FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
Commission File Number 001-10109
BECKMAN INSTRUMENTS, INC.
2500 Harbor Boulevard, Fullerton, California 92634
(714) 871-4848 (Principal Executive Offices)
State of Incorporation: Delaware
I.R.S. Employer Identification No.: 95-104-0600
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Common Stock, $.10 par value
Name of each exchange on which registered: New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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. Yes (X) No ( ).
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 the Form 10-K. ( )
Aggregate market value of voting stock held by non-affiliates of the
registrant as of January 24, 1994: $813,141,504.
Common Stock, $.10 par value, outstanding as of January 24, 1994:
29,040,768 shares.
Documents incorporated by reference in this report:
Documents incorporated Form 10-K part number
Annual Report to stockholders for
the fiscal year ended December 31, 1993 Part I and Part II
Proxy Statement for the 1994 Annual
Meeting of Stockholders to be held on
March 30, 1994 Part III
<PAGE>
BECKMAN INSTRUMENTS, INC.
PART I
Item 1. Business
Beckman Instruments, Inc. ("Beckman" or "the Company") is one
of the world's leading manufacturers of instrument systems that make
laboratories more efficient by simplifying and automating
biologically based processes. The Company designs, manufactures,
markets and services a broad range of laboratory instrument systems,
reagents and related products, which customers typically use to
conduct basic scientific research, new product research and
development or diagnostic analysis of patient samples. In 1993
about 60 percent of total sales were for diagnostic applications,
principally in hospital laboratories, while about 40 percent of
sales were for life sciences applications in universities, medical
schools and research institutes, or new product research and
development in pharmaceutical and biotechnology companies. About
half of reported sales were to customers outside the United States.
Background
The Company was founded in 1934 by Dr. Arnold O. Beckman to
manufacture analytical instruments and became a publicly traded
corporation in 1952, subsequently being listed on the New York Stock
Exchange in 1955. In 1968 the Company expanded its laboratory
instrument focus to include health care applications in clinical
diagnostics. Beckman was acquired by SmithKline Corporation to form
SmithKline Beckman Corporation ("SmithKline Beckman") in 1982 and
the Company was operated as a wholly owned subsidiary of SmithKline
Beckman until November 4, 1988. At that time approximately 16% of
Beckman's common stock was sold in a public offering and the stock
was listed on the New York Stock Exchange. On July 26, 1989,
SmithKline Beckman distributed the remainder of its Beckman common
stock as a tax free dividend to the stockholders of SmithKline
Beckman. This was part of a transaction involving the merger of
SmithKline Beckman and Beecham Group p.l.c., a public limited
company organized under the laws of the United Kingdom ("Beecham").
Since that time Beckman has operated as a fully independent publicly
owned company.
Simplification and Automation of Laboratory Processes
The Company's primary expertise and activity is the integration
of chemical, biological, engineering and software sciences into
complete systems that simplify and automate biologically focused
laboratory processes and the distribution and support of those
systems around the world. These laboratory processes can generally
be grouped into four categories:
Synthesis and Sample Preparation/Handling - Synthesizing
compounds useful in subsequent analysis and scientific
investigation or placing material into a proper
container, with necessary pretreatment, dilution,
measurement, weighing and identification.
Separation - Isolating materials of interest from
extraneous material or separating mixtures into
individual constituents, often in preparation for
subsequent processes.
Detection, Measurement and Characterization - Determining
the identity, structure, or quantity of specific analytes
(compounds or molecules of interest) present in sample
specimens.
Data Processing - Acquiring, reporting, analyzing,
archiving or calculating the results of laboratory
analysis.
Beckman's experience, knowledge and ability in simplifying and
automating these processes for biological laboratories forms a
technological continuum that extends across the Company. From this
common technical base comes a range of products that are configured
to meet specific needs of academic research, pharmaceutical and
biotechnology companies, hospitals and reference laboratories (large
central laboratories to which hospitals and physicians refer
specialized tests). By serving several customer groups with
differing needs related through common science, the Company has the
opportunity to broadly apply its technology.
There is a corresponding scientific and technical continuum
reflected in customer laboratories. Virtually all new analytical
methods and tests originate in academic research in universities and
medical schools. If the utility of a new method or test is
demonstrated by fundamental research, it often will then be used by
pharmaceutical investigators, biotechnology companies, teaching
hospitals or specialized clinical laboratories in an investigatory
mode. In some cases these new techniques eventually emerge in
routine, high volume clinical testing at hospitals and reference
labs. Generally instruments used at each stage from research to
routine clinical applications employ the same fundamental processes
but may differ in operating features such as number of tests
performed per hour and degree of automation.
Markets
Beckman's products facilitate a wide range of laboratory
processes in facilities concerned with cells, sub-cellular
particles, biochemical compounds and analysis of patient samples.
In 1993 the worldwide market for the types of products the Company
provides was about $5.9 billion. Slightly over half of this market
was in clinical diagnostic applications, with the remaining portion
of the market in more general purpose life science applications.
Other similar or related product categories not currently offered
by the Company represent an additional market potential which is
estimated to be approximately $10 billion. The size and growth of
markets for the Company's products are influenced by technological
innovation in bioanalytical practice, government funding for basic
and disease related research (for example, heart disease, AIDS and
cancer), research and development spending by biotechnology and
pharmaceutical companies, health care spending and physician
practice.
Products
The Company offers a wide range of instrument systems and
related products, including consumables, accessories, and support
services, which can be grouped into categories by type of laboratory
process or application:
Synthesis and Sample Preparation/Handling
Separation Processes
Detection, Measurement and Characterization
Data Processing
Automated General Chemistry for Clinical Diagnostics
Special Chemistry Applications for Clinical Diagnostics
PRODUCT SALES AS A PERCENT OF TOTAL PRODUCT SALES
FOR CATEGORIES REPRESENTING
MORE THAN 10 PERCENT OF SALES
1993 1992 1991
____ ____ ____
Separation Processes 27 28 29
Automated General Chemistry
for Clinical Diagnostics 40 39 39
Special Chemistry Applications
for Clinical Diagnostics 20 21 20
Synthesis and Sample Preparation/Handling
DNA Synthesizers
DNA synthesizers automate the process of making synthetic
oligonucleotides from organic chemicals. The Beckman Oligo 1000
significantly reduces the time required for synthesis and informs
the user of synthesis progress by providing reaction and reagents
status throughout the process. The system's ease-of-use is enhanced
by convenient chemicals packaging that minimize reagent preparation
and replacement. Oligo 1000 systems sell in the $18,000 price
range.
Robotic Workstation
The Biomek(R) automated laboratory workstations perform complex
operations involving liquids, including dispensing measured samples,
adding reagents, diluting, mixing and transferring small volumes
between reaction vessels. The systems handle multiple samples in
parallel and may be equipped with a photometer for detection
purposes. Biomek systems range in price from $35,000 to over
$80,000.
Separation Processes
Centrifuges
Centrifuges separate liquid sample mixtures on the basis of
density (weight per unit volume) differences between the mixture's
components. Samples are put into tubes which are placed in rotors
and spun at speeds varying from a few thousand to 120,000
revolutions per minute ("rpm"). The resulting centrifugal forces
cause sample components to separate according to their density.
Centrifuges are used for the nondestructive separation of
protein and DNA fractions, cellular components and other materials
of interest in modern biology and biotechnology. In addition to
efficiency (low power consumption), reliability and an
environmentally friendly design (e.g., without freon) on many
models, Beckman centrifuges are distinguished from those of
competitors by the wide variety of rotor designs available to meet
the precise needs of customer applications, including the separation
of blood cells from serum, an important use in clinical diagnostic
laboratories.
Beckman manufactures a broad line of centrifuges with varying
speed characteristics ranging from "low speed" (few thousand rpm)
to "high speed" (10,000 to 35,000 rpm) to "ultracentrifuges" (35,000
to 120,000 rpm) and sample capacities ranging from microliters (one
millionth of a liter) to liters. Prices of these units vary from
about $2,000 for a small low speed centrifuge to over $50,000 for
an ultracentrifuge and over $100,000 for an analytical
ultracentrifuge.
High Performance Liquid Chromatographs ("HPLC")
HPLC systems rely upon the difference in the rates of passage
of the components in a chemical mixture through a tubular column
filled with chemically active material. HPLC systems are powerful
separation devices for biologically active compounds, since they are
generally non-destructive, sensitive and capable of resolving very
complex mixtures of similar compounds. The System Gold(R) HPLC
manufactured by Beckman, which is designed to be particularly useful
in life sciences laboratories, consists of several instrument
modules that are used in various combinations, consumables,
accessories and software tailored to specific applications, such as
drug metabolism assays. Beckman's HPLC systems typically sell for
$20,000 to $55,000.
Protein Sequencers
Beckman manufactures and sells protein sequencer systems and
related chemicals. Protein sequencing is used to determine the
primary structure, i.e., the amino acid sequence, of a protein.
Protein sequencer systems sell in the range of $90,000 to $130,000.
Electrophoresis
Electrophoresis systems separate mixtures of proteins, DNA, and
other molecules principally on the basis of differences in mass and
electrical charge. The P/ACE(TM) capillary electrophoresis product
line represents a powerful extension of electrophoresis technology
by combining the speed of traditional electrophoresis with the
discrimination powers of chromatography. The result is an automated
system for high speed, high sensitivity separation of proteins,
nucleic acids and other biological materials. P/ACE systems
typically sell for $40,000 to $60,000.
Detection and Measurement
Spectrophotometer Systems
Spectrophotometers detect and measure the presence of compounds
in liquid mixtures by sensing the absorption of specific wavelengths
of light as that light passes through the sample. Some Beckman
spectrophotometers have the capability of measuring changes in
absorption during biological reactions. These spectrophotometers,
in conjunction with Beckman software, automatically control the
time, temperature and wavelength of the measurement while computing
and recording the results of the experiment. Depending on the
specific model, accessories or software, Beckman spectrophotometers
sell in the $9,000 to $25,000 range.
Nuclear Counters
Radioactive "labeling," which is the substitution or addition
of a radioactive atom into a compound of interest, is a powerful and
accepted method for tracing the path of a biochemical in a living
system. A labeled compound which is fed to or injected into a test
animal or plant can then be traced to specific tissue or waste
product by detecting the presence of the radioactive label.
Scintillation counters can be used for this purpose. Beckman
scintillation counters are distinguished by sophisticated software
and system features that combine accurate measurement with user
convenience. They typically sell in the $15,000 to $30,000 range.
Data Processing
In addition to the software associated directly with Beckman's
instrument systems, the Company produces computer software programs
to aid in the data processing functions of analytical laboratories.
These systems control laboratory instruments, direct data
acquisition from the instruments, and compute, store and report the
results in formats needed for internal purposes and satisfaction of
regulatory requirements. Beckman's data management systems are
characterized by several features, including the capability to
operate on a variety of manufacturers' computers and applications
flexibility which lets customers configure the system to meet their
individual needs. These systems vary greatly in cost depending
upon the customer's requirements, but typically range from $50,000
to $250,000.
Automated General Chemistry for Clinical Diagnostics
Automated general chemistry systems automatically detect and
quantify various chemical substances of clinical interest (analytes)
in human blood, urine and other body fluids. Beckman offers several
general chemistry systems with a range of capabilities to meet
specific customer requirements, principally for use in medium to
large hospital laboratories, but also with some application in
reference laboratories.
SYNCHRON(R) Systems
The Company's SYNCHRON(R) line of automated general chemistry
systems is a family of modular automated diagnostic instruments and
the reagents, standards and other consumable products required to
perform commonly requested diagnostic tests. The SYNCHRON analyzer
series includes the SYNCHRON AS(R) system, originally introduced as
the ASTRA(R), which is an automated "stat" (immediate test) routine
multi-channel analyzer. The original system, since extended,
determines the concentration of eight of the most commonly measured
analytes.
In response to changes in reimbursement policies for hospitals
and clinical laboratories, which required them to be more efficient,
the Company developed a newer series of instrument systems, the
SYNCHRON CX(R) line. The SYNCHRON CX systems have been designed as
compatible modules which may be used independently or in various
combinations with each other, to meet the specific needs of
individual customers. The smallest of these modules, the SYNCHRON
CX3 analyzer, is an upgrade of the ASTRA analyzer offering improved
software, easier operation and reduced reagent consumption.
The SYNCHRON CX4CE, CX5CE and CX7 are enhanced models with
industry leading, innovative software features. The CX(R)4CE
clinical system has up to 24 customer selected "on-board" types of
tests available, drawn from a menu of over 60 different types of
tests. The extensive menu includes immunoproteins, therapeutic
drugs and a complete listing of general chemistries. Drawing from
the same menu, the CX(R)5CE has 28 "on-board" types of tests and the
CX(R)7 has 32 "on-board" types of tests. These systems all enhance
productivity by providing bi-directional communication with
laboratory information systems. SYNCHRON systems range in price
from $56,000 to over $185,000 and are sold principally based on
their ability to improve laboratory efficiency.
Other Automated Clinical Chemistry Products
The Company has a family of electrolyte analyzers that provide
automated analysis of patient electrolyte concentrations such as
sodium, potassium, and chloride. These analyzers include the E4A,
E2A, LABLYTE(R) and SYNCHRON EL-ISE(R) series and range in price
from $6,000 to $20,000. Beckman also offers a family of low cost
instruments that perform manual analyses of glucose, blood urea
nitrogen and creatinine.
Special Chemistry Applications For Clinical Diagnostics
Immunochemistry Systems
The Array(R) 360 Protein and Therapeutic Drug Monitoring
Systems combine automated instrumentation and advanced software that
significantly enhance the efficiency of protein and drug analysis.
The Array provides automated random access testing which allows the
operator to mix samples at random, eliminating the need to run
identical analytes in batches. At the customer's option, it can
incorporate a computer enhancement that allows automatic reading of
bar-coded sample tubes for positive sample identification and bi-
directional communication with the laboratory's information system.
Array systems sell in the $45,000 to $55,000 price range.
Electrophoresis For Clinical Diagnostics
The Appraise(R) densitometer and the Paragon(R)
Electrophoresis Systems allow the Company to offer a full range of
electrophoresis products that provide specialized protein analysis
for clinical laboratories. Paragon reagent kits are used in the
diagnosis of diabetes, cardiac, liver and other diseases. The
Appraise densitometer can be used in conjunction with Paragon kits.
It ranges in price from $17,000 to $24,000.
Other Special Chemistry Products
The Company also produces a series of single use, self-
contained diagnostic test "kits" for use in physicians' offices and
group practices. For example, the Hemoccult(R) disposable fecal
occult blood testing kit is used in the diagnosis of
gastrointestinal disease.
Competition
The markets for the Company's products are highly competitive,
with hundreds of companies participating in one or more portions of
the market. There are a number of competitors which sell both life
sciences and diagnostic products, including the Hitachi Ltd./
Boehringer Mannheim GmbH collaboration, E.I. du Pont de Nemours &
Co. Inc., Bio-Rad Laboratories, Inc. and LKB Pharmacia AB.
Additional competitors focused more directly on life sciences
include Hewlett-Packard Co., Millipore Corporation, and The
Perkin-Elmer Corporation. Additional competitors in the clinical
laboratory market include Abbott Laboratories, Eastman Kodak
Company, Hoechst Corporation (Behring Diagnostics Division), and
Bayer Diagnostics. Competitors include divisions or subsidiaries
of corporations with substantial resources. In addition the Company
competes with several companies that sell reagents for laboratory
instruments that are manufactured by Beckman and others.
The Company competes primarily on the basis of improved
laboratory productivity, product quality and technology, service and
price. Discounting is used as a competitive tool when necessary.
Management believes that its extensive installed instrument base
provides the Company with a competitive advantage in obtaining both
instrument and after-market follow-on business.
Research, Development and Engineering
The Company's new products originate from four sources:
internal research, development and engineering ("RD&E") programs;
external collaborative efforts with individuals in academic
institutions and technology companies; devices or techniques that
are generated in customers' laboratories; and business acquisitions.
The Company's RD&E teams are skilled in optics, chemistry,
electronics, mechanical and other engineering disciplines and
software, in addition to a broad range of biological and chemical
sciences. Research studies are usually conducted in conjunction
with individuals in academic institutions or other outside
scientists. Development programs focus on production of new
generations of existing product lines, such as the SYNCHRON(R)
analyzers, as well as new product categories not currently offered
by the Company. Other areas of pursuit include innovative
approaches to immunochemistry, molecular biology and advanced
electrophoresis technologies, such as capillary electrophoresis.
The Company's RD&E expenditures for fiscal years 1993, 1992,
and 1991 were $93.3 million, $85.9 million and $82.2 million,
respectively. Management intends to maintain the present level of
the Company's investment in RD&E spending.
Sales and Service
The Company has sales in over 120 countries and maintains its
own marketing, service and sales forces throughout the world. While
nearly all of the Company's products are distributed by Beckman
sales groups throughout the world, the Company employs independent
distributors to serve those markets that are more efficiently
reached through such channels. Beckman's sales force is technically
educated and trained in the operation and application of the
Company's products. The sales force is supported by a staff of
scientists and technical specialists in each product line and in
each major scientific discipline served by the Company's products.
In addition to direct sales of its instruments, the Company leases
certain instruments, principally those sold for clinical diagnostic
applications in hospitals.
Beckman provides accessory products, consumables and service
for its instruments worldwide. Service offices and inventory depots
are associated with sales offices, subsidiaries and dealer
locations. The Company considers its reputation for service
responsiveness and competence to be an important competitive asset.
Patents and Trademarks
To complement and protect the innovations created by the
Company's RD&E efforts, the Company has an active patent protection
program which includes nearly 600 active U.S. patents and patent
applications. The Company also files important corresponding
applications in principal foreign countries. The Company has taken
an aggressive posture in protecting its patent rights; however, no
one patent is considered essential to the success of the business.
The Company's primary trademark is "Beckman", with the trade
name also being Beckman or Beckman Instruments, Inc. The Company
vigorously protects its primary trademark, which is used on the
Company's products and is recognized throughout the worldwide
scientific and diagnostic community. The Company owns and uses
secondary trademarks on various products, but none of these
secondary trademarks is considered of primary importance to the
business.
Government Regulations
Certain of the Company's products are subject to regulations
of the U.S. Food and Drug Administration (the "FDA") which require
such products to be manufactured in accordance with "good
manufacturing practices". Such laws and regulations also require
that such products be safe and effective and that the labeling of
those products conform with specific requirements. Testing is
conducted to demonstrate performance claims and to provide other
necessary assurances. Clinical systems and reagents must be
reviewed by the FDA before sale and, in some instances, are subject
to product standards, other special controls or a formal FDA
premarket approval process. Implementation in 1994 of federal
regulations under the Clinical Laboratory Improvement Amendments of
1988 will require FDA review and approval of quality assurance
protocols for the Company's clinical reagent products. While adding
to the overall regulatory review process, this is not expected to
materially affect the sale of the Company's products. Certain of
the Company's products are subject to comparable regulations in
foreign countries.
In January 1993 the European Community (EC) countries began
implementation of their plan for a new unified EC market with
reduced trade barriers and harmonized regulations. The EC adopted
a significant international quality standard, the International
Organization for Standardization Series 9000 Quality Standards ("ISO
9000"). The Company's manufacturing operations in its Brea,
Carlsbad, Fullerton, Palo Alto, Paso Robles and Porterville,
California; Allendale, New Jersey; Sharon Hill, Pennsylvania;
Naguabo, Puerto Rico and Galway, Ireland facilities have been
certified as complying with the requirements of ISO 9000. Many of
the Company's international sales subsidiaries have also been
certified, including those located in Australia, Canada, France,
Germany, Italy, The Netherlands, South Africa, Spain, Sweden,
Switzerland and the United Kingdom.
The design of the Company's products and the potential market
for their use may be directly or indirectly affected by U.S. and
foreign regulations concerning reimbursement for clinical testing
services. The configuration of new products, such as the
SYNCHRON(R) series of clinical analyzers, reflects the Company's
response to the changes in hospital capital spending patterns such
as those engendered by the Medicare Diagnostic Related Groups
("DRGs"). Under the DRG system, a hospital is reimbursed a fixed
sum for the services rendered in treating a patient, regardless of
the actual cost of the services provided.
Prior to the U.S. Government fiscal year which began October
1, 1991, inpatient capital costs incurred by a hospital were an
exception to the DRG system and were reimbursed, to the extent of
Medicare utilization, through a supplement to the DRG payment known
as "capital cost pass-through." Effective October 1, 1991, the
capital cost payment provisions of the Medicare Prospective Payment
System were changed to provide for the transition from a "pass-
through" payment methodology to a "prospective DRG based capital
payment" methodology for all inpatient capital related costs
incurred by a hospital.
Under this new payment methodology, "low capital costs"
hospitals are expected to receive greater capital payments from
Medicare than they would have had they remained under the prior
capital payment system. "High capital costs" hospitals are paid
under a "hold harmless" payment methodology which assures the
hospital of certain minimum payment levels for historical capital
costs and new capital costs during the ten year transition period
to a "fully prospective" payment system for inpatient capital costs.
To date, the Company has not experienced, and does not expect
to experience in the future, any material financial impact from the
change in Medicare's payment for inpatient capital costs.
The current health care reform efforts in the United States and
in some foreign countries are expected to further alter the methods
and financial aspects of doing business in the health care field.
The Company is closely following these developments so that it may
position itself to take advantage of them. However, the Company
cannot predict the effect on its business of these reforms should
they occur nor of any other future government regulation.
Environmental Matters
The Company is subject to federal, state, local and foreign
environmental laws and regulations. The Company believes that its
operations comply in all material respects with applicable federal,
state, and local environmental laws and regulations. Although the
Company continues to make expenditures for environmental protection,
it does not anticipate any significant expenditures in order to
comply with such laws and regulations which would have a material
impact on the Company's operations or financial position.
In 1983 the Company discovered organic chemicals in the
groundwater near a waste storage pond at a Company facility in
Porterville, California. SmithKline Beckman, the Company's former
controlling stockholder, agreed to indemnify the Company with
respect to this matter for any costs incurred by the Company in
excess of applicable insurance, eliminating any impact on the
Company's earnings or financial position. SmithKline Beecham
Corporation, the surviving entity of the 1989 merger between
SmithKline Beckman and Beecham, assumed the obligations of
SmithKline Beckman in this respect.
In 1984 the Company sold approximately 40 acres of land in
Irvine, California to The Prudential Insurance Company of America
("Prudential"). In 1988 the Company was sued by Prudential in U.S.
District Court in California for recovery of costs and other alleged
damages with respect to soil and groundwater contamination allegedly
caused by operations on the property. In 1990 the Company entered
into an agreement with Prudential for settlement of the lawsuit and
for sharing current and future costs of investigation, remediation
and other claims. Prudential has since sold the property to Mola
Development Corporation which subsequently sold a portion of the
property to F.C. Irvine, Inc., each local property developers. This
has resulted in additional litigation against the Company and
Prudential. See "Legal Proceedings" herein.
Investigations conducted on the property have determined that
soil and groundwater remediation is required and such remediation
is underway. During 1993 the Company made substantial progress in
remediating the soil, although there remain some areas of soil
contamination that may require further remediation. The Company
also operated a groundwater treatment system throughout most of 1993
and in the fourth quarter expanded the capacity of the system. The
expanded system is believed to be adequate to remediate the
groundwater based upon information available in 1993. In addition
a series of test wells were drilled on the property which provided
additional information concerning the area of groundwater
contamination. The Company believes that it has established
adequate reserves for remediation of any remaining soil
contamination, operation and maintenance of the expanded treatment
system and any necessary additional groundwater investigations.
Investigations on the property are continuing and there can be
no assurance that further investigation will not reveal additional
contamination or result in additional costs. The Company believes
that additional remediation costs, if any, beyond those already
provided for the contamination discovered by the current
investigations will not have a material adverse effect on the
Company's operations or financial position.
Employee Relations
The Company and its subsidiaries presently employ approximately
6,600 persons throughout the world, including approximately 4,600
in the United States. The Company considers that its relations with
its employees are generally good.
Geographic Area Information
Information with respect to the above-captioned item is
incorporated by reference to Note 11 Business Segment Information
of the Company's Annual Report to stockholders for the year ended
December 31, 1993.
Item 2. Properties
The Company's primary instrument assembly and manufacturing
facilities are located in Fullerton, Brea, and Palo Alto,
California. Central manufacturing support facilities for parts and
electronic subassemblies are located in Porterville and Paso Robles,
California. An additional manufacturing facility is located in
Galway, Ireland. Reagents are manufactured in Carlsbad, California,
Naguabo, Puerto Rico, and Galway, Ireland. The Company's computer
software products business is located in Allendale, New Jersey. The
Company's facility for the production of Hemoccult(R) test kits and
related products is located in Sharon Hill, Pennsylvania.
All U.S. manufacturing facilities, including land and
buildings, are owned by the Company with the exception of Allendale
and Sharon Hill which are leased facilities, and Palo Alto, where
the Company has built and owns its buildings on a long-term land
lease expiring in 2054. All manufacturing facilities outside the
U.S. are leased. The central production facilities for the Company
also include plastics fabrication and machine shop capabilities in
Fullerton to serve the entire Company. This facility, in
conjunction with electronic subassembly work done in Porterville and
Paso Robles, supplies the primary parts and subassemblies for the
instrument systems to the various instrument assembly locations in
California. The Company's principal U.S. distribution locations are
in Brea and Fullerton, California and Somerset, New Jersey. In
addition, the Company plans to establish a European administration
center at a facility in Nyon, Switzerland during the first quarter
of 1994.
The Company believes that its production facilities meet
applicable government environmental, health and safety regulations,
and industry standards for maintenance, and that its facilities in
general are adequate for its current business.
Item 3. Legal Proceedings
As previously reported, in 1991 Forest City Properties
Corporation and F.C. Irvine, Inc. (collectively, "Forest City"),
current owners and developers of a portion of the same real property
in Irvine referred to under the caption "Environmental Matters"
herein, filed suit against Prudential in the California Superior
Court for the County of Los Angeles, alleging breach of contract and
damages caused by the pollution of the property. Forest City seeks
damages of more than $20 million and additional remediation of the
property. Although the Company is not a named defendant in the
Forest City action, it may be obligated to contribute to any
resolution of that action pursuant to the Company's 1990 settlement
agreement with Prudential. See "Environmental Matters" herein. The
Company has established a reserve for the resolution of this lawsuit
and believes that any additional liability beyond that provided for
will not have a material adverse effect on the Company's operations
or financial position.
As previously reported, in July 1993 a toxic tort action was
filed in Maricopa County Superior Court, Arizona against the Company
and a number of other defendants, including Motorola, Inc., Siemens
Corporation, the Cities of Phoenix and Scottsdale, and others.
Please see the Company's report to the Securities and Exchange
Commission on form 10-Q for the quarter ended September 30, 1993 for
details. This lawsuit was served on the Company in December 1993
and the Company has undertaken its legal defense of the action. The
Company is indemnified by SmithKline Beecham Corporation, the
successor of its former controlling stockholder, for any costs
incurred in this matter in excess of applicable insurance, and thus
the outcome of this litigation, even if unfavorable to the Company,
should have no effect on the Company's earnings or financial
position.
In addition, the Company and its subsidiaries are involved in
a number of lawsuits which the Company considers ordinary and
routine in view of its size and the nature of its business. The
Company does not believe that any ultimate liability resulting from
any such lawsuits will have a material adverse effect on the
operations or financial position of the Company. See also
"Environmental Matters" herein.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of stockholders during the
fourth quarter of the fiscal year covered by this report.
Executive Officers of the Company
The following is a list of the executive officers of the
Company as of February 7, 1994, showing their ages, present
positions and offices with the Company and their business experience
during the past five or more years. Officers are elected by the
Board of Directors and serve until the next annual Organization
Meeting of the Board. Officers may be removed by the Board at will.
There are no family relationships among any of the named
individuals, and no individual was selected as an officer pursuant
to any arrangement or understanding with any other person.
Louis T. Rosso, 60, Chairman of Mr. Rosso was named Chairman of
the Board and Chief Executive the Board of the Company in
Officer 1989, was named Chief Executive
Officer in 1988 and was its
President from 1982 until 1993.
He also served as a Vice
President of SmithKline Beckman
from 1982 to 1989. Mr. Rosso
first joined the Company in
1959 and was named Corporate
Vice President in 1974. He is
a director of Allergan, Inc.
and of the Beckman Laser
Institute and Medical Clinic.
He is on the Board of Trustees
of St. Jude Medical Center in
Fullerton, California and
Harvey Mudd College and is a
member of the Board of Visitors
of the Graduate School of
Management of the University of
California Irvine. Mr. Rosso
has been a director of the
Company since 1988.
John P. Wareham, 52, Director, Mr. Wareham was named President
President, and Chief Operating and Chief Operating Officer of
Officer the Company effective October
15, 1993. On December 1, 1993
he was elected to the Board of
Directors. Mr. Wareham joined
the Company in 1984 as Vice
President, Diagnostic Systems
Group and served in that
capacity until his appointment
as President. Prior thereto he
had been President of Norden
Laboratories, Inc., a wholly
owned subsidiary of SmithKline
Beckman engaged in developing,
manufacturing and marketing
veterinary products. Mr.
Wareham first joined SmithKline
Beckman in 1968. He is a
director of the Little Rapids
Corporation and The John Henry
Foundation.
Michael T. O'Neill, 53, Senior Mr. O'Neill was named Senior
Vice President, Commercial Vice President, Commercial
Operations Operations of the Company
effective October 15, 1993. He
had been Vice President,
Bioanalytical Systems Group
since 1989. Prior thereto he
had been Vice President,
International Operations for
the Bioanalytical systems Group
since 1985. Mr. O'Neill first
joined the Company in 1973.
Dennis K. Wilson, 58, Vice Mr. Wilson was named Vice
President, Finance and Chief President, Finance and Chief
Financial Officer Financial Officer of the
Company effective December 24,
1993. He was Vice President,
Treasurer of the Company from
1989 until his current
appointment. Prior thereto he
had been Vice President,
Corporate Accounting and
Assistant Controller of
SmithKline Beckman since 1984.
Mr. Wilson first joined the
Company in 1969.
James T. Glover, 43, Vice Mr. Glover was appointed to his
President and Controller present position as Vice
President and Controller of the
Company in May 1993. From
1989 until assuming his current
position, he was Vice
President, Controller -
Diagnostic Systems Group. Mr.
Glover joined the Company in
1983 and prior to that held
management positions with KPMG
Peat Marwick and R.J. Reynolds,
Inc.
William H. May, 51, Vice Mr. May has been General
President, General Counsel and Counsel and Secretary of the
Secretary Company since 1984 and has been
Vice President, General Counsel
and Secretary of the Company
since 1985. Mr. May first
joined the Company in 1976.
Richard K. Sears, 61, Vice Mr. Sears has been Vice
President, Human Resources President, Human Resources of
the Company since 1991. Prior
thereto he had been President
of Haiku/Hawaii, a building
material and development
company, from 1989 to 1990.
Before that he was Vice
President - Corporate
Administration of the Irvine
Company of Newport Beach,
California, a major California
real estate developer, from
1984 to 1987, and served as the
principal of his own consulting
practice in the field of
planning and general management
from 1987 to 1989. Mr. Sears
originally joined the Company
in 1955 when he served in a
number of administrative and
management positions for a
period of 14 years.
Bruce A. Tatarian, 45, Vice Mr. Tatarian was named Vice
President, Bioresearch President Bioresearch
Commercial Operations Commercial Operations
International International of the Company
effective January 1, 1994. He
was Vice President, Marketing
Operations for the
Bioanalytical Systems Group
from 1991 until his current
appointment. Prior thereto he
had been Vice President -
Manager, Analytical Business
Unit from 1990 to 1991. He
rejoined the Company in 1989 as
Director of Product Planning
and Technical Assessment of the
Bioanalytical Systems Group.
Mr. Tatarian originally joined
the Company in 1973 when he
served in a number of marketing
positions for a period of ten
years.
Arthur A. Torrellas, 63, Vice Mr. Torrellas was named Vice
President, Diagnostic President, Diagnostic
Commercial Operations Commercial Operations of the
Company effective January 1,
1994. He had been Vice
President, International
Operations for the Diagnostic
Systems Group since 1985. Mr.
Torrellas first joined the
Company in 1977.
Albert R. Ziegler, 55, Vice Mr. Ziegler was named Vice
President, Diagnostics President, Diagnostics
Development Center Development Center of the
Company effective January 1,
1994. He joined the Company in
1986 as Vice President, North
America Operations for the
Diagnostic Systems Group.
Prior thereto he had been
President of Branson
Ultrasonics Corporation, a
manufacturer of industrial
ultrasound instruments and a
subsidiary of SmithKline
Beckman until the divestiture
of SmithKline Beckman's
industrial instruments
businesses in 1984. Mr.
Ziegler first joined SmithKline
Beckman in 1971.
Paul Glyer, 37, Treasurer Mr. Glyer was named Treasurer
of the Company effective
December 24, 1993. He served
as Assistant Treasurer since
1989 when he first joined the
Company.
George Kilmain, 60, Director, Mr. Kilmain was Vice President,
Vice President, Finance and Finance and Chief Financial
Chief Financial Officer Officer of the Company from
1984 until December 1993 when
he retired. Mr. Kilmain was
also a director of the Company
from 1988 until he resigned
effective December 1, 1993. He
first joined the Company in
1961.
Roger G. Novesky, 55, Vice Mr. Novesky was Vice President
President, Spinco Business Unit and general manager of the
Spinco Business Unit of the
Company from 1985 until
December 1993 when he elected
early retirement which will be
effective as of the end of
February, 1994. Mr. Novesky
first joined the Company in
1963.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters
Information with respect to the above-captioned item is
incorporated herein by reference to the sections entitled "Stock
Exchanges and Prices" and "Dividends" of the Company's Annual Report
to stockholders for the year ended December 31, 1993. During 1992
the Company paid a quarterly dividend of $.07 per share of common
stock for the first and second quarters and $.08 per share for the
third and fourth quarters, for a total of $.30 per share for the
year. During 1993 the Company paid four consecutive quarterly
dividends of $.09 per share of common stock, for a total of $.36 per
share for the year. Information with respect to dividend
restrictions is incorporated by reference to Note 5 Debt of the
Company's Annual Report to stockholders for the year ended December
31, 1993. In addition, as of January 24, 1994, there were
approximately 10,855 holders of record of the Company's common
stock.
Item 6. Selected Financial Data
Information with respect to the above-captioned item is
incorporated herein by reference to the section entitled "Five-Year
Financial and Statistical Data" of the Company's Annual Report to
stockholders for the year ended December 31, 1993.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Information with respect to the above-captioned item is
incorporated herein by reference to the section entitled "FINANCIAL
REVIEW" of the Company's Annual Report to stockholders for the year
ended December 31, 1993.
Item 8. Financial Statements and Supplementary Data
Information with respect to the above-captioned item is
incorporated herein by reference to the consolidated financial
statements, including all the notes thereto, and the sections
entitled "Report by Management," "Independent Auditors' Report," and
"Quarterly Data (Unaudited)" of the Company's Annual Report to
stockholders for the year ended December 31, 1993.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors - The information with respect to directors required
by this Item is incorporated herein by reference to those parts of
the Company's Proxy Statement for the Annual Meeting of Stockholders
to be held March 30, 1994 entitled "ELECTION OF DIRECTORS" and
"Board of Directors Information."
Executive Officers - The information with respect to executive
officers required by this Item is set forth in Part I of this
report.
Item 11. Executive Compensation
The information with respect to executive compensation required
by this Item is incorporated by reference to that part of the
Company's Proxy Statement for the Annual Meeting of Stockholders to
be held March 30, 1994 entitled "EXECUTIVE COMPENSATION."
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information with respect to security ownership required by
this Item is incorporated by reference to that part of the Company's
Proxy Statement for the Annual Meeting of Stockholders to be held
March 30, 1994 entitled "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT."
Item 13. Certain Relationships and Related Transactions
The information with respect to certain relationships and
related transactions required by this Item is incorporated by
reference to that part of the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held March 30, 1994 entitled
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a)(1), (a)(2) Financial Statements and Financial Statement
Schedules
The financial statements and financial statement schedules
filed as part of the report are listed or incorporated by reference
in the "Index of Financial Statements and Schedules" following this
Part IV.
(a)(3) Exhibits
Management contracts and compensatory plans or
arrangements are identified by *.
3.1 Third Restated Certificate of Incorporation of the
Company, June 5, 1992 (incorporated by reference to
Exhibit 3.1 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for
the fiscal year ended December 31, 1992, File No.
001-10109).
3.2 Amended and Restated By-Laws of the Company, as of
January 27, 1993.
4.1 Specimen Certificate of Common Stock (incorporated
by reference to Exhibit 4.1 of Amendment No.1 to the
Company's Form S-1 registration statement, File No.
33-24572).
4.2 Rights Agreement between the Company and Morgan
Shareholder Services Trust Company, as Rights Agent,
dated as of March 28, 1989 (incorporated by
reference to Exhibit 4 of the Company's current
report on Form 8-K filed with the Securities and
Exchange Commission on April 25, 1989, File No.
1-10109).
4.3 First amendment to the Rights Agreement dated as of
March 28, 1989 between the Company and First Chicago
Trust Company of New York (formerly Morgan
Shareholder Services Trust Company), as Rights
Agent, dated as of June 24, 1992 (incorporated by
reference to Exhibit 1 of the Company's current
report on Form 8-K filed with the Securities and
Exchange Commission on July 2, 1992, File No.
001-10109).
10.1 Cross-Indemnification Agreement between the Company
and SmithKline Beckman Corporation (incorporated by
reference to Exhibit 10.1 of Amendment No.1 to the
Company's Form S-1 registration statement, File No.
33-24572).
10.2 Tax Sharing Agreement between the Company and
SmithKline Beckman Corporation (incorporated by
reference to Exhibit 10.2 of Amendment No. 1 to the
Company's Form S-1 registration statement, File No.
33-24572).
* 10.3 SmithKline Beckman Corporation Supplemental Benefits
Plan (incorporated by reference to Exhibit 10(d) of
SmithKline Beckman Corporation's Annual Report to
the Securities and Exchange Commission on form 10-K
for the fiscal year ended December 31, 1987, File
No. 1-4077).
* 10.4 Beckman Instruments, Inc. Supplemental Pension Plan,
adopted by the Company October 24, 1990
(incorporated by reference to Exhibit 10.4 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December, 31 1990, File No. 001-10109).
* 10.5 The Company's Incentive Compensation Plan, as
amended by the Company's Board of Directors on
October 26, 1988 and as amended and restated by the
Company's Board of Directors on March 28, 1989
(incorporated by reference to Exhibit 10.16 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December, 31 1989, File No. 001-10109).
10.6 Distribution Agreement, dated as of April 11, 1989,
among SmithKline Beckman Corporation the Company and
Allergan, Inc. (incorporated by reference to Exhibit
3 to SmithKline Beckman Corporation's Current Report
on Form 8-K filed with the Securities and Exchange
Commission on April 14, 1989, File No. 1-4077).
10.7 Tax Agreement, dated as of April 11, 1989, between
SmithKline Beckman Corporation and the Company
(incorporated by reference to Exhibit 4 to
SmithKline Beckman Corporation's Current Report on
Form 8-K filed with the Securities and Exchange
Commission on April 14, 1989, File No. 1-4077).
10.8 Amendment to the Distribution Agreement effective as
of June 1, 1989 between SmithKline Beckman
Corporation, the Company and Allergan, Inc.
(incorporated by reference to Exhibit 10.26 of
Amendment No. 2 to the Company's Form S-1
registration statement, File No. 33-28853).
* 10.9 The Company's Executive Bonus Plan, adopted by the
Company in 1992 (incorporated by reference to
Exhibit 10.18 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for
the fiscal year ended December 31, 1992, File No.
001-10109).
* 10.10 Form of Change in Control Agreement, dated as of May
1, 1989, between the Company, each of its Executive
Officers and certain other key employees
(incorporated by reference to Exhibit 10.34 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December 31, 1989, File No. 001-10109).
* 10.11 Form of Restricted Stock Agreement, dated as of
September 16, 1991, between the Company, each of its
Executive Officers and certain other key employees
(incorporated by reference to Exhibit 10.19 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December 31, 1991, File No. 001-10109).
10.12 Revolving Credit Agreement, dated as of July 2,
1992, among the Company, the lenders named therein
and Citicorp USA, Inc. as Agent (incorporated by
reference to Exhibit 10.16 of the Company's Annual
Report to the Securities and Exchange Commission on
Form 10-K for the fiscal year ended December 31,
1992, File No. 001-10109).
10.13 First Amendment to Revolving Credit Agreement, dated
as of December 31, 1993, among the Company, the
lenders named therein and Citicorp USA, Inc. as
Agent.
10.14 Note Agreement, dated as of February 5, 1993, among
the Company, Nationwide Life Insurance Company and
three other insurance companies named therein
(incorporated by reference to Exhibit 10.17 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December 31, 1992, File No. 001-10109).
* 10.15 The Company's Executive Bonus Plan, adopted by the
Company in 1993.
* 10.16 The Company's Stock Option Plan for Non-Employee
Directors, as restated with amendments of January
29, 1992, amendments approved by stockholders May 6,
1992 (incorporated by reference to Exhibit 10.19 of
the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December 31, 1992, File No. 001-10109).
* 10.17 The Company's Incentive Compensation Plan of 1990,
as restated with amendments of January 29, 1992,
amendments approved by stockholders May 6, 1992
(incorporated by reference to Exhibit 10.20 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December 31, 1992, File No. 001-10109).
10.18 Line of Credit Promissory Note in favor of Mellon
Bank, N.A., dated as of October 6, 1993
(incorporated by reference to Exhibit 10.21 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December 31, 1992, File No. 001-10109).
10.19 Trust Agreement between the Company and Mellon Bank,
N.A. as Trustee, for the benefit of Participating
Employees, dated as of January 31, 1993
(incorporated by reference to Exhibit 10.22 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal year
ended December 31, 1992, File No. 001-10109).
* 10.20 Form of Legended Stock Agreement and Election For
Deferral of a Portion of the FY 93 Executive Bonus
Plan, between the Company and some of its Executive
Officers and other key employees.
10.21 Loan Agreement (Multiple Advance), dated September
30, 1993, between Beckman Instruments (Japan)
Limited and the Industrial Bank of Japan, Limited
(English translation, including certification as to
accuracy; original document executed in Japanese).
10.22 Term Loan Agreement, dated as of September 30, 1993,
between Beckman Instruments (Japan) Limited and
Citibank, N.A., Tokyo Branch.
10.23 Term Loan Agreement, dated as of December 9, 1993,
between Beckman Instruments (Japan) Limited and The
Dai-Ichi Kangyo Bank Limited (English translation,
including certification as to accuracy; original
document executed in Japanese).
* 10.24 Agreement Regarding Retirement Benefits of Arthur A.
Torrellas, dated December 20, 1993, between the
Company and Arthur A. Torrellas.
11. Statement regarding computation of per share
earnings: This information is incorporated by
reference to Note 1 Summary of Significant
Accounting Policies of the Company's Annual Report
to stockholders for the year ended December 31,
1993.
13. FINANCIAL REVIEW section of the Company's Annual
Report to stockholders for the year ended December
31, 1993.
22. List of principal subsidiaries of the Company.
24. Consent of KPMG Peat Marwick, February 8, 1994.
(b) Reports on Form 8-K During Fourth Quarter ended December
31, 1993.
No Reports on Form 8-K were filed during the quarter ended
December 31, 1993.
<PAGE>
KPMG Peat Marwick
Certified Public Accountants
Orange County Office
Center Tower
650 Town Center Drive
Costa Mesa, CA 92626
The Stockholders and Board of Directors
Beckman Instruments, Inc.:
Under the date of January 20, 1994 we reported on the consolidated
balance sheets of Beckman Instruments, Inc. and subsidiaries as of
December 31, 1993 and 1992, and the related consolidated statements
of operations and cash flows for each of the years in the three-year
period ended December 31, 1993, as contained in the 1993 annual
report to stockholders. These consolidated financial statements and
our report thereon are incorporated by reference in the annual
report on Form 10-K for the year 1993. In connection with our
audits of the aforementioned consolidated financial statements, we
also have audited the related supplementary financial schedules as
listed in the accompanying index. These supplementary financial
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these supplementary
financial schedules based on our audits.
In our opinion, such supplementary financial 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 1 and Note 7 to the consolidated financial
statements, the Company adopted the provisions of the Financial
Accounting Standards Board's Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes, and Statement of
Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits other Than Pensions, in 1993.
KPMG PEAT MARWICK
Orange County, California
January 20, 1994
<PAGE>
Beckman Instruments, Inc.
INDEX TO
FINANCIAL STATEMENTS AND SCHEDULES
The consolidated financial statements of the Company and the related
report of KPMG Peat Marwick dated January 20, 1994 are incorporated
by reference to the section entitled "FINANCIAL REVIEW" of the
Company's Annual Report to stockholders for the year ended December
31, 1993.
The supplemental financial schedules for each of the years in the
three-year period ended December 31, 1993 that follow this index
should be read in conjunction with the financial statements in the
Company's 1993 Annual Report to stockholders. Schedules not
included in this additional financial data have been omitted because
they are not applicable or the required information is presented in
the consolidated financial statements or in the notes to the
consolidated financial statements.
SUPPLEMENTARY FINANCIAL SCHEDULES
V Property, plant and equipment
VI Accumulated depreciation of property, plant
and equipment
VIII Allowance for doubtful accounts
IX Short-term borrowings
X Supplementary income statement information
<PAGE>
Beckman Instruments, Inc.
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
For the years ended December 31, 1993, 1992 and 1991
(Dollars in millions)
Balance at Other Balance
Beginning Additions Changes at End
Classification of Period at Cost Retirements Add(Deduct) of Period
December 31, 1993
Land $ 11.9 $ 0.1 $ 1.7 $ - $ 10.3
Buildings 134.6 5.5 4.0 (1.4) (a) 133.1
(1.6) (b)
Machinery & Equip. 351.9 87.2 42.6 (14.5) (a) 380.7
(1.3) (b)
______ _____ _____ _______ ______
$498.4 $92.8 $48.3 $(18.8) $524.1
December 31, 1992
Land $ 12.0 $ - $ 0.1 $ - $ 11.9
Buildings 130.0 6.8 1.2 (0.4) (a) 134.6
(0.6) (b)
Machinery & Equip. 315.0 84.6 38.1 (9.2) (a) 351.9
(0.4) (b)
______ _____ _____ _______ ______
$457.0 $91.4 $39.4 $(10.6) $498.4
December 31, 1991
Land $ 12.0 $ - $ - $ - $ 12.0
Buildings 129.3 6.1 0.9 (1.1) (a) 130.0
(3.4) (b)
Machinery & Equip. 289.2 63.6 41.3 (6.1) (a) 315.0
9.6 (b)
______ _____ _____ _______ ______
$430.5 $69.7 $42.2 $ (1.0) $457.0
(a) Adjustments from translating at current exchange rates.
(b) Transfers to/from other accounts.
<PAGE>
Beckman Instruments, Inc.
SCHEDULE VI
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
For the years ended December 31, 1993, 1992 and 1991
(Dollars in millions)
Balance at Other Balance
Beginning Additions Changes at End
Classification of Period at Cost Retirements Add(Deduct) of Period
December 31, 1993
Buildings $ 58.1 $ 5.7 $ 2.3 $(0.7) (b)$ 60.8
Machinery & Equip. 227.3 56.6 28.5 (8.1) (b) 246.5
(0.8) (c)
______ _____ _____ _______ ______
$285.4 $62.3 $30.8 $(9.6) $307.3
December 31, 1992
Buildings $ 53.6 $ 5.8 $ 1.1 $(0.2) (b)$ 58.1
Machinery & Equip. 200.4 58.1 24.7 (5.3) (b) 227.3
(1.2) (c)
______ _____ _____ _______ ______
$254.0 $63.9 $25.8 $(6.7) $285.4
December 31, 1991
Buildings $ 49.8 $ 6.5 $ 0.7 $(0.5) (b)$ 53.6
(1.5) (c)
Machinery & Equip. 177.6 49.0 30.8 (3.1) (b) 200.4
(1.2) (c)
______ _____ _____ _______ ______
$227.4 $55.5 $31.5 $ 2.6 $254.0
(a) Buildings are depreciated over 15 to 40 years, except for leasehold
improvements which are depreciated over the life of the lease.
Machinery and equipment are depreciated over 3 to 10 years.
(b) Adjustments from translating at current exchange rates.
(c) Transfers to/from other accounts.
<PAGE>
Beckman Instruments, Inc.
SCHEDULE VIII
ALLOWANCE FOR DOUBTFUL ACCOUNTS
For the years ended December 31, 1993, 1992 and 1991
(Dollars in millions)
Additions
Balance at Charged to Balance
Beginning Cost and at End
Description of Period Expenses Deductions of Period
December 31, 1993 $12.1 $2.4 (a) $2.0 (b) $11.9
0.6 (d)
_____ _____ _____ _____
December 31, 1992 $12.1 $1.6 (a) $1.5 (b) $12.1
0.4 (c) 0.5 (d)
_____ _____ _____ _____
December 31, 1991 $10.9 $1.2 (a) $0.4 (b) $12.1
0.7 (c) 0.3 (d)
_____ _____ _____ _____
(a) Provision charged to earnings.
(b) Accounts written off.
(c) Collection of accounts previously written off.
(d) Adjustments from translating at current exchange rates.
<PAGE>
Beckman Instruments, Inc.
SCHEDULE IX
SHORT-TERM BORROWINGS
For the years ended December 31, 1993, 1992 and 1991
(Dollars in millions)
Category Maximum Average Weighted
of Weighted Amount Amount Average
Aggregate Balance Average Outstanding Outstanding Interest Rate
Short-Term at End Interest During During During
Borrowings of Period Rate the Period the Period the Period
December 31, 1993
Bank Loans $29.4 6.71% $78.7 $46.1 7.94%
Current portion of
Long-term Debt 2.3
_____
TOTAL $31.7
December 31, 1992
Bank Loans $41.9 10.55% $55.3 $40.5 11.32%
Current portion of
Long-term Debt 2.5
_____
TOTAL $44.4
December 31, 1991
Bank Loans $28.0 10.42% $61.8 $42.8 13.11%
Current portion of
Long-term Debt 2.5
_____
TOTAL $30.5
General terms of short-term borrowings are incorporated by reference to Note 5
Debt of the Company's Annual Report to Stockholders for the year ended December
31, 1993.
The average amounts outstanding during the period were computed using month-end
balances.
The weighted average interest rates during the period were computed by dividing
the associated interest expense for the period by the average amounts of short-
term borrowing outstanding during the period.
<PAGE>
Beckman Instruments, Inc.
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the years ended December 31, 1993, 1992 and 1991
(Dollars in millions)
The following amounts have been charged to earnings:
Item Description 1993 1992 1991
Maintenance and repairs $ 7.7 $ 9.0 $ 8.8
Depreciation and amortization
of intangible assets (1)
Taxes, other than payroll and
income taxes $10.2 $ 9.6 $ 9.0
Royalties (1)
Advertising costs $15.2 $20.0 $17.6
(1) Amount does not meet 1% of total sales and revenues.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BECKMAN INSTRUMENTS, INC.
Date: January 28, 1994 By LOUIS T. ROSSO
Louis T. Rosso
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Signature Title Date
_________ _____ ____
Chairman of the Board
and Chief Executive
Officer (Principal
LOUIS T. ROSSO Executive Officer) January 28, 1994
Louis T. Rosso
President,
Chief Operating Officer
JOHN P. WAREHAM and Director January 27, 1994
John P. Wareham
Vice President, Finance
and Chief Financial Officer
(Principal Financial
DENNIS K. WILSON and Accounting Officer) January 27, 1994
Dennis K. Wilson
Vice President and
JAMES T. GLOVER Controller January 27, 1994
James T. Glover
EARNEST H. CLARK, JR. Director January 26, 1994
Earnest H. Clark, Jr.
<PAGE>
Signature Title Date
_________ _____ ____
CAROLYNE K. DAVIS, PH.D. Director January 26, 1994
Carolyne K. Davis, Ph.D.
DENNIS C. FILL Director January 26, 1994
Dennis C. Fill
GAVIN S. HERBERT Director January 31, 1994
Gavin S. Herbert
WILLIAM N. KELLEY, M.D. Director January 26, 1994
William N. Kelley, M.D.
FRANCIS P. LUCIER Director January 28, 1994
Francis P. Lucier
C. RODERICK O'NEIL Director January 31, 1994
C. Roderick O'Neil
DAVID S. TAPPAN, JR. Director January 31, 1994
David S. Tappan, Jr.
HENRY WENDT Director January 26, 1994
Henry Wendt
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
_______ _______ ____________
3.2 Amended and Restated By-Laws, as of
January 27, 1993.
10.13 First Amendment to Revolving Credit
Agreement, dated as of December 31, 1993,
among the Company, the lenders named
therein and Citicorp USA, Inc. as Agent.
10.15 The Company's Executive Bonus Plan,
adopted by the Company in 1993.
10.20 Form of Legended Stock Agreement and
Election For Deferral of a Portion of
the FY 93 Executive Bonus Plan, between
the Company and some of its Executive
Officers and other key employees.
10.21 Loan Agreement (Multiple Advance), dated
September 30, 1993, between Beckman
Instruments (Japan) Limited and the
Industrial Bank of Japan, Limited
(English translation, including
certification as to accuracy; original
document executed in Japanese).
10.22 Term Loan Agreement, dated as of September
30, 1993, between Beckman Instruments
(Japan) Limited and Citibank, N.A., Tokyo
Branch.
10.23 Term Loan Agreement, dated as of December
9, 1993, between Beckman Instruments (Japan)
Limited and The Dai-Ichi Kangyo Bank Limited
(English translation, including certification
as to accuracy; original document executed in
Japanese).
10.24 Agreement Regarding Retirement Benefits of
Arthur A. Torrellas, dated December 20, 1993,
between the Company and Arthur A. Torrellas.
<PAGE>
Sequentially
Exhibit Numbered
Number Exhibit Page
_______ _______ ____________
13. FINANCIAL REVIEW section of the Company's
Annual Report to stockholders for the
year ended December 31, 1993.
22. List of principal subsidiaries of the Company.
24. Consent of KPMG Peat Marwick, February 8,
1994.
Exhibit 3.2
BECKMAN INSTRUMENTS, INC.
AMENDED AND RESTATED BY-LAWS
ARTICLE I
Offices
Section 1. REGISTERED OFFICE. The registered office shall be
The Prentice-Hall Corporation System, Inc., 32 Loockerman Square,
Suite L-100, in the city of Dover, County of Kent, State of
Delaware, 19901.
Section 2. PRINCIPAL OFFICE. The principal office for the
transaction of the business of the corporation is hereby fixed and
located at 2500 Harbor Boulevard, Fullerton, Orange County,
California.
ARTICLE II
Meetings of Stockholders
Section 1. PLACE OF MEETINGS. All annual meetings of
stockholders shall be held at the principal office of the
corporation, unless from time to time the Board of Directors,
pursuant to authority hereby expressly conferred by resolution,
fixes a different place where annual meetings of stockholders shall
be held.
All other meetings of stockholders shall be held at the
principal office or at any other place which may be designated by
the Board of Directors pursuant to authority hereby expressly
granted.
Section 2. ANNUAL MEETINGS. The annual meetings of
stockholders shall be held on the last Wednesday of March of each
year, at 10:00 o'clock A.M. of said day or such other day and time
as may be designated by resolution of the Board of Directors;
provided, however, that should said day fall upon a legal holiday,
then any such annual meeting of stockholders shall be held at the
same time and place on the next day thereafter ensuing which is not
a legal holiday.
At an annual meeting of stockholders, only such business shall
be conducted, and only such proposals shall be acted upon, as shall
have been brought before the annual meeting (a) by, or at the
direction of, a majority of the Directors, or (b) by any stockholder
of the corporation who complies with the notice procedures set forth
in this section. For a proposal to be properly brought before an
annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the secretary of the
corporation. To be timely, a stockholder's notice must be delivered
to, or mailed and received at, the principal executive offices of
the corporation not less than 60 days prior to the scheduled annual
meeting, regardless of any postponements, deferrals or adjournments
of that meeting to a later date; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the
scheduled annual meeting is given or made, notice by the
stockholder, to be timely, must be so delivered or received not
later than the close of business on the tenth day following the
earlier of the day on which such notice of the date of the scheduled
annual meeting was mailed or the day on which such public disclosure
was made. A stockholder's notice to the secretary shall set forth
as to each matter the stockholder proposes to bring before the
annual meeting (a) a brief description of the proposal desired to
be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (b) the name and address, as
they appear on the corporation's books, of the stockholder proposing
such business and any other stockholders known by such stockholder
to be supporting such proposal, (c) the class and number of shares
of the corporation's stock which are beneficially owned by the
stockholder on the date of such stockholder notice and by any other
stockholders known by such stockholder to be supporting such
proposal on the date of such stockholder notice, and (d) any
financial interest of the stockholder in such proposal.
The presiding officer of the annual meeting shall determine and
declare at the annual meeting whether the stockholder proposal was
made in accordance with the terms of this section. If the residing
officer determines that a stockholder proposal was not made in
accordance with the terms of this section, he shall so declare at
the annual meeting and any such proposal shall not be acted upon at
the annual meeting.
This provision shall not prevent the consideration and approval
or disapproval at the annual meeting of reports of officers,
directors and committees of the Board of Directors, but, in
connection with such reports, no new business shall be acted upon
at such annual meeting unless stated, filed and received as herein
provided.
Section 3. NOTICE OF MEETINGS AND ADJOURNED MEETING. Written
notice stating the place, date and hour of any meeting shall be
given not fewer than ten (10) nor more than sixty (60) days before
the date of the meeting to each stockholder entitled to vote at such
meeting. If mailed, notice is given when deposited in the United
States mail, postage prepaid, directed to the stockholder at his
address as it appears on the records of the corporation. If a
stockholder gives no address, notice shall be deemed to have been
given him if sent by mail or other means of written communication
addressed to the place where the principal office of the corporation
is situated, or if published, at least once in a newspaper of
general circulation in the country in which said office is located.
When a meeting is adjourned to another time or place, notice
need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any
business that might have been transacted at the original meeting.
If the adjournment is for more than thirty (30) days, or if after
the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 4. SPECIAL MEETINGS. Special meetings of the
stockholders of the corporation for any purpose or purposes may be
called at any time by the Board of Directors, the chairman of the
Board of Directors or the president of the corporation. Special
meetings of the stockholders of the corporation may not be called
by any other person or persons. Except in special cases where other
express provision is made by statute, notice of such special
meetings shall be given in the same manner as for annual meetings
of the stockholders. Notices of any special meetings shall specify,
in addition to the place, day and hour of such meeting, the general
nature of the business to be transacted.
Section 5. VOTING; PROXIES. The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten
(10) days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours,
for a period of at least ten (10) days prior to the meeting, either
at a place within the city where the meeting is to be held, which
place may be specified in the notice of the meeting, or it not so
specified, at the place where the meeting is to be held. The list
also shall be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any
stockholder who is present.
Upon the willful neglect or refusal of the Directors to produce
such a list at any meeting for the election of Directors, they shall
be ineligible for election to any office at such meeting.
Each stockholder entitled to vote at a meeting of stockholders
may authorize another person or persons to act for him by proxy.
A stockholder may grant such authority by (a) executing a writing
authorizing another person or persons to act for him as proxy, which
execution may be accomplished by the stockholder or his authorized
officer, director, employee or agent signing such writing or causing
his or her signature to be affixed to such writing by any reasonable
means including, but not limited to, by facsimile signature, or (b)
authorizing another person or persons to act for him as proxy by
transmitting or authorizing the transmission of a telegram,
cablegram, or other means of electronic transmission to the person
who will be the holder of the proxy or to a proxy solicitation firm,
proxy support service organization or like agent duly authorized by
the person who will be the holder of the proxy to receive such
transmission, provided that any such telegram, cablegram or other
means of electronic transmission must either set forth or be
submitted with information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized
by the stockholder. If it is determined that such telegrams,
cablegrams or other electronic transmissions are valid, the
inspectors or, if there are no inspectors, such other persons making
that determination shall specify the information upon which they
relied. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to the
foregoing subsection (b) may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which
the original writing or transmission could be used, provided that
such copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original writing or
transmission. Each original writing, telegram, cablegram or other
means of electronic transmission, or a copy, facsimile
telecommunication or other reliable reproduction thereof, shall be
filed with the secretary of the corporation not later than the day
on which exercised. No proxy shall be voted or acted upon after
three (3) years from its date, unless the proxy provides for a
longer period.
Except as otherwise specifically provided by law, the
Certificate of Incorporation or these by-laws, the affirmative vote
of the majority of shares present in person or represented by proxy
at the meeting and entitled to vote on the subject matter shall be
the act of the stockholders. Elections of Directors need not be by
written ballot. Except as otherwise specifically provided by law,
all other votes may be viva voce or by ballot.
Section 6. QUORUM. Except as otherwise provided by the law,
the Certificate of Incorporation or these by-laws, the presence, in
person or by proxy, of the holders of a majority of the outstanding
shares entitled to vote shall constitute a quorum, but in no event
shall a quorum consist of less than one-third (1/3) of the shares
entitled to vote at a meeting. The stockholders present at a duly
organized meeting can continue to do business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.
Section 7. WAIVER OF NOTICE. The transactions of any meeting
of stockholders, either annual or special, however called and
noticed, shall be as valid as though had at a meeting duly held
after regular call and notice, if a quorum be present either in
person or by proxy, and if, either before or after the meeting, each
of the persons entitled to vote, not present in person or by proxy,
signs a written waiver of notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.
All such waivers shall be filed with the corporate records or made
a part of the minutes of the meeting.
Section 8. NO ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any annual or special meeting of
stockholders may be taken only upon the vote of the stockholders at
an annual or special meeting duly called and may not be taken by
written consent of the stockholders.
ARTICLE III
Directors
Section 1. POWERS.
(a) General Powers. The Board of Directors shall have all
powers necessary or appropriate to the management of the
corporation, and, in addition to the power and authority
conferred by these by-laws, may exercise all powers of the
corporation and do all such lawful acts and things as are not
by statute, these by-laws or the Certificate of Incorporation
directed or required to be exercised or done by the
stockholders.
(b) Specific Powers. Without limiting the general powers
conferred by the last preceding clause and the powers
conferred by the Certificate of Incorporation and by-laws of
the corporation, it is expressly declared that the Board of
Directors shall have the following powers:
First - To select and remove all the other officers, agents
and employees of the corporation, prescribe such
powers and duties for them as may not be
inconsistent with law, with the Certificate of
Incorporation or the by-laws, fix their compensation
and require from them security for faithful service.
Second - To conduct, manage and control the affairs and
business of the corporation, and to make such rules
and regulations therefor not inconsistent with law,
or with the Certificate of Incorporation or the by-
laws, as they may deem best.
Third - To change the principal office for the transaction
of the business of the corporation from one location
to another as provided in Article I, Section 2
hereof; to designate the place and time of annual
and other meetings of stockholders as provided in
Article II, Section 2 and Article II, Section 4 of
these by-laws; and to adopt, make and use a
corporate seal, and to prescribe the forms of
certificates of stock, and to alter the form of such
seal and of such certificates from time to time, as
in their judgment they may deem best, provided such
seal and such certificates shall at all times comply
with the provisions of law.
Fourth - To authorize the issuance of shares of stock of the
corporation from time to time, upon such terms as
may be lawful, in consideration of cash, services
rendered, personal property, real property, leases
of real property, or a combination thereof, or in
the case of shares issued as a dividend against
amounts transferred from surplus to stated capital.
Fifth - To borrow money and incur indebtedness for the
purposes of the corporation, and to cause to be
executed and delivered therefor, in the corporate
name, promissory notes, bonds, debentures, deeds of
trust, mortgages, pledges, hypothecations or other
evidences of debt and securities therefor.
Sixth - To appoint an Executive Committee and other
committees, and to delegate to the Executive
Committee, to the extent allowed by law, any of the
powers and authority of the Board in the management
of the business and affairs of the corporation,
except the power to declare dividends and to adopt,
amend or repeal by-laws. The Board of Directors
shall have the power to prescribe the manner in
which proceedings of the Executive Committee and
other committees shall be conducted. The Executive
Committee shall be composed of two or more
Directors. Unless the Board of Directors shall
otherwise provide: meetings of the Executive
Committee may be called by the President, any Vice
President who is a member of the Executive
Committee, or any two members thereof, upon written
notice to the members of the Executive Committee of
the time and place of such meeting given in the
manner provided for the giving of written notice to
members of the Board of Directors of the time and
place of special meetings of the Board of Directors;
vacancies in the membership of the Executive
Committee may be filled by the Board of Directors;
a majority of the authorized number of members of
the Executive Committee shall constitute a quorum
for the transaction of business; and transactions of
any meeting of the Executive Committee, however
called and noticed or wherever held, after regular
call and notice, if a quorum be present and if,
either before or after the meeting, each of the
members not present signs a written waiver of notice
or a consent to holding such meeting or an approval
of the minutes thereof. All such waivers, consents
or approvals shall be filed with the corporate
records or made a part of the minutes of the
meeting.
Section 2. INDEFINITE NUMBER OF DIRECTORS AUTHORIZED. The
authorized number of Directors shall be not less than six nor more
than twelve. The exact number of Directors shall be fixed from time
to time, within the limits specified in this section, by a
resolution duly adopted by the Board of Directors.
Section 3. ELECTION AND TERM OF OFFICE. The Directors shall
be elected at each annual meeting of the stockholders but, if any
such annual meeting is not held or the Directors are not elected
thereat, the Directors may be elected at any special meeting of
stockholders held for that purpose.
The Directors of the corporation shall be divided into three
classes, as nearly equal in number as reasonably possible, with the
Directors in each class to hold office until their successors are
elected and qualified. At each annual meeting of stockholders of
the corporation, the successors to the class of Directors whose term
shall then expire shall be elected to hold office for a three year
term. If the number of Directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain
the number of Directors in each class as nearly equal as possible,
and any additional Directors of any class elected to fill a vacancy
resulting from an increase in such class shall hold office for a
term that shall coincide with the remaining term of that class, but
in no case will a decrease in the number of Directors shorten the
term of any incumbent Director. A Director shall hold office until
the annual meeting for the year in which his term expires and until
his successor shall be elected and shall qualify, subject, however,
to prior death, resignation, retirement disqualification or removal
from office.
Notwithstanding the foregoing, no person shall be elected or
serve as a Director if such person is in a management position with
or a director of a direct competitor of the corporation.
Notwithstanding the foregoing, whenever the holders of any one
or more classes or series of Preferred Stock issued by the
corporation shall have the right, voting separately by class or
series, to elect Directors at an annual or special meeting of
stockholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms
of the Certificate of Incorporation or the resolution or resolutions
adopted by the Board of Directors pursuant to Paragraph 4 of the
Certificate of Incorporation, and such Directors so elected shall
not be divided into classes pursuant to this section unless
expressly provided by such terms.
Subject to the rights, if any, of the holders of shares of
Preferred Stock then outstanding only persons who are nominated in
accordance with the following procedures shall be eligible for
election as Directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors by any
nominating committee or person appointed by the board or by any
stockholder of the corporation entitled to vote for the election of
Directors at the meeting who complies with the notice procedures set
forth in this section. Such nominations, other than those made by
or at the direction of the Board, shall be made pursuant to timely
notice in writing to the secretary of the corporation. To be
timely, a stockholder's notice must be delivered to, or mailed and
received at, the principal executive offices of the corporation not
less than 60 days prior to the scheduled annual meeting, regardless
of any postponement, deferrals or adjournments of that meeting to
a later date; provided, however, that if less than 70 days' notice
or prior public disclosure of the date of the scheduled annual
meeting is given or made, notice by the stockholder, to be timely,
must be so delivered or received not later than the close of
business on the tenth day following the earlier of the day on which
such notice of the date of the scheduled annual meeting was mailed
or the day on which such public disclosure was made. A
stockholder's notice to the secretary shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or
reelection as a Director, (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or
employment of the person, (iii) the class and number of shares of
capital stock of the corporation which are beneficially owned by the
person and (iv) any other information relating to the person that
is required to be disclosed in solicitations for proxies for
election of Directors pursuant to Rule 14a under the Securities
Exchange Act of 1934, as amended; and (b) as to the stockholder
giving the notice (i) the name and address, as they appear on the
corporation's books, of the stockholder and (ii) the class and
number of shares of the corporation's stock which are beneficially
owned by the stockholder on the date of such stockholder notice.
The corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the corporation
to determine the eligibility of such proposed nominee to serve as
Director of the corporation.
The presiding officer of the annual meeting shall determine and
declare at the annual meeting whether the nomination was made in
accordance with the terms of this section. If the presiding officer
determines that a nomination was not made in accordance with the
terms of this section, he shall so declare at the annual meeting and
any such defective nomination shall be disregarded.
Section 4. VACANCIES. Newly created directorships resulting
from any increase in the number of Directors or any vacancy on the
Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled solely by
the affirmative vote of a majority of the remaining Directors then
in office,even though less than a quorum, or by a sole remaining
Director. Any Director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of the
class of Directors in which the new directorship was created or the
vacancy occurred and until such Director's successor shall have been
elected and qualified. No decrease in the number of Directors
constituting the Board of Directors shall shorten the term of any
incumbent Director.
Section 5. PLACE OF MEETING. Regular meetings of the Board
of Directors shall be held at any place within or without the State
of Delaware as a majority of the Directors from time to time may
designate or by written consent of all members of the Board. In the
absence of such designation regular meetings shall be held at the
principal office for the transaction of business of the corporation.
Special meetings of the Board may be held either at a place so
designated or at the principal office.
Section 6. ORGANIZATION MEETING. Immediately following each
annual meeting of the stockholders the Board of Directors shall hold
a regular meeting for the purpose of organization, election of
officers, and the transaction of other business. Notice of such
organizational meetings is hereby dispensed with.
Section 7. MEETINGS. Meetings of the Board of Directors for
any purpose or purposes shall be called at any time by the chairman
of the Board or the president or, if the president is absent or
unable or refuses to act, by any vice president or by any two
Directors.
Written notice of the time and place of meetings shall be
delivered personally to each Director or sent to each Director by
mail or by other form of written communication, charges prepaid,
addressed to him at his address as it is shown upon the records of
the corporation or, if it is not so shown on such records or is not
readily ascertainable, at the place in which the meetings of the
Directors are regularly held. In case such notice is mailed or
telegraphed, it shall be deposited in the United States mail or
delivered to the telegraph company in the place in which the
principal office of the corporation is located at least forty-eight
(48) hours prior to the time of the holding of the meeting. In case
such notice is delivered personally as above provided, it shall be
so delivered at least twenty-four (24) hours prior to the time of
the holding of the meeting. Such mailing, telegraphing or delivery
as above provided shall be due, legal and personal notice to such
Director.
Section 8. NOTICE OF ADJOURNMENT. Notice of the time and
place of holding an adjourned meeting need not be given to absent
Directors if the time and place be fixed at the meeting adjourned.
Section 9. CONSENT OF ABSENTEES; WAIVER OF NOTICE. The
transactions of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though had
at a meeting duly held after regular call and notice, if a quorum
be present and if, either before or after the meeting, each of the
Directors not present signs a written waiver of notice or a consent
to holding such meeting or an approval of the minutes thereof.
Attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting, except when the Director attends meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. All such waivers, consents or
approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
Section 9.1 ACTION WITHOUT A MEETING. Any action required or
permitted to be taken by the Board of Directors, or of any committee
thereof, may be taken without a meeting if all members of the Board
or committee, as the case may be, individually or collectively
consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board or
committee. Such action by written consent shall have the same force
and effect as a unanimous vote of the Directors.
Section 10. QUORUM. A majority of the total number of
Directors shall be necessary to constitute a quorum for the
transaction of business, except to adjourn as hereinafter provided.
Every act or decision done or made by a majority of the Directors
present at a meeting duly held at which a quorum is present shall
be regarded as the act of the Board of Directors, unless a greater
number be required by law or by the Certificate of Incorporation.
Section 11. ADJOURNMENT. A quorum of the Directors may
adjourn any Directors' meeting to meet again at a stated day and
hour; provided, however, that in the absence of a quorum a majority
of the Directors present at any Directors' meeting, either regular
or special, may adjourn from time to time until the time fixed for
the next regular meeting of the Board.
Section 12. FEES AND COMPENSATION. Directors and members of
committees may receive such compensation, if any, for their
services, and such reimbursement for expenses, as may be fixed or
determined by resolution of the Board.
Section 13. REMOVAL OF DIRECTORS BY STOCKHOLDERS. Subject to
the rights, if any, of the holders of shares of Preferred Stock then
outstanding, any or all of the Directors of the corporation may be
removed from office by the stockholders at any annual or special
meeting of stockholders of the corporation, the notice of which
shall state that the removal of a Director or Directors is among the
purposes of the meeting, but only for cause, by the affirmative vote
of at least 66-2/3% of the outstanding shares of Common Stock of the
corporation.
Section 14. RESIGNATIONS. Any Director may resign at any time
by submitting his written resignation to the corporation. Such
resignation shall take effect at the time of its receipt by the
corporation unless another time be fixed in the resignation, in
which case it shall become effective at the time so fixed. The
acceptance of a resignation shall not be required to make it
effective.
Section 15. PARTICIPATION BY CONFERENCE TELEPHONE. Directors
may participate in regular or special meetings of the Board by
telephone or similar communications equipment by means of which all
other persons at the meeting can hear each other, and such
participation shall constitute presence in person at the meeting.
Section 16. AGE LIMITATION. A person shall not hold office
as a director following the annual meeting of stockholders held on
or after the date of such person's 70th birthday; provided, however,
that nothing in this provision shall prohibit directors elected in
1988 from serving two terms if duly nominated and elected.
ARTICLE IV
Officers
Section 1. OFFICERS. The officers of the corporation shall
be a president, a vice president, a secretary and a treasurer. The
corporation may also have, at the discretion of the Board of
Directors, a chairman of the Board, one or more additional vice
presidents, one or more assistant secretaries, one or more assistant
treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 3 of this Article. One
person may hold two or more offices except that the president and
secretary shall not be the same person.
Section 2. ELECTION. The officers of the corporation, except
such officers as may be appointed in accordance with the provisions
of Section 3 or Section 5 of this Article IV, shall be chosen
annually by the Board of Directors, and each shall hold his office
until he shall resign or shall be removed or otherwise disqualified
to serve, or his successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors
may appoint such other officers as the business of the corporation
require, each of whom shall hold office for such period, shall have
such authority and shall perform such duties as are provided in the
by-laws or as the Board of Directors may from time to time
determine.
Section 4. REMOVAL AND RESIGNATION. Any officer may be
removed either with or without cause, by the Board of Directors, at
any regular or special meeting thereof, or, except in the case of
an officer chosen by the Board of Directors pursuant to Section 2
of this Article IV, by any officer upon whom such power of removal
may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to
the Board of Directors, the president, or the secretary of the
corporation. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause
shall be filled in the manner prescribed in the by-laws for regular
appointments to such office.
Section 6. DELEGATION OF OFFICE. The Board of Directors may
delegate the powers or duties of any officer of the corporation to
any other officer or to any Director from time to time.
Section 7. CHAIRMAN OF THE BOARD. The Chairman of the Board,
if there shall be such an officer, shall, if present, preside at all
meetings of the Board of Directors and exercise and perform such
other powers and duties as may be from time to time assigned to him
by the Board of Directors or prescribed by the by-laws.
Section 8. PRESIDENT. Subject to such supervisory powers, if
any, as may be given by the Board of Directors to the Chairman of
the Board, if there be such an officer, the president shall be the
chief executive officer of the corporation and shall, subject to the
control of the Board of Directors, have general supervision,
direction and control of the business and officers of the
corporation. He shall preside at all meetings of the stockholders
and, in the absence of the Chairman of the Board,or if there be
none, at all meetings of the Board of Directors. He shall have the
general powers and duties of management usually vested in the office
of president of a corporation, and shall have such other powers and
duties as may be prescribed by the Board of Directors or the by-
laws.
Section 9. VICE PRESIDENT. In the absence or disability of
the president, the vice presidents in order of their rank as fixed
by the Board of Directors or, if not ranked, the vice president
designated by the Board of Directors, shall perform all the duties
of the president, and when so acting shall have all the powers of,
and be subject to all the restrictions upon, the president. The
vice presidents shall have such other powers and perform such other
duties as from time to time may be prescribed for them respectively
by the Board of Directors or the by-laws.
Section 10. SECRETARY. The secretary shall keep or cause to
be kept, at the principal office or such other place as the Board
of Directors may order, a book of minutes of all meetings of
Directors and stockholders, with the time and place of holding,
whether regular or special, and, if special, how authorized, the
notice thereof given, the names of those present at Directors'
meetings, the number of shares present or represented at
stockholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
office or at the office of the corporation's transfer agent, a share
register, or a duplicate share register, showing the names of the
stockholders and their addresses, the number and classes of shares
held by each, the number and date of certificates issued for the
same, and the number and date of cancellation of every certificate
surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all
the meetings of the stockholders and of the Board of Directors
required by the by-laws or by law to be given, and he shall keep the
seal of the corporation in safe custody, and shall have such other
powers and perform such other duties as may be prescribed by the
Board of Directors or by the by-laws.
Section 11. TREASURER. The treasurer shall keep and maintain,
or cause to be kept and maintained, adequate and correct accounts
of the properties and business transactions of the corporation,
including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, surplus and shares. Any
surplus, including earned surplus, paid-in surplus and surplus
arising from a reduction of stated capital, shall be classified
according to source and shown in a separate account. The books of
account shall at all reasonable times be open to inspection by any
Director.
The treasurer shall deposit all moneys and other valuables in
the name and to the credit of the corporation with such depositories
as may be designated by the Board of Directors. He shall disburse
the funds of the corporation, shall render to the president and
Directors, whenever they request it, an account of all of his
transactions as treasurer and of the financial condition of the
corporation, and shall have such other powers and perform such other
duties as may be prescribed by the Board of Directors or the by-
laws.
ARTICLE V
Miscellaneous
Section l. RECORD DATE. The Board of Directors may fix, in
advance, a record date to determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any
adjournment thereof, entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange
of stock or for the purpose of any other lawful action. Such date
shall be not more than sixty (60) nor fewer than ten (10) days
before the date of any such meeting, nor more than sixty (60) days
prior to any other action.
If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived,
at the close of business on the day next preceding the day on which
the meeting is held.
The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, the Board of
Directors may fix a new record date for the adjourned meeting.
Section 2. INSPECTION OF CORPORATE RECORDS. The share
register or duplicate share register, the books of account, and
minutes of proceedings of the stockholders and Directors and of the
executive and other committees of the Directors shall be open to
inspection upon the written demand of any stockholder or holder of
a voting trust certificate, at any reasonable time, and for a
purpose reasonably related to his interests as a stockholder or as
the holder of a voting trust certificate and shall be exhibited at
any time when required by the demand of ten percent (10%) of the
shares represented at any stockholders' meeting. Such inspection
may be made in person or by an agent or attorney, and shall include
the right to make extracts. Demand of inspection other than at a
stockholders' meeting shall be made in writing upon the secretary
of the corporation and shall state the purpose of such demand.
Section 3. CHECKS, DRAFTS, ETC. All checks, drafts or other
orders for payment of money, notes or other evidences of
indebtedness, issued in the name of or payable to the corporation,
shall be signed or endorsed by such person or persons and in such
manner as, from time to time, shall be determined by resolution of
the Board of Directors.
Section 4. ANNUAL REPORTS. The Board of Directors of the
corporation may cause to be sent to the stockholders, not later than
one hundred twenty (120) days after the close of the fiscal or
calendar year, an annual report in such form as may be deemed
appropriate by the Board of Directors.
Section 5. EXECUTION OF INSTRUMENTS. The Board of Directors,
except as otherwise provided in the by-laws, may authorize any
officer or officers, agent or agents, to enter into any contract or
execute any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to
specific instances; and, unless so authorized by the Board of
Directors, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or
to pledge its credit or to render it liable for any purpose or to
any amount.
Section 6. CERTIFICATES OF STOCK. A certificate or
certificates for shares of the capital stock of the corporation
shall be issued to each stockholder when any such shares are fully
paid up. All such certificates shall be signed by the president or
a vice president and the secretary or an assistant secretary, or be
authenticated by facsimiles of the signatures of the president and
secretary or by a facsimile of the signature of the president and
the written signature of the secretary or an assistant secretary.
Every certificate authenticated by a facsimile of a signature must
be countersigned by a transfer agent or transfer clerk, and be
registered by an incorporated bank or trust company, either domestic
or foreign, as registrar of transfers, before issuance.
Certificates for shares may be issued prior to full payment
under such restrictions and for such purposes as the Board of
Directors or the by-laws may provide; provided, however, that any
such certificate so issued prior to full payment shall state the
amount remaining unpaid and the terms of payment thereof. Upon the
declaration of any dividend on fully paid shares, the corporation
shall declare a dividend upon partly paid shares of the same class,
but only upon the basis of the percentage of the consideration
actually paid thereon.
Section 7. REPRESENTATIONS OF SHARES OF OTHER CORPORATIONS.
The president or any vice president and the secretary or assistant
secretary of this corporation are authorized to vote, represent and
exercise on behalf of this corporation all rights incident to any
and all shares of any other corporation or corporations standing in
the name of this corporation. The authority herein granted to said
officers to vote or represent on behalf of this corporation any and
all shares held by this corporation in any other corporation or
corporations may be exercised either by such officers in person or
by any other person authorized so to do by proxy or power of
attorney duly executed by said officers.
Section 8. INSPECTION OF BY-LAWS. The corporation shall keep
in its principal office for the transaction of business the original
or a copy of the by-laws as amended or otherwise altered to date,
certified by the secretary, which shall be open to inspection by the
stockholders at all reasonable times during office hours.
Section 9. TRANSFER OF SHARES. Transfer of shares shall be
made on the books of the corporation only upon surrender of the
share certificate, fully endorsed and otherwise in proper form for
transfer, which certificate shall be canceled at the time of the
transfer. No transfer of shares shall be made on the books of this
corporation if such transfer is in violation of a lawful restriction
noted conspicuously on the certificate.
Section 10. LOST, STOLEN OR DESTROYED SHARE CERTIFICATES. The
corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate previously issued by it, alleged
to have been lost, stolen or destroyed, and the corporation may
require the owner of the lost, stolen, or destroyed certificate, or
his legal representative, to give the corporation a bond sufficient
to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate or
uncertificated shares.
Section 11. CONSTRUCTION AND DEFINITIONS. Unless the context
otherwise requires, the general provisions, rules of construction
and definitions contained in the General Corporation Law of the
State of Delaware shall govern the construction of these by-laws.
Without limiting the generality of the foregoing the masculine
gender includes the feminine and neuter, the singular number
includes the plural and the plural number includes the singular,
and the term "person" includes a corporation as well as a natural
person.
ARTICLE VI
Seal
The form of the seal of the corporation, called the
corporate seal of the corporation, shall be as impressed
[Form of Seal]
adjacent hereto.
ARTICLE VII
Fiscal Year
The fiscal year of the corporation shall begin on January 1 and
end on December 31.
ARTICLE VIII
Indemnification of Directors and Officers and Other Persons
Section 1. INDEMNIFICATION. Each person who was or is made
a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative, (hereinafter a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal
representative, is or was a Director or officer of the corporation
or is or was serving at the request of the corporation as a
Director, officer, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity as a
Director, officer, employee or agent or in any other capacity while
serving as a Director, officer, employee or agent, shall be
indemnified and held harmless by the corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law
permitted the corporation to provide prior to such amendment),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid
or to be paid in settlement) reasonably incurred or suffered by such
person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a Director, officer,
employee or agent and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that, except
as provided in Section 2 of this Article VIII, the corporation shall
indemnify any such person seeking indemnification in connection with
a proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the Board of
Directors of the corporation. The right to indemnification
conferred in this Article VIII shall be a contract right and shall
include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred by
a Director or officer in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is
rendered by such person while a Director or officer, including,
without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made upon
delivery to the corporation of an undertaking, by or on behalf of
such Director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such Director or officer is not
entitled to be indemnified under this Article VIII or otherwise.
The right to indemnification conferred in this Article VIII shall
include any claim made against the lawful spouse (whether such
status is derived by reason of statutory law, common law or
otherwise of any applicable jurisdiction in the world) of a Director
or officer for claims arising solely out of his or her capacity as
the spouse of a Director or officer, including such claims that seek
damages recoverable from marital community property, property
jointly held by the Director or officer and the spouse, or property
transferred from the Director or officer to the spouse; provided,
however, that this right shall not include any claim for any actual
or alleged Wrongful Act of the spouse and that this right of
indemnification shall apply only to actual or alleged Wrongful Acts
of a Director or officer. The corporation may, by action of its
Board of Directors, provide indemnification to employees and agents
of the corporation with the same scope and effect as the foregoing
indemnification of Directors and officers.
Section 2. CLAIM FOR INDEMNIFICATION. If a claim under
Section 1 of this Article VIII is not paid in full by the
corporation within thirty days after a written claim has been
received by the corporation, the claimant may at any time thereafter
bring suit against the corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense of prosecuting such claim.
It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the
corporation) that the claimant has not met the standards of conduct
which make it permissible under the Delaware General Corporation Law
for the corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its
Board of Directors, independent legal counsel or its stockholders)
to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that the claimant
has not met the applicable standard of conduct.
Section 3. RIGHT NOT EXCLUSIVE. The right to indemnification
and the payment of expenses incurred in defending a proceeding in
advance of its final disposition conferred in this Article VIII
shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, provision of the Certificate
of Incorporation, by-law, agreement, vote of stockholders or
disinterested Directors or otherwise.
Section 4. INSURANCE. The corporation may maintain insurance,
at its expense, to protect itself and any Director, officer,
employee or agent of the corporation or another corporation,
partnership, joint venture, trust or other enterprise against any
such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
ARTICLE IX
Amendments
Section 1. AMENDMENTS.
(a) By Stockholders. These by-laws may be amended or
repealed in whole or in part, and new or additional by-laws
may be adopted, by the vote of stockholders entitled to
exercise a majority of the voting power of the corporation,
except that the vote of stockholders holding more than eighty
percent (80%) of the voting power shall be necessary to reduce
the authorized number of Directors below five.
(b) By the Board of Directors. If the Certificate of
Incorporation so provides, these by-laws may be adopted,
amended, or repealed by the Board of Directors, provided,
however, that no alteration, amendment or repeal of these by-
laws that limits indemnification rights or changes the manner
or vote required to make such alteration, amendment or repeal,
shall be made except by the affirmative vote of stockholders
entitled to exercise a majority of the voting power of the
corporation. The fact that the power has been so conferred
upon the Board of Directors to adopt, amend or repeal these
by-laws shall not divest the stockholders of the power nor
limit their power to adopt, amend or repeal by-laws.
Exhibit 10.13
FIRST AMENDMENT TO
REVOLVING CREDIT AGREEMENT
This First Amendment to Revolving Credit Agreement (this
"Amendment") is made as of December 31, 1993 by and among BECKMAN
INSTRUMENTS, INC., a Delaware corporation (the "Borrower"), CITICORP
USA, INC. ("CUSA"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("B OF A"), DRESDNER BANK AG, LOS ANGELES AGENCY
("DRESDNER"), MELLON BANK, N.A. ("MELLON"), THE FIRST NATIONAL BANK
OF CHICAGO ("FNBC"), (CUSA, B OF A, DRESDNER, MELLON and FNBC being
referred to individually as a "Lender" and collectively as the
"Lenders"), and CITICORP USA, INC., a Delaware corporation, as agent
for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Borrower and the Lenders have entered into that certain
Revolving Credit Agreement dated as of July 2, 1992 (the "Credit
Agreement").
B. The Borrower has requested that the Agent and the Lenders agree
to amend the Credit Agreement to modify certain provisions thereof.
The Agent and the Lenders are willing to do so upon and subject to
the terms and conditions set forth below.
AGREEMENT
NOW, THEREFORE, the Borrower, the Agent and the Lenders hereby agree
as follows:
Section 1. Amendment of Credit Agreement. The Credit Agreement is
hereby amended as follows:
(a) The definition of "Operating Income" set forth in Section
1.01 of the Credit Agreement is hereby amended to read in its
entirety as follows:
"Operating Income" means, for any accounting period,
operating income (or operating deficit, as the case may
be) properly attributable to continuing operations (as
defined by generally accepted accounting principles) for
such period, but shall not include interest income or
expense, foreign exchange gains or losses, minority
interest adjustments, the effects of disposals of fixed
assets, charges for environmental matters (other than
maintenance, monitoring, compliance and remediation costs
which occur at properties where the Borrower is
conducting current operations), if any, unusual or other
non-recurring items (including charges associated with
restructuring the Borrower's operations) or other events
or transactions that are infrequent for the purposes of
generally accepted accounting principles, income taxes,
charges to implement new accounting standards required by
the Financial Accounting Standards Board, and any non-
cash charges associated with the write-down of long-term
assets including intangibles.
(b) Article II of the Credit Agreement is hereby amended by
adding thereto the following Section 2.15:
SECTION 2.15. Use of Proceeds. The proceeds of any
Advance shall be used solely, directly or indirectly, in
the Borrower's U.S. operations. In applying the proceeds
from any Advance, the Borrower represents that in no
event will any portion of the proceeds of any Advance be
used to repay the portion of any Indebtedness for
Borrowed Money, the proceeds of which were used to
previously fund any foreign investment or the working
capital needs of any foreign Subsidiary, foreign
Affiliate or other foreign entity. The Borrower further
represents that in no event will any portion of any
Advance be used to fund any foreign investment or the
working capital needs of any foreign Subsidiary, foreign
Affiliate or other foreign entity.
(c) Section 5.02(d) of the Credit Agreement is hereby amended
by deleting the reference therein to "$20,000,000" and
substituting a reference to "$45,000,000" in its place.
Section 3. Recitals, Warranties and Representations. The Borrower
makes the following representations and warranties to the Agent and
the Lenders, all of which are material and are made to induce the
Agent and the Lenders to enter into this Amendment.
(a) All representations made by the Borrower in the Credit
Agreement were true, accurate and complete in every respect as
of the date made and are true, accurate and complete in every
material respect as of the date hereof, and do not fail to
disclose any material fact necessary to make the
representations not misleading.
(b) The execution, delivery and performance by the Borrower
of this Amendment and the Credit Agreement as amended hereby
are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not
contravene (i) the Borrower's charter or by-laws, or (ii) any
law, decree, order, judgement or contractual restriction
binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery
and performance by the Borrower of this Amendment.
(d) Enforceability of Amendment. This Amendment has been
duly authorized, executed and delivered by the Borrower and is
enforceable against the Borrower in accordance with its terms.
Section 4. Ratification of Credit Agreement. Except as
specifically amended hereby, all of the provisions of the Credit
Agreement shall remain unamended and in full force and effect. The
Borrower hereby ratifies, affirms, reaffirms, acknowledges, confirms
and agrees that the Credit Agreement, as amended hereby, represents
a valid and enforceable obligation of the Borrower.
Section 5. Closing Costs. The Borrower shall reimburse or cause
to be reimbursed to the Agent the fees and expenses of counsel to
the Agent incident to this Amendment.
Section 6. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California.
Section 7. Successors and Assigns. The provisions of this
Amendment shall be binding upon and inure solely to the benefit of
the Agent, the Lenders and the Borrower, and their respective heirs,
legal representatives, successors and assigns.
Section 8. Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and
the same agreement.
Section 9. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
IN WITNESS WHEREOF, this Amendment has been executed as of the day
and year first above written.
BECKMAN INSTRUMENTS, INC.
By: D. K. WILSON
Name: Dennis K. Wilson
Title: Vice President, Finance and
Chief Financial Officer
CITICORP USA, INC., as Agent
By: BARBARA A. COHEN
Name: Barbara A. Cohen
Title: Vice President
LENDERS
CITICORP USA, INC.
By: BARBARA A. COHEN
Name: Barbara A. Cohen
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: ROBERT W. TROUTMAN
Name: Robert W. Troutman
Title: Vice President
DRESDNER BANK AG,
LOS ANGELES AGENCY
By: BARBARA J. READICK
Name: Barbara J. Readick
Title: Vice President
By: DENNIS G. BLANK
Name: Dennis G. Blank
Title: Asst. Vice President
MELLON BANK, N.A.
By: EDWIN H. WIEST
Name: Edwin H. Wiest
Title: First Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: L. GENE BEUBE
Name: L. Gene Beube
Title: Senior Vice President
Exhibit 10.15
FY 93 EXECUTIVE BONUS PLAN
Bonus Eligibility
The key factors in determining bonus awards are:
1) Growth in company net earnings;
2) Level of budget achievement for operating profit; and
3) Rating for MBO accomplishments.
Growth in Company Net Earnings
This is viewed as critical to the Company's overall success and a
key element in the enhancement of shareholder value. Because of its
importance, bonus eligibility under all executive and management
bonus plans will be contingent upon the attainment of a threshold
(gate) percentage growth in company net earnings over the prior
year. Approximately a third of the total bonus opportunity under
the plan at target will be based on this measure.
Level of Achievement for Operating Profit
Bonus eligibility for operating profit results begins at 90% of
budget and caps at 125% budget achievement. Payouts for below
budget performance apply only where the FY 93 budget represents a
meaningful increase over the FY 92 budget for operating profit.
Rating for MBO Accomplishments
Individual bonus awards may be varied above or below the combined
award guideline for company net earnings and operating profit based
on the overall evaluation for accomplishment of management
objectives (MBOs). The MBO rating is expressed as a percentage (0
to 150%) and applied to the total award guideline for financial
results.
Bonus Award Guidelines
EBP AWARD GUIDELINES
Net Earnings Operating Profit
____________________________ __________________________
% Growth Over Award % Budget Award
Prior Year Guideline Achievement Guideline
____________________________ __________________________
<13% 0 <90% 0
13% 11% 90% 1.25%
>13% 11% 95% 7.5%
____________________________ 99% 12.5%
100% 24.0%
No bonus eligibility for __________________________
operating profit results
unless 13% or higher growth >100% SEE BELOW
in company net earnings is
achieved over FY 92.
For Exceeding Operating Profit Budget
___________________________________________________________________
% Budget
Achievement Operating Profit Award Guideline
___________________________________________________________________
101%-109% 24% plus 1.5% for each 1% above 100% of budget
110%-125% 45% plus 1.25% for each 1% above 110% of budget
___________________________________________________________________
As a transition rule to bridge the FY 92 and FY 93 bonus plans, the
total bonus opportunity for operating profit achievement at 108% and
109% of budget plus the award guideline for company net earnings
will be no less than the comparable total award guideline under the
FY 92 plan.
<PAGE>
Bonus Eligibility Measurements
Operating Profit
_______________________________
Net For For
Earnings Achieving Exceeding
Growth Budget Budget
___________________________________________________________________
Corporate Total 50% BSG WW/ 50% BSG WW/
Staff Beckman 50% DSG WW 50% DSG WW
___________________________________________________________________
Total
BSG Beckman Group WW Group WW
___________________________________________________________________
DSG
Functional Total
Staff Beckman Group WW Group WW
___________________________________________________________________
DSG
Profit Total 70% Profit Center/
Center VP Beckman 30% Group WW Group WW
___________________________________________________________________
Below-budget bonus eligibility to be based on
operating profit measurement for achieving budget.
Individual Bonus Award Calculation
The individual bonus award is calculated by multiplying the total
award guideline for financial performance by the MBO percentage
rating and applying the result to total base earnings for the period
of bonus eligibility (eligible earnings).
Individual Rating for Percentage to be
MBO Accomplishments Applied to Award Guideline
____________________________ __________________________
Exceptional 130% - 150%
Excellent 100% - 120%
Good 70% - 90%
Acceptable 40% - 60%
Unacceptable 0
Example of How the Individual Bonus Award is Calculated
Assume that net earnings growth over the prior year is 13% and
operating profit budget achievement is 105%. Since the net earnings
growth threshold (gate) is met, bonus eligibility applies to both
net earnings growth and operating profit results. In this example,
the total award guideline before applying the MBO multiplier is
42.5%: 11% for net earnings growth plus 24% + (5x1.5%) or 7.5%, for
exceeding operating profit budget by 5%. A 42.5% basic total award
guideline is increased to a 51% individual bonus award with an MBO
rating of 120% (120%x42.5). Conversely, an MBO rating of 90%
reduces the 42.5% basic total award guideline to a 38.3% individual
bonus award (90%x42.5%). If total Beckman net earnings growth over
the prior year is below the 13% threshold, there will be no bonus
eligibility.
Administration
1) All financial results will be measured on an "as
reported" basis with no adjustment for any effect of
currency fluctuations.
2) All intercompany transactions will be excluded in the
financial results for determining operating profit budget
achievement.
3) Any issues regarding plan interpretation, including
financial measurements and results, will be referred for
resolution to an Executive Bonus Committee appointed by
the Chief Executive Officer.
Method and Eligibility for Payment
To be eligible for an award under this bonus program, a participant
must be in active pay status at the end of the fiscal year.
Exceptions may be approved by the Chief Executive Officer for
participants who retire in midyear or other special circumstances.
The earned bonus attributable to Beckman net earnings may, at the
participant's option, be paid in the form of ledgered common stock.
Details of this payment alternative are described in the plan
insert.
Questions?
If you have any questions about the Beckman Executive Bonus Plan,
ask your supervisor or contact Bill Baldwin, Corporate Director -
Compensation and Benefits.
Additional Award Guidelines
AWARD GUIDELINES
Net Earnings Operating Profit
____________________________ __________________________
% Growth Over Award % Budget Award
Prior Year Guideline Achievement Guideline
____________________________ __________________________
<13% 0 <90% 0
13% 13% 90% 1.5%
>13% 13% 95% 9.0%
____________________________ 99% 15.0%
100% 30.0%
No bonus eligibility for __________________________
operating profit results
unless 13% or higher growth >100% SEE BELOW
in company net earnings is
achieved over FY 92.
For Exceeding Operating Profit Budget
___________________________________________________________________
% Budget
Achievement Operating Profit Award Guideline
___________________________________________________________________
101%-109% 30% plus 1.5% for each 1% above 100% of budget
110%-125% 48% plus 1.25% for each 1% above 110% of budget
___________________________________________________________________
As a transition rule to bridge the FY 92 and FY 93 bonus plans, the
total bonus opportunity for operating profit achievement at 109% of
budget plus the award guideline for company net earnings will be no
less than the comparable total award guideline under the FY 92 plan.
AWARD GUIDELINES
Net Earnings Operating Profit
____________________________ __________________________
% Growth Over Award % Budget Award
Prior Year Guideline Achievement Guideline
____________________________ __________________________
<13% 0 <90% 0
13% 16% 90% 2.0%
>13% 16% 95% 12.0%
____________________________ 99% 20.0%
100% 36.0%
No bonus eligibility for __________________________
operating profit results
unless 13% or higher growth >100% SEE BELOW
in company net earnings is
achieved over FY 92.
For Exceeding Operating Profit Budget
___________________________________________________________________
% Budget
Achievement Operating Profit Award Guideline
___________________________________________________________________
101%-110% 36% plus 2.6% for each 1% above 100% of budget
111%-125% 62% plus 2.2% for each 1% above 110% of budget
___________________________________________________________________
AWARD GUIDELINES
Net Earnings Operating Profit
____________________________ __________________________
% Growth Over Award % Budget Award
Prior Year Guideline Achievement Guideline
____________________________ __________________________
<13% 0 <90% 0
13% 19% 90% 2.5%
>13% 19% 95% 15.0%
____________________________ 99% 25.0%
100% 44.0%
No bonus eligibility for __________________________
operating profit results
unless 13% or higher growth >100% SEE BELOW
in company net earnings is
achieved over FY 92.
For Exceeding Operating Profit Budget
___________________________________________________________________
% Budget
Achievement Operating Profit Award Guideline
___________________________________________________________________
101%-110% 44% plus 3.4% for each 1% above 100% of budget
111%-125% 78% plus 2.8% for each 1% above 110% of budget
___________________________________________________________________
Exhibit 10.20
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.
BECKMAN INSTRUMENTS, INC.
LEGENDED STOCK AGREEMENT AND ELECTION FOR DEFERRAL
OF A PORTION OF THE FY 93 EXECUTIVE BONUS PLAN
This Legended Stock Agreement and Election For Deferral (the
"Agreement") is entered into between Beckman Instruments, Inc., a
Delaware corporation (the "Company"), and _______________________,
an employee of the Company or a subsidiary of the Company
("Employee").
RECITALS
A. The Company has established the Beckman Instruments, Inc.
Incentive Compensation Plan of 1990, as amended (the "Plan"), the
terms of which are hereby incorporated by reference and made a part
of this Agreement, which provides for the issuance of shares of the
Company's Common Stock, $.10 par value, subject to certain
restrictions thereon (hereinafter referred to as "Legended Stock");
B. The Company has established the Beckman Instruments, Inc.
FY 93 Executive Bonus Plan With Deferred Stock Award Option;
C. Employee elects to defer the Beckman net earnings results
portion of any award granted to Employee under the provisions of the
FY 93 Executive Bonus Plan and the additional premium amount in
accordance with the Deferred Stock Award Option of the Executive
Bonus Plan and to have such amount paid in the form of the Company's
Common Stock issued under the Plan subject to certain restrictions
thereon; and
D. The Organization and Compensation Committee of the
Company's Board of Directors (the "Committee"), appointed to
administer the Plan, has determined that it would be to the
advantage and best interest of the Company and its stockholders to
issue the Legended Stock provided for herein to Employee in
consideration of past services to the Company and/or its
subsidiaries, and has advised the Company thereof and instructed the
undersigned officer to issue said Legended Stock;
THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto do hereby agree as
follows:
ARTICLE I
ELECTION FOR DEFERRAL
Section 1.1 - Irrevocable Election
Employee acknowledges and agrees that this election is
irrevocable once made and that it is not effective unless received
by the Company on or before August 10, 1993.
Section 1.2 - Deferred Amount
Employee acknowledges and agrees that: (a) This election
applies only to the Beckman net earnings results portion of any
award granted Employee under the provisions of the FY 93 Executive
Bonus Plan; (b) The amount deferred pursuant to this election will
be increased by and shall include a thirty-three and one-third
percent (33-1/3%) premium and such amount shall then be converted
into whole shares of Legended Stock based on the closing price of
Beckman stock on the last trading day of the FY 93 Executive Bonus
Plan year; and (c) Amounts which would otherwise result in
fractional shares will be paid in cash on the regular bonus payment
date.
Section 1.3 - Election
Employee hereby elects that the Beckman net earnings results
portion and the premium be deferred and paid in the form of Legended
Stock under a grant from the Plan subject to the terms and
conditions herein.
ARTICLE II
DEFINITIONS
Whenever the following terms are used below in this Agreement
they shall have the meaning specified below unless the context
clearly indicates to the contrary.
Section 2.1 - Change of Control
"Change of Control" shall have the meaning stated herein and
shall be deemed to occur if any of the following events occur: (a)
any "person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than an employee benefit plan of the Company, or a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
voting securities; (b) individuals who, as of the date hereof,
constitute the Board of the Company (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 the date
hereof whose election, or nomination for election by the Company's
stockholders, 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 considered as though such person
were a member of the Incumbent Board of the Company; (c) the
stockholders of the Company approve a merger or consolidation with
any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of another entity) more than 80% of the combined voting
power of the voting securities of the Company or such other entity
outstanding immediately after such merger or consolidation or (B)
a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no person acquires
20% or more of the combined voting power of the Company's then
outstanding voting securities; or (d) the stockholders of the
Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets. Notwithstanding the
preceding sentence, a Change of Control shall not be deemed to have
occurred if the "person" described in the preceding sentence is an
underwriting syndicate which has acquired the ownership of 20% or
more of the combined voting power of the Company's then outstanding
voting securities solely in connection with a public offering of the
Company's securities.
Section 2.2 - Plan
"Plan" shall mean the Beckman Instruments, Inc. Incentive
Compensation Plan of 1990, as amended and restated May 6, 1992.
Section 2.3 - Pronouns
The masculine pronoun shall include the feminine and neuter,
and the singular the plural, where the context so indicates.
Section 2.4 - Legended Stock
"Legended Stock" shall mean Common Stock of the Company issued
under this Agreement and subject to the Restrictions imposed
hereunder.
Section 2.5 - Restrictions
"Restrictions" shall mean the restrictions on sale or other
transfer and the exposure to forfeiture imposed upon the Legended
Stock under this Agreement.
Section 2.6 - Retirement
"Retirement" means termination of employment of Employee under
normal or late retirement (but not early retirement) provisions of
the Company's applicable retirement policy or plan as determined by
the Committee in its discretion.
Section 2.7 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 2.8 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain
then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in
such chain.
Section 2.9 - Termination of Employment
"Termination of Employment" shall mean the time when the
employee-employer relationship between Employee and the Company or
a Subsidiary is terminated for any reason, including, but not by way
of limitation, a termination by resignation, discharge, death, Total
Disability or Retirement, but excluding any termination where there
is a simultaneous reemployment by the Company or a Subsidiary. The
Committee, in its absolute discretion, shall determine the effect
of all other matters and questions relating to Termination of
Employment, including, but not by way of limitation all questions
of whether particular leaves of absence constitute Terminations of
Employment.
Section 2.10 - Total Disability
"Total Disability" shall mean that Employee has satisfied the
criteria for determination of disability (without regard to any age
requirement) for extended basic life insurance under the Company's
life insurance program (such determination shall in no way imply
that Employee is otherwise eligible for extended basic life
insurance).
Section 2.11 - Treasurer
"Treasurer" shall mean the Treasurer of the Company.
ARTICLE III
ISSUANCE OF LEGENDED STOCK
Section 3.1 - Issuance of Legended Stock
In consideration of Employee's agreement to remain in the
employ of the Company or a Subsidiary and for other good and
valuable consideration, the Company agrees to irrevocably issue to
Employee the number of shares of its $.10 par value Common Stock as
set forth in Schedule A, upon the terms and conditions set forth in
this Agreement. Schedule A shall be distributed to Employee on or
about the regular bonus payment date for the FY 93 Executive Bonus
Plan. The date of issuance of the Legended Stock shall be the date
shown on Schedule A.
Section 3.2 - Consideration to Company
As partial consideration for the issuance of Legended Stock by
the Company, Employee agrees to render faithful and efficient
services to the Company or a Subsidiary with such duties and
responsibilities as the Company shall from time to time prescribe.
Nothing in this Agreement or in the Plan shall confer upon Employee
any right to continue in the employ of the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries, which are hereby expressly reserved,
to discharge Employee at any time for any reason, with or without
cause.
ARTICLE IV
RESTRICTIONS
Section 4.1 - Forfeiture of Legended Stock
All shares of Legended Stock shall be forfeited back to the
Company immediately upon a voluntary Termination of Employment
occurring within twenty-four (24) months from the date of issuance,
other than termination due to Retirement, Total Disability, or
death.
Section 4.2 - Legend
Certificates representing shares of Legended Stock issued
pursuant to this Agreement shall, until all restrictions lapse and
new certificates are issued pursuant to Section 4.3, bear the
following legend:
"The shares represented by this certificate are
subject to reacquisition by Beckman
Instruments, Inc., and such shares may not be
sold or otherwise transferred except pursuant
to the provisions of the Legended Stock
Agreement by and between Beckman Instruments,
Inc. and the registered owner of such shares."
Section 4.3 - Lapse of Restrictions
(a) If no forfeiture pursuant to Section 4.1 has occurred, the
Restrictions shall lapse with respect to 100% of the shares of
Legended Stock on the date which is twenty-four (24) months from the
date the Legended Stock is issued.
(b) Notwithstanding subsection (a) above, the Restrictions
will lapse with respect to 100% of the shares of Legended Stock in
the following events: (i) A Termination of Employment by death or
Total Disability; (ii) A Termination of Employment by Retirement;
or, (iii) A Change of Control of the Company.
(c) As soon as practicable, the Company shall, upon the lapse
of the Restrictions, cause new certificates to be issued and
delivered to Employee or his legal representative, free from the
legend provided for in Section 4.2. Notwithstanding the foregoing,
no such new certificate shall be delivered to Employee or his legal
representative unless and until Employee or his legal representative
shall have paid to the Company (or other employer corporation) in
cash the full amount of all federal, state or local withholding or
other employment taxes applicable to the taxable income of Employee
resulting from the lapse of Restrictions.
Section 4.4 - Merger, Consolidation, Exchange, Acquisition,
Liquidation or Dissolution
In the event that the Company is succeeded by another
corporation in a reorganization, merger, consolidation, acquisition
of property or stock, separation or liquidation, the Board or the
Committee may, in its absolute discretion and on such terms and
conditions as it deems appropriate, provide, by a resolution adopted
prior to the occurrence of the reorganization, merger,
consolidation, acquisition of property or stock, separation, or
liquidation, that for some period of time prior to such event, (i)
all Restrictions on such shares of Legended Stock shall terminate
or expire, (ii) obligations of the Company in relation to such
shares of Legended Stock shall be assumed by such successor
corporation, (iii) such shares of Legended Stock shall be cancelled
and replaced by substitute shares of Legended Stock of the successor
corporation or (iv) such shares of Legended Stock shall be forfeited
to the Company in consideration for a cash payment in an amount to
be determined by the Committee.
Section 4.5 - Restrictions on New Shares
In the event that the outstanding shares of the Company's
Common Stock are changed into or exchanged for a different number
or kind of shares or other securities of the Company or of another
corporation pursuant to a merger of the Company into another
corporation, or the exchange of all or substantially all of the
assets of the Company for the securities of another corporation, or
the acquisition by another corporation of 80% or more of the
Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, or a stock split-up or stock dividend,
such new or additional or different shares or securities which are
attributable to Employee in his capacity as the owner of the
Legended Stock, shall be considered to be Legended Stock and shall
be subject to all of the Restrictions, unless the Committee
provides, pursuant to Section 4.4 or Section 4.3(b), for the
expiration of the Restrictions on the shares of Legended Stock
underlying the distribution of the new or additional shares or
securities.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. Any dispute
or disagreement which shall arise under or as a result of or
pursuant to this Agreement or the grant or issuance of Legended
Stock shall be determined by the Committee in its sole discretion.
All actions taken and all interpretations and determinations made
by the Committee in good faith shall be final, binding and
conclusive upon Employee, the Company and all other interested
persons. No member of the Committee shall be personally liable for
any action, determination, or interpretation made in good faith with
respect to the Plan or the Legended Stock.
Section 5.2 - Legended Stock Not Transferable
Neither the Legended Stock nor any interest or right therein
or part thereof shall be liable for the debts, contracts, or
engagements of Employee or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy) and any attempted
disposition thereof shall be null and void and of no effect;
provided, however, that this Section 5.2 shall not prevent transfers
by will or by the applicable laws of descent and distribution.
Section 5.3 - Conditions to Issuance of Stock Certificates
The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock pursuant to this
Agreement prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other qualification
of such shares under any state or Federal law or under rulings or
regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Committee shall, in
its absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in
its absolute discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time as the
Committee may from time to time establish for reasons of
administrative convenience.
Section 5.4 - Escrow
The Treasurer or such other escrow holder as the Committee may
appoint shall retain physical custody of the certificates
representing the Legended Stock, including shares of Legended Stock
issued pursuant to Section 4.5, until all of the Restrictions expire
or shall have been removed; provided, however, that in no event
shall Employee retain physical custody of any certificates
representing Legended Stock issued to him.
Section 5.5 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary
and any notice to be given to the Employee shall be addressed to him
at the last known address shown on Company records. By a notice
given pursuant to this Section, either party may hereafter designate
a different address for notices to be given to him. Any notice
which is required to be given to Employee shall, if Employee is then
deceased, be given to Employee's personal representative if such
representative has previously informed the Company of his or her
status and address by written notice under this Section. Any notice
shall have been deemed duly given when enclosed in a properly sealed
envelope or wrapper addressed as aforesaid, deposited (with postage
prepaid) in a post office or branch post office regularly maintained
by the United States Postal Service.
Section 5.6 - Rights as Stockholder
Except as otherwise provided herein, the holder of the Legended
Stock shall have all the rights of a stockholder with respect to the
Legended Stock, including the right to vote the Legended Stock and
the right to receive all dividends or other distributions paid or
made with respect to the Legended Stock.
Section 5.7 - Entire Agreement; Modification
This Agreement constitutes the entire agreement between the
parties hereto and supersedes any and all other written or oral
agreements, understandings, representations or proposals which may
have been made prior to or concurrently with the execution of the
Agreement. No modification or amendment of this Agreement or any
additional agreement concerning Legended Stock will take effect
unless it is approved by the Committee and is in writing and signed
by Employee and the Vice President of Human Resources. Any
modification, amendment, or additional agreement must expressly
state the intention of the parties to modify or supplement the terms
of this Agreement.
Section 5.8 - Receipt of Documents
Employee acknowledges the receipt of FY 93 Executive Bonus Plan
with Stock Award Deferral Option, the Incentive Compensation Plan
of 1990 as amended and restated May 6, 1992, Plan prospectus
documents, and tax information. Employee acknowledges that he has
been encouraged to seek tax and securities counsel before making the
election herein.
Section 5.9 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this
Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto.
EMPLOYEE BECKMAN INSTRUMENTS, INC.
____________________________ By_________________________________
Richard K. Sears
Vice President - Human Resources
Date:_______________________
Exhibit 10.21
Certification of Foreign Language Document
Attached hereto is a fair and accurate English translation of the
following document which in its original form appears in the
Japanese language:
Loan Agreement (Multiple Advance) made as of the 30th day
of September 1993 by and between Beckman Instruments
(Japan) Ltd., a corporation organized and existing under
the laws of Japan and The Industrial Bank of Japan,
Limited, a Japanese bank.
I certify under penalty of perjury that the foregoing is true and
correct.
KENJI YAMAURO
Kenji Yamamuro
Controller
Beckman Instruments (Japan) Ltd.
December 21, 1993
(Date)
LOAN AGREEMENT
(Multiple Advance)
September 30, 1993
TO: The Industrial Bank of Japan, Limited
3-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan
Article 1 (Borrowing Clause)
Based upon the terms and conditions set forth in the following
Articles, I have promised to borrow the amount set forth
below, subject further to the terms and conditions set forth
in the Agreement on Bank Transactions separately executed and
delivered to your bank.
1. Amount: The aggregate principal amount of the Loan shall be
JPY 500,000,000 (five hundred million yen) being made available
in several advances; provided, that the date and amount of each
advance shall be determined by further agreement with you. If
the amount required by me has been reduced due to changes in its
plan or otherwise, the above-described amount may be reduced by
further agreement with your bank. Notwithstanding this
Agreement, I confirm that you may reduce, or refuse to make
available, the aforesaid amount if any one of the items
specified in Article 5 of the Agreement on Bank Transaction or
Article 7 of this agreement is applicable to me or the Guarantor
at the time of an advance.
2. Purpose: The purpose of the Loan is for working capital.
3. Maturity Date: The Maturity Date shall be September 30, 1999.
4. Repayment: The principal of the Loan shall be repaid on the
Maturity Date.
5. Interest Rate: For advances drawn down on or before
September 30, 1993, the interest rate shall be 4.8% p.a.
For advances drawn down on or after 1 October, 1993, the
interest rate shall be the Long-Term Prime Lending Rate
prevailing on the date of draw down. The Interest shall
be calculated on the basis of a year of three hundred
sixty five (365) days.
6. Interest Payment Date: The Interest Payment Dates shall mean
the last day if March, June, September and December in
each year, commencing on December 30, 1993, the last such
Interest Payment Date to be on the Maturity Date.
7. Manner of Interest Payment: Interest shall be payable with
respect to each Loan in arrears on each Interest Payment
Date thereof, initially, for the period from and
including the date of advance thereof, to and including
the immediately following. Interest Payment Date
thereof, and thereafter from and including the day
immediately following each Interest Payment Date thereof
to and including the next Interest Payment Date thereof.
Or, in the case of the Final Payment, the Maturity Date
thereof.
8. Default Interest: In the event that I fail to perform any of
my obligations hereunder when due, I shall pay default
interest which shall be 14% per annum (based on a year of
365 days).
Article 2 (Prepayment)
1. If I intend to pay, prior to the specified maturity Date, any
or all of my obligations under this Agreement, I shall obtain
your prior approval thereto.
2. In case of a prepayment as aforesaid where applicable Interest
Rate is higher than your Long term Prime Lending Rate ("LTPR")
on the Prepayment Date, I shall pay you forthwith a prepayment
commission which is to be calculated based upon the interest
rate difference between the applicable Interest Rate and the
LTPR for the period from and including the Prepayment Date to
and including the Maturity Date.
Article 3 (Assignment of Credit)
1. I agree that you may assign to other financial institutions in
the future any or all of my obligation hereunder without any
notice. However even after such assignment, I may continue to
pay my obligations hereunder to you as provided in Article 1
of this Agreement, and you shall transfer what you receive to
such assignee(s) in proportion to the amount of the Loan(s)
assigned. Moreover you may continue to demand from me payment
of my obligations hereunder.
I confirm that the assigned Loan(s) shall remain subject to
the terms and conditions of the relevant Agreement on Bank
Transactions as notified separately executed and delivered to
you.
2. I confirm as long as you have been so authorized, by such
assignee(s), with respect to the assigned Loan you may act as
agent of such regarding the collection and management thereof.
Article 4 (Financial Report)
At the end of each of my annual fiscal periods, I shall furnish
my business report, balance sheet, profit and loss statement, etc.,
for each such fiscal period to you.
Article 5 (Cost)
All reasonable costs and expenses incurred in connection with
the preparation of this Agreement or otherwise relating hereto or
necessary for the preservation of your rights hereunder, shall be
borne by me.
Article 6 (Notarial Deeds)
I shall, upon your demand at any time, take all necessary
procedures to cause a competent notary public to execute notarial
deeds containing an acknowledgment of my obligations hereunder and
an agreement to the compulsory enforcement thereof.
Article 7 (Immediate Payment)
1. If any of the events set forth in the following clauses shall
apply to me, any and all of my obligations hereunder shall
immediately become due and payable even in the absence of
notice or demand, etc. from you; and I shall pay such
obligations forthwith:
1. If I suspend payment of my debts or if an
application or petition is submitted for bankruptcy,
commencement of composition of creditors,
commencement of corporate reorganization
proceedings, commencement of company arrangement or
commencement of special liquidation.
2. If I become subject to Clearing House to the
procedures for suspension of business transactions.
3. If an order or notice is issued for provisional
attachment, provisional attachment for the purpose
of assuring collection or attachment with respect to
any of my deposits or other credits with you.
4. If my whereabouts become unknown to you due to my
failure to notify you of a change in my address or
any other causes attributable to me.
2. If any of the events set forth in the following clauses shall
apply to the Guarantor, any and all of my obligations
hereunder shall immediately become due and payable even in the
absence of notice or demand, etc. from you; and I shall pay
such obligations forthwith:
1. If the Guarantor suspends payment of its debts or if
an application or petition is submitted for
bankruptcy, commencement of composition of
creditors, commencement of corporate reorganization
proceedings, commencement of company arrangement or
commencement of special liquidation.
2. If the whereabouts of Guarantor become unknown to
you due to failure to notify you of a change in
address or any other causes ascribable to me or the
Guarantor.
3. In the event of any of the following, upon your demand, any
and all obligations I owe you hereunder shall immediately
become due and payable; and I shall pay them forthwith:
1. If I fail to perform all or any part of my
obligations when due.
2. If I violate the terms of any agreement on
transactions with you.
3. If I cease to be wholly owned directly or indirectly
by Beckman Instruments Inc.
4. If the guarantee issued on September 28th, 1993 by
Beckman Instruments Inc. is canceled, terminated or
modified unfavorably to you, or is avoided, or if
the due date thereof is not extended or action which
has the same effect as such an extension is not
taken after the expired thereof.
Article 8 (Non-business Days)
In case the due date of payment of any obligations hereunder
falls on a Sunday or any other holiday, you may change the due date
to the day immediately preceding the same.
Article 9 (Negative Pledge)
With your consent, I shall not, for the purposes of securing
other debt, create, any security interest, upon or with respect to
any of my properties or assets, whether now owned or hereafter
acquired, provided that I shall be permitted to create security
interests (1) with respect to superior rights arising in connection
with taxes to be imposed; (2) with respect to superior rights
arising in connection with carriers', warehousemen's and mechanics'
liens and other similar liens imposed by law arising in the ordinary
course of business and not material in amount; (3) with respect to
superior rights arising in connection with workmen's compensation
laws, unemployment insurance, or pension or other social welfare
legislation; or (4) on properties or assets acquired after the date
hereof, which security interests were in existence prior to such
acquisition or were created at the time of purchase solely to secure
the purchase price of such properties or assets.
Article 10 (Relation to Agreement on Bank Transactions)
Notwithstanding Article 1 of this Agreement, this Agreement
shall govern in case of any conflicts between this Agreement and the
Agreement on Bank Transactions.
Article 3, Article 4, and Article 5 paragraph 2 section 5 of
the Agreement on Bank Transaction shall not apply to this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed in a
single copy which you shall keep in your possession.
BECKMAN JAPAN KK.
BY (SEAL APPLIED)
Exhibit 10.22
TERM LOAN AGREEMENT
between
BECKMAN INSTRUMENTS (JAPAN) LTD.
and
CITIBANK, N.A., TOKYO BRANCH
SEPTEMBER 30, 1993
TERM LOAN AGREEMENT
THIS AGREEMENT made as of the 30th day of September, 1993 by
and between Beckman Instruments (Japan) Ltd., a corporation
organized and existing under the laws of Japan with its principal
office at 6, Sanbancho, Chiyoda-ku, Tokyo 102, Japan (hereinafter
called the "Company"), and Citibank, N.A., Tokyo Branch at 3-14,
Higashi-Shinagawa 2-chome, Shinagawa-ku, Tokyo, Japan, a United
States national banking association and a foreign bank branch
licensed in Japan (hereinafter called the "Bank".)
WITNESS:
WHEREAS, the Company wishes to borrow certain funds from the
Bank, and the Bank is willing to lend such funds, all on the terms
and conditions hereinafter set forth; and
WHEREAS, Beckman Instruments, Inc., a Delaware corporation (the
"Guarantor"), has agreed to provide guaranty (the "Guaranty") with
respect to performance of any and all obligations of the Company
hereunder.
NOW THEREFORE, the parties hereby agree as follows:
ARTICLE 1: AMOUNT AND TERMS OF THE LOAN
Section 1.01
Subject to the terms and conditions hereof, and in reliance on
the representations and warranties contained herein, the Bank hereby
agrees to make a term loan (the "Loan") to the Company in the total
principal amount of seven hundred million Japanese Yen 700,000,000
(hereinafter the "Principal Amount") to be used by the Company for
the refinancing of existing short term borrowing.
Section 1.02
The Loan shall be drawn down in one lump sum on September 30,
1993 (hereinafter the "Drawdown Date") in exchange for one (1)
promissory note (hereinafter the "Note"). The Note shall be issued
by the Company and shall be payable to the order of the Bank at the
office of the Bank hereinabove set forth (hereinafter the "Office
of the Bank"). The Note shall be in form and substance satisfactory
to the Bank and shall include the Drawdown Date, and the Principal
Amount and the date of maturity, as follows:
Amount of Note Maturity Date
J. Yen 700,000,000 September 30, 1998
(the "Maturity Date")
Section 1.03
The Company shall repay the Loan by repayment of the Principal
Amount and any other outstanding sum under this Agreement in one
lump sum on the Maturity Date. The Company may not prepay the Loan
(whether in whole or in part) prior to the Maturity Date. Repayment
shall be made in Japanese Yen.
Section 1.04
The Company shall pay interest on the Principal Amount at the
rate of 4.6% per annum (hereinafter the "Contract Rate"). Interest
shall accrue in Japanese Yen and shall be calculated on the basis
of a 365-day year for the actual number of days elapsed. The
payment of interest shall be made to the Bank semi-annually in
arrears on the last Business Day of March and September each year.
As used herein, Business Day means a day other than a Saturday,
Sunday or day on which banks are required to close in Tokyo, Japan.
Any such day on which an interest payment shall be made hereunder
is hereinafter called an "Interest Payment Date."
If the Company shall fail to pay when due (whether at stated
maturity, by acceleration or otherwise) the whole or any portion of
the principal of the Loan, interest thereon or any other amount due
from the Company under this Agreement, the Company agrees to pay the
default interest on such past due principal of the Loan and, to the
fullest extent permitted by applicable law, on such past-due
interest and other amounts, in either case from and including the
due date thereof until the same shall be paid in full, at a rate per
annum equal to two percent (2%) above the Contract Rate. This
Section 1.04 shall supercede the provision of Article 3 of the
Agreement for Banking Transactions executed by and between the
parties hereto on the 1st day of May, 1978 (hereinafter the
"Agreement for Banking Transactions") with respect to the Loan.
Section 1.05
In the event that there are changes in applicable laws or
regulations, or in the interpretation thereof, by any governmental
authority charged with the administration thereof, which would
impose, modify or deem applicable any reserve requirements against
the Loan under this Agreement, or which would impose any other
condition with respect to this Agreement, the Loan, its principal
or interest, or the Note issued thereunder, the result of any of the
foregoing being to increase the cost to Bank of making or
maintaining the Loan, then the Company, upon the Bank's request and
subject to Japanese Government approval, if necessary, hereby agrees
either to pay to the Bank an amount so as to reimburse the Bank the
amount corresponding to such increased costs to the Bank or to take
any other alternative action so as to indemnify the Bank with
respect to any such increased costs.
Section 1.06
Any and all payments by the Company hereunder shall be made
free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges, withholdings and
all liabilities with respect thereto, provided that the Bank provide
the Company with a certificate of the tax authority under Article
180 of the Income Tax Law, excluding (i) taxes imposed on the Bank's
income, (ii) franchise taxes imposed on the Bank by the jurisdiction
under the laws of which the Bank is organized or any political
subdivision thereof, and (iii) if applicable, taxes imposed on the
Bank's income, and franchise taxes imposed on the Bank, by the
jurisdiction of the Bank's lending office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Company shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder
(i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this paragraph) the Bank
will receive and retain an amount equal to the sum the Bank would
have received had no such deductions been made, (ii) the Company
shall make such deductions and (iii) the Company shall pay the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law and shall provide the
Bank with proper evidence of such payment. In addition, the Company
agrees to pay any stamp taxes which arise from any payment made
hereunder or from the execution and delivery of this Agreement and
the Note (hereinafter referred to as "Other Taxes"). The Company
will indemnify the Bank for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this paragraph) paid by
the Bank or any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted.
Without prejudice to the survival of any other agreement contained
herein our agreements and obligations contained in this paragraph
shall survive the payments in full of the Loan and principal and
interest hereunder.
ARTICLE II: REPRESENTATIONS AND WARRANTIES
Section 2.01
The Company represents and warrants as follows:
(a) The Company is a corporation duly organized under the laws of
Japan, and is duly qualified to do business wherever necessary
to carry on its present operations.
(b) The making and performance of this Agreement and of the Note
are within the Company's corporate powers, have been duly
authorized by all necessary corporate actions and do not
contravene any law or any contractual restriction binding on
the Company.
(c) This Agreement is, and the Note when duly executed and
delivered will be, legal and binding obligations of the
company, enforceable against it in accordance with their
respective terms, subject, however, to limitations with
respect to restrictions imposed by law in connection with
bankruptcy, company reorganization and similar proceedings.
(d) There are no pending or threatened actions or proceedings
before any court or administrative agency which may materially
adversely affect the Company's financial condition or
operations.
(e) The latest balance sheet and related earning statement of the
Company for the fiscal year then ended have been furnished to
the Bank, and they correctly set forth the Company's financial
condition as of such date and the results of its operations
for such period, and since such date there has been no
material adverse change in such condition or operations.
(f) The claims of the Bank against the Company under this
Agreement rank at least pari passu with all other unsecured
debts of the Company.
ARTICLE III: COVENANTS OF THE COMPANY
Section 3.01
During the terms of this Agreement and for so long as any
obligation is outstanding under the Loan or the Note, the Company
will furnish to the Bank (i) within one hundred and twenty (120)
days after the close of each fiscal year, the Company's annual
report and accounts including the balance sheet and profit and loss
statement for such period, audited by independent public
accountant(s) of recognized standing, and (ii) such other financial
information as the Bank may reasonably require from time to time,
but subject to the conditions that the Bank maintain such financial
information in strict confidence, that the Bank utilize such
financial information only for the general banking purposes,
including, but not limited to, analysis of credit worthiness of the
Company and enforcement of the Bank's rights under this Agreement,
and that the information be disclosed only to the Lenders
(hereinafter defined) who agree to be bound by these conditions.
The Lenders shall be deemed to have agreed to be bound by these
conditions upon purchase of the Participation (hereinafter defined).
Section 3.02
During the term of this Agreement and for so long as any
obligation is outstanding under the Loan or the Note, the Company
will furnish to the Bank simultaneously with such financial
statements a certificate signed by a duly authorized officer of the
Company confirming that no event has occurred nor is continuing
which would constitute an Event of Default (hereinafter defined) or
would constitute such an Event of Default but for the requirement
that notice be given or time elapse or both.
Section 3.03
During the term of this Agreement and for so long as any
obligation is outstanding under the Loan or the Note, without the
prior written consent of the Bank, the Company will not enter into
any merger or consolidation or sell or otherwise transfer or
encumber a substantial portion of its assets so as to cause material
adverse changes(s) to the Company's operations or financial
condition.
ARTICLE IV: CONDITIONS OF LENDING
Section 4.01
The obligation of the Bank to make the Loan hereunder shall not
become effective unless all of the following conditions precedent
are fully satisfied:
(a) The Bank shall have received on or before the Drawdown Date
the following documents in form and substance satisfactory to
the Bank: (i) Certified copy of the Company's Articles of
Incorporation, (ii) Certified extract from the minutes of a
meeting of the Board of Directors of the Company authorizing
the Loan, this Agreement and the issue of the Note, (iii)
Legal evidence showing that the person(s) who executed this
Agreement, the Note and other related documents were fully
authorized to do so and that the signature or seal of such
person(s) affixed to this Agreement, the Note and other
documents are genuine and (iv) the fees contained in the fee
letter of even date herewith.
(b) The representations and warranties made by the Company in
connection with the execution and delivery of this Agreement
and the Note or contained in any certificate furnished
pursuant hereto continue to be true and correct as if made on
the Drawdown Date, and there shall not have occurred, in the
opinion of the Bank, any material adverse change in the
Company's financial, business and other conditions since the
date hereof.
(c) There shall not have occurred or been continuing any of the
following events:
(1) Any acts of force majeure preventing the Bank from
complying with this Agreement, including but not limited
to, foreign exchange control or other restriction or
change on capital outflows or inflows put into effect by
the Government of Japan, the United States of America or
any other government, their subdivision, their agency or
otherwise;
(2) Any representation or warranty made by the Company in
connection with the execution and delivery of this
Agreement or the Note or contained in any certificate
furnished pursuant hereto being found at any time
incorrect in any material respect when made;
(3) Default by the Company in the performance of any terms,
covenants or agreements contained in this Agreement; or
(4) Any circumstances specified in sub-paragraphs (d) through
(i) of Section 5.01.
(d) The Bank shall have received from the Guarantor the Guaranty
with respect to the Company's obligations under this Agreement
in the form and substance satisfactory to the Bank. The
Company shall not be required to furnish to the Bank any other
security with respect to the Loan in addition to the Guaranty.
This section 4.01(d) shall supersede the provision of Article
4 of the Agreement for Banking Transactions with respect to
the Loan.
(e) The Bank shall have received on or before the Drawdown Date
the following documents in form and substance satisfactory to
the Bank: (i) Certified copy of the Guarantor's Articles of
Incorporation, (ii) Certified extract from the minutes of a
meeting of the Board of Directors of the Guarantor authorizing
the Guaranty, (iii) Legal evidence showing that the person(s)
who executed the Guaranty, and other related documents were
fully authorized to do so and that the signature of such
person(s) affixed to the Guaranty and other documents are
genuine and (iv) Legal evidence showing that the Guarantor is
duly organized and validly existing and in good standing.
ARTICLE V: EVENTS OF DEFAULT
Section 5.01
If any of the following events (hereinafter the "Events of
Default") shall occur and be continuing with respect to the Company:
(a) The Company shall default on any payment of principal of or
interest on the Loan or the Note; or
(b) Any representation or warranty made in connection with the
execution and delivery of this Agreement or the Note or
contained in any certificate furnished pursuant hereto shall
prove to be incorrect when made in any material respect; or
(c) The Company shall default in a material manner in the
performance of any other terms, covenants or agreements
contained in this Agreement; or
(d) The Company shall become insolvent or bankrupt or make any
assignment for the benefit of creditors, or consent to the
appointment of a trustee or receiver, or liquidator shall be
appointed for the Company or for a substantial part of its
property; or bankruptcy, reorganization, insolvency or similar
proceedings shall be instituted by or against the Company
under the laws of any jurisdiction; or
(e) The Company shall fail to pay indebtedness for borrowed money
or guarantees thereon or any other indebtedness other than
under this Agreement, owing by the Company, or any interest or
premium thereon, when due, whether such indebtedness shall
become due by scheduled maturity, by required prepayment,
acceleration, by demand or otherwise; or the Company shall
fail to comply with any covenant or provision other than under
this Agreement which failure causes acceleration of any
indebtedness other than this Agreement owed by the Company, or
there occurs in the Company any event causing acceleration of
any indebtedness other than under this Agreement owed by the
Company, or any interest or premium thereon; or
(f) The Clearing House in observance of its rules shall take
procedures for suspension of the transactions of the Company
with banks and similar institutions; or
(g) An order or notice of provisional attachment, preservative
attachment or attachment shall be dispatched in respect of any
deposit or any other credits of the Company with the Bank; or
(h) Any of the claims of the Bank against the Company under this
Agreement shall fail for any reason to rank at least pari
passu with all other unsecured debts of the Company.
then, all obligations then outstanding hereunder shall become and
be immediately due and payable without presentment, demand, protest,
presentation of the Note, or other notice of any kind, all of which
are expressly waived by the Company.
Section 5.02
If any of the items (a) through (d) of Section 5.01 shall occur
and be continuing with respect to the Guarantor or the Guarantor
shall fail to pay any portion of indebtedness for borrowed money or
guarantees thereon or any other indebtedness of US$5,000,000 or
more, owing by the Guarantor, or any interest or premium thereon,
when due, whether such indebtedness shall become due by scheduled
maturity, by required prepayment, acceleration, by demand or
otherwise or the Guarantor shall fail to comply with any covenant
or provision which failure causes acceleration of any indebtedness
of US$5,000,000 or more owed by the Guarantor, or there occurs in
the Guarantor any event causing acceleration of any indebtedness of
US$5,000,000 or more owed by the Guarantor or any interest or
premium thereon; provided, that, the event set forth in this Section
5.02 constitutes an Event of Default only when the Bank declares
default of the Loan based upon such event,
then, all obligations then outstanding hereunder shall become and
be immediately due and payable without presentment, demand, protest,
presentation of the Note, or other notice of any kind, all of which
are expressly waived by the Company.
Section 5.03
This Article V shall supersede the provision of Article 5 of
the Agreement for Banking Transactions with respect to the Loan.
ARTICLE VI: MISCELLANEOUS
Section 6.01
The Company acknowledges that, in connection with the
transactions under this Agreement, the Bank will enter into certain
hedging arrangements (including but not limited to swap
transactions) with third parties. Such hedging arrangements rely
upon performance by the Company under this Agreement. The Company
shall indemnify the Bank for, and hold the Bank harmless against,
any damages, losses, costs or expenses arising in connection with
any and all related hedging transactions between the Bank and third
parties due to early termination of the Loan pursuant to Article V
above. Such damages, losses, costs and expenses shall be limited
to those reasonable under the prevailing market practice and shall
include all closeout and associated expenses to enter into the
market to obtain any counter-transactions necessary.
Section 6.02
The Bank may at any time, and from time to time, sell or
otherwise transfer a participation in the Loan ("Participation") to
one or more banks, finance companies, insurance companies, other
financial institutions or funds (each, a "Lender") in or to all or
a portion of its rights and obligations under this Agreement and the
Note. Any Lender may sell or otherwise transfer its Participation.
Payments by the Company under this Agreement (or on the Note) shall
in all cases be made to the Bank at the Office of the Bank and the
Company shall not be concerned with any payment which may be due to
a Lender as a result of a sale or transfer of a Participation.
Section 6.03
All payments under this Agreement and the Note shall be made
in Japanese Yen at the Office of the Bank and the Company hereby
indemnifies the Bank against any loss, cost and expense incurred
where payment is made in another currency or currencies or at
another place. Where any payment is made in a currency other than
Japanese Yen, the amount due shall be satisfied only to the extent
that the currency tendered can purchase Japanese Yen at the Bank's
quoted rate on the date payment was due.
Section 6.04
No failure or delay on the part of the Bank in exercising any
power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right,
power, or privilege preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege hereunder
or given by law.
Section 6.05
All notices, demands and communications in connection with this
Agreement, the Loan and the Note shall be given in writing to the
other party at the following addresses by prepaid registered mail:
If to the Company: Beckman Instruments (Japan) Ltd.
6, Sanbancho, Chiyoda-ku, Tokyo 102
JAPAN
Attention: Kenji Yamamuro
Director
Finance and Administration
Telephone No.: (813) 3221-5911
Facsimile No.: (813) 3221-5912
with a copy to: Beckman Instruments, Inc.
2500 Harbor Boulevard, Box 3100,
Fullerton, CA 92634-3100, U.S.A.
Attention: General Counsel
Telephone No.: (714) 773-6904
Fascimile No.: (714) 773-7936
If to the Bank: 3-14, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo
JAPAN
Attention: Capital Markets Group
Telephone No.: (813) 5462-9150
Fascimile No.: (813) 5462-5154
Any notice, demand or communication by facsimile must also be sent
by prepaid registered mail.
Section 6.06
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted principles of good
accounting practice.
Section 6.07
The Company agrees to pay all reasonable legal costs and
expenses in connection with the preparation, execution, and delivery
of this Agreement and costs and expenses, including legal costs and
expenses, in connection with the enforcement of this Agreement and
the Note.
Section 6.08
This Agreement may be amended or supplemented, by mutual
consent in writing, in the event any circumstanced requiring such
amendment or supplementation shall be considered to have arisen
after the signing of this Agreement.
Section 6.09
This Agreement together with the Agreement for Banking
Transactions sets forth the entire understanding of the parties with
regard to the subject matter, and supersedes all other negotiations,
prior discussions and prior agreements or understandings, whether
written or oral, relating to the subject matter. To the extent that
the provisions of this Agreement are inconsistent with the
provisions of the Agreement for Banking Transactions, the provisions
of this Agreement shall prevail.
Section 6.10
(a) This agreement shall inure to the benefit of the Bank and its
successors and assigns including any subsequent holder or
holders of the Note, and the term "Bank" shall include any
such holder or holders whenever the context permits. All
agreements, representations and warranties, covenants and
undertakings contained in this Agreement are for the benefit
of each and every Lender from time to time holding a
Participation in the Loan.
(b) Neither the obligations of the Company under this Agreement or
under the Note, nor any rights of the Company under this
Agreement or the Note, shall be assigned, transferred or
otherwise disposed of by the Company.
Section 6.11
This Agreement, the Note and any other documents required under
this Agreement shall be governed by the laws of Japan. The Company
hereby irrevocably submits to the non-exclusive jurisdiction of the
Tokyo District Court and any New York State or Federal Court of the
United States of America sitting in New York City, and all courts
of appeal therefrom, with respect to this Agreement, the Note and
any matter, action or proceedings arising therefrom. The Company
waives any right to claim immunity from suit or against enforcement
of a judgement or to claim that the forums mentioned in this Section
are inconvenient.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers.
Company: Beckman Instruments (Japan) Ltd.
By STAMP APPLIED
Name:
Title:
Bank: Citibank, N.A., Tokyo Branch
By STAMP APPLIED
Name:
Title:
Exhibit 10.23
Certification of Foreign Language Document
Attached hereto is a fair and accurate English translation of the
following document which in its original form appears in the
Japanese language:
Term Loan Agreement made as of the 9th day of December
1993 by and between Beckman Instruments (Japan) Ltd., a
corporation organized and existing under the laws of
Japan and The Dai-Ichi Kangyo Bank Limited, a Japanese
bank.
I certify under penalty of perjury that the foregoing is true and
correct.
KENJI YAMAMURO
Kenji Yamamuro
Controller
Beckman Instruments (Japan) Ltd.
December 21, 1993
(Date)
[THIS IS AN ENGLISH TRANSLATION. THE OFFICIAL TEXT WILL
BE EXECUTED IN THE JAPANESE LANGUAGE, AND SHALL GOVERN IN
THE EVENT OF CONFLICT.]
TERM LOAN AGREEMENT
This Term Loan Agreement made as of December 9, 1993, by and between
Beckman Instruments (Japan) Limited, a corporation organized and
existing under the laws of Japan with its principal office at 6,
Sanbancho, Chiyoda-ku, Tokyo 102, Japan ("BIJ") and The Dai-Ichi
Kangyo Bank Limited, a corporation organized and existing under the
laws of Japan with its principal office at 1-5, 1-chome,
Uchisaiwaicho, Chiyoda-ku, Tokyo 100, Japan ("DKB") is entered to
memorialize the complete understanding of the parties concerning the
December 9, 1993, Five Hundred Million Yen ("Amount") loan to BIJ
by DKB ("Loan").
Article 1 Borrowing Clause
Based upon the terms and conditions set forth in the following
Articles, BIJ has borrowed and DKB has loaned the Amount, subject
further to the terms and conditions set forth in the Agreement on
Bank Transactions dated July 30, 1977 ("ABT") separately executed
by the parties.
1. Amount: The Loan shall be drawn on December 9, 1993, in one
lump sum of Yen 500,000,000 (Five hundred million yen).
2. Purpose: The purpose of the Loan is for working capital.
3. Maturity Date: The Maturity Date shall be December 9, 1998.
4. Repayment: The principal of the Loan shall be repaid on the
Maturity Date unless earlier prepaid as set forth in this
Agreement.
5. Interest Rate: The Interest Rate shall be 3.7%. (Three and
seven-tenths percent) per annum. Interest shall be calculated
on the basis of a year of three hundred sixty-five (365) days.
6. Interest Payment Dates: The "Interest Payment Dates" shall
mean each March 9, June 9, September 9 and December 9
occurring on or prior to the Maturity Date, and commencing on
March 9, 1994. The last Interest Payment Date shall be the
Maturity Date.
7. Manner of Interest Payment: Interest shall be payable with
respect to outstanding principal of the Loan in arrears on
each Interest Payment Date. On the initial Interest Payment
Date, interest shall apply to the period from and including
the date of advance to and including the first Interest
Payment Date. On subsequent Interest Payment Dates, interest
shall apply to the period measured from and including the day
following the preceding Interest Payment Date to and including
the then current Interest Payment Date or, in the case of the
final payment, the Maturity Date.
8. Settlement Account of Principal and Interest: Principal and
interest shall be withdrawn, without BIJ issuing a check or
similar item, by DKB from the BIJ Current Account (#0129968)
with the DKB Hibiya Branch.
9. Default Interest: In the event that BIJ fails to pay any of
its obligations hereunder when due, BIJ shall pay default
interest which shall be 14% per annum (based on a year of 365
days).
Article 2 Prepayment
1. Prior to the specified Maturity Date, BIJ may not prepay the
Loan, whether in whole or part.
2. In case of a prepayment arising as a result of BIJ default
pursuant to Article 7, if the Interest Rate is higher than the
prime rate on "DKB's Fixed Interest Long Term Loan" (the "FILT
Prime Rate") on the Prepayment Date, BIJ shall pay a
prepayment commission. The prepayment commission shall equal
the difference between the interest that would have accrued at
the Interest Rate and the interest that would accrue over the
remaining term of the Loan if the FILT Prime Rate applied to
the Loan. The remaining term shall be considered to commence
from and including the day following the Prepayment Date to
and including the Maturity Date.
Article 3 Assignment
1. DKB may assign to other financial institutions any or all of
BIJ's payment obligations without any notice. In that event:
1. DKB shall continue to demand payment from BIJ and
confirms and shall confirm that the Loan shall remain
subject to the terms and conditions of this Agreement
exclusively;
2. BIJ confirms and upon request shall confirm that the Loan
shall remain subject to the terms and conditions of this
Agreement exclusively;
3. BIJ shall continue to pay obligations hereunder to DKB as
provided in Article 1 of this Agreement, and DKB shall
transfer the receipts to such assignee(s) in proportion
to the amount of the Loan assigned or otherwise as DKB
may have agreed with the assignee.
4. BIJ confirms that as long as DKB has been authorized by
such assignee(s) with respect to the assigned loan, DKB
may act as agent of such assignee(s) regarding the
collection and management thereof.
2. The assigned Loan shall remain subject to the terms and
conditions of this Agreement.
Article 4 Financial Report
Within On Hundred Twenty (120) days following the end of its fiscal
year, BIJ shall furnish DKB a copy of its annual financial report.
Article 5 Costs
If it should become necessary for DKB to take legal action to
collect funds and to enforce its rights to receive any payment which
is due, or becomes due as a result of a default by BIJ as set forth
in Article 7, DKB's reasonable costs and expenses, including fees
of outside counsel, actually paid to unrelated third parties shall
be borne by BIJ, but only if such costs and expenses directly arise
from and are incurred in connection with such action for collection
and enforcement of rights.
Article 6 Closing and Post-closing Documents
1. No later than December 20, 1993, a signed original guaranty in
the form attached shall be provided to DKB by Beckman
Instruments, Inc. For purposes of funding on schedule, DKB
has accepted a facsimile copy of the guaranty delivered under
the representation that the original is being sent by courier.
2. No later than December 24, 1993, BIJ shall provide DKB with a
copy of its Board of Directors' resolution authorizing BIJ to
enter this Agreement.
Article 7 Immediate Payment
1. If any of the following events shall apply to BIJ, any and all
of BIJ's obligations under this Agreement immediately shall
become due and payable, even in the absence of notice or
demand from DKB, and BIJ shall pay such obligations forthwith:
1. If BIJ suspends payment of its debts or if an application
or petition is submitted for bankruptcy, commencement of
composition of creditors, commencement of corporate
reorganization proceedings, commencement of company
arrangement or commencement of special liquidation.
2. If the Clearing House suspends the transactions of BIJ
with banks and similar companies.
3. If an order or notice is issued for provisional
attachment, provisional attachment for the purpose of
assuring collection or attachment with respect to any of
BIJ's deposits or other credits with DKB.
4. If the whereabouts of BIJ become unknown to DKB due to
BIJ's failure to notify DKB of a change in address or any
other causes attributable to BIJ.
2. If any of the following events shall apply to any guarantor of
BIJ's payment obligations under this Agreement, any and all of
BIJ's obligations under this Agreement immediately shall
become due and payable, even in the absence of notice or
demand from DKB, and BIJ shall pay such obligations forthwith:
1. If the guarantor suspends payment of its debts or if an
application or petition is submitted for bankruptcy,
commencement of composition of creditors, commencement of
corporate reorganization proceedings, commencement of
company arrangement or commencement of special
liquidation.
2. If the whereabouts of guarantor become unknown to DKB due
to failure to notify DKB of a change in address or any
other causes attributable to BIJ or the guarantor.
3. If any of the following events should occur, upon DKB's demand
any and all of BIJ's payment obligations under this Agreement
immediately shall become due and payable, and BIJ shall pay
such obligations forthwith:
1. If BIJ fails to pay any amount payable under this
Agreement when due and fails to cure this defective
performance by the end of the second complete business
day following receipt of demand from DKB.
2. If BIJ should violate any other provision of this
Agreement and fail to remedy such defective performance
within thirty (30) days following receipt of demand from
DKB.
3. If the ultimate parent of BIJ ceases to be Beckman
Instruments, Inc.
4. If the guarantee issued effective December 9, 1993, by
Beckman Instruments, Inc., is terminated, is modified
without prior acceptance of the modification by DKB, is
avoided or otherwise rendered void or unenforceable, or
is not extended directly, or indirectly by action which
has the same effect as an extension, to match any
extension of this Agreement or of the opportunity for BIJ
to perform its obligations under this Agreement.
Article 8 Non-Business Days
In case the due date of payment of any obligation hereunder falls
on a Sunday or any other holiday, the due date shall be the
immediately preceding business day.
Article 9 Notices
All legal notices and demands in connection with this Agreement or
the Loan shall be set forth in writing and shall be delivered to the
other party at the following addresses by personal delivery, prepaid
certified mail or by certified delivery courier as follows:
If to BIJ: Beckman Instruments (Japan) Ltd.
6, Sanbancho, Chiyoda-ku, Tokyo 102
JAPAN
Attention: Kenji Yamamuro
Director, Finance & Administration
Phone: (813) 3221-5911
Fax: (813) 3221-5912
WITH A COPY TO:
Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California
USA 92634
Attention: Vice President, General Counsel &
Secretary
Phone: (714) 773 6904
Fax: (714) 773 7936
If to DKB: The Dai-Ichi Kangyo Bank, Ltd.
Hibiya Branch
1-1, 1-chome, Shinbashi, Minato-ku
Tokyo 105, Japan
Attention: Hideshi Nagata
Phone: (813) 3591 3271
Fax: (813) 3508 0816
Article 10 Entire Agreement & Official Language
1. Duplicate original copies of this Agreement shall be executed
by the parties, with each party to receive a fully executed
original, and either original shall be considered valid and
legally binding.
2. This Agreement together with the ABT by and between BIJ and
DKB sets forth the entire understanding of the parties with
regard to the subject matter, and supersedes all other
negotiations, prior discussions and prior agreements or
understandings, whether written or oral, relating to the
subject matter. To the extent that the provisions of the ABT
are inconsistent with the provisions of this Agreement, this
Agreement shall prevail. Article 3, Article 4 and Article 5
of the ABT are superseded entirely by the provisions of this
Agreement.
IN WITNESS WHEREOF, BIJ and DKB execute this Agreement.
Beckman Instruments (Japan) Limited
By: SEAL APPLIED
Name: Taiji Nishimoto
Title: President & Representative Director
The Dai-Ichi Kangyho Bank Limited
By: SEAL APPLIED
Name: Hideshi Nagata
Title: Hibiya Branch General Manager
Exhibit 10.24
AGREEMENT REGARDING RETIREMENT BENEFITS
OF ARTHUR A. TORRELLAS
WHEREAS, Arthur A. Torrellas ("Executive") has been
employed by Beckman Instruments, Inc. ("Company") for approximately
16 years; and
WHEREAS, the Executive and the Company wish to provide an
incentive for the Executive to continue to remain employed by, and
provide unique international expertise to, the Company through
October, 1995, and to provide for an enhanced retirement benefit
should he retire October 31, 1995,
NOW, THEREFORE, this Agreement between the Company and the
Executive ("Agreement") is hereby adopted this 1st day of December,
1993.
1. Retirement Supplement. If Executive retires October
31, 1995, his aggregate pension benefit from the Beckman
Instruments, Inc. Pension Plan ("Pension Plan") and the Beckman
Instruments, Inc. Supplemental Pension Plan ("Supplemental Plan")
shall be increased by 38%. The 38% increase shall be calculated by
first calculating the aggregate single life benefit payable to
Executive from the Pension Plan and the Supplemental Plan. Such
aggregate amount shall be increased by 38%. The increase shall be
payable from the Supplemental Plan (along with any other benefits
which would otherwise be payable from the Supplemental Plan). The
benefit payable from the Pension Plan shall not be changed. If an
optional form of benefit is elected by Executive pursuant to the
terms of the Pension Plan and the Supplemental Plan, then the amount
of the optional form of benefit shall be calculated by using the
single life benefit after the increase described above.
Accordingly, the 38% increase in benefits shall be reflected in any
optional form of benefit.
2. Voluntary Termination Before or After October 31,
1995. The increase referred to in paragraph 1 does not apply if
Executive, before October 31, 1995, or after October 31, 1995,
voluntarily terminates employment (retires). The benefit payable
under such circumstances would be the benefit normally payable from
the Pension Plan and the Supplemental Plan.
3. Surviving Spouse Benefit. Under the Pension Plan
and the Supplemental Plan, a surviving spouse benefit is payable if
Executive dies while employed and while married for at least one
year on the date of his death. If Executive dies prior to October
31, 1995 while still an active employee, then the aggregate
surviving spouse benefit under the Pension Plan and the Supplemental
Plan shall be increased by 38%. The increase shall be calculated
according to the method set forth in paragraph 1. If Executive dies
after the enhanced retirement benefits described in paragraph 1
commence, then the method of calculation set forth in paragraph 1
will result in the increased benefit applying to the survivor
portion (if any) of the optional form of benefit (if any) elected
by Executive. For example, if Executive elected a joint and
survivor benefit with his surviving spouse as the contingent
annuitant, then the payments which are continued to his surviving
spouse after his death would reflect the increase described in
paragraph 1.
4. Termination by Company. If, prior to October 31,
1995, the Company terminates Executive, other than for "Cause" (as
defined in the Change of Control Agreement dated as of May 1, 1989),
then the 38% increase to Executive's aggregate benefit referred to
in paragraph 1 shall apply, calculated according to the benefit
earned by Executive under the Pension Plan and the Supplemental Plan
through the date of Executive's termination of employment. The
increase shall not apply if Executive is terminated at any time for
"Cause," or at any time after October 31, 1995.
5. No Competition. The increased benefits referred to
in this Agreement shall not be payable if, within one year of
Executive's termination of employment, he engages in business
activities, as an employee or otherwise, which the Company
reasonably determines are in competition with the Company. If the
Company determines that the competition prohibited by this paragraph
has occurred during such one year period, the Company shall (1)
suspend further payment of the increased portion of the benefits,
and (2) offset against future benefit payments from the Supplemental
Plan the increased portion of any benefits which had previously been
paid to Executive.
6. This Agreement shall be considered an exhibit to the
Supplemental Plan and shall constitute an official plan document for
the Supplemental Plan.
7. This Agreement shall be construed in accordance with
applicable federal law, and to the extent that state law is not
preempted by federal law, according to the laws of the State of
California.
8. This Agreement shall not modify any of the terms and
conditions of Executive's employment except as explicitly set forth
herein.
9. This Agreement is the entire agreement between the
parties and supercedes any and all prior and contemporaneous oral
and written agreements and discussions regarding the subject of
enhanced retirement benefits discussed herein. The parties may only
amend this Agreement by the mutual execution of a document
referencing this Agreement and pursuant to a resolution of the
Company's Board of Directors approving such amendment.
This Agreement is entered into this 20th day of December,
1993.
EXECUTIVE
By ARTHUR A. TORRELLAS
Arthur A. Torrellas
COMPANY
BECKMAN INSTRUMENTS, INC.
By JOHN P. WAREHAM
John P. Wareham
Its President
Exhibit 13
FINANCIAL REVIEW
Section of the Company's
Annual Report to Stockholders
for the year ended
December 31, 1993
<PAGE>
FINANCIAL REVIEW
Dollars in millions, except amounts per share
Overview
The Company designs, manufactures, markets and services a broad range of
laboratory instrument systems, reagents and related products, that address
the needs of diagnostic laboratories in hospitals and independent clinical
reference laboratories as well as bioanalytical laboratories in the life
sciences market, including those in universities, research institutes,
pharmaceutical companies and biotechnology companies. Generally, the
Company's products simplify and automate laboratory processes, saving time
and money. Products for clinical diagnostic laboratories include general and
special chemistry systems together with reagents, accessories and software
which are used to detect and quantify various substances of clinical interest
in human blood and other body fluids. Products for life sciences
laboratories include centrifuges, high performance liquid chromatographs,
spectrophotometers, laboratory robotic workstations, capillary zone
electrophoresis systems, nuclear counters, protein sequencers, DNA
synthesizers and the reagents and supplies for their operation. Beckman
supports its products with a worldwide sales and service network.
Redirected Business Strategy and Reorganization
In 1993 the Company announced a redirected business strategy and a new
organization. Beckman will concentrate on clinical diagnostics and
centrifugation while at the same time shifting its investment to the
biotechnology based portion of the life sciences business including molecular
biology and related sciences. The redirected strategy will position Beckman
to capitalize on the technical and market continuum that exists between the
life sciences and clinical fields by enabling the Company to serve a growing
research market today that will spawn clinical opportunities in the future.
To implement this strategy, Beckman's former operating groups, the
Bioanalytical Systems Group and Diagnostic Systems Group, have been
reorganized into a single unit. The new organization is headed by John P.
Wareham, who has been appointed President and Chief Operating Officer,
reporting to Louis T. Rosso, who continues as Chairman and Chief Executive
Officer. Mr. Wareham was previously Vice President of the Diagnostic Systems
Group.
In support of the redirected business strategy and adjustment to unfavorable
market conditions; including the European recession, the worldwide drive to
contain health care costs and generally weak economic conditions; the Company
announced a reorganization plan in late 1993. The planned reorganization
includes a net reduction of approximately 800 positions worldwide, primarily
in 1994. The restructuring plan includes a voluntary separation program for
U.S. based long term employees, including an enhanced early retirement
program; consolidation of European finance and administrative functions; and
consolidation of U.S. based manufacturing, finance, and administrative
functions. To accomplish these changes, a pretax restructuring charge of
$114.7 was recorded in the fourth quarter of 1993. In addition the Company
anticipates approximately $20.0 of additional restructuring costs to be
incurred in 1994. The restructuring charge in 1993 consists primarily of
employee related severance, pension and postretirement benefit costs as well
as costs associated with the reduction of facilities. Asset disposal costs
are approximately $4.1. The approximately $20.0 restructuring charge in 1994
consists primarily of facility startup and rearrangement costs. The Company
expects to realize annual savings of approximately $25.0 from the
restructuring in 1994 increasing to approximately $45.0 in 1995 and beyond.
<PAGE>
Results of Operations
The following table sets forth, for the periods indicated, the results of
operations as a percentage of sales:
Years ended December 31, 1993 1992 1991
Sales 100.0% 100.0% 100.0%
Operating costs and expenses
Cost of sales 47.8 48.5 48.7
Marketing, administrative and general 31.7 32.4 33.0
Operating income before research,
development, and engineering (1) 20.5 19.1 18.3
Research, development and engineering 10.7 9.5 9.6
Operating income (1) 9.8 9.6 8.7
Earnings before income taxes (2) 8.4 7.8 7.4
Net earnings before cumulative effect of
changes in accounting principles (2) 5.4% 4.8% 4.4%
(1) Excludes pretax restructuring charge of $114.7 in 1993, 13.1% of sales,
which resulted in the Company reporting an operating loss of 3.3% of
sales.
(2) Excludes pretax restructuring and environmental charges of $114.7 and
$12.5, respectively, which represent 14.5% of sales. These charges
resulted in the Company reporting a loss before income taxes of 6.1% and a
net loss before cumulative effect of changes in accounting principles of
3.8% of sales.
<PAGE>
1993 Compared to 1992
Sales in 1993 were $875.7 representing a decrease of 4% from 1992. Without
the unfavorable impact of changes in foreign currency exchange rates, sales
would have increased by 1%. Sales to areas outside the United States were
over 50% of total sales.
Both diagnostic and life sciences markets were unfavorably impacted by the
European recession, cost containment initiatives in several European health
care systems, and changes in currency. Diagnostic sales, representing over
55% of total sales, decreased in 1993 by 3% with currency unfavorably
impacting sales by 6%. The diagnostic market remains highly competitive with
sales growth being obtained through continued market penetration. Sales of
life sciences instrumentation declined by 5% in 1993 with currency
unfavorably impacting sales by 3%. In addition to the factors mentioned
above, the life sciences market was adversely affected by reductions of
U.S. pharmaceutical capital spending in response to anticipated health care
legislation. Cost containment initiatives in European health care systems and
anticipated U.S. health care legislation are expected to be continuing factors
which may affect the Company's sales in the short-term.
Excluding the impact of the restructuring charge (see "Redirected Business
Strategy and Reorganization") recorded in 1993, operating income decreased by
2% to $85.6 in 1993 from $87.2 in 1992. Operating income before the
restructuring charge increased as a percent of sales to 9.8% in 1993 from
9.6% in 1992. Contributing to the increase in operating income as a percent
of sales was improved gross margin resulting from an increase in sales of
higher margin products and a decrease in operating expenses partially offset
by an increased investment in research, development and engineering.
Operating expenses decreased due to cost containment as well as a reduction
in Company performance based incentive compensation. The Company's
investment in research, development and engineering increased 9% from the
prior year to $93.3. The Company's rate of profitability before, and after,
investment in research, development and engineering continues to improve as
indicated in the above table.
In 1993 the Company announced a redirected business strategy and
reorganization (see "Redirected Business Strategy and Reorganization"). The
planned reorganization includes a net reduction of approximately 800
positions worldwide, primarily in 1994. To accomplish these changes, a
pretax restructuring charge of $114.7 was recorded in the fourth quarter of
1993. Including the restructuring charge, the operating loss was $29.1 in
1993 compared to operating income of $87.2 in 1992.
Net nonoperating expenses, excluding a $12.5 environmental charge (see
"Environmental Matters"),decreased by $4.2 to $12.3 in 1993. The decrease
was the result of lower foreign currency expense in 1993 compared to 1992.
Foreign currency expense was higher in 1992 primarily as a result of the
collapse of the European Exchange Rate Mechanism (ERM). Including the
environmental charge, net nonoperating expenses increased by $8.3 million to
$24.8.
Earnings before income taxes, excluding the restructuring and environmental
charges, increased by 4% to $73.3. Including the restructuring and
environmental charges, the loss before income taxes was $53.9. The 1993
effective tax rate, before the restructuring and environmental charges, was
reduced to 36% from 38% in 1992 as a result of increased income in lower tax
rate jurisdictions. The passage of the 1993 budget act which changed the
U.S. statutory tax rate from 34% to 35% effective January 1, 1993 did not
have a significant impact on the Company's effective tax rate.
In the first quarter of 1993, the Company was required to adopt two new
accounting principles which together resulted in a one-time, noncash charge
to net earnings of $4.0. The adoption of Statement of Financial Accounting
Standards No. 106 ("SFAS 106") "Employers' Accounting for Postretirement
Benefits Other Than Pensions" resulted in an aftertax increase to the net
loss of $30.2. This cumulative effect adjustment represents a previously
unrecognized postretirement benefit obligation to retirees, employees,
employees' beneficiaries and covered dependents. The adoption of Statement
of Financial Accounting Standards No. 109 ("SFAS 109") "Accounting for Income
Taxes" resulted in a reduction in the net loss of $26.2. The cumulative
effect adjustment represents an expected benefit to be realized from
increased net deductible temporary differences. The impact on future
operating results of the newly adopted accounting principles when taken in
combination with changes in benefit plans is not expected to be material.
<PAGE>
The following table summarizes the impact of the restructuring and
environmental charges and the cumulative effect of changes in accounting
principles on net earnings (loss) and earnings (loss) per share for the year.
Per
Amount Share
Year ended December 31, 1993
Net earnings before restructuring and
environmental charges and cumulative
effect of changes in accounting principles $ 46.9 $ 1.69
Restructuring charge, net of tax benefit $(73.0) $(2.63)
Environmental charge, net of tax benefit $( 7.5) $(0.27)
Cumulative effect of changes in accounting principles
Accounting for income taxes $ 26.2 $ 0.95
Accounting for postretirement benefits
other than pensions $(30.2) $(1.09)
Net loss $(37.6) $(1.35)
Net earnings before the restructuring and environmental charges and the
cumulative effect of changes in accounting principles increased by 7% to
$46.9 compared to 1992. The restructuring and environmental charges reduced
net earnings by $73.0 and $7.5, respectively, and the cumulative effect of
changes in accounting principles increased the net loss by $4.0. The Company
reported a net loss of $37.6 in 1993 compared to net earnings of $43.8 in
1992.
Earnings per share before the cumulative effect of changes in accounting
principles and the restructuring and environmental charges increased 10% from
1992 to $1.69. The restructuring and environmental charges reduced earnings
per share by $2.63 and $0.27, respectively, and the cumulative effect of
changes in accounting principles increased the net loss per share by $0.14
resulting in net loss per share of $1.35 for 1993 compared to net earnings
per share in 1992 of $1.53.
<PAGE>
1992 Compared to 1991
Sales in 1992 were $908.8 representing an increase of 6% over 1991. Changes
in foreign currency exchange rates accounted for 2% of the sales increase.
Sales to areas outside the United States were over 55% of total sales.
Diagnostic sales increased in 1992, in a very competitive environment,
through market penetration. Sales in the Diagnostic market were over 55% of
total sales. Sales of life sciences instrumentation increased worldwide
despite a continued slowdown in government funding in the United States and
parts of Europe. The life sciences sales increase was due in part to
increased penetration of pharmaceutical and biotechnology accounts.
Operating income increased by 16% to $87.2 in 1992. The gross profit rate
increased to 51.5% in 1992 from 51.3% in 1991 as a result of benefits
achieved through facility consolidations and manufacturing efficiencies.
Marketing, administrative, and general expenses decreased as a percent of
sales due to cost containment efforts and leverage from sales growth. The
Company's investment in research, development and engineering increased by 5%
over the prior year to $85.9.
Net nonoperating expenses increased by $5.4 to $16.5 in 1992. Contributing
to the increase was higher expenses in the Company's currency hedging program
associated with the recent volatility in European exchange rates and
disruption of the ERM. Net interest expense increased slightly in 1992 due
to reduced interest income.
Earnings before income taxes increased by 11% to $70.7. The 1992 effective
tax rate was reduced to 38% from 40% in 1991 as a result of increased income
in lower tax rate jurisdictions, occurring principally in the fourth quarter.
Net earnings of $43.8, or $1.53 per share, increased by 15% from 1991
net earnings of $38.1, or $1.32 per share.
<PAGE>
Liquidity and Capital Resources
Net cash provided by operating activities in 1993 was $53.3 compared to $90.2
in 1992 and $83.1 in 1991. Operating cash in excess of investing activities
was negative in 1993 by $19.2 due to an increased contribution to the
Company's pension plan of $30.0. Accounts payable and accrued expenses have
been impacted by changes in certain payables and compensation accruals.
The Company believes that net cash provided by operating activities,
supplemented as necessary with funds expected to be available under the
Company's credit agreement, will provide sufficient resources to meet present
and reasonably foreseeable working capital requirements, debt service and
other cash needs, including the negative impact on cashflow expected in 1994
of approximately $39.0 resulting from the Company's decision to restructure.
Beginning in 1995 the Company should experience incremental positive cash
flow of approximately $28.0 as a result of the restructure.
Beckman continued to repurchase shares of its common stock during 1993 to
meet the needs of the Company's existing stock-related employee benefit
plans. By February 1993, the Company had completed the purchase of its then
authorized 2,000,000 share repurchase program having acquired the remaining
290,000 shares. During 1993, the Company was authorized to acquire up to
1,000,000 common shares per year up to a maximum of 3,000,000 additional
shares. The Company acquired 969,000 shares under this program during 1993.
The Company has a $100.0 credit agreement (see Note 5 "Debt") with a group of
banks which permits the Company to borrow on a revolving credit basis at
short-term market rates. Any increase in outstanding borrowings under the
credit agreement is subject to a number of conditions, including the absence
of a significant change in control of the Company. The credit agreement
requires the Company to maintain specified amounts of consolidated net worth,
and specified ratios of debt to total capital and operating income to
interest charges. The credit agreement also limits the Company's ability to
mortgage its assets, to merge or consolidate or to sell assets. As of
December 31, 1993, the Company was in compliance with the covenants of the
credit agreement.
In February 1993 the Company entered into an agreement to issue $50.0 in
senior notes of which $20.0 ("Series A") were issued in February and $30.0
("Series B") were issued in June 1993. The $50.0 senior notes mature in the
year 2000. The Company also issued $11.1 of yen denominated senior notes in
1993. These notes mature in 1998 and 1999.
Capital Expenditures
Expenditures for property, plant and equipment, including instruments
provided to customers on an operating lease basis, totaled $92.8 in 1993
compared with $91.4 in 1992, and $69.7 in 1991. The Company plans to invest
at approximately the same level in 1994 and intends to finance this capital
spending primarily through cash provided by operating activities.
Dividends
The Company paid cash dividends to stockholders each quarter for a total of
$0.36 per share in 1993,$0.30 per share in 1992 and $0.28 per share in 1991.
In January 1994 the Board of Directors declared a first quarter dividend of
$0.10 per share. This dividend is payable March 3, 1994 to stockholders of
record on February 11, 1994. The Company intends to continue paying cash
dividends of at least the current per share amount, subject to future
business conditions, requirements of the operations and financial condition
of the Company.
Inflation
Inflation increases the costs of goods and services used by the Company.
Competitive and regulatory conditions in many markets restrict the Company's
ability to fully recover the higher costs of acquired goods and services
through price increases. The Company continues to improve productivity and
reduce costs to mitigate the effects of inflation.
Foreign Currency
The Company derives over 50% of its sales from sources outside of the United
States. As a result of a disruption in the participation by member countries
in the ERM and volatility in foreign currencies, sales and earnings derived
from foreign operations are subject to more variability than historically
realized. In the short-term, the relative strength or weakness of the U.S.
dollar is not likely to have a material effect on the Company's business
decisions. The Company actively manages its foreign currency exposures
through foreign currency contracts. The Company may adjust certain aspects
of its operations in the event of a sustained material change in such
exchange rates.
Accounting Pronouncements to be Adopted
In November 1992 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 112 ("SFAS 112"), "Employers'
Accounting for Postemployment Benefits." This new standard requires the
Company to recognize an obligation for postemployment benefits provided to
former or inactive employees, their beneficiaries, and covered dependents,
after employment but before retirement. The Company historically recognized
these costs on a cash basis. The Company anticipates that the transition
obligation will be less than $10.0 on a pretax basis. The Company
will adopt this statement in the first quarter of 1994.
Environmental Matters
In 1983 the Company discovered organic chemicals in the groundwater near a
waste storage pond at a Company facility in Porterville, California.
SmithKline Beckman ("SmithKline"), the Company's former controlling
stockholder, agreed to indemnify the Company with respect to this matter for
any costs incurred by the Company in excess of applicable insurance,
eliminating any impact on the Company's earnings or financial position.
SmithKline Beecham Corporation, the surviving entity of the 1989 merger
between SmithKline and Beecham Group p.l.c., assumed the obligations of
SmithKline in this respect.
The Company is also involved in the investigation and remediation of soil and
groundwater contamination for property it sold in 1984. In 1990 the Company
entered into an agreement with the purchaser for settlement of a 1988 lawsuit
and for sharing current and future costs of investigation, remediation and
other claims. In 1991 a lawsuit was filed against the 1984 purchaser by a
third party that had subsequently purchased a portion of the above property,
alleging damages caused by the pollution of the property. Although the
Company is not a named defendant in the action, the Company may be obligated
to contribute to any resolution of that action pursuant to its 1990
settlement agreement with the original purchaser. In 1993 the Company
increased its existing reserves for soil and groundwater remediation and for
resolution of the 1991 lawsuit by $12.5.
During 1993 the Company made substantial progress in soil remediation on the
site, although there remain some areas of soil contamination that may require
further remediation. The Company also operated a groundwater treatment
system throughout most of 1993 and in the fourth quarter expanded the
capacity of the system. The expanded system is believed to be adequate to
remediate the groundwater based upon information available in 1993. A series
of test wells were drilled on the property which provided additional
information concerning the area of groundwater contamination. The Company
believes it has established adequate reserves to complete the remediation of
any remaining soil contamination, operation and maintenance of the expanded
groundwater treatment system and any additional groundwater investigations.
Investigations on the property are continuing and there can be no assurance
that further investigation will not reveal additional contamination or result
in additional costs. The Company believes additional remediation costs for
the contamination discovered by the current investigations and liability for
the resolution of the 1991 lawsuit, if any, beyond those already provided
will not have a material adverse effect on the Company's operations or
financial position (see Note 10 "Commitments and Contingencies").
<PAGE>
CONSOLIDATED BALANCE SHEETS
Beckman Instruments, Inc.
December 31 1993 1992
Dollars in millions
Assets
Current assets
Cash and equivalents $ 24.2 $ 25.9
Short-term investments 21.9 20.1
Trade receivables 252.1 265.1
Inventories 163.9 163.1
Deferred income taxes 70.6 20.7
Other current assets 11.8 13.7
Total current assets 544.5 508.6
Property, plant and equipment, net 216.8 213.0
Deferred income taxes 30.3 -
Other assets 28.4 16.8
Total assets $820.0 $738.4
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ 31.7 $ 44.4
Accounts payable 42.7 52.3
Accrued compensation 33.2 48.6
Other accrued expenses 166.8 94.1
Income taxes 48.9 41.9
Total current liabilities 323.3 281.3
Long-term debt 113.7 59.5
Deferred income taxes - 13.2
Other liabilities 107.5 27.0
Total liabilities 544.5 381.0
Commitments and contingencies
Stockholders' equity
Preferred stock, $.10 par value;
authorized 10,000,000 shares; none issued - -
Common stock, $.10 par value;
authorized 75,000,000 shares;
shares issued 29,124,457 at 1993
and 1992; shares outstanding 27,849,959 at
1993 and 28,558,543 at 1992 2.9 2.9
Additional paid-in capital 129.6 130.5
Foreign currency translation adjustment (1.1) 17.4
Retained earnings 172.4 220.1
Treasury stock, at cost (28.3) (13.5)
Total stockholders' equity 275.5 357.4
Total liabilities and stockholders' equity $820.0 $738.4
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
Beckman Instruments, Inc.
Years ended December 31, 1993 1992 1991
Dollars in millions, except amounts per share
Sales $ 875.7 $908.8 $857.9
Operating costs and expenses
Cost of sales 418.3 440.9 417.7
Marketing, administrative and general 278.5 294.8 283.1
Research, development and engineering 93.3 85.9 82.2
Restructuring charge 114.7 - -
904.8 821.6 783.0
Operating income (loss) (29.1) 87.2 74.9
Nonoperating income (expense)
Interest income 4.1 4.8 7.3
Interest expense (12.7) (13.0) (15.3)
Other, net (16.2) (8.3) (3.1)
(24.8) (16.5) (11.1)
Earnings (loss) before income taxes (53.9) 70.7 63.8
Income tax provision (benefit) (20.3) 26.9 25.7
Net earnings (loss) before cumulative effect
of changes in accounting principles (33.6) 43.8 38.1
Cumulative effect of changes in
accounting principles
Accounting for income taxes 26.2 - -
Accounting for postretirement benefits other
than pensions (net of tax benefit of $17.0) (30.2) - -
Net earnings (loss) $ (37.6) $ 43.8 $ 38.1
Average number of shares
outstanding - (thousands) 27,827 28,658 28,970
Net earnings (loss) per share before cumulative
effect of changes in accounting principles $ (1.21) $ 1.53 $ 1.32
Cumulative effect of changes in
accounting principles
Accounting for income taxes 0.95 - -
Accounting for postretirement benefits other
than pensions (1.09) - -
Net earnings (loss) per share $ (1.35) $ 1.53 $ 1.32
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Beckman Instruments, Inc.
Years ended December 31, 1993 1992 1991
Dollars in millions
Cash Flows from Operating Activities
Net earnings (loss) $(37.6) $43.8 $38.1
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities
Depreciation and amortization 63.5 64.7 55.9
Restructuring charge 66.8 - -
Net deferred income taxes (39.2) 5.5 0.2
Changes in assets and liabilities
Trade receivables (1.5) (13.1) (21.6)
Inventories (5.8) (0.6) (6.1)
Accounts payable and accrued expenses (13.1) (3.1) 22.3
Accrued income taxes 7.0 2.6 (2.4)
Other 13.2 (9.6) (3.3)
Net cash provided by operating activities 53.3 90.2 83.1
Cash Flows from Investing Activities
Additions to property, plant and equipment (90.4) (88.0) (67.5)
Net disposals of property,
plant and equipment 19.7 13.3 10.7
Purchase of short-term investments (1.8) (14.1) -
Other - (0.7) (3.6)
Net cash used by investing activities (72.5) (89.5) (60.4)
Cash Flows from Financing Activities
Dividends to stockholders (10.1) (8.5) (8.1)
Proceeds from issuance of stock 13.5 19.5 4.3
Purchases of treasury stock (28.3) (27.8) (7.3)
Notes payable borrowings 11.5 43.8 9.1
Notes payable reductions (22.3) (31.0) (9.9)
Long-term debt borrowings 82.0 2.3 13.4
Long-term debt reductions (27.3) (1.6) (18.2)
Other (0.9) 0.6 0.2
Net cash provided (used) by
financing activities 18.1 (2.7) (16.5)
Effect of exchange rates on cash and equivalents (0.6) - -
Increase (decrease) in cash and equivalents (1.7) (2.0) 6.2
Cash and equivalents-beginning of year 25.9 27.9 21.7
Cash and equivalents-end of year $ 24.2 $25.9 $27.9
Supplemental Disclosures of Cash Flow Information
Cash paid during the year for
Interest $ 12.4 $21.8 $18.3
Income taxes $ 14.5 $24.4 $27.6
Noncash investing and financing activities
Capital lease obligations of $2.4 for 1993,
$3.4 for 1992 and $2.2 for 1991 were incurred
when the Company entered into leases for new equipment.
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Dollars in millions, except amounts per share
1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Beckman
Instruments, Inc., and its wholly owned subsidiaries. The consolidated
entity is referred to as the Company in the accompanying consolidated
financial statements.
All significant transactions among the consolidated entities have been
eliminated from the financial statements. The accounts of most of the
Company's non-U.S. subsidiaries are included on the basis of their fiscal
years ended November 30.
Foreign Currency Translation
Non-U.S. assets and liabilities are translated into U.S. dollars at fiscal
year-end exchange rates. Operating results are translated at exchange rates
prevailing during the year. The resulting translation adjustments are
accumulated as a separate component of stockholders' equity.
The Company utilizes foreign currency contracts to manage the impact of
foreign currency fluctuations on its business. Where the foreign currency
contracts provide an effective hedge against currency fluctuations, gains and
losses are deferred and recognized in the period that gains and losses on the
hedged items are recognized. Gains and losses resulting from foreign
currency transactions and translation adjustments relating to foreign
entities deemed to be operating in U.S. dollar functional currency or in
highly inflationary economies are included in results of operations. The
Company experienced net foreign currency expenses of $2.1 in 1993, $8.1 in
1992 and $0.9 in 1991.
Cash and Equivalents
For purposes of the consolidated statements of cash flows, the Company
considers cash and equivalents to include cash in banks, time deposits and
investments having an original maturity of three months or less. All cash
and equivalents are carried at cost which approximates market.
Short-Term Investments
Short-term investments are principally comprised of investments with original
maturities in excess of three months. Investments are carried at cost which
approximates market.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined by
the first-in, first-out method.
Property, Plant and Equipment and Depreciation
Land, buildings and machinery and equipment are carried at cost. The cost of
additions and improvements are capitalized, while maintenance and repairs are
expensed as incurred. Depreciation is computed generally on the straight-line
method over the estimated useful lives of the related assets. Leasehold
improvements are amortized over the lesser of the life of the asset or the
term of the lease.
Earnings Per Share
Earnings (loss) per share is calculated on a weighted average basis,
including the dilutive effect of common stock equivalents in 1992 and 1991.
Primary earnings per share approximates fully diluted earnings per share.
Revenue Recognition
In general, revenue is recognized as the product is shipped. When a customer
enters into an operating-type lease agreement, revenue is recognized over the
life of the lease. Under a sales-type lease agreement, revenue is recognized
at the time of shipment with appropriate interest income recognized over the
life of the lease. Service revenues are recognized ratably over the life of
the service agreement or as service is performed, if not under contract.
Income Taxes
In the first quarter of 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes".
SFAS 109 requires a change from the deferred method of accounting for income
taxes of Accounting Principle Board Opinion 11 ("APB Opinion 11") to the
asset and liability method of accounting for income taxes. Under the asset
and liability method of SFAS 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Accordingly, the Company recognized deferred tax
assets reflecting the benefit expected to be realized from net deductible
temporary differences. The recognition resulted in the Company recording
income and a deferred tax asset equal to the cumulative effect of the
accounting change of $26.2 (net of a valuation allowance of $10.1) in the
first quarter of 1993.
For the periods ended December 31, 1992 and 1991, income taxes were based
upon pretax financial statement income with an appropriate deferred tax
provision in accordance with APB Opinion 11 to provide for the tax effect of
timing differences between pretax financial statement income and taxable
income per the tax return.
Accounting Pronouncements to be Adopted
In November 1992 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 112 ("SFAS 112"), "Employers' Accounting
for Postemployment Benefits". SFAS 112 requires the Company to recognize an
obligation for postemployment benefits provided to former or inactive
employees, their beneficiaries and covered dependents after employment but
before retirement. Depending on the terms of the benefit, the obligation
must be recognized in accordance with either SFAS 43 or SFAS 5. The Company
has historically recognized these costs on either a cash basis or, when
accrued, in accordance with SFAS 5. The Company anticipates that the
transition obligation will be less than $10.0 on a pretax basis. The Company
will adopt this accounting standard in the first quarter of 1994.
Reclassification
Certain amounts from the prior years have been reclassified to conform to the
1993 presentation.
2. Redirected Business Strategy and Reorganization
In the fourth quarter of 1993, the Company announced a redirected business
strategy and a new organization. The Company will concentrate on clinical
diagnostics and centrifugation while shifting its investment to the
biotechnology based portion of the life sciences business, including
molecular biology and related sciences. The redirected strategy will
position the Company to capitalize on the technical and market continuum that
exists between the life sciences and clinical fields by enabling the Company
to serve a growing research market today that will spawn clinical
opportunities in the future. To implement this strategy the Company's
operating groups, the Bioanalytical Systems Group and Diagnostic Systems
Group, have been reorganized into a single unit.
In support of the redirected business strategy and adjustment to unfavorable
market conditions; including the European recession, the worldwide drive to
contain health care costs and generally weak economic conditions; the Company
announced a restructuring plan. The planned restructure includes a net
reduction of approximately 800 positions worldwide, primarily in 1994. The
plan includes a voluntary separation program for U.S. based, long-term
employees, including an enhanced early retirement program; consolidation of
European finance and administrative functions and consolidation of U.S. based
manufacturing, finance and administrative functions. To accomplish these
changes, a pretax restructuring charge of $114.7 was recorded in the fourth
quarter of 1993. In addition the Company anticipates approximately $20.0 of
additional restructuring costs to be incurred in 1994. The restructuring
charge in 1993 consists primarily of employee related severance, pension and
postretirement costs as well as costs associated with the reduction of
facilities. Asset disposal costs are approximately $4.1 of the 1993 charge.
3. Distribution of Company Stock owned by SmithKline
In 1989 SmithKline Beckman ("SmithKline") entered into an agreement to
reorganize and combine certain of its businesses with Beecham Group p.l.c.
This agreement was approved by the stockholders of both companies creating
the new company of SmithKline Beecham p.l.c. As a result of this agreement,
all shares of Beckman Common Stock owned by SmithKline were distributed to
the holders of SmithKline stock, effective July 1989. In conjunction with
the distribution of Beckman Common Stock, the Company entered into a tax
agreement ("Tax Agreement") and a distribution agreement with SmithKline.
Certain provisions of such agreements are still in effect at December 31,
1993.
<PAGE>
4. Composition of Certain Financial Statement Captions
1993 1992
Trade receivables
Trade $261.2 $274.3
Current portion of lease receivables 2.8 2.9
Less allowance for doubtful receivables (11.9) (12.1)
$252.1 $265.1
Inventories
Finished products $110.2 $110.3
Raw materials, parts and assemblies 42.0 43.3
Work in process 11.7 9.5
$163.9 $163.1
Property, plant and equipment, net
Land $ 10.3 $ 11.9
Buildings 133.1 134.6
Machinery and equipment 214.3 203.0
Instruments subject to lease(a) 166.4 148.9
524.1 498.4
Less accumulated depreciation
Building, machinery and equipment (214.8) (202.2)
Instruments subject to lease (92.5) (83.2)
$216.8 $213.0
Other accrued expenses
Restructure reserve $ 65.4 $ -
Unrealized service income 35.4 35.6
Insurance 25.1 9.5
Accrued warranty and installation costs 5.9 6.7
Other 35.0 42.3
$166.8 $ 94.1
(a) Includes instruments leased to customers under three- to five-year
cancelable operating leases.
5. Debt
Notes payable consist primarily of bank borrowings by the Company's
subsidiaries outside the U.S. under local line of credit facilities and the
current portion of long-term debt. The bank borrowings are short-term
borrowings at rates which approximate the current market rates; therefore,
the carrying value of the notes approximates the market value. At December
31, 1993 approximately $107.6 of unused short-term lines of credit were
available to the Company's subsidiaries outside the U.S. at various interest
rates. Within the U.S., the Company had available $20.0 in committed unused
short-term lines of credit at market rates. Compensating balances and
commitment fees on these lines of credit are not material and there are no
withdrawal restrictions.
The Company's current $100.0 revolving Credit Agreement expires on July 1,
1996. The Agreement was amended as of December 31, 1993. Borrowings under
the Credit Agreement bear interest at current market rates and are subject to
a number of conditions, including the absence of a significant change in
control of the Company. In addition, the Credit Agreement requires the
Company to maintain minimum consolidated tangible net worth and specified
ratios of debt to total capital and operating income to interest charges.
The Credit Agreement also limits the Company's ability to mortgage its
assets, to merge or consolidate or to sell certain assets. Defaults under
the Credit Agreement include nonpayment, breach of covenants, bankruptcy and
certain cross defaults to other Company debt. Aggregate dividend payments
are limited to the sum of $45.0 and 30% of consolidated cumulative net
earnings of the Company from June 30, 1992. As of December 31, 1993, there
were no borrowings against the credit line and the Company is in compliance
with the covenants of the Credit Agreement.
Long-term debt consisted of the following at December 31:
Average Rate
of Interest
1993 1992
Senior notes, maturing 2000,
unsecured 7.4% $ 50.0 $25.0
Commercial paper 3.4% 48.4 27.5
Other long-term debt 6.7% 17.6 9.5
116.0 62.0
Less current maturities 2.3 2.5
Long-term debt $113.7 $59.5
The $50.0 senior notes mature in the year 2000 and are comprised of Series A
$20.0 and Series B $30.0. Series A notes bear interest at 7.3%, and Series B
notes bear interest at 7.4% annually. Interest is payable semiannually on
both Series A and Series B notes. The terms and conditions of the senior
notes are similar to those of the Credit Agreement. The market value of the
senior notes has been determined by quotes from a financial institution. At
December 31, 1993 the market value of the senior notes is approximately $2.6
higher than the face value.
The commercial paper program is backed by the Company's $100.0 Credit
Agreement. The commercial paper is issued at current market rates;
therefore, the carrying value approximates the market value.
Other long-term debt at December 31, 1993 consists principally of $11.1 of
yen denominated senior notes of which $6.5 mature in 1998 and $4.6 mature in
1999. Capitalized leases of $6.5 in 1993 and $7.2 in 1992 are also included
in other long-term debt.
The Company has entered into interest rate swap agreements to reduce the
impact of changes in interest rates on its long-term debt. At December 31,
1993 the Company had outstanding interest rate swap agreements with
commercial banks having a total notional principal amount of $35.0. In some
agreements the Company is paying a floating rate and receiving a fixed rate
from the counterparties, while in other agreements the Company is paying a
fixed rate and is receiving a floating rate. The agreements mature at
various dates through December 1995. Interest expense is adjusted for the net
amount receivable or payable under the swap agreements. The Company is
exposed to credit loss in the event of nonperformance by the counterparties
to the agreements, which the Company believes is remote. The market value of
the interest rate swaps has been determined by quotes from financial
institutions who are counterparties to the interest rate swaps. This value
represents the estimated amount the Company would receive or pay if the swap
agreements were terminated. At December 31, 1993 the Company would have to
pay $1.3 to terminate the swap agreements.
The aggregate maturities of long-term debt for the five years subsequent to
December 31, 1993 are $2.3 in 1994, $1.2 in 1995, $48.9 in 1996, $0.3 in
1997, $6.7 in 1998 and $56.6 in 1999 and beyond.
6. Income Taxes
As discussed in Note 1, the Company adopted SFAS 109 in the first quarter of
1993. The income tax provision for the years 1992 and 1991, and the
resulting deferred tax assets and liabilities at December 31, 1992, were
prepared in accordance with APB Opinion 11.
The components of earnings (loss) before income taxes were:
1993 1992 1991
U.S. $(66.0) $ 8.4 $(12.3)
Non-U.S. 12.1 62.3 76.1
$(53.9) $ 70.7 $ 63.8
The provision (benefit) for income taxes consisted of the following:
1993 1992 1991
Current
U.S. federal $ 4.8 $ 8.5 $ 7.3
Non-U.S. 9.3 16.3 23.4
U.S. state and Puerto Rico 2.7 2.2 2.7
Total current 16.8 27.0 33.4
Deferred
U.S. federal (20.2) - (8.1)
Non-U.S. (16.9) (0.1) 0.4
Total deferred, net (37.1) (0.1) (7.7)
Total $(20.3) $26.9 $25.7
The reconciliations of the U.S. federal statutory tax rate to the
consolidated effective tax rate is as follows:
1993 1992 1991
Statutory tax rate (35.0)% 34.0% 34.0%
State taxes, net of U.S.
tax benefit 1.1 1.7 0.7
Ireland and Puerto Rico
income (14.9) (10.5) (10.1)
Non-U.S. taxes 6.0 15.1 11.5
Tax credit utilization - (6.6) -
Losses producing limited
tax benefits - 2.3 3.6
Foreign income taxed in the U.S. 5.3 - -
Other (0.2) 2.0 0.5
Effective tax rate (37.7)% 38.0% 40.2%
Certain income of subsidiaries operating in Puerto Rico and Ireland is taxed
at substantially lower income tax rates than the U.S. federal statutory tax
rate. The lower rates reduced expected income taxes and reduced the net loss
in 1993 by approximately $8.1 and increased net earnings by approximately
$7.4 in 1992 and $6.4 in 1991. Since April 1990, earnings from manufacturing
operations in Ireland are subject to a 10% tax. The lower Puerto Rico
income tax rate expires in July 2003.
The components of the provision for deferred income taxes are:
1993 1992 1991
Restructuring costs $(43.5) $ - $ -
International transactions 5.9 - -
Accelerated depreciation (0.7) (2.0) (2.3)
Accrued expenses (5.0) (4.5) (2.4)
Pension costs 5.0 6.1 (0.4)
Postretirement medical costs (0.9) - -
Other 2.1 0.3 (2.6)
$(37.1) $(0.1) $(7.7)
Based upon the Company's historical pretax earnings, adjusted for significant
items such as non-recurring charges, management believes it is more likely
than not that the Company will realize the benefit of the existing deferred
tax asset at December 31, 1993. Management believes the existing net
deductible temporary differences will reverse during periods in which the
Company generates net taxable income. Certain tax planning or other
strategies will be implemented, if necessary, to supplement income from
operations to fully realize recorded tax benefits.
The tax effect of temporary differences which give rise to significant
portions of deferred tax assets and liabilities at December 31, 1993 consist
of the following:
Deferred Tax Assets
Receivables $1.6
Inventories 5.0
Capitalized expenses 2.7
Intercompany transactions 7.7
Pension expense 8.8
Accrued expenses 18.1
Restructuring costs 31.0
Environmental costs 5.9
Postretirement benefits 23.0
Other 9.3
113.1
Less: Valuation allowance (11.5)
Total deferred tax assets 101.6
Deferred Tax Liabilities
Depreciation 0.7
Net deferred tax asset $100.9
At December 31, 1993 the Company has recorded a valuation allowance of $11.5
for certain deductible temporary differences for which it is more likely than
not that the Company will not receive future benefits.
Non-U.S. withholding taxes and U.S. taxes have not been provided on
approximately $169.7 of unremitted earnings of certain non-U.S. subsidiaries
because such earnings are or will be reinvested in operations or will be
offset by appropriate credits for foreign income taxes paid.
SmithKline and its consolidated subsidiaries (including the Company) have
settled all issues with the U.S. Internal Revenue Service through 1986. All
U.S. federal income tax liability issues between the Company and SmithKline
have been resolved through 1986 in accordance with the Tax Agreement. Such
resolution did not have a material effect on the Company's consolidated
financial position or operating results. The Company believes that its
ultimate U.S. federal income tax liability to SmithKline, if any, for all
applicable post 1986 tax years will not have a material effect on the
consolidated financial position or operating results of the Company.
7. Pension and Retirement Benefits
The Company has defined benefit pension plans covering substantially all of
its employees. Consolidated pension expense was $53.0 in 1993, including
amounts associated with the restructuring, $16.3 in 1992 and $15.3 in 1991.
U.S. pension benefits are based on years of service and compensation during
the five highest consecutive earnings years. Components of U.S. pension
expense were:
1993 1992 1991
Service cost $11.5 $9.7 $ 8.9
Interest cost 20.4 18.4 16.3
Actual return on plan assets (23.5) (16.7) (11.3)
Net amortization and deferral 3.1 0.4 (2.3)
$11.5 $11.8 $11.6
As part of the Company's reorganization, (see Note 2 "Redirected Business
Strategy and Reorganization"), the Company implemented a voluntary separation
program for U.S. based long-term employees. Eligible voluntary separation
program participants also received a substantial enhancement to their pension
benefit. Eligible participants' pension benefit was calculated by adding
five years to their age and five years to their service period. This
enhanced pension benefit resulted in the Company recording a $35.9 pension
expense associated with the restructuring.
The Company's funding policy is to provide currently for accumulated
benefits, subject to federal regulations. Plan assets consist principally of
U.S. government fixed income securities and corporate stocks and bonds.
Funded status of the Company's pension liabilities and assets and amounts
recognized in the Company's financial statements with respect to the U.S.
plan were:
1993 1992
Vested benefit obligation $(269.7) $(177.1)
Accumulated benefit obligation $(278.3) $(184.4)
Projected compensation increases (59.2) (61.7)
Projected benefit obligation (337.5) (246.1)
Plan assets at fair market value 248.5 191.6
Projected benefit obligation
in excess of plan assets (89.0) (54.5)
Unrecognized transition obligation 3.4 4.1
Unrecognized net loss 59.0 26.3
Unrecognized prior service cost 10.1 11.6
Adjustment required to recognize
minimum liability (13.5) -
Accrued pension cost
in other liabilities $ (30.0) $ (12.5)
The expected long-term rate of return on U.S. plan assets was 9.75% in 1993
and 10.50% in 1992. The discount rate used in determining obligations was
7.25% in 1993 and 8.50% in 1992, and the assumed average rate of increase in
future compensation levels was 4.25% in 1993 and 6.20% in 1992.
Certain subsidiaries outside the U.S. have separate pension plan arrangements
which include both funded and unfunded plans. Unfunded foreign pension
obligations are recorded as a liability on the Company's consolidated balance
sheets. Plan assets and accrued liabilities for those plans exceed vested
benefits. Pension expense for plans outside of the U.S. were $4.5 in 1993,
$3.9 in 1992 and $2.9 in 1991.
The Company has a voluntary defined contribution savings plan for its U.S.
employees. Eligible employees may contribute a portion of their compensation
to this plan. Company contributions, which are based on a percentage of
employee contributions, were $4.2 in 1993, $3.9 in 1992 and $3.6 in 1991.
Employees generally become fully vested with respect to Company contributions
after three years of service with the Company.
In addition to pension benefits, the Company and its subsidiaries presently
provide certain health care and life insurance benefits for retired U.S.
employees and their dependents. Eligibility for the plan and participant
cost sharing is dependent upon the participant's age at retirement, years of
service and retirement date. In January 1993, the Company adopted Statement
of Financial Accounting Standards No. 106 ("SFAS 106"), "Employers Accounting
for Postretirement Benefits Other Than Pensions". This statement requires
the Company to accrue, as current costs, the postretirement benefits during
the period the employees provide their service. SFAS 106 also required the
Company to recognize a transition obligation for prior years' service cost.
Accordingly, the Company recorded a transition obligation for past service of
$47.2 and a net expense of $30.2 (net of tax benefits of $17.0) as
the cumulative effect of the accounting change in 1993.
Annual pretax postretirement benefits expense for 1993 increased $2.6 due to
the implementation of SFAS 106.
The net periodic cost for postretirement health care and life insurance
benefits for 1993 includes the following:
Service cost $1.4
Interest cost 3.9
$5.3
The voluntary separation program resulted in a curtailment loss to the
postretirement benefits plan of $7.2 which was recognized in 1993 as a
component of the $114.7 restructuring cost (see Note 2 "Redirected Business
Strategy and Reorganization").
The following table sets forth the plan's funded status and amounts
recognized in the Company's consolidated balance sheet at December 31, 1993:
Accumulated postretirement benefit obligations
Retirees $44.0
Fully eligible active plan participants 1.9
Other active plan participants 21.7
Total obligation 67.6
Plan assets -
Accumulated postretirement benefit
obligation in excess of plan assets 67.6
Unrecognized net loss 10.7
Accrued postretirement benefit liability $56.9
The costs of the retiree health and life insurance benefits were calculated
using a health care cost trend rate which assumed a 12% increase in health
care costs in 1994 with the rate decreasing to a 6% increase by the year
2007. An assumed 1% increase in the health care cost trend rate for each year
would have resulted in an increase in the net periodic cost to $6.1 and an
accumulated postretirement benefit obligation of $76.8. The accumulated
postretirement benefit obligation was calculated using a discount rate of
7.25%.
For the periods ended December 31, 1992 and 1991, the cost of retiree health
care insurance benefits were recognized as expense as expenditures were
incurred. These costs were $2.5 in 1992 and $2.2 in 1991. Employees outside
the U.S. generally receive similar benefits from government-sponsored plans.
8. Benefit Plans Stock Options
In 1988, the Company adopted an Incentive Compensation Plan for its officers
and key employees, which provided for stock-based incentive awards based upon
several factors including Company performance. This plan expired on December
31, 1990, but options outstanding on that date were not affected by such
termination. Pursuant to this plan, the Company has granted options to
purchase approximately 755,000 shares, with an expiration date of ten years
from the date of grant.
The Company has also adopted the Incentive Compensation Plan of 1990. This
1990 plan reserves shares of the Company's common stock for grants of options
and restricted stock. Granted options expire ten years from the date of
grant. Subsequent to stockholder approval in 1992, amendments were adopted
to extend the expiration of the plan to 2001 and to increase each year,
commencing January 1, 1993, the number of shares available under the plan by
1.5% of the number of common stock shares issued and outstanding as of the
prior December 31. As of January 1, 1994, 913,868 shares remain available
for grant under this plan.
The following is a summary of transactions of the Incentive Compensation
Plans of 1988 and 1990:
Number of Price Per
Shares Share Amount
Options outstanding at
Dec. 31, 1990 1,199,703 $13.88 - $19.00 $21.5
Granted(a) 598,820 0.00 - 18.75 10.4
Exercised(a) (43,625) 0.00 - 19.00 -
Cancelled (51,876) 13.88 - 19.00 (0.9)
Options outstanding at
Dec. 31, 1991 1,703,022 $13.88 - $19.00 $31.0
Granted 486,100 18.75 - 20.00 9.7
Exercised (70,594) 16.50 - 19.00 (1.2)
Cancelled (49,261) 16.50 - 20.00 (0.9)
Options outstanding at
Dec. 31, 1992 2,069,267 $13.88 - $20.00 $38.6
Granted 438,000 22.50 9.9
Exercised (163,825) 13.88 - 20.00 (3.0)
Cancelled (17,395) 18.38 - 22.50 (0.4)
Options outstanding at
Dec. 31, 1993 (b) 2,326,047 $13.88 - $22.50 $45.1
(a) Includes grant and exercise of approximately 42,000 shares of restricted
stock granted to certain officers and employees of the Company.
(b) At December 31, 1993 1,503,283 shares were exercisable under these plans.
Stock Purchase Plan
The Company's stock purchase plan allows all U.S. employees and employees of
certain subsidiaries outside of the U.S. to purchase the Company's common
stock at favorable prices and upon favorable terms. Subsequent to
stockholder approval in 1992, amendments were adopted to extend the
expiration of the plan to December 31, 2001, and in each calendar year
commencing in 1992, to reserve additional shares of common stock for use in
the plan based upon the number of common shares issued and outstanding as of
the annual stockholders' meeting. Employees purchased 288,401 shares in 1993.
At December 31, 1993 437,655 shares remain available for use in the plan.
Treasury Stock
The Board of Directors has approved a stock repurchase program whereby the
Company was authorized to purchase on the open market 3,000,000 shares of the
Company's common stock through December 1993. In addition the Company may
purchase 1,000,000 shares per year through 1995. In total 5,000,000 shares
have been authorized for purchase. The shares have been, and will continue
to be, reissued to satisfy the Company's obligations under existing employee
benefit plans. Through December 1993, the Company had purchased 2,969,000
shares of its common stock for $63.4 and at December 31, 1993 1,274,498
shares remain in treasury of which 988,107 are held by the Benefit Equity
Fund. At December 31, 1992 565,914 shares were held in treasury.
In February 1993 the Company created the Benefit Equity Fund (BEF), a trust
for prefunding future stock-related obligations of employee benefit plans.
The BEF does not change these plans or the amounts of stock expected to be
issued for these plans. The BEF will be funded by existing shares in
treasury as well as from additional shares the Company will purchase on the
open market over time. While shares in the BEF are not considered
outstanding for the calculation of earnings per share, the shares within the
BEF are voted by the participants of the Stock Purchase Plan.
<PAGE>
9. Stockholders' Equity
Changes in stockholders' equity were as follows:
Foreign
Additional Currency
Common Paid-in Translation Retained Treasury
Stock Capital Adjustment Earnings Stock
Balances, December 31, 1990 $2.9 $127.3 $40.4 $155.0 $ -
Net earnings 38.1
Foreign currency translation
adjustments (9.8)
Dividend to stockholders (8.1)
Purchase of treasury stock (7.3)
Issuance of restricted stock (0.8) 0.8
Employee stock purchase 2.4 (0.2) 2.3
Balances, December 31, 1991 2.9 128.9 30.6 184.8 (4.2)
Net earnings 43.8
Foreign currency translation
adjustments (13.2)
Dividend to stockholders (8.5)
Purchase of treasury stock (27.8)
Vesting of restricted stock 0.4
Employee stock purchase 1.2 18.5
Balances, December 31, 1992 2.9 130.5 17.4 220.1 (13.5)
Net loss (37.6)
Foreign currency translation
adjustments (18.5)
Dividend to stockholders (10.1)
Purchase of treasury stock (28.3)
Vesting of restricted stock 0.2
Employee stock purchase (1.1) 13.5
Balances, December 31, 1993 $2.9 $129.6 $(1.1) $172.4 $(28.3)
10. Commitments and Contingencies
Environmental
The Company is subject to federal, state, local and foreign environmental
laws and regulations. The Company believes that its operations comply in all
material respects with applicable federal, state and local environmental laws
and regulations. Although the Company continues to make expenditures for
environmental protection, it does not anticipate any significant expenditures
in order to comply with such laws and regulations which would have a material
impact on the Company's operations or financial position.
In 1983 the Company discovered organic chemicals in the groundwater near a
waste storage pond at a Company facility in Porterville, California.
SmithKline, the Company's former controlling stockholder, agreed to indemnify
the Company with respect to this matter for any costs incurred by the Company
in excess of applicable insurance, eliminating any impact on the Company's
earnings or financial position. SmithKline Beecham Corporation, the
surviving entity of the merger between SmithKline Beckman and Beecham Group
p.l.c., assumed the obligations of SmithKline Beckman in this respect.
The Company is also involved in the investigation and remediation of soil and
groundwater contamination for property it sold in 1984. In 1990 the Company
entered into an agreement with the purchaser for settlement of a 1988 lawsuit
and for sharing current and future costs of investigation, remediation and
other claims. In 1991 a lawsuit was filed against the 1984 purchaser by a
third party that had subsequently purchased a portion of the above property,
alleging damages caused by the pollution of the property. Although the
Company is not a named defendant in the action, the Company may be obligated
to contribute to any resolution of that action pursuant to its 1990
settlement agreement with the original purchaser. In 1993 the Company
increased its existing reserves for soil and groundwater remediation and for
resolution of the 1991 lawsuit by $12.5.
During 1993 the Company made substantial progress in soil remediation on the
site, although there remains some areas of soil contamination that may
require further remediation. The Company also operated a groundwater
treatment system throughout most of 1993 and in the fourth quarter expanded
the capacity of the system. The expanded system is believed to be adequate
to remediate the groundwater based upon information available in 1993. A
series of test wells were drilled on the property which provided additional
information concerning the area of groundwater contamination. The Company
believes it has established adequate reserves to complete the remediation of
any remaining soil contamination, operation and maintenance of the expanded
groundwater treatment system and any additional groundwater investigations.
Investigations on the property are continuing and there can be no assurance
that further investigations will not reveal additional contamination or
result in additional costs. The Company believes additional remediation
costs for the contamination discovered by the current investigations and
liability for the resolution of the 1991 lawsuit, if any, beyond those
already provided will not have a material adverse effect on the Company's
operations or financial position.
Litigation
The Company and its subsidiaries are involved in a number of lawsuits which
the Company considers normal in view of its size and the nature of its
business. The Company does not believe that any liability resulting from
such lawsuits will have a material adverse effect on the results of
operations or financial position of the Company.
Other
At December 31, 1993 the Company had written foreign currency options of $4.4
and purchased foreign currency options of $7.4 which expire at various dates
through March 1994. In addition the Company had commitments to sell forward
various currencies totalling $4.8 through March 1994. These instruments are
used in combination to hedge the Company's firm commitments denominated in
foreign currencies and mitigate the impact of changes in foreign currency
exchange rates on the Company's operations. The market values of the foreign
currency options and forward contracts have been determined by solicitation
of dealer quotes. At December 31, 1993 the market values of the foreign
currency contracts result in unrealized losses to the Company of $0.1.
In 1993 the Company commenced a program to hedge anticipated transactions
denominated in foreign currencies in an effort to mitigate the impact of
changes in foreign currency exchange rates on future operations. To
accomplish this objective, the Company utilizes complex options consisting of
a combination of purchased options and call spreads. The market values of
the purchased options and the call spreads have been determined by
solicitation of dealer quotes. At December 31, 1993 the market value of the
complex options result in an unrealized gain to the Company of $0.9.
During 1993 the Company received proceeds of $40.0 from factoring trade
receivables. The Company is contingently liable for the possible uncollected
portion of the factored receivables, if any, which was $1.1 at December 31,
1993.
11. Business Segment Information
Industry Segment
The Company is engaged primarily in the design, manufacture and sale of
laboratory instrument systems and related products.
Geographic areas
1993 1992 1991
Sales
United States-domestic $581.2 $586.8 $542.4
United States-export 24.1 20.2 21.6
Europe 303.6 357.8 330.9
Asia and other areas 144.7 134.7 124.7
Transfers between areas (177.9) (190.7) (161.7)
Total sales $875.7 $908.8 $857.9
Operating income (loss)
United States before research,
development and engineering $ 68.8 $121.8 $ 99.5
and engineering (a) (93.3) (85.9) (82.2)
United States (24.5) 35.9 17.3
Europe (9.2) 41.9 45.6
Asia and other areas 4.6 9.4 12.0
Total operating income (loss) $(29.1) $ 87.2 $ 74.9
Identifiable assets
United States $370.5 $372.3 $366.9
Europe 205.6 246.6 239.4
Asia and other areas 92.2 61.6 58.8
Corporate 151.7 57.9 47.1
Total assets $820.0 $738.4 $712.2
(a) The Company's principal research, development and engineering efforts are
performed in the United States.
Identifiable assets are those assets used by the operations in each
geographic location. Corporate assets consist primarily of cash and
equivalents, short-term investments, deferred tax assets, lease receivables
and fixed assets of a corporate nature. Asia and other areas include
primarily operations in Japan, Canada and Latin America. Inter-area sales are
made at terms that allow for a reasonable profit to the seller.
At December 31, 1993 trade receivables by geographic area were United States
$71.5, Europe $128.4 (including certain countries where normal trade terms
are substantially longer than U.S. terms) and Asia and other areas $52.2. At
December 31, 1992 trade receivables by geographic area were United States
$74.1, Europe $157.3 and Asia and other areas $33.7.
12. Lease Commitments
The Company leases certain facilities, equipment and automobiles. Certain of
the leases provide for payment of taxes, insurance and other charges by the
lessee. Rent expense was $34.5 in 1993, $28.5 in 1992 and $28.8 in 1991.
Minimum annual rentals payable under non-cancelable operating leases with a
remaining term of more than one year from December 31, 1993, aggregate $29.8
and for each of the next five years are $11.3 in 1994, $8.4 in 1995, $4.8 in
1996, $3.2 in 1997, $1.6 in 1998 and $0.5 in 1999 and beyond.
<PAGE>
Report by Management
The consolidated financial statements and related information for the years
ended December 31, 1993, 1992 and 1991 were prepared by management in
accordance with generally accepted accounting principles. Financial data
included in other sections of this Annual Report are consistent with that in
the consolidated financial statements.
Management maintains a system of internal accounting controls which is
designed to provide reasonable assurance, at appropriate costs, that its
financial and related records fairly reflect transactions, that proper
accountability for assets exists, and that established policies and
procedures are followed. A professional staff of internal auditors reviews
compliance with corporate policies. Among these policies is an ethics
policy, which requires employees to maintain high standards in conducting the
Company's affairs, and requires management level employees to submit
certificates of compliance annually. Management continually monitors the
system of internal accounting controls for compliance and believes the system
is appropriate to accomplish its objectives.
The Company's independent auditors examine the Company's consolidated
financial statements in accordance with generally accepted auditing
standards. Their report expresses an independent opinion on the fairness of
the Company's reported operating results and financial position. In
performing this audit, the auditors consider the Company's internal control
structure and perform such other tests and auditing procedures as they deem
necessary.
The Board of Directors, through its Audit Committee, reviews both internal
and external audit results and internal controls. The Audit Committee
consists of three outside Directors and meets periodically with management,
internal auditors and the independent auditors to review the scope and
results of their examinations. Both the independent auditors and the
internal auditors have free access to this Committee, with and without
management being present, to discuss the results of their audits.
LOUIS T. ROSSO DENNIS K. WILSON
Louis T. Rosso Dennis K. Wilson
Chairman and Chief Executive Officer Vice President, Finance and
Chief Financial Officer
<PAGE>
Independent Auditors' Report
To the Stockholders and Board of Directors of Beckman Instruments, Inc.:
We have audited the accompanying consolidated balance sheets of Beckman
Instruments, Inc. and subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of operations and cash flows for each of the
years in the three-year period ended December 31, 1993. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits 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 audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Beckman
Instruments, Inc. and subsidiaries as of December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1993 in conformity with generally
accepted accounting principles.
As discussed in Note 1 and Note 7 to the consolidated financial statements,
the Company adopted the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" and Statement of Financial Accounting Standards No. 106,
"Employers Accounting for Postretirement Benefits Other Than Pensions" in
1993.
KPMG PEAT MARWICK
Orange County, California
January 20, 1994
<PAGE>
FIVE-YEAR FINANCIAL AND STATISTICAL DATA
Beckman Instruments, Inc.
Years Ended December 31, 1993 1992 1991 1990 1989
Dollars in millions,
except amounts per share
Summary of Operations
Sales $875.7 $908.8 $857.9 $815.2 $785.9
Costs of sales 418.3 440.9 417.7 396.7 383.5
Marketing, administrative and general 278.5 294.8 283.1 266.3 248.1
Research, development and engineering 93.3 85.9 82.2 80.6 70.3
Restructuring charge 114.7 - - - -
Operating income (loss) (29.1) 87.2 74.9 71.6 84.0
Nonoperating expense, net 24.8 16.5 11.1 10.2 11.7
Earnings (loss) before income taxes (53.9) 70.7 63.8 61.4 72.3
Net earnings (loss) before
accounting changes (33.6) 43.8 38.1 36.2 41.9
Net earnings (loss) (37.6) 43.8 38.1 36.2 41.9
Average number of shares
outstanding (millions) 27.8 28.7 29.0 28.7 28.5
Return on average stockholders' equity (11.9%) 12.5% 11.4% 12.2% 16.7%
Net earnings (loss) per share before
accounting changes $(1.21) $ 1.53 $ 1.32 $ 1.26 $ 1.47
Net earnings (loss) per share (1.35) 1.53 1.32 1.26 1.47
Dividends paid per share of
common stock 0.36 0.30 0.28 0.28 0.28
Financial Position at December 31
Current assets $544.5 $508.6 $491.7 $465.3 $411.9
Current liabilities 323.3 281.3 264.4 246.8 224.7
Working capital 221.2 227.3 227.3 218.5 187.2
Property, plant and equipment, net 216.8 213.0 203.0 203.1 182.1
Total assets 820.0 738.4 712.2 681.0 607.1
Long-term debt 113.7 59.5 59.0 64.6 75.9
Stockholders' equity 275.5 357.4 343.0 325.6 268.8
Shares outstanding 27.8 28.6 28.9 29.0 28.6
Other Statistics
Capital expenditures $ 92.8 $ 91.4 $ 69.7 $ 70.0 $ 56.6
Research, development and
engineering expense 93.3 85.9 82.2 80.6 70.3
Depreciation expense 62.3 63.9 55.5 47.2 39.2
Number of employees 6,581 6,879 6,883 7,054 7,283
<PAGE>
Quarterly Data (Unaudited)
Beckman Instruments, Inc.
Dollars in millions, except amounts per share
March 31 June 30 Sept.30 Dec.31 Total
1993 Quarter Ended
Sales $201.7 $221.8 $215.6 $236.6 $875.7
Cost of sales 97.1 106.7 103.9 110.6 418.3
Marketing, administrative and general 63.3 72.1 66.1 77.0 278.5
Research, development and engineering 22.4 22.9 23.2 24.8 93.3
Restructuring charge - - - 114.7 114.7
Operating income (loss) 18.9 20.1 22.4 (90.5) (29.1)
Earnings (loss) before
income taxes 16.0 18.2 18.0 (106.1) (53.9)
Net earnings (loss) before
accounting changes 10.2 11.7 11.5 (67.0) (33.6)
Net earnings (loss) 6.2 11.7 11.5 (67.0) (37.6)
Net earnings (loss) per share before
accounting changes 0.36 0.42 0.42 (2.41) (1.21)
Net earnings (loss) per share 0.22 0.42 0.42 (2.41) (1.35)
1992 Quarter Ended
Sales $213.0 $225.1 $220.5 $250.2 $908.8
Cost of sales 105.5 111.0 104.8 119.6 440.9
Marketing, administrative and general 68.4 73.9 70.4 82.1 294.8
Research, development and engineering 20.4 20.8 20.8 23.9 85.9
Operating income 18.7 19.4 24.5 24.6 87.2
Earnings before income taxes 15.2 17.5 18.7 19.3 70.7
Net earnings 9.3 10.7 11.4 12.4 43.8
Net earnings per share 0.32 0.37 0.40 0.44 1.53
<PAGE>
Stock Prices and Other Information
Stock Exchanges and Prices
The Company's common stock is listed on the New York Stock Exchange. Its
ticker symbol is BEC. The following presents a summary of the price range
for the common stock as reported on the New York Stock Exchange Composite
Tape for the periods ended December 31, 1993 and 1992, respectively.
Quarter 1993
1st 2nd 3rd 4th
High 25 1/2 23 5/8 26 3/8 28 1/4
Low 21 7/8 20 1/2 19 5/8 25
Quarter 1992
1st 2nd 3rd 4th
High 22 1/2 20 7/8 23 5/8 24 1/4
Low 17 5/8 18 3/8 18 1/8 20
Dividends
The Company paid cash dividends to stockholders of $0.36 per share in 1993,
$0.30 per share in 1992 and $0.28 per share in 1991. The Company intends to
continue paying cash dividends of at least the current per share amount,
subject to future business conditions, requirements of the operations and
financial condition of the Company.
In January 1994 the Board of Directors declared a first quarter dividend of
$0.10 per share. This dividend is payable March 3, 1994 to stockholders of
record on February 11, 1994.
Annual Meeting
The annual meeting of stockholders will be held on March 30, 1994 at the Brea
Civic Center in Brea, California. Formal notice of the meeting together with
the proxy statement and form of proxy will be mailed to each stockholder of
record on February 1, 1994.
<PAGE>
Form 10-K Annual Report Available to Stockholders
A copy of Beckman Instruments' Form 10-K annual report filed with the
Securities and Exchange Commission may be obtained without charge by writing
to the Company as follows:
Beckman Instruments, Inc.
Jay Steffenhagen, Vice President
Office of Investor Relations, M/S A-41-A
2500 Harbor Boulevard
Fullerton, California, 92634-3100
Telephone: 714-773-7764
FAX: 714-773-8543
There are no accounting differences between the financial statements
presented in this Annual Report and the Form 10-K report, but the Form 10-K
report does provide certain supplemental information as required by
Securities and Exchange Commission regulations.
Transfer Agent, Registrar and Dividend Disbursing Agent
First Chicago Trust Company of New York
30 West Broadway
New York, NY 10007-2192
Telephone: 212-587-6406
Significant Subsidiaries
Beckman Analytical S.p.A.
Beckman Instruments (Australia) Pty. Ltd.
Beckman Instruments (Canada), Inc.
Beckman Instruments (Caribe), Inc.
Beckman Instruments Espana S.A.
Beckman Instruments France S.A.
Beckman Instruments G.m.b.H.
Beckman Instruments (Ireland), Inc.
Beckman Instruments (Japan), Ltd.
Beckman Instruments (United Kingdom), Ltd.
Beckman Instruments International S.A.
Beckman Instruments de Mexico, S.A. de C.V.
SmithKline Diagnostics, Inc.
Exhibit 22
PARENTS AND SUBSIDIARIES
________________________
The following table lists current subsidiaries of the Company whose
results are included in the Company's combined financial statements.
The list of subsidiaries does not include certain subsidiaries
which, when considered in the aggregate, do not constitute a
significant subsidiary of the Company.
Jurisdiction
Name of Company of Incorporation
_______________ ________________
Beckman Instruments (Australia) Pty. Ltd. Australia
Beckman Instruments (Caribe) Inc. California
Beckman Instruments (Canada) Inc. Canada
SmithKline Diagnostics, Inc. Delaware
Beckman Instruments (United Kingdom) Ltd. England
Beckman Instruments France S.A. France
Beckman Instruments G.m.b.H. Germany
Beckman Analytical S.p.A. Italy
Beckman Instruments (Japan) Ltd. Japan
Beckman Instruments de Mexico, S.A. de C.V. Mexico
Beckman Instruments (Ireland) Inc. Panama
Beckman Instruments Espana S.A. Spain
Beckman Instruments International S.A. Switzerland
Exhibit 24
KPMG PEAT MARWICK
Certified Public Accountants
Orange County Office
Center Tower
650 Town Center Drive
Costa Mesa, CA 92626
The Board of Directors
Beckman Instruments, Inc.:
We consent to incorporation by reference in the registration
statements (nos. 33-31573, 33-31862, 33-41519, 33-51506, 33-55778,
33-66990 and 33-66988) on Form S-8 of Beckman Instruments, Inc. of
our reports dated January 20, 1994, relating to the consolidated
balance sheets of Beckman Instruments, Inc. and subsidiaries as of
December 31, 1993 and 1992, and the related consolidated statements
of operations and cash flows and related supplementary financial
schedules for each of the years in the three-year period ended
December 31, 1993, which reports appear in the December 31, 1993
annual report on Form 10-K of Beckman Instruments, Inc.
Our reports refer to the adoption of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes, and Statement of Financial
Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions, in 1993.
KPMG PEAT MARWICK
Orange County, California
February 8, 1994
