SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
COMMISSION FILE NUMBER 0-1052
Millipore Corporation
(Exact name of registrant as specified in its charter)
Massachusetts
(State or other jurisdiction of incorporation or organization)
04-2170233
(I.R.S. Employer Identification No.)
80 Ashby Road
Bedford, Massachusetts 01730
(Address of principal executive offices)
Registrant's telephone number, include area code (781) 533-6000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities and Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
The Company had 46,069,773 shares of common stock outstanding as
of April 28, 2000.
MILLIPORE CORPORATION
INDEX TO FORM 10-Q
Page No.
Part I. Financial Information
Item 1. Condensed Financial Statements
Consolidated Balance Sheets -
March 31, 2000 and December 31, 1999 2
Consolidated Statements of Income -
Three Months Ended March 31, 2000 and 1999 3
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2000 and 1999 4
Notes to Consolidated Condensed
Financial Statements 5-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
8-11
Item 3. Quantitative and Qualitative Disclosures about Market
Risk 11
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
MILLIPORE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December
2000 31, 1999
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 65,565 $ 32,420
Cash held as collateral 14,784 18,640
Accounts receivable, net 201,425 195,751
Inventories 120,614 105,040
Other current assets 10,152 7,096
Total Current Assets 412,540 358,947
Property, plant and equipment, net 213,565 226,477
Deferred income taxes 109,822 109,822
Intangible assets 68,535 70,238
Other assets 34,064 27,249
Total Assets $ 838,526 $ 792,733
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 128,000 $ 115,645
Accounts payable 62,802 63,053
Accrued expenses 70,515 73,512
Dividends payable 5,034 4,970
Accrued retirement plan
contributions 3,601 7,333
Accrued income taxes payable 10,538 5,270
Total Current Liabilities 280,490 269,783
Long-term debt 312,396 313,107
Other liabilities 34,692 32,992
Shareholders' equity
Common stock 56,988 56,988
Additional paid-in capital 18,272 18,272
Retained earnings 511,033 491,429
Unearned compensation (3,599) (4,041)
Accumulated other comprehensive loss (44,753) (42,292)
537,941 520,356
Less: Treasury stock, at cost,
11,224 shares in 2000 and 11,794
in 1999 (326,993) (343,505)
Total Shareholders' Equity 210,948 176,851
Total Liabilities and Shareholders'
Equity $ 838,526 $ 792,733
The accompanying notes are an integral part of the consolidated
condensed financial statements.
-2-
MILLIPORE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
March 31,
2000 1999
Net sales $ 224,823 $ 180,403
Cost of sales 100,326 84,895
Gross profit 124,497 95,508
Selling, general &
administrative expenses 70,034 61,833
Research & development
expenses 14,714 12,345
Operating income 39,749 21,330
Interest income 466 699
Interest expense (7,034) (7,779)
Income before income taxes 33,181 14,250
Income tax expense 6,968 2,993
Net income $26,213 $ 11,257
Net income per share:
Basic $ 0.58 $ 0.26
Diluted $ 0.56 $ 0.25
Cash dividends declared per
share $ 0.11 $ 0.11
Weighted average shares
outstanding:
Basic 45,273 44,078
Diluted 46,452 44,477
The accompanying notes are an integral part of the consolidated
condensed financial statements.
-3-
MILLIPORE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March
31,
2000 1999
Cash Flows From Operating Activities:
Net income $26,213 $11,257
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 11,266 11,279
Changes in operating assets and
liabilities, net:
Increase in accounts receivable (9,913) (10,288)
(Increase) decrease in inventories (18,089) 1,011
Increase in other current assets and
other assets (3,001) (160)
Decrease in accounts payable and accrued
expenses (261) (1,715)
Decrease in accrued retirement plan
contributions (3,657) (3,410)
Increase in accrued income taxes 3,049 2,200
Increase in other 1,843 552
Net cash provided by operating activities 7,450 10,726
Cash Flows From Investing Activities:
Additions to property, plant and
equipment (7,584) (4,834)
Proceeds from sale of property 8,808 -
Net cash provided by (used in) investing
activities 1,224 (4,834)
Cash Flows From Financing Activities:
Issuance of treasury stock under stock
plans 14,600 439
Net change in short-term debt 12,355 (6,340)
Decrease in cash held as collateral 3,856 -
Dividends paid (4,982) (4,851)
Net cash provided by (used in) financing
activities 25,829 (10,752)
Effect of foreign exchange rates on cash
and cash equivalents (1,358) (2,426)
Net change in cash and cash equivalents 33,145 (7,286)
Cash and cash equivalents on January 1 32,420 36,022
Cash and cash equivalents on March 31 $65,565 $28,736
The accompanying notes are an integral part of the consolidated
condensed financial statements.
-4-
MILLIPORE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Dollars in millions, shares in thousands)
1. General: The accompanying unaudited consolidated condensed
financial statements have been prepared in accordance with the
instructions to Form 10-Q and, accordingly, these footnotes condense
or omit certain information and disclosures normally included in
financial statements. These financial statements, which in the
opinion of management reflect all adjustments necessary for a fair
presentation, should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1999. The accompanying
unaudited consolidated condensed financial statements are not
necessarily indicative of future trends or the Company's operations
for the entire year.
2.Inventories: Inventories consisted of the following:
March 31, December
2000 31, 1999
Raw materials $ 43.3 $ 38.1
Work in process 29.9 26.1
Finished goods 47.4 40.8
Total $ 120.6 $ 105.0
3. Property, Plant and Equipment: Accumulated depreciation on
property, plant and equipment was $210.6 at March 31, 2000 and
$206.9 at December 31, 1999.
4.Restructuring Charges: In the third quarter of 1998, the Company
initiated a restructuring program resulting in a restructuring
charge of $33.6. In the third quarter of 1999, $5.2 of the
remaining balance was reversed. The reversal reflected a lower
estimate for severance pay and lease cancellation costs required
to complete the various restructuring programs. As of March 31,
2000, 600 employees, of the planned 620 employees, left the
Company pursuant to this initiative.
Certain of the manufacturing consolidations originally planned for
1999 were delayed to 2000 due to facility preparation and customer
requirements. Under the terms of the severance agreements, the
Company expects to pay severance and associated benefits through
2000.
The following is a summary of the restructuring program reserve
balances at March 31, 2000:
Balance at Cash Balance
December 31, disbursements at March
1999 31, 2000
Employee severance $ 3.5 $ 0.7 $ 2.8
Lease cancellation costs 2.5 0.3 2.2
Other costs 1.6 0.4 1.2
Total $ 7.6 $ 1.4 $ 6.2
-5-
MILLIPORE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Dollars in millions, shares in thousands)
5. Business Segment Information: The Company has two reportable
business segments: Biopharmaceutical & Research and
Microelectronics. The results for Biopharmaceutical & Research,
Microelectronics and Corporate are presented below in "local
currencies". Local currency results represent the foreign currency
balances translated, in all periods presented, at Millipore's
budgeted exchange rates for 2000, thus excluding the impact of
fluctuations in the actual foreign currency rates. The Company's
management uses this presentation for internal evaluation of the
financial performance of the Company's business segments because
it believes that the local currency results provides a clearer
presentation of underlying business trends. The U.S. dollar
results represent the foreign currency balances translated at
actual exchange rates.
Three Months Ended
March 31,
Consolidated Net Sales 2000 1999
Biopharmaceutical & Research $ 151.6 $ 138.9
Microelectronics 75.1 42.3
Foreign exchange (1.9) (0.8)
Total net sales at actual
exchange rates $ 224.8 $ 180.4
Three Months
Ended
March 31,
Consolidated Operating Income 2000 1999
Biopharmaceutical & Research $36.1 $30.2
Microelectronics 16.8 1.2
Corporate (14.0) (9.1)
Foreign exchange 0.8 (1.0)
Total operating income at
actual exchange rates $39.7 $21.3
7.Basic and Diluted Earnings Per Share: The following table sets
forth the computation of basic and diluted earnings per share:
Three Months
Ended
March 31,
2000 1999
Numerator:
Net income $26.2 $11.3
Denominator:
For basic earnings per share:
Weighted average shares
outstanding 45,273 44,078
Effect of dilutive securities 1,179 399
Diluted weighted average shares
outstanding 46,452 44,477
Net income per share:
Basic $ 0.58 $ 0.26
Diluted $ 0.56 $ 0.25
-6-
MILLIPORE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Dollars in millions, shares in thousands)
8. Comprehensive Income: The following table presents the
components of comprehensive income (loss), net of taxes:
Three Months
Ended
March 31,
2000 1999
Unrealized holding gains on
marketable securities $5.8 $ 0.9
Reclassification adjustment for
gains realized in net income - (0.2)
Net unrealized gain on
securities available for sale 5.8 0.7
Foreign currency translation
adjustments (8.2) (13.0)
Other comprehensive loss (2.4) (12.3)
Net income 26.2 11.3
Total comprehensive income
(loss) $ 23.8 $(1.0)
9. New Accounting Pronouncements:
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" effective January
1, 2001 for the Company. SFAS 133 establishes accounting and
reporting standards requiring that every derivative instrument,
including certain derivative instruments embedded in other
contracts, be recorded in the balance sheet as either an asset or
liability measured at its fair value. The statement also requires
that changes in the derivative's fair value be recognized in
earnings unless specific hedge accounting criteria are met. The
Company is currently assessing the impact of this new statement on
its consolidated financial position, liquidity and results of
operations.
In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin 101, "Revenue Recognition in
Financial Statements" which is effective for the Company beginning
with the second quarter of 2000. SAB 101 provides guidance
related to revenue recognition based on interpretations and
practices followed by the SEC and requires any changes in revenue
recognition to be reported as a cumulative change in accounting
principles at the time of implementation in accordance with APB
Opinion No. 20, "Accounting Changes". The Company is currently in
the process of evaluating what impact, if any, SAB 101 will have
on the financial position or results of operations of the Company.
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements
The following discussion and analysis includes certain forward-
looking statements which are subject to substantial risks and
uncertainties described in Management's Discussion and Analysis in
the Company's Annual Report on Form 10-K for the year ended December
31, 1999. Such forward-looking statements are based on management's
current expectations and actual results may differ materially from
the results expressed in, or implied by, these forward-looking
statements.
Local Currency Results
The following discussion of the Results of Operations includes
reference to revenue, margins and expenses in "local currencies".
Local currency results represent the foreign currency balances
translated, in all periods presented, at Millipore's budgeted
exchange rates for 2000, thus excluding the impact of fluctuations in
the actual foreign currency rates. The Company's management uses
this presentation for internal evaluation of the financial
performance of the Company's business segments because it believes
that the local currency results provides a clearer presentation of
underlying business trends. The U.S. dollar results represent the
foreign currency balances translated at actual exchange rates.
Results of Operations
Consolidated net sales for the first quarter of 2000 were $225
million, an increase of 25% over sales for the same period last year.
The Company reported earnings of $0.56 per share for the first
quarter of 2000 compared to earnings of $0.25 per share for the first
quarter of 1999.
The following table summarizes sales growth by business segment and
geography in the first quarter of 2000 as compared to the first
quarter of 1999 (U.S. dollars in millions):
March 31, Sales Growth
2000 1999 in U.S. Local
Dollars Currency
Biopharmaceutical
& Research $ 148 $ 138 7% 9%
Microelectronics 77 42 83% 77%
Total $ 225 $ 180 25% 25%
Americas $ 97 $ 74 29% 29%
Europe 60 60 1% 11%
Asia/Pacific 68 46 47% 36%
Total $225 $180 25% 25%
Compared to the first quarter of 1999, the Japanese yen strengthened
against the U.S. dollar by approximately 8% during the period, while
the Euro weakened against the U.S. dollar by approximately 13%. The
positive effect from the stronger yen and an increase in volume of
yen denominated sales in Q1 2000 offset the decline in the Euro thus
neutralizing the effect to reported sales growth. If foreign
exchange rates remain at April 28, 2000 levels, the expected second
quarter sales growth in dollars should approximate the growth in
local currency and projected full year 2000 reported sales growth
rates would be approximately 2% lower than local currency growth
rates due to the anticipated growth in the European business.
-8-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Business Segment Results
Biopharmaceutical & Research Segment:
Biopharmaceutical & Research sales, in local currency, increased 9%
in the first quarter of 2000 compared to the first quarter of 1999.
Sales growth, in local currency, was positive in the Americas and
Europe offset by a slight decline in Asia. Sales growth was strongest
for products used in life science laboratory research and in hardware
and consumables used in the biopharmaceutical markets. This segment
anticipates similar sales growth for the remainder of 2000.
Biopharmaceutical & Research operating income, in local currency,
increased 20% in the first quarter of 2000 over the first quarter of
1999 as a result of the increased sales combined with improved gross
profit margins. The improved gross profit margin percentage was
attributed to an increased mix of consumable product sales which
generally have higher margins and volume through manufacturing
plants.
Microelectronics Segment:
Microelectronics sales, in local currency, increased 77% in the first
quarter of 2000 compared to the same period last year. Sales growth
was positive in all geographies with the most significant growth in
Asia. Sequential quarter sales growth was 19% from the fourth
quarter of 1999 to the first quarter of 2000. Recently published
industry results and forecasts depict trends of significant increase
in demand for both semiconductors and semiconductor capital
equipment. Both trends generally impact the Microelectronics
business segment. Sales growth in this segment is expected to
continue for the remainder of 2000, however, at lower quarterly
growth rates. It is anticipated that sequential sales will continue
to increase, although the sequential growth rate will be less than
the first quarter of 2000.
Microelectronics operating income, in local currency, increased from
$1.2 million or 2.9% of sales in the first quarter of 1999 to $16.8
million or 22.3% of sales in the first quarter of 2000. The increase
is primarily due to the significant sales growth coupled with
improved gross profit margins and operating expense leverage. The
gross profit margins were positively impacted by both the higher
sales volumes and by a greater mix of expendable sales. The ability
to maintain this percentage of operating income for the full year
will be dependent on a number of variables including the volume
through manufacturing plants, the impact of new products on both
gross profit margins and spending and sales mix of equipment versus
consumables.
Corporate Expenses:
Corporate expenses, in local currency increased from $9.1 million to
$14.0 million in the first quarter of 2000 as compared to the same
quarter of the prior year. The increased expenses related primarily
to incremental variable compensation expense associated with the
improved financial performance of the Company. For the remainder of
the year, Corporate expenses are anticipated to be in line with the
first quarter of 2000.
Consolidated Results
Gross profit margins were 55% of sales, in local currencies, in the
first quarter of 2000 compared to 53% reported in the first quarter
of 1999. The improved margins can be primarily attributed to
production efficiencies related to increased sales volume and
favorable mix of expendables to hardware. The ability to maintain
the gross profit margins reported in the first quarter of 2000 for
the remainder of the year will be impacted by the mix of hardware to
expendables sales, new product sales and volume through manufacturing
plants among other factors.
Selling, general and administrative expenses (SG&A), in local
currencies, increased 15% in the first quarter of 2000 as compared to
the first quarter of 1999. This increase is primarily attributed to
employee costs related to incremental variable compensation earned in
the first quarter of 2000 over amounts earned in the same period last
year, additional headcounts and increased spending due to higher
sales volume. As a percentage of net sales, SG&A expenses in local
currencies decreased approximately 3 percentage points. The Company
expects that for the remainder of the year SG&A as a percentage of
net sales will improve as sales increase resulting in a full year
SG&A rate lower than the first quarter's rate.
-9-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Research and development (R&D) expenses, in local currencies,
increased 20% in the first quarter of 2000 as compared to the first
quarter of 1999. This increase is due to incremental variable
compensation expense and additional research and development
programs. R&D expenses as a percentage of sales were 6.5% in the
first quarter of 2000 and the Company is targeting R&D spending
levels of 7% for the remainder of the year.
Net interest expense decreased in the first quarter of 2000 as
compared to the first quarter of 1999 primarily attributed to lower
average borrowings. The Company expects interest expense for the
remainder of 2000 to be lower than 1999 due to lower average
borrowings. The Company does not expect that increases in interest
rates will have a material effect on interest expense.
The effective income tax rate for the first quarter of 2000 was
21.0%, the same as the effective income tax rate from operations for
the full year of 1999. The effective tax rate may increase slightly
over the remainder of 2000 depending upon the geographic mix of
sales.
Foreign Exchange
A substantial portion of the Company's business is conducted outside
of the United States through its foreign subsidiaries. This business
is transacted through the Company's network of international
subsidiaries generally in the local currency. Approximately 30% of
the Company's sales are derived from Europe where the U.S. dollar
continued to strengthen against the Euro during the first quarter of
2000. The Company is able to partially mitigate the impact of
fluctuations in the Euro by active management of cross border
currency flows and material sourcing. Additionally, the Company has
significant exposure to changes in the Japanese yen that can not be
mitigated through normal financing or operating activities.
Accordingly, the net equity exposure is managed through the use of
debt swap agreements. Generally, when the U.S. dollar strengthens
against currencies in which the Company transacts its business, sales
and net income will be adversely impacted.
Restructuring Charges
In the third quarter of 1998, a restructuring program was initiated
to improve the competitive position of the Company by streamlining
worldwide operations and reducing the overall cost structure
resulting in a restructuring charge of $33.6 million. In the third
quarter of 1999, the Company reevaluated the accrual for the
restructuring program and reversed $5.2 million of the remaining
balance. The reversal reflected a lower estimate for severance pay
and lease cancellation costs. Although the planned number of employee
positions had been eliminated, the reduction in severance cost was
attributed to higher levels of attrition than originally anticipated
and impacted employees filling open positions as demand increased due
to improved sales volume.
Most of the major programs were completed in 1999, including the
realignment of European operating units, establishment of the
European regional transaction center, streamlining the supply chain
management function, consolidating certain manufacturing operations
and cancellation of leases. Certain of the manufacturing
consolidations originally planned for 1999 were delayed to 2000 due
to facility preparation and customer requirements.
The restructuring initiatives combined with the consolidation of the
Company's Microelectronics plants resulted in the elimination of 620
positions worldwide. Notification to employees was completed during
the third quarter of 1998, although some of the affected employees
will continue in their existing positions through 2000 with their
related salary costs charged to operations as incurred. As of March
31, 2000, 600 employees had left the Company pursuant to this
initiative. Under the terms of the severance agreements, the Company
expects to pay severance and associated benefits through 2000.
-10-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Resources and Liquidity
Cash generated by operations in the first three months of 2000 was
$7.5 million compared to $10.7 million in the first three months of
1999.
The decrease in cash flow from operations for the first three months
of 2000 as compared to the same period of the prior year was
primarily the result of increased inventories offset by improved
operating income. The inventory increase was attributed to
anticipated levels of future sales predominately in the
Microelectronics business segment.
Operating cash flow generated by the Company during the first three
months of 2000 was used to invest in property, plant and equipment
and pay dividends. The Company expects to spend approximately $45.0
to $50.0 million for property, plant and equipment during 2000.
During the first quarter of 2000, the Company received $8.8 million
from the sale of property and $14.6 million from the exercise of
employee stock options. Additionally short-term debt increased $12.4
million although net short-term debt decreased approximately $17
million.
The Company is required to provide cash collateralization on one of
its yen denominated debt swap agreements if (and to the extent that)
the net value of the Company's position falls below the net value of
the counterparty's position. While this will not impact the Company's
foreign exchange exposure, it could impact short-term liquidity and
compliance with certain debt covenants if there were a serious
deterioration in the value of the Company's swap position. The
amount of the collateral is dependent, among other things, on the
exchange rate of the yen to the U.S. dollar and is restricted as to
withdrawal or alternative usage.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The mitigating actions enumerated above under "Foreign Exchange" in
Management's Discussion and Analysis of Financial Condition and
Results of Operations and in Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the
Company's Annual Report on Form 10-K have effectively limited the
impact of exchange rate fluctuations and credit risk on the Company's
results of operations and financial position to a level which is not
material.
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The annual Meeting of Stockholders of Millipore Corporation was held
on April 27, 2000. At the Annual Meeting the only matter voted on
was the election of three Class I Directors for a three-year term
(expiring in 2003). The following votes were tabulated with respect
to the election:
Votes "For" Withheld
Mark Hoffman 40,457,168 630,876
John F. Reno 40,457,335 630,709
C. William Zadel 40,440,269 647,775
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
10 Letter Agreement, dated January 10, 2000 between the
Company and Douglas B. Jacoby
27 Article 5 Financial Data Schedule - for the three months ended
March 31, 2000
b. Report on Form 8-K
No reports on Form 8-K have been filed by the Company during the
fiscal quarter ended March 31, 2000.
-11-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Millipore Corporation
Registrant
May 12, 2000 /s/Kathleen B. Allen
Date Kathleen B. Allen
Chief Financial Officer
Chief Accounting Officer
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<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 80,349
<SECURITIES> 0
<RECEIVABLES> 201,425
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<PP&E> 424,168
<DEPRECIATION> 210,603
<TOTAL-ASSETS> 838,526
<CURRENT-LIABILITIES> 280,490
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<COMMON> 56,988
0
0
<OTHER-SE> 153,960
<TOTAL-LIABILITY-AND-EQUITY> 838,526
<SALES> 224,823
<TOTAL-REVENUES> 224,823
<CGS> 100,326
<TOTAL-COSTS> 100,326
<OTHER-EXPENSES> 84,748
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<INTEREST-EXPENSE> 7,034
<INCOME-PRETAX> 33,181
<INCOME-TAX> 6,968
<INCOME-CONTINUING> 26,213
<DISCONTINUED> 0
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</TABLE>
January 10, 2000
Mr. Douglas Jacoby
8 Nashua Avenue
Marblehead, MA 01945
Dear Doug:
As we discussed, Millipore and you have agreed that it
is in our mutual best interest for the Company to accept
your resignation as Corporate Vice President. Accordingly,
we further agree as follows:
1. Your termination date will be the close of
business on January 10, 2000 ("Severance Date").
2. You will receive severance in the amount of two years
of your current total annual target cash compensation
($507,000 per year) payable in 52 bi-weekly installments
commencing on January 27, 2000 and ending on January 10,
2002, the salary continuation period.
3. All unvested stock options previously granted to
you shall become immediately vested as of January 11, 2000.
All of your options must be exercised, if at all, no later
than one year after the Severance Date. All restricted
stock previously granted to you shall become free of all
restrictions on January 11, 2000.
4. During the salary continuation period, so long as
you remain unemployed, you will be eligible to continue your
medical and dental benefits by continuing to pay the premium
paid by Millipore employees. All other benefits provided to
employees who are actively employed by Millipore (other than
those described in paragraph 3 above) will terminate on the
Severance Date, except that you will be able to convert your
group term life insurance coverage (excluding the accidental
death and dismemberment portion of such insurance) and long
term disability insurance within thirty-one (31) days after
your Severance Date, in accordance with the terms of those
plans. Prior to the end of the salary continuation period,
you will be provided information necessary to convert your
medical and dental benefits as provided by the Comprehensive
Budget Reconciliation Act (COBRA) by paying the COBRA
premium rate to the Company.
5. We will make up to 12 months of outplacement
services available to you, at no cost with a mutually
acceptable firm.
6. From the Severance Date until January 10, 2002,
you shall not become employed by or act as a consultant for
any company or other person or organization who competes
with Millipore. Notwithstanding the preceding sentence,
Millipore's will agree to your becoming employed by or
acting as a consultant to a competitor, if, in its sole
discretion, it believes that you can do so without making
use of or revealing any confidential proprietary information
of Millipore.
7. Except for your family and legal and financial
advisors: you will keep the terms of this Agreement
confidential, you will not disclose to third parties the
nature or circumstances surrounding your termination, and
you will not speak disparagingly of Millipore, its products
or business practices to any third party.
8. You agree to hold in confidence any and all
confidential and proprietary information of Millipore to
which you have had access during the course of your
employment.
9. You will execute the attached general release.
(In the event that you revoke the general release per its
terms, this letter agreement will be deemed to be revoked as
well.)
If the above accurately reflects our agreement in the
above matter, please sign, date and return the enclosed copy
of this letter as well as the general release. You have 21
days from the Severance Date to consider whether you wish to
sign this letter agreement and the general release. In
addition, you will have seven days after you sign them to
revoke your acceptance of both. You are encouraged to
consult with an attorney with respect to the matter of your
termination and this agreement.
Very truly yours,
MILLIPORE CORPORATION
C. William Zadel
President and Chief Financial Officer
_______________________ _________________
Douglas Jacoby Dated
General Release of All Claims
This General Release of All Claims (referred to as the
"General Release") given by Douglas Jacoby to MILLIPORE
CORPORATION and its parents, subsidiaries, affiliates,
agents, officers, directors and employees, and all of their
predecessors and successors (all referred to as "Millipore"
or "the Company").
Effective January 10, 2000 ("Termination Date") I
acknowledge the termination of my employment with Millipore
and I agree that my employment and the termination from that
employment shall not give rise to any claim on my part
against Millipore.
In exchange for this General Release, Millipore has
provided to me good and valuable consideration (described in
the attached letter agreement dated January 10, 2000) the
receipt and adequacy of which is hereby acknowledged.
I hereby agree to forever discharge Millipore, from all
debts, demands, actions, causes of action, suits, accounts,
covenants, agreements, damages, expenses, compensation,
claims for attorneys' fees and all claims, demands and
liabilities whatsoever of every name and nature, both in law
and in equity, which may result from the existing state of
things, or which may be considered to be of a continuing
nature, more especially on account of, but not limited to,
any matters in any way relating to or stemming from my
employment by Millipore, or the termination thereof, and all
circumstances relating thereto or pursuant to any federal,
state or local employment laws, regulations, executive
orders or other requirements, including without limitation
all claims and causes of action under Title VII of the Civil
Rights Act of 1964, as amended; the Civil Rights Act of
1991; the Age Discrimination in Employment Act of 1967, as
amended; the Americans with Disabilities Act; the Older
Workers Benefit Protection Act of 1990; the Employee
Retirement Income Security Act of 1974, as amended; the
Worker Adjustment and Retraining Notification Act; the
Family Medical Leave Act and Mass. G.L., c. 151B, Mass.
G.L., c. 12, 11H and 11I, Mass. G.L., c. 93, 102 & 103,
all as may have been amended, which I ever had or may have
as of the date I sign this Agreement.
I also understand that this General Release constitutes
a binding legal obligation on my part, and that after
signing it, I will not be able to bring suit or make any
other kind of claim against Millipore or anyone else with
respect to any matter arising out of my employment with
Millipore or the termination of that employment.
This General Release (and the January 10, 2000 letter
agreement) represents my entire agreement and understanding
with Millipore, and there are no other written or oral
agreements or understandings on this subject.
This General Release shall be governed by and its terms
construed in accordance with the laws of the Commonwealth of
Massachusetts.
I HAVE READ AND UNDERSTAND THE CONTENTS OF THIS GENERAL
RELEASE. I HAVE BEEN GIVEN AT LEAST 21 DAYS FROM THE
TERMINATION DATE SET FORTH ABOVE TO CONSIDER IT (AND THE
JANUARY 10, 2000 LETTER AGREEMENT) AND I HAVE BEEN
SPECIFICALLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE
SIGNING IT. NO PROMISES OR REPRESENTATIONS OF ANY KIND HAVE
BEEN MADE TO ME ABOUT IT. I HAVE EXECUTED IT VOLUNTARILY
AND OF MY OWN FREE WILL, WITHOUT COERCION AND WITH FULL
KNOWLEDGE OF WHAT IT MEANS TO DO SO.
This General Release (and the January 10, 2000 letter
agreement) may be revoked by me within seven days of the
date listed below by delivering written notice of revocation
to C. William Zadel, Millipore Corporation, 80 Ashby Road,
Bedford, MA 01730, after which it shall be irrevocable.
____________________________
Douglas Jacoby
Dated:________________________
