CIA Annual Meeting Assemblée annuelle de l’ICA June 29 & 30, 2006  Les 29 et 30 juin 2006 Ottawa, Ontario Monsanto Status Report - Unresolved Legal Issues

Markus F. Kremer Borden Ladner Gervais LLP Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Legal Issues Left Unresolved by the Supreme Court of Canada retroactivity (1969?, 1988?) allocation of surplus ownership of surplus benefit enhancements interest extra-provincial application annuitization Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Big Issues undeclared PWUs / pre-1988 PWUs challenges to allocation of surplus / methods of updating surplus by FSCO by members applicability outside of Ontario liability of directors, officers & professional advisors regulatory negligence Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Implications 1.“Question authority” – Regulators’ positions may be subject to legal challenge 2.“Beware of Regulators bearing gifts” - regulatory approval does not preclude legal liability 3.“Better safe than sorry” - Sponsors need to protect themselves from legal liability Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Question authority … What FSCO requires but the law may not: allocation of surplus in proportion to liabilities forced annuitization funding of PWU deficit, even if plan is currently in surplus Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Beware of Regulators bearing gifts … What FSCO will allow but the law may not: using fund rate of return & current annuity rates even if surplus is decreased / eliminated treating benefit enhancements as surplus distribution limiting surplus distribution to post-’87 PWUs not declaring additional historical PWUs OSFI not requiring surplus distribution on partial termination Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Better safe than sorry … How sponsors can protect themselves: in ongoing Plans in the context of corporate transactions Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Ongoing Plans before distributing surplus, conduct due diligence regarding previous events that could constitute PWU address PWUs in order & one at a time obtain releases when distributing surplus Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Due diligence in share purchases past PWUs & mergers may result in overstatement of value of plan assets due diligence representations & warranties PWUs & potential PWUs indemnity Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Due diligence in asset purchases 1.Purchaser does not assume plan, has no plan of its own risk free for purchaser vendor risks declaration of PWU (now or later) 2.Purchaser does not assume plan, establishes own plan less likely to be PWU at time employees transferred purchaser does not risk surplus distribution re: pre- transfer events Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA 3.Purchaser assumes entire plan similar risk allocation as in share purchase 4.Purchaser assumes vendor’s obligations by establishing new plan most complicated from regulatory perspective – requires approval for asset transfer complex calculation re: assets to be transferred value to be assigned to surplus no means to protect against member claims Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA Parting thoughts …  some Regulatory requirements have not been decided by the courts  Regulatory approval does not preclude liability to members  agreements between parties to corporate transactions cannot preclude liability to members Monsanto Status Report - Unresolved Legal Issues

CIA Annual Meeting  Assemblée annuelle de l’ICA THANK YOU Markus F. Kremer Borden Ladner Gervais LLP Monsanto Status Report - Unresolved Legal Issues