1
EXHIBIT 5
DEKALB GENETICS CORPORATION
SEVERANCE PAY PLAN
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
Purpose................................................................1
Section 1.1. Purpose..................................................1
ARTICLE II
Definitions............................................................1
Section 2.1. Definitions..............................................1
(a) "Code"...............................................1
(b) "Committee"..........................................1
(c) "Company"............................................1
(d) "Effective Date".....................................1
(e) "Eligible Employee"..................................1
(f) "Employer"...........................................1
(g) "ERISA"..............................................2
(h) "Plan"...............................................2
(i) "Predecessor Company"................................2
(j) "Purchase Date"......................................2
(k) "Severance Pay"......................................2
(l) "Termination"........................................2
(m) "Weekly Compensation"................................3
(n) "Years of Service"...................................3
Section 2.2. Gender and Number........................................3
ARTICLE III
Method of Funding......................................................3
Section 3.1. Method of Funding........................................3
ARTICLE IV
Payment of Severance Pay...............................................4
Section 4.1. Qualification for Severance Pay..........................4
Section 4.2. Severance Pay for Eligible Employees with Less
Than Five Years of Service....................................4
Section 4.3. Severance Pay for Eligible Employees with Five
or More Years of Service......................................4
Section 4.4. Payment of Severance Pay.................................4
Section 4.5. Retirement Benefits......................................5
ARTICLE V
Administration of this Plan............................................5
Section 5.1. In General...............................................5
Section 5.2. Regulations..............................................5
Section 5.3. Claims Procedure.........................................5
i
3
ARTICLE VI
Amendment or Termination of this Plan..................................6
Section 6.1. Right to Amend or Terminate..............................6
ARTICLE VII
Miscellaneous..........................................................7
Section 7.1. Limitation on Rights.....................................7
Section 7.2. Headings.................................................7
Section 7.3. Severability.............................................7
Section 7.4. Governing Law............................................7
Section 7.5. Successors and Assigns...................................7
ii
4
DEKALB GENETICS CORPORATION
SEVERANCE PAY PLAN
ARTICLE I
PURPOSE
SECTION 1.1. PURPOSE. The purpose of this Plan is to provide
severance pay, outplacement support and adequate notice to an employee of the
Company or any other Employer with respect to certain terminations of
employment. The Effective Date of this Plan is February 24, 1998.
ARTICLE II
DEFINITIONS
SECTION 2.1. DEFINITIONS. When used in this Plan, the
words and phrases below have the following meanings unless the
context clearly otherwise requires:
(a) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(b) "Committee" shall mean the committee appointed by the
Board of Directors of the Company to administer this
Plan pursuant to Article V.
(c) "Company" shall mean DEKALB Genetics Corporation, a
Delaware corporation, and any other corporation or
other entity surviving or resulting from any merger
or consolidation of the Company.
(d) "Effective Date" shall mean February 24, 1998.
(e) "Eligible Employee" shall mean each individual
who, immediately prior to the Purchase Date, is a
regular full-time or regular part-time employee of
an Employer, including but not limited to each
such person who is on vacation, temporary layoff,
approved leave of absence, sick leave or short-
term disability with respect to such employment,
and excluding any person who is at such time
employed on a temporary or seasonal basis or
receiving benefits under an Employer's long-term
disability plan.
(f) "Employer" shall mean the Company, any corporation
organized under the laws of one of the States of the
United States of America that is, directly or
1
5
indirectly, a wholly-owned subsidiary of the Company,
and any other corporation or other entity surviving
or resulting from any merger or consolidation of any
such wholly-owned subsidiary but only while such
other corporation or entity remains, directly or
indirectly, wholly-owned by the Company.
(g) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
(h) "Plan" shall mean the "DEKALB Genetics Corporation
Severance Pay Plan" as set forth herein."
(i) "Predecessor Company" shall mean in respect of an
Eligible Employee any entity which has been merged
with or acquired by an Employer or which has had
substantially all or a part of its assets acquired by
an Employer, but only if the Eligible Employee became
an employee of an Employer on the date of such merger
or acquisition.
(j) "Purchase Date" shall mean the date of the
consummation of the "Offer" (as that term is
defined in the Agreement and Plan of Merger dated
as of May 8, 1998 among Monsanto Company, a
Delaware corporation ("Parent"), Corn Acquisition
Corporation, a Delaware corporation and a wholly-
owned subsidiary of Parent ("Sub"), and the
Company).
(k) "Severance Pay" shall mean any sum payable as set
forth in Article IV.
(l) "Termination" shall mean an Eligible Employee's
cessation of employment with all Employers by
reason of any involuntary dismissal without cause
by his Employer on or after the Purchase Date or
continued employment with an entity at a time when
such entity becomes no longer an Employer. For
purposes of the foregoing, "cause" shall be
defined as such term is defined in the Merger
Agreement.
Termination shall not mean cessation of employment
with the Employers by reason of:
"Resignation", meaning the employee's
voluntary cessation of employment with the
Employers, including but not limited to
cessation due to retirement.
2
6
"Disability", meaning cessation of
employment due to an illness or injury or
disability of the Eligible Employee.
(m) "Weekly Compensation" shall mean the Eligible
Employee's rate of "total regular cash compensation"
(calculated on a weekly basis) as in effect on the
date that the individual's employment as an active
employee ceases. "Total regular cash compensation"
shall mean base pay (including any regularly
scheduled shift differential but excluding overtime)
and salary in effect immediately prior to such date
and one fifty-second of any total incentive or
performance bonus target amount for the period
including such date.
(n) "Years of Service" shall mean the Eligible Employee's
total period of employment ending on the Eligible
Employee's Termination for which the Eligible
Employee is (1) directly paid or entitled to payment
by the Employer, a Predecessor Company or any entity
that is an affiliate of the Employer or the
Predecessor Company for the performance of duties, or
(2) directly paid or entitled to payment by the
Employer, a Predecessor Company or any entity that is
an affiliate of the Employer or the Predecessor
Company for a period of time during which the
Eligible Employee does not perform duties, including
but not limited to vacation, temporary layoff,
approved leave of absence, sick leave, and short-term
disability.
SECTION 2.2. GENDER AND NUMBER. The masculine gender whenever
used herein shall refer to and include the feminine gender, and the singular
number shall include the plural and the plural number the singular.
ARTICLE III
METHOD OF FUNDING
SECTION 3.1. METHOD OF FUNDING. An Employer shall pay
Severance Pay from current operating funds. No property of the Employers is or
shall be, by reason of this Plan, held in trust for any employee of the
Employers, nor shall any person have any interest in or any lien or prior claim
upon any property of the Employers, by reason of this Plan, or an Employer's
obligation to make payments hereunder.
3
7
ARTICLE IV
PAYMENT OF SEVERANCE PAY
SECTION 4.1. QUALIFICATION FOR SEVERANCE PAY. An Eligible
Employee who experiences a Termination shall receive Severance Pay, notice and
outplacement support as provided in Section 4.2 or 4.3, whichever applies.
SECTION 4.2. SEVERANCE PAY FOR ELIGIBLE EMPLOYEES WITH LESS
THAN FIVE YEARS OF SERVICE. Any Eligible Employee who is credited with less than
five Years of Service and who experiences a Termination shall receive Severance
Pay in the amount of 16 weeks of his Weekly Compensation; provided, however,
that any president or vice-president of an Employer who is an Eligible Employee
who experiences a Termination shall receive Severance Pay in an amount no less
than 26 weeks of his Weekly Compensation. Any such Eligible Employee shall be
notified of his Termination at least four weeks in advance of his termination
date and shall be eligible for outplacement support from his Employer or the
Company commensurate with the employee's job.
SECTION 4.3. SEVERANCE PAY FOR ELIGIBLE EMPLOYEES WITH FIVE OR
MORE YEARS OF SERVICE. Any Eligible Employee who is credited with five or more
Years of Service and who experiences a Termination shall receive Severance Pay
in an amount equal to the greater of (i) 20 weeks of his Weekly Compensation and
(ii) the product of his Years of Service and 2 weeks of his Weekly Compensation,
up to a maximum amount equal to 52 weeks of his Weekly Compensation; provided,
however, that any president or vice-president of an Employer who is an Eligible
Employee who experiences a Termination shall receive Severance Pay in an amount
no less than 26 weeks of his Weekly Compensation. Any such Eligible Employee
shall be notified of his Termination at least four weeks in advance of his
termination date and shall be eligible for outplacement support from his
Employer or the Company commensurate with the employee's job.
SECTION 4.4. PAYMENT OF SEVERANCE PAY. An Eligible Employee's
Severance Pay will be paid by his Employer or the Company in a lump sum as soon
as administratively practicable following the Eligible Employee's Termination.
Any Eligible Employee who is on short-term disability leave
when he experiences a Termination shall not receive Severance Pay unless and
until he has been released to return to active employment by his physician prior
to the date he ceases to be eligible for short-term disability, and such
Eligible Employee shall forfeit his right to any benefits under this Plan when
he begins to receive benefits under the Employer's long-term disability plan.
4
8
Severance Pay shall be reduced by withholdings and deductions
required under federal, state and local laws and by other applicable reductions.
Severance Pay shall not be reduced by any vacation taken in advance of having
been earned or tuition assistance reimbursements received in advance of
completion of the class or course of study for which assistance was extended and
reimbursement for such amounts shall not be required.
SECTION 4.5. RETIREMENT BENEFITS. The payment of Severance Pay
to an Eligible Employee under the terms of this Plan shall not affect either (i)
such Eligible Employee's right to receive benefits under any retirement plan
maintained by an Employer or (ii) the amount of any such benefits determined
pursuant to the terms of such retirement plan.
ARTICLE V
ADMINISTRATION OF THIS PLAN
SECTION 5.1. IN GENERAL. This Plan shall be administered by
the Committee, which shall be the "named fiduciary" and "administrator" (as
those terms are used in ERISA) of this Plan. The Committee may delegate any of
its administrative duties, including, without limitation, duties with respect to
the processing, review, investigation, approval and payment of Severance Pay to
a named administrator or administrators.
SECTION 5.2. REGULATIONS. The Committee shall promulgate any
rules and regulations which it deems necessary in order to carry out the
purposes of this Plan or to interpret the terms and conditions of this Plan,
provided, however, that no rule, regulation or interpretation shall be contrary
to the provisions of this Plan. The rules, regulations and interpretations made
by the Committee shall be final and binding on any employee or former employee
of an Employer.
SECTION 5.3. CLAIMS PROCEDURE. The Committee shall determine
the rights of any employee or former employee of an Employer to any Severance
Pay hereunder. The Committee has the sole and absolute power and authority to
interpret and apply the provisions of this Plan to a particular circumstance,
construe uncertain or disputed terms and make eligibility and benefit
determinations (including, without limitation, determining whether a Termination
under this Plan has occurred). Any employee or former employee of an Employer
who believes that he is entitled to receive Severance Pay under this Plan,
including Severance Pay other than that initially determined by the Committee,
may file a claim in writing with the Committee. No later than 90 days after the
receipt of a claim the Committee shall either allow or deny the claim in
writing.
5
9
A denial of a claim, in whole or in part, shall be written in
a manner calculated to be understood by the claimant and shall include:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions on
which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(d) an explanation of the claim review procedure.
A claimant whose claim is denied (or his duly authorized
representative) may within 60 days after receipt of denial of his claim:
(a) request a review upon written application to the
Committee;
(b) review pertinent documents; and
(c) submit issues and comments in writing.
The Committee shall notify the claimant of its decision on
review within 60 days after receipt of a request for review unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of a request for review. Notice of the decision on review shall be
in writing. The Committee's decision on review shall be final and binding on any
employee or former employee of an Employer or any successor in interest of
either.
ARTICLE VI
AMENDMENT OR TERMINATION OF THIS PLAN
SECTION 6.1. RIGHT TO AMEND OR TERMINATE. The Company reserves
the right to, and shall by action of its Board of Directors, at any time,
without any necessary prior notice to or approval of any employee or former
employee, amend or terminate this Plan in any particular manner; provided,
however, that no such amendment or termination shall adversely affect the
benefits or rights provided, or to be provided, hereunder (determined without
regard to any such amendment or termination) to or with respect to an Eligible
Employee in connection with a Termination that occurs on or prior to the later
of the date on which such
6
10
amendment or termination is adopted by the Company or the twelve- month
anniversary of the Purchase Date.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. LIMITATION ON RIGHTS. Participation in this Plan
shall not give any employee the right to be retained in the service of an
Employer or any rights to any benefits whatsoever, except to the extent
specifically set forth herein.
SECTION 7.2. HEADINGS. Headings of Articles and Sections in
this instrument are for convenience only, and do not constitute any part of this
Plan.
SECTION 7.3. SEVERABILITY. If any provision of this Plan or
the rules and regulations made pursuant to this Plan are held to be invalid or
illegal for any reason, such illegality or invalidity shall not affect the
remaining portions of this Plan.
SECTION 7.4. GOVERNING LAW. This Plan shall be construed and
enforced in accordance with ERISA and the laws of the State of Illinois to the
extent such laws are not preempted by ERISA.
SECTION 7.5. SUCCESSORS AND ASSIGNS. This Plan shall be
binding upon and inure to the benefit of the Employers and their successors and
assigns and shall be binding upon and inure to the benefit of the Eligible
Employees and their legal representatives, heirs and assigns. No rights,
obligations or liabilities of an Eligible Employee hereunder shall be
assignable, other than by a transfer by an Eligible Employee's will or by the
laws of descent and distribution, without the prior written consent of the
Company. This Plan shall not be terminated by any merger or consolidation of the
Company whereby the Company is or is not the surviving or resulting corporation.
In the event of any such merger or consolidation, the provisions of this Plan
shall be binding upon the surviving or resulting corporation.
7
11
IN WITNESS WHEREOF, this Plan has been executed this 8th day
of May, 1998.
DEKALB GENETICS CORPORATION
By: /s/ John H. Witmer, Jr.
--------------------------------
Title: Senior Vice President
-----------------------------
8