-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kue1FNxXzrYWduS2P0gBC/U+nMeeKp3a8WtgxkdbvlFX3pC7utR1SKrykw9j2+UC m8tNcoyCWkbuxfj/mapl0A== 0000950123-98-005124.txt : 19980518 0000950123-98-005124.hdr.sgml : 19980518 ACCESSION NUMBER: 0000950123-98-005124 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 19980515 SROS: NONE GROUP MEMBERS: CORN ACQUISITION CORPORATION GROUP MEMBERS: MONSANTO CO SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DEKALB GENETICS CORP CENTRAL INDEX KEY: 0000835015 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 363586793 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-39746 FILM NUMBER: 98622896 BUSINESS ADDRESS: STREET 1: 3100 SYCAMORE RD CITY: DEKALB STATE: IL ZIP: 60115 BUSINESS PHONE: 8157589196 MAIL ADDRESS: STREET 1: 3100 SYCAMORE ROAD CITY: DEKALB STATE: IL ZIP: 60115 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DEKALB GENETICS CORP CENTRAL INDEX KEY: 0000835015 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 363586793 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: SEC FILE NUMBER: 005-39746 FILM NUMBER: 98622897 BUSINESS ADDRESS: STREET 1: 3100 SYCAMORE RD CITY: DEKALB STATE: IL ZIP: 60115 BUSINESS PHONE: 8157589196 MAIL ADDRESS: STREET 1: 3100 SYCAMORE ROAD CITY: DEKALB STATE: IL ZIP: 60115 FILED BY: 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: SC 14D1 BUSINESS ADDRESS: STREET 1: 800 N LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 BUSINESS PHONE: 3146941000 MAIL ADDRESS: STREET 1: 800 NORTH LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 FILED BY: 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: SC 14D1 BUSINESS ADDRESS: STREET 1: 800 N LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 BUSINESS PHONE: 3146941000 MAIL ADDRESS: STREET 1: 800 NORTH LINDBERGH BLVD CITY: ST LOUIS STATE: MO ZIP: 63167 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 SC 14D1 1 SCHEDULE 14D1 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 5) DEKALB GENETICS CORPORATION (NAME OF SUBJECT COMPANY) ------------------------ CORN ACQUISITION CORPORATION MONSANTO COMPANY (BIDDERS) CLASS A COMMON STOCK, WITHOUT PAR VALUE CLASS B COMMON STOCK, WITHOUT PAR VALUE (TITLE OF CLASS OF SECURITIES) 244878104 244878203 (CUSIP NUMBER OF CLASS OF SECURITIES) BARBARA BLACKFORD, ESQ. CORN ACQUISITION CORPORATION C/O MONSANTO COMPANY 800 N. LINDBERGH BLVD. ST. LOUIS, MISSOURI 63167 (314) 694-2594 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER) COPIES TO: RICHARD D. KATCHER, ESQ. DAVID M. SILK, ESQ. WACHTELL, LIPTON, ROSEN & KATZ 51 WEST 52ND STREET NEW YORK, NEW YORK 10019 (212) 403-1000 ------------------------ CALCULATION OF FILING FEE
======================================================================================================= TRANSACTION VALUATION* AMOUNT OF FILING FEE** - ------------------------------------------------------------------------------------------------------- $2,326,878,700 $465,375.74 =======================================================================================================
* For purposes of calculating the filing fee only. Based upon (i) 7,100,097 shares of Class A Common Stock, without par value (the "Class A Shares"), and (ii) 29,975,568 shares of Class B Common Stock, without par value (the "Class B Shares" and, collectively with the Class A Shares, the "Shares"), of DEKALB Genetics Corporation (the "Company") outstanding on May 8, 1998 or issuable in accordance with the Merger Agreement (as defined herein), minus the 485,442 Class A Shares and the 13,321,436 Class B Shares owned by Monsanto Company ("Parent"). ** The fee, calculated in accordance with Rule 0-11(d) of the Securities Exchange Act of 1934, is 1/50th of one percent of the aggregate Transaction Valuation. [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and date of its filing. Amount Previously Paid None Form of Registration No.: N/A Filing Party: N/A Date Filed: N/A
================================================================================ 2 CUSIP No. 244878104 CUSIP No. 244878203 14D-1 - --------------------------------------------------------------------------- 1. Name of Reporting Person, S.S. or I.R.S. Identification No. of Above Person CORN ACQUISITION CORPORATION, 52-2099481 - --------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [ ] - --------------------------------------------------------------------------- 3. SEC Use Only - --------------------------------------------------------------------------- 4. Sources of Funds AF - --------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [ ] - --------------------------------------------------------------------------- 6. Citizenship or Place of Organization DELAWARE - --------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 3,157,092 CLASS A SHARES* - --------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares [X]** - --------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 67.9% CLASS A SHARES* - --------------------------------------------------------------------------- 10. Type of Reporting Person CO - ---------------------------------------------------------------------------
- --------------- * On May 8, 1998, Parent entered into a Stockholders Agreement (the "Stockholders Agreement") with the voting trustees (the "Voting Trustees") under the Roberts Family Voting Trust Agreement, dated January 31, 1996 (the "Voting Trust Agreement") and the registered holders (the "Registered Holders") of trust certificates pursuant to the Voting Trust Agreement. Pursuant to the Stockholders Agreement, such Voting Trustees and Registered Holders have agreed, among other things, to tender, in accordance with the terms of the tender offer (the "Offer") described in this Statement on Schedule 14D-1 (this "Schedule 14D-1"), and not withdraw, subject to the terms of the Stockholders Agreement, all of the 2,671,650 of the Class A Shares held of record by the Voting Trustees pursuant to the Voting Trust Agreement (the "Voting Trust Shares"). Pursuant to the Stockholders Agreement, the Voting Trustees have also granted to Parent an irrevocable proxy to vote the Voting Trust Shares in favor of the merger of Corn Acquisition Corporation (the "Purchaser") with and into the Company. The Voting Trust Shares are reflected in Rows 7 and 9 of the cover pages of this Schedule 14D-1. The Stockholders Agreement is described in more detail in Section 11 of the Offer to Purchase, dated May 15, 1998, included as Exhibit (a)(1) to this Schedule 14D-1 (the "Offer to Purchase"). ** Excludes an aggregate of 100,380 Class A Shares purchasable upon exercise of options held by Douglas C. Roberts, Virginia R. Holt and John T. Roberts. 2 3 CUSIP No. 244878104 CUSIP No. 244878203 14D-1 - --------------------------------------------------------------------------- 1. Name of Reporting Person, S.S. or I.R.S. Identification No. of Above Person MONSANTO COMPANY, 43-0420020 - --------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [ ] - --------------------------------------------------------------------------- 3. SEC Use Only - --------------------------------------------------------------------------- 4. Sources of Funds BK, WC, OO - --------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [ ] - --------------------------------------------------------------------------- 6. Citizenship or Place of Organization DELAWARE - --------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 3,157,092 CLASS A SHARES* - --------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares [X]** - --------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 67.9% CLASS A SHARES* - --------------------------------------------------------------------------- 10. Type of Reporting Person CO - ---------------------------------------------------------------------------
- --------------- * On May 8, 1998, Parent entered into the Stockholders Agreement with the Voting Trustees under the Voting Trust Agreement and the Registered Holders of trust certificates pursuant to the Voting Trust Agreement. Pursuant to the Stockholders Agreement, such Voting Trustees and Registered Holders have agreed, among other things, to tender, in accordance with the terms of the Offer described in this Schedule 14D-1, and not withdraw, subject to the terms of the Stockholders Agreement, all of the 2,671,650 of the Class A Shares held of record by the Voting Trustees pursuant to the Voting Trust Agreement. Pursuant to the Stockholders Agreement, the Voting Trustees have also granted to Parent an irrevocable proxy to vote the Voting Trust Shares in favor of the merger of the Purchaser with and into the Company. The Voting Trust Shares are reflected in Rows 7 and 9 of the cover pages of this Schedule 14D-1. The Stockholders Agreement is described in more detail in Section 11 of the Offer to Purchase, included as Exhibit (a)(1) to this Schedule 14D-1. ** Excludes an aggregate of 100,380 Class A Shares purchasable upon exercise of options held by Douglas C. Roberts, Virginia R. Holt and John T. Roberts. 3 4 This Tender Offer Statement on Schedule 14D-1 (this "Schedule 14D-1") relates to the offer by Corn Acquisition Corporation (the "Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation ("Parent"), to purchase all outstanding shares of (i) Class A Common Stock, without par value (the "Class A Shares") and (ii) Class B Common Stock, without par value (the "Class B Shares" and, collectively with the Class A Shares, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a purchase price of $100.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), which are annexed to and filed with this Schedule 14D-1 as Exhibits (a)(1) and (a)(2), respectively. This Schedule 14D-1 is being filed on behalf of the Purchaser and Parent. This Schedule 14D-1 is also Amendment No. 5 to the Schedule 13D filed by Parent with respect to the Class A Shares. ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is DEKALB Genetics Corporation. The address of its principal executive offices is 3100 Sycamore Road, DeKalb, Illinois 60115. (b) Reference is hereby made to the information set forth in the "Introduction," Section 1 ("Terms of the Offer") and Section 11 ("Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company") of the Offer to Purchase, which is incorporated herein by reference. (c) Reference is hereby made to the information set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer to Purchase, which is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d) This Schedule 14D-1 is being filed on behalf of Parent and the Purchaser. Reference is hereby made to the information set forth in the "Introduction," Section 9 ("Certain Information Concerning Parent and the Purchaser") and Schedule A ("Directors and Executive Officers of Parent and the Purchaser") of the Offer to Purchase, which is incorporated herein by reference. (e)-(f) During the last five years, neither Parent nor the Purchaser, nor, to the best of their knowledge, any of their respective executive officers and directors listed in Schedule A ("Directors and Executive Officers of Parent and the Purchaser") of the Offer to Purchase, which is incorporated herein by reference, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. (g) Reference is hereby made to the information set forth in Schedule A ("Directors and Executive Officers of Parent and the Purchaser") of the Offer to Purchase, which is incorporated herein by reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a)-(b) Reference is hereby made to the information set forth in the "Introduction," Section 9 ("Certain Information Concerning Parent and the Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company; Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company") and Section 12 ("Investment Agreement; Certain Agreements with Respect to the Company's Securities; Other Agreements") of the Offer to Purchase, which is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(b) Reference is made to the information set forth in Section 13 ("Source and Amount of Funds") of the Offer to Purchase, which is incorporated herein by reference. (c) Not applicable. 4 5 ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(g) Reference is hereby made to the information set forth in the "Introduction," Section 7 ("Possible Effects of the Offer on the Market for the Shares; NYSE Listing; Exchange Act Registration; Margin Regulations"), Section 10 ("Background of the Offer; Contacts with the Company; Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company"), Section 12 ("Investment Agreement; Certain Agreements with Respect to the Company's Securities; Other Agreements"), Section 15 ("Certain Legal Matters; Required Regulatory Approvals") and Section 16 ("Dividends and Distributions") of the Offer to Purchase, which is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a)-(b) Reference is hereby made to the information set forth in the "Introduction," Section 9 ("Certain Information Concerning Parent and the Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company; Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company"), Section 12 ("Investment Agreement; Certain Agreements with Respect to the Company's Securities; Other Agreements") and Schedule A ("Directors and Executive Directors of Parent and the Purchaser") of the Offer to Purchase, which is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. Reference is hereby made to the information set forth in the "Introduction," Section 9 ("Certain Information Concerning Parent and the Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company; Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company") and Section 12 ("Investment Agreement; Certain Agreements with Respect to the Company's Securities; Other Agreements") of the Offer to Purchase, which is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. Reference is hereby made to the information set forth in Section 17 ("Fees and Expenses") of the Offer to Purchase, which is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. Reference is hereby made to the information set forth in Section 9 ("Certain Information Concerning Parent and the Purchaser") of the Offer to Purchase, which is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. (a) Reference is hereby made to the information set forth in the "Introduction," Section 10 ("Background of the Offer; Contacts with the Company; Recommendation of the Company's Board of Directors"), Section 11 ("Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company") and Section 12 ("Investment Agreement; Certain Agreements with Respect to the Company's Securities; Other Agreements") of the Offer to Purchase, which is incorporated herein by reference. (b)-(c) Reference is hereby made to the information set forth in the "Introduction," Section 11 ("Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company") and Section 15 ("Certain Legal Matters; Required Regulatory Approvals") of the Offer to Purchase, which is incorporated herein by reference. (d) Reference is hereby made to the information set forth in Section 7 ("Possible Effects of the Offer on Market for the Shares; NYSE Listing; Exchange Act Registration; Margin Regulations") of the Offer to Purchase, which is incorporated herein by reference. (e) To the best knowledge of Parent and the Purchaser, no such proceedings are pending or have been instituted. (f) Reference is hereby made to the entire texts of the Offer to Purchase and the related Letter of Transmittal, which are incorporated herein by reference. 5 6 ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) -- Offer to Purchase, dated May 15, 1998. (a)(2) -- Letter of Transmittal. (a)(3) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(4) -- Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) -- Notice of Guaranteed Delivery. (a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) -- Text of press release issued by Parent and the Company on May 11, 1998. (a)(8) -- Form of Summary Advertisement, dated May 15, 1998. (b) -- Not applicable. (c)(1) -- Agreement and Plan of Merger, dated as of May 8, 1998, by and among the Company, the Purchaser and Parent. (c)(2) -- Stockholders Agreement, dated May 8, 1998, among Parent, the Voting Trustees and the Registered Holders. (c)(3) -- Investment Agreement, dated as of January 31, 1996, between the Company and Parent. (c)(4) -- Stockholders' Agreement, dated as of January 31, 1996, between Parent and the other holders of Class A Shares of the Company. (c)(5) -- Registration Rights Agreement, dated as of January 31, 1996, between the Company and Parent. (c)(6) -- Collaboration Agreement and License, dated as of January 31, 1996, between the Company and Parent.* (c)(7) -- Corn Borer-Protected Corn License Agreement, dated as of January 31, 1996, between the Company and Parent.* (c)(8) -- Glyphosate-Protected Corn License Agreement, dated as of January 31, 1996, between the Company and Parent.* (c)(9) -- CaMV Promoter License Agreement (Glufosinate-Protected Corn), dated as of January 31, 1996, between the Company and Parent.* (d) -- Not applicable. (e) -- Not applicable. (f) -- Not applicable.
- --------------- * Incorporated by reference to the Schedule 13D filed by Parent with respect to the Class A Shares. 6 7 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 15, 1998 MONSANTO COMPANY By: /s/ DEREK K. RAPP ------------------------------------ Name: Derek K. Rapp Title: Director, Mergers & Acquisitions CORN ACQUISITION CORPORATION By: /s/ BARBARA L. BLACKFORD ------------------------------------ Name: Barbara L. Blackford Title: President, Secretary, Treasurer and Director 7 8 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ------- ----------- (a)(1) -- Offer to Purchase, dated May 15, 1998. (a)(2) -- Letter of Transmittal. (a)(3) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(4) -- Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) -- Notice of Guaranteed Delivery. (a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) -- Text of press release issued by Parent and the Company on May 11, 1998. (a)(8) -- Form of Summary Advertisement, dated May 15, 1998. (b) -- Not applicable. (c)(1) -- Agreement and Plan of Merger, dated as of May 8, 1998, by and among the Company, the Purchaser and Parent. (c)(2) -- Stockholders Agreement, dated May 8, 1998, among Parent, the Voting Trustees and the Registered Holders. (c)(3) -- Investment Agreement, dated as of January 31, 1996, between the Company and Parent. (c)(4) -- Stockholders' Agreement, dated as of January 31, 1996, between Parent and the other holders of Class A Shares of the Company. (c)(5) -- Registration Rights Agreement, dated as of January 31, 1996, between the Company and Parent. (c)(6) -- Collaboration Agreement and License, dated as of January 31, 1996, between the Company and Parent.* (c)(7) -- Corn Borer-Protected Corn License Agreement, dated as of January 31, 1996, between the Company and Parent.* (c)(8) -- Glyphosate-Protected Corn License Agreement, dated as of January 31, 1996, between the Company and Parent.* (c)(9) -- CaMV Promoter License Agreement (Glufosinate-Protected Corn), dated as of January 31, 1996, between the Company and Parent.* (d) -- Not applicable. (e) -- Not applicable. (f) -- Not applicable.
- --------------- * Incorporated by reference to the Schedule 13D filed by Parent with respect to the Class A Shares. EX-99.A.1 2 OFFER TO PURCHASE, DATED MAY 15, 1998 1 Exhibit (A)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION AT $100 NET PER SHARE BY CORN ACQUISITION CORPORATION A WHOLLY-OWNED SUBSIDIARY OF MONSANTO COMPANY THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED. THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF MERGER, DATED AS OF MAY 8, 1998 (THE "MERGER AGREEMENT"), AMONG MONSANTO COMPANY ("PARENT"), CORN ACQUISITION CORPORATION (THE "PURCHASER") AND DEKALB GENETICS CORPORATION (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (WITHOUT THE PARTICIPATION OF THE TWO DIRECTORS NOMINATED BY PARENT) DETERMINED THAT THE OFFER AND THE MERGER (AS DEFINED HEREIN) ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE OFFER, THE MERGER AGREEMENT AND THE MERGER AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. ------------------------ THE OFFER IS CONDITIONED UPON THERE HAVING BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF SHARES OF CLASS A COMMON STOCK THAT (TOGETHER WITH THE SHARES OF CLASS A COMMON STOCK THEN HELD BY PARENT OR ANY OF ITS SUBSIDIARIES (AS DEFINED HEREIN)) WOULD CONSTITUTE A MAJORITY OF THE OUTSTANDING SHARES OF CLASS A COMMON STOCK (ASSUMING THE EXERCISE OF ALL OPTIONS TO PURCHASE, AND THE CONVERSION OR EXCHANGE OF ALL SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO, SHARES OF CLASS A COMMON STOCK) OUTSTANDING AT THE EXPIRATION DATE OF THE OFFER, THE EXPIRATION OR TERMINATION PRIOR TO THE EXPIRATION OF THE OFFER OF ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER (THE "HSR CONDITION"), AND CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 14. Holders of 2,671,650 shares of Class A Common Stock, or approximately 57.5% of the outstanding Class A Common Stock as of April 30, 1998, have agreed to tender such Shares pursuant to the Offer. See "Introduction" and Section 11. ------------------------ IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's Shares should either (1) complete and sign the Letter of Transmittal (or a manually signed facsimile thereof) in accordance with the instructions in the Letter of Transmittal, have such stockholder's signature thereon guaranteed if required by Instruction 1 or 5 of the Letter of Transmittal, and mail or deliver the Letter of Transmittal, or such facsimile, with the certificate(s) representing tendered Shares and any other required documents to the Depositary (as defined herein), or tender such Shares pursuant to the procedures for book-entry transfer set forth in Section 3, or (2) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect such transaction for such stockholder. Stockholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender Shares. A stockholder who desires to tender Shares and whose certificates for such Shares are not immediately available or who cannot comply with the procedures for book-entry transfer on a timely basis may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3. Questions and requests for assistance may be directed to the Information Agent or to the Dealer Managers (as such terms are defined herein) at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies and other nominees. ------------------------ The Dealer Managers for the Offer are: BANCAMERICA ROBERTSON STEPHENS GOLDMAN, SACHS & CO. May 15, 1998 2 TABLE OF CONTENTS
PAGE ---- 1. Terms of the Offer.......................................... 3 2. Acceptance for Payment and Payment for Shares............... 5 3. Procedures for Tendering Shares............................. 6 4. Withdrawal Rights........................................... 9 5. Certain Federal Income Tax Consequences..................... 10 6. Price Range of Shares; Dividends............................ 10 7. Possible Effects of the Offer on Market for the Shares; NYSE Listing; Exchange Act Registration; Margin Regulations...... 11 8. Certain Information Concerning the Company.................. 13 9. Certain Information Concerning Parent and the Purchaser..... 16 10. Background of the Offer; Contacts with the Company; Recommendation of the Company's Board of Directors.......... 17 11. Purpose of the Offer; the Merger Agreement; the Stockholders Agreement; Appraisal Rights; Plans for the Company.......... 20 12. Investment Agreement; Certain Agreements with Respect to the Company's Securities; Other Agreements...................... 34 13. Source and Amount of Funds.................................. 38 14. Certain Conditions of the Offer............................. 38 15. Certain Legal Matters; Required Regulatory Approvals........ 40 16. Dividends and Distributions................................. 42 17. Fees and Expenses........................................... 43 18. Miscellaneous............................................... 43 SCHEDULE A....................................................... A-1
3 To: All Holders of Class A Common Stock and All Holders of Class B Common Stock of DEKALB Genetics Corporation: INTRODUCTION Corn Acquisition Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation ("Parent"), hereby offers to purchase all of the outstanding shares of Class A Common Stock, without par value (the "Class A Common Stock"), and all of the outstanding shares of Class B Common Stock, without par value (the "Class B Common Stock" and, together with the Class A Common Stock, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a purchase price of $100 per Share, net to the seller in cash, without interest thereon (as such price may be increased, the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). If Shares are not accepted for purchase pursuant to the Offer on or prior to May 9, 1999, the Offer Price will be increased by $0.50 per Share on May 10, 1999, and on the tenth day of each subsequent month until Shares are so accepted, unless the Offer is earlier terminated. Subject to the terms and conditions of the Merger Agreement, Parent may terminate the Offer if it has not paid for Shares pursuant thereto prior to November 9, 1999 (the "Outside Date"). See Section 11. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. The Purchaser or Parent will pay all charges and expenses of First Chicago Trust Company of New York (the "Depositary"), Georgeson & Company Inc. (the "Information Agent") and BancAmerica Robertson Stephens ("BancAmerica Robertson Stephens") and Goldman, Sachs & Co. ("Goldman Sachs" and, together with BancAmerica Robertson Stephens, the "Dealer Managers"). See Section 17. Parent currently owns 485,442 Shares of Class A Common Stock, or approximately 10.4% of the outstanding Class A Common Stock as of April 30, 1998, and 13,321,436 Shares of Class B Common Stock, or approximately 44.4% of the outstanding Class B Common Stock as of April 30, 1998, and in the aggregate approximately 39.9% of the outstanding Shares as of April 30, 1998. THE OFFER IS CONDITIONED UPON THERE HAVING BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF SHARES OF CLASS A COMMON STOCK THAT (TOGETHER WITH THE SHARES OF CLASS A COMMON STOCK THEN HELD BY PARENT OR ANY OF ITS SUBSIDIARIES (AS DEFINED HEREIN)) WOULD CONSTITUTE A MAJORITY OF THE SHARES OF CLASS A COMMON STOCK (ASSUMING THE EXERCISE OF ALL OPTIONS TO PURCHASE, AND THE CONVERSION OR EXCHANGE OF ALL SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO, SHARES OF CLASS A COMMON STOCK) OUTSTANDING AT THE EXPIRATION DATE OF THE OFFER (THE "MINIMUM CONDITION") AND THE EXPIRATION OR TERMINATION PRIOR TO THE EXPIRATION OF THE OFFER OF ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT") APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER (THE "HSR CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED. SEE SECTIONS 1 AND 14. The Offer is being made pursuant to the terms of an Agreement and Plan of Merger, dated as of May 8, 1998, among Parent, the Purchaser and the Company (the "Merger Agreement"), pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company (the "Merger"), with the Company continuing as the surviving corporation (the "Surviving Corporation"). As of the effective time of the Merger (the "Effective Time"), each issued and outstanding Share (other than Shares owned by the Company or by any Subsidiary of the Company or by Parent, the Purchaser or any other Subsidiary of Parent, which Shares will be canceled with no consideration delivered in exchange therefor, and other than Shares, if any, held by stockholders who are entitled to and who properly exercise appraisal rights under Delaware law ("Dissenting Shares")) will, by virtue of the Merger and without any action by the holder thereof, be converted into the right to receive from the Surviving Corporation in cash the price per Share paid in the Offer (the "Merger Consideration"), payable to the holder thereof, without interest or dividends thereon, upon the surrender of the certificate formerly representing such Share. The Merger Agreement is more fully described in Section 11. Certain 4 federal income tax consequences of the sale of Shares pursuant to the Offer and the Merger, as the case may be, are described in Section 5. Concurrently with the execution of the Merger Agreement, Parent entered into a Stockholders Agreement (the "Stockholders Agreement") with the voting trustees, individually and in his or her capacity as such voting trustee (the "Voting Trustees") under the Roberts Family Voting Trust Agreement, dated January 31, 1996 (the "Voting Trust Agreement"), and the registered holders of trust certificates, individually and in his or her capacity as such registered holder (the "Registered Holders" and, together with the Voting Trustees, the "Roberts Family Stockholders") under the Voting Trust Agreement. Pursuant to the Stockholders Agreement, the Voting Trustees and Registered Holders have agreed, and the Registered Holders have instructed the Voting Trustees, among other things, to tender pursuant to the Offer and not withdraw, pursuant to the Stockholders Agreement, all of the 2,671,650 Shares of Class A Common Stock held of record by the Voting Trustees pursuant to the Voting Trust Agreement (the "Voting Trust Shares"), or approximately 57.5% of the outstanding Shares of Class A Common Stock as of April 30, 1998. For a more detailed description of the terms and conditions of the Stockholders Agreement, see Section 11. The Merger Agreement provides that, promptly after the Purchaser purchases Shares pursuant to the Offer, the Purchaser will be entitled to designate up to such number of directors, rounded to the next highest whole number, of the Company, subject to compliance with Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as will make the percentage of the Company's directors so designated by the Purchaser equal to the aggregate voting power of the Shares of Company Class A Common Stock held by Parent and any of its Subsidiaries, and the Company shall, at such time, cause the Purchaser's designees to be so elected by its existing Board of Directors. These designees will be in addition to the two current Monsanto Nominees (as defined herein). However, until the Effective Time, the Board of Directors of the Company shall have at least three directors who were directors on the date of the Merger Agreement or were designated by a majority of such directors, in each case excluding the Monsanto Nominees. The Company has agreed, at the option of Parent, either to increase the size of the Board of Directors of the Company and/or obtain the resignation of such number of directors as is necessary to enable the Purchaser's designees to be elected or appointed to the Board of Directors of the Company. The Merger Agreement is more fully described in Section 11. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (WITHOUT THE PARTICIPATION OF THE MONSANTO NOMINEES) HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE OFFER, THE MERGER AGREEMENT AND THE MERGER AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") has delivered to the Board of Directors of the Company a written opinion dated May 8, 1998 to the effect that, based upon and subject to various considerations and assumptions set forth in such opinion, the consideration to be received by the holders of Shares in connection with the Offer and the Merger is fair from a financial point of view to the holders of such Shares (other than Parent and its affiliates). A copy of Merrill Lynch's written opinion dated May 8, 1998 is included with the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders concurrently herewith, and stockholders are urged to read such opinion carefully in its entirety for a description of the assumptions made, matters considered and limitations of the review undertaken by Merrill Lynch. If the Minimum Condition and the other conditions to the Offer are satisfied and the Offer is consummated, the Purchaser will own a sufficient number of Shares to ensure that the Merger will be approved. Under the Delaware General Corporation Law (the "DGCL"), if after consummation of the Offer the Purchaser owns at least 90% of the Shares of each of the Class A Common Stock and Class B Common Stock then outstanding, the Purchaser will be able to cause the Merger to occur without a vote of the Company's stockholders. If, however, after consummation of the Offer, the Purchaser owns less than 90% of the then outstanding Shares of either the Class A Common Stock or the Class B Common Stock, a vote of the holders of the Class A Common Stock will be required under the DGCL to adopt the Merger Agreement, 2 5 and, since stockholders of the Company cannot act by written consent, a significantly longer period of time will be required to effect the Merger. See Section 11. The Company has informed the Purchaser that, as of April 30, 1998, there were 4,646,911 Shares of Class A Common Stock (of which Parent is the beneficial owner of 485,442 Shares) and 29,975,568 Shares of Class B Common Stock (of which Parent is the beneficial owner of 13,321,436 Shares) issued and outstanding and 2,339,249 Shares of Class A Common Stock and no Shares of Class B Common Stock reserved for issuance pursuant to outstanding stock options ("Options") or other rights to purchase Shares under the Company's Long Term Incentive Plan, Savings and Investment Plan and Director Stock Option Plan (the "Company Stock Plans"). In addition, the Company has informed the Purchaser that there are an additional 1,692,397 Shares of Class A Common Stock reserved for issuance pursuant to future grants of purchase rights under the Company Option Plans, of which 113,937 may be granted (and related Shares issued) in accordance with the Merger Agreement. Pursuant to the Merger Agreement, immediately prior to the consummation of the Offer, all of the Options will become fully vested and exercisable, and upon consummation of the Offer such Options will be canceled and the holders thereof will be entitled to receive, in respect of each Share theretofore issuable upon exercise of such Option, the excess of the Offer Price over the exercise price related thereto, minus any applicable taxes required to be withheld in connection therewith. Based on the foregoing and assuming that no additional Shares of Class A Common Stock (or warrants, options or rights exercisable for, or securities convertible into, Shares of Class A Common Stock) have been or are issued, the Minimum Condition would be satisfied if the Purchaser were to acquire 1,838,014 Shares of Class A Common Stock, and the number of Shares of Class A Common Stock to be tendered pursuant to the Stockholders Agreement would be sufficient to satisfy the Minimum Condition. Based on the foregoing and assuming that all outstanding Options are exercised (other than Options held by certain signatories to the Voting Agreement, with respect to which the holders thereof have agreed that any Shares acquired upon exercise thereof will be tendered and voted in accordance with the Stockholder Agreement), and assuming that all other Options or other rights to purchase Shares of Class A Common Stock that may be issued in accordance with the Merger Agreement are issued and exercised, and assuming that no Shares of Class A Common Stock are converted into Class B Common Stock, the Minimum Condition would be satisfied if the Purchaser were to acquire 3,499,859 Shares of Class A Common Stock pursuant to the Offer (or 342,767 Shares of Class A Common Stock in addition to the 2,671,650 Shares of Class A Common Stock to be tendered pursuant to the Stockholder Agreement and the 485,442 Shares of Class A Common Stock beneficially owned by Parent). No appraisal rights are available in connection with the Offer; however, stockholders may have appraisal rights in connection with the Merger regardless of whether the Merger is consummated with or without a vote of the Company's stockholders. See Section 11. THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and thereby purchase all Shares validly tendered prior to 12:00 midnight, New York City time, or such other time as the Purchaser may announce in connection with any extension of the Offer, on the Expiration Date (as defined herein) and not withdrawn as permitted by Section 4. The term "Expiration Date" means June 12, 1998, unless and until the Purchaser shall, as described below, have extended the period of time for which the Offer is open, in which event the term "Expiration Date" will mean the latest date on which the Offer, as so extended by the Purchaser, will expire. The Offer is subject to the conditions set forth under Section 14 (the "Offer Conditions"), including the satisfaction of the Minimum Condition and the HSR Condition. Subject to the applicable rules and 3 6 regulations of the Securities and Exchange Commission (the "Commission"), the Purchaser expressly reserves the right (but is not obligated) at any time and from time to time to waive any of the Offer Conditions in whole or in part in its sole discretion, provided that, without the prior written consent of the Company, the Merger Agreement provides that the Purchaser cannot waive the Minimum Condition. Subject to the applicable rules and regulations of the Commission, the Purchaser also expressly reserves the right at any time and from time to time to modify or amend the terms of the Offer; provided that under the Merger Agreement the Purchaser may not, without the prior written consent of the Company, (a) reduce the number of Shares to be purchased in the Offer, (b) reduce the Offer Price, (c) impose any conditions to the Offer in addition to the Offer Conditions or modify the Offer Conditions (other than to waive any Offer Conditions to the extent not prohibited by the Merger Agreement), (d) except as described below, extend the Offer, (e) change the form of consideration payable in the Offer or (f) make any other change or modification in any of the terms of the Offer in any manner that is adverse to the holders of Shares. Unless the Purchaser extends the Offer, the Offer will expire at 12:00 midnight, New York City time, on June 12, 1998. The Merger Agreement provides that the Purchaser may, without the consent of the Company, (a) extend the Offer, if at the scheduled or extended Expiration Date any of the Offer Conditions have not been satisfied or waived, until such time as such conditions are satisfied or waived, (b) extend the Offer for any period required by any rule, regulation, interpretation or position of the Commission or the staff thereof applicable to the Offer and (c) on one or more occasions, extend the Offer for a period of up to an aggregate of 15 business days if, on a scheduled Expiration Date on which the Offer Conditions have been satisfied or waived, the number of Shares of Class A Common Stock (together with any Shares of Class A Common Stock held by Parent or any of its Subsidiaries) that have been validly tendered and not withdrawn represent more than 70% of the then issued and outstanding Shares of Class A Common Stock, but less than 90% of the then issued and outstanding Shares of Class A Common Stock, and the number of Shares of Class B Common Stock (together with any Shares of Class B Common Stock held by Parent or any of its Subsidiaries) that have been validly tendered and not withdrawn represent more than 70% of the then issued and outstanding Shares of Class B Common Stock, but less than 90% of the then issued and outstanding Shares of Class B Common Stock. The Merger Agreement provides that the Purchaser may not terminate the Offer between scheduled Expiration Dates (except in the event that the Merger Agreement is terminated), and, in the event that the Purchaser would otherwise be entitled to terminate the Offer at any scheduled Expiration Date due to the failure of one or more of the Offer Conditions, unless the Merger Agreement has been terminated, the Purchaser is required to extend the Offer until such date as the Offer Conditions have been satisfied or such later date as required by applicable law; provided, however, that the Purchaser is not required to extend the Offer beyond the Outside Date. If Shares are not accepted for purchase pursuant to the Offer on or prior to May 9, 1999, the Offer Price will be increased by $0.50 per Share on May 10, 1999 and on the tenth day of each subsequent month until Shares are so accepted, unless the Offer is earlier terminated. During any extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to the right of a tendering stockholder to withdraw such stockholder's Shares. See Section 4. Under no circumstances will interest be paid on the purchase price for tendered Shares, whether or not the Offer is extended. Any extension of the Offer may be effected by the Purchaser giving oral or written notice of such extension to the Depositary. Subject to the terms and conditions of the Merger Agreement, Parent may terminate the Offer if it has not paid for Shares pursuant thereto prior to the Outside Date. Pursuant to the Merger Agreement, the Merger Agreement and the Offer may be terminated by the Purchaser and Parent if certain events occur. See Section 11. Subject to the applicable regulations of the Commission, and to the provisions of the Merger Agreement, the Purchaser expressly reserves the right to delay acceptance for payment of or payment for any Shares, to extend the Offer, or to terminate the Offer and not to accept for payment or pay for any Shares not theretofore accepted for payment or paid for, upon the occurrence of any of the conditions specified in paragraphs (a) through (g) of Section 14, and at any time or from time to time, to amend the Offer or to waive any conditions to the Offer in any respect consistent with the provisions of the Merger Agreement described above, as such provisions may be amended from time to time, in each case by giving oral or written notice of such delay, 4 7 extension, termination, amendment or waiver to the Depositary. These rights reserved by the Purchaser are in addition to the Purchaser's rights described in Section 14. Any such delay, extension, termination, amendment or waiver will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-l under the Exchange Act, which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Purchaser will extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the materiality of the changes. In the Commission's view, an offer should generally remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders, and, if material changes are made with respect to information that approaches the significance of price and the percentage of securities sought, a minimum of ten business days may be required to allow for adequate dissemination and investor response. With respect to a change in price, a minimum ten business day period from the date of such change is generally required under applicable Commission rules and regulations to allow for adequate dissemination to stockholders. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. The Company has provided the Purchaser with the Company's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal and, if required, other relevant materials will be mailed by the Purchaser to record holders of Shares and will be furnished by the Purchaser to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares when such lists or listings are received. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered prior to the expiration of the Offer (and not properly withdrawn in accordance with Section 4) as soon as practicable on or after the Expiration Date (and, in any event within three business days after the later of the Expiration Date and the receipt by the Depositary of the certificates for tendered Shares). Any determination concerning the satisfaction of such terms and conditions is within the sole discretion of the Purchaser and such determination will be final and binding on all tendering stockholders. See Section 14. The Purchaser expressly reserves the right to delay acceptance for payment of, or payment for, Shares in order to comply in whole or in part with any applicable law, including the HSR Act. See Sections 1 and 15. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility, as described in Section 3), a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), with any required signature guarantees, or an Agent's Message (as defined herein) in connection with a book-entry transfer and any other documents required by the Letter of Transmittal. 5 8 The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to and received by the Depositary and forming a part of a book-entry confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment and thereby purchased Shares validly tendered and not withdrawn if, as and when the Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer. In all cases, upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for purposes of receiving payments from the Purchaser and transmitting such payments to the tendering stockholders. Although the Offer Price may be increased as described herein, no interest will be paid by the Purchaser on the Offer Price for the Shares to be paid by the Purchaser, regardless of any delay in making such payment. If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased or untendered Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3, such Shares will be credited to an account maintained within the Book-Entry Transfer Facility), as soon as practicable following expiration or termination of the Offer. If, prior to the expiration of the Offer, the Purchaser increases the consideration offered to a holder of Shares pursuant to the Offer, such increased consideration will be paid to all holders of Shares that are purchased pursuant to the Offer, whether or not such Shares were tendered prior to such increase in consideration. The Purchaser reserves the right, at any time, to assign to one or more corporations directly or indirectly wholly-owned by Parent the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. In addition, pursuant to the Merger Agreement, Parent has the right to assign all of its and Purchaser's rights and obligations under the Merger Agreement to another person that is capable of acquiring a majority of the Class A Common Stock by the Outside Date subject in any case to Parent's guarantee of the performance by such other person of all of Parent's and the Purchaser's obligations thereunder. See Section 11. The reservation by Purchaser of the right to delay the acceptance or purchase of or payment for Shares is subject to the provisions of Rule 14e-1(c) under the Exchange Act, which requires Purchaser to pay the consideration offered or to return Shares deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer. 3. PROCEDURES FOR TENDERING SHARES. Valid Tender. For a stockholder validly to tender Shares pursuant to the Offer, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), together with any required signature guarantees or an Agent's Message in connection with a book-entry delivery of Shares and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the expiration of the Offer and either (a) certificates evidencing tendered Shares must be received by the Depositary at such address or such Shares must be tendered pursuant to the procedures for book-entry tender set forth below (and a confirmation of receipt of such tender received), in each case, prior to the expiration of the Offer, or (b) such stockholder must comply with the guaranteed delivery procedure set forth below. No alternate, conditional or contingent tenders will be accepted. 6 9 Book-Entry Transfer. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other required documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the expiration of the Offer, or the tendering stockholder must comply with the guaranteed delivery procedure described below. DELIVERY OF A DOCUMENT TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Signature Guarantees. Signatures on all Letters of Transmittal must be guaranteed by a firm which is a member of the Securities Transfer Agents Medallion Program or by any other "Eligible Guarantor Institution" as such term is defined in Rule 17Ad-15 under the Exchange Act (collectively, "Eligible Institutions") except in cases where Shares are tendered (a) by a registered holder of Shares who has not completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) for the account of an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a certificate evidencing Shares is registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or a certificate evidencing Shares not accepted for payment or not tendered is to be issued or returned, to a person other than the registered holder(s), then such certificate must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on such certificate, with the signature(s) on such stock powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If certificates evidencing Shares are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) must accompany each such delivery. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING ON PAYMENTS MADE TO CERTAIN STOCKHOLDERS WITH RESPECT TO THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH HIS, HER OR ITS CORRECT TAXPAYER IDENTIFICATION NUMBER BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates are not immediately available or such stockholder cannot deliver the certificates and all other required documents to the Depositary prior to the expiration of the Offer or the procedures for book- 7 10 entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered, provided that all of the following conditions are satisfied: (a) such tenders are made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, is received by the Depositary, as provided below, prior to the expiration of the Offer; and (c) the certificates (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book Entry Transfer Facility as described above) evidencing all tendered Shares, in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and all other documents required by the Letter of Transmittal are received by the Depositary within three trading days after the date of such Notice of Guaranteed Delivery. The term "trading day" is any day on which The New York Stock Exchange, Inc. (the "NYSE") is open for business. The Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by facsimile transmission to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery and a representation that the stockholder on whose behalf the tender is being made is deemed to own the Shares being tendered within the meaning of Rule 14e-4 under the Exchange Act. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility as described above), a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), together with any required signature guarantees (or, in the case of a book entry transfer, an Agent's Message), and any other documents required by the Letter of Transmittal. Accordingly, payment might not be made to all tendering stockholders at the same time, and will depend upon when Share certificates are received by the Depositary or Book-Entry Confirmations of such Shares are received into the Depositary's account at the Book-Entry Transfer Facility. Appointment as Proxy. By executing a Letter of Transmittal as set forth above, the tendering stockholder irrevocably appoints designees of the Purchaser as such stockholder's agents, attorneys-in-fact and proxies, with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of such stockholder's right with respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after the date of this Offer to Purchase. All such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the tendered Shares. Such appointment is effective upon the Purchaser's acceptance for payment of such Shares deposited with the Depositary. Upon such appointment, all prior proxies given by such stockholder with respect to such Shares and such other securities or rights will be revoked, without further action, and no subsequent powers of attorney or proxies may be given by such stockholder (and, if given, will not be effective). The Purchaser's designees will be empowered, among other things, to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual, special or adjourned meeting of the stockholders of the Company or otherwise. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment, the Purchaser must be able to exercise full voting and other rights with respect to such Shares, including voting at any meeting of stockholders (whether annual or special or whether or not adjourned) in respect of such Shares (to the extent that such Shares have such rights). Determination of Validity. All questions as to the form of documents and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, in its sole discretion, which determination will be final and binding on all parties. The Purchaser 8 11 reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right to waive any of the conditions of the Offer to the extent permitted by applicable law and the Merger Agreement or any defect or irregularity in the tender of any Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of other stockholders. Neither the Purchaser, the Depositary, the Information Agent, the Dealer Manager nor any other person will be under any duty to give notification of any defects or irregularities in tenders or shall incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and instructions thereto) will be final and binding. No tender of Shares shall be deemed to have been validly made until all defects or irregularities with respect to such tender have been expressly cured or waived by the Purchaser. A tender of Shares pursuant to any of the procedures described above will constitute the tendering stockholder's acceptance of the terms and conditions of the Offer, as well as the tendering stockholder's representation and warranty to the Purchaser that (a) such stockholder has the full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all other Shares or other securities issued or issuable in respect of such Shares), and (b) when the same are accepted for payment by the Purchaser, the Purchaser will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The acceptance for payment by the Purchaser of tenders of Shares pursuant to any one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Purchaser in accordance with the terms and subject to the conditions of the Offer. 4. WITHDRAWAL RIGHTS. Except as otherwise stated in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date (which is initially June 12, 1998) and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after July 13, 1998. To be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the tendering stockholder, the number of Shares to be withdrawn and (if certificates for Shares have been tendered) the names in which the certificate(s) evidencing the Shares to be withdrawn are registered, if different from that of the tendering stockholder. If the certificate(s) have been delivered to the Depositary, then, prior to the physical release of such certificate(s), the tendering stockholder must submit the serial numbers shown on the particular certificate(s) evidencing the Shares to be withdrawn and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of any Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry tender as set forth in Section 3, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the first sentence of this paragraph. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, which determination shall be final and binding. None of Parent, the Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person or entity will be under any duty to give any notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not validly tendered for any purposes of the Offer, but withdrawn Shares may be retendered at any subsequent time, by again following one of the procedures for tendering described in Section 3 at any time prior to the Expiration Date. 9 12 If the Purchaser is delayed in its acceptance for payment of any Shares tendered pursuant to the Offer, or is unable to accept for payment or pay for Shares tendered pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under this Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares until the expiration or termination of the Offer, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to and duly exercise withdrawal rights as set forth in this Section 4 subject to Rule 14e-1(c) under the Exchange Act, which provides that no person who makes a tender offer may fail to pay the consideration offered or return the securities deposited by or on behalf of securityholders promptly after the termination or withdrawal of the Offer. 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares pursuant to the Offer will be a taxable transaction for federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. In general, a stockholder will recognize gain or loss for federal income tax purposes equal to the difference between the amount of cash received in exchange for the Shares sold and such stockholder's adjusted tax basis in such Shares. Assuming the Shares constitute capital assets in the hands of the stockholder, such gain or loss will be capital gain or loss and will be long term capital gain or loss if the holder will have held the Shares for more than one year at the time of the sale. Gain or loss will be calculated separately for each block of Shares tendered pursuant to the Offer. THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN CORPORATIONS. THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE OFFER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS. 6. PRICE RANGE OF SHARES; DIVIDENDS. On June 16, 1997, the Class B Common Stock began trading on the NYSE under the symbol "DKB". Previously, the Class B Common Stock was traded in the over-the-counter market and prices were quoted on the Nasdaq National Market under the symbol "SEEDB". There is no established public trading market for the Class A Common Stock. The following table sets forth, for the quarters indicated, dividends per Share on the Class A Common Stock and the Class B Common Stock and the high and low sales prices per Share of Class B Common Stock as reported by the Nasdaq National Market and by the NYSE, as applicable for the periods indicated. All dividend amounts and Share prices have been adjusted to reflect the two-for-one split of 10 13 the Shares to holders of record on July 25, 1997, and the three-for-one split of the Shares to the holders of record on May 10, 1996 (together, the "Stock Splits"). DEKALB GENETICS CORPORATION
DIVIDENDS HIGH LOW --------- ------ ------ Fiscal 1996: First Quarter......................................... $ .0333 $ 8.33 $ 6.63 Second Quarter........................................ .0333 11.63 7.38 Third Quarter......................................... .035 15.00 10.79 Fourth Quarter........................................ .035 16.88 12.13 Fiscal 1997: First Quarter......................................... .035 21.38 16.25 Second Quarter........................................ .035 33.88 18.13 Third Quarter......................................... .035 35.63 25.38 Fourth Quarter........................................ .035 42.75 35.13 Fiscal 1998: First Quarter......................................... .035 47.13 33.00 Second Quarter........................................ .035 70.50 23.00 Third Quarter (through May 14, 1998).................. -- 98.00 65.75
On February 10, 1998, the last full trading day before the Board of Directors of the Company announced its determination to pursue a possible business combination, as more fully described in Section 10, the reported closing price of the Class B Common Stock on the NYSE was $33.13. On May 8, 1998, the last full trading day prior to the announcement of the Offer and the Merger Agreement and related transactions, the reported closing price of the Class B Common Stock on the NYSE was $77.00 per Share. On May 14, 1998, the last full trading day prior to commencement of the Offer, the reported closing price of the Class B Common Stock on the NYSE was $93.19 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES OF CLASS B COMMON STOCK. 7. POSSIBLE EFFECTS OF THE OFFER ON MARKET FOR THE SHARES; NYSE LISTING; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS. Possible Effects of the Offer on the Market for the Shares. The purchase of Shares pursuant to the Offer will reduce the number of Shares of Class B Common Stock that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares of Class B Common Stock held by the public. The purchase of Shares of Class B Common Stock pursuant to the Offer can also be expected to reduce the number of holders of Shares of Class B Common Stock. The Purchaser cannot predict with certainty whether the reduction in the number of Shares of Class B Common Stock that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares of Class B Common Stock or whether it would cause future market prices to be greater or less than the Offer price therefor. As described above, there is no public market for Shares of Class A Common Stock. NYSE Listing. Depending upon the number of Shares of Class B Common Stock purchased pursuant to the Offer, the Shares of Class B Common Stock may no longer meet the standards for continued listing on the NYSE. According to the NYSE's published guidelines, the NYSE could consider delisting the Shares of Class B Common Stock if, among other things, the number of publicly held Shares of Class B Common Stock falls below 600,000, the number of holders of Shares of Class B Common Stock falls below 400, the number of holders of Shares of Class B Common Stock falls below 1,200 and the average monthly trading volume is less than 100,000 Shares of Class B Common Stock, or the aggregate market value of such publicly held Shares of Class B Common Stock falls below $5,000,000. Shares of Class B Common Stock held by officers or directors 11 14 of the Company or their immediate families, and other concentrated holdings of 10% or more of such Shares, ordinarily will not be considered as being publicly held for this purpose. In the event the Shares of Class B Common Stock are no longer eligible for NYSE listing, quotations might still be available from other sources. The extent of the public market for the Shares of Class B Common Stock and the availability of such quotations would, however, depend upon the number of holders of such Shares of Class B Common Stock remaining at such time, the interest in maintaining a market in such Shares of Class B Common Stock on the part of securities firms, the possible termination of registration of such Shares of Class B Common Stock under the Exchange Act as described below and other factors. Exchange Act Registration. Both the Class A Common Stock and the Class B Common Stock are currently registered under the Exchange Act. The purchase of the Class A Common Stock or the Class B Common Stock pursuant to the Offer may result in such Class A Common Stock or Class B Common Stock, respectively, becoming eligible for deregistration under the Exchange Act. Registration of the Class A Common Stock or the Class B Common Stock may be terminated upon application by the Company to the Commission if the Shares of such class are not listed on a "national securities exchange" and there are fewer than 300 record holders. Termination of registration of both of the Class A Common Stock and the Class B Common Stock under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and the Commission and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act and the requirements of furnishing a proxy statement in connection with stockholders' meetings pursuant to Section 14(a) or 14(c) of the Exchange Act and the related requirement of an annual report, no longer applicable to the Company. If both of the Class A Common Stock and the Class B Common Stock are no longer registered under the Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions would no longer be applicable to the Company. Furthermore, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), may be impaired or, with respect to certain persons, eliminated. If registration of the Class A Common Stock or the Class B Common Stock under the Exchange Act were terminated, such Class A Common Stock or Class B Common Stock, respectively, would no longer be eligible for stock exchange listing or Nasdaq reporting. The Purchaser believes that the purchase of the Class A Common Stock or the Class B Common Stock pursuant to the Offer may result in such Class A Common Stock or Class B Common Stock, respectively, becoming eligible for deregistration under the Exchange Act, and it would be the intention of the Purchaser to cause the Company to make an application for termination of registration of the Class A Common Stock or the Class B Common Stock as soon as possible after successful completion of the Offer if the Class A Common Stock or the Class B Common Stock, respectively, is then eligible for such termination. If the registration of the Class A Common Stock or the Class B Common Stock is not terminated prior to the Merger, then the Class A Common Stock or the Class B Common Stock will no longer be eligible for NYSE listing and the registration of the Shares under the Exchange Act will be terminated following the consummation of the Merger. Margin Regulations. The Shares of Class B Common Stock are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such Shares for the purpose of buying, carrying or trading in securities ("Purpose Loans"). Depending upon factors such as the number of record holders of the Shares of Class B Common Stock and the number and market value of publicly held Shares of Class B Common Stock, following the purchase of Shares of Class B Common Stock pursuant to the Offer, the Shares of Class B Common Stock might no longer constitute "margin securities" for purposes of the Federal Reserve Board's margin regulations and, therefore, could no longer be used as collateral for Purpose Loans made by brokers. In addition, if registration of the Class B Common Stock under the Exchange Act were terminated, the Shares of Class B Common Stock would no longer constitute "margin securities." The Shares of Class A Common Stock are not "margin securities." 12 15 8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware corporation with its principal executive offices located at 3100 Sycamore Road, DeKalb, Illinois 60115. The Company engages in the development of products of major importance to two segments of modern agriculture -- seed and technology (corn, soybeans, sorghum, alfalfa and sunflower) and hybrid swine breeding stock. The Company operates two business segments, a seed segment and a swine breeding segment, through the Company's wholly owned subsidiary, DEKALB Swine Breeders, Inc. In fiscal 1997, the seed segment had revenues of approximately $394,800,000 and the swine breeding segment had revenues of approximately $56,600,000. The Company conducts major research and development programs on those genetically determined traits which are of primary importance to the producer's profitability. The Company develops primary or inbred lines through a process of observation, evaluation and selection for further breeding of those plants or swine which exhibit superior performance in certain traits. These primary or inbred lines, when mated or crossed to other primary or inbred lines, will pass on to their progeny the superior performance in those traits for which the primary or inbred lines were selected. Additionally, a fundamental genetic principle -- called heterosis, or hybrid vigor -- is generally utilized. Heterosis occurs when the progeny of genetically dissimilar parents have certain performance characteristics which are superior to those of either parent. The Company uses these principles of genetic selection and heterosis to provide products for the modern day agricultural industry. The Company also develops production and management techniques to complement the performance potential which resides in the genetic composition of its products. As part of its research and development, the Company uses biotechnology to improve hybrid performance in seed. For example, using gene cloning and transformation techniques in the seed business, researchers are able to incorporate genes from various sources to create new, value-added traits such as herbicide resistance, insect resistance, and improved nutritional quality. Further, DNA marker techniques enable researchers to correlate field performance with genetic makeup thereby giving them an improved ability to breed for desired product characteristics. The selected financial information of the Company and its consolidated subsidiaries for the years ended August 31, 1997, 1996 and 1995 set forth below has been taken from the audited financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997 (except as set forth in footnote 4 below), and such information is qualified in its entirety by reference to such document and all of the financial statements and related notes contained therein. The selected financial information for the quarter ended February 28, 1998 set forth below has been taken from unaudited financial information contained in the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998. Such Form 10-K and Form 10-Q are each incorporated by reference herein. More comprehensive financial information is included in such reports and other documents filed by the Company with the Commission, and the following summary is qualified in its entirety by reference to such reports and such other documents and all the financial information (including the related notes) contained therein. Such reports and 13 16 other documents should be available for inspection and copies thereof should be obtainable in the manner set forth below. DEKALB GENETICS CORPORATION SELECTED FINANCIAL INFORMATION (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
SIX MONTHS FOR THE YEAR ENDED OR AT ENDED AUGUST 31, FEBRUARY 28, -------------------------- 1998 1997 1996 1995 ------------ ------ ------ ------ OPERATIONS DATA Total operating revenues............................. $276.6 $451.4 $387.5 $319.4 Earnings before income taxes and discontinued operations......................................... 32.3 46.4 28.1 15.1 Net earnings......................................... 22.0 28.8 17.0 10.7 ====== ====== ====== ====== Basic net earnings per Share(1)(4)................... $ 0.64 $ 0.84 $ 0.52 $ 0.35 Diluted net earnings per Share(2)(4)................. 0.61 0.81 0.51 0.34 Dividends per Share.................................. 0.14 0.137 0.133
SIX MONTHS ENDED AT AUGUST 31, FEBRUARY 28, ---------------- 1998 1997 1996 ------------ ------ ------ FINANCIAL DATA Total assets................................................ $598.2 $449.6 $363.3 Long-term debt.............................................. 104.0 90.0 85.0 Shareholders' equity(3)..................................... 223.0 $196.1 $168.6
- --------------- (1) Basic net earnings per Share are calculated by dividing net earnings by the average number of common shares outstanding during the relevant periods. (2) Diluted net earnings per Share are calculated by dividing net earnings by the average number of common and common equivalent (stock options) Shares outstanding during the relevant periods. (3) Gains and losses resulting from translation (except in foreign countries experiencing hyperinflation) are reflected as an adjustment to shareholders' equity. (4) The Company adopted Financial Accounting Standards Board Statement No. 28, "Earnings per Share" effective February 28, 1998. Per Share amounts have been restated by the Company for prior periods. The Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Information as of particular dates concerning the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and also should be available for inspection at the Commission's regional offices located at Seven World Trade Center, 13th Floor, New York, New York 10048 and the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may also be obtained by mail, upon payment of the Commission's customary fees, by writing to its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material may be obtained electronically by visiting the Commission's web site on the internet at http://www.sec.gov. The information should also be available for inspection at the offices of the NYSE, 20 Broad Street, New York, New York 10005. Except as otherwise noted in this Offer to Purchase, all of the information with respect to the Company set forth in this Offer to Purchase has been provided by the Company or derived from publicly available information. Although neither the Purchaser nor Parent has any knowledge that any such information is 14 17 untrue, neither the Purchaser nor Parent takes any responsibility for the accuracy or completeness of information contained in this Offer to Purchase with respect to the Company or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information. Prior to entering into the Merger Agreement, Parent and the Purchaser conducted a due diligence review of the Company and in connection with such review, received certain non-public information from the Company. The non-public information included, among other things, projected financial information (the "Financial Plan") for fiscal years ending August 31, 1998, August 31, 1999 and August 31, 2002. The Company has advised Parent and the Purchaser that the Financial Plan was prepared by the Company's management based on numerous assumptions, including among others, projections of revenue, net gross profit, operating expenses, depreciation and amortization, capital expenditures and working capital requirements. No assurances can be given with respect to any such assumptions. Set forth below is a summary of certain projected income statement items for fiscal years ending August 31, 1998, August 31, 1999 and August 31, 2002. None of the assumptions in the Financial Plan give effect to the Offer, the Merger or financing thereof or the potential combined operations of the Parent and the Company after consummation of such transactions. THE COMPANY HAS ADVISED THE PURCHASER THAT IT DOES NOT AS A MATTER OF COURSE DISCLOSE PROJECTIONS AS TO FUTURE REVENUES OR EARNINGS, AND THE PROJECTIONS DISCUSSED IN THE FINANCIAL PLAN WERE NOT INTENDED TO FORECAST LIKELY OR ANTICIPATED OPERATING RESULTS, BUT INSTEAD WERE MERELY ONE SCENARIO PREPARED IN THE COURSE OF THE COMPANY'S ANNUAL STRATEGIC PLANNING PROCESS TO AID THE COMPANY IN SETTING INTERNAL GOALS AND ILLUSTRATING CAPITAL NEEDS. THE PROJECTIONS DISCUSSED IN THE FINANCIAL PLAN WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE COMMISSION OR THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FOR PROJECTIONS. THE FINANCIAL PLAN HAS NOT BEEN EXAMINED, REVIEWED OR COMPILED BY THE COMPANY'S INDEPENDENT AUDITORS, AND ACCORDINGLY THEY HAVE NOT EXPRESSED AN OPINION OR ANY OTHER ASSURANCE ON IT. THE FORECASTED INFORMATION IS INCLUDED HEREIN SOLELY BECAUSE SUCH INFORMATION WAS FURNISHED TO PARENT AND THE PURCHASER OR ITS FINANCIAL ADVISORS. ACCORDINGLY, THE INCLUSION OF THE PROJECTIONS IN THIS OFFER SHOULD NOT BE REGARDED AS AN INDICATION THAT PARENT OR PURCHASER OR THE COMPANY OR THEIR RESPECTIVE FINANCIAL ADVISORS OR THEIR RESPECTIVE OFFICERS AND DIRECTORS CONSIDER SUCH INFORMATION TO BE ACCURATE OR RELIABLE, AND NONE OF SUCH PERSONS ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY THEREOF. THE FINANCIAL PLAN WAS PREPARED FOR INTERNAL USE AND IS SUBJECTIVE IN MANY RESPECTS AND THUS SUSCEPTIBLE TO VARIOUS INTERPRETATIONS AND PERIODIC REVISION BASED UPON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT. IN ADDITION, BECAUSE THE ESTIMATES AND ASSUMPTIONS UNDERLYING THE FINANCIAL PLAN ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND ARE BEYOND THE CONTROL OF THE COMPANY, PARENT AND THE PURCHASER, THERE CAN BE NO ASSURANCE THAT THE FINANCIAL PLAN WILL BE REALIZED. IN PARTICULAR, THE FINANCIAL PLAN ASSUMED THAT THE COMPANY WOULD BE TOTALLY SUCCESSFULLY IN ASSERTING ITS INTELLECTUAL PROPERTY RIGHTS IN PENDING LITIGATION AND THAT THE COMPANY WOULD COLLECT ROYALTIES FROM ALL PARTIES TO SUCH LITIGATION ON ALL SALES OF RELATED PRODUCTS IN THE YEAR IN WHICH THE PRODUCTS ARE SOLD, BEGINNING IN 1998. NO ASSURANCES CAN BE GIVEN WITH RESPECT TO SUCH ASSUMPTIONS, PARTICULARLY IN LIGHT OF THE FACT THAT NO TRIALS IN SUCH LITIGATION ARE SCHEDULED IN 1998. ACCORDINGLY, IT IS EXPECTED THAT THERE WILL BE DIFFERENCES BETWEEN ACTUAL AND PROJECTED RESULTS, AND ACTUAL RESULTS MAY BE MATERIALLY HIGHER OR LOWER THAN THOSE SET FORTH BELOW. THE INFORMATION SET FORTH BELOW DOES NOT INCLUDE THE RESULTS OF THE SWINE BREEDING SEGMENT. EXCERPT FROM DEKALB GENETICS CORPORATION FINANCIAL PLAN -- CONSOLIDATED ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDING AUGUST 31, ----------------------- 1998 1999 2002 ----- ----- ----- Operating Revenues.......................................... $ 504 $ 574 $ 772 ----- ----- ----- Pre-tax Earnings............................................ 94 116 234 Net earnings................................................ $ 60 $ 71 $ 143 ----- ----- ----- Net earnings per Share...................................... $1.65 $1.94 $3.92
15 18 9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER. The Purchaser is a newly incorporated Delaware corporation. To date, the Purchaser has not conducted any business other than that incident to its formation, the execution and delivery of the Merger Agreement and the commencement of the Offer. Accordingly, no meaningful financial information with respect to the Purchaser is available. The Purchaser is a wholly-owned subsidiary of Parent. The principal executive office of the Purchaser is located at 800 North Lindbergh Blvd., St. Louis, Missouri 63167. Parent is a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 800 North Lindbergh Blvd., St. Louis, Missouri 63167. Parent and its subsidiaries are engaged in the worldwide manufacture and sale of a widely diversified line of agricultural products; nutrition and consumer products; pharmaceuticals; and other products. The agricultural products segment of Parent is a leading worldwide developer, producer and marketer of crop protection products. This group also develops and markets products enhanced by biotechnology. These products improve the efficiency of food production and preserve environmental quality for agricultural and industrial uses. The nutrition and consumer products segment manufactures and markets sweeteners (including Nutrasweet(R) brand sweetener and Equal(R) and Canderel(R) tabletop sweeteners), alginates, biogums and other food ingredients. It also develops, produces and markets Ortho(R) brand lawn-and-garden products, and RoundUp(R) herbicide for residential use. The pharmaceuticals segment reflects the operations of G.D. Searle ("Searle"). Searle develops, produces and markets prescription pharmaceuticals. Its major products include medications to relieve the symptoms of arthritis, to control high blood pressure, to relieve insomnia, to prevent the formation of ulcers, and to provide better health care for women. During 1997, Parent acquired several seed companies specializing in various stages of seed production. These acquisitions included the Asgrow Agronomics seed business, a global leader in soybean research and seeds; Holden's Foundation Seeds Inc., a global leader in the development and growth of corn germplasm and a supplier of parent seed to retail seed companies; Corn States Hybrid Service Inc., the exclusive marketer and distributor for Holden's products; and Sementes Agroceres S.A., the leading seed corn company in Brazil. Parent also acquired the remaining interest in Calgene Inc., which has done significant biotechnology research in oils, cotton and produce. The name, business address, present principal occupation, material positions held in the past five years and citizenship of each of the directors and executive officers of Parent and the Purchaser are set forth in Schedule A to this Offer to Purchase. At December 31, 1997, Parent employed approximately 21,900 persons in its worldwide operations. There is set forth below certain consolidated summary financial information of Parent's last three fiscal years and the three months ended March 31, 1998 and 1997 as contained in Parent's Annual Report on Form 10-K for the year ended December 31, 1997 and Form 10-Q for the quarter ended March 31, 1998 as filed with the Commission. More comprehensive financial information is included in such reports and other documents filed by Parent with the Commission, and the following summary is qualified in its entirety by reference to such reports and other documents and all of the financial information and notes contained therein. Copies of such reports and other documents may be examined at or obtained from the Commission in the manner set forth in Section 8. MONSANTO COMPANY SELECTED FINANCIAL INFORMATION (DOLLARS IN MILLIONS)
YEAR ENDED DECEMBER 31, -------------------------- 1997 1996 1995 ------ ------ ------ Net Sales................................................... $7,514 $6,348 $5,410 Operating Income............................................ 499 595 698 ------ ------ ------ Net Income (Loss)................................. $ 470 $ 385 $ 739
16 19 BALANCE SHEET DATA
AT DECEMBER 31, ------------------ 1997 1996 ------- ------- Total Assets................................................ $10,774 $11,237 Long-Term Debt.............................................. 1,979 1,608 Shareowners' Equity......................................... 4,104 3,690
Parent is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the Commission under the Exchange Act relating to its business, financial condition and other matters. Information, as of particular dates, concerning Parent's directors and officers, their remuneration, options granted to them, the principal holders of Parent's securities and any material interest of such persons in transactions with Parent is disclosed in proxy statements distributed to Parent's stockholders and filed with the Commission. Such reports, proxy statements and other information may be examined, and copies may be obtained at the same places and in the same manner set forth with respect to the information concerning the Company in Section 8. Except as set forth in Sections 11 and 12, neither Parent nor the Purchaser, nor, to the best knowledge of both Parent and the Purchaser, any of the persons listed in Schedule A hereto nor any associate or majority owned subsidiary of any of the foregoing, beneficially owns or has a right to acquire any equity securities of the Company. Neither Parent nor the Purchaser, nor, to the best knowledge of both Parent and the Purchaser, any of the persons or entities referred to above, nor any director, executive officer or subsidiary of any of the foregoing, has effected any transaction in such equity securities during the past 60 days. Except as set forth in Sections 10, 11 and 12, neither Parent nor the Purchaser, nor, to the best knowledge of both Parent and the Purchaser, any of the persons listed in Schedule A hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. Except as set forth in Sections 10, 11 and 12, there have been no contacts, negotiations or transactions since September 1, 1994 between Parent or the Purchaser, or, to the best knowledge of both Parent and the Purchaser, any of the persons listed in Schedule A hereto, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors, or a sale or other transfer of a material amount of assets. Except as described in Sections 10, 11 and 12, neither Parent, the Purchaser nor any other subsidiary of Parent, nor, to the best knowledge of both Parent and the Purchaser, any of the persons listed in Schedule A hereto, has since September 1, 1994 had any transaction with the Company or any of its executive officers and directors or affiliates that would require disclosure under the rules and regulations of the Commission applicable to the Offer. 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS. Beginning in April 1992, Parent and the Company entered into various research and similar agreements for the joint development of various products. In early 1995, Robert Shapiro, Chief Executive Officer of Parent, suggested, first, through representatives, then, in March 1995, directly to Bruce P. Bickner, Chief Executive Officer of the Company, that a business relationship between the companies could be beneficial to both companies. In April 1995, Mr. Shapiro, Mr. Bickner and other members of the senior management of both companies met to discuss the range of possible future relationships between the companies. At this meeting, Parent's representatives described their vision for Parent's agriculture business and indicated that a relationship with a company in the seed corn business, a major element of the Company's business, was a part of that vision. The Company's representatives indicated at that time that the Company was only interested in a collaboration. Representatives of the companies decided to continue discussions of a possible future relationship into which the companies might enter. Over the next several months members of both companies' managements met to assess potential opportunities for collaboration. 17 20 In October 1995, members of management and the representatives of both companies began discussing a possible structure for an investment by Parent in the Company as well as continuing to discuss and develop the nature of the collaboration of the companies in the development and marketing of products. During the succeeding months, representatives of the companies' management and advisors worked to develop possible structures for the investment and the collaboration. As a result of these negotiations, and with the approval of their respective Boards of Directors, on January 31, 1996 Parent and the Company entered into an investment agreement (the "Investment Agreement"), which provided for Parent to commence an offer to purchase up to 10,800,000 shares of Class B Common Stock at $11.83 per Share (the "1996 Offer") and to purchase from the Company (a) a number of newly issued Shares of Class A Common Stock, at a price per share of $10.83, equal to 10% of the outstanding shares of Class A Common Stock immediately after the expiration of such offer and the issuance of Class A Common Stock and (b) 2,268,000 newly issued shares of Class B Common Stock at a price per share of $10.83. The 1996 Offer was concluded on March 6, 1996 and Parent accepted for payment 10,342,428 Shares of Class B Common Stock. On March 8, 1996, pursuant to the terms of the Investment Agreement, Parent acquired 485,442 Shares of Class A Common Stock and 2,268,000 Shares of Class B Common Stock. After giving effect to all of these transactions, Parent held 10% of the outstanding Class A Common Stock and approximately 43.2% of the Class B Common Stock. Pursuant to the Investment Agreement, Parent also had the right, until March 8, 1997, to purchase an additional numbers of Shares of Class B Common Stock in the open market, but subject to a maximum ownership cap of 45% of the outstanding Shares. In accordance with these provisions, Parent purchased an aggregate of 516,200 Shares of Class B Common Stock at an average price of $12.38 per Share, in open market purchases between March 21, 1996 and July 9, 1996. (All such stock amounts and stock prices have been adjusted to reflect the Stock Splits.) For a more detailed discussion of the Investment Agreement and certain purchases of additional Shares pursuant thereto, see Section 12. The above acquisition of Shares is referred to herein as the "1996 Investment." In conjunction with the 1996 Investment, Parent and the Roberts Family Stockholders entered into a stockholders' agreement dated as of January 31, 1996 (the "1996 Stockholders' Agreement") and Parent and the Company entered into a registration rights agreement, dated as of June 31, 1996 (the "Registration Rights Agreement"). See Section 12. At the same time the Roberts Family Stockholders entered into the Voting Trust Agreement and a stockholders' agreement among themselves. Pursuant to the Investment Agreement, in April of 1996, Parent's designee, Robert T. Fraley, Ph.D., Co-President, Ag. Sector of Monsanto, was appointed to the Board of Directors of the Company, and a second Parent designee, William M. Ziegler, Special Projects Director in the Ag. Sector of Monsanto, was nominated by the Board and elected by the stockholders of the Company on January 13, 1997. Dr. Fraley and Mr. Ziegler are referred to herein as the "Monsanto Nominees." Concurrently with entering into the Investment Agreement, on January 31, 1996, Parent and the Company entered into an agreement (the "Collaboration Agreement") which provides the framework for a long-term research and development collaboration between Parent and the Company in the field of agricultural biotechnology, particularly corn seed. Parent and the Company also entered into cross-licensing agreements covering insect-resistant and herbicide-tolerant corn products. The two companies share the royalties received from third parties relating to the patents covered by such cross-licensing agreements. These agreements (collectively, the "Collaboration") are described in more detail in Section 12. The Collaboration Agreement contemplated the possibility of additional collaborations between the parties. Early in 1997, representatives of Parent and the Company began meeting to discuss the nature and scope of certain additional collaborations. These discussions continued up until February 11, 1998. In addition, in 1997, representatives of Parent discussed with representatives of the Company the possibility of the sale by Parent to the Company of certain row crop businesses. These discussions terminated without any transaction occurring. On February 10, 1998, after being informed by the Roberts Family Stockholders that the Roberts family had determined that it was an appropriate time to evaluate opportunities for a business combination, the Company's Board of Directors appointed a special committee consisting of Paul H. Hatfield, John T. Roberts, 18 21 Douglas C. Roberts and H. Blair White (the "Special Committee") to establish a procedure for consideration of a possible business combination, and authorized the retention of Merrill Lynch as the Company's financial advisor in connection with a business combination. The Monsanto Nominees were recused from the portion of the Board meeting at which Merrill Lynch made a presentation to the directors. On February 11, 1998, the Company announced publicly the Board's determination to pursue a possible business combination in order to maximize stockholder value. Later that day, Parent issued a press release announcing that it had advised the Board of Directors of the Company that Parent was actively considering making an offer to acquire all of the Shares that it did not then own. During the following weeks there were conversations between Parent and the Company and between Parent's and the Company's advisers in which representatives of the Company or its advisers advised representatives of Parent or its advisers of the procedures that the Company would require to be followed in the auction process. On February 26, 1998, the Board of Directors of the Company determined that the bidding process would be confidential, and that accordingly, the Monsanto Nominees would be excluded from all Board deliberations on the matter and would not receive any reports about the indications of interest, bids, bidders or the sale process generally. The Monsanto Nominees abstained from voting on such determinations, and were recused from the portion of the meeting at which Merrill Lynch addressed the directors concerning valuation and certain other items. Parent and the Company entered into a confidentiality agreement on March 12, 1998 (the "Confidentiality Agreement"). Subsequently, Merrill Lynch provided the Parent and its advisors a package containing certain public and non-public information concerning the Company. On March 26, 1998, the Company's senior management made a presentation to Parent's management and representatives of Parent's advisers with respect to the business of the Company. On April 2, 1998, in response to a request from Merrill Lynch, Parent submitted a preliminary indication of interest in a potential acquisition of the Company in the range of $65 to $72 per Share. During the week of April 6, 1998, Merrill Lynch informed Parent that Parent would be invited to continue its participation in the auction process. On April 16, 1998, Parent commenced a detailed due diligence investigation of the Company which included meetings with Company personnel, data review, presentations, site tours and question and answer sessions. The due diligence investigations included personnel from Parent, as well as its investment banking, accounting, legal, technical and other advisors. Parent and its representatives met with senior technology and breeding managers and other senior management of the Company and with advisors to the Company. In April, Parent received from the Company draft forms of merger agreement and from counsel to the Roberts Family Stockholders a draft form of stockholders agreement which provided for an irrevocable agreement to vote for the merger and to tender Shares into a cash tender offer. On April 27, 1998, Parent received a letter from Merrill Lynch outlining the specific procedures to be followed in connection with submission of final bids, and informing Parent that interested parties would be required to submit firm and final offers on May 7, 1998. On April 30, 1998, the Company's senior management and Merrill Lynch held a further due diligence question-and-answer session attended by Parent and its advisors. Representatives of Parent also met with executives of the Company to discuss the interest of such executives in continuing their employment with the Company (or in the combined business of Parent and the Company) following an acquisition of the Company by Parent. In accordance with the April 27 letter, Parent submitted written comments on the draft agreements on May 1, 1998. Subsequently, legal counsel for the Company and Parent had various conversations with respect to a form of merger agreement, and legal counsel for Parent and the Roberts Family Stockholders had similar conversations with respect to a form of stockholders agreement. On May 7, 1998, Parent's Board of Directors authorized Parent to submit an offer to acquire the Company. In accordance with instructions that were provided to bidders by Merrill Lynch, during the 19 22 afternoon of May 7, 1998, Parent communicated to the Company that it was prepared to acquire the Company at a price of $100 per Share. Concurrently with this communication, Parent's legal advisors submitted further proposed changes to the forms of merger agreement and stockholders agreement. Beginning on Friday, May 8, 1998, and continuing through Saturday, May 9, 1998, representatives of Parent and the Company negotiated the definitive form of the Merger Agreement, and representatives of the Roberts Family Stockholders and representatives of Parent negotiated the definitive form of the Stockholders Agreement. On May 8, 1998, the Company's Board unanimously (without the participation of the Monsanto Nominees) approved the Offer, the Merger, the Merger Agreement, the Stockholders Agreement and the transactions contemplated by the Merger Agreement and the Stockholders Agreement for purposes of rendering (a) Section 203 of the DGCL, (b) Article EIGHTH of the Company's Restated Certificate of Incorporation, as amended (the "Company Charter") and (c) Article 11 of the Investment Agreement irrevocably inapplicable to the Offer, the Merger, the Merger Agreement and the Stockholders Agreement, the transactions contemplated by the Merger Agreement and/or the Stockholders Agreement and any other transaction (except a transaction in which Parent acquires beneficial ownership of Shares other than pursuant to the Merger) between Parent and any of its affiliates on the one hand, and the Company and any of its affiliates, on the other hand, consummated after the date that the Purchaser acquires Shares pursuant to the Offer that could be defined as a "Business Combination" under Section 203 of the DGCL or Article EIGHTH of the Company Charter. The Company's Board of Directors also adopted resolutions (i) determining that the Offer and the Merger are in the best interests of the Company and its shareholders, and (ii) recommending the Company's stockholders accept the Offer and that holders of Shares of Class A Common Stock approve and adopt the Merger Agreement and the Merger. The Monsanto Nominees were not present at and did not participate in the meeting of the Company's Board at which the actions referred to in this paragraph were taken. For a more detailed discussion of Section 203 of the DGCL and Article Eighth of the Company Charter, see Section 15. For a more detailed discussion of Section 11 of the Investment Agreement, see Section 12. On May 9, 1998, the Stockholders Agreement was executed by Parent and the other parties thereto, and the Merger Agreement was executed by Parent, the Purchaser and the Company. On May 11, 1998, press releases announcing the execution of the definitive agreements were issued by both Parent and the Company. Reference is made to the Company's Statement on Schedule 14D-9 for a description of the matters considered by the Board in connection with its actions. 11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE STOCKHOLDERS AGREEMENT; APPRAISAL RIGHTS; PLANS FOR THE COMPANY. (a) Purpose. The purpose of the Offer and the Merger is to acquire control of, and the entire equity interest in, the Company. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of all the Shares. The purpose of the Merger is to acquire all capital stock of the Company not purchased pursuant to the Offer or otherwise. (b) The Merger Agreement. The following is a summary of certain provisions of the Merger Agreement. This summary is qualified in its entirety by reference to the Merger Agreement which is incorporated herein by reference and a copy or form of which has been filed with the Commission as an exhibit to the Schedule 14D-1 (the "Schedule 14D-1"). The Merger Agreement may be examined and copies may be obtained at the places set forth in Section 8. Defined terms used herein and not defined herein shall have the respective meanings assigned to those terms in the Merger Agreement. THE OFFER. The Merger Agreement provides that, so long as the Merger Agreement has not been terminated pursuant to its terms, as promptly as practicable but in no event later than five business days after the date of the public announcement by Parent and the Company of the Merger Agreement, the Purchaser 20 23 will, and Parent will cause Purchaser to, commence the Offer. In the Merger Agreement, Parent and the Purchaser agree that the Purchaser will not terminate the Offer between scheduled expiration dates (except in the event that the Merger Agreement is terminated) and that, in the event that the Purchaser would otherwise be entitled to terminate the Offer at any scheduled expiration date due to the failure of one or more of the Offer Conditions, unless the Merger Agreement has been terminated, the Purchaser will, and Parent will cause the Purchaser to, extend the Offer until such date as the Offer Conditions have been satisfied or such later date as required by applicable law; provided, however, that the Purchaser is not required to extend the Offer beyond the Outside Date. If the Merger Agreement is terminated by either Parent or the Purchaser or by the Company, the Purchaser will, and Parent will cause the Purchaser to, terminate promptly the Offer, except that if the Merger Agreement is terminated by Parent or Purchaser in the event that the Board of Directors of the Company withdraws or modifies in a manner adverse to Parent or the Purchaser its approval or recommendation of the Offer, the Merger or the Merger Agreement, Parent or the Purchaser may terminate the Offer. The Purchaser may, at any time, transfer or assign to one or more corporations directly or indirectly wholly-owned by Parent the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer or prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment. RECOMMENDATION. In the Merger Agreement, the Company represents and warrants that the Board of Directors of the Company, at a meeting duly called and held, duly adopted (by unanimous vote, with the Monsanto Nominees not participating) resolutions approving the Offer, the Merger Agreement, the Merger and the Stockholders Agreement, determining that the Offer and the Merger are fair to, and in the best interests of, the Company's stockholders and recommending that the Company's stockholders accept the Offer and approve and adopt the Merger Agreement and the Merger. The Company further represents and warrants that the action of the Board of Directors of the Company in approving the Offer (including the purchase of Shares pursuant to the Offer), the Merger, the Merger Agreement, the Stockholders Agreement and the transactions contemplated by the Merger Agreement and the Stockholders Agreement, is sufficient to render (i) Section 203 of the DGCL, (ii) Article EIGHTH of the Company's Restated Certificate of Incorporation and (iii) Article 11 of the Investment Agreement irrevocably inapplicable to the Offer, the Merger, the Merger Agreement and the Stockholders Agreement, the transactions contemplated by the Merger Agreement and/or the Stockholders Agreement and any other transaction (except a transaction in which Parent acquires beneficial ownership of Shares other than pursuant to the Merger) between Parent and any of its affiliates on the one hand, and the Company and any of its affiliates, on the other hand, consummated after the date that the Purchaser acquires Shares pursuant to the Offer that could be defined as a "Business Combination" under Section 203 of the DGCL or Article EIGHTH of the Company's Restated Certificate of Incorporation. THE MERGER. The Merger Agreement provides that upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the DGCL, Purchaser will be merged with and into the Company at the Effective Time. Following the Effective Time, the separate corporate existence of the Purchaser will cease and the Company will continue as the Surviving Corporation and will succeed to and assume all the rights and obligations of the Purchaser and the Company in accordance with the DGCL. CHARTER, BY-LAWS, DIRECTORS AND OFFICERS. The Restated Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time, will be amended and restated in its entirety as of the Effective Time as set forth in the Merger Agreement and will be the Restated Certificate of Incorporation of the Surviving Corporation, and the By-Laws of the Company will be amended as of the Effective Time to read in their entirety as the By-Laws of the Purchaser, as in effect immediately prior to the Effective Time. The directors of the Purchaser immediately prior to the Effective Time will be the directors of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time will be the officers of the Surviving Corporation. CONVERSION OF SECURITIES. As of the Effective Time, by virtue of the Merger and without any action on the part of any of the Purchaser, the Company or the holders of any securities of the Purchaser or the Company: each Share issued and outstanding (other than Shares owned by the Company or by any Subsidiary 21 24 of the Company or by Parent, the Purchaser or any other Subsidiary of Parent which will automatically be cancelled and retired, or by stockholders who properly exercise appraisal rights under the DGCL) will be cancelled and be converted into the right to receive from the Surviving Corporation in cash the Merger Consideration, and each issued and outstanding share of capital stock of the Purchaser will be converted into and become one validly issued, fully paid and nonassessable share of common stock, $0.01 par value, of the Surviving Corporation. For purposes of the Merger Agreement, "Subsidiary" of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. BEST EFFORTS. Subject to fiduciary responsibilities, each of the Company, Parent and the Purchaser agreed in the Merger Agreement to use best efforts to cause the purchase of Shares pursuant to the Offer prior to the Outside Date, and consummation of the Merger to occur as soon as practicable after such purchase of Shares. Without limiting the foregoing, (a) each of the Company, Parent and the Purchaser agreed to use best efforts to take, or cause to be taken, all actions necessary to comply promptly with all legal requirements that may be imposed on itself with respect to the Offer and the Merger (which actions include making all filings and furnishing all information required under the HSR Act and in connection with approvals of or filings with any other Governmental Entity) and to promptly cooperate with and furnish information (including all correspondence with any Governmental Entity) to each other in connection with any such requirements imposed upon any of them or any of their Subsidiaries in connection with the Offer and the Merger; (b) each of the Company, Parent and the Purchaser agreed to, and to cause its Subsidiaries to, use best efforts to obtain prior to the Outside Date (and to cooperate with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity or other public or private third party required to be obtained or made by Parent, the Purchaser, the Company or any of their Subsidiaries in connection with the Offer and the Merger or the taking of any action contemplated thereby or by the Merger Agreement; and (c) Parent agreed that if necessary to cause the purchase of Shares pursuant to the Offer prior to the Outside Date, Parent will, and will cause its Subsidiaries to, divest or hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, product lines or assets of Parent, the Company or any of their respective Subsidiaries. The Company agreed, at the request of Parent, to agree to divest, hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, product lines or assets of the Company or any of its Subsidiaries, provided that any such action may be conditioned upon the purchase of Shares pursuant to the Offer. Notwithstanding anything to the contrary contained in the Merger Agreement, in connection with any filing or submission required or action to be taken by Parent, the Company or any of its respective Subsidiaries to consummate the Offer, the Merger or the other transactions contemplated in the Merger Agreement, the Company agreed that it will not, without Parent's prior written consent, commit to any divestiture of assets or businesses of the Company and its Subsidiaries. The foregoing provisions of the Merger Agreement are referred to herein as the "Best Efforts Provision." NO SOLICITATION. The Merger Agreement provides that the Company will, and will cause its executive officers, directors, authorized representatives and authorized agents to, immediately cease any discussions or negotiations with any parties that may be ongoing with respect to any Takeover Proposal. The Company may not, nor may it permit any of its Subsidiaries to, nor may it permit any of its executive officers, directors, authorized representatives or authorized agents to, directly or indirectly, (a) solicit, initiate or knowingly encourage (including by way of furnishing non-public information) any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover Proposal or (b) participate in any discussions or negotiations regarding any Takeover Proposal. For purposes of the Merger Agreement, "Takeover Proposal" means (i) any inquiry, proposal or offer from any person relating to any direct or indirect acquisition or purchase of any of the assets of the Company or its Subsidiaries (other than the purchase of inventory or other assets in the ordinary course of business) or any of the Shares then outstanding, any tender offer or exchange offer for any of the Shares then outstanding, or any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of 22 25 its Subsidiaries, other than the transactions contemplated by the Merger Agreement or (ii) any other transaction the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the Offer and/or the Merger or which would reasonably be expected to dilute materially the benefits to Parent of the transactions contemplated by the Merger Agreement and the Stockholders Agreement. Notwithstanding the foregoing, proposals solely relating to the sale of all or a portion of the Company's business relating solely to the research and development of swine breeding stock and the marketing of such hybrid breeding swine and related management services to hog producers in domestic or international markets will not be considered Takeover Proposals, so long as the terms and conditions of any such proposal described in this sentence do not have any of the effects described in clause (ii) of the preceding sentence. The Merger Agreement provides further that except as otherwise provided in the section of the Merger Agreement described herein under "-- No Solicitation", neither the Board of Directors of the Company nor any committee thereof may (a) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent, the approval or recommendation by such Board of Directors or such committee of the Offer, the Merger or the Merger Agreement (or any transaction contemplated thereby); provided that, the Board of Directors may, (i) in response to any Takeover Proposal, suspend such recommendation for a period of up to 24 hours pending its analysis of such Takeover Proposal or (ii) at any time prior to the consummation of the Offer, modify or withdraw such recommendation, but only if the Board of Directors of the Company determines in good faith, based on a written opinion of Morris, Nichols, Arsht & Tunnell, which written opinion specifically takes into account the Stockholders Agreement and all the terms thereof, including the obligations and agreements therein of the Voting Trustees and Registered Holders with respect to tendering Shares and voting for the Merger and against any Takeover Proposal other than the Merger (a "Written Opinion"), that it would be a breach of its fiduciary duties not to so modify or withdraw such recommendation; provided further that, unless the Merger Agreement has been terminated, any such suspension, modification or withdrawal will not prevent Parent and the Purchaser, in its or their discretion, from consummating the Offer and in any event will be subject to the provisions described in the last paragraph of this section, (b) approve or recommend, or propose publicly to approve or recommend, any Takeover Proposal or (c) cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Takeover Proposal. In addition to the obligations of the Company described in the two preceding paragraphs the Merger Agreement provides that the Company will immediately advise Parent orally and in writing of any request for information or of any Takeover Proposal, the material terms and conditions of such request or Takeover Proposal and the identity of the person making such request or Takeover Proposal. The Merger Agreement also provides that subject to the provisions described in the next paragraph, nothing contained in the section of the Merger Agreement described herein under "-- No Solicitation" will prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rules 14d-9 and 14e-2 under the Exchange Act or from making any disclosure to the Company's stockholders if, in the good faith judgment of the Board of Directors of the Company, based on a Written Opinion, such disclosure is required under applicable law. Finally, the Merger Agreement provides that none of the provisions described in the preceding three paragraphs (including with respect to any modified or withdrawn recommendation) will be deemed to prevent or impede Parent and the Purchaser, in its or their discretion, from consummating the Offer, or to limit or affect any of the actions taken by the Company as described under "-- Recommendation" above. In addition, the Merger Agreement provides that if the Purchaser purchases Shares pursuant to the Offer, the Company and its Board of Directors will take all actions legally permitted to permit the Merger to occur. THIRD PARTY STANDSTILL AGREEMENTS. During the period from the date of the Merger Agreement through the Effective Time, the Company has agreed to enforce and not to terminate, amend, modify or waive any standstill or other provision of, any confidentiality, nonsolicitation or standstill agreement to which the Company or any of its Subsidiaries is a party (other than any involving Parent), including, without limitation, any such agreement entered into with any party in connection with the process conducted by the Company to solicit acquisition proposals for the Company. 23 26 REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has made customary representations and warranties to Parent and the Purchaser. The representations and warranties of the Company relate, among other things, to: its organization and qualification; subsidiaries; capital structure; authority to enter into the Merger Agreement and to consummate the transactions contemplated thereby; required consents and approvals; filings made by the Company with the Commission under the Securities Act or the Exchange Act (including financial statements included in the documents filed by the Company under those acts); absence of any material adverse change; information to be included in the Schedule 14D-1 and related documents, the Schedule 14D-9 and the proxy statement (if required) in connection with the Merger; compliance with laws; tax matters; liabilities; benefit plans and employees and employment practices; litigation; environmental matters; certain provisions of the Company's Restated Certificate of Incorporation and related matters; matters related to intellectual property; brokers; and contracts and indebtedness. COVENANTS. The Merger Agreement provides that, during the period from the date of the Merger Agreement until the earlier of the Effective Time or such time as Parent's designees constitute a majority of the Board of Directors of the Company, the Company will, and will cause each of its Subsidiaries to, in all material respects, except as contemplated by the Merger Agreement, carry on its business in the ordinary course as currently conducted and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of the Merger Agreement, seek to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers and others having business dealings with them to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise contemplated by the Merger Agreement (including, without limitation, as permitted or required by the Best Efforts Provision), during such period, the Company has agreed that it will not, and will not permit any of its Subsidiaries to, without the prior written consent of Parent: (a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock or otherwise make any payment to stockholders in their capacity as such, other than dividends on Shares to be declared and paid only at the customary times at a quarterly rate not in excess of $0.035 per Share, except for dividends by a wholly-owned domestic Subsidiary of the Company to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) redeem, purchase or otherwise acquire any of its securities; (b) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, or any rights, warrants, options or any other agreements of any character to acquire, any such shares, voting securities or convertible or exchangeable securities or rights, or securities or rights evidencing the right to subscribe, other than (i) the issuance, in the ordinary course, to new employees or promoted employees, of options to purchase not more than an aggregate of 40,000 Shares or the issuance of Shares pursuant to options outstanding under existing Stock Plans, (ii) the issuance of shares of Class B Common Stock in exchange for shares of Class A Common Stock in accordance with the Company's Restated Certificate of Incorporation, (iii) the issuance of Shares upon exercise of rights outstanding on the date of the Merger Agreement (including, without limitation, under the Investment Agreement) and (iv) the issuance of Shares pursuant to the Company's Savings and Investment Plan, in accordance with its terms; (c) amend its Restated Certificate of Incorporation or By-laws or other similar organizational documents; (d) acquire, or agree to acquire, in a single transaction or in a series of related transactions, any business or assets (other than materials and supplies purchased in the ordinary course, consistent with past practice), other than transactions which involve assets having a purchase price not in excess of $5,000,000 individually; 24 27 (e) make or agree to make any new capital expenditure in excess of $1,000,000 other than expenditures contemplated by the Company's capital budget for fiscal 1998 or fiscal 1999 as previously provided to Parent in writing; (f) sell, lease, encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of, any of its assets, other than (i) sales of inventory in the ordinary course of business and (ii) transactions which involve assets having a current value not in excess of $5,000,000 individually or $20,000,000 in the aggregate; provided that, notwithstanding this clause (f), neither the Company nor any of its Subsidiaries may sell, lease, encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of, any germplasm, recombinant DNA technology or Intellectual Property Rights, except with respect to Intellectual Property Rights as specifically permitted by clause (j) below; (g) except as disclosed by the Company to Parent as of the date of the Merger Agreement, (i) increase the salary or wages payable or to become payable to its directors, officers or employees, except for increases required under employment agreements existing on the date of the Merger Agreement, and except for increases for officers and employees in the ordinary course of business, consistent with past practice; (ii) pay or agree to pay any pension, retirement allowance or employee benefit not required or contemplated by any existing benefit, severance, pension or employment plans, agreements or arrangements; or (iii) enter into any employment or severance agreement with, or establish, adopt, enter into or amend any bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination or severance plan, agreement, policy or arrangement for the benefit of, any director, officer or employee, except, in each case, as may be expressly required by the terms of any such plan, agreement, policy or arrangement or to comply with applicable law; (h) except as is required as a result of a change in law or in generally accepted accounting principles, make any material change in its method of accounting; (i) enter into, modify in any material respect, amend in any material respect or terminate any material contract or agreement (including without limitation any contract or agreement which (i) cannot by its terms be terminated without liability or continuing obligation by the Company on less than one year's notice or (ii) may require a cash expenditure by the Company in excess of $5,000,000 in any fiscal year) to which the Company or any of its Subsidiaries is a party, or waive, release or assign any material rights or claims, in each case, in any manner adverse to the Company or any of its Subsidiaries and, in each case, except for (A) customary operational contracts not involving payments in excess of $5,000,000 individually over the term of such contract, (B) hedging and similar futures contracts with a term not in excess of one year or which can, by their terms, be terminated without liability or continuing obligation by the Company on not more than one year's notice and (C) seed production contracts, in each of cases (A), (B) and (C) above entered into in the ordinary course of business consistent with past practice; (j) (i) acquire a license or right to use from a third party for consideration (including without limitation cash, human or other resources or other assets or commitments, including out-licenses) in excess of $1,000,000 per year or $10,000,000 over the course of the agreement governing such license or right, or which by its terms cannot be terminated without liability or continued obligation by the Company on less than six months' notice or (ii) grant any license or sublicense other than (v) licenses to contract growers in the ordinary course of business consistent with past practice, (w) licenses granted under and in accordance with the Corn Borer-Protected License Agreement dated as of January 31, 1996 between Parent and the Company, the Glyphosate-Protected Corn License Agreement dated as of January 31, 1996 between Parent and the Company or the CaMV Promoter License Agreement dated as of January 31, 1996 between Parent and the Company, in each case, in the ordinary course of business consistent with past practice (and provided that this will not prohibit the granting by the Company in accordance with such licenses of sublicenses to the entities described with respect to this clause (j) by the Company to Parent as of the date of the Merger Agreement), (x) licenses of swine in the ordinary course of business consistent with past practice, (y) licenses included in "material transfer agreements" entered into solely for the purposes of research in the ordinary course of business consistent with past practice, 25 28 and (z) licenses required to be granted pursuant to the terms of agreements to which the Company or any of its Subsidiaries is a party (as such terms are in effect on the date of the Merger Agreement); (k) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries not constituting an inactive Subsidiary (other than the Merger); (l) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly-owned subsidiary of the Company; (m) settle or agree to dismiss any litigation with respect to Intellectual Property Rights or material litigation with respect to other matters; (n) pay, discharge, settle or satisfy any other claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of claims, liabilities or obligations (in each case not related to pending or threatened litigation) reflected or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business consistent with past practice; (o) enter into any contract, license, agreement or arrangement of any kind without including confidentiality agreements consistent with past practice; or (p) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing. Notwithstanding anything else in the Merger Agreement to the contrary, the Company and its Subsidiaries may, during the period from the date of the Merger Agreement until the earlier of the Effective Time or such time as Parent's designees constitute a majority of the Board of Directors of the Company, sell all or a portion of the Company's business solely relating to the research and development of swine breeding stock and the marketing of such hybrid breeding swine and related management services to hog producers in domestic or international markets, so long as Parent is reasonably satisfied with the terms and conditions of such sale. For purposes of the Merger Agreement, "Intellectual Property Rights" means any right to use, all patents, patent rights, certificates of plant variety protection, trademarks, trade names, service marks, copyrights, know how and other proprietary intellectual property rights and computer programs held by the Company or any of its Subsidiaries. EMPLOYEE BENEFIT ARRANGEMENTS. In the Merger Agreement, Parent has agreed to take all necessary action so that each person who is an employee of the Company or any of its Subsidiaries upon the consummation of the Offer (including each such person who is on vacation, temporary layoff, approved leave of absence, sick leave or short-term disability) will be permitted to remain an employee of the Company or the Surviving Corporation or a Subsidiary of the Company or of the Surviving Corporation, as the case may be, immediately following such time with wages or salary, as applicable, no less favorable than as in effect immediately preceding such time, and so that each person receiving, or who but for any waiting period would be receiving, long-term disability benefits under a plan of the Company or any of its Subsidiaries upon the consummation of the Offer will retain the right to continue or begin receiving such long-term disability benefits, so long as they remain disabled. Parent has agreed to take all necessary action so that until the first anniversary of the consummation of the Offer, the Company, the Surviving Corporation and their Subsidiaries maintain for each employee of the Company and its Subsidiaries who is employed by the Company or the Surviving Corporation or a Subsidiary of the Company or the Surviving Corporation upon the consummation of the Offer (collectively, the "Retained Employees") wages and other compensation levels, and benefits of the types provided under the employee benefit plans, policies, arrangements and understandings (the "Benefit 26 29 Plans") of the Company, Parent, Surviving Corporation or any of their subsidiaries, not less favorable than those wages and other compensation levels, and benefits provided under the Company's Benefit Plans, as in effect as of the consummation of the Offer. Parent has also agreed to take all necessary action so that each Retained Employee shall after the consummation of the Offer continue to be credited with the unused vacation and sick leave credited to such employee through the consummation of the Offer under the applicable vacation and sick leave policies of the Company and its Subsidiaries, and to permit or cause the Company, the Surviving Corporation and their Subsidiaries to permit such employees to use such vacation and sick leave, and to take all necessary action so that, for all purposes under each Benefit Plan maintained or otherwise provided by the Company, the Surviving Corporation or any of their Subsidiaries in which employees or former employees of the Company and its Subsidiaries or the spouses, dependents or other beneficiaries of such persons become eligible to participate after the consummation of the Offer, each such person shall be credited with all years of service to the extent such service would be taken into account under the Company's Benefit Plan providing benefits of a similar type in effect at the consummation of the Offer. Parent has also agreed that neither it, the Company, the Surviving Corporation, nor any of their Subsidiaries will during the one-year period commencing with the consummation of the Offer (a) terminate the employment of any Retained Employee other than for Cause (as defined in the Merger Agreement) or (b) relocate the site of any such person's employment or reassign any such person to a different location without such person's consent. Parent has also agreed to maintain, for a period of not less than twelve months from the consummation of the Offer, for the benefit of the Retained Employees, the Company's Severance Pay Plan as in effect as of the date of the Merger Agreement, and to honor all employment agreements with the persons who are directors, officers and employees of the Company and its Subsidiaries. In the Merger Agreement, Parent also agrees to maintain the DEKALB Genetics Corporation Policy and Procedure Regarding Reimbursement of Employees for Parachute Payment Taxes and Expenses to the extent required by the terms thereof. Without limitation of Parent's or the Company's obligations under any existing employment agreement, Parent has agreed to maintain, or to cause the Company and the Surviving Corporation to maintain, the Company's bonus programs set forth in the documents made available by the Company to Parent through the end of the twelve-month period beginning on the most recent September 1 preceding the consummation of the Offer, with bonuses to be paid to each Retained Employee participating thereunder in accordance with the performance goals previously established for such period (the "Existing Goals"), if (a) the achievement of the Existing Goals can still reasonably be measured despite the consummation of the transactions contemplated by the Merger Agreement, and (b) such achievement has not become unreasonably more difficult or easier than it would have been absent such consummation. If either of clause (a) or clause (b) of the preceding sentence is not satisfied with respect to the Existing Goals applicable to a particular Retained Employee, then the Existing Goals shall be reasonably adjusted, if possible, so that both such clauses are satisfied as to the adjusted Existing Goals, and if no such adjustment is possible, such Retained Employee's bonus shall be paid at his or her target bonus level (subject to all terms and conditions of such bonus except for the Existing Goals that cannot be so adjusted). The Merger Agreement also provides for (a) the waiver of all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Retained Employees and former employees of the Company and its Subsidiaries and the spouses, dependents and other beneficiaries of such persons under any welfare or fringe benefit plan that any such persons may be eligible to participate in after the consummation of the Offer, other than limitations or waiting periods that are in effect prior to the consummation of the Offer, and (b) credit for any co-payments and deductibles paid by such person for the applicable plan year prior to the consummation of the Offer. The Merger Agreement also requires Parent to or to cause the Company and the Surviving Corporation to provide retiree health benefits to persons who are, immediately prior to the consummation of the Offer, eligible for such benefits, or who would immediately prior to the consummation of the Offer be eligible therefor but for the fact that they, or the person with respect to whom they are a dependent, had not yet terminated employment with the Company and its Subsidiaries, or who will within twelve months after the consummation of the Offer be so eligible therefor, and medical and other health benefits to persons who incur or are dependents of persons who incur an illness 27 30 or other disability or leave of absence, or are dependents of persons who die, prior to the consummation of the Offer and who are at such time, or would be after such time, eligible for benefits under such medical or other health benefits plan due to such illness or other disability or leave of absence or death. For a period of not less than twelve months from the consummation of the Offer, Parent has also agreed to (a) maintain, or cause to be maintained, for the benefit of the Retained Employees the Company's Savings and Investment Plan (the "Retirement Plan") as in effect prior to the consummation of the Offer and (b) contribute, or cause to be contributed, to the Retirement Plan, on behalf of each Retained Employee who is or becomes a participant therein, matching contributions in amounts determined in accordance with the terms of the Retirement Plan as in effect as of the date of the Merger Agreement, and a "Compensation Based Contribution" as defined therein equal to 2% of compensation as described in the Retirement Plan. OPTIONS; RESTRICTED STOCK AWARDS. The Merger Agreement provides that prior to the execution of the Merger Agreement, the Board of Directors of the Company or the Long-Term Incentive Plan Administrative Committee of the Board of Directors of the Company has adopted such resolutions or has taken such other actions as are required (a) to provide that each Stock Option theretofore granted under any Stock Plan (other than the Company's Director Stock Option Plan) outstanding immediately prior to the consummation of the Offer, whether or not then exercisable, will become fully exercisable immediately prior to the consummation of the Offer, (b) to provide that all restrictions applicable to any restricted stock award heretofore granted under any Stock Plan outstanding immediately prior to the Offer will lapse immediately prior to the consummation of the Offer, (c) to provide that upon the consummation of the Offer each Stock Option then outstanding will be cancelled in consideration for the cash payment described below and (d) with respect to Stock Options held by persons subject to the reporting requirements of Section 16 of the Exchange Act, to specifically approve such transactions. The Company has agreed to use reasonable efforts to obtain any necessary consents of the holders of such Stock Options to effect these provisions. Pursuant to the Merger Agreement, the Company has agreed to use reasonable efforts to ensure that, upon the consummation of the Offer each Stock Option then outstanding is cancelled by the Company in consideration for which the holder thereof will thereupon be entitled to receive promptly (but in no event later than five days) after the consummation of the Offer, a cash payment in respect of such cancellation from the Company in an amount (if any) equal to (a) the product of (i) the number of shares of Company Common Stock subject or related to such Stock Option and (ii) the excess, if any, of the Offer Price over the exercise or purchase price per share of Company Common Stock subject or related to such Option, minus (b) all applicable federal, state and local taxes required to be withheld by the Company. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. The Merger Agreement provides that all rights to indemnification or exculpation, existing in favor of a director, officer, employee or agent (an "Indemnified Person") of the Company or any of its Subsidiaries as provided in the Restated Certificate of Incorporation of the Company, the By-Laws of the Company or any indemnification agreement, in each case, as in effect on the date of the Merger Agreement, and relating to actions or events through the Effective Time, will survive the Merger and will continue in full force and effect, without any amendment thereto; provided that any determination required to be made with respect to whether an Indemnified Person's conduct complies with the standards set forth under the DGCL, the Restated Certificate of Incorporation of the Company, the By-laws of the Company or any such agreement, as the case may be, must be made by independent legal counsel selected by such Indemnified Person and reasonably acceptable to Parent. The Merger Agreement also provides that prior to the Effective Time, the Company may obtain and pay for in full a "tail" coverage directors' and officers' liability insurance policy ("D&O Insurance") covering a period of not less than six years after the Effective Time and providing coverage in amounts and on terms consistent with the Company's existing D&O Insurance. In the event the Company is unable to obtain such insurance, Parent will cause the Surviving Corporation to maintain the Company's D&O Insurance for a period of not less than six years after the Effective Time; provided, that the Surviving Corporation may substitute therefor policies of substantially similar coverage and amounts containing terms no less advantageous to such former directors or officers; provided further that if the existing D&O Insurance expires or is cancelled during such period, Parent or the Surviving Corporation will use its best efforts to obtain 28 31 substantially similar D&O Insurance; and provided further that the Company may not, without Parent's consent (but after consultation with Parent), expend an amount in excess of 350% of the last annual premium paid prior to the date hereof to procure the above described "tail" coverage and neither Parent nor the Surviving Corporation will be required to expend, in order to maintain or procure an annual D&O Insurance policy, in lieu of a tail policy, an amount in excess of 250% of the last annual premium paid prior to the date of the Merger Agreement, but in such case will purchase as much coverage as possible for such amount. ACCESS TO INFORMATION. Upon reasonable notice and subject to restrictions contained in confidentiality agreements to which the Company is subject and subject to the terms of the Confidentiality Agreement, as the same may be amended, supplemented or modified, the Company will, and will cause each of its Subsidiaries to, afford to Parent and to the officers, employees, accountants, counsel and other representatives of Parent all reasonable access, during normal business hours during the period prior to the Effective Time, to all their respective properties, books, contracts, commitments and records and, during such period, the Company will (and will cause each of its Subsidiaries to) furnish promptly to Parent (a) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of the Federal or state securities laws or the Federal tax laws and (b) all other information concerning its business, properties and personnel as Parent may reasonably request, provided, that until the earlier of the Effective Time or such time as Parent's designees constitute a majority of the Board of Directors of the Company, none of the foregoing persons will have access to the respective properties, books, contracts, commitments and records of the Company or its Subsidiaries with respect to (i) pricing or pricing strategy or (ii) Intellectual Property Rights, except that the independent person who reviewed the Company's patent applications on behalf of Parent during the due diligence process conducted in connection with the negotiation of the Merger Agreement will be permitted to review the Company's Intellectual Property Rights other than access to germplasm pedigree and basic research, and, in any event, subject to confidentiality and disclosure limitations comparable to those previously applicable to such independent person's review of patent applications, and any representative of Parent will be entitled to review material relating to the Company's Intellectual Property Rights that is otherwise publicly available. Notwithstanding anything to the contrary in the Merger Agreement or any other agreement to which the Company and Parent are a party, the Confidentiality Agreement will terminate and be of no further force and effect from and after the date upon which the Offer is consummated. The Confidentiality Agreement contains customary terms concerning confidentiality of information. PUBLIC ANNOUNCEMENTS. In the Merger Agreement, Parent and the Company have agreed to consult with each other before issuing any press release or otherwise making any public statements with respect to the transactions contemplated by the Merger Agreement and not to issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, fiduciary duties or by obligations pursuant to any listing agreement with any national securities exchange. NOTIFICATION OF CERTAIN MATTERS. In the Merger Agreement, Parent and the Company have agreed to give prompt notice to the other of: (a) the occurrence, or non-occurrence, in each case, to the knowledge of the Company or Parent, as the case may be, of any event the occurrence, or non-occurrence, of which results in the executive officers of the Company or Parent, as the case may be, having a good faith belief that such change or event would be reasonably likely to cause (i) any representation or warranty of such entity contained in the Merger Agreement that is not qualified as to materiality to be untrue or inaccurate in any material respect, (ii) any representation or warranty of such entity contained in the Merger Agreement that is qualified as to materiality to be untrue or inaccurate in any respect, or (iii) any covenant, condition or agreement of such entity contained in the Merger Agreement not to be complied with or satisfied in all material respects; and (b) the executive officers of the Company or Parent, as the case may be, believing in good faith that the Company or Parent, as the case may be, has, to the knowledge of the Company or Parent, as the case may be, failed to comply with in all material respects or satisfy in all material respects any covenant, condition or agreement of such entity to be complied with or satisfied by it under the Merger Agreement. BOARD OF DIRECTORS. Pursuant to the Merger Agreement, promptly after such time as the Purchaser purchases Shares pursuant to the Offer, the Purchaser will be entitled, to the fullest extent permitted by law, 29 32 to designate at its option up to that number of directors, rounded to the next highest whole number, of the Company's Board of Directors, subject to compliance with Section 14(f) of the Exchange Act, as will make the percentage of the Company's directors designated by the Purchaser pursuant to this sentence equal to the aggregate voting power of the shares of Class A Common Stock held by Parent or any of its Subsidiaries; provided, however, that in the event that the Purchaser's designees are elected to the Board of Directors of the Company, until the Effective Time, such Board of Directors must have (a) at least three directors who are directors on the date of the Merger Agreement or are designated by a majority of the directors of the Company who were directors on the date of the Merger Agreement, in each case excluding the Monsanto Nominees (the "Independent Directors") and (b) the number of Monsanto Nominees required by the Investment Agreement which will be in addition to the number of directors designated by the Purchaser pursuant to the Merger Agreement; and provided further that, in such event, if the number of Independent Directors is reduced below three for any reason whatsoever, the remaining Independent Directors will, to the fullest extent permitted by law, designate a person to fill such vacancy who will be deemed to be an Independent Director for purposes of the Merger Agreement or, if no Independent Directors then remain, the other directors will designate three persons to fill such vacancies who are not officers or affiliates of the Company or any of its Subsidiaries, or officers or affiliates of Parent or any of its Subsidiaries or of any other entity in which Parent owns, directly or indirectly, any material amount of capital stock or other significant ownership interest, and such persons will be deemed to be Independent Directors for purposes of the Merger Agreement. The Merger Agreement further provides that, following the election or appointment of the Purchaser's designees, as described above, and prior to the Effective Time, any termination or amendment of the Merger Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of the Purchaser or waiver or assertion of any of the Company's rights under the Merger Agreement, and any other consent or action by the Board of Directors of the Company with respect to the Merger Agreement (other than recommending or reconfirming the recommendation that the holders of the Class A Common Stock approve and adopt the Merger Agreement and the Merger, and making determinations in connection therewith, which recommendations and determinations may be made by a majority of the Board of Directors as constituted at any time after such election or appointment of the Purchaser's designees) will require the concurrence of a majority of the Independent Directors and, to the extent permitted by law, no other action by the Company, including any action by any other director of the Company, shall be required to approve such actions. To the fullest extent permitted by applicable law, the Company agrees to take all actions requested by Parent which are reasonably necessary to effect the election of any such designee. STATE TAKEOVER LAWS. The Merger Agreement provides that if any "fair price" or "control share acquisition" statute or other similar statute or regulation shall become applicable to the transactions contemplated hereby, Parent and the Company and their respective Boards of Directors shall use all reasonable efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to minimize the effects of any such statute or regulation on the transactions contemplated hereby. CONDITIONS TO CONSUMMATION OF THE MERGER. The respective obligations of each party to effect the Merger is subject to the fulfillment at or prior to the Effective Time of the following conditions: (a) if required by applicable law, the approval of the Merger Agreement and the Merger by the holders of a majority of the outstanding Shares of the Class A Common Stock (the "Company Stockholder Approval") shall have been obtained; provided, however, that Parent and the Purchaser agree to vote all of their shares of capital stock of the Company entitled to vote thereon in favor of the Merger; (b) no statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other Governmental Entity preventing the consummation of the Merger shall be in effect; provided, however, that each of the parties has used their best efforts to prevent the entry of any such temporary restraining order, injunction or other order, including, without limitation, taking such action as is required to comply with the Best Efforts Provision, and to appeal promptly any injunction or other order that 30 33 may be entered; (c) the Purchaser shall have previously accepted for payment and paid for Shares pursuant to the Offer; and (d) any waiting period (and any extension thereof) under the HSR Act applicable to the Merger shall have expired or been terminated. TERMINATION. The Merger Agreement provides that it may be terminated at any time prior to the Effective Time, whether before or after the Company Stockholder Approval (if required by applicable law): (a) by mutual written consent of Parent, the Purchaser and the Company; (b) by either Parent or the Company: (i) if (x) as a result of the failure of any of the Offer Conditions (see Section 14) (other than the Minimum Condition) the Offer has terminated or expired in accordance with its terms without the Purchaser having accepted for payment any Shares pursuant to the Offer or (y) the Purchaser has, consistent with its obligations hereunder, failed to pay for the Shares prior to the Outside Date; provided, however, that the right to terminate the Merger Agreement described in this clause (b)(i) will not be available to any party whose failure to perform any of its obligations under the Merger Agreement results in the failure of any such Offer Condition or if the failure of such condition results from facts or circumstances that constitute a breach of any representation or warranty under the Merger Agreement by such party; or (ii) if any Governmental Entity has issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement and such order, decree or ruling or other action has become final and nonappealable; provided, however, that the right to terminate the Merger Agreement described in this clause (b)(ii) will not be available to any party who has not used its best efforts to cause such order to be lifted or otherwise taken such action as is required to comply with its obligation under the Best Efforts Provision; (c) by Parent or the Purchaser prior to the election of the Purchaser's designees to the Board of Directors of the Company in the event of a breach by the Company of any representation, warranty, covenant or other agreement contained in the Merger Agreement which (i) would give rise to the failure of a condition described in paragraph (d) or (e) of Section 14 below and (ii) cannot be or has not been cured within 30 days after the giving of written notice to the Company; (d) by Parent or the Purchaser if either Parent or the Purchaser is entitled to terminate the Offer as a result of the occurrence of any event described in paragraph (c) of Section 14 below, provided that the temporary suspension of the recommendation of the Company's Board of Directors as described above under "-- No Solicitation" does not give rise to a right of termination under the Merger Agreement; (e) by the Company, if the Purchaser or Parent has breached in any material respect any of their respective representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform cannot be or has not been cured within 30 days after the giving of written notice to Parent or the Purchaser, as applicable; or (f) by the Company, if the Offer has not been timely commenced. FEES AND EXPENSES. The Merger Agreement provides that all fees and expenses incurred in connection with the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby will be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated. ASSIGNMENT. Neither the Merger Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the parties thereto without the prior written consent of the other parties except that the Purchaser has the right to assign the right to purchase all or any portion of the Shares tendered pursuant to the Offer, as described above under " -- The Offer" and that Parent will be able without the consent of the Company to assign all of its and the Purchaser's rights and obligations under the Merger Agreement to another Person that is capable of acquiring a majority of the Class A Common Stock by the Outside Date, subject in any case to Parent's guarantee of the performance by such other Person of all of Parent's and the Purchaser's obligations hereunder, including without limitation the obligation to pay the Offer Price and the Merger Consideration, and the Company agrees to take all action necessary to permit such assignee to consummate the Merger after the purchase of Shares. Subject to the preceding sentence, the Merger Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. AMENDMENT. The Merger Agreement provides that, subject to the restrictions described above under "-- Board of Directors," the Merger Agreement may be amended by the parties thereto, by action taken or authorized by their respective Boards of Directors at any time before or after obtaining the Company Stockholder Approval (if required by law), but if the Company Stockholder Approval has been obtained, 31 34 thereafter no amendment may be made which by law requires further approval by the Company's stockholders without obtaining such further approval. (c) The Stockholders Agreement. The following is a summary of certain provisions of the Stockholders Agreement. This summary is qualified in its entirety by reference to the Stockholders Agreement, which is incorporated herein by reference and a copy or form of which has been filed with the Commission as an exhibit to the Schedule 14D-1. The Stockholders Agreement may be examined and copies may be obtained at the places set forth in Section 8. VOTING AND TENDER. Concurrently with the execution and delivery of the Merger Agreement, and as a condition to Parent's willingness to enter into the Merger Agreement, Parent entered into the Stockholders Agreement with the Voting Trustees under the Voting Trust Agreement and the Registered Holders of trust certificates pursuant to the Voting Trust Agreement (in each case, individually and in his or her respective capacity as Voting Trustee and/or Registered Holder). Contemporaneously with the execution and delivery of the Stockholders Agreement, each Registered Holder provided certain written instructions to the Voting Trustees (the "Voting and Tendering Instructions"). The Voting and Tendering Instructions instruct the Voting Trustees, in accordance with the provisions of the Voting Trust Agreement, to take the following actions on behalf of the Registered Holders: (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement and the transactions contemplated thereby or at any adjournment thereof (or in any other circumstances under which a vote, consent or approval with respect to the Merger Agreement and the transactions contemplated thereby is sought), to vote all of the Voting Trust Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of the stockholders of the Company or at any adjournment thereof (or in any other circumstances under which a vote, consent or approval is sought) with respect to any Business Combination (as such term is defined in the Stockholders Agreement) other than the Merger and to vote (or cause to be voted) all of the Voting Trust Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer all of the Voting Trust Shares pursuant to the Offer and not to withdraw such tendered shares. The Voting and Tendering Instructions are irrevocable. Pursuant to the Stockholders Agreement, the Voting Trustees and Registered Holders have agreed, among other things, that so long as the Stockholders Agreement is in effect, the Voting Trustees will cast such votes, consents or other approvals and take or cause such actions in accordance with the Voting and Tendering Instructions. In addition, pursuant to the Stockholders Agreement, the Voting Trustees have agreed not to take any action inconsistent with the Voting and Tendering Instruction, and each Registered Holder has agreed not to take any action that would amend or nullify the Voting and Tendering Instructions or in any way restrict or limit the performance of such Registered Holder's obligations under the Stockholders Agreement or the consummation of the transactions contemplated by the Merger Agreement. The Stockholders Agreement further provides for, among other things, during the term of the Stockholders Agreement: (i) restrictions on the transfer of any Voting Trust Shares or the taking of certain actions with respect to such Voting Trust Shares, other than pursuant to the Offer, the Merger or the Stockholders Agreement; (ii) the prompt deposit of Shares acquired upon exercise of options held by certain of the Registered Holders (the "Voting Trust Option Shares") into the trust governed by the Voting Trust Agreement such that, thereafter, the Voting Trust Option Shares shall be deemed Voting Trust Shares for purposes of the Stockholders Agreement; (iii) with respect to certain other agreements governing the relationship among the Voting Trustees and the Registered Holders (as such agreements are collectively defined in the Stockholders Agreement, the "Family Shareholder Agreements"), further assurances by the Voting Trustees and the Registered Holders to amend the Family Shareholder Agreements to the extent necessary (and not to otherwise amend such Family Shareholder Agreements) so that each Registered Holder and Voting Trustee can fully perform its obligations under the Stockholders Agreement; and (iv) the taking of certain actions by the Voting Trustees and Registered Holders in order to effectuate the terms of the Stockholders Agreement. The Stockholders Agreement also provides, among other things, for the making of certain representations by each of the Registered Holders, the Voting Trustees and Parent. 32 35 IRREVOCABLE PROXY. The Voting Trustees have also granted to Parent an irrevocable proxy to vote the Voting Trust Shares in favor of the adoption of the Merger Agreement and the transactions contemplated thereby and against (i) actions or proposals that could reasonably be expected to result in (x) any material breach of the Merger Agreement or (y) any of the closing conditions set forth in the Merger Agreement not being fulfilled, (ii) any Business Combination (other than the Merger and the transactions contemplated by the Merger Agreement) and (iii) other extraordinary corporate transactions which would prevent or delay the Merger or the transactions contemplated by the Merger Agreement. NO SOLICITATION. The Voting Trustees and the Registered Holders have agreed in the Stockholders Agreement not to (a) solicit, initiate or knowingly encourage the submission of any Takeover Proposal or (b) participate in any discussions or negotiations regarding, or furnish to any person information with respect to, or take any action that could reasonably be expected to lead to, any Takeover Proposal. TERMINATION. The Stockholders Agreement will terminate at the Effective Time of the Merger. In addition, the Stockholders Agreement may be terminated: (a) by mutual written consent of Parent and a majority of the Voting Trustees; (b) by Parent if (i) the Merger Agreement has terminated in accordance with its terms or (ii) in the event that (x) any of the representations and warranties of the Voting Trustees or the Registered Holders in the Stockholders Agreement shall not be true and correct in all material respects or (y) any of the Voting Trustees or the Registered Holders shall have failed to perform in any material respect any material covenant to be performed by any Voting Trustee or Registered Holder under the Stockholders Agreement and in the case of (x) or (y) such untruth or incorrectness or such failure cannot be or has not been cured within thirty days after notice thereof; or (c) by a majority of the Voting Trustees, if none of the Voting Trustees or Registered Holders are in violation of their respective obligations under the Stockholders Agreement and (i) Parent or the Purchaser shall not have completed payment for all Shares tendered pursuant to the Offer and not withdrawn by the Outside Date (as defined in the Stockholders Agreement), (ii) in the event that (x) any of the representations and warranties of Parent in the Stockholders Agreement shall not be true and correct in all material respects or (y) Parent shall have failed to perform in any material respect any material covenant to be performed by it under the Stockholders Agreement and in the case of (x) or (y) such untruth or incorrectness or such failure cannot be or has not been cured within thirty days after notice thereof, (iii) subject to the compliance by the Company with its obligations under the Best Efforts Provision, any Governmental Entity (as defined in the Merger Agreement) has issued an order enjoining or prohibiting the Offer or the consummation of the transactions contemplated by the Stockholders Agreement or the Merger Agreement and such order has become final and nonappealable, and (iv) the Merger Agreement has terminated in accordance with its terms. (d) Appraisal Rights. No appraisal rights are available in connection with the Offer. If the Merger is consummated, however, stockholders of the Company who have not tendered their Shares will have certain rights under the DGCL to dissent and demand appraisal of, and to receive payment in cash of the fair value of, their Shares. Stockholders who perfect such rights by complying with the procedures set forth in Section 262 of the DGCL ("Section 262") will have the "fair value" of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) determined by the Delaware Court of Chancery and will be entitled to receive a cash payment equal to such fair value from the Surviving Corporation. In addition, such dissenting stockholders may be entitled to receive payment of a fair rate of interest from the date of consummation of the Merger on the amount determined to be the fair value of their Shares. In determining the fair value of the Shares, the court is required to take into account all relevant factors. Accordingly, such determination could be based upon considerations other than, or in addition to, the market value of the Shares, including, among other things, asset values and earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered in an appraisal proceeding. The Weinberger court also noted that under Section 262, fair value is to be determined "exclusive of any element of value arising from the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor, Inc., however, the Delaware Supreme Court stated that, in the context of a two-step cash merger, 33 36 "to the extent that value has been added following a change in majority control before cash-out, it is still value attributable to the going concern," to be included in the appraisal process. As a consequence, the fair value determined in any appraisal proceeding could be more or less than (or the same as) the consideration to be paid in the Offer and the Merger. Parent does not intend to object, assuming the proper procedures are followed, to the exercise of appraisal rights by any stockholder and the demand for appraisal of, and payment in cash for the fair value of, the Shares. Parent intends, however, to cause the Surviving Corporation to argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of each Share is less than the price paid in the Merger. In this regard, stockholders should be aware that opinions of investment banking firms as to the fairness from a financial point of view (including Merrill Lynch's opinion described herein) are not necessarily opinions as to "fair value" under Section 262. THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL. (e) Plans for the Company. In connection with the Offer, Parent and the Purchaser have reviewed, and will continue to review, various possible business strategies that they might consider in the event that the Purchaser acquires control of the Company pursuant to this Offer. Such strategies could include, among other things, changes in the Company's business, corporate structure, capitalization or management. "GOING PRIVATE" TRANSACTIONS. The Commission has adopted Rule 13e-3 under the Exchange Act which is applicable to certain "going private" transactions and which may under certain circumstances be applicable to the Merger. However, Rule 13e-3 would be inapplicable if (i) both the Class A Common Stock and the Class B Common Stock are deregistered under the Exchange Act prior to the Merger or other business combination or (ii) the Merger or other business combination is consummated within one year after the purchase of the Shares pursuant to the Offer and the amount paid per Share in the Merger or other business combination is at least equal to the amount paid per Share in the Offer. If applicable, Rule 13e-3 requires, among other things, that certain financial information concerning the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction be filed with the Commission and disclosed to stockholders prior to the consummation of the transaction. Except as otherwise described in this Offer to Purchase, the Purchaser does not have any present plans or proposals which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization, liquidation, relocation of any operations of the Company or sale or transfer of a material amount of assets, involving the Company or any of its subsidiaries, or any changes in the Company's present capitalization or any other change in the Company's corporate structure or business or the composition of its Board of Directors or management. 12. INVESTMENT AGREEMENT; CERTAIN AGREEMENTS WITH RESPECT TO THE COMPANY'S SECURITIES; OTHER AGREEMENTS. The agreements summarized below have all been filed as exhibits to the Schedule 14D-1 and the summaries below are qualified in their entirety by reference to the text of the agreements as so filed which are incorporated herein by reference. (a) Investment Agreement. The Investment Agreement includes certain provisions governing the rights and obligations of Parent and the Company following the 1996 Investment. Pursuant to the Investment Agreement, the By-Laws of the Company were amended to define the primary business of the Company as the research-based production, marketing, licensing and sale of agronomic seed, to establish a maximum amount of 10% of the voting securities of the Company then outstanding to be issued to facilitate any one strategic collaboration and to prohibit the Company from 34 37 acquiring any business or assets outside of such primary business that would constitute in excess of 25% of the total consolidated assets of the Company, provided that the Company can engage in transactions inconsistent with these provisions unless at least three directors object. Such By-Laws may not be amended over the objection of two of the members of the Board. Pursuant to the Merger Agreement, the Company has agreed that the By-Law provisions described in this paragraph will be eliminated in their entirety immediately upon the acquisition of Shares in the Offer. The Investment Agreement provides that so long as Parent beneficially owns either 5% of the Class A Common Stock or 20% of the Class B Common Stock, if the Company proposes to issue for cash (subject to specified limitations) any Shares, securities convertible into such Shares or options, warrants or rights to acquire such Shares, Parent has the right to purchase all or any portion of its pro rata share of such securities on the terms set forth in the Investment Agreement. Pursuant to these provisions, Monsanto purchased from the Company 24,102 newly issued Shares of Class B Common Stock during the second quarter of fiscal 1997 and 156,024 newly issued Shares of Class B Common Stock during the first quarter of fiscal 1998, at prices of $24.51 per Share and $40.38 per Share, respectively (after taking into account the Stock Splits). With respect to Shares issued upon the exercise of options, these provisions require the Company to notify Parent, within twenty business days after the end of each fiscal year, of the number of Shares of Class A Common Stock or Class B Common Stock that Parent is entitled thereunder to purchase in respect of such year. If exercised, Parent has the right to acquire all or any portion of the Shares of Class A Common Stock or Class B Common Stock which it is so entitled to purchase at a price equal to the "current market value" (which, as defined in the Investment Agreement, is based on the market value of the Class B Common Stock) of such Shares on the date that Parent advises the Company that it intends to exercise such rights. It is Parent's current intention to exercise any and all such rights to purchase Shares of Class A Common Stock, as they become available, effective upon or immediately after the expiration of the Offer. Exercise of any such rights will increase the number of Shares of Class A Common Stock that Parent holds on the expiration date of the Offer, and thus decrease the number of Shares required to be tendered for the Minimum Condition to be satisfied. See Introduction. The Investment Agreement also prohibits the transfer or other disposition of any of the Shares owned by Parent, subject to certain exceptions, prior to the earliest of (a) March 8, 1999, (b) the termination or expiration of the Collaboration Agreement (except by reason of material breach by Parent), (c) the issuance of a non-appealable governmental order requiring Parent to divest its equity interest in the Company, or (d) the agreement by the Company to enter into a business combination with a person other than Parent or its affiliates. During this initial period, Parent is permitted to make certain transfers, including pursuant to a merger of the Company recommended by the Board of Directors of the Company and pursuant to a third party tender or exchange offer recommended by the Board or pursuant to which the Roberts Family Stockholders tender or exchange their majority interest. After the initial period described above, Parent may also make transfers of Class B Common Stock in bona fide open market brokers' transactions, or, subject to certain restrictions, for cash in private sales to financial or institutional buyers not purchasing on behalf of a competitor of the Company or in a bona fide public offering pursuant to the Registration Rights Agreement. Until March 8, 2006, the Company (or an assignee of the Company) has a right of first refusal with respect to certain of the transfers Parent is permitted to make under the Investment Agreement, including with respect to certain third party tender offers, private sales to financial or institutional buyers and public offerings. Article 11 of the Investment Agreement contains certain standstill provisions generally restricting Parent and its affiliates from owning or acquiring direct or indirect beneficial ownership of any additional equity of the Company aggregating more than (x) 10% of the total number of votes that may be cast generally in the election of directors (the "Total Voting Power") of the Company, (y) 45% of the outstanding Shares of Class B Common Stock, or (z) 40% of the outstanding Shares of the Company. Notwithstanding such restrictions, Parent is permitted to acquire beneficial ownership of additional Shares of Class A Common Stock from the Roberts Family Stockholders provided that, no later than sixty days after an acquisition of a majority of the Total Voting Power, Parent makes a tender or exchange offer or proposal with respect to a 35 38 business combination which meets certain requirements, including in any event that it be subject to the prior approval of the majority of independent directors and that it would result in the acquisition of 100% of the outstanding capital stock of the Company at a price per share not less than the highest price at which Parent acquired shares from any Roberts Family Stockholder in the preceding two years, in cash and/or the same form of consideration offered to such Roberts Family Stockholders. During the period in which Parent has acquired a majority of the Total Voting Power, but not 100% of the outstanding capital stock, Article 11 of the Investment Agreement requires Parent to use reasonable efforts to keep three independent directors on the Board of Directors and the approval of a majority of the independent directors is required for certain transactions, including the acquisition of additional capital stock (other than from the Roberts Family Stockholders) and entry into an acquisition proposal with regard to the Company. Article 11 of the Investment Agreement also requires the Company promptly to notify Parent if it receives an unsolicited acquisition proposal (including indications of interest) regarding a business combination from a third party, and sets forth certain procedures to be followed by the Board of Directors of the Company in the event that the Board of Directors determines to enter into a sale process with respect to the Company. Chapter 11 of the Investment Agreement also prohibits, until the earliest of March 8, 2006 and Parent's acquisition of a majority of the Total Voting Power, Parent and its affiliates generally from, without the consent of the Company, seeking to control or influence the Company, having the Company waive, amend or modify any of the restrictions described above, its Certificate of Incorporation or its By-Laws, making any acquisition proposal with respect to a business combination with the Company, taking any action with respect to the Company that would require the Company to make a public announcement with respect to an acquisition proposal, becoming a member of a "group" within the meaning of Section 13(d) of the Exchange Act, or soliciting, or encouraging any other person to solicit, proxies or become a participant or otherwise engage in a solicitation in opposition to a recommendation of a majority of the Company's directors or seek to advise or influence any person with respect to the voting of the Company's securities or execute any written consent in lieu of a meeting of stockholders, among other things. Pursuant to the Merger Agreement, the Board of Directors of the Company has taken action in approving the Offer, the Merger, the Merger Agreement and the Stockholders Agreement sufficient to render Article 11 of the Investment Agreement irrevocably inapplicable to the Offer, the Merger, the Merger Agreement, the Stockholders Agreement and the transactions contemplated thereby. The Company has also agreed that Article 11 of the Investment Agreement will be eliminated in its entirety upon the acquisition of Shares in the Offer and the entire Investment Agreement will terminate at the Effective Time. (b) 1996 Stockholders' Agreement. The 1996 Stockholders' Agreement provides that each Roberts Family Stockholder will use best efforts to attend each meeting of stockholders of the Company for purposes of establishing a quorum and will vote all of its shares of any voting stock of the Company ("Voting Stock") in favor of any Monsanto Nominee recommended by the Board of Directors of the Company. In addition, the 1996 Stockholders' Agreement provides that each Roberts Family Stockholder will not, without the consent of Parent, initiate any action that would result in the amendment of the By-Law provisions described above under "-- Investment Agreement" and that each Roberts Family Stockholder will vote its Voting Stock in favor of any proposed amendment to the Restated Certificate of Incorporation of the Company to increase the Company's authorized capital stock, which amendment is required in order for the Company to comply with Parent's rights to purchase equity under the Investment Agreement. The 1996 Stockholders' Agreement also provides that except for certain permitted transfers, no Roberts Family Stockholder may transfer any interest in its Voting Stock except as provided in such agreement, and that, with limited exceptions, no Roberts Family Stockholder will convert any Class A Common Stock to Class B Common Stock until such time as such Roberts Family Stockholder has entered into a binding agreement to sell or convey such Class B Common Stock to a third party. 36 39 If any Roberts Family Stockholder desires to transfer any interest in its Voting Stock (other than certain permitted transfers) such Roberts Family Stockholder is required to offer to sell such Voting Stock to Parent. If Parent decides not to purchase all of such Voting Stock for the price and upon the terms upon which such Roberts Family Stockholder proposes to transfer such Voting Stock, Parent has the exclusive right for a period of time to propose alternative terms for such purchase. If Parent does not accept the offer and Parent and such Roberts Family Stockholder have not otherwise reached an agreement regarding such purchase within such time period, then such Roberts Family Stockholder may offer and sell such Voting Stock to any person or entity on terms that are at least as favorable to such Roberts Family Stockholder as those set forth in the offer or those offered by Parent in any counteroffer. In the event of any involuntary transfer of any Voting Stock (other than certain permitted transfers), Parent will have an exclusive option to purchase all but not less than all of the Voting Stock subject to the involuntary transfer. The 1996 Stockholders' Agreement is effective until the earlier of (i) the termination of the Collaboration Agreement (except if it is terminated by reason of a material breach by the Company or by reason of a governmental decree caused by voluntary action of the Company), (ii) Parent owning less than 5% of the outstanding Class A Common Stock or less than 50% of the highest percent of the outstanding Shares beneficially owned by Parent and acquired in the 1996 Investment, (iii) the termination of the Investment Agreement or (iv) March 8, 2007 or any subsequent anniversary of such date upon notice by Parent or a majority in interest of the Voting Stock held by persons who are then Roberts Family Stockholders. (c) Registration Rights Agreement. The Registration Rights Agreement provides Parent with certain rights to require the Company to register the Class B Common Stock acquired by Parent, and upon conversion of the Class A Common Stock acquired by Parent, pursuant to the Investment Agreement and to participate in certain of the Company's registrations, subject to certain restrictions, at any time on or after the earlier of March 8, 1999 and the date as of which Parent is permitted to make certain transfers of shares of Class B Stock pursuant to the Investment Agreement. (d) Collaboration Agreement and License Agreements. In conjunction with the 1996 Investment, Parent and the Company also entered into the Collaboration Agreement, in which the two companies agreed to a long-term research and development collaboration for development of new transgenic products in the field of agricultural biotechnology. A variety of crops is contemplated under the Collaboration Agreement, including corn, soybean and others. Concurrently with the Collaboration Agreement, Parent and the Company also entered into the Corn Borer-Protected Corn License Agreement dated January 31, 1996; the Glyphosate-Protected Corn License Agreement dated January 31, 1996, and the CaMV Promoter License Agreement dated January 31, 1996 (collectively, the "License Agreements") to commercialize genetically engineered corn hybrids incorporating Bacillus thuringiensis tolerance to lepidopteran insects such as the European Corn Borer (YIELDGARD(TM) Bt insect-resistant corn), corn hybrids that are tolerant of glyphosate herbicide (ROUNDUP READY(TM) glyphosate-tolerant corn), and corn hybrids that are tolerant of glufosinate herbicides, respectively. The License Agreements define specific areas of commercial interest between Parent and the Company in Bt corn and in herbicide tolerant corn, while the Collaboration Agreement covers broadly all other fields of agricultural biotechnology in a spectrum of crops. The Collaboration Agreement and each of the License Agreements contemplates a worldwide territory. The Collaboration Agreement is the mechanism by which Parent and the Company share their respective technologies and intellectual property rights, for research and in the development of new products in the field of agricultural biotechnology. The initial term of the Collaboration Agreement is 10 years, with any extensions to be renegotiated in good faith and includes a series of cash payments from Parent to the Company originally aggregating $19,500,000 over the initial term of the Collaboration Agreement. In 1998, the Collaboration Agreement was amended to accelerate the payments into earlier years and to reduce the aggregate amount, but without materially changing the net present value of the payments. 37 40 Pursuant to the terms of the Collaboration Agreement and the License Agreement, if the Investment Agreement were to terminate prior to the Collaboration Agreement as the result of actions of either party that result in a government order requiring Parent to dispose of its shares or terminate the Collaboration Agreement, or if Parent were to terminate the Investment Agreement other than for cause, then the division of value for products of any Collaborative Effort under the Collaboration Agreement and under each of the License Agreements would be adjusted in favor of the non-terminating party, and against the terminating party. Any change of control of the Company, other than one where Parent becomes the controlling party, would result in a similar shift in the ratios in Parent's favor; any change of control of Parent would result in a shift in the Company's favor. During fiscal 1997, Parent paid $3,000,000 to the Company under the Collaboration Agreement. As part of the License Agreements, each party has an obligation to share with the other certain royalties and technology fees it receives that are related to seed corn that contains the applicable insect resistance or herbicide tolerance. The Company received a payment from Parent of approximately $2,700,000 under the License Agreements for sales occurring during fiscal 1997, net of certain fees. In the Company's fiscal 1998, the Company paid Parent approximately $200,000 in fees related to glufosinate tolerant corn. Parent expects that the Collaboration Agreement and the Licenses will be terminated or revised on or after the Effective Time. In addition, Parent may seek, prior to the acquisition of Shares pursuant to the Offer, to enter into further or additional collaboration agreements concerning research related to development of new products. Any such agreements may require the consent of the Company's Board of Directors in accordance with Article 11 of the Investment Agreement or Article EIGHTH of the Company's Restated Certificate of Incorporation. See Section 15. (e) Other Transactions. In fiscal 1997, the Company sold soybean products for which the Company collected a royalty or technology fee on behalf of Parent from the ultimate purchaser of the products, but was not entitled to share the net proceeds with Parent. For sales occurring during fiscal 1997, the Company paid Parent approximately $1,500,000 for such products, net of certain services fees the Company was permitted to retain. The Company also paid a subsidiary of Parent approximately $450,000 as royalties or fees for germplasm and specialty corn products. In an effort to increase available supplies of certain seeds to farmers in fiscal year 1997, Parent paid to the Company approximately $1,200,000 to help cover the Company's incremental winter production costs. In fiscal year 1998, Parent also paid the Company $2.05 million, and has agreed to make additional payments estimated to be an additional $2.5 million for additional seed production. All references in the preceding paragraphs to fiscal years are to the fiscal years of the Company. 13. SOURCE AND AMOUNT OF FUNDS. The Purchaser estimates that the total amount of funds required to purchase the outstanding Shares and to pay related fees and expenses will be approximately $2.5 billion. The Purchaser plans to obtain all funds needed for the Offer and the Merger through a capital contribution from Parent. Parent expects to obtain funds for its capital contribution from working capital, by borrowing on an unsecured basis, by the issuance of commercial paper, from other sources which might be available to Parent, or under some combination of the foregoing. As of the date of this Offer to Purchase, Parent has not made specific plans or arrangements with respect to the financing of the Offer and the Merger, or with respect to the repayment of any borrowings in respect thereof. The Offer is not conditioned on obtaining financing. 14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term of the Offer, but subject, in all cases, to Parent's and the Purchaser's obligations set forth under the Merger Agreement, including, without limitation, under the Best Efforts Provision, the Purchaser will not be required to accept for payment or, subject to any applicable rules and regulations of the Commission, including Rule 14e-l(c) under the Exchange Act (relating to the Purchaser's 38 41 obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer unless (i) there shall have been validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares of Class A Common Stock that (together with the Shares of Class A Common Stock then held by Parent or any of its Subsidiaries) would constitute a majority of the outstanding Shares of Class A Common Stock (assuming the exercise of all options to purchase, and the conversion or exchange of all securities convertible or exchangeable into, Shares of Class A Common Stock) outstanding at the expiration date of the Offer and (ii) any waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer shall have expired or been terminated prior to the expiration of the Offer. Furthermore, notwithstanding any other term of the Offer, but subject, in all cases, to certain of Parent's and the Purchaser's obligations set forth in the Merger Agreement, the Purchaser will not be required to accept for payment or, subject as aforesaid, to pay for any Shares not theretofore accepted for payment or paid for, and may terminate the Offer at any time if, at any time on or after the date of the Merger Agreement and before the acceptance of such Shares for payment or the payment therefor, any of the following conditions exists (other than as a result of any action or inaction of Parent or any of its Subsidiaries that constitutes a breach of the Merger Agreement): (a) there shall be threatened or pending by any Governmental Entity any suit, action or proceeding (i) challenging the acquisition by Parent or the Purchaser of any Shares under the Offer, seeking to restrain or prohibit the making or consummation of the Offer or the Merger or the performance of any of the other transactions contemplated by the Merger Agreement or the Stockholders Agreement or seeking to obtain from the Company, Parent or the Purchaser any damages that are material in relation to the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit or materially limit the ownership or operation by the Company, Parent or any of their respective Subsidiaries of a material portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a whole, or to compel the Company or Parent to dispose of or hold separate any material portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a whole, as a result of the Offer or any of the other transactions contemplated by the Merger Agreement or the Stockholders Agreement, (iii) seeking to impose material limitations on the ability of Parent or the Purchaser to acquire or hold, or exercise full rights of ownership of, any Shares to be accepted for payment pursuant to the Offer including, without limitation, the right to vote such Shares on all matters properly presented to the stockholders of the Company, (iv) seeking to prohibit Parent or any of its Subsidiaries from effectively controlling in any material respect any material portion of the business or operations of the Company or its Subsidiaries or (v) which otherwise is reasonably likely to have a material adverse effect on the business, properties, assets, financial condition or results of operations of the Company and its Subsidiaries taken as a whole; provided that the right of the Purchaser to not accept for payment or pay for, any Shares not theretofore accepted for payment or paid for, or to terminate the Offer, pursuant to this subparagraph (a) shall not be available if Parent or the Purchaser has not taken such action as is required to comply with the Best Efforts Provision; (b) there shall be enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger by any Governmental Entity any statute, rule, regulation, judgment, order or injunction, other than the application to the Offer or the Merger of applicable waiting periods under the HSR Act, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; provided that the right of the Purchaser to not accept for payment or pay for, any Shares not theretofore accepted for payment or paid for, or to terminate the Offer pursuant to this subparagraph (b) shall not be available to Parent or the Purchaser if Parent or the Purchaser has not taken such action as is required to comply with the Best Efforts Provision; (c) (i) the Board of Directors of the Company or any committee thereof shall have withdrawn or modified in a manner adverse to Parent or the Purchaser its approval or recommendation of the Offer, the Merger or the Merger Agreement or (ii) the Board of Directors of the Company or any committee thereof shall have resolved to take any of the foregoing actions; (d) any of the representations and warranties of the Company set forth in the Merger Agreement that are qualified as to materiality shall not be true and correct in any respect or any such representations 39 42 and warranties that are not so qualified shall not be true and correct in any material respect, in each case, at the date of the Merger Agreement and as if such representations and warranties were made as of such time of determination (except that (i) representations and warranties that speak as of a specified date shall be true and correct to such extent only as of such date and (ii) no representation or warranty of the Company shall be deemed to be untrue in any respect as a result of any event or circumstance that occurred after (and did not occur on or before) the first anniversary of the date hereof); (e) the Company shall have, and be continuing to have, failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or covenant of the Company to be performed or complied with by it under the Merger Agreement; (f) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on a national securities exchange in the United States (excluding any coordinated trading halt triggered solely as a result of a specified decrease in a market index), (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any limitation (whether or not mandatory) by any Governmental Entity on, or other event that materially adversely affects, the extension of credit by banks or other lending institutions, (iv) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States which in any case is reasonably expected to have a material adverse effect on the Company or to materially adversely affect Parent's or the Purchaser's ability to complete the Offer and/or the Merger or materially delay the consummation of the Offer and/or the Merger; or (g) the Merger Agreement shall have been terminated in accordance with its terms. The foregoing conditions are for the sole benefit of Parent and the Purchaser and may, subject to the terms of the Merger Agreement, be waived by Parent and the Purchaser in whole or in part at any time and from time to time in their sole discretion. The failure by Parent or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances, and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. Defined terms used but not defined in this Section 14 shall have the respective meanings assigned to those terms in the Merger Agreement. 15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. General. Except as otherwise disclosed herein, based upon an examination of publicly available filings with respect to the Company and discussions between representatives of the Purchaser and the Company, the Purchaser is not aware of (a) any licenses or other regulatory permits that appear to be material to the business of the Company and that might be adversely affected by the acquisition of Shares by the Purchaser pursuant to the Offer or (b) of any approval or other action by any governmental, administrative or regulatory agency or authority that would be required for the acquisition or ownership of Shares by the Purchaser as contemplated herein. Should any such approval or other action be required, it is currently contemplated that such approval or action would be sought except as otherwise described below under "State Takeover Laws." While the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. See Section 14 for certain conditions of the Offer. Antitrust Issues. Under the provisions of the HSR Act applicable to the Offer, the acquisition of Shares under the Offer may be consummated following the expiration of a 15-day waiting period following the filing of a Premerger Notification and Report Form with respect to the Offer, unless Parent receives a request for additional information or documentary material from the Department of Justice, Antitrust Division (the "Antitrust Division") or the Federal Trade Commission ("FTC") or unless early termination of the waiting 40 43 period is granted. Parent expects to make such a filing on May 15, 1998. If, within the initial 15-day waiting period, either the Antitrust Division or the FTC requests additional information or documentary material concerning the Offer, the waiting period will be extended through the tenth day after the date of substantial compliance by all parties receiving such requests. Complying with a request for additional information or documentary material can take a significant amount of time. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's proposed acquisition of the Company. At any time before or after the Purchaser's acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer, or the consummation of the Merger, or seeking the divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of the Company or its subsidiaries or Parent or its subsidiaries. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer or the consummation of the Merger on antitrust grounds will not be made, or, if such a challenge is made, of the result thereof. Pursuant to the Best Efforts Provision, Parent and the Company have agreed to take certain actions in order to permit the consummation of the Offer and the Merger. See Section 11. If any applicable waiting period under the HSR Act applicable to the Offer has not expired or been terminated prior to the Expiration Date, the Purchaser will not be obligated to proceed with the Offer or the purchase of any Shares not theretofore purchased pursuant to the Offer. See Section 14. State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. However, Section 203 of the DGCL, which generally prevents an "interested stockholder" (generally a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock, or an affiliate or associate thereof) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder), does not apply to the Company because the Company does not have a class of voting stock listed on a national securities exchange, authorized for quotation on the Nasdaq stock market or held of record by more than 2,000 stockholders. In any event, the Board of directors of the Company has resolved to make Section 203 of the DGCL inapplicable to the Offer, the Merger, the Merger Agreement, the Stockholders Agreement and the transactions contemplated by the Merger Agreement and the Stockholders Agreement. See Sections 10 and 11. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations that are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. The Company conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Purchaser does not know whether any of these laws will, by their terms, apply to the Offer and has not complied with any such laws. In the Merger Agreement, Parent and the Company and their respective Boards of Directors have agreed that, if any such state takeover law becomes applicable to the Merger Agreement and the transactions contemplated thereby, each of them will use all reasonable efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated thereby may be consummated as promptly as practicable on the terms contemplated thereby and otherwise act to minimize the effects of any such statute or regulation on the transactions contemplated thereby. Should any person seek to apply any state takeover law, Purchaser will take such action as then appears reasonable, which may include 41 44 challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. Certain Provisions of the Company Charter. Article Eighth of the Company Charter provides in relevant part that any merger or consolidation of the Company with any "Interested Stockholder" or affiliate of an Interested Stockholder will require the affirmative vote of at least 80% of the voting power of all the then outstanding voting power of the Company, voting together as a single class, unless (a) the transaction is approved by a majority of the "Continuing Directors" and there are at least five Continuing Directors or (b) certain requirements as to the consideration to be paid in the transaction are met and the Company has not taken certain actions or failed to take certain actions, including certain transactions with the Interested Stockholder, while there is an Interested Stockholder (including the acquisition by the Interested Stockholder of additional shares of the capital stock of the Company entitled to vote generally in the election of directors ("Voting Capital Stock")). The definition of Interested Stockholder for purposes of Article Eighth includes any person (other than the Company and controlled subsidiaries of the Company) who is the beneficial owner of 10% or more of the outstanding Voting Capital Stock. Under this definition, Parent became an Interested Stockholder as a result of the 1996 Investment. A Continuing Director, for purposes of this Article Eighth, is a director who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors of the Company prior to the time the Interested Stockholder became an Interested Stockholder, and any subsequent director who is both unaffiliated with the Interested Stockholder and who is recommended by a majority of the Continuing Directors then on the Board. As described above in Section 10, at its meeting of May 8, 1998, the Company's Board of Directors approved the Offer, the Merger, the Merger Agreement, the Stockholders Agreement and the transactions contemplated by the Merger Agreement and the Stockholders Agreement for purposes of rendering Article EIGHTH of the Company's Restated Certificate of Incorporation irrevocably inapplicable to the Offer, the Merger, the Merger Agreement and the Stockholders Agreement, the transactions contemplated by the Merger Agreement and/or the Stockholders Agreement and any other transaction (except a transaction in which Parent acquires beneficial ownership of Shares other than pursuant to the Merger) between Parent and any of its affiliates on the one hand, and the Company and any of its affiliates, on the other hand, consummated after the date that the Purchaser acquires Shares pursuant to the Offer that could be defined as a "Business Combination" under Article EIGHTH of the Company's Restated Certificate of Incorporation. Other Laws and Legal Matters. According to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, the Company conducts operations in a number of foreign countries. In the event that one or more foreign laws is deemed to be applicable to the Offer, the Purchaser and/or the Company may be required to file certain information or to receive the approval of the relevant foreign authorities. Such government may also attempt to impose additional conditions on the Company's operations conducted in such countries. After completion of the Offer, the Purchaser will seek further information regarding the applicability of any such laws and presently intends to take such actions as they may require. 16. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that neither the Company nor any of its Subsidiaries will, among other things, from the date of the Merger Agreement until the time that Parent's designees will constitute a majority of the Board of Directors of the Company, (a) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock or otherwise make any payment to stockholders in their capacity as such, other than dividends on Shares to be declared and paid only at the customary times at a quarterly rate not in excess of $0.035 per Share, except for dividends by a wholly owned domestic Subsidiary of the Company to its parent, (b) split, combine or reclassify any of its capital stock or issue or authorize the 42 45 issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its capital stock or (iii) redeem, purchase or otherwise acquire any of its securities. 17. FEES AND EXPENSES. BancAmerica Robertson Stephens and Goldman Sachs are acting as Dealer Managers for the Offer and have provided certain financial advisory services to Parent in connection with the Offer and the Merger. As compensation for such services, Parent has agreed to pay BancAmerica Robertson Stephens and Goldman Sachs $7,250,000 each. The Purchaser has agreed to reimburse both Dealer Managers for their reasonable out-of-pocket expenses, including the fees and expenses of their counsel, in connection with the Offer and has agreed to indemnify the Dealer Managers against certain liabilities and expenses in connection with the Offer, including liabilities under the federal securities laws. Parent has also retained Georgeson & Company Inc. to act as the Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interviews and may request brokers, dealers and other nominee stockholders to forward the Offer materials to beneficial owners of Shares. The Information Agent will receive reasonable and customary compensation for such services, plus reimbursement of out-of-pocket expenses. Parent will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, plus reimbursement for out-of-pocket expenses and will indemnify the Depositary against certain liabilities and expenses in connection therewith, including liabilities under the federal securities laws. Brokers, dealers, commercial banks and trust companies will be reimbursed by Parent for customary mailing and handling expenses incurred by them in forwarding material to their customers. 18. MISCELLANEOUS. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, the Purchaser may, in its sole discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction the securities laws or blue sky laws of which require the Offer to be made by a licensed broker or dealer, the Offer shall be made on behalf of the Purchaser by the Dealer Managers or one or more brokers or dealers licensed under the laws of such jurisdiction. Pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, the Purchaser has filed with the Commission the Schedule 14D-1, together with exhibits, furnishing additional information with respect to the Offer and may file amendments thereto. Pursuant to Rule 14d-9 promulgated under the Exchange Act, the Company has filed with the Commission the Schedule 14D-9 with respect to the Offer and may file amendments thereto. Such statements, including exhibits and any amendments thereto, that furnish certain additional information with respect to the Offer may be inspected at, and copies may be obtained from, the same places and in the same manner as set forth in Section 8, "Certain Information Concerning the Company" (except that they will not be available at the regional offices of the Commission). No person has been authorized to give any information or make any representation on behalf of the Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. CORN ACQUISITION CORPORATION May 15, 1998 43 46 SCHEDULE A DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER MONSANTO COMPANY The following table sets forth the name, current business address, present principal occupation or employment, and material occupations, positions, offices or employments and business addresses thereof for the past five years of each director and executive officer of Monsanto Company. Except for Jacobus F.M. Peters, who is a citizen of The Netherlands, Pierre Hochuli, who is a citizen of Switzerland, and Hendrik A. Verfaillie, who is a citizen of Belgium, each such person is a citizen of the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD NAME, AGE AND DURING PAST FIVE YEARS AND CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF ------------------------ ----------------------------------- Robert B. Shapiro (59)....................... Chairman and Chief Executive Officer of Monsanto Company Monsanto Company since 1997. Director of 800 North Lindbergh Blvd. Monsanto Company since 1993. Chairman, St. Louis, Missouri 63167 President and Chief Executive Officer of Monsanto Company, from 1995 to 1997. President and Chief Operating Officer of Monsanto Company, from 1993 to 1995. Executive Vice President and Advisory Director, Monsanto Company and President, The Agricultural Group, from 1990 to 1993. Director of Citicorp, New York, New York, and Silicon Graphics, Inc., Mountainview, California. Robert M. Heyssel (69)....................... Director of Monsanto Company since 1988. The Johns Hopkins Health System and Consultant and President Emeritus of The The Johns Hopkins Hospital Johns Hopkins Health System since 1992. 600 North Wolfe Street President and Chief Executive Officer of The Baltimore, Maryland 21287 Johns Hopkins Health System and The Johns Hopkins Hospital, from 1972 to 1992. Michael Kantor (58).......................... Director of Monsanto Company since 1997. Mayer, Brown & Platt Partner, Mayer, Brown & Platt, since 1997. 2000 Pennsylvania Avenue, N.W. United States Secretary of Commerce, Washington, D.C. 20006 Department of Commerce, Constitution Avenue, N.W., Washington, D.C. 20230, from 1996 to 1997. United States Trade Representative, Executive Offices of the President, 600 17th Street, N.W., Washington, D.C. 20508, from 1993 to 1996. National Chairman for the Clinton/Gore Campaign in 1992. Partner, Manatt, Phelps, Phillips and Kantor, from 1975 to 1992. Gwendolyn S. King (55)....................... Director of Monsanto Company since 1993. PECO Energy Company Senior Vice President, Corporate and Public 2301 Market Street Affairs, of PECO Energy Company from 1992 to Philadelphia, Pennsylvania 19101-8699 1998. Commissioner, Social Security Administration, from 1989 to 1992. Director of Adwin Equipment Co., Lester, Pennsylvania; Adwin Realty Co., Lester, Pennsylvania; Eastern Pennsylvania Development Corp., Lester, Pennsylvania; and Lockheed Martin Corp., Bethesda, Maryland.
A-1 47
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD NAME, AGE AND DURING PAST FIVE YEARS AND CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF ------------------------ ----------------------------------- Philip Leder (63)............................ Director of Monsanto Company since 1990. Harvard Medical School Senior Investigator, Howard Hughes Medical 200 Longwood Avenue Institute, 300 Longwood Avenue, Boston, Boston, Massachusetts 02115 Massachusetts 02115, since 1986. Chairman, Department of Genetics, and John Emory Andrus Professor of Genetics, at Harvard Medical School, since 1980. Director of Genome Therapeutics Corporation, Waltham, Massachusetts. Jacobus F.M. Peters (66)..................... Director of Monsanto Company since 1993. AEGON N.V. Retired Chairman of the Executive Board and 50 Mariahoeveplein, 2501 CE, Chief Executive Officer of AEGON N.V., from The Hague, The Netherlands 1984 to 1993. Member of the Supervisory Board of AEGON, N.V.; DAF Trucks, N.V.; IBM International Centre for Asset Management N.V.; and Randstad Holding N.V., all located in The Netherlands. Nicholas L. Reding (63)...................... Vice Chairman of the Board of Monsanto Monsanto Company Company since 1993. Executive Vice President, 800 North Lindbergh Blvd. Environment, Safety, Health and St. Louis, Missouri 63167 Manufacturing, of Monsanto Company, from 1990 to 1992. Advisory Director of Monsanto Company, from 1986 to 1992. Director of CPI Corp., St. Louis, Missouri; Meredith Corporation, Des Moines, Iowa; Multifoods Corporation, Minneapolis, Minnesota; and The Keystone Center, Keystone, Colorado. John S. Reed (58)............................ Director of Monsanto Company since 1985. Citibank N.A. Chairman and Chief Executive Officer of 153 East 53rd Street Citicorp and Citibank, N.A. since 1984. Citicorp Center, 23rd Floor Director of Phillip Morris Companies, Inc., New York, New York 10022 New York, New York and CitiCorp and Citibank, N.A., New York, New York. John E. Robson (67).......................... Director of Monsanto Company since 1996. BancAmerica Robertson Stephens Senior Advisor, BancAmerica Robertson 555 California Street Stephens, since 1993. Distinguished Faculty San Francisco, CA 94104 Fellow, Yale University School of Management, and Visiting Fellow, The Heritage Foundation in 1993. Deputy Secretary of the United States Department of the Treasury, from 1989 to 1992. Dean, Emory University Business School, from 1986 to 1989. President and Chief Executive Officer, G.D. Searle & Co., from 1985 to 1986. Executive Vice President, G.D. Searle & Co., from 1978 to 1985. Director of Northrop Corp., Security Capital Industrial Trust (REIT). William D. Ruckelshaus (65).................. Director of Monsanto Company since 1985. Browning-Ferris Industries, Inc. Chairman of Browning-Ferris Industries, Inc., 757 North Eldridge, since 1995. Principal, Madrona Investment Houston, Texas 77079 Group L.L.C., since 1996. Chairman and Chief Executive Officer of Browning-Ferris Industries, Inc., from 1988 to 1995. Director of Cummins Engine Co., Inc., Columbus, Indiana; Nordstrom, Inc., Seattle, Washington; and Weyerhaeuser Company, Tacoma, Washington.
A-2 48
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD NAME, AGE AND DURING PAST FIVE YEARS AND CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF ------------------------ ----------------------------------- Richard U. De Schutter (57).................. Vice Chairman of Monsanto Company and G.D. Searle & Co. Chairman, Chief Executive Officer and 5200 Old Orchard Road President of G.D. Searle & Co. since 1997. Skokie, Illinois 60077 Chairman and Chief Executive Officer of G.D. Searle & Co. and Advisory Director of Monsanto Company from 1995 to 1997. President and Chief Operating Officer of G.D. Searle & Co., from 1993 to 1995. President, G.D. Searle & Co., from 1991 to 1993. Chairman, International Operations of G.D. Searle & Co., from 1989 to 1991. Arnold W. Donald (43)........................ Senior Vice President of Monsanto Company Monsanto Company since 1998. President, Agricultural Sector of 800 North Lindbergh Blvd. Monsanto Company, from 1995 to 1998. Group St. Louis, Missouri 63167 Vice President and General Manager of Monsanto Company, from 1994 to 1995. Group Vice President, North America Division of Monsanto Company, from 1993 to 1994. Steven L. Engelberg (55)..................... Senior Vice President of Monsanto Company Monsanto Company since 1996. Vice President, Worldwide 700 14th Street, NW, Suite 1100 Government Affairs, of Monsanto Company, from Washington, DC 20005 1994 to 1996. Partner in Charge of Keck, Mahin & Cate Washington, D.C. office, 1201 New York Avenue, NW, Washington DC 20005-3919, from 1986 to 1993. Chief of Staff of Office of the United States Trade Representative, 600 17th Street, NW, Washington, DC 20506, from January 1993 to May 1993. Patrick J. Fortune (50)...................... Vice President and Chief Information Officer Monsanto Company of Monsanto Company since 1995. President and 800 North Lindbergh Blvd. Chief Operating Officer of Coram Health Care, St. Louis, Missouri 63167 1125 Seventeenth Street, Suite 2100, Denver, Colorado 80202, from 1994 to 1995. Corporate Vice President, Information Management of Bristol-Myers Squibb, 345 Park Avenue, New York, N.Y. 10154, from 1991 to 1994. Pierre Hochuli (50).......................... Executive Vice President of Monsanto Company Monsanto Europe S. A. since 1997. Vice President of Monsanto Avenue de Tervuren 270-272 Company and Chairman, Monsanto Europe-Africa, P. O. Box 1 B-1150 from 1996 to 1997. Vice President of Monsanto Brussels, Belgium Company and President, Growth Enterprises of Monsanto Company, from 1995 to 1996. Vice President, Corporate Planning, of Monsanto Company, from 1993 to 1995. Group Vice President and General Manager, New Products Division, The Agricultural Group of Monsanto Company in 1993. Vice President and General Manager, New Products Division, The Agricultural Group of Monsanto Company in 1992. Vice President, Finance and Planning, The Agricultural Group of Monsanto Company in 1991. Regional Director, Europe/ Africa/Middle East of Monsanto Europe, S.A., from 1985 to 1991.
A-3 49
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD NAME, AGE AND DURING PAST FIVE YEARS AND CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF ------------------------ ----------------------------------- Robert B. Hoffman (61)....................... Vice Chairman and Chief Financial Officer of Monsanto Company Monsanto Company since 1997. Senior Vice 800 North Lindbergh Blvd. President and Chief Financial Officer and St. Louis, Missouri 63167 Advisory Director of Monsanto Company, from 1994 to 1997. Vice President of FMC Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, from 1990 to 1994. Director of Harnishfeger Industries, Inc., Milwaukee, Wisconsin and all mutual funds of The Kemper Group, Chicago, Illinois. R. William Ide III (57)...................... Senior Vice President, General Counsel and Monsanto Company Secretary of Monsanto Company since 1996. 800 North Lindbergh Blvd. Partner, Long, Aldridge & Norman, One St. Louis, Missouri 63167 Peachtree Center, Suite 5300, 303 Peachtree Street, N.E., Atlanta, GA 30308, from 1993 to 1996. President, American Bar Association, 750 North Lake Shore Drive, Chicago, IL 60611, from 1993 to 1994. Partner, Kutak Rock, 225 Peachtree Street, N.E., Suite 2100, Atlanta, GA 30303, from 1989 to 1993. Donna A. Kindl (40).......................... Vice President, Human Resources of Monsanto Monsanto Company Company since 1996. Director, Human Resources 800 North Lindbergh Blvd. of Monsanto Company, from 1993 to 1996. St. Louis, Missouri 63167 Director of Human Resources Planning and Development, Clorox Corporation, 1221 Broadway, Oakland, CA 94612 in 1990. David L. Morley (41)......................... Senior Vice President of Monsanto Company Monsanto Company since 1998. President, Nutrition and Consumer 800 North Lindbergh Blvd. Products of Monsanto Company, from 1997 to St. Louis, Missouri 63167 1998. Group Vice President and General Manager, Americas Division, Crop Protection Business Unit of Monsanto Company from 1995 to 1997. Group Vice President and General Manager, Global Strategies and Operations, of The Agricultural Group of Monsanto Company, from 1993 to 1995. Vice President, Finance and Planning of The Agricultural Group of Monsanto Company in 1992. Philip Needleman (59)........................ Senior Vice President, Research and Monsanto Company Development and Advisory Director, of 800 North Lindbergh Blvd. Monsanto Company and President, Searle St. Louis, Missouri 63167 Research and Development, of G.D. Searle & Co. since 1993. Vice President, Research and Development, and Advisory Director, of Monsanto Company and President, Research and Development, of G.D. Searle & Co. in 1992. Vice President, Research and Development, and Advisory Director, of Monsanto Company, from 1991 to 1992. Vice President, Research and Development, of Monsanto Company, from 1989 to 1991. Robert W. Reynolds (54)...................... Vice Chairman of Monsanto Company, since Monsanto Company 1997. Vice President, International 800 North Lindbergh Blvd. Operations and Development, of Monsanto St. Louis, Missouri 63167 Company, from 1994 to 1997. Vice President and Managing Director, Latin America World Area, of Monsanto Company, from 1992 to 1994. Vice President and General Manager, Crop Protection Products Division, Monsanto Agricultural Company, from 1990 to 1992.
A-4 50
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD NAME, AGE AND DURING PAST FIVE YEARS AND CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF ------------------------ ----------------------------------- Hendrik A. Verfaillie (52)................... President of Monsanto Company since 1997. Monsanto Company Executive Vice President and Advisory 800 North Lindbergh Blvd. Director of Monsanto Company from 1995 to St. Louis, Missouri 63167 1997. Vice President and Advisory Director of Monsanto Company and President, The Agricultural Group of Monsanto Company, from 1993 to 1995. Vice President and General Manager, Roundup Division, The Agricultural Group, of Monsanto Company from 1990 to 1993.
A-5 51 CORN ACQUISITION CORPORATION The following table sets forth the name, current business address, present principal occupation or employment, and material occupations, positions, offices or employments and business addresses thereof for the past five years of each director and executive officer of Corn Acquisition Corporation. Each such person is a citizen of the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD NAME, AGE, AND DURING PAST FIVE YEARS AND CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF ------------------------ ----------------------------------- Barbara Blackford (41)....................... President, Secretary, Treasurer and Director Monsanto Company of Corn Acquisition Corporation. Associate 800 North Lindbergh Blvd. General Counsel, Corporate Governance and St. Louis, Missouri 63167 Mergers & Acquisitions of Monsanto Company from October 1997. Partner, Long Aldridge & Norman, One Peachtree Center, Suite 5300, 303 Peachtree Street, N.E., Atlanta, G.A. 30308, from 1992 to 1997. Eric Fencl (35).............................. Vice President and Assistant Secretary of Monsanto Company Corn Acquisition Company. Corporate Counsel, 800 North Lindbergh Blvd. Corporate Governance of Monsanto Company from St. Louis, Missouri 63167 September 1997. Counsel of McDonnell Douglas Corporation, Airport Road & McDonnell Boulevard, St. Louis, Missouri 63134, from 1993 to 1996. Counsel and Assistant Secretary of McDonnell Douglas Corporation from 1996 to 1997.
A-6 52 Facsimiles of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates evidencing Shares and any other required documents should be sent or delivered by each stockholder or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Mail: By Overnight Courier: By Hand: First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company of New York of New York of New York Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges P.O. Box 2569, Suite 4660-DGC Suite 4680-DGC c/o THE DEPOSITORY TRUST Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor COMPANY New York, NY 10005 55 Water Street, DTC TAD Vietnam Veterans Memorial Plaza New York, NY 10041
By Facsimile Transmission: (201) 222-4720 or (201) 222-4721 Confirm by Telephone: (201) 222-4707 Questions or requests for assistance may be directed to the Dealer Managers or Information Agent at their respective addresses and telephone numbers listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Dealer Managers or Information Agent. A stockholder may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. The Information Agent for the Offer is: (LOGO) Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect (212) 440-9800 CALL TOLL FREE 1-800-223-2064 The Dealer Managers for the Offer are: BANCAMERICA ROBERTSON STEPHENS GOLDMAN, SACHS & CO. 555 California Street 85 Broad Street San Francisco, California 94104 New York, New York 10004 (800) 288-7726 (800) 323-5678
EX-99.A.2 3 LETTER OF TRANSMITTAL 1 Exhibit (A)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED MAY 15, 1998 BY CORN ACQUISITION CORPORATION A WHOLLY-OWNED SUBSIDIARY OF MONSANTO COMPANY THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED. The Depositary for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Mail: By Overnight Courier: By Hand: First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company of New York of New York of New York Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges P.O. Box 2569, Suite 4660-DGC Suite 4680-DGC c/o THE DEPOSITORY Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor TRUST COMPANY New York, NY 10005 55 Water Street, DTC TAD Vietnam Veterans Memorial Plaza New York, NY 10041
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders either if certificates for Shares (as defined in the Offer to Purchase, dated May 15, 1998 (the "Offer to Purchase")) are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of Shares are to be made by book-entry transfer to an account maintained by First Chicago Trust Company of New York (the "Depositary") at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Stockholders who tender Shares by book-entry transfer are referred to herein as "Book-Entry Stockholders." Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase) or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2. 2 DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. [ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ----------------------------------------------------------------------------- Account Number: ------------------------------------------ Transaction Code Number: ------------------------------------ [ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY. Name(s) of Registered Holder(s): ----------------------------------------------------------------------------- Window Ticket Number (if any): ------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------------------------------------------------- Name of Institution which Guaranteed Delivery: ------------------------------------------------------------------------ 3
- ----------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED - ----------------------------------------------------------------------------------------------------------------------------- NAMES(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR AND SHARE(S) TENDERED ON SHARE CERTIFICATE(S) TENDERED) (ATTACH ADDITIONAL LIST, IF NECESSARY) - ----------------------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES SHARE REPRESENTED NUMBER CLASS CERTIFICATE BY SHARE OF SHARES (A OR B) NUMBER(S)* CERTIFICATE(S)* TENDERED** - ----------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------ ------------------------------------------------------------------ ------------------------------------------------------------------ ------------------------------------------------------------------ TOTAL SHARES
- -------------------------------------------------------------------------------------------------------------- * Need not be completed by Book-Entry Stockholders. ** Unless otherwise indicated it will be assumed that all Shares represented by Share Certificates delivered to the Depositary are being tendered. See Instruction 4. - --------------------------------------------------------------------------------------------------------------
Ladies and Gentlemen: The undersigned hereby tenders to Corn Acquisition Corporation (the "Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation ("Parent"), the above described shares of Class A Common Stock, without par value, and Class B Common Stock, without par value (collectively, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), pursuant to the Purchaser's offer to purchase all outstanding Shares at a purchase price of $100 per Share, net to the seller in cash, without interest thereon (as such price may be increased, the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together with any amendments or supplements thereto collectively constitute the "Offer"). The undersigned understands that the Purchaser reserves the right, at any time, to assign to one or more corporations directly or indirectly wholly-owned by Parent the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. As used herein, the term "Purchaser" shall, if applicable, include any such corporation. 4 Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered hereby in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns, and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby and any and all dividends on the Shares (including, without limitation, the issuance of additional Shares pursuant to a stock dividend or stock split, the issuance of other securities, the issuance of rights for the purchase of any securities, or any cash dividends that are declared or paid by the Company on or after the date of the Offer to Purchase and are payable or distributable to stockholders of record on a date prior to the transfer into the name of the Purchaser or its nominees or transferees on the Company's stock transfer records of the Shares purchased pursuant to the Offer (collectively, "Distributions"), other than regular cash dividends that may be declared by the Company in the ordinary course, not in excess of $0.035 per Share per quarter), and constitutes and irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact and proxy of the undersigned to the full extent of the undersigned's rights with respect to such Shares (and Distributions) with full power of substitution (such power of attorney and proxy being deemed to be irrevocable and coupled with an interest), to (a) deliver Share Certificates (and Distributions), or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility, together in either such case with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser upon receipt by the Depositary, as the undersigned's agent, of the purchase price, (b) present such Shares (and Distributions) for transfer on the books of the Company and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and Distributions), all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints designees of the Purchaser, and each of them, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to vote in such manner as each such attorney and proxy or his or her substitute shall, in his or her sole discretion, deem proper, and otherwise act (including pursuant to written consent) with respect to all of the Shares tendered hereby which have been accepted for payment by the Purchaser prior to the time of such vote or action (and Distributions) which the undersigned is entitled to vote at any meeting of stockholders of the Company (whether annual or special and whether or not an adjourned meeting), or by written consent in lieu of such meeting, or otherwise. This power of attorney and proxy is coupled with an interest in the Shares and is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by the Purchaser in accordance with the terms of the Offer. Such acceptance for payment shall revoke, without further action, any other power of attorney or proxy granted by the undersigned at any time with respect to such Shares (and Distributions) and no subsequent powers of attorney or proxies will be given (and if given will be deemed not to be effective) with respect thereto by the undersigned. The undersigned understands that the Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser is able to exercise full voting rights with respect to such Shares (and Distributions), to the extent that such Shares (or Distributions) have such rights. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby (and Distributions), that the undersigned own(s) the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that such tender of Shares complies with Rule 14e-4 under the Exchange Act and that when the same are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claim. The undersigned, upon request, will execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and Distributions). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser any and all other Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer and, pending such remittance or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of such Distributions and may withhold the entire purchase price or deduct from the purchase price of Shares tendered hereby the amount or value thereof, as determined by the Purchaser in its sole discretion. 5 All authority herein conferred or herein agreed to be conferred shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, legal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, tenders of Shares pursuant to the Offer are irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or return any Share Certificates not tendered or accepted for payment in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price and/or return any Share Certificates not tendered or accepted for payment (and accompanying documents as appropriate) to the undersigned at the address shown below the undersigned's signature. In the event that both the "Special Delivery Instructions" and the "Special Payment Instructions" are completed, please issue the check for the purchase price and/or return any Share Certificates not tendered or accepted for payment in the name(s) of, and deliver said check and/or return such Share Certificates to, the person or persons so indicated. The undersigned recognizes that the Purchaser has no obligation pursuant to the "Special Payment Instructions" to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares so tendered. 6 ------------------------------------------------------------ SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Share Certificates not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be issued in the name of someone other than the undersigned. Issue check and/or certificates to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ (TAX IDENTIFICATION OR SOCIAL SECURITY NO.) (SEE SUBSTITUTE FORM W-9) ============================================================ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Share Certificates not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown on the front cover. Mail check and/or certificates to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ (TAX IDENTIFICATION OR SOCIAL SECURITY NO.) ------------------------------------------------------------ 7 IMPORTANT -- SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) Dated: - --------------------------- (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the necessary information. See Instruction 5.) Name(s) ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (Full Title) ---------------------------------------------------------------- Address------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: ----------------------------------------------------- Tax Identification or Social Security No.: ------------------------------------------------- (SEE SUBSTITUTE FORM W-9) GUARANTEE OF SIGNATURE(S) (IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5) Authorized Signature: ---------------------------------------------------------------- Name -------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Name of Firm: --------------------------------------------------------------------- Address: ------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: ----------------------------------------------------- Dated: - --------------------------- 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required (i) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) of the Shares tendered herewith, unless such holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the inside front cover hereof or (ii) if such Shares are tendered for the account of a firm that is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or by any other "Eligible Guarantor Institution" as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (collectively, "Eligible Institutions"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of Transmittal is to be used either if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. Share Certificates, or timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the Depositary's account at the Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a manually signed facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in the case of a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein prior to the expiration of the Offer. Stockholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the expiration of the Offer or who cannot complete the procedures for delivery by book-entry transfer on a timely basis may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary on or prior to the expiration of the Offer; and (iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile hereof), with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and all other documents required by this Letter of Transmittal, must be received by the Depositary within three NYSE trading days after the date of execution of such Notice of Guaranteed Delivery. A "NYSE trading day" is any day on which The New York Stock Exchange, Inc. is open for business. If Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile hereof) must accompany each such delivery. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY A BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or a manually signed facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment. 9 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares and any other required information should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed. 4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such case, new certificate(s) for the remainder of the Shares that were evidenced by your old certificate(s) will be sent to you, unless otherwise provided in the appropriate box marked "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal, as soon as practicable after the expiration of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any other change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority to so act must be submitted. When this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made to or certificates for Shares not tendered or purchased are to be issued in the name of a person other than the registered holder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares listed, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear(s) on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the Purchaser will pay or cause to be paid any stock transfer taxes with respect to the transfer and sale of purchased Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificates for Shares not tendered or purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price received by such person(s) pursuant to this Offer (i.e., such purchase price will be reduced) unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates listed in this Letter of Transmittal. 10 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in the name of, and/or certificates for unpurchased Shares are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if a check is to be sent and/or such certificates are to be returned to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown on the front cover hereof, the appropriate boxes on this Letter of Transmittal should be completed. Book-Entry Stockholders may request that Shares not purchased be credited to such account maintained at the Book-Entry Transfer Facility as such Book-Entry Stockholder may designate hereon. If no such instructions are given, such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated above. See Instruction 1. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may be directed to either the Information Agent or the Dealer Managers at their respective addresses and telephone numbers set forth below. Requests for additional copies of the Offer to Purchase and this Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies and other nominees. 9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If the Depositary is not provided with the correct TIN, the Internal Revenue Service may subject the stockholder or other payee to a $50 penalty, and payments that are made to such stockholder or other payee with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, it must submit a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. If backup withholding applies, the Depositary is required to withhold 31% of any such payments made to the stockholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing a Substitute Form W-9 certifying (i) that the TIN provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and (ii) that (a) such stockholder is exempt from backup withholding, (b) such stockholder has not been notified by the Internal Revenue Service that such stockholder is subject to backup withholding as a result of a failure to report all interest or dividends or (c) the Internal Revenue Service has notified such stockholder that such stockholder is no longer subject to backup withholding. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN but has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% of all payments made prior to the time a properly certified TIN is provided to the Depositary. The stockholder is required to give the Depositary the TIN of the record holder of the Shares or of the last transferee appearing on the transfers attached to, or endorsed on, the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 11 10. LOST, DESTROYED, MUTILATED, OR STOLEN CERTIFICATES. If any certificate(s) representing Shares has been lost, destroyed, mutilated, or stolen, the stockholder should promptly notify the Depositary. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, or destroyed certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF) OR AN AGENT'S MESSAGE, TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION OF THE OFFER. 12 TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS (SEE INSTRUCTION 9) PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK - ----------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1 -- Please provide your name, address FORM W-9 and TIN and certify by signing and dating PART 3 -- Social Security Number DEPARTMENT OF THE TREASURY below or Employer ID Number INTERNAL REVENUE SERVICE Name: ---------------------------------- -------------------------------------------- Awaiting TIN [ ] Address: -------------------------------------------- -------------------------------------------- ------------------------------------------------------------------------------------ PART 2 -- CERTIFICATIONS -- Under penalties of perjury, I certify that: PAYER'S REQUEST FOR (1) The number shown on this form is my correct Taxpayer Identification Number (or TAXPAYER IDENTIFICATION I am waiting for a number to be issued to me and have checked the box in Part 3) NUMBER ("TIN") and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. - ----------------------------------------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS -- You must cross out item (2) of Part II above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). - ----------------------------------------------------------------------------------------------------------------------- Signature Date ---------------------------- - -----------------------------------------------------------------------------
- -------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable payments made to me will be withheld. - ----------------------------------------------- ----------------------------------------------- Signature Date
13 Facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, Share Certificates and any other required documents should be sent or delivered by each stockholder of the Company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below: The Depositary for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Mail: By Overnight Courier: By Hand: First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company of New York of New York of New York Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges P.O. Box 2569, Suite 4660-DGC Suite 4680-DGC c/o THE DEPOSITORY TRUST Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor COMPANY New York, NY 10005 55 Water Street, DTC TAD Vietnam Veterans Memorial Plaza New York, NY 10041
Questions and requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers listed below. Requests for additional copies of the Offer to Purchase and the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be directed to the Information Agent as set forth below, and will be furnished promptly at the Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: (LOGO) Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 ALL OTHERS CALL TOLL-FREE: (800) 223-2064 The Dealer Managers for the Offer are: BANCAMERICA ROBERTSON STEPHENS GOLDMAN, SACHS & CO. 555 California Street 85 Broad Street San Francisco, California 94104 New York, New York 10004 (800) 288-7726 (800) 323-5678
EX-99.A.3 4 LETTER TO BROKERS, DEALERS 1 Exhibit (A)(3) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION AT $100 NET PER SHARE BY CORN ACQUISITION CORPORATION A WHOLLY-OWNED SUBSIDIARY OF MONSANTO COMPANY THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED. May 15, 1998 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Corn Acquisition Corporation, a Delaware corporation (the "Purchaser"), and Monsanto Company, a Delaware corporation ("Parent"), to act as Information Agent in connection with the Purchaser's offer to purchase all outstanding shares of Class A Common Stock, without par value, and Class B Common Stock, without par value (collectively, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a purchase price of $100 per Share, net to the seller in cash, without interest thereon (as such price may be increased, the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 15, 1998 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together with any amendments or supplements thereto collectively constitute the "Offer") enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. The Offer is conditioned upon there having been validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares of Class A Common Stock that (together with the Shares of Class A Common Stock then held by Parent or any of its Subsidiaries) would constitute a majority of the Shares of Class A Common Stock (assuming the exercise of all options to purchase, and the conversion or exchange of all securities convertible or exchangeable into, Shares of Class A Common Stock) outstanding at the expiration date of the Offer and the expiration or termination prior to the expiration of the Offer of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to the purchase of Shares pursuant to the Offer. The Offer is also subject to certain other terms and conditions as set forth in the Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to Purchase. As described in the Offer to Purchase, if Shares are not accepted for purchase pursuant to the Offer on or prior to May 9, 1999, the Offer Price will be increased by $0.50 per Share on May 10, 1999 and on the tenth day of each subsequent month until Shares are so accepted, unless the Offer is earlier terminated. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Offer to Purchase, dated May 15, 1998. 2. The Letter of Transmittal for your use to tender Shares and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to tender Shares. 3. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 2 4. The Notice of Guaranteed Delivery for Shares to be used to accept the Offer if certificates for Shares ("Share Certificates") and all other required documents are not immediately available or cannot be delivered to First Chicago Trust Company of New York (the "Depositary") by the Expiration Date (as defined in the Offer to Purchase) or if the procedure for book-entry transfer cannot be completed by the Expiration Date. 5. A letter to stockholders from the Chairman of the Board and Chief Executive Officer of the Company accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. 7. A return envelope addressed to the Depositary. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED. In order to accept the Offer, a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and any other documents required by the Letter of Transmittal should be sent to the Depositary and either Share Certificates representing the tendered Shares should be delivered to the Depositary, or Shares should be tendered by book-entry transfer into the Depositary's account maintained at the Book Entry Transfer Facility (as described in the Offer to Purchase), all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. If holders of Shares wish to tender, but it is impracticable for them to forward their Share Certificates or other required documents prior to the expiration of the Offer or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified in Section 3 of the Offer to Purchase. The Purchaser will not pay any commissions or fees to any broker, dealer or other person (other than the Dealer Managers and the Information Agent, as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Questions and requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers listed on the back cover of the Offer to Purchase. Requests for additional copies of the Offer to Purchase and the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be directed to the Information Agent. Very truly yours, GEORGESON & COMPANY INC. as Information Agent Wall Street Plaza New York, New York 10005 (212) 440-9800 (Call Collect) NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE DEPOSITARY, THE DEALER MANAGERS OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. EX-99.A.4 5 LETTER TO CLIENTS 1 Exhibit (A)(4) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION AT $100 NET PER SHARE BY CORN ACQUISITION CORPORATION A WHOLLY-OWNED SUBSIDIARY OF MONSANTO COMPANY THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED. May 15, 1998 To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated May 15, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which together with any amendments or supplements thereto collectively constitute the "Offer") relating to the offer by Corn Acquisition Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation ("Parent"), to purchase all outstanding shares of Class A Common Stock, without par value, and Class B Common Stock, without par value (collectively, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a purchase price of $100 per Share, net to the seller in cash, without interest thereon (as such price may be increased, the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal enclosed herewith. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available, or who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the expiration of the Offer or who cannot complete the procedures for delivery by book-entry transfer on a timely basis must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish to have us tender on your behalf any or all Shares held by us for your account pursuant to the terms and conditions set forth in the Offer. Please note the following: 1. The tender price is $100 per Share, net to you in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. As described in the Offer to Purchase, if Shares are not accepted for Purchase pursuant to the Offer on or prior to May 9, 1999, the Offer Price will be increased by $0.50 per Share on May 10, 1999 and on the tenth day of each subsequent month until Shares are so accepted, unless earlier terminated. 2. The Offer is being made for all outstanding Shares. 2 3. The Offer is conditioned upon there having been validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares of Class A Common Stock that (together with the Shares of Class A Common Stock then held by Parent or any of its subsidiaries) would constitute a majority of the Shares of Class A Common Stock (assuming the exercise of all options to purchase, and the conversion or exchange of all securities convertible or exchangeable into, shares of Class A Common Stock) outstanding at the expiration date of the Offer and the expiration or termination prior to the expiration of the Offer of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to purchase of Shares pursuant to the Offer. The Offer is also subject to certain other terms and conditions as set forth in the Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to Purchase. 4. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. 5. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Friday, June 12, 1998, unless extended. 6. Payment for Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by First Chicago Trust Company of New York (the "Depositary") of (i) Share Certificates or timely confirmation of the book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility"), pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and (iii) any other documents required by the Letter of Transmittal. Accordingly, payment might not be made to all tendering stockholders at the same time, and will depend upon when Share Certificates or confirmations of book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility are actually received by the Depositary. If you wish to have us tender any or all of the Shares held by us for your account, please so instruct us by completing, executing, detaching and returning to us the instruction form set forth on the back page of this letter. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the back page of this letter. An envelope to return your instructions to us is enclosed. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the expiration of the Offer. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares residing in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, the Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Purchaser by the Dealer Managers or one or more other registered brokers or dealers that are licensed under the laws of such jurisdiction. 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION BY CORN ACQUISITION CORPORATION A WHOLLY-OWNED SUBSIDIARY OF MONSANTO COMPANY The undersigned acknowledge(s) receipt of your letter, the enclosed Offer to Purchase, dated May 15, 1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which together with any amendments or supplements thereto collectively constitute the "Offer") relating to the offer by Corn Acquisition Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation, to purchase all outstanding shares of Class A Common Stock, without par value, and Class B Common Stock, without par value (collectively, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation, at a purchase price of $100 per Share, net to the seller in cash, without interest thereon (as such price may be increased as described in the Offer to Purchase), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal. This will instruct you to tender to the Purchaser the number of Shares indicated below (or if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares to Be Tendered: Shares of Class A Common Stock* -------------- Shares of Class B Common Stock* -------------- - -------------------------------------------------------------------------------- SIGN BELOW Account Number: Signature(s) --------------------------- --------------------------- Dated: --------------------------------- - -------------------------------------------------------------------------------- PLEASE TYPE OR PRINT NAME(S) - -------------------------------------------------------------------------------- PLEASE TYPE OR PRINT ADDRESS(ES) HERE - -------------------------------------------------------------------------------- AREA CODE AND TELEPHONE NUMBER - -------------------------------------------------------------------------------- TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER(S) * Unless otherwise indicated, it will be assumed that you instruct us to tender all Shares held by us for your account. EX-99.A.5 6 NOTICE OF GUARANTEED DELIVERY 1 Exhibit (A)(5) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK OF DEKALB GENETICS CORPORATION TO CORN ACQUISITION CORPORATION A WHOLLY-OWNED SUBSIDIARY OF MONSANTO COMPANY (NOT TO BE USED FOR SIGNATURE GUARANTEES) As set forth in Section 3 of the Offer to Purchase, dated May 15, 1998 (the "Offer to Purchase"), this Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates ("Share Certificates") representing shares of Class A Common Stock, without par value, or Class B Common Stock, without par value (collectively, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), are not immediately available, if time will not permit all required documents to reach First Chicago Trust Company of New York (the "Depositary") on or prior to the expiration of the Offer (as defined in the Offer to Purchase), or if the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile transmission or mail to the Depositary. The Depositary for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Mail: By Overnight Courier: By Hand: First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company of New York of New York of New York Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges P.O. Box 2569, Suite 4660-UTP Suite 4680-UTP c/o THE DEPOSITORY Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor TRUST COMPANY New York, NY 10005 55 Water Street, DTC TAD Vietnam Veterans Memorial Plaza New York, NY 10041
By Facsimile Transmission: (201) 222-4720 or (201) 222-4721 Confirm by Telephone: (201) 222-4707 Delivery of this Notice of Guaranteed Delivery to an address other than as set forth above or transmission of instructions via a facsimile transmission to a number other than as set forth above will not constitute a valid delivery. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto (see Instructions 1 and 5 of the Letter of Transmittal), such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. 2 - ----------------------------------------------------------------------------------------------------------------- Ladies and Gentlemen: The undersigned hereby tenders to Corn Acquisition Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 15, 1998 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together with any amendments or supplements thereto collectively constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares indicated below pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. - ----------------------------------------------------------------------------------------------------------------- Number of Shares of Class A Common Stock Name(s) of Record Holder(s): --------------------------------------------- --------------------------------------------------- --------------------------------------------------- Number of Shares of Class B Common Stock PLEASE PRINT --------------------------------------------- Address(es):------------------------------------ Certificate Nos. (if available) --------------------------------------------------- INCLUDE ZIP CODE - ----------------------------------------------------- Area Code and Tel. No.: ----------------------- Check box if Shares will be tendered by book-entry transfer: Signature(s): ----------------------------------- --------------------------------------------------- [ ] The Depository Trust Company --------------------------------------------------- Dated: Account Number: -------------------------------- - -----------------------------------------------------------------------------------------------------------------
3 - ----------------------------------------------------------------------------------------------------------------- THE GUARANTEE BELOW MUST BE COMPLETED GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm that is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program, hereby guarantees to deliver to the Depositary at one of its addresses set forth above either the certificates representing all tendered Shares, in proper form for transfer, a Book-Entry Confirmation (as defined in the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, or, in the case of book-entry transfer of Shares, an Agent's Message (as defined in the Offer to Purchase), and all other documents required by the Letter of Transmittal, all within three NYSE trading days after the date of execution of this Notice of Guaranteed Delivery. A "NYSE trading day" is any day on which The New York Stock Exchange, Inc. is open for business. - ----------------------------------------------------------------------------------------------------------------- --------------------------------------------------- Name of Firm ------------------------------------ AUTHORIZED SIGNATURE Address------------------------------------------- Name:------------------------------------------ PLEASE PRINT - ----------------------------------------------------- INCLUDE ZIP CODE Title:-------------------------------------------- Area Code and Tel. No.: ------------------------- Date: - -----------------------------------------------------------------------------------------------------------------
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.A.6 7 GUIDELINES FOR CERTIFICATION OF TAX ID ON FORM W-9 1 Exhibit (A)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR.--Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payor. - ------------------------------------------------------------ GIVE THE FOR THIS TYPE OF ACCOUNT: TAXPAYER IDENTIFICATION NUMBER OF-- - ------------------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of account) the account or, if combined funds, the first individual on the account(1) 3. Husband and wife (joint account) The actual owner of the account or, if joint funds, either person(1) 4. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the minor(1) 6. Account in the name of guardian or The ward, minor, or committee for a designated ward, incompetent incompetent minor or incompetent person(3) person 7. a. The usual revocable savings The grantor- trust account (grantor is also trustee(1) trustee) b. So-called trust account that is The actual owner(1) not a legal or valid trust under state law 8. Sole proprietorship account The owner(4) ============================================================ GIVE THE TAXPAYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF-- - ------------------------------------------------------------ 9. A valid trust, estate or pension The legal entity trust (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in the The partnership name of the business 13. Association, club, or other tax- The organization exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district or prison) that receives agricultural program payments - ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show your individual name. You may also enter your business name. You may use either your social security number or your employer identification number. (5) List first and circle the name of the legal trust, estate or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 OBTAINING A NUMBER If you do not have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card (for individuals), or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), at the local office of the Social Security Administration or the Internal Revenue Service (the "IRS") and apply for a number. PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in items (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under Sections 6041 and 6041A of the Internal Revenue Code of 1986, as amended (the "Code") are generally exempt from backup withholding only if made to payees described in items (1) through (7), except a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions, patronage dividends and payments by certain fishing boat operators. (1) A corporation. (2) An organization exempt from tax under Section 501(a) of the Code, an IRA or a custodial account under Section 403(b)(7) of the Code. (3) The United States or any of its agencies or instrumentalities. (4) A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the United States or a possession of the United States. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under Section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc. Nominee List. (15) A trust exempt from tax under Section 664 or described in Section 4947 of the Code. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under Section 1441 of the Code. - Payments to partnerships not engaged in a trade or business in the United States and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. - Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payor's trade or business and you have not provided your correct taxpayer identification number to the payor. - Payments of tax-exempt interest (including exempt-interest dividends under Section 852 of the Code). - Payments described in Section 6049(b)(5) of the Code to non-resident aliens. - Payments on tax-free covenant bonds under Section 1451 of the Code. - Payments made by certain foreign organizations. - Payments of mortgage interest to you. - Payments made to an appropriate nominee. Exempt payees described above should file substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYOR. IF YOU ARE A NON-RESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYOR A COMPLETED INTERNAL REVENUE SERVICE FORM W-8 (CERTIFICATE OF FOREIGN STATUS). Certain payments other than interest, dividends and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see Sections 6041, 6041A(a), 6045, 6050A and 6050N of the Code and the regulations promulgated thereunder. PRIVACY ACT NOTICE.--Section 6109 of the Code requires most recipients of dividend, interest or other payments to give taxpayer identification numbers to payors who must report the payments to the IRS. The IRS uses the numbers for identification purposes. Payors must be given the numbers whether or not recipients are required to file tax returns. Payors must generally withhold 31% of taxable interest, dividend and certain other payments to a payee who does not furnish a taxpayer identification number to a payor. Certain penalties may apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your correct taxpayer identification number to a payor, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE IRS. EX-99.A.7 8 TEXT OF PRESS RELEASE 1 Exhibit (a)(7) Immediately Scarlett L. Foster (314-694-2883) scarlett.l.foster@monsanto.com MONSANTO ACQUIRES TWO SEED COMPANIES TO BROADEN AVAILABILITY OF AGRICULTURAL BIOTECHNOLOGY ST. LOUIS, May 11, 1998 - Monsanto Company announced today that it has reached agreements to acquire two seed companies - DEKALB Genetics Corporation, headquartered in DeKalb, Illinois, and Delta & Pine Land Company, based in Scott, Mississippi. These companies will play an important role in Monsanto's life sciences strategy, which is designed to enhance the sustainable production of food and feed and create new possibilities for better nutrition and health by linking Monsanto's expertise in agriculture, food and pharmaceuticals. These acquisitions will broaden the availability of agronomic traits - the first wave of traits developed through biotechnology - and give more farmers around the world access to the yield and productivity benefits of crops enhanced through this technology. They also pave the way for the rapid introduction of the second wave of biotechnology traits, which improve the composition of fibers, the nutritional composition of food and feed, and offer food processors new tools to enhance the value of grains and oil seed crops. "As we have implemented our life sciences strategy in the last three years, we have created a network of alliances to provide the depth and breadth necessary to rapidly develop and commercialize new technologies and to create new markets for the products of this research," said Monsanto Chairman and Chief Executive Officer Robert B. Shapiro. "The acquisitions of DEKALB and Delta & Pine Land provide both technology and global reach - more - 2 - 2 - by creating broader seed platforms that enable us to better connect our traits to the needs of growers and processors, and allow us to more quickly anticipate new markets or marketplace trends." DEKALB is a global leader in agricultural genetics and a top hybrid seed corn company in the United States. It also has a strong presence in Latin America, plus seed interests in Europe and Southeast Asia. DEKALB currently offers its customers Monsanto traits for YieldGard insect-protected corn and Roundup Ready herbicide-tolerant corn. Delta & Pine Land is leading breeder, producer and marketer of cotton seed. It currently sells Monsanto's Bollgard and Ingard insect-protected cotton in the United States, Mexico, Australia and China, and Roundup Ready cotton in the United States. Delta & Pine Land's international experience in commercializing crops developed through biotechnology has allowed it to quickly bring these new seeds to global markets. Regulatory approvals are pending to see Bollgard in Argentina and South Africa. "Monsanto has worked closely with DEKALB and Delta & Pine Land for a number of years to research new products and bring the economic and environmental benefits of agricultural biotechnology to growers worldwide," Shapiro added. "These acquisitions focus and accelerate those efforts. The employees of both companies will play an important role in implementing our life sciences strategy and creating value for growers, processors, and, ultimately, consumers." Under terms of the agreement with DEKALB, a Monsanto subsidiary set up specifically for this transaction will make a tender offer to acquire all of the common stock of DEKALB for $100 per share. This offer will be followed by a merger in which any remaining stock of DEKALB will be exchanged for cash at the same price per share paid in the tender offer. If the tender offer is not completed by May 9, 1999, the offer price will increase by 50 cents per share on the 10th day of each month, starting on May 10, 1999. Because Monsanto already holds approximately 45 percent of DEKALB's shares, the weighted average price per share of the acquisition is $67.41, or a total cost to Monsanto of approximately $2.5 billion. - more - 3 - 3 - The DEKALB tender offer is conditional on the receipt of the majority of the voting common stock of DEKALB, as well as other customary conditions. Trusts for the benefit of the Roberts family, which owns a majority of DEKALB's voting common stock, have agreed to tender their shares in the offer. Under a separate agreement, Delta & Pine Land will merge into Monsanto, subject to the approval of Delta & Pine Land's shareowners. Its shareowners would be entitled to receive 0.8625 shares of Monsanto's common stock in exchange for each share of Delta & Pine Land stock they hold. Monsanto currently owns 4.7 percent of Delta & Pine Land's common shares and 800,000 shares of nonvoting preferred stock. The exchange ratio may be adjusted if Monsanto's average stock price rises or falls by more than 25 percent during the period from signing until either Delta & Pine Land shareowners meet to act on the merger or 90 days pass from the time of the signing, whichever comes first. The acquisitions will be closed as soon as practical. PRODUCT BACKGROUND __________________ In 1998, Monsanto's technology is expected to be used on approximately 50 million acres worldwide. Approximately 30 million acres are expected to be planted with Roundup Ready soybeans, 2 million with Roundup Ready canola and 50,000 with NewLeaf insect-protected potatoes. Corn acreage in 1998 is projected to include more than 10 million acres planted in YieldGard corn and 750,000 acres planted in Roundup Ready corn. This acreage is more than triple the 3 million acres planted in 1997, the introductory year for YieldGard. For cotton this year, U.S. growers are purchasing Bollgard and Roundup Ready cotton in varieties produced by Delta & Pine Land, and Bollgard cotton in varieties by Stoneville Pedigreed Seed Co., a Monsanto subsidiary. Global acreage of Bollgard and Roundup Ready cotton is expected to increase to more than 5 million from 3 million in 1997. - more - 4 - 4 - As a life sciences company, Monsanto is committed to finding solutions to the growing global needs for food and health by sharing common forms of science and technology among agriculture, nutrition and health. The company's 21,900 employees worldwide make and market high-value agricultural products, pharmaceuticals and food ingredients. -oOo- Note to editors: YieldGard, Roundup Ready, Bollgard, Ingard and NewLeaf are trademarks or Monsanto Company and its subsidiaries. EX-99.A.8 9 FORM OF SUMMARY ADVERTISEMENT 1 EXHIBIT (a)(8) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated May 15, 1998, and the related Letter of Transmittal, and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Corn Acquisition Corporation by BancAmerica Robertson Stephens or Goldman, Sachs & Co. (the "Dealer Managers") or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Class A Common Stock and Class B Common Stock of DEKALB Genetics Corporation at $100 Net Per Share by Corn Acquisition Corporation a wholly-owned subsidiary of Monsanto Company Corn Acquisition Corporation (the "Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Monsanto Company, a Delaware corporation ("Parent"), is offering to purchase all outstanding shares of Class A Common Stock, without par value (the "Class A Common Stock") and all outstanding shares of Class B Common Stock, without par value (the "Class B Common Stock" and, together with the Class A Common Stock, the "Shares"), of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), at a purchase price of $100 per Share, net to the seller in cash, without interest thereon (as such price may be increased, the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 15, 1998 (the "Offer to Purchase") and in the related Letter of Transmittal (which together with any amendments or supplements thereto, collectively constitute the "Offer"). If Shares are not accepted for purchase pursuant to the Offer on or prior to May 9, 1999, the Offer Price will be increased by $0.50 per Share on May 10, 1999 and on the tenth day of each subsequent month until Shares are so accepted, unless the Offer is earlier terminated. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT NEW YORK CITY TIME, ON FRIDAY, JUNE 12, 1998, UNLESS EXTENDED. The Board of Directors of the Company unanimously (without the participation of the two directors nominated by Parent) has determined that the Offer and the Merger are fair to and in the best interests of the Company and its stockholders, has approved the Offer, the Merger Agreement and the Merger and recommends that the Company's stockholders accept the Offer and tender their Shares pursuant to the Offer. The Offer is being made pursuant to the terms of an Agreement and Plan of Merger, dated as of May 8, 1998 (the "Merger Agreement"), among Parent, the Purchaser and the Company, pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company (the "Merger"), with the Company continuing as the surviving corporation. As of the effective time of the Merger, each issued and outstanding Share (other than Shares owned by the Company or by any Subsidiary (as defined in the Merger Agreement) of the Company, or by Parent, the Purchaser, or any other Subsidiary of Parent, which Shares will be canceled with no consideration delivered in exchange therefor, and other than Shares, if any, held by stockholders who are entitled to and who properly exercise appraisal rights under Delaware law) will, by virtue of the Merger and without any action by the holder thereof, be converted into the right to receive from the surviving corporation in cash the price per Share paid in the Offer, payable to the holder thereof, 2 without interest or dividends thereon, upon surrender of the certificate formerly representing such Share. The Offer is conditioned upon there having been validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares of Class A Common Stock that (together with the Shares of Class A Common Stock then held by Parent or any of its Subsidiaries) would constitute a majority of the Shares of Class A Common Stock (assuming the exercise of all options to purchase, and the conversion or exchange of all securities convertible or exchangeable into, Shares of Class A Common Stock) outstanding at the expiration date of the Offer and the expiration or termination prior to the expiration of the Offer of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to the purchase of Shares pursuant to the Offer. The Offer is also subject to certain other terms and conditions as set forth in the Offer to Purchase. The Offer will expire at 12:00 midnight, New York City time, on Friday, June 12, 1998, unless extended. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment and thereby purchased Shares validly tendered and not withdrawn if, as and when the Purchaser gives oral or written notice to the Depositary (as defined in the Offer to Purchase) of its acceptance for payment of such Shares pursuant to the Offer. In all cases, upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for purposes of receiving payments from the Purchaser and transmitting such payments to the tendering stockholders. Although the Offer Price may be increased as described herein, no interest will be paid by the Purchaser on the Offer Price of the Shares to be paid by the Purchaser, regardless of any delay in making such payment. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase), a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), together with any required signature guarantees (or in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)) and any other documents required by the Letter of Transmittal. The Offer may be extended by the Purchaser by giving oral or written notice of such extension to the Depositary. The Merger Agreement provides that the Purchaser may, without the consent of the Company, (i) extend the Offer, if at the scheduled or extended Expiration Date (as defined below) any of the conditions to the Offer set forth under Section 14 of the Offer to Purchase (the "Offer Conditions") have not been satisfied or waived, until such time as such conditions are satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission or the staff thereof applicable to the Offer and (iii) on one or more occasions, extend the Offer for a period of up to an aggregate of 15 business days if, on a scheduled Expiration Date on which the Offer Conditions have been satisfied or waived, the number of Shares of Class A Common Stock (together with any Shares of Class A Common Stock held by Parent or any of its Subsidiaries) that have been validly tendered and not withdrawn represent more than 70% of the then issued and outstanding Shares of Class A Common Stock, but less than 90% of the then issued and outstanding Shares of Class A Common Stock, and the number of Shares of Class B Common Stock (together with any Shares of Class B Common Stock held by Parent or any of its Subsidiaries) that have been validly tendered and not withdrawn represent more than 70% of the then issued and outstanding Shares of Class B Common Stock, but less than 90% of the then issued and outstanding Shares of Class B Common Stock. The Purchaser may not terminate the Offer between scheduled Expiration Dates (except in the event that the Merger Agreement is terminated), and, in the event that the Purchaser would otherwise be entitled to terminate the Offer at any scheduled Expiration Date due to the 3 failure of one or more of the Offer Conditions, unless the Merger Agreement has been terminated, the Purchaser is required to extend the Offer until such date as the Offer Conditions have been satisfied or such later date as required by applicable law; provided, however, that the Purchaser is not required to extend the Offer beyond November 9, 1999. During any extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to the right of a tendering stockholder to withdraw such stockholder's Shares. Subject to the applicable regulations of the Securities and Exchange Commission, and to the provisions of the Merger Agreement, the Purchaser expressly reserves the right to delay acceptance for payment of or payment for any Shares, to extend the Offer, or to terminate the Offer and not to accept for payment or pay for any Shares not theretofore accepted for payment or paid for upon the occurrence of certain conditions specified in Section 14 of the Offer to Purchase, and at any time or from time to time, to amend the Offer or to waive any conditions to the Offer in any respect consistent with the provisions of the Merger Agreement as such provisions may be amended from time to time, in each case by giving oral or written notice of such delay, extension, termination, amendment or waiver to the Depositary. Any such delay, extension, termination, amendment or waiver will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Except as otherwise stated in the Offer to Purchase, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time on or prior to 12:00 midnight, New York City time, or such other time as the Purchaser may announce in connection with any extension of the Offer, on the Expiration Date and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after July 13, 1998. The term "Expiration Date" means Friday, June 12, 1998, unless and until the Purchaser shall, as described in the Offer to Purchase, have extended the period of time for which the Offer is open, in which event the term "Expiration Date" will mean the latest date on which the Offer, as so extended by the Purchaser, will expire. To be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any notice of withdrawal must specify the name of the tendering stockholder, the number of Shares to be withdrawn and (if certificates for Shares have been tendered) the names in which the certificate(s) evidencing the Shares to be withdrawn are registered, if different from that of the tendering stockholder. If the certificate(s) have been delivered to the Depositary, then, prior to the physical release of such certificate(s), the tendering stockholder must submit the serial numbers shown on the particular certificate(s) evidencing the Shares to be withdrawn and the signature(s) on the notice of withdrawal must be guaranteed by a firm which is a member of the Securities Transfer Agents Medallion Program or by any other "Eligible Guarantor Institution" as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (collectively, "Eligible Institutions"), unless such Shares have been tendered for the account of any Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry tender as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in this paragraph. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination shall be final and binding. Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not validly tendered for any purposes of the Offer, but withdrawn Shares may be retendered at any subsequent time by again following one of the procedures for tendering described in Section 3 of the Offer to Purchase at any time prior to the Expiration Date. 4 The information required to be disclosed pursuant to Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Exchange Act, is contained in the Offer to Purchase, and is incorporated herein by reference. The Company is providing the Purchaser with the Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares in accordance with Exchange Act Rule 14d-5(c). The Offer to Purchase and the related Letter of Transmittal and, if required, other relevant materials will be mailed by the Purchaser to record holders of Shares and will be furnished by the Purchaser to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares when such lists or listings are received. The Offer to Purchase and the Letter of Transmittal contain important information which should be read carefully before any decision is made with respect to the Offer. Questions and requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers listed below or as set forth on the back cover of the Offer to Purchase. Requests for additional copies of the Offer to Purchase and the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies and other nominees. Neither Parent nor the Purchaser will pay any fees or commissions to any broker, dealer or other person (other than the Dealer Managers and the Information Agent) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: [Georgeson Logo] Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll Free: 1-800-223-2064 The Dealer Managers for the Offer are: BancAmerica Robertson Stephens Goldman, Sachs & Co. 555 California Street 85 Broad St San Francisco, California 94104 New York, New York 10004 (800) 288-7726 (800) 323-5678 May 15, 1998 EX-99.C.1 10 AGREEMENT AND PLAN OF MERGER 1 Exhibit (c)(1) AGREEMENT AND PLAN OF MERGER DATED AS OF MAY 8, 1998 AMONG MONSANTO COMPANY, CORN ACQUISITION CORPORATION AND DEKALB GENETICS CORPORATION 2 TABLE OF CONTENTS ARTICLE I - THE OFFER.......................................................2 Section 1.1 The Offer.............................................2 Section 1.2 Company Actions.......................................3 Section 1.3 Investment Agreement..................................5 Section 1.4 Adjustment to Offer Price.............................5 ARTICLE II - THE MERGER.....................................................5 Section 2.1 The Merger............................................5 Section 2.2 Closing...............................................5 Section 2.3 Effective Time........................................5 Section 2.4 Effects of the Merger.................................5 Section 2.5 Restated Certificate of Incorporation and By-laws; Officers and Directors...................5 ARTICLE III - EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT CORPORATIONS; SURRENDER OF CERTIFICATES.......................6 Section 3.1 Effect on Stock.......................................6 Section 3.2 Surrender of Certificates.............................7 ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................8 Section 4.1 Organization..........................................8 Section 4.2 Subsidiaries..........................................9 Section 4.3 Capital Structure.....................................9 Section 4.4 Authority............................................10 Section 4.5 Consents and Approvals; No Violations................10 Section 4.6 SEC Documents and Other Reports......................11 Section 4.7 Absence of Material Adverse Change...................11 Section 4.8 Information Supplied.................................12 Section 4.9 Compliance with Laws.................................12 Section 4.10 Tax Matters.........................................13 Section 4.11 Liabilities.........................................13 Section 4.12 Benefit Plans; Employees and Employment Practices...........................................13 Section 4.13 Litigation..........................................16 Section 4.14 Environmental Matters...............................16 Section 4.15 Charter Provisions..................................17 Section 4.16 Intellectual Property...............................17 Section 4.17 Brokers.............................................18 Section 4.18 Contracts; Indebtedness.............................18 ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB...............19 Section 5.1 Organization.........................................19 Section 5.2 Authority............................................19 Section 5.3 Consents and Approvals; No Violations................19 Section 5.4 Information Supplied.................................20 -i- 3 Section 5.5 Interim Operations of Sub............................20 Section 5.6 Brokers..............................................20 Section 5.7 Financing............................................20 ARTICLE VI - COVENANTS RELATING TO CONDUCT OF BUSINESS.....................20 Section 6.1 Conduct of Business by the Company Pending the Merger...................................20 Section 6.2 No Solicitation......................................24 Section 6.3 Third Party Standstill Agreements....................25 Section 6.4 Disclosure to Parent; Delivery of Certain Filings......................................25 ARTICLE VII - ADDITIONAL AGREEMENTS........................................25 Section 7.1 Employee Benefits....................................25 Section 7.2 Severance Policy and Other Agreements................27 Section 7.3 Bonus Programs.......................................27 Section 7.4 Welfare Plans........................................28 Section 7.5 Retirement Plan......................................29 Section 7.6 Options; Restricted Stock Awards.....................29 Section 7.7 Stockholder Approval; Preparation of Proxy Statement......................................29 Section 7.8 Access to Information................................30 Section 7.9 Fees and Expenses....................................31 Section 7.10 Public Announcements................................31 Section 7.11 Real Estate Transfer Tax............................31 Section 7.12 State Takeover Laws.................................32 Section 7.13 Indemnification; Directors and Officers Insurance..................................32 Section 7.14 Notification of Certain Matters.....................33 Section 7.15 Board of Directors..................................34 Section 7.16 Best Efforts........................................35 Section 7.17 Certain Litigation..................................35 Section 7.18 Return of Confidential Information..................36 ARTICLE VIII - CONDITIONS PRECEDENT........................................36 Section 8.1 Conditions to Each Party's Obligation to Effect the Merger.................................36 ARTICLE IX - TERMINATION AND AMENDMENT....................................36 Section 9.1 Termination..........................................36 Section 9.2 Effect of Termination................................37 Section 9.3 Amendment............................................38 Section 9.4 Extension; Waiver....................................38 ARTICLE X - GENERAL PROVISIONS.............................................38 Section 10.1 Non-Survival of Representations and Warranties and Agreements...........................38 Section 10.2 Notices.............................................38 Section 10.3 Interpretation; Definitions.........................40 Section 10.4 Counterparts........................................45 Section 10.5 Entire Agreement; No Third-Party Beneficiaries......45 -ii- 4 Section 10.6 Governing Law.......................................46 Section 10.7 Assignment..........................................46 Section 10.8 Severability........................................46 Section 10.9 Enforcement of this Agreement.......................46 Section 10.10 Obligations of Subsidiaries.........................47 Section 10.11 Merger of the Company into Sub......................47 Exhibit A - Conditions of the Offer Exhibit B - Amended and Restated Certificate of Incorporation of the Company 5 AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER, dated as of May 8, 1998 (this "Agreement") among Monsanto Company, Delaware corporation ("Parent"), Corn Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent ("Sub"), and DEKALB Genetics Corporation, a Delaware corporation (the "Company") (Sub and the Company being hereinafter collectively referred to as the "Constituent Corporations"). Except as otherwise set forth herein, capitalized (and certain other) terms used herein shall have the meanings set forth in Section 10.3. W I T N E S S E T H: WHEREAS, the respective Boards of Directors of Parent, Sub and the Company have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement; WHEREAS, in furtherance of such acquisition, Parent proposes to cause Sub to make a tender offer (as it may be amended from time to time as permitted under this Agreement, the "Offer") to purchase all of the shares of Class A Common Stock, without par value, of the Company (the "Company Class A Common Stock") and all of the shares of Class B Common Stock, without par value, of the Company (the "Company Class B Common Stock" and together with the Company Class A Common Stock, the "Shares") at a purchase price of $100 per Share (such purchase price, as it may be increased pursuant to Section 1.4, being referred to as the "Offer Price"), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in this Agreement; and the Board of Directors of the Company has adopted resolutions approving the Offer, this Agreement and the Merger and recommending that the Company's stockholders accept the Offer and that the holders of the Company Class A Common Stock adopt this Agreement; WHEREAS, the respective Boards of Directors of Sub and the Company have each approved the merger of Sub with and into the Company (the "Merger"), upon the terms and subject to the conditions set forth in this Agreement, whereby each of the Shares, other than Shares owned directly or indirectly by Parent or the Company and Dissenting Shares, will be converted into the right to receive the price per Share paid in the Offer; WHEREAS, the Board of Directors of the Company or the Long-Term Incentive Plan Administrative Committee of the Board of Directors of the Company has approved the cancellation of Company Stock Options in consideration for the cash payments to be made pursuant to this Agreement; WHEREAS, the Board of Directors of the Company has approved the terms of the Stockholders Agreement (the "Stockholders Agreement") to be entered into by Parent, Sub and certain holders of Company Class A Common Stock, pursuant to which such holders of Company Class A Common Stock have, among other things, agreed to vote such shares of Company Class A Common Stock in favor of the Merger and tender such shares of Company Class A Common Stock pursuant to the Offer; and 1 6 WHEREAS, Parent, Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Parent, Sub and the Company hereby agree as follows: ARTICLE I - THE OFFER Section 1.1 The Offer. (a) Provided that this Agreement shall not have been terminated in accordance with Section 9.1 and subject to the provisions of this Agreement, as promptly as practicable but in no event later than five business days after the date of the public announcement by Parent and the Company of this Agreement, Sub shall, and Parent shall cause Sub to, commence the Offer. The obligation of Sub to, and of Parent to cause Sub to, commence the Offer and accept for payment, and pay for, any Shares tendered pursuant to the Offer shall be subject only to the conditions set forth in Exhibit A (the "Offer Conditions") (any of which may be waived in whole or in part by Sub in its sole discretion, provided that, without the prior written consent of the Company, Sub shall not waive the Minimum Condition (as defined in Exhibit A)). Sub expressly reserves the right to modify the terms of the Offer, except that, without the prior written consent of the Company, Sub shall not (i) reduce the number of Shares to be purchased in the Offer, (ii) reduce the Offer Price, (iii) impose any conditions to the Offer in addition to the Offer Conditions or modify the Offer Conditions (other than to waive any Offer Conditions to the extent not prohibited by this Agreement), (iv) except as provided in the next sentence, extend the Offer, (v) change the form of consideration payable in the Offer or (vi) make any other change or modification in any of the terms of the Offer in any manner that is adverse to the holders of Shares. Notwithstanding the foregoing, Sub may, without the consent of the Company, (i) extend the Offer, if at the scheduled or extended expiration date of the Offer any of the Offer Conditions shall not be satisfied or waived, until such time as such conditions are satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer and (iii) on one or more occasions, extend the Offer for a period of up to an aggregate of 15 business days if, on a scheduled expiration date on which the Offer Conditions shall have been satisfied or waived, the number of shares of Company Class A Common Stock (together with any shares of Company Class A Common Stock held by Parent or any of its Subsidiaries) that have been validly tendered and not withdrawn represent more than 70% of the then issued and outstanding shares of Company Class A Common Stock, but less than 90% of the then issued and outstanding shares of Company Class A Common Stock, and the number of shares of Company Class B Common Stock (together with any shares of Company Class B Common Stock held by Parent or any of its Subsidiaries) that have been validly tendered and not withdrawn represent more than 70% of the then issued and outstanding shares of Company Class B Common Stock, but less than 90% of the then issued and outstanding shares of Company Class B Common Stock. Parent and Sub agree that Sub will not terminate the Offer between scheduled expiration dates (except in the event that this Agreement is terminated pursuant to Section 9.1) and that, in the event that Sub would otherwise be entitled to terminate the Offer at any scheduled expiration date thereof due to the failure of one or more of the Offer Conditions, unless this Agreement shall have been terminated pursuant to Section 9.1, Sub shall, and 2 7 Parent shall cause Sub to, extend the Offer until such date as the Offer Conditions have been satisfied or such later date as required by applicable law; provided, however, that nothing herein shall require Sub to extend the Offer beyond the Outside Date. Subject to the terms and conditions of the Offer and this Agreement, Sub shall, and Parent shall cause Sub to, accept for payment and pay for, all Shares validly tendered and not withdrawn pursuant to the Offer that Sub is permitted to accept for payment and pay for under applicable law, as soon as practicable (and, in any event, within three business days after the later of the expiration of the Offer and the receipt by the depository for the Offer of the certificates representing such tendered shares). If this Agreement is terminated by either Parent or Sub or by the Company, other than pursuant to Section 9.1(d), Sub shall, and Parent shall cause Sub to, terminate promptly the Offer. If this Agreement is terminated pursuant to Section 9.1(d), Parent or Sub may terminate the Offer. Sub may, at any time, transfer or assign to one or more corporations directly or indirectly wholly-owned by Parent the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer or assignment shall not relieve Sub of its obligations under the Offer or prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment. (b) On the date of commencement of the Offer, Parent and Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with respect to the Offer, which shall contain an offer to purchase and a related letter of transmittal and summary advertisement (such Schedule 14D-1 and the documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the "Offer Documents"), and Parent and Sub shall cause the Offer Documents to be disseminated to holders of Shares as and to the extent required by applicable federal securities laws. Parent, Sub and the Company each agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and Parent and Sub further agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer Documents as so corrected to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given reasonable opportunity to review and comment upon the Offer Documents prior to their filing with the SEC or dissemination to the Company's stockholders. Parent and Sub agree to provide the Company and its counsel any comments Parent, Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments and to cooperate with the Company and its counsel in responding to such comments. (c) Parent shall provide or cause to be provided to Sub on a timely basis all funds necessary to accept for payment, and pay for, any Shares that are validly tendered and not withdrawn pursuant to the Offer and that Sub is permitted to accept for payment under applicable law and pay for, pursuant to the Offer. Section 1.2 Company Actions. (a) The Company hereby approves of and consents to the Offer and represents and warrants that the Board of Directors of the Company, at a meeting duly called and held, duly adopted (by unanimous vote, with the Investor Nominees (as defined in the Investment Agreement) not participating) resolutions approving the Offer, this Agreement, the Merger and the Stockholders Agreement, determining that the Offer and the Merger are fair to, and in the best interests of, the Company's stockholders and recommending that the Company's 3 8 stockholders accept the Offer and approve and adopt this Agreement and the Merger (it being understood that, notwithstanding anything in this Agreement to the contrary, if the Company's Board of Directors modifies or withdraws its recommendation in accordance with the terms of Section 6.2(b), such modification or withdrawal shall not constitute a breach of this Agreement). The Company represents and warrants that its Board of Directors has received the written opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") that, as of the date hereof, the proposed consideration to be received by the Company's stockholders pursuant to the Offer and the Merger is fair to the Company's stockholders from a financial point of view. The Company hereby consents to the inclusion in the Offer Documents of the recommendations of the Company's Board of Directors described in this Section 1.2. (b) On the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to time, the "Schedule 14D-9") containing the recommendation described in Section 1.2(a) (subject to the right of the Board of Directors of the Company to modify or withdraw such recommendation in accordance with Section 6.2(b)) and shall cause the Schedule 14D-9 to be disseminated to the Company's stockholders as and to the extent required by applicable federal securities laws. Each of the Company, Parent and Sub agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the Company's stockholders, in each case as and to the extent required by applicable federal securities laws. Parent and its counsel shall be given reasonable opportunity to review and comment upon the Schedule 14D-9 prior to its filing with the SEC or dissemination to the Company's stockholders. The Company agrees to provide Parent and its counsel any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments and to cooperate with Parent, Sub and their counsel in responding to such comments. (c) In connection with the Offer and the Merger, the Company shall cause its transfer agent to furnish Sub promptly with mailing labels containing the names and addresses of the record holders of Shares as of a recent date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and computer files and all other information in the Company's possession or control regarding the beneficial owners of Shares and any securities convertible into Shares, and shall furnish to Sub such information and assistance (including updated lists of stockholders, security position listings and computer files) as Parent or Sub may reasonably request in communicating the Offer to the record and beneficial holders of Shares. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Merger, Parent and Sub and their affiliates, associates and agents shall hold in confidence the information contained in any such labels, listings and files, will use such information only in connection with the Offer and the Merger and, if this Agreement shall be terminated, will promptly, upon request, deliver, and will use reasonable efforts to cause their affiliates, associates and agents to deliver, to the Company all copies of such information then in their possession or control. 4 9 Section 1.3 Investment Agreement. Effective upon the acquisition of Shares pursuant to the Offer, Section 11 (Standstill) of the Investment Agreement shall be eliminated in its entirety and Sections 9.3 through 9.7 of the By-laws of the Company shall be eliminated in their entirety. At the Effective Time of the Merger, the Investment Agreement shall terminate in its entirety. Section 1.4 Adjustment to Offer Price. Notwithstanding anything else to the contrary contained herein, on the tenth day of each calendar month, commencing with May 10, 1999, the Offer Price as in effect on the ninth day of such calendar month shall be increased by an amount equal to $.50 per Share. All references to the Offer Price in this Agreement shall be deemed to be to the Offer Price as so adjusted. ARTICLE II - THE MERGER Section 2.1 The Merger. Upon the terms and subject to the conditions hereof, and in accordance with the DGCL, Sub shall be merged with and into the Company at the Effective Time. Following the Effective Time, the separate corporate existence of Sub shall cease and the Company shall continue as the surviving corporation (the "Surviving Corporation") and shall succeed to and assume all the rights and obligations of Sub and the Company in accordance with the DGCL. Section 2.2 Closing. The closing of the Merger will take place at 10:00 a.m. on a date mutually agreed to by Parent and the Company, which shall be no later than the second business day after satisfaction or waiver of the conditions set forth in Article VIII (the "Closing Date"), at the offices of Sidley & Austin, One First National Plaza, Chicago, Illinois 60603, unless another date, time or place is agreed to in writing by the parties hereto. Section 2.3 Effective Time. The Merger shall become effective when a Certificate of Merger or, if applicable, a Certificate of Ownership and Merger (each, the "Certificate of Merger"), executed in accordance with the relevant provisions of the DGCL, is duly filed with the Secretary of State of the State of Delaware, or at such other time as Sub and the Company shall agree should be specified in the Certificate of Merger. When used in this Agreement, the term "Effective Time" shall mean the later of the date and time at which the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware or such later time established by the Certificate of Merger. The filing of the Certificate of Merger shall be made as soon as practicable after the satisfaction or waiver of the conditions to the Merger set forth herein. Section 2.4 Effects of the Merger. The Merger shall have the effects set forth in the DGCL. Section 2.5 Restated Certificate of Incorporation and By-laws; Officers and Directors. (a) If the Merger is effected in accordance with Section 251 of the DGCL, the Restated Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time, shall be amended and restated in its entirety as of the Effective Time as set forth in Exhibit B hereto. As so amended, such Restated Certificate of Incorporation shall be the Restated Certificate of Incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law. 5 10 (b) The By-laws of the Company shall be amended as of the Effective Time to read in their entirety as the By-laws of Sub, as in effect immediately prior to the Effective Time, until thereafter changed or amended as provided by the Restated Certificate of Incorporation of the Surviving Corporation or by applicable law. (c) The directors of Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation, until the next annual meeting of stockholders (or the earlier of their resignation or removal) and until their respective successors are duly elected and qualified, as the case may be. (d) The officers of the Company immediately prior to the Effective Time shall be the officers of the Surviving Corporation until the earlier of their resignation or removal and until their respective successors are duly elected and qualified, as the case may be. ARTICLE III - EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT CORPORATIONS; SURRENDER OF CERTIFICATES Section 3.1 Effect on Stock. As of the Effective Time, by virtue of the Merger and without any action on the part of any of Sub, the Company or the holders of any securities of the Constituent Corporations: (a) Capital Stock of Sub. Each issued and outstanding share of capital stock of Sub shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, $.01 par value, of the Surviving Corporation. (b) Treasury Stock and Parent Owned Stock. Each Share that is owned by the Company or by any Subsidiary of the Company and each Share that is owned by Parent, Sub or any other Subsidiary of Parent shall automatically be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor. (c) Conversion of Shares. Subject to Section 3.1(d), each Share issued and outstanding (other than shares to be cancelled in accordance with Section 3.1(b)), shall be cancelled and be converted into the right to receive from the Surviving Corporation in cash, without interest or dividends, the price per Share paid in the Offer (the "Merger Consideration"). As of the Effective Time, all such Shares shall be cancelled in accordance with this paragraph, and when so cancelled, shall no longer be outstanding and shall automatically be retired and shall cease to exist, and each holder of a certificate representing any such Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration for each such Share, without interest or dividends. (d) Shares of Dissenting Stockholders. Notwithstanding anything in this Agreement to the contrary, any issued and outstanding Shares held by a person (a "Dissenting Stockholder") who has not voted in favor of or consented to the Merger and complies with all the provisions of the DGCL concerning the right of holders of Shares to require appraisal of their Shares ("Dissenting Shares") 6 11 shall not be converted as described in Section 3.1(c), but shall become the right to receive such consideration as may be determined to be due to such Dissenting Stockholder pursuant to the DGCL. If, after the Effective Time, such Dissenting Stockholder withdraws his demand for appraisal or fails to perfect or otherwise loses his right of appraisal, in any case pursuant to the DGCL, his Shares shall be deemed to be converted as of the Effective Time into the right to receive the Merger Consideration for each such Share, without interest or dividends. The Company shall give Parent prompt notice of any demands for appraisal of Shares received by the Company. The Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands. Section 3.2 Surrender of Certificates. (a) Paying Agent. Prior to the Effective Time, Parent shall designate a bank or trust company who shall be reasonably satisfactory to the Company to act as paying agent in the Merger (the "Paying Agent"), and from time to time, on, prior to or after the Effective Time, Parent shall make available, or cause the Surviving Corporation to make available, to the Paying Agent cash in the amounts necessary for the payment of the Merger Consideration as provided in Section 3.1 upon surrender of certificates representing Shares as part of the Merger. Funds made available to the Paying Agent shall be invested by the Paying Agent as directed by Parent, provided that such investments shall only be in obligations of or guaranteed by the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker's acceptances of commercial banks with capital exceeding $1 billion (it being understood that any and all interest or income earned on funds made available to the Paying Agent pursuant to this Agreement shall be turned over to Parent). (b) Exchange Procedure. As soon as reasonably practicable after the Effective Time, the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of a certificate or certificates that immediately prior to the Effective Time represented Shares (the "Certificates"), (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent and shall be in a form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration as provided in Section 3.1. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the amount of cash, without interest or dividends, into which the Shares theretofore represented by such Certificate shall have been converted pursuant to Section 3.1, and the Certificate so surrendered shall forthwith be cancelled. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, payment may be made to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of such Certificate or establish to the satisfaction of the Surviving Corporation that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.2, each Certificate (other than Certificates representing Dissenting Shares) shall be deemed at any time after the Effective Time 7 12 to represent only the right to receive upon such surrender the amount of cash, without interest, into which the shares of stock theretofore represented by such Certificate shall have been converted pursuant to Section 3.1. No interest will be paid or will accrue on the cash payable upon the surrender of any Certificate. Parent or the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Shares such amounts as Parent or the Paying Agent is required to deduct and withhold with respect to the making of such payment under the Code or under any provision of state, local or foreign tax law. To the extent that amounts are so withheld by Parent or the Paying Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares in respect of which such deduction and withholding was made by the Parent or the Paying Agent. (c) No Further Ownership Rights in Shares. All cash paid upon the surrender of Certificates in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights pertaining to the Shares theretofore represented by such Certificates. At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Paying Agent for any reason, they shall be cancelled and exchanged as provided in this Article III. (d) Termination of Payment Fund. Any portion of the funds made available to Paying Agent to pay the Merger Consideration which remains undistributed to the holders of Shares for twelve months after the Effective Time shall be delivered to Parent, upon demand, and any holders of Shares who have not theretofore complied with this Article III and the instructions set forth in the letter of transmittal mailed to such holders after the Effective Time shall thereafter look only to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) for payment of the Merger Consideration to which they are entitled, without interest or dividends. (e) No Liability. None of Parent, Sub, the Company or the Paying Agent shall be liable to any person in respect of any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Parent and Sub as follows: Section 4.1 Organization. The Company and each of its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has requisite corporate power and authority to carry on its business as now being conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not reasonably be expected to have a Material Adverse Effect on the Company. The Company and each of its Subsidiaries is duly qualified or licensed to do business and in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, except in such jurisdictions where the failure to be 8 13 so duly qualified or licensed and in good standing would not reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger. The Company has delivered to Parent complete and correct copies of its Restated Certificate of Incorporation and By-laws and has made available to Parent the Certificate of Incorporation and By-laws (or similar organizational documents) of each of its Subsidiaries designated in Item 4.1 of the Company Letter as being a Significant Subsidiary of the Company (collectively, the "Significant Subsidiaries"). Section 4.2 Subsidiaries. Item 4.2 of the Company Letter lists each Subsidiary of the Company. All of the outstanding shares of capital stock of each Subsidiary that is a corporation have been validly issued and are fully paid and nonassessable. Except as set forth in Item 4.2 of the Company Letter, all of the outstanding shares of capital stock of each Subsidiary of the Company are owned by the Company, by another Subsidiary of the Company or by the Company and another Subsidiary of the Company, free and clear of all Liens. Except as set forth in Item 4.2 of the Company Letter and except for the capital stock of its Subsidiaries, the Company does not own, directly or indirectly, any capital stock or other ownership interest in any corporation, partnership, joint venture, limited liability company or other entity which is material to the business or financial position of the Company and its Subsidiaries, taken as a whole. Section 4.3 Capital Structure. The authorized capital stock of the Company consists of 500,000 shares of Preferred Stock, $1.00 par value (the "Company Preferred Stock") and 165,000,000 shares of Common Stock, without par value, divided into two classes, consisting of 35,000,000 shares of Company Class A Common Stock and 130,000,000 shares of Company Class B Common Stock. At the close of business on April 30, 1998, (i) no shares of Company Preferred Stock were outstanding, (ii) 4,646,911 shares of Company Class A Common Stock and 29,975,568 shares of Company Class B Common Stock were issued and outstanding, (iii) 287,182 shares of Company Class A Common Stock and no shares of Company Class B Common Stock were held by the Company in treasury and (iv) 2,339,249 shares of Company Class A Common Stock and no shares of Company Class B Common Stock were reserved for issuance pursuant to outstanding stock options (the "Company Stock Options") or other rights to purchase Shares under the Company's Long Term Incentive Plan, the Company's Savings and Investment Plan and the Company's Director Stock Option Plan (the "Company Stock Plans") and an additional 1,692,397 shares of Company Class A Common Stock were reserved for the grant of additional purchase rights thereunder (including 73,937 shares reserved for the grant of purchase rights under the Company's Savings and Investment Plan). Except (i) as set forth above, (ii) as provided in the Investment Agreement between Parent and the Company dated as of January 31, 1996 (the "Investment Agreement"), (iii) the issuance of Shares pursuant to options granted under the Company Stock Plans and outstanding on April 30, 1998 and (iv) the issuance of shares of Company Class B Common Stock in exchange for shares of Company Class A Common Stock in accordance with the Company's Restated Certificate of Incorporation, as of the date hereof, no Shares were issued, reserved for issuance or outstanding and there are not any phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any capital stock of the Company ("Stock Equivalents"). There are no outstanding stock appreciation rights with respect to the capital stock of the Company. Each outstanding Share is, and each Share which may be issued pursuant to the Company Stock Plans and the other agreements and instruments listed above will be, when issued, 9 14 duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which the Company's stockholders may vote. Except as set forth above or in Item 4.3 of the Company Letter, there are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional shares of capital stock or other voting securities or Stock Equivalents of the Company or of any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries except pursuant to existing employee arrangements described in Item 4.3 of the Company Letter. Section 4.4 Authority. The Company has requisite corporate power and authority to execute and deliver this Agreement and, subject to approval of this Agreement and the Merger by the holders of a majority of the outstanding shares of the Company Class A Common Stock (the "Company Stockholder Approval") (if required), to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Merger and of the other transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, and no other corporate proceedings on the part of the Company or its Board of Directors are necessary to authorize or approve this Agreement or to consummate the transactions contemplated hereby, other than the Company Stockholder Approval (if required). This Agreement has been duly executed and delivered by the Company and (assuming the valid authorization, execution and delivery of this Agreement by Parent and Sub) constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to the enforcement of creditors' rights generally and (ii) is subject to general principles of equity. Section 4.5 Consents and Approvals; No Violations. Except as set forth in Item 4.5 of the Company Letter, except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Exchange Act, the HSR Act, the DGCL, state takeover laws and foreign and supranational laws relating to antitrust and anticompetition clearances, neither the execution, delivery or performance of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the Restated Certificate of Incorporation or By-laws of the Company or of the similar organizational documents of any of its Subsidiaries, (ii) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity (except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings would not reasonably be expected to have a Material Adverse Effect on the Company or prevent or 10 15 materially delay the consummation of the Offer and/or the Merger), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, any of its Subsidiaries or any of their properties or assets, except in the case of clauses (iii) or (iv) for matters that would not reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger; provided, however, that the contracts, agreements and other instruments and obligations to which clause (iii) refers shall for purposes of the second parenthetical phrase of clause (iii) not include (A) any employee benefit plan, policy, arrangement or understanding (whether or not in writing) providing benefits to any current or former employee, officer or director of the Company or any of its Subsidiaries or (B) any employment, consulting, bonus, non-competition, severance or termination agreement between the Company or any of its Subsidiaries and any current or former employee, officer or director of the Company or any of its Subsidiaries. Section 4.6 SEC Documents and Other Reports. The Company has filed with the SEC all documents required to be filed by it since August 31, 1995 under the Securities Act or the Exchange Act (the "Company SEC Documents"). As of their respective filing dates, the Company SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect on the date so filed, and at the time filed with the SEC none of the Company SEC Documents including the financial statements of the Company and the notes thereto contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company (including the notes thereto) included in the Company SEC Documents comply as of their respective dates as to form in all material respects with the then applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles (except in the case of the unaudited statements, as permitted by Form 10-Q under the Exchange Act) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto) and fairly present the consolidated financial position of the Company and its consolidated Subsidiaries as at the dates thereof and the consolidated results of their operations and their consolidated cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein none of which were or will be material in amount or effect). Section 4.7 Absence of Material Adverse Change. Except as disclosed in Item 4.7 of the Company Letter or in the documents filed by the Company with the SEC and publicly available prior to the date of this Agreement (the "Company Filed SEC Documents"), since August 31, 1997 the Company and its Subsidiaries have conducted their respective businesses in all material respects only in the ordinary course, and there has not been (i) any Material Adverse Change with respect to the Company, (ii) any declaration, setting aside or payment of any dividend or other distribution with respect to its capital stock (other than regular quarterly cash dividends not in excess of $.035 per 11 16 Share) or any redemption, purchase or other acquisition of any of its capital stock, (iii) any split, combination or reclassification of any of its capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iv) any change in accounting methods, principles or practices by the Company materially affecting its assets, liabilities, business or results of operations, (v) any grant by the Company or its Subsidiaries to any officer of the Company or its Subsidiaries of any increase in compensation, except as was required under employment agreements in effect as of August 31, 1997 or as were made in the ordinary course of business consistent with past practice, (vi) any grant by the Company or its Subsidiaries to any such officer of any increase in severance or termination pay, except as part of a standard employment package to any person promoted or hired, or as was required under employment, severance or termination agreements in effect as of August 31, 1997, (vii) any revaluation by the Company of any of its material assets or (viii) any other action or omission of the type described in subparagraphs (a), (c), (f), (g), (h), (k), (l), (m), (n) or (o) of Section 6.1 or, except as previously disclosed to Parent in writing, subparagraphs (b), (e) or (j) of Section 6.1. The representations made in clauses (v) and (vi) of this Section 4.7 shall, to the extent made with respect to officers of the Company's foreign Subsidiaries, be deemed to be made to the knowledge of the executive officers of the Company. Section 4.8 Information Supplied. None of the information supplied or to be supplied by the Company specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the information to be filed by the Company in connection with the Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or (iv) the proxy statement (together with any amendments or supplements thereto, the "Proxy Statement") relating to the Stockholders Meeting, will, in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective times the Offer Documents, the Schedule 14D-9 and the Information Statement are filed with the SEC or first published, sent or given to the Company's stockholders, or, in the case of the Proxy Statement, at the time the Proxy Statement is first mailed to the Company's stockholders or at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Stockholders Meeting which has become false or misleading. The Schedule 14D-9, the Information Statement and the Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Parent or Sub specifically for inclusion or incorporation by reference therein. Section 4.9 Compliance with Laws. The businesses of the Company and its Subsidiaries are not being conducted in violation of any law, ordinance or regulation of any Governmental Entity, except for possible violations that would not reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger. Except as disclosed in Item 4.9 of the Company Letter, the Company and its Subsidiaries hold all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses as presently conducted (the "Company 12 17 Permits"), except for failures to hold such permits, licenses, variances, exemptions, orders and approvals that would not reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger. The Company and its Subsidiaries are in compliance with the terms of the Company Permits, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger. Except as disclosed in Item 4.9 of the Company Letter, to the knowledge of the Company, except as set forth in the Company Filed SEC Documents, as of the date of this Agreement, no investigation or review by any Governmental Entity with respect to the Company or any of its Subsidiaries is pending or threatened, other than, in each case, those the outcome of which would not be reasonably expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger. All representations made in this Section 4.9 shall, to the extent made with respect to any foreign law, ordinance, regulation or foreign Company Permit, be deemed to be made to the knowledge of the Company. Section 4.10 Tax Matters. The Company and each of its Subsidiaries has timely filed (after taking into account any extensions to file) all Tax Returns required to be filed by them either on a separate or combined or consolidated basis, except where the failure to timely file would not reasonably be expected to have a Material Adverse Effect on the Company. All such Tax Returns are complete and accurate, except where the failure to be complete or accurate would not reasonably be expected to have a Material Adverse Effect on the Company. Each of the Company and its Subsidiaries has paid or caused to be paid all Taxes as shown as due on such Tax Returns and all material Taxes for which no return was filed, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect on the Company. No deficiencies for any Taxes have been asserted, proposed or assessed against the Company or any of its Subsidiaries that have not been paid or otherwise settled or are not otherwise being challenged under appropriate procedures, except for deficiencies the assertion, proposing or assessment of which would not reasonably be expected to have a Material Adverse Effect on the Company, and no requests for waivers of the time to assess any such Taxes are pending. Section 4.11 Liabilities. Except as disclosed in Item 4.11 of the Company Letter or as set forth in the Company Filed SEC Documents, to the knowledge of the Company, neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by generally accepted accounting principles to be set forth on a consolidated balance sheet of the Company and its Subsidiaries or in the notes thereto, other than liabilities and obligations incurred in the ordinary course of business since August 31, 1997 and liabilities which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. Section 4.12 Benefit Plans; Employees and Employment Practices. (a) With respect to each material bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical, fringe benefit, employee stock purchase, stock appreciation, restricted stock or other material employee benefit plan, policy, arrangement or understanding (whether or not in writing) providing benefits to any current or former employee, officer or director 13 18 of, and maintained or contributed to as of the date of this Agreement by, the Company or any of its Subsidiaries, including but not limited to the health care plan (the "EMWA Plan") operated by the Employees' Mutual Welfare Association (the "EMWA"), and excluding any Employee Agreements (as defined below) (collectively, excluding such Employee Agreements, the "Benefit Plans"), other than any such plan, policy, arrangement or understanding under which most of the current or former employees, officers or directors of the Company or any of its Subsidiaries provided benefits thereunder are provided benefits with respect to employment outside of the United States of America (the Benefit Plans, excluding those under which most of the current or former employees, officers or directors of the Company or any of its Subsidiaries provided benefits thereunder are provided benefits with respect to employment outside of the United States of America, collectively the "U.S. Benefit Plans"), such U.S. Benefit Plan has not since August 31, 1997 and prior to the date of this Agreement been adopted or amended in any material respect by the Company or any of its Subsidiaries except as disclosed in the Company Filed SEC Documents or Item 4.12(a) of the Company Letter or as required by law. The Company has with respect to each material employment, consulting, bonus, non-competition, severance and termination agreement in effect as of the date of this Agreement between the Company or any of its Subsidiaries other than any foreign Subsidiary and any current or former employee, officer or director of the Company or any of its Subsidiaries other than any foreign Subsidiary (collectively, the "Employee Agreements") disclosed such agreement in Item 4.12(a) of the Company Letter or in the Company filed SEC Documents or made available to Parent a copy of such agreement. (b) Item 4.12(b) of the Company Letter contains a list of all U.S. Benefit Plans which are "employee pension benefit plans" (as defined in Section 3(2) of ERISA) or "employee welfare benefit plans" (as defined in Section 3(1) of ERISA) (collectively, the "ERISA Benefit Plans"). With respect to each U.S. Benefit Plan, except as disclosed in Item 4.12(b) of the Company Letter, the Company has made available to Parent true, complete and correct copies, where applicable and to the extent that they exist as of the date of this Agreement, of (i) the current plan document (including all amendments adopted on or before the date hereof that are still applicable) (or, in the case of any unwritten U.S. Benefit Plan, a description thereof), (ii) the most recent annual report on Form 5500 filed with the Internal Revenue Service, (iii) the most recent actuarial report, (iv) the most recent summary plan description and (v) the most recent determination letter issued by the Internal Revenue Service. The Company has made available to Parent or filed in the Company Filed SEC Documents a true, complete and correct copy of each Employee Agreement as in effect as of the date of the Agreement. The Company has made available to Parent a true, complete and correct copy of the three employment agreements as in effect as of the date hereof pursuant to which the most senior officer in each of the Company's three foreign Subsidiaries located in Argentina, Italy and Canada are employed by such foreign Subsidiaries. (c) Except as disclosed in Item 4.12(c) of the Company Letter, none of the Company or any of its Subsidiaries, or any other person or entity that together with the Company is treated as a single employer under Section 414 of the Code (an "ERISA Affiliate"), has, with respect to any ERISA Benefit Plan, or any other plan subject to the minimum funding requirements of Section 302 of ERISA, incurred or could reasonably be expected to incur (i) any material liability under Title IV of ERISA or to the Pension Benefit Guaranty Corporation (other than for contributions and premiums in the ordinary course) that has not been fully paid as of the date hereof , (ii) any accumulated funding 14 19 deficiency under Section 302 of ERISA or Section 412 of the Code of a material amount that has not been fully paid as of the date hereof, or (iii) any requirement under ERISA or the Code to post security of a material amount under such plan that is still outstanding as of the date hereof. To the Company's knowledge, none of the Company, any of its Subsidiaries, any officer of the Company or any of its Subsidiaries or any of the ERISA Benefit Plans, or any of the other plans maintained by the Company or any Subsidiary of the Company and subject to Section 406 of ERISA (an "Other ERISA Benefit Plan"), has on or before the date of this Agreement engaged in a "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) with respect to any ERISA Benefit Plan or Other ERISA Benefit Plan that could reasonably be expected to subject the Company, any of its Subsidiaries or any officer of the Company or any of its Subsidiaries to any material tax on prohibited transactions imposed by Section 4975 of the Code or to any material liability under Section 502(i) or (l) of ERISA. Except as disclosed in Item 4.12(c) of the Company Letter, none of the Company, its Subsidiaries or ERISA Affiliates has at any time during the five-year period preceding the date hereof contributed to any ERISA Benefit Plan that is a "multiemployer plan" (as defined in Section 3(37) of ERISA) except for any such plan maintained outside of the United States. (d) Except as disclosed in Item 4.12(d) of the Company Letter, as of the date of this Agreement there is no pending dispute, arbitration, claim, suit or grievance involving a Benefit Plan (other than routine claims for benefits payable under any such Benefit Plan) that would reasonably be expected to give rise to a material liability of the Company or any Subsidiary of the Company. All material contributions already required to be made to any Benefit Plan have been made. Notwithstanding the foregoing, to the extent the representations and warranties set forth in this paragraph are provided with respect to a Benefit Plan that is not a U.S. Benefit Plan, they are provided only to the knowledge of the Company. (e) Except as disclosed in Item 4.12(e) of the Company Letter, as of the date of this Agreement there are no material controversies, strikes, work stoppages or disputes pending between the Company or any of its Subsidiaries and any current or former employees, and, to the Company's knowledge, no material organizational effort by any labor union or other collective bargaining unit currently is under way with respect to any employee. None of the Company or any its Subsidiaries other than a foreign Subsidiary, and to the Company's knowledge no foreign Subsidiary of the Company, is a party to a collective bargaining agreement. (f) To the knowledge of the Company, all Benefit Plans that are not U.S. Benefit Plans and are subject to the laws of any jurisdiction outside of the United States have been maintained in material compliance with all applicable requirements and, if they are intended to be funded or book reserved, are appropriately funded or book reserved. (g) Except as set forth in the Company Filed SEC Documents, as expressly contemplated by this Agreement, or with respect to U.S. Benefit Plans and Employee Agreements copies of which have been made available by the Company to Parent, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (either alone or in conjunction with any other event) result in, cause the accelerated vesting or payment of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any of its Subsidiaries under any U.S. Benefit Plan or Employment Agreement. No executive 15 20 officer of the Company or of any Subsidiary of the Company that is not a foreign Subsidiary is aware of any provision in an employment agreement to which a foreign Subsidiary of the Company is a party, or in a plan maintained by a foreign Subsidiary of the Company, pursuant to which the execution and delivery of this Agreement, or the consummation of the transactions contemplated hereby, will (either alone or in conjunction with any other event) result in, cause the accelerated vesting or payment of, or increase the amount or value of, any material payment or benefit to any employee, officer or director of such foreign Subsidiary except for any such plan or agreement a copy of which has been made available by the Company to the Parent. The aggregate amount of the after-tax cost to the Company and its Subsidiaries of "parachute payments" within the meaning of Section 280G of the Code that could become payable to individuals who would be subject to the excise tax on "excess parachute payments" as a result of receiving such parachute payments is not more than $50,000,000 (assuming that such aggregate amount is calculated based upon the same assumptions as to "Change-in-Control Date," stock price, discount rate, individual income tax rate and corporate tax rates as were used to prepare the Towers Perrin Change-in-Control Analysis revised as of May 8, 1998 that has been delivered to Parent by the Company, to determine the amount shown under the column heading "Gross-Up/After-Tax Cost to Company" in such Analysis). (h) The Internal Revenue Service has issued a favorable determination letter with respect to each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (although such letter does not pertain to the Code as in effect as of the date hereof), and, except as disclosed in Item 4.12(h) of the Company Letter, to the knowledge of the Company as of the date of this Agreement, such qualified status is not reasonably likely to be adversely affected by any circumstances that exist, or events that have occurred, on or prior to the date of this Agreement. Section 4.13 Litigation. Except as disclosed in Item 4.13 of the Company Letter or in the Company Filed SEC Documents, as of the date of this Agreement, there is no suit, action, proceeding or investigation pending or to the knowledge of the Company threatened against the Company or any of its Subsidiaries that would reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger. Except as disclosed in Item 4.13 of the Company Letter or in the Company Filed SEC Documents, neither the Company nor any of its Subsidiaries is subject to any outstanding judgment, order, writ, injunction or decree that would reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Offer and/or the Merger. Section 4.14 Environmental Matters. Except as set forth in the Company Filed SEC Documents or in Item 4.14 of the Company Letter, neither the Company nor any of its Subsidiaries has (i) any knowledge that the Company or any of its Subsidiaries (or their predecessors) has stored, released, disposed or arranged for the disposal of any Hazardous Substances on, under or at any of the Company's or any of its Subsidiaries' properties or any other properties, or exposed any employee or other individual to any Hazardous Substance other than in a manner that would not, in all such cases taken individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Company, (ii) any knowledge of the presence of any Hazardous Substance on, under or at any of the Company's or any of its Subsidiaries' owned or leased properties other than that which would not reasonably be expected to result in a Material Adverse Effect on the Company, (iii) received any written notice or has knowledge of any facts which could reasonably be expected 16 21 to give rise to such notice (A) of any actual or alleged violation of or liability (whether accrued, contingent, known or unknown) arising under any Environmental Law that has not been resolved or settled with the relevant Governmental Entity or third party, (B) of the threat, institution or pendency of any suit, action, claim, proceeding or investigation by any Governmental Entity or any third party in connection with any such violation or liability, (C) by any Governmental Entity requiring response to or remediation of Hazardous Substances at or arising from any of the Company's or any of its Subsidiaries' properties or any other properties, (D) alleging noncompliance by the Company or any of its Subsidiaries with the terms of any permit, license, approval or other authorization required under any Environmental Law in any manner reasonably likely to require material expenditures or to result in material liability that has not been resolved or settled or in the revocation or denial of a permit or (E) demanding payment for, response to or remediation of Hazardous Substances at or arising from any of the Company's or any of its Subsidiaries' properties or any other properties, (iv) any knowledge of the storage of PCBs on the Company's or any of its Subsidiaries' owned or leased properties, (v) any knowledge of the existence of underground storage tanks on the Company's or any of its Subsidiaries' owned or leased properties located within the United States or (vi) any knowledge of the existence of asbestos-containing material in any of the buildings on the Company's or any of its Subsidiaries' owned or leased properties located within the United States, except in each case for the notices set forth in Item 4.14 of the Company Letter and except in each case for notices that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Company. Section 4.15 Charter Provisions. The action of the Board of Directors of the Company in approving the Offer (including the purchase of Shares pursuant to the Offer), the Merger, this Agreement, the Stockholders Agreement and the transactions contemplated by this Agreement and the Stockholders Agreement, is sufficient to render (i) Section 203 of the DGCL, (ii) Article EIGHTH of the Company's Restated Certificate of Incorporation and (iii) Article 11 of the Investment Agreement irrevocably inapplicable to the Offer, the Merger, this Agreement and the Stockholders Agreement, the transactions contemplated by this Agreement and/or the Stockholders Agreement and any other transaction (except a transaction in which Parent acquires beneficial ownership of Shares other than pursuant to the Merger) between Parent and any of its affiliates on the one hand, and the Company and any of its affiliates, on the other hand, consummated after the date that Sub acquires Shares pursuant to the Offer that could be defined as a "Business Combination" under Section 203 of the DGCL or Article EIGHTH of the Company's Restated Certificate of Incorporation. The Board of Directors has, in conjunction with the matters contemplated by this Agreement, considered all of the factors required by Article TENTH of the Company's Restated Certificate of Incorporation. Section 4.16 Intellectual Property. (a) Except as set forth in the Company Filed SEC Documents or in Item 4.16 of the Company Letter, the Company and its Subsidiaries own, or are validly licensed or otherwise have the right to use or practice, all Intellectual Property Rights that are material to the conduct of the business of the Company and its Subsidiaries taken as a whole, free and clear of all Liens (except with respect to recombinant DNA technology, for failures to own or possess the rights to freely use or practice such technology that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, assets, financial condition, results of operations or prospects of the Company and its Subsidiaries, taken as a whole). 17 22 Except as set forth in the Company Filed SEC Documents or in Item 4.16 of the Company Letter, no claims are pending or to the knowledge of the Company threatened that the Company or any of its Subsidiaries is infringing or otherwise adversely affecting the rights of any person with regard to any Intellectual Property Right so as to materially adversely affect the Company's ability to use or practice any of its material Intellectual Property Rights. To the knowledge of the Company, except as set forth in the Company Filed SEC Documents or in Item 4.16 of the Company Letter, no person is infringing the rights of the Company or any of its Subsidiaries with respect to any material Intellectual Property Right. (b) Except as set forth in Item 4.16 of the Company Letter, (i) the Company owns and possesses all right, title and interest in and to, or possesses the valid right to use, all germplasm and all recombinant DNA technology used in the conduct of the Company's business (except with respect to recombinant DNA technology, for failures to own or possess the rights to freely use or practice such technology that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, assets, financial condition, results of operations or prospects of the Company and its Subsidiaries, taken as a whole); and (ii) the Company has not received any notice of, and the Company has no knowledge of any potential claim of any, infringement of any patent, certificate of plant variety protection or other intellectual property right or misappropriation from any third party with respect to any such technology or right. (c) Notwithstanding the foregoing, the representations and warranties contained in this Section 4.16 shall not be untrue or incorrect as a result of, or otherwise be affected by, the issuance to any Person of any patent after the date of this Agreement. Section 4.17 Brokers. No broker, investment banker, financial advisor or other person, other than Merrill Lynch, the fees and expenses of which will be paid by the Company (and are reflected in an agreement between Merrill Lynch and the Company, a complete copy of which has been furnished to Parent), is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. Section 4.18 Contracts; Indebtedness. Except as disclosed in the Company Filed SEC Documents or as listed under Item 4.18 or other Items of the Company Letter, there are no contracts or agreements that are material to the business, properties, assets, financial condition or results of operations of the Company and its Subsidiaries taken as a whole; provided, however, that such contracts and agreements shall not include (i) any employee benefit plan, policy, arrangement or understanding (whether oral or written) providing benefits to any current or former employee, officer or director of the Company or any of its Subsidiaries or (ii) any employment, consulting, bonus, non-competition, severance or termination agreement between the Company or any of its Subsidiaries and any current or former employee, officer or director of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any loan or credit agreement, note, bond, mortgage, indenture, lease, permit, concession, franchise, license or any other contract, agreement, arrangement or understanding, to which it is a party or by which it or any of its properties or assets is bound, except 18 23 for violations or defaults that could not reasonably be expected to result in a Material Adverse Effect on the Company. ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB Parent and Sub represent and warrant to the Company as follows: Section 5.1 Organization. Each of Parent and Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has requisite corporate power and authority to carry on its business as now being conducted. Section 5.2 Authority. Parent and Sub have the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by Parent and Sub, and the consummation by Parent and Sub of the Merger and of the other transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent and Sub, and no other corporate proceedings on the part of Parent or Sub or their respective Boards of Directors are necessary to authorize or approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Parent and Sub and (assuming the valid authorization, execution and delivery of this Agreement by the Company) constitutes the valid and binding obligation of each of Parent and Sub enforceable against each of them in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to the enforcement of creditors' rights generally and (ii) is subject to general principles of equity. Section 5.3 Consents and Approvals; No Violations. Except as set forth in Item 5.3 of the Parent Letter, except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Exchange Act, the HSR Act, the DGCL, state takeover laws and foreign and supranational laws relating to antitrust and anticompetition clearances, neither the execution, delivery or performance of this Agreement by Parent and Sub nor the consummation by Parent and Sub of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the respective certificate of incorporation or By-laws of Parent and Sub, (ii) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity (except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings would not reasonably be expected to have a Material Adverse Effect on Parent or prevent or materially delay the consummation of the Offer and/or the Merger), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, lease, contract, agreement or other instrument or obligation to which Parent or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Parent, any of its Subsidiaries or any of their properties or assets, except in the case of clauses (iii) or (iv) for violations, 19 24 breaches or defaults that would not reasonably be expected to have a Material Adverse Effect on Parent or prevent or materially delay the consummation of the Offer and/or the Merger. Section 5.4 Information Supplied. None of the information supplied or to be supplied by Parent or Sub specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Information Statement or (iv) the Proxy Statement will, in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective times the Offer Documents, the Schedule 14D-9 and the Information Statement are filed with the SEC or first published, sent or given to the Company's stockholders, or, in the case of the Proxy Statement, at the time the Proxy Statement is first mailed to the Company's stockholders or at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Stockholders Meeting which has become false or misleading, except that no representation or warranty is made by Parent or Sub in connection with any of the foregoing with respect to statements made or incorporated by reference therein based on information supplied by the Company or any of its representatives specifically for inclusion or incorporation by reference therein. The Offer Documents will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by Parent or Sub in connection with any of the foregoing with respect to statements made or incorporated by reference therein based on information supplied by the Company or any of its representatives specifically for inclusion or incorporation by reference therein. Section 5.5 Interim Operations of Sub. Sub was formed solely for the purpose of engaging in the transactions contemplated hereby, has engaged in no other business activities and has conducted its operations only as contemplated hereby. Section 5.6 Brokers. No broker, investment banker, financial advisor or other person, other than BancAmerica Robertson Stephens and Goldman, Sachs & Co., the fees and expenses of which will be paid by Parent, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Sub. Section 5.7 Financing. Parent has or will have, and shall provide Sub with, the funds necessary to consummate the Offer and the Merger and the transactions contemplated hereby in accordance with the terms hereof. ARTICLE VI - COVENANTS RELATING TO CONDUCT OF BUSINESS Section 6.1 Conduct of Business by the Company Pending the Merger. During the period from the date of this Agreement until the earlier of the Effective Time or such time as Parent's designees shall constitute a majority of the Board of Directors of the Company, the Company shall, and shall cause each of its Subsidiaries to, in all material respects, except as contemplated by this 20 25 Agreement, carry on its business in the ordinary course as currently conducted and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers and others having business dealings with them to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise contemplated by this Agreement (including, without limitation, as permitted or required by Section 7.16), during such period, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed): (a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock or otherwise make any payment to stockholders in their capacity as such, other than dividends on Shares to be declared and paid only at the customary times at a quarterly rate not in excess of $0.035 per Share, except for dividends by a wholly-owned domestic Subsidiary of the Company to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) redeem, purchase or otherwise acquire any of its securities; (b) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, or any rights, warrants, options or any other agreements of any character to acquire, any such shares, voting securities or convertible or exchangeable securities or rights, or securities or rights evidencing the right to subscribe, other than (i) the issuance, in the ordinary course, to new employees or promoted employees, of options to purchase not more than an aggregate of 40,000 Shares (as described in Item 6.1 of the Company Letter) or the issuance of Shares pursuant to options outstanding under existing Company Stock Plans, (ii) the issuance of shares of Company Class B Common Stock in exchange for shares of Company Class A Common Stock in accordance with the Company's Restated Certificate of Incorporation, (iii) the issuance of Shares upon exercise of rights outstanding on the date of this Agreement (including, without limitation, under the Investment Agreement) and (iv) the issuance of Shares pursuant to the Company's Savings and Investment Plan, in accordance with its terms; (c) amend its Restated Certificate of Incorporation or By-laws or other similar organizational documents; (d) acquire, or agree to acquire, in a single transaction or in a series of related transactions, any business or assets (other than materials and supplies purchased in the ordinary course, consistent with past practice), other than transactions which involve assets having a purchase price not in excess of $5,000,000 individually; (e) make or agree to make any new capital expenditure in excess of $1,000,000 other than expenditures contemplated by the Company's capital budget for fiscal 1998 or fiscal 1999 as previously provided to Parent in writing; 21 26 (f) sell, lease, encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of, any of its assets, other than (i) sales of inventory in the ordinary course of business and (ii) transactions which involve assets having a current value not in excess of $5,000,000 individually or $20,000,000 in the aggregate; provided that notwithstanding this Section 6.1(f), neither the Company nor any of its Subsidiaries shall sell, lease, encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of, any germplasm, recombinant DNA technology or Intellectual Property Rights, except with respect to Intellectual Property Rights as specifically permitted by Section 6.1(j); (g) except as disclosed in Item 4.12(a) of the Company Letter, (i) increase the salary or wages payable or to become payable to its directors, officers or employees, except for increases required under employment agreements existing on the date hereof, and except for increases for officers and employees in the ordinary course of business, consistent with past practice; (ii) pay or agree to pay any pension, retirement allowance or employee benefit not required or contemplated by any existing benefit, severance, pension or employment plans, agreements or arrangements; or (iii) enter into any employment or severance agreement with, or establish, adopt, enter into or amend any bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination or severance plan, agreement, policy or arrangement for the benefit of, any director, officer or employee, except, in each case, as may be expressly required by the terms of any such plan, agreement, policy or arrangement or to comply with applicable law; (h) except as is required as a result of a change in law or in generally accepted accounting principles, make any material change in its method of accounting; (i) enter into, modify in any material respect, amend in any material respect or terminate any material contract or agreement (including without limitation any contract or agreement which (i) cannot by its terms be terminated without liability or continuing obligation by the Company on less than one year's notice or (ii) may require a cash expenditure by the Company in excess of $5,000,000 in any fiscal year) to which the Company or any of its Subsidiaries is a party, or waive, release or assign any material rights or claims, in each case, in any manner adverse to the Company or any of its Subsidiaries and, in each case, except for (A) customary operational contracts not involving payments in excess of $5,000,000 individually over the term of such contract, (B) hedging and similar futures contracts with a term not in excess of one year or which can, by their terms, be terminated without liability or continuing obligation by the Company on not more than one year's notice and (C) seed production contracts, in each of cases (A), (B) and (C) above entered into in the ordinary course of business consistent with past practice; (j) (i) acquire a license or right to use from a third party for consideration (including without limitation cash, human or other resources or other assets or commitments, including out-licenses) in excess of $1,000,000 per year or $10,000,000 over the course of the agreement governing such license or right, or which by its terms cannot be terminated without liability or continued obligation by the Company on less than six months' notice or (ii) grant any license or sublicense other than (v) licenses to contract growers in the ordinary course of business consistent with past practice, (w) licenses granted under and in accordance with the Corn Borer-Protected License Agreement dated as of January 31, 1996 between Parent and the Company, the Glyphosate-Protected Corn License 22 27 Agreement dated as of January 31, 1996 between Parent and the Company or the CaMV Promoter License Agreement dated as of January 31, 1996 between Parent and the Company, in each case, in the ordinary course of business consistent with past practice (and provided that this Section 6.1 shall not prohibit the granting by the Company in accordance with such licenses of sublicenses to the entities described with respect to this Section 6.1(j) in Item 6.1 of the Company letter), (x) licenses of swine in the ordinary course of business consistent with past practice, (y) licenses included in "material transfer agreements" entered into solely for the purposes of research in the ordinary course of business consistent with past practice, and (z) licenses required to be granted pursuant to the terms of agreements to which the Company or any of its Subsidiaries is a party (as such terms are in effect on the date hereof); (k) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries not constituting an inactive Subsidiary (other than the Merger); (l) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly-owned subsidiary of the Company; (m) settle or agree to dismiss any litigation with respect to Intellectual Property Rights or material litigation with respect to other matters; (n) pay, discharge, settle or satisfy any other claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of claims, liabilities or obligations (in each case not related to pending or threatened litigation) reflected or disclosed in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business consistent with past practice; (o) enter into any contract, license, agreement or arrangement of any kind without including confidentiality agreements consistent with past practice; or (p) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing. Notwithstanding anything else in this Agreement to the contrary, the Company and its Subsidiaries may, during the period from the date of this Agreement until the earlier of the Effective Time or such time as Parent's designees shall constitute a majority of the Board of Directors of the Company, (i) sell all or a portion of the Company's business solely relating to the research and development of swine breeding stock and the marketing of such hybrid breeding swine and related management services to hog producers in domestic or international markets, so long as Parent is reasonably satisfied with the terms and conditions of such sale, and (ii) take any action set forth in Item 6.1 of the Company Letter. 23 28 Section 6.2 No Solicitation. (a) The Company shall, and shall cause its executive officers, directors, authorized representatives and authorized agents to, immediately cease any discussions or negotiations with any parties that may be ongoing with respect to any Takeover Proposal. The Company shall not, nor shall it permit any of its Subsidiaries to, nor shall it permit any of its executive officers, directors, authorized representatives or authorized agents to, directly or indirectly, (i) solicit, initiate or knowingly encourage (including by way of furnishing non-public information) any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover Proposal or (ii) participate in any discussions or negotiations regarding any Takeover Proposal. For purposes of this Agreement, "Takeover Proposal" means (x) any inquiry, proposal or offer from any person relating to any direct or indirect acquisition or purchase of any of the assets of the Company or its Subsidiaries (other than the purchase of inventory or other assets in the ordinary course of business) or any of the Shares then outstanding, any tender offer or exchange offer for any of the Shares then outstanding, or any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of its Subsidiaries, other than the transactions contemplated by this Agreement or (y) any other transaction the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the Offer and/or the Merger or which would reasonably be expected to dilute materially the benefits to Parent of the transactions contemplated by this Agreement and the Stockholders Agreement. Notwithstanding the foregoing, proposals solely relating to the sale of all or a portion of the Company's business relating solely to the research and development of swine breeding stock and the marketing of such hybrid breeding swine and related management services to hog producers in domestic or international markets shall not be considered Takeover Proposals, so long as the terms and conditions of any such proposal described in this sentence do not have any of the effects described in clause (y) of the preceding sentence. (b) Except as otherwise provided in this Section 6.2, neither the Board of Directors of the Company nor any committee thereof shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent, the approval or recommendation by such Board of Directors or such committee of the Offer, the Merger or this Agreement (or any transaction contemplated thereby); provided that, the Board of Directors may, (A) in response to any Takeover Proposal, suspend such recommendation for a period of up to 24 hours pending its analysis of such Takeover Proposal or (B) at any time prior to the consummation of the Offer, modify or withdraw such recommendation, but only if the Board of Directors of the Company determines in good faith, based on a written opinion of Morris, Nichols, Arsht & Tunnell, which written opinion shall specifically take into account the Stockholders Agreement and all the terms thereof, including the obligations and agreements therein of the Voting Trustees and Registered Holders with respect to tendering Shares and voting for the Merger and against any Takeover Proposal other than the Merger (a "Written Opinion"), that it would be a breach of its fiduciary duties not to so modify or withdraw such recommendation; provided further that, unless this Agreement shall have been terminated, any such suspension, modification or withdrawal shall not prevent Parent and Sub, in its or their discretion, from consummating the Offer and in any event shall be subject to Section 6.2(e) of this Agreement, (ii) approve or recommend, or propose publicly to approve or recommend, any Takeover Proposal or (iii) cause the Company to enter into any letter of intent, agreement in principle, 24 29 acquisition agreement or other similar agreement (each, an "Acquisition Agreement") related to any Takeover Proposal. (c) In addition to the obligations of the Company contained in paragraphs (a) and (b) of this Section 6.2, the Company shall immediately advise Parent orally and in writing of any request for information or of any Takeover Proposal, the material terms and conditions of such request or Takeover Proposal and the identity of the person making such request or Takeover Proposal. (d) Subject to Section 6.2(e), nothing contained in this Section 6.2 shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act or from making any disclosure to the Company's stockholders if, in the good faith judgment of the Board of Directors of the Company, based on a Written Opinion, such disclosure is required under applicable law. (e) Nothing in this Section 6.2 (including any modified or withdrawn recommendation contemplated by paragraphs (b) or (c) of Section 6.2) shall be deemed to prevent or impede Parent and Sub, in its or their discretion, from consummating the Offer, or to limit or affect any of the actions taken by the Company and described in Section 4.15 of this Agreement. In addition, if Sub purchases Shares pursuant to the Offer, the Company and its Board of Directors shall take all actions legally permitted to permit the Merger to occur. Section 6.3 Third Party Standstill Agreements. During the period from the date of this Agreement through the Effective Time, the Company shall enforce and shall not terminate, amend, modify or waive any standstill or other provision of, any confidentiality, nonsolicitation or standstill agreement to which the Company or any of its Subsidiaries is a party (other than any involving Parent), including, without limitation, any such agreement entered into with any party in connection with the process conducted by the Company to solicit acquisition proposals for the Company. Section 6.4 Disclosure to Parent; Delivery of Certain Filings. The Company shall promptly advise Parent orally and in writing if there occurs, to the knowledge of the Company, any change or event which results in the executive officers of the Company having a good faith belief that such change or event has resulted in or is reasonably likely to result in a Material Adverse Effect on the Company or that such change or event could materially delay the consummation of the Offer and/or the Merger. The Company shall provide to Parent, and Parent shall provide to the Company, copies of all filings made by the Company or Parent, as the case may be, with any Governmental Entity in connection with this Agreement and the transactions contemplated hereby. ARTICLE VII - ADDITIONAL AGREEMENTS Section 7.1 Employee Benefits. (a) Parent shall take all necessary action so that each person who is an employee of the Company or any of its Subsidiaries upon the consummation of the Offer (including each such person who is on vacation, temporary layoff, approved leave of absence, sick leave or short-term disability) shall be permitted to remain an employee of the Company or the Surviving Corporation or a Subsidiary of the Company or of the Surviving Corporation, as the case 25 30 may be, immediately following such time with wages or salary, as applicable, no less favorable than as in effect immediately preceding such time. Parent shall take all necessary action so that each person receiving, or but for any waiting period would be receiving, long-term disability benefits under a plan of the Company or any of its Subsidiaries upon the consummation of the Offer shall retain after such time the right to continue or begin receiving such long-term disability benefits, so long as they remain disabled. Until the first anniversary of the consummation of the Offer, Parent shall take all necessary action so that the Company, the Surviving Corporation and their Subsidiaries maintain for each employee of the Company and its Subsidiaries who is employed by the Company or the Surviving Corporation or a Subsidiary of the Company or the Surviving Corporation upon the consummation of the Offer (collectively, the "Retained Employees") wages and other compensation levels, and benefits (including without limitation benefits thereunder for the spouses, dependents and other beneficiaries of Retained Employees, if applicable) of the types provided under the Benefit Plans, and under all other employee benefit plans, policies, arrangements and understandings that would be Benefit Plans but for their not being material (the "Other Benefit Plans"), as in effect as of the consummation of the Offer which are not and have eligibility requirements that are not less favorable than those wages and other compensation levels, and benefits provided under the Benefit Plans and the Other Benefit Plans, as in effect as of the consummation of the Offer. Parent shall take all necessary action so that each Retained Employee shall after the consummation of the Offer continue to be credited with the unused vacation and sick leave credited to such employee through the consummation of the Offer under the applicable vacation and sick leave policies of the Company and its Subsidiaries, and Parent shall permit or cause the Company, the Surviving Corporation and their Subsidiaries to permit such employees to use such vacation and sick leave. Parent shall take all necessary action so that, for all purposes under each benefit plan maintained or otherwise provided by the Company, the Surviving Corporation or any of their Subsidiaries in which employees or former employees of the Company and its Subsidiaries or the spouses, dependents or other beneficiaries of such persons become eligible to participate after the consummation of the Offer, each such person shall be credited with all years of service to the extent such service would be taken into account under the Benefit Plan or Other Benefit Plan providing benefits of a similar type in effect at the consummation of the Offer. (b) Parent shall take all necessary action so that neither it, the Company, the Surviving Corporation, nor any of their Subsidiaries will during the one-year period commencing with the consummation of the Offer (i) terminate the employment of any Retained Employee other than for Cause or (ii) relocate the site of any such person's employment or reassign any such person to a different location without such person's consent. Following such one-year period, employment of any of the Retained Employees will be "at will" and may be terminated at any time for any reason (subject to any legally binding agreement other than this Agreement, and subject to any applicable laws or collective bargaining agreement). Except as otherwise specifically provided in Sections 7.1 through 7.6, nothing in this Agreement shall be interpreted as limiting the power of the Surviving Corporation, Parent, or any of their respective Subsidiaries to amend or terminate any particular Benefit Plan or any other particular employee benefit plan, program, agreement or policy or as requiring the Surviving Corporation to offer to continue (other than as required by its terms) any written employment contract, provided, however, that no such termination or amendment may impair the rights of any person with respect to benefits or any other payments already accrued as of the time of such termination or amendment without the consent of such person. As used in this Section 7.1(b), 26 31 "Cause" shall mean the willful failure to substantially perform the duties reasonably assigned by Parent or its Subsidiaries (including the Surviving Corporation), as the case may be (other than a failure resulting from disability), any act of dishonesty, the commission of a felony, or a significant violation of any statutory or common law duty of loyalty to Parent and its Subsidiaries (including the Surviving Corporation). Section 7.2 Severance Policy and Other Agreements. (a) For a period of not less than twelve months from the consummation of the Offer, Parent shall maintain, and shall cause to be maintained by the Company, the Surviving Corporation and their Subsidiaries, for the benefit of the Retained Employees the Company's Severance Pay Plan as in effect as of the date hereof. (b) Parent shall honor or cause to be honored by the Company, the Surviving Corporation and their Subsidiaries all Employment Agreements, copies of which have been made available by the Company to Parent, with the persons who are directors, officers and employees of the Company and its Subsidiaries (it being understood that nothing herein shall be deemed to mean that the Company, the Surviving Corporation and their Subsidiaries shall not be required to honor their obligations under any legally binding employment, bonus, severance, consulting, termination or non-competition agreement to which they are a party). Parent acknowledges and agrees that anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by, or any other amount resulting from compensation, benefits or any other remuneration provided by, Parent, the Company, the Surviving Corporation or any of their Subsidiaries to or for the benefit of any person employed by the Company or any of its Subsidiaries at any time before the consummation of the Offer (a "Payment") is or will be subject to the excise tax imposed by Section 4999 of the Code as a result of the consummation of the Offer or the Merger, or any interest or penalties or expenses (including any attorney fees or other professional expenses incurred in challenging the application of any such tax) are incurred by such person with respect to such excise tax (such excise tax, together with any such interest and penalties and expenses, are hereinafter collectively referred to as the "Excise Tax"), then such person shall be entitled to receive from Parent, the Company or the Surviving Corporation, and Parent shall cause the Company or the Surviving Corporation to make, an additional payment pursuant to the terms of the DEKALB Genetics Corporation Policy and Procedure Regarding Reimbursement of Employees for Parachute Payment Taxes and Expenses (the "Policy and Procedure"). Parent shall maintain, and shall cause to be maintained by the Company, the Surviving Corporation and their Subsidiaries such Policy and Procedure to the extent required pursuant to the terms thereof. Section 7.3 Bonus Programs. Without limitation of Parent's or the Company's obligations under any existing Employment Agreement, Parent shall maintain, or shall cause the Company and the Surviving Corporation to maintain, the Company's bonus programs set forth in the documents made available by the Company to Parent through the end of the twelve-month period beginning on the most recent September 1 preceding the consummation of the Offer, with bonuses to be paid to each Retained Employee participating thereunder in accordance with the performance goals previously established for such period (the "Existing Goals"), if (i) the achievement of the Existing Goals can still reasonably be measured despite the consummation of the transactions contemplated hereby, and (ii) such achievement has not become unreasonably more difficult or easier than it would have been absent such consummation. If either of clause (i) or clause (ii) of the preceding sentence 27 32 is not satisfied with respect to the Existing Goals applicable to a particular Retained Employee, then the Existing Goals shall be reasonably adjusted, if possible, so that both such clauses are satisfied as to the adjusted Existing Goals, and if no such adjustment is possible, such Retained Employee's bonus shall be paid at his or her target bonus level (subject to all terms and conditions of such bonus except for the Existing Goals that cannot be so adjusted). Section 7.4 Welfare Plans. Parent shall, or shall cause the Company and the Surviving Corporation to, take all necessary action so that there shall be (i) waived all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Retained Employees and former employees of the Company and its Subsidiaries and the spouses, dependents and other beneficiaries of such persons under any welfare or fringe benefit plan that any such persons may be eligible to participate in after the consummation of the Offer, other than limitations or waiting periods that are in effect with respect to such persons and that have not been satisfied as of the consummation of the Offer under the corresponding welfare or fringe benefit plan maintained for such persons immediately prior to the consummation of the Offer and are not satisfied thereafter and (ii) provided each such person credit for any co-payments and deductibles paid by such person for the applicable plan year prior to the consummation of the Offer in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans that such person is eligible to participate in after the consummation of the Offer. Parent shall, or shall cause the Company and the Surviving Corporation to, provide or continue to provide (and never terminate), pursuant to the DEKALB Genetics Corporation Retiree Health Care Plan as in effect on the date hereof, retiree medical and other retiree health benefits to persons who are immediately prior to the consummation of the Offer eligible for such benefits under the EMWA Plan as in effect immediately prior to the consummation of the Offer, or who would immediately prior to the consummation of the Offer be eligible therefor but for the fact that they, or the person with respect to whom they are a dependent, had not yet terminated employment with the Company and its Subsidiaries, or who will or would within twelve months after the consummation of the Offer be so eligible therefor (such eligibility to be determined based on the terms of the EMWA Plan as in effect immediately prior to the date of this Agreement). Parent shall, or shall cause the Company and the Surviving Corporation to, provide or continue to provide (and never terminate), pursuant to the DEKALB Genetics Corporation Retiree Health Care Plan as in effect on the date hereof, medical and other health benefits to persons who incur or are dependents of persons who incur an illness or other disability or leave of absence, or are dependents of persons who die, prior to the consummation of the Offer and who are at such time, or would be after such time, according to the terms of the EMWA Plan as in effect immediately prior to such time, eligible for benefits under such plan due to such illness or other disability or leave of absence or death. Parent shall take all necessary action so that no amount held at any particular time by the trustee pursuant to the terms of EMWA Trust Agreement entered into between First National Bank in DeKalb and the Company (the "EMWA Trust") shall be used for the benefit of any persons other than the group of employees and former employees (and their spouses, dependents and beneficiaries) who contributed, or with respect to whom the Company, the Surviving Corporation and their Subsidiaries contributed, such amounts. In particular, if after the consummation of the Offer any action is taken to change the group of employees and former employees covered by the EMWA Plan, the assets of the EMWA Trust at such time shall only be used for the benefit of the group of employees and former employees (and their 28 33 spouses, dependents and beneficiaries) covered by the EMWA Plan prior the effective time of such action. Section 7.5 Retirement Plan. For a period of not less than twelve months from the consummation of the Offer, Parent shall (i) maintain, or cause to be maintained, for the benefit of the Retained Employees the Company's Savings and Investment Plan (the "Retirement Plan") as in effect prior to the consummation of the Offer and (ii) contribute, or cause to be contributed, to the Retirement Plan, on behalf of each Retained Employee who is or becomes a participant therein, matching contributions in amounts determined in accordance with the terms of the Retirement Plan as in effect as of the date hereof, such contributions to be made on at least a bi-weekly basis, and a "Compensation Based Contribution" as defined therein equal to 2% of compensation as described in the Retirement Plan. Section 7.6 Options; Restricted Stock Awards. (a) Prior to the execution of this Agreement, the Board of Directors of the Company or the Long-Term Incentive Plan Administrative Committee of the Board of Directors of the Company has adopted such resolutions or has taken such other actions as are required (i) to provide that each Company Stock Option heretofore granted under any Company Stock Plan (other than the Company's Director Stock Option Plan) outstanding immediately prior to the consummation of the Offer, whether or not then exercisable, shall become fully exercisable immediately prior to the consummation of the Offer, (ii) to provide that all restrictions applicable to any restricted stock award heretofore granted under any Company Stock Plan outstanding immediately prior to the Offer shall lapse immediately prior to the consummation of the Offer, (iii) to provide that upon the consummation of the Offer each Company Stock Option then outstanding shall be cancelled in consideration for the cash payment described in Section 7.6(b) and (iv) with respect to Company Stock Options held by persons subject to the reporting requirements of Section 16 of the Exchange Act, to specifically approve the transactions contemplated by this Section 7.6. The Company shall use reasonable efforts to obtain any necessary consents of the holders of such Company Stock Options to effect this Section 7.6. (b) The Company shall use reasonable efforts to ensure that, upon the consummation of the Offer each Company Stock Option then outstanding shall be cancelled by the Company in consideration for which the holder thereof shall thereupon be entitled to receive promptly (but in no event later than five days) after the consummation of the Offer, a cash payment in respect of such cancellation from the Company in an amount (if any) equal to (i) the product of (x) the number of shares of Company Common Stock subject or related to such Company Stock Option and (y) the excess, if any, of the Offer Price over the exercise or purchase price per share of Company Common Stock subject or related to such Option, minus (ii) all applicable federal, state and local taxes required to be withheld by the Company. The Company shall use reasonable efforts to ensure that, after giving effect to the foregoing, no Company Stock Option shall be exercisable for Company Common Stock following the consummation of the Offer. Section 7.7 Stockholder Approval; Preparation of Proxy Statement. (a) If the Company Stockholder Approval is required by law, the Company shall, at Parent's request, as soon as practicable following the expiration of the Offer in accordance with the terms of Section 1.1 of this Agreement, so long as permitted by law, duly call, give notice of, convene and hold a meeting of its 29 34 stockholders (the "Stockholders Meeting") for the purpose of obtaining the Company Stockholder Approval. The Company shall, through its Board of Directors (but subject to the right of the Company's Board of Directors to withdraw or modify its approval or recommendation of the Offer, the Merger and this Agreement as set forth in Section 6.2(b)), recommend to its stockholders that the Company Stockholder Approval be given. Notwithstanding the foregoing, if Sub or any other Subsidiary of Parent shall acquire 90% or more of the outstanding shares of Company Class A Common Stock and 90% or more of the outstanding shares of Company Class B Common Stock, the parties shall, at the request of Parent, take all necessary and appropriate action to cause the Merger to become effective as soon as reasonably practicable after the expiration of the Offer without a Stockholders Meeting in accordance with Section 253 of the DGCL. (b) If the Company Stockholder Approval is required by law, the Company shall, at Parent's request, as soon as practicable following the expiration of the Offer in accordance with the terms of Section 1.1, and to the extent permitted by law, prepare and file a preliminary Proxy Statement with the SEC and shall use all reasonable efforts to respond to any comments of the SEC or its staff, and, to the extent permitted by law, to cause the Proxy Statement to be mailed to the Company's stockholders as promptly as practicable after responding to all such comments to the satisfaction of the staff. The Company shall notify Parent promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Proxy Statement or for additional information and will supply Parent with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement or the Merger. If at any time prior to the Stockholders Meeting there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Company shall promptly prepare and mail to its stockholders such an amendment or supplement. Parent shall cooperate with the Company in the preparation of the Proxy Statement or any amendment or supplement thereto. Parent and its counsel shall be given a reasonable opportunity to review and comment upon the Proxy Statement and any such correspondence prior to its filing with the SEC or dissemination to the Company's stockholders, and the Company shall not so file or disseminate any Proxy Statement, or any amendment or supplement thereto, to which Parent reasonably objects. (c) Parent agrees to cause all Shares purchased pursuant to the Offer and all other Shares of the Company entitled to vote on the Merger owned by Parent or any Subsidiary of Parent to be voted in favor of the Merger. Section 7.8 Access to Information. Upon reasonable notice and subject to restrictions contained in confidentiality agreements to which the Company is subject and subject to the terms of the Confidentiality Agreement, dated March 12, 1998, between the Company and Parent, as the same may be amended, supplemented or modified (the "Confidentiality Agreement"), the Company shall, and shall cause each of its Subsidiaries to, afford to Parent and to the officers, employees, accountants, counsel and other representatives of Parent all reasonable access, during normal business hours during the period prior to the Effective Time, to all their respective personnel, properties, books, contracts, commitments and records and, during such period, the Company shall and shall cause each of its Subsidiaries to furnish promptly to Parent (a) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the 30 35 requirements of the Federal or state securities laws or the Federal tax laws and (b) all other information concerning its business, properties and personnel as Parent may reasonably request, provided, that until the earlier of the Effective Time or such time as Parent's designees shall constitute a majority of the Board of Directors of the Company, none of the foregoing persons shall have access to the respective properties, books, contracts, commitments and records of the Company or its Subsidiaries with respect to (i) pricing or pricing strategy or (ii) Intellectual Property Rights, except that the independent person who reviewed the Company's patent applications on behalf of Parent during the due diligence process conducted in connection with the negotiation of this Agreement shall be permitted to review the Company's Intellectual Property Rights other than access to germplasm pedigree and basic research, and in any event, subject to confidentiality and disclosure limitations comparable to those previously applicable to such independent person's review of patent applications, and any representative of Parent shall be entitled to review material relating to the Company's Intellectual Property Rights that is otherwise publicly available. Notwithstanding anything to the contrary in this Agreement or any other agreement to which the Company and Parent are a party, the Confidentiality Agreement shall terminate and be of no further force and effect from and after the date upon which the Offer is consummated. Section 7.9 Fees and Expenses. (a) All fees and expenses incurred in connection with the Offer, the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated. (b) The Company may pay the fees and expenses of Merrill Lynch described in Section 4.17 on or prior to the Effective Time. Section 7.10 Public Announcements. Parent and the Company will consult with each other before issuing any press release or otherwise making any public statements with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, fiduciary duties or by obligations pursuant to any listing agreement with any national securities exchange. Section 7.11 Real Estate Transfer Tax. Parent and the Company agree that either the Surviving Corporation or Parent (without any liability to any of the Company's stockholders) will pay any state or local tax which is attributable to the transfer of the beneficial ownership of the Company's or its Subsidiaries' real property, if any (collectively, the "Transfer Taxes"), and any penalties or interest with respect to the Transfer Taxes, payable in connection with the consummation of the Offer and the Merger. The Company agrees to cooperate with Parent in the filing of any returns with respect to the Transfer Taxes, including supplying in a timely manner a complete list of all real property interests held by the Company and its Subsidiaries and any information with respect to such property that is reasonably necessary to complete such returns. The portion of the consideration allocable to the real property of the Company and its Subsidiaries shall be determined by Parent in its reasonable discretion. To the extent permitted by law, the Company's stockholders shall be deemed to have agreed to be bound by the allocation established pursuant to this Section 7.11 in the preparation of any return with respect to the Transfer Taxes. 31 36 Section 7.12 State Takeover Laws. If any "fair price" or "control share acquisition" statute or other similar statute or regulation shall become applicable to the transactions contemplated hereby, Parent and the Company and their respective Boards of Directors shall use all reasonable efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to minimize the effects of any such statute or regulation on the transactions contemplated hereby. Section 7.13 Indemnification; Directors and Officers Insurance. (a) All rights to indemnification or exculpation, existing in favor of a director, officer, employee or agent (an "Indemnified Person") of the Company or any of its Subsidiaries (including, without limitation, rights relating to advancement of expenses and indemnification rights to which such persons are entitled because they are serving as a director, officer, agent or employee of another entity at the request of the Company or any of its Subsidiaries), as provided in the Restated Certificate of Incorporation of the Company, the By-laws of the Company or any indemnification agreement, in each case, as in effect on the date of this Agreement, and relating to actions or events through the Effective Time, shall survive the Merger and shall continue in full force and effect, without any amendment thereto; provided, however, that the Surviving Corporation shall not be required to indemnify any Indemnified Person in connection with any proceeding (or portion thereof) to the extent involving any claim initiated by such Indemnified Person unless the initiation of such proceeding (or portion thereof) was authorized by the Board of Directors of the Company or unless such proceeding is brought by an Indemnified Person to enforce rights under this Section 7.13; provided further that any determination required to be made with respect to whether an Indemnified Person's conduct complies with the standards set forth under the DGCL, the Restated Certificate of Incorporation of the Company, the By-laws of the Company or any such agreement, as the case may be, shall be made by independent legal counsel selected by such Indemnified Person and reasonably acceptable to Parent; and provided further that nothing in this Section 7.13 shall impair any rights of any Indemnified Person. Without limiting the generality of the preceding sentence, in the event that any Indemnified Person becomes involved in any actual or threatened action, suit, claim, proceeding or investigation after the Effective Time, Parent shall, or shall cause the Surviving Corporation to, promptly advance to such Indemnified Person his or her legal and other expenses (including the cost of any investigation and preparation incurred in connection therewith), subject to the providing by such Indemnified Person of an undertaking to reimburse all amounts so advanced in the event of a non-appealable determination of a court of competent jurisdiction that such Indemnified Person is not entitled thereto. (b) In the event that, from and after the Effective Time, a third person asserts any claim against any Indemnified Person with respect to any matter to which the foregoing indemnities apply, the Indemnified Person shall give prompt written notice to the Surviving Corporation, and the Surviving Corporation shall have the right, at its election, to take over the defense or settlement of such claim at its own expense by giving prompt written notice to the Indemnified Person; provided, however, that, (i) if the Surviving Corporation does not give such notice and does not proceed diligently to defend the claim within thirty (30) days (or such shorter period as is necessary to permit the Indemnified Person to respond) after receipt of such notice of the claim, then the Indemnified Person may employ separate counsel to represent it and defend it against such claim and (ii) if the Surviving Corporation elects to defend the claim then the Surviving Corporation shall employ counsel 32 37 reasonably satisfactory to the Indemnified Person and the Indemnified Person shall be entitled to participate in (but not control) the defense of such claim and to employ separate counsel at its own expense to assist in the handling of such claim. The Indemnified Person and the Surviving Corporation shall cooperate in defending any such third person's claim. Notwithstanding the foregoing, neither the Surviving Corporation nor the Indemnified Person may settle or compromise any such claim without the prior written consent of the other, which consent shall not be unreasonably withheld, unless, after consultation between such parties, the terms of such settlement or compromise release such Indemnified Person from any and all liability with respect to such claim and do not in any manner adversely affect the future operations or activities of such Indemnified Person. (c) Prior to the Effective Time, the Company shall have the right to obtain and pay for in full a "tail" coverage directors' and officers' liability insurance policy ("D&O Insurance") covering a period of not less than six years after the Effective Time and providing coverage in amounts and on terms consistent with the Company's existing D&O Insurance. In the event the Company is unable to obtain such insurance, Parent shall cause the Surviving Corporation to maintain the Company's D&O Insurance for a period of not less than six years after the Effective Time; provided, that the Surviving Corporation may substitute therefor policies of substantially similar coverage and amounts containing terms no less advantageous to such former directors or officers; provided further that if the existing D&O Insurance expires or is cancelled during such period, Parent or the Surviving Corporation shall use its best efforts to obtain substantially similar D&O Insurance; and provided further that the Company shall not, without Parent's consent (but after consultation with Parent), expend an amount in excess of 350% of the last annual premium paid prior to the date hereof to procure the above described "tail" coverage and neither Parent nor the Surviving Corporation shall be required to expend, in order to maintain or procure an annual D&O Insurance policy, in lieu of a tail policy, an amount in excess of 250% of the last annual premium paid prior to the date hereof, but in such case shall purchase as much coverage as possible for such amount. Section 7.14 Notification of Certain Matters. Parent shall give prompt notice to the Company, and the Company shall give prompt notice to Parent, of: (i) the occurrence, or non-occurrence, in each case, to the knowledge of the Company or Parent, as the case may be, of any event the occurrence, or non-occurrence, of which results in the executive officers of the Company or Parent, as the case may be, having a good faith belief that such change or event would be reasonably likely to cause (x) any representation or warranty of such entity contained in this Agreement that is not qualified as to materiality to be untrue or inaccurate in any material respect, (y) any representation or warranty of such entity contained in this Agreement that is qualified as to materiality to be untrue or inaccurate in any respect, or (z) any covenant, condition or agreement of such entity contained in this Agreement not to be complied with or satisfied in all material respects; and (ii) the executive officers of the Company or Parent, as the case may be, believing in good faith that the Company or Parent, as the case may be, has, to the knowledge of the Company or Parent, as the case may be, failed to comply with in all material respects or satisfy in all material respects any covenant, condition or agreement of such entity to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 7.14 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice. Each of the Company, Parent and Sub shall give prompt notice to the other parties hereof of any notice or other 33 38 communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement. Section 7.15 Board of Directors. Promptly after such time as Sub purchases Shares pursuant to the Offer (but subject to the satisfaction of the Minimum Condition), Sub shall be entitled, to the fullest extent permitted by law, to designate at its option up to that number of directors, rounded to the next highest whole number, of the Company's Board of Directors, subject to compliance with Section 14(f) of the Exchange Act, as will make the percentage of the Company's directors designated by Sub pursuant to this sentence equal to the aggregate voting power of the shares of Company Class A Common Stock held by Parent or any of its Subsidiaries; provided, however, that in the event that Sub's designees are elected to the Board of Directors of the Company, until the Effective Time, such Board of Directors shall have (i) at least three directors who are directors on the date of this Agreement or are designated by a majority of the directors of the Company who were directors on the date hereof, in each case excluding the Investor Nominees (as defined in the Investment Agreement) (the "Independent Directors") and (ii) the number of Investor Nominees required by the Investment Agreement which shall be in addition to the number of directors designated by Sub pursuant to this Section 7.15; and provided, further that, in such event, if the number of Independent Directors shall be reduced below three for any reason whatsoever, the remaining Independent Directors shall, to the fullest extent permitted by law, designate a person to fill such vacancy who shall be deemed to be an Independent Director for purposes of this Agreement or, if no Independent Directors then remain, the other directors shall designate three persons to fill such vacancies who shall not be officers or affiliates of the Company or any of its Subsidiaries, or officers or affiliates of Parent, of any of its Subsidiaries or of any other entity in which Parent owns, directly or indirectly, any material amount of capital stock or other significant ownership interest, and such persons shall be deemed to be Independent Directors for purposes of this Agreement. Following the election or appointment of Sub's designees pursuant to this Section 7.15 and prior to the Effective Time, any termination or amendment of this Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of Sub or waiver or assertion of any of the Company's rights hereunder, and any other consent or action by the Board of Directors of the Company with respect to this Agreement (other than recommending or reconfirming the recommendation that the holders of the Company Class A Common Stock approve and adopt this Agreement and the Merger, and making determinations in connection therewith, which recommendations and determinations may be made by a majority of the Board of Directors as constituted at any time after such election or appointment of Sub's designees pursuant to this Section) will require the concurrence of a majority of the Independent Directors and, to the extent permitted by law, no other action by the Company, including any action by any other director of the Company, shall be required to approve such actions. To the fullest extent permitted by applicable law, the Company shall take all actions requested by Parent which are reasonably necessary to effect the election of any such designee, including mailing to its stockholders the Information Statement containing the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing with the mailing of the Schedule 14D-9 (provided that Sub shall have provided to the Company on a timely basis all information required to be included in the Information Statement with respect to Sub's designees). Parent and Sub will be solely responsible for any information with respect to either of them and their 34 39 nominees, officers, directors and affiliates required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. In connection with the foregoing, the Company will promptly, at the option of Parent, to the fullest extent permitted by law, either increase the size of the Company's Board of Directors and/or obtain the resignation of such number of its current directors as is necessary to enable Sub's designees to be elected or appointed to the Company's Board of Directors as provided above. Section 7.16 Best Efforts. Subject to fiduciary responsibilities, each of the Company, Parent and Sub agrees to use best efforts to cause the purchase of Shares pursuant to the Offer prior to the Outside Date, and consummation of the Merger to occur as soon as practicable after such purchase of Shares. Without limiting the foregoing, (a) each of the Company, Parent and Sub agrees to use best efforts to take, or cause to be taken, all actions necessary to comply promptly with all legal requirements that may be imposed on itself with respect to the Offer and the Merger (which actions shall include making all filings and furnishing all information required under the HSR Act and in connection with approvals of or filings with any other Governmental Entity) and shall promptly cooperate with and furnish information (including all correspondence with any Governmental Entity) to each other in connection with any such requirements imposed upon any of them or any of their Subsidiaries in connection with the Offer and the Merger (b) each of the Company, Parent and Sub shall, and shall cause its Subsidiaries to, use best efforts to obtain prior to the Outside Date (and shall cooperate with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity or other public or private third party required to be obtained or made by Parent, Sub, the Company or any of their Subsidiaries in connection with the Offer and the Merger or the taking of any action contemplated thereby or by this Agreement and (c) if necessary to cause the purchase of Shares pursuant to the Offer prior to the Outside Date, Parent shall, and shall cause its Subsidiaries to, divest or hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, product lines or assets of Parent, the Company or any of their respective Subsidiaries. At the request of Parent, the Company shall agree to divest, hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, product lines or assets of the Company or any of its Subsidiaries, provided that any such action may be conditioned upon the purchase of Shares pursuant to the Offer. Notwithstanding anything to the contrary contained in this Agreement, in connection with any filing or submission required or action to be taken by Parent, the Company or any of its respective Subsidiaries to consummate the Offer, the Merger or the other transactions contemplated in this Agreement, the Company shall not, without Parent's prior written consent, commit to any divestiture of assets or businesses of the Company and its Subsidiaries. Section 7.17 Certain Litigation. The Company agrees that it shall not settle any litigation commenced after the date hereof against the Company or any of its directors by any stockholder of the Company relating to the Offer, the Merger, this Agreement or the Stockholders Agreement without the prior written consent of Parent. In addition, the Company shall not voluntarily cooperate with any third party that may hereafter seek to restrain or prohibit or otherwise oppose the Offer or the Merger and shall cooperate with Parent and Sub to resist any such effort to restrain or prohibit or otherwise oppose the Offer or the Merger. 35 40 Section 7.18 Return of Confidential Information. No later than five (5) business days following the date hereof, the Company shall take all reasonable actions necessary to cause all third parties who have received any confidential information in connection with any discussions of potential acquisition or business combination proposals relating to the Company during the previous twelve months, to return such confidential information to the Company or to destroy all copies and records of such confidential information. ARTICLE VIII - CONDITIONS PRECEDENT Section 8.1 Conditions to Each Party's Obligation to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the fulfillment at or prior to the Effective Time of the following conditions: (a) Company Stockholder Approval. If required by applicable law, the Company Stockholder Approval shall have been obtained; provided, however, that Parent and Sub shall vote all of their shares of capital stock of the Company entitled to vote thereon in favor of the Merger. (b) No Injunction or Restraint. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other Governmental Entity preventing the consummation of the Merger shall be in effect; provided, however, that each of the parties shall have used their best efforts to prevent the entry of any such temporary restraining order, injunction or other order, including, without limitation, taking such action as is required to comply with Section 7.16, and to appeal promptly any injunction or other order that may be entered. (c) Purchase of Shares. Sub shall have previously accepted for payment and paid for Shares pursuant to the Offer. (d) HSR Act. Any waiting period (and any extension thereof) under the HSR Act applicable to the Merger shall have expired or been terminated. ARTICLE IX - TERMINATION AND AMENDMENT Section 9.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after the Company Stockholder Approval (if required by applicable law): (a) by mutual written consent of Parent, Sub and the Company; (b) by either Parent or the Company: (i) if (x) as a result of the failure of any of the Offer Conditions set forth in Exhibit A, (other than the Minimum Condition) the Offer shall have terminated or expired in accordance 36 41 with its terms without Sub having accepted for payment any Shares pursuant to the Offer or (y) Sub shall have, consistent with its obligations hereunder, failed to pay for the Shares prior to November 9, 1999 (the "Outside Date"); provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(b)(i) shall not be available to any party whose failure to perform any of its obligations under this Agreement results in the failure of any such Offer Condition or if the failure of such condition results from facts or circumstances that constitute a breach of any representation or warranty under this Agreement by such party; or (ii) if any Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree or ruling or other action shall have become final and nonappealable; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(b)(ii) shall not be available to any party who has not used its best efforts to cause such order to be lifted or otherwise taken such action as is required to comply with its obligation under Section 7.16; (c) by Parent or Sub prior to the election of Sub's designees to the Board of Directors of the Company in the event of a breach by the Company of any representation, warranty, covenant or other agreement contained in this Agreement which (i) would give rise to the failure of a condition set forth in paragraph (d) or (e) of Exhibit A and (ii) cannot be or has not been cured within 30 days after the giving of written notice to the Company; (d) by Parent or Sub if either Parent or Sub is entitled to terminate the Offer as a result of the occurrence of any event set forth in paragraph (c) of Exhibit A; provided that the temporary suspension of the recommendation of the Company's Board of Directors referred to herein in accordance with Section 6.2(b) shall not give rise to a right of termination pursuant to this Section 9.1(d); (e) by the Company, if Sub or Parent shall have breached in any material respect any of their respective representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform cannot be or has not been cured within 30 days after the giving of written notice to Parent or Sub, as applicable; or (f) by the Company, if the Offer has not been timely commenced in accordance with Section 1.1. Section 9.2 Effect of Termination. In the event of a termination of this Agreement by either the Company or Parent as provided in Section 9.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Parent, Sub or the Company or their respective officers or directors, except with respect to Section 4.17, Section 5.6, Section 7.9, this Section 9.2 Article X, the penultimate sentence of Section 1.1(a) and the last sentence of Section 1.2(c); provided, however, that (a) nothing herein shall relieve any party for liability for any breach hereof and (b) the periods of limitation with respect to Proprietary Information provided in the second paragraph of the Confidentiality Agreement shall not expire. 37 42 Section 9.3 Amendment. Subject to Section 7.15, this Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors at any time before or after obtaining the Company Stockholder Approval (if required by law), but if the Company Stockholder Approval shall have been obtained, thereafter no amendment shall be made which by law requires further approval by the Company's stockholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. Section 9.4 Extension; Waiver. At any time prior to the Effective Time, the parties hereto, by action taken or authorized by their respective Boards of Directors, may, to the extent legally allowed, (i) subject to the provisions of Section 7.15, extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) subject to the provisions of Section 7.15, waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (iii) subject to the provisions of Section 7.15, waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. ARTICLE X - GENERAL PROVISIONS Section 10.1 Non-Survival of Representations and Warranties and Agreements. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 10.1 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time of the Merger. Section 10.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): 38 43 (a) if to Parent or Sub, to: Monsanto Company 700 Chesterfield Parkway North BB3N St. Louis, Missouri 63198 Attn: Robert T. Fraley, Ph. D. Telecopy: 314 737-7037 with copies to: Monsanto Company 800 N. Lindbergh Blvd. E2ND St. Louis, Missouri 63167 Attn: Barbara Blackford, Esq. Telecopy: 314 694-2594 and: Wachtell Lipton Rosen & Katz 51 West 52nd Street New York, New York 10019 Attn: Richard D. Katcher, Esq. David M. Silk, Esq. Telecopy: 212 403-2000 (b) if to the Company, to: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attn: Richard O. Ryan, President and Chief Operating Officer Telecopy: 815 758-3711 with copies to: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, Illinois 60115 Attn: John H. Witmer, Jr., Esq. Senior Vice President and General Counsel Telecopy: 815 895-4862 39 44 Sidley & Austin One First National Plaza Chicago, Illinois 60603 Attn: Thomas A. Cole, Esq. Telecopy: 312 853-7036 and: Sidley & Austin 875 Third Avenue New York, New York 10022 Attn: James G. Archer, Esq. Telecopy: 212 906-2021 Section 10.3 Interpretation; Definitions. When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." As used in this Agreement, the phrase "made available" shall mean that the information referred to has been made available if requested by the party to whom such information is to be made available. As used in this Agreement, the following terms have the meanings specified or referred to in this Section 10.3 and shall be equally applicable to both the singular and plural forms. Any agreement referred to below shall mean such agreement as amended, supplemented or modified from time to time to the extent permitted by the applicable provisions thereof and by this Agreement. "ACQUISITION AGREEMENT" shall have the meaning set forth in Section 6.2(b). "AGREEMENT" means this Agreement and Plan of Merger, dated as of May 8, 1998 among Parent, Sub and the Company. "BENEFIT PLANS" shall have the meaning set forth in Section 4.12(a). "CAUSE" shall have the meaning set forth in Section 7.1(b). "CERTIFICATE OF MERGER" shall have the meaning set forth in Section 2.3. "CLOSING DATE" shall have the meaning set forth in Section 2.2. "CODE" means the Internal Revenue Code of 1986, as amended. "COMPANY" shall have the meaning set forth in the introductory paragraph of this Agreement. "COMPANY CLASS A COMMON STOCK" shall have the meaning set forth in the second Whereas provision of this Agreement. 40 45 "COMPANY CLASS B COMMON STOCK" shall have the meaning set forth in the second Whereas provision of this Agreement. "COMPANY FILED SEC DOCUMENTS" shall have the meaning set forth in Section 4.7. "COMPANY LETTER" means the letter from the Company to Parent dated the date hereof, which letter relates to this Agreement and is designated therein as the Company Letter. "COMPANY PREFERRED STOCK" shall have the meaning set forth in Section 4.3. "COMPANY SEC DOCUMENTS" shall have the meaning set forth in Section 4.6. "COMPANY STOCKHOLDER APPROVAL" shall have the meaning set forth in Section 4.4. "COMPANY STOCK OPTIONS" shall have the meaning set forth in Section 4.3. "COMPANY STOCK PLANS" shall have the meaning set forth in Section 4.3. "CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section 7.8. "CONSTITUENT CORPORATIONS" shall have the meaning set forth in the introductory paragraph of this Agreement. "CONSUMMATION OF THE OFFER" means the purchase of Shares pursuant to the Offer. "D&O INSURANCE" shall have the meaning set forth in Section 7.13(b). "DGCL" means the General Corporation Law of the State of Delaware. "DISSENTING SHARES" shall have the meaning set forth in Section 3.1(d). "DISSENTING STOCKHOLDER" shall have the meaning set forth in Section 3.1(d). "EFFECTIVE TIME" shall have the meaning set forth in Section 2.3. "EMWA" shall have the meaning set forth in Section 4.12. "EMWA PLAN" shall have the meaning set forth in Section 4.12. "EMWA TRUST" shall have the meaning set forth in Section 7.4. "ENVIRONMENTAL LAWS" means any applicable statute, law, ordinance, regulation, rule, judgment, decree or order of any Governmental Entity relating to any matter of pollution, protection of the environment or environmental regulation or control or regarding Hazardous Substances. 41 46 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, together with the rules and regulations promulgated thereunder. "ERISA AFFILIATE" shall have the meaning set forth in Section 4.12(c). "ERISA BENEFIT PLANS" shall have the meaning set forth in Section 4.12(b). "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder. "EXCISE TAX" shall have the meaning set forth in Section 7.2(b). "EXISTING GOALS" shall have the meaning set forth in Section 7.4. "EXPENSES" means documented and reasonable out-of-pocket fees and expenses incurred or paid by or on behalf of Parent in connection with the Offer, the Merger or the consummation of any of the transactions contemplated by this Agreement, including all fees and expenses of law firms, commercial banks, investment banking firms, accountants, experts and consultants to Parent. "GOVERNMENTAL ENTITY" means any Federal, state, local or foreign government or any court, tribunal, administrative agency or commission or other governmental or other regulatory authority or agency, domestic, foreign or supranational. "HAZARDOUS SUBSTANCE" means any material defined as toxic or hazardous, including any petroleum and petroleum products, under any applicable Environmental Law. "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "INDEMNIFIED PERSON" shall have the meaning set forth in Section 7.13(a). "INDEPENDENT DIRECTORS" shall have the meaning set forth in Section 7.15. "INFORMATION STATEMENT" shall have the meaning set forth in Section 4.8. "INTELLECTUAL PROPERTY RIGHTS" means any right to use, all patents, patent rights, certificates of plant variety protection, trademarks, trade names, service marks, copyrights, know how and other proprietary intellectual property rights and computer programs held by the Company or any of its Subsidiaries. "INVESTMENT AGREEMENT" shall have the meaning set forth in Section 4.3. "INVESTOR NOMINEES" shall have the meaning set forth in the Investment Agreement. 42 47 "KNOWLEDGE" shall mean, with respect to the Company, the actual knowledge of its executive officers and the actual knowledge of the senior officer of each of its foreign Subsidiaries and, with respect to Parent, the actual knowledge of its executive officers of Parent. "LIENS" means any pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever. "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when used in connection with the Company or Parent, as the case may be, any change or effect (or any development that, insofar as can reasonably be foreseen, is likely to result in any change or effect) or fact or condition (or any development that, insofar as can reasonably be foreseen, is likely to result in any fact or condition) that is materially adverse to the business, properties, assets, financial condition or results of operations of the Company and its Subsidiaries taken as a whole, or Parent and its Subsidiaries taken as a whole, as the case may be, provided, however, that (i) any adverse change, effect or development that is primarily caused by conditions affecting the United States economy generally or the economy of any nation or region in which the Company or Parent, as the case may be, or its Subsidiaries conducts business that is material to the business of the Company or Parent, as the case may be, and its Subsidiaries, taken as a whole, shall not be taken into account in determining whether there has been (or whether there could reasonably be foreseen) a "Material Adverse Change" or "Material Adverse Effect" with respect to the Company or Parent, as the case may be, (ii) any adverse change, effect or development that is primarily caused by conditions generally affecting the industries in which the Company or Parent, as the case may be, conducts its business shall not be taken into account in determining whether there has been (or whether there could reasonably be foreseen) a "Material Adverse Change" or "Material Adverse Effect" with respect to the Company or Parent, as the case may be, and (iii) any adverse change, effect or development that is primarily caused by the announcement or pendency of this Agreement, the Offer, the Merger or the transactions contemplated hereby shall not be taken into account in determining whether there has been (or whether there could reasonably be foreseen) a "Material Adverse Change" or "Material Adverse Effect" with respect to the Company or Parent, as the case may be. "MERGER" shall have the meaning set forth in the third Whereas provision of this Agreement. "MERGER CONSIDERATION" shall have the meaning set forth in Section 3.1(c). "MERRILL LYNCH" shall have the meaning set forth in Section 1.2(a). "MINIMUM CONDITION" shall have the meaning set forth in Exhibit A of this Agreement. "OFFER" shall have the meaning set forth in the second Whereas provision of this Agreement. "OFFER CONDITIONS" shall have the meaning set forth in Section 1.1(a). "OFFER DOCUMENTS" shall have the meaning set forth in Section 1.1(b). 43 48 "OFFER PRICE" shall have the meaning set forth in the second Whereas provision of this Agreement. "OTHER BENEFIT PLANS" shall have the meaning set forth in Section 7.1(a). "OUTSIDE DATE" shall have the meaning set forth in Section 9.1(b). "PARENT" shall have the meaning set forth in the introductory paragraph of this Agreement. "PARENT LETTER" means the letter from Parent to the Company dated the date hereof, which letter relates to this Agreement and is designated therein as the Parent Letter. "PAYING AGENT" shall have the meaning set forth in Section 3.2(a). "PAYMENT" shall have the meaning set forth in Section 7.2(b). "PERSON" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. "POLICY AND PROCEDURE" shall have the meaning set forth in Section 7.2. "PROXY STATEMENT" shall have the meaning set forth in Section 4.8. "REGISTERED HOLDER" shall have the meaning set forth in the Stockholders Agreement. "RETAINED EMPLOYEES" shall have the meaning set forth in Section 7.1(a). "RETIREMENT PLAN" shall have the meaning set forth in Section 7.5. "SCHEDULE 14D-1" shall have the meaning set forth in Section 1.1(b). "Schedule 14D-9" shall have the meaning set forth in Section 1.2(b). "SEC" means the Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder. "SHARES" shall have the meaning set forth in the second Whereas provision of this Agreement. "SIGNIFICANT SUBSIDIARY" shall have the meaning set forth in Section 4.1. "STOCK EQUIVALENTS" shall have the meaning set forth in Section 4.3. 44 49 "STOCKHOLDERS AGREEMENT" shall have the meaning set forth in the fifth Whereas provision of this Agreement. "STOCKHOLDERS MEETING" shall have the meaning set forth in Section 7.7(a). "SUB" shall have the meaning set forth in the introductory paragraph of this Agreement. "SUBSIDIARY" or "SUBSIDIARY" of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. "SURVIVING CORPORATION" shall have the meaning set forth in Section 2.1. "TAKEOVER PROPOSAL" shall have the meaning set forth in Section 6.2(a). "TAX" AND "TAXES" means any federal, state, local or foreign net income, gross income, gross receipts, windfall profit, severance, property, production, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add-on minimum or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any Governmental Entity. "TAX RETURN" means any return, report or similar statement required to be filed with respect to any tax including, without limitation, any information return, claim for refund, amended return or declaration of estimated tax. "TRANSFER TAXES" shall have the meaning set forth in Section 7.11. "U.S. BENEFIT PLANS" shall have the meaning set forth in Section 4.12(a). "VOTING TRUST AGREEMENT" shall have the meaning set forth in the Stockholders Agreement. "VOTING TRUSTEE" shall have the meaning set forth in the Stockholders Agreement. Section 10.4 Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Section 10.5 Entire Agreement; No Third-Party Beneficiaries. Except for the Confidentiality Agreement and the Investment Agreement (including the confidentiality agreement dated May 16, 1995 referenced therein) this Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. To the extent there is any inconsistency between the terms of this Agreement and the Confidentiality Agreement and/or the Investment Agreement, the provisions of this Agreement shall 45 50 govern. This Agreement, except for the provisions of Section 7.13 and the second and third sentences of Section 7.2(b), is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. Section 10.6 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any Federal or state court located in the State of Delaware in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a Federal or state court sitting in the State of Delaware. Section 10.7 Assignment. Except as otherwise provided in Section 1.1(a) neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties except that Parent shall be able without the consent of the Company to assign all of its and Sub's rights and obligations under this Agreement to another Person that is capable of acquiring a majority of the Class A Common Stock by the Outside Date, subject in any case to Parent's guarantee of the performance by such other Person of all of Parent's and Sub's obligations hereunder, including without limitation the obligation to pay the Offer Price and the Merger Consideration, and the Company shall take all action necessary to permit such assignee to consummate the Merger after the purchase of Shares. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. Section 10.8 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement may be consummated as originally contemplated to the fullest extent possible. Section 10.9 Enforcement of this Agreement. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, such remedy being in addition to any other remedy to which any party is entitled at law or in equity. 46 51 Section 10.10 Obligations of Subsidiaries. Whenever this Agreement requires any Subsidiary of Parent (including Sub) or of the Company to take any action, such requirement shall be deemed to include an undertaking on the part of Parent or the Company, as the case may be, to cause such Subsidiary to take such action. Section 10.11. Merger of the Company into Sub. If at any time prior to the Closing Date Parent notifies the Company that it desires for the Company to be merged with and into Sub (in lieu of Sub merging with and into the Company), the Company, Parent and Sub will promptly negotiate in good faith an amendment to and restatement of this Agreement which provides for such changes to this Agreement as are necessary or appropriate to effectuate such merger (and upon finalization thereof, the parties will promptly enter into such amendment and restatement). IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized all as of the date first written above. MONSANTO COMPANY By:/s/ Derek K. Rapp -------------------------------- Derek Rapp Director, Mergers & Acquisitions CORN ACQUISITION CORPORATION By:/s/ Barbara L. Blackford ------------------------------- Barbara Blackford President DEKALB GENETICS CORPORATION By:/s/ Bruce P. Bickner ------------------------------ Bruce P. Bickner Chairman and Chief Executive Officer 47 52 EXHIBIT A CONDITIONS OF THE OFFER Notwithstanding any other term of the Offer, but subject, in all cases, to Parent's and Sub's obligations set forth under the Merger Agreement, including, without limitation, under Section 1.1 and Section 7.16, Sub shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Sub's obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer unless (i) there shall have been validly tendered and not withdrawn prior to the expiration of the Offer such number of shares of Company Class A Common Stock (together with the shares of Company Class A Common Stock then held by Parent or any of its Subsidiaries) that would constitute a majority of the outstanding shares of Company Class A Common Stock (assuming the exercise of all options to purchase, and the conversion or exchange of all securities convertible or exchangeable into, shares of Company Class A Common Stock) outstanding at the expiration date of the Offer (the "Minimum Condition") and (ii) any waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer shall have expired or been terminated prior to the expiration of the Offer. Furthermore, notwithstanding any other term of the Offer, but subject, in all cases, to Parent's and Sub's obligations set forth in the Merger Agreement under Section 1.1, Sub shall not be required to accept for payment or, subject as aforesaid, to pay for any Shares not theretofore accepted for payment or paid for, and may terminate the Offer at any time if, at any time on or after the date of this Agreement and before the acceptance of such Shares for payment or the payment therefor, any of the following conditions exists (other than as a result of any action or inaction of Parent or any of its Subsidiaries that constitutes a breach of this Agreement): (a) there shall be threatened or pending by any Governmental Entity any suit, action or proceeding (i) challenging the acquisition by Parent or Sub of any Shares under the Offer, seeking to restrain or prohibit the making or consummation of the Offer or the Merger or the performance of any of the other transactions contemplated by this Agreement or the Stockholders Agreement or seeking to obtain from the Company, Parent or Sub any damages that are material in relation to the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit or materially limit the ownership or operation by the Company, Parent or any of their respective Subsidiaries of a material portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a whole, or to compel the Company or Parent to dispose of or hold separate any material portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a whole, as a result of the Offer or any of the other transactions contemplated by this Agreement or the Stockholders Agreement, (iii) seeking to impose material limitations on the ability of Parent or Sub to acquire or hold, or exercise full rights of ownership of, any Shares to be accepted for payment pursuant to the Offer including, without limitation, the right to vote such Shares on all matters properly presented to the stockholders of the Company, (iv) seeking to prohibit A-1 53 Parent or any of its Subsidiaries from effectively controlling in any material respect any material portion of the business or operations of the Company or its Subsidiaries or (v) which otherwise is reasonably likely to have a material adverse effect on the business, properties, assets, financial condition or results of operations of the Company and its Subsidiaries taken as a whole; provided that the right of Sub to not accept for payment or pay for, any Shares not theretofore accepted for payment or paid for, or to terminate the Offer, pursuant to this subparagraph (a) shall not be available if Parent or Sub has not taken such action as is required to comply with Section 7.16; (b) there shall be enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger by any Governmental Entity any statute, rule, regulation, judgment, order or injunction, other than the application to the Offer or the Merger of applicable waiting periods under the HSR Act, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; provided that the right of Sub to not accept for payment or pay for, any Shares not theretofore accepted for payment or paid for, or to terminate the Offer pursuant to this subparagraph (b) shall not be available to Parent or Sub if Parent or Sub has not taken such action as is required to comply with Section 7.16; (c) (i) the Board of Directors of the Company or any committee thereof shall have withdrawn or modified in a manner adverse to Parent or Sub its approval or recommendation of the Offer, the Merger or this Agreement or (ii) the Board of Directors of the Company or any committee thereof shall have resolved to take any of the foregoing actions; (d) any of the representations and warranties of the Company set forth in this Agreement that are qualified as to materiality shall not be true and correct in any respect or any such representations and warranties that are not so qualified shall not be true and correct in any material respect, in each case, at the date of this Agreement and as if such representations and warranties were made as of such time of determination (except that (i) representations and warranties that speak as of a specified date shall only be true and correct to such extent as of such date and (ii) no representation or warranty of the Company shall be deemed to be untrue in any respect as a result of any event or circumstance that occurred after (and did not occur on or before) the first anniversary of the date hereof); (e) the Company shall have and be continuing to have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or covenant of the Company to be performed or complied with by it under this Agreement; or A-2 54 (f) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on a national securities exchange in the United States (excluding any coordinated trading halt triggered solely as a result of a specified decrease in a market index), (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any limitation (whether or not mandatory) by any Governmental Entity on, or other event that materially adversely affects, the extension of credit by banks or other lending institutions, (iv) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States which in any case is reasonably expected to have a material adverse effect on the Company or to materially adversely affect Parent's or Sub's ability to complete the Offer and/or the Merger or materially delay the consummation of the Offer and/or the Merger; or (g) this Agreement shall have been terminated in accordance with its terms. The foregoing conditions are for the sole benefit of Parent and Sub and may, subject to the terms of this Agreement, be waived by Parent and Sub in whole or in part at any time and from time to time in their sole discretion. The failure by Parent or Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. Terms used but not defined herein shall have the meanings assigned to such terms in the Agreement to which this Exhibit A is a part. A-3 55 EXHIBIT B AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF DEKALB GENETICS CORPORATION ARTICLE I ---------- The name of the corporation (which is hereinafter referred to as the "Corporation") is: DEKALB Genetics Corporation ARTICLE II ---------- The address of the Corporation's registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name of the Corporation's registered agent at such address is The Corporation Trust Company. ARTICLE III ----------- The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized and incorporated under the General Corporation Law of the State of Delaware. ARTICLE IV ---------- Section 1. The Corporation shall be authorized to issue 2,000 shares of capital stock, of which 1,000 shares shall be shares of Common Stock, $0.01 par value ("Common Stock"), and 1,000 B-1 56 shares shall be shares of Preferred stock, $0.01 par value ("Preferred Stock"). Section 2. Shares of Preferred Stock may be issued from time to time in one or more series. The Board (as defined below) is hereby authorized to fix the voting rights, if any, designations, powers, preferences and the relative, participation, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, of any unissued series of Preferred Stock; and to fix the number of shares constituting such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). Section 3. Except as otherwise provided by law or by the resolution or resolutions adopted by the Board designating the rights, powers and preferences of any series of Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Each share of Common Stock shall have one vote, and the Common Stock shall vote together as a single class. ARTICLE V ---------- Unless and except to the extent that the By-Laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. ARTICLE VI ---------- In furtherance and not in limitation of the powers conferred by law, the Board of Directors of the Corporation (the "Board") is expressly authorized and empowered to make, alter and repeal, the By-Laws of the Corporation by a majority vote at any regular or special meeting of the Board or by written consent, subject to the power of the stockholders of the Corporation to alter or repeal any B-2 57 By-Laws made by the Board. ARTICLE VII ----------- The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article. ARTICLE VIII ------------ Section 1. Elimination of Certain Liability of Directors. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any appeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to such repeal or modification. Section 2. Indemnification and Insurance. (a) Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative B-3 58 or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, to the fullest extent permitted by law, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, amounts paid or to be paid in settlement, and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in paragraph (b) hereof, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the General Corporation Law of the State of Delaware requires, the payment of such expenses incurred by a director or officer in his or her capacity as a B-4 59 director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section or otherwise. The Corporation may, by action of the Board, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers. (b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of this Section is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board, independent legal counsel, or its stockholders) that the claimant B-5 60 has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (c) Non-Exclusivity of Rights. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-law, agreement, vote of stockholders or disinterested directors or otherwise. (d) Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. B-6 EX-99.C.2 11 STOCKHOLDERS AGREEMENT, DATED MAY 8, 1998 1 Exhibit (c)(2) STOCKHOLDERS AGREEMENT THIS STOCKHOLDERS AGREEMENT, dated as of May 8, 1998 (this "Agreement"), among Monsanto Company, a Delaware corporation ("Parent"), and the voting trustees, individually and in his or her capacity as such voting trustee (the "Voting Trustees"), and the registered holders of voting trust certificates, individually and in his or her capacity as such registered holder (the "Registered Holders"), under that certain Roberts Family Voting Trust Agreement, dated as of January 31, 1996 (the "Voting Trust Agreement"), relating to shares of Class A Common Stock ("Voting Common Stock") of DEKALB Genetics Corporation, a Delaware corporation (the "Company"), W I T N E S S E T H: WHEREAS, concurrently with the execution and delivery of this Agreement by the parties hereto, the Company, Parent and Corn Acquisition Corporation, a Delaware corporation ("Sub"), are entering into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"), pursuant to which Parent has agreed to make or cause Sub to make a cash tender offer (the "Offer") for all outstanding shares of Voting Common Stock and Class B Common Stock of the Company (collectively, "Company Common Shares") at the Offer Price (as defined in the Merger Agreement), the completion of such tender offer to be followed by a merger of Sub with and into the Company (the "Merger"); WHEREAS, Parent and Sub are entering into the Merger Agreement and pursuing the transactions contemplated thereby in reliance on the representations and warranties of the Voting Trustees and the Registered Holders contained herein; WHEREAS, the Voting Trustees possess record title to the shares of Voting Common Stock subject to the Voting Trust Agreement as set forth on Schedule I attached hereto (the "Subject Shares") and are entitled, upon the written instruction of the Registered Holders, to vote in favor of the Merger Agreement and the transactions contemplated thereby, and to tender and sell to Parent pursuant to the Offer, all of the Subject Shares; WHEREAS, each Registered Holder set forth on Schedule II hereto is the holder of Trust Certificates, as defined in the Voting Trust Agreement, with respect to, and beneficially owns, the number of Subject Shares set forth opposite such Registered Holder's name on Schedule II; and WHEREAS, as a condition to the willingness of Parent to enter into the Merger Agreement, Parent has required that each Voting Trustee and each Registered Holder agree, 1 2 and in order to induce Parent to enter into the Merger Agreement, each Voting Trustee and each Registered Holder has agreed, to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows: ARTICLE I VOTING OF SHARES SECTION 1.1 Instructions to Voting Trustees. Contemporaneously with the execution and delivery of this Agreement by the parties hereto, each Registered Holder has provided written instructions to the Voting Trustees in the form attached hereto as Exhibit A (the "Voting and Tendering Instructions") to (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, vote the Subject Shares set forth opposite such Registered Holder's name on Schedule II hereto in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby, and (b) be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as such term is defined in the Monsanto Agreement (as hereinafter defined)) other than the Merger, and vote (or cause to be voted) such Subject Shares against any such Business Combination, in either such case during the time this Agreement is in effect. Each Registered Holder agrees not to amend or modify or take any action that would nullify the Voting and Tendering Instructions, so long as this Agreement is in effect. Each Voting Trustee and each Registered Holder acknowledges and agrees that the instructions contained in the Voting and Tendering Instructions are sufficient to authorize the Voting Trustees to vote the Subject Shares in accordance with the terms thereof. SECTION 1.2 Voting Agreement. At any duly noticed meeting of stockholders of the Company called to vote upon the Merger Agreement and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, the Voting Trustees shall vote (or cause to be voted) the Subject Shares in accordance with the Voting and Tendering Instructions. At any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances upon which the stockholders' vote, consent or other approval is sought, the Voting Trustees shall be present (in person or by proxy) and shall vote (or cause to be voted) the Subject Shares against: (a) any action, proposal or agreement that could reasonably be expected to result in a breach in any material respect of any covenant, representation or warranty or any other obligation of the Company 2 3 under the Merger Agreement, or which could reasonably be expected to result in any of the conditions set forth in Article VIII or Exhibit A of the Merger Agreement not being fulfilled; (b) any Business Combination or any Takeover Proposal (as hereinafter defined), in either case other than the Merger, the Merger Agreement and the transactions contemplated thereby; and (c) (i) any other extraordinary corporate transaction other than the Merger, the Merger Agreement and the transactions contemplated thereby, such as a merger, consolidation, business combination, reorganization, recapitalization or liquidation involving the Company or any of its subsidiaries, or a sale or transfer of a material amount of the assets of the Company or any of its subsidiaries or (ii) any other proposal or transaction not covered by the foregoing which would in any manner impede, frustrate, prevent, delay or nullify the Merger, the Merger Agreement or the transactions contemplated thereby. SECTION 1.3 Irrevocable Proxy. (a) In furtherance of the transactions contemplated hereby, concurrently with the execution of this Agreement, the Voting Trustees shall execute and deliver to Parent a proxy in the form attached hereto as Exhibit B (the "Proxy"). THE PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST. (b) Each Voting Trustee hereby revokes all other proxies and powers of attorney with respect to the Subject Shares which such Voting Trustee may have heretofore appointed or granted, and no subsequent proxy or power of attorney shall be given or written consent executed (and if given or executed, such proxy or power of attorney shall not be effective) by such Voting Trustee with respect thereto. SECTION 1.4 No Inconsistent Agreements. Each Voting Trustee hereby covenants and agrees that, except as contemplated by this Agreement and the Proxy, such Voting Trustee shall not enter into any agreement or arrangement or grant a proxy or power of attorney or other authorization with respect to the Subject Shares or take any other action, including, without limitation, by terminating the Voting Trust Agreement, that would in any way restrict, limit or interfere with the performance of any Voting Trustee's obligations hereunder or the consummation of the transactions contemplated by the Merger Agreement. ARTICLE II TENDER OFFER; TENDER OF SUBJECT SHARES SECTION 2.1 Parent's Obligations Regarding the Offer. So long as this Agreement is in effect, Parent agrees: (a) that it shall not and that it shall cause Sub not to (i) reduce the number of Company Common Shares to be purchased in the Offer, (ii) reduce the Offer Price (as defined in the Merger Agreement), (iii) impose any conditions to the Offer in addition to the Offer Conditions (as defined in the Merger Agreement) or modify the Offer Conditions (other than to waive any Offer Conditions to the extent not prohibited by the Merger Agreement), (iv) change the form of consideration payable in the Offer or (v) make any other change or modification in any of the terms of the Offer in any manner that is 3 4 adverse to the holders of Company Common Shares; (b) that it shall and shall cause Sub to use its best efforts to cause the Offer Conditions to be satisfied no later than the Outside Date (as defined in the Merger Agreement); (c) that it shall extend the Offer until such date as the Offer Conditions have been satisfied or such later date as required by applicable law; and (d) that it shall accept and pay for or cause Sub to accept and pay for all of the Company Common Shares validly tendered and not withdrawn pursuant to the Offer as promptly as practicable after satisfaction of the Offer Conditions, subject to compliance with applicable law and subject to the right of Parent or Sub to extend the Offer for up to an aggregate of fifteen business days under the circumstances described in Section 1.1(a) of the Merger Agreement. Whether or not the Merger Agreement is terminated, Parent shall and shall cause Sub to comply with all covenants of Parent relating to the Offer as set forth in the Merger Agreement, so long as this Agreement remains in effect. SECTION 2.2 Instructions to Voting Trustees. Contemporaneously with the execution and delivery of this Agreement by the parties hereto, each Registered Holder has provided written instructions to the Voting Trustees in the form of the Voting and Tendering Instructions attached hereto as Exhibit A to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer) the Subject Shares set forth opposite such Registered Holders' name on Schedule II hereto pursuant to the Offer, and not to withdraw such tender of the Subject Shares so long as this Agreement is in effect. Each Registered Holder agrees not to amend or modify or take any action that would nullify the Voting and Tendering Instructions or in any way restrict, limit or interfere with the performance of such Registered Holder's obligations hereunder or the consummation of the transactions contemplated by the Merger Agreement, including without limitation by withdrawing any of the Subject Shares from the Voting Trust Agreement, in any such case as long as this Agreement is in effect. SECTION 2.3 Tendering of Subject Shares. As promptly as practicable after the execution and delivery of this Agreement by the parties hereto and in any event not later than two business days prior to the first scheduled expiration date of the Offer, the Voting Trustees shall tender the Subject Shares pursuant to the Offer by delivering to the depository for the Offer a fully executed letter of transmittal together with the certificates for the Subject Shares and any other documents that may be reasonably requested by Parent or such depository to give effect to the tender of the Subject Shares pursuant to the Offer, and the Voting Trustees further agree not to withdraw such tender of the Subject Shares so long as this Agreement is in effect. The Voting Trustees agree not to take any action inconsistent with the Voting and Tendering Instructions. 4 5 ARTICLE III RESTRICTIONS ON TRANSFER; CERTAIN ADDITIONAL COVENANTS SECTION 3.1 Transfer of Title. (a) Each Voting Trustee and each Registered Holder covenants and agrees not to directly or indirectly sell, assign, pledge, hypothecate, transfer, exchange, convert (including, without limitation, converting any of the Subject Shares into shares of Class B Common Stock of the Company) or withdraw from the trust created by the Voting Trust Agreement (the "Voting Trust") or dispose of, including by tendering into any tender or exchange offer by any third party (collectively, "Transfer"), or enter into any contract, option or other arrangement with respect to the Transfer of, any of the Subject Shares or any interest therein (including, without limitation, any Trust Certificates with respect to such Subject Shares) or deposit any of the Subject Shares into a voting trust or enter into a voting trust agreement or arrangement with respect to the Subject Shares (it being acknowledged by the parties hereto that the Subject Shares are held subject to the Voting Trust Agreement, the Roberts Family Shareholder Agreement dated as of January 31, 1996, among the Registered Holders (the "Family Shareholder Agreement" and, together with the Voting Trust Agreement, the "Family Agreements") and the Monsanto Agreement), or to take any other action with respect to such Subject Shares or such Trust Certificates, or otherwise permit or authorize any of the foregoing actions, other than pursuant to the Offer, the Merger or this Agreement, without the prior written consent of Parent, so long as this Agreement is in effect. (b) Each Voting Trustee and each Registered Holder hereby agrees and consents to the entry of stop transfer instructions with the Company's transfer agent against the transfer of any Subject Shares, consistent with the terms of Section 3.1(a). Each Voting Trustee further agrees that such Voting Trustee shall not permit any transfer of Trust Certificates to be recorded on the books maintained by the Voting Trustees for such purpose pursuant to the Voting Trust Agreement, except as expressly permitted by this Agreement. (c) Each Voting Trustee and each Registered Holder represents and warrants that the legend set forth in Section 3.3 of the Monsanto Agreement has been placed pursuant to such Section 3.3 on each of the certificates representing Subject Shares. Each Voting Trustee and each Registered Holder further agrees to use best efforts to place or cause to be placed on such certificates and the Trust Certificates any additional legends with respect to this Agreement and the transactions contemplated hereby as Parent may reasonably request in order to effectuate the terms hereof. (d) Douglas C. Roberts, Virginia R. Holt and John T. Roberts (collectively, the "Optionees") hold options to purchase the number of shares of Voting Common Stock set forth on Schedule III hereto. Without the prior written consent of Parent, none of the Optionees shall Transfer such options or enter into any contract or other arrangement to 5 6 transfer such options. Further, the Optionees shall, upon any exercise of such options, promptly deposit the shares of Voting Common Stock so purchased with the Voting Trustees under the Voting Trust Agreement and thereafter such shares shall be deemed Subject Shares for purposes of this Agreement. SECTION 3.2 Nonrecognition of Certain Transfers. (a) Any transfer, acquisition, withdrawal from the Voting Trust or conversion of Subject Shares or transfer of Trust Certificates in violation of this Agreement shall be null and void. Each Voting Trustee and Registered Holder agrees that any such transfer, acquisition withdrawal or conversion may and should be enjoined. (b) If any involuntary transfer of any of the Subject Shares shall occur (such as, but not limited to, a sale by a Registered Holder's trustee in bankruptcy, or a sale to a purchaser at any creditor's or court sale) the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold such Subject Shares subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect. SECTION 3.3 Existing Agreements. To the extent that this Agreement is inconsistent with any provision of the Family Agreements, the Registered Holders and the Voting Trustees agree that such provision of such Family Agreement or Family Agreements is hereby amended to the extent necessary so that each Registered Holder and Voting Trustee can and must fully perform its obligations under this Agreement. Each Registered Holder and each Voting Trustee agrees not to otherwise amend any of the Family Agreements during the term of this Agreement without the prior written consent of Parent. Without limiting the first sentence of this Section 3.3, each Voting Trustee and each Registered Holder agrees that the Offer is a tender offer meeting the requirements of the fourth paragraph of Section 7 of the Voting Trust Agreement and that, notwithstanding anything to the contrary therein, the Voting Trustees may agree to tender and tender the Subject Shares prior to the publication by the Company to security holders of the Company of a statement pursuant to Rule 14e-2 (or any successor rule) under the Securities Exchange Act of 1934, as amended, and that none of the Voting and Tendering Instructions, the Proxy or the tender of the Subject Shares by the Voting Trustees are or will be subject to the restrictions on transfer included in Section 2 of the Family Shareholder Agreement. At the request of Parent, each Voting Trustee and Registered Holder also agrees to use all reasonable efforts to cause any legends to be removed from any certificates representing the Subject Shares and any stop transfer orders with respect thereto to be rescinded to the extent necessary to permit the consummation of the transactions contemplated by this Agreement. SECTION 3.4 Successor Voting Trustees. The Voting Trustees agree not to resign as Voting Trustees during the term of this Agreement. The Voting Trustees and the Registered Holders agree that no successor or additional Trustee shall be appointed unless required by law or the Voting Trust Agreement and that, should it become necessary to appoint any such successor or additional Voting Trustee, the remaining Voting Trustees shall 6 7 promptly designate such successor or additional Voting Trustee pursuant to the terms of the Voting Trust Agreement, provided however, that the terms of this Agreement shall be binding upon any successor or additional Voting Trustee. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE VOTING TRUSTEES Each Voting Trustee hereby represents and warrants to Parent as follows: SECTION 4.1 Authority Relative to This Agreement. Such Voting Trustee has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement, the Monsanto Agreement and each of the Family Agreements has been duly and validly executed and delivered by such Voting Trustee and constitutes a valid and binding obligation of such Voting Trustee, enforceable against such Voting Trustee in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting or relating to the enforcement of creditors rights generally and to general principles of equity. SECTION 4.2 No Conflict. Except for such filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the HSR Act (as defined in the Merger Agreement) and foreign and supranational laws relating to antitrust and anticompetition clearances, the execution and delivery of this Agreement by such Voting Trustee does not, and the performance of this Agreement by such Voting Trustee will not, result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the Subject Shares pursuant to, the Family Agreements, the Monsanto Agreement or any note, bond, mortgage, indenture, contract, agreement, lease, instrument, license, permit, franchise, judgment, order, decree, statute, law, rule or regulation applicable to such Voting Trustee or by which such Voting Trustee or the Subject Shares are bound or affected the effect of which, in any case, would be to prevent or delay in any material respect the ability of such Voting Trustee to comply with the terms hereof. SECTION 4.3 The Subject Shares. The Voting Trustees are the record holders of the Subject Shares set forth on Schedule I hereto, free and clear of any claims, liens, encumbrances and security interests whatsoever, other than the encumbrance represented by the Monsanto Agreement, the Family Agreements and as contemplated by this Agreement. The Voting Trustees have the sole right to take the actions required to be taken by the Voting Trustees under Articles I and II of this Agreement. 7 8 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE REGISTERED HOLDERS Each Registered Holder hereby represents and warrants to Parent as follows: SECTION 5.1 Authority Relative to This Agreement. Such Registered Holder has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement, the Monsanto Agreement and each of the Family Agreements has been duly and validly executed and delivered by such Registered Holder and constitutes a valid and binding obligation of such Registered Holder, enforceable against such Registered Holder in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting or relating to the enforcement of creditors rights generally and to general principles of equity. SECTION 5.2 No Conflict. Except for such filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the HSR Act and foreign and supranational laws relating to antitrust and anticompetition clearances, the execution and delivery of this Agreement by such Registered Holder does not, and the performance of this Agreement by such Registered Holder will not, result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the Subject Shares pursuant to, the Family Agreements, the Monsanto Agreement or any note, bond, mortgage, indenture, contract, agreement, lease, instrument, license, permit, franchise, judgment, order, decree, statute, law, rule or regulation applicable to such Registered Holder or by which such Registered Holder or the Subject Shares or the Trust Certificates with respect thereto are bound or affected the effect of which, in any case, would be to prevent or delay in any material respect the ability of such Registered Holder to comply with the terms hereof. SECTION 5.3 The Subject Shares. Such Registered Holder is the beneficial owner of, and the record holder of Trust Certificates with respect to, the number of Subject Shares set forth opposite such Registered Holder's name on Schedule II hereto (and, except as provided in Section 3.1(d), is neither the record nor beneficial owner of any other shares of Voting Common Stock or Trust Certificates), free and clear of any claims, liens, encumbrances and security interests whatsoever, other than the encumbrance represented by the Monsanto Agreement, the Family Agreements and as contemplated by this Agreement. 8 9 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT Parent hereby represents and warrants to the Voting Trustees and the Registered Holders as follows: SECTION 6.1 Authority Relative to This Agreement. Parent has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Parent and constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting or relating to the enforcement of creditors rights generally and to general principles of equity. SECTION 6.2 No Conflict. Except for such filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the HSR Act and foreign and supranational laws relating to antitrust and anticompetition clearances and compliance with the requirements of any federal or state securities laws applicable to the Offer, the execution and delivery of this Agreement by Parent does not, and the performance of this Agreement by Parent will not, (a) conflict with or violate the certificate of incorporation, bylaws or other similar organizational documents of Parent or (b) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any property or asset of Parent pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, instrument, license, permit, franchise, judgment, order or decree, or, to the best knowledge of Parent, any statute, law, rule or regulation applicable to Parent or by which Parent or any property or asset of Parent is bound or affected the effect of which, in any case, would be to prevent or delay in any material respect the ability of Parent to comply with the terms hereof. SECTION 6.3 Securities Law Compliance. Neither Parent nor Sub will effect any offer or sale of Subject Shares which offer or sale would cause any Registered Holder or Voting Trustee to violate the registration requirements of the Securities Act of 1933, as amended, or the registration or qualification requirements of the securities laws of any other jurisdiction. 9 10 ARTICLE VII TERMINATION SECTION 7.1 Termination of Agreement. This Agreement shall terminate immediately upon the Effective Time (as defined in the Merger Agreement). This Agreement may be terminated: (a) by mutual written consent of Parent and a majority of the Voting Trustees, on behalf the Voting Trustees and the Registered Holders; (b) by Parent if: (i) the Merger Agreement shall have been terminated in accordance with Section 9.1 thereof; or (ii) at the time of termination of this Agreement by Parent (A) any of the representations and warranties of the Voting Trustees or the Registered Holders set forth in this Agreement shall not be true and correct in all material respects or (B) any of the Voting Trustees or the Registered Holders shall have failed to perform in any material respect any material covenant to be performed by any Voting Trustee or Registered Holder under this Agreement, and in the case of (A) or (B) such untruth or incorrectness or such failure cannot be or has not been cured within thirty (30) days after the giving of written notice to the Voting Trustees and the Registered Holders by Parent. (c) by a majority of the Voting Trustees, on behalf of the Voting Trustees and the Registered Holders, if none of the Voting Trustees or Registered Holders are in violation of their respective obligations under this Agreement and if: (i) Parent or Sub shall not have completed payment for all Company Common Shares tendered pursuant to the Offer and not withdrawn by the Outside Date; (ii) at the time of termination of this Agreement by the Voting Trustees (A) any of the representations and warranties of Parent set forth in this Agreement shall not be true and correct in all material respects or (B) Parent shall have failed to perform in any material respect any material covenant to be performed by Parent under this Agreement, and in the case of (A) or (B) such untruth or incorrectness or such failure cannot be or has not been cured within thirty (30) days after the giving of written notice to Parent by any Voting Trustee; (iii) any Governmental Entity (as defined in the Merger Agreement) shall have issued an order, decree or ruling or taken any other action 10 11 permanently restraining, enjoining or otherwise prohibiting the Offer or the consummation of the transactions contemplated hereby or by the Merger Agreement and such order, decree, ruling or other action shall have become final and nonappealable; provided that the Voting Trustees shall not have the right to terminate this Agreement pursuant to this clause (iii) if the Company has not taken such action as is necessary to comply with Section 7.16 of the Merger Agreement; or (iv) the Merger Agreement shall have been terminated in accordance with Section 9.1 thereof. SECTION 7.2 No Effect of Termination of Merger Agreement. Except as provided in Section 7.1(b)(i) or Section 7.1(c)(iv), the termination of the Merger Agreement shall have no effect on the obligations of the parties hereto. SECTION 7.3 Effect of Termination. In the event of termination of this Agreement pursuant to Section 7.1, this Agreement shall become void and of no effect with no liability on the part of any party hereto; provided, however, no such termination shall relieve any party hereto from any liability for any breach of this Agreement occurring prior to such termination. ARTICLE VIII MISCELLANEOUS SECTION 8.1 No Solicitation. During the term of this Agreement, the Voting Trustees and Registered Holders shall not, nor shall they permit any of their affiliates or any director, officer, employee, investment banker, attorney or other advisor or representative of any of the foregoing to, (a) directly or indirectly, solicit, initiate or knowingly encourage (including by way of furnishing non-public information) the submission of (i) any inquiry, proposal or offer from any person relating to any direct or indirect acquisition or purchase of any of the assets of the Company or its Subsidiaries (as such term is defined in the Merger Agreement) (other than the purchase of inventory or other assets in the ordinary course of the Company's business) or any of the Company Common Shares then outstanding, any tender offer or exchange offer for any of the Company Common Shares then outstanding, or any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of its Subsidiaries, other than the transactions contemplated by the Merger Agreement, or (ii) any other transaction the consummation of which would reasonably be expected to impede, interfere with, prevent or materially delay the purchase of Company Common Shares pursuant to the Offer and/or the Merger or which would reasonably be expected to dilute materially the benefits to Parent of the transactions contemplated by this Agreement and the Merger Agreement ("Takeover Proposal") or (b) directly or indirectly participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or knowingly take any other action to facilitate any inquiries or the making of any proposal that constitutes, or could 11 12 reasonably be expected to lead to, any Takeover Proposal. Notwithstanding the foregoing, proposals solely relating to the sale of all or a portion of the Company's business relating solely to the research and development of swine breeding stock and the marketing of such hybrid breeding swine and related management services to hog producers in domestic or international markets shall not be considered Takeover Proposals, so long as the terms and conditions of such proposals do not have any of the effects described in clause (ii) of the preceding sentence. SECTION 8.2 Voting Trustee and Registered Holder Capacity. By executing this Agreement no person who is or becomes during the term hereof a director or officer of the Company makes any agreement or understanding in his or her capacity as such officer or director. Each Voting Trustee and Registered Holder signs solely in his or her capacity as the record holder and beneficial owner, respectively, of the number of Subject Shares set forth opposite his or her name on Schedules I and II hereto, respectively, and nothing herein shall limit or affect any actions taken by a Voting Trustee or Registered Holder in his or her capacity as an officer or director of the Company. Nothing in this Section 8.2 shall be construed to permit any party hereto to take any action which would violate any provision of the Merger Agreement. SECTION 8.3 Enforcement of Agreement. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that monetary damages will not provide an adequate remedy. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to specific performance of the terms and provisions hereof in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any Federal or state court located in the State of Delaware in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement; (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a Federal or state court sitting in the State of Delaware, and appoints The Corporation Trust Company, The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware as its agent for service of process in connection with this Agreement. SECTION 8.4 Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns. Each Voting Trustee and each Registered Holder specifically agrees that the obligations of such Voting Trustee and/or Registered Holder hereunder shall not be terminated by operation of law, whether by the death or incapacity of the Voting Trustee and/or Registered Holder or otherwise. 12 13 SECTION 8.5 Entire Agreement. This Agreement constitutes the entire agreement between Parent, the Voting Trustees and the Registered Holders with respect to the subject matter hereof. SECTION 8.6 Amendment. This Agreement may not be amended except by an instrument in writing signed by Parent and a majority of the Voting Trustees. SECTION 8.7 Extension; Waiver. A majority of the Voting Trustees, on behalf of the Voting Trustees and Registered Holders, or Parent may, by a writing signed by such Voting Trustees or Parent, (i) extend the time to perform any obligation or other act of the other, (ii) waive any inaccuracy in any representation or warranty of the other or (iii) waive compliance by the other with any agreement or condition in this Agreement. The failure of any party hereto to assert any right under this Agreement shall not constitute a waiver of such right. SECTION 8.8 Further Assurances. Each of the Voting Trustees and Registered Holders shall upon the request of Parent execute and deliver any additional documents and take such further actions as may reasonably be deemed by Parent to be necessary or desirable to carry out the provisions hereof. SECTION 8.9 Expenses. All fees and expenses incurred by any one party hereto shall be borne by the party incurring such fees and expenses. SECTION 8.10 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in a mutually acceptable manner in order that the terms of this Agreement remain as originally contemplated to the fullest extent possible. SECTION 8.11 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made and shall be effective upon receipt, if delivered personally or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice) or electronically transmitted (provided that a confirmation copy is sent by another approved means) to the facsimile number specified below: 13 14 If to any Voting Trustee or Registered Holder: c/o Douglas C. Roberts DeKalb Genetics Corporation 3100 Sycamore Road DeKalb, IL 60115 Attention: [name of Voting Trustee or Registered Holder] Telephone: (815) 758-9195 Facsimile: (815) 758-9403 with a copy to: Pillsbury Madison & Sutro LLP 235 Montgomery Street San Francisco, CA 94104 Attention: Blair W. White, Esq. Telephone: (415) 983-7480 Facsimile: (415) 983-1200 If to Parent, at: Monsanto Company 700 Chesterfield Parkway N BB3N St. Louis, MO 63198 Attention: Robert T. Fraley, Ph.D. Telephone: (314) 737-6204 Facsimile: (314) 737-7037 with copies to: Monsanto Company 800 N. Lindbergh Blvd. E2ND St. Louis, MO 63167 Attention: Barbara Blackford, Esq. Telephone: (314) 694-2860 Facsimile: (314) 694-2594 14 15 and Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, NY 10019-6150 Attention: Richard D. Katcher, Esq. David M. Silk, Esq. Telephone: (212) 403-1000 Facsimile: (212) 403-2000 SECTION 8.12 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware regardless of the laws that might otherwise govern under applicable principles of conflicts of law. SECTION 8.13 Definition. The term "Monsanto Agreement" means that certain Stockholders Agreement, dated as of January 31, 1996, among Monsanto Company and the Registered Holders. IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be duly executed on the date hereof. MONSANTO COMPANY By:/s/ Derek K. Rapp ------------------------------------ Name: Derek K. Rapp Title: Director, Mergers & Acquisitions DOUGLAS C. ROBERTS /s/ Douglas C. Roberts ---------------------------------------- Douglas C. Roberts, individually and as Voting Trustee under the Voting Trust Agreement and as Trustee of (i) the Douglas C. Roberts Trust dated 1/28/72, (ii) the David Kim Roberts 1989 Trust, (iii) the Steven Suh Roberts 1989 Trust, and (iv) the Jeffrey King Roberts 1989 Trust 15 16 VIRGINIA R. HOLT /s/ Virginia R. Holt -------------------------------------- Virginia R. Holt, individually and as Voting Trustee under the Voting Trust Agreement and as Trustee of (i) the Virginia R. Holt Trust dated 8/22/73, (ii) the Amanda Mary Holt 1989 Trust, (iii) the Laura Elizabeth Holt 1989 Trust, (iv) the Jenna Christine Holt 1997 Trust dated 7/23/97 and (v) the John Douglas Holt 1997 Trust dated 7/23/97 JOHN T. ROBERTS /s/ John T. Roberts -------------------------------------- John T. Roberts, individually and as Voting Trustee under the Voting Trust Agreement and as Trustee of (i) the John T. Roberts Trust dated 4/9/76, (ii) the Allison Elizabeth Roberts 1989 Trust, and (iii) the Katherine Elsie Roberts 1990 Trust #1 ROBIN R. ROBERTS /s/ Robin R. Roberts -------------------------------------- Robin R. Roberts, individually and as Trustee of (i) the Allison Elizabeth Roberts Trust dated 8/6/86, (ii) the Katherine Elsie Roberts Trust dated 3/13/90, (iii) the Charles David Roberts Trust dated 2/28/94, and (iv) the John T. Roberts 1998 Annuity Trust dated 2/9/98. 16 17 TERRANCE K. HOLT /s/ Terrance K. Holt ------------------------------------------- Terrance K. Holt, individually and as Trustee of (i) the Amanda Mary Holt Trust dated 12/6/85 and (ii) the Virginia Roberts Holt 1998 Annuity Trust CHARLES C. ROBERTS AND MARY R. ROBERTS /s/ Charles C. Roberts ------------------------------------------- /s/ Mary R. Roberts ------------------------------------------- Charles C. Roberts and Mary R. Roberts, individually and as Voting Trustees under the Voting Trust Agreement and as Trustees of (i) the Charles C. and Mary R. Roberts Living Trust dated 10/15/91, (ii) the Trust F/B/O Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67, (iii) the Trust F/B/O Virginia R. Holt under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67, and (iv) the Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67 LYNNE KING ROBERTS /s/ Lynne King Roberts ------------------------------------------ Lynne King Roberts, individually and as Trustee of the David Kim Roberts Trust dated 10/14/87 17 18 EXHIBIT A ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 18 19 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under the Voting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. -------------------------------- [name of Registered Holder] [signing capacity] 19 20 EXHIBIT B IRREVOCABLE PROXY to Vote CLASS A COMMON STOCK of DEKALB GENETICS CORPORATION The undersigned are the Voting Trustees under the Roberts Family Voting Trust Agreement, dated as of January 31, 1996 (the "Voting Trust Agreement"), and as such are the record owners of shares of Class A Common Stock of DEKALB Genetics Corporation, a Delaware corporation (the "Company"). The undersigned, in their capacities as such Voting Trustees, hereby irrevocably (to the fullest extent permitted by the General Corporation Law of the State of Delaware), appoint R. William Ide, III, Hendrick A. Verfaillie and the members of the Board of Directors of Monsanto Company, a Delaware corporation ("Parent"), and each of them, as the sole and exclusive attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting and related rights (to the full extent that the undersigned is entitled to do so) with respect to all of the Subject Shares (as such term is defined in the Stockholders Agreement (as defined below)) in accordance with the terms of this Proxy. Upon the execution of this Proxy by the undersigned, any and all prior proxies given by the undersigned with respect to any Subject Shares are hereby revoked and the undersigned agree not to grant any subsequent proxies with respect to the Subject Shares until after the Expiration Date (as defined below). This Proxy is irrevocable and coupled with an interest, is granted pursuant to that certain Stockholders Agreement, dated as of the date hereof, among Parent, the undersigned and the Registered Holders named therein (the "Stockholders Agreement"), and is granted in consideration of the Company, Corn Acquisition Corporation, a Delaware corporation ("Sub"), and Parent entering into that certain Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"). The Merger Agreement provides, among other things, for the merger (the "Merger") of Sub with and into the Company, with the Company becoming a wholly-owned subsidiary of Parent, all in accordance with the terms of the Merger Agreement. As used herein, the term "Expiration Date" shall mean the earlier to occur of (i) the termination of the Stockholders Agreement in accordance with its terms, or (ii) such date and time as the Merger shall have become effective in accordance with the terms and provisions of the Merger Agreement. The attorneys and proxies named above, and each of them, are hereby authorized and empowered by the undersigned stockholders, at any time prior to the Expiration Date, to act as the attorney and proxy of the undersigned to vote the Subject Shares (including, without 20 21 limitation, the power to execute and deliver written consents) at every annual, special or adjourned meeting of the stockholders of the Company and in every written consent in lieu of such meeting and in any other circumstances under which a vote, consent or approval (including by written consent) of the stockholders of the Company is sought: (a) in favor of the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement; (b) against any action, proposal or agreement that could reasonably be expected to result in a breach in any material respect of any covenant, representation or warranty or any other obligation of the Company under the Merger Agreement, or which could reasonably be expected to result in any of the conditions set forth in Article VIII or Exhibit A of the Merger Agreement not being fulfilled; (c) against any Business Combination (as defined in the Stockholders Agreement) or any Takeover Proposal (as defined in the Merger Agreement), in either case other than the Merger, the Merger Agreement and the transactions contemplated thereby; and (d) against (i) any other extraordinary corporate transaction other than the Merger, the Merger Agreement and the transactions contemplated thereby, such as a merger, consolidation, business combination, reorganization, recapitalization or liquidation involving the Company or any of its subsidiaries, or a sale or transfer of a material amount of the assets of the Company or any of its subsidiaries or (ii) any other proposal or transaction not covered by the foregoing which would in any manner impede, frustrate, prevent, delay or nullify the Merger, the Merger Agreement or the transactions contemplated thereby. The attorneys and proxies named above may not exercise this Proxy on any other matter except as provided in clauses (a), (b), (c) and (d) above. Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the undersigned. Dated: May 8, 1998 ---------------------------------------------- Douglas C. Roberts, as Voting Trustee under the Voting Trust Agreement ---------------------------------------------- John T. Roberts, as Voting Trustee under the Voting Trust Agreement ---------------------------------------------- Virginia R. Holt, as Voting Trustee under the Voting Trust Agreement 21 22 ---------------------------------------------- Mary R. Roberts, as Voting Trustee under the Voting Trust Agreement ---------------------------------------------- Charles C. Roberts, as Voting Trustee under the Voting Trust Agreement 22 23 SCHEDULE I Record Holder Shares of Class A Common Stock Douglas C. Roberts, Virginia R. Holt, 2,671,650 John T. Roberts, Charles C. Roberts & Mary R. Roberts as Voting Trustees of the Roberts Family Voting TR Agmt 1/31/96. 23 24 SCHEDULE II Registered Holder Shares of Class A Common Stock Douglas C. Roberts, as Trustee of the 700,614 Douglas C. Roberts Trust dated 1/28/72 Douglas C. Roberts, as Trustee of the 42,000 David Kim Roberts 1989 Trust Douglas C. Roberts, as Trustee of the 42,000 Steven Suh Roberts 1989 Trust Douglas C. Roberts, as Trustee of the 42,000 Jeffrey King Roberts 1989 Trust Virginia R. Holt, as Trustee of the 417,032 Virginia R. Holt Trust dated 8/22/73 Virginia R. Holt, as Trustee of the 42,000 Amanda Mary Holt 1989 Trust Virginia R. Holt, as Trustee of the 42,000 Laura Elizabeth Holt 1989 Trust John T. Roberts, as Trustee of the 534,484 John T. Roberts Trust dated 4/9/76 John T. Roberts, as Trustee of the 42,000 Allison Elizabeth Roberts 1989 Trust John T. Roberts, as Trustee of the 42,000 Katherine Elsie Roberts 1990 Trust #1 Robin R. Roberts, as Trustee of the 22,434 Allison Elizabeth Roberts Trust dated 8/6/86 Robin R. Roberts, as Trustee of the 2,880 Katherine Elsie Roberts Trust dated 3/13/90 Robin R. Roberts, as Trustee of the 2,880 Charles David Roberts Trust dated 2/28/94 24 25 Registered Holder Shares of Class A Common Stock Terrance K. Holt, as Trustee of the 21,588 Amanda Mary Holt Trust dated 12/6/85 Charles C. Roberts and Mary R. Roberts, as Trustees 48,082 of the Charles C. and Mary R. Roberts Living Trust dated 10/15/91 Charles C. Roberts and Mary R. Roberts, 34,002 as Trustees of the Trust F/B/O Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67 Charles C. Roberts and Mary R. Roberts, 22,704 as Trustees of the Trust F/B/O Virginia R. Holt under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67 Charles C. Roberts and Mary R. Roberts, 23,646 as Trustees of the Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67 Lynne King Roberts, as Trustee of the 9,708 David Kim Roberts Trust dated 10/14/87 Virginia R. Holt, as Trustee of the Jenna 6,298 Christine Holt 1997 Trust dated 7/23/97 Virginia R. Holt, as Trustee of the John 6,298 Douglas Holt 1997 Trust dated 7/23/97 Terrance K. Holt, as Trustee of the 325,000 Virginia Roberts Holt 1998 Annuity Trust Robin Richey Roberts, as Trustee of the 200,000 John T. Roberts 1998 Annuity Trust dated 2/9/98 25 26 SCHEDULE III Shares of Class A Common Stock Name Underlying Options Douglas C. Roberts 36,000 Virginia R. Holt 16,247 John T. Roberts 48,133 26 27 ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 28 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under the Voting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. DOUGLAS C. ROBERTS /s/ Douglas C. Roberts -------------------------------------------------- Douglas C. Roberts, individually and as Voting Trustee under the Voting Trust Agreement and as Trustee of (i) the Douglas C. Roberts Trust dated 1/28/72, (ii) the David Kim Roberts 1989 Trust, (iii) the Steven Suh Roberts 1989 Trust, and (iv) the Jeffrey King Roberts 1989 Trust 2 29 ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 30 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under theVoting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. LYNNE KING ROBERTS /s/ Lynne King Roberts ----------------------------------------------- Lynne King Roberts, individually and as Trustee of the David Kim Roberts Trust dated 10/14/87 2 31 ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 32 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under the Voting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. JOHN T. ROBERTS /s/ John T. Roberts ---------------------------------------------------- John T. Roberts, individually and as Voting Trustee under the Voting Trust Agreement and as Trustee of (i) the John T. Roberts Trust dated 4/9/76, (ii) the Allison Elizabeth Roberts 1989 Trust, and (iii) the Katherine Elsie Roberts 1990 Trust #1 2 33 ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 34 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under the Voting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. ROBIN R. ROBERTS /s/ Robin R. Roberts ---------------------------------------------------- Robin R. Roberts, individually and as Trustee of (i) the Allison Elizabeth Roberts Trust dated 8/6/86, (ii) the Katherine Elsie Roberts Trust dated 3/13/90, (iii) the Charles David Roberts Trust dated 2/28/94, and (iv) the John T. Roberts 1998 Annuity Trust dated 2/9/98. 2 35 ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 36 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under the Voting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. VIRGINIA R. HOLT /s/ Virginia R. Holt ---------------------------------------------------- Virginia R. Holt, individually and as Voting Trustee under the Voting Trust Agreement and as Trustee of (i) the Virginia R. Holt Trust dated 8/22/73, (ii) the Amanda Mary Holt 1989 Trust, (iii) the Laura Elizabeth Holt 1989 Trust, (iv) the Jenna Christine Holt 1997 Trust dated 7/23/97 and (v) the John Douglas Holt 1997 Trust dated 7/23/97 2 37 ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 38 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under the Voting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. TERRANCE K. HOLT /s/ Terrance K. Holt ---------------------------------------------------- Terrance K. Holt, individually and as Trustee of (i) the Amanda Mary Holt Trust dated 12/6/85 and (ii) the Virginia Roberts Holt 1998 Annuity Trust 2 39 ROBERTS FAMILY VOTING TRUST AGREEMENT VOTING AND TENDERING INSTRUCTIONS TO: Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees (and any successor or additional voting trustees) under the Roberts Family Voting Trust Agreement dated as of January 31, 1996 (the "Voting Trust Agreement") Pursuant to Sections 5 and 7 of the Voting Trust Agreement, you are hereby instructed as follows with respect to all shares of Class A Common Stock of DEKALB Genetics Corporation (the "Company") held by you on behalf of the undersigned on the date hereof under the Voting Trust Agreement (the "Subject Shares"): (a) at any duly noticed meeting of the stockholders of the Company called to vote upon the Merger Agreement, dated as of the date hereof, by and among the Company, Monsanto Company and Corn Acquisition Corporation (the "Merger Agreement") and the transactions contemplated thereby or at any adjournment thereof or in any other circumstances under which a vote, consent or approval (including by written consent) with respect to the Merger Agreement and the transactions contemplated thereby is sought, to vote all of the Subject Shares in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby; (b) to be present (in person or by proxy) at any duly noticed meeting of stockholders of the Company or any adjournment thereof or in any other circumstances under which the vote, consent or other approval of the stockholders of the Company is sought with respect to any Business Combination (as defined in the Stockholders Agreement (as defined below)) other than the Merger (as defined in the Merger Agreement) and to vote (or cause to be voted) all of the Subject Shares against any such Business Combination; and (c) to tender as soon as practicable (and in any event not later than two business days prior to the first scheduled expiration date of the Offer (as defined in the Merger Agreement)) all of the Subject Shares pursuant to the Offer and not to withdraw such tender of the Subject Shares. These Instructions are the instructions of the undersigned referred to in Sections 1.1 and 2.2 of the Stockholders Agreement, dated as of the date hereof (the "Stockholders 40 Agreement"), among Monsanto Company, the undersigned, the other holders of trust certificates under the Voting Trust Agreement and the Voting Trustees under the Voting Trust Agreement. These instructions are irrevocable and are binding upon the successors and assigns of the undersigned. Dated: May 8, 1998. CHARLES C. ROBERTS AND MARY R. ROBERTS /s/ Charles C. Roberts ------------------------------------------------- /s/ Mary R. Roberts ------------------------------------------------- Charles C. Roberts and Mary R. Roberts, individually and as Voting Trustees under the Voting Trust Agreement and as Trustees of (i) the Charles C. and Mary R. Roberts Living Trust dated 10/15/91, (ii) the Trust F/B/O Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67, (iii) the Trust F/B/O Virginia R. Holt under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67, and (iv) the Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated 12/21/67 2 41 IRREVOCABLE PROXY to Vote CLASS A COMMON STOCK of DEKALB GENETICS CORPORATION The undersigned are the Voting Trustees under the Roberts Family Voting Trust Agreement, dated as of January 31, 1996 (the "Voting Trust Agreement"), and as such are the record owners of shares of Class A Common Stock of DEKALB Genetics Corporation, a Delaware corporation (the "Company"). The undersigned, in their capacities as such Voting Trustees, hereby irrevocably (to the fullest extent permitted by the General Corporation Law of the State of Delaware), appoint R. William Ide, III, Hendrick A. Verfaillie and the members of the Board of Directors of Monsanto Company, a Delaware corporation ("Parent"), and each of them, as the sole and exclusive attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting and related rights (to the full extent that the undersigned is entitled to do so) with respect to all of the Subject Shares (as such term is defined in the Stockholders Agreement (as defined below)) in accordance with the terms of this Proxy. Upon the execution of this Proxy by the undersigned, any and all prior proxies given by the undersigned with respect to any Subject Shares are hereby revoked and the undersigned agree not to grant any subsequent proxies with respect to the Subject Shares until after the Expiration Date (as defined below). This Proxy is irrevocable and coupled with an interest, is granted pursuant to that certain Stockholders Agreement, dated as of the date hereof, among Parent, the undersigned and the Registered Holders named therein (the "Stockholders Agreement"), and is granted in consideration of the Company, Corn Acquisition Corporation, a Delaware corporation ("Sub"), and Parent entering into that certain Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"). The Merger Agreement provides, among other things, for the merger (the "Merger") of Sub with and into the Company, with the Company becoming a wholly-owned subsidiary of Parent, all in accordance with the terms of the Merger Agreement. As used herein, the term "Expiration Date" shall mean the earlier to occur of (i) the termination of the Stockholders Agreement in accordance with its terms, or (ii) such date and time as the Merger shall have become effective in accordance with the terms and provisions of the Merger Agreement. The attorneys and proxies named above, and each of them, are hereby authorized and empowered by the undersigned stockholders, at any time prior to the Expiration Date, to act as the attorney and proxy of the undersigned to vote the Subject Shares (including, without limitation, the power to execute and deliver written consents) at every annual, special or adjourned meeting of the stockholders of the Company and in every written consent in lieu of 42 such meeting and in any other circumstances under which a vote, consent or approval (including by written consent) of the stockholders of the Company is sought: (a) in favor of the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement; (b) against any action, proposal or agreement that could reasonably be expected to result in a breach in any material respect of any covenant, representation or warranty or any other obligation of the Company under the Merger Agreement, or which could reasonably be expected to result in any of the conditions set forth in Article VIII or Exhibit A of the Merger Agreement not being fulfilled; (c) against any Business Combination (as defined in the Stockholders Agreement) or any Takeover Proposal (as defined in the Merger Agreement), in either case other than the Merger, the Merger Agreement and the transactions contemplated thereby; and (d) against (i) any other extraordinary corporate transaction other than the Merger, the Merger Agreement and the transactions contemplated thereby, such as a merger, consolidation, business combination, reorganization, recapitalization or liquidation involving the Company or any of its subsidiaries, or a sale or transfer of a material amount of the assets of the Company or any of its subsidiaries or (ii) any other proposal or transaction not covered by the foregoing which would in any manner impede, frustrate, prevent, delay or nullify the Merger, the Merger Agreement or the transactions contemplated thereby. The attorneys and proxies named above may not exercise this Proxy on any other matter except as provided in clauses (a), (b), (c) and (d) above. Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the undersigned. Dated: May 8, 1998 /s/ Douglas C. Roberts ------------------------------------------------- Douglas C. Roberts, as Voting Trustee under the Voting Trust Agreement /s/ John T. Roberts ------------------------------------------------- John T. Roberts, as Voting Trustee under the Voting Trust Agreement /s/ Virginia R. Holt ------------------------------------------------- Virginia R. Holt, as Voting Trustee under the Voting Trust Agreement 2 43 /s/ Mary R. Roberts ------------------------------------------------- Mary R. Roberts, as Voting Trustee under the Voting Trust Agreement /s/ Charles C. Roberts ------------------------------------------------- Charles C. Roberts, as Voting Trustee under the Voting Trust Agreement EX-99.C.3 12 INVESTMENT AGREEMENT 1 Exhibit (c)(3) Execution Copy ================================================================================ INVESTMENT AGREEMENT Between MONSANTO COMPANY, a Delaware corporation and DEKALB GENETICS CORPORATION, a Delaware corporation Dated as of January 31, 1996 ================================================================================ 2 TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . 2 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE 2 SALE AND PURCHASE OF THE NEWLY ISSUED SHARES . . . . . . . . 11 2.1. Sale and Purchase of the Newly Issued Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2.2. Closing and Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE 3 THE OFFER . . . . . . . . . . . . . . . . . 12 3.1. Commencement of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.2. Changes to the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.3. Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.4. Schedule 14D-1 and Other Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.5. Actions by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.6. Acquisition of Additional Class B Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . 17 4.1. Organization, Standing and Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.3. Capital Structure; New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.4. Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 4.5. SEC Reports; Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.6. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Page 4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.9. Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.10. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.11. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.12. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.13. No Untrue Statement or Omission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF INVESTOR . . . . . . . . 24 5.1. Organization; Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 5.2. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.3. Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.4. Acquisition for Investment and Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.5. Legal Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.6. Purchase Entirely for Own Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.7. Current Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ARTICLE 6 COVENANTS OF THE COMPANY . . . . . . . . . . . . . 27 6.1. Conduct of Business by the Company Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ARTICLE 7 CONDITIONS TO CLOSING . . . . . . . . . . . . . . 28 7.1. Obligations of Investor with respect to the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 28 7.2. Obligations of the Company with respect to the Closing. . . . . . . . . . . . . . . . . . . . . . . . . 30 ARTICLE 8 CERTAIN ADDITIONAL AGREEMENTS . . . . . . . . . . . . 31 8.1. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 8.2. Reasonable Efforts; Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 8.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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Page 8.4. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 8.5. Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 8.6. Nonrecognition of Certain Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 8.7. Independent Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 ARTICLE 9 RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS . . . . . . . . 35 9.1. Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 9.2. Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.3. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 9.4. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets . . . . . . . . . . . 44 9.5. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 ARTICLE 10 EQUITY PURCHASE RIGHTS . . . . . . . . . . . . . 44 10.1. Equity Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 10.2. Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 10.3. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 ARTICLE 11 STANDSTILL . . . . . . . . . . . . . . . . 48 11.1. Restriction on Acquisition by Investor of Company Securities . . . . . . . . . . . . . . . . . . . . . 48 11.2. Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 ARTICLE 12 TERMINATION . . . . . . . . . . . . . . . . 53 12.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 12.2. Termination After Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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Page 12.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 ARTICLE 13 INDEMNIFICATION . . . . . . . . . . . . . . . 54 13.1. Investor's Indemnification Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 13.2. Company's Indemnification Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 13.3. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 ARTICLE 14 GENERAL PROVISIONS . . . . . . . . . . . . . . 56 14.1. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 14.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 14.3. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 14.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 14.5. Entire Agreement; No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 14.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.7. Corporate Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.9. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 14.10. Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 14.11. Accounting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 14.12. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Exhibit A Offer Conditions Exhibit B By-law Amendments Exhibit C Opinion of John H. Witmer, Jr. Exhibit D Opinion of Frank E. Vigus
-iv- 6 INVESTMENT AGREEMENT dated as of January 31, 1996 (this "Agreement"), between MONSANTO COMPANY, a Delaware corporation ("Investor") and DEKALB GENETICS CORPORATION, a Delaware corporation (the "Company"). WHEREAS, the respective managements of Investor and the Company have negotiated and the Boards of Directors of Investor and the Company have approved a strategic alliance under which the two companies will enter into various collaborations, the Company will remain an autonomous and entrepreneurial business and Investor will make a substantial investment in the Company; WHEREAS, Investor proposes to make a tender offer (as it may be amended from time to time as permitted under this Agreement with the Company's consent if required hereby, the "Offer") to purchase any or all up to a maximum of 1,800,000 shares of Class B Common Stock, without par value, of the Company (the "Class B Stock"), at a price per share of Class B Stock of $71.00 net to the seller in cash (such price, as may hereafter be increased, the "Tender Offer Price") (such 1,800,000 shares representing approximately 37% of the outstanding shares of Class B Stock, after giving effect to the transactions contemplated by this Agreement), upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, Investor further proposes to purchase from the Company in accordance with the terms and conditions hereof newly issued shares of the Company's Class A Common Stock, without par value (the "Class A Stock") at a price per share of $65.00 (such shares representing 10% of the outstanding shares of Class A Stock after expiration of the Offer and after giving effect to the issuance thereof) (the "Newly Issued Class A Shares") and 378,000 newly issued shares of Class B Stock at a price per share of $65.00 (the "Newly Issued Class B Shares") (such Newly Issued Class A Shares and Newly Issued Class B Shares collectively referred to as the "Newly Issued Shares"); -1- 7 WHEREAS Investor and the Company desire to make certain representations, warranties, covenants and agreements and also to prescribe various conditions in connection with the transactions contemplated hereby; and WHEREAS, contemporaneously herewith, Investor and the Company and Investor and the Major A Stockholders, as applicable, have entered into the Ancillary Agreements described herein, which Ancillary Agreements will be effective upon the consummation of the Closing. NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement and in the Ancillary Agreements, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS 1.1. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings set forth below. "Acquisition Proposal" shall mean any tender offer or exchange offer or proposal (including without limitation any proposal or offer to shareholders of the Company) with respect to a Business Combination or a sale of 10% or more of the outstanding capital stock of the Company. "Affiliate" of a party means any person or entity controlling, controlled by, or under common control with such party. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or -2- 8 indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise. "Amended Bylaws" means the Bylaws of the Company, which Bylaws include the amendments provided in Exhibit B hereto, to be adopted by the Company prior to the Closing. "Ancillary Agreements" means the Stockholders' Agreement, the Registration Rights Agreement, the Collaboration Agreement, the Corn Borer-Protected Corn License Agreement; the Glyphosate-Protected Corn License Agreement and the CaMV Promoter License Agreement each of which is dated as of the date hereof and effective upon the consummation of the Closing. "beneficially owned", "beneficially own" and "beneficial ownership" shall have the meaning provided in Rule 13d-3 under the Exchange Act, including subsection (d)(1)(i) thereof, without giving effect to whether or not such beneficial ownership may be acquired within 60 days as required by such subsection, provided, however, that "beneficial ownership" shall not be deemed to include any right of Investor conferred by (i) the Stockholders' Agreement until such time as Investor shall become legally bound (whether or not subject to conditions) to purchase any Equity pursuant to such agreement or otherwise or (ii) Section 10.1 until such time as the Company shall give Investor an Issuance Notice (unless Investor shall have waived its right thereunder by failure to provide a Response Notice and as reduced in accordance with Section 10.1.4) or (iii) Section 10.3 until the Company shall notify Investor that it is entitled to purchase shares of Common Stock pursuant to such section (unless Investor shall waive or be deemed to have waived its rights thereunder). "Board" means the Board of Directors of the Company. "Business Combination" shall mean a merger or consolidation in which the Company is a constituent corporation and pursuant to which the Common Stock is convertible into or exchanged for cash, securities or other property or a sale of all or -3- 9 substantially all of the assets of the Company and its subsidiaries taken as a whole, or a sale of all or substantially all the assets of the Company's United States seed corn business; provided that a transaction in which the beneficial ownership of the capital stock of the Company or of the sole surviving corporation to the transaction (or of the ultimate parent of the Company or of such sole surviving corporation) immediately after the consummation of such transaction is substantially the same as the beneficial ownership of the Company's capital stock immediately prior to the consummation thereof shall not be deemed a Business Combination unless such transaction shall result in the sale of all or substantially all the assets of the Company and its subsidiaries taken as a whole or all or substantially all the assets of the Company's United States seed corn business. "Business Day" means any day other than a Saturday, a Sunday, or a bank holiday in the States of Illinois, New York or Missouri. "CaMV Promoter License Agreement" means the CaMV Promoter License Agreement dated as of the date hereof between Investor and the Company. "Class A Stock" means the Class A Common Stock, without par value, of the Company. "Class B Percentage Limitation" means the percentage of the Class B Stock determined by dividing (i) the number of shares of Class B Stock beneficially owned by Investor after (a) acquisition of the Newly Issued Shares, (b) acquisition of Class B Stock pursuant to the Offer and (c) acquisition of any additional Class B Stock actually acquired pursuant to Section 3.6 by (ii) the total number of outstanding shares of Class B Stock outstanding on the first anniversary of the Closing Date. "Class B Stock" means the Class B Common Stock, without par value, of the Company. -4- 10 "Closing" means the closing of the purchase and sale of the Newly Issued Shares pursuant to Section 2.1. "Closing Date" means the date the Closing is consummated. "Collaboration Agreement" shall mean the Collaboration Agreement and License between Investor and the Company dated as of the date hereof. "Common Stock" means the Class A Stock and Class B Stock of the Company. "Company" has the meaning set forth at the beginning of this Agreement. "Company Indemnified Parties" has the meaning set forth in Section 13.1. "Company Letter" means the letter, dated as of the date hereof, from the Company to Investor regarding certain matters related to this Agreement. "Competitor" means a person who either (i) sells seed for growing corn, sorghum, soybean, sunflower or alfalfa and who is estimated by Doane's (or, if such information is not provided by Doane's another independent source generally considered reliable) to have, or who has publicly stated that it does have, at least 2% of the United States or Argentine market for any such seed for any of the most recent two years for which such market share is reported or claimed or (ii) is primarily engaged in the business of selling foundation seed. "Confidentiality Agreement" means that certain letter agreement between Investor and the Company, dated May 16, 1995. "Corn Borer-Protected Corn License Agreement" shall mean the Corn Borer-Protected Corn License Agreement dated as of the date hereof between Investor and the Company. -5- 11 "Current Market Value" shall mean, with respect to any security, the average of the daily closing prices on the NASDAQ National Market (or such principal exchange on which such security may be listed) for such security for the 20 consecutive trading days commencing on the 22nd trading day prior to the date with respect to which the Current Market Value is being determined. The closing price for each day shall be the closing price, if reported, or if the closing price is not reported, the average of the closing bid and asked prices as reported by NASDAQ or a similar source selected from time to time by the Company for such purpose. "Director Representation Period" has the meaning set forth in Section 8.5. "Doane's" shall mean the U.S. Farm Corn Seed Study by Doane Marketing Research Inc., or if such information is not provided by Doane's, another independent source generally considered reliable. "Environmental Laws" has the meaning set forth in Section 4.11.2. "Equity" shall mean any and all shares of Common Stock of the Company, securities of the Company convertible into such shares, and options, warrants or other rights to acquire such shares. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Fair Market Value" shall mean, as to any shares or other property, the cash price at which a willing seller would sell and a willing buyer would buy such shares or property in an arms'-length negotiated transaction without time constraints. "Final Governmental Order" has the meaning set forth in Section 9.1.1. -6- 12 "GAAP" means generally accepted accounting principles as in effect in the United States of America (as such principles may change from time to time). "Glyphosate-Protected Corn License Agreement" shall mean the Glyphosate-Protected Corn License Agreement dated as of the date hereof between Investor and the Company. "Governmental Authority" means any governmental, quasi-governmental, judicial, self-regulatory or regulatory agency or entity or subdivision thereof with jurisdiction over the Company or Investor or any of their subsidiaries or any of the transactions contemplated by this Agreement. "Hazardous Material" means any substance: (i) the presence of which requires investigation or remediation under any federal, state or local statute, regulation, ordinance, order, action policy or common law; (ii) which is defined and regulated as a "hazardous waste," "hazardous substance," pollutant or contaminant under any federal, state or local statute, regulation, rule or ordinance or amendments thereto; (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, the state in which such substance is located or any political subdivision thereof; or (iv) the presence of which poses or threatens to pose a hazard to the health or safety of persons or the environment on or about the property on which such substance is located or adjacent properties. Hazardous Material shall include, without limitation, petroleum, including crude oil and any fraction thereof, asbestos and polychlorinated biphenyls (PCBs). "Indemnified Party" has the meaning set forth in Section 13.3. "Indemnifying Party" has the meaning set forth in Section 13.3. -7- 13 "Independent Director" means an individual who is not (apart from such directorship) (i) an officer or employee of the Company or any Affiliate of the Company, (ii) a director, officer or employee of Investor or any Affiliate of Investor, (iii) a Major A Stockholder, an Affiliate of a Major A Stockholder or a Permitted Transferee (as defined in the Stockholders' Agreement) of a Major A Stockholder, (iv) did not in either of the last two completed calendar years receive, and is not an officer, director, employee, stockholder holding more than 10% of the voting interest of, partner or Affiliate of any person ("Entity") that in either of such Entity's two most recent fiscal years, received, more than (A) $350,000 in revenues or other compensation or (B) 20% of such person's total revenues from the Company, the Investor, a Major A Stockholder or a Permitted Transferee or an Affiliate of any of the foregoing; provided no person who is serving as a director of the Company as of the date of this Agreement shall be excluded pusuant to this clause (iv) unless such person is also excluded pursuant to clauses (i), (ii), (iii) or (v) of this definition; or (v) any voting trustee under the Voting Trust Agreement among the Major A Stockholders and certain voting trustees dated as of January 31, 1996, but shall not include any Investor Nominee. "Interest Rate" shall mean the interest rate per annum publicly announced by Citibank N.A. as its "base rate" as in effect from time to time. "Issue Price" means $65.00 per share of Class A Stock and $65.00 per share of Class B Stock. "Investor" has the meaning set forth at the beginning of this Agreement. "Investor Indemnified Parties" has the meaning set forth in Section 13.2. "Investor Nominee" has the meaning set forth in Section 8.5. "Knowledge", when used in reference to the Company, means the knowledge of those officers and managerial employees of the Company identified in the Company -8- 14 Letter and limited as to scope with respect to certain individuals as specified in the Company Letter. "Liabilities, Actions and Damages" has the meaning set forth in Section 13.1. "Licenses" shall mean the European Corn Borer-Protected License Agreement, the Glyphosate-Protected Corn License Agreement and the CaMV Promoter License Agreement. "Lien" means any mortgage, lien, security interest, pledge, lease or other charge or encumbrance of any kind, including, without limitation, the lien or retained security title of a purchase money creditor or conditional vendor, and any easement, right of way or other encumbrance on title to real property, and any agreement to give any of the foregoing. "Major A Stockholder" shall have the meaning set forth in the Stockholders' Agreement. "Material Adverse Effect" means a material adverse effect, or the occurrence or existence of facts or circumstances reasonably expected to result in a material adverse effect, on the business, assets, results of operations, properties, financial or operating condition of the Company and its subsidiaries taken as a whole (without including economic or other matters affecting business or the seed industry generally) or the ability of the Company (and, to the extent applicable, its subsidiaries) to perform its (or their) obligations under this Agreement or consummate the transactions contemplated hereby or by the Ancillary Agreements. "Merrill Lynch" has the meaning set forth in Section 3.5.1 "Newly Issued Shares" has the meaning set forth in the third Whereas clause. -9- 15 "Newly Issued Class A Shares" has the meaning set forth in the third Whereas clause. "Newly Issued Class B Shares" has the meaning set forth in the third Whereas clause. "Offer" has the meaning set forth in the second Whereas clause. "Offer Conditions" has the meaning set forth in Section 3.1. "Offer Documents" has the meaning set forth in Section 3.4. "Offer Notice" shall have the meaning specified in Section 9.3.1. "Offer Price" has the meaning set forth in Section 9.3.2. "Offer Shares" means those shares of Class B Stock, if any, purchased by Investor pursuant to the Offer. "Outstanding Interest" shall mean the respective aggregate percentages of the outstanding shares of Class A Stock or Class B Stock beneficially owned (without regard to any rights Investor may have to acquire shares pursuant to Section 10.3) from time to time by Investor and its United States subsidiaries, including (for purposes of determining the outstanding shares of Class A Stock and Class B Stock) as Class A Stock any Equity convertible into or entitling the holder to acquire Class A Stock and as Class B Stock any Equity convertible into or entitling the holder to acquire Class B Stock (except by virtue of converting Class A Stock into Class B Stock), but excluding in each case stock options or other rights to acquire Class A Stock or Class B Stock granted under Stock Plans or under any stock option plan or any stock-based incentive compensation plan adopted in the future and Investor's rights described in Section 10.3 with respect thereto. -10- 16 "Percentage Limitation" shall have the meaning specified in Section 11.1. "Permitted Acquisition Proposal" shall have the meaning specified in Section 11.1. "Permitted Offering" shall have the meaning specified in Section 9.1.2 (ii). "person" means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. "Primary Business" means the research-based production, marketing, licensing and sale of agronomic seed, including both technology related thereto and products derived therefrom. "Reasonable Solicitation Efforts" shall have the meaning set forth in Section 8.5(i). "Registration Rights Agreement" shall have the meaning specified in Section 9.5. "Schedule 14D-1" has the meaning set forth in Section 3.4. "Schedule 14D-9" has the meaning set forth in Section 3.5.2. "SEC" means the Securities and Exchange Commission. "SEC Reports" has the meaning set forth in Section 4.5. "Securities Act" means the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder. "Shares" means issued and outstanding shares of Common Stock. -11- 17 "Significant Subsidiary" means any subsidiary of the Company or Investor, as the case may be, that constitutes a significant subsidiary within the meaning of Rule 1-02 of Regulation S-X of the SEC. "Small Offering" shall have the meaning specified in Section 10.2.2. "Stockholders' Agreement" shall mean the Stockholders' Agreement dated as of the date hereof by and among Investor and the Major A Stockholders. "Stock Plans" shall have the meaning specified in Section 4.3. "subsidiary" of any person means another person whose voting securities, other voting ownership or voting partnership interests are owned directly or indirectly by such first person in an amount sufficient to elect at least a majority of the board of directors or other governing body of such other person (or, if there are no such voting interests, more than 50% of the equity interests of such other person). "taxes" has the meaning set forth in Section 4.8. "Tender Offer Price" has the meaning specified in the second Whereas clause. "third party" means any person (including a "person" as defined in Section 13(d)(3) of the Exchange Act) or entity other than, or group not including, Investor or any Affiliate of Investor or the Company. "Total Voting Power" means, at any date, the total number of votes that may be cast in the election of directors of the Company at any meeting of stockholders of the Company held on such date, assuming all shares of Voting Stock were present and voted at such meeting, other than votes that may be cast only by one class or series of stock (other than Class A Stock) or upon the happening of a contingency. -12- 18 "Transfer" shall have the meaning set forth in Section 9.1.1. "United States subsidiary" means a direct or indirect subsidiary of Investor which is a corporation organized and existing under the laws of the United States and with its principal place of business in the United States. "Voting Stock" means Class A Stock and all other securities of the Company, if any, entitled to vote generally in the election of directors. ARTICLE 2 SALE AND PURCHASE OF THE NEWLY ISSUED SHARES 2.1. Sale and Purchase of the Newly Issued Shares. Upon the terms and subject to the satisfaction or waiver of all of the conditions set forth in Article 7, the Company shall issue and sell to Investor, and Investor shall purchase from the Company, in exchange for the Issue Prices thereof, the Newly Issued Shares at the Closing. Investor shall pay the Issue Prices with respect to the Newly Issued Shares to the Company at the Closing by bank wire transfer of immediately available funds to an account designated by the Company, or by such other means as is acceptable to the Company and Investor. 2.2. Closing and Deliveries. Subject to the satisfaction or waiver of all of the conditions set forth in Article 7, the Closing shall take place as promptly as practicable after the expiration of the Offer, or on such later date and time as may be mutually agreed by the parties within five Business Days after the last to occur of satisfaction or waiver of the respective conditions set forth in Article 7. Such Closing shall occur at the offices of Sidley & Austin, One First National Plaza, Chicago, Illinois 60603, or at such other place and time as Investor and the Company agree in writing. -13- 19 2.2.1. Deliveries by Investor. At the Closing, Investor shall deliver to the Company the following: (i) the Issue Price for each of the Newly Issued Shares; and (ii) such other documents and instruments, duly executed to the extent required, as may be reasonably requested by the Company in order to consummate the transactions contemplated hereby. 2.2.2. Deliveries by the Company. At the Closing, the Company shall deliver to Investor the following: (i) stock certificates in such denominations as may be reasonably requested by Investor evidencing the Newly Issued Shares; and (ii) such other documents and instruments, duly executed to the extent required, as may reasonably requested by Investor in order to consummate the transactions contemplated hereby. ARTICLE 3 THE OFFER 3.1. Commencement of the Offer. As promptly as practicable, but no later than the fifth Business Day following the public announcement of this Agreement, Purchaser shall commence the Offer within the meaning of Rule 14d-2 under the Exchange Act. The obligations of Investor to accept for payment, and pay for, any Offer Shares tendered pursuant to the Offer shall be subject to (the following being referred to as the "Offer Conditions") the satisfaction or waiver of the conditions set forth in Exhibit A attached hereto. -14- 20 3.2. Changes to the Offer. Investor may increase the Tender Offer Price and may make any other changes in the terms and conditions of the Offer, provided that, unless previously approved by the Company in writing, Investor may not (i) decrease the Tender Offer Price, (ii) change the form of consideration payable in the Offer, (iii) increase or decrease the maximum number of Shares sought pursuant to the Offer, (iv) add to or modify the Offer Conditions (v) amend the Offer in a manner which would require the extension of the originally scheduled expiration date to a date later than 50 business days from the date of the commencement of the Offer, as required by any rule, regulation, interpretation or position of the SEC or the staff or (vi) otherwise amend the Offer in any manner adverse to the interests of the Company or its stockholders. Subject to the terms and conditions thereof, the Offer shall expire at midnight, New York City time, on the date that is not more than 30 business days from the date the Offer is first published or sent to holders of Class B Stock. Investor shall be required to extend the Offer for at least ten business days from the originally scheduled expiration date and shall be entitled to extend the Offer for up to 20 business days from such original expiration date (A) if at the scheduled expiration date of the Offer any of the Offer Conditions shall not have been satisfied or waived, until such time as such Offer Conditions are satisfied or waived and (B) for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer, provided, however, that Investor shall terminate the Offer if this Agreement is terminated. 3.3. Purchase. Provided that this Agreement shall not have been terminated in accordance with Article 12 and provided that all Offer Conditions shall have been satisfied or waived by Investor in accordance with this Article 3, Investor shall accept for payment and purchase, in accordance with the terms of the Offer, shares of Class B Stock validly tendered and not withdrawn pursuant to the Offer (up to the amount sought pursuant to the Offer). The Offer Conditions are for the sole benefit of Investor and may be asserted by Investor regardless of the circumstances giving rise to any such condition or may be waived by Investor, in whole or in part at any time and from time to time, in Investor's sole discretion. The failure by Investor at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to -15- 21 particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination (which shall be made in good faith) by Investor with respect to any of the foregoing conditions (including without limitation the satisfaction of such conditions) shall be final and binding on the parties. The Offer Price (to the extent, if any, adjusted pursuant to the Offer) shall be paid net to the seller in cash, less any required withholding of taxes, upon the terms and subject to the conditions of the Offer as soon as practicable after expiration of the Offer. It is the intention of Investor and the Company that the purchase by Investor of the Offer Shares shall not be a condition to the purchase by Investor of the Newly Issued Shares. 3.4. Schedule 14D-1 and Other Offer Documents. On the date the Offer is commenced, Investor shall file with the SEC a Tender Offer Statement on Schedule 14D-1 (together with all amendments and supplements thereto, the "Schedule 14D-1") with respect to the Offer. The Schedule 14D-1 shall contain as an exhibit or incorporate by reference the Offer to Purchase (or portions thereof) and form of the related letter of transmittal and summary advertisement to be used in connection with the Offer (the Schedule 14D-1 and such other documents, together with any supplements thereto or amendments thereof, being referred to herein collectively as the "Offer Documents"). The Company shall provide to Investor in writing all information regarding the Company necessary for the preparation of the Offer Documents, which information shall be accurate and shall not contain any material misstatement of fact or omit to state any material fact necessary to make the statements included in such information, in light of the circumstances under which they are made, not misleading. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents prior to the filing thereof with the SEC and the distribution thereof to the Company's stockholders. Investor shall provide to the Company and its counsel any comments that Investor receives (directly or through its counsel) from the SEC or its staff with respect to the Offer Documents promptly after receipt of such comments. The Offer Documents shall comply in all material respects with the provisions of applicable federal securities laws and shall not, on the date the Offer Documents are filed with the SEC and on the date first published, sent or given to the Company's stockholders, -16- 22 as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Investor with respect to information supplied by the Company in writing specifically for inclusion in the Offer Documents. If any event relating to the Company or any of its Affiliates, officers or directors shall be discovered by the Company which causes the information previously supplied by the Company to Investor for use in the Offer Documents to contain any untrue statements of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, the Company shall promptly inform Investor. Investor and the Company shall each promptly correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect, and Investor shall promptly amend and supplement the Offer Documents if and to the extent that they shall have become false or misleading in any material respect and shall promptly cause the Offer Documents as so amended and supplemented to be filed with the SEC and to be disseminated to the Company's stockholders, in each case as and to the extent required by applicable federal securities laws. 3.5. Actions by the Company. 3.5.1. Approval and Recommendation of Offer. On January 31, 1996, the Company's Board of Directors, at a meeting duly called, unanimously adopted resolutions by which the Board (i) determined that this Agreement and the transactions contemplated hereby, including the Offer, are fair to and in the best interest of the Company and the Company's stockholders, (ii) approved this Agreement and the transactions contemplated hereby, including the Offer, and (iii) resolved to recommend that the stockholders of the Company accept the Offer and tender their Shares thereunder to Investor. In connection with such approval by the Board, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") delivered to the Board its written opinion dated the date of such meeting to the effect that, as of the date of such opinion, the proposed consideration to be received by the Company and the holders of Class B Common Stock is fair to the Company and such -17- 23 holders from a financial point of view. The Company is authorized by Merrill Lynch to permit the inclusion of such fairness opinion in the Offer Documents and the Schedule 14D-9 referred to below. The Company hereby consents to the inclusion in the Offer Documents of the recommendations of the Board described in this Section 3.5.1. 3.5.2. Schedule 14D-9. As promptly as practicable, but no later than the tenth Business Day following the commencement of the Offer, the Company shall file with the SEC a solicitation/recommendation statement on Schedule 14D-9 pertaining to the Offer (together with any amendments or supplements thereto, the "Schedule 14D-9") containing the Board's recommendation described in Section 3.5.1. The Company shall promptly mail the Schedule 14D-9 to the Company's stockholders. Investor and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 prior to the filing thereof with the SEC and its dissemination to the Company's stockholders. The Company shall provide to Investor and its counsel any comments that the Company receives (directly or through its counsel) from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments. The Schedule 14D-9 shall comply in all material respects with the provisions of applicable federal securities laws and shall not, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representations are made by the Company with respect to information supplied by Investor in writing specifically for inclusion in the Schedule 14D-9. If any event relating to Investor or any of its Affiliates, officers or directors shall be discovered by Investor which causes the information previously supplied by Investor to the Company for use in the Schedule 14D-9 to contain any untrue statements of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, Investor shall promptly inform the Company. Investor and the Company shall each promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect, and the Company shall promptly amend and supplement the Schedule 14D-9 if and to the extent -18- 24 that it shall have become false or misleading in any material respect and shall promptly cause the Schedule 14D-9 as so amended and supplemented to be filed with the SEC and disseminated to the Company's stockholders in each case as and to the extent required by applicable federal securities laws. 3.5.3. Stockholder Information. In connection with the Offer the Company shall promptly furnish Investor with mailing labels, security position listings and any available listing or computer files containing the names and addresses of the record holders of the Shares as of a recent date and shall furnish Investor with such additional information and assistance (including, without limitation, updated lists of stockholders, mailing labels and list of securities positions) as Investor or its agents may reasonably request for the purpose of communicating the Offer to the record and beneficial holders of Shares. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the transactions contemplated by this Agreement, Investor shall and shall cause its Affiliates, associates, agents and advisors to, hold the information contained in any such labels, listings and files confidential and use such information only in connection with the Offer, and, if this Agreement shall be terminated, shall deliver to the Company all copies of such information and any extracts or summaries thereof then in their possession or control. 3.6. Acquisition of Additional Class B Shares. If Investor shall beneficially own less than 40% of the outstanding Common Stock on the first day after completion of the Offer and the Closing, then Investor shall have the right, at any time during the period ending on the first anniversary of the Closing Date to acquire in the market at prices prevailing from time to time up to an additional number of shares of Class B Stock such that after completion of all such purchases, the total Common Stock beneficially owned by Investor and its Affiliates does not exceed 40% of the Common Stock outstanding at such time. The Investor may from time to time request that the Company provide information as to the number of shares of Common Stock of each class outstanding as of the most recent conveniently available date, provided, the Investor shall be entitled to rely on the number of outstanding shares of Common Stock, Class A Stock and Class B Stock as most recently -19- 25 reported by a filing of the Company pursuant to the Exchange Act unless the Company shall advise the Investor in writing of more recent information. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Investor as follows: 4.1. Organization, Standing and Corporate Power. Each of the Company and its Significant Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and has the requisite corporate power and authority to carry on its business as now being conducted. The Company and each of its Significant Subsidiaries is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) could not reasonably be expected to have a Material Adverse Effect on the Company. 4.2. Subsidiaries. Schedule 4.2 to the Company Letter lists each subsidiary of the Company. All the outstanding shares of capital stock of each Significant Subsidiary that is a corporation have been validly issued and are fully paid and nonassessable. Except as set forth in Schedule 4.2 to the Company Letter, the entire equity interest in each subsidiary of the Company is owned by the Company, by another subsidiary of the Company or by the Company and another such subsidiary, free and clear of all Liens. 4.3. Capital Structure; New Shares. The authorized capital stock of the Company consists of 500,000 shares of Preferred Stock, par value $1.00 per share ("Preferred Stock"), and 20,000,000 shares of Common Stock, without par value, divided into two classes, consisting of 5,000,000 shares of Class A Stock and 15,000,000 shares of Class B Stock. At -20- 26 the close of business on January 16, 1996, (i) no shares of Preferred Stock were outstanding, (ii) 763,799 shares of Class A Stock and 4,431,327 shares of Class B Stock were issued and outstanding, (iv) no shares of Class A Stock and 73,201 shares of Class B Stock were held by the Company in treasury, and (v) 349,689 shares of Class A Stock were reserved for issuance pursuant to outstanding stock options or other rights to purchase shares of Class A Stock under the Company's Long Term Incentive Plan, the Company's Savings and Investment Plan and the Company's Director Stock Option Plan (the "Stock Plans") and an additional 417,340 shares of Common Stock were reserved for the grant of additional purchase rights thereunder. Except as set forth above or as otherwise expressly provided herein, and except for conversions of Class A Stock to Class B Stock and the issuance of shares pursuant to options granted under the Stock Plans, as of the date hereof, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding and there are not any phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any capital stock of the Company ("Stock Equivalents"). There are no outstanding stock appreciation rights ("SARs") with respect to Common Stock. Upon issuance pursuant to the terms of this Agreement, the Newly Issued Shares will be duly authorized and no further approval of the stockholders or the directors of the Company will be required by the Company for the issuance and sale of the Newly Issued Shares as contemplated by this Agreement. When issued and sold to Investor upon payment of the Issue Price, the Newly Issued Shares will be duly authorized, validly issued, fully paid and non-assessable. Other than this Agreement, the Newly Issued Shares are not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting or disposition of the Newly Issued Shares. All outstanding shares of capital stock of the Company are, and all shares that may be issued pursuant to the Stock Plans and the other agreements and instruments listed above will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are not any outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which stockholders of the Company may vote. Except as set forth above and in Schedule -21- 27 4.3 of the Company Letter, and as otherwise expressly set forth in this Agreement, as of the date of this Agreement, there are not any securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Significant Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Significant Subsidiaries to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional shares of capital stock or other voting securities or Stock Equivalents of the Company or of any of its Significant Subsidiaries or obligating the Company or any of its Significant Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company or any of its Significant Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Significant Subsidiaries except pursuant to existing employee arrangements. 4.4. Authority; Noncontravention. The Company has requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated by this Agreement and such Ancillary Agreements. The execution and delivery by the Company of this Agreement and each Ancillary Agreement to which it is a party and the consummation by the Company of the transactions contemplated by this Agreement and such Ancillary Agreements have been duly authorized by all necessary corporate action on the part of the Company. This Agreement and the Ancillary Agreements to which it is a party have been duly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms. Except as set forth on Schedule 4.4 to the Company Letter, the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party by the Company did not, and the consummation of the transactions contemplated by this Agreement and such Ancillary Agreements and compliance with the provisions of this Agreement and such Ancillary Agreements without obtaining the consent of any third party will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right to termination, cancellation or acceleration of any obligation or to loss -22- 28 by the Company or any of its Significant Subsidiaries of a material benefit under, or the creation of any material additional benefit to any third party under, or result in the creation of any Lien upon any of the properties or assets of the Company or any of its subsidiaries under, (i) the Certificate of Incorporation or Bylaws of the Company or the comparable charter or organizational documents of any of its Significant Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit or license applicable to the Company or any of its subsidiaries or their respective properties or assets or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or any of its subsidiaries or their respective properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, violations, defaults, rights or Liens that individually or in the aggregate could not reasonably be expected to (x) have a Material Adverse Effect on the Company, (y) materially impair the ability of the Company to perform its obligations under this Agreement or any Ancillary Agreement to which it is a party or (z) prevent the consummation of any of the transactions contemplated by this Agreement or any of such Ancillary Agreements. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or any party to a Material Contract (as defined in Section 4.12 is required by or with respect to the Company or any of its Significant Subsidiaries or its subsidiaries that are parties to such a Material Contract in connection with the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party or the consummation by the Company of the transactions contemplated by this Agreement and such Ancillary Agreements, except for (A) any filings required pursuant to foreign antitrust and competition law statutes and regulations, (B) the filing with the SEC of (x) a solicitation/recommendation statement on Schedule 14D-9 and (y) such reports under Sections 12 and 13(a) of the Exchange Act as may be required in connection with this Agreement, such Ancillary Agreements and the transactions contemplated by this Agreement and such Ancillary Agreements, and (C) such other consents, approvals, orders, authorizations, registrations, declarations and filings as are set forth on Schedule 4.4 to the Company Letter. -23- 29 4.5. SEC Reports; Undisclosed Liabilities. The Company has timely filed all required reports, schedules, forms, statements and other documents with the SEC since December 31, 1994 (the "SEC Reports"). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Reports, and none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial position of the Company and its subsidiaries as of the dates thereof and their consolidated statements of operations, stockholders' equity and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the SEC Reports, to the Company's knowledge neither the Company nor any of its subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by generally accepted accounting principles to be set forth on a consolidated balance sheet of the Company and its subsidiaries or in the notes thereto, other than liabilities and obligations incurred in the ordinary course of business consistent with prior practice and experience since August 31, 1995 and liabilities which would not, individually or in the aggregate, have a Material Adverse Effect. 4.6. Absence of Certain Changes or Events. Except as set forth on Schedule 4.6 to the Company Letter, since August 31, 1995, the Company and each of its subsidiaries has conducted its business only in the ordinary course, and there has not been (i) one or more events or occurrences which individually or in the aggregate has had or would reasonably be expected to result in a Material Adverse Effect, (ii) any declaration, setting -24- 30 aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any of the Company's capital stock, except for declaration and payment to holders of record of Common Stock of normal quarterly dividends consistent with existing practice, (iii) any split, combination or reclassification of any of its capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of the Company's capital stock, or (iv) any change in accounting methods, principles or practices by the Company materially affecting its assets, liabilities or business, except insofar as may have been required by a change in generally accepted accounting principles. 4.7. Litigation. Except as set forth on Schedule 4.7 to the Company Letter, there is no suit, action or proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries that, individually or in the aggregate, could reasonably be expected to (i) have a Material Adverse Effect, (ii) materially impair the ability of the Company to perform its obligations under this Agreement or any Ancillary Agreement to which it is a party or (iii) prevent the consummation of any of the transactions contemplated by this Agreement or any such Ancillary Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Authority or arbitrator outstanding against the Company or any of its subsidiaries having, or that could reasonably be expected to have, a Material Adverse Effect. 4.8. Taxes. The Company and each of its subsidiaries has timely filed all tax returns and reports required to be filed by them either on a separate or combined or consolidated basis except where failure to timely file could not reasonably be expected to have a Material Adverse Effect. All such returns are complete and accurate except where the failure to be complete or accurate could not reasonably be expected to have a Material Adverse Effect. Each of the Company and its subsidiaries has paid or caused to be paid all taxes shown as due on such returns and all material taxes for which no return was filed except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. No deficiencies for any taxes have been asserted, proposed or assessed against the Company or any of its subsidiaries that have not been paid or otherwise settled -25- 31 or are not otherwise being challenged under appropriate procedures except for deficiencies the assertion, proposing or assessment of which could not reasonably be expected to have a Material Adverse Effect, and no requests for waivers of the time to assess any such taxes are pending. As used in this Agreement, "taxes" shall include all Federal, state, local and foreign income, property, sales, excise, employment, withholding and other taxes, tariffs or governmental charges of any nature whatsoever. 4.9. Voting Requirements. No vote of the holders of any class or series of the Company's capital stock is necessary to approve this Agreement, the Ancillary Agreements to which the Company is a party or the transactions contemplated by this Agreement and such Ancillary Agreements. 4.10. Brokers. No broker, investment banker, financial advisor or other person, other than Merrill Lynch, the fees and expenses of which will be paid by the Company, is entitled to any broker's, finder's, financial advisor's or other similar fee in connection with the transactions contemplated by this Agreement and the Ancillary Agreements based upon arrangements made by or on behalf of the Company and its subsidiaries. 4.11. Compliance with Laws. 4.11.1. The Company and each of its subsidiaries has in effect all Federal, state, local and foreign governmental approvals, authorizations, certificates, filings, franchises, licenses, notices, permits and rights ("Permits") necessary for it to own, lease or operate its properties and assets and to carry on its business as now conducted, and there has not occurred any default under any Permit, except for absence of Permits and for defaults under Permits which absence or defaults, individually or in the aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect. Except as disclosed in Section 4.11.1 to the Company Letter, the Company and its subsidiaries are in compliance with all applicable statues, laws, ordinances, regulations, rules, judgments, decrees or orders of any Governmental Authority except where failures to so comply, -26- 32 individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 4.11.2. Except as set forth in Schedule 4.11.2 to the Company Letter, (i) neither the Company nor any of its subsidiaries has received any written communication from a Governmental Authority that alleges that the Company or any subsidiary thereto is not in compliance with any Environmental Law (as defined below) if such non-compliance could reasonably be expected to have a Material Adverse Effect and (ii) the Company has no knowledge of any environmental materials or information, other than as listed in the Schedule 4.11.2 to the Company Letter, including on-site or off-site storage, disposal or releases of Hazardous Materials, that could reasonably be expected to have a Material Adverse Effect on the Company. As used in this Agreement, the term "Environmental Laws" means any applicable treaties, laws, regulations, enforceable requirements, orders, decrees or judgments issued, promulgated or entered into by any Governmental Authority, which relate to (A) pollution or protection of the environment or (B) the generation, storage, use, handling, disposal or transportation of or exposure to Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section Section 9601, et seq. ("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section Section 6901 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section Section 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C. Section Section 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. Section Section 2601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section Section 1801 et seq., and any similar or implementing state or local law, and all amendments or regulations promulgated thereunder. 4.12. Material Contracts. All contracts, leases and other agreements to which the Company or any of its subsidiaries is a party that would be required to be filed as Exhibits to the SEC Documents (the "Material Contracts") have been filed as Exhibits to the SEC Documents. Except as disclosed in Schedule 4.12 to the Company Letter, (i) each Material Contract is in full force and effect except as the same may have expired in accordance with its terms; (ii) the Company and its subsidiaries have performed all the material obligations required to be performed thereby under each Material Contract; (iii) -27- 33 neither the Company nor any of its subsidiaries has received any written assertion of default under any Material Contract; (iv) neither the Company nor any of its subsidiaries expects or has received any notice related to any termination or material change to, or proposal with respect to, any of the Material Contracts as a result of the transactions contemplated by this Agreement and the Ancillary Agreements to which it is a party; and (v) the Company has no knowledge of any material breach or anticipated material breach by any other party to any Material Contract; in each case except where the result of a failure of a representation contained in clauses (i), (ii), (iii), (iv) or (v) above would not reasonably be expected to have a Material Adverse Effect. 4.13. No Untrue Statement or Omission. Neither this Agreement nor any Ancillary Agreement to which the Company is a party nor any exhibit or schedule hereto or thereto, nor any statement, list or certificate delivered to Investor pursuant to this Agreement or any such Ancillary Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF INVESTOR 5.1. Organization; Authority; Noncontravention. Investor is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated. Investor has all requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated by this Agreement and the Ancillary Agreements. The execution and delivery by Investor of this Agreement and each Ancillary Agreement to which it is a party and the consummation by Investor of the transactions contemplated by this Agreement and the Ancillary Agreements have been duly authorized by all necessary corporate action on the part of Investor. This Agreement and the Ancillary Agreements to which it is a party -28- 34 have been duly executed and delivered by Investor, and constitute valid and binding obligations of Investor, enforceable against Investor in accordance with their respective terms. The execution and delivery by Investor of this Agreement and the Ancillary Agreements to which it is a party did not, and the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and compliance with the provisions of this Agreement and the Ancillary Agreements to which it is a party without obtaining the consent of any third party will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss by Investor or any of its Significant Subsidiaries of a material benefit under, or the creation of any material additional benefit to any third party under, or result in the creation of any Lien upon any of the properties or assets of Investor or any of its Significant Subsidiaries under, (i) the certificate of incorporation or bylaws of Investor, (ii) any loan or credit agreement, note, bond, mortgage indenture, lease or other agreement, instrument, permit or license applicable to Investor or its subsidiaries or their respective properties or assets or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Investor, or its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflict, violations, defaults, rights or Liens that individually or in the aggregate could not reasonably be expected to impair the ability of Investor to perform its obligations under this Agreement and the Ancillary Agreements or prevent the consummation of any of the transactions contemplated by this Agreement and the Ancillary Agreements. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or any other third party is required by or with respect to Investor in connection with the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party or the consummation by Investor of any transaction contemplated by this Agreement or any Ancillary Agreement, except for (i) any filings required pursuant to the foreign antitrust and competition law statutes and regulations, (ii) the filing with the SEC of the Offer Documents, and such statements and reports under Sections 12, 13 and 16(a) of the Exchange Act as may be required in connection with this Agreement, the Ancillary Agreements and the transactions contemplated by this Agreement -29- 35 and the Ancillary Agreements, and (iii) such other consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under the "takeover" or "blue sky" laws of various states. 5.2. Brokers. No broker, investment banker, financial advisor or other person, other than Robertson, Stephens & Company LLC, the fees and expenses of which will be paid by Investor, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement and the Ancillary Agreements based upon arrangements made by or on behalf of Investor and its subsidiaries. 5.3. Investment Intent. Investor is purchasing or acquiring the Newly Issued Shares for its own account for investment and not with a present view to, or for sale in connection with, any distribution thereof in violation of the Securities Act. The certificates evidencing the Newly Issued Shares and any other Shares issued to Investor pursuant to this Agreement shall bear substantially the following legend until such time as the same is no longer required under the applicable requirements of the Securities Act or applicable state securities or blue sky laws and under this Agreement and the Ancillary Agreements: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THE TRANSFER OF SUCH SHARES IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE INVESTMENT AGREEMENT DATED AS OF JANUARY 31, 1996, BETWEEN THE COMPANY AND INVESTOR, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SHARES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE. THESE SECURITIES HAVE NOT BEEN -30- 36 REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE THEREWITH." 5.4. Acquisition for Investment and Rule 144. Investor understands that the Newly Issued Shares will not be registered under the Securities Act by reason of a specific exemption from the registration provision of the Securities Act which depends upon, among other things, the bona fide nature of Investor's investment intent as expressed herein. Investor acknowledges that the Newly Issued Shares must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Investor has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act which permits limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions. Investor is aware that the certificates representing the Newly Issued Shares will bear such legends relating to restrictions on resale under the Securities Act as provided in Section 5.3 and the Company under certain conditions may issue stop transfer instructions to its stock transfer agent with respect to the Newly Issued Shares. 5.5. Legal Investment. The purchase of the Newly Issued Shares by Investor hereunder is legally permitted by all laws and regulations to which Investor is subject and all consents, approvals, authorizations of or designations, declarations or filings in connection with the valid execution and delivery of this Agreement by Investor and the purchase of the Newly Issued Shares by Investor have been obtained, or will be obtained prior to the Closing Date. 5.6. Purchase Entirely for Own Account. The Newly Issued Shares will be acquired for investment for Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, -31- 37 transfer or grant participations to such person or to any third person, with respect to any of the Newly Issued Shares. 5.7. Current Ownership. Except for it rights to acquire Newly Issued Shares pursuant to this Agreement, neither Investor nor any of its Affiliates beneficially owns any shares of Class A Stock or Class B Stock; provided, with respect to any Affiliate of Investor which is not incorporated or otherwise organized in the United States, Investor shall be entitled to correct this representation by advising the Company in writing at any time within 90 days of the date of this Agreement of the beneficial ownership of any shares of Class A or Class B Stock by any such Affiliate, including the amount thereof, nature of ownership, identity of the beneficial owner, and nature of its relationship with Investor, in such detail as the Company shall reasonably request. Investor shall cause any Affiliate which is not a United States subsidiary of Investor to divest such beneficial ownership within 30 days after Investor becomes aware of such ownership, but only in the manner permitted by Section 9.1.2 (without regard to the time limitations thereof and excluding Transfers permitted pursuant to 9.1.2(i)) and shall promptly advise the Company upon completion of any such divestitures. ARTICLE 6 COVENANTS OF THE COMPANY 6.1. Conduct of Business by the Company Prior to Closing. During the period from the date of this Agreement until the Closing, the Company shall, and shall cause its subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted. Without limiting the generality of the foregoing, the Company will not (and as to Section 6.1.3, or Section 6.1.5 as applicable to Section 6.1.3, neither the Company nor any subsidiary shall) take any of the following actions: -32- 38 6.1.1. (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends on its Common Stock to be declared and paid only at the customary rates and times, or (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; 6.1.2. issue, deliver, sell, pledge or otherwise encumber any shares of capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities (other than (i) the issuance of new options or Common Stock under existing Stock Plans or Common Stock upon the exercise or conversion of rights outstanding on the date of this Agreement and in accordance with their present terms, (ii) the purchase of Common Stock pursuant to such Stock Plans, in accordance with their terms and (iii) the issuance and sale of the Newly Issued Shares in accordance with the terms hereof); 6.1.3. acquire, in a single transaction or in a series of related transactions, any business or assets outside the Primary Business of the Company that would be equal in amount to more than 25% of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made whether such acquisition be by merger or consolidation or the purchase of stock or assets or otherwise; 6.1.4 amend its certificate of incorporation or bylaws except for the adoption of Amended Bylaws by the Company; or 6.1.5 authorize, or commit or agree to take, any of the foregoing actions. -33- 39 ARTICLE 7 CONDITIONS TO CLOSING 7.1. Obligations of Investor with respect to the Closing. The obligation of Investor to consummate the transactions contemplated to occur at the Closing is subject to the satisfaction (or waiver by Investor) as of the Closing of the following conditions: 7.1.1. The representations and warranties of the Company set forth in this Agreement and in the Ancillary Agreements to which it is a party qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date) and Investor shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of the Company. The Company shall have performed or complied in all material respects with all obligations and covenants required by this Agreement and the Ancillary Agreements to which it is a party to be performed or complied with by the Company by the time of the Closing. 7.1.2. There shall not be threatened or pending by any Governmental Authority any suit, action or proceeding, and there shall not be pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, (i) seeking to restrain or prohibit the purchase and sale of the Newly Issued Shares or the Class B Stock pursuant to the Offer, (ii) seeking to compel the Company to dispose of or hold separate any material portion of the business or -34- 40 assets of the Company and its subsidiaries, taken as a whole, or to compel Investor or its subsidiaries to dispose of or hold separate any material portion of the business or assets of Investor and its subsidiaries, as a result of any of the transactions contemplated by this Agreement or the Ancillary Agreements or (iii) seeking to prohibit Investor from effectively exercising any of its material rights under this Agreement or any Ancillary Agreement. 7.1.3. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Authority or other legal restraint or prohibition preventing the consummation of any of the transactions contemplated hereby or by the Ancillary Agreements or having any of the other consequences described in Section 7.1.2 shall be in effect. 7.1.4. The Amended Bylaws shall have been duly authorized, approved and effected. 7.1.5. The Company shall have furnished to Investor an opinion of John H. Witmer, Jr., Senior Vice President and General Counsel of the Company, in the form attached hereto as Exhibit C. 7.1.6. During the period from the date of this Agreement until the Closing Date, neither the Company nor any subsidiary shall have sold or otherwise disposed of (or authorized, committed or agreed to sell or otherwise dispose of), in a single transaction or in a series of transactions, excluding sales of inventory or other assets in the normal course of business, any business or assets relating to the Primary Business of the Company that constitute more than five percent of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made, whether such sale or disposition be by merger or consolidation or the sale of stock or assets or otherwise. -35- 41 7.2. Obligations of the Company with respect to the Closing. The obligation of the Company to consummate the transactions contemplated to occur at the Closing is subject to the satisfaction (or waiver by the Company) as of the Closing of the following conditions: 7.2.1. The representations and warranties of Investor set forth in this Agreement and in the Ancillary Agreements qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date) and the Company shall have received a certificate to such effect dated the Closing Date and executed by a duly authorized officer of Investor. Investor shall have performed or complied in all material respects with all obligations and covenants required by this Agreement and the Ancillary Agreements to be performed or complied with by Investor by the time of the Closing. 7.2.2. There shall not be threatened or pending by any Governmental Authority any suit, action or proceeding and there shall not be pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, (i) seeking to restrain or prohibit the purchase and sale of the Newly Issued Shares or the Class B Stock pursuant to the Offer, (ii) seeking to compel the Company to dispose of or hold separate any material portion of the business or assets of the Company and its subsidiaries, taken as a whole, or to compel Investor or its subsidiaries to dispose of or hold separate any material portion of the business or assets of Investor and its subsidiaries, as a result of any of the transactions contemplated by this Agreement or the Ancillary Agreements or (iii) seeking to prohibit the Company from effectively exercising any of its material rights under this Agreement or any Ancillary Agreement. -36- 42 7.2.3. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent inunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Authority or other legal restraint or prohibition preventing the consummation of any of the transactions contemplated hereby or by the Ancillary Agreements or having any of the other consequences described in Section 7.2.2 shall be in effect. 7.2.4. The Offer shall have expired and Investor shall have purchased or accepted for payment and purchase any Class B Stock which it will acquire pursuant to the Offer. 7.2.5. Investor shall have furnished to the Company an opinion of Frank E. Vigus, Assistant General Counsel of Investor, in the form attached hereto as Exhibit D. ARTICLE 8 CERTAIN ADDITIONAL AGREEMENTS 8.1. Confidentiality. Except as required by law, each of the Company and Investor shall hold, and shall cause its respective officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold, in confidence any nonpublic information obtained from the other pursuant to the Confidentiality Agreement or from time to time hereafter as may be disclosed to the Company, the Investor or any Investor Nominee until such time as such information becomes publicly available (otherwise than through the wrongful act of any such person) and shall use all reasonable efforts to cause such persons not to disclose such information to others without the prior written consent of the Company or Investor, as the case may be. In the event of the termination of this Agreement for any reason, the Company and Investor shall promptly return or destroy all documents containing nonpublic information so obtained from the other party or any of its subsidiaries and any copies made of such documents. -37- 43 8.2. Reasonable Efforts; Notification. 8.2.1. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and the Ancillary Agreements to which they are parties, including (i) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Authorities and the making of all necessary registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Authority, (ii) the obtaining of all necessary consents, approvals or waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or any of such Ancillary Agreements or the consummation of the transactions contemplated by this Agreement or such Ancillary Agreements; including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authorities vacated or reversed, and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement and such Ancillary Agreements. 8.2.2. The Company shall give prompt notice to Investor, and Investor shall give prompt notice to the Company, of (i) any representation or warranty made by it contained in this Agreement or any Ancillary Agreement that is qualified as to materiality becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue and inaccurate in any material respect or (ii) the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement or any Ancillary Agreement; provided, however, that no such notification shall affect the representations, warranties, -38- 44 covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement or the Ancillary Agreements. 8.3. Fees and Expenses. All fees and expenses incurred in connection with the Offer, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Offer or the sale of the Newly Issued Shares on the terms contemplated hereby is consummated. 8.4. Public Announcements. Investor and the Company shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and the Ancillary Agreements and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchange. 8.5. Election of Directors. (i) No later than 20 Business Days after the Closing Date, subject to occurrence of the Closing, the Board of Directors of the Company shall be increased in number so that Investor may nominate one director whose term shall expire at the Company's 1999 annual meeting of stockholders. In addition, subject to the occurrence of the Closing, if Investor shall have acquired beneficial ownership of at least 20% of the outstanding Common Stock in accordance with the terms hereof (including, without limitation, pursuant to Section 3.6), Investor may nominate an additional director who shall be placed on the ballot for election at the Company's annual meeting of stockholders to be held in January, 1997 and whose term shall expire at the Company's 2000 annual meeting (each such director and any other persons nominated from time to time by Investor pursuant to this Section 8.5 being referred to herein as an "Investor Nominee"). Any Investor Nominee may be an employee, officer or director of Investor or any of its subsidiaries and each Investor Nominee shall be reasonably satisfactory to the Company. The Company shall use all reasonable efforts at all times thereafter during which (x) Investor shall retain -39- 45 beneficial ownership of at least 7.5% of the Class A Stock and that number of shares of Common Stock (the "75% Limitation") as is equal to at least 75% of the highest percentage of the outstanding Common Stock as is beneficially owned by Investor after completion of the Offer, the Closing and the acquisition of any additional shares of Class B Stock acquired by Investor pursuant to Section 3.6, and (y) the Collaboration Agreement shall remain in full force and effect (except if terminated by reason of material breach of its terms by the Company), to cause the Investor Nominees to be elected to the Board of Directors (such efforts shall include the same efforts to solicit from the stockholders of the Company eligible to vote for the election of Directors proxies in favor of Investor Nominees as the Company devotes to election of the other management-recommended nominees (such efforts being hereafter described as "Reasonable Solicitation Efforts"); provided, if Investor shall retain beneficial ownership of less than 7.5% of the Class A Stock and the 75% Limitation but at least 5% of the outstanding Class A Stock and that number of shares of Common Stock as is equal to at least 50% of the highest percentage of the outstanding Common Stock as is beneficially owned by Investor after completion of the Offer, the Closing and the acquisition of any additional shares of Class B Stock acquired by Investor pursuant to Section 3.6, and the Collaboration Agreement shall remain in full force and effect as aforesaid, the Investor Nominees shall be limited to one director. The period in which Investor is entitled to one or more Investor Nominees is referred to as the "Director Representation Period". If, at any time, the conditions entitling the Investor to elect one or two Investor Nominees, as the case may be, shall not be met, Investor shall at the request of the Company use all reasonable efforts to cause such Investor Nominee(s) who shall then be serving as a director to resign and shall thereafter have no further rights under this Section 8.5 with respect to election of one or two Investor Nominees, as the case may be. During any Director Representation Period in which two Investor Nominees shall serve as directors, one such Nominee shall be a member of the Executive Committee and the other shall be a member of the Audit Committee; provided, if only one such Nominee shall serve as a director, such Nominee shall serve as a member of the Executive Committee. Investor Nominees will not be paid director fees or meeting fees but will be reimbursed for reasonable expenses of attending meetings. -40- 46 (ii) During the Director Representation Period, Investor shall have the right to designate any replacement for an Investor Nominee upon the death, resignation, retirement, disqualification or removal from office for cause of such Investor Nominee, such replacement to be reasonably satisfactory to the Company. The Company shall use all reasonable efforts, including Reasonable Solicitation Efforts to cause each person so designated by Investor pursuant to this paragraph (ii) to be promptly appointed or elected to the Board. During any period in which Investor is entitled to designate an Investor Nominee to the Board but no Investor Nominee is then serving on the Board (if Investor shall have designated such a person within a reasonable period of time), the Board shall not amend Sections 9.3, 9.4, 9.5, 9.6 or 9.7 of the Bylaws without Investor's consent. 8.6. Nonrecognition of Certain Transfers. The Company shall promptly notify Investor in writing of all requests for transfers and conversions of shares of Common Stock held subject to the Stockholders' Agreement to anyone who has received such shares in a transfer or conversion made other than in accordance with the terms of the Stockholders' Agreement of which the Company has knowledge. The Company shall not recognize any transfer or conversion, or issue any certificate representing such shares in writing for at least 15 days after giving Investor such notice, unless prior or during such 15 days, it shall have received notice from Investor that it has no objection to such transfer. In addition, the Company agrees that it shall not in any manner, whether directly or indirectly, redeem any such shares from a Major A Stockholder if within 15 days after having been given notice of a proposed redemption, the Investor shall object in writing that such stockholder has not complied with the provisions of the Stockholders' Agreement, stating the reasons therefor, until the Investor shall have withdrawn such objection in writing or as otherwise ordered by a court having competent jurisdiction. 8.7. Independent Directors. The Company shall use all reasonable efforts including Reasonable Solicitation Efforts to assure that at all times during the Director Representation Period there will be at least three Independent Directors on the Board. -41- 47 ARTICLE 9 RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS 9.1. Restrictions on Transfer. 9.1.1. Investor covenants and agrees with the Company that, prior to the earliest of (a) the third anniversary of the Closing Date, (b) the termination or expiration of the Collaboration Agreement (except if the same is terminated by reason of material breach of its terms by Investor), (c) the issuance by any Governmental Authority having competent jurisdiction of a final, non-appealable order requiring Investor to divest its Equity, ("Final Governmental Order") or (d) the agreement of the Company to enter into a Business Combination with a person other than Investor or any Affiliate of Investor, neither Investor nor any of its United States subsidiaries will, directly or indirectly, offer, sell, transfer, assign, pledge, hypothecate or otherwise dispose of the beneficial ownership of (any such act, a "Transfer") any Equity except for (i) a Transfer by Investor to a United States subsidiary of Investor, provided that prior to such Transfer each such transferee consents in writing with the Company to be bound by the restrictions set forth in this Section 9.1 and assumes all other rights and obligations of Investor under this Agreement and the Registration Rights Agreement, provided further that Investor (A) shall remain liable for the performance by any such subsidiary of its obligations under this Agreement, (B) shall act as agent for any and all such subsidiaries in connection with the receipt or giving of any and all notices under this Agreement and (C) shall not cause or permit any such subsidiary to be other than United States subsidiary of Investor, (ii) a Transfer to the Company or to a subsidiary of the Company pursuant to a self-tender offer or otherwise, -42- 48 (iii) a Transfer pursuant to a merger or consolidation that is recommended by the Board of Directors of the Company in which the Company is a constituent corporation, (iv) a Transfer pursuant to a bona fide third party tender offer or exchange offer, which was not induced directly or indirectly by Investor or any of its Affiliates, that is recommended by the Board of Directors of the Company or pursuant to which Major A Stockholders tender or exchange shares equal to a majority of the Total Voting Power of the Company and do not withdraw the same on or before the Business Day immediately prior to the expiration date of such offer, subject to the Company's right of first refusal set forth in Section 9.3, or (v) a Transfer of Class B Stock tendered on the expiration date of a bona fide third party tender offer or exchange offer, which was not induced directly or indirectly by Investor or any of its Affiliates, of a number of shares of Class B Stock equal to the aggregate number of shares of Common Stock tendered by all Major A Stockholders and not withdrawn by such Major A Stockholders prior to the close of business on the Business Day immediately prior to such expiration date; provided Investor shall have received (and shall be entitled to rely for such purposes on) written notice from the third party making such tender or exchange offer certifying that such Major A Stockholders shall have tendered and not withdrawn such shares as of the close of business on the Business Day prior to such expiration date, subject to the Company's right of first refusal set forth in Section 9.3. The certificate or certificates representing any such Equity transferred as provided above shall bear the legend or legends described in Section 9.2 to the extent required by such Section 9.2. 9.1.2. After the earliest to occur of the events described in clauses (a) through (d) of Section 9.1.1, neither Investor nor any of its United States subsidiaries will, directly or indirectly, Transfer any Equity except for, -43- 49 (i) a Transfer permitted pursuant to Section 9.1.1, or (ii) a Transfer by Investor or any of its United States subsidiaries of Class B Stock for cash (A) in private sales to financial or institutional buyers who shall not be or purchase on behalf of any Competitor of the Company, (B) in bona fide open market "brokers' transactions" as permitted by the provisions of Rule 144 under the Securities Act or (C) in a bona fide public offering pursuant to the Registration Rights Agreement (such a public offering being hereafter referred to as a "Permitted Offering"), provided that in the case of a Transfer described in (A) or (C) the Company has waived its right of first refusal set forth in Section 9.3, and provided further that Investor or such subsidiaries, as the case may be, will take all reasonable steps to assure that, in connection with any such open market transactions or Permitted Offering, Transfers shall not be made to any Person or "group" (as defined in Section 13(d) of the Exchange Act) that would, following such Transfer, beneficially own more than 5% of the outstanding Voting Stock or more than 5% of the outstanding Class B Stock or in the case of a private sale described in (A) more than 7.5% of the outstanding Voting Stock or more than 7.5% of the outstanding Class B Stock; and provided further, in the case of a Permitted Offering which is not made pursuant to a firm underwriting commitment, such Transfers are completed within 60 days from the date such shares are first made available for public sale. The certificate or certificates representing any such Equity transferred as provided above (other than pursuant to clause (ii) in the preceding sentence) shall bear the legend or legends described in Section 9.2 to the extent required by such Section 9.2. 9.1.3. No Transfer of any Equity in violation of this Section 9 shall be made or recorded on the books of the Company and any such Transfer shall be void and of no effect. 9.1.4. Subject to the provisions of the Registration Rights Agreement and except as otherwise provided in Sections 9.1.5, 9.1.6 or 9.1.7, the expenses incurred by the -44- 50 transferor and/or transferee in connection with any Transfer permitted under this Section 9.1 shall be borne by the purchaser and/or seller party to such sale. 9.1.5. In the event that prior to the tenth anniversary of the Closing Date, Investor shall dispose of beneficial ownership of any Equity pursuant to the terms of Section 9.1.2 as a result of a Final Governmental Order which arises out of or results from the acquisition or attempted acquisition by Investor (by merger, consolidation, purchase of stock or assets, contract or otherwise) of assets or businesses not owned by Investor or its Affiliates on the date hereof other than the transaction contemplated by this Agreement (the "Acquisition"), then the terms of the Collaboration Agreement and the Licenses shall be amended as provided in Subsection 9.05(d) of the Collaboration Agreement and Subsections 4.08(a) of the CaMV Promoter License Agreement, 4.09(a) of the Corn Borer-Protected Corn License Agreement and 4.12(a) of the Glyphosate-Protected Corn License Agreement. In addition, (i) Investor shall be required to reimburse the Company for all reasonable costs and expenses incurred by the Company in connection with any registrations effected by the Company to permit such disposition of Equity whether or not required to be borne by the Company in accordance with the Registration Rights Agreement and (ii) Investor shall only be entitled to dispose of that amount of Equity required to be disposed of pursuant to the Final Governmental Order. 9.1.6. In the event Investor shall dispose of beneficial ownership of any Equity after the third anniversary of the Closing Date and prior to the tenth anniversary of the Closing Date other than in (i) Transfers permitted pursuant to Section 9.1.1, (ii) dispositions required after the issuance of a Final Government Order (such dispositions being covered by Sections 9.1.5 and 9.1.7, whichever is applicable), (iii) dispositions following the termination or expiration of the Collaboration Agreement (except if the same is terminated by reason of a material breach of its terms by Investor), (iv) dispositions for Cause (as hereafter defined), or (v) dispositions following the agreement of the Company to enter into a Business Combination with a person other than Investor or any Affiliate of Investor, then the terms of the Collaboration Agreement and the Licenses shall be amended as provided in Subsection 9.05(d) of the Collaboration Agreement and Subsections 4.08(a) of the CaMV -45- 51 Promoter License Agreement, 4.09(a) of the Corn Borer-Protected Corn License Agreement and 4.12(a) of the Glyphosate-Protected Corn License Agreement. In addition, Investor shall be required to reimburse the Company for all reasonable costs and expenses incurred by the Company in connection with any registrations effected by the Company to permit such disposition of Equity whether or not required to be borne by the Company in accordance with the Registration Rights Agreement. For purposes of this Section 9.1.6, "Cause" shall mean (a) a decrease in the Company's share of the United States seed corn market as reported by Doane's to less than seven per cent as determined by annual gross units sold or licensed in any two consecutive fiscal years or (b) the incurrence by the Company of net operating losses in any two consecutive fiscal years. 9.1.7. In the event that prior to the tenth anniversary of the Closing Date, the Investor shall dispose of beneficial ownership of any Equity pursuant to the terms of Section 9.1.2 as a result of a Final Governmental Order which arises out of or results from the acquisition or attempted acquisition by the Company (by merger, consolidation, purchase of stock or assets, contract or otherwise) of assets or business not owned by the Company or its Affiliates on the date hereof other than as contemplated by this Agreement, then the terms of the Collaboration Agreement and the Licenses shall be amended as provided in Subsection 9.05(e) of the Collaboration Agreement and Subsections 4.08(b) of the CaMV Promoter License Agreement, 4.09(b) of the Corn Borer-Protected Corn License Agreement and 4.12(b) of the Glyphosate-Protected Corn License Agreement. In addition, the Company shall be required to reimburse Investor for all reasonable costs and expenses, excluding underwriting discounts and commissions, incurred by Investor in connection with any registrations effected by the Company on behalf of Investor to permit such disposition of Equity whether or not required to be borne by Investor in accordance with the Registration Rights Agreement. 9.2. Legends. 9.2.1. Upon original issuance thereof and until such time as the same is no longer required hereunder or under the applicable requirements of the Securities Act or -46- 52 applicable state securities or blue sky laws, any certificate issued representing any of the Newly Issued Shares and any Common Stock issued pursuant to Section 10 (including, without limitation, all certificates issued upon transfer or in exchange thereof or in substitution therefor) shall bear the legend set forth in Section 5.3. If at any time the legend set forth in Section 5.3 is not required, and until such time as the same is no longer required pursuant to the provisions of Section 9.3, any certificate issued representing Shares described in the preceding sentence and any of the Class B Stock acquired pursuant to the Offer (including without limitation all certificates issued upon transfer or in exchange thereof or in substitution therefor) shall bear the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF ARTICLE 9 OF A CERTAIN INVESTMENT AGREEMENT DATED AS OF JANUARY 31, 1996 BETWEEN INVESTOR AND THE COMPANY, COPIES OF WHICH INVESTMENT AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. A COPY OF ARTICLE 9 WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE" A similar legend shall be placed upon any certificates described in the first sentence of this Section 9.2.1 in the event such shares are no longer subject to the applicable requirements of the Securities Act or applicable state securities or blue sky laws, but continue to be beneficially owned by Investor or its United States subsidiaries. 9.2.2. The Company may make a notation on its records or give instructions to any transfer agents or registrars for the Class A Stock or the Class B Stock in order to implement the restrictions on transfer set forth in this Section 9.2. 9.2.3. Investor shall submit any and all certificates representing Equity beneficially owned by Investor or any of its United States subsidiaries to the Company so that the legend or legends required by this Section 9.2 may be placed thereon. All Equity -47- 53 beneficially owned by Investor or any of such subsidiaries that is neither Class A Stock or Class B Stock shall be treated in the same manner as Common Stock for purposes of this Section 9.2. 9.2.4. In connection with any Transfer of Equity, the transferor shall provide the Company with such customary certificates, opinions and other documents as the Company may reasonably request to assure that such Transfer complies fully with applicable securities and other laws. 9.2.5. The Company shall not incur any liability for any delay in recognizing any Transfer of Equity if the Company in good faith reasonably believes that such Transfer may have been or would be in violation in any material respect of the provisions of the Securities Act, applicable state securities or blue sky laws, or this Agreement. 9.2.6. After such time as any of the legends described by this Section 9.2 are no longer required on any certificate or certificates representing the Common Stock, upon the request of Investor the Company will cause such certificate or certificates to be exchanged for a certificate or certificates that do not bear such legend. 9.3. Right of First Refusal. 9.3.1. Until the tenth anniversary of the Closing, prior to any Transfer described in clause (ii) (A) or (C) of Section 9.1.2 or any Transfer described in clauses (iv) or (v) of Section 9.1.1 pursuant to a tender or exchange offer not recommended by the Board, Investor shall deliver a written notice (the "Offer Notice") to the Company, which Offer Notice shall specify (i) the number and amount and description of Equity to be sold or otherwise transferred, including the method of proposed distribution, (ii) the Offer Price (as defined in Section 9.3.2), (iii) in the case of a privately negotiated transaction described in clause (ii) (A) of Section 9.1.2, any other proposed terms of the Transfer including the identity of the proposed transferees and a description of the nature of their respective businesses and (iv) in the case of a tender or exchange offer (A) shall be conditional upon -48- 54 tender by one or more Major A Stockholders of the requisite number of shares of Common Stock described in clause (iv) or (v) of Section 9.1.1 (without subsequent withdrawal of any such shares on or before the close of business on the Business Day immediately prior to the expiration date) and (B) in the case of such clause (v) shall relate only to the Class B Stock permitted to be tendered thereunder. The Offer Notice shall constitute an irrevocable offer to the Company or its designee, for the period of time described below, to purchase such securities upon the same terms specified in the Offer Notice, subject to Section 9.3.6. 9.3.2. For purposes of this Section 9.3, "Offer Price" shall be defined to mean on a per share or other amount of Equity basis (i) in the case of a Permitted Offering, the market value per share or other amount of Equity determined as provided below (the "Market Value" ) as of the date that the Investor publicly announces its intention to dispose of such equity (a "Public Notice"), less the cost and expenses, including underwriting commissions, reasonably expected to be incurred by Investor and any of its United States subsidiaries in connection with such Permitted Offering on a per share or other amount of Equity basis (ii) in the case of a privately negotiated transaction the proposed sales price per share or other amount of Equity and (iii) in the case of a third party tender offer or exchange offer, the tender offer or exchange offer price per share. For purposes of determination of the Offer Price in the case of a Permitted Offering, (A) the Market Value shall mean with respect to any security, the average of the daily closing prices on the NASDAQ National Market (or such principal exchange on which such security may be listed) for such security for the 40 consecutive trading days commencing on the 20th consecutive trading day prior to the date of the Public Notice, and (B) in the event Investor shall intend to sell in the Permitted Offering (by conversion to Class B Stock) any Class A Stock, such Class A Stock shall be valued as if it had been converted into Class B Stock as of the beginning of the 20th consecutive trading day prior to the date of the Public Notice. The closing price for each day shall be the closing price, if reported, or if the closing price is not reported, the average of the closing bid and asked prices, as reported by NASDAQ or a similar source selected from time to time by the Company for such purpose. (If Investor does not exercise its right of first refusal as provided herein, transfers of such Equity shall be made only in compliance with Article 9.) -49- 55 9.3.3. The Company may elect to purchase all or in the case of a Permitted Offering, any portion of the securities at the Offer Price and upon the terms and conditions specified in the Offer Notice, provided that, if in the case of a Permitted Offering the Company elects to purchase less than all of the offered securities in connection with a Permitted Offering, the number of shares or other amount of such offered securities that the Company has elected to purchase shall be subject to a reduction (determined by the managing underwriter after consultation with a financial advisor selected by Investor) to the extent the managing underwriter (after consultation with Investor's financial advisor) determines that the full number of shares or other amount of such offered securities that the Company has elected to purchase would so reduce the number of shares or other amount of Equity to be sold pursuant to the Permitted Offering as to have a material adverse effect on such offering as contemplated by Investor (including the price at which Investor proposes to sell such securities), provided further that if the managing underwriter determines that the number of shares or other amount of such offered securities that the Company has elected to purchase hereunder should be reduced in accordance with the criteria set forth in the preceding proviso in this sentence, then the Company shall be given the opportunity to make a further election either (i) to purchase the number of shares or other amount of such offered securities as so reduced (or, at the Company's sole option, a lesser number of shares or other amount of such offered securities), (ii) to purchase all of such offered securities or (iii) to withdraw its earlier election and to be released from any obligation to purchase any of such offered securities, provided that such election shall be made within five Business Days of notice to the Company of the managing underwriter's determination. 9.3.4. If the Company elects to purchase the offered securities, it shall give notice to Investor within 90 days of its receipt of the Offer Notice (or in the case of a third party tender offer or exchange offer, not later than the close of business on the second Business Day prior to the expiration date of such offer, provided that the Offer Notice shall have been provided at least ten Business Days prior to the initial expiration date of such offer and provided further that such purchase shall be rescinded and be of no effect if shares are not actually taken up pursuant to the tender offer or to the extent Investor is not -50- 56 entitled to tender or exchange shares pursuant to clauses (iv) or (v) of Section 9.1.1) of its election, which shall constitute a binding obligation, subject to standard terms and conditions for a stock purchase contract between an issuer and a significant stockholder, to purchase the offered securities, which notice shall include the date set for the closing of such purchase, which date shall be no later than 30 days (or in the case of a third party tender or exchange offer 90 days) following the delivery of such election notice. Notwithstanding the foregoing, such time periods shall not be deemed to commence with respect to, and the Company shall not be obligated to respond to, any purported notice that does not comply in all material respects with the requirements of this Section 9.3, which purported notice shall not be deemed to be an Offer Notice for purposes of this Agreement and shall be null and void under this Agreement, provided that if such purported notice is actually received by the Company and the Company does not within five Business Days of such receipt notify Investor that such purported notice does not comply in all material respects with such requirements, such purported notice shall be deemed not to be defective in any material respect with regard to such requirements. 9.3.5. The Company may assign its rights to purchase under this Section 9.3 to any person. If the Company does not respond to the Offer Notice within the required response time period or elects not to purchase the offered securities, Investor or its United States subsidiary, as the case may be, shall be free to complete the proposed Transfer in accordance with the terms of this Article 9 (including to the same proposed transferees in the case of a privately negotiated transaction, unless in the case of a previously undesignated transferee which is a financial not a strategic buyer Investor shall certify to the Company that after reasonable investigation Investor does not believe that any transferee identified for the first time may be considered to be a Competitor or to have purchased on behalf of a Competitor), on terms no less favorable to Investor or such subsidiary, as the case may be, than those set forth in the Offer Notice, provided that (i) such Transfer is closed within 120 days of the latest of (x) the expiration of the foregoing required response time period, or (y) in the case of a Permitted Offering within 90 days of the declaration by the SEC of the effectiveness of a registration statement filed with the SEC pursuant to the Registration Rights Agreement and (ii) the price at which the securities are transferred must be equal -51- 57 to or higher than the Offer Price (except in the case of a Permitted Offering, in which case the price may be equal to, higher than or less than the Offer Price), provided, however, that such periods within which such Transfer must be closed shall be extended to the extent necessary to obtain required governmental approvals and Investor shall use all reasonable efforts to obtain such approvals, provided further that the terms and conditions of the Transfer other than the financial terms thereof may be varied in non-material respects from those set forth in the Offer Notice if Investor gives notice to the Company of the nature of such variations at least five Business Days prior to the consummation of the Transfer, provided that compliance with such five Business Day period shall not operate to terminate any of the Company's rights under this Section 9.3. 9.3.6. In the case of a Permitted Offering, Investor shall provide the Company with a good faith estimate of the costs and expenses, including underwriting commissions, reasonably expected to be incurred by Investor and any of its United States subsidiaries in connection with such Permitted Offering. 9.4. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. The provisions of this Section 9 shall apply, to the full extent set forth herein with respect to the Equity of the Company, to any and all Equity or other securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for, or in substitution of such Equity, including, without limitation, in connection with any stock dividends, splits, reverse splits, combinations, reclassifications, recapitalizations, mergers, consolidations and the like occurring after the date hereof. 9.5. Registration Rights. The Company and Investor have entered into an agreement (the "Registration Rights Agreement") providing for registration rights with respect to shares of Class B Stock issued or acquired hereunder or issuable upon the conversion of any shares of Class A Stock issued or acquired hereunder to the extent provided under such agreement. The registration rights provided to Investor under the Registration Rights -52- 58 Agreement shall not be transferrable to any Person other than a transferee to which Investor has transferred Equity pursuant to clause (i) of the first sentence of Section 9.1.1. ARTICLE 10 EQUITY PURCHASE RIGHTS 10.1. Equity Purchase Rights. 10.1.1. From the Closing Date and for so long as Investor shall beneficially own either 5% of the Class A Stock or 20% of the Class B Stock, if the Company proposes to issue for cash (excluding (i) grants of any options or any other rights to acquire Common Stock pursuant to Stock Plans or as otherwise described in Section 10.3 and issuance of Common Stock pursuant to any such options or other rights (as to which Investor will have the benefit of Section 10.3), (ii) issuance of shares of Common Stock upon the exercise of any options exercisable for Common Stock that are outstanding as of the Closing Date, (iii) issuance of shares of Common Stock upon the conversion or exercise of any options, warrants, rights or other securities convertible into or exercisable for Common Stock the issuance of which was subject to the provisions of this Section 10.1, (iv) issuance of shares of Common Stock in a Small Offering and (v) the reissuance of Common Stock purchased by the Company subsequent to the Closing Date) any Equity ("Additional Equity") it shall give Investor at least ten days prior written notice (the "Issuance Notice") of such intention, describing the type of Equity, the estimated price and the other terms upon which the Company proposes to issue the Additional Equity and the estimated date of such issuance. If the Company intends to issue Additional Equity in a public offering, then the Issuance Notice may state both the minimum and maximum amount of Additional Equity that the Company intends to issue ("Issuance Range") together with both the minimum and maximum prices ("Price Range") that correspond with the Issuance Range. It is agreed that Investor shall have no more than 20 days from the date the Issuance Notice is received to agree to purchase all or any portion of its Pro Rata Share (as defined below) of the Additional -53- 59 Equity by giving written notice to the Company of its desire to purchase the Additional Equity (the "Response Notice"), subject to obtaining regulatory approval for such purchase and completion of the issuance of the Additional Equity as contemplated in the applicable Issuance Notice, and stating therein the amount of Additional Equity to be purchased. Investor shall use all reasonable efforts to obtain such regulatory approval. Such Response Notice shall constitute the irrevocable agreement of Investor to purchase the amount of Additional Equity indicated in the Response Notice at the price and upon the terms stated in the Issuance Notice. Any purchase by Investor of Additional Equity shall be consummated on or prior to the date on which all other Additional Equity described in the applicable Issuance Notice is issued, except that such purchase may be up to 90 days later than such date if Investor cannot consummate such purchase due solely to the failure of Investor to obtain regulatory approval. "Pro Rata Share" means the amount of Additional Equity necessary to permit Investor to maintain Investor's Outstanding Interest immediately prior to issuance of Additional Equity (without regard to any rights Investor may have to acquire shares pursuant to the application of Section 10.1 for which Pro Rata Share is then being determined or Section 10.3) for the price and upon the other terms and conditions upon which the Company actually effects such issuance; provided, however, that in the case of a public offering of Additional Equity, then the price to be paid by Investor shall be net of underwriting discounts or commissions. 10.1.2. (i) If the Equity issued or proposed to be issued in respect of which Investor is entitled to a purchase right under Section 10.1 consists of shares of Class A Stock, Investor's right to acquire Equity under Section 10.1 shall be the right to acquire the number of shares of Class A Stock determined in all other respects in accordance with the provisions of Section 10.1.1 (except to the extent subject to clause (iii) of this sentence), (ii) if the Equity issued or proposed to be issued in respect of which Investor is entitled to a purchase right under this Section 10.1 consists of shares of Class B Stock, Investor's right to acquire Equity under Section 10.1.1 shall be the right to acquire the number of shares of Class B Stock determined in all other respects in accordance with the provisions of this -54- 60 Section 10.1 (except to the extent subject to clause (iii) of this sentence), and (iii) if the Equity issued or proposed to be issued in respect of which Investor is entitled to a purchase right under this Section 10.1 consists of securities of the Company convertible into shares of Common Stock or options, warrants or other rights to acquire shares of Common Stock (collectively, "Option Securities"), Investor's right to acquire Equity under Section 10.1 shall be the right to acquire Equity convertible into shares of the class of Common Stock or options, warrants or other rights to acquire shares of the class of Common Stock, in each case upon the same terms as the Option Securities; provided, Investor's rights with respect to Option Securities giving the holder the right to acquire Common Stock shall be determined pursuant to Section 10.1.1 according to the then Outstanding Interest of Investor and its United States subsidiaries in Class A Stock or Class B Stock, as the case may be, without regard to any outstanding Equity convertible into or entitling the holder to acquire such Common Stock. 10.1.3. If there have been issuances of the Company's Equity in respect of which Investor has a purchase right under this Section 10.1 in Small Offerings as to which Investor's rights to acquire Equity hereunder have not yet become exercisable (the "Small Offering Shares"), then, as of and in connection with the immediately following issuance of Equity of the same class that is subject to the purchase rights of this Section 10.1, Investor shall also have a right to acquire (on the same terms and conditions applicable herein to such issuance, including, without limitation, price) additional shares or other amounts of a class of Equity equal to the number of shares or other amounts Investor would have been entitled to acquire at the time or times of issuance of the Small Offering Shares but for the inapplicability of its purchase rights to such issuances. 10.1.4. To the extent that, after Investor's election to acquire Equity pursuant to its purchase right under Section 10.1.1, the number of shares or other amount of Equity to be issued to Persons other than Investor and any of its United States subsidiaries that gave rise to Investor's purchase right under this Section 10 shall be reduced (whether at the discretion of the Company or otherwise), then the number of shares or other amount of Equity that Investor has the right to acquire under Section 10.1.1 shall be reduced pro rata -55- 61 and Investor's election shall be deemed to have been its irrevocable commitment to purchase such reduced number of shares or other amount of such Equity. 10.2. Limitations. 10.2.1. Notwithstanding anything to the contrary contained in this Section 10, Investor shall not be entitled to purchase any securities pursuant to Section 10.1 or, in the case of clause (iii), to convert any Equity convertible into, or exercise any rights to acquire, any Class A Stock, (i) unless and until the Company actually issues the securities that gave rise to Investor's purchase right under Section 10.1 (and the Company may in its sole discretion elect at any time to abandon any such issuance) or (ii) in connection with any pro rata stock split, stock dividend or other combination or reclassification of any capital stock of the Company or (iii) in the case of Class A Stock, to the extent that the percentage of Class A Stock then permitted to be held by Investor pursuant to Section 11.1 exceeds 10% in which event Investor shall only have the right to acquire sufficient shares of Class A Stock to maintain the percentage of Class A Stock beneficially owned by Investor at 10% or in case a higher percentage of Class A Stock shall then be permitted to be beneficially owned pursuant to Section 11.1(i), such higher percentage. 10.2.2. Notwithstanding anything to the contrary contained in this Section 10, Investor shall not be entitled to purchase any securities pursuant to Section 10.1 in connection with the issuance of a number of shares or other amounts of Equity representing less than 1% of the total number of shares of the relevant class of Common Stock of the Company outstanding as of the date of such issuance (a "Small Offering"), except as otherwise provided in Section 10.1.3, unless the Company elects to otherwise provide Investor with Equity purchase rights in connection therewith on the terms and conditions set forth in Section 10.1.1. 10.3. Stock Options. From the Closing Date and for so long as Investor shall beneficially own either 5% of the Class A Stock or 20% of the Class B Stock, with respect to the issuance of shares of Class A Stock or Class B Stock pursuant to the exercise of stock -56- 62 options or other rights to acquire Class A Stock or Class B Stock granted under the Stock Plans, or under any other stock option plan or any stock-based incentive compensation plan that the Company may adopt in the future, Investor shall have the right, in respect of each fiscal year of the Company beginning with its fiscal year ending August 31, 1996, to purchase from the Company all or any portion of the number of shares of Class A Stock or Class B Stock which it would be necessary for Investor to purchase in order to maintain the same percentage of ownership of issued and outstanding shares of Class A Stock and Class B Stock that Investor owned as of the last day of that fiscal year without regard to shares of Class A Stock and Class B Stock issued pursuant to the exercise of stock options during that fiscal year (or in the case of the Company's fiscal year ending August 31, 1996, after the Closing Date); provided, that no share issued pursuant to exercise of such options shall be considered Class A Stock if prior to the time the Company is required to give the notice described in the following sentence with regard to such fiscal year, such share has been converted to Class B Stock (in which event such share shall be considered Class B Stock). The Company shall notify Investor no later than 20 Business Days after the end of each fiscal year of the Company of the shares of the Class A Stock or Class B Stock which Investor is entitled to purchase under this Section 10.3 in respect of that fiscal year. Investor shall have 20 Business Days from the date of receipt of the Company's notice in which to advise the Company whether or to what extent Investor elects to exercise its rights under this Section 10.3. If Investor does not respond, or if Investor indicates in writing that it will not exercise its rights, then Investor shall be considered irrevocably to have waived its rights under this Section 10.3 with respect to the fiscal year in question. If Investor timely advises the Company that Investor will exercise its rights, then Investor shall have the right to acquire all or any portion of the number of shares of Class A Stock or Class B Stock which it is entitled to purchase at a price per share equal to the Current Market Value on the date Investor advises the Company that it will exercise its rights under this Section 10.3. For purposes of determination of the Current Market Value, any Class A Stock shall be deemed to have been converted into Class B Stock as of the beginning of the 22nd trading day prior to the date with respect to which the determination of Current Market Value is to be made. At the closing of such purchase, the Company and Investor shall provide customary and appropriate representations to one another regarding the purchase and sale -57- 63 of the Common Stock being purchased by Investor and shall also provide any additional documentation reasonably requested by the other party. ARTICLE 11 STANDSTILL 11.1. Restriction on Acquisition by Investor of Company Securities. Investor covenants and agrees with the Company that prior to the tenth anniversary of the Closing Date (I) none of Investor's Affiliates except for United States subsidiaries of Investor shall beneficially own (subject to Section 5.7) any Equity of the Company, (II) neither Investor nor its Affiliates shall acquire directly or indirectly any beneficial ownership of any Equity of the Company except as permitted by Articles 2, 3 or 10 of this Agreement and (III) neither Investor nor any of its Affiliates will acquire directly or indirectly beneficial ownership of any additional Equity of the Company such that the Equity beneficially owned by Investor and its Affiliates would represent in the aggregate more than any of the foregoing (x) 10% of the Total Voting Power of the Company, or (y) the Class B Percentage Limitation, or (z) 40% of the outstanding Common Stock (each such percentage described herein as a "Percentage Limitation") unless (i) Investor shall receive from a Major A Stockholder an offer to purchase shares of Class A Stock beneficially owned by such Major A Stockholder pursuant to any rights granted by such Major A Stockholder to Investor in the Stockholders' Agreement, in which event Investor shall be entitled to acquire beneficial ownership from such Major A Stockholder of such additional shares of Class A Stock, and (ii) no later than 60 days after acquisition of beneficial ownership of a majority of the Total Voting Power of the Company in accordance with the terms hereof, Investor shall be required to make a Permitted Acquisition Proposal. A "Permitted Acquisition Proposal" shall be an Acquisition Proposal (including any proposed tender offer) which: (A) is made to the Board and, unless and until approved in accordance with clause (B), not made directly to stockholders; -58- 64 (B) is subject to the approval of a majority of the Independent Directors prior to execution of any definitive agreement in connection with a transaction involving the Company or the making of any tender or other offer to purchase Common Stock from any stockholders who are not Major A Stockholders; and (C) would result, if successful, in the acquisition by Investor of beneficial ownership of not less than 100% of the outstanding capital stock of the Company at a price per share not less than the highest price at which Investor has acquired (or proposes to acquire in connection with the transaction) beneficial ownership of any Common Stock from a Major A Stockholder within the preceding two years and for cash and/or the same form of consideration if other than cash as paid or offered to be paid the Major A Stockholders. 11.1.1. If Investor shall have acquired a majority of the Total Voting Power of the Company, but Investor has not acquired 100% of the outstanding capital stock of the Company, Investor shall: (i) use all reasonable efforts to assure that at all times thereafter there will be three Independent Directors on the Board of the Company until such time as Investor has acquired 100% of the outstanding capital stock of the Company, and (ii) not acquire additional capital stock of the Company (other than from a Major A Stockholder) or implement any Acquisition Proposal with regard to the Company or enter into any commercial transaction with the Company (not previously in existence) involving a value to the Company as approved in good faith by a majority of the Independent Directors of less than $1,000,000 unless such offer, Acquisition Proposal or commercial transaction is approved by a majority of the Independent Directors of the Company. 11.1.2. Neither Investor nor any of its Affiliates shall be deemed in violation of the foregoing limitations in Section 11.1 if their beneficial ownership of Equity exceeds such limitation solely as a result of (i) an acquisition of Common Stock by the Company -59- 65 that, by reducing the number of securities outstanding, increases the proportionate amount of Common Stock beneficially owned by Investor and its Affiliates in the aggregate to more than the respective Percentage Limitations of Total Voting Power, Class B Percentage Limitation or Common Stock or (ii) the exercise by third parties of the right to convert Class A Stock into Class B Stock, provided that in each case such limitation shall be deemed crossed if Investor or any of its Affiliates thereafter becomes the beneficial owner of any additional Equity unless (i) Investor shall be permitted to acquire such Common Stock pursuant to Subsection 11.1(i) or (ii), or (ii) upon the consummation of the acquisition of such additional Equity Investor and its Affiliates do not beneficially own in the aggregate more than the applicable respective Percentage Limitations of Total Voting Power, Class B Percentage Limitation or Common Stock outstanding. 11.1.3. (i) In the event the Company receives an Acquisition Proposal (including an indication of interest in making such a proposal) from a third party which has not been solicited by the Board and which, if consummated, would result in a Business Combination (an "Unsolicited Proposal"), the Company shall promptly notify Investor in writing (the "Company Notice") of the material terms of such Unsolicited Proposal, including without limitation any specified consideration. (ii) In the event (A) the Board determines to enter into negotiations with regard to an Unsolicited Proposal and the Investor shall not have advised the Company subsequent to the receipt of the Company Notice that it is not interested in submitting an Investor Proposal (as hereinafter defined), or (B) in the absence of receipt of an Unsolicited Proposal, the Company invites any third party to make an Acquisition Proposal which if consummated would lead to a Business Combination (the "Company Proposal"), then the Company shall also promptly invite the Investor to submit a proposal (an "Investor Proposal") for a Business Combination which would result in the acquisition of an equal or greater amount of assets or shares of Common Stock than the Unsolicited Offer or the Company Proposal (which may include all or substantially all the assets or all of the Common Stock of the Company). Thereafter, if Investor shall have submitted an Investor Proposal, the Company shall conduct the solicitation and negotiation process as an open process available to all bidders, including provision to the Investor and other interested parties of further -60- 66 information with regard to the terms of any offers received and the opportunity to submit further offers in accordance with procedures approved by a committee of directors consisting of an equal number of (A) non-employee or officer Major A Stockholder directors (if such directors agree to serve on such committee) including the Chairman of the Board and (B) Independent Directors; provided however, that the Board shall not be required to conduct such process in a manner which, after advice of special independent outside counsel and its financial advisors, the Board determines is inconsistent with its fiduciary duties. If Investor shall not have submitted an Investor Proposal or shall withdraw any such proposal and advise the Company that it is not interested in submitting a further proposal, the Company shall conduct the negotiation and sale process in such manner as the Board determines. (iii) Solely for purposes of this Section 11.1.3, a Business Combination shall include a transaction with respect to which the Company receives or solicits from a third party or enters into negotiations with respect to, a proposal (the "Limited Proposal") which (A) contemplates the acquisition of a portion of the Company's international seed business or the Company's North American seed business that would be equal to or greater in amount than 25% of the average revenues derived from such international or North American seed business, respectively, in the Company's most recently completed two fiscal years, and (B) would not otherwise be described by Section 11.1.3 (i) or (ii), provided, that Investor shall not in such case be entitled to make a proposal which would involve the acquisition of a greater amount of assets or ownership interest than the Limited Proposal. 11.2. Other Restrictions. Prior to the earliest of (a) the tenth anniversary of the Closing Date or (b) such date as Investor and its subsidiaries acquire a majority of the Total Voting Power, in accordance with the terms of this Agreement, neither Investor nor any of its Affiliates shall (i) seek to have the Company waive, amend or modify any of the restrictions contained in this Article 11, the Certificate of Incorporation or the bylaws (other than the amendment described on Exhibit B hereto) of the Company, (ii) make any Acquisition Proposal or proposal with respect to a Business Combination, (iii) take any initiatives involving the Company that would otherwise require the Company to make a public announcement, or make any public comment or proposal with respect to any -61- 67 Acquisition Proposal, (iv) become a member of a "group" within the meaning of Section 13(d) of the Exchange Act (other than a group composed solely of Investor and any of its wholly owned direct or indirect subsidiaries), (v) solicit, or encourage any other person to solicit, "proxies" or become a "participant" or otherwise engage in an "solicitation" (as such terms are defined or used in Regulation 14A under the Exchange Act) in opposition to a recommendation of a majority of the directors of the Company with respect to any matter; seek to advise or influence any person (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the voting of any securities of the Company; or execute any written consent in lieu of a meeting of holders of securities of the Company or any class thereof, (vi) initiate, propose or otherwise solicit stockholders for the approval of one or more stockholder proposals with respect to the Company, as described in Rule 14a-8 under the Exchange Act, (vii) deposit any of the Equity into a voting trust, or subject any of the Equity to any agreement or arrangement other than the Stockholders' Agreement with respect to the voting of the Shares or any agreement having similar effect to any of the foregoing in this Section 11.2; or (viii) enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing ("Contacts") or otherwise seek to control or influence the Company other than Contacts with one or more Major A Stockholder(s) if such Major A Stockholder(s) shall have given Investor a Transfer Notice pursuant to Section 3.2(b) of the Stockholders' Agreement or has otherwise actively initiated such Contact, provided, however, that (A) Investor shall be permitted to make any proposal which Investor is permitted to make pursuant to Sections 11.1 or 11.1.3, as the case may be, (B) if Investor shall in good faith determine to accept any offer from a Major A Stockholder to purchase shares of Class A Stock beneficially owned by such Major A Stockholder or to make a counter proposal to such Major A Stockholder as permitted by and in accordance with the terms of the Stockholders' Agreement, as a result of which Investor would acquire beneficial ownership of a majority of the Total Voting Power of the Company, Investor shall be entitled to make any Permitted Acquisition Proposal to the Board which it is permitted or required to make pursuant to Section 11.1, and (C) actions taken by any representative of Investor on the Board, acting solely in his or her capacity as such a director, shall not violate this Section 11.2. -62- 68 ARTICLE 12 TERMINATION 12.1. Termination. Prior to the Closing Date, this Agreement and the transactions contemplated hereby may be terminated at any time: 12.1.1. Mutual Consent. By mutual consent of the Company and Investor; 12.1.2. Expiration Date. By the Company or Investor by written notice to the other party at any time after June 30, 1996 if any condition is not waived or satisfied within such period; provided, however, that if any condition shall not have been waived or satisfied within such period due to the willful act or omission of one of the parties, that party may not terminate this Agreement; 12.1.3. Permanent Injunction. By the Company or Investor if consummation of the issuance and sale by the Company of the Newly Issued Shares contemplated by this Agreement shall violate any final non-appealable order, decree or judgment of any court or governmental body having competent jurisdiction; or 12.1.4. Failure to Honor Agreements. By the Company or Investor if the other party shall have failed to perform or comply in any material respect with any agreement or covenant contained herein that is required to be performed or complied with by it on or before the Closing Date after having been provided by the other party written notice of, and a reasonable opportunity to cure, such failure. 12.2. Termination After Closing Date. This Agreement, with the exception of Article 11, shall terminate at any time after the Closing Date in the event that the Investor and its Affiliates beneficially own less than (a) five percent of the Total Voting Power of the Company and (b) less than ten percent of the outstanding Common Stock of the Company. -63- 69 The Investor shall promptly notify the Company in writing at any time that it believes it no longer owns such amounts. 12.3. Effect of Termination. If this Agreement is terminated pursuant to this Section 12, this Agreement shall forthwith become wholly void and of no further force and effect, except as provided in Section 12.2, and all further obligations of the Company and Investor or their respective officers or directors with respect to any obligation under this Agreement shall terminate without further liability except, (i) for the obligations of the Company and Investor under Sections 8.1 and 8.3 and (ii) that to the extent that such termination results from the material breach by a party of any representations, warranties, or covenants herein contained such termination shall not constitute a waiver or bar by any party of any rights or remedies at law or in equity it may have by reason of a breach of this Agreement by the other party. ARTICLE 13 INDEMNIFICATION 13.1. Investor's Indemnification Agreement. Subject to Sections 13.3 and 14.1, Investor shall indemnify and hold the Company and its directors, officers, employees and agents (collectively, the "Company Indemnified Parties") harmless from and against any and all claims, liabilities, fines, penalties, demands, causes of action, suits, judgments, losses, injuries, damages (including costs of defense, settlement and reasonable attorneys' fees) (all of the foregoing hereinafter collectively called "Liabilities, Actions and Damages") suffered or incurred by said Company Indemnified Parties with respect to (i) any inaccuracy of representations and warranties made herein including without limitation pursuant to Article 5 by Investor, and (ii) breaches of covenants made herein by Investor, which breaches, if curable, are not cured within 60 days after written notice thereof from the Company. -64- 70 13.2. Company's Indemnification Agreement. Subject to Sections 13.3 and 14.1, the Company shall indemnify and hold Investor and its directors, officers, employees and agents (collectively, the "Investor Indemnified Parties") harmless from and against any and all Liabilities, Actions and Damages suffered or incurred by said Investor Indemnified Parties with respect to (i) any inaccuracy of representations and warranties made herein, including but not limited to, pursuant to Article 4 hereof by the Company, or (ii) breaches of covenants made herein by the Company, which breaches, if curable, are not cured within 60 days after written notice thereof from Investor. 13.3. Procedure. In the event that, from and after the Closing Date, a third party asserts any claim against any Company Indemnified Party or any Investor Indemnified Party with respect to any matter to which the foregoing indemnities apply, the party against whom the claim is asserted (the "Indemnified Party") shall give prompt written notice to the indemnifying party (the "Indemnifying Party"), and the Indemnifying Party shall have the right, at its election, to take over the defense or settlement of such claim at its own expense by giving prompt written notice to the Indemnified Party; provided, however, that, if the Indemnifying Party does not give such notice and does not proceed diligently to defend the claim within 30 days after receipt of such notice of the claim, the Indemnifying Party shall be bound by any defense or settlement that the Indemnified Party may make as to such claim and shall reimburse the Indemnified Party for any and all losses and expenses resulting therefrom. The Indemnified Party and the Indemnifying Party shall cooperate in defending any such third party's claim, and the Indemnifying Party, to the extent the Indemnifying Party elects to defend such claim, shall have reasonable access to records, information and personnel in the possession or control of any other party hereto which are applicable to the subject matter of any claim or which are otherwise pertinent to the defense of such claim and the Indemnified Party shall otherwise cooperate with the Indemnifying Party in all respects in connection therewith. The Indemnifying Party shall reimburse the Indemnified Party for all of the Indemnified Party's reasonable out-of-pocket costs incurred in connection with the activities set forth in the immediately preceding sentence and in enforcing this indemnification. Each party hereto shall have an obligation to retain all relevant records until the period ending on December 31 of the seventh full calendar year -65- 71 following the Closing Date unless such records relate to actions, claims or proceedings known to such party to be pending at the time such records are scheduled not to be retained or unless such records are required to be maintained for longer periods of time under applicable laws, rules or regulations or unless such records relate to taxes, in which case each party hereto shall have an obligation to retain such records for the term of the applicable statute of limitations, as the same may be extended or tolled. Notwithstanding the foregoing, the Indemnifying Party shall not settle or compromise any such claim without the prior written consent of the Indemnified Party, (such consent not to be unreasonably withheld) unless, after consultation between such parties, the terms of such settlement or compromise release such Indemnified Party from any and all liability with respect to such claim and do not in any manner adversely affect the future operations or activities of such Indemnified Party. ARTICLE 14 GENERAL PROVISIONS 14.1. Survival of Representations and Warranties. The representations and warranties in this Agreement and in the instruments delivered pursuant to this Agreement (without regard to the Ancillary Agreements) shall survive the Closing for a period of 24 months. Notwithstanding the foregoing, (i) the representations and warranties set forth in Sections 4.3 and 4.4, to the extent applicable to the issuance of the Newly Issued Shares to Investor at Closing, shall survive the Closing indefinitely and (ii) the representations and warranties set forth in Section 4.8 shall survive until the expiration of the applicable statute of limitations (as such statute of limitations may be extended). This Section 14.1 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Closing. 14.2. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to -66- 72 have been duly given upon receipt) by delivery in person, by facsimile transmission or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 14.2): If to Investor, to: Monsanto Company 800 N. Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Chief Financial Officer Fax: 314-694-3001 with a copy to: General Counsel and Secretary Fax: 314-694-3001 If to Company, to: DEKALB Genetics Corporation 3100 Sycamore Road Dekalb, IL 60115 Attention: Senior Vice President and General Counsel Fax: 815-758-6953 -67- 73 with a copy to: James G. Archer c/o Sidley & Austin 875 Third Avenue New York, NY 10022 Fax: 212-906-2021 14.3. Interpretation. References in this Agreement to any gender include all genders and references to the singular include the plural and vice versa. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The words "hereof," "hereby" and "herein" and words of similar meaning where used in this Agreement or any exhibit or schedule refer to such agreement, exhibit or schedule in its entirety and not to any particular article, section or paragraph unless otherwise specifically indicated. 14.4. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 14.5. Entire Agreement; No Third-Party Beneficiaries. This Agreement, the Ancillary Agreements and the Confidentiality Agreement between Investor and the Company (i) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement and such Ancillary Agreements and (ii) are not intended to confer upon -68- 74 any person other than the parties and their permitted successors and assigns any rights or remedies. 14.6. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. 14.7. Corporate Powers. Nothing herein shall be construed to relieve the directors and officers of the Company or its subsidiaries from the performance of their respective fiduciary duties or limit the exercise of their powers in performance of their duties hereunder and the obligations of the Company herein shall be subject to such fiduciary duties. 14.8. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or transferred, in whole or in part, by any of the parties without the prior written consent of the other party, except that Investor may, without the prior written consent of the Company, assign all or any of its rights, interests, and obligations under this Agreement (other than under Articles 8, 9 and 11) to a wholly owned, direct or indirect, United States subsidiary of Investor, provided that Investor (i) shall remain liable for the performance by any such subsidiary of its obligations under this Agreement, (ii) shall act as agent for any and all such subsidiaries in connection with the receipt and giving of notices under this Agreement and (iii) shall not cause or permit any such subsidiary to be other than a wholly owned direct or indirect subsidiary of Investor, and Investor may assign its rights under the Registration Rights Agreement to the extent provided therein. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns. Any attempted assignment in violation of this Section 14.8 shall be void. 14.9. Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement or any of the Ancillary Agreements -69- 75 between Investor and the Company were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and such Ancillary Agreements and to enforce specifically the terms and provisions of this Agreement and such Ancillary agreements in any Federal or state court located in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any Federal or state court located in the State of Delaware in the event any dispute arises out of this Agreement, any of such Ancillary Agreements, or any of the transactions contemplated by this Agreement or any of such Ancillary Agreements, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this Agreement, any of such Ancillary Agreements or any of the transactions contemplated by this Agreement or any of such Ancillary Agreements in any court other than a Federal or state court sitting in the State of Delaware. All rights and remedies existing hereunder are cumulative to and not exclusive of any rights or remedies otherwise available. 14.10. Amendment and Waiver. No amendment to this Agreement or waiver of any provision hereof shall be effective unless such amendment or waiver is in writing and signed by each party to this Agreement. Any failure of a party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the parties entitled to the benefits thereof only by a written instrument duly executed and delivered by the parties granting such waiver. Any waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure of compliance. 14.11. Accounting Information. As soon as reasonably practicable but in any event within 25 days after the end of each calendar month after the Closing Date, the Company shall provide Investor with such accounting and financial information as is reasonably requested by Investor in order for Investor to implement equity accounting for its investment in the Company. -70- 76 14.12. Severability. In the event any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. IN WITNESS WHEREOF, Investor and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above. MONSANTO COMPANY By Robert T. Fraley ----------------------------- Name: Robert T. Fraley Title: President, Ceregen DEKALB GENETICS CORPORATION By Bruce P. Bickner ----------------------------- Name: Bruce P. Bickner Title: Chairman and CEO -71- 77 EXHIBIT A Conditions of the Offer Notwithstanding any other term of the Offer or this Agreement, Investor shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Investor's obligation to pay for or return tendered shares of Class B Stock after the termination or withdrawal of the Offer), to pay for any shares of Class B Stock tendered pursuant to the Offer and may terminate or amend the Offer, with the consent of the Company or if, at any time on or after the date of this Agreement and before the acceptance of such shares for payment or the payment therefor, any of the following conditions exists: (a) there shall be threatened or pending by any Governmental Authority any suit, action or proceeding, or there shall be pending by any other person any suit, action or proceeding, which has a substantial likelihood of success, (i) challenging the acquisition by Investor of any shares of Common Stock, seeking to restrain or prohibit the making or consummation of the Offer or the share issuances as contemplated by the Agreement or the performance of any of the other transactions contemplated by the Agreement or the Ancillary Agreements, or seeking to obtain from the Company or Investor any damages that are material in relation to the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit or limit the ownership or operation by the Company, Investor or any of their respective subsidiaries of the business or assets of the Company and its subsidiaries, taken as a whole, or Investor and its subsidiaries, taken as a whole, or to compel the Company to dispose of or hold separate any material portion of the business or assets of the Company and its subsidiaries, taken as a whole or Investor and its subsidiaries, taken as a whole, as a result of the Offer or any of the other transactions contemplated by this Agreement or the Ancillary Agreements, (iii) seeking to impose limitations on the ability of Investor to acquire or hold, or exercise full rights of ownership of, any shares of Common Stock to be accepted for payment pursuant to the Offer or any 78 Newly Issued Shares including, without limitation, the right to vote such Newly Issued Shares on all matters properly presented to the stockholders of the Company, (iv) seeking to prohibit Investor or any of its subsidiaries from exercising any of their respective material rights under this Agreement or any Ancillary Agreement; (b) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or applicable to the Offer or the share issuances, or any other action shall be taken by any Governmental Authority or court, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (iv) of paragraph (a) above; (c) there shall have occurred any event which constitutes a Material Adverse Effect; (d) any of the representations and warranties of the Company set forth in this Agreement that are qualified as to materiality shall not be true and correct and any such representations and warranties that are not so qualified shall not be true and correct in any material respect, in each case as of the date of the Agreement and as of the Expiration Date as though made on and as of the Expiration Date (or any other date as of which such representations and warranties expressly speak); (e) the Company shall have failed to furnish to Investor an opinion of John H. Witmer, Jr., Senior Vice President and General Counsel of the Company, in the form attached hereto as Exhibit C, dated as of the Closing Date if it occurs on or before the Expiration Date, or if the Closing Date shall not have occurred, speaking in future tense as relates to issuance of the Newly Issued Shares; (f) during the period from the date of this Agreement until the Expiration Date, neither the Company nor any subsidiary shall have sold or otherwise disposed of (or authorized, committed or agreed to sell or otherwise dispose of), in a single transaction or in a series of transactions, excluding sales of inventory or other assets -2- 79 in the normal course of business, any business or assets relating to the Primary Business of the Company that constitute more than five percent of the total consolidated assets of the Company as shown on the Company's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made, whether such sale or disposition be by merger or consolidation or the sale of stock or assets or otherwise; (g) there shall have occurred (i) any general suspension or trading in, or limitation on prices for, securities (excluding any coordinated trading halt triggered solely as a result of a specified decrease in a market index), (ii) any extraordinary change in the financial markets in the United States, (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iv) any limitation (whether or not mandatory) by any Governmental Authority on, or other event that materially affects, the extension of credit by banks or other lending institutions, (v) a commencement of a war directly involving the armed forces of the United States, or (vi) in case of any of the foregoing existing on the date of this Agreement, material acceleration or worsening thereof; (h) the Board of Directors of the Company shall have failed to give, withdrawn or modified in a manner adverse to Investor its approval or recommendation of the Offer or the other transactions contemplated by this Agreement or the Ancillary Agreements; (i) the Amended Bylaws shall not be authorized, approved and effected; or -3- 80 (j) the Agreement shall have terminated in accordance with its terms; which, in the reasonable good faith judgment of Investor, and regardless of the circumstances giving rise to any such condition (other than any action or inaction by Investor or any of its subsidiaries which constitutes a breach of the Agreement), makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of Investor and may be asserted by Investor regardless of the circumstances giving rise to any such condition or may be waived by Investor in whole or in part at any time and from time to time in its sole discretion. The failure by Investor or any other subsidiary of Investor at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. Any determination (which shall be made in good faith by the Investor) with respect to the foregoing conditions shall be final and binding on the parties. -4- 81 EXHIBIT B AMENDED BYLAWS OF THE COMPANY TO CONTAIN THE FOLLOWING BY- LAW PROVISIONS: -- Section 9.3 Primary Business. The Primary Business of the Corporation shall be the research-based production, marketing, licensing and sale of agronomic seed, including both technology related thereto and products derived therefrom. -- Section 9.4 Use of Voting Securities. i) The use of the Corporation's Voting Securities to facilitate strategic collaborations is in the Corporation's interest, but as to any one strategic collaboration, the maximum amount of Voting Securities to be issued to any Person or Group shall not exceed 10 percent of Voting Securities of the Corporation outstanding at the time of issuance. (ii) As used in this Section 9.4, the following terms shall have the meanings set forth: "Voting Securities" means any shares of capital stock or other securities of the Corporation entitled to vote generally in the election of directors, (including the right to elect one or more directors as a class unless such right is only exercisable during the continuance of a defined event.) "Person" means any individual, limited partnership, general partnership, trust, corporation or other firm or entity. 82 "Group" shall have the meaning ascribed in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, or any successor provision thereto. -- Section 9.5 Acquisitions. The Corporation shall not acquire, in a single transaction or in series of related transactions, any business or assets outside of the Primary Business of the Corporation that would be equal to or greater in amount than twenty-five percent (25%) of the total consolidated assets of the Corporation as shown on the Corporation's consolidated balance sheet as of the end of the most recent fiscal quarter ending prior to the time the determination is made whether such acquisition be by merger or consolidation or the purchase of stock or assets or otherwise; -- Section 9.6 "Permitted Transactions". No transaction which would result in the change of the Primary Business of the Corporation as set forth in Section 9.3, no issuance of Voting Securities to facilitate a strategic collaboration in contravention of Section 9.4 and no acquisition of any business or assets outside the Primary Business of the Corporation in contravention of Section 9.5 shall be approved by the Board of Directors if the resolution regarding such transaction receives the negative vote of at least three directors after the 1997 annual meeting of stockholders and at least two directors prior to the 1997 annual meeting of stockholders. -- Section 9.7 Certain Amendments. The Corporation shall not amend Sections 9.3, 9.4, 9.5, 9.6 or 9.7 hereof if the resolution regarding such amendment receives the negative vote of at least one director, or two directors after the 1997 annual meeting of stockholders. -6- 83 EXHIBIT C Opinion of John H. Witmer Subject to appropriate qualifications, limitations, conditions and assumptions, which are reasonably acceptable to Investor: 1. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has corporate power and authority to own the properties it purports to own and conduct its business as described in the SEC Reports (as defined in the Investment Agreement) and has corporate power and authority to execute, deliver and perform its obligations under the Investment Agreement and the Ancillary Agreements to which it is a party (collectively, the "Transaction Documents"). 2. The Transaction Documents have been duly authorized, executed and delivered by the Company and (assuming the due authorization, execution and delivery thereof by the Investor) constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws of general applicability relating to or affecting the enforcement of creditors' rights and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). 3. Neither the execution and delivery by the Company of the Transaction Documents or the consummation of the transactions contemplated thereby, nor compliance by the Company with the terms and conditions thereof, does or will result in any breach of or constitute a default under the Restated Certificate of Incorporation of the Company, or the By-laws of the Company, or, to my knowledge, any agreement, instrument or judgment which is applicable to the Company or any of its subsidiaries or any court injunction or decree or any valid and enforceable order of a governmental entity having jurisdiction over the Company or any of its subsidiaries. -7- 84 4. To my knowledge, after due inquiry, there are no actions, suits or proceedings or claims pending against the Company seeking to restrain or prohibit (or questioning the validity or legality of) the consummation of the transactions contemplated by the Transaction Documents. 5. The authorized, issued and outstanding shares of capital stock of the Company are as set forth in Section 4.3 of the Investment Agreement; all of the issued and outstanding shares of Common Stock (as defined in the Investment Agreement) have been duly authorized and validly issued, are fully paid and non-assessable; and the Newly Issued Shares (as defined in the Investment Agreement) to be issued in connection with the Investment Agreement, when certificates therefor have been duly executed, countersigned and registered and delivered against payment of the agreed consideration therefor in accordance with the terms of the Investment Agreement, will constitute shares of Common Stock which have been duly authorized and validly issued, are fully paid and non-assessable and have not been issued in violation of the preemptive rights of any stockholder of the Company. -8- 85 EXHIBIT D Opinion of Frank E. Vigus Subject to appropriate qualifications, limitations, conditions and assumptions, which are reasonably acceptable to the Company: 1. Investor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has corporate power and authority to execute, deliver and perform its obligations under the Investment Agreement and the Ancillary Agreements (collectively, the "Transaction Documents"). 2. The Transaction Documents have been duly authorized, executed and delivered by Investor and (assuming the due authorization, execution and delivery thereof by the other parties thereto) constitute the legal, valid and binding obligation of Investor enforceable against Investor in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws of general applicability relating to or affecting the enforcement of creditors' rights and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). 3. Neither the execution and delivery by Investor of the Transaction Documents or the consummation of the transactions contemplated thereby, nor compliance by Investor with the terms and conditions thereof, does or will result in any breach of or constitute a default under the Certificate of Incorporation, as amended, of Investor, or the By-Laws of Investor, or, to my knowledge, any agreement, instrument or judgment which is applicable to Investor or any of its subsidiaries or any court injunction or decree or any valid and enforceable order of a governmental entity having jurisdiction over Investor or its subsidiaries. -9- 86 4. To my knowledge, after due inquiry, there are no actions, suits or proceedings or claims pending against Investor or any subsidiary seeking to restrain or prohibit (or questioning the validity or legality of) the consummation of the transactions contemplated by the Transaction Documents. -10- EX-99.C.4 13 STOCKHOLDERS' AGREEMENT 1 Exhibit (c)(4) STOCKHOLDERS' AGREEMENT dated as of January 31, 1996 2 TABLE OF CONTENTS Page ---- ARTICLE 1 Definitions . . . . . . . . . . . . . . . . . . . . . 3 1.1 "Affiliate. . . . . . . . . . . . . . . . . . . . . . 3 1.2 "Board of Directors . . . . . . . . . . . . . . . . . 3 1.3 "Business Combination . . . . . . . . . . . . . . . . 3 1.4 "Bylaws . . . . . . . . . . . . . . . . . . . . . . . 3 1.5 "Class A Common Stock . . . . . . . . . . . . . . . . 4 1.6 "Class B Common Stock . . . . . . . . . . . . . . . . 4 1.7 "Closing Date . . . . . . . . . . . . . . . . . . . . 4 1.8 "Common Stock . . . . . . . . . . . . . . . . . . . . 4 1.9 "Company. . . . . . . . . . . . . . . . . . . . . . . 4 1.10 "Director . . . . . . . . . . . . . . . . . . . . . . 4 1.11 "Depositor. . . . . . . . . . . . . . . . . . . . . . 4 1.12 "Exchange Act . . . . . . . . . . . . . . . . . . . . 4 1.13 "Monsanto . . . . . . . . . . . . . . . . . . . . . . 4 1.14 "Monsanto Director. . . . . . . . . . . . . . . . . . 4 1.15 "hereto", "hereunder", "herein", "hereof. . . . . . . 4 1.16 "Involuntary Transfer Notice. . . . . . . . . . . . . 4 1.17 "Involuntary Transfer Stock . . . . . . . . . . . . . 5 1.18 "Indemnified Person . . . . . . . . . . . . . . . . . 5 1.19 "Investment Agreement . . . . . . . . . . . . . . . . 5 1.20 "Losses . . . . . . . . . . . . . . . . . . . . . . . 5 1.21 "Major A Stockholder. . . . . . . . . . . . . . . . . 5 1.22 "Offer Period . . . . . . . . . . . . . . . . . . . . 5 1.23 "Offered Stock. . . . . . . . . . . . . . . . . . . . 5 1.24 "Permitted Transferee . . . . . . . . . . . . . . . . 5 1.25 "Person . . . . . . . . . . . . . . . . . . . . . . . 6 1.26 "Pledge . . . . . . . . . . . . . . . . . . . . . . . 6 1.27 "Roberts Family Shareholder Agreement . . . . . . . . 6 1.28 "Roberts Family Voting Trust Agreement. . . . . . . . 6 1.29 "Selling Stockholder. . . . . . . . . . . . . . . . . 6 1.30 "Stock. . . . . . . . . . . . . . . . . . . . . . . . 6 1.31 "Transfer Notice. . . . . . . . . . . . . . . . . . . 6 1.32 "Transferring Stockholder . . . . . . . . . . . . . . 7 1.33 "Voting Trust . . . . . . . . . . . . . . . . . . . . 7 i 3 ARTICLE 2 Election of Monsanto Directors; Corporate Governance Provisions in Certificate of Incorporation and Bylaws. . . 7 2.1 Monsanto Directors. . . . . . . . . . . . . . . . . 7 2.2 Amendment of Bylaws . . . . . . . . . . . . . . . . 7 2.3 Solicitation and Voting of Shares . . . . . . . . . 7 2.4 Amendment of Bylaws . . . . . . . . . . . . . . . . 8 2.5 Implementation of Investment Agreement. . . . . . . 8 2.6 Injunctive Relief . . . . . . . . . . . . . . . . . 8 2.7 Indemnification of Major A Stockholders . . . . . . 9 ARTICLE 3 Limitation on Certain Transfers . . . . . . . . . . . 11 3.1 General Limitations on Certain Transfers. . . . . . 11 3.2 Limitation on Certain Conversions and Transfers . . 11 3.3 Legend. . . . . . . . . . . . . . . . . . . . . . . 20 3.4 Nonrecognition of Certain Transfers . . . . . . . . 20 3.5 Exceptions. . . . . . . . . . . . . . . . . . . . . 20 ARTICLE 4 Miscellaneous . . . . . . . . . . . . . . . . . . . . 22 4.1 Governing Law . . . . . . . . . . . . . . . . . . . 22 4.2 Successors and Assigns. . . . . . . . . . . . . . . 22 4.3 Entire Agreement. . . . . . . . . . . . . . . . . . 22 4.4 Notice. . . . . . . . . . . . . . . . . . . . . . . 23 4.5 Delays or Omissions . . . . . . . . . . . . . . . . 26 4.6 Counterparts. . . . . . . . . . . . . . . . . . . . 26 4.7 Severability. . . . . . . . . . . . . . . . . . . . 26 4.8 Sections and Articles . . . . . . . . . . . . . . . 26 4.9 Headings. . . . . . . . . . . . . . . . . . . . . . 26 4.10 Term. . . . . . . . . . . . . . . . . . . . . . . . 27 4.11 Effective Date. . . . . . . . . . . . . . . . . . . 27 Exhibits Exhibit "A" Exhibit "B" Exhibit "C" Exhibit "D" ii 4 STOCKHOLDERS' AGREEMENT This STOCKHOLDERS AGREEMENT is made as of the 31st day of January, 1996, by and among Douglas C. Roberts, individually and as Trustee of (i) the Douglas C. Roberts Trust dated January 28, 1972, (ii) the David Kim Roberts 1989 Trust, (iii) the Steven Suh Roberts 1989 Trust, and (iv) the Jeffrey King Roberts 1989 Trust ("Douglas C. Roberts"); Virginia R. Holt, individually and as Trustee of (i) the Virginia R. Holt Trust dated August 22, 1973, (ii) the Amanda Mary Holt 1989 Trust, and (iii) the Laura Elizabeth Holt 1989 Trust ("Virginia R. Holt"); John T. Roberts, individually and as Trustee of (i) the John T. Roberts Trust dated April 9, 1976, (ii) the Allison Elizabeth Roberts 1989 Trust, and (iii) the Katherine Elsie Roberts 1990 Trust Number 1 ("John T. Roberts"); Charles C. Roberts and Mary R. Roberts, as Trustees of (i) the Charles C. and Mary R. Roberts Living Trust dated October 15, 1991, (ii) the Trust F/B/O Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, (iii) the Trust F/B/O Virginia R. Holt under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, and (iv) the Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967 ("Charles C. Roberts and Mary R. Roberts"); Lynne King Roberts, as Trustee of the David Kim Roberts Trust dated October 14, 1987 ("Lynne King Roberts"); Terrance K. Holt, as Trustee of the Amanda Mary Holt Trust dated December 6, 1985 ("Terrance K. Holt"); and Robin R. Roberts, as Trustee of (I) the Allison Elizabeth Roberts Trust dated August 6, 1986, (ii) the Katherine Elsie Roberts Trust dated March 13, 1990, and (iii) the Charles David Roberts Trust dated February 28, 1994 ("Robin R. Roberts"), and Charles C. Roberts, Mary R. Roberts, Douglas C. Roberts, Virginia R. Holt and John T. Roberts, as Voting Trustees under the Roberts Family Voting Trust Agreement (collectively referred to as the "Major A Stockholders" and individually as a "Major A Stockholder") and Monsanto Company, a Delaware corporation, having its principal place of business at 800 N. Lindbergh Blvd., St. Louis, Missouri 63167, ("Monsanto"). 5 RECITALS WHEREAS, DEKALB Genetics Corporation, a Delaware corporation, having its principal place of business at 3100 Sycamore Road, DeKalb, Illinois 60115 (the "Company") and Monsanto have entered into an Investment Agreement, dated as of January 31, 1996 (the "Investment Agreement"), and certain other related agreements whereby Monsanto will acquire shares of the Company's Class A Common Stock, no par value ("Class A Common Stock") and shares of the Company's Class B Common Stock, no par value ("Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock"); WHEREAS, the Major A Stockholders own shares of Class A Common Stock as indicated on Exhibit "A" to this Agreement; WHEREAS, pursuant to the Investment Agreement, the Company has agreed that under certain circumstances Monsanto shall have the right to designate up to two (2) directors on the Company's Board of Directors; WHEREAS, pursuant to the Investment Agreement, the Company has agreed to amend its Bylaws (as amended, the "Bylaws") and to provide notification to Monsanto in the event the Company is considering certain business combination transactions; and WHEREAS, the Major A Stockholders have entered into the Roberts Family Voting Trust Agreement in the form attached hereto as Exhibit B and the Roberts Family Shareholder Agreement in the form attached hereto as Exhibit C. NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein contained, the Major A Stockholders and Monsanto hereby agree as follows: 2 6 ARTICLE 1 Definitions As used in this Agreement, the following terms shall have the following respective meanings (all terms defined in this Article 1 or in other provisions of this Agreement in the singular shall have the same meaning when used in the plural and vice versa): 1.1 "Affiliate" has the same meaning as in Rule 12b-2 promulgated under the Exchange Act. 1.2 "Board of Directors" means the Board of Directors of the Company. 1.3 "Business Combination" shall mean a merger or consolidation in which the Company is a constituent corporation and pursuant to which the Common Stock is converted into or exchanged for cash, securities or other property or a sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole, or a sale of all or substantially all the assets of the Company's United States seed corn business; provided that a transaction in which the beneficial ownership of the capital stock of the Company or of the sole surviving corporation to the transaction (or of the ultimate parent of the Company or of such sole surviving corporation) immediately after the consummation of such transaction is substantially the same as the beneficial ownership of the Company's capital stock immediately prior to the consummation thereof shall not be deemed a Business Combination unless such transaction shall result in the sale of all or substantially all the assets of the Company and its subsidiaries taken as a whole or all or substantially all of the assets of the Company's United States seed corn business. 1.4 "Bylaws" has the meaning set forth in the recitals hereto. 3 7 1.5 "Class A Common Stock" has the meaning set forth in the recitals hereto. 1.6 "Class B Common Stock" has the meaning set forth in the recitals hereto. 1.7 "Closing Date" means the closing of the purchase of Common Stock by Monsanto from the Company pursuant to the terms of the Investment Agreement. 1.8 "Common Stock" has the meaning set forth in the recitals hereto. 1.9 "Company" has the meaning set forth in the first paragraph hereof. 1.10 "Director" means a member of the Board of Directors. 1.11 "Depositor" means a depositor of shares of Common Stock under the Voting Trust Agreement. 1.12 "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 1.13 "Monsanto" has the meaning set forth in the first paragraph hereof. 1.14 "Monsanto Director" has the meaning set forth in Section 2.1. 1.15 "hereto", "hereunder", "herein", "hereof" and the like mean and refer to this Agreement as a whole and not merely to the specific article, section, paragraph or clause in which the respective word appears. 1.16 "Involuntary Transfer Notice" has the meaning set forth in Section 3.2(e). 4 8 1.17 "Involuntary Transfer Stock" has the meaning set forth in Section 3.2(e). 1.18 "Indemnified Person" has the meaning set forth in Section 2.7(b). 1.19 "Investment Agreement" means that certain Investment Agreement, dated as of January 31, 1996 between the Company and Monsanto. 1.20 "Losses" has the meaning as set forth in Section 2.7(a). 1.21 "Major A Stockholder" has the meaning set forth in the first paragraph hereof, together with any pledgees and Permitted Transferees who become parties to this Agreement pursuant to Section 3.5 (a) and (b). 1.22 "Offer Period" has the meaning set forth in Section 3.2(b). 1.23 "Offered Stock" has the meaning set forth in Section 3.2(b). 1.24 "Permitted Transferee" means (i) Douglas C. Roberts, Virginia Roberts Holt, John T. Roberts, or their parents, (ii) any Depositor, (iii) any spouse, lineal descendant (including adopted descendants), or spouse of a lineal descendant (including adopted descendants) of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts, (iv) any trust or other entity the sole beneficiaries or owners of which are Persons referred to in this definition, (v) any Person receiving any interest in shares of Stock pursuant to a Major A Stockholder's last will and testament or by distribution at a Major A Stockholder's death from a trust established by a Major A Stockholder or according to the laws of intestate succession, or (vi) any ex-spouse of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts or any ex-spouse of a lineal descendant (including adopted descendants) of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts, 5 9 to the extent (and only to the extent) that any such ex-spouse receives any interest in Stock pursuant to a court order entered in connection with a divorce proceeding. 1.25 "Person" means a corporation, association, partnership, joint venture, limited liability company, individual, trust, unincorporated organization, a government agency or political subdivision thereof and any other entity. 1.26 "Pledge" when used as a verb means to pledge, hypothecate, mortgage, create any security interests in or otherwise encumber and when used as a noun means any resulting pledge, hypothecation, mortgage, security interest or other encumbrance. 1.27 "Roberts Family Shareholder Agreement" means the agreement attached hereto as Exhibit C. 1.28 "Roberts Family Voting Trust Agreement" means the agreement attached hereto as Exhibit B. 1.29 "Selling Stockholder" has the meaning set forth in Section 3.2(b). 1.30 "Stock" means the following securities: (i) the Class A Common Stock of the Company and any other common or preferred stock of the Company entitled to vote generally in the election of directors whether presently issued or hereafter authorized, designated and issued, now owned or hereafter acquired by each Major A Stockholder, (ii) any option, warrant or right to acquire Class A Common Stock (or any security or other instrument referred to in this definition) and (iii) any security or other instrument exchangeable for, or convertible into, Class A Common Stock (or any security or other instrument referred to in this definition). 1.31 "Transfer Notice" has the meaning set forth in Section 3.2(b). 6 10 1.32 "Transferring Stockholder" has the meaning set forth in Section 3.2(e). 1.33 "Voting Trust" means the trust established under the Roberts Family Voting Trust Agreement. ARTICLE 2 Election of Monsanto Directors; Corporate Governance Provisions in Certificate of Incorporation and Bylaws 2.1 Monsanto Directors. As set forth in the Investment Agreement, depending on its ownership percentage of the Company's Common Stock, Monsanto shall have the right to nominate up to two (2) directors (together, the "Monsanto Directors" and, individually, a "Monsanto Director") to the Board of Directors. Initially, one Monsanto Director shall be nominated by Monsanto within twenty (20) business days after the Closing Date and shall have a term expiring at the Company's 1999 annual meeting of stockholders. If Monsanto is entitled to nominate a second director, then such second Monsanto Director shall be nominated for election at the Company's 1997 annual meeting of stockholder and shall have a term expiring at the Company's 2000 annual meeting of stockholders. 2.2 Amendment of Bylaws. As set forth in the Investment Agreement, prior to the Closing, the Company has agreed to cause Article IX of the Bylaws to be amended as provided in Exhibit "D" hereto. 2.3 Solicitation and Voting of Shares. In any election of Directors, each Major A Stockholder shall use best efforts to attend such stockholder meeting (in person or by proxy) for purposes of establishing a quorum and shall vote (in person or by proxy) all its shares of Stock in favor of any Monsanto Director nominated by Monsanto and 7 11 recommended by the Board of Directors; provided that such Monsanto Director is reasonably satisfactory to the Company. 2.4 Amendment of Bylaws. During the term of this Agreement and after the adoption by the Company of the amendments to the Bylaws described in Exhibit "D" hereto, without the prior written consent of Monsanto, the Major A Stockholders shall not directly or indirectly initiate any action that would result in the amendment of Section 9.3, 9.4, 9.5, 9.6 or 9.7 of the Bylaws. 2.5 Implementation of Investment Agreement. During the term of this Agreement, each Major A Stockholder shall vote its shares of Stock in favor of any proposed amendment to the Company's Certificate of Incorporation increasing the Company's authorized capital stock, which amendment is required in order for the Company to comply with the provisions of Article 10 of the Investment Agreement. 2.6 Injunctive Relief. In the event of a breach of the provisions of this Article 2 by any of the Major A Stockholders, Monsanto will suffer irreparable harm and the total amount of monetary damages will be impossible to calculate and will therefore be an inadequate remedy. Accordingly, in such event, Monsanto shall be entitled to temporary and permanent injunctive relief against the breaching party and to any other rights and remedies to which Monsanto may be entitled to at law or in equity. 8 12 2.7 Indemnification of Major A Stockholders. (a) Monsanto's Indemnification Agreement. Subject to paragraph (b) below, Monsanto shall indemnify and hold the Major A Stockholders and their respective affiliates, trustees, trust beneficiaries, directors, officers, stockholders, employees, agents, successors and assigns (each an "Indemnified Person") harmless from and against any and all claims, liabilities, fines, penalties, demands, causes of action, suits, judgments, losses, injuries, damages (including costs of defense, settlement and reasonable attorneys' fees) (all of the foregoing hereinafter collectively called "Losses") suffered or incurred by any Indemnified Person which arise from or in connection with actions or inactions of any Indemnified Person in the performance of the obligations of any Major A Stockholder under this Article 2. (b) Procedure. In the event that, from and after the Closing, a third person asserts any claim against any Indemnified Person with respect to any matter to which the foregoing indemnities apply, the Indemnified Person shall give prompt written notice to Monsanto, and Monsanto shall have the right, at its election, to take over the defense or settlement of such claim at its own expense by giving prompt written notice to the Indemnified Person; provided, however, that, (i) if Monsanto does not give such notice and does not proceed diligently to defend the claim within thirty (30) days after receipt of such notice of the claim, then the Indemnified Person may employ separate counsel to represent it and defend it against such claim and Monsanto shall be bound by any defense or settlement that the Indemnified Person may make as to such claim and shall reimburse the Indemnified Person for any and all Losses resulting therefrom as such Losses are incurred and (ii) if Monsanto elects to defend the claim, then Monsanto shall employ counsel reasonably satisfactory to the Indemnified Person and the 9 13 Indemnified Person shall be entitled to participate in (but not control) the defense of such claim and to employ separate counsel at its own expense to assist in the handling of such claim, unless the common counsel determines, in compliance with the canons of ethics of the legal profession, that a conflict of interest exists between Monsanto and an Indemnified Person, in which event the Indemnified Person may appoint separate counsel to represent or defend it against the claim and Monsanto shall reimburse such Indemnified Person for all Losses resulting therefrom as such Losses are incurred. The Indemnified Person and Monsanto shall cooperate in defending any such third person's claim, and Monsanto, to the extent Monsanto elects to defend such claim, shall have reasonable access to records, information and personnel in the possession or control of any other party hereto which are applicable to the subject matter of any claim or which are otherwise pertinent to the defense of such claim and the Indemnified Person shall otherwise cooperate with Monsanto in all respects in connection therewith. Monsanto shall reimburse the Indemnified Person for all of the Indemnified Person's reasonable out-of-pocket costs as they are incurred in connection with the activities set forth in the immediately preceding sentence and in enforcing this indemnification. Notwithstanding the foregoing, Monsanto shall not settle or compromise any such claim without the prior written consent of the Indemnified Person, such consent not to be unreasonably withheld, unless, after consultation between such parties, the terms of such settlement or compromise release such Indemnified Person from any and all liability with respect to such claim and do not in any manner adversely affect the future operations or activities of such Indemnified Person. 10 14 ARTICLE 3 Limitation on Certain Transfers 3.1 General Limitations on Certain Transfers. (a) Subject to Section 3.5, during the term of this Agreement, no Major A Stockholder shall in any manner, whether directly or indirectly, voluntarily or by operation of law, sell, convey, transfer, assign, or otherwise dispose of ("transfer") any interest in its Stock to any Person or convert any of its Class A Common Stock to Class B Common Stock except as provided under the terms of this Agreement after complying with the provisions of this Article 3. (b) Notwithstanding any other provision of this Agreement including this Article 3, in no event shall any Major A Stockholder tender any of its shares of Stock in the tender offer to purchase shares of Class B Common Stock to be made by Monsanto pursuant to the terms described in the Investment Agreement. 3.2 Limitation on Certain Conversions and Transfers. (a) Limitation on Conversions. Except pursuant to a court order entered in connection with a divorce proceeding to an ex-spouse of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts or to an ex-spouse of a lineal descendant of Douglas C. Roberts, Virginia Roberts Holt or John T. Roberts, no Major A Stockholder shall convert any of its Class A Common Stock to Class B Common Stock until such time as such Major A Stockholder has entered into a binding agreement to sell or otherwise convey such Class B Common Stock to a third party. 11 15 (b) Limitations on Voluntary Transfers. Subject to Section 3.5, in the event that any Major A Stockholder desires to transfer any interest in its Stock, including, without limitation, a redemption of such Stock by the Company, such Major A Stockholder (the "Selling Stockholder") shall make a written offer (the "Transfer Notice") to Monsanto stating (i) the number of shares of Stock proposed to be so transferred (the "Offered Stock") and (ii) the price, form of consideration and other material terms upon which the Offered Stock are being offered; provided, however, that in the event the Transfer Notice shall state that the Major A Stockholder intends to dispose of such Offered Stock by means of an underwritten public offering (a "Public Offering"), in lieu of stating a price at which the Offered Stock is being offered, the Major A Stockholder may state an estimated price (less estimated underwriting discounts and expenses of sale) at which the Major A Stockholder is advised in writing by the managing underwriter as its good faith estimate of the average between the estimated minimum and maximum amounts at which such Offered Stock may be sold in the Public Offering (the "Average Price"). For a period of twenty-five (25) days (if the form of consideration specified in the Transfer Notice only includes cash and/or shares of stock traded in the NASDAQ National Market System or on a U.S. securities exchange ("traded stock")), or ninety (90) days (if the form of consideration specified in the Transfer Notice includes property other than cash or traded stock) following the date of the Transfer Notice (the "Offer Period"), Monsanto shall have the irrevocable and exclusive option (but not obligation) to purchase all (but not less than all) of the Offered Stock in cash for the price per share and upon the other terms specified in the Transfer Notice; provided, however, in the event the Transfer Notice shall have stated that the Major A Stockholder intends to dispose of the Offered Stock in a Public Offering, Monsanto may purchase the Offered Stock at the Average Price (less the estimated amount of underwriting discounts and expenses of offering) stated in the Transfer Notice; provided, further, that if the proposed consideration specified in the Transfer Notice includes property 12 16 other than cash, then Monsanto shall have the option to purchase the Offered Stock for consideration other than cash that is equal in value to the non-cash property specified in the Transfer Notice; and provided, further, that if the consummation of the transfer described in the Transfer Notice would cause the Selling Stockholder to recognize less gain for income tax purposes than the amount of taxable gain which the Selling Stockholder would recognize as a result of a cash sale to Monsanto, then the aggregate purchase price for the Offered Stock payable by Monsanto shall be increased by an amount equal to (A) the gain which would not have otherwise been recognized for income tax purposes multiplied by a fraction, the numerator of which is one and the denominator of which is one minus the highest marginal income tax rate on capital gains for individuals in effect at such time, minus (B) the gain which would not have otherwise been recognized for income tax purposes. The gain which would not have otherwise been recognized for income tax purposes shall be computed using the Selling Stockholder's actual tax basis in the Offered Stock based upon (i) such records as Monsanto shall reasonably request and (ii) as are certified by such Selling Stockholder as true, complete, and correct. Monsanto's option to purchase the shares of Offered Stock shall be exercised by giving written notice to the Selling Stockholder within the Offer Period. Alternatively, if Monsanto rejects the Selling Shareholder's offer to sell the Offered Stock for the price per share and upon the terms specified in the Transfer Notice, then, for the remainder of the Offer Period, Monsanto shall have the exclusive right to propose alternative terms to the Selling Stockholder for the purchase of the Offered Stock at such price per share and upon such terms as the parties may agree upon. Subject to Section 3.5, in the event a Selling Stockholder proposes to dispose of Offered Stock in a transaction subject to Article 3 hereof for consideration that includes non-cash consideration other than traded stock, such Selling Stockholder shall stipulate the value of such property in the Transfer 13 17 Notice and shall, at the request of Monsanto, provide to Monsanto, at the Selling Stockholder's expense, a written valuation of such property prepared by a nationally-recognized firm experienced in appraising the specified type of property , which sets forth the value of such property. In the event that Monsanto does not agree with such valuation, Monsanto shall deliver a written notice of such disagreement to the Selling Stockholder within fifteen (15) days of the receipt of the written valuation and shall thereafter deliver to the Selling Stockholder within thirty (30) days following delivery of such disagreement, at Monsanto's expense, a written valuation of such property prepared on the same basis by another nationally-recognized firm experienced in appraising the specified type of property, which sets forth the value of such property. The Selling Stockholder may either accept such subsequent valuation or deliver written notice of its disagreement with such valuation to such Selling Stockholder. In the latter event, the Selling Stockholder and Monsanto shall agree to the appointment of a third nationally-recognized firm experienced in appraising the specified type of property, who shall be selected by mutual agreement of their respective nationally-recognized firms, whose valuation shall establish conclusively the price for purposes of the Transfer Notice. The expense of such third firm shall be borne equally by the parties. If property to be received by a Selling Stockholder includes shares of stock that are traded on the NASDAQ National Market System or any other system then in use, then the value of a share of such stock shall be deemed to be the last reported sale price (or, if not available, the average of the closing bid and ask price) per share during the 30-day period immediately preceding the date of the Transfer Notice. If the property to be received by a Selling Stockholder includes shares of a stock that is listed on a United States securities exchange registered under the Exchange Act, then the value of a share of such stock shall be deemed to be the average of the closing sale price per share of such stock 14 18 during the 30-day period immediately preceding the date of the Transfer Notice on the principal United States securities exchange registered under the Exchange Act on which such stock is listed. (c) Acceptance of Offer. If, during the Offer Period, Monsanto exercises its right to purchase the Offered Stock at the price per share and upon the terms specified in the Transfer Notice or if the parties otherwise reach an agreement regarding the price, terms and conditions of the sale, then the Selling Stockholder shall sell the shares of Offered Stock to Monsanto in accordance with the price per share and terms specified in the Transfer Notice or pursuant to such price, terms and conditions otherwise agreed upon by the parties, including standard terms and conditions for a stock purchase agreement. The closing of any such purchase shall take place no later than twenty-five (25) days (if the form of consideration specified in the Transfer Notice only includes cash or traded stock) or ninety (90) days (if the form of consideration specified in the Transfer Notice includes property other than cash or traded stock) following the expiration of the Offer Period. (d) Nonacceptance of Offer. If, at the end of the Offer Period, Monsanto has not exercised its right to purchase the Offered Stock at the price per share and upon the terms specified in the Transfer Notice and the parties have not otherwise reached an agreement regarding the price, terms and conditions of the Sale, then such Selling Stockholder shall be entitled to offer and sell such shares of Offered Stock to any Person (free and clear of any rights of Monsanto) provided that the price, terms and conditions of such sale, considered as a whole, are at least as favorable to the Selling Stockholder as either (i) those set forth in the Transfer Notice or (ii) those offered by Monsanto in any counter offer, if any; provided, in the event the Transfer Notice shall have stated an Average Price, the Offered Stock may be disposed of in a Public Offering at a price no less than the minimum 15 19 amount used as a basis to calculate the Average Price (less actual underwriting discounts and expenses). Notwithstanding the foregoing, if the Selling Stockholder shall not have signed a definitive agreement to sell the Offered Stock within one hundred eighty (180) days immediately following the expiration of the Offer Period, then the shares of Offered Stock shall again be subject to the terms and conditions of this Agreement in the same manner as if the Transfer Notice had not been given. (e) Limitations on Involuntary Transfers. Subject to Section 3.5, if any involuntary transfer of any of the Stock owned by a Major A Stockholder (a "Transferring Stockholder") shall occur (such as, but not limited to, a sale by a Major A Stockholder's trustee in bankruptcy, or a sale to a purchaser at any creditor's or court sale) other than an involuntary transfer to a Permitted Transferee: (i) Transferee Takes Subject Hereto. The transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold such Stock subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect. (ii) Involuntary Transfer Notice. The Transferring Stockholder (or, if it fails to do so, the transferee) shall promptly give written notice (the "Involuntary Transfer Notice") to Monsanto and the Company stating (a) when the involuntary transfer occurred or is to occur, (b) the circumstances alleged to require such transfer, (c) the number of shares of Stock involved and (d) the name, address and capacity of the transferee. If both the Transferring Stockholder and the transferee shall fail to give the Involuntary Transfer Notice, then the Involuntary Transfer Notice may be given by the Company or by any other stockholder of the Company and 16 20 the Involuntary Transfer Notice so given may contain only such portion of the information set forth in the preceding sentence as shall be known to the Person so giving the Involuntary Transfer Notice. (iii) Purchase Option. Monsanto shall have the irrevocable and exclusive option (but not the obligation) for a period of forty-five (45) days immediately following receipt of the Involuntary Transfer Notice to purchase all but not less than all of the shares of Stock included in the Involuntary Transfer Notice (the "Involuntary Transfer Stock") in cash for the price per share and upon the terms and conditions set forth in this Section 3.2(e). An election to exercise Monsanto's option shall be made by Monsanto by giving written notice to the Company, the transferee and the Transferring Stockholder. (iv) Failure to Give Notice. Failure by Monsanto to give the notice provided for in paragraph (e)(iii) within the time period provided for therein shall be deemed an election by Monsanto not to purchase any shares of the Involuntary Transfer Stock. (v) Closing. If the shares of Involuntary Transfer Stock are to be purchased by Monsanto pursuant to this Section 3.2(e), then such purchase shall, unless the parties thereto otherwise agree, be completed at the principal office of Monsanto on the thirtieth (30th) day following the giving of notice by Monsanto pursuant to paragraph (e)(iii) of its election to exercise its option to purchase the Involuntary Transfer Stock. (vi) Purchase Price. The price per share of the Involuntary Transfer Stock to be paid by Monsanto upon exercise of its option to purchase such 17 21 Involuntary Transfer Stock pursuant to paragraph (e)(iii) shall be as follows: (a) With respect to shares of Class A Common Stock, if the shares of the Company's Class B Common Stock are then traded in the NASDAQ National Market System or on a United States securities exchange registered under the Exchange Act, the price per share shall be the average of the last reported sales price (or, if not available, the average of the closing bid and ask price) per share of the Company's Class B Common Stock on the NASDAQ National Market System (or such other securities exchange on which the Company's Class B Common Stock is then listed) on each of the thirty (30) trading days immediately preceding the closing of the purchase of such Class A Common Stock; and (b) With respect to shares of any Involuntary Transfer Stock other than Class A Common Stock, or, with respect to shares of Class A Common Stock if the Company's Class B Common Stock is not then listed on the NASDAQ National Market System or on a United States securities exchange registered under the Exchange Act, the price per share shall be the fair market value per share as determined by an investment banking firm of recognized standing selected by mutual agreement of the transferee or Transferring Stockholder, as the case may be (depending on who is the legal owner of the Involuntary Transfer Stock), and Monsanto. If the transferee or the Transferring Stockholder, as the case may be, and Monsanto are unable to agree upon an investment banking firm to perform the valuation, then both Monsanto and the transferee or the Transferring Stockholder, as the case may be, shall select an 18 22 investment banking firm and the two investment banking firms so selected shall select a third investment banking firm to perform the valuation. The determination of the third investment banking firm as to the fair market value per share shall be final and binding on the parties. If the parties are unable to mutually agree upon an investment banking firm to perform the valuation, then Monsanto and the transferee or the Transferring Stockholder, as the case may be, shall pay the fees of the investment banking firm selected by each such party. The fees of any investment banking firm mutually agreed upon by the parties and the fees of any third investment banking firm performing the valuation in connection with the services provided pursuant to this paragraph (e)(vi) shall be paid fifty percent (50%) by Monsanto and fifty percent (50%) by the transferee or the Transferring Stockholder, as the case may be. (vii) Delivery of Certificates. At the closing of the purchase and sale of Involuntary Transfer Stock pursuant to the exercise of options granted under this Section 3.2, the Transferring Stockholder or the transferee, as the case may be, shall deliver to Monsanto duly endorsed for transfer, with all required state or federal documentary tax stamps affixed thereto, certificates representing all of the shares of Involuntary Transfer Stock being purchased and sold at such closing against payment therefor in cash or certified or bank cashier's check. In addition, the Transferring Stockholder or the transferee, as the case may be, shall deliver to Monsanto such signature guarantees and other documents and certificates as may be reasonably requested by Monsanto in order to confirm the Transferring Stockholder's or the transferee's, as the case may be, 19 23 title to such Involuntary Transfer Stock and its authority to act in connection with the sale thereof. 3.3 Legend. A copy of this Agreement shall be filed with the Secretary of the Company and shall be kept at its principal executive office. Upon the execution of this Agreement, each of the Major A Stockholders shall cause each certificate representing shares of Stock owned by such Major A Stockholder to carry a legend as follows: THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, CONVEYED, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, MORTGAGED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER COMPLIES WITH THE PROVISIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF JANUARY 31, 1996, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY. Upon the acquisition of additional shares of Stock after the date hereof, each Major A Stockholder shall cause each certificate representing such additional shares of Stock to carry the above legend. 3.4 Nonrecognition of Certain Transfers. Any transfer, acquisition or conversion of shares of Stock in violation of this Agreement shall be null and void. Each Major A Stockholder agrees that any such transfer, acquisition or conversion may and should be enjoined. 3.5 Exceptions. The provisions of this Article 3 shall not apply to: (a) a Pledge of Stock or any interest therein to a bank or other reputable lending institution in a bona fide loan transaction and not made in bad faith to avoid the provisions of this Article 3; provided, however, if the pledgee is not a party to this 20 24 Agreement it shall execute a counterpart of this Agreement acknowledging that it has become a party to this Agreement with respect to the shares of Stock so pledged, after which such pledgee shall be deemed a Major A Stockholder; (b) a transfer, directly or indirectly, voluntarily or involuntarily, of any interest in Stock to a Permitted Transferee (including transfers of Voting Trust Certificates or interests in Stock pursuant to the Roberts Family Voting Trust Agreement and the Roberts Family Shareholder Agreement); provided, however, that the Permitted Transferee, if not then a party to this Agreement, shall execute a counterpart to this Agreement acknowledging that it has become a party to this Agreement with respect to the shares of Stock so transferred, after which such Permitted Transferee shall be deemed a Major A Stockholder; (c) the appointment of or transfer of any interest in Stock to any trustee, guardian, executor, administrator, Voting Trustee of the Voting Trust or other fiduciary acting solely for the benefit of one or more Permitted Transferees; (d) the granting of a proxy with respect to Stock solicited by the Board of Directors; (e) any exchange, conversion or transfer of Stock in connection with a Business Combination; provided, however, that this clause (e) shall not permit any agreement to sell or otherwise transfer any interest in Stock (including the granting of any proxy to the acquiror) by any Major A Stockholder prior to the Company's execution of an agreement with respect to such Business Combination; or (f) any tender or exchange of Stock in accordance with the terms of any tender or exchange offer, which tender or exchange offer would result, if consummated in accordance with its terms, in the beneficial ownership by any Person or group (within the meaning of Rule 13d-3 of the Exchange Act) of all of the Class A Common Stock and 21 25 Class B Common Stock; provided, however, that this clause (f) shall not permit any Major A Stockholder to surrender (or enter into a binding agreement to sell or surrender) any Stock or interest therein in connection with such tender or exchange offer unless the Company has previously published to security holders of the Company a statement pursuant to Rule 14e-2 (or any successor rule) under the Exchange Act. ARTICLE 4 Miscellaneous 4.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State of Delaware (exclusive of such state's choice of laws rules). 4.2 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or transferred, in whole or in part, by any of the parties without the prior written consent of the other parties hereto, except that Monsanto may, without the prior written consent of the other parties hereto, assign all or any of its rights, interests, and obligations under this Agreement to a wholly owned, direct or indirect, United States subsidiary of Monsanto, provided that Monsanto (i) shall remain liable for the performance by any such subsidiary of its obligations under this Agreement, (ii) shall act as agent for any and all such subsidiaries in connection with the receipt and giving of notices under this Agreement and (iii) shall not cause or permit any such subsidiary to be other than a wholly owned direct or indirect subsidiary of Monsanto. Subject to the preceding sentence and as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors, and administrators of the parties hereto. 4.3 Entire Agreement. This Agreement constitutes the complete, exclusive and final understanding and agreement between the parties with regard to the subjects hereof. 22 26 4.4 Notices. Any notice required or permitted to be given under this Agreement shall be in writing, and shall be deemed sufficiently given when delivered in person or transmitted by telegram or telecopier (confirmed by mail) or by a national overnight delivery service, addressed as follows: If to Monsanto: Monsanto Company 800 N. Lindbergh Blvd. St. Louis, MO 63167 Attention: Chief Financial Officer Telecopy Number: (314) 694-3001 with a copy to: Monsanto Company 800 N. Lindbergh Blvd. St. Louis, MO 63167 Attention: General Counsel and Secretary Telecopy Number: (314) 694-3001 If to Douglas C. Douglas C. Roberts Roberts: DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, IL 60115 Telecopy Number: (815) 758-3711 23 27 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Lynne King Roberts: Lynne King Roberts c/o Douglas C. Roberts DEKALB Genetics Corporation 3100 Sycamore Road DeKalb, IL 60115 Telecopy Number: (815) 758-3711 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Terrance K. Holt: Terrance K. Holt 2329 Clover Lane Northfield, IL 60093 Telecopy Number: (708) 572-1818 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Virginia R. Holt: Virginia R. Holt 2329 Clover Lane Northfield, IL 60093 Telecopy Number: (708) 572-1818 24 28 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to John T. Roberts: John T. Roberts 2090 Mulsanne Drive Zionsville, IN 46077 Telecopy Number: (317) 594-4501 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 If to Robin R. Robin R. Roberts Roberts: 2090 Mulsanne Drive Zionsville, IN 46077 Telecopy Number: (317) 594-4501 with a copy to: Frank H. Roberts, Esq. Pillsbury, Madison & Sutro LLP 225 Bush Street San Francisco, CA 94104 Telecopy Number: (415) 983-1200 or to such other address as may be specified from time to time in a notice given by such party. The parties agree to acknowledge in writing the receipt of any such notice delivered in person. 25 29 4.5 Delays or Omissions. Except as otherwise provided in this Agreement, no delay or omission to exercise any right, power or remedy accruing to Monsanto, upon any breach or default of or any Major A Stockholder under this Agreement, shall impair any such right, power or remedy of Monsanto nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party or any waiver on the part of any party of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, at law, in equity or otherwise afforded to any party, shall be cumulative and not alternative. 4.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 4.7 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided, however, that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party. 4.8 Sections and Articles. All sections and articles referred to herein are sections and articles of this Agreement. 4.9 Headings. Headings as to the contents of particular articles and sections are for convenience only and are in no way to be construed as part of this Agreement or as a limitation of the scope of the particular articles or sections to which they refer. 26 30 4.10 Term. The provisions of this Agreement shall be effective from the date hereof until the earlier of (i) the termination of the Collaboration Agreement and License between Monsanto and the Company dated of even date herewith (except if the same is terminated by reason of a material breach thereof by the Company or by reason of a governmental decree caused by the voluntary action of the Company), (ii) such time as Monsanto owns less than (A) five percent (5%) of the outstanding Class A Common Stock or (B) less than fifty percent (50%) of the highest percent of the outstanding Common Stock as is beneficially owned by Monsanto after completion of the tender offer contemplated by the Investment Agreement, the Closing and any purchases in the market of Class B Common Stock by Monsanto as permitted under the Investment Agreement during the one year period after the Closing, (iii) the date on which the Investment Agreement is terminated and (iv) on the eleventh anniversary of the Closing or any subsequent anniversary of the Closing if either Monsanto on the one hand or a majority in interest of Stock beneficially owned by the Persons who are then Major A Stockholders on the other gives written notice to all other parties hereto that this Agreement shall terminate on any such anniversary which is more than 60 days after the date of such notice. 4.11 Effective Date. The provisions of this Agreement shall be effective as of the consummation of the Closing. If the Investment Agreement is terminated prior to the consummation of the Closing, then the provisions of this Agreement shall be null and void and of no further force or effect and this Agreement shall be deemed to be terminated. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written. Monsanto Company /s/ Robert T. Fraley ------------------------------- Robert T. Fraley President, Ceregen 27 31 Douglas C. Roberts /s/ Douglas C. Roberts --------------------- Douglas C. Roberts, individually and as Trustee of (i) the Douglas C. Roberts Trust dated January 28, 1972, (ii) the David Kim Roberts 1989 Trust, (iii) the Steven Suh Roberts 1989 Trust, and (iv) the Jeffrey King Roberts 1989 Trust 28 32 Virginia R. Holt /s/ Virginia R. Holt --------------------- Virginia R. Holt, individually and as Trustee of (i) the Virginia R. Holt Trust dated August 22, 1973, (ii) the Amanda Mary Holt 1989 Trust, and (iii) the Laura Elizabeth Holt 1989 Trust 29 33 John T. Roberts /s/ John T. Roberts ------------------- John T. Roberts, individually and as Trustee of (i) the John T. Roberts Trust dated April 9, 1976, (ii) the Allison Elizabeth Roberts 1989 Trust, and (iii) the Katherine Elsie Roberts 1990 Trust Number 1 30 34 Robin R. Roberts /s/ Robin R. Roberts -------------------- Robin R. Roberts, as Trustee of (i) the Allison Elizabeth Roberts Trust dated August 6, 1986, (ii) the Katherine Elsie Roberts Trust dated March 13, 1990, and (iii) the Charles David Roberts Trust dated February 28, 1994 31 35 Terrance K. Holt /s/ Terrance K. Holt -------------------- Terrance K. Holt, as Trustee of the Amanda Mary Holt Trust dated December 6, 1985 32 36 Charles C. Roberts and Mary R. ROBERTS /s/ Charles C. Roberts ---------------------- /s/ Mary R. Roberts ------------------- CHARLES C. Roberts and Mary R. Roberts, as Trustees of (i) the Charles C.and Mary R. Roberts Living Trust dated October 15, 1991, (ii) the Trust F/B/O Douglas C. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, (iii) the Trust F/B/O Virginia R. Holt under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967, and (iv) the Trust F/B/O John T. Roberts under Eleanor T. Roberts Charitable Trust Agreement dated December 21, 1967 33 37 Lynne King Roberts /s/ Lynne King Roberts ---------------------- Lynne King Roberts, as Trustee of the David Kim Roberts Trust dated October 14, 1987 EX-99.C.5 14 REGISTRATION RIGHTS AGREEMENT 1 Exhibit (c)(5) Execution Copy ================================================================================ REGISTRATION RIGHTS AGREEMENT dated as of January 31, 1996 between DEKALB GENETICS CORPORATION and MONSANTO COMPANY ================================================================================ 2 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of January 31, 1996 between DEKALB GENETICS CORPORATION, a Delaware corporation (the "Company"), and MONSANTO COMPANY, a Delaware corporation ("Holder"). RECITALS WHEREAS, the Holder has agreed to purchase from the Company in accordance with the terms and conditions of an Investment Agreement between the Company and the Holder dated the date hereof (the "Investment Agreement") certain newly issued shares of the Company's Class B Stock and Class A Stock and may acquire additional shares of outstanding Class B Stock pursuant to a tender offer as described in the Investment Agreement; WHEREAS, the parties hereto desire to set forth the Holder's rights and the Company's obligations to cause the registration of the Registrable Securities pursuant to the Securities Act; NOW, THEREFORE, in consideration of the covenants and agreements of the Holder and the Company contained herein and in the Investment Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions and Usage. As used in this Agreement: 1.1. Definitions. Agent. "Agent" shall mean the principal placement agent on an agented placement of Registrable Securities. Board. "Board" shall mean the Board of Directors of the Company. Class A Stock. "Class A Stock" shall mean (i) the Class A Common Stock, without par value, of the Company; and (ii) shares of capital stock of the Company issued by the Company in respect of or in exchange for shares of such Class A Stock in connection with any stock dividend or distribution, stock split-up, recapitalization, recombination or exchange by the Company generally of shares of such Class A Stock. Class B Stock. "Class B Stock" shall mean (i) the Class B Common Stock, without par value, of the Company, and (ii) shares of capital stock of the Company issued by the Company in respect of or in exchange for shares of such Class B Stock in -1- 3 connection with any stock dividend or distribution, stock split-up, recapitalization, recombination or exchange by the Company generally of shares of such Class B Stock. Closing. "Closing" shall mean the closing for the issuance and purchase of the Class A Stock and the Class B Stock as defined in and pursuant to the Investment Agreement. Closing Date. "Closing Date" shall mean the date of the Closing. Commission. "Commission" shall mean the Securities and Exchange Commission. Continuously Effective. "Continuously Effective", with respect to a specified registration statement, shall mean that such registration statement shall not cease to be effective and available for Transfers of Registrable Securities thereunder for longer than either (i) any ten (10) consecutive business days, or (ii) an aggregate of fifteen (15) business days during the period specified in the relevant provision of this Agreement. Demand Registration. "Demand Registration" shall have the meaning set forth in Section 2.1(i). Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934. Holder. "Holder" shall mean HERB COMPANY. Investment Agreement. "Investment Agreement" shall have the meaning set forth in the first Recital to this Agreement. Person. "Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. Piggyback Registration. "Piggyback Registration" shall have the meaning set forth in Section 3. Register, Registered and Registration. "Register", "registered", and "registration" shall refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering by the Commission of effectiveness of such registration statement or document. -2- 4 Registrable Securities. "Registrable Securities" shall mean the Class B Stock which the Holder acquires pursuant to the Investment Agreement (including by way of the tender offer described therein and any open market purchases permitted thereunder) and any Class B Stock which the holder acquires upon exchange of Class A Stock acquired by the Holder pursuant to the Investment Agreement, in either case owned by the Holder on the date of determination; provided, however, that Registrable Securities shall not include any security of the Company acquired by the Holder in violation of an express covenant of the Holder contained in the Investment Agreement, and, provided further, the Company shall have no obligation under Sections 2 and 3 to register any Registrable Securities of the Holder if the Company shall deliver to the Holder an opinion of counsel reasonably satisfactory to such Holder and its counsel to the effect that the proposed sale or disposition of all of the Registrable Securities for which registration was requested does not require registration under the Securities Act for a sale or disposition in a single public sale, and offers to remove any and all legends restricting transfer from the certificates evidencing such Registrable Securities, subject to prior compliance by the Holder with the provisions of Article 9 of the Investment Agreement. Registration Expenses. "Registration Expenses" shall have the meaning set forth in Section 6.1. Securities Act. "Securities Act" shall mean the Securities Act of 1933. Transfer. "Transfer" shall mean and include the act of selling, giving, transferring, creating a trust (voting or otherwise), assigning or otherwise disposing of (other than pledging, hypothecating or otherwise transferring as security) (and correlative words shall have correlative meanings); provided however, that any transfer or other disposition upon foreclosure or other exercise of remedies of a secured creditor after an event of default under or with respect to a pledge, hypothecation or other transfer as security shall constitute a "Transfer". Underwriters' Representative. "Underwriters' Representative" shall mean the managing underwriter, or, in the case of a co-managed underwriting, the managing underwriter designated as the Underwriters' Representative by the co-managers. Violation. "Violation" shall have the meaning set forth in Section 7.1. 1.2. Usage. (i) References to a Person are also references to its successors in interest (by means of merger, consolidation or sale of all or substantially all the assets of such Person or otherwise, as the case may be) and permitted assigns. (ii) References to a document are to it as amended, waived and otherwise modified from time to time and references to a statute or other governmental rule are to it as amended and otherwise modified from time to time (and references to any provision thereof shall include references to any successor provision). -3- 5 (iii) References to Sections or to Schedules or Exhibits are to sections hereof or schedules or exhibits hereto, unless the context otherwise requires. (iv) The definitions set forth herein are equally applicable both to the singular and plural forms and the feminine, masculine and neuter forms of the terms defined. (v) The term "including" and correlative terms shall be deemed to be followed by "without limitation" whether or not followed by such words or words of like import. (vi) The term "hereof" and similar terms refer to this Agreement as a whole. (vii) The "date of" any notice or request given pursuant to this Agreement shall be determined in accordance with Section 11. Section 2. Demand Registration. 2.1. (i) At any time on or after the third anniversary of the Closing Date, or after such earlier date as the Holder shall be entitled to transfer shares of Class B Stock pursuant to the provisions of Section 9.1.2 of the Investment Agreement, if the Holder shall make a written request to the Company, the Company shall cause to be filed with the Commission a registration statement meeting the requirements of the Securities Act (a "Demand Registration"), and the Holder shall be entitled to have included therein all or such number of Holder's Registrable Securities, as the Holder shall request in writing; provided, however, that no request may be made pursuant to this Section 2.1 if within twelve (12) months prior to the date of such request a Demand Registration Statement pursuant to this Section 2.1 shall have been declared effective by the Commission. Any request made pursuant to this Section 2.1 shall be addressed to the attention of the Secretary of the Company, and shall specify the number of Registrable Securities to be registered, the intended methods of disposition thereof and that the request is for a Demand Registration pursuant to this Section 2.1(i). (ii) The Company shall be entitled to postpone for up to 180 days the filing of any Demand Registration statement otherwise required to be prepared and filed pursuant to this Section 2.1 (or delay seeking effectiveness of a Registration Statement which has been filed), if the Board determines, in its good faith reasonable judgment, that such registration would materially interfere with, or require premature disclosure of, any financing, acquisition, reorganization or other material matter involving the Company or any of its subsidiaries and the Company promptly gives the Holder notice of such determination; provided, however, that the Company shall not have postponed pursuant to this Section 2.1(ii) the filing of any other Demand Registration statement otherwise required to be -4- 6 prepared and filed pursuant to this Section 2.1 during the 180-day period ended on the date of the relevant request pursuant to Section 2.1(i). 2.2. Following receipt of a request for a Demand Registration, the Company shall: (i) File the registration statement with the Commission as promptly as practicable, and, subject to Section 2.1(ii), shall use the Company's reasonable efforts to have the registration declared effective under the Securities Act as soon as reasonably practicable, in each instance giving due regard to the need to prepare current financial statements, conduct due diligence and complete other actions that are reasonably necessary to effect a registered public offering. (ii) Use the Company's reasonable efforts to keep the relevant registration statement Continuously Effective, if a Demand Registration, for up to 60 days or until such earlier date as of which all the Registrable Securities under the Demand Registration statement shall have been disposed of in the manner described in the Registration Statement. Notwithstanding the foregoing, if for any reason the effectiveness of a registration pursuant to this Section 2 is suspended or, in the case of a Demand Registration, filing of the Registration Statement or seeking effectiveness thereof is postponed as permitted by Section 2.1(ii), the foregoing period shall be extended by the aggregate number of days of such suspension or postponement. 2.3. The Company shall be obligated to effect no more than two Demand Registrations. For purposes of the preceding sentence, registration shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective, (ii) if after such registration statement has become effective, such registration or the related offer, sale or distribution of Registrable Securities thereunder is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to the Holder and such interference is not thereafter eliminated, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of the Holder. If the Company shall have complied with its obligations under this Agreement, a right to demand a registration pursuant to this Section 2 shall be deemed to have been satisfied upon the earlier of (x) the date as of which all of the Registrable Securities included therein shall have been disposed of pursuant to the Registration Statement, and (y) the date as of which such Demand Registration shall have been Continuously Effective for a period of [90] days, provided no stop order or similar order, or proceedings for such an order, is thereafter entered or initiated. -5- 7 2.4. A registration pursuant to this Section 2 shall be on such appropriate registration form of the Commission as shall (i) be selected by the Company and be reasonably acceptable to the Holder, and (ii) permit the disposition of the Registrable Securities in accordance with the intended method or methods of disposition specified in the request pursuant to Section 2.1(i). 2.5. If any registration pursuant to Section 2 involves an underwritten offering (whether on a "firm", "best efforts" or "all reasonable efforts" basis or otherwise), or an agented offering, the Holder, shall have the right to select the underwriter or underwriters and manager or managers to administer such underwritten offering or the placement agent or agents for such agented offering; provided, however, that each Person so selected shall be reasonably acceptable to the Company. Section 3. Piggyback Registration. 3.1. If at any time after the third anniversary of the Closing Date, or after such earlier date as the Holder shall be entitled to transfer shares of Class B Stock pursuant to the provisions of Section 9.1.2 of the Investment Agreement, the Company proposes to register (including for this purpose a registration effected by the Company for shareholders of the Company other than the Holder) securities under the Securities Act in connection with the public offering solely for cash on Form S-1, S-2 or S-3 (or any replacement or successor forms), the Company shall promptly give the Holder written notice of such registration (a "Piggyback Registration"). Upon the written request of the Holder given within 20 days following the date of such notice, the Company shall cause to be included in such registration statement and use its reasonable efforts to be registered under the Securities Act all the Registrable Securities that the Holder shall have requested to be registered; provided, however, that such right of inclusion shall not apply to any registration statement covering an underwritten offering of convertible debt securities. The Company shall have the absolute right to withdraw or cease to prepare or file any registration statement for any offering referred to in this Section 3 without any obligation or liability to the Holder. 3.2. If the Underwriters' Representative or Agent shall advise the Company in writing (with a copy to the Holder) that, in its opinion, the amount of Registrable Securities requested to be included in such registration would materially adversely affect such offering, or the timing thereof, then the Company will include in such registration, to the extent of the amount and class which the Company is so advised can be sold without such material adverse effect in such offering: First, all securities proposed to be sold by the Company for its own account; and second, the Registrable Securities requested to be included in such registration by the Holder pursuant to this Section 3 and third, any other securities being registered other than on behalf of the Company or the Holder. 3.3. The Holder shall be entitled to have its Registrable Securities included in up to five (5) Piggyback Registrations pursuant to this Section 3. -6- 8 Section 4. Registration Procedures. Whenever required under Section 2 or Section 3 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as practicable: 4.1. Prepare and file with the Commission a registration statement with respect to such Registrable Securities and, subject to Section 3.1, use the Company's reasonable efforts to cause such registration statement to become effective; provided, however, that before filing a registration statement or prospectus or any amendments or supplements thereto, including documents incorporated by reference after the initial filing of the registration statement and prior to effectiveness thereof, the Company shall furnish to counsel for the Holder, copies of all such documents in the form substantially as proposed to be filed with the Commission prior to filing for review and comment by such counsel. 4.2. Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act and rules thereunder with respect to the disposition of all securities covered by such registration statement. If the registration is for an underwritten offering, the Company shall amend the registration statement or supplement the prospectus whenever required by the terms of the underwriting agreement entered into pursuant to Section 5.2. Pending such amendment or supplement the Holder shall cease making offers or Transfers of Registerable Shares pursuant to the prior prospectus. In the event that any Registrable Securities included in a registration statement subject to, or required by, this Agreement remain unsold at the end of the period during which the Company is obligated to use its reasonable efforts to maintain the effectiveness of such registration statement, the Company may file a post-effective amendment to the registration statement for the purpose of removing such Securities from registered status. 4.3. Furnish to the Holder, without charge, such numbers of copies of the registration statement, any pre-effective or post-effective amendment thereto, the prospectus, including each preliminary prospectus and any amendments or supplements thereto, in each case in conformity with the requirements of the Securities Act and the rules thereunder, and such other related documents as the Holder may reasonably request in order to facilitate the disposition of Registrable Securities owned by the Holder. 4.4. Use the Company's reasonable efforts (i) to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such states or jurisdictions as shall be reasonably requested by the Underwriters' Representative or Agent (as applicable, or if inapplicable, in up to ten states designated by the Holder), and (ii) to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification (or exemption from qualification) of the offer and transfer of any of the Registrable Securities in any jurisdiction, at the earliest possible moment; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify -7- 9 to do business or to file a general consent to service of process in any such states or jurisdictions. 4.5. In the event of any underwritten or agented offering, enter into and perform the Company's obligations under an underwriting or agency agreement (including indemnification and contribution obligations of underwriters or agents in the form set forth in Section 7), in usual and customary form, with the managing underwriter or underwriters of or agents for such offering. The Company shall also cooperate with the Holder, and the Underwriters' Representative or Agent for such offering in the marketing of the Registrable Securities. 4.6. Promptly notify the Holder of any stop order issued or threatened to be issued by the Commission in connection therewith and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered. 4.7. Make available for inspection by the Holder, any underwriter participating in such offering and the representatives of the Holder and Underwriter all financial and other information as shall be reasonably requested by them, and provide the Holder, any underwriter participating in such offering and the representatives of the Holder and such Underwriter the reasonable opportunity to discuss the business affairs of the Company with its principal executives and independent public accountants who have certified the audited financial statements included in such registration statement, in each case all as necessary to enable them to exercise their due diligence responsibility under the Securities Act; provided, however, that information that the Company determines, in good faith, to be confidential and which the Company advises such Person in writing, is confidential shall not be disclosed unless such Person signs a confidentiality agreement reasonably satisfactory to the Company or the Holder of Registrable Securities agrees to be responsible for such Person's breach of confidentiality on terms reasonably satisfactory to the Company. 4.8. Use the Company's reasonable efforts to obtain a so-called "comfort letter" from its independent public accountants, and legal opinions of counsel to the Company addressed to the Holder, in customary form and covering such matters of the type customarily covered by such letters, and in a form that shall be reasonably satisfactory to the Holder. The Company shall furnish to the Holder a signed counterpart of any such comfort letter or legal opinion. Delivery of any such opinion or comfort letter shall be subject to the recipient furnishing such written representations or acknowledgements as are customarily provided by selling shareholders who receive such comfort letters or opinions. 4.9. Provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such registration statement from and after a date not later than the effective date of such registration statement. 4.10. Use reasonable efforts to cause the Registrable Securities covered by such registration statement (i) if the Class B Stock is then listed on a securities exchange or included for quotation in a recognized trading market, to continue to be so listed or -8- 10 included for a reasonable period of time after the offering, and (ii) to be registered with or approved by such other United States or state governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Holder to consummate the disposition of the Registrable Securities which are included in such registration. 4.11. Take such other actions as are reasonably required in order to expedite or facilitate the disposition of Registrable Securities included in such registration Section 5. Holder's Obligations. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities which are included in such registration that the Holder shall: 5.1. Furnish to the Company such information regarding the Holder, the number of the Registrable Securities owned by it, and the intended method of disposition of such Registrable Securities as shall be required to effect the registration of the Holder's Registrable Securities, and to cooperate with the Company in preparing such registration. Section 6. Expenses of Registration. Expenses in connection with registrations pursuant to this Agreement shall be allocated and paid as follows: 6.1. With respect to each Demand Registration (except as otherwise provided in Sections 9.1.5, 9.1.6 and 9.1.7 of the Investment Agreement), the Company shall bear and pay all expenses incurred in connection with any registration, filing, or qualification of Registrable Securities with respect to such Demand Registrations, including all registration, filing and National Association of Securities Dealers, Inc. fees, all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, messenger and delivery expenses, and the reasonable fees and disbursements of counsel for the Company, and of the Company's independent public accountants, including the expenses of "cold comfort" letters required by or incident to such performance and compliance (the "Registration Expenses"), but excluding underwriting discounts and commissions relating to Registrable Securities or fees and expenses of Holder's counsel (which shall be paid by the Holder) provided, however, that the Company shall not be required to pay for any expenses of any registration begun pursuant to Section 2 if the registration is subsequently withdrawn at the request of the Holder (in which case the Holder shall bear such expense), unless the Holder agrees that such withdrawn registration shall constitute one of the demand registrations under Section 2 hereof. 6.2. The Company shall bear and pay all Registration Expenses incurred in connection with any Piggyback Registrations pursuant to Section 3 for the Holder, but excluding, except as otherwise provided in Sections 9.1.5, 9.1.6 and 9.1.7 of the Investment Agreement, underwriting discounts and commissions relating to Registrable Securities or fees and expenses of the Holder's counsel (each of which shall be paid by the Holder). -9- 11 6.3. Any failure of the Company to pay any Registration Expenses as required by this Section 6 shall not relieve the Company of its obligations under this Agreement. Section 7. Indemnification; Contribution. If any Registrable Securities are included in a registration statement under this Agreement: 7.1. To the extent permitted by applicable law, the Company shall indemnify and hold harmless the Holder, each Person, if any, who controls such Holder within the meaning of the Securities Act, and each officer, director, partner, and employee of the Holder and such controlling Person, against any and all losses, claims, damages, liabilities and expenses (joint or several), including reasonable attorneys' fees and disbursements and expenses of investigation, incurred by such party pursuant to any actual or threatened action, suit, proceeding or investigation, or to which any of the foregoing Persons may become subject under the Securities Act, the Exchange Act or other federal or state laws, insofar as such losses, claims, damages, liabilities and expenses arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) Any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein, or any amendments or supplements thereto; (ii) The omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) Any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any applicable state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any applicable state securities law; provided, however, that the indemnification required by this Section 7.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or expense to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished to the Company by the indemnified party expressly for use in connection with such registration; provided, further, that the indemnity agreement contained in this Section 7 shall not apply to any underwriter to the extent that any such loss is based on or arises out of an untrue statement or alleged untrue statement of a material fact, or an omission or alleged omission to state a material fact, contained in or omitted from any preliminary prospectus if the final prospectus shall correct such untrue statement or alleged untrue statement, or such omission or alleged omission, and a copy of the final prospectus has not been sent or given to such person at or prior to the confirmation of sale to such person if such -10- 12 underwriter was under an obligation to deliver such final prospectus and failed to do so. The Company shall also indemnify underwriters and selling or placement agents participating in the distribution, their officers, directors, agents and employees and each person who controls such persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holder provided, however that no such underwriter or agent shall be entitled to indemnification under this Agreement if such person shall have entered into a separate underwriting agency or indemnification agreement with the Company. 7.2. To the extent permitted by applicable law, the Holder shall indemnify and hold harmless the Company, each of its directors, each of its officers who shall have signed the registration statement, each Person, if any, who controls the Company within the meaning of the Securities Act, and each officer, director, partner, and employee of the Company and such controlling Person, against any and all losses, claims, damages, liabilities and expenses (joint and several), including attorneys' fees and disbursements and expenses of investigation, incurred by such party pursuant to any actual or threatened action, suit, proceeding or investigation, or to which any of the foregoing may otherwise become subject under the Securities Act, the Exchange Act or other federal or state laws, insofar as such losses, claims, damages, liabilities and expenses arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by the Holder expressly for use in connection with such registration; provided, however, that the indemnification required by this Section 7.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense if settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld. 7.3. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, suit, proceeding, investigation or threat thereof made in writing for which such indemnified party may make a claim under this Section 7, such indemnified party shall deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; subject to the rights of an indemnified party to retain its own counsel as hereinafter provided. The failure to deliver written notice to the indemnifying party within a reasonable time following the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 7 but shall not relieve the indemnifying party of any liability that it may have to any indemnified party otherwise than pursuant to this Section 7. Any fees and expenses incurred by the indemnified party (including any fees and expenses incurred in connection with investigating or preparing to defend such action or proceeding) owed by the indemnifying party hereunder shall be paid to the indemnified party, as incurred, within thirty (30) days of written notice thereof to the indemnifying party (subject to refund if it is ultimately determined that an indemnified party is not entitled to indemnification hereunder). Any such indemnified party shall have the right to employ separate counsel in any such action, claim or proceeding and to participate in the defense -11- 13 thereof, but the fees and expenses of such counsel shall be the expenses of such indemnified party unless (i) the indemnifying party has agreed to pay such fees and expenses or (ii) the indemnifying party shall have failed to promptly assume the defense of such action, claim or proceeding or (iii) the named parties to any such action, claim or proceeding (including any impleaded parties) include both such indemnified party and the indemnifying party, and such indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or in addition to those available to the indemnifying party and that the assertion of such defenses would create a conflict of interest such that counsel employed by the indemnifying party could not faithfully represent the indemnified party (in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such action, claim or proceeding on behalf of such indemnified party, it being understood, however, that the indemnifying party shall not, in connection with any one such action, claim or proceeding or separate but substantially similar or related actions, claims or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all such indemnified parties, unless in the reasonable judgment of such indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such action, claim or proceeding, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels). 7.4. If the indemnification required by this Section 7 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to in this Section 7: (i) The indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any Violation has been committed by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such Violation. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 7.1 and Section 7.2, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. (ii) The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7.4 were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in Section 7.4(i). No Person guilty of fraudulent -12- 14 misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 7.5. If indemnification is available under this Section 7, the indemnifying parties shall indemnify each indemnified party to the full extent provided in this Section 7 without regard to the relative fault of such indemnifying party or indemnified party or any other equitable consideration referred to in Section 7.4. 7.6. The obligations of the Company and the Holder under this Section 7 shall survive the completion of any offering of Registrable Securities pursuant to a registration statement under this Agreement, and otherwise. Section 8. Holdback. If so requested by the Underwriters' Representative or Agent in connection with an offering of any securities covered by a registration statement filed by the Company, whether or not Holder's securities are included therein, the Holder shall agree not to effect any sale or distribution of shares of Class B Stock or any securities convertible into or exchangeable or exercisable for shares of Class B Stock, including a sale pursuant to Rule 144 under the Securities Act (except as part of such underwritten or agented registration), during the 30-day period prior to, and during the 150-day period beginning on, the date such registration statement is declared effective under the Securities Act by the Commission, provided that the Holder is timely notified of such effective date in writing by the Company or such Underwriters' Representative or Agent. In order to enforce the foregoing covenant, the Company shall be entitled to impose stop-transfer instructions with respect to the Registrable Securities of the Holder until the end of such period. Section 9. Amendment, Modification and Waivers; Further Assurances. (i) This Agreement may be amended with the consent of the Company and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent of the Holder to such amendment, action or omission to act. (ii) No waiver of any terms or conditions of this Agreement shall operate as a waiver of any other breach of such terms and conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. No written waiver hereunder, unless it by its own terms explicitly provides to the contrary, shall be construed to effect a continuing waiver of the provisions being waived and no such waiver in any instance shall constitute a waiver in any other instance or for any other purpose or impair the right of the party against whom such waiver is claimed in all other instances or for all other purposes to require full compliance with such provision. -13- 15 (iii) Each of the parties hereto shall execute all such further instruments and documents and take all such further action as any other party hereto may reasonably require in order to effectuate the terms and purposes of this Agreement. Section 10. Assignment; Benefit. This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by the Holder to any Person except a wholly owned direct or indirect subsidiary of the Holder to whom the Holder shall have transferred all of the Registrable Securities then owned by the Holder as permitted by, and subject to the terms of, Sections 9.1.1 or 9.1.2 of the Investment Agreement. Section 11. Miscellaneous. 11.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. 11.2. Notices. All notices and requests given pursuant to this Agreement shall be in writing and shall be made by hand-delivery, first-class mail (registered or certified, return receipt requested), confirmed facsimile or overnight air courier guaranteeing next business day delivery to the relevant address specified below: If to Investor, to: Monsanto Company 800 N. Lindbergh Boulevard St. Louis, Missouri 63167 Attention: Chief Financial Officer Fax: 314-694-3001 -14- 16 with a copy to: General Counsel and Secretary Fax: 314-694-3001 If to Company, to: DEKALB Genetics Corporation 3100 Sycamore Road Dekalb, IL 60115 Attention: Senior Vice President and General Counsel Fax: 815-758-6953 with a copy to: James G. Archer c/o Sidley & Austin 875 Third Avenue New York, NY 10022 Fax: 212-906-2021 -15- 17 Except as otherwise provided in this Agreement, the date of each such notice and request shall be deemed to be, and the date on which each such notice and request shall be deemed given shall be: at the time delivered, if personally delivered or mailed; when receipt is acknowledged, if sent by facsimile; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next business day delivery. 11.3. Entire Agreement; Integration. This Agreement supersedes all prior agreements between or among any of the parties hereto with respect to the subject matter contained herein and therein, and such agreements embody the entire understanding among the parties relating to such subject matter. 11.4. Injunctive Relief. Each of the parties hereto acknowledges that in the event of a breach by any of them of any material provision of this Agreement, the aggrieved party may be without an adequate remedy at law. Each of the parties therefore agrees that in the event of such a breach hereof the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach hereof. By seeking or obtaining any such relief, the aggrieved party shall not be precluded from seeking or obtaining any other relief to which it may be entitled. 11.5. Section Headings. Section headings are for convenience of reference only and shall not affect the meaning of any provision of this Agreement. 11.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute one and the same instrument. All signatures need not be on the same counterpart. 11.7. Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement, unless the result thereof would be unreasonable, in which case the parties hereto shall negotiate in good faith as to appropriate amendments hereto. 11.8. Filing. A copy of this Agreement and of all amendments thereto shall be filed at the principal executive office of the Company with the corporate records of the Company. 11.9. Termination. If for any reason the Closing does not occur and the Investment Agreement shall be terminated, this Agreement shall terminate and be of no further force and effect. This Agreement may be terminated at any time by a written instrument signed by the parties hereto. Unless sooner terminated in accordance with the preceding sentences, this Agreement (other than Section 7 hereof) shall terminate in its entirety on such date as there shall be no Registrable Securities outstanding, provided that any shares of Class B Stock previously subject to this Agreement shall not be Registrable Securities following the sale of any such shares in an offering registered pursuant to this Agreement. -16- 18 11.10. Attorneys' Fees. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys' fees (including any fees incurred in any appeal) in addition to its costs and expenses and any other available remedy. 11.11. No Third Party Beneficiaries. Nothing herein expressed or implied is intended to confer upon any person, other than the parties hereto or their respective permitted assigns, successors, heirs and legal representatives, any rights, remedies, obligations or liabilities under or by reason of this Agreement. IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first written above. MONSANTO COMPANY By: Robert T. Fraley ------------------------- Robert T. Fraley President, Ceregen DEKALB GENETICS CORPORATION By: Bruce P. Bickner ------------------------- Bruce P. Bickner Chairman and CEO -17- -----END PRIVACY-ENHANCED MESSAGE-----