SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant To Section 13 Or 15(d)
Of The Securities Exchange Act Of 1934
For the Fiscal Year Ended June 30, 1994
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 1-4389
The Perkin-Elmer Corporation
(Exact name of registrant as specified in its charter)
NEW YORK 06-0490270
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
761 Main Avenue, Norwalk, Connecticut 06859-0001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: 203-762-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of class on which registered
Common Stock (par value New York Stock Exchange
$1.00 per share) Pacific Stock Exchange
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
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.
X Yes No
As of September 6, 1994, 42,489,989 shares of Registrant's Common
Stock were outstanding, and the aggregate market value of shares of such
Common Stock (based upon the average sales price) held by non-affiliates
was approximately $1,269,389,727.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Shareholders for Fiscal Year ended June 30, 1994 -
Parts I, II, and IV.
Proxy Statement for Annual Meeting of Shareholders dated September
16, 1994 - Part III.
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
PART I
Item 1. BUSINESS
(a) General Development of Business.
The Perkin-Elmer Corporation was incorporated in 1939
under the laws of the State of New York. Together with its
consolidated subsidiaries, The Perkin-Elmer Corporation
(hereinafter collectively referred to as "Registrant" or the
"Corporation") develops, manufactures, and sells products in
the industry segment described in sub-item (c) below.
On February 18, 1993, the shareholders of Registrant and
Applied Biosystems, Inc. ("ABI"), a supplier of automated
systems for life science research and related applications,
approved the merger of a subsidiary of Registrant with and
into ABI which resulted in ABI becoming a wholly-owned
subsidiary of Registrant. Effective July 1, 1994, ABI was
merged into Registrant and is now the Applied Biosystems
division of Registrant.
On July 29, 1993, Registrant announced plans to divest
its Material Sciences segment which consists of its Metco
Division ("Metco") headquartered in Westbury, New York. On
April 18, 1994, Registrant entered into an agreement with
Sulzer Inc. to sell Metco. Registrant expects to complete the
sale in calendar year 1994.
The consolidated financial statements and schedules
reflect the merger with ABI as a pooling of interests and
present the Corporation's Material Sciences segment as a
discontinued operation.
On May 18, 1993, Registrant amended its By-laws to change
Registrant's fiscal year end from July 31 to June 30. Prior
to fiscal 1993, the financial statements of ABI and
Registrant's subsidiaries outside the United States were for
fiscal years ended June 30, while Registrant's domestic
operations reported on a July 31 fiscal year end.
In fiscal year 1990 Registrant divested the net assets of
what had been its Semiconductor Equipment, Avionic
Instrumentation, and Electro-Optical segments.
(b) Financial Information About Industry Segments.
Registrant is engaged in one business segment which is
generally described as analytical instruments. Accordingly,
separate segment financial information is not provided.
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(c) Narrative Description of Business.
BUSINESS
Registrant develops, manufactures, markets, sells, and
services analytical instrument systems. Included in this
industry segment are biochemical analytical instrument
systems, consisting of instruments and associated consumable
products, for life science research and related applications.
These automated systems are used for synthesis, amplification,
purification, isolation, analysis and sequencing of nucleic
acids, proteins, and other biological molecules. This
industry segment also includes analytical instrument systems
for determining the composition and molecular structure of
chemical substances (both organic and inorganic) and measuring
the concentration of materials in a sample. These instruments
include: spectrophotometers utilizing a number of analytical
techniques; gas and liquid chromatographs; thermal analyzers;
thermal cyclers; analytical balances; flame photometers;
polarimeters; data-handling devices that are principally
designed for use with analytical instruments; and data systems
for applications in analytical chemistry. In a joint venture,
Perkin-Elmer Sciex Instruments, Registrant is engaged in the
manufacture and sale of mass spectrometry instrument systems.
Registrant also develops, manufactures, markets, and services
on-line, real time, process analysis systems to monitor
process quality and environmental purity.
Registrant's instruments are used by private industry,
educational and research institutions, and governmental
entities for fundamental research, applied industrial
research, quality control, medical research, hospital clinical
testing, pollution analysis, drug identification, and
forensics.
MARKETING AND DISTRIBUTION
In the United States, Registrant markets the largest
portion of its products directly through its own sales and
distribution organization, although certain analytical
instruments are marketed through independent distributors and
sales representatives. Sales to major markets outside of the
United States are generally made by foreign sales
subsidiaries, although some sales are made directly from the
United States to foreign customers. In foreign countries
where sales potential does not warrant the establishment of a
sales subsidiary, sales are made through various
representative and distributorship arrangements. Registrant
owns or leases sales and service offices in strategic regional
locations in the United States, and in foreign countries
through its foreign sales subsidiaries and distribution
operations. None of Registrant's products is distributed
through retail outlets.
RAW MATERIALS
There are no specialized raw materials that are
particularly essential to the operation of Registrant's
business. Registrant's manufacturing operations require a
wide variety of raw materials, electronic and mechanical
components, chemical and biochemical materials, and other
supplies, some of which are occasionally found to be in short
supply. Registrant has multiple commercial sources for most
components and supplies but is dependent on single sources for
a limited number of such items, in which case Registrant
normally secures long term supply contracts.
PATENTS, LICENSES, AND FRANCHISES
Registrant has pursued a policy of seeking patent protection
in the United States and other countries for developments,
improvements, and inventions originating within its organization
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which are incorporated in Registrant's
products or which fall within its fields of interest. Certain
licenses under patents have been granted to, and received
from, other entities. Registrant is licensed by Hoffmann-La
Roche Inc. under patents relating to polymerase chain reaction
technology ("PCR"), which patents expire July 28, 2004. In
Registrant's opinion, however, no other single patent or
license, or group of patents or licenses, or any franchise, is
material to its business as a whole.
From time to time, Registrant has asserted that various
competitors and others are infringing Registrant's patents and
similarly, from time to time, others have asserted that
Registrant was infringing patents owned by them. Generally,
such claims are settled by mutual agreement on a satisfactory
basis and have resulted in the granting of licenses by
Registrant or the granting of licenses to Registrant.
SEASONAL FLUCTUATIONS
Registrant's business is not subject to pronounced
seasonal fluctuations.
BACKLOG
Registrant's recorded backlog was approximately $155
million at June 30, 1994 and 1993. With respect to commercial
products, it is Registrant's general policy to include in
backlog only purchase orders or production releases which have
firm delivery dates within one year. Recorded backlog may not
result in sales because of cancellation or other factors. It
is anticipated that all orders included in the current backlog
will be delivered before the close of fiscal year 1995.
UNITED STATES GOVERNMENT SALES
No material portion of Registrant's business is subject
to renegotiation of profits or termination of contracts or
subcontracts at the election of the United States Government.
COMPETITION
The industry segment in which Registrant operates is
highly competitive and is characterized by the application of
advanced technology. There are numerous companies which
specialize in, and a number of larger companies which devote a
significant portion of their resources to, the development,
manufacture, and sale of products which compete with those
manufactured or sold by Registrant. Many of Registrant's
competitors are well-known manufacturers with a high degree of
technical proficiency. In addition, competition is
intensified by the ever-changing nature of the technologies in
the industry in which Registrant is engaged. The markets for
Registrant's products are characterized by specialized
manufacturers that often have strength in narrow segments of
these markets. While the absence of reliable statistics makes
it difficult to determine Registrant's relative market
position, Registrant is confident it is one of the principal
manufacturers in its field, marketing a broad line of
analytical instruments and life science systems. In addition
to competing in terms of the technology that Registrant
offers, Registrant competes in terms of price, service, and
quality.
RESEARCH, DEVELOPMENT, AND ENGINEERING
Registrant is actively engaged in basic and applied
research, development, and engineering programs designed to
develop new products and to improve existing products. During
fiscal years 1994, 1993, and 1992, Registrant spent
approximately $94 million, $84 million, and $81 million,
respectively, on company sponsored research, development, and
engineering activities.
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ENVIRONMENTAL MATTERS
Registrant is subject to federal, state, and local laws
and regulations regulating the discharge of materials into the
environment, or otherwise relating to the protection of the
environment, in those jurisdictions where Registrant operates
or maintains facilities. Registrant does not believe that
compliance with all environmental provisions will have a
material effect on its business, and no material capital
expenditures are expected for environmental control.
EMPLOYEES
As of June 30, 1994, Registrant employed 5,954 persons
worldwide. None of Registrant's United States employees is
subject to collective bargaining agreements.
(d) Financial Information About Foreign and Domestic
Operations and Export Sales.
A summary of net revenues to unaffiliated customers,
operating income, and identifiable assets attributable to each
of Registrant's geographic areas and export sales for the
fiscal years 1994, 1993, and 1992 is incorporated herein by
reference to Note 6 on Pages 38-40 of the Annual Report to
Shareholders for the fiscal year ended June 30, 1994.
Registrant's consolidated net revenues to unaffiliated
customers in countries other than the United States for the
fiscal years 1994, 1993, and 1992 were approximately $607
million, $607 million, and $558 million, or approximately 59%,
60%, and 58%, respectively, of Registrant's consolidated net
revenues.
All of the Registrant's manufacturing facilities outside
of the continental United States are located in Germany, the
United Kingdom, the Commonwealth of Puerto Rico, Japan, and
the Peoples Republic of China. There are currently no
material foreign exchange controls or similar limitations
restricting the repatriation to the United States of capital
or earnings from operations outside the United States.
(e) Discontinued Operations
On July 29, 1993, Registrant announced its plans to
divest Metco headquartered in Westbury, New York. Metco
produces combustion, electric arc and plasma thermal spray
equipment and supplies. Registrant has entered into an
agreement with Sulzer Inc., a wholly-owned subsidiary of
Sulzer Ltd., Winterthur, Switzerland for the sale of Metco.
The completion of the sale is subject to closing conditions,
including obtaining relevant government regulatory approvals.
The transaction has taken longer to complete than expected due
primarily to obtaining necessary government approvals in both
the U.S. and Europe. As a result of this and negative
operating factors, Registrant recorded an after-tax loss on
disposal of $7.7 million during the fourth quarter of fiscal
year 1994.
On October 5, 1992, prior to its merger with Registrant,
ABI announced the decision to distribute to its shareholders
approximately 82% of the stock of its subsidiary, Lynx
Therapeutics, Inc. ("Lynx"), the successor to ABI's
therapeutics division. The financial statements reflect the
Lynx operating results as a discontinued operation. The net
assets of Lynx were not significant.
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Item 2. PROPERTIES
Listed below are the principal facilities of Registrant
as of June 30, 1994. Registrant considers all facilities
listed below to be reasonably appropriate for the purpose(s)
for which they are used, including manufacturing, research and
development, and administrative purposes. All properties are
maintained in good working order and, except for those held
for sale or lease, are substantially utilized on the basis of
at least one shift. None of the leased facilities is leased
from an affiliate of Registrant.
Owned or Expiration Approximate
Location Leased Date of Floor Area
Lease In Sq. Ft
Norwalk, CT Owned 402,000
Wilton, CT Owned 262,000
San Jose, CA Owned 81,000
Beaconsfield, England Owned 70,000
Ueberlingen, Germany Owned 65,000
Warrington, England Owned 58,000
Narita, Japan Owned 24,000
Irvine, CA Owned 22,000
Foster City, CA Leased 1994-2000 319,000
Ueberlingen, Germany Leased 1995-2001 196,000
Llantrinsant, Wales Leased 1996 113,000
Mayaguez, Puerto Rico Leased 1997-1998 34,000
Oberschleissheim, Germany Leased 1995 19,000
Beaconsfield, England Leased 2005 8,000
Beijing, China Leased 1996 350
In addition to the facilities listed above, Registrant
leases space in certain industrial centers for use as sales
and service offices and for warehousing. Registrant also owns
undeveloped land in Redding, Connecticut, San Jose and
Vacaville, California and Oberschleissheim, Germany.
In addition to the properties used by Registrant in its
operations, Registrant owns three facilities in Wilton,
Connecticut (aggregating approximately 248,000 square feet)
which are currently leased to SVG Lithography Systems, Inc.
for a term expiring in 2010, a facility in Garden Grove,
California (approximately 82,000 square feet) which is
currently leased to OCA Applied Optics, Inc. for a term
expiring in 1995, and a facility in Pomona, California
(approximately 135,000 square feet) which is currently leased
to Orbital Sciences Corporation for a term expiring in 2003.
Registrant also owns a facility in Ridgefield, Connecticut
(approximately 201,000 square feet), a facility in Wilton,
Connecticut (approximately 51,000 square feet), and a facility
in San Jose, California (approximately 67,000 square feet)
which are held for sale or lease.
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Listed below are the principal facilities utilized as of
June 30, 1994 by Metco, which is being accounted for as a
discontinued operation. Registrant considers such facilities
to be reasonably appropriate for the purpose(s) for which they
are used, including manufacturing, research and development,
and administrative purposes. All properties are maintained in
good working order and are substantially utilized on the basis
of at least one shift.
Approximate
Owned or Floor Area
Location Leased In Sq. Ft.
Westbury, NY Owned 137,000
Duffy Avenue, Hicksville, NY Owned 103,000
Chobham-Woking, England Owned 78,000
Hattersheim, Germany Owned 69,000
Miller Place, Hicksville, NY Owned 59,000
Item 3. LEGAL PROCEEDINGS
The Corporation has been named as a defendant in several
legal actions arising from the conduct of its normal business
activities. Although the amount of any liability that might
arise with respect to any of these matters cannot be
accurately predicted, the resulting liability, if any, will
not in the opinion of management of Registrant have a material
adverse effect on the financial statements of Registrant. In
addition, although no legal claim was filed, the Corporation
participated in the United States government's investigation
of the Hubble Space Telescope. Registrant settled all of the
government's potential claims with regard to this matter on
October 4, 1993, for $15 million.
Registrant is one of approximately 125 third party
defendants named in United States of America v. Davis et al.
which is pending in the United States District Court for the
District of Rhode Island. The third party plaintiffs, who
were named as defendants and potentially responsible parties
in the Government's initial complaint, seek equitable
contribution and indemnification in the event they are found
liable for remediation costs relating to the removal of
hazardous substances from a site located in Smithfield, Rhode
Island (initially estimated by the Government to be $27.8
million but most recently estimated to be $77.5 million). A
trial on the question of the third party plaintiffs' liability
to the Government has been held, but no decision has been
rendered. Until the liability of the third party plaintiffs
has been established, the court will not consider the amount
of any such liability or the validity of any third party
claims. While the Registrant contends that it should have no
liability in this case, because of the uncertainty of all
litigation, it cannot definitively state that it will incur
less than $100,000 in monetary sanctions.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
No matter was submitted to a vote of security holders,
through the solicitation of proxies or otherwise, during the
fourth quarter of the fiscal year covered by this report.
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PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
The principal United States market where Registrant's
Common Stock is traded is the New York Stock Exchange,
although such stock is also traded on the Pacific Stock
Exchange.
The following information, which appears in Registrant's
Annual Report to Shareholders for the fiscal year ended June
30, 1994, is hereby incorporated by reference in this Form 10-
K: the high and low sales prices of Registrant's Common Stock
for each quarterly period during the fiscal years 1994 and
1993 (Note 14, Page 43 of the Annual Report to Shareholders).
(b) Holders.
On September 6, 1994, the approximate number of holders
of Common Stock of Registrant was 8,975. The approximate
number of record holders is based upon the actual number of
holders registered in the books of Registrant at such date and
does not include holders of shares in "street name" or
persons, partnerships, associations, corporations, or other
entities identified in security position listings maintained
by depositary trust companies. Note: the calculation of the
number of shares of Registrant's Common Stock held by non-
affiliates shown on the cover of this Form 10-K was made on
the assumption that there were no affiliates other than
executive officers and directors.
(c) Dividends.
The following information which appears in Registrant's
Annual Report to Shareholders for the fiscal year ended June
30, 1994, is hereby incorporated by reference in this Form 10-
K: the amount of quarterly dividends paid during the fiscal
years 1994 and 1993 (Note 14, Page 43 of the Annual Report to
Shareholders).
Item 6. SELECTED FINANCIAL DATA
Registrant hereby incorporates by reference in this Form
10-K Page 20 of Registrant's Annual Report to Shareholders for
the fiscal year ended June 30, 1994.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Registrant hereby incorporates by reference in this Form
10-K Pages 21-25 of Registrant's Annual Report to Shareholders
for the fiscal year ended June 30, 1994.
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Item 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
The following financial statements and the supplementary
financial information included in Registrant's Annual Report
to Shareholders for the fiscal year ended June 30, 1994 are
incorporated by reference in this Form 10-K: the Consolidated
Financial Statements and the report thereon of Price
Waterhouse LLP dated July 28, 1994, and Pages 26-45 of said
Annual Report, including Note 14, Page 43, which contains
unaudited quarterly financial information.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Registrant has not changed its public accounting firm
within 24 months prior to June 30, 1994, the date of
Registrant's most recent financial statements.
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PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT
(a) Identification and Background of Directors.
Registrant hereby incorporates by reference in this Form 10-K
Pages 2-4 of Registrant's Proxy Statement dated September 16, 1994,
in connection with its Annual Meeting of Shareholders to be held on
October 20, 1994.
(b) Identification of Executive Officers.
The following is a list of Registrant's executive officers,
their ages, and their positions and offices with the Registrant, as
of September 14, 1994.
<TABLE>
<S> <C> <C>
Name Age Present Positions and Year First Elected
William F. Emswiler 50 Vice President, Finance, Chief Financial Officer (1992)
Julianne A. Grace 56 Vice President (1986), Corporate Relations (1990)
Gaynor N. Kelley 63 Chairman and Chief Executive Officer (1990)
Joseph E. Malandrakis 49 Vice President, Worldwide Operations (1993)
Andre F. Marion 58 Vice President and President, Applied Biosystems Division (1993)
John B. McBennett 56 Corporate Controller (1993)
Michael J. McPartland 45 Vice President, Human Resources (1993)
Riccardo Pigliucci 47 President and Chief Operating Officer (1993)
William B. Sawch 40 Vice President, General Counsel and Secretary (1993)
Rhonda L. Seegal 44 Vice President (1991), Treasurer (1988)
</TABLE>
Each of the foregoing named officers was either elected at the
last organizational meeting of the Board of Directors held on
October 21, 1993 or was elected by the Board since that date. The
term of each officer will expire on October 20, 1994, the date of
the next scheduled organizational meeting of the Board of
Directors, unless renewed for another year.
(c) Identification of Certain Significant Employees.
Not applicable.
(d) Family Relationships.
To the best of Registrant's knowledge and belief, there is no
family relationship between any of Registrant's directors,
executive officers, or persons nominated or chosen by Registrant to
become a director or an executive officer.
(e) Business Experience.
With respect to the business experience of Registrant's
directors and persons nominated to become directors, Registrant
hereby incorporates by reference in this Report on Form 10-K Pages
2-4 of Registrant's Proxy Statement dated September 16, 1994, in
connection with its Annual Meeting of Shareholders to be held on
October 20, 1994. With respect to the executive officers of
Registrant, each such officer has been employed by Registrant or a
subsidiary in one or more executive or managerial capacities for at
least the past five years, with the exception of Messrs.
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Emswiler, Marion, and McPartland. Mr. Emswiler was elected Vice President
of Registrant on May 21, 1992. Prior to his employment by Registrant
in May, 1992, Mr. Emswiler was employed by Aquarion Company, a
diversified water-quality and related services corporation, for
three years, most recently as Senior Vice President and Chief
Financial Officer, and prior to that he was employed by American
Home Products Corporation, a worldwide manufacturer and marketer of
prescription drugs, medical supplies and diagnostics, over-the-
counter medicines, and food products, as Vice President and
Comptroller and Vice President and Treasurer. Mr. Marion was
elected Vice President of Registrant on February 18, 1993. Prior
to his employment by Registrant in February, 1993, Mr. Marion was
employed by ABI as Chairman of the Board and Chief Executive
Officer. Mr. Marion was one of the founders of ABI, and had been
President since 1985. Mr. McPartland was elected Vice President of
Registrant on February 18, 1993. Prior to his employment by
Registrant in January, 1993, Mr. McPartland was employed by
SmithKline Beecham plc, a worldwide manufacturer of pharmaceutical
and consumer products and clinical laboratory services, from 1980
to 1993, most recently as Senior Vice President and Director,
Corporate Personnel.
(f) Involvement in Certain Legal Proceedings.
To the best of Registrant's knowledge and belief, none of
Registrant's directors, persons nominated to become directors, or
executive officers has been involved in any proceedings during the
past five years that are material to an evaluation of the ability
or integrity of such persons to be directors or executive officers
of Registrant.
(g) Compliance with Section 16(a) of the Securities Exchange
Act of 1934.
Information concerning compliance with Section 16(a) of the
Securities Exchange Act of 1934 is incorporated by reference to
Page 7 of Registrant's Proxy Statement dated September 16, 1994, in
connection with its Annual Meeting of Shareholders to be held on
October 20, 1994.
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Item 11. EXECUTIVE COMPENSATION
Registrant hereby incorporates by reference in this Form 10-K
Pages 5-13 of Registrant's Proxy Statement dated September 16,
1994, in connection with its Annual Meeting of Shareholders to be
held on October 20, 1994.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners.
Registrant hereby incorporates by reference in this Form 10-K
Page 6 of Registrant's Proxy Statement dated September 16, 1994, in
connection with its Annual Meeting of Shareholders to be held on
October 20, 1994.
(b) Security Ownership of Management.
Information concerning the security ownership of management is
hereby incorporated by reference to Pages 2-4 and 6-7 of
Registrant's Proxy Statement dated September 16, 1994, in
connection with its Annual Meeting of Shareholders to be held on
October 20, 1994.
(c) Changes in Control.
Registrant knows of no arrangements, including any pledge by
any person of securities of Registrant, which may at a subsequent
date result in a change in control of Registrant.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a) 1. Financial Statements.
The following consolidated financial statements, together with
the report thereon of Price Waterhouse LLP dated July 28, 1994,
appearing on Pages 26 through 45 of Registrant's Annual Report to
Shareholders for the fiscal year ended June 30, 1994, are
incorporated by reference in this Form 10-K. With the exception of
the aforementioned information and that which is specifically
incorporated in Parts I and II, the Annual Report to Shareholders
for the fiscal year ended June 30, 1994, is not to be deemed filed
as part of this report on Form 10-K.
10-K Annual
Page No. Report
Page No.
Consolidated Statements of
Operations - fiscal years
1994, 1993, and 1992 -- 26
Consolidated Statements of
Financial Position - fiscal years
1994, 1993, and 1992 -- 27
Consolidated Statements of
Cash Flows - fiscal years
1994, 1993, and 1992 -- 28
Consolidated Statements of
Shareholders' Equity - fiscal years
1994, 1993, and 1992 -- 29
Notes to Consolidated Financial
Statements -- 30-43
Statement of Financial
Responsibility -- 44
Report of
Price Waterhouse LLP -- 45
Report of
Deloitte & Touche LLP 25 --
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(a) 2. Financial Statement Schedules.
The following additional financial data should be read in
conjunction with the consolidated financial statements in said
Annual Report to Shareholders for the fiscal year ended June 30,
1994. Schedules not included with this additional financial data
have been omitted because they are not applicable or the required
information is shown in the consolidated financial statements or
notes thereto.
Annual
10-K Page Report
No. Page No.
Report of Independent Accountants
on Financial Statement Schedules 18 --
Schedule VIII - Valuation and
Qualifying Accounts and Reserves 19 --
Schedule IX - Short-Term Borrowings 20 --
Schedule X - Supplementary
Income Statement Information 21 --
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(a) 3. Exhibits.
Exhibit
No.
2(1) Acquisition Agreement dated July 19, 1991, among the
Corporation, Hoffmann-La Roche Inc., and Roche Probe,
Inc. (Incorporated by reference to Exhibit 1 to
Current Report on Form 8-K of the Corporation dated
July 19, 1991 (Commission file number 1-4389).)
2(2) Acquisition Agreement dated July 19, 1991, between
the Corporation and F. Hoffmann-La Roche Ltd.
(Incorporated by reference to Exhibit 2 to Current
Report on Form 8-K of the Corporation dated July 19,
1991 (Commission file number 1-4389)).
2(3) Agreement and Plan of Merger, by and among
Registrant, Sequence Acquisition Company and Applied
Biosystems, Inc. dated as of October 6, 1992.
(Incorporated by reference to Exhibit 2 to Current
Report on Form 8-K of the Corporation dated October
6, 1992 (Commission file number 1-4389).)
2(4) Agreement dated April 18, 1994 between Sulzer Inc.
and The Perkin-Elmer Corporation, as amended through
August 31, 1994.
3(i) Restated Certificate of Incorporation of the
Corporation, as amended through July 1, 1994.
3(i) Amended and Restated By-laws of the Corporation, as
amended through July 15, 1993. (Incorporated by
reference to Exhibit 3(ii) to Annual Report on Form
10-K of the Corporation for fiscal year ended June
30, 1993 (Commission file number 1-4389).)
4(1) Three Year Credit Agreement dated June 1, 1994, among
Morgan Guaranty Trust Company, certain banks named in
such Agreement, and the Corporation.
4(2) Shareholder Protection Rights Agreement dated April
30, 1989, between The Perkin-Elmer Corporation and
The First National Bank of Boston. (Incorporated by
reference to Exhibit 4 to Current Report on Form 8-K
of the Corporation dated April 20, 1989 (Commission
file number 1-4389).)
10(1) The Perkin-Elmer Corporation 1974 Stock Option Plan
for Key Employees, as amended through May 21, 1987.
(Incorporated by reference to Exhibit 28(a) to Post
Effective Amendment No. 1 to the Corporation's
Registration Statement on Form S-8 (No. 2-95451).)
10(2) The Perkin-Elmer Corporation 1981 Incentive Stock
Option Plan for Key Employees, as amended through May
21, 1987. (Incorporated by reference to Exhibit
28(b) to Post Effective Amendment No. 1 to the
Corporation's Registration Statement on Form S-8 (No.
2-95451).)
10(3) The Perkin-Elmer Corporation 1984 Stock Option Plan
for Key Employees, as amended through May 21, 1987.
(Incorporated by reference to Exhibit 28(c) to Post
Effective Amendment No. 1 to the Corporation's
Registration Statement on Form S-8 (No. 2-95451).)
10(4) The Perkin-Elmer Corporation 1988 Stock Incentive
Plan for Key Employees. (Incorporated by reference
to Exhibit 10(4) to Annual Report on Form 10-K of the
Corporation for the fiscal year ended July 31, 1988
(Commission file number 1-4389).)
10(5) The Perkin-Elmer Corporation 1993 Stock Incentive
Plan for Key Employees. (Incorporated by reference
to Exhibit 99 to the Corporation's Registration
Statement on Form S-8 (No. 33-50847).)
10(6) Contingent Compensation Plan for Key Employees of The
Perkin-Elmer Corporation, as amended through August
1, 1990. (Incorporated by reference to Exhibit 10(5)
to Annual Report on Form 10-K of the Corporation for
the fiscal year ended July 31, 1992 (Commission file
number 1-4389).)
10(7) The Perkin-Elmer Corporation Supplemental Retirement
Plan as amended through August 1, 1991. (Incorporated
by reference to Exhibit 10(6) to Annual Report on
Form 10-K of the Corporation for the fiscal year
ended July 31, 1991 (Commission file number 1-4389).)
10(8) Deferred Compensation Contract dated July 29, 1974,
as amended through January 20, 1994, between
Registrant and Gaynor N. Kelley.
10(9) Deferred Compensation Contract dated September 22,
1989, between Registrant and Riccardo Pigliucci, as
amended through April 15, 1993. (Incorporated by
reference to Exhibit 10(9) to Annual Report on Form
10-K of the Corporation for the fiscal year ended
June 30, 1993 (Commission file number 1-4389).)
- 14 -
<PAGE>
10(10) Deferred Compensation Contract dated May 21, 1992,
between Registrant and William F. Emswiler.
(Incorporated by reference to Exhibit 10(10) to
Annual Report on Form 10-K of the Corporation for the
fiscal year ended July 31, 1992 (Commission file
number 1-4389).)
10(11) Deferred Compensation Contract dated February 18,
1993, between Registrant and Andre F. Marion.
10(12) Deferred Compensation Contract dated January 21,
1993, between Registrant and Joseph E. Malandrakis.
(Incorporated by reference to Exhibit 10(11) to
Annual Report on Form 10-K of the Corporation for the
fiscal year ended June 30, 1993 (Commission file
number 1-4389).)
10(13) Employment Agreement dated November 21, 1991, between
Registrant and Gaynor N. Kelley. (Incorporated by
reference to Exhibit 10(1) to Quarterly Report on
Form 10-Q of the Corporation for the fiscal quarter
ended January 31, 1992 (Commission file number 1-
4389).)
10(14) Employment Agreement dated November 21, 1991, between
Registrant and Riccardo Pigliucci. (Incorporated by
reference to Exhibit 10(3) to Quarterly Report on
Form 10-Q of the Corporation for the fiscal quarter
ended January 31, 1992 (Commission file number 1-
4389).)
10(15) Employment Agreement dated May 21, 1992, between
Registrant and William F. Emswiler. (Incorporated by
reference to Exhibit 10(15) to Annual Report on Form
10-K of the Corporation for the fiscal year ended
July 31, 1992 (Commission file number 1-4389).)
10(16) Employment Agreement dated November 1, 1990 as
amended through December 3, 1992, between Registrant
and Andre F.Marion.
10(17) Employment Agreement dated November 21, 1991, between
Registrant and Joseph E. Malandrakis. (Incorporated
by reference to Exhibit 10(16) to Annual Report on
Form 10-K of the Corporation for the fiscal year
ended June 30, 1993 Commission file number 1-4389).)
10(18) Consulting Agreement dated March 17, 1994, between
Registrant and Robert H. Hayes.
10(19) The Excess Benefit Plan of The Perkin-Elmer
Corporation dated August 1, 1984 as amended through
June 30, 1993. (Incorporated by reference to Exhibit
10(18) to Annual Report on Form 10-K of the
Corporation for the fiscal year ended June 30, 1993
(Commission file number 1-4389).)
10(20) 1993 Director Stock Purchase and Deferred
Compensation Plan. (Incorporated by reference to
Exhibit 99 to the Corporation's Registration
Statement on Form S-8 (No. 33-50849).)
10(21) Consulting Agreement dated September 16, 1994,
between Registrant and Andre F. Marion.
11 Computation of Net Income (Loss) per Share for the
five years ended June 30, 1994.
13 Annual Report to Shareholders for 1994.
21 List of Subsidiaries.
23(1) Consent of Price Waterhouse LLP.
23(2) Consent of Deloitte & Touche LLP.
27 Financial Data Schedule.
Note: None of the Exhibits listed in Item 14(a) 3 above, except
Exhibits 11, 23(1) and 23(2) are included with this Form 10-K
Annual Report. Registrant will furnish a copy of any such Exhibit
upon written request to the Secretary at the address on the cover
of this Form 10-K Annual Report accompanied by payment of $3 for
each Exhibit requested.
(b) Reports on Form 8-K
Registrant did not file a report on Form 8-K during the last
quarter of the period covered by this report.
- 15 -
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
THE PERKIN-ELMER CORPORATION
By /s/ William B. Sawch
William B. Sawch
Vice President, General Counsel
and Secretary
Date: September 15, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of Registrant and in the capacities and on the dates
indicated.
/s/ G. N. Kelley September 15, 1994
Gaynor N. Kelley
Chairman of the Board of Directors,
Chief Executive Officer
(Principal Executive Officer)
/s/ W. F. Emswiler September 15, 1994
William F. Emswiler
Vice President, Finance, Chief Financial Officer
(Principal Financial Officer)
/s/ John B. McBennett September 15, 1994
John B. McBennett
Corporate Controller
(Principal Accounting Officer)
- 16 -
<PAGE>
/s/ Joseph F. Abely, Jr. September 15, 1994
Joseph F. Abely, Jr.
Director
/s/ Richard H. Ayers September 15, 1994
Richard H. Ayers
Director
/s/ Jean-Luc Belingard September 15, 1994
Jean-Luc Belingard
Director
/s/ Robert H. Hayes September 15, 1994
Robert H. Hayes
Director
/s/ Donald R. Melville September 15, 1994
Donald R. Melville
Director
/s/ Riccardo Pigliucci September 15, 1994
Riccardo Pigliucci
Director
/s/ Burnell R. Roberts September 15, 1994
Burnell R. Roberts
Director
/s/ John S. Scott September 15, 1994
John S. Scott
Director
/s/ Carolyn W. Slayman September 15, 1994
Carolyn W. Slayman
Director
/s/ Richard F. Tucker September 15, 1994
Richard F. Tucker
Director
-17 -
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors
of The Perkin-Elmer Corporation
Our audits of the consolidated financial statements referred
to in our report dated July 28, 1994, appearing on Page 45 of the
1994 Annual Report to Shareholders of The Perkin-Elmer Corporation
(which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also
included an audit of the Financial Statement Schedules listed in
Item 14(a)2 of this Form 10-K. We did not audit the Financial
Statement Schedules of Applied Biosystems, Inc., a wholly owned
subsidiary, as of and for the year ended July 31, 1992. Those
schedules were audited by other auditors, whose report thereon has
been furnished to us, and our opinion expressed herein, insofar as
it relates to the amounts included for Applied Biosystems, Inc., is
based solely on the report of other auditors. Based upon our
audits and the report of other auditors, these Financial Statement
Schedules present fairly, in all material respects, the information
set forth therein when read in conjunction with the related
consolidated financial statements.
PRICE WATERHOUSE LLP
Stamford, Connecticut
July 28, 1994
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<PAGE>
THE PERKIN-ELMER CORPORATION
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE FISCAL YEARS ENDED JUNE 30, 1994 AND 1993, AND JULY 31, 1992
(Amounts in thousands)
ALLOWANCE FOR
DOUBTFUL
ACCOUNTS(1)
Balance at July 31, 1991 $ 5,636
Charged to income in 1992 2,671
Deductions from reserve in 1992 (549)
Balance at July 31, 1992 7,758
Charged to income in 1993 4,229
Deductions from reserve in 1993 (3,761)
Balance at June 30, 1993 8,226
Charged to income in 1994 2,927
Deductions from reserve in 1994 (3,906)
Balance at June 30, 1994 $ 7,247
(1) Deducted in the Consolidated Statements of Financial Position
from accounts receivable.
SCHEDULE VIII
- 19 -
<PAGE>
THE PERKIN-ELMER CORPORATION
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED JUNE 30, 1994 AND 1993, AND JULY 31, 1992
(Amounts in thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Maximum Average Weighted
Category Weighted Month-End Amount Average
of Balance Average Amount Outstandi Interest
Aggregate At End of Interest Outstandi ng During Rate
Short-Term Period Rate At ng During the During
Borrowings End of the Period the
(a) Period Period (b) Period
(c)
1994
Bank
Borrowings $67,752 6.2% $72,262 $57,324 6.1%
Commercial
Paper 15,800 4.5% 58,250 41,142 3.5%
1993
Bank
Borrowings $56,932 6.3% $85,748 $52,975 8.9%
Commercial
Paper 17,050 3.2% 99,800 74,502 3.4%
1992
Bank
Borrowings $34,262 9.4% $60,456 $43,941 10.2%
Commercial
Paper 63,932 3.7% 78,100 71,382 4.9%
(a) Commercial Paper refers to unsecured debt
obligations maturing in fixed periods that range from 30 to
180 days; interest at fixed rates is payable on maturity. Bank
Borrowings are unsecured debt obligations including those
due on demand, as well as those with fixed terms. With respect
to some Bank Borrowings, interest rates are fixed; in other cases,
interest floats in accordance with a prescribed index.
(b) The average amount outstanding during the period was
determined on the basis of average month-end balances of Bank
Borrowings and average daily balances for Commercial Paper
borrowings.
(c) For Bank Borrowings and Commercial Paper, the
weighted average interest rate during the period was computed by
dividing the interest expense for the year by the average amount of
short-term borrowings outstanding during the period.
SCHEDULE IX
- 20 -
<PAGE>
THE PERKIN-ELMER CORPORATION
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Amounts in thousands)
The following items have been charged to costs and expenses as
stated:
For the years ended
June 30, June 30, July 31,
1994 1993 1992
Maintenance and repairs $17,210 $16,712 $15,763
Advertising costs $19,325 $17,857 $15,826
The following items have been charged to costs and expenses but do
not exceed one percent of net revenues by category:
- Amortization of intangible assets
- Royalties
- Taxes, other than payroll and income taxes
SCHEDULE X
- 21 -
<PAGE>
THE PERKIN-ELMER CORPORATION
COMPUTATION OF NET INCOME(LOSS) PER SHARE
(Dollar amounts in thousands, except per share amounts)
<TABLE>
<CAPTION> 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Weighted average number of
common shares 43,857 43,780 43,526 42,091 49,705
Common stock equivalents-
stock options 816 1,173 1,169 - 130
Weighted average number of
common shares used in
calculating primary
earnings per share 44,673 44,953 44,695 42,091 49,835
Additional dilutive stock
options under paragraph #42
APB #15 172 97 280 - -
Shares used in calculating
fully diluted earnings
per share 44,845 45,050 44,975 42,091 49,835
Calculation of primary and
fully diluted earnings per
share:
PRIMARY AND FULLY DILUTED:
Income (loss) from
continuing operations $ 73,978 $ 24,444 $ 24,296 $ (16,384) $ 27,697
Income (loss) from
discontinued operations (22,851) 1,714 10,941 (2,020) 20,913
Income (loss) before cumulative
effect of changes in
accounting principles 51,127 26,158 35,237 (18,404) 48,610
Cumulative effect on prior years
of changes in accounting principles - (83,098) - - -
Net income (loss) used in the
calculations of primary and
fully diluted earnings per share $ 51,127 $ (56,940) $ 35,237 $ (18,404) $ 48,610
PRIMARY:
Per share amounts:
Income (loss)
from continuing operations $ 1.66 $ .54 $ .54 $ (.39) $ .56
Income (loss)
from discontinued operations (.52) .04 .25 (.05) .42
Income (loss) before
cumulative effect of changes
in accounting principles 1.14 .58 .79 (.44) .98
Loss from cumulative effect on
prior years of changes in
accounting principles - (1.85) - - -
Net income (loss) $ 1.14 $ (1.27) $ .79 $ (.44) $ .98
FULLY DILUTED:
Per share amounts:
Income (loss)
from continuing operations $ 1.65 $ .54 $ .54 $ (.39) $ .56
Income (loss)
from discontinued operations (.51) .04 .24 (.05) .42
Income (loss) before
cumulative effect of changes
in accounting principles 1.14 .58 .78 (.44) .98
Loss from cumulative effect on
prior years of changes in
accounting principles - (1.84) - - -
Net income (loss) $ 1.14 $ (1.26) $ .78 $ ( .44) $ .98
</TABLE>
EXHIBIT 11
- 22 -
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectuses constituting part of the Registration Statements on
Form S-8 (Nos. 2-95451, 33-25218, 33-44191, 33-50847, 33-50849, and
33-58778) of The Perkin-Elmer Corporation of our report dated July
28, 1994, appearing on page 45 of the Annual Report to Shareholders
for 1994 of The Perkin-Elmer Corporation which is incorporated in
this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial Statement
Schedules, which appears on page 18 of this Form 10-K.
PRICE WATERHOUSE LLP
Stamford, Connecticut
September 21, 1994
- 23 -
<PAGE>
Deloitte & Touche LLP [LOGO]
50 Fremont Street
San Francisco, California
94105-2230
Telephone: (415) 247-4000
Facsimile: (415) 247-4329
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration
Statements of The Perkin-Elmer Corporation on Form S-8 (Nos. 2-
95451, 33-25218, 33-44191, 33-50847, 33-50849, and 33-58778) of our
report dated July 29, 1992 (November 5, 1992 as to Notes 13 and 14)
(related to the consolidated financial statements and financial
statement schedules of Applied Biosystems, Inc. not
presented separately therein) appearing in the Annual
Report on Form 10-K of The Perkin-Elmer Corporation for the
year ended June 30, 1994.
DELOITTE & TOUCHE LLP
September 21, 1994
[LOGO]
- 24 -
<PAGE>
Deloitte & Touche LLP [LOGO]
50 Fremont Street
San Francisco, California 94105-2230
Telephone: (415) 247-4000
Facsimile: (415) 247-4329
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors
of Applied Biosystems, Inc.:
We have audited the consolidated balance sheet of Applied
Biosystems, Inc. as of June 30, 1992, and the related
consolidated statements of operations, shareholders' equity
and cash flows for the fiscal year then ended (not presented
separately herein). Our audit also included the financial
statement schedules (not presented separately herein).
These financial statements and financial statement schedules
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, such consolidated financial statements
present fairly, in all material respects, the financial
position of Applied Biosystems, Inc. at June 30, 1992, and
the results of its operations and its cash flows for the
fiscal year then ended in conformity with generally accepted
accounting principles. Also, in our opinion, such financial
statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth
therein.
As discussed in Note 13, the consolidated statement of
operations for the fiscal year ended June 30, 1992 has been
reclassified to present the Company's subsidiary, Lynx
Therapeutics, Inc., as a discontinued operation.
Deloitte & Touche LLP
July 29, 1992 (November 5, 1992
as to Notes 13 and 14)
[LOGO]
-25-
<PAGE>
EXHIBIT INDEX
Exhibit
No.
2(1) Acquisition Agreement dated July 19, 1991, among the
Corporation, Hoffmann-La Roche Inc., and Roche Probe,
Inc. (Incorporated by reference to Exhibit 1 to
Current Report on Form 8-K of the Corporation dated
July 19, 1991 (Commission file number 1-4389).)
2(2) Acquisition Agreement dated July 19, 1991, between
the Corporation and F. Hoffmann-La Roche Ltd.
(Incorporated by reference to Exhibit 2 to Current
Report on Form 8-K of the Corporation dated July 19,
1991 (Commission file number 1-4389)).
2(3) Agreement and Plan of Merger, by and among
Registrant, Sequence Acquisition Company and Applied
Biosystems, Inc. dated as of October 6, 1992.
(Incorporated by reference to Exhibit 2 to Current
Report on Form 8-K of the Corporation dated October
6, 1992 (Commission file number 1-4389).)
2(4) Agreement dated April 18, 1994 between Sulzer Inc.
and The Perkin-Elmer Corporation, as amended through
August 31, 1994.
3(i) Restated Certificate of Incorporation of the
Corporation, as amended through July 1, 1994.
3(i) Amended and Restated By-laws of the Corporation, as
amended through July 15, 1993. (Incorporated by
reference to Exhibit 3(ii) to Annual Report on Form
10-K of the Corporation for fiscal year ended June
30, 1993 (Commission file number 1-4389).)
4(1) Three Year Credit Agreement dated June 1, 1994, among
Morgan Guaranty Trust Company, certain banks named in
such Agreement, and the Corporation.
4(2) Shareholder Protection Rights Agreement dated April
30, 1989, between The Perkin-Elmer Corporation and
The First National Bank of Boston. (Incorporated by
reference to Exhibit 4 to Current Report on Form 8-K
of the Corporation dated April 20, 1989 (Commission
file number 1-4389).)
10(1) The Perkin-Elmer Corporation 1974 Stock Option Plan
for Key Employees, as amended through May 21, 1987.
(Incorporated by reference to Exhibit 28(a) to Post
Effective Amendment No. 1 to the Corporation's
Registration Statement on Form S-8 (No. 2-95451).)
10(2) The Perkin-Elmer Corporation 1981 Incentive Stock
Option Plan for Key Employees, as amended through May
21, 1987. (Incorporated by reference to Exhibit
28(b) to Post Effective Amendment No. 1 to the
Corporation's Registration Statement on Form S-8 (No.
2-95451).)
10(3) The Perkin-Elmer Corporation 1984 Stock Option Plan
for Key Employees, as amended through May 21, 1987.
(Incorporated by reference to Exhibit 28(c) to Post
Effective Amendment No. 1 to the Corporation's
Registration Statement on Form S-8 (No. 2-95451).)
10(4) The Perkin-Elmer Corporation 1988 Stock Incentive
Plan for Key Employees. (Incorporated by reference
to Exhibit 10(4) to Annual Report on Form 10-K of the
Corporation for the fiscal year ended July 31, 1988
(Commission file number 1-4389).)
10(5) The Perkin-Elmer Corporation 1993 Stock Incentive
Plan for Key Employees. (Incorporated by reference
to Exhibit 99 to the Corporation's Registration
Statement on Form S-8 (No. 33-50847).)
10(6) Contingent Compensation Plan for Key Employees of The
Perkin-Elmer Corporation, as amended through August
1, 1990. (Incorporated by reference to Exhibit 10(5)
to Annual Report on Form 10-K of the Corporation for
the fiscal year ended July 31, 1992 (Commission file
number 1-4389).)
10(7) The Perkin-Elmer Corporation Supplemental Retirement
Plan as amended through August 1, 1991. (Incorporated
by reference to Exhibit 10(6) to Annual Report on
Form 10-K of the Corporation for the fiscal year
ended July 31, 1991 (Commission file number 1-4389).)
10(8) Deferred Compensation Contract dated July 29, 1974,
as amended through January 20, 1994, between
Registrant and Gaynor N. Kelley.
10(9) Deferred Compensation Contract dated September 22,
1989, between Registrant and Riccardo Pigliucci, as
amended through April 15, 1993. (Incorporated by
reference to Exhibit 10(9) to Annual Report on Form
10-K of the Corporation for the fiscal year ended
June 30, 1993 (Commission file number 1-4389).)
- 14 -
<PAGE>
10(10) Deferred Compensation Contract dated May 21, 1992,
between Registrant and William F. Emswiler.
(Incorporated by reference to Exhibit 10(10) to
Annual Report on Form 10-K of the Corporation for the
fiscal year ended July 31, 1992 (Commission file
number 1-4389).)
10(11) Deferred Compensation Contract dated February 18,
1993, between Registrant and Andre F. Marion.
10(12) Deferred Compensation Contract dated January 21,
1993, between Registrant and Joseph E. Malandrakis.
(Incorporated by reference to Exhibit 10(11) to
Annual Report on Form 10-K of the Corporation for the
fiscal year ended June 30, 1993 (Commission file
number 1-4389).)
10(13) Employment Agreement dated November 21, 1991, between
Registrant and Gaynor N. Kelley. (Incorporated by
reference to Exhibit 10(1) to Quarterly Report on
Form 10-Q of the Corporation for the fiscal quarter
ended January 31, 1992 (Commission file number 1-
4389).)
10(14) Employment Agreement dated November 21, 1991, between
Registrant and Riccardo Pigliucci. (Incorporated by
reference to Exhibit 10(3) to Quarterly Report on
Form 10-Q of the Corporation for the fiscal quarter
ended January 31, 1992 (Commission file number 1-
4389).)
10(15) Employment Agreement dated May 21, 1992, between
Registrant and William F. Emswiler. (Incorporated by
reference to Exhibit 10(15) to Annual Report on Form
10-K of the Corporation for the fiscal year ended
July 31, 1992 (Commission file number 1-4389).)
10(16) Employment Agreement dated November 1, 1990 as
amended through December 3, 1992, between Registrant
and Andre F.Marion.
10(17) Employment Agreement dated November 21, 1991, between
Registrant and Joseph E. Malandrakis. (Incorporated
by reference to Exhibit 10(16) to Annual Report on
Form 10-K of the Corporation for the fiscal year
ended June 30, 1993 Commission file number 1-4389).)
10(18) Consulting Agreement dated March 17, 1994, between
Registrant and Robert H. Hayes.
10(19) The Excess Benefit Plan of The Perkin-Elmer
Corporation dated August 1, 1984 as amended through
June 30, 1993. (Incorporated by reference to Exhibit
10(18) to Annual Report on Form 10-K of the
Corporation for the fiscal year ended June 30, 1993
(Commission file number 1-4389).)
10(20) 1993 Director Stock Purchase and Deferred
Compensation Plan. (Incorporated by reference to
Exhibit 99 to the Corporation's Registration
Statement on Form S-8 (No. 33-50849).)
10(21) Consulting Agreement dated September 16, 1994,
between Registrant and Andre F. Marion.
11 Computation of Net Income (Loss) per Share for the
five years ended June 30, 1994.
13 Annual Report to Shareholders for 1994.
21 List of Subsidiaries.
23(1) Consent of Price Waterhouse LLP.
23(2) Consent of Deloitte & Touche LLP.
27 Financial Data Schedule.
CONFORMED COPY CONFIDENTIAL
PURCHASE AGREEMENT
between
THE PERKIN-ELMER CORPORATION
and
SULZER INC.
Dated as of April 18, 1994
TABLE OF CONTENTS
Page
ARTICLE I - PURCHASE AND SALE OF PURCHASED ASSETS;
ASSUMPTION OF CERTAIN OBLIGATIONS BY
THE PURCHASER
1.1 The Purchase . . . . . . . . . . . . . . . . . . . 2
1.2 Certain Definitions. . . . . . . . . . . . . . . . 3
ARTICLE II - THE CLOSING
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . 18
2.2 Deliveries and Payments by the Purchaser . . . . . 19
2.3 Deliveries by the Seller . . . . . . . . . . . . . 19
2.4 Purchase Price Adjustment. . . . . . . . . . . . . 22
ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Sell-
er . . . . . . . . . . . . . . . . . . . . . . 26
3.2 Representations and Warranties of the Pur-
chaser . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IV - COVENANTS
4.1 Operation of The Business . . . . . . . . . . . . 56
4.2 Preservation of Business. . . . . . . . . . . . . 58
4.3 Approvals and Consents; Cooperation . . . . . . . 58
4.4 Access. . . . . . . . . . . . . . . . . . . . . . 59
4.5 Taxes and Fees. . . . . . . . . . . . . . . . . . 60
4.6 Preservation of Records . . . . . . . . . . . . . 73
4.7 Employee Benefits and Related Matters . . . . . . 74
4.8 Confidentiality . . . . . . . . . . . . . . . . . 84
4.9 Use of Name . . . . . . . . . . . . . . . . . . . 84
4.10 Transition Services . . . . . . . . . . . . . . 85
4.11 Current Information . . . . . . . . . . . . . . . 85
4.12 Disclosure Supplements. . . . . . . . . . . . . . 86
4.13 Covenant Not to Compete . . . . . . . . . . . . . 87
4.14 Title Commitment and Survey . . . . . . . . . . . 89
4.15 Releases of Guarantees. . . . . . . . . . . . . . 90
4.16 Further Assurances. . . . . . . . . . . . . . . . 90
4.17 Environmental Work. . . . . . . . . . . . . . . . 91
ARTICLE V - CONDITIONS TO CLOSING
5.1 Conditions to Each Party's Obligation to
Close. . . . . . . . . . . . . . . . . . . . . 91
5.2 Conditions to Obligation of the Purchaser
to Close . . . . . . . . . . . . . . . . . . . 94
5.3 Conditions to Obligation of the Seller to
Close. . . . . . . . . . . . . . . . . . . . . 95
ARTICLE VI - INDEMNITY
6.1 Survival of Representations. . . . . . . . . . . 96
6.2 Indemnity by the Seller. . . . . . . . . . . . . 97
6.3 Indemnity by the Purchaser . . . . . . . . . . . 98
6.4 Environmental Indemnification. . . . . . . . . . 100
6.5 Procedures Relating to Environmental Indem-
nification . . . . . . . . . . . . . . . . . 101
6.6 Indemnification Procedure. . . . . . . . . . . . 104
6.7 Limitations on Indemnification . . . . . . . . . 106
6.8 Indemnity Not Exclusive Remedy . . . . . . . . . 107
ARTICLE VII - TERMINATION
7.1 Termination. . . . . . . . . . . . . . . . . . . 107
7.2 Effect of Termination. . . . . . . . . . . . . . 108
ARTICLE VIII - MISCELLANEOUS
8.1 Expenses. . . . . . . . . . . . . . . . . . . . 109
8.2 Public Communications . . . . . . . . . . . . . 109
38.3 Notices. . . . . . . . . . . . . . . . . . . . 109
8.4 Amendments; Waivers . . . . . . . . . . . . . . 110
8.5 Section Headings. . . . . . . . . . . . . . . . 111
8.6 Counterparts. . . . . . . . . . . . . . . . . . 111
8.7 Assignment. . . . . . . . . . . . . . . . . . . 111
8.8 Bulk Sales. . . . . . . . . . . . . . . . . . . 112
8.9 Governing Law . . . . . . . . . . . . . . . . . 112
8.10 Jurisdiction. . . . . . . . . . . . . . . . . . 112
8.11 Miscellaneous . . . . . . . . . . . . . . . . . 113
CONFORMED COPY
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement"), dated as
of April 18, 1994, between The Perkin-Elmer Corporation,
a New York corporation (the "Seller"), and Sulzer Inc., a
Delaware corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, prior to the date hereof, the Seller,
through its Metco Division and through certain foreign
subsidiaries identified in a Schedule to this Agreement
(collectively, the "Division"), has engaged in the devel-
opment, design, manufacture and marketing of coating ser-
vices and servicing of, and training with respect to,
combustion, electric arc and plasma thermal spray equip-
ment, and related equipment and materials (the "Busi-
ness"); and
WHEREAS, the Seller desires to sell and trans-
fer to the Purchaser, and the Purchaser desires to pur-
chase and assume from the Seller, substantially all of
the assets and certain of the liabilities Related to the
Business (as hereinafter defined), all as more specifi-
cally provided herein.
NOW, THEREFORE, in consideration of the mutual
covenants and undertakings contained herein, and subject
to and on the terms and conditions herein set forth, the
parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Purchased Assets;
Assumption of Certain Obligations by the Purchaser
1.1 The Purchase. Upon the terms and subject
to the conditions of this Agreement, at the Closing (as
hereinafter defined), the Seller shall sell, assign,
transfer, convey and deliver, or cause to be sold, as-
signed, transferred, conveyed and delivered, to the
Purchaser all of the Seller's right, title and interest
in and to the Purchased Assets (as hereinafter defined)
free and clear of all Liens (as hereinafter defined),
except the Owned Real Property (as hereinafter defined)
shall be conveyed subject to the Permitted Encumbrances
(as hereinafter defined) and the Leased Real Property (as
hereinafter defined) shall be conveyed subject to the
Permitted Leasehold Encumbrances (as hereinafter de-
fined), and the Purchaser shall pay to the Seller on
Purchaser's own behalf and as agent for and on behalf of
those affiliates purchasing shares of the Stock Subsid-
iaries (as hereinafter defined) and assets from the Asset
Subsidiaries (as hereinafter defined) the amount set
forth in Section 2.2 hereof (which Seller accepts on its
own behalf and as agent for and on behalf of those affil-
iates selling shares of the Stock Subsidiaries and on
behalf of the Asset Subsidiaries with respect to the
assets sold) and the Purchaser shall assume and discharge
or perform when due the Assumed Liabilities (as hereinaf-
ter defined) solely and exclusively for the benefit of
the Division and not any third party. Such transaction
is hereinafter referred to as the "Purchase."
1.2 Certain Definitions. As used herein, the
following terms have the meanings indicated:
"Accountants" means Price Waterhouse.
"Assumed Environmental Liabilities" means one
hundred percent (100%) of Environmental Liabilities other
than Excluded Environmental Liabilities.
"Assumed Liabilities" means the following and
only the following:
(i) all liabilities of the Division Related to
the Business that are reflected as liabilities on the
Final Statement but only to the extent and in the amount
of such inclusion;
(ii) all liabilities, commitments, duties or
other obligations contained in or arising out of each As-
sumed Contract (as hereinafter defined) that is fully and
effectively assigned to the Purchaser;
(iii) all liabilities, costs and expenses of
the Division which arise as a result of any claim, ac-
tion, suit or proceeding against the Division or the Pur-
chased Assets and which is based on a claim that a prod-
uct or products manufactured or sold by the Division
prior to the Closing Date was or were defectively or
improperly designed or manufactured ("Product Liabili-
ties");
(iv) all liabilities and obligations of the
Seller under the German pension plan at Perkin-Elmer
Metco GmbH (Germany) ("Metco GmbH");
(v) Assumed Environmental Liabilities; and
(vi) Unknown Liabilities (as hereinafter
defined).
Assumed Liabilities shall not mean or include any Exclud-
ed Liability.
"Closing Date Net Assets" means the difference
between the Purchased Assets and the Assumed Liabilities
that is reflected in the Final Statement (as hereinafter
defined).
"Closing Statement" means the audited statement
of net assets of the Business as of the Closing Date (as
hereinafter defined), which statement shall be prepared
by the Seller in accordance with generally accepted ac-
counting principles applied on a world wide basis consis-
tent with the Financial Statement; provided that the
Closing Statement shall in any event include as a liabil-
ity the pension obligation for Metco GmbH to be assumed
by the Purchaser pursuant to clause (iv) under the head-
ing "Assumed Liabilities" in this Section 1.2 in an
amount equal to the actuarially computed present value of
such obligation (computed on a basis consistent with past
valuations by the plan actuary). In addition, the Clos-
ing Statement shall be prepared using the Seller's corpo-
rate accounting policies and directives (a copy of cer-
tain of which is attached hereto as Schedule 1.2(A))
which shall be applied consistently on a worldwide basis
to the Purchased Assets and the Assumed Liabilities
reflected on such statement; provided, however, under no
circumstances shall the inventory obsolescence require-
ment for inventory included in the Purchased Assets be
determined using the Metco Obsolescence Procedure but it
shall instead be determined in accordance with Perkin-
Elmer Finance Manual Procedure 2-37 Inventory Obsoles-
cence. The Closing Statement shall be accompanied by an
unqualified opinion thereon of the Accountants.
"Employees" means persons employed by the
Division in connection with the Business.
"Environment" means exterior air, water vapor,
surface water, ground water, drinking water supply or
land, including land surface or subsurface, and includes
all fish, wildlife, biota and all other natural resourc-
es.
"Environmental Claim" means any claim, action,
cause of action, investigation or written notice by any
person or entity alleging potential liability (including,
without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natu-
ral resource damages, property damages, personal inju-
ries, or penalties) arising out of, based on or resulting
from (a) the presence, or release into the Environment,
of any Material of Environmental Concern on or prior to
the Closing Date on, in or under the Real Property, or
(b) the violation, or alleged violation, of any Environ-
mental Law arising out of the condition of or operations
conducted at the Real Property on or prior to the Closing
Date.
"Environmental Condition" means any state of
facts that exist at any time on or before the Closing
Date on, in or under the Real Property that relate to or
affect the compliance of the Real Property with all Envi-
ronmental Laws.
"Environmental Law(s)" means those United
States federal, state, local and foreign environmental
statutes and ordinances, as such laws have been amended
or supplemented as of the Closing Date, and lawfully pro-
mulgated rules and regulations pursuant thereto as of the
Closing Date relating to the protection of the Environ-
ment, including, without limitation, the Resource Conser-
vation and Recovery Act of 1976, as amended, the Clean
Air Act, as amended, the Federal Water Pollution Control
Act, as amended, the Comprehensive Environmental Re-
sponse, Compensation and Liability Act of 1980, as amend-
ed, the Toxic Substances Control Act, as amended, and
state statutes similar to or based upon the foregoing,
including, without limitation, Articles 17 and 27 of the
New York State Environmental Conservation Law and other
applicable laws and regulations relating to emissions,
discharges, releases or threatened releases of Materials
of Environmental Concern, or otherwise relating to the
manufacture, processing, use, treatment, storage, dis-
posal, transport, or handling of Materials of Environmen-
tal Concern.
"Environmental Liabilities" means any liabili-
ties and obligations of every kind, character and de-
scription based upon, arising out of or otherwise in
respect of (a) the violation or alleged violation of any
Environmental Law, as such laws may be amended or sup-
plemented after the Closing Date, including but not
limited to, any Environmental Claim or Environmental
Condition, or (b) the presence or release into the Envi-
ronment of any Material of Environmental Concern on, in
or under the Real Property.
"Estimated Purchase Price" means
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission]
"Excluded Assets" means all assets listed on
Schedule 1.2(B) hereto.
"Excluded Environmental Liabilities" means
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission]
of Environmental Liabilities first commenced
or asserted on or prior to the fifteenth anniversary of
the Closing Date and that are based on, arising out of or
otherwise in respect of the violation or alleged viola-
tion of any Environmental Law existing on or prior to the
Closing Date, an Environmental Claim, Environmental
Condition, or the presence of any Material of Environmen-
tal Concern on, in or under all or any portion of the
Real Property, as of the Closing Date.
"Excluded Liabilities" means the following and
only the following:
(i) any and all liabilities and obligations,
direct or indirect, fixed or contingent, for Taxes (as
hereinafter defined) of the Seller, or any of the Asset
Subsidiaries or Stock Subsidiaries, whether or not as-
sessed prior to, on or after the Closing Date, attrib-
utable to the Pre-Closing Tax Period (as hereinafter
defined);
(ii) Excluded Environmental Liabilities;
(iii) any liability, duty or other obligation
contained in or arising out of any agreement, contract,
license agreement, lease or sublease Related to the Busi-
ness that is not an Assumed Contract which is fully and
effectively assigned to Purchaser;
(iv) any liability of the Seller for any
severance or similar payment for any Transferred Employee
(as hereinafter defined) to whom Purchaser makes an offer
of employment in conformity with the terms of Section
4.7(a); provided, however, all liabilities arising out of
or incurred in connection with those certain severance
agreements between the Sellers and Messrs. Thomas R.
Klein, Burton Kushner, Andrew B. Mazzone, Francis J.
McKendry, Vincent Meringolo and Robert P. Zounek are Ex-
cluded Liabilities;
(v) (A) any Product Liability related to an
occurrence (as hereinafter defined) prior to the Closing
of which the Seller had knowledge on the Closing Date, to
the extent of 100% of such Product Liability (a "Known
Product Liability") and (B) any Product Liability related
to an occurrence prior to the Closing of which the Seller
had no knowledge on the Closing Date, to the extent of
100% of the portion of such Product Liability covered by
the Seller's insurance and 50% of the portion of such
Product Liability not covered by the Seller's insurance.
For purposes of this definition, "occurrence" means an
accident, including continuous or repeated exposure to
substantially the same general harmful condition;
(vi) any liabilities of the Division resulting
from (A) any litigation, arbitration or other similar
proceeding, including labor grievances and administrative
agency actions with respect to employees or employment
practices of the Divison, or (B) any workers' compensa-
tion claims and automobile liability claims, in either
case pending or threatened in writing prior to the Clos-
ing Date;
(vii) any liabilities or obligations related
to the Excluded Assets;
(viii) subject to the provisions of Section
4.7 hereof, any liabilities or obligations of the Seller
under employee health, welfare and severance benefit
plans relating to the Employees, including but not limit-
ed to (A) all liabilities for such health, welfare and
severance benefits owed with respect to former salaried
and non-salaried Employees who are retired as of the
Closing, and (B) federal and state income tax liability,
arising by reason of the Seller's failure, through any
act or omission before, on or after the Closing Date, to
comply with the requirements of Section 4980 B of the
Internal Revenue Code of 1986, as amended (the "Code") or
Sections 601-607 of the Employee Retirement Income Secu-
rity Act of 1974, as amended ("ERISA") ("COBRA"), with
respect to any "qualified beneficiary" (as defined in
COBRA), whether the relevant "qualifying event" (as
defined in COBRA) occurs before, on or after the Closing
Date; provided, however, those liabilities and obliga-
tions of the Seller to those Employees who are actively
employed in the Business at Metco GmbH shall be Assumed
Liabilities;
(ix) all obligations of the Seller or any
Subsidiary to any banks or to Seller and its affiliates
with respect to money borrowed; and
(x) all liabilities under the lease agreement
with respect to the Seller's Farnborough (U.K.) facility.
"Final Statement" means the Closing Statement,
after giving effect to the provisions of Section 2.4(b)
hereof.
"Financial Statement" means the audited State-
ment of Net Assets of the Division at June 30, 1993
attached as Schedule 1.2(C) hereto.
"Liens" means all pledges, security interests,
liens, charges, encumbrances, equities, and options of
whatsoever nature, and any claims of any of the forego-
ing, except for statutory liens for taxes not yet due and
payable.
"Materials of Environmental Concern" means any
"hazardous waste," "hazardous material," "hazardous sub-
stance," "extremely hazardous waste," or "restricted
hazardous waste," "subject waste," "pollutant," "contami-
nant," "toxic waste" or "toxic substance" under any
provision of Environmental Law, including, but not limit-
ed to, asbestos, petroleum and polychlorinated biphenyls.
"Material Subsidiaries" means the Subsidiaries
listed on Schedule 1.2(G) hereto which are specifically
identified as "Material Subsidiaries".
"Pre-Closing Tax Period" means any taxable
period ending on or before the Closing Date.
"Purchased Assets" means all assets, properties
or rights (of every kind, nature and description, real,
personal or mixed, tangible or intangible and wherever
situated, and including the rights of the Division to the
use of properties and assets owned by Seller and the
Subsidiaries), goodwill and business as a going concern
that are Related to the Business (as hereinafter de-
fined), other than the Excluded Assets, including, with-
out limitation, the following:
(a) all real property Related to the
Business, whether owned (the "Owned Real Property") or
leased (the "Leased Real Property"; and, together with
the Owned Real Property, the "Real Property"), including
any buildings, structures and improvements thereon or
appurtenances thereto listed on Schedule 1.2(E) hereto;
(b) all accounts receivable arising out
of the sale or other disposition of goods or services
Related to the Business;
(c) all raw materials, supplies and
manufactured goods constituting inventories, together
with such additions thereto and deletions therefrom as
shall have occurred from the date hereof to the Closing
in the ordinary course of business, Related to the Busi-
ness;
(d) all machinery, tools, equipment,
automobiles and trucks, furniture, fixtures and other
personal property Related to the Business, whether owned
(the "Owned Equipment") or leased (the "Leased Equip-
ment"; and, together with the Owned Equipment, the
"Equipment");
(e) all intellectual property rights
Related to the Business, including all rights in or to
(i) patents, trademarks, service marks, and all appli-
cations therefor and registrations and recordings there-
of, (ii) copyrights, (iii) product designations, trade
names, permits, approvals, ideas, plans, specifications,
formulae, processing procedures, quality standards, data,
trade secrets, inventions, investigations, designs, pro-
cesses, production methods and techniques, know-how,
books, records, manuals and other information, including,
without limitation, all such rights listed on Schedule
1.2(F) hereto (the "Intellectual Property");
(f) all of the Seller's rights in and to
the name "Metco" and any variation thereof;
(g) (i) all assets, properties or rights
(of any kind, nature and description, real, personal or
mixed, tangible or intangible and wherever situated),
goodwill and business as a going concern, including,
without limitation, the specific assets listed in this
definition of Purchased Assets, of the divisions and
branches Related to the Business and held by the subsid-
iaries of Seller as described and listed on Schedule
1.2(G)(i) hereof (the "Asset Subsidiaries"); and
(ii) all outstanding capital stock of
those subsidiaries of Seller Related to the Business and
listed on Schedule 1.2(G)(ii) hereto (the "Stock Subsid-
iaries") and all interests, beneficial or otherwise, in
the joint ventures of Seller or any affiliate of Seller
Related to the Business and listed on Schedule
1.2(G)(iii) hereto (the "Joint Ventures"); provided,
however, that the Stock Subsidiaries shall not include
the Asset Subsidiaries listed on Schedule 1.2(G)(i) here-
to. (The Asset Subsidiaries, the Stock Subsidiaries and
the Joint Ventures are herein referred to as the "Subsid-
iaries," except for purposes of Sections 3.1 and 4.5,
wherein the term "Subsidiaries" shall not include Joint
Ventures);
(h) all right, title and interest of the
Seller in and to all contracts and license agreements
listed or referred to on Schedule 1.2(H) hereto (the "As-
sumed Contracts");
(i) all permits, licenses, franchises,
consents, authorizations of any foreign or domestic
federal, state or local governmental body Related to the
Business, except to the extent that the transfer thereof
to the Purchaser would violate applicable laws or regula-
tions;
(j) all documents, files, records and
other materials Related to the Business; and
(k) without limiting the generality of
the foregoing, all assets, properties and rights reflect-
ed on the Final Statement.
"Purchase Price" means the amount of the Clos-
ing Date Net Assets plus [material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission].
"Related to the Business" means primarily
related to, or used primarily in connection with, or
primarily arising out of or in connection with, the
operations of the Business prior to the Closing.
"Remedial Action" means all actions required
under Environmental Law to clean up, remove, treat or in
any other way address any Material of Environmental Con-
cern that is on, in or under the Real Property on or
prior to the Closing Date.
"Straddle Period" means any taxable period of
the Seller or any Subsidiary that begins before the Clos-
ing Date and ends after the Closing Date.
"Taxes" means any and all taxes, charges, fees,
levies or other like assessments (including penalties,
interest or additions to tax imposed in connection there-
with or with respect thereto, if applicable), including
but not limited to income, transfer, gains, gross re-
ceipts, excise, inventory, property (real, personal or
tangible), sales, use, license, withholding, payroll,
employment, social security, unemployment, occupation,
premium, windfall profits, capital stock, franchise, ser-
vice, ad valorem or value added taxes or customs duties
imposed by the United States or any state, local or
foreign government or subdivision or agency thereof,
whether computed on a unitary, combined or any other
basis.
"Tax Returns" means all reports, returns,
information, statements, and other documentation (includ-
ing any additional or supporting material) filed or
maintained, or required to be filed or maintained, in
connection with the calculation, determination, assess-
ment or collection of any Taxes.
"Unknown Liabilities" means all liabilities (as
defined in Section 3.1(s)) Related to the Business which
are not specifically referred to in clauses (i), (ii) and
(iv) of the definition of "Assumed Liabilities". No Ex-
cluded Liability, Product Liability or Environmental Lia-
bility shall be an Unknown Liability, and no Unknown
Liability shall be either a Product Liability or an Envi-
ronmental Liability.
ARTICLE II
The Closing
2.1 Closing. The closing of the Purchase (the
"Closing") shall take place at the offices of Skadden,
Arps, Slate, Meagher & Flom, 919 Third Avenue, New York,
NY at 10:00 a.m., New York time, on the later of (i) May
31, 1994, and (ii) the month end next following the date
on which the last to be satisfied or waived of the condi-
tions set forth in Article V hereof shall be satisfied or
waived in accordance with this Agreement; or at such
other time, day or place as the parties hereto shall
mutually agree. The day on which the Closing takes place
is herein referred to as the "Closing Date."
2.2 Deliveries and Payments by the Purchaser.
At the Closing, the Purchaser shall deliver the following:
(a) The Estimated Purchase Price, payable to
the Seller in immediately available funds by wire transfer
to a United States bank account to be designated by Seller
in writing not less than three business days prior to the
Closing Date; and
(b) Such instruments of assumption and other
instruments or documents as may be reasonably necessary to
carry out the Purchase and to comply with the terms here-
of.
2.3 Deliveries by the Seller. At the Closing,
the Seller shall deliver the following:
(i) the Purchased Assets;
(ii) with respect to the Purchased Assets
other than the Real Property, such bills of sale and
other instruments of conveyance or assignment or docu-
ments in form and substance reasonably satisfactory to
the Purchaser and its counsel as may be necessary to vest
in the Purchaser all of the right, title and interest of
the Seller in and to the Purchased Assets, including,
without limitation, such bills of sale and other instru-
ments or documents as shall be necessary to vest in the
Purchaser good title, free and clear of all Liens;
(iii) certificates or other statements from
the Secretary of State of the State of New York which
indicate that as of the Closing Date there are no filings
against Seller under the Uniform Commercial Code of New
York which would be a Lien on the Equipment included in
the Purchased Assets (other than such filings, if any, as
are being released at the time of the Closing) unless
such filing secures an obligation that is an Assumed
Liability;
(iv) written notices executed by the Seller
changing the address for payment on accounts and services
and written notices of the Purchase jointly signed by
Seller and the Purchaser, as the Purchaser shall reason-
ably request;
(v) with respect to the Owned Real Property,
bargain and sale deeds, in the customary form in the
jurisdictions in which the Owned Real Property is locat-
ed, with covenants against grantor's acts, in recordable
form, subject only to the Permitted Encumbrances, togeth-
er with any third party consents listed on Schedule
3.1(j) to be obtained from any such third party related
to the Owned Real Property; and with respect to the
Leased Real Property, assignments of lease, in the cus-
tomary form in the jurisdictions in which the Leased Real
Property is located, in recordable form, subject only to
the Permitted Leasehold Encumbrances, together with any
third party consents listed on 3.1(j), to be obtained
from any such third party related to the Leased Real
Property;
(vi) a true, correct and complete affidavit of
non-foreign status of the Seller in a form which complies
with the provisions of Section 1445 of the Code, and the
regulations thereunder (the "FIRPTA Affidavit") which
attests to Seller's non-foreign status;
(vii) estoppel certificates, in the form
reasonably satisfactory to the Purchaser, executed by
each Landlord which is a party to any leases on the
Leased Real Property; provided, however (i) as to the
Leased Real Property in the United States, in the event
that the Seller, after using its reasonable efforts, is
unable to obtain such estoppel certificates, or (ii) as
to the other Leased Real Property in the event that the
Seller is unable to obtain such estoppel certificates,
then in lieu thereof, the Seller shall execute and deliv-
er a reasonably acceptable tenant's estoppel certificate
for such Leased Real Property; and
(viii) all other documents, instruments and
writings required to be delivered by the Seller pursuant
to this Agreement or otherwise reasonably required in
connection herewith.
2.4 Purchase Price Adjustment. (a) As soon
as practicable, but not more than ninety (90) calendar
days after the Closing Date, the Seller shall deliver to
the Purchaser the Closing Statement. During the prepara-
tion and audit of the Closing Statement by the Seller and
the Accountants and during the period of any dispute
within the contemplation of Section 2.4(b) hereof, the
Purchaser shall provide the Seller, the Accountants and
the Seller's authorized representatives reasonable access
to the books, records, facilities and employees of the
Business and shall cause the Business to cooperate with
the Seller, the Accountants and the Seller's authorized
representatives, in each case to the extent reasonably
required in order to prepare the Closing Statement and to
investigate the basis for any such dispute. The Purchas-
er and its representatives, including Deloitte & Touche
(the "Purchaser's Accountants"), shall have the right to
communicate with and to review the work papers, sched-
ules, memoranda and other documents prepared or reviewed
by the Seller and/or the Accountants in connection with
their preparation and/or audit of the Closing Statement,
and the Purchaser and its representatives shall have
access to the Accountants and such employees of the
Seller and to all relevant books and records, to the
extent reasonably required by them in order to complete
their review of the Closing Statement and to investigate
the basis for any potential dispute contemplated by
Section 2.4(b). Subject to Section 2.4(b), the Closing
Statement shall be conclusive and binding as the "Final
Statement."
(b) The Purchaser may dispute any amounts re-
flected on the Closing Statement, based solely on wheth-
er such disputed amounts were arrived at in accordance
with the provisions with respect to the preparation of
the Closing Statement set forth in Section 1.2 under the
heading "Closing Statement"; provided that the Purchaser
shall notify the Seller in writing of each disputed
item, and specify the amount thereof in dispute and the
basis for such dispute, within forty-five (45) calendar
days of the Purchaser's receipt of the Closing State-
ment. In the event of such a dispute, the Purchaser,
the Seller and their respective independent certified
public accountants shall attempt to reconcile their
differences and any resolution by the Purchaser and the
Seller as to any disputed amounts shall be in writing
and signed by the Purchaser and the Seller and shall
thereafter be final, binding and conclusive. If the
Purchaser and the Seller are unable to reach a resolu-
tion with such effect within fifteen (15) business days
of the Seller's receipt of the Purchaser's written no-
tice of dispute, then the Purchaser and the Seller shall
submit the items remaining in dispute for resolution to
KPMG Peat Marwick, or another independent "big six" ac-
counting firm (other than the Accountants or the
Purchaser's Accountants) mutually appointed by the Sell-
er and the Purchaser (such accounting firm being herein
referred to as the "Independent Accounting Firm"), which
shall, within thirty (30) calendar days after submis-
sion, determine such disputed items in accordance with
the provisions with respect to the preparation of the
Closing Statement set forth in Section 1.2 under the
heading "Closing Statement," and report to the parties
which report shall be final, binding and conclusive.
The fees and disbursements of the Independent Accounting
Firm shall be allocated equally between the Purchaser
and the Seller.
(c) If the Purchase Price exceeds the Esti-
mated Purchase Price, then the Purchaser shall pay to
the Seller an amount equal to such excess, together with
simple interest thereon from the Closing Date to the
date of payment at the rate of 6% per annum, calculated
on the basis of a 365-day year. If the Estimated Pur-
chase Price exceeds the Purchase Price, then the Seller
shall pay to the Purchaser an amount equal to such ex-
cess, together with simple interest thereon from the
Closing Date to the date of payment at the rate of 6%
per annum, calculated on the basis of a 365-day year.
(d) Any amount payable pursuant to Section
2.4(c) hereof shall be paid by wire transfer of immedi-
ately available funds to a bank account designated by the
Purchaser or the Seller, as the case may be, as soon as
practicable following the determination of the Final
Statement, but in no event more than three (3) days
thereafter.
ARTICLE III
Representations and Warranties
3.1 Representations and Warranties of the
Seller. The Seller hereby represents and warrants to the
Purchaser as follows:
(a) Organization of the Seller and Material
Subsidiaries. The Seller and each of the Material Sub-
sidiaries are corporations duly organized, validly exist-
ing and in good standing under the laws of their respec-
tive jurisdictions of incorporation or organization and
each such entity has all necessary corporate power to
own, lease and operate its respective Purchased Assets
and to carry on the Business conducted by it as now being
conducted. The Seller and each of the Material Subsid-
iaries are duly qualified and in good standing to do
business in all jurisdictions in which the Purchased
Assets owned or used by it or the Business conducted by
it makes such qualification necessary, except for those
jurisdictions where the failure to be so duly qualified
will not have a material adverse effect on the Purchased
Assets, the Assumed Liabilities or the business, finan-
cial condition or results of operations of the Business,
taken as a whole (a "Material Adverse Effect").
(b) Authorization and Noncontravention. The
execution, delivery and performance of this Agreement has
been duly authorized by the Seller and no other corporate
proceedings on the part of the Seller are necessary to
authorize this Agreement or the transactions contemplated
hereby. The Seller has full corporate power and authori-
ty to enter into this Agreement and to perform its obli-
gations hereunder. This Agreement has been duly and
validly executed and delivered by the Seller and consti-
tutes a valid and legally binding obligation of the
Seller enforceable against the Seller in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights and to general equity principles. The execution
and the delivery by the Seller of this Agreement and the
consummation by the Seller of the Purchase will not (i)
violate any term or provision of the Restated Certificate
of Incorporation or By-laws of the Seller; (ii) subject
to obtaining any required authorizations, approvals,
consents or waivers set forth in Schedule 3.1(j) hereto,
conflict with or result in a breach of or constitute a
default under or result in the termination of, or entitle
any party to accelerate (whether after the filing or
notice or lapse of time or both), any agreement to which
the Seller or any Material Subsidiary is a party or by
which it is bound or to which any of its assets are
subject, or result in the creation of any lien or encum-
brance upon any of said assets, other than conflicts,
breaches, defaults, terminations, accelerations, liens or
encumbrances which, individually or in the aggregate,
would not have a Material Adverse Effect or materially
impair the ability of the parties hereto to consummate
the Purchase; or (iii) subject to obtaining the authori-
zations, approvals, consents or waivers set forth in
Schedule 3.1(j) hereto and to the expiration of the
applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Omnibus Trade and Competitiveness Act of 1988
(the "Exon-Florio Amendment") and the Federal Republic of
Germany's Act Against Restraints of Competition (the "GWB
Act"), violate or result in a breach of or constitute a
default under any judgment, order, decree, law, rule,
regulation or other restriction of any court, government
or governmental agency to which the Seller, any Subsid-
iary or any of the Purchased Assets are subject, other
than violations, breaches or defaults which individually
or in the aggregate would not have a Material Adverse
Effect or materially impair the ability of the parties
hereto to consummate the Purchase.
(c) The Purchased Assets. Except as set forth
Schedule 3.1(c) hereto, the Purchased Assets constitute
in all material respects the rights, properties and
assets (real, personal or mixed, tangible or intangible)
used in the conduct of the Business as currently con-
ducted by the Seller and the Subsidiaries. The Seller
has good and valid title to the owned Purchased Assets
(other than the Owned Real Property, which is the subject
of Section 3.1(d) hereof, and the Intellectual Property,
which is the subject of Section 3.1(k) hereof), free and
clear of all Liens except for Liens set forth on Schedule
3.1(c) hereto, which shall be released on or prior to the
Closing.
(d) Real Property. Seller and each Subsid-
iary has fee simple and insurable title, or the equiva-
lent of fee simple and insurable title under applicable
law in the case of the Owned Real Property located out-
side the United States, to the Owned Real Property iden-
tified as belonging to it on Schedule 1.2(E), free and
clear of all liens, covenants, conditions, restrictions,
rights of way, easements, encroachments, charges and
encumbrances or other adverse claims or interests of any
nature other than: (i) liens for current taxes not yet
due and payable; (ii) liens for installments for special
or other assessments not yet due and payable; (iii) the
matters set forth on Schedule 3.1(d) hereto; (iv) laws,
ordinances and governmental regulations (including, but
not limited to, building and zoning ordinances) restrict-
ing and regulating but not prohibiting the occupancy, use
or enjoyment of the Owned Real Property for the business
presently conducted thereon, or regulating the character,
dimensions or location of any improvement now or hereaf-
ter erected on the Owned Real Property provided the same
are not materially violated by any existing improvements
or the use thereof and provided the same do not prohibit
a transfer of the Owned Real Property, (v) such other
encroachments, easements, overlaps, gaps, boundary line
disputes or claims and any other matters which would be
disclosed by an accurate survey or inspection which,
individually or in the aggregate, do not materially
interfere with the use or operation of the particular
Owned Real Property affected as presently used and oper-
ated, and (vi) such other imperfections of title, encum-
brances, covenants, conditions and restrictions which
individually or in the aggregate, do not materially
interfere with the use and operation of the particular
Owned Real Property affected as presently used and oper-
ated. Collectively, items (i), (ii), (iii), (iv), (v)
and (vi) above are herein referred to as the "Permitted
Encumbrances." The Seller and each Subsidiary, with
respect to each Leased Real Property identified on Sched-
ule 3.1(l) as belonging to it, has a good and valid
leasehold interest free and clear of all liens, charges
and encumbrances or other adverse claims or interests of
any nature other than: (i) claims for rent and additional
rent not yet due and payable, and all other obligations
of the tenant pursuant to each such lease, provided that
tenant is not in default beyond applicable notice and
grace provisions under such lease, (ii) matters set forth
in Schedule 3.1(d) hereto, (iii) matters affecting its
landlord's title, and (iv) laws, ordinances and govern-
mental regulations (including, but not limited to, build-
ing and zoning ordinances) restricting and regulating but
not prohibiting the occupancy, use or enjoyment of the
Leased Real Property for the use permitted by each such
lease and the business presently conducted in the premis-
es demised under each such lease, or regulating the
character, dimensions or location of the demised premises
or the business presently conducted on the demised pre-
mises provided the same are not materially violated.
Collectively, items (i), (ii), (iii) and (iv) above are
herein referred to as the "Permitted Leasehold Encum-
brances". Except as set forth on Schedule 3.1(d), Seller
(A) has not pre-paid or anticipated rent or additional
rent under any such lease, except as required by the
terms of any Lease, (B) knows of no requirement that any
third party (including the landlord under each such
lease) consent to the assignment or transfer of each such
lease or consent to the transfer of the stock of any
Subsidiary which is a tenant under any such lease and (C)
knows of no guarantee of the obligations of a tenant
under any such lease by Seller or any Subsidiary except
as shown on Schedule 4.15.
(e) Condemnation. There is no pending or, to
knowledge of the Seller, threatened condemnation of the
Owned Real Property or, to the knowledge of Seller,
pending or threatened condemnation of the Leased Real
Property or any part thereof or, to the knowledge of
Seller, any general or special assessment relating to any
condemnation referred to in this paragraph.
(f) Financial Statement. The Seller has
previously furnished to the Purchaser (i) the audited
statements of net sales and direct costs and expenses and
sources and uses of cash of the Division for the fiscal
year ended June 30, 1993 (the "Special Purpose State-
ments"), and (ii) the Financial Statement. Except as set
forth in the notes to the Special Purpose Statements, the
Financial Statement and Schedule 3.1(f) hereto, the
Financial Statement presents fairly the June 30 Net
Assets at June 30, 1993, and the Special Purpose State-
ments present fairly the related net sales and direct
costs and expenses and sources and uses of cash for the
fiscal year then ended, in each case in accordance with
generally accepted accounting principles consistently
applied on a worldwide basis in accordance with the
Seller's corporate accounting policies and directives.
(g) Absence of Certain Changes. Except as set
forth in Schedule 3.1(g) hereto, since June 30, 1993
there has not been with respect to the Business (i) any
material adverse change in the business, financial condi-
tion or results of operations of the Business, taken as a
whole; (ii) other than in the ordinary course of busi-
ness, any expenditures or commitments, including capital
expenditures or commitments for capital expenditures,
made by the Seller for additions to property, plant,
equipment or intangible capital assets which exceed
$50,000 individually or $250,000 in the aggregate, other
than as described on Schedule 4.1; (iii) any failure to
maintain in full force and effect substantially the same
level and types of insurance coverage as in effect on
June 30, 1993; (iv) any destruction, damage to, or loss
of any Purchased Asset (whether or not covered by insur-
ance) which would have a Material Adverse Effect; (v) any
change in accounting methods, principles or practices;
(vi) any sale, assignment or transfer of any material
tangible or intangible Purchased Assets, including any
material Intellectual Property, other than licenses of
Purchased Assets entered into in the ordinary course of
business; or (vii) any agreement or understanding to take
any of the actions described in this Section.
(h) Litigation. Except as set forth in Sched-
ule 3.1(h) or 3.1(k) hereto, there are no written claims,
actions, suits, or proceedings, nor has the Seller re-
ceived any notice of governmental investigations (i) in-
volving the Business pending or, to the knowledge of the
Seller, threatened or (ii) relating to the products of
the Business or any products alleged to have been manu-
factured or sold by the Seller or any Subsidiary in con-
nection with the Business, based on allegations that such
products are defective or improperly designed or manufac-
tured pending or, to the knowledge of the Seller, threat-
ened. Except as set forth in Schedule 3.1(h) or 3.1(k)
hereto, neither the Seller nor any Subsidiary is subject
to any judgment, order or decree in any lawsuit or pro-
ceeding Related to the Business.
(i) Compliance with Law. Except as set forth
in Schedule 3.1(i) hereto and except with respect to
Environmental Laws (compliance with which is the subject
of Section 3.1(p) hereof), to the knowledge of the Seller
(i) the Business is being conducted in compliance in all
material respects with all applicable laws, rules and
regulations and orders and (ii) the Seller has not re-
ceived any written complaint or notice from any govern-
mental authority alleging that the Seller has violated
any laws, rules, regulations or orders.
(j) Approvals and Consents. Except for com-
pliance with the HSR Act, the Exon-Florio Amendment and
the GWB Act and other than as set forth in Schedule
3.1(j) hereto, (1) there are no authorizations, approv-
als, consents or waivers required to be obtained from or
notices or filings required to be given to or made with,
any government or governmental agency by the Seller in
connection with the Purchase, and (2) there are no autho-
rizations, approvals, consents or waivers required to be
obtained by the Seller or any Subsidiary from any third
party or notices required to be given by the Seller or
any Subsidiary to any third party, in either case pursu-
ant to any Material Agreement in connection with the Pur-
chase.
(k) Intellectual Property. (i) Schedule
1.2(F) sets forth a complete and accurate list of all
trademarks, patents and material copyrights registered or
applied for, Related to the Business, owned by the Seller
or any Subsidiary. Except as set forth in Schedule
3.1(k) hereto, either the Seller or such Subsidiary is
the sole and exclusive beneficial owner of the Intel-
lectual Property, free and clear of all Liens. Except as
set forth in Schedule 3.1(k) hereto, to the knowledge of
the Seller (x) there are no actions or proceedings pend-
ing or threatened which challenge the Seller's right to
use any of its material Intellectual Property in connec-
tion with the Business and (y) the Seller's use of Intel-
lectual Property in connection with the Business does not
infringe upon or otherwise violate the rights of others.
(ii) All registered trademarks, patents and
material copyrights are validly registered, and, except
as set forth in Schedule 3.1(k) the Seller or a Subsid-
iary is the current record owner of all such registra-
tions or applications therefor. The Seller is not a
party to any settlement agreement, consent or waiver
which restricts the use of such Intellectual Property in
connection with the Business. To the knowledge of the
Seller, no other person is infringing upon the Seller's
rights in the Intellectual Property, except as set forth
in Schedule 3.1(k).
(iii) Except as set forth on Schedule 3.1(k),
the Seller does not pay any royalty to anyone relating to
the Intellectual Property. There is no restriction or
limitation of Seller's rights to transfer the Intellectu-
al Property as herein contemplated.
(iv) Schedule 3.1(k) contains a complete and
accurate list of all contracts, licenses, agreements or
understandings, written or oral, Related to the Business,
pursuant to which (a) a third party is licensing its in-
tellectual property to the Seller, and (b) the Seller is
licensing any Intellectual Property to a third party (the
"Licenses"). The Seller is in compliance with all mate-
rial terms of the Licenses and to the knowledge of the
Seller each of the Licenses is in full force and effect.
All royalties due and payable under the Licenses have
been paid.
(l) Material Agreements. Listed on Schedule
3.1(l) is (i) each agreement, contract, license and per-
sonal property lease and sublease, written or oral,
Related to the Business involving an obligation of the
Seller or a Subsidiary or of the other party or parties
thereto of more than $100,000 in any year (other than
contracts cancelable upon up to sixty (60) days notice,
without penalty), (ii) each lease of real property Relat-
ed to the Business (collectively, the "Leases"), (iii)
each agreement which by its terms is over one year in
length of obligation of the Seller or a Subsidiary Relat-
ed to the Business (other than contracts cancelable upon
up to sixty (60) days notice, without penalty), (iv) each
agreement or contract which by its terms will result in a
loss to the Business in excess of $50,000, and (v) all
agreements or contracts which by their terms will result
in an aggregate loss to the Business in excess of
$500,000 (hereinafter collectively called the "Material
Agreements"). Except as set forth in Schedule 3.1(l)
hereto, to the knowledge of the Seller, none of the
Seller, any Subsidiary or the other party or parties to
any Material Agreement is in default with respect to any
material term or condition thereof and no event has oc-
curred which through the passage of time or the giving of
notice, or both, would constitute such a default. Nei-
ther the Seller nor any Subsidiary has received any
written notice of any default by the Seller or any Sub-
sidiary under any of the Material Agreements. The list
of Material Agreements on Schedule 3.1(e) hereto includes
all amendments and modifications to such Material Agree-
ments. Copies of all Material Agreements and Assumed
Contracts, including all supplements and amendments
thereto, have been or will be made available to the
Purchaser prior to the Closing.
(m) Employee Benefit Plans. (i) Schedule
3.1(m)(i) hereto lists all "employee benefit plans,"
within the meaning of Section 3(3) of ERISA, covering
persons employed or formerly employed in the United
States by the Division in connection with the Business
(the "U.S. Employees"). True and complete copies of all
plan documents and summary plan descriptions pertaining
to all such plans (the "ERISA Plans") have been, or as
soon as practicable after the date of this Agreement will
be, made available to the Purchaser.
(ii) All ERISA Plans are in substantial com-
pliance with ERISA. To the knowledge of the Seller, each
ERISA Plan intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter
from the Internal Revenue Service (except with respect to
amendments to such ERISA Plans adopted after August 1,
1986), and the Seller is not aware of any circumstances
likely to result in revocation of any such favorable de-
termination letter. Except as set forth on Schedule
3.1(m)(ii) hereto, there is no material pending or, to
the knowledge of the Seller, threatened action, suit or
claim with respect to the ERISA Plans (other than routine
claims for benefits in the ordinary course). None of the
ERISA Plans is a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA.
(iii) Assuming the Purchaser makes the offers
of employment provided for in Section 4.7(a) hereof, the
consummation of the transactions contemplated by this
Agreement will not, in and of themselves, (a) entitle any
current or former employee of Seller or any Transferred
Employee (as defined in Section 4.7 hereof) to any sever-
ance pay, unemployment compensation or any other payment,
(b) accelerate the time of payment or vesting, or in-
crease the amount of compensation due to any such em-
ployees, or (c) result in any employment-related expenses
or liabilities, in every such case the full cost of which
will not be paid by Seller.
(iv) Schedule 3.1(m)(iv) sets forth a list of
all plans, agreements or arrangements pursuant to which
any Employee receives any employee benefits from Seller
or any Subsidiary, including without limitation, bonus,
deferred compensation, pension, profit-sharing, severance
and health insurance plans, agreements or arrangements
(the "Employee Plans"). Seller has provided the Purchas-
er with true and complete copies of all written Employee
Plans or true and complete summaries of all oral Employee
Plans.
(v) Schedule 4.7(a)(1) sets forth the annual
salary and job title of each of the Transferred Employ-
ees.
(n) Labor Matters. The Seller has paid in
full to, or accrued on behalf of, all Employees all
wages, salaries, vacation pay, commissions, bonuses and
other direct compensation for all services performed by
them to the date hereof and all amounts required to be
reimbursed to such Employees. Except as set forth on
Schedule 3.1(n), Seller has not been notified in writing
that any charges with respect to or relating to any
Employee are pending before the Equal Employment Opportu-
nity Commission or any other agency responsible for the
prevention of unlawful employment practices. Except as
set forth on Schedule 3.1(n), there are no employment
contracts or severance agreements with any Employees.
The Seller is not a party to any collective bargaining or
similar agreement with any labor organization, group or
association with respect to the Employees. To the knowl-
edge of the Seller, the Seller has not experienced, in
the past five (5) years, any attempt by organized labor
or its representatives to make the Seller conform to de-
mands of organized labor relating to the U.S. Employees,
or to enter into a binding agreement with organized labor
that would cover the U.S. Employees. Seller has not been
notified in writing that there are any unfair labor
practices, charges or complaints against the Seller with
respect to the Business pending before the National Labor
Relations Board or any other U.S. governmental agency
arising out of the Seller's activities in the United
States with respect to the Business; there is no labor
strike, material dispute, material slowdown or material
labor disturbance pending or, to the knowledge of the
Seller, threatened, nor is any grievance currently being
asserted, against the Seller with respect to the Business
in the United States; and the Business has not experi-
enced a labor strike, material dispute, material slow-
down, material labor disturbance or work stoppage during
the past five (5) years.
Since February 1, 1991, the Seller has not ef-
fectuated a "plant closing" or "mass layoff" (each as de-
fined in the Worker Adjustment and Retraining Notifica-
tion Act (the "WARN Act")) affecting any site of employ-
ment, operating unit or facility of the Seller Related to
the Business; nor has the Seller engaged in layoffs or
employment terminations sufficient in number to trigger
application of any similar U.S. state or local law relat-
ing to the Business. None of the Employees has suffered
an "employment loss" (as defined in the WARN Act) since
six months prior to the date hereof.
(o) Insurance. Schedule 3.1(o) contains a
complete and accurate list of all policies or binders of
fire, liability, worker's compensation and other forms of
insurance, including bonds but not including any insur-
ance related to Employees other than worker's compensa-
tion (showing as to each policy or binder the carrier,
coverage limits, expiration dates, deductibles or reten-
tion levels and a general description of the type of
coverage provided) maintained by the Seller or a Subsid-
iary with respect to the Business, any Purchased Assets,
any Assumed Liabilities or the Employees. The coverage
provided under such policies and binders is in full force
and effect on the date hereof and shall be kept in full
force and effect by the Seller through the Closing Date.
Neither the Seller nor any Subsidiary has been refused
any insurance coverage with respect to the Purchased As-
sets or the Business, nor has coverage been limited or
cancelled in any material respect by any insurance carri-
er to which the Seller or any Subsidiary has applied for
any such insurance or with which the Seller or any Sub-
sidiary has carried insurance.
(p) Environmental Matters. Except as set
forth in Schedule 3.1(p), to Seller's knowledge, the
Seller is in material compliance with all applicable
Environmental Laws, and the Seller is in possession of
all permits, licenses and other authorizations required
as of the Closing Date under applicable Environmental
Laws for the operation of the Business as presently con-
ducted, and to Seller's knowledge, is in compliance with
the terms thereof. Except as set forth in Schedule
3.1(p) hereto, neither the Seller nor any Material Sub-
sidiary has received any written claim, notice or com-
plaint from any governmental agency, or from any person
or group purportedly authorized to bring a private action
pursuant to a citizens suit provision of an Environmental
Law in the last five years, and to the knowledge of the
Seller, at any time, alleging that the Real Property or
the operation of the Business is in violation of any
Environmental Law. All permits and other governmental
authorizations currently held by the Seller or any Mate-
rial Subsidiary pursuant to the Environmental Laws are
identified in Schedule 3.1(p).
Except as set forth in Schedule 3.1(p), there
is no Environmental Claim pending or, to the knowledge of
Seller, threatened against the Seller or any Material
Subsidiary. Except as set forth on Schedule 3.1(p), to
Seller's knowledge, there are no past or present actions,
activities, circumstances, conditions, events or inci-
dents, including, without limitation, the release, emis-
sion, discharge, presence or disposal of any Material of
Environmental Concern, on the Real Property that could
form the basis of any Environmental Claim against the
Seller or any Material Subsidiary. Without in any way
limiting the generality of the foregoing, to Seller's
knowledge, (i) all on site locations where the Seller or
any Material Subsidiary has stored or disposed of Materi-
als of Environmental Concern are identified in Schedule
3.1(p), (ii) underground storage tanks, and the capacity
and contents of such tanks, located on the Real Property
are identified in Schedule 3.1(p), and (iii) except as
set forth in Schedule 3.1(p), no polychlorinated
biphenyls (PCB's) are used or stored at the Real Proper-
ty. To Seller's knowledge, since the date of acquisition
of the Owned Real Property by the Seller, the Owned Real
Property has not been used as a landfill or disposal site
for hazardous, industrial or municipal waste. The Seller
has not received any administrative or judicial order,
decree, judgment or directive issued by any federal,
state or local government or governmental agency or
authority relating to or which requires environmental
removal or remedial action (as defined under 42 U.S.C.A.
section 9601 (23) and (24)) at the Owned Real Property. To
Seller's knowledge, there is no lien on the Owned Real
Property filed by any federal, state or local government
or governmental agency or authority in connection with
the presence of any Materials of Environmental Concern on
or at the Owned Real Property.
(q) Subsidiaries. Schedule 1.2(G) hereto
lists (i) all of the Subsidiaries and the number of
shares of capital stock of each Stock Subsidiary out-
standing and such number owned beneficially and of record
by the Seller and (ii) each other corporation, partner-
ship, joint venture or other person which owns or holds
Purchased Assets or in which the Seller has made a finan-
cial investment Related to the Business. Each of the
Subsidiaries is duly organized and validly existing under
the laws of its jurisdiction of incorporation and has all
necessary corporate power to own all of its respective
properties and assets and to carry on its business as now
being conducted.
(r) Finders and Investment Bankers. Except
for the Seller's engagement of Goldman, Sachs & Co., the
Seller has not employed any broker or finder or incurred
any liability for any brokerage fees, commissions or
finders' fees in connection with the Purchase.
(s) Undisclosed Liabilities. To the knowledge
of the Seller, there are no liabilities or obligations,
secured or unsecured, whether absolute, accrued, contin-
gent or otherwise, and whether due or to become due
(hereinafter in this paragraph (s) and for purposes of
the definition of "Unknown Liabilities", "liabilities")
of the Business, except for (i) liabilities of the Busi-
ness that are or will be included as liabilities on the
Final Statement; (ii) liabilities contained in each As-
sumed Contract that is fully and effectively assigned to
the Purchaser; and (iii) Excluded Liabilities. Notwith-
standing the foregoing, the Seller makes no represen-
tation or warranty in this Section 3.1(s) with respect to
any Environmental Liability or Product Liability.
(t) Accounts Receivable. All accounts receiv-
able reflected on the Final Statement will be good and
collectible at the aggregate recorded amounts thereof
(net of the allowance for doubtful accounts, which allow-
ance will be adequate and consistent with past practic-
es). To the Seller's knowledge, such accounts receivable
will have arisen out of bona fide transactions in the
ordinary course of business and will be owned by the
Seller free and clear of all Liens.
(u) Inventory. All inventory of the Business
to be reflected on the Final Statement will be valued at
the lower of cost or market on a first-in, first-out
basis in accordance with generally accepted accounting
principles consistently applied and will consist of a
quantity and quality usable and salable in the ordinary
course of business, except for items of obsolete materi-
als and materials of below-standard quality which will be
written-down in the Final Statement to realizable market
value or for which adequate reserves will be provided
therein.
(v) Bank Accounts. Schedule 3.1(v) is a list
of the names and locations of all financial institutions
at which the Seller maintains in connection with the
Business a deposit account or other similar deposit or
safekeeping arrangement, the number or other identifica-
tion of all such accounts and arrangements and the names
of all persons authorized to draw thereon or have access
thereto.
(w) Disclosure. The representations and war-
ranties of the Seller in this Agreement and the state-
ments contained in the schedules, certificates and other
writings furnished and to be furnished by the Seller or
any Subsidiary to the Purchaser pursuant to this Agree-
ment when considered as a whole and giving effect to any
supplements or amendment thereof do not and will not con-
tain any untrue statement of a material fact and do not
and will not omit to state any material fact necessary to
make the statements herein or therein not misleading.
(x) Licenses and Permits. Except with respect
to licenses and permits related to Environmental Matters
and Intellectual Property, which are the subject of
Sections 3.1(p) and 3.1(k) herein, the material govern-
mental and third party licenses, permits, certificates,
consents, approvals, waivers, authorizations and regis-
trations (collectively, "Approvals") listed in Schedule
3.1(x) hereto constitute all the licenses and permits
necessary for the Business to be conducted as now being
conducted in all material respects. Each of such li-
censes and permits and the rights of the Seller or any
Subsidiary with respect thereto are valid and subsisting,
in full force and effect, and the Seller or such Subsid-
iary is in compliance in all material respects with the
terms of such licenses or permits. None of such licenses
or permits has been or, to the knowledge of the Seller,
is threatened to be, revoked, cancelled, suspended or
modified. Without in any way limiting the foregoing,
Seller has for each Owned Real Property located in the
United States a current, valid certificate of occupancy
and Seller's use of each such Owned Real Property is in
conformity with such certificate of occupancy in all
material respects.
(y) Taxes. (i) With respect to the Seller
and each Asset Subsidiary for the Pre-Closing Tax Period,
(A) except as set forth on Schedule 3.1(y)(i), all feder-
al, state, local and foreign Tax Returns required to be
filed by or on behalf of the Seller or any of the Asset
Subsidiaries Related to the Business have been duly filed
(or appropriate extensions filed) with the appropriate
taxing authorities; (B) except as set forth on Schedule
3.1(y)(i), all Taxes shown on such Tax Returns for such
Pre-Closing Tax Period have been paid or will be paid in
full when due or assessed; (C) except as set forth on
Schedule 3.1(y)(i), there are no pending examinations or
other audits by federal, state, local or, to the knowl-
edge of Seller, foreign taxing authorities Related to the
Business (other than any such audit or examination relat-
ing to income or franchise tax) and no outstanding issue
or claim is being asserted for Taxes (other than income
or franchise taxes) by any federal, state, local or, to
the knowledge of Seller, foreign taxing authority for any
Pre-Closing Tax Period; and (D) except as set forth on
Schedule 3.1(y)(i), there are no outstanding agreements
or waivers extending the statutory period of limitations
applicable to any federal, state, local or, to the knowl-
edge of Seller, foreign Tax Return (other than income or
franchise Tax Returns) of the Seller or any of the Asset
Subsidiaries Related to the Business.
(ii) With respect to each Stock Subsidiary for
the Pre-Closing Tax Period, except as set forth on Sched-
ule 3.1(y)(ii), (A) all foreign Tax Returns required to
be filed by or on behalf of each of the Stock Subsid-
iaries have been duly filed (or appropriate extensions
filed) with the appropriate taxing authorities and, to
the knowledge of Seller, such Tax Returns are true, cor-
rect and complete; (B) all Taxes shown on such Tax Re-
turns for such Pre-Closing Tax Period have been or will
be paid in full when due or assessed; (C) to the knowl-
edge of Seller, for all taxable years ending on or before
June 30, 1993, (1) the income or franchise Tax Returns
required to be filed by or on behalf of each of the Stock
Subsidiaries have been examined by the appropriate taxing
authority, or (2) the period during which any assessments
may be made by the taxing authority has expired, (D) to
the knowledge of Seller, all deficiencies and assessments
asserted in writing as a result of any examinations or
other audits by foreign taxing authorities have been paid
or fully settled and no issue or claim has been asserted
for Taxes by any foreign taxing authority for any Pre-
Closing Tax Period, other than those heretofore paid; and
(E) to the knowledge of Seller, there are no outstanding
agreements or waivers extending the statutory period of
limitations applicable to any foreign income Tax Return
of any of the Stock Subsidiaries.
3.2 Representations and Warranties of the
Purchaser. The Purchaser hereby represents and warrants
to the Seller as follows:
(a) Organization of the Purchaser. The Pur-
chaser is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction
of incorporation and has all necessary corporate power to
own, lease and operate all of its properties and assets
and to carry on its business as now being conducted.
(b) Authorization and Noncontravention. The
execution, delivery and performance of this Agreement has
been duly authorized by the Purchaser and no other corpo-
rate proceedings on the part of the Purchaser are neces-
sary to authorize this Agreement or the transactions con-
templated hereby. The Purchaser has full corporate power
and authority to enter into this Agreement and to perform
its obligations hereunder. This Agreement has been duly
and validly executed and delivered by the Purchaser and
constitutes a valid and legally binding obligation of the
Purchaser enforceable against the Purchaser in accordance
with its terms, subject to bankruptcy, insolvency, fraud-
ulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The
execution and the delivery by the Purchaser of this
Agreement and the consummation by the Purchaser of the
Purchase will not (i) violate any term or provision of
the Certificate of Incorporation or By-laws of the Pur-
chaser; (ii) conflict with or result in a breach of or
constitute a default under or result in the termination
of, or entitle any party to accelerate (whether after the
filing of notice or lapse of time or both), any agreement
to which the Purchaser is a party or by which it is bound
or to which any of its assets are subject, or result in
the creation of any lien or encumbrance upon any of said
assets, other than conflicts, breaches, defaults, termi-
nations, accelerations, liens or encumbrances which,
individually or in the aggregate, would not have a mate-
rial adverse effect on the assets, liabilities, business,
financial condition or results of operations of the busi-
ness of the Purchaser, taken as a whole, or materially
impair the ability of the parties hereto to consummate
the Purchase; or (iii) subject to the expiration of the
applicable waiting periods under the HSR Act, the Exon-
Florio Amendment and the GWB Act, violate or result in a
breach of or constitute a default under any judgment,
order, decree, law, rule, regulation or other restriction
of any court, government or governmental agency to which
the Purchaser is subject, other than violations, breaches
or defaults which, individually or in the aggregate,
would not have a material adverse effect on the assets,
liabilities, business, financial condition or results of
operations of the business of the Purchaser, taken as a
whole, or materially impair the ability of the parties
hereto to consummate the Purchase.
(c) Litigation. There are no written claims,
actions, suits, proceedings or government investigations
pending or, to the knowledge of the Purchaser, threatened
which seek to question, delay or prevent the consummation
of, or would materially impair the ability of the parties
hereto to consummate, the Purchase.
(d) Approvals and Consents. Except for com-
pliance with the HSR Act, the Exon-Florio Amendment, and
the GWB Act and other purely notice filings with certain
governmental agencies in Europe which the Purchaser has
made or will make in accordance with applicable regula-
tions, (1) there are no authorizations, approvals, con-
sents or waivers required to be obtained from, or notices
or filings required to be given to or made with, any gov-
ernment or governmental agency by the Purchaser in con-
nection with the Purchase, and (2) there are no autho-
rizations, approvals, consents or waivers required to be
obtained by the Purchaser from any third party or notices
to be given to any third party by the Purchaser in con-
nection with the Purchase.
(e) Finders and Investment Bankers. Except
for the Purchaser's engagement of CS First Boston Corpo-
ration, the Purchaser has not employed any broker or
finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the
Purchase.
(f) Access to Funds. The Purchaser has, or
has immediate access to, and will have on the Closing
Date, sufficient cash to meet its obligations under Sec-
tions 2.2 and 2.4 hereof.
(g) Disclosure. The representations and war-
ranties of the Purchaser in this Agreement and the state-
ments contained in the schedules, certificates and other
writings furnished and to be furnished by the Purchaser
to the Seller pursuant to this Agreement when considered
as a whole and giving effect to any supplements or amend-
ment thereof do not and will not contain any untrue
statement of a material fact and do not and will not omit
to state any material fact necessary to make the state-
ments herein or therein not misleading.
ARTICLE IV
Covenants
4.1 Operation of The Business. From the date
hereof until the Closing Date, the Business shall be
operated in the ordinary course of business consistent
with past practice. Without limiting the generality of
the foregoing, except as otherwise contemplated by this
Agreement or consented to by the Purchaser (which consent
will not be unreasonably withheld), the Seller covenants
and agrees with respect to the Business that it will not:
(a) terminate or amend, or fail in any materi-
al respect to perform material obligations under any
Material Agreement;
(b) sell, transfer, mortgage or otherwise dis-
pose of, or encumber, any Purchased Assets having a
value, individually or in the aggregate, in excess of
$100,000, other than in the ordinary course of business
consistent with past practice;
(c) issue, contract to issue, or cause to be
issued or contracted to issue, on behalf of the Business,
additional debt (excluding trade accounts payable in ac-
cordance with their terms) or guarantees of debt;
(d) make or become obligated to make any capi-
tal expenditures in excess of $50,000 for any single
project or $250,000 in the aggregate or enter into any
commitments therefor, other than as described in Schedule
4.1 hereto;
(e) commit to any expenditures in excess of
$50,000 individually or $250,000 in the aggregate, other
than expenditures in the ordinary course of business;
(f) fail to maintain in full force and effect
substantially the same level and types of insurance
coverage as in effect on June 30, 1993;
(g) change its accounting methods, principles
or practices;
(h) materially revalue any assets or material-
ly write down the value of any inventory;
(i) (A) increase the compensation payable or
to become payable to any Employee, other than regular,
scheduled compensation increases, or (B) make any in-
crease in any bonus plan, insurance, pension or other
employee benefit plan, payment or arrangement made to,
for or with any Employee other than pursuant to the terms
of any such plan or as a result of a regularly scheduled
compensation increase;
(j) waive or release any rights or claims ex-
ceeding $50,000 in the aggregate, other than settlements
of accounts receivable in the ordinary course of business
not to exceed $100,000 in the aggregate;
(k) (i) dispose of or allow to lapse (other
than by operation of law), or otherwise fail to preserve,
any Intellectual Property, dispose of or allow to lapse
(other than by operation of law) any material license,
permit or other form of authorization, or (ii) dispose of
or disclose to any person, other than authorized repre-
sentatives of the Purchaser, any material trade secret,
formula, process or know how of the Seller or any Sub-
sidiary Related to the Business, except pursuant to non-
disclosure or secrecy agreements entered into in the
ordinary course of business; or
(l) agree to do any of the foregoing.
4.2 Preservation of Business. From the date
hereof until the Closing Date, the Seller shall use
reasonable efforts to keep the Business substantially
intact and to maintain satisfactory relations with the
Employees and with the suppliers and customers of the
Business.
4.3 Approvals and Consents; Cooperation. (a)
The parties hereto shall use reasonable efforts, and
cooperate with each other, to obtain all governmental and
third party authorizations, approvals, consents or waiv-
ers required in order to consummate the Purchase, includ-
ing, without limitation, pursuant to the Exon-Florio
Amendment and the GWB Act; provided, however, that nei-
ther the Seller nor the Purchaser shall be required to
pay any other consideration therefor. Subject to the
foregoing and the other terms and conditions set forth
herein, each of the parties hereto agrees to use its rea-
sonable efforts to take, or cause to be taken, all ac-
tions, and to do, or cause to be done, all things neces-
sary, proper or advisable to consummate the Purchase.
(b) As promptly as reasonably practicable
after the execution hereof, the Purchaser and the Seller
shall make their respective filings under the HSR Act,
the Exon-Florio Amendment, and the GWB Act and each party
shall be responsible for the payment of its respective
filing fees.
4.4 Access. From the date hereof until the
Closing, (a) the Seller will furnish to the Purchaser any
information with respect to the Business as the Purchaser
may from time to time reasonably request, and (b) the
Purchaser may, at its discretion, locate one of its
representatives at the Division's headquarters located in
Westbury, New York, subject to the restrictions set forth
in the next sentence; and provided further that the
Seller shall be permitted to restrict access by such
representative to any Employee to the extent that the
Seller determines, in its sole discretion, that such
access could result in the disclosure of competitive
information related to the Seller or the Business.
Beginning immediately upon the execution hereof, the
Seller, upon reasonable notice by the Purchaser, shall
give or cause to be given to the Purchaser and to its
accountants, counsel and other authorized representa-
tives, during regular business hours, in a manner so as
not to unduly disrupt the business of the Seller or the
Business, reasonable access to all of the properties,
documents and records Related to the Business except to
the extent that such access would violate any governmen-
tal regulation, law or order to which the Business or the
Employees are subject; provided, however, that the Seller
shall have the right to have a representative present at
all such times; and provided, further, that such access
shall be at the expense and risk of the Purchaser, and
the Purchaser shall indemnify and hold harmless the
Seller from and against any loss, expense, damage, lia-
bility or claim arising from the Purchaser's negligence
or misconduct during such access in accordance with
Article VI hereof.
4.5 Taxes and Fees. (a)(i) Seller shall
timely prepare and file, or cause to be prepared and
filed, all Tax Returns of any Stock Subsidiary for the
Pre-Closing Tax Period and Seller shall timely pay, or
cause to be paid, when due all Taxes relating to such Tax
Returns (including any such Taxes assessed or due after
the Closing Date). Such Tax Returns shall be prepared or
completed in a manner consistent with prior practice of
Seller and the Stock Subsidiaries (including elections
and accounting methods and conventions), except as other-
wise required by law or regulation or otherwise agreed to
by Purchaser prior to the filing thereof, and such Tax
Returns shall be true, correct and complete to the knowl-
edge of Seller. Purchaser shall cooperate with Seller in
connection with the preparation and filing of such Tax
Returns (including, without limitation, by causing the
Stock Subsidiaries to sign such Tax Returns, provided
such Tax Returns are prepared or completed in a manner
consistent with the prior sentence). No later than five
(5) business days prior to the due date for any such Tax
Return, Seller shall provide Purchaser with a signature
copy of such Tax Return. Promptly after receipt of such
Tax Return, Purchaser shall notify Seller of any reason-
able objections Purchaser may have to the filing of such
Tax Returns and Purchaser and Seller agree to consult and
resolve in good faith any such objection to the signing
of any such Tax Return; provided, however, that in the
event such resolution fails, Purchaser and Seller agree
to submit any such Tax Return to the Independent Account-
ing Firm whose determination as to the propriety of
filing such Tax Return shall be binding, and to share
equally any and all expenses associated with such consul-
tation.
(ii) For any taxable period beginning after
the Closing Date, Purchaser shall timely prepare and
file, or cause to be prepared and filed, all Tax Returns
of the Stock Subsidiaries, and such Tax Returns shall be
true, correct and complete to the knowledge of Purchaser,
and shall timely pay, or cause to be paid, when due all
Taxes relating to such Tax Returns.
(iii) Any Taxes described in this Section
4.5(a)(iii) due with respect to Seller, or any Subsidiary
that relate to any Straddle Period shall be apportioned
between Purchaser and Seller with respect to the portions
of any such period before and after the Closing Date, (x)
with respect to Seller or any Subsidiary, in the case of
real and personal property, use and intangible Taxes (in
the case of Seller or any Asset Subsidiary to the extent
such Taxes are Related to the Business), on a per diem
basis and, where applicable, in accordance with the
provisions of Code Section 164(d), and (y) with respect
to any Stock Subsidiary, in the case of other Taxes,
based on a deemed closing of the books of the Stock
Subsidiaries as of the Closing Date, with all standard
exemptions, deductions, progressivity in rates and other
items with respect to the full Straddle Period allocated
between the portion of the Straddle Period falling in the
Pre-Closing Tax Period and the remainder of such Straddle
Period on a per-diem basis; provided, however, that in no
event shall either party's obligation with respect to its
portion of a particular Straddle Period Tax of a Stock
Subsidiary as calculated under this clause (y) exceed the
liability for that particular Tax of such Stock Subsid-
iary for such Straddle Period. Straddle Period Tax
Returns other than those relating to Stock Subsidiaries
shall be prepared and timely filed by the entity respon-
sible for filing such Tax Returns under local law, regu-
lation or custom, and Seller or Purchaser, as the case
may be, shall cause such entity to timely file such Tax
Returns and timely pay and Tax due with respect to such
Tax Returns when due or assessed. To the extent that
any Tax Returns of a Stock Subsidiary with respect to any
Straddle Period are due on or prior to the Closing (tak-
ing into account applicable extensions), Seller shall
timely prepare and file, or cause to be prepared and
filed, all such Returns and shall timely pay, or cause to
be paid when due, all Taxes relating to such Returns. To
the extent any Tax Returns of a Stock Subsidiary with re-
spect to any Straddle Period are due after the Closing
(taking into account applicable extensions), Purchaser
shall timely prepare and file, or cause to be prepared
and filed, all such Tax Returns and shall timely pay, or
cause to be paid when due, all Taxes relating to such Tax
Returns. All Straddle Period Tax Returns shall be pre-
pared in a manner consistent with past practice of Seller
or the relevant Subsidiary and in a manner that does not
distort the taxable income or loss or Tax liability of
Seller, any Subsidiary, Purchaser or any affiliate of the
foregoing, except as required by law or regulation or
otherwise agreed to by Purchaser and Seller and such Tax
Returns shall be true, complete and correct to the best
knowledge of the party responsible for filing such Tax
Return under this Section 4.5(a)(iii) (the "Filing Par-
ty"). At least fifteen (15) business days prior to the
due date for filing (including extensions) of any Strad-
dle Period Tax Return due after Closing, the Filing Party
shall provide the other party with a substantially final
draft of such Tax Return and a notice setting forth in
reasonable detail the calculations regarding the other
party's share of Straddle Period Taxes shown as due on
such Tax Return (calculated as described in this Section
4.5(a)), and the other party shall have the right to
review such Tax Return and such notice. The other party
shall notify the Filing Party of any reasonable objec-
tions the other party may have to any items set forth in
such Tax Return and to the Filing Party's calculations
regarding the other party's share of Straddle Period
Taxes, and the parties agree to consult and resolve in
good faith any such objection to the calculation of
Straddle Period Taxes and the filing of such Tax Returns
and to mutually consent to the filing of such Tax Re-
turns; provided, however, that in the event such resolu-
tion fails, each party agrees to submit any such Tax
Return to the Independent Accounting Firm, whose determi-
nation as to the calculation of Straddle Period Taxes and
the propriety of filing such Tax Return shall be binding,
and to share equally any and all expenses associated with
such consultation.
(iv) To the extent a Straddle Period Tax has
been paid in full by Seller or any Subsidiary (or an
affiliate of any of them) prior to the Closing (excluding
any estimated or like Tax payments), Purchaser shall pay
to Seller at Closing the amount of any such Taxes appor-
tioned to Purchaser under the first sentence of paragraph
4.5(a)(iii). With respect to all other Straddle Period
Taxes, Seller shall pay Purchaser (but only to the extent
not paid by Seller or any Subsidiary or an affiliate of
any of them) or Purchaser shall pay Seller, as the case
may be, the amount apportioned to the relevant party
under the first sentence of paragraph 4.5(a)(iii) the
later of the payment date of the Straddle Period Tax or
within fifteen (15) business days of receipt of the
notice described in Section 4.5(a)(iii) (or at such other
time as is mutually agreed by the parties) by Seller or
Purchaser, respectively. Seller and Purchaser shall
adjust the amount of Straddle Period Taxes apportioned
under the first sentence of paragraph 4.5(a)(iii) in the
event of a change in the amount of such Taxes due as a
result of any audit, examination, claim for refund or
otherwise and, subject to the provisions of this Section
4.5, make appropriate payments reflecting such adjust-
ments.
(b)(i) Seller shall be entitled to retain, or
receive payment from the Purchaser and any Subsidiary of
any refund or credit with respect to Taxes (including,
without limitation, refunds and credits arising by reason
of the carryover or carryback of any deduction, loss or
credit to any Pre-Closing Tax Period or Seller's portion
of any Straddle Period or the filing of an amended return
for any such periods) that are described as being the
responsibility of the Seller in Section 4.5(a). Purchas-
er shall promptly forward to or reimburse Seller for any
such refunds or credits due Seller after the receipt
thereof by Purchaser or the Subsidiaries.
(ii) Purchaser and the Subsidiaries shall be
entitled to retain, or receive payment from the Seller
of, any refund or credit with respect to Taxes that are
described as being the responsibility of Purchaser in
Section 4.5(a) and that are not due to Seller under
Section 4.5(b)(i). Seller shall promptly forward to or
reimburse Purchaser for any such refunds or credits due
Purchaser after the receipt thereof.
(c) Seller shall control the representation of
the interests of Seller and any Stock Subsidiaries in any
Tax audit or administrative or court proceeding relating
to Tax Returns described in Section 4.5(a) with respect
to which Seller may be liable for Taxes pursuant to this
Agreement; provided, however, that Seller will consult
with Purchaser regarding any Tax issue of a Stock Subsid-
iary that may affect the Tax liability of Purchaser, any
of its affiliates or any Stock Subsidiary for any period
ending after the Closing Date and that where a particular
Tax issue of a Stock Subsidiary would in the reasonable
opinion of Purchaser, have an adverse effect on the Tax
liability of Purchaser, any of its affiliates or any
Stock Subsidiary for any period ending after the Closing
Date, Purchaser shall have the right, at its discretion
after good faith consultation with Seller, to release
Seller from its obligation to indemnify Purchaser with
respect to such Tax issue by a written agreement mutually
agreed to by Seller and Purchaser and, in that event, to
participate in any such audit or proceeding and control
the representation of the interest of the relevant Stock
Subsidiary solely with respect to such Tax issue and to
employ counsel of its choice at its own expense for
purposes of such participation. Purchaser and Seller
mutually agree to consult and cooperate with each other
so that the transfer of control is effected in a manner
that will minimize any disruption to any such audit or
proceeding and so that Seller is not prejudiced in any
such audit or proceeding. Notwithstanding anything to
the contrary contained or implied in this Agreement,
without the prior approval of Purchaser, Seller shall not
agree to compromise any issue or claim arising in any
audit or proceeding covered by this Section 4.5(c) to the
extent that any such compromise would affect the Tax
liability of Purchaser, any of its affiliates, or any
Stock Subsidiary for any period ending after the Closing
Date (including a Straddle Period).
(d) Each party shall promptly notify the other
party in writing upon receipt by the notifying party, or
any affiliate of the notifying party, of notice of any
pending or threatened Tax audits or assessments relating
to Seller or any Asset Subsidiary (in each case only to
the extent Related to the Business) or any Stock Subsid-
iary, in each case for Pre-Closing Tax Periods and Strad-
dle Periods only.
(e) After the Closing Date, Purchaser and
Seller shall provide each other with such cooperation and
information relating to Seller or any Asset Subsidiary
(in each case only to the extent Related to the Business)
or Stock Subsidiary as either party reasonably may re-
quest in filing any Tax Return, determining any Tax
liability or a right to refund of Taxes, conducting or
defending any audit or other proceeding in respect of
Taxes or effectuating the terms of this Agreement. Any
information obtained under this Section 4.5(a) shall be
kept confidential, except as may be otherwise necessary
in connection with filing any Tax Return, amended return,
or claim for refund, determining any liability or a right
to refund of Taxes, or in conducting or defending any
audit or other proceeding in respect of Taxes. Purchaser
and Seller agree that the party requesting such coopera-
tion or information shall reimburse the other party for
the reasonable out-of-pocket costs and expenses incurred
in providing such cooperation or information. Notwith-
standing the foregoing, neither Seller nor Purchaser, nor
any of their affiliates, shall be required unreasonably
to prepare any document, or determine any information not
then in its possession, in response to a request under
this Section 4.5(e).
(f) All transfer, sales, use, recording, ad
valorem, real property transfer, real property convey-
ance, documentary, notarial, excise, value added, stamp
and other like Taxes, fees and expenses (the "Transfer
Taxes") which may be due or payable in connection with
the consummation of the Purchase, including without
limitation, fees and expenses in connection with the
transfer or the Intellectual Property, shall be paid and
borne by Purchaser and Seller equally, with the exception
of any tax imposed on the transfer of real property and
measured solely by the excess, if any, between the amount
of Aggregate Consideration (as hereinafter defined)
allocated to such real property and Seller's original
purchase price (or basis, if applicable) for such real
property (a "Real Property Transfer Gains Tax"), which
shall be paid and borne by Seller. Such payments shall
not be treated as either an increase or reduction in
Aggregate Consideration. To the extent that Buyer,
Seller or any Subsidiary is entitled to a refund of any
Transfer Taxes paid pursuant to this Section 4.5(f), the
party so entitled shall file for a refund of such Trans-
fer Taxes, which refund shall be shared equally by Seller
and Buyer; provided, however, that any refunds of Real
Property Transfer Gains Taxes shall be solely for the
account of the Seller. The party that applies for such
refund shall promptly pay over to the other party that
other party's portion of such refund upon receipt thereof
by the applying party (or any affiliate).
(g) On or before the Closing Date, Purchaser
and Seller shall (to the extent required by law) com-
plete, execute, deliver and verify any return, question-
naire, affidavit, resale certificate, certificate of
registration, or other document required in connection
with any Tax, including but not limited to Transfer
Taxes, relating to the sale of the Purchased Assets,
including any pre-filing documents (including, without
limitation, any filing required by the New York State
real property transfer gains tax provisions).
(h) Any indemnification payments made pursuant
to this Agreement, shall, to the extent permitted by
applicable law, be treated as an adjustment to the pur-
chase price.
(i) Prior to the Closing, the Purchaser and
the Seller shall agree to an allocation of the Aggregate
Consideration among the Purchased Assets. The Purchaser
and the Seller represent, warrant and agree that the fair
market values of the assets included in the Purchased
Assets will be determined through arm's length negotia-
tions, provided, however, that in no event shall the
amount allocated to New York state real property (includ-
ing, without limitation, land, buildings, fixtures and
improvements) exceed $6,000,000. Such allocation in any
event shall comply with the requirements of Section 1060
of the Code. The Seller and the Purchaser agree that, to
the extent permitted by applicable law, they shall file
all income tax returns and reports in accordance with and
based upon such allocation and shall take no position in
any income tax return, proceeding or audit which is
inconsistent with such allocation. As used in this
Section 4.5(i), the term "Aggregate Consideration" shall
mean the sum of the Purchase Price paid pursuant to this
Agreement and the amount of the Assumed Liabilities of
the Seller and the Asset Subsidiaries, each as adjusted
pursuant to this Agreement. Notwithstanding any other
provision of this Agreement, the foregoing agreement
shall survive the Closing Date without limitation. Each
of the Purchaser and the Seller shall timely file a
federal form 8594 in accordance with the requirements of
Section 1060 of the Code and the regulations thereunder.
(j) Seller shall furnish to the Purchaser such
information as is necessary for the application of the
incremental research credit provisions of Section
41(f)(3)(A) of the Code.
(k) With respect to that certain Profit & Loss
Pooling Agreement dated April 8, 1992 between Perkin-
Elmer Holding GmbH Uberlingen (PEH) and Perkin-Elmer
Metco GmbH Hattersheim (Metco Gmbh), Purchaser shall
promptly reimburse Seller for any payment made by PEH to
Metco GmbH pursuant to that agreement if such payments
are made after the Closing Date due to the requirements
of German law and the statutory audit. Any such reim-
bursement by Purchaser shall be considered an adjustment
to the Purchase Price. Seller shall cause PEH to prompt-
ly reimburse Metco GmbH, or Purchaser shall cause Metco
GmbH to reimburse PEH, as the case may be, for any amount
due to or from either Metco GmbH or PEH with respect to
the VAT account between PEH and Metco GmbH promptly after
the determination thereof and in any case prior to the
time for payment thereof.
4.6 Preservation of Records. The Purchaser
agrees that it shall cause to be preserved and kept the
records of the Seller Related to the Business delivered
to it hereunder for a period of six (6) years from April
15, 1995, or for any longer period as may be required by
applicable law or in connection with any ongoing litiga-
tion, and shall make such records (for the period of time
referred to above) and employees of the Purchaser (for an
unlimited period of time) available to the Seller as may
be reasonably required by the Seller in connection with
any legal proceedings involving, or governmental investi-
gations or tax examinations of, the Seller. In the event
the Purchaser wishes to destroy such records after that
time, it shall first give ninety (90) calendar days'
prior written notice to the Seller and the Seller shall
have the right at its option, upon notice given to the
Purchaser within said 90-day period, to take possession
of said records.
4.7 Employee Benefits and Related Matters.
(a) Covenants of the Purchaser. (i) Within a
reasonable period of time prior to Closing, the Purchaser
shall make offers of employment, which employment shall
be effective as of the Closing Date and subject to con-
summation at the Closing of the transactions contemplated
hereby, to (X) every employee of the Division who is on
the date hereof employed in the Business in the United
States and who is listed on Schedule 4.7(a)(1) (the
"United States Transferred Employees"), (Y) every em-
ployee of the Division who is on the date hereof employed
in the Business outside the United States by a Stock
Subsidiary or an Asset Subsidiary and who is listed on
Schedule 4.7(a)(1) (the "Foreign Transferred Employees"),
and (Z) every other employee hired by the Division in the
ordinary course of business from the date hereof to the
Closing to be employed by the Division in the United
States or in a foreign location and who will be listed on
an amendment to Schedule 4.7(a)(1) which will be deliv-
ered to the Purchaser prior to the Closing (the "New
Transferred Employees"). The United States Transferred
Employees, the Foreign Transferred Employees, and the New
Transferred Employees are referred to herein collectively
as the "Transferred Employees." Such offers of employ-
ment shall be at the job title and annual salary set
forth opposite the respective Transferred Employees'
names on Schedule 4.7(a)(1), as the same may be updated
by the Seller from time to time prior to the Closing. In
addition, as part of its offer of employment to all
Transferred Employees: (A) the Purchaser shall offer a
severance plan containing severance benefits payable upon
any termination of such Transferred Employee's employment
after the Closing as set forth in Schedule 4.7(a)(2)
hereto (the "Purchaser Severance Plan"); (B) the Purchas-
er shall offer such Transferred Employees such other
terms and conditions set forth on Schedule 4.7(a)(2)
hereto including the opportunity to participate in the
other plans, arrangements, commitments, benefits and
payroll practices (including severance, pension and
welfare plans) set forth on Schedule 4.7(a)(2); (C) the
Purchaser's medical plan shall not contain any exclusion
or limitation with respect to any pre-existing condi-
tions; (D) the Purchaser shall cause the Purchaser's
medical plan to recognize any out-of-pocket medical and
dental expenses incurred by Transferred Employees and
their eligible dependents prior to the Closing Date and
during the calendar year in which the Closing Date occurs
for purposes of determining the deductibles and out-of-
pocket maximums applicable to such Transferred Employees;
(E) the Purchaser shall credit each Transferred Employee
for time of service with the Division and the Seller for
purposes of eligibility, vesting and benefit accrual (in-
cluding vacation entitlement) under all such employee
benefit plans maintained by the Purchaser (including,
without limitation, the Purchaser Severance Plan); (F)
for a period of two years following the Closing Date, the
Purchaser will not reduce the benefits available under
the Purchaser Severance Plan nor the aggregate level of
employee benefits (when such benefits are considered as a
whole) offered to such Transferred Employees; and (G)
with respect to any Transferred Employee employed by the
Division outside the United States, the Purchaser shall
comply with all applicable legislation affecting such
employee's rights upon a transfer of a business. The
Purchaser will give each Transferred Employee an opportu-
nity to ask and have answered prior to the Closing any
questions such Transferred Employee may have regarding
the foregoing offer of employment and shall, if requested
by the Seller, provide written confirmation to the Seller
of such offers of employment.
(ii) Based upon (x) the Purchaser's review and
analysis of all information provided by the Seller con-
cerning the severance, pension, welfare and other em-
ployment plans and policies currently being provided by
the Seller to the United States Transferred Employees
(the "Seller's United States Plans"), (y) discussions
between the Purchaser's representatives and the Seller's
representatives concerning the Seller's United States
Plans, and (z) the Purchaser's review of the Seller's
United States Plans, the Purchaser believes that the
aggregate benefits to be provided by the Purchaser's
severance, pension, welfare and other employment plans
and policies to the United States Transferred Employees
following the Closing (the "Purchaser's United States
Plans") are comparable in the aggregate to the Seller's
United States Plans. The Purchaser agrees to offer the
Seller reasonable cooperation and consultation in connec-
tion with the Seller's supporting or defending the compa-
rability of the Purchaser's United States Plans, includ-
ing in connection with ordinary course communications
with the United States Transferred Employees (including
the introduction and explanation of the employee benefits
provided by the Purchaser); grievances or complaints by
the United States Transferred Employees in respect of
such comparability; and administrative or judicial pro-
ceedings commenced by a United States Transferred Employ-
ee in respect of such comparability. Such cooperation
shall include making available employees and records of
the Purchaser as reasonably requested by the Seller,
providing information and analyses prepared by the Pur-
chaser with respect to the Purchaser's comparability
analysis and offering reasonable consultation to the
Seller in connection with the Seller's defense of any
administrative or judicial proceeding or employee griev-
ance or complaint with respect to the comparability of
employee benefits. Notwithstanding the foregoing:
(1) the provisions of this paragraph (a)
shall not grant to any such persons any right to contin-
ued employment if the Purchaser elects to terminate any
such person's employment;
(2) the severance benefits offered to any
Transferred Employee and payable upon any termination of
such Transferred Employee after the Closing shall be as
set forth on the Purchaser Severance Plan;
(3) except as otherwise expressly provid-
ed herein, nothing contained in this Agreement shall be
construed to obligate the Purchaser to assume, provide,
sponsor, maintain or contribute to any employee benefit
plans, arrangements, commitments and payroll practices
(whether or not such plan, arrangement, commitment or
practice is an "employee benefit plan" as defined in
Section 3(3) of ERISA), including, without limitation,
with respect to sick leave, vacation pay, severance pay,
salary continuation for disability, consulting or other
compensation arrangements, retirement, deferred compensa-
tion, bonus, incentive compensation, stock purchase,
stock option, health including hospitalization, medical
and dental, life insurance, scholarship plans or programs
and "Multiemployer Plans" (as such term is defined by
Section 4001(a)(3) of ERISA), maintained by the Seller
for the benefit of any such Transferred Employees or to
which the Seller has contributed or is or was obligated
to make payments); and
(4) the Purchaser shall not be required
to offer employment to any employee of the Division who
is receiving either short-term or long-term disability
benefits under a short-term or long-term disability plan
of the Seller or a Subsidiary as of the Closing Date, and
such employee shall not be considered a Transferred
Employee, unless and until such employee is able to
resume active employment within one year after the Clos-
ing Date.
(b) Severance Liability of the Purchaser.
Notwithstanding any provisions of any severance or other
similar plan maintained by the Seller for the benefit of
any Transferred Employee, the Purchaser shall have no
liability for any severance or other similar payment
under any plan maintained by Seller to any Transferred
Employee to whom it makes an offer of employment in
conformity with the terms of Section 4.7(a), nor shall
the Purchaser have any liability to the Seller for any
severance or other similar payment to any Transferred
Employee to whom the Purchaser makes such an offer of
employment. If the Purchaser fails to make an offer of
employment in conformity with Section 4.7(a) to any
Transferred Employee and if, by reason of such failure,
the Seller is subject to an obligation for a severance or
other similar payment to such Transferred Employee, the
Purchaser shall discharge such obligation either by
making such payment directly to the Transferred Employee
or by reimbursing the Seller for such payment by the
Seller. Notwithstanding the foregoing, the Purchaser
shall be liable for any severance or other similar pay-
ment required to be made to any Transferred Employee
under the terms of the Purchaser Severance Plan. To the
extent that any employment termination pay has been
funded in Italy, the Seller shall transfer to the Pur-
chaser the portion of the fund attributable to the Trans-
ferred Employees employed by the Division in Italy to
whom offers of employment have been made in conformity
with Section 4.7(a) and accepted.
(c) For purposes of allocating responsibility
for claims incurred by Transferred Employees and their
covered dependents between the Seller's welfare plans and
the Purchaser's welfare plans, the following rules shall
apply (for purposes of this paragraph (c), references to
the Seller and its plans shall, where appropriate, be
references to the applicable Subsidiary and its plans):
(i) The Seller's short-term and long-term dis-
ability plans shall continue to be responsible for long-
term disability benefits payable to any Transferred
Employee who is receiving short-term or long-term dis-
ability benefits as of the Closing Date, until such time
as such Transferred Employee resumes active employment
with the Purchaser. The Purchaser's short-term and long-
term disability plans shall be responsible for all other
disability benefits payable to Transferred Employees on
and after the Closing Date. Any period of short-term
disability incurred by a Transferred Employee under the
Purchaser's short-term disability plan shall count to-
wards the waiting period for long-term disability bene-
fits under the Purchaser's long-term disability plan.
(ii) With respect to all other welfare bene-
fits, the Seller's plans shall be responsible for claims
incurred by Transferred Employees and their covered
dependents prior to the Closing Date, and the Purchaser's
plans shall be responsible for claims incurred on and
after the Closing Date. A claim shall be deemed incurred
when an individual obtains professional services, equip-
ment or prescription drugs covered by a medical, pre-
scription drug, dental or vision benefit plan, upon death
in the case of a life insurance plan, and as of the date
of the accident in the case of an accidental death and
dismemberment plan.
(iii) Notwithstanding the foregoing, the
Seller's plans shall be responsible for the cost of all
professional services, equipment and prescription drugs
provided during a hospital stay or similar confinement of
a Transferred Employee or his or her covered dependent
that begins prior to the Closing Date and ends after the
Closing Date (subject to the terms and conditions of the
Seller's applicable plans), and the Purchaser's plans
shall be responsible for the cost of all professional
services, equipment and prescription drugs obtained by
such Transferred Employee or covered dependent after the
termination of such hospital stay or similar confinement
(subject to the terms and conditions of the Purchaser's
applicable plans).
(d) No Third-Party Beneficiaries. No provi-
sion of this Section 4.7 shall create any third-party
beneficiary rights in any person or organization, includ-
ing, without limitation, employees or former employees
(including any beneficiary or dependent thereof) of the
Seller or the Purchaser or any of their respective affil-
iates, unions or other representatives of such employees
or former employees, or trustees, administrators, partic-
ipants or beneficiaries of any employee benefit plan, and
no provision of this Section 4.7 shall create such third-
party beneficiary rights in any such person or organiza-
tion in respect of any benefits that may be provided,
directly or indirectly, under any employee benefit plan
or arrangement, including the currently existing plans of
the Seller or the Purchaser.
4.8 Confidentiality. The terms of the letter
agreement dated as of September 14, 1993 (the "Confiden-
tiality Agreement") between the Seller and the Purchaser
are incorporated by reference herein and shall apply with
full force and effect to the Purchaser for the term set
forth therein; provided, however, that after the Closing,
the Purchaser shall be free to use any confidential
information Related to the Business in any manner that it
desires.
4.9 Use of Name. On the Closing Date, the
Purchaser shall cease using the name "Perkin-Elmer" or
any variation thereof in connection with the operation of
the Business or as part of any corporate, partnership or
assumed name and shall file such documents as are neces-
sary and appropriate to change any such corporate, part-
nership or assumed name to a dissimilar name and shall
promptly assume a dissimilar name for all purposes of the
Business; provided, however, that for a period of one
year from the Closing Date, the Purchaser may sell and
distribute (a) all inventory existing on the Closing Date
bearing the name "Perkin-Elmer" and (b) any inventory
manufactured after the Closing Date with labels bearing
the name "Perkin-Elmer" which were in stock or ordered on
the Closing Date.
4.10 Transition Services. For a period of six
(6) months following the Closing Date, the Seller shall
make available to the Purchaser those support and admin-
istrative services, including, without limitation, com-
puter and data processing services and any software
associated therewith, currently being provided by the
Seller to the Business on a basis substantially consis-
tent with the Seller's recent historical practice re-
quested by the Purchaser. The Purchaser will reimburse
the Seller for the cost (including without limitation,
any documented surcharges imposed by outside vendors) of
such services promptly upon (but not more than thirty
(30) calendar days following) the receipt of an invoice
from the Seller therefor.
4.11 Current Information. During the period
from the date of this Agreement to the Closing Date, the
Seller will notify the Purchaser of any material change
in the normal course of business or operations of the
Business and the receipt of any governmental complaints,
formal investigations or hearings (or communications
indicating that the same may be contemplated), or the
institution or written threat or settlement of material
litigation, in each case Related to the Business, and to
keep the Purchaser fully informed of such events.
4.12 Disclosure Supplements. From time to
time prior to the Closing Date, the Seller will promptly
supplement or amend the Schedules made a part of this
Agreement with respect to any matter hereafter arising
which, if existing or occurring at or prior to the date
of this Agreement, would have been required to be set
forth or described in a Schedule hereto or which is
necessary to correct any information in a Schedule hereto
or in any representation and warranty of the Seller which
has been rendered inaccurate thereby. For purposes of
determining the accuracy of the representations and
warranties of the Seller contained in this Agreement in
order to determine the fulfillment of the conditions set
forth in Section 5.2(a), the Schedules delivered by the
Seller shall be deemed to include only that information
contained therein on the date of this Agreement and shall
be deemed to exclude any information contained in any
subsequent supplement or amendment thereto. For purposes
of determining any liability of the Seller hereunder or
otherwise after the Closing, the Schedules delivered
hereunder shall be deemed amended by any information
supplied by the Seller as contemplated by this Section
4.12.
4.13 Covenant Not to Compete. (a) The Seller
agrees that it will not, for a period of five years fol-
lowing the Closing Date, (i) directly or indirectly own,
manage, operate, finance or participate in the ownership,
management, operation or financing of, any business which
is competitive with the Business, (ii) engage in any
other manner in any business which is competitive with
the Business, or (iii) induce or attempt to induce any
customers, suppliers or distributors of the Division to
terminate their relationships with the Business; pro-
vided, however, that the Seller's compliance with Section
4.10 shall not be deemed a breach of this Section 4.13.
(b) The Seller agrees that for a period of two
years following the Closing Date, it will, and it will
cause its officers, directors and employees to, keep se-
cret and retain in confidence, and not at any time or for
any reason, directly or indirectly (including but not
limited to, acting by, through or with any subsidiary,
affiliate, or any other person, firm, corporation, joint
venture or agent), use, publish or disclose, any non-pub-
lic and confidential information Related to the Business,
except as required by law or the rules of an applicable
stock exchange, and further, that the Seller will not use
or exploit the same for its own benefit or with or for
the benefit of others. Notwithstanding the foregoing
provisions of this Section 4.13(b), the Seller agrees
that at all times following the Closing Date, it will,
and it will cause its officers, directors and employees
to, keep secret and retain in confidence, and not at any
time or for any reason, directly or indirectly (including
but not limited to, acting by, through or with any sub-
sidiary, affiliate, or any other person, firm, corpora-
tion, joint venture or agent), use, publish or disclose,
any non-public and confidential information with respect
to Intellectual Property except as required by law or the
rules of an applicable stock exchange. For the purposes
of this Agreement, non-public and confidential informa-
tion shall include, without limitation, customer lists,
marketing plans and strategies, market studies and data,
pricing policies and lists, manufacturing methods, speci-
fications, processes and procedures, sources of supply,
designs, the terms of contracts or agreements, know-how,
trade secrets or any other information or data which is
not public and of a confidential nature, Related to the
Business.
(c) The Seller agrees that it will not, for a
period of two years following the Closing Date, directly
solicit the employment of any person who is at the time
employed by the Business without the Purchaser's prior
written consent.
4.14 Title Commitment and Survey. The Pur-
chaser has ordered (at the cost and expense of the Pur-
chaser) title commitments (as amended from time to time,
the "Title Commitments") for each Owned Real Property
located in the United States issued by Chicago Title
Insurance Company (the "Title Company"). The Purchaser
and the Seller shall mutually cooperate to obtain (at the
sole cost and expense of the Purchaser) (i) updates of
each Title Commitment from time to time prior to the
Closing Date, and (ii) a survey or an updated survey de-
picting each Owned Real Property located in the United
States, with an ALTA/ASCM certification or its equivalent
to Purchaser and the Title Company and otherwise in form
reasonably satisfactory to the Purchaser and its counsel
and the Title Company, prepared by a surveyor reasonably
acceptable to the Purchaser licensed to practice in the
state where such property is located (the "Survey"). If
a Title Commitment or update shall reveal one or more
defects to title not included as Permitted Encumbrances
(the "Unpermitted Encumbrances"), Purchaser shall prompt-
ly notify Seller of such Unpermitted Encumbrances and
Seller shall (a) cure such Unpermitted Encumbrances which
can be cured with the payment of money only ("Monetary
Defects"); provided that the Seller shall not be obligat-
ed to spend in excess of $5,000,000 in the aggregate (the
"Monetary Defects Cure Cap") to cure such Monetary De-
fects, except that the foregoing dollar limit shall not
apply to Monetary Defects which were voluntarily placed
upon the Owned Real Property by the Seller; and (b) shall
use reasonable efforts to cure the Unpermitted Encum-
brances which cannot be cured with the payment of money
only ("Non-Monetary Defects") prior to Closing. If,
prior to the Closing, Seller is unable to cure the Non-
Monetary Defects or is unable or unwilling to cure such
Monetary Defects in excess of the Monetary Defects Cure
Cap (the "Extraordinary Monetary Defects"), Purchaser
shall have the option to either (i) consummate the trans-
action contemplated by this Agreement, except that Pur-
chaser shall not be obligated to acquire the particular
Owned Real Property affected by the Non-Monetary Defects
and there shall be an adjustment to the Purchase Price
equal to the value of that particular Owned Real Property
as allocated by the parties, or (ii) consummate the
transaction contemplated by this Agreement, including,
without limitation, the acquisition of the particular
Owned Real Property affected by the Non-Monetary Defects
and/or the Extraordinary Monetary Defects with no adjust-
ment to the Purchase Price, and such Non-Monetary Defects
and/or such Extraordinary Monetary Defects shall be
deemed to be Permitted Encumbrances.
4.15 Releases of Guarantees. The Purchaser
agrees that it will either (i) cause the Seller to be re-
leased as of the Closing Date from the guarantees listed
on Schedule 4.15 hereto or (ii) indemnify the Seller with
respect to any such guarantee from which the Seller is
not released as of the Closing Date.
4.16 Further Assurances. At any time or from
time to time after the Closing, either party shall, at
the request of the other party, execute and deliver any
further instruments and documents and take such further
action as such party may reasonably request, in order to
consummate and make effective the transactions contem-
plated by this Agreement.
4.17 Environmental Work. Notwithstanding
Section 6.4, Seller agrees that it will commence promptly
after execution of this Agreement, and diligently pursue
beyond the Closing Date, if necessary, at its own ex-
pense, the environmental work with respect to the Real
Property listed on Schedule 4.17 unless Seller determines
on or prior to the Closing Date in its sole discretion
that the cost of the remediation required as a result of
the results of the samplings and soil borings referred to
on the Schedule is material, in which case its sole
option shall be to terminate this Agreement.
ARTICLE V
Conditions to Closing
5.1 Conditions to Each Party's Obligation to
Close. The respective obligations of the Seller and the
Purchaser to consummate the Purchase shall be subject to
the satisfaction, at or prior to Closing, of each of the
following conditions:
(a) The applicable waiting periods under the
HSR Act and the GWB Act shall have expired, all authori-
zations, approvals, consents and waivers required to be
obtained from, and notices and filings required to be
given to or made with, any government or governmental
agency in connection with the Purchase shall have been
obtained, given or made, the Committee on Foreign Invest-
ment in the United States ("CFIUS") shall have determined
not to investigate the transactions contemplated hereby
under the Exon-Florio Amendment or it otherwise shall
have provided assurances sufficient to satisfy the Pur-
chaser, in its reasonable judgment, that the transactions
contemplated hereby will not be so investigated under the
Exon-Florio Amendment and the GWB Act.
(b) All third party authorizations, approvals,
consents, waivers and notices required in connection with
the Purchase shall have been obtained, given or made
except for such authorizations, approvals, consents,
waivers and notices which, in the aggregate, will not
have any significant adverse affect on the Business.
(c) No court or other governmental body or
public authority of competent jurisdiction shall have
issued an order which shall then be effective restraining
or prohibiting the consummation of the Purchase.
(d) No action, suit, proceeding or investiga-
tion by or before any court, administrative agency or
other governmental authority shall have been instituted
(i) to restrain, prohibit or invalidate the transactions
contemplated hereby, (ii) which seeks material or sub-
stantial damages by reason of completion of such transac-
tion, or (iii) which will materially affect the right of
the Purchaser to own, operate or control, after the
Closing Date, the Business or any of the Purchased As-
sets.
(e) Affiliates of each of the Seller and the
Purchaser shall have executed and delivered agreements
containing mutually satisfactory terms and conditions
(not inconsistent with the terms hereof) with respect to
the sale of the capital stock of each of the Stock Sub-
sidiaries, the sale of the Purchased Assets owned or held
by the Asset Subsidiaries and the sale of the Joint Ven-
tures to the appropriate affiliates of the Purchaser
(including the payment of the portion of the Purchase
Price allocable to the capital stock of the Stock Subsid-
iaries, Purchased Assets or Joint Venture by such Affil-
iate of the Purchaser). Without limiting the foregoing,
the agreement governing the sale of the capital stock of
Metco GmbH, (the "Metco GmbH Purchase Agreement") shall
be independent of and separate from this Agreement; and
the purchase price for the capital stock of Metco GmbH
shall be separately stated in the Metco GmbH Agreement
(the "Metco GmbH Purchase Price"); provided, however, the
Purchase Price for the Purchased Assets provided for in
this Agreement shall include the Metco GmbH Purchase
Price and payment of the Purchase Price hereunder shall
constitute payment of the Metco GmbH Purchase Price.
5.2 Conditions to Obligation of the Purchaser
to Close. The obligation of the Purchaser to consummate
the Purchase shall be subject to the satisfaction, at or
prior to Closing, of each of the following conditions:
(a) The representations and warranties of the
Seller contained in this Agreement shall be true and cor-
rect in all material respects on and as of the Closing
Date as though restated and made at the Closing, except
for changes specifically contemplated by this Agreement,
and the Seller shall have delivered to the Purchaser a
certificate to the foregoing effect, signed on behalf of
the Seller by a duly authorized officer of the Seller and
dated as of the Closing Date.
(b) The Seller shall have duly performed or
complied in all material respects with all of the obliga-
tions to be performed or complied with by it under the
terms of this Agreement on or prior to the Closing Date,
and the Seller shall have delivered to the Purchaser a
certificate to the foregoing effect, signed on behalf of
the Seller by a duly authorized officer of the Seller and
dated as of the Closing Date.
(c) The Purchaser shall have obtained the ALTA
Owner's Policies of Title Insurance (1990) contemplated
by Section 4.14 insuring title to the Owned Real Property
without exceptions other than Permitted Encumbrances.
5.3 Conditions to Obligation of the Seller to
Close. The obligation of the Seller to consummate the
Purchase shall be subject to the satisfaction, at or
prior to Closing, of each of the following conditions:
(a) The representations and warranties of the
Purchaser contained in this Agreement shall be true and
correct in all material respects on and as of the Closing
Date as though restated and made at the Closing, except
for changes specifically contemplated by this Agreement,
and the Purchaser shall have delivered to the Seller a
certificate to the foregoing effect, signed on behalf of
the Purchaser by a duly authorized officer of the Pur-
chaser and dated as of the Closing Date.
(b) The Purchaser shall have duly performed or
complied in all material respects with all of the obliga-
tions to be performed or complied with by it under the
terms of this Agreement on or prior to the Closing Date,
and the Purchaser shall have delivered to the Seller a
certificate to the foregoing effect, signed on behalf of
the Purchaser by a duly authorized officer of the Pur-
chaser and dated as of the Closing Date.
(c) The Seller shall have conducted the sam-
pling and soil borings required pursuant to Schedule 4.17
hereof, and shall have determined, in its sole discre-
tion, that based on the nature and extent of contamina-
tion detected, the cost of such remediation is not mate-
rial.
ARTICLE VI
Indemnity
6.1 Survival of Representations. Each repre-
sentation and warranty of the Purchaser and the Seller
made pursuant to this Agreement shall survive for a
period of eighteen months following the Closing Date re-
gardless of any investigation made at any time by or on
behalf of either party, and thereafter neither party may
make any claim for any breach of such representations and
warranties. Notwithstanding the foregoing, the represen-
tations and warranties set forth in Sections 3.1(a),
3.1(b), 3.1(q), 3.2(a) and 3.2(b) shall survive in perpe-
tuity and the representations and warranties set forth in
Section 3.1(y) shall survive until the expiration of the
statute of limitations with respect to the matters set
forth therein. All statements contained in this Agree-
ment or in any schedule, certificate, list or other
writing or document delivered or provided pursuant to
this Agreement shall constitute representations and
warranties as such term is used in this Agreement. For
purposes of indemnification claims pursuant to this
Article VI, every representation and warranty made by
either party shall be subject to every schedule, qualifi-
cation and disclosure, and every amendment and supplement
thereof, made with respect to such representation and
warranty at any time on or prior to the Closing Date.
6.2 Indemnity by the Seller. Upon the terms
and subject to the conditions of this Article VI, the
Seller shall indemnify, defend and hold harmless the Pur-
chaser and its affiliates and their respective directors,
officers and employees (collectively, the "Indemnified
Purchaser Group") from and against all demands, claims,
actions or causes of action, assessments, losses, damag-
es, liabilities, amounts paid in settlement, costs and
expenses, including, without limitation, interest, penal-
ties and attorneys', consultants and expert witness fees,
disbursements and expenses (collectively, "Losses"),
asserted against, resulting to, or imposed upon or in-
curred by any member of the Indemnified Purchaser Group
directly or indirectly by reason of or resulting from:
(i) the untruth, inaccuracy, breach or nonful-
fillment of any representation or warranty of the Seller
contained in this Agreement;
(ii) the breach or nonperformance by the Sell-
er of any covenant, commitment, undertaking or agreement
contained in this Agreement or in any agreement or in-
strument delivered pursuant to this Agreement;
(iii) any Excluded Liability; provided that
with respect to any Losses relating to any individual
liability a portion of which is an Excluded Liability and
the balance of which is an Assumed Liability (because the
underlying liability is a Product Liability), the Seller
shall be responsible for only that percentage of all
Losses relating to such liability equal to the ratio of
the amount of the Excluded Liability to the sum of the
amounts of the Excluded Liability and the Assumed Liabil-
ity, and the Purchaser shall be responsible for the
balance of such Losses; and
(iv) any Unknown Liability; provided that the
Seller shall be responsible for only
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission]
of the total
amount of all Losses relating to any individual Unknown
Liability and the Purchaser shall be responsible for the
remaining
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission]
of such Losses and provided, further that
the indemnity set forth in this clause (iv) shall termi-
nate on the sixth anniversary of the Closing Date.
6.3 Indemnity by the Purchaser. Upon the
terms and subject to the conditions of this Article VI,
the Purchaser shall indemnify, defend and hold harmless
the Seller and its affiliates and their respective direc-
tors, officers and employees (collectively, the "Indemni-
fied Seller Group") from and against all Losses asserted
against, resulting to, or imposed upon or incurred by any
member of the Indemnified Seller Group directly or indi-
rectly by reason of or resulting from:
(i) the untruth, inaccuracy, breach or nonful-
fillment of any representation or warranty of the Pur-
chaser contained in this Agreement;
(ii) the breach or nonperformance by the Pur-
chaser of any covenant, commitment, undertaking or agree-
ment contained in this Agreement or in any agreement or
instrument delivered pursuant to this Agreement;
(iii) any Assumed Liability; provided that:
(i) until the sixth anniversary of the Closing Date, the
Purchaser shall be responsible for only
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission]
of the total amount of all Losses related to any individual Unknown
Liability, and the Seller shall be responsible for the remaining
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission]
of such Losses; thereafter, the Purchaser
shall be responsible for 100% of such Losses; and (ii)
with respect to any Losses relating to any individual
liability a portion of which is an Assumed Liability and
the balance of which is an Excluded Liability (because
the underlying liability is a Product Liability), the
Purchaser shall be responsible for only that percentage
of all Losses relating to such liability equal to the
ratio of the amount of the Assumed Liability to the sum
of the amounts of the Assumed Liability and the Excluded
Liability, and the Seller shall be responsible for the
balance of such Losses;
(iv) any liability arising out of the opera-
tion of the Business by the Purchaser after the Closing
or the use of the Purchased Assets by the Purchaser after
the Closing, provided that the indemnity set forth in
this clause (iv) shall not apply to Excluded Liabilities,
Environmental Liabilities, Product Liabilities or Unknown
Liabilities; and
(v) any liability arising with respect to the
Purchaser's use of the "Perkin-Elmer" name pursuant to
Section 4.9 hereof.
6.4 Environmental Indemnification. In addi-
tion to the parties' other obligations under this Article
VI and subject to the provisions set forth below, the
Seller and Purchaser agree to indemnify, defend and hold
harmless each other from and against all Losses which may
at any time during a period of fifteen years after the
Closing Date be imposed upon, incurred by, or asserted or
awarded against, the other based upon, arising out of or
otherwise in respect of any Excluded Environmental Lia-
bilities (in the case of the Seller as indemnitor) and
any Assumed Environmental Liabilities (in the case of the
Purchaser as indemnitor). For purposes of Section 6.4,
Losses shall include, without limitation, the costs of
any Remedial Action but shall exclude any costs incurred
by Seller pursuant to the provisions of Section 4.17.
The parties' obligations under this Section 6.4 shall
expire on the fifteenth anniversary of the Closing Date
and thereafter, all such Losses as described in this
Section 6.4 shall be the sole obligation of the Purchas-
er. In the event of a conflict between this Section 6.4
and any of the other Sections of Article VI, this Section
6.4 shall control.
6.5 Procedures Relating to Environmental
Indemnification. In addition to the parties' other
obligations under this Article VI, the following provi-
sions shall apply and in the event of a conflict or
ambiguity between this Section 6.5 and other Sections of
Article VI, this Section 6.5 shall control.
(a) The Seller and Purchaser agree, so long as
they each comply with their obligations to indemnify
pursuant to Section 6.4, to reasonably cooperate with
each other in managing and controlling all actions, in-
cluding, without limitation, the defense of Environmental
Claims and the conduct of Remedial Actions, undertaken in
connection with their obligations to indemnify pursuant
to Section 6.4. In the event of an asserted Environmen-
tal Claim, Seller and Purchaser shall provide their own
defense each at their own cost and expense unless other-
wise agreed by the parties.
(b) With respect to each condition requiring
Remedial Action pursuant to Section 6.4, the Purchaser
and Seller shall cooperate to undertake such Remedial
Action as is reasonably necessary to achieve compliance
with applicable Environmental Laws in effect on the
Closing Date, including but not limited to, retaining an
environmental professional that is acceptable to both
Purchaser and Seller. Purchaser and Seller's obligations
under this Section 6.5 shall expire upon the receipt of
either (i) a written statement by a governmental body
with jurisdiction over the condition to the effect that
compliance with such applicable Environmental Laws has
been achieved or no further action is required under such
applicable Environmental Laws or (ii) a written statement
of an environmental professional mutually acceptable to
the Purchaser and the Seller to the same effect. In the
event applicable Environmental Laws are amended or re-
vised after the Closing Date, the Seller's obligations
hereunder shall be limited to performance of Remedial
Action only to the extent necessary to comply with appli-
cable Environmental laws as in effect on the Closing Date
and, in such case, the Seller shall deliver to the Pur-
chaser a written opinion, addressed to the Purchaser, of
an environmental professional that such compliance has
been achieved or that no further action is required to
comply with applicable Environmental Laws as in effect on
the Closing Date.
(c) To the extent that the Purchaser or any
affiliate is the occupant of the Real Property, the Pur-
chaser will cooperate and will cause such affiliate to
cooperate and, during normal business hours or at such
other times as may be reasonably acceptable to the Pur-
chaser, permit access to any entry upon the Real Property
by the Seller as reasonably necessary to conduct any
action in satisfaction of the Seller's obligations to
indemnify pursuant to Section 6.5.
(d) The Purchaser and Seller shall promptly
provide to each other copies of all scopes of work, final
reports, correspondence with any governmental body and
sampling data related to, or which result from, any
Remedial Action at the Real Property and the Seller and
Purchaser, as the case may be, shall each be given a
reasonable opportunity to provide to the other written
comments to such documents.
(e) As between the Purchaser and the Seller,
the party providing indemnification pursuant to this
Section 6.4 shall have no obligation to do so to the
extent a written notice of claim has not been received on
or before the fifteenth anniversary of the Closing Date.
6.6 Indemnification Procedure. The obliga-
tions and liabilities of the Seller and the Purchaser, as
the case may be, pursuant to Sections 6.2, 6.3, 6.4 and
6.5, respectively (the indemnifying party being herein
referred to as the "Indemnifying Party" and the indemni-
fied group being referred to as the "Indemnified Group"),
with respect to claims by third parties resulting in
Losses that are subject to the indemnities in Sections
6.2, 6.3, 6.4, and 6.5 (individually, a "Third Party
Claim" and collectively, "Third Party Claims") shall be
subject to the following terms and procedures:
(i) The member of the Indemnified Group to whom
such Third Party Claim relates will give the Indemnifying
Party prompt notice of such Third Party Claim, and the
Indemnifying Party will assume the defense thereof by
representatives chosen by it; provided that the Indemni-
fied Group or the member thereof against which such Third
Party Claim has been asserted shall be entitled to par-
ticipate in the defense of such Third Party Claim and to
employ counsel at its own expense to assist in the han-
dling of such Third Party Claim.
(ii) If the Indemnifying Party, within a rea-
sonable time after notice of any such Third Party Claim,
fails or elects not to assume the defense thereof, the
Indemnified Group or the member thereof against which
such Third Party Claim has been asserted shall have the
right to undertake the defense, compromise or settlement
of such Third Party Claim on behalf of and for the ac-
count and at the risk of the Indemnifying Party, subject
to the right of the Indemnifying Party to assume the
defense of such Third Party Claim at any time prior to
the settlement, compromise or final determination there-
of. Neither the Indemnifying Party nor the Indemnified
Group shall settle or compromise any Third Party Claim
without the prior consent of the other (which consent
will not be unreasonably withheld).
(iii) For all purposes of this Section 6.6, in
the case of any Third Party Claim asserting or alleging
an Unknown Liability or a Product Liability (other than a
Known Product Liability), the Purchaser shall be deemed
the Indemnifying Party and the Seller group shall be
deemed the Indemnified Group, whether such Third Party
Claim is asserted against the Purchaser or the Seller but
subject, however to the rights of any insurance carrier
under the Seller's insurance policies. In such cases the
party against whom the Third Party Claim is asserted
shall notify the other, and the Purchaser shall assume
the defense thereof by representatives chosen by it. All
Losses resulting from any such Third Party Claim shall be
borne equally by the Purchaser and the Seller in the same
proportion as their respective responsibilities for the
liability giving rise to the Third Party Claim bear to
one another notwithstanding whichever of them assumes the
defense thereof. The party which assumes the defense of
any such Third Party Claim shall be entitled to be reim-
bursed on a regular, periodic basis by the other party
for the applicable percentage of the Losses incurred in
connection with the defense of such Third Party Claim, as
such Losses are incurred.
6.7 Limitations on Indemnification. Neither
party hereto shall have any liability to the other in
respect of any claim for indemnification of Losses pursu-
ant to this Article VI for the breach of any representa-
tion or warranty contained herein until (and then only to
the extent that) the Losses incurred by such Indemnified
Group as a result of all such breaches of representations
and warranties exceed an aggregate total of
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission]
and shall have no further obligation in respect of such
Losses at such time as it shall have made aggregate
payments equal to the amount of
[material at this point has been
omitted pursuant to a request for confidential treatment under
the Freedom of Information Act and has been filed separately with
the Securities and Exchange Commission] million.
6.8 Indemnity Not Exclusive Remedy. Nothing
contained in this Agreement shall prevent any party
hereto from seeking and obtaining specific performance by
the other party hereto of any of its obligations under
this Agreement or from seeking and obtaining injunctive
or other equitable relief against the other party's
activities in breach of this Agreement or any other forms
of relief or other remedies which may be available to it,
either at law or in equity; provided, however, in the
absence of actual or constructive fraud the exclusive
remedy for breaches of representations and warranties set
forth in this Agreement is indemnification provided for
in Article VI.
ARTICLE VII
Termination
7.1 Termination. Notwithstanding anything in
this Agreement to the contrary, this Agreement may be
terminated only (a) by the mutual written consent of the
parties to this Agreement, (b) by the Purchaser or the
Seller if, for any reason (other than breach of this
Agreement by the terminating party), the Closing has not
occurred (or cannot occur) on or prior to August 31,
1994, (c) by the Seller pursuant to Section 4.17 hereof,
or (d) by either party, on written notice to the other
party, upon material breach of any covenant, representa-
tion or warranty contained in this Agreement by the non-
terminating party which has rendered the satisfaction of
any condition to the obligations of the breaching party
impossible and such violation or breach has not been
waived by the terminating party; provided that the non-
terminating party is first given notice of such breach
and fails to remedy, or commit to remedying, such breach
within ten (10) days after receipt of such notice.
7.2 Effect of Termination. If this Agreement
is terminated pursuant to Section 7.1, this Agreement,
other than with respect to the Purchaser's obligations
under Section 4.4 and the Purchaser's and the Seller's
obligations under Sections 4.8 and 8.1 hereof, shall
thereafter have no effect, except that termination of
this Agreement will not relieve either party of any
liability for breach of any agreements hereunder occur-
ring prior to such termination, provided that no supple-
ment or amendment to any of the Schedules delivered by
the Seller pursuant to Section 4.12 shall furnish a basis
for liability of the Seller in the event that this Agree-
ment is terminated.
ARTICLE VIII
Miscellaneous
8.1 Expenses. Except as otherwise specifical-
ly provided herein, each party hereto shall bear its own
expenses incurred in connection with the preparation and
execution of this Agreement and the consummation of the
Purchase.
8.2 Public Communications. Except as may be
required by applicable law or the rules of any applicable
stock exchange, neither the Seller nor the Purchaser nor
any of their respective affiliates shall issue any press
release or other public communications relating to this
Agreement or the Purchase without the prior written con-
sent of the other party hereto. In the event that any
such press release or other public communication shall be
required, the party required to issue such release or
communication shall consult in good faith with the other
party hereto with respect to the form and substance of
such release or communication prior to the public dissem-
ination thereof.
8.3 Notices. All notices, requests, demands
and other communications required or permitted hereunder
shall be in writing and shall be delivered personally or
sent by telecopier or by a nationally recognized over-
night courier, postage prepaid, and shall be deemed to
have been duly given when so delivered personally or sent
by telecopier, with receipt confirmed, or one (1) busi-
ness day after the date of deposit with such nationally
recognized overnight courier. All such notices, requests,
demands and other communications shall be addressed to
the respective parties at the addresses set forth below,
or to such other address or person as any party may
designate by notice to the other party in accordance
herewith:
If to the Seller: The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, CT 06859-0313
Attn.: Corporate Secretary
Telecopier No.: (203) 761-5000
If to the Purchaser: Sulzer Inc.
200 Park Avenue
New York, NY 10166-0068
Attn: Chief Financial
Officer
Telecopier No.: (212) 370-1138
8.4 Amendments; Waivers. This Agreement may
not be changed orally and no waiver of compliance with any
provision or condition hereof and no consent provided for
herein shall be effective unless evidenced by an instru-
ment in writing duly executed by the proper party. Either
party may at any time waive compliance by the other party
with any covenant or condition contained in this Agreement
only by written instrument executed by the party waiving
such compliance. No such waiver, however, shall be deemed
to constitute the waiver of any such covenant or condition
in any other circumstance or the waiver of any other
covenant or condition.
8.5 Section Headings. The section and para-
graph headings contained in this Agreement are for refer-
ence purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
8.6 Counterparts. This Agreement may be exe-
cuted in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute one and the same instrument.
8.7 Assignment. Except as provided in the
following sentence, this Agreement may not be assigned
prior to the Closing, by operation of law or otherwise,
and any attempt to do so shall be void. The Purchaser may
assign its rights under this Agreement in whole or in part
to an affiliate or a wholly-owned subsidiary of the Pur-
chaser; provided, however, that in such event, the Pur-
chaser shall remain fully liable for the fulfillment of
all of its obligations hereunder. This Agreement shall be
binding upon and inure to the benefit of successors and
assigns of the parties hereto. No assignment by any party
of any obligations under this Agreement shall release the
assignor from such obligations without the written consent
of the other party hereto.
8.8 Bulk Sales. The parties hereto agree to
waive compliance with any bulk sales laws adopted by each
of the jurisdictions in which Purchased Assets are located
to the extent, if any, that such laws are applicable to
the Purchase. The Seller shall indemnify and hold harm-
less the Purchaser against any and all liabilities which
may be asserted by third parties against the Purchaser as
a result of noncompliance with any such bulk sales laws.
8.9 Governing Law. This Agreement shall be
governed by, and construed and enforced in accordance
with, the internal laws of the State of New York.
8.10 Jurisdiction. The Purchaser and the
Seller hereby agree that any legal action or proceeding by
either of them against the other arising out of or based
upon this Agreement, the agreements, instruments and other
documents delivered in connection herewith, or the trans-
actions contemplated hereby or thereby, shall be brought
in the courts of the State of New York or the United
States of America sitting in the State of New York, and,
by execution and delivery of this Agreement, the Purchaser
and the Seller accept and consent, generally and uncondi-
tionally, to the jurisdiction of such courts and agree
that such jurisdiction shall be exclusive, unless waived
by both the Purchaser and the Seller in writing. The
Purchaser and the Seller irrevocably consent to the ser-
vice of process in any action or proceeding in such courts
by any means legally permissible, including, without
limitation, by the mailing of such process, postage pre-
paid, to either of them at the addresses set forth in this
Agreement, such service by mail to become effective upon
the earlier of (a) receipt of said mailing or (b) any
earlier date permitted by applicable law. The Purchaser
and the Seller hereby waive any right to stay or to dis-
miss any action or proceeding brought before said courts
on the basis of forum non conveniens.
8.11 Miscellaneous. This Agreement (a) con-
stitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral,
among the parties with respect to the subject matter
hereof; provided, however, that the Confidentiality Agree-
ment shall remain in full force and effect except as
provided in Section 4.8 hereof; and (b) is not intended to
confer upon any other persons any rights or remedies
hereunder, and (c) is intended solely and exclusively for
the benefit of the Seller and the Purchaser, and their
permitted successors and assigns, respectively, and not
for the benefit of any third party. In case any provision
in this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be af-
fected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date
first written above.
THE PERKIN-ELMER CORPORATION
By /s/ Riccardo Pigliucci
Name: Riccardo Pigliucci
Title: President & C.O.O.
SULZER INC.
By /s/ Philip T. Hauser
Name: Philip T. Hauser
Title: Executive Vice President
By /s/ Urs Scherrer
Name: Urs Scherrer
Attorney-in-Fact
EXHIBIT INDEX
1.2(A) Inventory Valuation Provisions
1.2(B) Excluded Assets
1.2(C) Financial Statement
1.2(E) Real Property
1.2(F) Intellectual Property Rights
1.2(G) Subsidiaries
1.2(H) Assumed Contracts
3.1(c) Assets
3.1(d) Real Property
3.1(f) Financial Statement
3.1(g) Certain Changes
3.1(h) Litigation
3.1(i) Compliance with Laws
3.1(j) Approvals and Consents
3.1(k) Intellectual Property Exceptions
3.1(l) Material Agreements
3.1(m) Employee Benefit Plans
3.1(n) Labor Matters
3.1(o) Insurance
3.1(p) Environmental Matters
3.1(v) Bank Accounts
3.1(x) Licenses and Permits
3.1(y) Taxes
4.1 Capital Commitments
4.7(a)(1) Transferred Employees
4.7(a)(2) Sulzer Benefit Plans
4.15 Guarantees
4.17 Environmental Work
SULZER INC.
200 PARK AVENUE
NEW YORK, NY 10166-0068
Tel. (212) 949-0999
Fax: (212) 370-1138
August 31, 1994
Mr. Gaynor Kelley
Chairman and CEO
The Perkin-Elmer Corporation
Norwalk, Connecticut
Dear Mr. Kelley,
This will confirm our understanding with respect to the
closing of the sale of the Metco Division of The Perkin-
Elmer Corporation ("Perkin-Elmer") to Sulzer Inc.
("Sulzer").
[Material at this point has been omitted pursuant to a
request for confidential treatment under the Freedom of
Information Act and has been filed separately with the
Securities and Exchange Commission] the purchase price
payable by Sulzer for the Metco Division to the net book
value of the assets of the Division at closing, plus
[material at this point has been omitted pursuant to a
request for confidential treatment under the Freedom of
Information Act and has been filed separately with the
Securities and Exchange Commission]. The net book value of
the assets will continue to be determined in accordance with
the terms set forth in the Purchase Agreement dated as of
April 18, 1994, as the same may be amended (the "Purchase
Agreement"). In addition, Perkin-Elmer will indemnify
Sulzer for certain losses incurred by Sulzer as a result of
compliance with the proposed consent order of the Federal
Trade Commission (the "FTC") in its present form (the
"Consent Order"), as provided hereunder. Perkin-Elmer will
also use its best efforts to close the sale at the earliest
possible date.
On the seventh anniversary of the closing of this
transaction Sulzer, at its option, may request to meet with
Perkin-Elmer to review with Perkin-Elmer Sulzer's
calculation of legitimate damages it believes it incurred
solely as a result of the entry in the market of the new
supplier contemplated by the FTC Consent Order. Perkin-
Elmer will meet with Sulzer at that time, review the data
provided and reimburse Sulzer for legitimate damages that
Sulzer demonstrates were incurred by it solely as a result
of the entry in the market of the new supplier contemplated
by the FTC Consent Order; however, in no event shall the
reimbursement to Sulzer for damages in this connection
exceed $5 mio.
In consideration of this agreement by Perkin-Elmer,
Sulzer will:
1. Immediately sign and deliver to the FTC the Consent
Order, together with the proposed affidavit of Sumitomo
Chemical Company Limited in its present form. Subject to
the foregoing, Sulzer will also use its best efforts to take
all steps necessary with respect to the FTC to ensure prompt
and satisfactory closing of the transaction and to comply
with the terms of the Consent Order.
2. Use its best efforts to close the sale at the
earliest possible date, including using its best efforts to
resolve any outstanding issues (including employee issues)
related to the purchase and sale of assets or stock outside
of the United States.
3. Waive any and all conditions to closing based upon:
(a) any changes to the Schedules to the Purchase Agreement
from the date of the Purchase Agreement to the date of
closing which are not, in the aggregate, material to the
financial condition of the Metco Division; (b) the failure
to receive any required governmental or other approvals,
other than the final approval of the German Cartel Office
under German antitrust law and the FTC; or (c) any alleged
deterioration of the Metco business generally.
4. Make no further claims (a) from and after the date
of the Final Statement contemplated by the Purchase
Agreement and determined in accordance with Section 2.4(b)
thereof, based on accounting methods and financial issues
related to any item or matter included or reflected on or
the subject of the Final Statement, and (b) at any time
either before or after the closing, based on or related to
any alleged deterioration of the business of Metco, or
losses or reduced profits allegedly based upon the signing
or enforcement of the Consent Order (other than pursuant to
the indemnification referred to above).
In furtherance of the foregoing, Perkin-Elmer and
Sulzer agree that the representations and warranties of
Perkin-Elmer set forth in Section 3.1(g)(i) shall not
survive the closing and the representations and warranties
of Perkin-Elmer set forth in Sections 3.1(t) and 3.1(u)
shall survive only until the determination of the Final
Statement in accordance with Section 2.4(b) of the Purchase
Agreement. All other representations and warranties shall
survive for the applicable period set forth in Section 6.1
of the Purchase Agreement.
The "drop dead" date set forth in Section 7.1(b) of the
Purchase Agreement is hereby extended from August 31, 1994
to September 30, 1994.
This letter shall have no further effect and neither
Perkin-Elmer nor Sulzer shall have any further obligations
hereunder if the FTC shall fail to accept the Consent Order
and affidavit contemplated by paragraph 1 of this letter.
If you are willing to proceed on the basis set forth
above, please sign and return one copy of this letter to us.
Very truly yours,
Sulzer Inc.
By: /s/ Fritz Fahrni /s/ Roman Beran
Fritz Fahrni Roman Beran
Accepted and Agreed to this 31st day of August, 1994
The Perkin-Elmer Corporation
By: /s/ Gaynor N. Kelley
RESTATED CERTIFICATE OF INCORPORATION
OF
THE PERKIN-ELMER CORPORATION
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
We, the undersigned, Gaynor N. Kelley and William B.
Sawch, being the duly elected and acting Chairman of the
Board and Secretary, respectively, of The Perkin-Elmer
Corporation, do hereby certify that:
1. The name of the corporation is The Perkin-Elmer
Corporation (the "Corporation").
2. The Certificate of Incorporation of the
Corporation was filed by the Department of State on December
13, 1939.
3. The Certificate of Incorporation of the
Corporation, as heretofore amended and restated, is amended
to effect a change authorized by Section 801 of the Business
Corporation Law of the State of New York; namely, to amend
Article THIRD thereof to increase the total number of shares
of Common Stock, par value $1.00 per share, which the
Corporation is authorized to issue from sixty million
(60,000,000) to ninety million (90,000,000).
4. To effect the foregoing amendment and to
integrate such amendment into a Restated Certificate of
Incorporation of the Corporation, the text of the
Certificate of Incorporation of the Corporation is hereby
restated to read in its entirety as follows:
FIRST: The name of the corporation is THE PERKIN-
ELMER CORPORATION.
SECOND: The purposes for which the Corporation is
formed are:
(a) To design, invent, develop, manufacture,
produce, purchase, lease or otherwise acquire, use, exploit,
process, fabricate, rebuild, service, transport, sell,
market at wholesale or retail or otherwise dispose of,
import, export, lease, distribute, provide and deal in and
with, whether as principal or agent, or through franchised
dealers, distributors or otherwise, optical, electrical,
electro-optical, mechanical, electro-mechanical, electronic,
astronomical, astrological, astronavigational, general
purpose digital computer, data communications, electronic
processing, information handling, industrial or commercial
thermal, electric arc, plasma flame or other, spraying,
coating, scientific, analytical, precision, laboratory,
industrial, commercial, educational, process control and
instructional systems, instruments, products, apparatus,
equipment and devices, including components, peripherals,
interfaces, parts, accessories, supplies, machinery, tools,
equipment, wares, merchandise, materials, equipment and
goods, of every kind and description, in any way, in whole
or in part, related or incidental thereto.
(b) To undertake, conduct, assign, promote and
engage in research, exploration, laboratory design and
developmental work or studies for its own account, as a
consultant or otherwise, in connection with or related to
any of the businesses of the Corporation.
(c) To design, invent, develop, manufacture,
produce, purchase, lease or otherwise acquire, use, exploit,
process, fabricate, rebuild, service, transport, sell,
market at wholesale or retail or otherwise dispose of,
import, export, lease, distribute, provide and deal in and
with, whether as principal or agent, or through franchised
dealers, distributors, or otherwise, raw materials,
products, goods, wares, merchandise, materials and other
personal property, tangible or intangible, and rights,
interests or privileges therein of every kind and
description, wheresoever situated.
(d) To acquire by purchase, exchange, lease, devise
or otherwise, and to hold, own, operate, maintain, manage,
improve, develop, and exploit, and to sell, transfer,
convey, lease, mortgage, exchange or otherwise deal with or
dispose of, real property, improved and unimproved,
wheresoever situated, and any rights, interests or
privileges therein.
(e) To provide services of every kind and nature in
connection with or related or incidental to the businesses
of the Corporation.
(f) To acquire by purchase, exchange, or otherwise,
all or any part of, or any interest in, the properties,
assets, rights, business and goodwill of any person, firm,
association or corporation heretofore or hereafter engaged
in any business for which a corporation may now or hereafter
be organized under the Business Corporation Law of the State
of New York, or under any act amendatory thereof,
supplemental thereto or substituted therefor; to pay for the
same in cash, property or its own or other securities; to
hold, operate, lease, reorganize, liquidate, sell or in any
manner dispose of the whole or any part thereof; in
connection therewith to assume or guarantee performance of
any of the liabilities, obligations or contracts of such
persons, firms, associations or corporations; and after such
acquisition to operate the properties, assets and rights so
acquired and to conduct the whole or any part of the
business so acquired.
(g) To acquire by purchase, subscription or
otherwise, and to invest in, receive, hold, own, guarantee,
sell, assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of the shares
of the capital stock, or any voting trust certificates in
respect of the shares of capital stock, scrip, warrants,
rights, bonds, debentures, notes, trust receipts, and other
securities, obligations, choses in action and evidences of
indebtedness or interest issued or created by any
corporation, joint stock companies, partnerships, firms,
syndicates, associations, firms, trusts or persons, public
or private, or by the government of the United States of
America, or by any foreign government, or by any state,
territory, province, municipality or other political
subdivision or by any governmental agency, and as owner
thereof to possess and exercise all the rights, powers and
privileges of ownership, including the right to execute
consents and vote thereon, and to do any and all acts and
things necessary or advisable for the preservation,
protection, improvement and enhancement in value thereof.
(h) To such an extent as a corporation organized
under the laws of the State of New York may now or hereafter
lawfully do, to do, either as principal or agent and either
alone or in connection with other corporations, firms or
individuals, all and everything necessary, suitable,
convenient or proper for, or in connection with, or incident
to the accomplishment of any of the purposes or the
attainment of any one or more of the objects enumerated
herein, or in Section 202 of the Business Corporation Law of
New York (which shall be considered both as purposes and
powers), or designed directly or indirectly to promote the
interests of the Corporation or to enhance the value of its
properties; and in general carry on any business in
connection therewith and incident thereto not forbidden by
the laws of the State of New York and use all the powers
conferred upon corporations by the laws of the State of New
York.
THIRD: The total number of shares which may be
issued by the Corporation is ninety million (90,000,000)
shares of Common Stock, all of which shall have a par value
of one dollar ($1.00) per share, and one million (1,000,000)
shares of Preferred Stock, all of which shall have a par
value of one dollar ($1.00) per share.
The Preferred Stock shall be issued in one or more
series. The Board of Directors is hereby expressly
authorized to issue the shares of Preferred Stock in such
series, and to fix from time to time before issuance the
number of shares to be included in any series and the
designation, relative rights, preferences and limitations of
all shares of such series. The authority of the Board of
Directors with respect to each series shall include without
limitation thereto, the determination of all of the
following, and the shares of each series may vary from the
shares of any other series in any or all of the following
respects:
(1) The number of shares constituting such series,
and the designation thereof to distinguish the shares of
such series from the shares of all other series;
(2) The annual dividend rate on the shares of such
series, whether such dividends are payable in installments
and whether such dividends shall be cumulative and, if
cumulative, the date from which such dividends shall
accumulate;
(3) The preference, if any, of the shares of such
series in the event of any voluntary or involuntary
liquidation or dissolution of the Corporation;
(4) The voting rights, if any, of the shares of such
series, in addition to the voting rights prescribed by law,
and the terms and conditions of exercise of any such voting
rights;
(5) The redemption price or prices, if any, of the
shares of such series and the terms and conditions of any
such redemption;
(6) The right, if any, of the shares of such series
to be converted into shares of any other series or class,
and the terms and conditions of any such conversion; and
(7) Any other relative rights, preferences and
limitations of the shares of such series.
FOURTH: No holder of any shares of stock of any
class of the Corporation shall as such holder have any
preemptive right to purchase any shares or securities of any
class which at any time may be sold or offered for sale by
the Corporation.
FIFTH: The office of the Corporation shall be
located in the Borough of Manhattan, City of New York,
County of New York, State of New York; and the Secretary of
State shall mail a copy of process in any action or
proceeding against the Corporation which may be served upon
him to CT Corporation System, 1633 Broadway, New York, New
York 10019.
SIXTH: The duration of the Corporation shall be
perpetual.
SEVENTH: The number of directors shall be not less
than three and not more than fifteen. The directors need
not be stockholders.
EIGHTH: The Corporation may issue and sell its
authorized shares for such consideration (but not less than
the par value thereof) as from time to time may be fixed by
the Board of Directors.
NINTH: CT Corporation System, 1633 Broadway, New
York, New York 10019 is hereby designated as the registered
agent of the Corporation upon whom process in any action or
proceeding against it may be served.
TENTH: (a) Notwithstanding any other provisions of
this Certificate of Incorporation or the By-laws of the
Corporation, no transaction between the Corporation and any
Controlling Person (as hereinafter defined) shall be valid
nor shall any such transaction be consummated unless (i)
such transaction is expressly approved by at least a vote of
the Disinterested Directors (as hereinafter defined) who at
the time constitute at least a majority of the entire Board
of Directors of the Corporation, or (ii) such transaction is
approved by the affirmative vote of not less than two-thirds
of the voting power of the shares of each class of the
Corporation's capital stock entitled to vote thereon held by
Disinterested Shareholders (as hereinafter defined), or
(iii) if such transaction would result in payment of cash or
other property to the shareholders of the Corporation, such
transaction is consummated and provides for the payment to
each of the shareholders other than such Controlling Person
upon the consummation thereof, in exchange for all the
shares of the Corporation's capital stock held by each of
such shareholders, consideration which, as to both amount
and kind, is equal to or greater than the highest per share
price actually paid by or for the account of such
Controlling Person for the same class of shares of capital
stock held by each of such shareholders during both the two-
year period prior to the time any such Controlling Person
became such and the two-year period prior to the
consummation of such transaction.
(b) For purposes of this Article TENTH: (i) the
term "Controlling Person" means any individual, corporation,
partnership, trust, association or other organization or
entity (including any group formed for the purpose of
acquiring, voting or holding securities of the Corporation)
which either directly, or indirectly through one or more
intermediaries, owns, beneficially or of record, or controls
by agreement, voting trust or otherwise, at least 1% of the
voting power of any class of capital stock of the
Corporation, and such term also includes any corporation,
partnership, trust, association, or other organization or
entity in which one or more Controlling Persons have the
power, through the ownership of voting securities, by
contract, or otherwise, to influence significantly any of
the management, activities or policies of such corporation,
partnership, trust, association or other organization or
entity; (ii) the term "Disinterested Director" means a
director (excluding any director who is a Controlling
Person) who was either a member of the Board of Directors of
the Corporation prior to the time such Controlling Person
became a Controlling Person or who subsequently became a
director of the Corporation and whose election, or
nomination for election, was approved by the vote of at
least a majority of the Disinterested Directors of the
Corporation voting on such nomination or election; and (iii)
the term "Disinterested Shareholders" means those holders of
the Corporation's capital stock entitled to vote on the
transaction, none of which is a Controlling Person.
(c) The provisions of this Article TENTH shall
not be amended without the affirmative vote of not less than
two-thirds of the voting power of the shares of each class
of the capital stock of the Corporation entitled to vote
thereon; provided, however, that if, at the time of such
vote, there shall be one or more Controlling Persons, either
(i) such affirmative vote shall include the affirmative vote
in favor of such amendment of not less than two-thirds of
the voting power of the shares of each class of the
Corporation's capital stock entitled to vote thereon held by
Disinterested Shareholders, or (ii) such amendment shall
have been approved by at least a majority vote of
Disinterested Directors who at the time constitute at least
a majority of the entire Board of Directors of the
Corporation.
(d) The provisions of this Article TENTH shall be
in addition to any other provisions of the New York Business
Corporation Law or this Certificate of Incorporation or the
By-laws of the Corporation, each as amended from time to
time, applicable to the authorization and consummation by
the Corporation of any transaction or amendment contemplated
by this Article TENTH.
ELEVENTH: The Corporation is subject to the
following restrictions:
a. Except as otherwise provided in this Article
ELEVENTH, no purchase by the Corporation from any
Controlling Person (as hereinafter defined) of shares of any
stock of the Corporation owned by such Controlling Person
shall be made at a price exceeding the average price paid by
such Controlling Person for all shares of stock of the
Corporation acquired by such Controlling Person during the
two-year period preceding the date of such proposed purchase
unless such purchase is approved by the affirmative vote of
not less than a majority of the voting power of the shares
of stock of the Corporation entitled to vote held by
Disinterested Shareholders (as hereinafter defined).
b. The provisions of this Article ELEVENTH shall
not apply to (i) any offer to purchase made by the
Corporation which is made on the same terms and conditions
to the holders of all shares of stock of the Corporation,
(ii) any purchase by the Corporation of shares owned by a
Controlling Person occurring after the end of two years
following the date of the last acquisition by such
Controlling Person of stock of the Corporation, (iii) any
transaction which may be deemed to be a purchase by the
Corporation of shares of its stock which is made in
accordance with the terms of any stock option or other
employee benefit plan now or hereafter maintained by the
Corporation, or (iv) any purchase by the Corporation of
shares of its stock at prevailing market prices pursuant to
a stock repurchase program.
c. Notwithstanding any other provision to the
contrary, the provisions of this Article ELEVENTH shall not
be amended without the affirmative vote of not less than a
majority of the stock of the Corporation entitled to vote
thereon; provided, however, that if, at the time of the such
vote, there shall be one or more Controlling Persons, such
affirmative vote shall include the affirmative vote in favor
of such amendment of not less than a majority of the voting
power of the shares of stock of the Corporation entitled to
vote thereon held by Disinterested Shareholders.
d. For purposes of this Article ELEVENTH: (i)
the term "Controlling Person" means any individual,
corporation, partnership, trust, association or other
organization or entity (including any group formed for the
purpose of acquiring, voting or holding securities of the
Corporation) which either directly, or indirectly through
one or more intermediaries, owns, beneficially or of record,
or controls by agreement, voting trust or otherwise, at
least 1% of the voting power of the stock of the
Corporation, and such term also includes any corporation,
partnership, trust, association or other organization or
entity in which one or more Controlling Persons have the
power, through the ownership of voting securities, by
contract, or otherwise, to influence significantly any of
the management, activities or policies of such corporation,
partnership, trust, association, other organization or
entity and (ii) the term "Disinterested Shareholders" means
those holders of the stock of the Corporation entitled to
vote on any matter, none of which is a Controlling Person.
5. The restatement of, and amendment to, the
Certificate of Incorporation of the Corporation were
authorized in accordance with Sections 807 and 803(a) of the
Business Corporation Law of the State of New York by
resolutions of the Board of Directors of the Corporation
duly adopted on July 15, 1993, and by votes cast, in person
or by proxy, by the holders of a majority of all outstanding
shares entitled to vote thereon at the Annual Meeting of
Shareholders of the Corporation held on October 21, 1993.
IN WITNESS WHEREOF, we have executed this
Certificate this 21st day of October, 1993, and we affirm
the statements contained herein as true under penalties of
perjury.
/s/ Gaynor N. Kelley
Gaynor N. Kelley
Chairman of the Board
/s/ William B. Sawch
William B. Sawch
Secretary
CERTIFICATE OF MERGER
OF
APPLIED BIOSYSTEMS, INC.
INTO
THE PERKIN-ELMER CORPORATION
UNDER SECTION 905 OF THE BUSINESS CORPORATION LAW
We, the undersigned, Gaynor N. Kelley and William B.
Sawch, being respectively the Chairman of the Board and
Secretary of The Perkin-Elmer Corporation, pursuant to the
provisions of Section 905 of the Business Corporation Law of
the State of New York, do hereby certify as follows:
1. The Perkin-Elmer Corporation, a corporation
organized under the laws of the State of New York ("Perkin-
Elmer"), owns all of the issued and outstanding shares of
capital stock of Applied Biosystems, Inc., a corporation
organized under the laws of the State of California
("Applied Biosystems").
2. The authorized capital stock of Applied Biosystems
consists of 1,000 shares of common stock, no par value, all
of which are issued and outstanding and owned by Perkin-
Elmer.
3. (a) The Certificate of Incorporation of Perkin-
Elmer was filed by the New York Department of State on
December 13, 1939.
(b) The Certificate of Incorporation of Applied
Biosystems was filed by the Secretary of State of the State
of California on September 18, 1980, and its application for
authority to do business in the State of New York was filed
by the New York Department of State on September 13, 1983.
(c) The merger is permitted by the provisions of
the General Corporation Law of the State of California and
is in compliance therewith.
4. The surviving corporation owns all of the
outstanding shares of capital stock of the corporation to be
merged.
5. This effective date of the merger shall be July 1,
1994.
6. The Plan of Merger was duly adopted by the Board of
Directors of Perkin-Elmer on June 16, 1994.
IN WITNESS WHEREOF, this Certificate has been executed
this 17th day of June, 1994 and the statements contained
therein are affirmed as true under penalties of perjury.
THE PERKIN-ELMER CORPORATION
By: /s/ Gaynor N. Kelley
Gaynor N. Kelley
Chairman of the Board
By: /s/ William B. Sawch
William B. Sawch
Secretary
[CONFORMED COPY]
$100,000,000
THREE-YEAR
CREDIT AGREEMENT
dated as of
June 1, 1994
among
THE PERKIN-ELMER CORPORATION
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations. . . 13
1.03 Types of Borrowings. . . . . . . . . . . 13
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend. . . . . . . . . . . 13
2.02 Notice of Committed Borrowing. . . . . . 14
2.03 Money Market Borrowings. . . . . . . . . 14
2.04 Notice to Banks; Funding of Loans. . . . 18
2.05 Notes. . . . . . . . . . . . . . . . . . 19
2.06 Maturity of Loans. . . . . . . . . . . . 20
2.07 Interest Rates . . . . . . . . . . . . . 20
2.08 Fees . . . . . . . . . . . . . . . . . . 24
2.09 Optional Termination or
Reduction of Commitments . . . . . . . . 25
2.10 Scheduled Termination
of Commitments . . . . . . . . . . . . . 25
2.11 Optional Prepayments . . . . . . . . . . 25
2.12 General Provisions as to Payments. . . . 26
2.13 Funding Losses . . . . . . . . . . . . . 27
2.14 Computation of Interest and Fees . . . . 27
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness. . . . . . . . . . . . . . 27
3.02 Borrowings . . . . . . . . . . . . . . . 28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power. . . . . . 29
4.02 Corporate and Governmental
Authorization; No Contravention. . . . . 29
4.03 Binding Effect . . . . . . . . . . . . . 30
4.04 Financial Information. . . . . . . . . . 30
4.05 Litigation.. . . . . . . . . . . . . . . 30
4.06 Compliance with ERISA. . . . . . . . . . 31
4.07 Environmental Matters. . . . . . . . . . 31
4.08 Taxes. . . . . . . . . . . . . . . . . . 31
4.09 Subsidiaries.. . . . . . . . . . . . . . 32
4.10 Not an Investment Company. . . . . . . . 32
4.11 Full Disclosure. . . . . . . . . . . . . 32
ARTICLE V
COVENANTS
SECTION 5.01 Information. . . . . . . . . . . . . . . 32
5.02 Payment of Obligations . . . . . . . . . 35
5.03 Maintenance of Property; Insurance . . . 35
5.04 Conduct of Business and
Maintenance of Existence . . . . . . . . 35
5.05 Compliance with Laws.. . . . . . . . . . 36
5.06 Inspection of Property,
Books and Records. . . . . . . . . . . . 36
5.07 Minimum Consolidated
Net Worth. . . . . . . . . . . . . . . . 36
5.08 Negative Pledge. . . . . . . . . . . . . 36
5.09 Consolidations, Mergers and
Sales of Assets. . . . . . . . . . . . . 37
5.10 Use of Proceeds. . . . . . . . . . . . . 37
5.11 Interest Coverage. . . . . . . . . . . . 38
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default. . . . . . . . . . . . 38
6.02 Notice of Default. . . . . . . . . . . . 40
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization. . . . . . 41
7.02 Agent and Affiliates.. . . . . . . . . . 41
7.03 Action by Agent. . . . . . . . . . . . . 41
7.04 Consultation with Experts. . . . . . . . 41
7.05 Liability of Agent . . . . . . . . . . . 41
7.06 Indemnification. . . . . . . . . . . . . 42
7.07 Credit Decision. . . . . . . . . . . . . 42
7.08 Successor Agent. . . . . . . . . . . . . 42
7.09 Agent's Fee. . . . . . . . . . . . . . . 43
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair. . . . . . . . 43
8.02 Illegality . . . . . . . . . . . . . . . 44
8.03 Increased Cost and Reduced Return. . . . 44
8.04 Taxes. . . . . . . . . . . . . . . . . . 46
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans. . . . . . . . 48
8.06 Substitution of Bank . . . . . . . . . . 48
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices. . . . . . . . . . . . . . . . . 49
9.02 No Waivers . . . . . . . . . . . . . . . 49
9.03 Expenses; Indemnification. . . . . . . . 49
9.04 Sharing of Set-Offs. . . . . . . . . . . 50
9.05 Amendments and Waivers . . . . . . . . . 50
9.06 Successors and Assigns . . . . . . . . . 51
9.07 Collateral . . . . . . . . . . . . . . . 53
9.08 Governing Law; Submission to Juris-
diction . . . . . . . . . . . . . . . . 53
9.09 Counterparts; Integration. . . . . . . . 53
9.10 WAIVER OF JURY TRIAL . . . . . . . . . . 53
Pricing Schedule
Exhibit A - Note
Exhibit B - Form of Money Market Quote Request
Exhibit C - Form of Invitation for Money Market Quotes
Exhibit D - Form of Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Davis Polk & Wardwell Special
Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
THREE-YEAR CREDIT AGREEMENT
AGREEMENT dated as of June 1, 1994 among THE
PERKIN-ELMER CORPORATION, the BANKS listed on the signature
pages hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of
Money Market Quotes setting forth Money Market Absolute
Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in
Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the
meaning set forth in Section 2.07(c).
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Borrower) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"Applicable Lending Office" means, with respect to
any Bank, (i) in the case of its Domestic Loans, its
Domestic Lending Office, (ii) in the case of its Euro-Dollar
Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in
Section 2.07(b).
"Assignee" has the meaning set forth in Section
9.06(c).
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for
such day.
"Base Rate Loan" means a Committed Loan to be made
by a Bank as a Base Rate Loan in accordance with the
applicable Notice of Committed Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an
employee benefit plan within the meaning of Section 3(3) of
ERISA which is not a Plan or a Multiemployer Plan and which
is maintained or otherwise contributed to by any member of
the ERISA Group.
"Borrower" means The Perkin-Elmer Corporation, a
New York corporation, and its successors.
"Borrower's 1993 Form 10-K" means the Borrower's
annual report on Form 10-K for the transition period from
August 1, 1992 through June 30, 1993, as filed with the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
"Borrower's Latest Form 10-Q" means the Borrower's
quarterly report on Form 10-Q for the quarter ended March
31, 1994 as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section
1.03.
"CD Base Rate" has the meaning set forth in
Section 2.07(b).
"CD Loan" means a Committed Loan to be made by a
Bank as a CD Loan in accordance with the applicable Notice
of Committed Borrowing.
"CD Margin" has the meaning set forth in Section
2.07(b).
"CD Reference Banks" means Citibank, N.A., Credit
Suisse and Morgan Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages hereof, as such amount may be reduced from
time to time pursuant to Sections 2.09 and 2.10.
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.01.
"Consolidated EBIT" means, for any period, the sum
(without duplication) of (i) the net operating income of the
Borrower for such period plus (ii) interest income of the
Borrower for such period, determined in each case on a
consolidated basis for the Borrower and its Consolidated
Subsidiaries.
"Consolidated Interest Expense" means, for any
period, the Interest Expense of the Borrower and its
Consolidated Subsidiaries determined on a consolidated basis
for such period.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Borrower in its consolidated
financial statements if such statements were prepared as of
such date.
"Consolidated Net Worth" means at any date the
consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries, determined as of such date.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized
in accordance with generally accepted accounting principles,
(v) all non-contingent obligations (and, for purposes of
Section 5.08 and the definitions of Material Debt and
Material Financial Obligations, all contingent obligations)
of such Person to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of
such Person, whether or not such Debt is otherwise an
obligation of such Person, and (vii) all Debt of others
Guaranteed by such Person.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Derivatives Obligations" of any Person means all
obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity
or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect
to any of the foregoing transactions) or any combination of
the foregoing transactions.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its
Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as
its Domestic Lending Office by notice to the Borrower and
the Agent; provided that any Bank may so designate separate
Domestic Lending Offices for its Base Rate Loans, on the one
hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate
Loans or both.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.07(b).
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental
restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Substances
or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation
thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary
and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for
international business (including dealings in dollar
deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or
affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the
Agent.
"Euro-Dollar Loan" means a Committed Loan to be
made by a Bank as a Euro-Dollar Loan in accordance with the
applicable Notice of Committed Borrowing.
"Euro-Dollar Margin" has the meaning set forth in
Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal
London offices of Citibank, N.A., Credit Suisse and Morgan
Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" has the meaning
set forth in Section 2.07(c).
"Event of Default" has the meaning set forth in
Section 6.01.
"Existing Credit Agreement" means the Credit
Agreement dated as of June 7, 1991 among the Borrower, the
lenders parties thereto and Bankers Trust Company, as agent,
as amended to the Effective Date.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or Money Market Loans (excluding Money Market LIBOR
Loans bearing interest at the Base Rate pursuant to Section
8.01(a)) or any combination of the foregoing.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person and,
without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the holder of such
Debt of the payment thereof or to protect such holder
against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has
a corresponding meaning.
"Hazardous Substances" means any toxic,
radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section
9.03(b).
"Interest Coverage Ratio" means, for any period,
the ratio of Consolidated EBIT for such period to
Consolidated Interest Expense for such period.
"Interest Expense" means, with respect to any
Person, for any period, the sum, for such Person and its
Consolidated Subsidiaries determined on a consolidated basis
(without duplication), of all interest on Debt and
Derivatives Obligations (including, without limitation,
imputed interest on capital lease obligations).
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of
such Borrowing and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (c) below, be extended to the next
succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(2) with respect to each CD Borrowing, the period
commencing on the date of such Borrowing and ending 30, 60,
90 or 180 days thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(4) with respect to each Money Market LIBOR Borrowing, the
period commencing on the date of such Borrowing and ending
such whole number of months thereafter as the Borrower may
elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (c) below, be extended to the next
succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(5) with respect to each Money Market Absolute Rate
Borrowing, the period commencing on the date of such
Borrowing and ending such number of days thereafter (but not
less than 14 days) as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, or any successor statute.
"Leverage Ratio" means, at any date, the ratio of
Total Borrowed Funds at such date to Total Capitalization at
such date.
"LIBOR Auction" means a solicitation of Money
Market Quotes setting forth Money Market Margins based on
the London Interbank Offered Rate pursuant to Section 2.03.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the
purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease
or other title retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan
or a Money Market Loan and "Loans" means Domestic Loans or
Euro-Dollar Loans or Money Market Loans or any combination
of the foregoing.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.07(c).
"Material Debt" means Debt (other than the Notes)
of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, in
an aggregate principal or face amount exceeding $15,000,000.
"Material Financial Obligations" means (i)
Material Debt or (ii) net payment obligations in respect of
Derivatives Obligations of the Borrower and/or one or more
of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate amount exceeding
$25,000,000.
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of
$5,000,000.
"Money Market Absolute Rate" has the meaning set
forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each
Bank, its Domestic Lending Office or such other office,
branch or affiliate of such Bank as it may hereafter
designate as its Money Market Lending Office by notice to
the Borrower and the Agent; provided that any Bank may from
time to time by notice to the Borrower and the Agent
designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case
all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made
by a Bank pursuant to a LIBOR Auction (including such a loan
bearing interest at the Base Rate pursuant to Section
8.01(a)).
"Money Market Loan" means a Money Market LIBOR
Loan or a Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.03.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group
is then making or accruing an obligation to make
contributions or has within the preceding five plan years
made contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such
five year period.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
9.06(b).
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any
member of the ERISA Group for employees of any member of the
ERISA Group or (ii) has at any time within the preceding
five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of
the ERISA Group.
"Pricing Schedule" means the Schedule attached
hereto identified as such.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its Prime Rate.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing
which, after application of the proceeds thereof, results in
no net increase in the outstanding principal amount of
Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Required Banks" means at any time Banks having at
least 66 2/3% of the aggregate amount of the Commitments or,
if the Commitments shall have been terminated, holding Notes
evidencing at least 66 2/3% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from
and including the Effective Date to but excluding the
Termination Date.
"Significant Subsidiary" has the meaning set forth
in Regulation S-X promulgated by the Securities and Exchange
Commission, as in effect on the date hereof.
"Subsidiary" means, as to any Person, any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons
performing similar functions are at the time directly or
indirectly owned by such Person; unless otherwise specified,
"Subsidiary" means a Subsidiary of the Borrower.
"Termination Date" means May 30, 1997, or, if such
day is not a Euro-Dollar Business Day, the next preceding
Euro-Dollar Business Day.
"Total Borrowed Funds" means, at any date, the
aggregate amount which would appear under the captions
"Loans Payable" and "Long-Term Debt" on a consolidated
balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with generally accepted
accounting principles as of such date.
"Total Capitalization" means, at any date, the sum
of Total Borrowed Funds at such date plus Consolidated Net
Worth at such date.
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued
but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of
a member of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
"United States" means the United States of
America, including the States and the District of Columbia,
but excluding its territories and possessions.
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants) with
the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to
the Banks; provided that, if the Borrower notifies the Agent
that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or
if the Agent notifies the Borrower that the Required Banks
wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in
effect immediately before the relevant change in generally
accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Borrower and the Required
Banks.
SECTION 1.03. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to the Borrower pursuant to Article II on a
single date and for a single Interest Period. Borrowings
are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing
(e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of
Article II under which participation therein is determined
(i.e., a "Committed Borrowing" is a Borrowing under Section
2.01 in which all Banks participate in proportion to their
Commitments, while a "Money Market Borrowing" is a Borrowing
under Section 2.03 in which the Bank participants are
determined on the basis of their bids in accordance
therewith).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the
Revolving Credit Period each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make
loans to the Borrower pursuant to this Section from time to
time in amounts such that the aggregate principal amount of
Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate
principal amount of $10,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the
aggregate amount available in accordance with Section
3.02(b)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.11,
prepay Loans and reborrow at any time during the Revolving
Credit Period under this Section.
SECTION 2.02. Notice of Committed Borrowing. The
Borrower shall give the Agent notice (a "Notice of Committed
Borrowing") not later than 10:15 A.M. (New York City time)
on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the
third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(a) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic
Borrowing or a Euro-Dollar Business Day in the case of
a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing
are to be CD Loans, Base Rate Loans or Euro-Dollar
Loans, and
(d) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest
Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to
Committed Borrowings pursuant to Section 2.01, the Borrower
may, as set forth in this Section, request the Banks during
the Revolving Credit Period to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When the
Borrower wishes to request offers to make Money Market Loans
under this Section, it shall transmit to the Agent by telex
or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be
received no later than 10:00 A.M. (New York City time) on
(x) the fifth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified the Banks not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective)
specifying:
(i) the proposed date of Borrowing, which shall
be a Euro-Dollar Business Day in the case of a LIBOR
Auction or a Domestic Business Day in the case of an
Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger multiple of
$1,000,000,
(iii) the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period, and
(iv) whether the Money Market Quotes requested are
to set forth a Money Market Margin or a Money Market
Absolute Rate.
The Borrower may request offers to make Money Market Loans
for more than one Interest Period in a single Money Market
Quote Request. No Money Market Quote Request shall be given
within five Euro-Dollar Business Days (or such other number
of days as the Borrower and the Agent may agree) of any
other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly
upon receipt of a Money Market Quote Request, the Agent
shall send to the Banks by telex or facsimile transmission
an Invitation for Money Market Quotes substantially in the
form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money
Market Quotes offering to make the Money Market Loans to
which such Money Market Quote Request relates in accordance
with this Section.
(d) Submission and Contents of Money Market
Quotes. (i) Each Bank may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex
or facsimile transmission at its offices specified in or
pursuant to Section 9.01 not later than (x) 2:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:15 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified the Banks not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective);
provided that Money Market Quotes submitted by the Agent (or
any affiliate of the Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Agent or such
affiliate notifies the Borrower of the terms of the offer or
offers contained therein not later than (x) one hour prior
to the deadline for the other Banks, in the case of a LIBOR
Auction or (y) 15 minutes prior to the deadline for the
other Banks, in the case of an Absolute Rate Auction.
Subject to Articles III and VI, any Money Market Quote so
made shall be irrevocable except with the written consent of
the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit D hereto and shall in any
case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may
not exceed the principal amount of Money Market Loans
for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount
of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "Money Market Margin") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest
Period specified in the related Invitation for Money Market
Quotes.
(iii) Any Money Market Quote shall be disregarded
if it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly
notify the Borrower of the terms (x) of any Money Market
Quote submitted by a Bank that is in accordance with
subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. Any such
subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money
Market Quote. The Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market
Loans for which offers have been received for each Interest
Period specified in the related Money Market Quote Request,
(B) the respective principal amounts and Money Market
Margins or Money Market Absolute Rates, as the case may be,
so offered and (C) if applicable, limitations on the
aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later
than 10:15 A.M. (New York City time) on (x) the third
Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified the Banks not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective), the
Borrower shall notify the Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a
"Notice of Money Market Borrowing") shall specify the
aggregate principal amount of offers for each Interest
Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount
set forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $10,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise
fails to comply with the requirements of this
Agreement.
(g) Allocation by Agent. If offers are made by
two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans
in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as
possible (in multiples of $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by the Agent of the
amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents
thereof and of such Bank's share (if any) of such Borrowing
and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City
time) on the date of each Borrowing, each Bank participating
therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied,
the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a
day on which the Borrower is to repay all or any part of an
outstanding Loan from such Bank, such Bank shall apply the
proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be made
available by such Bank to the Agent as provided in
subsection (b), or remitted by the Borrower to the Agent as
provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this
Section 2.04 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the Agent,
such Bank and the Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.07 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank
shall be evidenced by a single Note payable to the order of
such Bank for the account of its Applicable Lending Office
in an amount equal to the aggregate unpaid principal amount
of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and
the Agent, request that its Loans of a particular type be
evidenced by a separate Note in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference
in this Agreement to the "Note" of such Bank shall be deemed
to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01(a), the Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount, type and
maturity of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with
any transfer or enforcement of its Note, endorse on the
schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such
Loan then outstanding; provided that the failure of any Bank
to make any such recordation or endorsement shall not affect
the obligations of the Borrower hereunder or under the
Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a
part of its Note a continuation of any such schedule as and
when required.
SECTION 2.06. Maturity of Loans. Each Loan
included in any Borrowing shall mature, and the principal
amount thereof shall be due and payable, on the last day of
the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base
Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made
until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue
principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day during
the Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b) or (2)(c)(i) of the definition
of Interest Period, have an Interest Period of less than 30
days, such portion shall bear interest during such Interest
Period at the rate applicable to Base Rate Loans during such
period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period
is longer than 90 days, at intervals of 90 days after the
first day thereof. Any overdue principal of or interest on
any CD Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2%
plus the higher of (i) the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to the Interest Period
for such Loan and (ii) the rate applicable to Base Rate
Loans for such day.
"CD Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid at
10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of
such CD Reference Bank to which such Interest Period applies
and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. section 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day
during the Interest Period applicable thereto, at a rate per
annum equal to the sum of the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be
payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum
determined in accordance with the Pricing Schedule.
The "Adjusted London Interbank Offered Rate"
applicable to any Interest Period means a rate per annum
equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i)
the applicable London Interbank Offered Rate by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to
any Interest Period means the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London
interbank market at approximately 11:00 A.M. (London time)
two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of
the effective date of any change in the Euro-Dollar Reserve
Percentage.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the higher
of (i) the sum of 2% plus the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate
applicable to the Interest Period for such Loan and (ii) the
sum of 2% plus the Euro-Dollar Margin for such day plus the
quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which one day (or, if such
amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer
than six months as the Agent may select) deposits in dollars
in an amount approximately equal to such overdue payment due
to each of the Euro-Dollar Reference Banks are offered to
such Euro-Dollar Reference Bank in the London interbank
market for the applicable period determined as provided
above by (y) 1.00 minus the Euro-Dollar Reserve Percentage
(or, if the circumstances described in clause (a) or (b) of
Section 8.01 shall exist, at a rate per annum equal to the
sum of 2% plus the rate applicable to Base Rate Loans for
such day).
(e) Subject to Section 8.01(a), each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto,
at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money
Market LIBOR Borrowing were a Committed Euro-Dollar
Borrowing) plus (or minus) the Money Market Margin quoted by
the Bank making such Loan in accordance with Section 2.03.
Each Money Market Absolute Rate Loan shall bear interest on
the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall
be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan
shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the
Base Rate for such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the Borrower and the participating Banks of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest
error.
(g) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if
none of such quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.
SECTION 2.08. Fees.
(a) Commitment Fee. During the Revolving Credit
Period, the Borrower shall pay to the Agent for the account
of the Banks ratably in proportion to their Commitments a
commitment fee at the Commitment Fee Rate (determined daily
in accordance with the Pricing Schedule) on the daily amount
by which the aggregate amount of the Commitments exceeds the
aggregate outstanding principal amount of the Loans. Such
commitment fee shall accrue from and including the Effective
Date to but excluding the Termination Date (or earlier date
of termination of the Commitments in their entirety).
(b) Facility Fee. The Borrower shall pay to the
Agent for the account of the Banks ratably a facility fee at
the Facility Fee Rate (determined daily in accordance with
the Pricing Schedule). Such facility fee shall accrue (i)
from and including the Effective Date to but excluding the
Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate
amount of the Commitments (whether used or unused) and (ii)
from and including the Termination Date or such earlier date
of termination to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding
principal amount of the Loans.
(c) Payments. Accrued fees under this Section
shall be payable quarterly on each March 31, June 30,
September 30 and December 31, and upon the date of
termination of the Commitments in their entirety (and, if
later, the date the Loans shall be repaid in their
entirety).
SECTION 2.09. Optional Termination or Reduction
of Commitments. During the Revolving Credit Period, the
Borrower may, upon at least three Domestic Business Days'
notice to the Agent, (i) terminate the Commitments at any
time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple thereof, the aggregate
amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
SECTION 2.10. Scheduled Termination of
Commitments. The Commitments shall terminate on the
Termination Date, and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.11. Optional Prepayments. (a) Subject
in the case of any Fixed Rate Borrowing to Section 2.13, the
Borrower may, upon at least one Domestic Business Day's
notice to the Agent, prepay any Base Rate Borrowing (or any
Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)), upon at least three Domestic
Business Days' notice to the Agent, prepay any CD Borrowing
or upon at least three Euro-Dollar Business Days' notice to
the Agent, prepay any Euro-Dollar Borrowing, in each case in
whole at any time, or from time to time in part in amounts
aggregating $10,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied
to prepay ratably the Loans of the several Banks included in
such Borrowing.
(b) Except as provided in Section 2.11(a), the
Borrower may not prepay all or any portion of the principal
amount of any Money Market Loan prior to the maturity
thereof.
(c) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of,
and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal
of, or interest on, the Domestic Loans or of fees shall be
due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Loans shall be due on a
day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or
interest on, the Money Market Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is
due to the Banks hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to
the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for
each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower
makes any payment of principal with respect to any Fixed
Rate Loan (pursuant to Article II, VI or VIII or otherwise)
on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.07(d), or if the Borrower fails
to borrow or prepay any Fixed Rate Loans after notice has
been given to any Bank in accordance with Section 2.04(a) or
2.11(c), the Borrower shall reimburse each Bank within 15
days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the
period after any such payment or failure to borrow or
prepay, provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement
shall become effective on the date that each of the
following conditions shall have been satisfied (or waived in
accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof
signed by each of the parties hereto (or, in the case
of any party as to which an executed counterpart shall
not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other
written confirmation from such party of execution of a
counterpart hereof by such party);
(b) receipt by the Agent of a duly executed Note
for the account of each Bank dated on or before the
Effective Date complying with the provisions of Section
2.05;
(c) receipt by the Agent of an opinion of the
General Counsel of the Borrower, substantially in the
form of Exhibit E hereto and covering such additional
matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Agent of an opinion of Davis
Polk & Wardwell, special counsel for the Agent,
substantially in the form of Exhibit F hereto and
covering such additional matters relating to the
transactions contemplated hereby as the Required Banks
may reasonably request;
(e) receipt by the Agent of all documents the
Agent may reasonably request relating to the existence
of the Borrower, the corporate authority for and the
validity of this Agreement and the Notes, and any other
matters relevant hereto, all in form and substance
satisfactory to the Agent; and
(f) receipt by the Agent of evidence satisfactory
to it of the payment of all principal of and interest
on any loans outstanding under and of all other amounts
payable under, and of the termination of all lending
commitments under, the Existing Credit Agreement;
provided that this Agreement shall not become effective or
be binding on any party hereto unless all of the foregoing
conditions are satisfied not later than June 7, 1994. The
Agent shall promptly notify the Borrower and the Banks of
the Effective Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing
as required by Section 2.02 or 2.03, as the case may
be;
(b) the fact that, immediately after such
Borrowing, the aggregate outstanding principal amount
of the Loans will not exceed the aggregate amount of
the Commitments;
(c) the fact that, immediately before and after
such Borrowing, no Default shall have occurred and be
continuing; and
(d) the fact that the representations and
warranties of the Borrower contained in this Agreement
(except, in the case of a Refunding Borrowing, the
representations and warranties set forth in Sections
4.04(c) and 4.05 as to any matter which has theretofore
been disclosed in writing by the Borrower to the Banks)
shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in clauses (b), (c)
and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of New York,
and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery
and performance by the Borrower of this Agreement and the
Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement, judgment,
injunction, order, decree or other instrument binding upon
the Borrower or any of its Significant Subsidiaries or
result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Significant
Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower
and each Note, when executed and delivered in accordance
with this Agreement, will constitute a valid and binding
obligation of the Borrower, in each case enforceable in
accordance with its terms.
SECTION 4.04. Financial Information.
(a) The consolidated statement of financial
position of the Borrower and its Consolidated Subsidiaries
as of June 30, 1993 and the related consolidated statements
of operations and cash flows for the fiscal year then ended,
reported on by Price Waterhouse and set forth in the
Borrower's 1993 Form 10-K, a copy of which has been
delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles,
the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
fiscal year.
(b) The unaudited consolidated statement of
financial position of the Borrower and its Consolidated
Subsidiaries as of March 31, 1994 and the related unaudited
consolidated statements of operations and cash flows for the
nine months then ended, set forth in the Borrower's Latest
Form 10-Q, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted
accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower
and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
nine month period (subject to normal year-end adjustments).
(c) Since March 31, 1994 there has been no
material adverse change in the business, financial position
or results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. There is no action,
suit or proceeding pending against, or to the knowledge of
the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Borrower and its Consolidated Subsidiaries, considered
as a whole, or which in any manner draws into question the
validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member
of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each
Plan. No member of the ERISA Group has (i) sought a waiver
of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement,
or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA
or the Internal Revenue Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the
ordinary course of its business, the Borrower reviews the
effect of Environmental Laws on the business, operations and
properties of the Borrower and its Subsidiaries, in the
course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any
capital or operating expenditures required for clean-up or
closure of properties presently or previously owned, any
capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards
imposed by law or as a condition of any license, permit or
contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility
or reduction in the level of or change in the nature of
operations conducted thereat, any costs or liabilities in
connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third
parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has
reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental
Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
SECTION 4.08. Taxes. The Borrower and its
Subsidiaries have filed all United States Federal income tax
returns and all other material tax returns which are
required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment
received by the Borrower or any Subsidiary, except taxes
being contested in good faith and by appropriate
proceedings. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of
the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the
Borrower's Significant Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted.
SECTION 4.10. Not an Investment Company. The
Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 4.11. Full Disclosure. All information
heretofore furnished by the Borrower to the Agent or any
Bank for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent
or any Bank will be, true and accurate in all material
respects on the date as of which such information is stated
or certified. The Borrower has disclosed to the Banks in
writing any and all facts which materially and adversely
affect or may affect (to the extent the Borrower can now
reasonably foresee), the business, operations or financial
condition of the Borrower and its Consolidated Subsidiaries,
taken as a whole, or the ability of the Borrower to perform
its obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has
any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will
deliver to each of the Banks:
(a) as soon as available and in any event within
120 days after the end of each fiscal year of the
Borrower, a consolidated statement of financial
position of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations and cash
flows for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal
year, all reported on in a manner acceptable to the
Securities and Exchange Commission by independent
public accountants of nationally recognized standing;
(b) as soon as available and in any event within
60 days after the end of each of the first three
quarters of each fiscal year of the Borrower, a
consolidated statement of financial position of the
Borrower and its Consolidated Subsidiaries as of the
end of such quarter and the related consolidated
statements of operations and cash flows for such
quarter and for the portion of the Borrower's fiscal
year ended at the end of such quarter, setting forth in
the case of such statements of operations and cash
flows in comparative form the figures for the
corresponding quarter and the corresponding portion of
the Borrower's previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness
of presentation, generally accepted accounting
principles and consistency by the chief financial
officer or the chief accounting officer of the
Borrower;
(c) simultaneously with the delivery of each set
of financial statements referred to in clauses (a) and
(b) above, a certificate of the chief financial officer
or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations
required to establish whether the Borrower was in
compliance with the requirements of Sections 5.07 and
5.11 on the date of such financial statements, (ii)
setting forth a calculation of the Leverage Ratio as at
the date of such financial statements and the Interest
Coverage Ratio for the period of four consecutive
fiscal quarters then ended and (iii) stating whether
any Default exists on the date of such certificate and,
if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) within five days after any officer of the
Borrower obtains knowledge of any Default, if such
Default is then continuing, a certificate of the chief
financial officer or the chief accounting officer of
the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take
with respect thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) which the Borrower shall have
filed with the Securities and Exchange Commission;
(g) if and when any member of the ERISA Group (i)
gives, either on a mandatory or a voluntary basis,
notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the
plan administrator of any Plan has given, either on a
mandatory or a voluntary basis, notice of any such
reportable event, a copy of the notice of such
reportable event given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii)
receives notice from the PBGC under Title IV of ERISA
of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect
of, or appoint a trustee to administer any Plan, a copy
of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the
Internal Revenue Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section
4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial
officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action,
if any, which the Borrower or applicable member of the
ERISA Group is required or proposes to take; and
(h) from time to time such additional information
regarding the financial position or business of the
Borrower and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The
Borrower will pay and discharge, and will cause each
Significant Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and
liabilities, including, without limitation, tax liabilities,
except where the same may be contested in good faith by
appropriate proceedings, and will maintain, and will cause
each Significant Subsidiary to maintain, in accordance with
generally accepted accounting principles, appropriate
reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each Significant
Subsidiary to keep, all property useful and necessary in its
business in good working order and condition, ordinary wear
and tear excepted.
(b) The Borrower will, and will cause each
Significant Subsidiary to, maintain (either in the name of
the Borrower or in such Significant Subsidiary's own name)
with financially sound and responsible insurance companies,
insurance on all their respective properties in at least
such amounts and against at least such risks (and with such
risk retention) as are usually insured against in the same
general area by companies of established repute engaged in
the same or a similar business.
SECTION 5.04. Conduct of Business and Maintenance
of Existence. The Borrower will continue, and will cause
each Significant Subsidiary to continue, to engage in
business of the same general type as now conducted by the
Borrower and its Subsidiaries, and will preserve, renew and
keep in full force and effect, and will cause each
Significant Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence and
their respective rights, privileges and franchises necessary
or desirable in the normal conduct of business; provided
that nothing in this Section 5.04 shall prohibit (i) the
merger of a Subsidiary into the Borrower or the merger or
consolidation of a Subsidiary with or into another Person if
the corporation surviving such consolidation or merger is a
Subsidiary and if, in each case, after giving effect
thereto, no Default shall have occurred and be continuing or
(ii) the termination of the corporate existence of any
Subsidiary if the Borrower in good faith determines that
such termination is in the best interest of the Borrower and
is not materially disadvantageous to the Banks.
SECTION 5.05. Compliance with Laws. The Borrower
will comply, and cause each Subsidiary to comply, in all
material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental
Laws and ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and
Records. The Borrower will keep, and will cause each
Significant Subsidiary to keep, proper books of record and
account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its
business and activities; and will permit, and will cause
each Significant Subsidiary to permit, representatives of
any Bank at such Bank's expense to visit and inspect any of
their respective properties, to examine and make abstracts
from any of their respective books and records and to
discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public
accountants, all at such reasonable times and as often as
may reasonably be desired.
SECTION 5.07. Minimum Consolidated Net Worth.
Consolidated Net Worth will at no time be less than
$200,000,000.
SECTION 5.08. Negative Pledge. Neither the
Borrower nor any Significant Subsidiary will create, assume
or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement
securing Debt outstanding on the date of this Agreement
in an aggregate principal or face amount not exceeding
$25,000,000;
(b) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Subsidiary and not created in contemplation of such
event;
(c) any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part
of the cost of acquiring such asset, provided that such
Lien attaches to such asset concurrently with or within
90 days after the acquisition thereof;
(d) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Subsidiary and
not created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by
any Lien permitted by any of the foregoing clauses of
this Section, provided that such Debt is not increased
and is not secured by any additional assets;
(g) Liens arising in the ordinary course of its
business which (i) do not secure Debt or Derivatives
Obligations, (ii) do not secure any obligation in an
amount exceeding $25,000,000 and (iii) do not in the
aggregate materially detract from the value of its
assets or materially impair the use thereof in the
operation of its business;
(h) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate
amount of cash and cash equivalents subject to such
Liens may at no time exceed $10,000,000; and
(i) Liens not otherwise permitted by the
foregoing clauses of this Section securing Debt in an
aggregate principal or face amount at any date not to
exceed 7.5% of Consolidated Net Worth.
SECTION 5.09. Consolidations, Mergers and Sales
of Assets. The Borrower will not (i) consolidate or merge
with or into any other Person or (ii) sell, lease or
otherwise transfer, directly or indirectly, all or
substantially all of its assets to any other Person;
provided, that the Borrower may merge with another Person if
(A) the Borrower is the corporation surviving such merger
and (B) immediately after giving effect to such merger, no
Default shall have occurred and be continuing.
SECTION 5.10. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrower for its general corporate purposes. None of such
proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of
Regulation U.
SECTION 5.11. Interest Coverage. The Interest
Coverage Ratio will not, for any period of four consecutive
fiscal quarters, be less than 2.0 to 1.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) the Borrower shall fail to pay when due any
principal of any Loan or shall fail to pay within five
days of the due date thereof any interest on any Loan,
any fees or any other amount payable hereunder;
(b) the Borrower shall fail to observe or perform
any covenant contained in Sections 5.07 to 5.11,
inclusive;
(c) the Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above)
for 10 days after notice thereof has been given to the
Borrower by the Agent at the request of any Bank;
(d) any representation, warranty, certification
or statement made by the Borrower in this Agreement or
in any certificate, financial statement or other
document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect
when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to
make any payment in respect of any Material Financial
Obligations when due or, if later, within any
applicable grace period;
(f) any event or condition shall occur which
results in the acceleration of the maturity of or the
termination of the commitment in respect of any
Material Financial Obligations or enables the holder of
such Material Financial Obligations or any Person
acting on such holder's behalf to accelerate the
maturity thereof or terminate the commitment in respect
thereof;
(g) the Borrower or any Significant Subsidiary
shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief
with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall
be commenced against the Borrower or any Significant
Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of
60 days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary
under the federal bankruptcy laws as now or hereafter
in effect;
(i) any member of the ERISA Group shall fail to
pay when due an amount or amounts aggregating in excess
of $5,000,000 which it shall have become liable to pay
under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV
of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or
to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated;
or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more
members of the ERISA Group to incur a current payment
obligation in excess of $5,000,000;
(j) judgments or orders for the payment of money
in excess of $20,000,000 in the aggregate shall be
rendered against the Borrower or any Subsidiary and
such judgments or orders shall continue unsatisfied and
unstayed for a period of 10 days; or
(k) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 20% or more of the outstanding shares of common
stock of the Borrower; or, during any period of 12
consecutive calendar months, individuals who were
directors of the Borrower on the first day of such
period shall cease to constitute a majority of the
board of directors of the Borrower;
then, and in every such event, the Agent shall (i) if
requested by Banks having more than 50% in aggregate amount
of the Commitments, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by the Borrower; provided that in the case of any of
the Events of Default specified in clause (g) or (h) above
with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes
(together with accrued interest thereon) shall become
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Borrower under Section 6.01(c) promptly
upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the Notes as are delegated
to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan
Guaranty Trust Company of New York shall have the same
rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though
it were not the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower
as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations
of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this
Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness
or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile
transmission or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees'
gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action
under this Agreement.
SECTION 7.08. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Borrower. Upon any such resignation, the Required Banks
shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30
days after the retiring Agent gives notice of resignation,
then the retiring Agent may, on behalf of the Banks, appoint
a successor Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of
America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties
of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After
any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Agent.
SECTION 7.09. Agent's Fee. The Borrower shall
pay to the Agent for its own account fees in the amounts and
at the times previously agreed upon between the Borrower and
the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any Fixed Rate Borrowing:
(a) the Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts)
are not being offered to the Reference Banks in the
relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks
having 50% or more of the aggregate amount of the
Commitments advise the Agent that the Adjusted CD Rate
or the Adjusted London Interbank Offered Rate, as the
case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of
funding their CD Loans or Euro-Dollar Loans, as the
case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such
date, (i) if such Fixed Rate Borrowing is a Committed
Borrowing, such Borrowing shall instead be made as a Base
Rate Borrowing and (ii) if such Fixed Rate Borrowing is a
Money Market LIBOR Borrowing, the Money Market LIBOR Loans
comprising such Borrowing shall bear interest for each day
from and including the first day to but excluding the last
day of the Interest Period applicable thereto at the Base
Rate for such day.
SECTION 8.02. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully
continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the
then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently
with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans
of the other Banks), and such Bank shall make such a Base
Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after (x) the date hereof, in the case of any
Committed Loan or any obligation to make Committed Loans or
(y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve
Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar
Reserve Percentage), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of
any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank
to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent),
the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Borrower
and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution
methods.
SECTION 8.04. Taxes. (a) For purposes of this
Section 8.04, the following terms have the following
meanings:
"Taxes" means any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings
with respect to any payment by the Borrower pursuant to this
Agreement or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Bank and
the Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the
laws of which such Bank or the Agent (as the case may be) is
organized or in which its principal executive office is
located or, in the case of each Bank, in which its
Applicable Lending Office is located and (ii) in the case of
each Bank, any United States withholding tax imposed on such
payments but only to the extent that such Bank is subject to
United States withholding tax at the time such Bank first
becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or
similar charges or levies, which arise from any payment made
pursuant to this Agreement or under any Note or from the
execution or delivery of, or otherwise with respect to, this
Agreement or any Note.
(b) Any and all payments by the Borrower to or
for the account of any Bank or the Agent hereunder or under
any Note shall be made without deduction for any Taxes or
Other Taxes; provided that, if the Borrower shall be
required by law to deduct any Taxes or Other Taxes from any
such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law and
(iv) the Borrower shall furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank
and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as
the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days
after such Bank or the Agent (as the case may be) makes
demand therefor.
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the
United States is a party which exempts the Bank from United
States withholding tax or reduces the rate of withholding
tax on payments of interest for the account of such Bank or
certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a
trade or business in the United States.
(e) For any period with respect to which a Bank
has failed to provide the Borrower with the appropriate form
pursuant to Section 8.04(d) (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to
the date on which such form originally was required to be
provided), such Bank shall not be entitled to
indemnification under Section 8.04(b) or (c) with respect to
Taxes imposed by the United States; provided that if a Bank,
which is otherwise exempt from or subject to a reduced rate
of withholding tax, becomes subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request
to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section 8.04, then such Bank will change the jurisdiction of
its Applicable Lending Office if, in the judgment of such
Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is
not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant
to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or
Euro-Dollar Loans and the Borrower shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through
the Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by
such Bank as CD Loans or Euro-Dollar Loans, as the case
may be, shall be made instead as Base Rate Loans (on
which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of
the other Banks), and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, has been repaid, all
payments of principal which would otherwise be applied
to repay such Fixed Rate Loans shall be applied to
repay its Base Rate Loans instead.
SECTION 8.06. Substitution of Bank. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04, the
Borrower shall have the right, with the assistance of the
Agent, to seek a mutually satisfactory substitute bank or
banks (which may be one or more of the Banks) to purchase
the Note and assume the Commitment of such Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address,
facsimile number or telex number set forth on the signature
pages hereof, (y) in the case of any Bank, at its address,
facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any
party, such other address, facsimile number or telex number
as such party may hereafter specify for the purpose by
notice to the Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate
answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is
received, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by
any other means, when delivered at the address specified in
this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The
Borrower shall pay (i) all out-of-pocket expenses of the
Agent, including fees and disbursements of special counsel
for the Agent, in connection with the preparation and
administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Agent and each
Bank, including (without duplication) the fees and
disbursements of outside counsel and the allocated cost of
inside counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent
and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that
no Indemnitee shall have the right to be indemnified
hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to any Note held by it which is greater
than the proportion received by any other Bank in respect of
the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other
Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest
with respect to the Notes held by the Banks shall be shared
by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness hereunder. The
Borrower agrees, to the fullest extent it may effectively do
so under applicable law, that any holder of a participation
in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor
of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any
provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal
of, accrued interest on, or rate of interest on any Loan or
any fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or any fees
hereunder or for any reduction or termination of any
Commitment, (iv) change the aggregate amount by which or to
which the Commitments are required to be reduced on or prior
to any Commitment Reduction Date or (v) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any
action under this Section or any other provision of this
Agreement.
SECTION 9.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii), (iii) or (iv) of
Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the
benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all,
or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially
the form of Exhibit G hereto executed by such Assignee and
such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent; provided that if an
Assignee is an affiliate of such transferor Bank or was a
Bank immediately prior to such assignment, no such consent
shall be required; and provided further that such assignment
may, but need not, include rights of the transferor Bank in
respect of outstanding Money Market Loans. Upon execution
and delivery of such instrument and payment by such Assignee
to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee,
such Assignee shall be a Bank party to this Agreement and
shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption,
and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required.
Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Bank, the Agent and the
Borrower shall make appropriate arrangements so that, if
required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is
not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower
and the Agent certification as to exemption from deduction
or withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any
greater payment under Section 8.03 or 8.04 than such Bank
would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the
provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. This
Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
THE PERKIN-ELMER CORPORATION
By /s/ William F. Emswiler
Title: Vice President, Finance
761 Main Avenue
Norwalk, Connecticut 06859-0001
Telex number: 965954
Facsimile number: (203) 761-5000
Commitments
$20,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Sandra J.S. Kurek
Title: Associate
$20,000,000 CITIBANK, N.A.
By /s/ James M. Walsh
Title: Attorney-in-Fact
$20,000,000 CREDIT SUISSE
By /s/ Lynn Allegaert
Title: Member of Senior
Management
By /s/ Demian M. Gage
Title: Associate
$10,000,000 BANQUE NATIONALE DE PARIS
By /s/ Eric Vigne
Title: Senior Vice President
By /s/ Sophie Revillard Kaufman
Title: Vice President
$10,000,000 CHEMICAL BANK
By /s/ Edmond DeForest
Title: Vice President
$10,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By /s/ Takeshi Kawano
Title: Senior Vice President
$10,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Linda M. Harris
Title: Senior Vice President
_________________
Total Commitments
$100,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Sandra J.S. Kurek
Title: Associate
60 Wall Street
New York, New York 10260-0060
Attention: Loan Department
Telex number: 177615 MGT UT
Facsimile number: (212) 648-5014<PAGE>
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin", "Commitment
Fee Rate" and "Facility Fee Rate" for any day are the
respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on
such day:
Level Level Level Level Level
Status I II III IV V
Euro-Dollar
Margin 0.2375% 0.275% 0.350% 0.375% 0.500%
CD Margin 0.3625% 0.400% 0.475% 0.500% 0.625%
Commitment Fee
Rate 0.025% 0.025% 0.050% 0.050% 0.0625%
Facility Fee
Rate 0.075% 0.100% 0.100% 0.175% 0.250%
For purposes of this Schedule, the following terms
have the following meanings:
"Level I Status" exists at any date if, at such
date, the Applicable Leverage Ratio is equal to or less than
0.25 and the Applicable Interest Coverage Ratio is equal to
or greater than 8.0.
"Level II Status" exists at any date if, at such
date, (i) the Applicable Leverage Ratio is equal to or less
than 0.33 and the Applicable Interest Coverage Ratio is
equal to or greater than 6.0 and (ii) Level I Status does
not exist.
"Level III Status" exists at any date if, at such
date, (i) the Applicable Leverage Ratio is equal to or less
than 0.375 and the Applicable Interest Coverage Ratio is
equal to or greater than 4.5 and (ii) neither Level I Status
nor Level II Status exists.
"Level IV Status" exists at any date if, at such
date, (i) the Applicable Leverage Ratio is equal to or less
than 0.47 and the Applicable Interest Coverage Ratio is
equal or greater than 3.0 and (ii) none of Level I Status,
Level II Status and Level III Status exists.
"Level V Status" exists at any date if, at such
date, no other Status exists.
"Applicable Interest Coverage Ratio" means, with
respect to each day during any Quarter, the Interest
Coverage Ratio for the period of four consecutive Quarters
ending with the immediately preceding Quarter.
"Applicable Leverage Ratio" means, for each day
during any Quarter, the Leverage Ratio as at the last day of
the immediately preceding Quarter.
"Quarter" means each period of three consecutive
calendar months consisting of (i) January, February and
March; (ii) April, May and June; (iii) July, August and
September and (iv) October, November and December.
"Status" refers to the determination of which of
Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status exists at any date.
The Applicable Leverage Ratio and Applicable Interest
Coverage Ratio for each Quarter shall be determined
initially on the basis of an estimate which shall be
furnished by the Borrower to the Agent not later than the
earlier of (i) the 60th day of such Quarter and (ii) the
tenth day prior to the first day (if any) during such
Quarter on which interest is payable in respect of Euro-
Dollar Loans or CD Loans. If when finally determined the
actual Applicable Leverage Ratio or Applicable Interest
Coverage Ratio differs from the estimate, appropriate
adjustments shall be made as determined by the Agent.
EXHIBIT A
NOTE
New York, New York
, 19
For value received, The Perkin-Elmer Corporation,
a New York corporation (the "Borrower"), promises to pay to
the order of
(the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the
Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period
relating to such Loan. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on
the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States
in Federal or other immediately available funds at the
office of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made by the Bank, the respective types
and maturities thereof and all repayments of the principal
thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding
may be endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make
any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit
Agreement.
This note is one of the Notes referred to in the
Three-Year Credit Agreement dated as of June 1, 1994 among
the Borrower, the banks listed on the signature pages
thereof and Morgan Guaranty Trust Company of New York, as
Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made
to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
THE PERKIN-ELMER CORPORATION
By________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: The Perkin-Elmer Corporation
Re: Three-Year Credit Agreement (the "Credit
Agreement") dated as of June 1, 1994 among
the Borrower, the Banks listed on the
signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of
the Credit Agreement that we request Money Market Quotes for
the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to
them in the Credit Agreement.
THE PERKIN-ELMER CORPORATION
By________________________
Title:
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to The
Perkin-Elmer Corporation (the "Borrower")
Pursuant to Section 2.03 of the Three-Year Credit
Agreement dated as of June 1, 1994 among the Borrower, the
Banks parties thereto and the undersigned, as Agent, we are
pleased on behalf of the Borrower to invite you to submit
Money Market Quotes to the Borrower for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Please respond to this invitation by no later than
[2:00 P.M.] [9:15 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
<PAGE>
EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to The Perkin-Elmer
Corporation (the "Borrower")
In response to your invitation on behalf of the
Borrower dated _____________, 19__, we hereby make the
following Money Market Quote on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted
shall not exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not
exceed principal amount requested. Specify aggregate
limitation if the sum of the individual offers exceeds the
amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable
conditions set forth in the Three-Year Credit Agreement
dated as of June 1, 1994 among the Borrower, the Banks
listed on the signature pages thereof and yourselves, as
Agent, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in
part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 30 days, as
specified in the related Invitation. No more than five bids
are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify
whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).<PAGE>
EXHIBIT E
OPINION OF WILLIAM B. SAWCH
COUNSEL FOR THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am Vice President, General Counsel and Secretary
of, and have acted as counsel to, The Perkin-Elmer
Corporation (the "Borrower") in connection with the Three-
Year Credit Agreement (the "Credit Agreement") dated as of
June 1, 1994 among the Borrower, the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company of
New York, as Agent. Terms defined in the Credit Agreement
are used herein as therein defined. This opinion is being
rendered to you at the request of my client pursuant to
Section 3.01(c) of the Credit Agreement.
I, or persons acting under my supervision, have
examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate
records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the
opinion that:
1. The Borrower is a corporation duly
incorporated, validly existing and in good standing under
the laws of New York, and has all corporate powers and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency
or official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower
or of any agreement, judgment, injunction, order, decree or
other instrument known by me to be binding upon the Borrower
or any of its Significant Subsidiaries or result in the
creation or imposition of any Lien on any asset of the
Borrower or any of its Significant Subsidiaries.
3. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and each Note constitutes
a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general
principles of equity.
4. There is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against
or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole or which in any manner
draws into question the validity of the Credit Agreement or
the Notes.
5. Each of the Borrower's Significant
Subsidiaries is a corporation validly existing and in good
standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
Very truly yours,
<PAGE>
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
Three-Year Credit Agreement (the "Credit Agreement") dated
as of June 1, 1994 among The Perkin-Elmer Corporation, a New
York corporation (the "Borrower"), the banks listed on the
signature pages thereof (the "Banks") and Morgan Guaranty
Trust Company of New York, as Agent (the "Agent"), and have
acted as special counsel for the Agent for the purpose of
rendering this opinion pursuant to Section 3.01(d) of the
Credit Agreement. Terms defined in the Credit Agreement are
used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate powers and have been duly
authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and each Note constitutes
a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general
principles of equity.
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York and the federal laws of the United States
of America. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
any other person without our prior written consent.
Very truly yours,
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
THE PERKIN-ELMER CORPORATION (the "Borrower") and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the Three-Year Credit Agreement
dated as of June 1, 1994 among the Borrower, the Assignor
and the other Banks party thereto, as Banks, and the Agent
(the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans to the Borrower
in an aggregate principal amount at any time outstanding not
to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by
the Assignor under the Credit Agreement in the aggregate
principal amount of $__________ are outstanding at the date
hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its
outstanding Committed Loans, and the Assignee proposes to
accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee[, the Borrower
and the Agent] and the payment of the amounts specified in
Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under
the Credit Agreement with a Commitment in an amount equal to
the Assigned Amount, and (ii) the Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount
and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein
shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them. It
is understood that commitment and/or facility fees with
respect to the Assigned Amount accrued to the date hereof
are for the account of the Assignor and such fees accruing
from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
[SECTION 4. Consent of the Borrower and the
Agent. This Agreement is conditioned upon the consent of
the Borrower and the Agent pursuant to Section 9.06(c) of
the Credit Agreement. The execution of this Agreement by
the Borrower and the Agent is evidence of this consent.
Pursuant to Section 9.06(c) the Borrower agrees to execute
and deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The
Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the
solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
THE PERKIN-ELMER CORPORATION
By__________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
CONTRACT
AGREEMENT entered into as of the 29th day of July, 1974
between THE PERKIN-ELMER CORPORATION, a New York corporation
having its principal place of business at Norwalk,
Connecticut (hereinafter referred to as the "Company") and
GAYNOR N. KELLEY of New Canaan, Connecticut (hereinafter
referred to as "Kelley" or the "Employee").
WHEREAS, Kelley has rendered the Company valuable
services and it is regarded as essential by the Company that
it shall have the benefit of his services during future
years, and
WHEREAS, it is the desire of the Company to assist him
in providing for the contingencies of death and old age
dependency, and
WHEREAS, it appears desirable to provide for retirement
at an age prior to the current normal retirement age of 65
years in appropriate cases so as to facilitate an orderly
succession in senior management positions of the Company,
NOW, THEREFORE, it is hereby mutually agreed as
follows:
(1) Should Kelley still be in the employ of the
Company at age 65, his normal retirement age, the Company
(beginning on a date to be determined by the Company but
within 6 months from such date) will pay him annually for a
continuous period of 10 years an amount equal to $8,000.00.
Payment of this amount shall be made in quarterly
installments on the first days of the fiscal quarters of the
Company
Should the Employee be in the employ of the Company at
age 65 and thereafter die but before the entire said 10
annual payments have been paid, the unpaid balance of the 10
annual payments will continue to be paid by the Company to
the beneficiary.
(2) Should the Employee die before age 65 while in the
employ of the Company, the Company (beginning on a date to
be determined by the Company but within 6 months from the
date of death) will pay annually for a continuous period of
10 years $8,000.00. Payment of this amount shall be made in
quarterly installments on the first days of the fiscal
quarters of the Company. Payments shall be made to his
beneficiary.
(3) If the Employee shall retire on or after age 60
and before age 65, with the written consent or at the
request of the Company, payments will be made by the Company
in the amount and in the manner provided in Paragraph (1) to
commence within 6 months of the date of retirement.
(4) Should the Employee's employment be terminated at
any time after the date hereof and prior to his attaining
age 60, with the written consent or by the act of the
Company, the Company will make payments in the manner
provided in Paragraph (1) to him or his beneficiary
commencing at age 60 or the date of his prior death in an
amount determined by multiplying the benefit set forth in
Paragraph (1) by a fraction, the numerator of which shall be
the number of whole months or major part thereof of
employment from the date hereof to the date of termination
of employment, and the denominator of which shall be the
number of whole months or major part thereof from the date
hereof to the date he attains age 60.
(5) Unless the Company shall consent in writing, the
Employee, if his employment be terminated other than by
death or disability or as provided in Paragraphs (3) or (4)
prior to his attaining age 65, shall forfeit all right to
benefits hereunder and the Company shall have no liability
for any payment to the Employee or a beneficiary.
(6) In the event the Employee shall become disabled so
that he is unable to perform his duties as an Employee and
so that he is entitled to benefits under a long range
disability insurance program made available by the Company,
or so that he would have been eligible for such benefits had
he elected to insure himself thereunder, the Company will
make payments as provided in Paragraph (1) above to commence
at age 65.
In the event the Employee should die at any time after
becoming disabled and before attaining age 65, payments as
provided in this Paragraph (6) will be made to his
designated beneficiary commencing as of the date of the
Employee's death.
(7) The Company has or may procure a policy or
policies of life insurance upon the life of the Employee to
aid it in meeting its obligations under this Agreement. It
is understood, however, that such policy or policies held by
the Company and the proceeds therefrom shall be treated as
the general assets of the Company; that they shall in no way
represent any vested, secured, or preferred interest of the
Employee or his beneficiaries under this Agreement; and that
the Company shall be under no obligation either to procure
or to continue life insurance in force upon the life of the
Employee.
The Employee hereby agrees that he already has or will
submit to a physical examination and answer truthfully and
completely without mental reservation or concealment any
question or request for information by any insurance company
in connection with the issuance of any policy procured by
the Company under this Paragraph (7). In the event the
Employee fails to do so or in the event the Employee dies by
suicide, and the liability of the insurer under such policy
is restricted as a result of such failure or suicide, then
the Company shall thereby be released from all of its
obligations under Paragraph (2) above.
(8) If the Company shall procure any policy or policies
of life insurance in accordance with Paragraph (7) above and
shall have the option of including in any such policy an
accidental death or so-called "double indemnity" provision,
the Company will so advise the Employee and if the Employee
requests and agrees to pay any additional premium resulting
therefrom will include in the policy such accidental death
or double indemnity provisions as may be available and will
further provide or cause to be provided that any benefit
payable under or by reason of such provisions shall be paid
as a death benefit to the beneficiary designated by the
Employee hereunder; provided that in the event the Employee
shall cease to pay such additional premium the Company may
cancel any accidental death or double indemnity provision;
and further provided that the inclusion of such a provision
shall in no way affect the Company's right to cancel or
otherwise dispose of the policy, even though such action may
have the effect of terminating such provision.
(9) If during a period of 10 years from the
termination of his employment by the Company the Employee
shall engage in a business competitive with any business
activity engaged in by the Company during his period of
employment, including without limitation, designing or
manufacturing scientific instruments, electro-optical
systems, precision optics or electronic devices similar to
or in competition with those produced by the Company or any
subsidiary or affiliate thereof; or enter into the service
of any organization so engaged in such business (or any
subsidiary or affiliate of such an organization), or
personally engage in or enter the service of any
organization that is engaged in consulting work or research
or development or engineering activities for any
organization so engaged in such business (or any subsidiary
or affiliate of such an organization); then any liability of
the Company to make any further payments hereunder shall
cease.
The investment of funds by the Employee in securities
of a corporation listed on a recognized stock exchange shall
not be considered to be a breach of the above paragraph.
(10) The Company may in its sole discretion grant the
Employee a leave of absence for a period not to exceed one
year during which time the Employee will be considered to be
still in the employ of the Company for the purposes of this
Agreement.
(11) The Company in its sole discretion and without
the consent of the Employee, his estate, beneficiaries or
any other person claiming through or under him, may commute
any payments which are due hereunder at the rate of 4% per
annum to a lump sum and pay such lump sum to the Employee or
to the beneficiary or beneficiaries entitled to receive
payment at the date of commutation and such payment shall be
a full discharge of the Company's liabilities hereunder.
The Company may also in its sole discretion and without the
consent of any other person accelerate the payment of any of
the sums payable hereunder.
(12) The right to receive payments under this
Agreement shall not be assignable nor subject to
anticipation, nor shall such right be subject to
garnishment, attachment or any other legal process of
creditors of the Employee or of any person or persons
designated as beneficiaries hereunder except to the extent
that this provision may be contrary to law.
(13) This Agreement creates no rights in the Employee
to continue in the employ of the Company for any length of
time nor does it create any rights in the Employee or
obligations on the part of the Company other than those set
forth herein.
For purposes of the contract, the work "beneficiary"
shall mean the beneficiary or beneficiaries designated in
writing by the Employee. The Employee may change a
beneficiary at any time by written notice to the Company
which shall take effect only on its receipt and
acknowledgment in writing by the Company.
(14) If the Company, or any corporation surviving or
resulting from any merger or consolidation to which the
Company may be a party or to which substantially all the
assets of the Company shall be sold or otherwise
transferred, shall at any time be merged or consolidated
with or into any other corporation or corporations or shall
otherwise transfer substantially all its assets to another
corporation, the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the
corporation surviving or resulting from such merger or
consolidation or to which such assets shall be so sold or
otherwise transferred. Except as hereinafter provided, this
Agreement shall not be assignable by the Company or by the
Employee.
This Agreement is solely between the Company and the
Employee. The Employee and his beneficiaries designated
under Paragraph (2) above shall have recourse only against
the Company for enforcement and the Agreement shall be
binding upon the beneficiaries, heirs, executors and
administrators of the Employee and upon the successors and
assigns of the Company.
This Agreement has been made, executed and delivered in
the State of Connecticut; and shall be governed in
accordance with the laws thereof.
IN WITNESS WHEREOF the parties hereto have set their
hands and affixed the seal of the Corporation this 29th day
of July 1974.
THE PERKIN-ELMER CORPORATION
By /s/ R. H. Sorensen
President
/s/ Gaynor N. Kelley
Second Amendment to Contract
AMENDED AGREEMENT entered into as of the 20th day of
January, 1983, between THE PERKIN-ELMER CORPORATION, a New
York corporation having its principal place of business at
Norwalk, Connecticut (hereinafter referred to as the
"Company"), and Gaynor N. Kelley, of 1801 Ponus Ridge Road,
New Canaan, Ct. 06840 (hereinafter referred to as
"Employee").
WHEREAS, the Company and Employee have entered into an
Agreement, dated as of July 29, 1974 (hereinafter called the
"Original Agreement"), providing among other things for the
payment of certain compensation to Employee upon his
retirement from the Company;
NOW, THEREFORE, it is hereby mutually agreed as
follows:
(1) The Original Agreement, as heretofore amended,
shall be further amended to add the following paragraph
after the second paragraph of Paragraph (1) of the Original
Agreement:
"The Employee may elect in writing at any time
prior to his normal retirement date one of the
following optional forms of payment in lieu of the
normal form of payment set forth above, with the annual
value of such optional form of payment being
actuarially reduced from such normal form of payment;
provided, however, that such optional forms of payment
are not available to an Employee in the event he dies
or terminates his employment and is covered by
paragraphs (2), (4), (5) or (6) of this Agreement;
"Option 1. Reduced annual payments payable during
his life with the provision that if he shall not
survive a period of ten years, such reduced annual
payments shall continue to be paid after the death of
the Employee and during the remainder of such ten-year
period, to the Beneficiary designated by the Employee
in his written notice of election (and, if such
Beneficiary shall die during the remainder of such
period, then to the estate of such Beneficiary), or if
the Employee shall survive such Beneficiary, to the
estate of the Employee; or
"Option 2. Reduced annual payments payable during
his life, with the provision that after his death such
reduced annual payments shall continue during the life
of, and shall be paid to, the Beneficiary designated by
the Employee in his written notice of election; or
"Option 3. Reduced annual payments payable during
his life, with the provision that after his death
annual payments equal to 50% of his reduced annual
payments shall continue during the life of, and shall
be paid to, the Beneficiary designated by the Employee
in his written notice of election; or
"Option 4. Reduced annual payments payable to
Employee during his life."
(2) All of the other terms and conditions of the
Original Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their
hands and affixed the seal of the Company as of the date
first appearing on this Amendment.
ATTEST: THE PERKIN-ELMER CORPORATION
/s/ C. Wendell Bergere, Jr. By /s/ R. H. Sorensen
Assistant Secretary Robert H. Sorensen
Chairman of the Board
ACCEPTED AND AGREED:
/s/ Gaynor N. Kelley
Third Amendment to Contract
AMENDED AGREEMENT entered into as of the 18th day of
August, 1983, between THE PERKIN-ELMER CORPORATION, a New
York corporation having its principal place of business at
Norwalk, Connecticut (hereinafter referred to as the
"Company"), and Gaynor N. Kelley, of 1801 Ponus Ridge Road,
New Canaan, Connecticut, 06840 (hereinafter referred to as
"Employee").
WHEREAS, the Company and Employee have entered into an
Agreement, dated as of July 29, 1974 (hereinafter called the
"Original Agreement"), providing among other things for the
payment of certain compensation to Employee upon his
retirement from the Company;
NOW, THEREFORE, it is hereby mutually agreed as
follows:
(1) The Original Agreement, as heretofore amended,
shall be further amended to add the following paragraph at
the end of Paragraph (5) of the Original Agreement:
"Notwithstanding any other provision of this
Agreement, in the event of an involuntary termination
of the Employee's employment at any time following a
Change in Control (as hereafter defined), payments will
be made in the same amount and in the manner provided
in Paragraph (1), to commence within 3 months of the
date of such termination. For purposes hereof, (a) the
term 'Control' shall have the same meaning as is
ascribed thereto in Rule 12b-2(f) of the Rules and
Regulations promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of
1934, and (b) an event or events constituting a Change
in Control of the Company shall be deemed to have
occurred on such date as the Company shall file, or
shall have become obligated to file, whichever is
earlier, a Current Report on Form 8-K describing any
such Change in Control of the Company pursuant to Item
1 thereof or indicating that any such Change in Control
either is imminent or may have occurred."
(2) All of the other terms and conditions of the
Original Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their
hands and affixed the seal of the Company as of the date
first appearing on this Amendment.
ATTEST: THE PERKIN-ELMER CORPORATION
/s/ C. Wendell Bergere, Jr. By /s/ R. H. Sorensen
Assistant Secretary Robert H. Sorensen
Chairman of the Board
ACCEPTED AND AGREED:
/s/ Gaynor N. Kelley
Gaynor N. Kelley
AMENDMENT
TO
DEFERRED COMPENSATION CONTRACT
Amended Agreement entered into as of the 21st day of
May, 1987, between THE PERKIN-ELMER CORPORATION, a New York
Corporation having its principal place of business at
Norwalk, Connecticut (hereinafter referred to as the
"Company"), and Gaynor N. Kelley of 1801 Ponus Ridge Road,
New Canaan, Connecticut 06840 (hereinafter referred to as
the "Employee").
WHEREAS, pursuant to an Agreement entered into as of
July 29, 1974 between the Company and the Employee
(hereinafter referred to as the "Agreement), the Company
agreed to make certain payments to the Employee (or his
beneficiary) in the event of the Employee's retirement or
death;
NOW, THEREFORE, it is hereby mutually agreed that
Paragraph (5) of the Agreement is amended, effective as of
the date hereof, by amending the second paragraph thereof in
its entirety to read as follows:
Notwithstanding any other provision of this
Agreement, if within three years of a Change in Control
the employment of Employee is terminated by the Employee
for Good Reason or by the Company without Cause, then the
Company will pay Employee the amount referred to in
Paragraph (1) of this Agreement within 60 days of such
termination of employment. For purposes hereof:
(a) A "Change in Control" shall have occurred if
(i) any "person" within the meaning of Section 14(d) of
the Securities Exchange Act of 1934 becomes the
"beneficial owner" as defined in Rule 13d-3 thereunder,
directly or indirectly, of more than 25% of the
Company's Common Stock, (ii) any "person" acquires by
proxy or otherwise, other than pursuant to
solicitations by the Incumbent Board (as hereinafter
defined), the right to vote more than 35% of the
Company's Common Stock for the election of directors,
for any merger or consolidation of the Company or for
any other matter or questions, (iii) during any two
year period, individuals who constitute the Board of
Directors of the Company (the "Incumbent Board") as of
the beginning of the period cease for any reason to
constitute at least a majority thereof, provided that
any person becoming a director during such period whose
election or nomination for election by the Company's
stockholders was approved by a vote of at least three-
quarters of the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for
director without objection to such nomination) shall
be, for purposes of this clause (iii), considered as
though such person were a member of the Incumbent
Board, or (iv) the approval by the Company's
stockholders of the sale of all or substantially all of
the assets of the Company.
(b) Termination by the Company of the employment
of the Employee for "Cause" shall mean termination upon
(i) the willful and continued failure by the Employee
to perform substantially his duties with the Company
(other than any such failure resulting from the
Employee's incapacity due to physical or mental
illness) after a demand for substantial performance is
delivered to the employee by the Chairman of the Board
or President of the Company which specifically
identifies the manner in which such executive believes
that the Employee has not substantially performed his
duties, or (ii) the willful engaging by the Employee in
illegal conduct which is materially and demonstrably
injurious to the Company. For purposes of this
subparagraph (b), no act, or failure to act, on the
part of the Employee shall be considered "willful"
unless done, or omitted to be done, by the Employee in
bad faith and without reasonable belief that the
Employee's action or omission was in, or not opposed
to, the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall
conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best
interests of the Company. Notwithstanding the
foregoing, the Employee shall not be deemed to have
been terminated for Cause unless and until there shall
have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for
the purpose (after reasonable notice to the employee
and an opportunity for him, together with his counsel,
to be heard before the Board), finding that in the good
faith opinion of the Board the Employee was guilty of
the conduct set forth above in (i) or (ii) of this
subparagraph (b) and specifying the particulars thereof
in detail.
(c) Termination by the employee of employment for
"Good Reason" shall mean termination based on:
(i) an adverse change in the status of the
Employee (other than any such change primarily
attributable to the fact that the Company may no longer
be publicly owned) or position(s) as an officer of the
Company as in effect immediately prior to the Change in
Control, or the assignment to the Employee of any
duties or responsibilities which, in his reasonable
judgement, are inconsistent with such status or
position(s), or any removal of the Employee from or any
failure to reappoint or reelect him to such position(s)
(except in connection with the termination of the
Employee's employment for Cause, total disability or
retirement on or after attaining age 65 or as a result
of death or by the Employee other than for Good
Reason);
(ii) a reduction by the Company in the Employee's
base salary as in effect immediately prior to the
Change in Control;
(iii) A material reduction in the Employee's
total annual compensation; a reduction for any year of
over 10% of total compensation measured by the
preceding year without a substantially similar
reduction to other executives shall be considered
"material"; provided, however, the failure of the
Company to adopt or renew a stock option plan or to
grant stock options to the Employee shall not be
considered a reduction; and
(iv) the Company's requiring the employee to be
based more than fifty miles from Norwalk, Connecticut,
except for required travel on the Company's business to
an extent substantially consistent with the business
travel obligations which he undertook on behalf of the
Company prior to the change of Control.
All other provisions of the Agreement not amended
herein shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed
this instrument as of the year and day first above written.
THE PERKIN-ELMER CORPORATION
By /s/ Horace G. McDonell
Horace G. McDonell
Chairman and
Chief Executive Officer
ATTEST:
By /s/ C. Wendell Bergere, Jr.
C. Wendell Bergere, Jr.
Vice President, General Counsel
and Secretary
ACCEPTED AND AGREED:
/s/ Gaynor N. Kelley
Gaynor N. Kelley
AMENDMENT TO CONTRACT
AMENDMENT entered into as of the 20th day of January,
1994, between THE PERKIN-ELMER CORPORATION, a New York
corporation having its principal place of business at
Norwalk, Connecticut (hereinafter referred to as the
"Company"), and GAYNOR N. KELLEY, of 1801 Ponus Ridge Road,
New Canaan, Connecticut 06840 (hereinafter referred to as
the "Employee").
WHEREAS, the Company and the Employee have entered into
an Agreement, dated as of July 29, 1974 (hereinafter
referred to as the "Original Agreement"), as amended,
providing, among other things, for the payment of certain
compensation to the Employee upon his retirement from the
Company.
NOW, THEREFORE, it is hereby mutually agreed as
follows:
(1) The Original Agreement, as heretofore amended,
shall be further amended to change the amount of "$75,000"
set forth in Paragraphs (1) and (2) of the Original
Agreement, as so amended, to read "$190,000."
(2) All of the other terms and conditions of the
Original Agreement, as heretofore amended, shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their
hands and affixed the
seal of the Company as of the 20th day of January, 1994.
ATTEST THE PERKIN-ELMER CORPORATION
/s/ William B. Sawch /s/ Riccardo Pigliucci
William B. Sawch Riccardo Pigliucci
Secretary President
ACCEPTED AND AGREED:
/s/ Gaynor N. Kelley
Gaynor N. Kelley
DEFERRED COMPENSATION CONTRACT
AGREEMENT entered into as of February 18, 1993, between THE
PERKIN-ELMER CORPORATION, a New York corporation having its
principal place of business at Norwalk, Connecticut (hereinafter
referred to as the "Company") and Andre F. Marion, of 556
Kingsley Avenue, Palo Alto, CA 94301 (hereinafter referred to as
the "Employee").
WHEREAS, the Employee has rendered valuable service to the
Company, and it is regarded as essential by the Company that it
shall have the benefit of his services during future years, and
WHEREAS, it is the desire of the Company to assist the
Employee in providing for the contingencies of death and old age
dependency, and
WHEREAS, it appears desirable to provide for retirement at an
age prior to the current normal retirement age of 65 years in
appropriate cases so as to facilitate an orderly succession in
senior management positions of the Company.
NOW, THEREFORE, it is hereby mutually agreed as follows:
(1) Should the Employee still be in the employ of the
Company at age 65, the Company (beginning on a date to be
determined by the Company but within 6 months from the
Employee's retirement date) will pay him $25,000 each year
for a continuous period of 10 years. Payment of this amount
shall be made in quarterly installments on the first day of
the fiscal quarters of the Company.
Should the Employee be in the employ of the Company
at age 65 and thereafter die before the entire said 10 annual
payments have been paid, the unpaid balance of the 10 annual
payments will continue to be paid by the Company to that
person designated by the Employee in a written notice of
election as the Employee's beneficiary hereunder (hereinafter
referred to as the "Beneficiary"). The Employee may change
such designation at any time by giving the Company written
notice of such intent; and such change shall become effective
only upon being received and acknowledged by the Company.
If the Beneficiary shall die after receiving
benefits under this Agreement and further payments are
payable, such further payments shall be paid to the estate of
the Beneficiary. If the Employee shall survive the
Beneficiary without designating another Beneficiary, any
payments hereunder shall be paid to the estate of the
Employee.
The Employee may elect in writing at any time prior
to his normal retirement date one of the following optional
forms of payment in lieu of the normal form of payment set
forth above, with the annual value of such optional form of
payment being actuarially reduced from such normal form of
payment; provided, however, that such optional forms of
payment are not available to an Employee in the event he dies
or terminates his employment and is covered by Paragraphs
(2), (4), (5), or (6) of this Agreement:
Option 1. Reduced annual payments payable during his life
with the provision that if he shall not survive a period
of ten years, such reduced annual payments shall continue
to be paid after the death of the Employee and during the
remainder of such ten-year period to the Beneficiary.
Option 2. Reduced annual payments payable during his
life, with the provision that after his death such reduced
annual payments shall continue during the life of, and
shall be paid to the
Beneficiary (provided the Beneficiary survives the
Employee).
Option 3. Reduced annual payments payable during his
life, with the provision that after his death annual
payments equal to 50% of such reduced annual payments
shall continue during the life of, and shall be paid to,
the Beneficiary (provided the Beneficiary survives the
Employee).
Option 4. Reduced annual payments payable to the Employee
during his life.
Notwithstanding any contrary provisions herein, the
Employee may not change his Beneficiary in Options 2 and 3,
above, after the Employee has begun to receive payments
hereunder.
(2) Should the Employee die before age 65 while in the
employ of the Company, the Company (beginning on a date to be
determined by the Company but within 6 months from the date
of death) will pay the Beneficiary $25,000 each year for a
continuous period of 10 years. Payment of this amount shall
be made in quarterly installments on the first day of the
fiscal quarters of the Company.
(3) If the Employee shall retire on or after age 60 and
before age 65, with the written consent or at the request of
the Company, payments will be made by the Company in the
amount and in the manner provided in Paragraph (1) to
commence within 6 months of the date of retirement.
(4) Should the Employee's employment be terminated at
any time after the date hereof and prior to his attaining age
60, with the written consent or by the act of the Company,
the Company will make payments in the manner provided in
Paragraph (1) to commence when the Employee attains age 60 or
the date of his prior death in an amount determined by
multiplying the benefit set forth in Paragraph (1) by a
fraction, the numerator of which shall be the number of whole
months or major part thereof from the date hereof to the date
of termination of employment, and the denominator of which
shall be the number of whole months or major part thereof
from the date hereof to the date he attains age 60.
(5) Unless the Company shall consent in writing, the
Employee, if his employment be terminated other than by death
or disability or as provided in Paragraphs (3) or (4) prior
to his attaining age 65, shall forfeit all right to benefits
hereunder and the Company shall have no liability for any
payment to the Employee or the Beneficiary. Notwithstanding
any other provision of this Agreement, if within three years
of a Change in Control the employment of the Employee is
terminated by the Employee for Good Reason or by the Company
without Cause, then the Company will pay Employee the amount
referred to in Paragraph (1) of this Agreement within 60 days
of such termination of employment. For purposes hereof:
(a)A "Change in Control" shall have occurred if (i) any
"person" within the meaning of Section 14 (d) of the
Securities Exchange Act of 1934 becomes the "beneficial
owner" as defined in Rule 13d-3 thereunder, directly or
indirectly, of more than 25% of the Company's Common Stock,
(ii) any "person" acquires by proxy or otherwise, other
than pursuant to solicitations by the Incumbent Board (as
hereinafter defined), the right to vote more than 35% of
the Company's Common Stock for the election of directors,
for any merger or consolidation of the Company or for any
other matter or question, (iii) during any two-year period,
individuals who constitute the Board of Directors of the
Company (the "Incumbent Board") as of the beginning of the
period cease for any reason to constitute at least a
majority thereof, provided that any person becoming a
director during such period whose election or nomination
for election by the Company's stockholders was approved by
a vote of at least three-quarters of the Incumbent Board
(either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a
nominee for director without objection to such nomination)
shall be, for purposes of this clause (iii), considered as
though such person were a member of the Incumbent Board, or
(iv) the Company's Stockholders approve the sale of all or
substantially all of the assets of the Company.
(b)Termination by the Company of the employment of the
Employee for "Cause" shall mean termination upon (i) the
willful and continued failure by the Employee to perform
substantially his duties with the Company, (other than any
such failure resulting from the Employee's incapacity due
to physical or mental illness) after a demand for
substantial performance is delivered to the employee by
the Chairman of the Board or President of the Company
which specifically identifies the manner in which such
executive believes that the Employee has not substantially
performed his duties, or (ii) the willful engaging by the
Employee in illegal conduct which is materially and
demonstrably injurious to the Company. For purposes of
this subparagraph (b), no act or failure to act on the
part of the Employee shall be considered "willful" unless
done, or omitted to be done, by the Employee in bad faith
and without reasonable belief that the Employee's action
or omission was in, or not opposed to, the best interests
of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by
the Board or based upon the advice of counsel for the
Company shall conclusively presumed to be done, or omitted
to be done, by the Employee in good faith and in the best
interests of the Company. Notwithstanding the foregoing,
the Employee shall not be deemed to have been terminated
for Cause unless and until there shall have been delivered
to the Employee a copy of a resolution, duly adopted by
the affirmative vote of not less than three-quarters of
the entire membership of the Board at a meeting of the
Board called and held for that purpose (after reasonable
notice to the employee and an opportunity for him,
together with his counsel, to be heard before the Board),
finding that in the good faith opinion of the Board the
Employee was guilty of the conduct set forth in sections
(i) or (ii) of this subparagraph (b) and specifying the
particulars thereof in detail.
(c)Termination by the employee of employment for "Good
Reason" shall mean termination based on:
(i) an adverse change in the status of the Employee (other
than any such change primary attributable to the fact
that the Company may no longer be publicly owned) or
the Employee's position(s) as an officer of the Company
as in effect immediately prior to the Change in
Control, or the assignment to the Employee of any
duties or responsibilities which, in his reasonable
judgement, are inconsistent with such status or
position(s), or any removal of the Employee from, or
any failure to reappoint or reelect him to, such
position(s) (except in connection with the termination
of the Employee's employment for Cause, total
disability, or retirement on or after attaining age 65
or as a result of death or by the Employee other than
for Good Reason);
(ii) a reduction by the Company in the Employee's base
salary as in effect immediately prior to the Change in
Control;
(iii) A material reduction in the Employee's total
annual compensation; a reduction for any year of over
10% of total compensation measured by the preceding
year without a substantially similar reduction to other
executives shall be considered "material"; provided,
however, the failure of the Company to adopt or renew a
stock option plan or to grant stock options to the
Employee shall not be considered a reduction; and
(iv) the Company's requiring the employee to be more
than fifty miles from Norwalk, Connecticut, except for
required travel on the Company's business to an extent
substantially consistent with the business travel
obligations which he undertook on behalf of the Company
prior to the Change in Control.
(6) In the event the Employee shall become disabled so
that he is unable to perform his duties as an employee and so
that he is entitled to benefits under a long range disability
insurance program made available by the Company, or so that
he would have been eligible for such benefits had he elected
to insure himself thereunder, the Company will make payments
as provided in Paragraph (1) above to commence at age 65. In
the event the Employee should die at any time after becoming
disabled and before attaining age 65, payments as provided in
this Paragraph (6) will be made to the Beneficiary commencing
as of the date of the Employee's death.
(7) The Company has or may procure a policy or policies
of life insurance upon the life of the Employee to aid it in
meeting its obligations under this Agreement. It is
understood, however, that such policy or policies held by the
Company and the proceeds therefrom shall be treated as the
general assets of the Company; that they shall in no way
represent any vested, secured, or preferred interest of the
Employee or his beneficiaries under this Agreement; and that
the Company shall be under no obligation either to procure or
to continue life insurance in force upon the life of the
Employee.
The employee hereby agrees that he already has or
will submit to a physical examination and answer truthfully
and completely without mental reservation or concealment any
question or request for information by any insurance company
in connection with the issuance of any policy procured by the
Company under this Paragraph. (7). In the event the Employee
fails to do so or in the event the Employee dies by suicide,
and the liability of the insurer under such policy is
restricted as a result of such failure or suicide, then the
Company shall thereby be released from all of its obligations
under Paragraph (2) above.
(8) If the Company shall procure any policy or policies
of life insurance in accordance with Paragraph (7) above and
shall have the option of including in any such policy an
accidental death or so-called "double indemnity" provision,
the Company will so advise the Employee and, if the Employee
requests and agrees to pay any additional premium resulting
therefrom, will include in the policy such accidental death
or double indemnity provisions as may be available and will
further provide or cause to be provided that any benefit
payable under or by reason of such provisions shall be paid
as a death benefit to the beneficiary designated by the
Employee hereunder; provided that in the event the Employee
shall cease to pay such additional premium the Company may
cancel any accidental death or double indemnity provision;
and further provided that the inclusion of such a provision
shall in no way affect the Company's right to cancel or
otherwise dispose of the policy, even though such action may
have the effect of terminating such provision.
(9) If during a period of 10 years from the termination
of his employment with the Company the Employee shall: engage
in a business competitive with any business activity engaged
in by the Company at any time while he was employed; enter
into the service of any organization so engaged in such
business (or any subsidiary or affiliate of such an
organization); or personally engage in or enter the service
of any organization that is engaged in consulting work or
research or development or engineering activities for any
organization so engaged in such business (or any subsidiary
or affiliate of such an organization), then any liability of
the Company to make any further payments hereunder shall
cease. The investment of funds by the Employee in securities
of a corporation listed on a recognized stock exchange shall
not be considered to be a breach of this Paragraph.
(10) The Company may in its sole discretion grant the
Employee a leave of absence for a period not to exceed one
year during which time the Employee will be considered to be
still in the employ of the Company for the purposes of this
Agreement.
(11) The Company in its sole discretion and without the
consent of the Employee, his estate, his beneficiaries, or
any other person claiming through or under him, may commute
any payments which are due hereunder at the rate of 4% per
annum to a lump sum and pay such lump sum to the Employee or
to the beneficiary or beneficiaries entitled to receive
payment at the date of commutation, and such payment shall be
a full discharge of the Company's liabilities hereunder. The
Company may also in its sole discretion and without the
consent of any other person accelerate the payment of any of
the sums payable hereunder.
(12) The right to receive payments under this Agreement
shall not be assignable or subject to anticipation, nor shall
such right be subject to garnishment, attachment, or any
other legal process of creditors of the Employee or of any
person or persons designated as beneficiaries hereunder
except to the extent that this provision may be contrary to
law.
(13) This Agreement creates no rights in the Employee
to continue in the employ of the Company for any length of
time nor does it create any rights in the Employee or
obligations on the part of the Company other than those set
forth herein.
(14) If the Company, or any corporation surviving or
resulting from any merger or consolidation to which the
Company may be a party or to which substantially all the
assets of the Company shall be sold or otherwise transferred,
shall at any time be merged or consolidated with or into any
other corporation or corporations or shall otherwise transfer
substantially all its assets to another corporation, the
terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the corporation surviving or
resulting from such merger or consolidation or to which such
assets shall be so sold or otherwise transferred. Except as
herein provided, this Agreement. This Agreement is solely
between the Company and the Employee. The Employee and his
beneficiaries shall have recourse only against the Company
for enforcement, and the Agreement shall be binding upon the
beneficiaries, heirs, executors, and administrators of the
Employee and upon the successors and assigns of the Company.
(15) This Agreement has been made, executed, and
delivered in the State of Connecticut; and shall be governed
in accordance with the laws thereof.
IN WITNESS WHEREOF, the parties hereto have set their hands
and affixed the seal of the Corporation as of the date first
written above.
THE PERKIN-ELMER CORPORATION
By: / s / Gaynor N. Kelley
Gaynor N. Kelley
Chairman and President
Chief Executive Officer
ATTEST:
By: / s / C.Wendell Bergere, Jr.
ACCEPTED AND AGREED:
By: / s / A. F. Marion
November 1, 1990
Dear Andre Marion:
In view of your position as a Corporate Senior Manager at
Applied Biosystems Inc. (the "Company"), and in
consideration of your services in such capacity, the Board
of Directors (the "Board") has approved the commitment by
the Company to you ("Employee") to provide you with the
certain benefits in the event your employment is terminated
for specified reasons within two years after a Change of
Control. The purpose of this letter agreement (the
"Agreement") is to set forth the terms and conditions of the
Company's agreement with you concerning such benefits.
1. Termination of Benefits. If within two years after
the date of a Change of Control, Employee's employment is
terminated (a) by the Company for any reason other than for
Cause or Employee's death or Disability or (b) by Employee
for Good Reason, Employee will be entitled to receive the
following benefits:
1.1 Salary Continuation. The Company will continue to
pay Employee salary at the annual rate equal to Employee's
Annual Compensation for the number of weeks determined by
adding (a) the number of years Employee has been an employee
of the Company (rounding up to the next full year and
excluding any intervening periods during which Employee was
not an employee) or two, if greater, plus (b) two and one-
half times the number of $5,000 increments (rounded up to
the next $5,000 increment) contained in the Employee's
Annual Compensation. Continued salary will be paid to
Employee on the Company's regular paydays during the period
of salary continuation and will be subject to applicable
withholding taxes. If Employee should die before receiving
all amounts payable to Employee hereunder, any unpaid
amounts will be paid to Employee's spouse, if living,
otherwise to Employee's estate. Employee shall be entitled
to receive interest on any amount payable hereunder from the
date payment was due to the date actually paid at the rate
of the lesser of 12% or the highest rate legally
permissible. Employee will not be required to mitigate the
amount of the payments due to Employee hereunder by seeking
other employment or otherwise, and any amount earned by
Employee as the result of employment by another employer or
otherwise after the Date of Termination shall not reduce the
Company's obligation to Employee hereunder.
1.2 COBRA Benefits. The Company will pay for
Employee's health insurance continuation benefits provided
for under the Consolidated Omnibus Budget Reconciliation Act
of 1986 ("COBRA") and Section 4980B of the Internal Revenue
Code of 1986 until the earliest of (a) eighteen months after
the Date of Termination, (b) the last payday on which the
Company is obligated to make a payment to Employee pursuant
to paragraph 1.1 above or (c) the date on which Employee
first becomes eligible to participate in another health
insurance plan. The insurance continuation benefits paid
for hereunder shall be deemed to be part of Employee's COBRA
coverage.
1.3 Offset for Other Arrangements. The severance
benefits provided hereunder will be reduced by the amount of
any payment to which Employee may be entitled under any
severance plan or policy of the Company or under any
individual severance agreement, employment agreement or
offer letter.
2. Notice of Termination. Any termination by the
Company for Cause or by Employee for Good Reason shall be
communicated by written notice to the other party given by
hand delivery or by registered or certified mail, return
receipt requested, postage prepaid, if to Employee, then to
Employee at his or her address as set forth in the Company's
records, and, if to the Company, to Applied Biosystems,
Inc., 777 Lincoln Centre Drive, Foster City, California
94404, Attention: Andre F. Marion. Any notices given
pursuant to this paragraph 2 shall be effective the earlier
of when such notice is actually received by the addressee or
three days after such notice is delivered or sent.
3. Definitions.
3.1 "Annual Compensation" means all wages, salary,
bonus and other incentive compensation (including
commissions) paid by the Company as consideration for
Employee's service during the 12 months ended on either the
Termination Date or the date of the Change of Control,
whichever is greater, which are includable in the gross
income of Employee for federal income tax purposes.
3.2 "Cause" means (a) gross or habitual failure to
perform assigned duties of Employee's job, that is,
performance failure not corrected within thirty (30) days
after written notice to Employee thereof or (b) misconduct,
including but not limited to: (i) conviction of a crime, or
entry of a plea of nolo contendere with regard to a crime,
involving moral turpitude or dishonesty, or (ii) drug or
alcohol abuse on Company premises or at a Company sponsored
event or reporting to or remaining at work while under the
influence of drugs or alcohol, or (iii) conduct by Employee
which in the good faith and reasonable determination of the
Board demonstrates gross unfitness to serve.
3.3 "Change of Control" shall be deemed to have
occurred at any of the following times:
i. Upon the acquisition (other than from the Company)
by any person, entity or "group," within the meaning
of Section 13(d) (3) or 14(d) (2) of the Securities
Exchange Act of 1934 (the "Exchange Act")
(excluding, for this purpose, the Company or its
affiliates, or any employee benefit plan of the
Company or its affiliates which acquires beneficial
ownership of voting securities of the Company) of
beneficial ownership (within the meaning of Rule 13d-
3 promulgated under the Exchange Act) of 50% or more
of either the then outstanding shares of common
stock or the Combined Voting Power; or
ii.At the time individuals who, as of October 31, 1990,
constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of
the Board, provided that any person becoming a
director subsequent to October 31, 1990 whose
election, or nomination for election by the
Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising
the Incumbent Board (other than an election or
nomination of an individual whose initial assumption
of office is in connection with an actual or
threatened election contest relating to the election
of the Directors of the Company, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of
the Plan, considered as though such person were a
member of the Incumbent Board; or
iii. Immediately prior to the consummation by the
Company of a reorganization, merger, consolidation
(in each case, with respect to which persons who
were the shareholders of the Company immediately
prior to such reorganization, merger or
consolidation do not, immediately thereafter, own
more than 50% of the Combined Voting Power of the
reorganized, merged or consolidated company's then
outstanding voting securities) or a liquidation or
dissolution of the Company or of the sale of all or
substantially all of the assets of the Company; or
iv.The occurrence of any other event which the
Incumbent Board in its sole discretion determines
constitutes a Change of Control.
3.4 "Combined Voting Power" means the combined voting
power of the Company's then outstanding securities
ordinarily (and apart from rights accruing under special
circumstances ) having the right to vote at elections of
directors.
3.5 "Date of Termination" means the date of receipt of
the written notice of termination pursuant to paragraph 2 or
any later date specified therein, as the case may be;
provided, however, that (1.) if Employee's employment is
terminated by the Company other than for Cause or by reason
of death or Disability, the Date of Termination shall be the
date on which the Company notifies Employee of such
termination and (2.) if Employee's employment is terminated
by reason of death or Disability, the Date of Termination
shall be the date of death or determination of Disability
pursuant to paragraph 3.6 , as the case may be.
3.6 "Disability" means disability which, at least 26
weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its
insurers and acceptable to Employee or Employee's legal
representative (such acceptance not to be unreasonably
withheld).
3.7 "Good Reason" means (i) reduction of Employee's
base salary or rate of compensation as in effect immediately
prior to the Change of Control, (ii) failure to continue in
effect any medical, dental, accident or disability plan in
which Employee is entitled to participate immediately prior
to the Change of Control and failure to provide plans with
substantially similar benefits (except that employee
contributions may be raised to the extent of any cost
increases imposed by third parties) or any action by the
Company which would adversely affect Employee's
participation or reduce Employee's benefits under any of
such plans, (iii) failure or refusal of the successor
company to assume the Company's obligations under this
Agreement, as required by paragraph 5 or (iv) breach by the
Company or any successor company any of the provisions of
this Agreement.
4. Nonexclusivity. Nothing in this Agreement shall
prevent or limit Employee's continuing or future
participation in any benefit, bonus, incentive or other
plans, programs, policies or practices provided by the
Company and for which Employee may otherwise qualify, nor
shall anything herein limit or otherwise affect such rights
as any Employee may have under any stock option or other
agreements with the Company. Except as otherwise expressly
provided herein, amounts which are vested benefits or which
Employee is otherwise entitled to receive under any plan,
policy, practice or program of the Company at or subsequent
to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program.
5. Successor to Company. The Company shall require any
successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company,
expressly and unconditionally to assume and agree to perform
the Company's obligations under this Agreement, in the same
manner and to the same extent that the Company would be
required to perform if no such succession or assignment had
taken place. In such event, the term "Company," as used in
this Agreement, shall mean the Company as hereinafter
defined and any successor or assignee to the business or
assets which by reason hereof becomes bound by the terms and
provisions of this Agreement.
6. Certain Reduction of Payments.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that
any payment or distribution by the Company to or for the
benefit of Employee (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or
otherwise) (a "Payment") would be nondeductible by the
Company for Federal income tax purposes because of Section
280G of the Code, then the aggregate present value of
amounts payable or distributable as severance benefits
hereunder shall be reduced to the Reduced Amount. The
"Reduced Amount" shall be an amount expressed in present
value which maximizes the aggregate present value of such
severance benefits without causing any Payment to be
nondeductible by the Company because of Section 280G of the
Code. Anything to the contrary notwithstanding, if the
Reduced Amount is zero and it is determined further that any
Payment which is not part of the severance benefits payable
hereunder would nevertheless be nondeductible by the Company
for Federal income tax purposes because of Section 280G of
the Code, then the aggregate present value of Payments which
are not severance benefits under this Agreement shall also
be reduced (but not below zero) to an amount expressed in
present value which maximizes the aggregate present value of
Payments without causing any payment to be nondeductible by
the Company because of Section 280G of the Code. For
purposes of this paragraph 6, present value shall be
determined in accordance with Section 280G(d) (4) of the
Code.
(b) All determinations required to be made under this
paragraph 6 shall be made by the Company's independent
auditors which shall provide detailed supporting
calculations both to the Company and Employee within 15
business days of the Date of Termination or such earlier
time as is requested by the Company and an opinion to
Employee that he or she has substantial authority not to
report any excise tax on his Federal income tax return with
respect to any Payments. Any such determination by the
Company's independent auditors shall be binding upon the
Company and Employee. Employee shall determine which and
how much of the Payments, shall be eliminated or reduced
consistent with the requirements of this paragraph 6,
provided that, if Employee does not make such determination
within ten business days of the receipt of the calculations
made by the Company's independent auditors, the Company
shall elect which and how much of the Payments shall be
eliminated or reduced consistent with the requirements of
this paragraph 6 and shall notify Employee promptly of such
election. Within five business days thereafter, the Company
shall pay to or distribute to or for the benefit of Employee
such amounts as are then due to Employee under this
Agreement.
(c) As a result of the uncertainty in the application
of Section 280G of the Code at the time of the initial
determination by the Company's independent auditors
hereunder, it is possible that Payments will have been made
by the Company which should not have been made
("Overpayment") or that severance benefits payable hereunder
will not have been made by the Company which could have been
made ("Underpayment"), in each case, consistent with the
calculations required to be made hereunder. In the event
that the Company's independent auditors, based upon the
assertion of a deficiency by the Internal Revenue Service
against Employee or the Company which the Company's
independent auditors believe has a high probability of
success, determine that an Overpayment has been made, any
such Overpayment paid or distributed by the Company to or
for the benefit of Employee shall be treated for all
purposes as a loan ab initio to Employee which Employee
shall repay to the Company together with interest at the
applicable federal rate provided for in Section 7872(f) (2)
of the Code; provided, however, that no such loan shall be
deemed to have been made and no amount shall be payable to
the Company if and to the extent such deemed loan and
payment would not either reduce the amount on which Employee
is subject to tax under Section 1 and Section 4999 of the
Code or generate a refund of such taxes. In the event that
the Company's independent auditors, based upon controlling
precedent or other substantial authority, determine that an
Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of
Employee together with interest at the applicable federal
rate provided for in Section 7872(f) (2) of the Code.
7. Amendments and Termination. The Incumbent Board may
from time to time supplement, amend or terminate this
Agreement or make any other provisions which the Company may
deem necessary or desirable, without the approval of
Employee; provided, however, that from and after such time
there has been a Change of Control, this Agreement shall not
be amended in any manner which would adversely affect the
interests of Employee without the written consent of
Employee. Subject to the foregoing, this Agreement
establishes and vests in Employee a contractual right to the
benefits to which Employee is entitled hereunder,
enforceable by Employee against the Company. The form of
any proper amendment or termination of this Agreement shall
be a written instrument signed by a duly authorized officer
or officers of the Company certifying that the amendment or
termination has been approved by the Incumbent Board.
8. Miscellaneous.
8.1 Employment Status. This Agreement does not
constitute a contract of employment or impose on Employee or
the Company any obligation to retain Employee as an
employee, to change the status of Employee's employment, or
to change the Company's policies regarding termination of
employment.
8.2 No Assignment. No benefit hereunder shall be
subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt
to do so shall be void.
8.3 Governing Law. This Agreement shall be governed
by the laws of the State of California.
8.4 Expenses of Suit. In the event of any dispute or
litigation between the Company and the Employee arising out
of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys' fees and expenses incurred
in connection with the enforcement of its rights hereunder.
8.5 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
8.6 Descriptive Headings. Descriptive headings of the
several paragraphs of this Agreement are inserted for
convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
Please acknowledge your agreement to the foregoing
agreement by signing the enclosed counterpart of this letter
and returning it to the Company.
Very truly yours,
APPLIED BIOSYSTEMS, INC.
/s/ A. F. Marion
Andre F. Marion
Chairman of the Board
Chief Executive Officer
AGREED;
/S/ A. F. Marion
December 3, 1992
Dear Andre Marion:
Pursuant to a letter dated November 1, 1990 (the
"Severance Benefit Letter") between you ("Employee") and
Applied Biosystems, Inc., a California corporation (the
"Company"), the Company has agreed to provide you with
certain benefits in the event that your employment is
terminated for specified reasons within two years after a
Change of Control. We now wish to make certain amendments
to that letter. Certain capitalized terms not otherwise
defined herein shall have the meaning given them in the
Severance Benefit Letter.
Recitals. The Company has entered into an Agreement
and Plan of Merger, dated as of October 6, 1992, by and
among the Company, The Perkin-Elmer Corporation ("Perkin-
Elmer") and a wholly owned subsidiary of Perkin-Elmer (the
"Merger Agreement"), providing for a merger ("Merger")
following which the Company will become a wholly owned
subsidiary of Perkin-Elmer. In consideration for and as an
inducement to Employee's agreement to the provisions of
Section 1(b), the Company is willing to agree to the
provisions of Section 1(a).
1. Amendments.
a. Paragraph 3.7 of the Severance Benefit Letter is
hereby amended in its entirety to read as follows:
"Good Reason" means (i) reduction of Employee's
base salary or rate of compensation as in effect
immediately prior to the Change of Control, (ii)
failure to continue to provide any medical, dental,
accident or disability benefits that are no less
favorable in the aggregate than the benefits provided
to Employee immediately prior to the Change of Control
(except that employee contributions may be raised to
the extent of any cost increases imposed by third
parties), (iii) failure or refusal of the successor
company to assume the Company's obligations under this
Agreement, as required by paragraph 5, (iv) breach by
the Company or any successor company of any of the
provisions of this Agreement, or (v) change of
Employee's principal place of employment to a location
more than 50 miles from Employee's principal place of
employment on the date hereof without the consent of
Employee.
b. New paragraph 8 is added as follows:
Conditions to Payment of Salary Continuation
Benefits. Payment of benefits pursuant to Sections 1.1
and 1.2 shall be conditioned upon (i) Employee not,
directly or indirectly, during the period in which
Employee is receiving salary continuation benefits
pursuant to Section 1.1, without the written consent of
Perkin-Elmer, becoming a principal, partner,
shareholder owning more than 5%, director, officer,
employee, agent or consultant of a company or other
business entity whose principal business is the
development, manufacturing, marketing, sale or lease of
instrument systems or associated consumable products,
including reagents, for life science research, (ii)
Employee not, during the period in which Employee is
receiving salary continuation benefits pursuant to
Section 1.1, without the written consent of Perkin-
Elmer, becoming a principal, partner, shareholder
owning more than 5%, director, officer, employee, agent
or consultant in a part of a business not covered by
clause (i) where Employee's primary work responsibility
involves the development, manufacturing, marketing,
sale or lease of instrument system or associated
consumable products, including reagents, for life
science research, and (iii) Employee not directly or
indirectly interfering with an customer or supplier
relationship of Perkin-Elmer's or the Company's, or
solicit or assisting anyone to solicit in any way any
employee of Perkin-Elmer or the Company to resign or
sever employment, or to breach an employment contract
with Perkin-Elmer or the Company. In the event that
Employee shall at any time during the period in which
Employee is receiving salary continuation benefits
pursuant to Section 1.1 fail to meet the condition to
payment of benefits set forth in the preceding
sentence, then the Company shall, effective as of the
date on which Employee fails to meet such condition,
have no further obligation to make any payments
pursuant to Sections 1.1 or 1.2.
and the subsequent paragraph is renumbered accordingly.
2. Governing Law. This letter shall be governed by
and construed in accordance with the laws of the State of
California, without giving effect to its conflict of laws
principles or rules.
3. Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed
shall constitute an original copy hereof, but all of which
together shall constitute one agreement.
4. Full Force and Effect. Except to the extent
expressly provided in this letter, the terms and provisions
of the Severance Benefit Letter shall remain in full force
and effect.
The undersigned duly authorized officer of the Company
hereby certifies that, the amendments to the Severance
Benefit Letter contained herein have been approved by the
Incumbent Board.
If you are in agreement with the foregoing, please so
indicate by signing and returning one copy of this letter by
the end of business on December 11, 1992, which will
constitute our agreement with respect to the matters set
forth herein.
Very truly yours,
APPLIED BIOSYSTEMS, INC.
By: /s/ A. F. Marion
Name: Andre F. Marion
CONFIRMED AND AGREED TO:
Andre Marion
CONSULTING AGREEMENT
The undersigned agrees to serve as a consultant to The
Perkin-Elmer Corporation upon the following terms:
1. A. Fee: $15,000/year payable $3,750 quarterly
B. Term: 4/1/94 - 3/31/95
C. Reporting Relationship: Riccardo Pigliucci
D. Field of Consultancy: Membership on the ACE Board
and other general management consulting services.
2. You are free to do work for others and yourself during
the time which you do not devote to our projects and your
duties under this Agreement will not interfere nor be in
conflict with any government rules or regulations or your
duties to other parties; however, you agree to promptly
notify Perkin-Elmer if and when you perform work related to
the work to be performed under this Agreement for any third
parties who compete or may compete with Perkin-Elmer. All
work which results from performance of services under this
agreement shall belong exclusively to Perkin-Elmer.
3. You agree to keep us fully informed of any scientific
advances you may make during the term of this Agreement
which result from, or are suggested by, any work you may do
for Perkin-Elmer. Any inventions, patentable developments,
copyrightable materials and designs arising out of any such
work are hereby assigned to Perkin-Elmer without further
compensation, and you agree to cooperate in obtaining
patents and copyrights thereon. Any work of authorship
created under this Agreement shall constitute a "work for
hire", when so defined by the Copyright Act, and as to any
work not so defined, Consultant hereby transfers to Perkin-
Elmer any and all right, title and interest Consultant may
have in and to the copyright in such work. You agree not to
disclose to others, without Perkin-Elmer's permission,
either during or after the term of this Agreement, any
scientific development, trade secret or manufacturing
technique of Perkin-Elmer which is not generally known to
the public. Prior to publication, you will make available
for review all disclosures, written contributions to
periodicals and scientific papers concerning or referring to
the subject matter within the purview of this Agreement.
4. You agree that: proprietary information of Perkin-Elmer
will remain the trade secret and confidential property of
Perkin-Elmer and will be held by you in secrecy and
confidence; you will not use it for any purpose other than
performance of assigned tasks under this Consulting
Agreement; you will not make any record or copy of any
proprietary information; and that upon the request of Perkin-
Elmer or the termination of your Consulting Agreement,
whichever occurs first, you will return all material
furnished to you by Perkin-Elmer.
Your obligations of confidentiality under this Agreement
will not extend to any information that (a) is known to you
at the date of this Agreement from a source other than one
having an obligation of confidentiality to Perkin-Elmer, (b)
hereafter becomes known to you independently of the
disclosure by Perkin-Elmer except from a source having an
obligation of non-disclosure to Perkin-Elmer, or (c) becomes
publicly known as by public use or by publication or
otherwise ceases to be secret or confidential through no
fault of yours.
5. Nothing in this Agreement will be construed as granting
you any license, for any purpose, under any patent or other
intellectual property rights of Perkin-Elmer. As a basis
for payment, you will submit on the tenth of each month an
invoice showing the number of hours of service during the
previous month requested by your Reporting Relationship and
actually performed, a brief statement of work done by
project, and the amount due you. It is not expected that it
will be necessary for Perkin-Elmer to provide any special
facilities or supplies for your use, although you will be
reimbursed for supplies and for expenses in connection with
traveling which is requested in advance and authorized in
writing by your Reporting Relationship. Either party may
terminate this Agreement without cause at anytime upon five
(5) days prior written notice. Thereafter, neither party
shall have any further obligation under this Agreement
except for the obligations relating to confidentiality and
assistance in obtaining patents and copyrights.
If the foregoing arrangements are satisfactory, please sign
below.
THE PERKIN-ELMER CORPORATION
BY: / s / Riccardo Pigliucci
ACCEPTED AND AGREED:
/ s / Robert H. Hayes
NAME: Robert H. Hayes
SS Number: ###-##-####
ADDRESS: 53 Cedar Road
Belmont, Massachusetts 02178
DATE: March 17, 1994
Reviewed, and Approved,
Office of the General Counsel:
BY: / s / William B. Sawch
PERKIN-ELMER
The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, CT 06859-0199
CONSULTING AGREEMENT
The undersigned agrees to serve as a consultant to The
Perkin-Elmer Corporation upon the following terms:
A. Fee: $1,750.00 per day (Consultant will make
himself available at least 7 days per month as
requested by Perkin-Elmer).
B. Term: February 1, 1995 to January 31, 1996,
renewable.
C. Reporting Relationship: Riccardo Pigliucci
D. Field of Consultancy: Evaluation, design and
communication of business objectives, organization,
policies, values and missions. Related and other
projects requested by my Reporting Relationship.
2. You are free to do work for others and yourself during
the time which you do not devote to our projects and your
duties under this Agreement will not interfere nor be in
conflict with any government rules or regulations or your
duties to other parties; however, you agree to promptly
notify Perkin-Elmer if and when you perform work related to
the work to be performed under this Agreement for any third
parties who compete or may compete with Perkin-Elmer. All
work which results from performance of services under this
agreement shall belong exclusively to Perkin-Elmer.
3. You agree to keep us fully informed of any scientific
advances you may make during the term of this Agreement
which result from, or are suggested by, any work you may do
for Perkin-Elmer. Any inventions, patentable developments,
copyrightable materials and designs arising out of any such
work are hereby assigned to Perkin-Elmer without further
compensation, and you agree to cooperate in obtaining
patents and copyrights thereon. Any work of authorship
created under this Agreement shall constitute a "work for
hire", when so defined by the Copyright Act, and as to any
work not so defined, Consultant hereby transfers to Perkin-
Elmer any and all right, title and interest Consultant may
have in and to the copyright in such work. You agree not to
disclose to others, without Perkin-Elmer's permission,
either during or after the term of this Agreement, any
scientific development, trade secret or manufacturing
technique of Perkin-Elmer which is not generally known to
the public. Prior to publication, you will make available
for review all disclosures, written contributions to
periodicals and scientific papers concerning or referring to
the subject matter within the purview of this Agreement.
4. You agree that: proprietary information of Perkin-Elmer
will remain the trade secret and confidential property of
Perkin-Elmer and will be held by you in secrecy and
confidence; you will not use it for any purpose other than
performance of assigned tasks under this Consulting
Agreement; you will not make any record or copy of any
proprietary information; and that upon the request of Perkin-
Elmer or the termination of your Consulting Agreement,
whichever occurs first, you will return all material
furnished to you by Perkin-Elmer.
Your obligations of confidentiality under this Agreement
will not extend to any information that (a) is known to you
at the date of this Agreement from a source other than one
having an obligation of confidentiality to Perkin-Elmer, (b)
hereafter becomes known to you independently of the
disclosure by Perkin-Elmer except from a source having an
obligation of non-disclosure to Perkin-Elmer, or (c) becomes
publicly known as by public use or by publication or
otherwise ceases to be secret or confidential through no
fault of yours.
5. Nothing in this Agreement will be construed as granting
you any license, for any purpose, under any patent or other
intellectual property rights of Perkin-Elmer. As a basis
for payment, you will submit on the tenth of each month an
invoice showing the number of hours of service during the
previous month requested by your Reporting Relationship and
actually performed, a brief statement of work done by
project, and the amount due you. It is not expected that it
will be necessary for Perkin-Elmer to provide any special
facilities or supplies for your use, although you will be
reimbursed for supplies and for expenses in connection with
traveling which is requested in advance and authorized in
writing by your Reporting Relationship and you will be
provided with office space in Perkin-Elmer's San Jose, CA
facility and support services in connection with work
hereunder. Either party may terminate this Agreement
without cause at anytime upon five (5) days prior written
notice. Thereafter, neither party shall have any further
obligation under this Agreement except for the obligations
relating to confidentiality and assistance in obtaining
patents and copyrights.
If the foregoing arrangements are satisfactory, please sign
below.
THE PERKIN-ELMER CORPORATION
BY: /s/ Riccardo Pigliucci
ACCEPTED AND AGREED:
/s/ A. F. Marion
NAME: Andre Marion
SS Number: ###-##-####
ADDRESS: 556 Kingsley Avenue
Palo Alto, CA 94301
DATE: September 16, 1994
Reviewed, and Approved,
Office of the General Counsel:
BY:
THE PERKIN-ELMER CORPORATION
COMPUTATION OF NET INCOME(LOSS) PER SHARE
(Dollar amounts in thousands, except per share amounts)
<TABLE>
<CAPTION> 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Weighted average number of
common shares 43,857 43,780 43,526 42,091 49,705
Common stock equivalents-
stock options 816 1,173 1,169 - 130
Weighted average number of
common shares used in
calculating primary
earnings per share 44,673 44,953 44,695 42,091 49,835
Additional dilutive stock
options under paragraph #42
APB #15 172 97 280 - -
Shares used in calculating
fully diluted earnings
per share 44,845 45,050 44,975 42,091 49,835
Calculation of primary and
fully diluted earnings per
share:
PRIMARY AND FULLY DILUTED:
Income (loss) from
continuing operations $ 73,978 $ 24,444 $ 24,296 $ (16,384) $ 27,697
Income (loss) from
discontinued operations (22,851) 1,714 10,941 (2,020) 20,913
Income (loss) before cumulative
effect of changes in
accounting principles 51,127 26,158 35,237 (18,404) 48,610
Cumulative effect on prior years
of changes in accounting principles - (83,098) - - -
Net income (loss) used in the
calculations of primary and
fully diluted earnings per share $ 51,127 $ (56,940) $ 35,237 $ (18,404) $ 48,610
PRIMARY:
Per share amounts:
Income (loss)
from continuing operations $ 1.66 $ .54 $ .54 $ (.39) $ .56
Income (loss)
from discontinued operations (.52) .04 .25 (.05) .42
Income (loss) before
cumulative effect of changes
in accounting principles 1.14 .58 .79 (.44) .98
Loss from cumulative effect on
prior years of changes in
accounting principles - (1.85) - - -
Net income (loss) $ 1.14 $ (1.27) $ .79 $ (.44) $ .98
FULLY DILUTED:
Per share amounts:
Income (loss)
from continuing operations $ 1.65 $ .54 $ .54 $ (.39) $ .56
Income (loss)
from discontinued operations (.51) .04 .24 (.05) .42
Income (loss) before
cumulative effect of changes
in accounting principles 1.14 .58 .78 (.44) .98
Loss from cumulative effect on
prior years of changes in
accounting principles - (1.84) - - -
Net income (loss) $ 1.14 $ (1.26) $ .78 $ ( .44) $ .98
</TABLE>
EXHIBIT 11
- 22 -
<PAGE>
SELECTED FINANCIAL DATA The Perkin-Elmer Corporation
<TABLE>
<CAPTION>
(Dollar amounts in thousands except per share amounts) June 30, June 30, July 31, July 31, July 31,
For the years ended 1994 (a) 1993 (b) 1992 (c) 1991 (d) 1990
<S> <C> <C> <C> <C> <C>
Financial Operations
Net revenues $ 1,024,467 $ 1,011,297 $ 970,054 $ 893,499 $ 849,005
Operating costs and expenses 928,451 967,836 907,490 892,174 796,625
Operating income 96,016 43,461 62,564 1,325 52,380
Income (loss) before income taxes 89,132 43,929 49,283 (10,389) 41,713
Income (loss) from continuing operations 73,978 24,444 24,296 (16,384) 27,697
Cumulative effect on prior years of changes
in accounting principles (net of income taxes) (83,098)
Net income (loss) 51,127 (56,940) 35,237 (18,404) 48,610
Income (loss) per share from continuing
operations 1.66 .54 .54 (.39) .56
Loss per share from cumulative effect on prior
years of changes in accounting principles (1.85)
Net income (loss) per share 1.14 (1.27) .79 (.44) .98
Financial Position
Working capital $ 136,400 $ 100,929 $ 140,456 $ 116,802 $ 162,514
Property, plant and equipment, at cost 329,076 352,767 362,840 351,607 324,562
Total assets 884,500 851,070 948,953 898,248 923,067
Long-term debt 34,270 7,069 67,011 65,881 65,356
Shareholders' equity 290,432 306,605 429,007 411,034 448,919
Other Data
Orders $ 1,048,350 $ 995,379 $ 983,568 $ 914,409 $ 855,079
Dividends per share .68 .68 .68 .68 .68
Average common shares including
equivalents where dilutive (in thousands) 44,673 44,953 44,695 42,091 49,835
Shareholders 9,115 9,728 10,483 11,487 13,079
Employees 5,954 6,563 6,632 6,797 6,996
</TABLE>
(a) Includes a $22.9 million after-tax charge for
discontinued operations (see Note 2).
(b) Includes $41.0 million in one-time charges in
connection with the merger with ABI and an $83.1 million
charge representing the cumulative effect of adopting
SFAS 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," SFAS 112, "Employers'
Accounting for Postemployment Benefits" and SFAS
109, "Accounting for Income Taxes." Prior years were
not restated for SFAS 106, 112 or 109 (see Notes 2, 4
and 5).
(c) Includes $22.0 million in charges related to product
line discontinuance and facility relocation, as well as a
$3.3 million gain on the sale of a joint venture (see Notes 2
and 10).
(d) Includes a $50.2 million charge related to the
consolidation of manufacturing, engineering and
marketing functions worldwide.
- 20 -
<PAGE>
Management's Discussion and Analysis
Management's Discussion of Operations
The following discussion should be read in conjunction with the
Consolidated Financial Statements and related notes included on pages
26 through 43. Historical results and percentage relationships are not
necessarily indicative of operating results for any future periods.
During fiscal 1994, The Perkin-Elmer Corporation (PE or the Company)
sold its Applied Sciences Operation (ASO) in the first quarter and its
Physical Electronics Division (PHI) as of March 31, 1994. Both product
lines were sold for approximately net book value.
On February 18, 1993, the shareholders of PE and Applied Biosystems,
Inc. (ABI) approved the merger of PE and ABI. The transaction was
accounted for as a pooling of interests (see Note 2).
On July 29, 1993, the Company announced its plans to divest its
Material Sciences business segment. Consequently, the Material
Sciences segment is presented in the accompanying Consolidated
Financial Statements as a discontinued operation (see Note 2).
Effective June 30, 1993, the Company changed its fiscal year end from
July 31 to June 30. Prior to fiscal 1993, the financial statements of
ABI and PE's subsidiaries outside the United States were for fiscal
years ended June 30, while PE's domestic operations reported on a July
31 year end. Fiscal 1993, therefore, includes PE's domestic operations
for eleven months compared with a full year for fiscal years 1994 and
1992.
Results of Continuing Operations
Consolidated net revenues were $1,024.5 million in fiscal 1994,
up $13.2 million from $1,011.3 million in fiscal 1993. The Company
sold ASO during the first quarter of fiscal 1994 and PHI as of the end
of the third quarter. The effect of selling these two business units
decreased net revenues by $37 million compared with the prior year.
Currency effects, primarily from the stronger U.S. dollar compared to
the major European currencies, decreased net revenues approximately
$25 million in the current year when compared with fiscal 1993. Strong
worldwide demand for life science products, especially Polymerase
Chain Reaction (PCR) - related instruments and consumables and DNA
sequencers, increased revenues $53.5 million (including the
unfavorable effects of currency) in fiscal 1994 and offset slower
demand experienced in traditional analytical instrument product lines.
As previously mentioned, fiscal 1993's net revenues for domestic
operations included only eleven months of results because of the
change in the Company's fiscal year end. Management estimates that
this decreased net revenues by approximately $35 million.
Fiscal 1993 consolidated net revenues of $1,011.3 million were up 4.3%
from $970.1 million in fiscal 1992. The increase of $41.2 million in
fiscal 1993 was attributed to strong worldwide demand for the
Company's life science products, especially DNA sequencers, PCR-
related instruments and consumables, and liquid chromatography mass
spectrometry instrument systems. The effects from foreign currency
translation added approximately $5 million to net revenues for fiscal
1993.
Net revenues by geographic area
(Dollar amounts in millions) 1994 1993 1992
United States $ 417.8 $ 404.5 $ 412.2
Europe 362.6 420.4 395.2
Far East 195.3 144.5 120.1
Other Countries 48.8 41.9 42.6
$ 1,024.5 $1,011.3 $970.1
The previously mentioned change in year end and the loss of ASO and
PHI revenues approximately offset each other in the U.S. on a year-to-
year comparison of fiscal 1994 to fiscal 1993. The U.S., Far East and
Latin American markets improved during fiscal 1994 as demand for life
science products increased. Net revenues in the Far East increased 35%
from year to year showing improvement in both traditional analytical
instrument products (organic and inorganic product lines) and life
science products. This is indicative of the emerging markets in this
region. In the Far East, the Company used selective pricing strategies
throughout the year in analytical instrument product lines to generate
higher unit sales volumes in the current fiscal year. Latin America
showed a 17% increase year to year as sales were strong in all
analytical instrument product lines. In Europe, the continued
recessionary environment and strong competition resulted in sales at a
lower level than the prior year.
During fiscal 1993, net revenues in the United States decreased $7.7
million primarily because of the change in fiscal year end, offset
somewhat by increased sales in life science products. European sales
were higher in fiscal 1993, increasing 6.4% over fiscal 1992, as a
result of higher unit prices. Instrument sales in the Far East were
strong during fiscal 1993 as a result of increased demand for large
scale DNA products and increased sales of thermal analysis and atomic
absorption instrument systems. Net revenues in the Far East benefited
from the establishment of several direct sales offices in emerging
markets.
-21-
<PAGE>
Consolidated gross margin as a percentage of net revenues was
48% in fiscal 1994 compared with 47% in fiscal 1993 and 46% in fiscal
1992. Gross margins are traditionally lower in the U.S. than overseas
due to keen domestic competition and favorable pricing in Europe for
specific product offerings. The improvement in gross margin in fiscal
1994 resulted from a more favorable product mix worldwide. The more
favorable product mix was caused by sales of higher margin life
science products in the U.S. and the Far East and the decrease in
sales of lower margin products resulting from the divestitures of ASO
and PHI. The increase in life science revenues in the Far East,
yielding improved gross margins, helped offset lower margins resulting
from the poor economic conditions in Europe and the aforementioned
pricing strategies used in the Far East for analytical instruments.
The increase from fiscal 1992 to 1993 was primarily attributed to
higher sales volumes of life science products.
Consolidated selling, general and administrative expenses
(SG&A) decreased $8.8 million or 3% in fiscal 1994. Favorable
currency effects during fiscal 1994 accounted for approximately $7
million of the decrease. Higher marketing expenses of approximately $6
million in the Far East, primarily related to the life science
business, were offset by reduced marketing expenses of approximately
$8 million in Europe during fiscal 1994. Also, fiscal 1993 included a
$3 million one-time charge to reduce the value of certain receivables
due from customers in Eastern Bloc countries.
The increase in fiscal 1993 of $22.2 million was attributed to the
aforementioned writedown of receivables, higher marketing expenses
resulting from the establishment of direct sales offices in the Far
East, expansion of marketing activities in the Company's life science
markets and currency effects from the weaker U.S. dollar during the
first half of the year.
Consolidated research, development and engineering expenses
(R&D) were $94.2 million in fiscal 1994, an increase of 12% over
the prior year, and $83.8 million in fiscal 1993, an increase of 3%
over fiscal 1992. The Company has increased its investment in R&D,
primarily in life science programs, which accounts for the higher
spending in fiscal 1994.
In fiscal 1993, the increase of $2.5 million was the result of higher
spending on R&D efforts in the biotechnology field.
Other. In connection with the ABI merger, the Company
recorded one-time charges in the third quarter of fiscal 1993 of $12.5
million for transaction costs and $28.5 million to combine operations
of the two companies. The transaction costs included expenses for
investment banker and professional fees. The costs to combine
operations included provisions for streamlining marketing and
distribution arrangements, consolidation of field sales and service
offices worldwide, relocation of certain product lines and key
personnel and severance-related costs. During fiscal 1994,
approximately $17 million in costs was incurred. The balance primarily
represents severance and facilities-related costs which are expected
to be paid over the next two fiscal years. Accordingly, the impact on
working capital in future years is expected to be minimal.
In fiscal 1992, the Company and Hoffmann-La Roche Inc. formed a
strategic alliance to market and develop PCR technology used in the
amplification of DNA. Under the terms of the agreement, the Company
sold its 51% interest in the Perkin-Elmer Cetus Instruments joint
venture. The transaction resulted in a one-time before-tax gain of
$3.3 million (see Note 2 for further discussion).
Based upon a strategic assessment of its markets, in fiscal 1992 ABI
recorded a $22 million charge to write down goodwill and other
intangibles and to provide for costs of closing a small European
operation and a manufacturing facility in San Jose, California. This
restructuring was substantially completed in fiscal 1993 (see Note
10).
Consolidated operating income for fiscal 1994 was $96.0 million
compared to $43.5 million in fiscal 1993 and $62.6 million in fiscal
1992. Operating income was affected in fiscal 1993 and 1992 by the
aforementioned merger and restructuring costs.
Consolidated interest expense was $7.1 million in fiscal 1994
compared with $13.1 million in fiscal 1993 and $19.9 million in fiscal
1992. The decrease of $6 million in fiscal 1994 was primarily the
result of reduced borrowing levels and lower interest rates. The
decrease of $6.8 million in fiscal 1993 was a result of lower interest
rates, lower average commercial paper borrowings, repayment of long-
term debt and the reclassification of interest expense on tax claims
to income tax expense. This reclassification was made in connection
with the adoption of SFAS No. 109, "Accounting for Income Taxes."
Consolidated interest income was $2.4 million in fiscal 1994
compared with $7.5 million in fiscal 1993 and $10.1 million in fiscal
1992. During fiscal 1993, the Company owned a 7% promissory note from
F. Hoffmann-La Roche Ltd. which was sold in June 1993. The sale of
this note accounted for most of the decrease in interest income in
fiscal 1994. In addition, two sub-
-22-
<PAGE>
ordinated long-term notes receivable totaling $3.7 million were repaid
in connection with the sale of the Company's minority equity investment
in MRJ Inc. during the second quarter of this year (see Note 2).
The lower interest income in fiscal 1993, when compared with the prior
year, was the result of a reduction in long-term notes receivable.
During fiscal 1992, higher interest income resulted from accrued
interest on the note received as partial consideration for the sale of
an equity investment (see Note 2).
Consolidated other income (expense), net was expense of $2.1
million in fiscal 1994 compared with income of $6.1 million in fiscal
1993 and expense of $3.5 million in fiscal 1992. In fiscal 1993, other
income included the gain of $8.5 million from the sale of a promissory
note from F. Hoffmann-La Roche Ltd., and higher joint venture income
which was partially offset by a $5 million charge to reduce the
carrying value of certain unoccupied properties. Fiscal 1994 included
higher miscellaneous nonoperating expenses than fiscal 1993. The
increased other income in fiscal 1993 over the prior year was the
result of the aforementioned events in fiscal 1993, as well as lower
net realized exchange losses.
The consolidated effective income tax rate was 17% for fiscal
1994 compared with 44% for fiscal 1993 and 51% in fiscal 1992. The
prior year's results included one-time charges of $41.0 million
related to the merger with ABI, which were not fully deductible for
tax purposes, resulting in a higher tax rate. During the first quarter
of fiscal 1994, the Company received a favorable ruling from the U.S.
Tax Court upholding the Company's pricing method on intercompany sales
with respect to its operations in Puerto Rico. Resolution of this long-
standing dispute with the U.S. government and the additional tax
benefits realized from the inclusion of ABI results for a full year
also reduced the Company's effective tax rate for fiscal 1994 when
compared with the prior year. Together with other information about
the income tax provision, an analysis of the differences between the
U.S. federal statutory rate and the effective rate can be found in
Note 4.
Discontinued Operations (see Note 2)
Loss from discontinued operations in fiscal 1994 includes the
after-tax settlement of $15.2 million related to the Hubble Space
Telescope mirror and the anticipated loss on disposal of the Company's
Material Sciences segment. During fiscal 1994, the Company entered
into an agreement with Sulzer Inc., a wholly-owned subsidiary of
Sulzer, Ltd., Winterthur, Switzerland, for the sale of the Material
Sciences segment. The completion of the sale is subject to closing
conditions, including obtaining relevant government regulatory
approvals. The transaction has taken longer to complete than expected
due primarily to obtaining necessary government approvals in both the
U.S. and Europe. As a result of this and negative operating factors,
the Company recorded an after-tax loss on disposal of $7.7 million
during the fourth quarter of fiscal 1994.
Income (loss) from discontinued operations in fiscal 1993 and 1992
includes the results of the Company's Material Sciences segment and
Lynx Therapeutics, Inc., a discontinued operation of ABI.
Management believes that divesting its Material Sciences business will
allow the Company to concentrate on growth opportunities in its core
business of analytical instruments. This will allow the Company to
focus its financial and operational resources in one industry segment:
the development, manufacture, marketing, sales and service of
analytical instrument systems. As disclosed in Note 2, Material
Sciences profits declined from fiscal 1992 to fiscal 1994. This was
primarily related to the weakness and extended downturn in the
aircraft turbine engine market and significant downsizing that has
occurred in the airline industry in recent years. In addition, in
fiscal 1994, operations were adversely affected by the pro-
tracted negotiations with the potential buyer and regulatory
authorities.
Changes in Accounting Principles. In fiscal 1993, the Company
adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," No. 109, "Accounting for Income Taxes"
and No. 112, "Employers' Accounting for Postemployment Benefits." SFAS
Nos. 106 and 112 require the accrual method of accounting for the
related costs (see Note 5). SFAS No. 109 supersedes SFAS No. 96 and,
among other things, changes the criteria for recognition and
measurement of deferred tax assets (see Note 4).
As a result of adopting the new accounting standards as of August 1,
1992, a one-time, after-tax charge of $83.1 million was recorded. This
represented the cumulative effect of the changes on fiscal years prior
to 1993.
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<PAGE>
Foreign Currency. It is the Company's policy to reduce sub-
stantially the effects of fluctuations in foreign currency exchange
rates associated with future cash flows through its exposure
management and foreign currency hedging activities. The Company enters
into foreign exchange forward contracts and foreign exchange option
contracts to hedge the risk of changes in foreign currency rates
associated with certain assets and obligations denominated in foreign
currencies. The foreign exchange options permit but do not require the
Company to exchange foreign currencies at a future date with another
party at a contracted exchange rate. The foreign exchange contracts
are accounted for as hedges of net investments, firm commitments, and
foreign currency transactions. Gains and losses on hedges of net
investments are reported as equity adjustments from translation on the
balance sheet. The gains and losses on hedges of firm commitments are
deferred and included in the basis of the transaction underlying the
commitment. Gains and losses on transaction hedges are recognized in
income and offset the foreign exchange gains and losses on the related
transaction. Management believes any reasonably likely change in the
level of underlying major currencies being hedged will not have a
material adverse effect on the financial statements.
Management's Discussion of Financial Resources and Liquidity
This discussion of financial resources and liquidity focuses on the
Statements of Financial Position (page 27) and the Statements of Cash
Flows (page 28).
Statements of Financial Position
bullet Cash and short-term investments are primarily cash, cash equivalents,
time deposits and certificates of deposit with original maturity dates
of three months to one year (short-term investments). Cash and short-
term investments were $25.0 million at June 30, 1994 and $30.3 million
at June 30, 1993.
bullet PE's current accounts receivable of $231.6 million at June 30, 1994
increased by $13.3 million over June 30, 1993. An estimated $8.5
million was due to the effects of currency translation. The balance at
June 30, 1993 included $12.4 million of accounts receivable with
respect to the operations of PHI and ASO which were sold during fiscal
1994. Increased fourth quarter sales of analytical instruments in
fiscal 1994 accounted for the remaining increase year to year.
bullet Inventories were $201.4 million at June 30, 1994 compared with $179.1
million a year ago. The effects of currency translation accounted for
approximately $7 million of the increase. The balance at June 30, 1993
included $12.8 million of inventory with respect to the divested
operations of PHI and ASO. Orders for analytical instruments in the
fourth quarter of this year outpaced sales in every geographic region.
The primary reason for the higher inventories was an increase in
manufacturing to support the higher backlog at June 30, 1994.
bullet Prepaid expenses and other current assets increased to $56.7 million
at June 30, 1994 from $47.3 million a year ago. The increase in
prepaid expenses and other current assets of $9.4 million was
primarily because of increased taxes receivable and royalties
receivable.
bullet Net property, plant and equipment (PP&E) was $149.1 million at June
30, 1994 compared with $162.7 million a year ago. PP&E consists
primarily of investments for productive use. The net decrease of $13.6
million primarily resulted from the sales of PP&E of $14.4 million for
ASO and PHI and reclassifications of assets held for sale, which were
partially offset by capital spending during fiscal 1994.
bullet Total other long-term assets increased from $152.7 million at June
30, 1993 to $164.5 million at June 30, 1994. Other long-term assets
primarily consist of marketable securities maturing beyond one year,
goodwill, investments in affiliated companies, deferred tax assets and
other long-term assets. The primary reason for the increase in long-
term assets was higher assets held for sale and a note receivable for
$7.2 million received as partial consideration for the sale of PHI.
bullet Accounts payable increased approximately $7 million at
June 30, 1994 compared with the prior year. This resulted from higher
purchases to support production as previously discussed.
bullet Other accrued expenses decreased approximately $11 million. The
decrease resulted primarily from funding merger-related costs of $17
million and the reclassification of pension liabilities from current
to long-term. This was partially offset by an increase in deferred
service revenues. The reclassification of pension liabilities was the
result of anticipated funding requirements in the U.S. for fiscal
1995.
bullet Total borrowings on a consolidated basis aggregated $117.8 million at
June 30, 1994 compared with $81.1 million at the end of fiscal 1993.
The Company's debt to total capitalization was 29% at June 30, 1994
compared with 21% at June 30, 1993. The increase in total borrowings
of $36.7 million in fiscal 1994 was primarily the result of PE's
funding of merger-related costs, settlement of potential claims
related to the Hubble Space Telescope mirror and the Company's stock
repurchase program. In accordance with existing Board authorizations,
the Company purchased approximately 1.8 million shares of PE common
stock during fiscal 1994.
-24-
<PAGE>
bullet Other long-term liabilities were $181.5 million at June 30, 1994
compared with $163.4 million at the end of fiscal 1993. The increase
was primarily the result of higher pension and postretirement benefit
liabilities.
PE has consistently maintained a strong financial position and
conservative capital structure. Management believes that the Company's
financial resources and liquidity remain strong and adequate to meet
ongoing operational and financial commitments.
Statements of Cash Flows
The Statements of Cash Flows depict cash flows by three broad
categories: operating activities, investing activities and financing
activities.
Operating activities are the principal source of PE's cash flows.
Investments in property, plant and equipment represent the Company's
ongoing investing activity. Major ongoing financing activities include
payment of dividends to shareholders and transactions surrounding the
Company's various stock plans. PE's capital expenditures for fiscal
1994 approximated $34 million compared with $28 million for fiscal
1993 and $31 million for fiscal 1992.
PE's cash and cash equivalents aggregated $25 million at June 30, 1994
compared with $28.6 million at the end of fiscal 1993. Net cash
provided by operating activities was $37 million for the year ended
June 30, 1994 compared with $66.4 million at the end of fiscal 1993
and $71.5 million at the end of fiscal 1992. Fiscal 1994 included
approximately $15 million paid to settle potential claims related to
the Hubble Space Telescope mirror and $17 million to fund combination
costs related to the merger with ABI. The Company generated $32
million in additional borrowings, $31.9 million from the sale of
businesses and assets and $17.4 million from the exercise of Company
stock options. During the year, the Company invested approximately $34
million in capital expenditures, paid $30 million in dividends to
shareholders and repurchased approximately $60 million of PE's common
stock. Purchases of common stock were made to support the Company's
various stock plans and additional shares were repurchased under the
existing Board authorization. Capital spending commitments as of June
30, 1994 were not significant.
Outlook
Inflation and changing prices are continually monitored. The
Company attempts to minimize the impact of inflation by improving
productivity. When operating costs increase, the Company generally
recovers such costs by increasing, over time, the price of its
products and services. The Company believes that the effects of
inflation have been appropriately managed and therefore have not had a
material impact on its operations or financial position.
Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," is
required to be implemented no later than fiscal 1995. The Company
believes adoption of the standard, at this time, will not have a
material impact on its financial statements.
The global economic and political outlook for 1995 has uncer-
tainties. PE is subject to these economic uncertainties in key markets
around the world. However, management believes that the Company has
been strengthened by its merger with ABI and will benefit from its
decision to divest its Material Sciences business and concentrate on
growth opportunities for analytical instrument systems. Expectations
for the remainder of this calendar year are being impacted by the
protracted economic downturn in the European analytical instrument
markets and the uncertain climate for environmental and pharmaceutical
customers in the United States. In the longer term, the Company is
encouraged by the accelerating pace of biotechnology advances which it
hopes will translate into demand for its life science systems. The
Company is also optimistic about the gradual upturn of global
analytical instrument markets. Management believes that PE's global
businesses and strong financial condition combine to position the
Company to deal effectively with the uncertainties and to benefit from
any improvements in the economy in fiscal 1995.
-25-
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS The Perkin-Elmer Corporation
<TABLE>
<CAPTION>
(Dollar amounts in thousands except per share amounts) June 30, June 30, July 31,
For the years ended 1994 1993 1992
<S> <C> <C> <C>
Net revenues $ 1,024,467 $ 1,011,297 $ 970,054
Cost of sales 535,178 535,137 521,737
Gross margin 489,289 476,160 448,317
Selling, general and administrative 299,101 307,852 285,672
Research, development and engineering 94,172 83,847 81,381
Costs to combine operations 28,500
Transaction costs 12,500
Gain on sale of joint venture (3,300)
Provision for restructured operations 22,000
Operating income 96,016 43,461 62,564
Interest expense 7,145 13,139 19,859
Interest income 2,382 7,468 10,073
Other income (expense), net (2,121) 6,139 (3,495)
Income before income taxes 89,132 43,929 49,283
Provision for income taxes 15,154 19,485 24,987
Income from continuing operations 73,978 24,444 24,296
Income (loss) from discontinued operations (net of income taxes) (22,851) 1,714 10,941
Income before cumulative effect of changes in
accounting principles 51,127 26,158 35,237
Cumulative effect on prior years of changes in accounting
principles for:
Postretirement benefits other than pensions (net of income taxes of $0) (88,847)
Income taxes 19,929
Postemployment benefits (net of income taxes of $800) (14,180)
Net income (loss) $ 51,127 $ (56,940) $ 35,237
Per share amounts:
Income from continuing operations $ 1.66 $ .54 $ .54
Income (loss) from discontinued operations (.52) .04 .25
Income before cumulative effect of changes in
accounting principles 1.14 .58 .79
Loss from cumulative effect on prior years of
changes in accounting principles (1.85)
Net income (loss) $ 1.14 $ (1.27) $ .79
</TABLE>
See accompanying notes to consolidated financial statements.
- 26 -
<PAGE>
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The Perkin-Elmer Corporation
<TABLE>
<CAPTION>
(Dollar amounts in thousands)
At June 30, 1994 1993
<S>
Assets
Current Assets <C> <C>
Cash and cash equivalents $ 25,003 $ 28,582
Short-term investments 1,749
Accounts receivable, less allowances for doubtful accounts of $7,247 ($8,226 - 1993) 231,564 218,236
Inventories 201,436 179,082
Prepaid expenses and other current assets 56,695 47,275
Total current assets 514,698 474,924
Property, Plant and Equipment, net 149,071 162,689
Other Assets
Other long-term assets 164,524 152,735
Net assets of discontinued operations 56,207 60,722
Total other assets 220,731 213,457
Total Assets $ 884,500 $ 851,070
Liabilities and Shareholders' Equity
Current Liabilities
Loans payable $ 83,552 $ 73,982
Accounts payable 73,221 66,172
Accrued salaries and wages 41,809 43,350
Accrued taxes on income 38,073 38,056
Other accrued expenses 141,643 152,435
Total current liabilities 378,298 373,995
Long-Term Debt 34,270 7,069
Other Long-Term Liabilities 181,500 163,401
Commitments and Contingencies (see Note 11)
Shareholders' Equity
Capital stock
Preferred stock $1 par value: shares authorized 1,000,000; none issued
Common stock $1 par value: shares authorized 90,000,000 - 1994,
60,000,000 - 1993; shares issued 45,599,755 - 1994 and 1993 45,600 45,600
Capital in excess of par value 178,739 178,739
Retained earnings 181,130 163,861
Cumulative translation adjustments 5,521 (3,931)
Minimum pension liability (36,259) (31,859)
Treasury stock, at cost (shares: 1994 - 2,651,049; 1993- 1,655,766) (84,299) (45,805)
Total shareholders' equity 290,432 306,605
Total Liabilities and Shareholders' Equity $ 884,500 $ 851,070
</TABLE>
See accompanying notes to consolidated financial statements.
- 27 -
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS The Perkin-Elmer Corporation
<TABLE>
<CAPTION>
(Dollar amounts in thousands) June 30, June 30, July 31,
For the years ended 1994 1993 1992
<S>
Operating Activities <C> <C> <C>
Income from continuing operations $ 73,978 $ 24,444 $ 24,296
Adjustments to reconcile income from continuing operations
to net cash provided by operating activities:
Depreciation and amortization 42,679 41,304 46,624
Restricted stock amortization 717 1,030
Deferred income taxes 1,750 5,679 1,159
Costs to combine operations and transaction costs 41,000
Gain on sale of joint venture (3,300)
Provision for restructured operations 22,000
Changes in operating assets and liabilities:
Increase in accounts receivable (21,527) (4,240) (34,254)
(Increase) decrease in inventories (25,360) (6,889) 1,944
(Increase) decrease in prepaid expenses and other assets (15,043) 16,922 32,214
Increase (decrease) in accounts payable and other liabilities 2,973 (56,505) (29,751)
Divestitures (6,934) 4,003 9,559
Legal settlement (15,550)
Net Cash Provided by Operating Activities 36,966 66,435 71,521
Investing Activities
Additions to property, plant and equipment
(net of disposals of $2,185, $3,264 and $6,877, respectively) (32,327) (25,114) (23,821)
Marketable securities and short-term investments 1,778 8,409 3,645
Proceeds from sale of assets 31,850 53,412
Investment in Lynx Therapeutics, Inc. (9,581)
Other, net (930) (1,429) (4,132)
Net Cash Provided (Used) by Investing Activities 371 25,697 (24,308)
Financing Activities
Proceeds from long-term borrowings 26,992 32
Principal payments on long-term debt (1,886) (60,707) (4,375)
Net change in loans payable 5,053 (19,982) (8,893)
Dividends paid (29,813) (26,417) (23,013)
Purchase of treasury stock (59,615) (14,012) (15,282)
Stock issued for stock plans, net of cancellations 17,426 17,685 16,071
Net Cash Used by Financing Activities (41,843) (103,401) (35,492)
Effect of Exchange Rate Changes on Cash 927 (3,255) 1,886
Net Change in Cash and Cash Equivalents (3,579) (14,524) 13,607
Cash and Cash Equivalents beginning of year 28,582 43,106 29,499
Cash and Cash Equivalents end of year $ 25,003 $ 28,582 $ 43,106
</TABLE>
See accompanying notes to consolidated financial statements.
- 28 -
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY The Perkin-Elmer Corporation
<TABLE>
<CAPTION>
Common Capital In Cumulative Minimum
Stock $1.00 Excess Of Retained Translation Pension Treasury Stock
(Dollar amounts and shares in thousands) Par Value Par Value Earnings Adjustments Liability At Cost Shares
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at July 31, 1991 $ 45,084 $ 167,770 $ 246,227 $ 2,774 $ (6,018) $ (44,803) (1,866)
Net income 35,237
Cash dividends (23,013)
Purchase of treasury stock (15,282) (510)
Shares issued under stock plans 149 2,760 (1,525) 14,644 600
Required minimum pension liability
(unfunded accumulated benefits) (9,573)
Restricted stock plan amortization
and cancellations 1,073
Translation adjustments 13,503
Balance at July 31, 1992 $ 45,233 $ 171,603 $ 256,926 $ 16,277 $ (15,591) $ (45,441) (1,776)
Net loss (56,940)
Cash dividends (26,417)
Lynx Therapeutics, Inc. stock
distribution (6,959)
Purchase of treasury stock (14,012) (443)
Shares issued under stock plans 367 6,419 (2,749) 14,597 602
Required minimum pension liability
(unfunded accumulated benefits) (16,268)
Restricted stock plan amortization
and withholdings 717 (949) (39)
Translation adjustments (20,208)
Balance at June 30, 1993 $ 45,600 $ 178,739 $ 163,861 $ (3,931) $ (31,859) $ (45,805) (1,656)
Net income 51,127
Cash dividends (29,813)
Lynx Therapeutics, Inc. stock
distribution (350)
Purchase of treasury stock (59,615) (1,841)
Shares issued under stock plans (3,695) 21,121 846
Required minimum pension liability
(unfunded accumulated benefits) (4,400)
Translation adjustments 9,452
Balance at June 30, 1994 $ 45,600 $ 178,739 $ 181,130 $ 5,521 $ (36,259) $ (84,299) (2,651)
</TABLE>
See accompanying notes to consolidated financial statements.
- 29 -
<PAGE>
Note 1 Accounting Policies and Practices
Principles of Consolidation. The consolidated financial
statements include the accounts of all majority-owned
subsidiaries of The Perkin-Elmer Corporation (PE or the Company),
reflect the acquisition of Applied Biosystems, Inc. (ABI) as a
pooling of interests and present the Company's Material Sciences
segment as a discontinued operation (see Note 2). Effective June
30, 1993, the Company changed its fiscal year end from July 31 to
June 30. Prior to fiscal 1993, the financial statements of ABI
and PE's subsidiaries outside the United States were for fiscal
years ended June 30, while PE's domestic operations reported on a
July 31 fiscal year end. Fiscal 1993, therefore, includes PE's
domestic operations for eleven months. The fiscal 1993
Consolidated Statement of Operations has been reclassified to
reflect a $3.0 million charge to reduce the value of receivables
due from Eastern Bloc countries, previously included as other
expense, as an operating expense.
Investments. The Company uses the equity method of accounting for
its investments in 50% or less owned joint ventures. Investments
in which PE's ownership is less than 20% are carried at cost.
The Company is required to implement SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," no later
than fiscal year 1995. This statement requires investments in
equity securities that have readily determinable fair values and
all investments in debt securities to be classified in three
categories: (1) held-to-maturity securities, which are reported
at amortized cost; (2) trading securities, which are reported at
fair value with unrealized gains and losses included in earnings;
and (3) available-for-sale securities, which are reported at fair
value with unrealized gains and losses excluded from earnings and
reported as a separate component of shareholders' equity. The
Company believes adoption of the standard, at this time, will not
have a material impact on its financial statements.
Changes in Accounting Principles. During fiscal 1993, the Company
adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," No. 109, "Accounting for Income
Taxes" and No. 112, "Employers' Accounting for Postemployment
Benefits." SFAS Nos. 106 and 112 require the accrual method of
accounting for the related costs (see Note 5). SFAS No. 109
supersedes SFAS No. 96 and, among other things, changes the
criteria for recognition and measurement of deferred tax assets
(see Note 4).
As a result of adopting the new accounting standards as of August
1, 1992, a one-time, after-tax charge of $83.1 million was
recorded in fiscal 1993. This represented the cumulative effect
of the changes on fiscal years prior to 1993.
Cash, Short-Term Investments and Marketable Securities. Cash
equivalents consist of highly liquid debt instruments, time
deposits and certificates of deposit with original maturities of
three months or less. Time deposits and certificates of deposit
with original maturities of three months to one year are
classified as short-term investments. Short-term investments and
marketable securities are valued at cost which approximates
market. Long-term marketable securities were $7 million at June
30, 1994 and 1993, and are included in other long-term assets
(see Note 13).
Foreign Currency. Assets and liabilities of foreign operations,
where the functional currency is the local currency, are
translated into U.S. dollars at the fiscal year end exchange
rate. The related translation adjustments are recorded as
cumulative translation adjustments, a separate component of
shareholders' equity. Revenues and expenses are translated using
average exchange rates prevailing during the year. Foreign
currency transaction gains and losses, as well as translation
adjustments for assets and liabilities of foreign operations
where the functional currency is the dollar, are included in net
income (loss). Foreign currency realized and unrealized gains and
losses for the years presented were not material.
It is the Company's policy to reduce substantially the effects of
fluctuations in foreign currency exchange rates associated with
future cash flows through its exposure management and foreign
currency hedging activities. The Company enters into foreign
exchange forward contracts and foreign exchange option contracts
to hedge the risk of changes in foreign currency rates associated
with certain assets and obligations denominated in foreign
currencies. The foreign exchange options permit but do not
require the Company to exchange foreign currencies at a future
date with another party at a contracted exchange rate. The
foreign exchange contracts are accounted for as hedges of net
investments, firm commitments, and foreign currency transactions.
Gains and losses on hedges of net investments are reported as
equity adjustments from translation on the balance sheet. The
gains and losses on hedges of firm commitments are deferred and
included in the basis of the transaction underlying the
commitment. Gains and losses on transaction hedges are recognized
in income (loss) and offset the foreign exchange gains and losses
on the related transaction.
The forward contracts and options contain an element of risk that
the counterparties may be unable to meet the terms of the
agreements. However, the Company minimizes such risk exposure for
forward contracts and options by limiting the counterparties to
major international banks and financial institutions. Management
does not expect to record any losses as a result of counterparty
default. The Company does not require or place collateral for
these financial instruments.
-30-
<PAGE>
Inventories. Inventories are stated at the lower of cost (on a
first-in, first-out basis) or market. Inventories at June 30,
1994 and 1993 included the following components:
(Dollar amounts in millions) 1994 1993
Raw materials and supplies $ 24.9 $ 27.9
Work-in-process 22.4 25.4
Finished products 154.1 125.8
Total $201.4 $179.1
Property, Plant and Equipment and Depreciation. Property, plant
and equipment are stated at cost and at June 30, 1994 and 1993
consisted of the following:
(Dollar amounts in millions) 1994 1993
Land $ 20.8 $ 27.9
Buildings and leasehold improvements 124.6 131.2
Machinery and equipment 183.7 193.7
Property, plant and equipment, at cost 329.1 352.8
Accumulated depreciation and
amortization 180.0 190.1
Property, plant and equipment, net $149.1 $162.7
Major renewals and improvements that significantly add to
productive capacity or extend the life of an asset are
capitalized. Repairs, maintenance and minor renewals and
improvements are expensed when incurred.
Provisions for depreciation of owned property, plant and
equipment are based upon the expected useful lives of the assets
and computed primarily by the straight-line method. Leasehold
improvements are amortized over their estimated useful lives or
the term of the applicable lease, whichever is less, using the
straight-line method. Fixed assets leased under capital leases
were not material for the years presented.
Intangible Assets. The excess of purchase price over the net
asset value of companies acquired is amortized on a straight-line
method over periods not exceeding 40 years. Patents and
trademarks are amortized using the straight-line method over
their expected useful lives. The accumulated amortization of
intangibles at June 30, 1994 and 1993 was $22.5 million and $17.6
million, respectively.
Amortization of Software Development Costs. Capitalized software
development costs are amortized based upon the greater of the
straight-line method over the estimated economic life or the
ratio of current gross revenues to total expected gross revenues
for the product. The amounts recorded in the financial statements
are not material.
Income Taxes. PE intends to permanently reinvest substantially
all of the undistributed earnings of its foreign subsidiaries. In
those instances where the Company expects to remit earnings, the
effect on the results of operations, after considering available
tax credits and amounts previously accrued, would not be
significant.
Revenues. PE recognizes revenues when products are shipped or
services are rendered. Amounts billed for service contracts are
credited to deferred service contract income and reflected in net
revenues over the term of the contract. The balance of deferred
service contract income included in other accrued expenses at
June 30, 1994 and 1993 was $37.3 million and $30.7 million,
respectively.
Research, Development and Engineering. Research, development and
engineering expenditures are expensed when incurred.
Net Income (Loss) Per Share. Net income (loss) per share is
computed by dividing net income (loss) by the weighted average
number of common shares and dilutive common stock equivalents
outstanding. Common stock equivalents include stock options. The
difference between weighted average shares for primary and fully
diluted net income (loss) per share was not significant for the
years presented.
Supplemental Cash Flow Information. SFAS No. 95, "Statement of
Cash Flows," requires disclosure of noncash investing and
financing activities excluded from the Consolidated Statements of
Cash Flows and amounts paid in cash for interest and income
taxes.
The following is a statement of supplemental cash flow
information for fiscal years ended 1994, 1993 and 1992:
(Dollar amounts in millions) 1994 1993 1992
Interest $ 7.0 $12.5 $14.4
Income taxes $16.1 $18.5 $13.7
Noncash investing and
financing activities:
Note receivable from sale of
assets (see Note 2) $ 7.2
Acquisition of preferred stock
for common stock and a note
receivable (see Note 2) $17.0
Acquisition of note receivable
for Payment-in-Kind
preferred stock (see Note 2) $ 5.8
Acquisition of purchased tech-
nology payable in future
periods $ 3.2
Lynx Therapeutics, Inc. stock
distribution $ .4 $ 7.0
Minimum pension liability $ 4.4 $16.3 $ 9.6
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Other. During fiscal 1993, because of the continued softness in
the commercial real estate market, the Company reduced the
carrying value of certain unoccupied properties by $5 million.
This charge is included in other income (expense), net in the
Consolidated Statement of Operations.
Note 2 Mergers and Divestitures
Merger with Applied Biosystems, Inc. On February 18, 1993, the
shareholders of PE and ABI approved the merger of PE and ABI.
Under the terms of the agreement, ABI shareholders received .678
of a share of the Company's common stock for each ABI share.
Accordingly, the Company issued 10.2 million shares of its common
stock for all the outstanding shares of ABI common stock.
Additionally, outstanding options to acquire ABI common stock
were converted to options to acquire 1.5 million shares of the
Company's common stock. ABI, founded in 1981, is a leading
supplier of automated systems for life science research and
related applications. ABI develops, manufactures and markets
systems, instruments and associated chemicals used to purify,
analyze, interpret results and synthesize biological molecules
such as DNA, RNA and proteins.
The merger qualified as a tax-free reorganization and was
accounted for as a pooling of interests. Accordingly, the
Company's financial statements include the results of ABI for all
periods presented.
Combined and separate results of PE and ABI during the periods
preceding the merger were as follows (in millions):
Six months ended
January 31, 1993
(unaudited) PE ABI Adjustment Combined
Net revenues $420.2 $100.9 $521.1
Net income (loss) $(54.5) $ 5.7 $(48.8)
Fiscal year ended
July 31, 1992
Net revenues $788.3 $181.8 $970.1
Net income (loss) $ 58.8 $(15.9) $(7.7) $ 35.2
The combined financial results presented above include
adjustments made to conform accounting policies of PE and ABI.
The only adjustment impacting net income was the restatement of
ABI's provision for income taxes from the accounting methods
prescribed by SFAS No. 109, to the methods prescribed by SFAS No.
96, which was used by PE prior to fiscal 1993. All other
adjustments were reclassifications to conform financial statement
presentation. Intercompany transactions between the two companies
for the periods presented were not material.
In connection with the merger, the Company recorded one-time
charges in the third quarter of fiscal 1993 for transaction costs
($12.5 million) and to reflect the costs to combine operations of
the two companies ($28.5 million). The transaction costs include
expenses for investment banker and professional fees. The costs
to combine operations include provisions for streamlining
marketing and distribution arrangements, consolidation of field
sales and service offices worldwide, relocation of certain
product lines and key personnel, and severance-related costs.
Amounts included in other accrued expenses related to costs to
combine operations at June 30, 1994 and 1993, were $9.6 million
and $26.4 million, respectively.
Discontinued Operations
Legal Settlement. During the first quarter of fiscal 1994, the
Company paid $15.5 million to settle potential claims related to
the Hubble Space Telescope mirror. This amount, which included
legal costs, resulted in an after-tax charge of $15.2 million and
is recorded in discontinued operations. In 1989, the Company had
sold the unit which performed the work on the telescope to a
subsidiary of Hughes Aircraft Company.
Material Sciences Segment. On July 29, 1993, the Company
announced its plans to divest its Material Sciences segment which
consists of the Company's Metco division (Metco) headquartered in
Westbury, New York. Metco produces combustion, electric arc and
plasma thermal spray equipment and supplies. The Company has
entered into an agreement with Sulzer Inc., a wholly-owned
subsidiary of Sulzer, Ltd., Winterthur, Switzerland, for the sale
of Metco. The completion of the sale is subject to closing
conditions, including receipt of relevant government regulatory
approvals. The transaction has taken longer to complete than
expected due primarily to obtaining necessary government
approvals in both the U.S. and Europe. As a result of this and
negative operating factors, the Company recorded an after-tax
loss on disposal of $7.7 million during the fourth quarter of
fiscal 1994.
The net assets and operating results of Metco are presented in
the accompanying consolidated financial statements as a
discontinued operation.
Lynx Therapeutics, Inc. On October 5, 1992, prior to its merger
with PE, ABI announced the decision to distribute to its
shareholders approximately 82% of the stock of its subsidiary,
Lynx Therapeutics, Inc. (Lynx). The accompanying Consolidated
Statements of Operations reflect the Lynx operating results as a
discontinued operation. The net assets of Lynx were not
significant.
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Summary results of the aforementioned discontinued operations
were as follows:
(dollar amounts in millions) June 30, June 30, July 31,
For the years ended 1994 1993 1992
Net revenues $106.7 $122.9
Costs and expenses 103.2 108.0
Provision for income taxes .2 2.9
Income from discontinued
operations - Metco prior to
the measurement date 3.3 12.0
Loss on disposal of Metco
including a provision of $5.0
for operating losses during
the phase-out period
(less applicable income
taxes of $.8) $ (7.7)
Loss from discontinued
operations (net of income
taxes of $(.2) in 1993, $.7
in 1992) - Lynx (1.6) (1.1)
Legal settlement (less appli-
cable income taxes of $.3) (15.2)
Income (loss) from
discontinued operations $(22.9) $ 1.7 $10.9
The net assets of Metco have been segregated in the June 30,
1994 and 1993 Consolidated Statements of Financial Position and
are summarized below:
(Dollar amounts in millions) 1994 1993
Assets:
Accounts receivable, net $25.6 $27.1
Inventories 26.3 28.3
Other current assets 1.2 1.2
Property, plant and equipment, net 20.1 19.6
Other long-term assets 3.9 4.1
Total Assets 77.1 80.3
Liabilities:
Accounts payable 5.3 4.1
Other accrued expenses 3.1 4.0
Other current liabilities 3.5 5.3
Long-term liabilities 4.3 3.3
Total Liabilities 16.2 16.7
Cumulative translation adjustments 4.7 2.9
Net Assets $56.2 $60.7
Divestitures. During the first quarter of fiscal 1994, the
Company sold the net assets of its Applied Science Operation to
Orbital Sciences Corporation. The Company received cash proceeds
of $600,000 and 320,000 shares of Orbital Sciences Corporation
common stock which were subsequently disposed of in the second
quarter of fiscal 1994 for proceeds of approximately $5 million.
During the second quarter of fiscal 1994, the Company sold its
minority equity investment in MRJ, Inc. to MRJ Group, Inc. for
$3.3 million in cash. In addition, two subordinated notes due
from MRJ, Inc. were repaid to the Company. During the fourth
quarter of fiscal 1994, the Company completed the sale of its
Physical Electronics Division (PHI) to the management of PHI and
Chemical Venture Partners. The unit, which was sold for
approximately net book value, manufactures and markets surface
analysis equipment primarily used for thin-film characterization
by chemical analysis. The Company received cash proceeds of $23
million and a 10% interest-bearing note with a face value of $7.2
million in connection with the sale. The gains and losses from
the aforementioned divestitures were not significant to the
Company's results of operations.
Other. In June of fiscal 1992, PE acquired 10,000 shares of
Silicon Valley Group preferred stock in exchange for its minority
interest in SVG Lithography, Inc. (SVGL) (2 million shares of
SVGL common stock), and an SVGL note receivable maturing on May
1, 1995, representing an aggregate purchase price of $17 million.
The investment in preferred stock is included in other long-term
assets in the Consolidated Statements of Financial Position. In
July of fiscal 1992, the Company sold to ETEC its senior Payment-
in-Kind preferred stock with a liquidation value of $6 million in
exchange for $250,000 in cash and a senior subordinated note
valued at approximately $5.8 million. The note is included in
other long-term assets.
Sale of Joint Venture. On December 11, 1991, PE and Hoffmann-La
Roche Inc. formed a strategic alliance to market and develop the
Polymerase Chain Reaction (PCR) technology used in the
amplification of DNA. Under the terms of the agreement, the
Company sold its 51% interest in the noninstrument PCR assets of
the Perkin-Elmer Cetus Instruments joint venture to Hoffmann-La
Roche Inc. The agreement provides for PE to remain the exclusive
distributor of all PCR products in the nondiagnostic markets for
Hoffmann-La Roche Inc. The Company received a 7% promissory note
from F. Hoffmann-La Roche Ltd., in the amount of $45 million and
royalty payments based on the net revenues of future sales for
PCR products. The transaction resulted in a one-time before-tax
gain of $3.3 million in fiscal 1992. In June of fiscal 1993, the
Company completed the sale of the 7% promissory note. This
transaction resulted in a one-time pretax gain of $8.5 million
included in other income (expense), net in the Consolidated
Statement of Operations for fiscal 1993.
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Note 3 Debt and Lines of Credit
Loans payable and long-term debt at June 30, 1994 and 1993 are
summarized below:
(Dollar amounts in millions) 1994 1993
Loans payable, United States:
Commercial paper $15.8 $17.1
Notes payable, banks 18.5
Current maturities of long-term debt .1
15.8 35.7
Loans payable, Foreign:
Notes payable, banks 65.9 36.6
Current maturities of long-term debt 1.9 1.7
67.8 38.3
Total loans payable $83.6 $74.0
Long-term debt:
3.255% Yen term loan maturing in
fiscal 1997 $28.4
Yen denominated bank notes with
maturities through fiscal 2005 5.7 $ 6.9
Other .2 .2
Total long-term debt $34.3 $ 7.1
The weighted average interest rates at June 30, 1994 and 1993 for
bank borrowings were 6.2% and 6.3%, respectively, and 4.5% and
3.2%, respectively, for commercial paper borrowings.
On June 1, 1994, the Company entered into a $150 million credit
facility consisting of a $50 million 364 day revolving credit
agreement and a $100 million three year revolving credit
agreement. The facility supports commercial paper issued by the
Company in the United States and working capital financing
requirements. Commitment and facility fees are based on leverage
and interest coverage ratios. Borrowings under the facility may
be either in the domestic or Eurodollar markets at the option of
the Company; interest rates on amounts borrowed vary depending on
the source. There were no borrowings under this facility at June
30, 1994 . This agreement replaced a similar facility which would
have expired on June 7, 1994.
On November 12, 1993, the Company's subsidiary, Perkin-Elmer
Italia S.p.A., exercised its option to extend 10 billion Lira of
the 15 billion Lira credit facility for an additional year.
Interest is payable at the Milan Interbank Offered Rate plus .75%
per annum. The loan agreement provides for a commitment fee of
.2%. At June 30, 1994, there were borrowings of approximately 3
billion Lira under the facility.
The Company's subsidiary, Perkin-Elmer Japan, entered into a
three year credit agreement under which it borrowed 2.8 billion
Yen at a fixed interest rate of 3.255%. The final maturity date
is scheduled for February 1997.
At June 30, 1994, PE had unused credit facilities for short-term
borrowings from domestic and foreign banks in various currencies
totaling approximately $321 million. Compensating balance
requirements and/or commitment fees for such credit arrangements
were not material.
Yen denominated bank notes include fixed rate notes (5.4% and
6.2% at June 30, 1994) and notes bearing interest at the bank's
long-term variable prime rates (3.5% and 4.4% at June 30, 1994).
Under various credit agreements, the Company is restricted as to
maintenance of minimum net worth and interest charge coverage
ratios.
Annual maturities of long-term debt for the fiscal years 1995
through 1999 are $1.9 million, $1.5 million, $29.3 million, $.7
million and $.4 million, respectively.
Note 4 Income Taxes
Effective August 1, 1992, PE adopted the provisions of SFAS No.
109, "Accounting for Income Taxes." SFAS No. 109 requires
recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been
included in the financial statements or tax returns.
The cumulative effect of the change in the method of accounting
for income taxes attributable to fiscal years prior to 1993 was
to increase net income by $19.9 million. The tax benefit
primarily resulted from the recognition of deferred tax assets
relating to future tax amortization of foreign intangibles. The
impact of this change on fiscal 1993 operating results, after
recording the cumulative effect, was to recognize additional tax
expense of $2 million.
Income before income taxes for fiscal years ended 1994, 1993 and
1992 was as follows:
(Dollar amounts in millions) 1994 1993 1992
United States $65.0 $16.1 $14.2
Foreign 24.1 27.8 35.1
Total $89.1 $43.9 $49.3
The components of the provision for income taxes for fiscal years
1994, 1993 and 1992 consisted of the following:
(Dollar amounts in millions) 1994 1993 1992
Currently payable:
Federal $(1.3) $ 2.4 $13.2
Foreign 12.6 10.4 9.8
State and local 2.1 1.0 .8
Total currently payable 13.4 13.8 23.8
Deferred:
Federal 2.3 3.0
Foreign 1.8 3.4 (1.8)
Total deferred 1.8 5.7 1.2
Total provision for
income taxes $15.2 $19.5 $25.0
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Significant components of deferred tax assets and liabilities
at June 30, 1994 and 1993 were:
Deferred Tax Assets
(Dollar amounts in millions) 1994 1993
Intangibles $ 13.8 $ 13.0
Inventories 7.7 9.3
Postretirement and
postemployment benefits 38.2 36.8
Other reserves and accruals 63.6 68.3
Tax credit carryforwards 20.7 34.3
Subtotal 144.0 161.7
Valuation allowance (119.6) (136.0)
Total deferred tax asset $ 24.4 $ 25.7
Deferred Tax Liabilities
(Dollar amounts in millions) 1994 1993
Inventories $ (1.0) $ (.7)
Other reserves and accruals (6.6) (5.1)
Total deferred tax liability (7.6) (5.8)
Total net deferred tax asset $ 16.8 $ 19.9
For fiscal 1992, temporary differences giving rise to deferred
income taxes principally resulted from intangibles, reserves and
inventories.
A reconciliation of the federal statutory tax provision to the
Company's tax provision for the fiscal years ended 1994, 1993 and
1992 follows:
(Dollar amounts in millions) 1994 1993 1992
Federal statutory rate 35% 34% 34%
Tax at federal statutory rate $31.2 $14.9 $16.7
State income taxes (net of
federal benefit) 1.4 .6 .6
Goodwill .4 .4 5.7
Effect on income from foreign
operations (.2) (.5) (3.1)
Merger expenses 4.3
Utilization of tax benefit
carryforwards (16.5) (8.8) (2.6)
U.S. gain from foreign
reorganization 4.6
Alternative minimum tax 1.1
Domestic temporary
differences for which (benefit
is recognized)/no benefit
is provided (7.4) 5.7 10.0
Miscellaneous items 1.7 1.8 (2.3)
Total provision for
income taxes $15.2 $19.5 $25.0
At June 30, 1994, PE has available foreign tax credit
carryforwards of $8.5 million which will expire between 1995 and
1999, and alternative minimum tax credits of $12.3 million with
an indefinite carryforward period.
The Company's federal tax returns have been examined by the
Internal Revenue Service (IRS) for the years 1975 through 1987,
and the IRS is currently examining 1988 and 1989. The primary
issue of significant dollar amount for the fiscal years 1975
through 1987 relates to the Company's pricing method on
intercompany sales with its subsidiary in Puerto Rico. In 1989,
the Company filed a petition in the United States Tax Court
contesting a Notice of Deficiency for taxable years 1975 through
1981 relating primarily to this matter. The Company has completed
trial before the Tax Court with respect to the deficiencies
relating to pricing and has received the Court's decision, which
essentially upheld the Company's pricing methods of the
intercompany sales. The favorable ruling from the Tax Court
contributed to a lower effective tax rate for the Company in
fiscal 1994. The other issue being considered by the Tax Court
has not yet been decided but is not material in nature. The years
1982 through 1987 are under consideration at the IRS appeals
level. It is the Company's opinion that it has adequately
provided in the financial statements for any potential IRS tax
adjustment relating to these years.
Note 5 Retirement and Other Benefits
Pension Plans. Substantially all employees worldwide are covered
by either PE or government sponsored retirement plans. The
Company recognizes pension expense in accordance with SFAS No.
87, "Employers' Accounting for Pensions." Total pension expense
for its domestic plans and significant foreign plans was $17.3
million for fiscal 1994, $13.8 million for fiscal 1993 and $11.7
million for fiscal 1992.
The Company has a noncontributory pension plan (contributory
1984 and prior) covering substantially all of its domestic
employees (ABI employees were covered effective July 1, 1993).
Plan benefits are generally established based on average career
earnings. The Company also has nonqualified supplemental and
deferred compensation plans for certain officers and key
employees which are unfunded and paid directly by the Company.
The qualified pension plan in the United States is funded in
accordance with the requirements of the Employee Retirement
Income Security Act of 1974. Plan assets are invested in various
securities including U.S. government and federal agency
obligations, corporate debt, preferred and common stocks, foreign
government obligations, real estate and foreign equities.
Employees outside of the U.S. generally receive retirement
benefits under various pension plans based upon such factors as
years of service and employee compensation levels which conform
to the practice common in the country in which PE conducts
business.
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The following assumptions and components were used for the fiscal
years ended 1994, 1993 and 1992 to develop net periodic pension
cost:
Domestic Plans
(Dollar amounts in millions) 1994 1993 1992
Assumptions:
Discount rate 8 1/2% 8 1/2% 8 1/2%
Rate of increase in future
compensation levels 4% 4% 4%
Expected long-term rate
of return on assets 8 1/2-10% 8 1/2-10% 8 1/2-10%
Components:
Service cost $ 9.1 $ 6.2 $ 6.5
Interest cost 30.6 25.6 26.7
Actual return on assets (19.5) (29.0) (23.6)
Net amortization and
deferral (9.8) 3.5 (4.3)
Net periodic pension cost $ 10.4 $ 6.3 $ 5.3
Foreign Plans
(Dollar amounts in millions) 1994 1993 1992
Assumptions:
Discount rate 6-8 1/2% 6 1/2-9 1/2% 7 1/2-9 1/2%
Rate of increase in future
compensation levels 4 1/2% 4 1/2-5% 4 1/2-6%
Expected long-term rate
of return on assets 6 1/2-10% 7-10 1/2% 7 1/2-10 1/2%
Components:
Service cost $ 2.9 $ 3.1 $ 2.8
Interest cost 6.0 6.3 5.9
Actual return on assets (1.7) (4.3) (.9)
Net amortization and
deferral (.3) 2.4 (1.4)
Net periodic pension cost $ 6.9 $ 7.5 $ 6.4
The following table sets forth the funded status of the plans and
amounts recognized in the Company's Consolidated Statements of
Financial Position at June 30, 1994 and 1993:
Domestic Plans
(Dollar amounts in millions) 1994 1993
Plan assets at fair value $339.3 $323.8
Actuarial present value
of benefit obligations:
Vested 362.7 346.8
Nonvested 6.1 7.0
Accumulated benefit obligation 368.8 353.8
Effect of assumed increase in
future compensation levels 13.1 11.8
Reduction of projected benefit
obligation due to curtailment (2.8)
Projected benefit obligation 379.1 365.6
Excess of projected benefit
obligation over plan assets 39.8 41.8
Required minimum pension liability
(unfunded accumulated benefits) 37.9 33.1
Effect of items not yet recognized:
Net actuarial loss (57.2) (51.6)
Prior service cost (4.7) (9.3)
Net transition asset 13.7 16.0
Pension liability $ 29.5 $ 30.0
In accordance with the provisions of SFAS No. 87, the Company
recorded, as shown in the table above, an additional minimum
liability at the end of each year representing the excess of the
accumulated benefit obligations over the fair value of plan
assets and accrued pension liabilities. The liabilities have been
offset by intangible assets to the extent possible. Because the
asset recognized may not exceed the amount of unrecognized prior
service cost, the balance of the liability is reported as a
reduction of shareholders' equity.
As a result of the Company's decision to sell its Applied Science
Operation, Physical Electronics Division and Material Sciences
segment (see Note 2), PE recognized a curtailment of its domestic
pension plan. The loss recognized was not material to the
financial statements.
The curtailment reduction of $2.8 million, reflected in the
Statement of Financial Position, was the gain from the reduction
in the projected benefit obligation. This is not recognized
immediately as a reduction of expense because it did not exceed
the amount of unrecognized cumulative loss, net of the
unrecognized initial asset, as required by SFAS No. 88.
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Foreign Plans
Assets Exceed Accumulated
Accumulated Benefits
Benefits Exceed Assets
(Dollar amounts in millions) 1994 1993 1994 1993
Plan assets at fair value $25.2 $23.5
Actuarial present value
of benefit obligations:
Vested 23.1 20.4 $43.0 $38.0
Nonvested 4.1 3.6
Accumulated benefit
obligation 23.1 20.4 47.1 41.6
Effect of assumed increase in
future compensation levels 1.7 .8 12.6 13.1
Projected benefit obligation 24.8 21.2 59.7 54.7
Projected benefit obligation
in excess of (less than)
plan assets (.4) (2.3) 59.7 54.7
Effect of items not yet
recognized:
Net actuarial loss (3.8) (1.2) 1.0 (.1)
Prior service cost (.4) (.4)
Net transition asset
(obligation) 3.4 3.7 (7.4) (7.7)
Pension liability (asset) $(1.2) $ (.2) $53.3 $46.9
PE has a profit sharing and savings plan whereby, when pretax
earnings per share of the common stock outstanding exceed $.3125
per share, the Company is required to fund the plan in an amount
equal to 8% of consolidated pretax earnings, as defined by the
plan, provided the amount of such payment does not reduce the
balance of such earnings below $.3125 per share of common stock.
The profit sharing payment by the Company is allocated among its
domestic employees (ABI employees were covered as of July 1,
1993) in direct proportion to their earnings. PE's contribution
was $7.5 million for fiscal 1994, $6.7 million for fiscal 1993
and $7 million for fiscal 1992.
Retiree Health Care and Life Insurance Benefits. PE provides
certain health care and life insurance benefits to domestic
employees, hired prior to January 1, 1993, who retire from the
Company and satisfy certain service and age requirements.
Generally, the medical coverage pays a stated percentage of most
medical expenses reduced for any deductible and payments made by
Medicare or other group coverage. Benefits are administered
through an insurance carrier paid by PE. The cost of providing
these benefits is shared with retirees. The cost sharing
provisions will vary depending on the retirement date, age and
years of service. The Company has amended the plan to exclude any
domestic employees hired after January 1, 1993. The plan is
unfunded.
The Company adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of August 1,
1992. This statement requires the accrual of the cost of
providing postretirement benefits, including medical and life
insurance coverage, during the active service period of the
employee. The Company elected to immediately recognize the
accumulated liability, measured as of August 1, 1992. This
resulted in a one-time after-tax charge of $88.8 million or $1.98
per share. The effect of this change on fiscal 1993 operating
results, after recording the cumulative effect for fiscal years
prior to 1993, was to recognize additional after-tax expense of
$3.0 million or $.07 per share. The pro forma effect of the
change on fiscal years prior to 1993 was not determinable. Prior
to fiscal 1993, the Company recognized expense in the year the
benefits were paid. Postretirement health care and life insurance
costs charged to expense were $5.3 million in fiscal 1992.
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The following table sets forth the funded status of the plan,
reconciled to the accrued postretirement benefit liability
recognized in the Company's Consolidated Statements of Financial
Position at June 30, 1994 and 1993:
(Dollar amounts in millions) 1994 1993
Actuarial present value of
postretirement benefit obligation:
Retirees $68.8 $72.1
Fully eligible active participants 7.5 6.1
Other active participants 10.9 14.6
Accumulated postretirement benefit
obligation (APBO) 87.2 92.8
Effect of items not yet recognized:
Unrecognized net gain 6.6
Accrued postretirement benefit liability $93.8 $92.8
Net periodic postretirement benefit cost for fiscal 1994 and 1993
included the following components:
(Dollar amounts in millions) 1994 1993
Service cost of benefits earned $1.2 $1.2
Interest cost on accumulated postretirement
benefit obligation 7.2 6.7
Net periodic postretirement benefit cost $8.4 $7.9
As a result of the Company's decision to sell its Applied Science
Operation, Physical Electronics Division and Material Sciences
segment (see Note 2), it recognized a $2.9 million gain related
to the curtailment of its postretirement benefit plan during
fiscal 1994.
The discount rate used in determining the APBO was 8.5% in fiscal
1994 and 1993. The assumed health care cost trend rate used for
measuring the APBO was divided into three categories:
1994 1993
Pre-65 participants 12.3% 13.0%
Post-65 participants 8.7% 9.0%
Medicare 7.8% 8.0%
All three rates were assumed to decline to 5.5% over 11 years in
fiscal 1994 and over 12 years in fiscal 1993.
If the health care cost trend rate was increased 1 percent, the
APBO, as of June 30, 1994, would have increased 10.3%. The effect
of this change on the aggregate of service and interest cost for
fiscal 1994 would be an increase of 13%.
Foreign employees are primarily covered under government
sponsored programs and, therefore, the impact of SFAS No. 106 was
not material. No significant expense for foreign retiree medical
benefits was incurred by the Company in any of the years
presented.
Postemployment Benefits. The Company provides certain
postemployment benefits to eligible employees. These benefits
include severance, disability and medical-related costs paid
after employment but before retirement.
The Company adopted, effective as of the beginning of fiscal
1993, SFAS No. 112, "Employers' Accounting for Postemployment
Benefits." SFAS No. 112 requires an accrual method of accounting
for the related costs. Prior to the adoption of this standard,
the Company recognized such costs at the time the benefits were
paid.
The adoption of SFAS No. 112 in fiscal 1993 resulted in a one-
time after-tax charge to net income of $14.2 million in the first
quarter of the year, representing the cumulative effect on prior
years of adopting the new standard.
Note 6 Geographic Area Information
PE operates in one industry segment: the development,
manufacture, marketing, sales and service of analytical
instrument systems. Included in this industry segment are
analytical instrument systems and associated consumable products
used to amplify, purify, analyze, interpret results of,
synthesize and sequence biological molecules such as DNA, RNA and
proteins utilized in life science and related applications.
This industry segment also includes analytical instrument systems
used for determining the composition and molecular structure of
chemical substances and measuring the concentration of materials
in a sample. Analytical instruments include spectrophotometers,
gas and liquid chromatographs, analytical balances, flame
photometers, polarimeters and data handling devices that are
designed for use with analytical instrument systems.
Operating income is net revenues less operating costs and
expenses. Operating costs and expenses include cost of sales,
selling, general and administrative and research, development and
engineering expenses. Identifiable assets include all assets
directly identified with those geographic areas. Corporate assets
consist primarily of cash and cash equivalents, short-term
investments, long-term marketable securities, certain
-38-
<PAGE>
other current and long-term assets and certain investments in
unconsolidated companies.
Information by geographic area is presented on a source basis,
with exports shown in their area of origin and R&D expenses
reflected in the area where the activity was performed. Operating
income reflects all profit in the region where the sale
originated. The geographic groupings of non-U.S. operations are
based on similarities of business environment and geographic
proximity.
<TABLE>
<CAPTION> Eliminations
United Other and Corporate
(DOLLAR AMOUNTS IN MILLIONS) States Europe Far East Countries Expenses Consolidated
Fiscal 1994:
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ 417.8 $ 362.6 $ 195.3 $ 48.8 $ 1,024.5
Interarea transfers 56.0 114.3 102.2 6.6 $ (279.1)
473.8 476.9 297.5 55.4 (279.1) $ 1,024.5
Operating income (loss) (3.4) 48.8 62.0 9.7 $ (21.1) 96.0
Identifiable assets $ 319.3 $ 224.6 $ 102.6 $ 23.3 $ 669.8
Corporate assets 158.5
Net assets of discontinued operations 56.2
Total assets 884.5
Fiscal 1993: (a)
Net revenues $ 404.50 $ 420.40 $ 144.5 $ 41.9 $ 1,011.3
Interarea transfers 56.5 122.8 64.2 7.6 $ (251.1)
461.0 543.2 208.7 49.5 (251.1) $ 1,011.3
Operating income (loss) (b) (24.7) 58.1 43.9 8.3 $ (42.1) 43.5
Identifiable assets $ 332.4 $ 215.8 $ 70.5 $ 20.9 $ 639.6
Corporate assets 150.8
Net assets of discontinued operations 60.7
Total assets 851.1
Fiscal 1992: (a)
Net revenues $ 412.2 $ 395.2 $ 120.1 $ 42.6 $ 970.1
Interarea transfers 47.8 112.7 50.8 6.0 $ (217.3)
460.0 507.9 170.9 48.6 (217.3) $ 970.1
Operating income (loss) (14.1) 60.1 36.2 7.4 $ (27.0) 62.6
Identifiable assets 352.0 233.0 62.5 26.9 674.4
Corporate assets 210.0
Net assets of discontinued operations 64.6
Total assets 949.0
</TABLE>
(a) The financial data by geographic area for prior years has been
reclassified to reflect all operating profit in the region where the revenue
originated.
(b) The costs to combine operations of $28.5 million were included in
operating income of the United States ($15.4 million), Europe ($11.4
million), Far East ($1.4 million) and other countries ($.3 million). The $12.5
million in transaction costs is reflected as a corporate expense.
For purposes of this footnote, revenues between geographic areas
are accounted for at approximately cost.
Export sales for the fiscal years ended June 30, 1994, 1993 and
July 31, 1992 were approximately $63.8 million, $76.1 million and
$80.7 million, respectively.
Note 7 Shareholders' Equity
Treasury Stock. PE's Board of Directors has authorized the
purchase of PE common stock to support the Company's employee
stock purchase plan and stock option plans. Under this Board of
Directors' resolution, purchases for this program are limited
annually to the number of shares expected to be issued under
these plans. For the years ended June 30, 1994, 1993 and July 31,
1992, the Company purchased .8 million shares, .4 million shares
and .5 million shares, respectively, to support these plans.
Under a separate program, PE is authorized to purchase common
stock when management deems such action to be in the best
interest of its shareholders and the Company. During fiscal 1989,
the Company's Board of Directors increased its authorization to
purchase PE common stock from 5 million shares to 10 million
shares. As of June 30, 1994, approximately 5 million shares
remain authorized to be purchased.
Shareholder Protection Rights Plan. PE has adopted a Shareholder
Protection Rights Plan designed to protect shareholders against
abusive takeover tactics by declaring a dividend of one right on
each outstanding share of common stock. Each right entitles
shareholders to buy one one-hundredth of a newly-issued share of
participating preferred stock having economic and voting terms
similar to those of one share of common stock at an exercise
price of $90.00, subject to adjustment.
The rights will be exercisable only if a person or a group: (a)
acquires 20% or more of the Company's shares or (b) commences a
tender offer that will result in such person or group owning 20%
or more of the Company's shares. Before that time, the rights
trade with the common stock, but thereafter they become
separately tradeable.
Upon exercise, after a person or a group acquires 20% or more of
the Company's shares, each right (other than rights held by the
acquiring person) will entitle the shareholder to purchase a
number of shares of preferred stock of the Company having a
market value of two times the exercise price. If PE is acquired
in a merger or other business combination, each right will
entitle the shareholder to purchase at the then exercise price a
number of shares of common stock of the acquiring company having
a market value of two times such exercise price. If any person or
group acquires between 20% and 50% of PE's shares, the Company's
Board of Directors may, at its option, exchange one share of the
Company's common stock for each right.
The rights are redeemable at PE's option at one cent per right
prior to a person or group becoming an acquiring person.
Common Stock. In October 1993, the Company's shareholders
approved an increase in the number of authorized shares of common
stock from 60 million to 90 million.
Note 8 Stock Plans
Stock Option Plans. Under PE's stock option plans, officers and
other key employees may be granted options, each of which allows
for the purchase of common stock at a price of not less than 100%
of fair market value at the date of grant.
As a result of the merger with ABI in 1993, all unexpired and
unexercised stock options under ABI's stock option plans were
converted to options to acquire .678 of a share of the Company's
common stock, and the obligations with respect to such options
have been assumed by PE. Each ABI option assumed by PE is subject
to the same terms and conditions which existed prior to the
merger.
Stock options granted under the ABI plans were available for
grant to employees, directors, consultants, sales representatives
and distributors. Incentive stock options, granted at prices not
less than the fair market value of the common stock on the date
of grant, and nonstatutory stock options, granted at prices
ranging from 85% to 100% of the fair market value on the date of
grant, were available for grant.
Transactions relating to the stock purchase and option plans of
the Company are summarized below. The table reflects the pooled
activity of PE and ABI options for 1992 and 1993 as if all ABI
options were granted, exercised, or canceled at .678 of a PE
share.
Number of Shares
Outstanding at July 31, 1991 3,982,226
Granted at $18.07-$34.81 per share 896,246
Exercised at $15.90-$35.88 per share 630,091
Canceled 234,380
Outstanding at July 31, 1992 4,014,001
Granted at $20.47-$37.75 per share 1,387,417
Exercised at $9.96-$35.88 per share 841,752
Canceled 199,523
Outstanding at June 30, 1993 4,360,143
Granted at $30.25-$37.75 per share 970,150
Exercised at $10.70-$35.32 per share 763,085
Canceled 253,458
Outstanding at June 30, 1994 4,313,750
Options exercisable at June 30, 1994 2,491,665
-40-
<PAGE>
As of June 30, 1994, 1.0 million shares remain available for
option grant.
Employee Stock Purchase Plan. The Employee Stock Purchase Plan
enables substantially all domestic employees to subscribe to
shares of common stock on an annual offering date at a purchase
price equal to the lower of 85% of the fair market value of the
common stock on the day the right is granted or 85% of the fair
market value of the common stock on the day the 24 month purchase
period applicable to each right to purchase terminates.
At the effective time of the merger, each outstanding right to
acquire ABI common stock pursuant to the ABI Employee Stock
Purchase Plan was converted to a right to purchase .678 of a
share of PE common stock subject to the same terms and conditions
set forth in the ABI purchase plan. ABI contributed 25% of the
purchase price of eligible stock purchases.
Common stock issued under the PE and ABI Employee Stock Purchase
Plans, assuming ABI stock was issued at .678 of a PE share prior
to the merger, was approximately .1 million in fiscal 1994, 1993
and 1992. At June 30, 1994, .8 million shares are reserved for
issuance.
Director Stock Purchase and Deferred Compensation Plan. In 1993,
PE adopted the Director Stock Purchase and Deferred Compensation
Plan which requires nonemployee directors of the Company to apply
at least 50% of their annual retainer to the purchase of common
stock. The purchase price of the common stock to be purchased
under the plan is the fair market value on the first calendar day
of the third month of each fiscal quarter. At June 30, 1994,
approximately 96,500 shares were available for issuance.
Restricted Stock. As part of PE's 1993 Stock Incentive Plan, a
total of 100,000 shares of common stock may be granted to key
employees pursuant to restricted stock awards. Such stock will
not vest until certain continuous employment restrictions are
met. PE's 1988 Stock Incentive Plan also permitted the grant of
restricted stock awards. In fiscal 1994, 1993 and 1992, there
were no shares awarded. The amounts charged to expense in fiscal
years 1993 and 1992 related to the 1988 plan were $.7 million and
$1 million, respectively. There were no charges in fiscal 1994.
Note 9 Additional Information
The following table provides the major components of selected
accounts of the Consolidated Statements of Financial Position:
(Dollar amounts in millions)
At June 30, 1994 1993
Other long-term assets
Investments in affiliated companies $ 34.0 $ 38.1
Assets held for sale 45.0 31.6
Other 85.5 83.0
Total $164.5 $152.7
Other accrued expenses
Deferred service revenues $ 37.3 $ 30.7
Accrued pension liabilities 16.7 25.4
Costs to combine operations 9.6 26.4
Other 78.0 69.9
Total $141.6 $152.4
Other long-term liabilities
Accrued pension liabilities $ 56.1 $ 41.9
Accrued postretirement benefits 89.9 86.8
Other 35.5 34.7
Total $181.5 $163.4
The following table provides the significant components of other
income (expense) in the Consolidated Statement of Operations for
the year ended June 30, 1993:
(Dollar amounts in millions) 1993
Gain on sale of 7% promissory note $8.5
Reduction in carrying value of
unoccupied properties (5.0)
Other, net 2.6
Total $6.1
The components of other income (expense) for fiscal years 1994
and 1992 were not material.
Note 10 Provision for Restructured Operations
In the fourth quarter of fiscal 1992, ABI recorded a $22 million
charge to write down goodwill and other intangibles with limited
or no continuing value; to reserve for the closing of its Swedish
operation; and to accrue for expenses related to the closure and
relocation of its San Jose, California manufacturing facility.
The closure of the Swedish operation and the San Jose facility
were substantially completed in fiscal 1993.
-41-
<PAGE>
Note 11 Commitments and Contingencies
Future minimum payments at June 30, 1994 under noncancelable
operating leases for real estate and equipment were as follows:
(Dollar amounts in millions)
1995 $24.1
1996 20.1
1997 15.7
1998 10.2
1999 8.0
2000 and thereafter 9.2
Total $87.3
Rental expense was $32.9 million in fiscal 1994, $31.9 million in
fiscal 1993 and $27.7 million in fiscal 1992.
The Company has been named as a defendant in several legal
actions arising from the conduct of its normal business
activities. Although the amount of any liability that might arise
with respect to any of these matters cannot be accurately
predicted, the resulting liability, if any, will not in the
opinion of management have a material adverse effect on the
financial statements of the Company.
Note 12 Sale of Accounts Receivable
The Company periodically sells accounts receivable in Japan. In
1992, the Company also sold accounts receivable in Italy. These
transactions are recorded as sales in accordance with SFAS No.
77, "Reporting by Transferors for Transfers of Receivables with
Recourse," as amended. During the fiscal years ended 1994, 1993
and 1992, the Company received cash proceeds of $43.8 million,
$17.8 million and $38.1 million, respectively. The Company
believes that it has adequately provided for any risk of loss
which may occur under these arrangements.
Note 13 Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the
fair value of the following financial instruments held by the
Company:
Cash and Short-Term Investments. The carrying amount approximates
fair value because of the short maturity of those instruments.
Marketable Securities Beyond One Year. The fair values of these
investments are estimated based on quoted market prices for those
or similar instruments.
Minority Equity Investments, Notes Receivable. The fair values
of these instruments are estimated based on quoted market prices
if available or quoted market prices of financial instruments
with similar characteristics.
Debt. The fair value of the Company's debt is estimated based on
the quoted market prices for the same or similar issues or on the
current rates offered to the Company for debt of the same
remaining maturities.
Foreign Currency Contracts. The fair value of foreign currency
contracts (used for hedging purposes) is estimated using fiscal
year end exchange rates.
The carrying values and estimated fair values of the Company's
financial instruments at June 30, 1994 and 1993 were as follows:
Carrying Fair Carrying Fair
Amount Value Amount Value
(Dollar amounts in millions) 1994 1993
Cash and short-term
investments $25.0 $25.0 $30.3 $30.3
Marketable securities
maturing beyond one year 7.0 7.0 7.0 7.0
Minority equity investments 27.3 30.0 28.3 28.7
Notes receivable 13.4 13.7 9.8 10.0
Short-term debt 83.6 83.6 74.0 74.0
Long-term debt 34.3 34.3 7.1 7.1
Foreign currency contracts 90.8 90.8 59.5 59.5
-42-
<PAGE>
Note 14 Quarterly Financial Information (Unaudited)
The following is a summary of quarterly financial results for the
fiscal years ended June 30, 1994 and June 30, 1993:
<TABLE>
<CAPTION>
First Quarter Second Quarter Third Quarter Fourth Quarter
(Dollar amounts in millions except per share amounts) 1994 1993 1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues $ 243.3 $ 250.9 $ 256.8 $ 270.2 $ 263.5 $ 258.6 $ 260.9 $ 231.6
Gross margin 113.6 117.5 123.6 129.8 128.9 123.0 123.1 105.9
Income (loss) from continuing operations 13.5 11.6 22.2 20.5 20.4 (16.9) 17.9 9.3
Income (loss) from discontinued
operations (12.5) 1.8 .4 2.7 (10.4) (3.2)
Income (loss) before cumulative effect of
changes in accounting principles 1.0 13.4 22.2 20.9 20.4 (14.2) 7.5 6.1
Cumulative effect on prior years of
changes in accounting principles
(net of income taxes) (83.1)
Net income (loss) 1.0 (69.7) 22.2 20.9 20.4 (14.2) 7.5 6.1
Income (loss) per share from continuing
operations .30 .26 .50 .46 .45 (.38) .41 .20
Income (loss) per share from
discontinued operations (.28) .04 .01 .06 (.24) (.07)
Income (loss) per share before cumulative
effect of changes in accounting principles .02 .30 .50 .47 .45 (.32) .17 .13
loss per share from cumulative effect on prior
years of changes in accounting principles (1.85)
Net income (loss) per share $ .02 $ (1.55) $ .50 $ .47 $ .45 $ (.32) $ .17 $ .13
</TABLE>
Stocks Prices and Dividends 1994 1993
<TABLE>
<CAPTION>
Stock prices High Low High Low
<S> <C> <C> <C> <C>
First Quarter $ 33 7/8 $ 30 $ 35 1/2 $ 28 1/2
Second Quarter $ 39 $ 28 1/2 $ 39 3/4 $ 30 1/8
Third Quarter $ 39 1/2 $ 31 $ 39 1/4 $ 32 3/4
Fourth Quarter $ 33 $ 27 $ 36 1/2 $ 30 3/4
</TABLE>
Dividends per share 1994 1993
First Quarter $ .17 $ .17
Second Quarter $ .17 $ .17
Third Quarter $ .17 $ .17
Fourth Quarter $ .17 $ .17
- 43 -
<PAGE>
To the Shareholders of The Perkin-Elmer Corporation
The Company is responsible for the preparation and integrity of
the accompanying consolidated financial statements. The
statements have been prepared in conformity with generally
accepted accounting principles appropriate in the circumstances
and include amounts based upon management's best estimates and
judgments. These accounting principles have been consistently
applied. The financial statements are believed to reflect, in all
material respects, the substance of events and transactions that
should be included. Financial information presented elsewhere in
this annual report is consistent with that in the financial
statements.
In meeting its responsibility for preparing reliable financial
statements, the Company depends on its system of internal
accounting controls. This system is designed to provide
reasonable assurance that assets are safeguarded and transactions
are executed in accordance with the appropriate corporate
authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted
accounting principles. The Company believes that its accounting
controls provide reasonable assurance that errors or
irregularities that could be material to the financial statements
are prevented or would be detected within a timely period by
employees in the normal course of performing their assigned
functions. The concept of reasonable assurance is based on the
recognition that judgments are required to assess and balance the
costs and expected benefits of a system of internal accounting
controls. Written internal accounting control and other operating
policies and procedures supporting this system are communicated
throughout the Company. Adherence to these policies and
procedures is reviewed through a coordinated audit effort of the
Company's internal audit staff and independent accountants.
The independent accountants review and test the system of
internal accounting controls to the extent they consider
necessary to support their opinion on the consolidated financial
statements of the Company. Their report is the result of an
independent and objective review of management's discharge of its
responsibilities relating to the fairness of reported operating
results and financial condition.
The Company's Board of Directors has an Audit Committee composed
solely of outside directors. The committee meets periodically
with the Company's independent accountants, management and
internal auditors to review matters relating to the quality of
financial reporting and internal accounting controls, the nature
and extent of internal and external audit plans and results, and
certain other matters. The independent accountants, whose
appointment is recommended by the Audit Committee to the Board of
Directors, have full and free access to this committee.
A statement of business ethics policy is communicated to all
Company employees. The Company monitors compliance with this
policy to help assure that operations are conducted in a
responsible and professional manner with a commitment to the
highest standard of business conduct.
William F. Emswiler
Vice President, Finance
Chief Financial Officer
Gaynor N. Kelley
Chairman and
Chief Executive Officer
-44-
<PAGE>
Report of Independent Accountants
To the Shareholders and Board of Directors of
The Perkin-Elmer Corporation
In our opinion, based upon our audits and the
report of other auditors, the accompanying
consolidated statements of financial position
and the related consolidated statements of
operations, of shareholders' equity and of
cash flows present fairly, in all material
respects, the financial position of The
Perkin-Elmer Corporation and its subsidiaries
at June 30, 1994 and 1993, and the results of
their operations and their cash flows for
each of the three fiscal years in the period
ended June 30, 1994, in conformity with
generally accepted accounting principles.
These financial statements are the
responsibility of the Company's management;
our responsibility is to express an opinion
on these financial statements based on our
audits. We did not audit the financial
statements of Applied Biosystems, Inc., which
statements reflect total revenues of
$181,805,000 for the year ended July 31,
1992. Those statements were audited by other
auditors whose report thereon has been
furnished to us, and our opinion expressed
herein, insofar as it relates to the amounts
included for Applied Biosystems, Inc., is
based solely on the report of the other
auditors. We conducted our audits of these
statements in accordance with generally
accepted auditing standards which require
that we plan and perform the audit to obtain
reasonable assurance about whether the
financial statements are free of material
misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts
and disclosures in the financial statements,
assessing the accounting principles used and
significant estimates made by management, and
evaluating the overall financial statement
presentation. We believe that our audits and
the report of other auditors provide a
reasonable basis for the opinion expressed
above.
As discussed in Note 4 and Note 5 to the
financial statements, the Company changed its
method of accounting for income taxes,
postretirement benefits and postemployment
benefits in fiscal 1993.
Price Waterhouse LLP
Stamford, Connecticut
July 28, 1994
- 45 -
<PAGE>
SUBSIDIARIES OF THE PERKIN-ELMER CORPORATION
State or
Jurisdiction
Name of Incorporation
or Organization
PKN Overseas Corporation (New York,USA)
Perkin-Elmer (UK) Limited (UK)
Perkin-Elmer (UK) Pension
Trustees Limited (UK)
Perkin-Elmer Limited (UK)
Metco Limited (UK)
Applied Biosystems Ltd. (UK)
Perkin-Elmer Pty Limited (Australia)
Perkin-Elmer (Canada) Ltd. (Canada)
Perkin-Elmer Sciex * (Canada)
Perkin-Elmer Taiwan Corporation (Delaware,USA)
Perkin-Elmer (Thailand) Limited (Thailand)
Perkin-Elmer AG (Switzerland)
Perkin-Elmer Japan Co. Ltd. (Japan)
Perkin-Elmer SA (France)
Perkin-Elmer (Sweden) AB (Sweden)
Perkin-Elmer AB (Sweden)
Metco Scandinavia AB (Sweden)
Perkin-Elmer OY (Finland)
Perkin-Elmer Nederland BV (The Netherlands)
Applied Biosystems, BV (The Netherlands)
Perkin-Elmer Belgium NV (Belgium)
Metco Nederland BV (The Netherlands)
Perkin-Elmer Sro (Czech Republic)
Perkin-Elmer Hungaria Kft (Hungary)
Perkin-Elmer Polska Spolka zoo (Poland)
Spartan Ltd. + (Channel Isles)
Listronagh Company (Ireland)
Perkin-Elmer Instruments Asia Pte. Ltd. (Singapore)
Perkin-Elmer Instruments Pte. Ltd. (Malaysia)
Perkin-Elmer Holding GmbH (Germany)
Bodenseewerk Perkin-Elmer GmbH (Germany)
Perkin-Elmer Metco GmbH (Germany)
Perkin-Elmer GmbH (Austria)
Metco Vertrieb GmbH (Austria)
Perkin-Elmer Italia SpA (Italy)
Perkin-Elmer Hong Kong, Ltd. (Hong Kong)
Metco de Mexico SA (Mexico)
Perkin-Elmer Analytical and Biochemical
Instruments (Beijing) Co., Ltd. (China)
Perkin-Elmer International, Inc. (Delaware, USA)
Analitica de Centroamerica, S.A. (Costa Rica)
Perkin-Elmer Industria e Comercio Ltda. (Brazil)
Metco Industria e Comercio Ltda. (Brazil)
Perkin-Elmer Korea Corporation (Delaware, USA)
Perkin-Elmer de Mexico SA (Mexico)
Perkin-Elmer Overseas Ltd. (Cayman Islands)
PECO Insurance Company Limited (Bermuda)
ULVAC-PHI, Inc. * (Japan)
Daiichi Metco, Co. Ltd. * (Japan)
Perkin-Elmer Caribbean Corporation (Delaware, USA)
Perkin-Elmer China, Inc. (Delaware, USA)
Perkin-Elmer FSC, Inc. (Virgin Islands)
Perkin-Elmer Hispania SA (Spain)
Metco Iberica SA (Spain)
Hitachi Perkin-Elmer, Ltd. + (Japan)
Applied Biosystems (Australia) Pty. Ltd. (Australia)
Applied Biosystems Canada, Inc. (Canada)
EXHIBIT 21
LIST OF SUBSIDIARIES
Note: Persons directly owned by subsidiaries of The Perkin
Elmer Corporation are indented and listed below their
immediate parent.
* 50% ownership
+ 49% ownership
SUBSIDIARIES OF THE PERKIN-ELMER CORPORATION (cont'd)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectuses constituting part of the Registration Statements on
Form S-8 (Nos. 2-95451, 33-25218, 33-44191, 33-50847, 33-50849, and
33-58778) of The Perkin-Elmer Corporation of our report dated July
28, 1994, appearing on page 45 of the Annual Report to Shareholders
for 1994 of The Perkin-Elmer Corporation which is incorporated in
this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial Statement
Schedules, which appears on page 18 of this Form 10-K.
PRICE WATERHOUSE LLP
Stamford, Connecticut
September 21, 1994
Deloitte & Touche LLP [LOGO]
50 Fremont Street
San Francisco, California
94105-2230
Telephone: (415) 247-4000
Facsimile: (415) 247-4329
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration
Statements of The Perkin-Elmer Corporation on Form S-8 (Nos. 2-
95451, 33-25218, 33-44191, 33-50847, 33-50849, and 33-58778) of our
report dated July 29, 1992 (November 5, 1992 as to Notes 13 and 14)
(related to the consolidated financial statements and financial
statement schedules of Applied Biosystems, Inc. not presented
separately therein) appearing in the Annual Report on Form 10-K
of The Perkin-Elmer Corporation for the year ended June 30, 1994.
DELOITTE & TOUCHE LLP
September 21, 1994
[LOGO]
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> JUN-30-1994
<CASH> 25,003
<SECURITIES> 7,000
<RECEIVABLES> 238,811
<ALLOWANCES> (7,247)
<INVENTORY> 201,436
<CURRENT-ASSETS> 514,698
<PP&E> 329,076
<DEPRECIATION> (180,005)
<TOTAL-ASSETS> 884,500
<CURRENT-LIABILITIES> 378,298
<BONDS> 0
<COMMON> 45,600
0
0
<OTHER-SE> 244,902
<TOTAL-LIABILITY-AND-EQUITY> 884,500
<SALES> 1,024,467
<TOTAL-REVENUES> 1,024,467
<CGS> 535,178
<TOTAL-COSTS> 535,178
<OTHER-EXPENSES> 94,172
<LOSS-PROVISION> 2,927
<INTEREST-EXPENSE> 7,145
<INCOME-PRETAX> 89,132
<INCOME-TAX> (15,154)
<INCOME-CONTINUING> 73,978
<DISCONTINUED> (22,851)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,127
<EPS-PRIMARY> 1.14
<EPS-DILUTED> 1.14
</TABLE>
