & UPJOHN, INC.
By: /s/ Don W. Schmitz
--------------------------------
Name: Don W. Schmitz
Title: Vice President, Associate
General Counsel and
Corporate Secretary
Page 6 of 10
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SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF PHARMACIA & UPJOHN, INC.
The name, business address, title, present principal occupation or
employment of each of the directors and executive officers of Pharmacia &
Upjohn, Inc. (the "Company") are set forth below. The business address for each
person listed below is c/o Pharmacia & Upjohn, Inc., 100 Route 206 North,
Peapack, New Jersey 07977.
<TABLE>
Title, Present Principal Occupation
Name or Employment and Citizenship
- ----------------------------------------------------- ---------------------------------------------------------------
<S> <C>
Fred Hassan........................................... President, Chief Executive Officer and Director of the Company.
Mr. Hassan is a citizen of the United States.
Soren Gyll............................................ Chairman of the Board. Retired (former President and Chief
Executive Officer of AB Volvo, an automobile manufacturer). Mr.
Gyll is a citizen of Sweden.
Frank C. Carlucci..................................... Director. Chairman of the Carlyle Group, a merchant bank. Mr.
Carlucci is a citizen of the United States.
Gustaf Douglas........................................ Director. Chairman of Investment AB Latous, an investment holding
company. Mr. Douglas is a citizen of Sweden.
M. Kathryn Eickhoff................................... Director. President of Eickhoff Incorporated, economic consultants.
Ms. Eickhoff is a citizen of the United States.
Berthold Lindqvist.................................... Director. Retired (former President and Chief Executive Officer of
Gambro AB, a global medical technology company). Mr. Lindqvist
is a citizen of Sweden.
Olof Lund............................................. Director. Retired (former President and Chief Executive Officer of
Celsius Industrier AB, a defense manufacturing company). Mr. Lund
is a citizen of Sweden.
C. Steven McMillan.................................... Director. President and Chief Operating Officer of Sara Lee
Corporation, a consumer goods company. Mr. McMillan is a citizen
of the United States.
William U. Parfet..................................... Director. Co-Chairman of MPI Research, LLC, a pre-clinical
toxicology and clinical pharmaceutical testing laboratory. Mr. Parfet
is a citizen of the United States.
Ulla Reinius.......................................... Director. President of U. Reinius Finansfakta AB, publisher and
financial information consultant. Ms. Reinus is a citizen of Sweden.
Bengt Samuelsson, M.D................................. Director. Professor of Medical and Physiological Chemistry, and,
formerly, President, Karolinska Institute. Mr. Samuelsson is a citizen
of Sweden.
Morton L. Topfer...................................... Director. Retired (former Vice Chairman of Dell Computer
Corporation, a computer manufacturer). Mr. Topfer is a citizen of
the United States.
Goran A. Ando, M.D.................................... Executive Vice President and President, Research & Development o
the Company. Mr. Ando is a citizen of the United States.
Hakan Astrom.......................................... Senior Vice President, Corporate Strategy and Investor Relations of
the Company. Mr. Astrom is a citizen of Sweden.
Page 7 of 10
<PAGE>
Richard T. Collier.................................... Senior Vice President and General Counsel of the Company.
Mr. Collier is a citizen of the United States.
Christopher J. Coughlin............................... Executive Vice President and Chief Financial Officer of the
Company. Mr. Coughlin is a citizen of the United States.
Paul L. Matson........................................ Senior Vice President, Human Resources of the Company.
Mr. Matson is a citizen of the United States.
Mats G. Pettersson.................................... Senior Vice President, Mergers & Acquisitions of the Company.
Mr. Pettersson is a citizen of the United States.
Timothy G. Rothwell................................... Executive Vice President and President, Global Pharmaceutical
Operations of the Company. Mr. Rothwell is a citizen of the United
States.
Carrie Smith Cox...................................... Executive Vice President and Head, Global Business Management of
the Company. Ms. Smith Cox is a citizen of the United States.
</TABLE>
Page 8 of 10
<PAGE>
SCHEDULE B
BENEFICIAL OWNERSHIP OF SHARES OF MONSANTO
Fred Hassan, the Chief Executive Officer of the Company, may be deemed to
be the beneficial owner of 4,400 shares of the common stock of Monsanto that are
beneficially owned by his spouse. These shares were purchased more than 60 days
prior to December 29, 1999, the date of filing of the Schedule 13D to which this
Schedule B is attached (the "Schedule 13D"). Mr. Hassan disclaims beneficial
ownership of such Shares.
Page 9 of 10
<PAGE>
INDEX OF EXHIBITS
1. Agreement and Plan of Merger, dated as of December 19, 1999, by and among
Monsanto Company, MP Sub, Incorporated and Pharmacia & Upjohn, Inc.
(incorporated by reference to exhibit 2.1 to the Current Report on Form 8-K
of the Company dated December 29, 1999).
2. Stock Option Agreement, dated as of December 19, 1999, between Monsanto
Company, as issuer, and Pharmacia & Upjohn, Inc., as grantee (incorporated by
reference to exhibit 2.2 to the Current Report on Form 8- K of the Company
dated December 29, 1999).
3. Stock Option Agreement, dated as of December 19, 1999, between Pharmacia &
Upjohn, Inc., as issuer, and Monsanto Company, as grantee (incorporated by
reference to exhibit 2.3 to the Current Report on Form 8-K of the Company
dated December 29, 1999).
Page 10 of 10
