SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the six month period ended February 28, 1995 or
Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act 1934
For the transition period from to
Commission file number: 0-17005
DEKALB Genetics Corporation
(Exact name of registrant as specified in its charter)
Delaware 36-3586793
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3100 Sycamore Road, DeKalb, Illinois 60115
(Address of principal executive offices) (Zip Code)
815-758-3461
(Registrant's telephone number,
including area code)
Indicate whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Title of class Outstanding as of February 28, 1995
Class A Common, no par value 792,376
Class B Common, no par value 4,371,332
Exhibit index is located on page 2
Total number of pages 42
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DEKALB GENETICS CORPORATION
INDEX
Page No.
Part I - Financial Information (Unaudited except for the
Condensed Consolidated Balance Sheet as of August 31, 1994):
Management's Discussion and Analysis of Financial Condition
and Results of Operations 3-5
Condensed Consolidated Statements of Operations for the three
months ended February 28, 1995 and 1994 6
Condensed Consolidated Statements of Operations for the six
months ended February 28, 1995 and 1994 7
Condensed Consolidated Balance Sheets, February 28, 1995 and 1994
and August 31, 1994 8
Condensed Consolidated Statements of Cash Flows for the six
months ended February 28, 1995 and 1994 9
Notes to Condensed Consolidated Financial Statements 10-12
Part II - Other Information 13-14
EXHIBIT 10 - Employment Agreements between DEKALB Genetics
Corporation and its executive officers. 15-40
EXHIBIT 11 - Computation of Net Earnings per Common and Common
Equivalent Share for the six months ended February 28, 1995
and 1994 and for the three months ended February 28, 1995
and 1994. 41-42
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Management's Discussion and Analysis of
Financial Condition and Results of Operations
and Financial Position
Net earnings for the first six months of fiscal 1995 were $6.5 million ($1.25
per share) compared with $7.2 million ($1.37 per share) in the same period of
the prior year. Fiscal 1994 included an after-tax benefit of $1.6 million
($.32 per share) related to the suspension of the defined benefit portion of
the Company's retirement program. Excluding that benefit and the expense
($0.4 million or $.09 per share) related to adopting the new standard of
accounting for income taxes in fiscal 1994, net earnings in fiscal 1994 were
$6.0 million ($1.14 per share). The increase in fiscal 1995 was due to higher
North American seed earnings offset partly by lower swine segment
profitability and lower equity earnings from Mexican operations.
Consolidated revenues in fiscal 1995 were $197.6 million compared with $183.8
million the prior year. The eight percent increase was primarily due to
higher North American and Argentine corn selling prices and sales volumes.
Swine revenues decreased nearly nine percent as the result of lower market hog
prices.
Fiscal 1995 second quarter net earnings were 20 percent higher than the same
period a year ago. Excluding the benefit related to the retirement program
($1.1 million or $.20 per share), prior year second quarter earnings were $5.3
million compared with $7.7 million in the second quarter of fiscal 1995.
North American seed earnings were up significantly due to increased corn
margins while Mexican results were down substantially as a result of lower
operating earnings and the devaluation of the peso during this time period.
Lower market hog prices caused the swine segment to report a $0.4 million loss
compared with $0.9 million of earnings in the second quarter of fiscal 1994.
Quarterly Industry Segment Revenues and Earnings
In Millions
(Unaudited)
Second Quarter Year-to-Date
February February February February
1995 1994 1995 1994
Revenues
North American Seed $111.2 $104.8 $115.5 $107.5
International Seed 21.3 20.5 50.1 41.0
Swine 11.7 13.1 23.8 26.1
Poultry 4.2 4.6 8.2 9.2
Total revenues $148.4 $143.0 $197.6 $183.8
Earnings
North American Seed $14.2 $8.4 $13.9 $9.0
International Seed 2.5 3.1 5.4 5.9
Swine (0.4) 0.9 (1.3) 2.7
Poultry (0.6) (0.4) (0.9) (0.6)
Total operations $15.7 $12.0 $17.1 $17.0
General corporate expenses (1.4) (1.5) (2.5) (2.7)
Net interest expense (2.1) (1.9) (4.2) (3.8)
Earnings before income taxes
and accounting change 12.2 8.6 10.4 10.5
Income tax provision 4.5 2.2 3.9 2.9
Earnings before cumulative
effect of accounting change 7.7 6.4 6.5 7.6
Cumulative effect of accounting
Change - - - (0.4)
Net Earnings $7.7 $6.4 $6.5 $7.2<PAGE>
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Seed
North American and European sales and net earnings are primarily realized in
the second and third fiscal quarters (December through May) and, for that
reason, the first six month's results should not be annualized. The best
year-to-year comparison of seed results from these two markets is a combined
total of the second and third quarters for the years compared.
North American Seed
Segment earnings for the first six months of fiscal 1995 were $4.9 million
higher than a year earlier as revenues increased $8.0 million or seven
percent. Second quarter earnings in fiscal 1995 followed a similar trend
and were $5.8 million higher than the same quarter of fiscal 1994, as
relatively few seed shipments occur in the first quarter. Corn unit gross
margin increased significantly due to lower costs per unit and higher
average selling prices.
Cost per unit improved nearly $4.00 per unit as a result of a large
production crop produced under very favorable growing conditions during the
summer of 1994. Average selling price for corn was higher primarily due to
an improved sales mix which included fewer units of lower priced, small
sized seed.
International Seed
International seed segment earnings were $0.5 million lower than a year ago.
Devaluation of the Mexican peso significantly reduced corn sales
opportunities for the Company due to the lack of agricultural credit. In
addition, corn production in Mexico was substantially below target,
increasing production cost per unit. These two factors, coupled with higher
interest costs due to increased borrowing requirements, caused earnings to
decrease nearly $2.0 million in Mexico. Improved earnings from Argentine
operations were the result of higher average selling prices and higher sales
volume for corn.
Swine
Swine segment results were $4.0 million lower than a year earlier as revenues
decreased nine percent. The revenue decrease resulted from a 24 percent drop
in market hog revenues offset to a large extent by higher breeding stock
revenues. Revenues from the female lines of the breeding stock business were
higher due to increased sales volume as demand for DEKALB gilts remained
strong. Male genetic revenues were down nine percent due to weak demand for
boars.
Since over 40 percent of DEKALB's sales volume is by-product market hogs,
lower prices have a direct impact on profitability. Average market hog prices
dropped almost $12.00 per hundred weight from a year ago, causing swine to
report a loss of $1.3 million in the first six months of fiscal 1995 compared
with earnings of $2.7 million in the same period of fiscal 1994. Higher
futures prices for market hogs in the second half of the fiscal year would
suggest improved results for DEKALB's swine operation.
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Poultry
The loss of $0.9 million for the first six months from the poultry segment was
$0.3 million more than the prior year. Gross margins from domestic breeder
and commercial hatchery operations were both lower than a year ago.
General
The effective tax rate increased from 27 percent in the first six months of
fiscal 1994 to 37 percent for the same period in fiscal 1995. A change in the
earnings mix, including fluctuations in Mexican equity earnings, was the
principal factor causing the increase. For each interim period, the tax rate
is determined from an estimate of full year earnings and the resultant tax.
The first six months of fiscal 1994 included increased tax benefits associated
with international seed losses incurred in prior years.
First quarter fiscal 1994 net earnings reflected the adoption of statement of
Financial Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income
Taxes". The cumulative effect of this accounting change was an after-tax
charge to net earnings of $0.4 million ($.09 per share).
In October 1993, the Board of Directors approved management's suspension of
the defined benefit portion of the Company's retirement program. The
cumulative effect of this suspension through the second quarter of 1994 was a
benefit of $1.6 million after-tax. Due to the Company's method of annualizing
seed segment expenses, the full effects of this benefit ($2.3 million after
tax) were not recognized until nine months results were reported.
Financial Position
During the first half of fiscal 1995, net cash flow from operations was down
slightly from a year ago. Cash requirements for increased seed production
costs were offset by receipts from early cash discount programs.
Cash requirements for the first six months were provided by earnings and
existing short-term credit facilities. Committed credit lines include a $50
million revolving credit facility through December 31, 1997 and a $20 million
facility available through November 26, 1995. These agreements contain
various restrictions on the activities of the Company as to maintenance of
working capital and tangible net worth, amount and type of indebtedness, and
the acquisition or disposition of capital shares or assets of the Company and
its subsidiaries.
Management believes its operating cash flow and existing lines of credit are
sufficient to cover normal and expected working capital needs, capital
expenditures, dividends and debt maturities.
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<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended February 28, 1995 and 1994
(Dollars in millions except per share amounts)
(Unaudited)
February February
1995 1994
<S> <C> <C>
Revenues 148.4 143.0
Cost of revenues 74.2 80.1
GROSS MARGIN 74.2 62.9
Selling expenses 30.3 28.9
Research and development cost 18.7 18.5
General and administrative expense 8.4 4.5
57.4 51.9
OPERATING EARNINGS 16.8 11.0
Interest expense, net of interest income of
$0.1 in 1995. (2.1) (1.9)
Other expense, net (2.5) (0.5)
Earnings before income taxes and cumulative effect
of accounting change 12.2 8.6
Income tax provision 4.5 2.2
NET EARNINGS $ 7.7 $ 6.4
NET EARNINGS PER SHARE $ 1.48 $ 1.22
DIVIDENDS PER SHARE $ 0.20 $ 0.20
The accompanying notes are an integral part of the financial st
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<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the six months ended February 28, 1995 and 1994
(Dollars in millions except per share amounts)
(Unaudited)
February February
1995 1994
<S> <C> <C>
Revenues 197.6 183.8
Cost of revenues 103.5 101.6
GROSS MARGIN 94.1 82.2
Selling expenses 37.5 34.3
Research and development cost 24.8 23.8
General and administrative expense 14.3 8.7
76.6 66.8
OPERATING EARNINGS 17.5 15.4
Interest expense, net of interest income of
$0.2 in 1995 and $.1 in 1994 (4.2) (3.8)
Other expense, net (2.9) (1.1)
Earnings before income taxes and cumulative effect
of accounting change 10.4 10.5
Income tax provision 3.9 2.9
Earnings before cumulative effect of account 6.5 7.6
Cumulative effect of accounting change - (0.4)
NET EARNINGS $ 6.5 $ 7.2
Earnings per share before cumulative
effect of accounting change $ 1.25 $ 1.46
Accounting change - (0.09)
NET EARNINGS PER SHARE $ 1.25 $ 1.37
DIVIDENDS PER SHARE $ 0.20 $ 0.20
The accompanying notes are an integral part of the financial state
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<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
February 28, 1995 and 1994 and August 31, 1994
(Dollars in millions)
February February August
1995 1994 1994
(Unaudited)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $0.8 $0.2 $6.2
Notes and accounts receivable, net of allowance for
doubtful accounts of $2.5 at February 28, 1995, $2.2 at
February 28, 1994, and $2.4 at August 31, 1994 85.8 79.4 47.5
Inventories (Note 2) 120.9 117.5 100.8
Deferred income taxes 4.7 5.4 4.7
Other current assets 6.0 6.5 4.8
Total current assets 218.2 209.0 164.0
Investments in and advances to related companies 4.7 8.4 8.9
Intangible assets 40.6 41.9 41.3
Other assets 3.9 5.5 4.2
Property, plant and equipment, at cost 249.3 238.8 246.0
Less accumulated depreciation and amortization (148.3) (142.3) (145.4)
Net property, plant and equipment 101.0 96.5 100.6
Total assets $368.4 $361.3 $319.0
Current liabilities:
Notes payable $36.0 $51.0 $45.1
Accounts payable, trade 32.3 32.2 7.0
Other accounts payable 28.6 21.3 13.4
Other current liabilities 45.4 33.9 29.6
Total current liabilities 142.3 138.4 95.1
Deferred compensation and other credits 6.2 5.3 5.4
Deferred income taxes 11.5 12.9 12.2
Long-term debt, less current maturities 85.0 85.0 85.0
Commitments and contingent liabilities (Note 4)
Shareholders' equity:
Capital stock:
Common, Class A; authorized 5,000,000 shares 0.1 0.1 0.1
Common, Class B; authorized 15,000,000 shares 0.4 0.4 0.4
Capital in excess of stated value 80.5 80.0 80.1
Retained earnings 50.1 44.4 45.8
Currency translation adjustments (Note 3) (5.3) (2.8) (2.7)
125.8 122.1 123.7
Less treasury stock, at cost (2.4) (2.4) (2.4)
Total shareholders' equity 123.4 119.7 121.3
Total liabilities and shareholders' equity $368.4 $361.3 $319.0
The accompanying notes are an integral part of the financial statements.
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<CAPTION>
DEKALB Genetics Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended February 28, 1995 and 1994
(Dollars in millions)
(Unaudited)
February February
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $6.5 $7.2
Adjustments to reconcile net income to net cash
flow from operating activities:
Depreciation and amortization 5.8 6.1
Equity earnings, net of dividends 2.0 0.5
Cumulative effect of accounting change - 0.4
Provision for inventory valuation 7.0 6.1
Other (0.7) 1.0
Changes in assets and liabilities:
Receivables (39.0) (43.1)
Inventories (27.1) (5.4)
Other current assets (1.1) (2.7)
Accounts payable 40.6 41.2
Accrued expenses 12.7 2.2
Other assets and liabilities 4.1 (2.1)
Net cash flow from operating activities $10.8 $11.4
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (5.9) (8.6)
Proceeds from sale of property, plant and equipment 1.0 0.3
Other (0.5) (0.1)
Net cash flow from investing activities ($5.4) ($8.4)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments made on debt (9.1) (4.2)
Dividends paid (2.0) (2.0)
Other 0.3 0.1
Net cash flow from financing activities ($10.8) ($6.1)
Net effect of exchange rates on cash - (0.2)
Net decrease in cash and cash equivalents (5.4) (3.3)
Cash and cash equivalents August 31 6.2 3.5
Cash and cash equivalents at the end of February $0.8 $0.2
Supplemental Cash Flow Information
Cash paid during the period for:
Income taxes $1.3 $1.2
Interest $4.2 $3.6
The accompanying notes are an integral part of the financial statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The consolidated financial statements included herein are presented in
accordance with the requirements of Form 10-Q and consequently do not
include all of the disclosures normally required by generally accepted
accounting principles or those normally made in the Company's annual Form
10-K filing. In order to facilitate a better comparison of the highly
seasonal seed operations of the Company, a Condensed Consolidated Balance
Sheet at February 28, 1994 is included herein as part of the condensed
consolidated financial statements.
The results presented are unaudited (other than the Condensed Consolidated
Balance Sheet at August 31, 1994, which is derived from the Company's
audited year-end balance sheet) but include, in the opinion of management,
all adjustments of a normal recurring nature necessary for a fair
statement of the results of operations and financial position for the
respective interim periods.
Certain costs and expenses incurred in the North American and
international seed businesses are charged against income as sales are
recognized for interim reporting purposes. The Company believes this
method more closely matches revenues with expenses and results in more
comparability of reporting periods within the year. Since there are only
minor North American seed sales recorded in the first and fourth quarters,
this method defers first quarter expenses related to sales which will
occur later in the year, primarily in the second quarter; it also
anticipates expenses incurred in the fourth quarter, primarily in the
third quarter. Southern hemisphere international seed sales occur largely
in the first and second quarters and this same method anticipates future
expenses from the third and fourth quarters and matches them against the
first and second quarter revenues.
2. Inventories, valued at the lower of cost or market (in millions), were as
follows:
February February August
1995 1994 1994
Restated
Commercial seed $109.3 $104.7 $ 88.1
Commercial poultry and swine 8.1 8.5 8.9
Supplies and other 3.5 4.3 3.8
$120.9 $117.5 $100.8
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(continued)
During the third quarter of fiscal 1994, the Company changed the accounting
method of valuing its commercial seed inventories, previously valued using
the last-in, first-out (LIFO) method, to average cost. The change in
accounting method has been applied retroactively and financial information
for all periods presented has been restated to eliminate the effect of LIFO
on prior periods.
3. Effective in fiscal 1995, the Company accounts for translation of foreign
currency in countries formerly considered hyperinflationary in accordance
with Statement of Financial Accounting Standards No. 52 (SFAS No. 52),
"Foreign Currency Translation." Foreign-currency assets and liabilities
are translated into their U.S. dollar equivalents based on rates of
exchange prevailing at the end of the respective period. Translation
adjustments resulting from translating foreign currency financial
statements of consolidated subsidiaries into their U.S. dollar equivalents
are reported separately and accumulated in a separate component of
stockholders' equity. The following summarizes the activity in the
translation adjustment account:
(In millions)
February February
1995 1994
Balance at September 1 $(2.7) $(2.5)
Translation gain (loss) (2.6) (0.3)
Balance at end of February $(5.3) $(2.8)
Aggregate exchange gains and losses arising from the translation of foreign
currency transactions in other than the functional currency of the
particular entity are included in income.
4. The Company and its subsidiaries are defendants in various legal actions
arising in the course of business activities. In the opinion of
management, these actions will not result in a material adverse effect on
the Company's consolidated operations or financial position.
Most potential property losses are self-insured.
5. In October 1993, the Board of Directors approved management's suspension of
the defined benefit portion of the Company's retirement program. The
cumulative effect of this curtailment through the second quarter of 1994
was a benefit of $1.6 million after-tax. Due to the Company's method of
annualizing seed segment expenses, the full effects of this benefit ($2.3
million after tax) was not recognized until nine months results were
completed.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(continued)
6. Effective September 1, 1993, the Company changed its method of accounting
for income taxes by adopting the provisions of Statement of Financial
Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income Taxes".
SFAS 109 requires a change from the deferred method of accounting for
income taxes under APB Opinion 11 to the asset and liability method of
accounting for income taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the expected future
tax consequences attributable to differences between the financial
statement and tax bases of assets and liabilities using enacted tax rates
expected to apply in the years in which the temporary differences are
expected to reverse.
The adoption of SFAS 109 resulted in the recognition of $0.4 million, $.09
per share, of deferred tax expense. This amount was included as a charge
to net earnings as the cumulative effect of change in accounting principle
in the first quarter of fiscal 1994.
7. Certain corporate expense reclassifications have been made for
comparability purposes. These restatements had no effect on net earnings.
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Part II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company and its subsidiaries are defendants in various legal actions
arising in the course of business activities. In the opinion of
management, these actions will not result in a material adverse effect on
the Company's consolidated operations or financial position.
Item 4. Sumission of Matters to a Vote of Security Holders
The annual meeting of stockholders of the Company was held on Wednesday,
January 18, 1995. The stockholders elected four directors and the votes
were cast as follows:
For Withheld
Charles J. Arntzen 646,005 9,410
Bruce P. Bickner 646,010 9,405
John T. Roberts 646,033 9,382
H. Blair White 645,892 9,523
There were no abstentions or broker non-votes.
Item 6. Exhibits and Reports on Form 8-K Page
(a) Exhibit 10A - Employment Agreement between DEKALB Genetics
Corporation and Bruce P. Bickner 15-20
Exhibit 10B - Employment Agreement between DEKALB Genetics
Corporation and Rickard O. Ryan 21-26
Exhibit 10C - Employment Agreement between DEKALB Genetics
Corporation and John H. Witmer, Jr. 27-34
Exhibit 10D - Employment Agreement between DEKALB Genetics
Corporation and Roy L. Poage 35-40
Exhibit 11 - Computation of Net Earnings per Common and
Common Equivalent Share 41-42
(b) Reports on Form 8-K -
No Form 8-K was filed during the three months ended February 28, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DEKALB Genetics Corporation
Date: April 11, 1995 Thomas R. Rauman
(Signature)
Thomas R. Rauman
Vice President-Finance,
Chief Financial Officer
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EMPLOYMENT AND NON-COMPETITION AGREEMENT
1. This Agreement is effective September 1, 1994.
2. Employee is Bruce P. Bickner. The Company is DEKALB Genetics
Corporation and its subsidiaries and affiliates.
3. If this Agreement is not terminated in writing by either party prior to
any anniversary of its effective date, the Agreement shall extend for
another year.
4. Employee shall work for the Company in an executive capacity.
5. Employee shall perform the duties assigned by the Company ("Duties") at
such location(s) as the Company reasonably requires.
6. Employee shall devote full efforts during normal business hours to
Duties, and the Company shall receive all of the benefits related to
Duties.
7. Employee's annual compensation is described in Exhibit A. If the
Exhibit is not updated prior to an anniversary date, the terms of the
Exhibit shall continue until a new written Exhibit is agreed to by the
parties.
8. If Employee dies or becomes disabled and cannot perform Employee's
Duties with reasonable accommodation, Employee or employee's estate
shall receive an annual performance bonus equal to the target annual
performance bonus in effect at the Employee's death or date of
disability, prorated for the portion of the year up to the date of such
death or disability.
9. The Company will pay Employee's travel and other business expenses,
consistent with company policies and as supported by appropriate
documentation.
10. Other than in the normal course of Duties with the Company, Employee
will not at any time, during or after employment by the Company,
disclose any non-public information relating to the Company. Employee
agrees to treat as confidential all such information, whether written or
otherwise, including but not limited to, information regarding financial
reports, employees, customers, products, costs, prices, services,
research programs, patents, equipment, systems, production procedures,
operations, potential acquisitions, new location plans, prospective and
executed contracts and other business arrangements.
11. Upon termination of employment, Employee will return to the Company all
assets and all books, records, lists and other written materials,
including information in computers or computer disks, whether furnished
by the Company or prepared by the Employee, which contain any
information relating to the Company's business.
12. Employee shall make full and prompt written disclosure to the Company of
any business opportunity of which Employee becomes aware and which
relates to the business of the Company.
13. All inventions, discoveries, ideas, improvements and designs made or
conceived by Employee, and copyrights to all software, writings or other
materials prepared by Employee, in each case solely or with others,
while employed by the Company, during or after working hours, which are
related to the actual or anticipated business of the Company, belong
exclusively to the Company. Employee shall make full and prompt written
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disclosure to the Company of the above. At the request and expense of
the Company, either before or after termination of employment, Employee
shall execute a written assignment of and shall assist in acquiring and
maintaining patent or other proprietary information protection of the
Company's rights to such inventions, ideas, improvements, designs or
copyrights.
14. For three years after employment, Employee will not, in any way or
capacity, solicit any officer, director, employee or other individual:
A. to leave employment or any position with the Company,
B. to compete with the business of the Company, or
C. to violate the terms of any agreement with the Company.
15. For 24 months following termination of Employee's employment with
Company for any reason whatsoever, Employee will not, in any way or
capacity, participate in or have any employment, consultant, financial,
management or other interest in any business enterprise anywhere that
engages in or plans to engage in (either at the time of Employee's
termination and/or during the 24-month period following such
termination) significant or substantial competition with any business
conducted by the Company.
16. During the period set forth in paragraph 15, the Company shall (except
in the case of Employee's termination on account of death or inability
to perform Duties due to disability) pay Employee one month's base
salary and one-twelfth of Employee's target annual performance bonus
(both at the rate in effect on Employee's termination date) for every
one month during the period set forth in paragraph 15. The Company
shall not, however, be obligated to make such payments during any period
of time that Employee is in breach of paragraph 15 of this Agreement.
17. Payments by the Company to Employee pursuant to paragraph 16 shall be in
lieu of any other severance payments that may otherwise be due to
Employee. Payments pursuant to paragraph 16 shall not, however, be in
lieu of any compensation due Employee for Company's breach of this
Agreement (e.g., the Company's obligation to make salary and bonus
payments in the event of the Company's termination of Employee without
cause during the term of this Agreement or any annual extension
thereof).
18. Employee agrees that (a) both the duration and geographic scope of
paragraph 15 are necessary to reasonably and adequately protect the
Company's businesses, and (b) the compensation provided in paragraph 16
will adequately compensate Employee during transition to new employment
or other status.
19. Employee will not begin employment with another employer without first
giving at least thirty days notice to the Company. Prior to accepting
any new employment, Employee shall inform his new employer of the
existence of this Agreement and provide a copy hereof to such new
employer.
20. Except as otherwise provided in this Agreement, Employee's rights under
any employee benefit plan shall not be affected by this Agreement.
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21. Employee has received a copy of both the DEKALB Antitrust Compliance
Policy and the DEKALB Business Conduct Standards. Employee will adhere
to the policies and principles contained therein, and will require all
employees reporting to Employee to adhere to those policies and
principles.
22. The Company shall have the right, at its own expense and for its own
benefit, to take out life insurance on Employee in such amount or
amounts as it shall see fit, and Employee agrees to cooperate with the
Company in obtaining such insurance.
23. The Beneficiary Designation form attached hereto as Exhibit B is a part
of this Agreement. In the event of Employee's death when no beneficiary
designation is in effect, the Company shall make payment of any amounts
to which Employee was entitled to Employee's personal representative,
heirs, devisees or legatees. Employee may change Exhibit B at any time
by providing an amended version to the Personnel Department.
24. Without limiting the rights of the Company to pursue all other legal and
equitable rights available to the Company, it is agreed that: (a) the
Duties performed by Employee are of a special, unique, unusual and
extraordinary character which give them a peculiar value, and the loss
of such performance cannot be reasonably and adequately compensated in
damages in an action at law, and (b) remedies other than injunctive
relief cannot fully compensate the Company for violation of Paragraphs
10, 11, 12, 13, 14 or 15, of this Agreement; accordingly, the Company
shall be entitled to injunctive relief to prevent violations of such
paragraphs or continuing violations thereof. All of Employee's
covenants in and obligations under Paragraphs 10, 11, 12, 13, 14 and 15
of this Agreement shall continue in effect notwithstanding termination
of Employee's employment under any circumstances whatsoever.
25. If in any proceeding a term, geographic or other restriction, covenant
or promise contained herein is found to be unreasonable, unlawful or
otherwise invalid and for that reason unenforceable, then such term,
geographic or other restriction, covenant or promise shall automatically
be deemed modified to the extent necessary to make it enforceable.
26. This Agreement shall be binding upon the Company, its successors and
assigns and upon Employee, Employee's heirs, executors and
administrators. This Agreement may be assigned by the Company or
transferred by operation of law. Employee agrees that if the Company is
sold or Employee is transferred to a subsidiary or affiliate, or from
one subsidiary or affiliate to another, all terms and conditions of this
Agreement shall remain in force as if it initially had been made with
that purchaser, subsidiary or affiliate.
27. Notices contemplated by this Agreement shall be effective when delivered
in writing to the Company at 3100 Sycamore Road, DeKalb, IL 60115,
ATTN: General Counsel or to Employee at 11702 Deerpath Road, Sycamore,
IL 60178.
28. This Agreement, including Exhibits A and B as they may be amended from
time to time, all confidentiality agreements and all invention
assignment agreements signed by Employee during any employment with the
Company, contain the entire agreement between the parties hereto with
respect to the transactions contemplated herein; together they supersede
all prior negotiations and other agreements, both oral and written,
between the parties and they cannot be modified except by an instrument
in writing signed by both parties.
<PAGE>
<PAGE>
Employee
DEKALB Genetics Corporation
By:
<PAGE>
EMPLOYMENT AND NON-COMPETITION AGREEMENT
1. This Agreement is effective September 1, 1994.
2. Employee is Richard O. Ryan. The Company is DEKALB Genetics Corporation
and its subsidiaries and affiliates.
3. If this Agreement is not terminated in writing by either party prior to
any anniversary of its effective date, the Agreement shall extend for
another year.
4. Employee shall work for the Company in an executive capacity.
5. Employee shall perform the duties assigned by the Company ("Duties") at
such location(s) as the Company reasonably requires.
6. Employee shall devote full efforts during normal business hours to
Duties, and the Company shall receive all of the benefits related to
Duties.
7. Employee's annual compensation is described in Exhibit A. If the
Exhibit is not updated prior to an anniversary date, the terms of the
Exhibit shall continue until a new written Exhibit is agreed to by the
parties.
8. If Employee dies or becomes disabled and cannot perform Employee's
Duties with reasonable accommodation, Employee or employee's estate
shall receive an annual performance bonus equal to the target annual
performance bonus in effect at the Employee's death or date of
disability, prorated for the portion of the year up to the date of such
death or disability.
9. The Company will pay Employee's travel and other business expenses,
consistent with company policies and as supported by appropriate
documentation.
10. Other than in the normal course of Duties with the Company, Employee
will not at any time, during or after employment by the Company,
disclose any non-public information relating to the Company. Employee
agrees to treat as confidential all such information, whether written or
otherwise, including but not limited to, information regarding financial
reports, employees, customers, products, costs, prices, services,
research programs, patents, equipment, systems, production procedures,
operations, potential acquisitions, new location plans, prospective and
executed contracts and other business arrangements.
11. Upon termination of employment, Employee will return to the Company all
assets and all books, records, lists and other written materials,
including information in computers or computer disks, whether furnished
by the Company or prepared by the Employee, which contain any
information relating to the Company's business.
12. Employee shall make full and prompt written disclosure to the Company of
any business opportunity of which Employee becomes aware and which
relates to the business of the Company.
13. All inventions, discoveries, ideas, improvements and designs made or
conceived by Employee, and copyrights to all software, writings or other
materials prepared by Employee, in each case solely or with others,<PAGE>
<PAGE>
while employed by the Company, during or after working hours, which are
related to the actual or anticipated business of the Company, belong
exclusively to the Company. Employee shall make full and prompt written
disclosure to the Company of the above. At the request and expense of
the Company, either before or after termination of employment, Employee
shall execute a written assignment of and shall assist in acquiring and
maintaining patent or other proprietary information protection of the
Company's rights to such inventions, ideas, improvements, designs or
copyrights.
14. For three years after employment, Employee will not, in any way or
capacity, solicit any officer, director, employee or other individual:
A. to leave employment or any position with the Company,
B. to compete with the business of the Company, or
C. to violate the terms of any agreement with the Company.
15. For 24 months following termination of Employee's employment with
Company for any reason whatsoever, Employee will not, in any way or
capacity, participate in or have any employment, consultant, financial,
management or other interest in any business enterprise anywhere that
engages in or plans to engage in (either at the time of Employee's
termination and/or during the 24-month period following such
termination) significant or substantial competition with any business
conducted by the Company.
16. During the period set forth in paragraph 15, the Company shall (except
in the case of Employee's termination on account of death or inability
to perform Duties due to disability) pay Employee one month's base
salary and one-twelfth of Employee's target annual performance bonus
(both at the rate in effect on Employee's termination date) for every
one month during the period set forth in paragraph 15. The Company
shall not, however, be obligated to make such payments during any period
of time that Employee is in breach of paragraph 15 of this Agreement.
17. Payments by the Company to Employee pursuant to paragraph 16 shall be in
lieu of any other severance payments that may otherwise be due to
Employee. Payments pursuant to paragraph 16 shall not, however, be in
lieu of any compensation due Employee for Company's breach of this
Agreement (e.g., the Company's obligation to make salary and bonus
payments in the event of the Company's termination of Employee without
cause during the term of this Agreement or any annual extension
thereof).
18. Employee agrees that (a) both the duration and geographic scope of
paragraph 15 are necessary to reasonably and adequately protect the
Company's businesses, and (b) the compensation provided in paragraph 16
will adequately compensate Employee during transition to new employment
or other status.
19. Employee will not begin employment with another employer without first
giving at least thirty days notice to the Company. Prior to accepting
any new employment, Employee shall inform his new employer of the
existence of this Agreement and provide a copy hereof to such new
employer.
20. Except as otherwise provided in this Agreement, Employee's rights under
any employee benefit plan shall not be affected by this Agreement.
<PAGE>
<PAGE>
21. Employee has received a copy of both the DEKALB Antitrust Compliance
Policy and the DEKALB Business Conduct Standards. Employee will adhere
to the policies and principles contained therein, and will require all
employees reporting to Employee to adhere to those policies and
principles.
22. The Company shall have the right, at its own expense and for its own
benefit, to take out life insurance on Employee in such amount or
amounts as it shall see fit, and Employee agrees to cooperate with the
Company in obtaining such insurance.
23. The Beneficiary Designation form attached hereto as Exhibit B is a part
of this Agreement. In the event of Employee's death when no beneficiary
designation is in effect, the Company shall make payment of any amounts
to which Employee was entitled to Employee's personal representative,
heirs, devisees or legatees. Employee may change Exhibit B at any time,
by providing an amended version to the Personnel Department.
24. Without limiting the rights of the Company to pursue all other legal and
equitable rights available to the Company, it is agreed that: (a) the
Duties performed by Employee are of a special, unique, unusual and
extraordinary character which give them a peculiar value, and the loss
of such performance cannot be reasonably and adequately compensated in
damages in an action at law, and (b) remedies other than injunctive
relief cannot fully compensate the Company for violation of Paragraphs
10, 11, 12, 13, 14 or 15, of this Agreement; accordingly, the Company
shall be entitled to injunctive relief to prevent violations of such
paragraphs or continuing violations thereof. All of Employee's
covenants in and obligations under Paragraphs 10, 11, 12, 13, 14 and 15
of this Agreement shall continue in effect notwithstanding termination
of Employee's employment under any circumstances whatsoever.
25. If in any proceeding a term, geographic or other restriction, covenant
or promise contained herein is found to be unreasonable, unlawful or
otherwise invalid and for that reason unenforceable, then such term,
geographic or other restriction, covenant or promise shall automatically
be deemed modified to the extent necessary to make it enforceable.
26. This Agreement shall be binding upon the Company, its successors and
assigns and upon Employee, Employee's heirs, executors and
administrators. This Agreement may be assigned by the Company or
transferred by operation of law. Employee agrees that if the Company is
sold or Employee is transferred to a subsidiary or affiliate, or from
one subsidiary or affiliate to another, all terms and conditions of this
Agreement shall remain in force as if it initially had been made with
that purchaser, subsidiary or affiliate.
27. Notices contemplated by this Agreement shall be effective when delivered
in writing to the Company at 3100 Sycamore Road, DeKalb, IL 60115,
ATTN: General Counsel or to Employee at 135 Thornbrook, DeKalb, IL
60115.
28. This Agreement, including Exhibits A and B as they may be amended from
time to time, all confidentiality agreements and all invention
assignment agreements signed by Employee during any employment with the
Company, contain the entire agreement between the parties hereto with
respect to the transactions contemplated herein; together they supersede
all prior negotiations and other agreements, both oral and written,
between the parties and they cannot be modified except by an instrument
in writing signed by both parties.
<PAGE>
<PAGE>
Employee
DEKALB Genetics Corporation
By:
<PAGE>
EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective September 1, 1993, and made by and
between John H. Witmer, Jr. ("Employee") and DEKALB Genetics Corporation, a
Delaware corporation (the "Company").
WHEREAS, Employee is a key employee of the Company and he
acknowledges that Employee's talents and services to the Company are of a
special, unique, unusual and extraordinary character and are of particular and
peculiar benefit and importance to the Company; and
WHEREAS, the Company desires to obtain assurances that the Employee
will devote Employee's best efforts to Employee's employment with the Company,
that he will not compete with the Company and that he will not solicit other
employees of the Company to terminate their relationships with the Company;
and
WHEREAS, Employee is willing, in consideration for Employee's
employment with the Company, to provide the Company with such assurances and
to enter into and carry out this Agreement;
NOW, THEREFORE, the parties agree as follows:
1. Employment. The Company agrees to employ Employee in an executive
capacity as an officer of the Company, and Employee agrees to be so employed
by the Company, for a term commencing September 1, 1993, and ending on August
31, 1994, subject, however, to prior termination as provided herein. In the
event the Company terminates Employee's employment on or before August 31,
1994 or any August 31st thereafter for other than cause, Employee shall, in
addition to amounts otherwise due and owing under this Agreement and in lieu
of any other severance pay to which Employee may be entitled, be entitled to
termination pay which shall equal twelve (12) months base salary beginning
with the next September 1 following such termination. In the event the
Company does not give the Employee notice of termination of this Agreement on
or before August 31, 1994 or any August 31st thereafter, the contract will be
extended for an additional one year period beginning September 1, 1994, or any
September 1st thereafter.
2. Best Efforts and Other Employment of Employee.
A. Employee agrees that he will at all times faithfully,
industriously and to the best of Employee's ability, experience and talents,
perform all of the duties that may be required of and from Employee pursuant
to the express and implicit terms hereof to the reasonable satisfaction of the
Company. Such duties shall be rendered at DeKalb, Illinois or at such other
place or places within or without the State of Illinois as the Company shall
in good faith require or as the interest, needs, business, or opportunities of
the Company shall require.
B. Employee shall devote Employee's normal and regular business
time, attention, knowledge and skill to the business and interests of the
Company, and the Company shall be entitled to all of the benefits, profits or
other issue arising from or incident to all work, services and advice of
Employee performed for the Company. It is acknowledged that Employee will
also be serving for his own account as Vice-President and General Counsel of
DEKALB Energy Company. Employee shall have the right to make investments in
businesses which engage in activities other than those engaged in by the
Company from time to time. Employee shall also have the right to devote such
incidental and immaterial amounts of Employee's time which are not required
<PAGE>
<PAGE>
for the full and faithful performance of Employee's duties hereunder to any
outside activities and businesses which are not being engaged in by the
Company and which shall not otherwise interfere with the performance of
Employee's duties hereunder.
3. Annual Compensation.
A. (1). The compensation to be paid for the services to be
rendered by Employees shall be as described in
Exhibit A , hereto. The payment of all such
amounts, including the payment of all severance
obligations, if any, shall constitute full
satisfaction and discharge of the obligations of
the Company under this Agreement, but without
prejudice to Employee's rights under any employee
benefit plan or incentive compensation plan
provided by the Company.
(2). Since this Agreement shall remain in effect until
amended or terminated, a new Exhibit A shall be
prepared, signed by the parties and attached to
this Agreement on a yearly basis. This Agreement
and the applicable Exhibit A shall be treated as
one agreement.
B. If Employee voluntarily terminates Employee's employment
with the Company, Employee shall not be entitled to, and shall not receive,
the cash bonus, if any, referred to in Exhibit A if he did not work for the
entire fiscal year. If Employee should die or become disabled and unable to
perform Employee's duties on or before August 31, 1994, or any applicable
subsequent August 31, he shall receive a cash bonus equal to the cash bonus he
would have received had he worked for the entire fiscal year multiplied times
a fraction, the numerator of which equals the number of months transpiring
between September 1, 1993, or any applicable subsequent September 1, and the
last day of the month during which the death or disability occurred, and the
denominator of which is twelve.
C. The Company shall pay Employees reasonable airline fares,
hotel bills and other necessary and proper expenses when traveling on, or
otherwise performing, the Company's business, provided that Employee furnishes
the Company with appropriate supporting documentation of such expenses.
4. Termination for Cause. Employee shall be deemed to have been
terminated by the Company for cause if he is terminated because of Employee's
acts or conduct which would make it unreasonable to require the Company to
retain Employee in its employment, such as, but not limited to, embezzlement
or misappropriation of corporate funds, other acts of dishonesty, improper
disclosure of any information concerning any matter affecting or relating to
the Company or the business of the Company, activities harmful to the
reputation of the Company, refusal to perform or neglect of the substantive
duties properly assigned to Employee, a violation of any contractual,
statutory or common law duty of loyalty to the Company or breach of any of the
provisions of this Agreement. If Employee is terminated for cause, he shall
be entitled to no severance pay and shall be entitled to no bonus payment that
might otherwise be owed to Employee even if he worked for the entire year.
5. Solicitation of Employees. For a period of three (3) years after
he is no longer employed by the Company, the Employee will not, directly, or
indirectly, either as an individual, proprietor, stockholder, partner,
officer, director, employee or otherwise, solicit any officer, director,
employee or other individual:
A. to leave his or her employment or position with the Company,
<PAGE>
<PAGE>
B. to compete with the business of the Company, or
C. to violate the terms of any employment, noncompetition or
similar agreement with the Company.
For purposes of this Paragraph 5, references to the business of the
Company shall include the business of any subsidiary or affiliate of the
Company.
6. Confidentiality. The Employee will not at any time during or after
Employee's employment by the Company, directly or indirectly, divulge,
disclose or communicate to any person, firm or corporation in any manner
whatsoever, other than in the normal course of performing Employee's duties
for the Company, any information concerning any matter affecting or relating
to the Company or the business of the Company. While engaged as an employee
of the Company, the Employee may only use information concerning any matters
affecting or relating to the Company or the business of the Company for a
purpose which is necessary to the carrying out of the Employee's duties as an
employee of the Company, and the Employee may not make use of any information
of the Company after he is no longer an employee of the Company. The Employee
agrees to the foregoing without regard to whether all of the foregoing matters
will be deemed confidential, material or important, it being stipulated by the
parties that all information, whether written or otherwise, regarding the
Company's business, including but not limited to, information regarding
customers, customer lists, employees, employee salaries, costs, prices,
earnings, any financial or cost accounting reports, products, services,
research programs, pedigrees, formulae, compositions, patents, machines,
equipment, apparatus, systems, manufacturing or production procedures,
operations, potential acquisitions, new location plans, prospective and
executed contracts and other business arrangements, and sources of supply, is
presumed to be important, material and confidential information of the Company
for purposes of this Agreement, except to the extent that such information may
be otherwise lawfully and readily available to the general public. Employee
agrees that all such information is a trade secret owned exclusively by the
Company which shall at all times be kept confidential. The Employee further
agrees that he will, upon termination of Employee's employment with the
Company, return to the Company all books, records, lists and other written,
typed or printed materials, including information in computers or computer
disks, whether furnished by the Company or prepared by the Employee, which
contain any information relating to the Company's business, and the Employee
agrees that he will neither make nor retain any copies of such materials after
termination of employment. For purposes of this Paragraph 6, references to
the business or information of or relating to the Company shall include the
information or business of any subsidiary or affiliate of the Company.
7. Business Opportunities and Inventions.
A. Employee shall make full and prompt written disclosure to
the Company or its nominee of any business opportunity of which he becomes
aware and which relates to the business of the Company or any of its
subsidiaries or affiliates; and
B. (1) Employee will make full and prompt written
disclosure to the Company or its nominee of all inventions, discoveries,
developments, improvements and innovations ("Inventions") whether patentable
or not, conceived or made by Employee, either solely or in concert with others
during the period of Employee's employment with the Company, including, but
not limited to, any period prior to the date of this Agreement, whether or not
made or conceived during working hours which:
<PAGE>
<PAGE>
(a) relate in any manner to the existing or
contemplated business or research
activities of the Company, or
(b) are suggested by or result from
Employee's work at the Company, or
(c) result from the use of the Company's
time, materials or facilities,
and Employee acknowledges that all such Inventions shall be the exclusive
property of the Company.
(2) Employee hereby assigns to the Company Employee's
entire right, title and interest to all such Inventions which are the property
of the Company under the provisions of Subparagraph 7(B)(1) of this Agreement
and to all unpatented Inventions generated during the period of Employee's
employment with the Company which he now owns and Employee will, at the
Company's request and expense, execute specific assignments to any such
Inventions and execute, acknowledge and deliver such other documents and take
such further action as may be considered necessary by the Company at any time
during or subsequent to the period of Employee's employment with the Company
to obtain and defend letters patent in any and all countries and to vest title
in such Inventions in the Company or its assigns.
(3) Employee agrees that an Invention conceived by
Employee or described in a patent application filed by Employee or on
Employee's behalf within twelve months following the period of Employee's
employment with the Company shall be presumed to have been conceived or made
by Employee during the period of Employee's employment with the Company unless
proven to have been conceived and made by Employee following the termination
of employment with the Company. For purposes of this Subparagraph 7(B)(3),
witnessed documentation of the Invention shall constitute such proof and shall
shift the burden of proof concerning the time of conception of such Invention
to the Company.
8. Noncompetition Covenant.
A. Employee covenants and agrees that for a period extending
from the effective date of this Agreement and until that date which is
eighteen (18) months after the effective date of the termination of Employee's
employment with the Company hereunder (whether such termination shall have
been voluntary or involuntary on the part of the Employee), Employee will not
(without the prior written consent of the Company) directly or indirectly,
either individually or as an employee, agent, partner, shareholder, director,
officer, consultant or in any other capacity, participate in or have a
financial, management or other interest in any business enterprise anywhere in
the world that engages in (or within eighteen (18) months of the termination
of Employee's employment has plans to engage in) substantial and direct
competition with any business operation actively conducted by the Company or
it subsidiaries or affiliates, or any of their successors or assigns, if the
Employee actively participated in such business operation of the Company or
had awareness of such business operation of the Company during Employee's
employment. The ownership of less than one percent of the outstanding debt or
equity in a corporation whose shares are traded on a recognized stock exchange
or in the over-the-counter market, even though that corporation may be a
competitor of the Company or any of its affiliates or subsidiaries, shall not
constitute a breach of this Agreement.
B. The Company acknowledges that it would be appropriate to
compensate Employee during the period of time between the effective date of
Employee's termination of Employee's employment with the Company and the end
of the noncompetition period. To that end, the Company shall pay Employee one
<PAGE>
<PAGE>
month's base pay (at the rate in effect on Employee's termination date) for
every one month during the noncompetition period; provided that, the Company
shall make no payment to Employee pursuant to this Subparagraph 8(B) for any
month during which a payment can be deemed to have been paid pursuant to
Paragraph 1, above.
C. Employee acknowledges and agrees that the period of time and
the geographic scope specified with respect to Employee's aforesaid covenant
not to compete is the minimum period of time and geographic area necessary to
reasonably and adequately protect the Company and its affiliates in the
continued operation of their business and affairs, and in the use and
enjoyment of their assets, properties and property rights. Employee further
acknowledges that the compensation provided in Subparagraph 8(B) hereof will
adequately compensate Employee during his transition to new employment.
D. If and to the extent that any part of the noncompetition
covenant set forth above shall be deemed by the court in which a suit is
brought to be unenforceable as written, by reason of it scope in terms of area
or length of time, but may be made enforceable by reducing the area or period
of time applicable to such covenant, Employee and the Company stipulate and
agree that such covenant shall automatically be deemed to be amended for all
purposes of such suit so as to incorporate the aforesaid reduction in area, or
duration of time, or both, to the end that such covenant, as modified in
connection with such suit, shall be enforceable to the fullest extent
permissible in such jurisdiction.
E. Employee and the Company acknowledge that there may be times
when the Company may consider it to be appropriate to waive all or part of the
agreement that Employee not compete with the Company. In such event, the
Company may, at its option, waive all or part of the time period specified in
Subparagraph 8(A) during which Employee is not permitted to complete. The
compensation provided in Subparagraph 8(B) shall be reduced to the same extent
as the noncompetition period is reduced; provided that this reduction in
compensation shall not reduce the compensation which may be owed to Employee
pursuant to Paragraph 1.
9. Resolution of Disputes Regarding Termination. Employee shall not
initiate legal proceedings against the Company, or any of its directors,
officers, employees, agents or representatives relating in any way to this
Agreement, to Employee's employment with the Company, or the termination of
Employee's employment until 30 days after the Company receives written notice
from Employee of the specific nature of any purported claim against the
Company and the amount of any purported damages. Employee further agrees that
if the Company submits Employee's claim to the Center for Public Resources,
680 Fifth Avenue, New York, New York 10019, for nonbinding mediation prior to
the expiration of such 30 day period, Employee may not institute legal
proceedings against the Company until the earlier of: a) the completion of
nonbinding mediation efforts, or b) 90 days after the date on which the
Company received written notice of Employee's claim. Employee and the Company
agree that all mediation sessions shall take place in Chicago or in such other
place as Employee and the Company mutually agree.
10. Early Termination. In the event Employee's employment shall end
with the Company prior to the termination date provided herein, or in the
event Employee shall act in violation of the provisions of Paragraphs 5, 6, 7
or 8 of this Agreement or otherwise breach this Agreement, Employee shall be
subject to any and all of the penalties contained in, or legal and equitable
remedies available to the Company resulting from, this Agreement.
11. Modification. If, in any action before any court or agency legally
empowered to enforce such covenants, any term, restriction, covenant or
promise contained herein is found to be unreasonable, unlawful or otherwise
<PAGE>
<PAGE>
invalid and for that reason unenforceable, then such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to make
it enforceable by such court or agency.
12. Remedies; Survival of Employee's Covenants. Without limiting the
rights of the Company to pursue all other legal and equitable rights available
to them for any violation of the covenants of Employee herein, it is agreed
that: (a) the services to be rendered by Employee under this Agreement are of
a special, unique, unusual and extraordinary character which give them a
peculiar value, and the loss of such services cannot be reasonably and
adequately compensated in damages in an action at law, and (b) remedies other
than injunctive relief cannot fully compensate the Company for violation of
Paragraphs 5, 6, 7 or 8 of this Agreement; accordingly, the Company shall be
entitled to injunctive relief to prevent violations of such paragraphs or
continuing violations thereof. All of Employee's covenants in and obligations
under Paragraphs 5, 6, 7 and 8 of this Agreement shall continue in effect
notwithstanding any termination of Employee's employment, whether by the
Company or by Employee, upon expiration or otherwise, and whether or not
pursuant to the terms of this Agreement.
13. Life Insurance. The Company shall have the right, at its own
expense and for its own benefit, to take out life insurance on Employee in
such amount or amounts as it shall see fit, and Employee agrees to cooperate
with the Company in obtaining such insurance.
14. Designation of Beneficiary. Employee may, by written instrument
delivered to the Company, designate a beneficiary or beneficiaries to receive
any payments to which he may be entitled under Paragraph 3 which become
payable following Employee's death, and may at any time or from time to time
change such designated beneficiary by similar written instrument, and the
Company shall be fully protected in making any such payments to such
designated beneficiary. In the event of Employee's death when no such
beneficiary designation is in effect, the Company shall make payment of any
amounts to which Employee was entitled following Employee's death to
Employee's personal representative, heirs, devisees or legatees.
15. DEKALB Antitrust Compliance Policy and Business Conduct Standards.
Employee acknowledges that he has received a copy of both the DEKALB Antitrust
Compliance Policy and the DEKALB Business Conduct Standards adopted by the
Board of Directors of DEKALB at its meeting on May 15, 1990. Employee shall
to the best of Employee's belief and ability, adhere to the policies and
principles contained therein, and will require all appropriate employees
reporting to Employee to adhere to those policies and principles.
16. Successors and Assigns; Parties in Interest. This Agreement shall
be binding upon the Company, its successors and assigns and upon Employee,
Employee's heirs, executors and administrators.
17. Notices. Notices contemplated by this Agreement shall be in
writing and shall be deemed given when delivered in person or mailed
registered first class mail postage prepaid, to the Company at 3100 Sycamore
Road, DeKalb, IL 60115 or to Employee at 2575 Greenwood Acres Drive, DeKalb,
IL 60115.
18. Integration. This Agreement, including Exhibit A as it may be
amended from time to time, as well as all confidentiality agreements signed by
Employee during his employment with the Company, contain the entire agreement
between the parties hereto with respect to the transactions contemplated
herein, supercedes all prior negotiations and agreements, both oral and
written, between the parties and cannot be amended, supplemented or modified
except by an instrument in writing signed by all parties.
<PAGE>
<PAGE>
19. Headings. The headings in this Agreement are inserted for
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, this Agreement is entered into effective as of
the date set forth above.
DEKALB Genetics Corporation
By:
Employee
<PAGE>
<PAGE>
EMPLOYMENT AND NON-COMPETITION AGREEMENT
1. This Agreement is effective September 1, 1994.
2. Employee is Roy L. Poage. The Company is DEKALB Genetics Corporation
and its subsidiaries and affiliates.
3. If this Agreement is not terminated in writing by either party prior to
any anniversary of its effective date, the Agreement shall extend for
another year.
4. Employee shall work for the Company in an executive capacity.
5. Employee shall perform the duties assigned by the Company ("Duties") at
such location(s) as the Company reasonably requires.
6. Employee shall devote full efforts during normal business hours to
Duties, and the Company shall receive all of the benefits related to
Duties.
7. Employee's annual compensation is described in Exhibit A. If the
Exhibit is not updated prior to an anniversary date, the terms of the
Exhibit shall continue until a new written Exhibit is agreed to by the
parties.
8. If Employee dies or becomes disabled and cannot perform Employee's
Duties with reasonable accommodation, Employee or employee's estate
shall receive an annual performance bonus equal to the target annual
performance bonus in effect at the Employee's death or date of
disability, prorated for the portion of the year up to the date of such
death or disability.
9. The Company will pay Employee's travel and other business expenses,
consistent with company policies and as supported by appropriate
documentation.
10. Other than in the normal course of Duties with the Company, Employee
will not at any time, during or after employment by the Company,
disclose any non-public information relating to the Company. Employee
agrees to treat as confidential all such information, whether written or
otherwise, including but not limited to, information regarding financial
reports, employees, customers, products, costs, prices, services,
research programs, patents, equipment, systems, production procedures,
operations, potential acquisitions, new location plans, prospective and
executed contracts and other business arrangements.
11. Upon termination of employment, Employee will return to the Company all
assets and all books, records, lists and other written materials,
including information in computers or computer disks, whether furnished
by the Company or prepared by the Employee, which contain any
information relating to the Company's business.
12. Employee shall make full and prompt written disclosure to the Company of
any business opportunity of which Employee becomes aware and which
relates to the business of the Company.
13. All inventions, discoveries, ideas, improvements and designs made or
conceived by Employee, and copyrights to all software, writings or other
materials prepared by Employee, in each case solely or with others,
<PAGE>
<PAGE>
while employed by the Company, during or after working hours, which are
related to the actual or anticipated business of the Company, belong
exclusively to the Company. Employee shall make full and prompt written
disclosure to the Company of the above. At the request and expense of the
Company, either before or after termination of employment, Employee shall
execute a written assignment of and shall assist in acquiring and maintaining
patent or other proprietary information protection of the Company's rights to
such inventions, ideas, improvements, designs or copyrights.
14. For three years after employment, Employee will not, in any way or
capacity, solicit any officer, director, employee or other individual:
A. to leave employment or any position with the Company,
B. to compete with the business of the Company, or
C. to violate the terms of any agreement with the Company.
15. For 18 months following termination of Employee's employment with
Company for any reason whatsoever, Employee will not, in any way or
capacity, participate in or have any employment, consultant, financial,
management or other interest in any business enterprise anywhere that
engages in or plans to engage in (either at the time of Employee's
termination and/or during the 18 month period following such
termination) significant or substantial competition with any business
conducted by the Company involving the producing, distributing or
marketing of hybrid or specialized breeding swine or conducting or
administering any research activities relating to hybrid or specialized
breeding swine.
16. During the period set forth in paragraph 15, the Company shall (except
in the case of Employee's termination on account of death or inability
to perform Duties due to disability) pay Employee one month's base
salary and one-twelfth of Employee's target annual performance bonus
(both at the rate in effect on Employee's termination date) for every
one month during the period set forth in paragraph 15. The Company
shall not, however, be obligated to make such payments during any period
of time that Employee is in breach of paragraph 15 of this Agreement.
17. Payments by the Company to Employee pursuant to paragraph 16 shall be in
lieu of any other severance payments that may otherwise be due to
Employee. Payments pursuant to paragraph 16 shall not, however, be in
lieu of any compensation due Employee for Company's breach of this
Agreement (e.g., the Company's obligation to make salary and bonus
payments in the event of the Company's termination of Employee without
cause during the term of this Agreement or any annual extension
thereof).
18. Employee agrees that (a) both the duration and geographic scope of
paragraph 15 are necessary to reasonably and adequately protect the
Company's businesses, and (b) the compensation provided in paragraph 16
will adequately compensate Employee during transition to new employment
or other status.
19. Employee will not begin employment with another employer without first
giving at least thirty days notice to the Company. Prior to accepting
any new employment, Employee shall inform his new employer of the
existence of this Agreement and provide a copy hereof to such new
employer.
<PAGE>
<PAGE>
20. Except as otherwise provided in this Agreement, Employee's rights under
any employee benefit plan shall not be affected by this Agreement.
21. Employee has received a copy of both the DEKALB Antitrust Compliance
Policy and the DEKALB Business Conduct Standards. Employee will adhere
to the policies and principles contained therein, and will require all
employees reporting to Employee to adhere to those policies and
principles.
22. The Company shall have the right, at its own expense and for its own
benefit, to take out life insurance on Employee in such amount or
amounts as it shall see fit, and Employee agrees to cooperate with the
Company in obtaining such insurance.
23. The Beneficiary Designation form attached hereto as Exhibit B is a part
of this Agreement. In the event of Employee's death when no beneficiary
designation is in effect, the Company shall make payment of any amounts
to which Employee was entitled to Employee's personal representative,
heirs, devisees or legatees. Employee may change Exhibit B at any time,
by providing an amended version to the Personnel Department.
24. Without limiting the rights of the Company to pursue all other legal and
equitable rights available to the Company, it is agreed that: (a) the
Duties performed by Employee are of a special, unique, unusual and
extraordinary character which give them a peculiar value, and the loss
of such performance cannot be reasonably and adequately compensated in
damages in an action at law, and (b) remedies other than injunctive
relief cannot fully compensate the Company for violation of Paragraphs
10, 11, 12, 13, 14 or 15, of this Agreement; accordingly, the Company
shall be entitled to injunctive relief to prevent violations of such
paragraphs or continuing violations thereof. All of Employee's
covenants in and obligations under Paragraphs 10, 11, 12, 13, 14 and 15
of this Agreement shall continue in effect notwithstanding termination
of Employee's employment under any circumstances whatsoever.
25. If in any proceeding a term, geographic or other restriction, covenant
or promise contained herein is found to be unreasonable, unlawful or
otherwise invalid and for that reason unenforceable, then such term,
geographic or other restriction, covenant or promise shall automatically
be deemed modified to the extent necessary to make it enforceable.
26. This Agreement shall be binding upon the Company, its successors and
assigns and upon Employee, Employee's heirs, executors and
administrators. This Agreement may be assigned by the Company or
transferred by operation of law. Employee agrees that if the Company is
sold or Employee is transferred to a subsidiary or affiliate, or from
one subsidiary or affiliate to another, all terms and conditions of this
Agreement shall remain in force as if it initially had been made with
that purchaser, subsidiary or affiliate.
27. Notices contemplated by this Agreement shall be effective when delivered
in writing to the Company at 3100 Sycamore Road, DeKalb, IL 60115,
ATTN: General Counsel or to Employee at 11578 Deerpath Road, Sycamore,
IL 60178.
28. This Agreement, including Exhibits A and B as they may be amended from
time to time, all confidentiality agreements and all invention
assignment agreements signed by Employee during any employment with the
Company, contain the entire agreement between the parties hereto with
respect to the transactions contemplated herein; together they supersede
<PAGE>
<PAGE>
all prior negotiations and other agreements, both oral and written,
between the parties and they cannot be modified except by an instrument
in writing signed by both parties.
Employee
DEKALB Genetics Corporation
By:
<PAGE> EXHIBIT 11
COMPUTATION OF NET EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
For the six months ended February 28, 1995 and 1994
February February
1995 1994
PRIMARY EARNINGS PER SHARE:
Shares
Average shares outstanding 5,151,754 5,139,520
Net average additional shares outstanding
assuming dilutive stock options exercised
and proceeds used to purchase treasury stock
at average market price 72,799 69,851
Average number of common and common
equivalent shares outstanding 5,224,553 5,209,371
Net Earnings
Net earnings for primary earnings per share $6,534,000 $7,169,000
Primary Earnings Per Share $1.25 $1.37
<PAGE>
<PAGE> EXHIBIT 11
COMPUTATION OF NET EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
For the three months ended February 28, 1995 and 1994
February February
1995 1994
PRIMARY EARNINGS PER SHARE:
Shares
Average shares outstanding 5,154,976 5,140,055
Net average additional shares outstanding
assuming dilutive stock options exercised
and proceeds used to purchase treasury stock
at average market price 65,621 84,082
Average number of common and common
equivalent shares outstanding 5,220,597 5,224,137
Net Earnings
Net earnings for primary earnings per share $7,717,000 $6,416,000
Primary Earnings Per Share $1.48 $1.22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Operations and the Consolidated Balance Sheets and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> FEB-28-1995
<CASH> 800
<SECURITIES> 0
<RECEIVABLES> 88300
<ALLOWANCES> 2500
<INVENTORY> 120900
<CURRENT-ASSETS> 218200
<PP&E> 249300
<DEPRECIATION> 148300
<TOTAL-ASSETS> 368400
<CURRENT-LIABILITIES> 142300
<BONDS> 0
<COMMON> 500
0
0
<OTHER-SE> 122900
<TOTAL-LIABILITY-AND-EQUITY> 368400
<SALES> 197600
<TOTAL-REVENUES> 197600
<CGS> 103500
<TOTAL-COSTS> 37500
<OTHER-EXPENSES> 39100
<LOSS-PROVISION> 2900
<INTEREST-EXPENSE> 4200
<INCOME-PRETAX> 10400
<INCOME-TAX> 3900
<INCOME-CONTINUING> 6500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6500
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 0
</TABLE>
