<PAGE>
As filed with the Securities and Exchange Commission on February 10, 1997
Registration No. 333-__________________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
MYCOGEN CORPORATION
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3802654
- ---------------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5501 Oberlin Drive, San Diego, California 92121
- ------------------------------------------ -----------
(Address of Principal Executive Offices) (Zip Code)
1992 STOCK OPTION PLAN
----------------------
(Full title of aggregate offering price the plan)
CARLTON J. EIBL
President, Chief Operating Officer and Secretary
5501 Oberlin Drive, San Diego, California 92121
----------------------------------------------------
(Name and address of agent for service)
619-453-8030
--------------
(Telephone number, including area code, of agent for service)
____________________________________
This Registration Statement shall become effective immediately
upon filing with the Securities and Exchange Commission,
and sales of the registered securities will begin as soon as
reasonably practicable after such effective date.
____________________________________
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per share aggregate offering price registration fee
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 2,000,000(1) $26.00(2) $52,000,000(2) $17,931.03
$.001 par value
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the 1992 Stock Option Plan by reason of
any stock dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration which results in an increase in
the number of the Registrant's outstanding shares of Common Stock.
(2) Calculated solely for purposes of this offering under rule 457 (h) of the
Securities Act of 1933, as amended, on the basis of the last sale reported per
share of Common Stock of Mycogen Corporation on February 4, 1997, as reported on
the NASDAQ National Market System.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The contents of (i) the Registration Statement filed by Mycogen Corporation
(the "Company") with the Securities and Exchange Commission (the "Commission")
for registration of shares to be issuable under the Company's 1992 Stock Option
Plan on December 9, 1992, as Registration No. 33-55508 (the "1992 Stock Option
Plan First Registration Statement"); (ii) the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1996, filed by the Company on November
13, 1996; and (iii) the Company's Form 8-K filed by the Company on October 5,
1996, (and as amended, filed by the Company on December 6, 1996) are hereby
incorporated by reference.
THE PLAN
The Company registered 3,541,047 shares of Common Stock issuable pursuant
to its 1992 Stock Option Plan (the "1992 Stock Option Plan") by means of the
1992 Stock Option Plan First Registration Statement. This Registration
Statement will register an additional 2,000,000 shares of Common Stock issuable
pursuant to the 1992 Stock Option Plan as authorized by the Company's
shareholders at the Company's Annual Shareholders Meeting held on December 12,
1996.
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the 1933 Act, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Diego, State of California, on this 7th day of February, 1997.
MYCOGEN CORPORATION
Date: February 7, 1997 /s/ JERRY CAULDER
-------------------------------
Jerry Caulder, Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ JERRY CAULDER
- ------------------------ Chairman, Chief Executive February 7, 1997
(Jerry Caulder) Officer and Director (Principal
Executive Officer)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(Thomas J. Cable*)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(David H. Rammler*)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(Louis W. Pribila*)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(John L. Hagaman*)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(Perry J. Gehring*)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(William C. Schmidt*)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(G. William Tolbert*)
/s/ JAMES A. BAUMKER
- ------------------------ Director February 7, 1997
(W. Wayne Withers*)
</TABLE>
* By James A. Baumker under power of attorney.
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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
MYCOGEN CORPORATION
5 of 35
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
5 Opinion and Consent of Loreen P. Collins, Esq.
10.1 1992 Stock Option Plan (as amended October 17, 1996)
23 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney
</TABLE>
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<PAGE>
Exhibit 5
Opinion and Consent of
Loreen P. Collins,
Legal Counsel of Mycogen Corporation
7 of 35
<PAGE>
February 7, 1997
Mycogen Corporation
5501 Oberlin Drive
San Diego, CA 92121
Ladies and Gentlemen:
I have acted as counsel to Mycogen Corporation, a California corporation,
(the "Company") with respect to certain matters in connection with the filing by
the Company of a Registration Statement on Form S-8 (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") for
an aggregate of 2,000,000 shares of Common Stock, $.001 par value reserved for
issuance under the Company's 1992 Stock Option Plan, as amended, collectively
(the "Registered Shares").
In connection with this opinion, I have examined, issued and relied upon the
Registration Statement No. 33-5508 and related prospectus filed by the Company
with the Commission on December 9, 1992, the Company's Articles of Incorporation
and Bylaws, as amended, and the originals or copies certified to my
satisfaction, of such records, documents, certificates, memoranda, and other
instruments as in my judgment is necessary or appropriate to enable me to render
the opinion expressed below.
On the basis of the foregoing, and in reliance thereon, I am of the opinion that
the Registered Shares, when sold and issued in accordance with the Registration
Statement and related prospectus, will be validly issued, fully paid and
nonassessable.
I consent to the filing of this opinion as Exhibit 5 to this Registration
Statement.
Very truly yours,
/s/ LOREEN P. COLLINS
---------------------
Loreen P. Collins
Legal Counsel
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<PAGE>
Exhibit 10.1
1992 Stock Option Plan
(as amended October 17, 1996)
9 of 35
<PAGE>
MYCOGEN CORPORATION
1992 STOCK OPTION PLAN
AS AMENDED AND RESTATED EFFECTIVE OCTOBER 17, 1996
--------------------------------------------------
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSES OF THE PLAN
--------------------
A. This 1992 Stock Option Plan (the "Plan") is intended to promote
the interests of Mycogen Corporation, a Delaware corporation (the "Company"), by
providing a method whereby (i) key employees (including officers and directors)
of the Company (or its parent or subsidiaries) who are primarily responsible for
the management, growth and financial success of the Company (or its parent or
subsidiaries), (ii) the non-employee members of the Company's Board of Directors
and (iii) consultants and other independent contractors who provide valuable
services to the Company (or its parent or subsidiaries) may be offered the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Company as an incentive for them to remain in the
service of the Company (or its parent or subsidiaries).
B. The Plan initially became effective immediately upon approval by
the Company's stockholders at the 1992 Special Stockholders Meeting on October
27, 1992. Such date is hereby designated as the Effective Date of the Plan.
This October 1996 restatement of the Plan shall become effective immediately
upon adoption by the Board of Directors, subject, however, to stockholder
approval at the 1996 Annual Meeting. The Plan shall be administered in
compliance with the applicable requirements of SEC Rule 16b-3, as in effect from
time to time.
C. This Plan shall serve as the successor to the Mycogen Corporation
1983 Stock Option Plan (the "1983 Plan"), and no further option grants shall be
made under the 1983 Plan from and after the Effective Date of this Plan. All
options outstanding under the 1983 Plan on such Effective Date are hereby
incorporated into this Plan and shall accordingly be treated as outstanding
options under this Plan. However, each outstanding option so incorporated shall
continue to be governed solely by the express terms and conditions of the
instrument evidencing such grant, and no provision of this Plan shall be deemed
to affect or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of the
Company's common stock thereunder or their exercise of any outstanding stock
appreciation rights thereunder.
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<PAGE>
D. For purposes of the Plan, the following provisions shall be
applicable in determining the parent and subsidiaries of the Company:
Any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company shall be considered to be a parent
corporation of the Company, provided each such corporation in the unbroken
chain (other than the Company) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
Each corporation, partnership or other entity (other than the
Company) in an unbroken chain of corporations, partnerships or other
entities beginning with the Company shall be considered to be a subsidiary
of the Company, provided each such corporation, partnership or other entity
(other than the last corporation, partnership or other entity) in the
unbroken chain owns, at the time of the determination, stock or other
ownership interests possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock or other ownership interests
in one of the other corporations, partnerships or other entities in such
chain.
II. STRUCTURE OF THE PLAN
---------------------
A. Stock Programs. The Plan shall be divided into two separate
--------------
components: the Discretionary Option Grant Program specified in Article Two and
the Automatic Option Grant Program specified in Article Three. Under the
Discretionary Option Grant Program, key employees (including officers), non-
employee Board members, consultants and other independent contractors of the
company or its subsidiaries who contribute to the management, growth and
financial success of the Company or its subsidiaries, may, at the discretion of
the Plan Administrator, be granted options to purchase shares of Common Stock in
accordance with the provisions of Article Two. Under the Automatic Option Grant
Program, certain non-employee members of the Company's Board of Directors (the
"Board") will automatically receive special option grants to purchase shares of
Common Stock in accordance with the provisions of Article Three.
B. General Provisions. Unless the context clearly indicates
------------------
otherwise, the provisions of Articles One and Four of the Plan shall apply to
both the Discretionary Option Grant Program and the Automatic Option Grant
Program and shall accordingly govern the interests of all individuals under the
Plan.
III. ADMINISTRATION OF THE PLAN
----
A. The Discretionary Option Grant Program shall be administered by a
committee ("Committee") of two (2) or more non-employee Board members appointed
by the Board.
11 0f 35
<PAGE>
B. The Committee as Plan Administrator shall have the sole and
exclusive power and authority (subject to the express provisions of the
Discretionary Option Grant Program) to establish such rules and regulations as
it may deem appropriate for the proper administration of such program and to
make such determinations under the program and any outstanding option as it may
deem necessary or advisable. Decisions of the Plan Administrator shall be final
and binding on all parties with an interest in any outstanding option under the
Discretionary Option Grant Program.
C. Service on the Committee shall constitute service as a Board
member, and members of the Committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their service on the
Committee. No member of the Committee shall be liable for any act or omission
made in good faith with respect to the Plan or any option granted under the
Plan.
D. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Three.
IV. ELIGIBILITY FOR OPTION GRANTS
-----------------------------
A. The persons eligible to participate in the Discretionary Option
Grant Program under Article Two of the Plan shall be limited to the following:
(i) officers and other key employees of the Company (or its
parent or subsidiaries) who render services which contribute to the
management, growth and financial success of the Company (or its parent or
subsidiaries);
(ii) non-employee Board members; and
(iii) those consultants and other independent contractors who
provide valuable services to the Company (or its parent or subsidiaries).
B. The Plan Administrator shall have the sole and exclusive authority
to determine which eligible individuals are to receive option grants under the
Discretionary Option Grant Program, the number of shares to be covered by each
such grant, the status of the granted option as either an incentive stock option
("Incentive Option") which satisfies the requirements of Section 422 of the
Internal Revenue Code or a non-statutory option not intended to meet such
requirements, the time or times at which each such option is to become
exercisable, and the maximum term for which the option is to remain outstanding.
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<PAGE>
V. STOCK SUBJECT TO THE PLAN
-------------------------
A. Shares of the Company's Common Stock shall be issuable under the
Plan, and such shares may be obtained from either the Company's authorized but
unissued shares of Common Stock or from shares of Common Stock reacquired by the
Company and held as treasury shares. The maximum number of shares available for
issuance over the term of the Plan shall not exceed 7,566,719 shares of Common
Stock, subject to adjustment from time to time in accordance with the provisions
of this Section V. Such authorized share reserve includes the two million
(2,000,000)-share increase authorized by the Board under this October 1996
restatement, subject to stockholder approval at the 1996 Annual Meeting. To the
extent one or more outstanding options under the 1983 Plan which have been
incorporated into this Plan are subsequently exercised, the number of shares
issued with respect to each such option shall reduce, on a share-for-share
basis, the number of shares available for issuance under this Plan.
B. In no event shall any one individual participating in the Plan be
granted stock options and separately exercisable stock appreciation rights for
more than 200,000 shares of Common Stock in the aggregate per calendar year,
effective retroactive to January 1, 1996.
C. Should an outstanding option under this Plan (including any
outstanding options under the 1983 Plan incorporated into this Plan) expire or
terminate for any reason prior to exercise in full (including any option
canceled in accordance with the cancellation-regrant provisions of Section IV of
Article Two of this Plan), the shares subject to the portion of the option not
so exercised shall be available for subsequent option grants under this Plan.
Unvested shares issued under the Plan and subsequently repurchased by the
Company at the original option or issue price paid per share shall be added back
to the share reserve and shall accordingly be made available for subsequent
issuance under the Plan. Shares subject to any option or portion thereof
surrendered in accordance with Section V of Article Two or Section III of
Article Three shall not be available for subsequent issuance under the Plan. In
addition, should the exercise price of an outstanding option under the Plan
(including any option incorporated from the 1983 Plan) be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable under the Plan
be withheld by the Company in satisfaction of the withholding taxes incurred in
connection with the exercise of an outstanding option under the Plan, then the
number of shares of Common Stock available for issuance under the Plan shall be
reduced by the gross number of shares for which the option is exercised, and not
by the net number of shares of Common Stock actually issued to the option
holder.
D. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Company's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the maximum
number and/or class of securities for which any one participant may be granted
stock options and separately exercisable stock appreciation rights per calendar
year, (iii) the
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<PAGE>
number and/or class of securities and price per share in effect under each
outstanding option under the Discretionary Option Grant Program, (iv) the number
and/or class of securities per non-employee Board member for which automatic
option grants are subsequently to be made under the Automatic Option Grant
Program to both newly-elected and re-elected non-employee Board members, (v) the
number and/or class of securities and price per share in effect under each grant
outstanding under the Automatic Option Grant Program and (vi) the number and /or
class of shares and price per share in effect under each outstanding option
incorporated into this Plan from the 1983 Plan. The purpose of such adjustments
to the outstanding options shall be to preclude the enlargement or dilution of
rights and benefits thereunder.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
VI. TERMS AND CONDITIONS OF OPTIONS
-------------------------------
Options granted pursuant to this Article Two shall be authorized by
action of the Plan Administrator and may, at the Plan Administrator's
discretion, be either Incentive Options or non-statutory options. Individuals
who are not employees of the Company or its parent or subsidiaries may only be
granted non-statutory options under this Article Two. Each option granted shall
be evidenced by one or more instruments in the form approved by the Plan
Administrator; provided, however, that each such instrument shall comply with
--------
the terms and conditions specified below. Each instrument evidencing an
Incentive Option shall, in addition, be subject to the applicable provisions of
Section II of this Article Two.
A. Option Price.
------------
1. The option price per share shall be fixed by the Plan
Administrator. In no event, however, shall the option price per share be less
than eighty-five percent (85%) of the fair market value per share of Common
Stock on the date of the option grant.
2. The option price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section VI of this Article
Two and the instrument evidencing the grant, be payable in one of the
alternative forms specified below:
(i) full payment in cash or check drawn to the Company's order;
or
(ii) full payment in shares of Common Stock held by the optionee
for the requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at fair market value
on the Exercise Date (as such term is defined below); or
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<PAGE>
(iii) full payment through a combination of shares of Common
Stock held by the optionee for the requisite period necessary to avoid a
charge to the Company's earnings for financial reporting purposes and
valued at fair market value on the Exercise Date and cash or check drawn to
the Company's order; or
(iv) full payment effected through a broker-dealer sale and
remittance procedure pursuant to which the optionee (I) shall provide
irrevocable written instructions to a Company-designated brokerage firm to
effect the immediate sale of the purchased shares and remit to the Company,
out of the sale proceeds available on the settlement date, sufficient funds
to cover the aggregate option price payable for the purchased shares plus
all applicable Federal, State and local income and employment taxes
required to be withheld by the Company by reason of such purchase and (II)
shall provide written directives to the Company to deliver the certificates
for the purchased shares directly to such brokerage firm in order to
complete the sale transaction.
For purposes of this subparagraph 2, the Exercise Date shall be the
date on which written notice of the option exercise is delivered to the Company.
Except to the extent the sale and remittance procedure above is utilized in
connection with the exercise of the option, payment of the option price for the
purchased shares must accompany such notice.
3. The fair market value per share of Common Stock on any relevant
date under subparagraph 1 or 2 above (and for all other valuation purposes
under the Plan) shall be determined in accordance with the following
provisions:
(i) If the Common Stock is not at the time listed or admitted to
trading on any national stock exchange but is traded on the Nasdaq National
Market, then the fair market value shall be the closing selling price per
share of Common Stock on the date in question, as reported by the National
Association of Securities Dealers on the Nasdaq National Market or any
successor system. If there is no reported closing selling price for the
Common Stock on the date in question, then the closing selling price on the
last preceding date for which such quotation exists on the Nasdaq National
Market shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or admitted to
trading on any national stock exchange, then the fair market value shall be
the closing selling price per share of Common Stock on the date in question
on the stock exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially quoted in
the composite tape of transactions on such exchange. If there is no such
reported price on the date in question, then the fair market value shall be
the closing selling price on the exchange on the last preceding date for
which such quotation exists.
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<PAGE>
B. Term and Exercise of Options.
----------------------------
Each option granted under this Article Two shall be exercisable at
such time or times, during such period, and for such number of shares as shall
be determined by the Plan Administrator and set forth in the instrument
evidencing such option. No such option, however, shall have a maximum term in
excess of ten (10) years from the grant date. During the lifetime of the
optionee, the option, together with any stock appreciation rights pertaining to
such option, shall be exercisable only by the optionee and shall not be
assignable or transferable by the optionee other than a transfer of the option
effected by will or by the laws of descent and distribution following the
optionee's death.
C. Termination of Service.
----------------------
1. Should an optionee cease to remain in Service for any reason
(including death or permanent disability as defined in Section 22(e)(3) of the
Internal Revenue Code) while the holder of one or more outstanding options
under this Article Two, then each such option shall not (except to the extent
otherwise provided pursuant to Section VII of this Article Two) remain
exercisable for more than a twelve (12) month period (or such shorter period
as is determined by the Plan Administrator and specified in the instrument
evidencing the grant) measured from the date of such cessation of Service.
Under no circumstances, however, shall any such option be exercisable after
the specified expiration date of the option term. Each such option shall,
during such twelve (12) month or shorter period, be exercisable only to the
extent of the number of shares (if any) for which the option is exercisable on
the date of the optionee's cessation of Service. Upon the expiration of such
twelve (12) month or shorter period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be outstanding for any
unexercised shares for which the option was exercisable at the time of the
optionee's cessation of Service. The option, however, shall immediately
terminate and cease to be outstanding, at the time of the optionee's cessation
of Service, with respect to any shares for which such option is not otherwise
at that time exercisable or in which the optionee is not otherwise at that
time vested.
2. Should the optionee die while holding one or more outstanding
options under this Article Two, then each such option shall be exercisable,
subject to the limitations of subparagraph 1 above, by the personal
representative of the optionee's estate or by the person or persons to whom
the option is transferred pursuant to the optionee's will or the laws of
descent and distribution.
3. Should (i) the optionee's Service be terminated for misconduct
(including, but not limited to, any act of dishonesty, willful misconduct,
fraud or embezzlement) or (ii) the optionee make any unauthorized use or
disclosure of confidential information or trade secrets of the Company or its
parent or subsidiaries, then in any such event all outstanding options held by
the optionee under this Article Two shall terminate immediately and cease to
be outstanding.
4. The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time the option
remains outstanding, to
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<PAGE>
permit one or more options granted under this Article Two to be exercised,
during the applicable exercise period under subparagraph 1 above, not only for
the number of shares for which each such option is exercisable at the time of
the optionee's cessation of Service but also for one or more subsequent
installments of purchasable shares for which the option would otherwise have
become exercisable had such cessation of Service not occurred.
5. For purposes of the foregoing provisions of this Section I.C
(and for all other purposes under the Plan):
The optionee shall be deemed to remain in the Service of the
Company for so long as such individual renders services on a periodic basis
to the Company (or any parent or subsidiary) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor.
The optionee shall be considered to be an Employee for so long
as such individual remains in the employ of the Company or one or more of
its parent or subsidiaries, subject to the control and direction of the
employer entity not only as to the work to be performed but also as to the
manner and method of performance.
D. Stockholder Rights.
------------------
An optionee shall have none of the rights of a stockholder with
respect to the shares of Common Stock subject to the option until such
individual shall have exercised the option, paid the option price for the
purchased shares and been issued a stock certificate for such shares.
E. Repurchase Rights.
-----------------
The shares of Common Stock issued under this Article Two may be
subject to repurchase by the Company in accordance with the following
provisions:
1. The Plan Administrator shall have the discretion to authorize
the issuance of unvested shares of Common Stock under this Article Two.
Should the Optionee cease Service while holding such unvested shares, the
Company shall have the right to repurchase any or all of those unvested shares
at the option price paid per share. The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the issued shares) shall be
established by the Plan Administrator and set forth in the instrument
evidencing such repurchase right.
2. All of the Company's outstanding repurchase rights shall
automatically terminate, and all shares subject to such terminated rights
shall immediately vest in full, upon the occurrence of any Corporate
17 of 35
<PAGE>
Transaction under Section III of this Article Two, except to the extent: (i)
any such repurchase right is, in connection with a Corporate Transaction,
expressly assigned to the successor corporation (or parent thereof) or (ii)
such termination is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is granted.
3. The Plan Administrator shall have the discretionary authority,
exercisable either before or after the optionee's cessation of Service, to
cancel the Company's outstanding repurchase rights with respect to one or more
shares purchased or purchasable by the optionee under this Article Two and
thereby accelerate the vesting of such shares at any time.
VII. INCENTIVE OPTIONS
-----------------
The terms and conditions specified below shall be applicable to all
Incentive Options granted under this Article Two. Incentive Options may only be
granted to individuals who are Employees of the Company. Options which are
specifically designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.
---
A. Option Price. The option price per share of the Common Stock
------------
subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of the fair market value of such Common Stock on the grant
date.
B. Dollar Limitation. The aggregate fair market value (determined as
-----------------
of the respective date or dates of grant) of the Common Stock for which one
or more options granted to any Employee under this Plan (or any other
option plan of the Company or its parent or subsidiaries) may for the first
time become exercisable as incentive stock options under the Federal tax
laws during any one calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). To the extent the Employee holds two or more
such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such
options as incentive stock options under the Federal tax laws shall be
applied on the basis of the order in which such options are granted. To
the extent the One Hundred Thousand Dollar ($100,000) limitation is
exceeded in any calendar year, the option shall nevertheless be exercisable
for the excess number of shares as a non-statutory option.
C. 10% Stockholder. If any individual to whom an Incentive Option is
---------------
granted is the owner of stock (as determined under Section 424(d) of the
Internal Revenue Code) possessing 10% or more of the total combined voting
power of all outstanding classes of stock of the Company or any parent or
subsidiary, then the option price per share shall not be less than one
hundred and ten percent (110%) of the fair market value per share of the
Common Stock on the grant date, and the option term shall not exceed five
(5) years, measured from the grant date.
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<PAGE>
Except as modified by the preceding provisions of this Section II, the
provisions of Articles One, Two and Four of the Plan shall apply to all
Incentive Options granted hereunder.
VIII. CORPORATE TRANSACTION/CHANGE IN CONTROL
---------------------------------------
A. In the event of any of the following stockholder-approved
transactions to which the Company is a party (a "Corporate Transaction"):
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State of the Company's incorporation,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company in complete liquidation or
dissolution of the Company, or
(iii) any reverse merger in which the Company is the
surviving entity but in which the holders of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities (as measured immediately prior to such
merger) transfer ownership of those securities to person or persons not
otherwise part of the transferor group,
the exercisability of each option at the time outstanding under this
Article Two shall automatically accelerate so that each such option shall,
immediately prior to the specified effective date for the Corporate Transaction,
become fully exercisable with respect to the total number of shares of Common
Stock at the time subject to such option and may be exercised for all or any
portion of such shares. However, an outstanding option under this Article Two
shall not so accelerate if and to the extent: (i) such option is, in connection
with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof or be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation or parent
thereof, (ii) such option is to be replaced by a cash incentive program of the
successor corporation which preserves the option spread existing at the time of
the Corporate Transaction and provides for pay-out in accordance with the same
vesting schedule in effect for such option, or (iii) the acceleration of such
option is subject to other limitations imposed by the Plan Administrator at the
time of grant. The determination of option comparability under clause (i) above
shall be made by the Plan Administrator, and its determination shall be final,
binding and conclusive. The Plan Administrator shall also have full power and
authority to grant options under the Plan which are to automatically accelerate
in whole or in part immediately prior to the Corporate Transaction, whether or
not those options are otherwise to be assumed or replaced in connection with the
consummation of such Corporate Transaction.
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<PAGE>
B. Upon the consummation of the Corporate Transaction, all
outstanding options under this Article Two shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation or its
parent company.
C. Each outstanding option under this Article Two which is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would have been
issuable, in consummation of such Corporate Transaction, to an actual holder of
the same number of shares of Common Stock as are subject to such option
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to the option price payable per share, provided the aggregate
--------
option price payable for such securities shall remain the same. In addition,
the class and number of securities available for issuance under the Plan
following the consummation of the Corporate Transaction shall be appropriately
adjusted.
D. The grant of options under this Article Two shall in no way affect
the right of the Company to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
E. The Plan Administrator shall have the discretionary authority,
exercisable in advance of any actually-anticipated Change in Control or at the
time of an actual Change in Control, to provide for the automatic acceleration
of one or more outstanding options under this Article Two (and the automatic
termination of one or more of the Company's outstanding repurchase rights under
this Article Two) upon the occurrence of the Change in Control. Alternatively,
the Plan Administrator shall have full power and authority to condition any such
option acceleration (and the termination of any outstanding repurchase rights)
upon the subsequent termination of the optionee's Service within a specified
period following the Change in Control. For purposes of this Article Two, a
Change in Control shall be deemed to occur in the event:
(i) any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Company) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer
made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept; or
(ii) there is a change in the composition of the Board over a
period of twenty-four (24) consecutive months or less such that a majority
of the Board members (rounded up to the next whole number) cease, by reason
of one or more proxy contests for the election of Board members, to be
comprised of individuals who either (A) have been Board members
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<PAGE>
continuously since the beginning of such period or (B) have been elected or
nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in
office at the time such election or nomination was approved by the Board.
F. Each option accelerated in connection with the Change in Control
shall remain fully exercisable until the expiration or sooner termination of the
option term or the cancellation of such option in accordance with Section V of
this Article Two (if applicable).
G. The exercisability as incentive stock options under the Federal
tax laws of any options accelerated under this Section III in connection with a
Corporate Transaction or Change in Control shall remain subject to the
applicable dollar limitation specified in Section II of this Article Two.
IX. CANCELLATION AND REGRANT OF OPTIONS
-----------------------------------
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under this Article Two and to
grant in substitution new options under the Plan covering the same or different
numbers of shares of Common Stock but having an option price per share not less
than (i) eighty-five percent (85%) of the fair market value of the Common Stock
on the new grant date, or (ii) one hundred percent (100%) of such fair market
value in the case of an Incentive Option, or (iii) one hundred ten percent
(110%) of such fair market value in the case of an Incentive Option to be
granted to a 10% Stockholder.
X. STOCK APPRECIATION RIGHTS
-------------------------
A. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Section
V, one or more optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish, to surrender all or part
of an unexercised option under this Article Two in exchange for a distribution
from the Company in an amount equal to the excess of (i) the fair market value
(on the option surrender date) of the number of shares in which the optionee is
at the time vested under the surrendered option (or surrendered portion thereof)
over (ii) the aggregate option price payable for such vested shares.
B. No such option surrender shall be effective unless it is approved
by the Plan Administrator. If the surrender is so approved, then the
distribution to which the optionee shall accordingly become entitled under this
Section V may be made in shares of Common Stock valued at fair market value on
the option surrender date, in cash, or partly in shares and partly in cash, as
the Plan Administrator shall in its sole discretion deem appropriate.
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<PAGE>
C. If the surrender of an option is rejected by the Plan
Administrator, then the optionee shall retain whatever rights the optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
-----
(i) five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years (or five (5) years in the case of an
Incentive Option granted to a 10% Stockholder) after the date of the option
grant.
D. One or more officers of the Company subject to the short-swing
profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under this Discretionary Option Grant
Program. Upon the occurrence of a Hostile Take-Over, each such officer holding
one or more options with such a limited stock appreciation right in effect shall
have the unconditional right (exercisable for a thirty (30)-day period following
such Hostile Take-Over) to surrender each such option to the Company, to the
extent the option is at the time exercisable for vested shares of Common Stock.
In return for the surrendered option, the officer shall be entitled to a cash
distribution from the Company in an amount equal to the excess of (i) the Take-
Over Price of the shares of Common Stock which are at the time vested under each
surrendered option (or surrendered portion) over (ii) the aggregate exercise
price payable for such vested shares. Such cash distribution shall be paid
within five (5) days following the option surrender date. At the time any such
limited stock appreciation right is granted, the Plan Administrator shall
concurrently pre-approve the subsequent exercise of that right in accordance
with the provisions of this Section V.D, and no additional approval of the Board
or any Plan Administrator shall accordingly be required at the time of the
actual option surrender and cash distribution. The balance of the option (if
any) shall continue in full force and effect in accordance with the instrument
evidencing such grant.
E. For purposes of Section V.D, the following definitions shall be in
effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the event (i) any
person or related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) directly or indirectly acquires beneficial ownership (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or exchange
offer made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept.
The TAKE-OVER PRICE per share shall be deemed to be equal to the
greater of (a) the fair market value per share on the option surrender date, as
- -------
determined pursuant to the valuation provisions of Section I.A.3 of this Article
Two, or (b) the highest reported price per share paid by the tender offer or in
effecting such Hostile Take-Over. However, if the surrendered option is an
Incentive Option, the Take-Over Price shall not exceed the clause (a) price per
share.
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<PAGE>
F. The shares of Common Stock subject to any option surrendered for
an appreciation distribution pursuant to this Section V shall not be available
for subsequent option grants under the Plan.
XI. LOANS OR INSTALLMENT PAYMENTS
-----------------------------
The Plan Administrator may assist any optionee (including any officer)
in the exercise of one or more outstanding options under this Article Two by (a)
authorizing the extension of a loan to such optionee from the Company or (b)
permitting the optionee to pay the option price for the purchased Common Stock
in installments over a period of years. The terms of any such loan or
installment method of payment (including the interest rate and terms of
repayment) shall be established by the Plan Administrator in its sole
discretion. Loans and installment payments may be granted without security or
collateral, but the maximum credit available to the optionee shall not exceed
the sum of (i) the aggregate option price (less par value) of the purchased
---
shares plus (ii) any Federal, State and local income tax and employment tax
liabilities incurred by the optionee in connection with the exercise of the
option.
XII. EXTENSION OF EXERCISE PERIOD
----------------------------
The Plan Administrator shall have full power and authority to extend
the period of time for which any option granted under this Article Two is to
remain exercisable following the optionee's cessation of Service or death from
the limited period in effect under Section 1.C.1 of this Article Two to such
greater period of time as the Plan Administrator shall deem appropriate;
provided, however, that in no event shall such option be exercisable after the
- --------
specified expiration date of the option term.
ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
XIII. ELIGIBILITY
-----------
A. Eligible Optionees. The individuals eligible to receive
------------------
automatic option grants pursuant to the provisions of this successor Article
Three program shall be limited to (i) those individuals who are first elected or
appointed as non-employee Board members on or after the Effective Date of this
Plan, whether through appointment by the Board or election by the Company's
stockholders, provided they have not otherwise been in the prior employ of the
Company (or any parent or subsidiary) and (ii) those individuals who are re-
elected as non-employee Board member at one or more stockholder meetings held
after the Effective Date, whether or not such individuals are otherwise serving
as non-employee Board members on the Effective Date.
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<PAGE>
XIV. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS
-----------------------------------------------
A. Grant Dates. Option grants will be made under this Article Three
-----------
on the dates specified below:
(i) Each individual who first becomes a non-employee Board member
on or after the Effective Date of the Plan, whether through election by the
Company's stockholders or appointment by the Board, and who has not
otherwise been in the prior employ of the Company shall automatically be
granted, at the time of such initial election or appointment, a non-
statutory stock option to purchase 20,000 shares of Common Stock upon the
terms and conditions of this Article Three.
(ii) Each individual re-elected as a non-employee Board member at
one or more annual stockholder meetings, beginning with the 1996 Annual
Meeting at which this October 1996 restatement is approved, shall
automatically be granted, at each such meeting at which he or she is so re-
elected, a non-statutory stock option to purchase an additional 7,500
shares of Common Stock upon the terms and conditions of this Article Three.
However, any non-employee Board member who is an officer or other executive
of DowElanco at the time of his or her re-election shall receive a non-
statutory option for only 5,000 shares of Common Stock.
There shall be no limit on the number of annual option grants any one non-
employee Board member may receive over the period of Board service.
The applicable 20,000-share, 7,500-share and 5,000-share limitations on the
automatic grants to be made to each newly-elected or re-elected non-employee
Board member shall be subject to periodic adjustment pursuant to the applicable
provisions of Section V.C of Article One.
B. Exercise Price. The exercise price per share of each automatic
--------------
option grant made under this Article Three shall be equal to one hundred percent
(100%) of the fair market value per share of Common Stock on the automatic grant
date.
C. Payment.
-------
The exercise price shall be payable in one of the alternative
forms specified below:
(i) full payment in cash or check made payable to the Company's
order; or
(ii) full payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Company's reported
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<PAGE>
earnings and valued at fair market value on the Exercise Date (as such term
is defined below); or
(iii) full payment in a combination of shares of Common Stock
held for the requisite period necessary to avoid a charge to the Company's
reported earnings and valued at fair market value on the Exercise Date and
cash or check payable to the Company's order; or
(iv) full payment through a sale and remittance procedure
pursuant to which the non-employee Board member shall provide irrevocable
written directives to a designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares and shall
concurrently provide written instructions to the Company to deliver the
certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
For purposes of this subparagraph, the Exercise Date shall be the date
on which written notice of the option exercise is delivered to the Company, and
the fair market value per share of Common Stock on any relevant date shall be
determined in accordance with the provisions of Section I.A.3 of Article Two.
Except to the extent the sale and remittance procedure specified above is
utilized for the exercise of the option, payment of the option price for the
purchased shares must accompany the exercise notice.
D. Option Term. Each automatic grant under this Article Three shall
-----------
have a maximum term of ten (10) years measured from the automatic grant date.
E. Exercisability. Each automatic grant shall become exercisable in
--------------
a series of three (3) equal annual installments over the optionee's period of
service on the Board, with the first such installment to become exercisable one
(1) year after the automatic grant date. The option shall not become
exercisable for any additional option shares following the optionee's cessation
of Board service for any reason.
F. Non-Transferability. During the lifetime of the optionee, each
-------------------
automatic option grant, together with the limited stock appreciation right
pertaining to such option, shall be exercisable only by the optionee and shall
not be assignable or transferable by the optionee other than a transfer of the
option effected by will or by the laws of descent and distribution following
optionee's death.
G. Effect of Termination of Board Membership.
-----------------------------------------
1. Should the optionee cease to serve as a Board member for any
reason (other than death) while holding one or more automatic option grants
under this Article Three, then such optionee shall have a six (6) month period
following the date of
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<PAGE>
such cessation of Board membership in which to exercise each such option for
any or all of the shares of Common Stock for which the option is exercisable
at the time of such cessation of Board service. Each such option shall
immediately terminate and cease to be outstanding, at the time of such
cessation of Board service, with respect to any shares for which the option is
not otherwise at that time exercisable.
2. Should the optionee die while serving as a member of the Board
or within six (6) months after cessation of Board service, then each
outstanding automatic option grant held by the optionee at the time of death
may subsequently be exercised, for any or all of the shares of Common Stock
for which the option is exercisable at the time of the optionee's cessation of
Board service (less any option shares subsequently purchased by the optionee
prior to death), by the personal representative of the optionee's estate or by
the person or persons to whom the option is transferred pursuant to the
optionee's will or in accordance with the laws of descent and distribution.
Any such exercise must occur within twelve (12) months after the date of the
optionee's death. However, each such automatic option grant shall immediately
terminate and cease to be outstanding, at the time of the optionee's cessation
of Board service, with respect to any option shares for which it is not
otherwise at such time exercisable.
3. In no event shall any automatic grant under this Article Three
remain exercisable after the specified expiration date of the ten (10)-year
option term. Upon the expiration of the applicable exercise period in
accordance with subparagraphs 1 and 2 above or (if earlier) upon the
expiration of the ten (10)-year option term, the automatic grant shall
terminate and cease to be outstanding for any unexercised shares for which the
option was exercisable at the time of the optionee's cessation of Board
service.
H. Stockholder Rights. The holder of an automatic option grant under
------------------
this Article Three shall have none of the rights of a stockholder with respect
to any shares subject to such option until such individual shall have exercised
the option, paid the exercise price for the purchased shares and been issued a
stock certificate for such shares.
I. Remaining Terms. The remaining terms and conditions of each
---------------
automatic option grant shall be as set forth in the prototype Non-statutory
Stock Option Agreement attached as Exhibit A to the Plan.
XV. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
---------------------------------------------------------
A. In the event of any of the following stockholder-approved
transactions to which the Company is a party (a "Corporate Transaction"):
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State of the Company's incorporation,
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<PAGE>
(ii) the sale, transfer or disposition of all or substantially
all of the assets of the Company in liquidation or dissolution of the
Company, or
(iii) any reverse merger in which the Company is the surviving
entity but in which the holders of securities possessing more than fifty
percent (50%) of the total combined voting power of the Company's
outstanding securities (as measured immediately prior to such merger)
transfer ownership of those securities to person or persons not otherwise
part of the transferor group,
the exercisability of each automatic option grant at the time
outstanding under this Article Three shall automatically accelerate so that each
such option shall, immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable with respect to the total number
of shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of such shares. Upon the consummation of the
Corporate Transaction, all automatic option grants under this Article Three
shall terminate and cease to be outstanding.
B. In connection with any Change in Control of the Company, the
exercisability of each automatic option grant at the time outstanding under this
Article Three shall automatically accelerate so that each such option shall,
immediately prior to the specified effective date for the Change in Control,
become fully exercisable with respect to the total number of shares of Common
Stock at the time subject to such option and may be exercised for all or any
portion of such shares. For purposes of this Article Three, a Change in Control
shall be deemed to occur in the event:
(i) any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Company) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer
made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept; or
(ii) there is a change in the composition of the Board over a
period of twenty-four (24) consecutive months or less such that a majority
of the Board members (rounded up to the next whole number) cease, by reason
of one or more proxy contests for the election of Board members, to be
comprised of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have been elected or
nominated for election as Board members during such period by at least a
majority of the Board members described in clause (A) who were still in
office at the time such election or nomination was approved by the Board.
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<PAGE>
C. Upon the occurrence of a Hostile Take-Over, each non-employee
Board member holding an automatic option grant under this Article Three shall
have the unconditional right (exercisable for a thirty (30)-day period following
such Hostile Take-Over) to surrender such option in return for a cash
distribution from the Company in an amount equal to the excess of (i) the Take-
Over Price of the shares of Common Stock at the time subject to the surrendered
option (whether or not the option is otherwise at the time exercisable for such
shares) over (ii) the aggregate exercise price payable for such shares. Such
cash distribution shall be paid within five (5) days following the option
surrender date. At the time of each Article Three option grant, the Board shall
concurrently pre-approve any subsequent surrender of that option in accordance
with the provisions of this Section III.C, and no additional approval of the
Board or any Plan Administrator shall accordingly be required at the time of the
actual option surrender and cash distribution.
D. For purposes of this Section III, the following definitions shall
be in effect:
A HOSTILE TAKE-OVER shall be deemed to occur in the event (i) any
person or related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) directly or indirectly acquires beneficial ownership (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or exchange
offer made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept.
The TAKE-OVER PRICE per share shall be deemed to be equal to the
greater of (a) the fair market value per share on the option surrender date, as
- -------
determined pursuant to the valuation provisions of Section I.A.3 of Article Two,
or (b) the highest reported price per share paid by the tender offer or in
effecting such Hostile Take-Over.
E. The shares of Common Stock subject to each option surrendered in
connection with the Hostile Take-Over shall not be available for subsequent
issuance under this Plan.
F. The automatic option grants outstanding under this Article Three
shall in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
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<PAGE>
ARTICLE FOUR
MISCELLANEOUS
-------------
XVI. AMENDMENT OF THE PLAN
---------------------
The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects whatsoever; provided, however,
--------
that no such amendment or modification shall, without the consent of the
holders, adversely affect rights and obligations with respect to options at the
time outstanding under the Plan. In addition, amendments to the Plan shall be
subject to stockholder approval to the extent required under applicable law or
regulation.
XVII. TAX WITHHOLDING
---------------
A. The Company's obligation to deliver shares of Common Stock or
cash upon the exercise of stock options or stock appreciation rights granted
under the Discretionary Option Grant Program shall be subject to the
satisfaction of all applicable Federal, State and local income tax and
employment tax withholding requirements.
B. The Plan Administrator may, in its discretion and in accordance
with the provisions of this Section II of Article Four and such supplemental
rules as the Plan Administrator may from time to time adopt (including the
applicable safe-harbor provisions of Securities and Exchange Commission Rule
16b-3), provide any or all holders of non-statutory options (other than the
automatic grants made pursuant to Article Three of the Plan) or unvested shares
under the Plan with the right to use shares of the Company's Common Stock in
satisfaction of all or part of the Federal, State and local income tax and
employment tax liabilities incurred by such holders in connection with the
exercise of their options or the vesting of their shares(the "Taxes"). Such
right may be provided to any such option holder in either or both of the
following formats:
1. Stock Withholding: The holder of the non-statutory option
-----------------
or unvested shares may be provided with the election to have the Company
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such non-statutory option or the vesting of such shares, a portion of those
shares with an aggregate fair market value not to exceed one hundred percent
(100%) of the applicable Taxes.
2. Stock Delivery: The Plan Administrator may, in its
--------------
discretion, provide the holder of the non-statutory option or the unvested
shares with the election to deliver to the Company, at the time the non-
statutory option is exercised or the shares vest, one or more shares of Common
Stock previously acquired by such individual (other than in connection with the
option exercise or share vesting triggering the Taxes) with an aggregate fair
market value equal to the designated percentage (up to 100% as specified by the
option holder) of the Taxes incurred in connection with such option exercise or
share vesting.
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<PAGE>
XVIII. EFFECTIVE DATE AND TERM OF PLAN
-------------------------------
A. This Plan, as successor to the Company's 1983 Plan, became
effective immediately upon approval by the Company's stockholders at the 1992
Special Stockholders Meeting.
B. Each option issued and outstanding under the 1983 Plan immediately
prior to the Effective Date of this Plan was incorporated into this Plan and
treated as an outstanding option under this Plan, but each such option continued
to be governed solely by the terms and conditions of the instrument evidencing
such grant, and nothing in this Plan shall be deemed to affect or otherwise
modify the rights or obligations of the holders of such options with respect to
their acquisition of shares of Common Stock thereunder or their exercise of
outstanding stock appreciation rights thereunder.
C. The Plan was amended and restated on October 17, 1996 (the
"October 1996 Restatement") to effect the following changes: (i) increase the
number of shares of Common Stock authorized for issuance over the term of the
Plan by an additional two million (2,000,000) shares, (ii) limit to two hundred
thousand (200,000) shares of Common Stock the stock option grants and separately
exercisable stock appreciation rights which any one participant in the Option
Plan may receive in the aggregate per calendar year, (iii) render the non-
employee Board members eligible to receive option grants and stock appreciation
rights under the Discretionary Option Grant Program, (iv) allow unvested shares
issued under the Plan and subsequently repurchased by the Company at the option
exercise price or issue price paid per share to be reissued under the Plan, (v)
increase the number of shares of Common Stock for which options are to be
granted on an annual basis to certain non-employee Board members upon their re-
election to the Board at each Annual Stockholders Meeting, beginning with the
1996 Annual Meeting, and (vi) effect a series of technical changes to the
provisions of the Plan in order to take advantage of the recent amendments to
Rule 16b-3 of the Securities Exchange Act of 1934 which exempts certain officer
and director transactions under the Plan from the short-swing liability
provisions of the federal securities laws. The October 1996 Restatement is
subject to stockholder approval at the 1996 Annual Meeting, and no option grants
made on the basis of the share increase included in the October 1996 Restatement
shall become exercisable in whole or in part unless and until the October 1996
Restatement is approved by the stockholders. Should such stockholder approval
not be obtained at the 1996 Annual Meeting, then each option grant made pursuant
to the share increase included in the October 1996 Restatement shall terminate
and cease to remain outstanding, and no further option grants shall be made on
the basis of that share increase. However, the provisions of the Plan as in
effect immediately prior to the amendments effected by the October 1996
Restatement shall automatically be reinstated, and option grants may thereafter
continue to be made pursuant to the reinstated provisions of the Plan. All
option grants made prior to the October 1996 Restatement shall remain
outstanding in accordance with the terms and conditions of the respective
instruments evidencing those options, and nothing in the October 1996
Restatement shall be deemed to modify or in any way affect those outstanding
options. Subject to the foregoing limitations, the Plan Administrator may make
option grants under the Plan at any time before the date fixed herein for the
termination of the Plan.
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<PAGE>
D. Unless sooner terminated in accordance with Section III of Article
Two and Section III of Article Three, the Plan shall terminate upon the earlier
-------
of (i) December 31, 2002 or (ii) the date on which all shares available for
issuance under the Plan shall have been issued or cancelled pursuant to the
exercise, surrender or cash-out of the options granted hereunder. If the date
of termination is determined under clause (i) above, then options outstanding on
such date shall thereafter continue to have force and effect in accordance with
the provisions of the instruments evidencing such options.
E. Options may be granted under this Plan to purchase shares of
Common Stock in excess of the number of shares then available for issuance under
the Plan, provided each option so granted is not to become exercisable, in whole
--------
or in part, at any time prior to stockholder approval of an amendment
authorizing a sufficient increase in the number of shares issuable under the
Plan.
XIX. USE OF PROCEEDS
---------------
Any cash proceeds received by the Company from the sale of shares
pursuant to options granted under the Plan shall be used for general corporate
purposes.
XX. REGULATORY APPROVALS
--------------------
The implementation of the Plan, the granting of any option hereunder,
and the issuance of stock upon the exercise or surrender of any such option
shall be subject to the procurement by the Company of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the stock issued pursuant to it.
XXI. NO EMPLOYMENT/SERVICE RIGHTS
----------------------------
Neither the action of the Company in establishing this Plan, nor any
action taken by the Plan Administrator hereunder, nor any provision of this Plan
shall be construed so as to grant any individual the right to remain in the
employ or service of the Company (or any parent or subsidiary) for any period of
specific duration, and the Company (or any parent or subsidiary corporation
retaining the services of such individual) may terminate such individual's
employment or service at any time and for any reason, with or without cause.
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<PAGE>
Exhibit 23
Consent of Ernst & Young,
Independent Auditors
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<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Mycogen Corporation 1992 Stock Purchase Plan and
Restricted Stock Issuance Plan of our report dated October 11, 1996, with
respect to the consolidated financial statements and schedule of Mycogen
Corporation included in its Annual Report (Form 10-K) for the year ended August
31, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young
-----------------
ERNST & YOUNG LLP
San Diego, California
February 5, 1997
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<PAGE>
Exhibit 24
Power of Attorney
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<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
WHEREAS, Mycogen Corporation (the "Corporation") intends to file a
Registration Statement of Form S-8 regarding the registration of additional
shares for the Corporation's 1992 Stock Option Plan with the Securities and
Exchange Commission under the provisions of the Securities Act of 1933, as
amended.
WHEREAS, the undersigned are directors of the Corporation.
NOW, THEREFORE, the undersigned hereby constitute and appoint Jerry
Caulder, Carlton J. Eibl, James A. Baumker, or any of them, as their attorneys-
in-fact to act in their place and stead and to execute and to file such
Registration Statement and any amendments or supplements thereto, giving and
granting to said attorneys full power and authority to do and perform each and
every act whatsoever requisite and necessary to be done in and about the
premises, with full power of substitution, as fully to all intents and purposes
as the undersigned might or could do if personally present at the doing thereof,
and hereby ratifying and confirming all that said attorneys may or shall
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
this 7th day of February, 1997.
/s/ THOMAS J. CABLE
- --------------------------
(Thomas J. Cable)
/s/ DAVID H. RAMMLER
- --------------------------
(David H. Rammler)
/s/ LOUIS W. PRIBILA
- --------------------------
(Louis W. Pribila)
/s/ JOHN L. HAGAMAN
- --------------------------
(John L. Hagaman)
/s/ PERRY J. GEHRING
- --------------------------
(Perry J. Gehring)
/s/ WILLIAM C. SCHMIDT
- --------------------------
(William C. Schmidt
/s/ G. WILLIAM TOLBERT
- --------------------------
(G. William Tolbert)
/s/ W. WAYNE WITHERS
- --------------------------
(W. Wayne Withers)
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