-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, V4unWjm9mNLlfuoWjeFWHM5aPLvdhQV8xYZoVxoVt7nOsI8CPx+d+9K8SDGeZbfN 2+g9+hvlfppsuB/LbtxFBQ== 0000950114-95-000150.txt : 19950803 0000950114-95-000150.hdr.sgml : 19950803 ACCESSION NUMBER: 0000950114-95-000150 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950802 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONSANTO CO CENTRAL INDEX KEY: 0000067686 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 430420020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02516 FILM NUMBER: 95558479 BUSINESS ADDRESS: STREET 1: 800 N LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 BUSINESS PHONE: 3146941000 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 10-Q 1 MONSANTO COMPANY 10-Q 1 ======================================================================== FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 1-2516 ------ MONSANTO COMPANY ---------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 43-0420020 -------- ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 800 NORTH LINDBERGH BLVD., ST. LOUIS, MISSOURI 63167 ---------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (314) 694-1000 -------------- (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING TWELVE MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO --- ---- INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
OUTSTANDING AT CLASS JUNE 30, 1995 ----- ------------- COMMON STOCK, $2 PAR VALUE 115,269,781 SHARES -------------------------- ------------------
======================================================================== 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The Statement of Consolidated Income of Monsanto Company and subsidiaries for the three months and six months ended June 30, 1995 and 1994, the Statement of Consolidated Financial Position as of June 30, 1995 and December 31, 1994, the Statement of Consolidated Cash Flow for the six months ended June 30, 1995 and 1994 and related Notes to Financial Statements follow. In the opinion of management, these unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported. Unless otherwise indicated by the context, "Monsanto" means Monsanto Company and consolidated subsidiaries, and "the Company" means Monsanto Company only. MONSANTO COMPANY AND SUBSIDIARIES STATEMENT OF CONSOLIDATED INCOME (DOLLARS IN MILLIONS, EXCEPT PER SHARE)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, --------------------- --------------------- 1995 1994 1995 1994 ---- ---- ---- ---- Net Sales.................................................... $2,482 $2,269 $4,800 $4,270 Cost of Goods Sold........................................... 1,358 1,224 2,682 2,332 ------ ------ ------ ------ Gross Profit................................................. 1,124 1,045 2,118 1,938 Marketing Expenses........................................... 325 326 621 602 Administrative Expenses...................................... 143 137 301 264 Technological Expenses....................................... 181 165 335 316 Amortization of Intangible Assets............................ 30 20 55 40 ------ ------ ------ ------ Operating Income............................................. 445 397 806 716 Interest Expense............................................. (54) (35) (96) (67) Interest Income.............................................. 17 13 28 19 Other Income (Expense)-Net................................... 7 1 14 2 ------ ------ ------ ------ Income Before Income Taxes................................... 415 376 752 670 Income Taxes................................................. 125 118 233 218 ------ ------ ------ ------ Net Income................................................... $ 290 $ 258 $ 519 $ 452 ------ ------ ------ ------ Earnings per Share........................................... $ 2.51 $ 2.19 $ 4.53 $ 3.82 ------ ------ ------ ------ Dividends per Share.......................................... $ 0.68 $ 0.63 $ 1.31 $ 1.21 ------ ------ ------ ------ Weighted Average Number of Common and Common Equivalent Shares (in millions)........................................ 114.4 118.5 ------ ------
1 3 MONSANTO COMPANY AND SUBSIDIARIES STATEMENT OF CONSOLIDATED FINANCIAL POSITION (DOLLARS IN MILLIONS, EXCEPT PER SHARE)
JUNE 30, DECEMBER 31, 1995 1994 -------- ------------ ASSETS Current Assets: Cash and cash equivalents.................................................................. $ 278 $ 507 Trade receivables, net of allowances of $48 in 1995 and $57 in 1994........................ 2,264 1,530 Miscellaneous receivables and prepaid expenses............................................. 390 313 Deferred income tax benefit................................................................ 337 321 Inventories................................................................................ 1,373 1,212 ------- ------- Total Current Assets................................................................... 4,642 3,883 ------- ------- Property, Plant and Equipment................................................................ 7,689 7,555 Less Accumulated Depreciation................................................................ 4,681 4,738 ------- ------- Net Property, Plant and Equipment.......................................................... 3,008 2,817 ------- ------- Investments in Affiliates.................................................................... 528 279 Intangible Assets, net of accumulated amortization of $577 in 1995 and $522 in 1994................................................................................ 1,832 1,134 Other Assets................................................................................. 804 778 ------- ------- Total Assets................................................................................. $10,814 $ 8,891 ------- ------- LIABILITIES AND SHAREOWNERS' EQUITY Current Liabilities: Accounts payable........................................................................... $ 786 $ 629 Accrued liabilities........................................................................ 1,389 1,494 Short-term debt............................................................................ 1,173 312 ------- ------- Total Current Liabilities.............................................................. 3,348 2,435 ------- ------- Long-Term Debt............................................................................... 1,696 1,405 Deferred Income Taxes........................................................................ 65 65 Postretirement Liabilities................................................................... 1,368 1,341 Other Liabilities............................................................................ 817 697 Shareowners' Equity: Common stock (authorized, 200,000,000 shares, par value $2) Issued, 164,394,194 shares in 1995 and 1994.............................................. 329 329 Additional contributed capital........................................................... 854 849 Treasury stock, at cost (51,112,308 shares in 1995 and 52,859,031 shares in 1994).............................................................. (2,656) (2,744) Reserve for ESOP debt retirement........................................................... (189) (199) Net unrealized investment holding gains (losses)........................................... (3) 19 Accumulated currency adjustment............................................................ 153 33 Reinvested earnings........................................................................ 5,032 4,661 ------- ------- Total Shareowners' Equity.............................................................. 3,520 2,948 ------- ------- Total Liabilities and Shareowners' Equity.................................................... $10,814 $ 8,891 ------- -------
2 4 MONSANTO COMPANY AND SUBSIDIARIES STATEMENT OF CONSOLIDATED CASH FLOW (DOLLARS IN MILLIONS)
SIX MONTHS ENDED JUNE 30, ------------------------ 1995 1994 ---- ---- Increase (Decrease) in Cash and Cash Equivalents Operating Activities: Net income................................................................................. $ 519 $ 452 Add income taxes........................................................................... 233 218 ------- ----- Income before income taxes................................................................. 752 670 Adjustments to reconcile to Cash Provided by Operations: Income tax payments...................................................................... (201) (123) Items that did not use cash: Depreciation and amortization.......................................................... 292 271 Other.................................................................................. 18 27 Working capital changes that provided (used) cash: Accounts receivable.................................................................... (672) (622) Inventories............................................................................ (111) 15 Accounts payable and accrued liabilities............................................... (119) (176) Other.................................................................................. (12) 83 Other items.............................................................................. 71 30 ------- ----- Total Cash Provided by Operations............................................................ 18 175 ------- ----- Investing Activities: Property, plant and equipment purchases.................................................... (209) (155) Acquisition of Kelco....................................................................... (1,062) Investment payments........................................................................ (93) (65) Investment and property disposal proceeds.................................................. 30 142 ------- ----- Cash Used in Investing Activities............................................................ (1,334) (78) ------- ----- Financing Activities: Net change in short-term financing......................................................... 861 156 Long-term debt proceeds.................................................................... 654 41 Long-term debt reductions.................................................................. (372) (74) Treasury stock purchases................................................................... (149) Dividend payments.......................................................................... (148) (142) Other financing activities................................................................. 92 67 ------- ----- Cash Provided by (Used in) Financing Activities.............................................. 1,087 (101) ------- ----- Decrease in Cash and Cash Equivalents........................................................ (229) (4) Cash and Cash Equivalents: Beginning of year.......................................................................... 507 273 ------- ----- End of period.............................................................................. $ 278 $ 269 ------- -----
The effect of exchange rate changes on cash and cash equivalents was not material. Cash payments for interest (net of amounts capitalized) were $88 million in 1995 and $66 million in 1994. 3 5 MONSANTO COMPANY AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (DOLLARS IN MILLIONS) 1. On February 20, 1995, Monsanto completed its acquisition of the worldwide business of Kelco, the specialty chemicals division of Merck and Co., Inc., for a purchase price of approximately $1,075 million. The acquisition was accounted for as a purchase and, accordingly, the results of operations for Kelco were included in the Statement of Consolidated Income from the date of acquisition. The estimated fair value of assets acquired and liabilities assumed totaled approximately $1.15 billion and $75 million, respectively. The allocation of purchase price is based on preliminary assumptions and is subject to revision. The excess of the purchase price over the estimated fair value of net assets acquired is being amortized over 30 years. On an unaudited, proforma basis, assuming the acquisition of Kelco had occurred at the beginning of 1994, net sales, net income and earnings per share for the three months and six months ended June 30, 1995 and 1994 would not have been significantly different from the reported amounts. In conjunction with the acquisition of Kelco, Monsanto issued approximately $975 million in commercial paper. Monsanto has the ability and intent to renew a certain portion of these obligations past June 1996 and into future periods or replace these borrowings with long- or intermediate-term debt. Accordingly, commercial paper balances of $400 million as of June 30, 1995, have been classified as long-term. On April 5, 1995, Monsanto issued $150 million in 8.20% debentures due 2025. The proceeds were used to pay down commercial paper balances related to the Kelco acquisition. 2. In December 1994, Monsanto agreed to merge its rubber chemicals and instruments businesses with the rubber chemicals business of Akzo Nobel N. V. to form a 50/50 joint venture. In the first quarter of 1995, final governmental approvals were granted and on April 12, 1995, the joint venture, known as Flexsys L.P., was formed. The joint venture began operations on May 1, 1995. Accordingly, Monsanto's share of Flexsys' earnings after that date were reflected in "Other Income (Expense)- Net" in the Statement of Consolidated Income. Upon formation, each partner agreed to bear the one-time cost to integrate its contribution into the operations of the joint venture. For Monsanto, this cost totaled a pretax charge of $40 million ($25 million aftertax, or $0.22 per share), primarily for the cost of workforce reductions related to approximately 120 people and for special termination benefits for approximately 300 people transferring employment from Monsanto to the joint venture. This reserve was recorded in the first quarter in cost of goods sold in the Statement of Consolidated Income. 3. In March 1995, Monsanto received payments from several insurance- related settlements with Talegen Holdings, Inc. (previously Crum & Forster, Inc.) and several related entities. The settlements resulted in a $40 million gain ($25 million aftertax, or $0.22 per share). The settlements were recorded in cost of goods sold in the Statement of Consolidated Income. 4. In June 1995, Monsanto announced that it had signed a letter of intent to acquire a 49.9 percent interest in Calgene, Inc. ("Calgene") for approximately $30 million in cash, certain intellectual property, and 100 percent of the partnership interest in Gargiulo L.P. and Gargiulo G.P. (jointly, "Gargiulo"). In addition, Monsanto will provide long-term credit facilities for the general business needs of Calgene and Gargiulo. The transaction is subject to the approval of the shareowners of Calgene and is expected to close in the fourth quarter of 1995. In July 1995, Searle reached agreement with a major Japanese pharmaceutical company to co-develop and co-market xemilofiban, an anti-platelet agent, in Japan. Under the terms of the agreement, Searle will receive a significant licensing fee in the third quarter of 1995. Upon the achievement of certain developmental milestones, additional payments will be made to Searle by the other party. 5. Earnings per share were computed using the weighted average number of common shares and common share equivalents outstanding each period (114,441,704 and 118,517,416 in 1995 and 1994, respectively). Common share equivalents (2,258,313 and 2,566,435 in 1995 and 1994, respectively) consist of common stock issuable upon exercise of outstanding stock options. Earnings per share assuming full dilution were not significantly different from the primary amounts. 4 6 MONSANTO COMPANY AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (CONTINUED) 6. Components of inventories at June 30, 1995 and December 31, 1994 were as follows:
JUNE 30, DECEMBER 31, 1995 1994 -------- ------------ Finished goods............................................. $ 848 $ 751 Goods in process........................................... 315 285 Raw materials and supplies................................. 490 459 ------ ------ Inventories, at FIFO cost.................................. 1,653 1,495 Excess of FIFO over LIFO cost.............................. (280) (283) ------- ------- Total.................................................... $1,373 $1,212 ------ ------
7. On April 20, 1994, a federal court jury verdict was returned against Monsanto in a lawsuit related to a Superfund site in La Marque, Texas. The lawsuit was brought by IT Corporation ("IT"), a subsidiary of International Technology Corporation, claiming fraud, negligent misrepresentation and breach of a contract calling for IT to perform incineration and remediation work at the site. On May 5, 1995, the trial court entered judgment for IT in the amount of $63.2 million, representing compensatory damages for breach of contract and $19.4 million in prejudgment interest. In addition, IT was awarded $2.6 million in attorneys' fees. On July 31, 1995, the Company entered a settlement agreement with IT for $41.1 million. This amount will be reported as a one-time pretax charge in the Company's third quarter results. Monsanto is a party to a number of lawsuits and claims, which it is vigorously defending. Such matters arise out of the normal course of business and relate to product liability, government regulation including environmental issues, and other issues. Certain of the lawsuits and claims seek damages in very large amounts. While the results of litigation cannot be predicted with certainty, management believes, based upon the advice of Company counsel, that the final outcome of such litigation will not have a material adverse effect on Monsanto's consolidated financial position, profitability or liquidity in any one year. 8. Segment data for the three months and six months ended June 30, 1995 and 1994 were as follows:
THREE MONTHS ENDED JUNE 30, ----------------------------------------------------------- 1995 1994 -------------------------- -------------------------- OPERATING OPERATING NET INCOME NET INCOME SALES (LOSS) SALES (LOSS) ----- -------- ----- -------- Segment: Agricultural Products...................................... $ 849 $291 $ 753 $260 Chemicals.................................................. 938 93 926 103 Pharmaceuticals............................................ 402 30 370 (3) Food Ingredients........................................... 293 48 220 53 Corporate.................................................. (17) (16) ------ ----- ------ ----- Total........................................................ $2,482 $445 $2,269 $397 ------ ---- ------ ----
5 7 MONSANTO COMPANY AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SIX MONTHS ENDED JUNE 30, ----------------------------------------------------------- 1995 1994 -------------------------- -------------------------- OPERATING OPERATING NET INCOME NET INCOME SALES (LOSS) SALES (LOSS) ----- -------- ----- -------- Segment: Agricultural Products...................................... $1,602 $527 $1,388 $466 Chemicals.................................................. 1,912 188 1,779 188 Pharmaceuticals............................................ 788 47 713 5 Food Ingredients........................................... 498 76 390 86 Corporate.................................................. (32) (29) ------ ----- ------ ----- Total........................................................ $4,800 $806 $4,270 $716 ------ ---- ------ ----
As of February 1, 1995, Monsanto created a new organization structure that assigns primary business responsibilities to individual business units. As a result of those changes and the acquisition of Kelco, Monsanto has realigned its segment structure. The Food Ingredients segment now reflects the operations of the following business units: NutraSweet Consumer Products, comprised of Equal(R), Canderel(R), and NutraSweet(R) Spoonful(TM) tabletop sweeteners, and other consumer products; NutraSweet Ingredient, comprised of NutraSweet(R) brand sweetener and other consumer products; and Kelco. The Pharmaceutical segment reflects the operations of Searle, after the transfer of the Canderel(R) tabletop sweetener business to NutraSweet Consumer Products. Segment information for prior periods has been reclassified to conform to the current presentation. Financial information for the first six months of 1995 should not be annualized. Monsanto's sales and operating income are historically higher during the first half of the year, primarily because of the concentration of generally more profitable sales from the Agricultural Products segment in the first half of the year. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Note 8 of the Notes to Financial Statements indicates operating results by operating unit, including the concentration of the generally more profitable sales of Agricultural Products in the first half of the year. RESULTS OF OPERATIONS-SECOND QUARTER 1995 COMPARED WITH THE SECOND QUARTER 1994 Net income for the second quarter of 1995 was $290 million, or $2.51 per share, compared with net income of $258 million, or $2.19 per share, in the second quarter of last year. Net sales of $2,482 million were 9 percent higher than the comparable figure in 1994. Net sales for Agricultural Products increased 13 percent versus sales for the same period last year to a record level of $849 million. The increase was primarily driven by higher sales volumes of Roundup(R) herbicide which reflects strong demand, both domestically and in key worldwide markets, resulting from expanding conservation tillage practices and favorable weather conditions, on balance, in many key markets. Partially offsetting the increase were lower sales of lawn-and-garden products of the Solaris group which were negatively impacted by unusually wet weather conditions in the western U.S., which is a large consumer market, and inventory adjustments at both the distributor and retailer levels. Operating income for the segment was up $31 million, or 12 percent, over the prior year, also a quarterly record, fueled primarily by the sales increase and a favorable sales mix. Net sales for Chemicals increased slightly over its second quarter performance last year. Net sales in the second quarter of 1995 and 1994 include those from the Company's rubber chemicals and instruments 6 8 businesses through April 30, 1995. The Flexsys L.P. joint venture began operations on May 1, 1995. Excluding the sales of these businesses for both 1994 and 1995, Chemicals' sales for the second quarter of 1995 would have increased 8 percent over those in the comparable period last year, primarily because of higher sales prices. Operating income declined 10 percent to $93 million as a result of increased raw material costs. While selective pricing actions have been taken, worldwide competitive conditions limited the ability to fully pass on the raw material price increases. Pharmaceutical net sales for the quarter increased 9 percent, or $32 million over the second quarter of 1994. This strong performance was primarily the result of increased sales of Ambien(R), a short-term treatment for insomnia, and Daypro(R) and Arthrotec(R) arthritis treatments, which more than offset the effect of significantly lower sales of Calan(R), a calcium channel blocker. As a result, operating income increased by $33 million over the same period last year to a second quarter record of $30 million. Food Ingredient net sales for the second quarter of 1995 were up 33 percent over the same period last year; however, 1995 results include sales from the recently acquired Kelco business. Excluding these sales, net sales for Food Ingredients were down slightly, as sales of tabletop products were lower than the same period a year earlier reflecting the timing of shipments to key customers. Operating income declined $5 million versus the second quarter of 1994 to $48 million as a result of the lower tabletop sales and higher marketing expenses, offset somewhat by modest income from Kelco. Interest expense for Monsanto increased because of higher short-term debt levels in 1995 associated with the Kelco acquisition. RESULTS OF OPERATIONS-FIRST SIX MONTHS 1995 COMPARED WITH FIRST SIX MONTHS 1994 Net income for the first six months of 1995 was $519 million, or $4.53 per share, compared with net income of $452 million, or $3.82 per share, in the first six months of last year. Net sales of $4,800 million were 12 percent higher than the comparable figure in 1994. Net sales for Agricultural Products increased 15 percent, or $214 million, during the first six months of 1995 compared to the same period in 1994. Net sales in 1995 benefited from higher worldwide sales volumes of Roundup(R) herbicide and higher sales of acetanilide-based herbicide products such as Harness(R) and Harness(R) Xtra. However, these factors were partially offset by lower sales of lawn-and-garden products of the Solaris group. Operating income in 1995 increased $61 million, or 13 percent, compared with the results for the first six months of 1994, primarily due to increased sales of herbicide products. The increase in operating income was partially offset by the effect of the lower sales for Solaris. Net sales for Chemicals increased 7 percent compared with those in the same period last year. Net sales for the first half of 1995 and 1994 include those from the Company's rubber chemicals and instruments businesses through April 30, 1995. The Flexsys L.P. joint venture began operations on May 1, 1995. Excluding sales from these businesses for both 1994 and 1995, Chemicals' sales for the first half of 1995 would have increased 11 percent over those in the comparable period last year, principally the result of higher sales prices for plastics and for fibers. The sales increase was partially offset by lower sales to automotive producers in the U.S. and Western Europe. Operating income for the segment of $188 million was even with the results for the first six months of 1994. Operating income benefited from the effect of the higher sales prices and higher capacity utilization, but was hurt by the effect of higher raw material costs. Competitive pressures on a worldwide basis, however, have limited the ability to fully recover the increased costs through increased prices. Pharmaceutical sales for the first half of 1995 increased 11 percent, or $75 million, compared to the first six months of 1994. The sales increase can be attributed to sales of key growth products Ambien(R), Daypro(R) and Arthrotec(R). Partially offsetting this increase were significantly lower sales of Calan(R). Operating income improved significantly in the first half of 1995 compared to the first half of 1994 on the strength of increased sales, partially offset by European new-product launch costs and the impact of lower Calan(R) sales. Net sales for Food Ingredients increased $108 million in the first half of 1995 compared to the first half of 1994. However, sales in 1995 include sales from the Kelco business. After excluding these sales, net sales for 7 9 Food Ingredients declined slightly versus the same period in 1994 primarily due to lower sales volumes. Operating income for the period decreased 12 percent, partially offset by modest Kelco income, primarily the result of lower sales volumes and higher marketing expenses. For Monsanto, marketing and administrative expenses for the first half of 1995 were higher than the comparable period in 1994, primarily because of higher costs associated with various employee incentive programs and new-product launch costs for Pharmaceuticals. Interest expense increased because of higher short-term debt levels in 1995 related to the Kelco acquisition. CHANGES IN FINANCIAL CONDITION-JUNE 30, 1995 COMPARED WITH DECEMBER 31, 1994 Working capital at June 30, 1995 decreased to $1,294 million from $1,448 million at December 31, 1994, primarily because of higher short- term debt related to the Kelco acquisition offset, in part, by a seasonal increase in trade receivables. The current ratio was 1.4 at June 30, 1995 and 1.6 at year-end 1994. The percent of total debt to total capitalization increased to 45 percent at June 30, 1995 versus 37 percent at year-end 1994 because of the increase in debt related to the Kelco acquisition. The Statement of Consolidated Financial Condition at June 30, 1995 includes the estimated fair value of assets acquired and liabilities assumed of Kelco, totaling approximately $1.15 billion and $75 million, respectively. The allocation of purchase price is based on preliminary assumptions and is subject to revision. The increase in intangibles is primarily due to the excess of the Kelco purchase price over the estimated fair value of net assets acquired. The increase in investments in affiliates is primarily due to the Company's investment in the Flexsys L.P. joint venture. Cash provided by operations totaled a net $18 million for the first six months of 1995, compared with $175 million for the comparable period in 1994. The decrease in cash flow from operations resulted primarily from higher seasonal working capital requirements for Agricultural Products. Investing activities in 1995 used $1,334 million, principally for the purchase of Kelco. The increase in short-term financing was primarily due to short-term debt incurred to finance the Kelco acquisition and higher seasonal working capital levels for Agricultural Products. Monsanto has filed with the Securities and Exchange Commission a shelf registration statement for the issuance of up to $300 million of debt securities, the proceeds of which are intended for general corporate purposes. Management continues to expect that cash provided by operations, supplemented by periodic borrowings, will be adequate to fund its future operating requirements. 8 10 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company's Report on Form 10-K for the year ended December 31, 1994, and the Company's Report on Form 10-Q for the period ended March 31, 1995, described a lawsuit filed by IT Corporation, a remediation contractor at the MOTCO site, an 11-acre waste site in La Marque, Texas. On July 31, 1995, the Company entered a settlement agreement with IT for $41.1 million. The Company's Report on Form 10-K for the year ended December 31, 1994, and the Company's Report on Form 10-Q for the quarter ended March 31, 1995, described a number of product liability lawsuits arising out of the sales by G. D. Searle & Co. ("Searle"), a subsidiary of the Company acquired in 1985, of the Cu-7(R), an intrauterine device. As of June 30, 1995, there were approximately 40 cases pending in various U.S. state and federal courts. Searle believes it has meritorious defenses and is vigorously defending each of these lawsuits. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Company's Annual Meeting of Stockholders on April 28, 1995, two matters were submitted to a vote of stockholders. 1. The following directors were elected, each to hold office until the next Annual Meeting or until a successor is elected and has qualified or until his or her earlier death, resignation, or removal. Votes were cast as follows:
VOTES VOTES "WITHHOLD NAME "FOR" AUTHORITY" ---- ----- ---------- Joan T. Bok................................................ 98,981,539 1,074,848 Robert M. Heyssel.......................................... 99,025,944 1,030,443 Gwendolyn S. King.......................................... 98,899,510 1,156,877 Philip Leder............................................... 97,963,510 2,092,877 Howard M. Love............................................. 98,999,671 1,056,716 Richard J. Mahoney......................................... 98,741,647 1,314,740 Frank A. Metz, Jr.......................................... 99,027,144 1,029,243 Buck Mickel................................................ 98,918,116 1,138,271 Jacobus F. M. Peters....................................... 98,998,537 1,057,850 Nicholas L. Reding......................................... 99,004,473 1,051,914 John S. Reed............................................... 98,362,681 1,693,706 William D. Ruckelshaus..................................... 99,054,060 1,002,327 Robert B. Shapiro.......................................... 98,937,961 1,118,426 John B. Slaughter.......................................... 99,009,083 1,047,304
2. The appointment by the Board of Directors of Deloitte & Touche LLP as principal independent auditors for the year 1995 was ratified by the stockholders. A total of 98,972,788 votes were cast in favor of ratification, a total of 600,203 votes were cast against it, and a total of 483,396 votes were counted as abstentions. Brokers were permitted to vote on the election of directors and ratification of auditors in the absence of instructions from street- name holders; therefore, broker non-votes did not occur. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits-See the Exhibit Index at page 11 of this report. (b) No reports on Form 8-K were filed by the Company during the quarter ended June 30, 1995. 9 11 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MONSANTO COMPANY --------------------------------- (Registrant) BRUCE R. SENTS ...................................... Bruce R. Sents Vice President and Controller (On behalf of the Registrant and as Principal Accounting Officer) Date: August 2, 1995 10 12 EXHIBIT INDEX These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.
EXHIBIT NUMBER DESCRIPTION ------ ----------- 2 Omitted - Inapplicable 4 Omitted - Inapplicable 10 Searle Phantom Stock Option Plan of 1986, as amended in 1990, 1991, 1992 and 1995 11 Omitted - Inapplicable; see Note 5 of Notes to Financial Statements on page 4 12 Statement re Computation of the Ratio of Earnings to Fixed Charges-See Exhibit 99 below 15 Omitted - Inapplicable 18 Omitted - Inapplicable 19 Omitted - Inapplicable 22 Omitted - Inapplicable 23 Consent of Company Counsel 24 Omitted - Inapplicable 27 Financial Data Schedule 99 Computation of the Ratio of Earnings to Fixed Charges for Monsanto Company and Subsidiaries
11 13 APPENDIX TO FORM 10-Q Throughout the narrative of the printed Form 10-Q, trademarks are designated on each page by the letter "R" in a circle or by the letters "TM". EX-10 2 STOCK OPTION PLAN 1 EXHIBIT 10 SEARLE MONSANTO STOCK OPTION PLAN OF 1986 ARTICLE I. GENERAL PROVISIONS SECTION 1. PURPOSES. The SEARLE MONSANTO STOCK OPTION PLAN OF 1986 ("Plan") is designed to attract and retain for the Company and its Subsidiaries personnel of exceptional ability; to motivate such personnel through added incentives to make a maximum contribution to greater profitability; to develop and maintain a highly competent management team; and to be competi- tive with other pharmaceutical companies in the executive compen- sation area. SECTION 2. DEFINITIONS. Except where the context otherwise indicates, the following definitions apply: "Associated Company" means any corporation (or partner- ship, joint venture, or other enterprise) of which the Company owns or controls, directly or indirectly, 10% or more, but less than 50% of the outstanding shares of stock normally entitled to vote for the election of directors (or comparable equity partici- pation and voting power), but which is not a Subsidiary. "Board" means Board of Directors of the Company. "Committee" means the Special Stock Option Grant Committee and, to the extent delegated by the Special Stock Option Grant Committee, the ECDC. "Company" means Monsanto Company, a Delaware corpora- tion. "ECDC" means any Committee consisting of one or more senior managers of the Company or its Subsidiaries, or its permitted delegate. "Effective Date" means October 24, 1986. "Eligible Participant" means any officer or other salaried employee (including a director who is a salaried employee) of the Company or a Subsidiary. "Fair Market Value" means, with respect to any given day, the average of the highest and lowest sales prices of the Shares reported as the New York Stock Exchange-Composite Trans- actions for such day, or if the Shares were not traded on such day, then on the next preceding day on which the Shares were traded, all as reported by such source as the Committee may select. "Monsanto" means Monsanto Company, a Delaware corpora- tion. "Participant" means an Eligible Participant to whom a Stock Option, Stock Appreciation Right, or Restricted Stock Grant (as those terms are hereinafter defined) has been granted. 2 "Restricted Shares" means Shares that were made subject to restrictions in accordance with Article III of this Plan. "Shares" means shares of $2 par value common stock of Monsanto, and any shares of stock or other securities received as a result of a Share adjustment as set forth in Section 4 of this Article I. "Special Stock Option Grant Committee" means the Executive Compensation and Development Committee of the Board. "Stock Appreciation Right" means a right referred to in Section 4 of Article II of this Plan. "Stock Appreciation Right Fair Market Value" or "SAR Fair Market Value" shall mean a value established by the Commit- tee for the exercise of a Stock Appreciation Right. If such exercise occurs during any quarterly "window period" as specified by Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended from time to time, or any law, rule, regulation or other provision that may hereafter replace such Rule, the Committee may establish a common value for exercises during such window period. "Stock Option" or "Option" means a non-qualified stock option granted pursuant to this Plan. "Subsidiary" means any corporation (or partnership, joint venture, or other enterprise) (i) of which the Company owns or controls, directly or indirectly, 50% or more of the outstand- ing shares of stock normally entitled to vote for the election of directors (or comparable equity participation and voting power) or (ii) which the Company otherwise controls (by contract or any other means). "Control" means the power to direct or cause the direction of the management and policies of a corporation, partnership, joint venture, or other enterprise. "Termination of Employment" means the discontinuance of employment of a Participant for any reason other than a Transfer. "Transfer" means a change of employment of a Partici- pant within the group consisting of the Company, its Subsidiaries and Associated Companies and Monsanto, its subsidiaries and associated companies. SECTION 3. ADMINISTRATION. (a) This Plan shall be administered by the Special Stock Option Grant Committee except that the Special Stock Option Grant Committee may delegate a portion of the administration of this Plan to the ECDC as set forth in paragraph (b) below. (b) The Special Stock Option Grant Committee shall have the exclusive right to interpret this Plan and to select the persons who are to receive Stock Options, Stock Appreciation Rights and Restricted Stock Grants under this Plan, including, without 3 limitation, the determination of the number of Shares to be subject to and the form, terms, conditions and duration of each Stock Option, Stock Appreciation Right and Restricted Stock Grant and the amendment thereof, consistent with the provisions of this Plan; provided, however, that the Special Stock Option Grant Committee may delegate to the ECDC (and may authorize further delegation by the ECDC to senior managers of the Company and its Subsidiaries) the right to select those persons who are not offi- cers or directors of Monsanto (as defined in Section 16(b) of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission issued pursuant to such Act) who are to receive Options, Stock Appreciation Rights and Restricted Stock Grants under this Plan, including, without limitation, the determination of the number of Shares to be subject to and the form, terms, conditions and duration of each Option, Stock Appreciation Right and Restricted Stock Grant granted to such Participants (and the amendment thereof), consistent with the provisions of this Plan, and to authorize payment in respect of an Option (pursuant to Article II, Section 1(c)) or a Stock Appreciation Right (pursuant to Article II, Section 4(c), (e) and (f)), involving such a Participant. All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, includ- ing the severability of any and all of the provisions hereof, shall be conclusive, final and binding upon all Participants. No person shall be eligible for the grant of an Award under this Plan while serving as a member of the Special Stock Option Grant Committee. (c) The Committee may adopt and amend, from time to time, rules and regulations of general application for the administra- tion of this Plan, including terms and conditions related to the receipt and exercise of Options, Stock Appreciation Rights and Restricted Stock Grants. Such rules and regulations may include, at the Committee's discretion, the provision by the Company of loans for the purpose of financing the exercise of Options, and the amount of taxes payable in connection therewith. (d) Without limiting the foregoing Sections 3(a), (b) and (c) of this Article I (and notwithstanding any other provisions of this Plan), the Committee is authorized to take such action as it determines to be necessary or advisable, and fair and equit- able to Participants, with respect to Options, Stock Appreciation Rights and Restricted Stock Grants in the event of: a merger of Monsanto with, consolidation of Monsanto into, or the acquisition of Monsanto by, another corporation; a sale or transfer of all or substantially all of the assets of Monsanto to another corpora- tion or any other person or entity; a tender or exchange offer for Shares made by any corporation, person or entity (other than Monsanto); or other reorganization in which Monsanto will not survive as an independent, publicly owned corporation. Such action may include (but shall not be limited to) establishing, amending or waiving the forms, terms, conditions and duration of Stock Options, Stock Appreciation Rights and Restricted Stock Grants so as to provide for earlier, later, extended or addition- al times for exercise or payments, differing methods for calcu- 4 lating payments, alternate forms and amounts of payment, or other modifications. The Committee may take such actions pursuant to this Section 3(d) by adopting rules and regulations of general applicability to all Participants or to certain categories of Participants, by including, amending or waiving terms and condi- tions in Option, Stock Appreciation Right and Restricted Stock grants, or by taking action with respect to individual Partici- pants. The Committee may take such actions as part of the grants or before or after the public announcement of any such merger, consolidation, acquisition, sale or transfer of assets, tender or exchange offer or other reorganization. SECTION 4. SHARE ADJUSTMENTS. In the event that at any time or from time to time a stock dividend, stock split, recapitalization, merger, consolidation, or other change in capitalization, or a sale by Monsanto of all or part of its assets, or any distribution to shareholders other than a cash dividend results in (a) the outstanding Shares, or any securities exchanged therefor or received in their place, being exchanged for a different number or class of shares of stock or other securities of Monsanto, or for shares of stock or other securi- ties of any other corporation; or (b) new, different or addition- al shares or other securities of Monsanto or of any other corpo- ration being received by the holders of outstanding Shares, then: (i) the limitation of 1,500,000 Shares set forth in Section 1(a) of Article II and in Article III of this Plan; (ii) the number and class of Shares (A) that may be subject to Stock Options, Stock Appreciation Rights or Restricted Stock Grants and (B) which have not been issued or transferred under Stock Options, Stock Appreciation Rights or Restricted Stock Grants; and (iii) the purchase price to be paid per Share under unexercised Stock Options and the number of Shares to be trans- ferred in settlement of outstanding Stock Appreciation Rights; shall in each case be equitably adjusted as determined by the Committee in its sole discretion. ARTICLE II. PLAN SECTION 1. OPTION SHARES. (a) (i) The total number of Shares for which Options may be granted under this Plan shall not exceed 1,500,000 Shares, subject to: (A) the adjustments provided for in Section 4 of Article I of this Plan; (B) the provisions of Section 1(b) of this Article II; and (C) reduction by the number of shares committed or awarded pursuant to Article III of this Plan. Such Shares may be authorized but unissued Shares, or treasury Shares, or both. Options may be granted for restricted or unrestricted Shares. 5 (ii) The total number of Shares for which Options may be granted under this Plan to any one Eligible Participant shall not exceed in any one calendar year 5% of the total number of Shares for which Options may be granted under this Plan, subject to the adjustments provided for in Section 4 of Article I of this Plan. (b) In the event that any unexercised Stock Option granted hereunder lapses or ceases to be exercisable for any reason other than a surrender of the Option pursuant to Section 1(c) of this Article II or the exercise of a Stock Appreciation Right under Section 4 of this Article II, the Shares subject to such Option shall again be available for Option grants under this Plan without again being charged against the limitation of 1,500,000 Shares set forth in Section 1(a) of this Article II. Any amend- ment of any Option or Stock Appreciation Right by the Committee pursuant to Article I, Section 3 of this Plan shall not be considered the grant of a new Option. (c) In the event of Termination of Employment for death, disability, hardship or unusual circumstances as determined by the Committee, the Committee may, with the consent of the Parti- cipant or his or her legal representative, authorize payment, in cash or in Shares, or partly in cash and partly in Shares, as the Committee may direct, of an amount equal to the difference at the time between the Fair Market Value of the Shares subject to an Option and the Option exercise price in consideration of the surrender of the Option. In such an event the Shares subject to the Option so surrendered shall be charged against the limita- tions set forth in Section 1(a) of this Article II. SECTION 2. INCIDENTS OF OPTIONS AND STOCK APPRECIATION RIGHTS. (a) Each Stock Option and Stock Appreciation Right shall be granted subject to such terms and conditions, if any, not incon- sistent with this Plan, as shall be determined by the Committee, including any provisions as to continued employment as considera- tion for the grant or exercise of such Option or Stock Appreci- ation Right and any provisions which may be advisable to comply with applicable laws, regulations or rulings of any governmental authority. Unless otherwise provided at the time of any Option grant and except as otherwise specifically provided in this Plan, Options shall only be exercisable by a Participant as follows:
Percentage of Total Shares Per Option Grant Option Exercise Dates Exercisable --------------------- ------------ 1. On and after twelve (12) months from the Option grant date................... 33-1/3% 2. On and after twenty-four (24) months from the Option grant date.............. 66-2/3% 6 3. On and after thirty-six (36) months from the Option grant date.............. 100%
If the application of the foregoing vesting schedule would result in a fractional Share being issuable upon the exercise of an Option, the number of Options vested shall be rounded up to the next full Share, but not to exceed in the aggregate the original grant total. (b) A Stock Option or Stock Appreciation Right shall not be transferable by the Participant except by will, by the laws of descent and distribution, pursuant to a written beneficiary designation, pursuant to a qualified domestic relations order as defined in the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act or the rules thereunder, or in such circumstances as would not result in the failure to comply with Rule 16b-3 under the Securities Exchange Act of 1934 (or any successor rule or provision) if the transferor were a person subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 (or any successor rule or provision) with respect to Shares. SECTION 3. CONDITIONS OF OPTIONS. Options may be granted to Eligible Participants at such time or times determined by the Committee, subject to the following terms and conditions: (a) The Option exercise price per Share shall be estab- lished by the grant but shall not be less than 100% of the Fair Market Value at the time of the grant (or such later date as the Committee shall determine). (b) The Option and its related Stock Appreciation Right, if any, may be exercised in full or in part from time to time prior to Termination of Employment and within ten (10) years and thirty (30) days from the date of the grant, or such shorter period as may be specified by the Committee in the grant, provided that in any event each shall lapse and cease to be exercisable upon, or within such period following, Termination of Employment as shall have been determined by the Committee and as specified in the Option or Stock Appreciation Right; provided, however, that such period following Termination of Employment shall not exceed twelve months unless employment shall have terminated: (i) as a result of retirement pursuant to, and as defined in, the applicable pension plan of the Company, its Subsidiary or Associated Company or total and permanent disability as determined by the Committee; or (ii) as a result of death or death shall have occurred following Termination of Employment and while the Option or Stock Appreciation Right was still exercisable; and provided further, that such period following Termination of Employment shall in no event extend the original exercise period of the Option or related Stock Appreciation Right, if any. (c) INTENTIONALLY OMITTED 7 (d) The Option grant may include any other terms and conditions not inconsistent with this Plan, as determined by the Committee. SECTION 4. CONDITIONS OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right may be granted to an Eligible Partici- pant in connection with (and only in connection with) an Option granted under this Plan, subject to the following terms and conditions: (a) Such Stock Appreciation Right shall entitle a holder of an Option within the period specified for the exercise of the Option in the related Option grant to surrender the unexercised Option (or a portion thereof) and to receive in exchange therefor a payment in cash or Shares having an aggregate value equal to the product of (i) the amount by which (A) the SAR Fair Market Value of each Share exceeds (B) the Option price per Share, times (ii) the number of Shares under the Option, or portion thereof, which is surrendered. (b) Each Stock Appreciation Right granted hereunder shall be subject to the same terms and conditions as the related Option. It shall be exercisable only to the extent such Option is exercisable and shall terminate or lapse and cease to be exercisable when the related Option terminates or lapses. The Committee may grant Stock Appreciation Rights concurrently with grants of Options or in connection with previously granted Options under this Plan which are unexercised and have not terminated or lapsed. With respect to Stock Appreciation Rights granted in connection with such previously granted Options, the Committee shall provide that such Stock Appreciation Rights shall not be exercisable until the holder completes six (6) months (or such longer period as the Committee shall determine) of service with the Company, a Subsidiary, or an Associated Company immedi- ately following the date of the grant of such Stock Appreciation Rights. (c) The Committee shall have sole discretion to determine in each case whether the payment will be in the form of all cash, all Shares or any combination thereof. If payment is to be made in Shares, the number of Shares shall be determined as follows: the amount payable in Shares shall be divided by the SAR Fair Market Value of Shares. The payments to be made, in whole or in part, in cash upon the exercise of Stock Appreciation Rights by any officer of Monsanto shall be made in accordance with the provisions relating to the exercise of stock appreciation rights of Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect at the time of such exercise, or any law, rule, regulation or other provision that may hereafter replace such Rule. (d) Upon exercise of a Stock Appreciation Right, the number of Shares subject to exercise under the related Option shall automatically be reduced by the number of Shares represented by the Option or portion thereof which is surrendered. To the extent that a Stock Appreciation Right shall be exercised, any 8 Shares transferred upon such exercise shall not be charged against the maximum limitations upon the grant of Options set forth in the Plan under which such Option shall have been granted but the Option in connection with which a Stock Appreciation Right shall have been granted shall be deemed to have been exercised for the purpose of such maximum limitations. (e) The Committee shall have the sole discretion as to the timing of any payment made in cash, Shares, or a combination thereof upon exercise of Stock Appreciation Rights hereunder, whether in a lump sum, in annual installments or otherwise deferred and the Committee shall have sole discretion to deter- mine whether such payments may bear amounts equivalent to inter- est or cash dividends. (f) For purposes of this Section 4 of Article II: (i) "Unrelated Party" means any party or group of parties acting together other than (A) Monsanto, its directors and officers, or (B) any nominee holder for any stock exchange; (ii) "Offer" means any tender or exchange offer made by an Unrelated Party for the Shares and shall be deemed to occur upon the first purchase or exchange of such Shares; (iii) "Change of Control" means any acquisition, benefi- cially or otherwise, by any Unrelated Party of 25% or more of the combined voting power of the common and preferred stock of Monsanto and shall be deemed to occur upon the date that the Unrelated Party attains control of said 25% or more of the combined voting power; (iv) "Change of Control Market Value" of the Shares means the higher of -- (A) the value for which such Shares may be exchanged or offered under any Offer pursuant to which Shares are actually exchanged or purchased; or (B) the Fair Market Value of such Shares on the date of exercise of a Stock Appreciation Right. Notwithstanding the foregoing provisions of this Section 4 of Article II and without limiting the provisions of Section 3 of Article I of this Plan, in the event of an Offer or Change of Control, a Participant holding an unexercised Stock Appreciation Right may exercise such Stock Appreciation Right and elect to be paid solely in cash in an amount equal to the difference between the Option price and the Change of Control Market Value of the Shares, unless within five (5) business days after receipt of notification of such election by the Secretary of Monsanto, the Committee acts to disapprove the cash election. Unless it acts to disapprove, the Committee's consent shall be deemed to be given at the close of business on the fifth business day after the Secretary's receipt of notification of such election and payment shall be made as soon as practicable after expiration of 9 such five (5) business day period. The election provided herein shall apply only: (x) during the thirty (30) day period following the first exchange or purchase of Shares pursuant to an Offer; or (y) during the thirty (30) day period following the date on which sufficient Shares are acquired to constitute a Change of Control. ARTICLE III. RESTRICTED SHARES The Committee may make awards of Restricted Shares to Eligible Participants. The Committee shall have full discretion to determine the terms and conditions of such awards. The total number of Shares which may be used for such awards under this Plan shall not exceed 1,500,000 Shares, subject to: (A) the adjustments provided for in Section 4 of Article I of this Plan; and (B) reduction by the number of Shares for which Stock Options have been granted pursuant to Article II of this Plan (except as provided in Section 1(b) of Article II). Restricted Shares shall be subject to such terms and condi- tions, including forfeiture, if any, and to such restrictions against sale, transfer or other disposition as may be determined by the Committee at the time a Non-qualified Option for the purchase of Restricted Shares is granted, at the time a Stock Appreciation Right to be settled with Restricted Shares is granted, at the time of making a bonus award of Restricted Shares or at any other time as reasonably determined by the Committee (collectively a "Restricted Stock Grant"). Any new or additional or different Shares or other securities resulting from any adjustment of such Shares of the type described in Section 4 of Article I shall be subject to the same terms, conditions, and restrictions as the Restricted Shares prior to such adjustment. The Committee may, in its discretion, remove, modify or accelerate the release of restrictions on any Restricted Shares in the event of hardship or disability of the Participant while employed, in the event that the Participant ceases to be an employee of the Company, a Subsidiary or Associated Company, as the result of death or otherwise, in the event of a relocation of a Participant to another country or for such other reasons as the Committee may deem appropriate. In the event of the death of a Participant following the transfer of Restricted Shares to him, the legal representative of the Participant, the beneficiary designated in writing by the Participant during his lifetime, or the person receiving such Shares under his will or under the laws of descent and distribution shall take such Shares subject to the same restrictions, conditions and provisions in effect at the time of his death, to the extent applicable. ARTICLE IV. MISCELLANEOUS PROVISIONS SECTION 1. TRANSFER. Neither a Stock Option nor a Stock Appreciation Right shall be transferable except as provided for herein. If any Participant makes such a transfer in violation hereof, any obligation of the Company with respect to such Option or Stock Appreciation Right shall forthwith terminate. 10 SECTION 2. CONTINUED EMPLOYMENT. Nothing in this Plan or any booklet or other document describing or referring to this Plan shall be deemed to confer on any employee or Participant the right to continue in the employ of his or her employer or affect the right of his or her employer to terminate the employment of any such person with or without cause. SECTION 3. SEGREGATED FUND. Nothing contained herein shall require the Company to segregate any monies from its general funds, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, nor require Monsanto to segregate any treasury Shares. SECTION 4. GOVERNING LAW. This Plan and all actions taken hereunder will be governed by the laws of the State of Illinois. SECTION 5. WITHHOLDING. The Company may make such provi- sions and take such steps as it may deem necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation of any governmental authority, whether federal, state or local, domestic or foreign, to withhold in connection with any Stock Option or the exercise thereof or any Stock Appreciation Right or the exercise thereof. ARTICLE V. AMENDMENTS SECTION 1. AMENDMENT OR TERMINATION OF PLAN. The Board or the Special Stock Option Grant Committee may, from time to time, amend this Plan, or discontinue this Plan or any provision thereof, provided that no amendments or modifications to this Plan shall, without the prior approval of the shareholders normally entitled to vote for the election of directors of Monsanto: (a) change the number of Shares for which Stock Options may be granted, or the percentage thereof which may be made subject to Options granted to any one Eligible Participant, as set forth in Section 1(a) of Article II of this Plan; (b) make any member of the Committee eligible for the grant of a Stock Option, Stock Appreciation Right or Restricted Stock Grant; (c) limit or restrict the powers of the Committee with respect to the administration of this Plan except as may be required by any law, regulation or governmental order; (d) materially increase the benefits accruing to Partici- pants under this Plan; (e) materially modify the requirements as to eligibility for participation under the Plan; or (f) change any of the provisions of this Article V. 11 SECTION 2. EFFECT ON OPTIONS OR STOCK APPRECIATION RIGHTS. No amendment or discontinuance of this Plan or any provision thereof shall, without the written consent of the Participant, adversely affect any Stock Option, Stock Appreciation Right, or Restricted Stock Grant theretofore granted to such Participant under this Plan. ARTICLE VI. MISCELLANEOUS SECTION 1. OTHER PLANS. This Plan is not intended to and shall not preclude the establishment or operation by the Company or any Subsidiary of any thrift, savings and investment, achieve- ment award, stock purchase, incentive, employee recognition or other benefit plan or arrangement for any employees and any such other plan may be authorized and payments made thereunder independently of this Plan. EX-23 3 CONSENT OF COUNSEL 1 EXHIBIT 23 CONSENT OF COMPANY COUNSEL I hereby consent to the incorporation by reference in Monsanto Company's Registration Statements on Form S-8 (Nos. 2-36636, 2-76696, 2-90152, 33-13197, 33-21030, 33-39704, 33-39705, 33-39706, 33-39707, 33-49717, 33-53363, 33-53365, and 33-53367) and on Form S-3 (No. 33-60189) of the reference to Company counsel in Note 7 to the Notes to Financial Statements in the Company's Form 10-Q Report for the quarter ended June 30, 1995. In giving this consent I do not thereby admit that I am within the category of persons whose consent is required under Section 7 of the Securities Act of 1933. RICHARD W. DUESENBERG RICHARD W. DUESENBERG General Counsel Monsanto Company Saint Louis, Missouri August 2, 1995 EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENT OF CONSOLIDATED INCOME OF MONSANTO COMPANY AND SUBSIDIARIES FOR THE SIX MONTHS ENDED JUNE 30, 1995, AND THE STATEMENT OF CONSOLIDATED FINANCIAL POSITION AS OF JUNE 30, 1995. SUCH INFORMATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS. 1,000,000 6-MOS DEC-31-1995 JUN-30-1995 278 0 2,264 0 1,373 4,642 7,689 4,681 10,814 3,348 1,696 329 0 0 3,191 10,814 4,800 4,800 2,682 2,682 0 0 96 752 233 519 0 0 0 519 4.53 0 RECEIVABLES ARE STATED NET OF ALLOWANCES OF $48.
EX-99 5 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 99 MONSANTO COMPANY AND SUBSIDIARIES COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES (DOLLARS IN MILLIONS)
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, ------------------ ---------------------------------------------------------- 1995 1994 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- ---- ---- Income from continuing operations before provision for income taxes........................... $752 $670 $ 895 $729 $(174) $354 $716 Add Fixed charges.................. 121 94 182 184 231 233 248 Less capitalized interest...... (4) (5) (10) (12) (16) (24) (29) Dividends from affiliated companies..................... - - 2 5 5 5 6 Less equity income (add equity loss) of affiliated companies... (19) (4) (21) (20) (1) (3) 11 ---- ----- ------- ----- ----- ----- ---- Income as adjusted........... $850 $755 $1,048 $886 $ 45 $565 $952 ---- ---- ------ ---- ----- ---- ---- Fixed charges Interest expense............... $ 96 $ 67 $ 131 $129 $ 169 $166 $176 Capitalized interest........... 4 5 10 12 16 24 29 Portion of rents representative of interest factor............ 21 22 41 43 46 43 43 ---- ---- ------ ---- ----- ---- ---- Fixed charges................ $121 $ 94 $ 182 $184 $ 231 $233 $248 ---- ---- ------ ---- ----- ---- ---- Ratio of earnings to fixed charges......................... 7.02 8.03 5.76 4.82 0.19 2.42 3.84 ---- ---- ---- ---- ---- ---- ---- - ----- Includes restructuring and other unusual items of $7 million, $(30) million, $699 million and $457 million in 1994, 1993, 1992 and 1991, respectively. Excluding the restructuring and other unusual items, the ratio of earnings to fixed charges would have been 5.80, 4.65, 3.22 and 4.39, respectively.
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