CALGENE, INC.
(formerly Calgene II, Inc.)
AND
MONSANTO COMPANY
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 Effect of this Agreement .............................. 2
1.1 Effect of this Agreement ........................................ 2
ARTICLE 2 Compliance with Securities Act ........................ 2
2.1 Certain Definitions ............................................. 2
2.2 Requested Registration .......................................... 8
2.3 Company Registration ............................................ 11
2.4 Expenses of Registration ........................................ 12
2.5 Registration Procedures ......................................... 13
2.6 Indemnification ................................................. 14
2.7 Information by Holder ........................................... 16
2.8 Rule 144 Reporting .............................................. 17
2.9 Transfer of Registration Rights ................................. 17
2.10 Limitations on Subsequent Registration Rights .............. 18
2.11 Termination of Registration Rights ......................... 18
2.12 "Market Stand-off" Agreement ............................... 18
ARTICLE 3 Anti-Dilution Rights and Limitations on Owner ......... 18
3.1 Anti-Dilution Rights ............................................ 18
3.2 Private Offering ................................................ 19
3.3 Public Offering ................................................. 19
3.4 Limitations ..................................................... 20
3.5 Open Market Purchases to Maintain Ownership Percentage .......... 20
3.6 Limitations on Holder's Ownership ............................... 20
3.7 Limitations on Holder's Resale of Company Securities ............ 21
ARTICLE 4 Company and Calgene Corporate Governance .............. 22
4.1 Composition of the Board of Directors and Calgene Board ......... 22
4.2 Solicitation and Voting of Shares ............................... 25
4.3 Committees ...................................................... 26
4.4 Approval Required for Certain Actions ........................... 28
4.5 Enforcement of this Agreement ................................... 31
4.6 Certificate of Incorporation and By-laws ........................ 31
4.7 Advisors ........................................................ 31
4.8 Injunctive Relief ............................................... 31
ARTICLE 5 Governance of ▇▇▇▇▇▇▇▇ ................................ 32
ARTICLE 6 Miscellaneous ......................................... 32
6.1 Governing Law ................................................... 32
6.2 Successors and Assigns .......................................... 32
6.3 Entire Agreement; Amendment ..................................... 32
6.4 Notices ......................................................... 32
6.5 Delays or Omissions ............................................. 33
6.6 Counterparts .................................................... 33
6.7 Severability .................................................... 33
6.8 Stock Legends ................................................... 34
6.9 [This section intentionally left blank.] ........................ 34
6.10 Audits, Consultants and Inspections ........................ 34
6.11 No Third Party Beneficiaries ............................... 35
6.12 Sections and Articles ...................................... 35
6.13 Headings ................................................... 35
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
AGREEMENT made as of the 12th day of November, 1996, by and between
Calgene, Inc., a Delaware corporation, (formerly known as Calgene II, Inc.)
having its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Company"), and Monsanto Company, a Delaware corporation, having its
principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Monsanto").
WHEREAS, Calgene Technology Corporation, a Delaware corporation and a
wholly- owned subsidiary of the Company (formerly known as Calgene, Inc.)
("Calgene"), and Monsanto entered into an Agreement and Plan of Reorganization,
dated as of October 13, 1995 (the "Reorganization Agreement"), and certain other
Transaction Agreements (as defined in the Reorganization Agreement) whereby
Monsanto acquired shares of the Company's common stock, par value $.001 per
share ("Common Stock") and may acquire additional shares of Common Stock;
WHEREAS, the Company and Monsanto agreed that the Company shall, at the
request of a Holder (as hereafter defined), register under the Securities Act of
1933, as amended (the "Securities Act"), and register or qualify under any
applicable state securities or blue sky laws the Common Stock of the Company
acquired or to be acquired by Holder so as to permit a Holder to sell such
Common Stock in the public markets;
WHEREAS, the Company and Monsanto agreed on certain restrictions and
obligations with respect to the management and operation of the Company, Calgene
and Tomato Investment Associates, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Tomato Associates");
WHEREAS, the Company and Monsanto have entered into a Stock Purchase
Agreement dated as of September 27, 1996 (the "Stock Purchase Agreement")
pursuant to which Monsanto has agreed to purchase additional shares of Common
Stock of the Company; and
WHEREAS, in connection with the consummation of the transaction
contemplated by the Stock Purchase Agreement, the Company and Monsanto desire to
amend the Stockholders Agreement dated March 31, 1996 by and between the Company
and Monsanto (the "Prior Stockholders Agreement") in its entirety and to become
bound by the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, the Company and Monsanto hereby agree as
follows:
ARTICLE 1
Effect of this Agreement
1.1 Effect of this Agreement. Effective upon the date hereof, and subject
only to the conditions set forth herein, all provisions relating to
the granting of registration rights and covenants related thereto made
by the Company and Monsanto shall be contained in this Agreement. The
registration rights and covenants provided herein set forth the sole
and entire agreement between the Company and Monsanto on the subject
matter of registration rights.
ARTICLE 2
Compliance with Securities Act
2.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings (all terms defined in
this Article 2 or in other provisions of this Agreement in the
singular shall have the same meaning when used in the plural and vice
versa):
"Affiliate" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act.
"Associate" has the same meaning as in Rule 12b-2 promulgated under
the Exchange Act.
"Board" or "Board of Directors" means the Board of Directors of the
Company except where the context otherwise requires.
"Calgene" has the meaning set forth in the recitals herein.
"Calgene Board" means the Board of Directors of Calgene.
"Calgene Director" means a member of the Calgene Board.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, $.001 par value, of the
Company.
"Company" has the meaning set forth in the first paragraph hereof.
"Company Credit Facility" means the Holding Company Credit Facility
Agreement dated March 31, 1996 between the Company and Monsanto.
"Company Director" means an Independent Director who is designated for
such position by the Company in accordance with Section 4.1 hereof.
"Company Management Director" means the Chief Executive Officer (or,
if there is none at any time, a Director nominated by a majority of
the Company Directors) and a second Director who shall be nominated by
a majority of the Company Directors.
"Company Securities" has the meaning set forth in Section 3.1 hereof.
"Control Securities" means securities of the Company, other than
Restricted Securities, owned by a Holder at the time such Holder would
be deemed to be an Affiliate of the Company.
"Credit Facilities" means the Company Credit Facility and the ▇▇▇▇▇▇▇▇
Credit Facility.
"Director" means a member of the Board of Directors of the Company.
"Effective Date" means November 12, 1996.
"Effective Date Percentage" means the greater of 53% or the percentage
of outstanding shares of Common Stock of the Company held by Monsanto
immediately after the consummation of the transactions contemplated by
the Stock Purchase Agreement.
"Equity Security" means (i) any Common Stock or other Voting Stock,
(ii) any securities of the Company convertible into or exchangeable
for Common Stock or other Voting Stock or (iii) any options, rights or
warrants (or any similar securities) issued by the Company to acquire
Common Stock or other Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financial Purchaser" means a Person (i) purchasing Company Securities
from Monsanto for investment purposes or otherwise in the ordinary
course of business and not for the purpose nor with the effect of
changing or influencing the control of the Company and (ii) which
Person is not already primarily in the same lines of business as the
Company.
"▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇, Inc. formerly known as Tomato Investment
Associates, Inc.
"▇▇▇▇▇▇▇▇ Business" means the business transacted by Tomato Associates
after March 31, 1996, which business was transacted by ▇▇▇▇▇▇▇▇ prior
to March 31, 1996.
"▇▇▇▇▇▇▇▇ Credit Facility" means the ▇▇▇▇▇▇▇▇ Credit Facility
Agreement dated March 31, 1996 between the Company and Monsanto.
"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.
"Holder" means Monsanto and, subject to Section 2.9 hereof and
except for purposes of Article 3 hereof, any subsequent holder of
outstanding Registrable Securities.
"Indemnified Party" has the meaning set forth in Section 2.6(c)
hereof.
"Indemnifying Party" has the meaning set forth in Section 2.6(c)
hereof.
"Independent Director" means a Director or Calgene Director (i)
who is not and has never been an officer or employee of Calgene,
the Company, any Affiliate or Associate of Calgene or the Company
or of a Person that derived five percent (5%) or more of its
revenues or earnings in its most recent fiscal year from
transactions involving Calgene, the Company or any Affiliate or
Associate of Calgene or the Company, (ii) who is not and has never
been an officer or employee of Monsanto, any Affiliate or
Associate of Monsanto or of a Person that derived more than five
percent (5%) of its revenues or earnings in its most recent fiscal
year from transactions involving Monsanto or any Affiliate or
Associate of Monsanto, (iii) who is not and never has been an
officer or employee of ▇▇▇▇▇▇▇▇, any Affiliate or Associate of
▇▇▇▇▇▇▇▇ or of a Person that derived more than five percent (5%)
of its revenues or earnings in its most recent fiscal year from
transactions involving ▇▇▇▇▇▇▇▇ or any Affiliate or Associate of
▇▇▇▇▇▇▇▇, (iv) who has no affiliation, compensation, consulting or
contracting arrangement with Calgene, the Company, Monsanto,
▇▇▇▇▇▇▇▇ or their respective Affiliates or Associates or any other
Person such that a reasonable person would regard such Director as
likely to be unduly influenced by management of Calgene, the
Company or Monsanto, respectively (provided, however, that no
Person shall be regarded as being unduly influenced by the
management of Monsanto merely because such Person serves or
previously served as a director of Monsanto or any Affiliate or
Associate of Monsanto), and (v) who has an outstanding reputation
for personal integrity and distinguished achievement in areas
relevant to the Company. Notwithstanding the foregoing, no member
of the immediate family of any Person who does not qualify to be
an Independent Director by reason
of clause (i), (ii), (iii) or (iv) above shall be considered an
Independent Director. For purposes of the preceding sentence, the
term "immediate family" shall have the same meaning as set forth
in Item 404(a) of Regulation S-K. Without limiting the foregoing,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall qualify as an Independent Director so long
as he continues to qualify under clauses (iv) and (v) of such
definition. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall not fail to qualify under
clause (iv) above as a result of his Change in Control Employment
Agreement dated July 19, 1995, as modified, or Consulting
Agreement dated September 16, 1996 with the Company. Any of the
above restrictions may be waived by unanimous action of the Board
of Directors.
"Monsanto" has the meaning set forth in the first paragraph
hereof.
"Monsanto Director" means a Director or Calgene Director,
including any Monsanto Management Director, who is designated for
such position by Monsanto in accordance with Section 4.1 hereof.
"Monsanto Management Director" means a Director or Calgene
Director who is designated for such position by Monsanto in
accordance with Section 4.1 hereof and who is or was an employee
of Monsanto.
"New Percentage Ownership" has the meaning set forth in
Section 3.6(c) hereof.
"Non-Financial Purchaser" means a Person, other than a Financial
Purchaser, purchasing Company Securities from Monsanto.
"Operating Plan" has the meaning set forth in Section 4.4(a)(ix)
hereof.
"Other Selling Stockholders" has the meaning set forth in Section
2.2(c) hereof.
"Percentage Interest" means the percentage of outstanding Voting
Stock that is controlled directly or directly by Monsanto and its
Affiliates.
"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.
"Preliminary Prospectus" means a preliminary prospectus as
contemplated by Rule 430 or 430A under the Securities Act included
at any time in the Registration Statement.
"Pre-Offering Percentage" has the meaning set forth in Section
3.1 hereof.
"Prospectus" means (i) the prospectus as first filed with the
Commission pursuant to Rule 424(b) under the Securities Act or,
(ii) if no such filing is required, the form of final prospectus
included in the Registration Statement at the effective date
thereof or (iii) if a Term Sheet or Abbreviated Term Sheet (as
such terms are defined in Rule 434(b) and 434(c), respectively,
under the Securities Act) is filed with the Commission pursuant to
Rule 424(b) (7) under the Securities Act, the Term Sheet or
Abbreviated Term Sheet and the last Preliminary Prospectus filed
with the Commission prior to the time the Registration Statement
became effective, taken together (including, in each case, the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act), together with any supplement
to any of the foregoing.
"Registration Statement" means any registration statement of the
Company filed under the Securities Act which covers any of the
Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus relating thereto and all
amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all material
incorporated or deemed to be incorporated by reference in such
registration statement.
"Registrable Securities" means shares of Common Stock issued or
issuable to Monsanto pursuant to the Transaction Agreements and
the Prior Stockholders Agreement and the Stock Purchase Agreement
whether owned by Monsanto or a permitted transferee of Monsanto
and all such other securities of the Company acquired by Monsanto
or any Affiliate of Monsanto in accordance herewith.
"Register", "Registered" and "Registration", whether or not
capitalized, mean and refer to a registration effected by
preparing and filing a Registration Statement in compliance with
the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness
of such Registration Statement.
"Registration Expenses" means all expenses incurred by the Company
in compliance with this Article 2, including, without limitation,
all registration fees, qualification fees, filing fees,
advertising and road show expenses (excluding advertising and road
show expenses incurred by a Holder), printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky
fees and expenses, and the expense of any special audits incident
to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be
paid in any event by the Company).
"Reorganization Agreement" has the meaning set forth in the
recitals herein.
"Requesting Holder" means a Holder requesting any registration
pursuant to Section 2.2 hereof.
"Restricted Securities" means the securities of the Company
acquired by a Holder from the Company or an Affiliate of the
Company otherwise than pursuant to a public offering.
"Section 16 Officers" has the meaning set forth in Section
4.3(b)(iii) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
"Strategic Plan" has the meaning set forth in Section 4.4(a)(ix)
hereof.
"Subsidiary" has the same meaning as in Rule l2b-2 promulgated
under the Exchange Act.
"Substantial Part" means more than ten percent (10%) 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.
"Tomato Associates" has the meaning set forth in the recitals
herein.
"Transaction Agreements" has the meaning set forth in the
Reorganization Agreement.
"Trigger Event" means the earliest of (i) any time that Monsanto's
Percentage Interest is at least fifty-five percent (55%), (ii) the
Company elects to convert borrowings made from Monsanto into
Equity Securities and Monsanto's Percentage Interest is at least
fifty percent (50%) after such conversion, or (iii) the closing of
Monsanto's purchase of additional shares of Common Stock pursuant
to the Stock Purchase Agreement.
"Unaffiliated Equity Holders" means holders of Equity Securities
other than Monsanto or any of its Affiliates.
"Voting Stock" means securities having the right to vote generally
in any election of Directors of the Company (other than solely by
reason of the occurrence of an event).
2.2 Requested Registration.
(a) Request for Registration. Holders of Registrable Securities
shall have the right to request (with such requests in
writing and stating the number of shares of Registrable
Securities to be disposed of and the intended method of
disposition of shares by such Holders) up to two (2)
registrations on Form S-3 (and up to two (2) additional
registrations on Form S-3 for each conversion of outstanding
principal or interest into shares of Common Stock upon the
occurrence of an "Event of Default" under the Company Credit
Facility or the ▇▇▇▇▇▇▇▇ Credit Facility (as defined in each
such Credit Facility, respectively)) at the Company's
expense and an unlimited number of additional registrations
on Form S-3 at the selling Holder's expense, provided that
the requests for additional registrations are made by
Holders of at least ten percent (10%) of the Registrable
Securities, subject only to the following:
(i) The Company shall not be required to effect a registration
pursuant to this Section 2.2 prior to September 30, 1998,
unless an Event of Default has occurred and is continuing
under the Company Credit Facility or under the ▇▇▇▇▇▇▇▇
Credit Facility, in which event the Company shall be
required to effect a registration pursuant to this Section
2.2 at any time upon the request of a Holder with respect to
any shares of Common Stock issued to a Holder upon
conversion of outstanding principal or accrued interest
under either the Company Credit Facility or the ▇▇▇▇▇▇▇▇
Credit Facility after the occurrence of an Event of Default
under either of such agreements.
(ii) The Company shall not be required to effect a registration
pursuant to this Section 2.2 within one hundred eighty (180)
days after the effective date of the last such registration
pursuant to this Section 2.2.
(iii)The Company shall not be required to effect a Registration
Statement in any particular jurisdiction in which the
Company would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or
regulations thereunder.
(iv) The Company shall not be required to effect a Registration
Statement for a period of not more than ninety (90) days
immediately following the delivery of a certificate signed
by the
President of the Company to the Requesting Holders stating
that, in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the
Company and its shareholders for such Registration
Statement to be filed on or before the date filing
would otherwise be required hereunder; provided,
however, that the Company may not utilize this right
more than once in any twelve (12) month period and the
Company may not exercise this right based on the fact
that the Company has recently registered any of its
securities for the account of a security holder or
holders exercising their respective demand
registration rights.
If the Company cannot qualify for registration on Form S-3,
then the Company shall effect any registration required or
requested by the Holder on Form S-1, or such other
appropriate form, in which event this Section 2.2 shall
apply in all respects as if the words "Form S-3" were
replaced by the words "Form S-1" or the appropriate
designation for such other form.
(b) Notice of Inclusion. The Company shall give written notice
to all Holders of Registrable Securities of the receipt of a
request for registration pursuant to this Section 2.2 and
shall provide a reasonable opportunity for other Holders to
participate in the registration; provided, however, that, if
the registration is for an underwritten offering, then the
terms of Section 2.2(c) hereof shall apply to all
participants in such offering. Subject to the foregoing, the
Company shall use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form
S-3 to the extent requested by the Holder or Holders thereof
for purposes of disposition.
(c) Underwriting. If the Requesting Holders intend to distribute
the Registrable Securities covered by their request by means
of an underwriting, then they shall so advise the Company as
a part of their request made pursuant to this Section 2.2,
and the Company shall include such information in the
written notice referred to in Section 2.2(b) hereof. The
right of any Holder to registration pursuant to this Section
2.2 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent
requested and to the extent provided herein.
The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter
into an underwriting agreement in customary form with the
representative of the underwriter
or underwriters of recognized national standing, selected for
such underwriting by a majority in interest of the Requesting
Holders and reasonably acceptable to the Company.
Notwithstanding any other provision of this Section 2.2, if
the representative advises the Requesting Holders in writing
that marketing factors require a limitation on the number of
shares to be underwritten, then the Requesting Holders shall
so advise all Holders, and the number of shares of
Registrable Securities that may be included in the
registration and underwriting shall be allocated first among
all Holders thereof in proportion, as nearly as practicable,
to the respective amounts of Registrable Securities held by
such Holders at the time of filing the Registration
Statement. No Registrable Securities excluded from the
underwriting by reason of the underwriter's marketing
limitation shall be included in such registration.
If any Holder of Registrable Securities disapproves of the
terms of the underwriting, then such person may elect to
withdraw therefrom by written notice to the Company, the
underwriter and the Requesting Holders. The Registrable
Securities and/or other securities so withdrawn shall also be
withdrawn from registration; provided, however, that, if, by
the withdrawal of such Registrable Securities, a greater
number of Registrable Securities held by other Holders may be
included in such registration (up to the maximum of any
limitation imposed by the underwriters), then the Company
shall offer to all Holders who have included Registrable
Securities in the registration the right to include
additional Registrable Securities in the same proportion used
to determine the underwriter limitation in this Section
2.2(c).
If the underwriter has not limited the number of Registrable
Securities to be underwritten, then the Company and its
executive officers, and such other Persons as are determined
by the Board of Directors, their successors, and their
assigns ("Other Selling Stockholders"), may include
securities for their own account in such registration if the
underwriter so agrees and if the number of Registrable
Securities held by the Holders that would otherwise have been
included in such registration and underwriting will not
thereby be limited for any reason, including but not limited
to the price for which the Registrable Securities will be
sold. To the extent that the underwriter wishes to limit the
number of shares to be included in the registration on behalf
of the Company and the Other Selling Stockholders, the shares
of Common Stock to be registered held by the Other Selling
Stockholders shall be excluded from such offering prior to
excluding any shares held by the Company and those held by
the Company shall be excluded prior to excluding any
Registrable Securities held by the Holders.
2.3 Company Registration.
(a) Notice and Inclusion. If, at any time after September 30,
1998, the Company shall determine to register any of its
securities for its own account, other than a registration
relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, the
Company shall:
(i) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state
securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance),
and in any underwriting involved therein, all
Registrable Securities specified in a written request or
requests, within twenty (20) days after receipt of the
written notice from the Company, by any Holder or
Holders.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering by the Company of
its securities through an underwriting, then the Company
shall so advise the Holders as a part of the written notice
given pursuant to Section 2.3(a)(i) hereof. In such event,
the right of any Holder to registration pursuant to this
Section 2.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together
with the Company, and all the Other Selling Stockholders
distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for underwriting by
the Company. Notwithstanding any other provision of this
Section 2.3, if the underwriter determines that marketing
factors require a limitation on the number of shares to be
underwritten, then the underwriter may exclude from such
registration and underwriting some or all of the Registrable
Securities held by the Holders or the stock held by Other
Selling Stockholders in accordance with this Section 2.3(b).
The Company shall so advise all Holders and all Other
Selling Stockholders distributing their securities through
such underwriting, and (i) as to the first registration in
which Holders are entitled to participate pursuant to this
Section 2.3, the number of Registrable Securities and other
securities that may be included in the registration and
underwriting shall be allocated among all Holders thereof on
the basis that shares held by all
the Other Selling Stockholders who are not Holders shall
first be excluded to the extent required and, if further
exclusion is necessary, shares held by the selling Holders
shall then be excluded; provided, however, that, as among the
respective Other Selling Stockholders as a group on the one
hand and the Holders as a group on the other hand suffering
such exclusion, the exclusion shall be in proportion, as
nearly as practicable, to the amount of securities entitled
to inclusion in such registration held by each of the Other
Selling Stockholders as a group and each of the Holders at
the time of filing the Registration Statement; and (ii) as to
all subsequent registrations, the number of shares of
Registrable Securities and other securities that may be
included in the registration and underwriting shall be
allocated among all Other Selling Stockholders and the
Holders in proportion, as nearly as practicable, to the
respective amounts of securities entitled to inclusion in
such registration held by all such Other Selling Stockholders
and Holders at the time of filing the Registration Statement.
For purposes of the apportionment provisions in clause (i)
above, for any selling Holder that is a partnership or
corporation, the partners, retired partners, and shareholders
of such Holder, the estate and family members of such
partners and retired partners, and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a
single "selling Holder," and any pro rata reduction with
respect to such selling Holder shall be based upon the
aggregate number of shares carrying registration rights owned
by all entities and individuals included in such "selling
Holder," as defined in this sentence. If any Other Selling
Stockholder or Holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written
notice to the Company and the underwriter. Any securities
excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
2.4 Expenses of Registration. All Registration Expenses incurred in
connection with any registration qualification or compliance
pursuant to this Article 2 shall be borne by the Company;
provided, however, that the Registration Expenses for the fifth
and all subsequent registrations under Section 2.2(a) hereof
requested by the Holders shall be borne by the requesting Holders
pro rata on the basis of the number of their shares so registered.
All Selling Expenses relating to the securities registered by
Holders and, if applicable, Other Selling Stockholders, and fees
and disbursements of counsel, shall be borne by the Holders or the
Other Selling Stockholders, as the case may be, of such securities
pro rata on the basis of the number of their shares so registered.
2.5 Registration Procedures.
(a) Company shall use its best efforts to register or qualify
the Registrable Securities covered by such Registration
Statement under such other securities or blue sky laws of
such United States jurisdictions as Holder shall reasonably
request and do any and all acts and things which may be
necessary or desirable to enable Holder to consummate the
public sale or other disposition in such jurisdictions;
provided, however, that Company shall not be required in
connection therewith or as a condition thereto to qualify to
do business or file a general consent to service of process
in any such jurisdictions.
(b) The Company represents and warrants that, on the date of its
effectiveness, the Registration Statement will comply in all
material respects with the applicable requirements of the
Securities Act and the rules thereunder, including without
limitation Rule 415; on the date of its effectiveness, the
Registration Statement will not 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 made therein not misleading; provided,
however, that no representation is made by Company with
respect to information relative to any Holder; and the
Prospectus will not include any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that no representation is made by Company
with respect to information relative to any Holder.
(c) If, at any time or times while the Registration Statement is
effective, Company notifies Holder that a development has
occurred or is pending which, based upon consultation with
Company's legal counsel, Company reasonably believes may
cause the then current Prospectus not to be in compliance
with applicable securities laws, then Holder shall refrain
from delivering the Prospectus and from making any offers or
sales of Registrable Securities requiring the delivery of
the Prospectus until such time as Company either notifies
Holder that the Prospectus complies with such laws or
delivers an amended Prospectus in replacement of the
deficient Prospectus. Company shall use its reasonable best
efforts to minimize the time during which Holder must so
refrain, and no more than one (1) such period of refrain
shall be imposed during any period of one hundred eighty
(180) days.
(d) At least two (2) business days prior to the initial filing of
the Registration Statement or Prospectus and no fewer than
two (2) business days prior to the filing of any amendment or
supplement thereto
(including any document that would be incorporated or deemed
to be incorporated therein by reference), Company shall
furnish Holder, its legal counsel and the managing
underwriter, if any, copies of all such documents proposed to
be filed, which documents (other than those incorporated or
deemed to be incorporated by reference) shall be subject to
review of Holder, its legal counsel and such underwriters, if
any, and Company shall cause its officers and directors and
the independent certified public accountants to Company to
respond to such inquiries as shall be necessary, in the
opinion of respective counsel to Company and any such
underwriters, to conduct a reasonable investigation within
the meaning of the Securities Act. Company shall not file any
such Registration Statement or Prospectus or any amendments
or supplements thereto to which Holder, its legal counsel, or
the managing underwriters, if any, shall reasonably object on
a timely basis (i.e., within two (2) business days of receipt
thereof).
(e) Company shall promptly notify Holder when the Registration
Statement is declared effective; notify Holder of any
stop-order or similar proceeding by the Commission or any
state securities authority; and furnish such number of
Prospectuses, Prospectus supplements and other documents
incident thereto as Holder from time to time may reasonably
request.
(f) In the event of any breach by Company of the provisions of
Section 2.2, 2.3, 2.4 or 2.5, the parties agree that Holder
will suffer irreparable harm. Accordingly, the parties agree
that the provisions of Sections 2.2, 2.3, 2.4 and 2.5 are
specifically enforceable by Holder and that Holder shall be
entitled to temporary and permanent injunctive relief against
Company and the other rights and remedies to which Holder may
be entitled to at law, in equity or under this Agreement for
any such breach.
2.6 Indemnification.
(a) Indemnification by the Company. The Company shall indemnify
each Holder with respect to which registration,
qualification or compliance has been effected pursuant to
this Article 2, each of its officers, directors, employees,
agents and partners, each Person controlling such Holder
within the meaning of Section 15 of the Securities Act, each
underwriter, if any, and each Person who controls any
underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses,
damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a
material fact contained in any Prospectus,
offering circular or other document (including any related
Registration Statement, notification or the like) incident to
any such registration qualification or compliance, or based
on any 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 any violation
by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating
to action or inaction required of the Company in connection
with any such registration, qualification or compliance. The
Company shall reimburse each such Holder, each of its
officers, directors, employees, agents and partners, and each
Person controlling such Holder, each such underwriter and
each Person who controls any such underwriter for any legal
and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such expense,
claim, loss, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the
extent that any such claim, loss, damage, liability, action
or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by
such Holder or underwriter and stated to be specifically for
use therein.
(b) Indemnification by the Holders. To the extent set forth in
the second sentence of this Section 2.6(b), each Holder
shall, if Registrable Securities or other securities held by
such Holder are included in the securities as to which such
registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers,
employees and agents, each underwriter, if any, of the
Company's securities covered by such a Registration
Statement, each Person who controls the Company or such
underwriter within the meaning of Section 15 of the
Securities Act, each other such Holder, each of such other
Holder's officers, directors, employees, agents and
partners, and each Person controlling such Holder within the
meaning of Section 15 of the Securities Act against all
expenses, claims, losses, damages and liabilities (or
actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact made by the
Holder and contained in any such Registration Statement,
Prospectus, offering circular or other document, or any
amendment or supplement thereto or incident to any such
registration, qualification or compliance or based on any
omission (or alleged omission) to state therein a material
fact required to be made by the Holder and stated therein or
necessary to make the statements therein not misleading or
any violation by the Company of any rule or regulation
promulgated
under the Securities Act applicable to the Company in
connection with such registration, qualification or
compliance as a result of any statement (or based on any
omission to state or alleged omission) required to be made by
such Holder. Each such Holder shall reimburse the Company,
such other Holders, directors, officers, employees, agents,
partners, Persons, underwriters and control persons for any
legal or any other expenses reasonably incurred in connection
with investigating, preparing or defending any such expense,
claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement, Prospectus,
offering circular or other document or any amendment or
supplement thereto in reliance upon and in conformity with
written information furnished by the Holder to the Company by
an instrument duly executed by such Holder and stated to be
specifically for use therein; provided, however, that the
obligations of such Holders hereunder shall be limited to an
amount equal to the proceeds to each such Holder of
Registrable Securities sold as contemplated herein in
connection with the particular registration qualification or
compliance involved.
(c) Notice. Each party entitled to indemnification under this
Section 2.6 (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may
be sought and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting
therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be
approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and that the Indemnified Party
may participate in such defense at its own expense; and
provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2.6
unless such failure resulted in detriment to the
Indemnifying Party. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment
or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
2.7 Information by Holder. Each Holder or Holders of Registrable
Securities in any registration shall furnish to the Company such
information regarding such Holder or Holders and the distribution
proposed by such Holder or Holders as
the Company may reasonably request in writing but only to the
extent as shall be required in connection with any registration,
qualification or compliance referred to in this Article 2.
2.8 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may
permit the sale of the Restricted Securities or Control Securities
to the public without registration, the Company agrees to:
(a) Use its best efforts to make and keep public information
available as those terms are understood and defined in Rule
144 under the Securities Act;
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting
requirements);
(c) For so long as a Holder owns any Restricted Securities or
Control Securities, furnish to the Holder forthwith upon
request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and
of the Securities Act and the Exchange Act, (ii) a copy of
the most recent annual or quarterly report of the Company,
and (iii) such other reports and documents so filed as such
Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing a Holder to sell
any such securities without registration; and
(d) When any Holder qualifies under Rule 144 for the unrestricted
right of sale under Rule 144, the Company shall, upon written
request of such Holder (such request to include sufficient
detail as to establish how the Holder so qualifies under Rule
144), promptly remove any restrictive legend that may have
been placed on any Restricted or Control Securities and issue
Common Stock of the Company free of such restrictive or other
legends.
2.9 Transfer of Registration Rights. The rights to cause the Company
to register the Registrable Securities granted to each Holder by
the Company under Sections 2.2 and 2.3 hereof may be transferred
or assigned to a transferee or assignee in connection with the
transfer or assignment of not less than one million (1,000,000)
shares of the Registrable Securities; provided, however, that the
Company shall be entitled to notice of any such transfer of
registration rights within thirty (30) days of the date such
transfer is effected.
2.10 Limitations on Subsequent Registration Rights. No owner or
prospective owner of securities of the Company shall have any
registration rights other than as set forth in this Agreement. The
Company shall not, without the prior written consent of the
Holders (which consent shall not be unreasonably withheld) of not
less than sixty-six and two-thirds percent (66 2/3%) of the
Registrable Securities then held by Holders, enter into any
agreement with any owner or prospective owner of any securities of
the Company that would allow such owner or prospective owner to
include such securities in any registration filed under this
Article 2 if such inclusion would adversely affect the rights of
any Holder.
2.11 Termination of Registration Rights. The registration rights
granted pursuant to this Article 2 shall terminate as to each
Holder at such time as (a) all Registrable Securities can be sold
within a given three (3) month period without compliance with the
registration requirements of the Securities Act pursuant to Rule
144 supported by a written opinion of legal counsel for the
Company, which opinion shall be reasonably satisfactory in form
and substance to legal counsel for such Holders, and (b) all
accrued interest and principal under the Company Credit Facility
and the ▇▇▇▇▇▇▇▇ Credit Facility has been repaid in full or
converted into Common Stock of the Company (and such Common Stock
can be sold as provided in (a) above).
2.12 "Market Stand-off" Agreement. Each Holder hereby agrees that, to
the extent requested by the Company and an underwriter of a sale
of Common Stock (or other securities) of the Company for the
account of the Company and not for the account of a security
holder or holders exercising their respective demand registration
rights, it shall not sell or otherwise transfer or dispose of
(other than to transferees who agree to be similarly bound) any
Registrable Securities during the ninety (90) day period following
the effective date of a registration statement of the Company
filed under the Securities Act; provided, however, that all
officers and directors of the Company, all Other Selling
Stockholders and all other Persons with registration rights
(whether or not pursuant to this Agreement) shall enter into
similar agreements. To enforce the foregoing covenant, the Company
may impose stop-transfer instructions with respect to the
Registrable Securities of each Holder (and the shares or
securities of every other Person subject to the foregoing
restriction) until the end of such ninety (90) day period.
ARTICLE 3
Anti-Dilution Rights and Limitations on Owner
3.1 Anti-Dilution Rights. If, at any time after the Effective Date,
Company agrees to sell shares of its Common Stock or other Voting
Stock ("Company
Securities") in a private or public offering (other than Company
Securities issued pursuant to the Company's stock option plans),
Holder shall have the right, but not the obligation, to acquire
all or any portion of the Company Securities sufficient for Holder
to maintain, after the offering, the same percentage of ownership
of issued and outstanding Company Securities that Holder possessed
immediately prior to the offering (the "Pre-Offering Percentage").
With respect to the issuance of Company Securities pursuant to the
Company's stock option plans, Holder shall have a right to
maintain its percentage ownership of issued and outstanding
Company Securities by making open market purchases as provided in
Section 3.5 hereof.
3.2 Private Offering. With respect to a private offering, other than
pursuant to a Company stock option plan, Company shall, within
five (5) business days after the execution of any agreement
entered into in connection with such private offering, notify
Holder in writing of the proposed offering and provide Holder with
copies of all related documentation, including, for example, any
letter of intent and the final contract. Holder shall have twenty
(20) business days from the date of receipt of Company's notice in
which to advise Company whether Holder elects to exercise its
rights under Section 3.1 hereof. If Holder does not respond, or if
Holder indicates that it will not exercise its rights, Holder
shall be considered irrevocably to have waived its rights under
Section 3.1 hereof with respect to such specific private offering.
If Holder timely advises Company that Holder will exercise its
rights under Section 3.1 hereof, Holder shall have the right to
acquire all or any portion of the necessary amount of the Company
Securities to maintain Holder's Pre-Offering Percentage at the
price or value of the consideration specified in the private
offering agreement entered into between Company and the purchaser.
Closing shall be in accordance with the terms of the private
offering agreement, and Holder shall make such investment
representations to Company and shall provide Company with such
other documentation at closing as is reasonably required by
Company to comply with applicable securities laws.
3.3 Public Offering. With respect to a public offering, Company shall
notify Holder no later than five (5) business days after Company
has entered into a letter of intent with its underwriters, and
shall provide Holder with a copy of the letter of intent. Holder
shall have twenty (20) business days from the date of receipt of
Company's notice in which to advise Company whether Holder elects
to exercise its rights under Section 3.1 hereof. If Holder does
not respond or if Holder indicates that it will not exercise its
rights, Holder shall be considered irrevocably to have waived its
rights under Section 3.1 hereof with respect to the public
offering. If Holder timely advises Company that Holder desires to
retain its rights under Section 3.1 hereof, then, when Company
files a Registration Statement containing a Preliminary Prospectus
with the Commission, Company shall provide Holder with copies of
the Preliminary
Prospectus and all subsequent amendments. Holder shall have twenty
(20) business days from its receipt of the Preliminary Prospectus
in which to exercise its rights under Section 3.1 hereof by making
an offer to acquire all or any portion of the necessary amount of
Company Securities to maintain Holder's Pre-Offering Percentage
based on the price, less all Selling Expenses, and the other terms
contained in the final Prospectus. No such offer to buy shall be
accepted prior to the time that the Registration Statement becomes
effective. The Registration Statement shall indicate that Holder
has anti-dilution rights to purchase Company Securities on the
terms offered to the public.
3.4 Limitations. Notwithstanding the preceding provisions of this
Article 3, Company shall not be required to issue any fractional
shares as a result of Holder's exercise of its rights under
Section 3.1 hereof. Company shall not be required to transfer any
Company Securities to Holder under this Article 3 if to do so
would result in the violation of any applicable law, rule or
regulation.
3.5 Open Market Purchases to Maintain Ownership Percentage.
Notwithstanding any other provision hereof, at any time after the
Effective Date, Holder may make such open market purchases of
Company Securities as are necessary to maintain Holder's
percentage of ownership of issued and outstanding Company
Securities at the Effective Date Percentage or to increase its
percentage of ownership of issued and outstanding Company
Securities to the Effective Date Percentage. With respect to the
issuance of Company Securities pursuant to a Company stock option
plan or any warrant, conversion right or other option, Company
shall notify Holder no later than ten (10) calendar days after the
end of each calendar quarter and within ten (10) calendar days of
the record date for a shareholder meeting and for dividend
payments for Company Securities of the number of shares and
issuance price of Company Securities issued pursuant to Company's
stock option plans or any warrant, conversion right or other
option subsequent to the last notice given pursuant to this
Section 3.5 so as to enable Holder to make open market purchases
of Company Securities as permitted under this Section 3.5.
3.6 Limitations on Holder's Ownership. Except for purchases of Company
Securities made in accordance with this Article 3 or the Stock
Purchase Agreement, during the term of this Agreement, Holder
shall not directly or indirectly acquire any Company Securities
except as follows:
(a) On and after March 31, 1996 until September 30, 1998, Holder
shall not increase or further increase its ownership of
issued and outstanding Company Securities above the Effective
Date Percentage, except through one (1) or more of the
following:
(i) Conversion of principal and/or interest under the
Company Credit Facility or the ▇▇▇▇▇▇▇▇ Credit Facility
into shares of Common Stock;
(ii) Issuance of Company Securities in an asset sale by
Holder Company; and
(iii)A tender offer by Holder to increase its ownership to
seventy percent (70%) or more of the issued and
outstanding Company Securities at a price approved by
the disinterested Directors of Company and based upon a
fairness opinion delivered to the Board of Directors of
the Company by an investment banking firm; provided,
however, that, if Holder makes a tender offer to
increase its ownership to more than eighty percent (80%)
of the issued and outstanding Company Securities, such
tender offer must be for one hundred percent (100%) of
the publicly traded Company Securities.
(b) After September 30, 1998, Holder may increase its ownership
of Company Securities through open market purchases or
otherwise.
(c) If, at any time after the Effective Date, Holder shall elect
to increase its percentage of ownership of issued and
outstanding Company Securities above the Effective Date
Percentage as permitted by paragraph (a) above (such
increased percentage hereafter being the "New Percentage
Ownership"), then thereafter Holder may make such open
market purchases of Company Securities as are necessary to
maintain such New Percentage Ownership or to increase its
percentage of ownership of issued and outstanding Company
Securities to such New Percentage Ownership.
(d) Holder shall not be required to dispose of any Company
Securities if Holder's percentage ownership of Company
Securities is increased as a result of any recapitalization
by Company or any other action taken by Company.
3.7 Limitations on Holder's Resale of Company Securities. Holder shall not
directly or indirectly sell any Company Securities (other than to an
Affiliate of Holder) except as follows:
(a) On and after March 31, 1997 until September 30, 1998, Holder
may sell Company Securities (i) as part of a joint venture,
merger or sale of all or substantially all of its current
Crop Protection business unit, as such
business may be subsequently renamed or reorganized, or (ii)
pursuant to a tender offer by a third party to the
shareholders of Company.
(b) After September 30, 1998, in addition to the rights to sell
Company Securities set forth in paragraph (a) above, Holder
may sell Company Securities (i) in a registered public
offering pursuant to the registration rights granted to
Holder under this Agreement, (ii) through sales pursuant to
Rule 144 under the Securities Act, (iii) through sales
of not more than ten percent (10%) of the total issued
and outstanding Company Securities to a Non-Financial
Purchaser, or (iv) through sales to a Financial Purchaser.
(c) After September 30, 1999, in addition to the rights to sell
Company Securities as set forth in paragraphs (a) and (b)
above, Holder may sell Company Securities through a private
sale of thirty-five percent (35%) or more of the total issued
and outstanding Company Securities to a Non-Financial
Purchaser under circumstances where such third party assumes
the applicable and proportionate rights and obligations of
Holder under this Agreement and the other Transaction
Agreements.
(d) Notwithstanding the foregoing, at any time after the
Effective Date, Holder may sell Company Securities issued to
Holder upon conversion by Holder of principal or accrued
interest under either of the Credit Facilities after the
occurrence of an Event of Default under either of such Credit
Facilities.
ARTICLE 4
Company and Calgene Corporate Governance
4.1 Composition of the Board of Directors and Calgene Board. The
number of Directors comprising both the Board of Directors and the
Calgene Board and the manner of nominating the members thereof
shall be as follows:
(a) The number of Directors comprising the Board of Directors
shall initially be fixed at nine (9) Directors. The parties
agree that the manner of nominating, and the governance
provisions relating to, the Board of Directors and the
Calgene Board shall be identical, and that the provisions of
this Section 4.1 set forth below and of Sections 4.3(c) and
4.3(d) hereof shall be deemed to apply equally to the
Calgene Board and Calgene Directors. Accordingly, when
applied to the Calgene Board, the term "Director" shall be
deemed to mean "Calgene Director", the term "Company",
whether used alone or as a modifier, shall be deemed to
mean "Calgene", and the term "Board of Directors" shall be
deemed to mean "Calgene Board".
(b) Until changed in accordance with this Agreement, the Board of
Directors shall be comprised of nine (9) Directors, and the
Company shall nominate for election as Directors: (i) one (1)
Company Management Director, (ii) three (3) Company
Directors, and (iii) five (5) Directors designated by
Monsanto, at least one (1) of which shall be an Independent
Director.
(c) [This section intentionally left blank]
(d) At any time that Monsanto's Percentage Interest is at least
seventy percent (70%), (i) the Company shall nominate: (i)
six (6) Directors designated by Monsanto, which shall
consist of the one (1) Company Management Director and five
(5) other Monsanto Directors (including at least one (1)
Independent Director) and (ii) three (3) Independent
Directors. At such time as Monsanto's Percentage Interest is
at least ninety-nine percent (99%), the Company shall
nominate nine (9) Directors designated by Monsanto.
(e) Notwithstanding anything in the foregoing paragraphs (b) and
(d) to the contrary, (i) at any time Monsanto's Percentage
Interest is less than forty percent (40%) but at least
twenty percent (20%), the Company shall nominate three (3)
Directors designated by Monsanto, (ii) at any time
Monsanto's Percentage Interest is less than twenty percent
(20%) but at least ten percent (10%), the Company shall
nominate two (2) Directors designated by Monsanto and (iii)
at any time Monsanto's Percentage Interest is less than ten
percent (10%) but at least five percent (5%), the Company
shall nominate one (1) Director designated by Monsanto. If,
at any time, Monsanto's Percentage Interest is less than
five percent (5%), the Company shall not be obligated to
nominate any Director designated by Monsanto. At any such
time, all other Directors, other than the Company Management
Directors, shall be nominated by the Company.
(f) The Independent Directors to be nominated by the Company
from time to time shall be nominated by action of a majority
of Company Directors then in office. The Company Directors
shall consult with the other Independent Directors as to the
nomination of any Company Director, and in the event a
majority of the Company Directors are unable to agree upon
any Company Director nominee, then the majority of all the
Independent Directors shall nominate such nominee. In the
event that no Company Directors are in office at the time of
any
nomination of a Company Director, such Company Directors
shall be nominated by a majority of the Independent Directors
then in office; provided, however, that the holders of a
majority of the outstanding Voting Stock held by Unaffiliated
Equity Holders shall be entitled to nominate and elect
Company Directors in lieu of any individuals so nominated to
be such Company Directors by a majority of the Independent
Directors.
(g) The Company and Monsanto, respectively, shall have the right
to nominate any replacement for a Director nominated in
accordance with this Section 4.1 by the Company or Monsanto,
respectively, upon the death, resignation, retirement,
disqualification or removal from office for cause of such
Director. Such replacement for any Independent Director
shall also be an Independent Director unless, in the case of
a replacement of a Monsanto Director, the Monsanto Directors
include more than the required number of Independent
Directors. The Board of Directors shall elect each person so
nominated by Monsanto or the Company pursuant to this
paragraph (g). In addition, the Board of Directors shall
nominate the Company's Chief Executive Officer to replace
such officer's predecessor in office as a Company Management
Director.
(h) In the event that the number of Monsanto Directors on the
Board of Directors differs from the number that Monsanto has
the right (and wishes) to designate for nomination pursuant
to this Section 4.1, (i) if the number of Monsanto Directors
exceeds such number, Monsanto shall promptly take all
appropriate action to cause to resign that number of
Monsanto Directors as is required to make the remaining
number of such Monsanto Directors conform to this Section
4.1 or (ii) if the number of Monsanto Directors otherwise is
less than such number, the Company shall promptly take all
necessary action to create sufficient vacancies on the Board
of Directors to permit Monsanto to designate the full number
of Monsanto Directors which it is entitled (and wishes) to
nominate pursuant to this Section 4.1 (such action to
include seeking the resignation or removal of Directors or,
at the request of Monsanto, calling a special meeting of the
stockholders of the Company for the purpose of removing
Directors to create such vacancies to the extent permitted
by applicable law). Upon the creation of any vacancy
pursuant to the preceding sentence, Monsanto shall nominate
the person to fill such vacancy in accordance with this
Section 4.1 and the Board of Directors shall elect each
person so nominated. Notwithstanding the foregoing, at each
annual meeting of the stockholders of the Company, the
Company shall nominate such number of Directors as Monsanto
is otherwise entitled to designate under this Section 4.1.
(i) Notwithstanding anything herein to the contrary, no
individual who is an officer, director, employee, agent,
partner or principal stockholder of any competitor of the
Company or any of its Affiliates (other than Monsanto and its
Affiliates) or any competitor of Monsanto or any of its
Affiliates (other than the Company) shall serve as a Director
without the unanimous consent of the Board of Directors.
(j) In the event that Monsanto desires to remove any Monsanto
Director with or without cause and Monsanto is unable to
procure the resignation of such Monsanto Director, then,
upon the request of Monsanto, the Board of Directors shall
promptly call a special meeting of stockholders of the
Corporation for purposes of removing such Monsanto Director.
In the event that the Company desires to remove any Company
Director with or without cause and the Company is unable to
procure the resignation of such Company Director, then, upon
the request of a majority of all of the Independent
Directors then in office, the Board of Directors shall
promptly call a special meeting of stockholders of the
Company for purposes of removing such Company Director. In
the event that the Chief Executive Officer's employment with
the Company is terminated for any reason, then upon the
request of either Monsanto or a majority of all of the
Independent Directors then in office, the Board of Directors
shall promptly call a special meeting of stockholders of the
Corporation for the purpose of removing such person as a
Company Management Director.
(k) Notwithstanding anything to the contrary herein, the Board of
Directors, by unanimous action of all members of the Board of
Directors, may increase the number of directors comprising
the Board of Directors and may elect, or nominate for
election, the director(s) to fill the vacancy or vacancies
created by such increase.
4.2 Solicitation and Voting of Shares.
(a) The Company shall use its best efforts to solicit from the
stockholders of the Company eligible to vote for the election
of Directors proxies in favor of the Company Management
Directors and the nominees designated in accordance with
Section 4.1 hereof or the removal of any Director pursuant to
Section 4.1(h) or 4.1(j) hereof.
(b) In any election of Directors or any meeting of the
stockholders of the Company called expressly for the removal
of Directors, so long as the Board of Directors includes (and
will include after any such removal) the number of Monsanto
Directors contemplated by Section 4.1 hereof and so long as
such meeting is properly called and Monsanto is
properly notified in accordance with the Company's By-laws
and Certificate of Incorporation, Monsanto and its Affiliates
shall attend such meeting for purposes of establishing a
quorum and shall vote all their shares of Voting Stock (i) in
favor of any nominee or Director designated in accordance
with Section 4.1 hereof, (ii) in favor of removal of any
Director as contemplated by Section 4.1(h) or 4.1(j) hereof,
and (iii) otherwise against the removal of any Director
designated in accordance with Section 4.1 hereof (other than
in cases of removal of a Director for cause); provided,
however, that, if Monsanto and its Affiliates elect to
cumulate their votes in accordance with the Company's By-laws
and Certificate of Incorporation, then, in any vote electing
Monsanto Directors, Monsanto and its Affiliates may cast all
of their votes in favor of one (1) or more of the Monsanto
Directors designated by Monsanto and in any vote with respect
to the removal of a Monsanto Director, Monsanto and its
Affiliates may cast all or any portion of their votes either
in favor or against the removal of any Monsanto Director
unless a Monsanto Director is otherwise required to be
removed in accordance with Section 4.1(h) hereof. In any
other matter submitted to a vote of the stockholders of the
Company, Monsanto and its Affiliates may vote any or all of
their shares in their sole discretion.
(c) Monsanto agrees that it will, and will cause any of its
Subsidiaries (other than the Company and its Subsidiaries)
to, take all action as a stockholder of the Company or as is
otherwise reasonably within its control, as necessary to
effect the provisions of this Agreement, including, without
limitation, voting all shares of Voting Stock in favor of
all persons nominated in accordance with Section 4.1 hereof;
provided, however, that, if Monsanto cannot so take actions
to give effect to all of the provisions of this Agreement,
it may first take actions to ensure that it receives all of
its benefits hereunder and then, to the extent possible, to
give effect to the provisions in favor of the Company.
4.3 Committees.
(a) The Board of Directors shall establish, empower and maintain
the committees of the Board of Directors contemplated by this
Section 4.3.
(b) The following committees shall be established, empowered and
maintained by the Board of Directors at all times during the
term of this Agreement:
(i) an Audit Committee, consisting of at least three (3) of
the Company's Independent Directors, which committee
shall be authorized and empowered to cause an audit to
be performed of the Company and each of its
Subsidiaries;
(ii) [This section intentionally left blank]
(iii)a Compensation Committee, responsible, among other
things, for recommending to the Board of Directors, for
approval by a majority of the Board of Directors, (a)
the adoption and amendment of all employee benefit plans
and arrangements, (b) the engagement of, terms of any
employment agreements and arrangements with, and
termination of, all persons designated by the Company as
"officers" for purposes of Section 16 of the Exchange
Act ("Section 16 Officers") and (c) the policies,
limitations and procedures under which the Stock Option
Plan Administration Committee shall operate; and
(iv) such other committees as the Board of Directors deems
necessary or desirable; provided, however, that such
committees are established in compliance with Section
4.4(a)(vi) hereof, if applicable.
(c) Except as otherwise provided in Section 4.3(b) hereof or as
agreed by a majority of the Monsanto Management Directors,
the number of Monsanto Directors on each committee of the
Board of Directors shall be the same proportion (but not
less than one (1)) of the total membership of such committee
as the number of Monsanto Directors, as the case may be, is
of the entire Board of Directors. Except as otherwise
provided in Section 4.3(b) hereof, the Monsanto Directors on
each committee of the Board of Directors shall be determined
by a majority of the Monsanto Management Directors.
(d) No action by any committee of the Board of Directors shall
be valid unless taken by unanimous written consent as
provided in the Company's by-laws or taken at a meeting for
which adequate notice has been duly given or waived by the
members of such committee. Such notice shall include a
description of the general nature of the business to be
transacted at the meeting, and no other business may be
transacted at such meeting unless all members of the
committee are present and consent to the consideration of
such other business. Any committee member unable to
participate in person at any meeting shall be given the
opportunity to participate by telephone. The Board of
Directors or the remaining committee members shall designate
an Independent Director or Company Management Director to
replace any absent or disqualified Independent Director
member or Company Management
Director member, respectively, of any committee and a
majority of the Monsanto Management Directors shall designate
a Monsanto Director to replace any absent or disqualified
Monsanto Director member of any committee. Each of the
committees established by the Board of Directors pursuant to
this Section 4.3 shall establish such other rules and
procedures for its operation and governance (consistent with
the terms of this Agreement) as it shall see fit and may seek
such consultation and advice as to matters within its purview
as it shall require.
4.4 Approval Required for Certain Actions.
(a) On and after the Effective Date and until the earlier of a
Trigger Event or such date on which Monsanto's Percentage
Interest is less than twenty-five (25%), a majority of the
Board, including at least one (1) Company Director and one
(1) Monsanto Management Director, shall be required to
approve any of the following:
(i) the entry by the Company or any of its Affiliates into
any merger or consolidation or the acquisition by the
Company or any of its Affiliates of any business or
assets that would constitute a Substantial Part of the
Company (determined on a consolidated basis) whether
such acquisition be by merger or consolidation or the
purchase of stock or assets or otherwise;
(ii) the sale, pledge, grant of security interest in,
transfer, retirement or other disposal of (A) a
Substantial Part of the Company (determined on a
consolidated basis), except pursuant to a security
interest granted in connection with borrowings permitted
under subsection (iv) below or (B) the pledge or
granting of a security interest in any intangible
property set forth in Exhibit B attached to the
disclosure letter from Monsanto to Calgene dated June
27, 1995 (the "Monsanto Disclosure Letter");
(iii)any dividend by or return of capital by the Company or
▇▇▇▇▇▇▇▇ (other than such distributions by ▇▇▇▇▇▇▇▇ to
the Company as are necessary for the Company to timely
perform its obligations under Sections 1.02 and 5.02(c)
of the ▇▇▇▇▇▇▇▇ Credit Facility);
(iv) any incurrence or assumption, in the aggregate, by the
Company, any of its Affiliates or any combination
thereof, of any indebtedness for borrowed money at any
time outstanding exceeding in the aggregate (determined
on a consolidated basis) the greater of (i) fifteen
million dollars ($15,000,000), increasing by five
million dollars ($5,000,000) on each July 1 commencing
July
1, 1996, plus amounts secured by inventory and/or
receivables for seasonal working capital lines and
indebtedness incurred to acquire property, plant or
equipment and secured by the acquired asset, minus
amounts outstanding under the Company Credit Facility,
or (ii) the amounts set forth in the Company's Operating
Plan (hereinafter defined), provided that loans under
the ▇▇▇▇▇▇▇▇ Credit Facility shall not be counted in
this limitation;
(v) the repurchase or redemption of any Equity Securities
of the Company, other than from employees upon
termination of employment or service;
(vi) the establishment of any new committees of the Board (or
the Calgene Board) or new or revised delegation(s) of
Board (or the Calgene Board) authority to any Board (or
Calgene Board) committee or changes or revisions to
general delegations of authority to officers or other
Persons for categories of expenditures;
(vii)the adoption of or amendment to any benefit or incentive
plans of the Company or any of its Affiliates which
would increase the annual cost thereof by more than
fifteen percent (15%) from the prior fiscal year or any
adoption of, or amendment to, any stock option plan;
(viii)the election, appointment or removal of the Chief
Executive Officer, Chief Operating Officer or Chief
Financial Officer of the Company and Calgene and their
successors and the establishment of their annual or long
term compensation level and benefits and basis for
awards (other than agreements in effect on the Effective
Date); provided, however, that Monsanto shall have the
right to select the Chief Technical Officer of the
Company and a controller reporting to the Chief
Financial Officer of the Company;
(ix) approval of the annual operating plan ("Operating Plan")
and long-term strategic plan ("Strategic Plan") of the
Company and its Affiliates, as well as the annual
operating plan and long-term strategic plan for the
▇▇▇▇▇▇▇▇ Business, to be submitted to the Board annually
for approval, and any material changes thereto;
(x) any transaction between the Company (and its
Affiliates), on the one hand, and its (their) directors,
officers or employees, on the other hand, which is not
in the normal course of business;
(xi) any modification of the Transaction Agreements;
(xii)any amendment of the By-laws or Certificate of
Incorporation of the Company, Calgene or ▇▇▇▇▇▇▇▇ by
the respective Boards of Directors thereof;
(xiii)the issuance of any warrants for the purchase of Equity
Securities or the issuance of additional Equity
Securities (other than warrants for the purchase of
Equity Securities) in excess of four million (4,000,000)
shares of Common Stock in any two (2) year period to a
third party, other than pursuant to plans referred to in
subsection (vii) above;
(xiv)the sale or licensing by the Company or any of its
Affiliates of (A) any intangible property set forth in
Exhibit B attached to the Monsanto Disclosure Letter or
(B) any other intangible property for consideration
(other than royalties contingent on future sales)
exceeding five million dollars ($5,000,000) in the
aggregate (determined on a consolidated basis) per
transaction or per series of related transactions;
(xv) new fixed capital investments, capital leases or
noncancellable operating leases by the Company and its
Affiliates having annual payments in the aggregate
(determined on a consolidated basis) exceeding the
aggregate amount set forth in the Operating Plan;
(xvi)[This section intentionally left blank]
(xvii)any press release which mentions or directly or
indirectly refers to Monsanto, except as required by law
and where Board approval cannot be obtained in a timely
manner;
(xviii)the initiation, settlement or termination of any suit
or proceeding concerning intellectual property, any
other matter which could have an adverse public affairs
effect upon Monsanto or the filing of any insolvency or
bankruptcy proceeding by or on behalf of the Company or
any of its Affiliates; or
(xix)the removal or election of the directors of ▇▇▇▇▇▇▇▇.
(b) After a Trigger Event and until the earlier of (i) March 31,
1999 or (ii) Monsanto's Percentage Interest is at least
seventy percent (70%), a majority of the Board, including at
least two (2) Company Directors, shall be required to approve
any of the following:
(i) the matters set forth in subsections (i), (ii), (vi),
(viii), (ix) and (xi) of paragraph (a) above; or
(ii) any transaction between the Company (and its
Affiliates) and Monsanto or any Affiliate of Monsanto.
(c) From and after the occurrence of both (i) a Trigger Event and
(ii) March 31, 1999, and until Monsanto's Percentage Interest
is at least ninety-nine percent (99%), neither Monsanto nor
any of its Affiliates shall enter into any transaction with
the Company or any of its Affiliates without the approval of
at least two (2) Company Directors.
4.5 Enforcement of this Agreement. The Independent Directors, acting
by unanimous consent, shall have full and complete authority on
behalf of the Company to enforce the terms of this Agreement.
4.6 Certificate of Incorporation and By-laws. The Company and Monsanto
shall take or cause to be taken all lawful action necessary to
ensure at all times that the Company's and Calgene's Certificate
of Incorporation and By-laws are not at any time inconsistent with
the provisions of this Agreement. Not later than the Effective
Date, the Board of Directors shall amend the Company's By-laws and
the Calgene Board shall amend Calgene's By-laws to reflect the
provisions of this Agreement.
4.7 Advisors. The Independent Directors shall be entitled to retain,
at the cost and expense of the Company, the services of an
investment banking firm of national reputation of their choice and
one (1) law firm of their choice to advise them in their capacity
as Independent Directors with respect to any matter on which the
Independent Directors are required or permitted to act hereunder.
4.8 Injunctive Relief. In the event of a breach of the provisions of
this Article 4, a party hereto entitled to rights under this
Article 4 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,
such party shall be entitled to temporary and permanent
injunctive relief against the Company and any other breaching
party and to any other rights and remedies to which such party
may be entitled to at law or in equity.
ARTICLE 5
Governance of ▇▇▇▇▇▇▇▇
[This Article intentionally left blank.]
ARTICLE 6
Miscellaneous
6.1 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).
6.2 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto.
6.3 Entire Agreement; Amendment. The Company and Monsanto hereby
agree that, as of the date of this Agreement: (i) the Prior
Stockholders Agreement is hereby amended in its entirety by this
Agreement, (ii) the provisions of the Prior Stockholders
Agreement shall no longer be of any force or effect, (iii) the
Company and Monsanto shall be bound by the terms of this
Agreement, and (iv) this Agreement and the other documents
delivered pursuant hereto constitute the complete, exclusive and
final understanding and agreement between the parties with regard
to the subjects hereof and thereof. Except as specifically set
forth herein, any term of Section 2 or 3 hereof may be waived
only with the prior written consent of the Company and the
Holders of at least sixty-six and two-thirds percent (66 2/3%) of
the outstanding shares of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 6.3
shall be binding upon each Holder of the Registrable Securities
(including securities into which such Registrable Securities have
been converted) outstanding at the time, each future Holder of
all such securities, and the Company. Any provision of this
Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an
amendment, by the Company and Monsanto, or in the case of a
waiver, by the party against whom the waiver is to be effective;
provided that no such amendment or waiver shall be effective
without the approval of all of the Independent Directors.
6.4 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), addressed as follows:
If to Monsanto: Monsanto Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Secretary
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
If to any other Holder, at such address and telecopy number as
such Holder shall have furnished the Company in writing.
If to Company: Calgene, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman and Chief Executive
Officer
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
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.
6.5 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any Holder of any Registrable
Securities, upon any breach or default of the Company under this
Agreement, shall impair any such right, power or remedy of such
Holder 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.
6.6 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.
6.7 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.
6.8 Stock Legends. Subject to Section 2.8(d) hereof, certificates
representing Restricted Securities (other than Restricted
Securities issued to Monsanto in connection with the conversion
of principal and/or accrued interest under the Company Credit
Facility or the ▇▇▇▇▇▇▇▇ Credit Facility upon the occurrence of
an Event of Default under either such Credit Facility) issued to
Monsanto pursuant to the Transaction Agreements and the Stock
Purchase Agreement shall bear the following legend:
"The securities represented by this certificate are subject
to certain resale restrictions and entitled to the benefits
set forth in a Stockholders Agreement dated March 31, 1996,
as amended and restated on November 12, 1996, between
Calgene, Inc., a Delaware corporation (formerly known as
Calgene II, Inc.), and Monsanto Company, a Delaware
corporation (the "Agreement") . A copy of the Agreement and
all amendments thereto are on file in the office of the
Secretary of the Company."
6.9 [This section intentionally left blank.]
6.10 Audits, Consultants and Inspections. Monsanto (using Monsanto's
internal and/or external auditors or any other Person appointed
by Monsanto to whom the Company does not reasonably object) shall
have the right (i) to audit the books and records, other
financial information and business practices and operations of
the Company and its Affiliates, and (ii) to discuss the business
practices and operations, affairs, finances and accounts of the
Company and its Affiliates with the officers of the Company and
its Affiliates and the independent public accountants who review
or audit the Company's financial statements, all at such
reasonable times and as often as may reasonably be requested. The
Company shall also permit inspection of its (and its Affiliates')
properties, books and records by Monsanto (using the Persons
identified above) during normal business hours or at other
reasonable times. The scope of all such audits, discussions and
inspections shall be determined by Monsanto in its sole
discretion. Any authorized representative of Monsanto who or
which is not employed by Monsanto (i) shall be required to
execute a confidentiality agreement in a form approved by the
Board of Directors (which approval shall not be unreasonably
withheld or delayed) and (ii) may not be employed by or
affiliated with a competitor of the Company, as reasonably
determined by the Board of Directors; provided, however, that an
independent certified public accounting firm shall not be deemed
to be employed by or affiliated with a competitor of the Company
even if such firm provides services to a competitor of the
Company.
6.11 No Third Party Beneficiaries. Nothing contained in this
Agreement, express or implied, is intended to or shall confer
upon anyone other than the parties hereto (and their successors
and assigns, including, without limitation, subsequent Holders
and purchasers under Section 3.7(c)) any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
6.12 Sections and Articles. All sections and articles referred to
herein are sections and articles of this Agreement.
6.13 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
CALGENE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
MONSANTO COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Executive Vice President
dansz/▇▇▇▇▇▇/103884.212/amstkag5.wpf