United States v. Monsanto Co.; Proposed Final Judgment and Competitive Impact Statement, 33336-33360 [07-2897]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 72, Number 115 (Friday, June 15, 2007)]
[Notices]
[Pages 33336-33360]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-2897]



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Part III





Department of Justice





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Antitrust Division



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United States v. Monsanto Co.; Proposed Final Judgement and Competitive 
Impact Statement; Notice

Federal Register / Vol. 72, No. 115 / Friday, June 15, 2007 / 
Notices

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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Monsanto Co.; Proposed Final Judgment and 
Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, proposed Final 
Judgment, Hold Separate and Preservation of Assets Stipulation and 
Order, and Competitive Impact Statement have been filed with the United 
States District Court for the District of Columbia in United States v. 
Monsanto Co., Civ. Action No. 1:07CV00992. On May 31, 2007, the United 
States filed a Complaint alleging that the proposed acquisition by 
Monsanto Company (``Monsanto'') of Delta and Pine Land Company 
(``DPL'') would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The 
Complaint alleges that the acquisition would substantially reduce 
competition for the development, breeding, and sale of traited 
cottonseed in the MidSouth (Mississippi, Arkansas, Louisiana, Missouri, 
and Tennessee) and Southeast (Alabama, Georgia, Florida, South 
Carolina, North Carolina, and Virginia) United States. Specifically, 
the Complaint alleges that Monsanto's acquisition of Delta and Pine 
Land would enhance Monsanto's ability and incentive to raise traited 
cottonseed prices and eliminate Delta and Pine Land as a partner 
independent of Monsanto for competing trait developers. The proposed 
Final Judgment, lodged at the same time as the Complaint, requires the 
parties to divest (1) Monsanto's Stoneville Pedigreed Seed Company; (2) 
other Monsanto cotton breeding assets; (3) specified lines of Delta and 
Pine Land cottonseed to the acquirer of the Stoneville assets; (4) and 
specified lines of Delta and Pine Land cottonseed containing the VipCot 
transgenic trait to Syngenta AG. It also requires Monsanto to modify 
certain licenses. A Competitive Impact Statement filed by the United 
States describes the Complaint, the proposed Final Judgment, and the 
remedies available to private litigants who may have been injured by 
the alleged violation.
    Copies of the Complaint, proposed Final Judgment, Hold Separate and 
Preservation of Assets Stipulation and Order, and Competitive Impact 
Statement are available for inspection at the Department of Justice, 
Antitrust Division, 325 7th Street, NW., Suite 215, Washington, DC 
20530 (202-514-2481), on the Internet at https://www.usdoj.gov/atr, and 
at the Office of the Clerk of the United States District Court for the 
District of Columbia. Copies of these materials may be obtained from 
the Antitrust Division upon request and payment of the copying fee.
    Public comment is invited within sixty (60) days of the date of 
this notice. Such comments, and responses thereto, will be published in 
the Federal Register and filed with the Court. Comments should be 
directed to Donna N. Kooperstein, Chief, Transportation, Energy & 
Agriculture Section, Antitrust Division, Department of Justice, 325 7th 
Street, NW., Suite 500, Washington, DC 20530 (202-307-6349).

J. Robert Kramer II,
Director of Operations, Antitrust Division.

United States District Court for the District of Columbia

    United States of America, Department of Justice, Antitrust 
Division, 325 7th Street, NW., Suite 500, Washington, DC 20530, 
Plaintiff, v. Monsanto Company, 800 North Lindbergh Boulevard, St. 
Louis, MO 63167, and Delta and Pine Land Company, 1 Cotton Row, Scott, 
MS 38772, Defendants
    Civil Case No.:
    Case: 1:07-cv-00992.
    Assigned To: Urbina, Ricardo M.
    Assign. Date: 5/31/2007.
    Description: Antitrust.

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil action to 
enjoin the merger of defendants Monsanto Company (``Monsanto'') and 
Delta and Pine Land Company (``DPL'') and allege as follows:
    1. In 2006, cottonseed was planted on more than 15 million acres in 
the United States and generated more than $5 billion in annual revenues 
for United States farmers. Cotton is grown across the Southern United 
States from Virginia, the Carolinas, Georgia, and Florida on the East 
Coast to California on the West Coast.
    2. Farmers grow substantially all of this important crop from 
cottonseed that has been enhanced through the introduction of 
biotechnology traits (``traited cottonseed''). Traited cottonseed 
results from combining cottonseed stock that has attractive growing 
characteristics (such as producing a high yield of cotton per acre) 
with performance traits foreign to cotton that are inserted through 
genetic engineering.
    3. Monsanto is the largest producer and supplier of biotechnology 
traits sold in cottonseed in the United States, with over 96% of United 
States traited cottonseed containing Monsanto traits. Monsanto is also 
one of the largest sellers of traited cottonseed in the United States, 
primarily through its Stoneville Pedigreed Seed Company 
(``Stoneville'').
    4. DPL is the largest producer of cottonseed in the United States. 
DPL is the leading seller in the MidSouth (Mississippi, Arkansas, 
Louisiana, Missouri, and Tennessee), where DPL sells 79% of all traited 
cottonseed, and the Southeast (Alabama, Georgia, Florida, South 
Carolina, North Carolina, and Virginia), where DPL sells 87% of all 
traited cottonseed.
    5. In the 1980s, Monsanto partnered with DPL to introduce 
cottonseed containing Monsanto traits. DPL's experienced and 
knowledgeable cotton breeders and large collection of high-quality 
germplasm (the genetic material of a cottonseed that gives the plant 
its characteristics) provided Monsanto with an unparalleled avenue 
through which to commercialize and market its traits. The combination 
of Monsanto traits and DPL cottonseed has been highly successful, 
particularly in the MidSouth and Southeast, due to the performance of 
DPL's cottonseed and the value of Monsanto's biotechnology traits in 
those regions.
    6. Monsanto's position as the dominant supplier of traits used in 
cottonseed was jeopardized in the early 2000s when DPL began to partner 
with other biotechnology companies. Through these partnerships, DPL's 
germplasm library and breeding capabilities were available to 
alternative trait developers, allowing them to work toward introducing 
new traits in DPL cottonseed that would compete with Monsanto's traits. 
DPL publicly stated its intent to replace Monsanto traits in its 
products and planned to launch products with non-Monsanto traits as 
early as the 2009 growing season, with additional products to follow.
    7. Spurred by this competitive threat and recognizing the potential 
for a successful pairing of DPL's cottonseed with competing traits, 
Monsanto purchased Stoneville to position Monsanto to compete 
vigorously with DPL. Monsanto aggressively worked to develop 
Stoneville's germplasm and its traited cottonseed sales and also 
continued its efforts to develop germplasm and expand traited 
cottonseed sales through its Cotton States business unit.
    8. The proposed merger will consolidate Monsanto's and DPL's 
traited cottonseed sales, eliminating competition between these firms 
in the sale of cottonseed. DPL and Monsanto

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together would control over 95% of sales in the important MidSouth and 
Southeast regions, where harvested cotton garners higher prices per 
bale, and where cottonseed traits are most valued by farmers. The 
proposed merger will also eliminate DPL as a partner independent of 
Monsanto for competing trait developers, substantially delaying or 
preventing the development and introduction of cottonseed containing 
non-Monsanto traits. Accordingly, Monsanto's merger with DPL would 
substantially lessen competition in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18.

Jurisdiction and Venue

    9. This action is filed by the United States under Section 15 of 
the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    10. Monsanto and DPL are engaged in interstate commerce and in 
activities substantially affecting interstate commerce. The Court has 
jurisdiction over this action and the parties pursuant to Sections 15 
and 16 of the Clayton Act, 15 U.S.C. 25, 26; and 28 U.S.C. 1331, 1337.
    11. The Defendants have consented to personal jurisdiction and 
venue in this judicial district.

II. The Defendants

    12. Defendant Monsanto is a Delaware corporation, with its 
headquarters located in St. Louis, Missouri. Monsanto is a leading 
global provider of agricultural products for farmers, including seeds 
for cotton, soybeans, and corn; traits that help farmers control 
insects and weeds; and crop protection chemicals such as the herbicide 
Roundup, a branded version of the chemical glyphosate. Monsanto had 
total company revenues of more than $7.3 billion in 2006.
    13. Defendant DPL is a Delaware corporation, with its headquarters 
located in Scott, Mississippi. DPL is the largest cottonseed producer 
in the world. DPL's sales in the United States in 2006 exceeded $400 
million.

III. Trade and Commerce

A. Affected Commerce
Cottonseed Varieties
    14. Cottonseed varieties differ in their performance, including the 
yield, the strength and the length of the cotton fibers, and the 
adaptability of the cottonseed to specific weather conditions and soil 
types. Varieties that perform best in certain regions of the country, 
such as the drier areas of the Southwest (including West Texas, Kansas, 
and Oklahoma) do not typically perform well in other regions, such as 
the MidSouth and the Southeast. Farmers select cottonseed varieties 
that have the best performance characteristics for the area in which 
the cottonseed will be planted, with the primary focus on yield.
    15. To be competitive, cottonseed companies must continually work 
on developing new and improved cottonseed varieties through their 
breeding programs. Cotton breeding is a costly and time-consuming 
process in which the cottonseed company selects lines to breed together 
(or ``cross''), plants the cottonseed produced from that initial cross, 
and then selects the best plants for further crossing to create a 
variety with the desired characteristics. In most cases, it takes eight 
to ten years from the initial cross until a new cottonseed variety is 
ready for market.
    16. The success of a cottonseed company's breeding program is 
dependent on many factors, the most important of which is the quantity 
and quality of available breeding materials, i.e. germplasm. A company 
with a large collection of high quality, or elite, germplasm has a 
competitive advantage because the company has the ability to identify 
the best genetic material and use it in a wide variety of possible 
crossing combinations, resulting in a greater likelihood of developing 
a successful variety.
    17. DPL has the largest cotton germplasm collection, with by far 
the greatest track record of success in the important MidSouth and 
Southeast regions, and an extensive breeding program for cottonseed. It 
has eight research or breeding facilities in the United States and five 
located elsewhere in the world. It has more breeding capabilities than 
any competitor and over ninety years of germplasm development.
Traits for Cottonseed
    18. Historically, farmers grew cotton from conventional cottonseed 
that contained naturally occurring characteristics. Cotton farming with 
conventional cottonseed involved labor intensive and costly herbicide 
and insecticide spraying programs that required multiple applications 
at very specific times in the growing season. Failure to spray or to 
correctly time the applications could result in substantial crop 
damage.
    19. In the 1980s, Monsanto developed a trait that could be inserted 
into cotton plants to make plants resistant to certain insects. It also 
developed an herbicide-tolerant trait that would make cotton plants 
grown from cottonseed with the trait resistant to certain herbicides 
sprayed to kill weeds, allowing farmers to spray herbicides less 
precisely without killing the young plants.
    20. To gain acceptance by farmers, the traits had to be delivered 
in cottonseed lines that performed well in the growing area where the 
farmer was located. In 1988, Monsanto approached DPL to develop and 
commercialize cottonseed with the Monsanto insect-resistant and 
herbicide-tolerant traits. DPL was then, and still is, the market 
leader in cottonseed, with what was considered the best germplasm and 
the most sought-after varieties.
    21. The companies proceeded with the development and 
commercialization process, which involved inserting the Monsanto trait 
into DPL germplasm, evaluating plant lines grown from that germplasm, 
and breeding promising candidate plants to produce varieties with 
desired characteristics. In 1996, DPL began to sell the first 
cottonseed with Monsanto's initial insect-resistant trait (marketed 
under the name ``Bollgard''), and, the following year, it introduced a 
variety with Monsanto's initial herbicide-tolerant trait (marketed 
under the name ``Roundup Ready'').
    22. Farmers, particularly those in the MidSouth and Southeast, 
quickly adopted traited cottonseed because its use significantly 
lowered overall farming costs, increased yields, and reduced the risk 
of crop loss. Today, almost all cottonseed varieties planted in the 
United States are traited, and, in 2006, over 96% of the traited 
cottonseed sold in the United States contained traits developed by 
Monsanto.
    23. When farmers acquire traited cottonseed, they pay a price per 
bag to the seed distributor, who pays the seed manufacturer for the 
seed, and a separate license fee (commonly referred to as the 
``technology fee'') to the developer of the trait. Typically, the trait 
developer shares a portion of the technology fee with the seed 
manufacturer. The technology fee can constitute as much as 80% of 
farmers' total costs for a bag of traited cottonseed.
DPL's Trait Development With Monsanto's Competitors
    24. Following Monsanto's and DPL's successful introduction 
oftraited cottonseed, they agreed in 1998 that Monsanto would acquire 
DPL. The Antitrust Division of the United States Department of Justice 
investigated the proposed transaction. In late 1999, while the 
transaction was still under review, Monsanto decided to abandon

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the transaction. DPL thus remained an independent company.
    25. Despite ensuing litigation from the companies' failed attempt 
to merge, DPL continued to develop and market cottonseed varieties with 
Monsanto's traits. DPL also commenced a strategy to replace (or 
``trade-out'') the Monsanto traits in DPL cottonseed with traits of 
other companies. DPL believed that this strategy would be profitable 
for DPL because competing trait developers would offer DPL a higher 
percentage of the technology fee for traits than would Monsanto. In 
DPL's suit against Monsanto for breach of the merger agreement, DPL 
alleged significant financial losses resulting from the delay that the 
failed merger caused to DPL's efforts to develop traits with companies 
other than Monsanto.
    26. Pursuant to the trade-out strategy, DPL has worked with several 
other biotechnology companies, including Dow AgroSciences, DuPont, 
Syngenta Crop Protection AG and Bayer CropScience, to develop and 
commercialize cottonseed containing the traits developed by these 
companies that would compete with cottonseed containing Monsanto's 
traits. DPL is an attractive partner that is well suited to quickly 
introduce new trait technologies due to the strength and breadth of its 
germplasm base and breeding programs as well as its technical service 
capabilities, know-how, brand recognition and market position.
    27. DPL's trait license with Monsanto also makes DPL an attractive 
partner for competing trait developers. Most farmers in the United 
States buy cottonseed containing traits that provide both herbicide 
tolerance and insect resistance. In the MidSouth and Southeast United 
States, the vast majority of farmers use both traits. DPL's trait 
licenses with Monsanto allow DPL to offer competing trait developers 
the ability to combine or ``stack'' their traits in DPL cottonseed 
along with Monsanto traits. This stacking right would allow, for 
example, the developer of an insect-resistant trait to bring that trait 
to market in cottonseed that also contains a Monsanto herbicide-
tolerant trait (i.e., Roundup Ready or the more-recent version, Roundup 
Ready Flex). Monsanto's trait licenses with most other cottonseed 
companies, by contrast, severely restrict the ability of these 
companies to work with other trait developers, with some of these 
licenses prohibiting the stacking of cottonseed containing Monsanto 
traits with another company's traits and others subjecting the 
licensees to severe penalties if they stack non-Monsanto traits with 
Monsanto traits.
    28. Even with the advantages that partnering with DPL offers 
Monsanto's competing trait developers, the process to develop, breed 
and commercialize cotton varieties with traits typically takes eight to 
twelve years and costs over $40 million. The process often requires 
thousands of attempts before developing a traited cottonseed that then 
can be used to breed commercial varieties. In addition, extensive 
regulatory approvals, both in the United States and abroad, are 
required.
    29. DPL's trait-development work with Monsanto's competitors has 
recently begun to show results. DPL's developmental work with Syngenta 
resulted in a 2004 agreement to commercialize cottonseed with 
Syngenta's VipCot insect-resistant traits. DPL expects to begin 
marketing such cottonseed as early as 2009. The DPL/Syngenta agreement 
provides that DPL will receive 70% of the net trait technology fees 
earned through sales of this product, compared with the 30% that DPL 
earns pursuant to its Monsanto agreement.
Monsanto's Competitive Reaction to DPL's ``Trade-Out'' Plan
    30. Monsanto recognized that its and DPL's ``paths will continue to 
diverge'' as DPL continues its strategy to replace Monsanto traits in 
DPL cottonseed with traits developed by Monsanto's competitors. Driven 
by the competitive threat posed by DPL's work with these other 
companies, Monsanto set about building its own cottonseed business.
    31. In 2002, Monsanto began Cotton States, through which Monsanto 
obtains licenses on germplasm developed by private breeders and 
universities, breeds its traits into the germplasm, and out-licenses 
the resulting traited varieties to sellers of cottonseed for sale under 
their private labels.
    32. In 2005, Monsanto repurchased Stoneville, the second-largest 
traited cottonseed company in the MidSouth and Southeast United States. 
Monsanto had previously owned Stoneville but sold it in 1999 before 
abandoning its attempt to acquire DPL. Upon reacquiring Stoneville, 
Monsanto immediately invested capital to improve Stoneville's 
competitive position.
    33. Monsanto aggressively worked to strengthen its cottonseed 
business by, among other things, focusing on advanced breeding 
techniques and germplasm development and investing in breeding 
facilities. Monsanto predicted internally that these investments would 
enable Monsanto to increase its share of the cottonseed business at the 
expense of DPL and other companies.
B. Relevant Markets
    34. Across regions such as the MidSouth and Southeast, growing 
conditions for cotton differ due to weather conditions, soil type, and 
varied demands for weed and insect control. Fanners demand cottonseed 
varieties that produce high yield for their particular growing 
conditions. Monsanto and DPL recognize this demand and market 
cottonseed varieties by region.
    35. In many regions of the country, including the MidSouth and 
Southeast, farmers demand that cottonseed have traits to provide insect 
resistance and herbicide tolerance. Monsanto prices traits by region.
    36. Cotton fanners consider cotton the most valuable crop for their 
land, and the cost of the traited cottonseed amounts to only a fraction 
of the total cost of growing cotton. If there were a small but 
significant increase in price of traited cottonseed within regions such 
as the MidSouth and Southeast, it is not likely that farmers would 
switch to other crops or switch purchases to conventional (non-traited) 
cottonseed or cottonseed varieties not well suited for their regions in 
sufficient volumes to make the price increase unprofitable. The 
development, commercialization, and sale of traited cottonseed 
constitutes a line of commerce or product market, and the MidSouth and 
Southeast United States are sections of the country or geographic 
markets, within the meaning of Section 7 of the Clayton Act.

IV. Anticompetitive Effects

A. Concentration
    37. DPL is the largest firm in the traited cottonseed market in the 
United States. It is even more dominant in the MidSouth United States 
market, with 79% of the traited cottonseed sales, and the Southeast 
United States market, with over 87% of the traited cottonseed sales.
    38. Monsanto is the second-largest traited cottonseed company in 
the MidSouth and Southeast United States markets, with 17% of sales in 
the MidSouth United States market and 8% of sales in the Southeast 
United States market.
    39. After the merger, Monsanto would account for more than 95% of 
sales of traited cottonseed in the MidSouth United States market and 
95% of sales in the Southeast United States market.
    40. Using a measure of market concentration called the Herfindahl-

[[Page 33339]]

Hirschman Index (``HHI''), explained in Appendix A, Monsanto's merger 
with DPL would result in a post-merger HHI of 9110 in the MidSouth 
United States market, with an increase of 331O, and a post-merger HHI 
of 9184 in the Southeast United States, with an increase of 1489.
B. Effect of Transaction
    41. The merger will eliminate competition between DPL and Monsanto 
for the development, breeding, and sale of traited cottonseed. As a 
result, farmers likely will have fewer choices of, and face higher 
prices for, traited cottonseed.
    42. The merger will also eliminate DPL as a partner independent of 
Monsanto for developers of traits that would compete against Monsanto. 
DPL's current efforts to develop and commercialize cottonseed with 
Syngenta's VipCot insect-resistant technology, which would be 
competitive with Monsanto's Bollgard and more-recent Bongard II traits, 
will be substantially delayed or prevented. Further, the merger will 
likely delay if not deter efforts to develop other traits that would 
compete with Monsanto traits and that would provide benefits to United 
States cotton farmers, including other insect-resistant traits, 
herbicide-tolerant traits, and potentially other cottonseed traits. As 
a result, farmers likely will have fewer choices of, and face higher 
prices for, traited cottonseed.

V. Entry

    43. Entry into the traited cottonseed business requires the assets 
and expertise both to breed high-performing varieties of cottonseed and 
to develop or access herbicide-tolerant and insect-resistant traits to 
breed into the cottonseed. Each of those steps requires many years and 
the investment of tens of millions of dollars.
    44. Entry into the traited cottonseed business would not be timely, 
likely, or sufficient in its magnitude, character, and scope to deter 
or counteract an anticompetitive increase in the price of traited 
cottonseed by the merged Monsanto or DPL.

VI. Violation Alleged

    45. The effect of Monsanto's merger with DPL may be substantially 
to lessen competition in the market for the development, production, 
and sale of traited cottonseed in violation of Section 7 of the Clayton 
Act. Unless restrained, the transaction would likely have the following 
effects, among others:
    a. Competition in the market for the development, production, and 
sale of traited cottonseed in the MidSouth and Southeast United States 
would be substantially lessened; and
    b. Cotton farmers will suffer harm as a result of fewer choices and 
higher prices for traited cottonseed.

VII. Request for Relief

    Plaintiff requests that this Court adjudicate and decree as 
follows:
    1. That Monsanto's proposed merger with DPL would violate Section 7 
of the Clayton Act, as amended, 15 U.S.C. 18;
    2. That Monsanto and DPL be permanently enjoined from carrying out 
their proposed merger, or from entering into or carrying out any 
agreement, understanding, or plan, the effect of which would be to 
combine the businesses or assets of Monsanto and DPL;
    3. That Plaintiff be awarded the costs of this action; and
    4. Such other relief as the Court may deem just and proper.

    Dated: May 31, 2007.

    Respectfully submitted,

For Plaintiff United States

Thomas O. Barnett,

Assistant Attorney General.

David L. Meyer,

Deputy Assistant Attorney General.

J. Robert Kramer II,

Director of Operations.

Donna N. Kooperstein,
Chief, Transportation, Energy & Agriculture Section.

William H. Stallings,

Assistant Chief, Transportation, Energy & Agriculture Section.

Jill A. Ptacek (WA Bar 18756)
Angela L. Hughes (DC Bar 303420)
J. Richard Doidge (MA Bar 600158)
Michael D. Billiel (DC Bar 394377)
David A. Blotner (WI Bar 1008674)
Ian R. Conner (V A Bar 65349)
John W. Elias (CA Bar 244620)
Tracy L. Fisher (MN Bar 315837)
Mark J. Niefer (DC Bar 470370)
Sarah L. Wagner (TX Bar 24013700)

Trial Attorneys, U.S. Department of Justice, Antitrust Division, 
Transportation, Energy & Agriculture Section, 325 7th Street, NW., 
Suite 500, Washington, DC 20004 Telephone: (202) 307-6607, 
Facsimile: (202) 307-2784.

Appendix A--Definition of HHI

    ``HHI'' means the Herfindahl-Hirschman Index, a commonly 
accepted measure of market concentration. It is calculated by 
squaring the market share of each firm competing in the market and 
then summing the resulting numbers. For example, for a market 
consisting of four firms with shares of 30, 30, 20, and 20 percent, 
the HHI is 2,600 (30\2\ + 30\2\ +20\2\ + 20\2\ = 2,600). (Note: 
Throughout the Complaint, market share percentages have been rounded 
to the nearest whole number, but HHIs have been estimated using 
unrounded percentages in order to accurately reflect the 
concentration of the various markets.) The HHI takes into account 
the relative size distribution of the firms in a market and 
approaches zero when a market consists of a large number of small 
firms. The HHI increases both as the number of firms in the market 
decreases and as the disparity in size between those firms 
increases.
    Markets in which the HHI is between 1,000 and 1,800 points are 
considered to be moderately concentrated, and those in which the HHI 
is in excess of 1,800 points are considered to be highly 
concentrated. See Horizontal Merger Guidelines 1.51 (revised Apr. 8, 
1997). Transactions that increase the HHI by more than 100 points in 
concentrated markets presumptively raise antitrust concerns under 
the guidelines issued by the U.S. Department of Justice and Federal 
Trade Commission. See id.

United States District Court for the District of Columbia

    United States of America, Plaintiff, Monsanto Company and Delta and 
Pine Land Company, Defendants.
    Case: 1:07-cv-00992 Assigned To: Urbina, Ricardo M. Assign Date: 5/
31/2007 Description: Antitrust.

Proposed Final Judgment

    Whereas, Plaintiff United States of America filed its Complaint on 
May 31, 2007, Plaintiff and Defendants, Monsanto Company (``Monsanto'') 
and Delta and Pine Land Company (``DPL''), by their respective 
attorneys, have consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against or admission by any 
party regarding any issue of fact or law;
    And whereas, Defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights and assets and alterations of 
certain existing license terms by Defendants to assure that competition 
is not substantially lessened;
    And whereas, Plaintiff requires Defendants to make certain 
divestitures and alter certain existing license terms for the purpose 
of remedying the loss of competition alleged in the Complaint;
    And whereas, Defendants have represented to Plaintiff that the 
divestitures and license term alterations required below can and shall 
be made and that Defendants shall later raise no claim of hardship or 
difficulty as grounds for asking the Court to modify any of the 
divestiture or license alteration provisions contained below;

[[Page 33340]]

    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against Defendants under Section 7 of the Clayton 
Act, 15 U.S.C. 18.

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer of the Enhanced Stoneville Assets'' means the entity 
or entities to whom Defendant Monsanto divests the Enhanced Stoneville 
Assets.
    B. ``Cotton States'' means Defendant Monsanto's cotton variety 
licensing business pursuant to which Defendant Monsanto licenses other 
cottonseed companies to produce or sell Defendant Monsanto's own cotton 
varieties, cotton varieties Defendant Monsanto in-licenses from other 
breeders, or cotton varieties Defendant Monsanto produces from such 
varieties.
    C. ``DPL'' means Defendant Delta and Pine Land Company, a Delaware 
corporation with its headquarters in Scott, Mississippi, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
interests in partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    D. ``DPL Acquirer'' means the entity to whom Defendant Monsanto 
divests Defendant DPL.
    E. ``Monsanto'' means Defendant Monsanto Company, a Delaware 
corporation with its headquarters in St. Louis, Missouri, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    F. ``Stoneville'' means all assets used exclusively or primarily 
in, or to support, the U.S. business of Stoneville Pedigreed Seed 
Company, including, but not limited to the assets described in Schedule 
A.
    G. ``Enhanced Stoneville Assets'' means Stoneville and the 
additional assets, properties, and rights listed in Schedule B.
    H. ``Syngenta'' means Syngenta Crop Protection AG, a Swiss 
corporation with its headquarters in Basel, Switzerland, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    I. ``Vip Cot Assets'' means the assets, properties, and rights 
listed in Schedule C.

III. Applicability

    A. This Final Judgment applies to Defendants Monsanto and DPL, as 
defined above, and all other persons in active concert or participation 
with any of them who receive actual notice of this Final Judgment by 
personal service or otherwise.
    B. If, prior to complying with Sections IV and V of this Final 
Judgment, Defendants sell or otherwise dispose of all or substantially 
all of their assets that include the Enhanced Stoneville Assets or the 
VipCot Assets, they shall require, as a condition of the sale or other 
disposition, that the purchaser(s) agree to be bound by the provisions 
of this Final Judgment. Defendants need not obtain such an agreement 
from the acquirers of the assets divested pursuant to this Final 
Judgment.

IV. Divestiture of Enhanced Stoneville Assets

    A. Defendants are ordered and directed, in accordance with the 
terms of this Final Judgment, within ninety (90) calendar days after 
the filing of the Complaint in this matter, to divest the Enhanced 
Stoneville Assets to an acquirer acceptable to Plaintiff in Plaintiff's 
sole discretion. Defendants shall use their best efforts to accomplish 
the divestiture of the Enhanced Stoneville Assets as expeditiously as 
possible. Plaintiff, in its sole discretion, may grant one or more 
extensions of this time period, not to exceed sixty (60) calendar days 
in total, and shall notify the Court in each such circumstance.
    B. Within two (2) business days following execution of a definitive 
agreement or agreements for the divestiture of the Enhanced Stoneville 
Assets, or the filing of this Final Judgment, whichever is later, 
Defendants shall notify Plaintiff in writing of the proposed 
divestiture. The notice shall set forth the details of the proposed 
divestiture, including a list of the name, address, and telephone 
number of each person who offered, or expressed an interest in or 
desire, to acquire any ownership interest in the Enhanced Stoneville 
Assets, together with full details of the same. Defendants need not 
include in this notice information about any persons previously 
identified in an affidavit filed in compliance with this Final Judgment 
as offering, or expressing an interest in or desiring, to acquire any 
ownership interest in the Enhanced Stoneville Assets. Defendants shall 
include with the notice a copy of the divestiture agreement or 
agreements and copies of any other agreements entered into by either or 
both of the Defendants and the proposed Acquirer of the Enhanced 
Stoneville Assets since the Complaint in this matter was filed, or up 
to three (3) months before the filing of the Complaint in this matter. 
Defendants may incorporate by reference in this notice any responsive 
information or documents previously provided to Plaintiff, provided 
that Defendants identify with specificity when the information or 
documents were previously provided and, if the information or documents 
were part of a larger submission, where in the submission the 
information or documents may be located.
    C. Within fifteen (15) calendar days of receipt by Plaintiff of 
such notice, Plaintiff may request from Defendants, the proposed 
Acquirer of the Enhanced Stoneville Assets, or any other third party, 
additional information concerning the proposed divestiture, the 
proposed Acquirer of the Enhanced Stoneville Assets, and any other 
potential acquirer. Defendants shall furnish any additional information 
requested of Defendants within fifteen (15) calendar days of the 
receipt of the request, unless Defendants and Plaintiff shall otherwise 
agree.
    D. Within fifteen (15) calendar days after receipt of the notice or 
within ten (10) calendar days after Plaintiff has been provided the 
additional information requested from Defendants, the proposed Acquirer 
of the Enhanced Stoneville Assets, and any third party, whichever is 
later, Plaintiff shall provide written notice to Defendants stating 
whether or not it objects to the proposed divestiture. If Plaintiff 
provides written notice that it does not object, the divestiture may be 
consummated. Absent written notice that Plaintiff does not object to 
the proposed Acquirer of the Enhanced Stoneville Assets or upon 
objection by Plaintiff, the divestiture of the Enhanced Stoneville 
Assets to that proposed Acquirer shall not be consummated.
    E. The divestiture of the Enhanced Stoneville Assets shall be 
accomplished in such a way as to satisfy Plaintiff, in its sole 
discretion, that the Enhanced Stoneville Assets can and shall be used 
by the Acquirer of the Enhanced Stoneville Assets to operate a viable, 
ongoing business engaged in the development, production and sale of 
traited cottonseed. The divestiture of the Enhanced Stoneville Assets:
    (1) Shall be made to an Acquirer of the Enhanced Stoneville Assets 
that, in Plaintiff's sole judgment, has the intent and capability 
(including the necessary

[[Page 33341]]

managerial, operational, technical, and financial capability and 
intellectual property rights) of competing effectively in the business 
of developing, producing and selling traited cottonseed in the United 
States, including a credible commitment to the traited cottonseed 
market;
    (2) Shall be accomplished so as to satisfy Plaintiff, in its sole 
discretion, that the divestiture shall not result in the substantial 
lessening of competition for the development, production, and sale of 
traited cottonseed in any geographic area; and
    (3) Shall be accomplished so as to satisfy Plaintiff, in its sole 
discretion, that none of the terms of any agreement between an Acquirer 
of the Enhanced Stoneville Assets and Defendants give Defendants the 
ability unreasonably to raise the Acquirer's costs, to lower the 
Acquirer's efficiency, or otherwise to interfere in the ability of the 
Acquirer to compete effectively.
    F. Defendants shall provide to the Acquirer of the Enhanced 
Stoneville Assets and Plaintiff information relating to the personnel 
primarily involved in the operation of Stoneville to enable the 
Acquirer of the Enhanced Stoneville Assets to make offers of 
employment. Defendants shall not interfere with any negotiations by the 
Acquirer of the Enhanced Stoneville Assets to employ any such 
personnel.
    G. For a period of two (2) years from the filing of the Complaint 
in this matter, Defendants shall not solicit to hire, or hire, any 
individual primarily involved in the operation of Stoneville on the 
date of the filing of the Complaint in this matter who receives a 
substantially equivalent offer of employment from the Acquirer, unless 
such individual is terminated or laid off by the Acquirer, or the 
Acquirer agrees that Defendants may solicit and employ that individual.
    H. Defendants shall not take any action that shall impede in any 
way the operation, use or divestiture of the Enhanced Stoneville 
Assets.
    I. Defendants shall warrant to the Acquirer of the Enhanced 
Stoneville Assets that there are no material defects in the 
environmental, zoning or other permits pertaining to the operation of 
each asset that shall have a material adverse effect on the operation 
of the Enhanced Stoneville Assets, and that following the sale of the 
Enhanced Stoneville Assets, Defendants shall not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the use or operation of the Enhanced Stoneville 
Assets based on actions or inactions that existed prior to the date of 
divestiture.

V. Divestiture of VipCot Assets

    A. Defendants are ordered and directed, in accordance with the 
terms of this Final Judgment, to offer Syngenta the VipCot Assets 
listed in the attached Schedule C within thirty (30) calendar days of 
the filing of the Complaint in this matter. The offer shall remain open 
for at least six (6) months. Defendants shall use their best efforts to 
accomplish the divestiture of the VipCot Assets as expeditiously as 
possible, but in any event no later than ninety (90) calendar days 
after the divestiture of the Enhanced Stoneville Assets or thirty (30) 
calendar days after Syngenta accepts the offer, whichever is latest. 
Plaintiff, in its sole discretion, may extend the time period for 
Defendants to divest the VipCot Assets to Syngenta by granting one or 
more extensions, not to exceed ninety (90) calendar days in total, and 
shall notify the Court in each such circumstance.
    B. Prior to transmitting to Syngenta the offer for the assets 
described in the attached Schedule C, Defendants shall provide 
Plaintiff with copies of the offer for the approval of the Plaintiff in 
its sole discretion. Along with the offer, Defendants shall provide 
Plaintiff copies of any other agreements not previously provided to 
Plaintiff entered into by either or both of the Defendants and Syngenta 
since the Complaint in this matter was filed, or up to three (3) months 
before the filing of the Complaint in this matter. Within five (5) 
business days following receipt of the offer, Plaintiff shall provide 
written notice to Defendants stating whether the offer must be amended 
to meet the objectives of the divestiture of the VipCot Assets. Absent 
written notice that Plaintiff does not object to the offer, the 
divestiture of the VipCot Assets to Syngenta pursuant to the offer 
shall not proceed. Upon objection by Plaintiff, Defendants shall alter 
the terms of the offer to satisfy Plaintiff in its sole discretion.
    C. Defendants shall permit Syngenta to have reasonable access to 
personnel and to any and all financial, operational, or other documents 
and information relating to the VipCot Assets customarily provided as 
part of a due diligence process.
    D. Defendants shall not take any action that shall harm the VipCot 
Assets or impede in any way the divestiture of the VipCot Assets.

VI. Changes in Third Party Licenses

    A. Defendant Monsanto agrees to offer to its licensees, within 
thirty (30) calendar days of the date of the sale of the Enhanced 
Stoneville Assets, to make the following changes to its third-party 
cottonseed trait and Cotton States licenses, subject to the approval of 
Plaintiff in its sole discretion:
    1. Current Cotton Insect Resistance and Herbicide Tolerance Trait 
Licensing--Agreements: Defendant Monsanto shall modify its current 
cottonseed trait licenses to provide the licensees with the flexibility 
Defendant DPL currently has to develop, market or sell cottonseed 
containing non-Monsanto traits by removing any provisions that require 
or incentivize the licensee to develop, market or sell cottonseed 
containing only traits from Defendant Monsanto.
    2. Cotton States Licenses: Defendant Monsanto shall modify its 
Cotton--States licenses to eliminate any provision that allows 
Defendant Monsanto to terminate the license if the licensee sells 
cottonseed containing non-Monsanto traits in brands not licensed under 
the Cotton States license.
    B. Prior to making the offers, and no later than five (5) days 
after the date of sale of the Enhanced Stoneville Assets, Defendant 
Monsanto shall provide Plaintiff with copies of the offers for the 
approval of Plaintiff in its sole discretion. Within five (5) days of 
receipt of the offers to modify the license agreements, Plaintiff shall 
provide written notice to Defendant Monsanto stating whether the offers 
must be amended. Absent written notice that Plaintiff does not object 
to the offers, Defendant Monsanto may not proceed with offering the 
modifications to the licensees. Upon objection by Plaintiff, Defendant 
Monsanto shall alter the terms of the offers to satisfy Plaintiff in 
its sole discretion. In the event any of the licensees do not accept 
the offer containing the modifications described in Section VI.A. as 
approved by Plaintiff in its sole discretion, Defendant Monsanto shall 
act as though such modification has been made and shall not enforce any 
license provision that is the subject of any such modification.

VII. Divestiture of Defendant DPL

    A. If Defendants have not divested the Enhanced Stoneville Assets 
by the end of the time period permitted by this Final Judgment, 
Defendants shall notify Plaintiff of that fact in writing. Defendant 
Monsanto shall then divest DPL within sixty (60) days. If Defendant 
Monsanto has not divested Defendant DPL by the end of the sixty-day 
period, Defendant Monsanto shall notify Plaintiff of that fact in 
writing. Upon application of Plaintiff, the Court shall appoint a 
trustee selected by Plaintiff and approved by the Court to effect the 
divestiture of Defendant DPL.

[[Page 33342]]

    B. Defendant Monsanto shall use its best efforts to assist the 
trustee in accomplishing the required divestiture of Defendant DPL, 
including its best efforts to effect all necessary regulatory 
approvals. The trustee and any consultants, accountants, attorneys, and 
other persons retained by the trustee shall have full and complete 
access to the personnel, books, records, and assets at the facilities 
to be divested, and Defendant Monsanto shall develop financial or other 
information relevant to the assets to be divested customarily provided 
in a due diligence process as the trustee may reasonably request, 
subject to reasonable protection for confidential commercial 
information. In addition, Defendant Monsanto shall:
    (1) Permit prospective acquirers of Defendant DPL who have been 
invited to submit binding bids for Defendant DPL to have reasonable 
access to Defendant DPL's personnel and to make such inspection of 
Defendant DPL and any and all financial, operational, or other 
documents and other information as may be relevant to the divestiture 
of Defendant DPL, subject to reasonable protection for confidential 
commercial information;
    (2) Provide the DPL Acquirer and Plaintiff information relating to 
the personnel of Defendant DPL to enable the DPL Acquirer to make 
offers of employment;
    (3) Take no action to interfere with any negotiations by the DPL 
Acquirer to employ any Defendant DPL employee;
    (4) Take no action to interfere with or to impede the trustee's 
accomplishment of the divestiture of Defendant DPL;
    (5) Warrant to the DPL Acquirer that on the date of sale each asset 
shall be in the same condition as when Defendant Monsanto acquired 
Defendant DPL, except for the harvesting of cotton plants and selection 
lines in the ordinary course of business, and ordinary wear and tear of 
assets and facilities;
    (6) Warrant to the DPL Acquirer that there are no material defects 
in the environmental, zoning or other permits pertaining to the 
operation of each asset that have arisen since Defendant Monsanto 
acquired Defendant DPL; and
    (7) Shall not, following divestiture of Defendant DPL, undertake, 
directly or indirectly, any challenges to the environmental, zoning, or 
other permits relating to the operation of Defendant DPL, or otherwise 
take any action that shall impede in any way the permitting, operation, 
or divestiture of Defendant DPL.
    C. Unless Plaintiff otherwise consents in writing, the divestiture 
of Defendant DPL pursuant to this Section of the Final Judgment, 
whether accomplished by Defendant Monsanto or a trustee, shall include 
the entirety of Defendant DPL, and shall be accomplished in such a way 
as to satisfy Plaintiff, in its sole discretion, that (a) Defendant DPL 
shall remain no less viable than when Defendant Monsanto acquired it, 
(b) the divestiture of Defendant DPL shall remedy the competitive harm 
alleged in the Complaint, and (c) none of the terms of any agreement 
between a DPL Acquirer and Defendant Monsanto give Defendant Monsanto 
the ability unreasonably to raise that person's costs, to lower that 
person's efficiency, or otherwise to interfere in the ability of that 
person to compete effectively.
    D. The trustee shall have the power and authority to accomplish the 
divestiture of Defendant DPL at the earliest possible time to an 
acquirer acceptable to Plaintiff, in its sole discretion, at such price 
and on such terms as are then obtainable upon reasonable effort by the 
trustee, and shall have such other powers as the Court deems 
appropriate. Subject to Section VII.F of this Final Judgment, the 
trustee shall have the power and authority to hire at the cost and 
expense of Defendant Monsanto any investment bankers, attorneys, or 
other agents who are reasonably necessary in the judgment of the 
trustee to assist in the divestiture of Defendant DPL and who shall be 
solely accountable to the trustee.
    E. Defendant Monsanto shall not object to a sale by the trustee on 
any ground other than the trustee's malfeasance. Any such objections by 
Defendant Monsanto must be conveyed in writing to Plaintiff and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under this Section.
    F. The trustee shall serve at the cost and expense of Defendant 
Monsanto, on such terms and conditions as Plaintiff approves, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to Defendant Monsanto, and the trust 
shall then be terminated. The compensation of the trustee and of any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of Defendant DPL and based on a fee arrangement 
providing the trustee with an incentive based on the price and terms of 
the divestiture of Defendant DPL and the speed with which it is 
accomplished, but timeliness is paramount.
    G. After its appointment, the trustee shall file monthly reports 
with Plaintiff, Defendant Monsanto, and the Court setting forth the 
trustee's efforts to accomplish the divestiture of Defendant DPL, 
provided however, that to the extent such reports contain information 
that the trustee deems confidential, such reports shall not be filed in 
the public docket of the Court and Defendant Monsanto's copy of the 
report shall have such confidential information redacted. Such reports 
shall include the name, address, and telephone number of each person 
who, during the preceding month, made an offer to acquire, expressed an 
interest in acquiring, entered into negotiations to acquire, or was 
contacted or made an inquiry about acquiring, any interest in Defendant 
DPL, and shall describe in detail each contact with any such person 
during that period. The trustee shall maintain full records of all 
efforts made to divest Defendant DPL.
    H. If the trustee has not accomplished such divestiture of 
Defendant DPL within ninety (90) calendar days after its appointment, 
the trustee shall file promptly with the Court a report setting forth 
(1) The trustee's efforts to accomplish the required divestiture of 
Defendant DPL; (2) the reasons, in the trustee's judgment, why the 
required divestiture of Defendant DPL has not been accomplished; and 
(3) the trustee's recommendations. To the extent such report contains 
information that the trustee deems confidential, such report shall not 
be filed in the public docket of the Court. The trustee shall at the 
same time furnish such report to Plaintiff. Plaintiff shall have the 
right to make additional recommendations consistent with the purpose of 
the trust. The Court shall enter thereafter such orders as it shall 
deem appropriate to carry out the purpose of this Final Judgment which 
may, if necessary, include extending this Final Judgment and the term 
of the trustee's appointment by a period requested by Plaintiff.
    I. The trustee shall notify Plaintiff and Defendant Monsanto within 
two (2) business days following execution of a definitive agreement for 
the sale of Defendant DPL. The notice shall set forth the details of 
the proposed divestiture of Defendant DPL and list the name, address, 
and telephone number of each person not previously identified who 
offered or expressed an interest in or desire to acquire any ownership 
interest in Defendant DPL, together with full details of the same.

[[Page 33343]]

    J. Within fifteen (15) calendar days of receipt by Plaintiff of 
such notice, Plaintiff may request from Defendants, the proposed DPL 
Acquirer, any other third party, or the trustee, additional information 
concerning the proposed divestiture of Defendant DPL, the proposed DPL 
Acquirer, and any other potential acquirer. Defendants and the trustee 
shall furnish any additional information requested within fifteen (15) 
calendar days of the receipt of the request, unless the Defendants and 
Plaintiff shall otherwise agree.
    K. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after Plaintiff has been provided the 
additional information requested from Defendant Monsanto, the proposed 
DPL Acquirer, any third party, and the trustee, whichever is later, 
Plaintiff shall provide written notice to Defendant Monsanto and the 
trustee stating whether or not it objects to the proposed divestiture 
of Defendant DPL. If Plaintiff provides written notice that it does not 
object, the sale of Defendant DPL may be consummated, subject only to 
Defendant Monsanto's limited right to object to the sale under Section 
VII.E of this Final Judgment. Absent written notice that Plaintiff does 
not object to the proposed DPL Acquirer or upon objection by Plaintiff, 
the sale of Defendant DPL shall not be consummated. Upon objection by 
Defendant Monsanto under Section VII.E, a sale of Defendant DPL 
proposed under this Section shall not be consummated unless approved by 
the Court.

VIII. Financing

    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV or Section VII of this Final Judgment.

IX. Hold Separate

    Until the divestitures required by this Final Judgment have been 
accomplished, Defendants shall take all steps necessary to comply with 
the Hold Separate and Preservation of Assets Stipulation and Order 
entered by this Court. Defendants shall take no action that would 
jeopardize the divestitures ordered by this Court.

X. Affidavits

    A. Within ten (10) calendar days of the filing of the Complaint in 
this matter, and every thirty (30) calendar days thereafter until the 
divestitures have been completed under Sections IV and V, Defendants 
shall deliver to Plaintiff an affidavit as to the fact and manner of 
its compliance with Sections IV, V, and VI of this Final Judgment. Each 
such affidavit shall include the name, address, and telephone number of 
each person who, during the preceding thirty days, made an offer to 
acquire, expressed an interest in acquiring, entered into negotiations 
to acquire, or was contacted or made an inquiry about acquiring, any 
interest in the Enhanced Stoneville Assets, and shall describe in 
detail each contact with any such person during that period, including 
a summary of all conversations (1) Between Defendants and any Acquirer 
of the Enhanced Stoneville Assets, and (2) between Defendants and 
Syngenta with respect to the VipCot Assets. Defendants may incorporate 
by reference in any such affidavit any responsive information or 
documents previously provided to Plaintiff, provided however, that 
Defendants identify with specificity when the information or documents 
were previously provided and, if the information or documents were part 
of a larger submission, where in the submission the information or 
documents may be located. Assuming the information set forth in the 
affidavit is true and complete, any objection by Plaintiff to 
information provided by Defendants, including any limitation on 
information, shall be made within fourteen (14) days of receipt of such 
affidavit.
    B. Defendants shall keep all records of all efforts made to 
preserve and divest the Enhanced Stoneville Assets and VipCot Assets 
until one year after each such divestiture has been completed.

XI. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time duly authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of a duly authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to Defendants, be 
permitted:
    (1) Access during Defendants' office hours to inspect and copy, or 
at Plaintiffs option, to require Defendants to provide copies of all 
books, ledgers, accounts, records and documents in the possession, 
custody, or control of Defendants, relating to any matters contained in 
this Final Judgment; and
    (2) To interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendants.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, 
Defendants shall submit written reports or responses to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by Plaintiff to any person other than an 
authorized representative of the executive branch of the United States, 
except in the course of legal proceedings to which the United States is 
a party (including grand jury proceedings), or for the purpose of 
securing compliance with this Final Judgment, or as otherwise required 
by law.
    D. If, at the time information or documents are furnished by 
Defendants to Plaintiff, Defendants represent and identify in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and Defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26( c)(7) of the 
Federal Rules of Civil Procedure,'' then Plaintiff shall give 
Defendants ten (10) calendar days' notice prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).

XII. Notification

    A. Unless such transaction is otherwise subject to the reporting 
and waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''), 
Defendant Monsanto, without providing advance notification to 
Plaintiff, shall not directly or indirectly acquire (1) Voting 
securities, (2) all or substantially all of the cotton germplasm, or 
(3) substantially all of the assets relating to cottonseeds or 
cottonseed traits, of any company that develops and sells cottonseed in 
the United States, or any company that has developed, or has under 
development traits for commercialization in cottonseed in the United 
States, where such acquisition would be reportable under the HSR Act 
but for a failure to satisfy the thresholds of 15 U.S.C. l8a(a)(2).

[[Page 33344]]

    B. Such notification shall be provided to Plaintiff in the same 
format as, and per the instructions relating to the Notification and 
Report Form set forth in the Appendix to Part 803 of Title 16 of the 
Code of Federal Regulations as amended, except that the information 
requested in Items 5 through 9 of the instructions must be provided 
only about cottonseeds or transgenic traits that shall be or could be 
used in cottonseeds. Notification shall be provided at least thirty 
(30) days prior to acquiring any such interest, and shall include, 
beyond what may be required by the applicable instructions, the names 
of the principal representatives of the parties to the agreement who 
negotiated the agreement, and any management or strategic plans 
discussing the proposed transaction. If within the thirty (30) day 
period after notification, representatives of Plaintiff make a written 
request for additional information, Defendant Monsanto shall not 
consummate the proposed transaction or agreement until twenty (20) days 
after submitting all such additional information. Early termination of 
the waiting periods in this paragraph may be requested and, where 
appropriate, granted in the same manner as is applicable under the 
requirements and provisions of the HSR Act and rules promulgated 
thereunder. This Section shall be broadly construed and any ambiguity 
or uncertainty regarding the filing of notice under this Section shall 
be resolved in favor of filing notice.

XIII. No Reacquisition

    If Defendant Monsanto divests the Enhanced Stoneville Assets and 
the VipCot Assets, Defendant Monsanto may not reacquire any part of the 
Enhanced Stoneville Assets or the VipCot Assets during the term of this 
Final Judgment. If Defendant Monsanto divests Defendant DPL, it may not 
reacquire any part of Defendant DPL during the term of this Final 
Judgment.

XIV. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XV. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry.

XVI. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and Plaintiff's responses to comments. Based upon 
the record before the Court, which includes the Competitive Impact 
Statement and any comments and response to comments filed with the 
Court, entry of this Final Judgment is in the public interest.

Date:------------------------------------------------------------------

Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

-----------------------------------------------------------------------

United States District Judge

Definitions for Schedules

    1. ``Advanced Exotic Yield Lines'' means the Breeding populations 
and proprietary Lines created by Defendant Monsanto from a cross 
between Gossypium hirsutum and Gossypium barbadense that are identified 
in Schedule D.
    2. ``Backcross'' means to cross a hybrid with one of its parents 
and then to cross the resulting progeny with the same parent Line 
(perhaps multiple times) in order to develop progeny with a genetic 
makeup that approximates the genetic make up of that parent while 
retaining certain desirable characteristics of the genetic makeup of 
the other parent of the hybrid.
    3. ``Breed'' means to purposefully modify the Germplasm of a plant 
so as to alter its genetic make up, and to develop the progeny from the 
altered Germplasm.
    4. ``DPL Marker Data'' means Fingerprints that Defendant Monsanto 
shall create for the DPL Germplasm being divested pursuant to Schedule 
B.2.
    5. ``Donor Lines'' means the cotton Lines used by Defendant 
Monsanto to create or transmit novel cotton traits or events, and 
identified in Schedule F.
    6. ``Fingerprint'' means a record of the presence or absence of 
genetic markers for which a Line has been tested.
    7. ``Germplasm'' means a collection of heterozygous and homozygous 
cotton plants or parts thereof. For purposes of Schedules B and C of 
this Final Judgment, when the Defendants are required to convey 
Germplasm to a party, the Defendant may satisfy that obligation by 
conveying that Germplasm in seed form, or if necessary, in potted plant 
form.
    8. ``Introgress'' means to move a gene from one cotton plant into 
another.
    9. ``Line'' means a set of cottonseed or plants that share a common 
reasonably homogenous genotype that originate from a cross between two 
cotton plants.
    10. ``MAB Populations'' means the Germplasm populations for which 
Defendant Monsanto has conducted significant marker analyses that are 
identifie