<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Secton 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
BECKMAN INSTRUMENTS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BECKMAN INSTRUMENTS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Paying of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-7(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.*
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number of the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
February 23, 1994
Dear Stockholder:
You are cordially invited to attend the 1994 Annual Meeting of
Stockholders of Beckman Instruments, Inc. to be held at 10:00 a.m., Wednesday,
March 30, 1994 at The Curtis Theatre at The Brea Civic & Cultural Center, One
Civic Center Circle, Brea, California.
The attached Notice of Annual Meeting of Stockholders and Proxy Statement
describe the matters to be acted upon. Whether or not you plan to attend
personally, and regardless of the number of shares you own, it is important that
your shares be represented. Accordingly, WE URGE YOU TO COMPLETE THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. If you attend the
Annual Meeting and wish to vote in person, you may withdraw your proxy at that
time.
If you plan to attend the Annual Meeting in person, mark the designated
box on the proxy card. Please promptly return the proxy card in sufficient time
to receive a card of admission, which you should present upon entering the
meeting.
Sincerely,
[SIG]
LOUIS T. ROSSO
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 30, 1994
TO OUR STOCKHOLDERS:
The 1994 Annual Meeting of Stockholders of Beckman Instruments, Inc., a
Delaware corporation, will be held at The Curtis Theatre at The Brea Civic &
Cultural Center, One Civic Center Circle, Brea, California, on Wednesday, March
30, 1994, at 10:00 a.m. for the following purposes:
1. To elect a class of directors to serve until the expiration of
their term in 1997 and until their successors are elected and
qualified; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on February 1, 1994
will be entitled to notice of and to vote at the meeting and any adjournment
thereof.
You are cordially invited to attend the meeting. Whether or not you expect
to attend, PLEASE PROMPTLY VOTE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY/INSTRUCTION CARD IN THE ENCLOSED U.S. POSTAGE-PAID ENVELOPE. This will
ensure that your shares are voted in accordance with your wishes and that a
quorum will be present. Even though you have returned your proxy card, you may
withdraw your proxy at any time prior to its use and vote in person at the
meeting should you so desire.
By Order of the Board of Directors
[SIG]
William H. May
Secretary
Fullerton, California
February 23, 1994
<PAGE> 4
BECKMAN INSTRUMENTS, INC.
2500 HARBOR BOULEVARD
FULLERTON, CALIFORNIA 92634-3100
------------------------
PROXY STATEMENT
------------------------
INTRODUCTION
This Proxy Statement is furnished to holders of shares of common stock, par
value $.10 per share ("Beckman Common Stock"), of Beckman Instruments, Inc., a
Delaware corporation ("Beckman" or the "Company"), in connection with the
solicitation by the Company's Board of Directors ("Board") of the accompanying
proxy to be used at the 1994 Annual Meeting of Stockholders to be held at The
Curtis Theatre at The Brea Civic & Cultural Center, One Civic Center Circle,
Brea, California, at 10:00 a.m. on Wednesday, March 30, 1994, and any
adjournment or postponement thereof (the "Annual Meeting"). Copies of this Proxy
Statement and the accompanying proxy are being mailed on or about February 23,
1994 to stockholders of record on February 1, 1994.
The expense of this solicitation will be paid by the Company. In addition
to solicitation by mail, officers and employees of the Company may solicit
proxies by telephone, by telex, or in person. The Company has engaged the firm
of D. F. King & Co., Inc., as proxy solicitors, to whom the fee payable for such
services is estimated to be $10,000 plus reimbursement of out-of-pocket
expenses. The Company will also reimburse brokers, nominees, fiduciaries and
other custodians for reasonable expenses incurred by them in forwarding proxy
materials to the beneficial owners of the stock.
Only holders of record of Beckman Common Stock at the close of business on
February 1, 1994 ("Record Date") are entitled to vote at the Annual Meeting. On
the Record Date, there were outstanding for voting purposes 29,040,768 shares of
Beckman Common Stock. Each stockholder shall have one vote per share on all
business of the Annual Meeting. The Company's Benefit Equity Trust, established
to assist the Company in meeting its stock-related obligations for benefit
programs, holds 1,150,878 of the shares outstanding for voting purposes. These
are voted by the trustee in the same proportion as instructions received from
employees recently participating in the Company's Employees' Stock Purchase
Plan.
The shares represented by properly executed proxies received in time for
the Annual Meeting will be voted. The proxy may be revoked by a stockholder at
any time prior to its use by giving written notice of such revocation to the
Secretary of the Company, by submitting a later dated proxy, or by voting in
person at the Annual Meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Beckman Common Stock will constitute a quorum at the
Annual Meeting. Outstanding shares of Beckman Common Stock represented by a
properly signed and returned proxy will be treated as being present at the
Annual Meeting for purposes of determining a quorum, without regard to whether
the proxy is marked as casting a vote, abstaining, withholding a vote for the
election of one or more nominees for director or constituting a broker non-vote.
The accompanying proxy card provides space to vote for or to withhold voting for
any or all nominees for the Board of Directors. Directors are elected by the
affirmative vote of a majority of the shares present in person or represented by
proxy at the Annual Meeting and entitled to vote on the subject matter. Proxies
marked as abstaining or withholding a vote in connection with the election of
one or more nominees for director will not be counted as casting votes for such
nominees, although the shares covered by such proxies will be included in
determining the number of shares present at the meeting and entitled to vote on
the subject matter.
The Company does not presently know of any business other than the election
of directors that may properly come before the stockholders for a vote at the
Annual Meeting. As to any such other matters, unless
<PAGE> 5
a greater or different vote were required by applicable law, the certificate of
incorporation or the by-laws, the affirmative vote of a majority of the shares
present in person or represented by proxy at the Annual Meeting and entitled to
vote on the subject matter would be required to approve such matter, and
abstentions would be treated as described above. Under the rules of the New York
Stock Exchange, Inc., brokers who hold shares in street name for customers have
the authority to vote on the election of directors and certain other matters
when they have not received instructions from beneficial owners, but lack such
authority on other matters. Proxies subject to such broker non-votes would not
be counted as casting votes for or against any matter as to which authority was
so withheld, and the shares covered by such proxies would not be included in
determining the number of shares present at the meeting and entitled to vote on
the subject matter in question.
UNLESS OTHERWISE DIRECTED IN THE PROXY, THE PERSONS NAMED IN THE PROXY CARD
WILL VOTE FOR THE DIRECTOR NOMINEES PRESENTED IN THE PROPOSAL BELOW. AS TO ANY
OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE MEETING, THE PERSONS NAMED IN
THE PROXY CARD WILL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT, ALTHOUGH THE
COMPANY DOES NOT PRESENTLY KNOW OF ANY OTHER BUSINESS.
PROPOSAL
ELECTION OF DIRECTORS
Four members of the Board are proposed to be elected for a term expiring at
the 1997 annual meeting of stockholders. The Board currently consists of eleven
persons and is divided into three classes, with the term of office of one class
expiring each year. All director nominees are currently directors of the Company
with terms expiring at this Annual Meeting.
The Board recently elected four new members, who are Dennis C. Fill,
William N. Kelley, M.D., C. Roderick O'Neil, and John P. Wareham. In addition,
the Board intends to elect one additional new member of the Board within the
next few months. George Kilmain, Vice President -- Finance and Chief Financial
Officer retired from the Company and resigned from the Board in December 1993.
The persons named in the accompanying proxy intend to vote the shares
represented by the proxy for the election of these director nominees, unless
authority to vote for one or more of such nominees is withheld in the proxy. The
proxies cannot be voted for a greater number of persons than the number of
nominees named. The Board is informed that all of the nominees are willing to
serve as directors, but if any of them should decline or be unable to act as a
director, the persons named in the proxy will vote for such substitute nominee
or nominees as may be designated by the Board unless the Board reduces the
number of directors accordingly.
DIRECTOR NOMINEES FOR TERM EXPIRING IN 1997
EARNEST H. CLARK, JR., 67, has been Chairman and Chief Executive Officer of
The Friendship Group, an investment partnership, since 1989. He served as
Chairman of Baker Hughes Incorporated, which manufactures and services equipment
for drilling and completing oil wells and equipment for surface and underground
mining, from 1987 to 1989. From 1969 to 1987, he served as Chairman of Baker
International Corporation, a predecessor to Baker Hughes Incorporated. He also
served as Chief Executive Officer of Baker International Corporation from 1965
to 1987 and as its President from 1962 to 1985, respectively. He is a director
of CBI Industries, Honeywell Inc., Kerr McGee Corporation and The American
Mutual Fund. Mr. Clark is Chairman of the Board and Chief Volunteer Officer of
the YMCA of the USA and a member of the Board of Harvey Mudd College. He has
been a director of Beckman since 1988.
GAVIN S. HERBERT, 61, has been Chairman of the Board of Allergan, Inc., a
global provider of specialty therapeutic products which he helped found in 1950,
since 1977. He also served as its Chief Executive Officer from 1961 to 1991. He
was Executive Vice President of SmithKline Beckman Corporation, predecessor of
SmithKline Beecham Corporation, which markets prescription and proprietary
products for human and animal health care and diagnostic and analytical products
and services, from 1986 to 1989. He was President of SmithKline Beckman
Corporation's Eye and Skin Care Products Operations from 1981 to 1989. Mr.
Herbert is a Trustee of the University of Southern California and on the Board
of Directors of Research to
2
<PAGE> 6
Prevent Blindness, California Healthcare Institute, and the Pharmaceutical
Manufacturers Association. He has been a director of Beckman since 1988.
C. RODERICK O'NEIL, 63, has been Chairman of O'Neil Associates, an
investment management consulting firm, since 1987. He was a partner in Greenspan
O'Neil Associates from 1984 to 1987 and Chairman of the Finance Committee of
Travelers Corporation from 1977 to 1984. Mr. O'Neil is a director of AMBAC Inc.,
Brinson Global Funds and Fort Dearborn Fund. He has been a director of Beckman
since January 1994.
LOUIS T. ROSSO, 60, has been Chief Executive Officer of the Company since
1988 and Chairman of the Board since 1989. He served as the Company's President
from 1982 to October 1993. He also served as a Vice President of SmithKline
Beckman Corporation from 1982 to 1989. Mr. Rosso first joined Beckman in 1959
and was named Corporate Vice President in 1974. He is a director of Allergan,
Inc. and 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 Beckman since 1988.
Vote Required. The affirmative vote of a majority of the shares of Beckman
Common Stock present in person, or represented by proxy at the Annual Meeting
and entitled to vote on the subject matter is required.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE NOMINEES.
BOARD OF DIRECTORS INFORMATION
CONTINUING DIRECTORS -- TERM EXPIRING IN 1995
CAROLYNE K. DAVIS, Ph.D., 62, has been a national and international health
care advisor to Ernst & Young, certified public accountants, since 1985, and a
consultant and advisor to the Board of Beverly Enterprises, Inc., operator of
nursing facilities, retirement and congregate living projects, pharmacies and
home health care entities, since 1989. Dr. Davis served as Administrator of the
Health Care Financing Administration of the U.S. Department of Health and Human
Services from 1981 to 1985. She is a member of the Institute of Medicine, and
the American Red Cross Board of Governors as well as the National Museum for
Medicine and Health. Dr. Davis is a Trustee of the National Rehabilitation
Hospital, Washington DC and Trustee for the University of Pennsylvania Medical
Center. She is a director of Merck & Co., Inc., The Prudential Insurance Company
of America, and Pharmaceutical Marketing Services, Inc. Dr. Davis has been a
director of Beckman since 1989.
DENNIS C. FILL, 64, is Chairman and Chief Executive Officer of Advanced
Technology Laboratories, Inc., a worldwide leader in the development,
manufacturing and distribution of medical ultrasound systems, formerly known as
Westmark International. He was Chairman of the Board, Chief Executive Officer
and President of Westmark from 1986 to 1992. From 1978 to 1987, he served as
President and Chief Operating Officer of Squibb Corporation. He is a director of
ATL, SpaceLabs, Cytran, Inc. and Morton International. Mr. Fill has been a
director of Beckman since January 1994.
WILLIAM N. KELLEY, M.D., 54, has served as Executive Vice President of the
University of Pennsylvania, Chief Executive Officer of the University of
Pennsylvania Medical Center and Health System, and Dean of the School of
Medicine at the University of Pennsylvania since 1989. He was Professor and
Chairman of the Department of Internal Medicine and a Professor -- Department of
Biological Chemistry from 1975 to 1989. He also serves as a Trustee of Emory
University. Dr. Kelly is a director of Merck & Co., Inc. He has been a director
of Beckman Instruments since January 1994.
HENRY WENDT, 60, is Chairman of the Board of SmithKline Beecham p.1.c.,
which manufactures and markets prescription and proprietary products for human
and animal health care, and its subsidiary, SmithKline Beecham Corporation. He
was President of SmithKline Beckman Corporation, predecessor of SmithKline
Beecham Corporation, from 1982 to 1987 and from January 1989 to July 1989. He
served as its Chief Executive Officer from 1982 to 1989 and its Chairman of the
Board from 1987 to 1989. Mr. Wendt is a
3
<PAGE> 7
director of Allergan, Inc., Atlantic Richfield Co., and Aviall, Inc. He is a
member and former Chairman of the U.S.-Japan Business Council and a member of
the Trilateral Commission. Mr. Wendt has been a director of Beckman since 1988
and served as its Chairman of the Board until 1989.
CONTINUING DIRECTORS -- TERM EXPIRING IN 1996
FRANCIS P. LUCIER, 66, served 21 years with the Black & Decker Corporation,
international manufacturer of power tools and home appliances, holding the posts
of President, Chief Executive Officer or Chairman of the Board from 1972 to
1984. He has served as Chairman of the Board of Hartland & Company, consultants
for management of pension finance planning policy and communication, since 1989.
He was Chairman of the Board and Chief Executive Officer of Mohawk Data Sciences
Corporation, producers of electronic data processing equipment, from 1984 until
1985 and Chairman of the Board of Micon Systems, Inc., a producer of data
communications products, from January 1988 until its sale in September 1988. Mr.
Lucier has been a management consultant since 1985. He is a director of PHH
Corporation. He has been a director of Beckman since 1988.
DAVID S. TAPPAN, JR., 71, served as Chief Executive Officer and Chairman of
the Board of Fluor Corporation, an international engineering construction and
technical services company with investments in coal and lead, from 1984 until
1989 and 1990, respectively, and currently serves as a director of that
corporation. Mr. Tappan is also a director of Advanced Tissue Sciences, Inc.,
Genentech, Inc., Allianz Insurance Company, and the United States Chamber of
Commerce. He is also a member of the Board of Trustees of The Scripps Research
Institute and the University of Southern California. Mr. Tappan has been a
director of Beckman since 1988.
JOHN P. WAREHAM, 52, has served as President and Chief Operating Officer of
the Company since October 1993. He served as the Company's Vice
President -- Diagnostic Systems Group from 1984 through October 1993. Prior
thereto he had been President of Norden Laboratories, Inc., a wholly owned
subsidiary of SmithKline Beckman Corporation engaged in developing,
manufacturing and marketing veterinary products. Mr. Wareham first joined
SmithKline Corporation, a predecessor of SmithKline Beckman Corporation, in
1968. He is a director of the Little Rapids Corporation and The John Henry
Foundation. He has been a director of Beckman since December 1993.
BOARD COMPENSATION AND BENEFITS
Non-employee directors receive an annual $20,000 retainer plus $1,000 for
each Board meeting and each committee meeting attended. Meeting fees are paid
for the committee meetings whether or not held on the day of Board meetings. The
director receives an additional business fee equal to the Board meeting fee for
each day or significant portion of a day spent on Company business. No
additional business fee is paid to any director who receives consulting fees
from the Company. Directors who are officers of the Company receive no
additional compensation for Board or committee service. Therefore, Messrs.
Rosso, Kilmain and Wareham received no additional compensation for Board or
committee service during 1993.
Non-employee directors of the Company who have not been an employee of the
Company, or a subsidiary of the Company, for at least one year prior to the date
of grant automatically receive a non-qualified option to purchase 1,000 shares
of Beckman Common Stock (subject to adjustments occurring after the grant) on
the date of each annual meeting of stockholders, pursuant to the Company's Stock
Option Plan for Non-Employee Directors approved by stockholders in May 1989 and
amended with stockholder approval in 1992. The option price for each option
granted is the fair market value on the date of grant. Options are generally
exercisable six months from the date of grant (subject to the individual serving
as director for the duration of those six months) and expire ten years after the
date of grant (subject to earlier termination if the director ceases to serve as
a director). The amount of shares pursuant to outstanding options under this
plan which are exercisable or which will become exercisable within 60 days of
February 23, 1994, are included in the table shown under "Security Ownership of
Certain Beneficial Owners and Management -- By Directors and Executive Officers"
below.
4
<PAGE> 8
MEETINGS OF BOARD AND COMMITTEES
The Company's Board held eight meetings during 1993. The Board's Audit
Committee and Organization and Compensation Committee held four meetings each
and the Board's Finance Committee and Nominating Committee held five meetings
each, for a total of eighteen committee meetings in 1993. Each of the incumbent
directors attended at least 94% of the meetings of the Board and committees on
which such director served. The average attendance for all Board and committee
meetings was approximately 97%.
COMMITTEES OF THE BOARD
Audit Committee. This committee meets with the independent public
accountants and internal audit staff to discuss the annual audit plan and the
results of their audit examinations. It also meets with the Company's internal
auditors to review the internal audit department's activities and to discuss the
adequacy of the Company's accounting and control systems. This committee also
considers any issues raised by its members, the independent public accountants,
the internal audit staff, the legal staff or management. Each year it recommends
to the full Board an accounting firm to audit the consolidated financial
statements of the Company. This committee currently consists of Mr. Lucier,
Chairman, Mr. Herbert, Dr. Kelley and Mr. Wendt.
Organization and Compensation Committee. This committee reviews and
approves major corporate organization structure, reviews performance of
corporate officers and establishes overall executive compensation policies and
programs. It reviews and approves compensation elements such as base salary,
bonus awards, stock option grants and other forms of long-term incentives. No
member of the committee may be a member of management or eligible for
compensation other than as a director or consultant. This committee currently
consists of Mr. Tappan, Chairman, Mr. Clark, Mr. Fill and Mr. Lucier.
Finance Committee. This committee reviews, approves or modifies management
recommendations on corporate financial strategy and policy and, where
appropriate, makes recommendations to the Board. This committee currently
consists of Mr. Wendt, Chairman, Dr. Davis, Mr. Herbert and Mr. O'Neil.
Nominating Committee. This committee reviews the qualifications of nominees
for directors and makes recommendations to the Board to fill vacancies and newly
created directorships. It develops criteria to determine the qualifications of
directors and the appropriate retirement and tenure of directors. Stockholders
may submit recommendations for Board nominees to the committee for its
consideration by addressing them to the Secretary of the Company at its
headquarters in Fullerton, California. The committee may or may not act or
provide reasons related to its actions or inactions on any such recommendations.
This committee currently consists of Mr. Clark, Chairman, Dr. Davis, and Mr.
Tappan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Company's Organization and Compensation Committee is a
current or former officer or employee of the Company. In addition, there are no
compensation committee interlocks between Beckman and other entities involving
Beckman executive officers and Beckman Board members who serve as executive
officers of such other entities.
The Company employs the consulting services of Hartland & Company relating
to pension finance planning policy and communications for Beckman's Pension Plan
and Savings and Investment Plan. Beckman paid Hartland & Company $127,596 for
such consulting services in 1993. During 1993 and presently, Mr. Lucier is a
member of the Company's Organization and Compensation Committee. Mr. Lucier is
Chairman of the Board of Hartland & Company, receives a fee from Hartland and
Company for his services, and owns 20% equity interest therein.
5
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the amount of shares of Beckman Common Stock
beneficially owned (as of February 1, 1994, unless otherwise indicated) by
directors of the Company, the Chief Executive Officer and the five highest paid
executive officers reported in the "Executive Compensation -- Summary
Compensation Table" below ("named executive officers"), and all directors and
executive officers as a group. Percentage of ownership is calculated using the
number of outstanding shares as of February 1, 1994, the Record Date.
<TABLE>
<CAPTION>
BECKMAN PERCENTAGE
BENEFICIAL OWNER COMMON STOCK OF OWNERSHIP
---------------- ------------ -----------
<S> <C> <C>
Directors:
L. T. Rosso......................................... 244,778(1)(2) *
E. H. Clark, Jr..................................... 5,100(1) *
C. K. Davis......................................... 5,127(1) *
D. C. Fill.......................................... 1,000 *
G. S. Herbert....................................... 13,212(1)(3) *
W. N. Kelley........................................ -0- *
F. P. Lucier........................................ 6,586(1)(3) *
C. R. O'Neil........................................ 2,000 *
D. S. Tappan, Jr.................................... 6,000(1) *
J. Wareham.......................................... 88,881(1)(2) *
H. Wendt............................................ 16,771(1)(3) *
Other Named Executive Officers:
G. Kilmain.......................................... 76,569(1)(2)(3) *
M. O'Neill.......................................... 85,494(1)(2) *
A. Torrellas........................................ 40,651(1)(2)(3) *
A. Ziegler.......................................... 38,787(1)(2) *
All Directors and Officers as a group (22 persons).... 831,512(1)(2)(3) *
</TABLE>
- ---------------
* Less than 1% of outstanding shares.
(1) The amounts shown include shares which directors and executive officers had
the current right to acquire, or will have the right to acquire within 60
days of February 23, 1994 upon the exercise of options under the Company's
Stock Option Plan for Non-Employee Directors and Incentive Compensation
Plans, as applicable, as follows: Messrs. Clark, Lucier, and Tappan, and Dr.
Davis, 5,000 shares each; Messrs. Herbert and Wendt, 3,000 shares each; Mr.
Rosso, 161,360 shares; Mr. Wareham, 77,220 shares; Mr. Kilmain, 62,200
shares; Mr. O'Neill, 71,410 shares; Messrs. Torrellas and Ziegler, 35,690
shares each; and all directors and officers as a group, 632,582 shares.
(2) Included are shares held in trust for the benefit of the named executive
officers and employee directors under the Company's Savings and Investment
Plan as of November 30, 1993, as follows: Mr. Rosso, 42,249 shares; Mr.
Wareham, 899 shares; Mr. Kilmain, 365 shares; Mr. O'Neill, 2,652 shares; Mr.
Torrellas, 357 shares; Mr. Ziegler, 324 shares; and all executive officers
as a group, 57,656 shares. Also included are restricted stock holdings as
follows: Mr. Rosso, 4,968 shares; Messrs. Wareham and O'Neill, 2,262 shares
each; Messrs. Torrellas and Ziegler, 996 shares each; and all executive
officers as a group, 16,548 shares.
(3) Included in the amounts shown above are shares of Beckman Common Stock for
the named individuals as follows: Mr. Herbert, a total of 8,682 shares held
as trustee or co-trustee in family trusts (but not including 1,530 shares
held in the Marilyn Hausman Successor Trust of which he is trustee but
disclaims beneficial ownership of such shares); Mr. Kilmain, 9,400 shares
held by himself and his spouse as co-trustees in a family trust; Mr. Lucier,
1,458 shares held by his pension plan; Mr. Torrellas, 2,366 shares held by
himself and his spouse as co-trustees in a family trust; and Mr. Wendt,
3,366 shares held by his
6
<PAGE> 10
spouse. Also included are shares of Beckman Common Stock for other executive
officers totalling 5,277 shares held as trustees or co-trustees in family
trusts or as custodian for children.
BY OTHERS
Management of the Company knows of no person, except as set forth below,
who is the beneficial owner of more than 5% of the Company's issued and
outstanding Common Stock. The table sets forth information known to the Company
as of February 14, 1994, with percentage of ownership calculated using the
number of outstanding shares on February 1, 1994.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES PERCENT
BENEFICIAL OWNERS BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
<S> <C> <C>
Trimark Investment Management Inc....................... 2,824,700(1) 9.73
Brinson Partners, Inc. and related entities............. 2,726,780(2) 9.39(2)
Mellon Bank Corporation and its subsidiaries............ 2,576,070(3) 8.87
Quantum Partners LDC and related entities............... 1,787,500(4) 6.16(4)
</TABLE>
- ---------------
(1) Based on the Schedule 13G amendment dated February 10, 1994, wherein Trimark
Investment Management Inc. ("TIMI") reported the beneficial ownership of
2,824,700 shares at December 31, 1993. The Schedule 13G amendment states
that TIMI is both manager of the assets and sole trustee of various trust
funds and, as such, has sole voting power and sole dispositive power in
respect of all 2,824,700 shares. TIMI's address is One First Canadian Place,
Suite 5600, P.O. Box 487 , Toronto, Ontario, M5X 1E5.
(2) Based on information provided by Brinson Partners, Inc. ("BPI"), Brinson
Trust Company ("BTC"), and Brinson Holdings, Inc. ("BHI"), included in their
joint Schedule 13G amendment dated February 14, 1994, wherein they reported
the beneficial ownership of 2,575,634 shares at December 31, 1993. They
state that: BPI has sole voting and dispositive powers over the 2,058,785
shares (7.09% of outstanding shares) it beneficially owns; BTC has sole
voting and dispositive powers over the 667,995 shares (2.3% of outstanding
shares) it beneficially owns; and BHI beneficially owns the shares by BPI
and BTC solely through its ownership of BPI which in turns owns BTC. The
address for BPI, BTC and BHI is 209 South LaSalle, Chicago, Illinois
60604-1295.
(3) Based on a Schedule 13G dated February 9, 1994, wherein Mellon Bank
Corporation and its subsidiaries, including also subsidiaries of The Boston
Company, Inc., ("Mellon") reported the beneficial ownership of 2,576,070 at
December 31, 1993. The Schedule 13G states that all of the securities are
beneficially owned by Mellon in various fiduciary capacities, with no
individual accounts holding an interest of 5% or more. Mellon has sole
voting and dispositive powers in respect of 119,000 shares, shared voting
power in respect of 26,000 shares, and shared dispositive power in respect
of 1,705,000 shares. Mellon Bank, N.A., as trustee of Beckman's Savings and
Investment Plan, disclaims beneficial ownership of all shares that have been
allocated to the individual accounts of employee participants for which
directions have been received and followed. The principal place of business
is Mellon Bank Corporation, One Mellon Bank Center, Pittsburgh, Pennsylvania
15258.
(4) Based on a joint Schedule 13D amendment dated September 15, 1993, reporting
the information which follows.
Quantum Partners LDC ("Quantum Partners"), shares voting power for 604,500
shares (2.08% of outstanding shares). The address of its principal office
is De Ruyterkade 62, Curacao, Netherlands Antilles.
George Soros is beneficial owner of 1,200,700 shares (4.13% of outstanding
shares). This number consists of (a) 596,200 shares owned by Mr. Soros
personally, for which he has sole voting and dispositive powers, and (b)
the 604,500 shares (as stated above) owned by Quantum Partners, of which
Mr. Soros (as sole proprietor of the investment firm Soros Fund Management
("SFM"), which is under contract as discretionary investment manager to
Quantum Partners) may be considered beneficial owner, and as to
7
<PAGE> 11
which he shares voting power with Quantum Partners and has sole dispositive
power. The address of SFM's principal office is 888 Seventh Avenue, New
York, New York 10106.
Winston Partners L.P. ("Winston") holds 586,800 shares (2.02% of
outstanding shares), for which Purnendu Chatterjee, in his capacity as sole
general partner of Chatterjee Fund Management, a limited partnership which
is the sole general partner of Winston, has sole voting and dispositive
powers. The business address for Mr. Chatterjee is 888 Seventh Avenue, New
York, New York 10106.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
directors, officers and certain other employees of the Company, and persons who
own more than ten percent of a registered class of the Company's equity
securities ("Reporting Persons") to file with the Securities and Exchange
Commission and the New York Stock Exchange initial reports of ownership and
reports of changes in ownership of Beckman Common Stock. In addition, under
Section 16(a), trusts for which a Reporting Person is a trustee and a
beneficiary (or a member of his immediate family is a beneficiary), may have a
separate reporting obligation with regard to holdings and transactions in
Beckman Common Stock. Specific due dates for these reports have been established
and the Company is required to disclose in this proxy statement any failure to
file by these dates during 1993. To the Company's knowledge, all of these
requirements were satisfied, except that two Reporting Persons each filed one
late Form 4 for purchases under the Company's newly established Dividend
Reinvestment Plan, which transactions are exempt from liability under Section
16(b), as follows: Mr. May, three transactions of less than one share each; and
Mr. Ziegler, one transaction of less than six shares.
8
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth information, as to the Chief Executive
Officer and the five highest paid executive officers of the Company, for the
last three fiscal years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS(2)
---------------------------
ANNUAL SECURITIES
COMPENSATION(2) RESTRICTED UNDERLYING
------------------- STOCK OPTIONS/ ALL OTHER
SALARY(3) BONUS(4) AWARD(S)(5) SARS(6) COMPENSATION(7)
NAME AND PRINCIPAL POSITION(1) YEAR ($) ($) ($) (#) ($)
- --------------------------------- ----- --------- -------- ----------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Louis T. Rosso 1993 449,167 -- -- 50,000 shares 7,075
Chairman of the Board,
President 1992 420,006 415,400 -- 45,000 shares 5,722
and Chief Executive Officer 1991 397,924 137,300 163,530 55,000 shares 5,556
John P. Wareham 1993 273,008 -- -- 17,000 shares 7,075
Vice President, Diagnostic 1992 261,174 198,500 -- 19,000 shares 5,722
Systems Group (DSG) 1991 251,000 191,500 74,458 25,000 shares 5,556
George Kilmain 1993 248,906 -- -- 11,000 shares 222,141(8)
Vice President, Finance and 1992 221,167 136,900 -- 12,500 shares 6,103
Chief Financial Officer 1991 211,004 48,500 53,523 18,000 shares 5,556
Michael T. O'Neill 1993 246,008 -- -- 17,000 shares 7,075
Vice President Bioanalytical 1992 233,258 195,500 -- 19,000 shares 6,103
Systems Group (BSG) 1991 212,841 10,900 74,458 25,000 shares 5,556
Arthur A. Torrellas 1993 197,526 -- -- 7,000 shares 7,075
Vice President, International 1992 186,472 132,000 -- 8,000 shares 6,103
Operations -- DSG 1991 165,330 115,110 32,785 11,000 shares 3,586
Albert R. Ziegler 1993 196,625 -- -- 7,000 shares 7,075
Vice President, North 1992 187,425 130,800 -- 8,000 shares 6,094
American Operations -- DSG 1991 179,363 111,000 32,785 11,000 shares 4,702
</TABLE>
- ---------------
(1) In October 1993, Mr. Wareham became President and Chief Operating Officer
and Mr. O'Neill became Senior Vice President of Commercial Operations. In
December 1993, Mr. Kilmain retired.
(2) The aggregate amount of other annual compensation for each named individual
did not equal or exceed the lesser of either $50,000 or 10% of the total of
such individual's basic salary and bonus for each of the fiscal years
reported herein and is not shown. Also, there were no pay-outs pursuant to
long term incentive plans made during the fiscal years shown.
(3) Amounts shown include salary reductions under the Company's Flexible
Benefits Plan and compensation deferred under the Savings and Investment
Plan, pursuant, respectively, to Sections 125 and 401(k) of the Internal
Revenue Code of 1986, as amended. The amount shown includes payout upon
retirement of accrued vacation to Mr. Kilmain, whose salary otherwise would
have been $231,138 in 1993.
(4) Amounts shown include bonuses paid relating to services in 1991 and 1992.
These awards were contingent upon the attainment of certain organizational
and individual goals prescribed by the Board's Organization and Compensation
Committee. Awards were paid in cash. The plans did not provide for
deferrals. No bonus amounts were paid to executive officers relating to
services in 1993.
(5) The amounts shown represent the values of the awards of restricted stock,
calculated by multiplying the number so awarded by the closing price per
share of $19.75 as reported on the New York Stock Exchange on the grant
date. The number of shares of restricted stock granted to the named
individuals follows: Mr. Rosso, 8,280; Messrs. Wareham and O'Neill, 3,770
each; Mr. Kilmain, 2,710; and Messrs. Torrellas and Mr. Ziegler, 1,660 each.
Restrictions lapse annually as to 20% of the total number of shares awarded.
At the last fiscal year-end, the aggregate restricted stock holdings for the
named individuals and their values (calculated by multiplying the number so
held December 31, 1993 by the closing price per share of $27.375 as reported
on the New York Stock Exchange on that date) follows: Mr. Rosso, 4,968
shares, $135,999; Messrs. Wareham and O'Neill, 2,262 shares, $61,922 each;
and Messrs. Torrellas and Ziegler,
9
<PAGE> 13
996 shares, $27,266 each. All restrictions lapsed as to Mr. Kilmain's shares
upon his retirement prior to year end. Values shown do not include any
diminution effect attributable to the restrictions on such stock.
Restrictions may lapse sooner in the event of termination of employment due
to death or total disability, retirement occurring at least twelve months
after the award, or a change of control (as defined in the Restricted Stock
Agreement). Dividends are paid on restricted stock at the same amount per
share declared for all holders of Beckman Common Stock.
(6) No SARs have been awarded. Options are for shares of Beckman Common Stock.
(7) The amounts shown in this column for the last fiscal year include Company
matching contributions to the Company's Savings and Investment Plan, a
defined contribution plan wherein eligible employees of the Company and
certain subsidiaries may invest in various funds generally up to 15% of
their compensation through payroll deductions. The Company makes
contributions to the plan equal to 50% or 60% (depending upon investment of
Company matching contributions) of up to the first 5% of each employee's
contribution (subject to certain limitations).
(8) The amount shown for Mr. Kilmain includes $7,075, the Company's matching
contribution to the Savings and Investment Plan (discussed in the above
footnote). Also included is $222,141 attributable to payments calculated
according to a common formula for lump sum separation pay and a medical
insurance subsidy under the Company's voluntary separation program, a
broad-based separation of employment program available in 1993, under which
Mr. Kilmain retired (see "Termination and Change in Control Agreements"
below).
FISCAL YEAR OPTION GRANTS
The following table sets forth the number of options granted and the
estimated grant date present value for the named executive officers during the
fiscal year ended December 31, 1993:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
- --------------------------------------------------------------------------------------------------------
GRANT DATE
PERCENT OF TOTAL VALUE
NUMBER OF SECURITIES OPTIONS/SARS --------------
UNDERLYING OPTIONS/ GRANTED TO EXERCISE OF GRANT DATE
SARS GRANTED EMPLOYEES BASE PRICE EXPIRATION PRESENT VALUE
NAME (#) IN FISCAL YEAR ($/SH) DATE ($)(2)
- -------- -------------------- ---------------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
L. Rosso........... 50,000 11.4% $ 22.50 4/6/03 $447,000
J. Wareham......... 17,000 3.9 22.50 4/6/03 151,980
M. O'Neill......... 17,000 3.9 22.50 4/6/03 151,980
G. Kilmain......... 11,000 2.5 22.50 4/6/03 98,340
A. Torrellas....... 7,000 1.6 22.50 4/6/03 62,580
A. Ziegler......... 7,000 1.6 22.50 4/6/03 62,580
</TABLE>
- ---------------
(1) Non-qualified stock options were granted in 1993 pursuant to the Company's
Incentive Compensation Plan of 1990 at an option price equal to the fair
market value of the stock at the date of grant. The option price may be paid
by delivery of already owned shares, subject to certain conditions. The
number of 1993 options exercisable increases in 33% increments after each
successive anniversary of the date of grant. Options may become exercisable
sooner in the event of death, disability, or retirement occurring after 12
months from the date of grant; retirement under the voluntary separation
program; or in the event of a change of control occurring at any time after
the date of grant. The options have a term of ten years, subject to sooner
expiration in the event of termination of employment. The Organization and
Compensation Committee of the Board retains discretion, subject to plan
limits, to modify the terms of outstanding options, to reprice options, and
to adjust the number, price and kind of shares in the event of certain
changes affecting Company stock. No adjustments or repricing of any options
granted has occurred. No free-standing or tandem SARs have been granted.
10
<PAGE> 14
(2) Grant date present value estimates were made using a variation of the
Black-Scholes pricing model. The following factors and assumptions were
used: option price ($22.50, the fair market value on the date of grant);
term of option (10 years); risk of forfeiture due to termination (adjusted
by 3% for each year of the three-year vesting period); risk free rate of
return (6%); dividend yield (1.59%); volatility (.2920); and market price
($22.50). Although this model is widely used, the value of stock options may
not be determined absolutely, and such value cannot be guaranteed, because
of the wide range of assumptions and variations which may occur from time to
time.
OPTION EXERCISES AND YEAR-END OPTION VALUES
None of the named executive officers exercised stock options during the
fiscal year ended December 31, 1993. No free-standing or tandem SARs have been
granted. The table below shows the number of exercisable and unexercisable
in-the-money stock options and their values at fiscal year-end. An option is
in-the-money if the fair market value of the underlying securities exceeds the
exercise price of the option.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR-END
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FY-END (#)(1) AT FY-END ($)(2)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
L. Rosso.................... 111,310 98,850 $1,016,446 $627,394
J. Wareham.................. 56,840 38,230 $ 518,890 $250,071
M. O'Neill.................. 51,030 38,230 $ 470,501 $250,071
G. Kilmain.................. 62,200 0 $ 505,925 $ 0
A. Torrellas................ 27,000 16,100 $ 247,800 $105,913
A. Ziegler.................. 27,000 16,100 $ 247,800 $105,913
</TABLE>
- ---------------
(1) All options granted have a term of ten years, subject to earlier
termination, with options becoming exercisable over periods of two, three,
or four years from dates of grant. See footnote 1 to "Option/SAR Grants in
Last Fiscal Year" table above for additional information on general terms
which apply to stock option awards made.
(2) Values were calculated by multiplying the closing market price of Beckman
Common Stock at December 31, 1993 ($27.375 per share as reported on the New
York Stock Exchange on that date) by the respective number of shares and
subtracting the option price, without any adjustment for any vesting or
termination contingencies or other variables.
TERMINATION AND MANAGEMENT CHANGE IN CONTROL AGREEMENTS
In October 1993, the Company offered a voluntary separation program to
employees with at least twenty years of service with the Company. In general,
the program provided a pension plan enhancement for age and benefit service and
a Social Security bridge payment of up to $500 a month until age 62, for
employees meeting certain additional eligibility requirements. The program also
provided for a lump sum separation pay amount based on a formula common to all
participants and a medical insurance subsidy, in addition to a retraining
scholarship, preretirement planning seminars, vesting of stock options held less
than one year, and outplacement services. All executive officers (except Mr.
Rosso) who met the eligibility requirements could participate in the program.
Mr. Kilmain retired from the Company under the program and was eligible to
receive all provisions of the program (see further discussion at footnote 8 to
the "Executive Compensation -- Summary Compensation Table" above).
All senior management who are Vice Presidents or above of the Company,
including the named executives, have entered into agreements with the Company
that are effective if, within two years after the occurrence of a change in
control of the Company (as defined in the agreements), any of these individuals
is
11
<PAGE> 15
terminated without cause or has a material change to compensation or
responsibilities. Under these agreements, the Company will pay up to three times
the individual's annual compensation as specified in the agreements, as well as
a limited continuance of certain Company benefits.
DEFINED BENEFIT PENSION PLANS
The Company's defined benefit qualified and non-qualified supplemental
pension plans provide pension benefits to employees, including officers of the
Company, based upon the average of the highest 60 consecutive months of eligible
compensation and years of eligible service. Eligible compensation includes basic
salary and bonuses earned during the year. Benefit amounts are offset generally
by a portion of the employee's Social Security Covered Compensation and, if
applicable, amounts from any other similar Company or subsidiary sponsored plan.
If an employee elects a form of payment providing a benefit for his or her
beneficiary, the benefit amount for the employee is reduced.
Normal retirement age generally is 65, but employees may continue
employment beyond age 65 and earn additional retirement benefits. Pursuant to
the Company's voluntary separation program (see "Termination and Management
Change in Control Agreements" above), Mr. Kilmain was credited with five
additional years of eligible service which resulted in a total of approximately
37 years of eligible service upon his 1993 retirement at age 60. Credited years
of eligible service at normal retirement for the other named executive officers
would be as follows: Mr. Rosso, 40 years; Mr. Wareham, 38 years; Mr. O'Neill, 33
years; Mr. Torrellas, 18 years; and Mr. Ziegler, 30 years.
The Company has entered into an agreement under the non-qualified
supplemental pension plan with Mr. Torrellas. Under certain stipulations on
employment tenure with the Company, the agreement provides additional retirement
benefits under the non-qualified plan as if he had a 38% increase in the single
life annuity amount under the Company's qualified pension plan.
The following table illustrates the annual pension benefits, before any
offsets, calculated as a single life annuity, payable at normal retirement.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40 45
- ------------ --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$300,000 $ 76,500 $ 102,000 $ 127,500 $ 153,000 $ 178,500 $ 186,000 $ 193,500
350,000 89,250 119,000 148,750 178,500 208,250 217,000 255,750
400,000 102,000 136,000 170,000 204,000 238,000 248,000 258,000
450,000 114,750 153,000 191,250 229,500 267,750 279,000 290,250
500,000 127,500 170,000 212,500 255,000 297,500 310,000 322,500
550,000 140,250 187,000 233,750 280,500 327,250 341,000 354,750
600,000 153,000 204,000 255,000 306,000 357,000 372,000 387,000
650,000 165,750 221,000 276,250 331,500 386,750 403,000 419,250
700,000 178,000 238,000 297,500 357,000 416,500 434,000 451,500
750,000 191,250 255,000 318,750 382,500 446,250 465,000 483,750
</TABLE>
12
<PAGE> 16
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the Report below and the Stock Performance Graph which follows
shall not be incorporated by reference into any such filings.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Among the duties of the Organization and Compensation Committee of the
Board is the determination of compensation for all executive officers, including
the Chief Executive Officer ("CEO").
EXECUTIVE COMPENSATION COMPONENTS
The committee intended that 1993 executive compensation be competitive and
that it further align the interests of management and stockholders, as well as
allow rewards for long-term vision and growth. The three components of executive
compensation were base salary, bonus opportunity and stock options.
Information on compensation competitiveness was derived using companies of
comparable revenue size reported in the 1992 Towers Perrin Compensation Data
Bank ("Data Bank"), which included 394 companies representing a composite of all
business sectors and 300 CEO positions. This larger data base was viewed as
substantially more reliable than data from the peer group companies in the Stock
Performance Graph (shown following this report). Also, data on comparable
positions is generally unavailable for the Company's direct competitors, which
are primarily privately held foreign corporations or smaller divisions of
substantially larger public companies.
A significant portion of compensation related directly to company financial
results through the annual bonus plans. While the desired "base salary"
compensation was a 50th percentile of base salary levels in the Data Bank, a
75th percentile of "total cash compensation" levels (base salary and bonus)
could have been achieved upon meeting the net earnings threshold and other
objectives under the bonus plans. This percentile was chosen in recognition of
the risk associated with a critical "all or nothing" provision precluding bonus
eligibility for any performance measure in the bonus plans unless company net
earnings increased by at least 13% over fiscal year 1992.
Long-term incentives were provided through the grant of stock options. The
1992 Towers Perrin Long-Term Incentive Plan Survey ("Survey") was consulted to
provide a comparable incentive reference point. The Survey reported on some 270
companies representing a composite of all business sectors, 400 long-term
incentive plans and 10,500 individuals.
The compensation components are discussed further below.
- BASE SALARY
The CEO base salary determination by the committee, approved by the other
outside members of the Board, was to increase Mr. Rosso's base pay from $440,000
to $450,000, a 2.3% increase, just above the 50th percentile level in the
analysis of CEO base salary reported in the Data Bank. The committee reviewed
the base salary for the CEO five months earlier than normal in order to shift
Mr. Rosso to a common salary review date with other Company officers.
The process of determining base salary for executive officers was
comparable to that utilized for the CEO, with reference made to the 50th
percentile level of base salary for positions in the Data Bank reflecting
responsibilities comparable to those of the respective officers.
While the Data Bank reference was the primary factor in the determination
of base salary, individual performance and internal pay relationships was
considered in individual cases by some members of the committee. These factors,
however, were not weighted, ranked, or generally discussed by the committee.
- BONUS OPPORTUNITY
As a result of not achieving the threshold 13% net earnings increase, no
annual cash bonuses were paid in 1993 to any executive officer. Had the initial
threshold been met, bonus awards would have been based on the
13
<PAGE> 17
sum of a net earnings growth percentage (weighted at approximately 30%) and a
profitability of operating units percentage (weighted at approximately 70%)
multiplied by an additional factor (ranging from 0% to 150%) derived from the
assessment of individual accomplishment of management objectives. The assessment
of individual accomplishments is performed by the committee for the CEO, and by
the CEO (reviewed by the committee) for the other executive officers.
Due to the large amount of compensation at risk relating to the net
earnings threshold, the impact of no bonuses on competitive positioning for
executive officers, although varied somewhat by individual, generally resulted
in total cash compensation below competitive levels. The lack of bonus payment
to the CEO caused a 46% reduction in total cash compensation compared to 1992
earnings, placing his total cash compensation below the 25th percentile in the
competitive compensation analysis for his position.
In its review of the individual performance of corporate officers in 1993,
the committee commended the CEO for his leadership in the redirection of
business market strategy and the company restructuring in support of new
strategic initiatives. The committee also noted the significant progress in the
creation of shareholder value, as shown by the 1993 growth of total return on
Beckman Common Stock compared to that of the composite peer group companies and
the Standard and Poor's 500 Stock Index (see "Stock Performance Graph" following
this report).
- STOCK OPTIONS
Long-term performance incentives for 1993 were provided through stock
options granted pursuant to the current incentive compensation plan, approved by
stockholders and administered by the committee. The non-qualified options have a
ten year term (subject to earlier expiration upon termination of employment)
with a non-discounted strike price and a three year vesting period. The grant
levels in 1993 were graduated by job class from the CEO to nine lower levels of
key management and senior technical staff members. The gradations for executive
officers, all of whom were in the top five levels below the CEO ranged from 34%
downward to 1.3% of the number of option shares approved for the CEO.
Although the 50th percentile of option grant values in the Survey
(discussed above) was the beginning reference point in the determination of the
number of stock options to be granted, limitations on the number of shares
available for plan purposes and the broad range of employees potentially
receiving grants or awards under the plan required share conservation measures.
This resulted in 1993 grant amounts 10% below the 50th percentile level in the
Survey for the CEO and a range of 10% to 15% below the 50th percentile level for
other executive officers.
OTHER MATTERS
The committee is in the process of considering any revisions to the
Company's executive compensation policy or plans which may be necessary due to
provisions of the Omnibus Budget Reconciliation Act of 1993. This legislation
amended Section 162 of the Internal Revenue Code by limiting to one million
dollars the deductibility of compensation (including stock-based compensation)
paid to certain executives.
No member of the committee is a former or current officer or employee of
the Company. The committee is composed entirely of independent outside
directors. Mr. Fill, a current member of this committee as of January 1994, was
not a Board or committee member in 1993 and did not participate in last year's
executive compensation matters.
Organization and Compensation
Committee
David S. Tappan, Jr.
Earnest H. Clark, Jr.
Francis P. Lucier
14
<PAGE> 18
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on Beckman Common Stock, based on its market price and assuming
reinvestment of dividends, with the cumulative total return of companies on the
Standard & Poor's 500 Stock Index and a selected peer group for the period
December 31, 1988 through December 31, 1993. Beckman Common Stock was initially
offered to the public and subject to securities registration in November 1988.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Beckman S&P 500 Peer Group
<S> <C> <C> <C>
12/88 100 100 100
12/89 102 131 110
12/90 88 127 124
12/91 109 166 129
12/92 142 179 145
12/93 168 197 142
</TABLE>
- ---------------
* Assumes $100 invested on December 31, 1988.
The Company has chosen, as its competitive peer group, the following
companies: Applied Bio-Systems, Becton-Dickenson, Bio-Rad Laboratories,
Diagnostic Products, Millipore, and Perkin-Elmer. Applied Bio-Systems is
included until the merger with Perkin-Elmer, and included thereafter with
Perkin-Elmer information. Beckman has the unique characteristic of serving both
the life sciences and diagnostic markets. Very few companies are similarly
balanced between these two markets. Therefore, the peer group chosen reflects
consideration given to the fact that these peer group companies are global
public companies, are research and development based product manufacturers, have
products focused on instrument systems and reagents, are an appropriate
comparable size and/or focus, and have in the mix of companies a reasonable
representation between the life sciences and diagnostic markets. Many of the
direct competitors for Beckman's diagnostic products are privately held foreign
corporations or smaller divisions of substantially larger public companies. As a
result and in addition to the above reasons, Beckman has chosen this peer group
because it is often compared to them by the financial investment community.
15
<PAGE> 19
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the Audit Committee, whose members and functions
are described under "Board of Directors Information -- Committees of the Board"
above. Upon recommendation of the Audit Committee, the Board has appointed the
firm of KPMG Peat Marwick as the Company's independent accountants for the
current year. KPMG Peat Marwick has served as auditor of the Company since it
was selected on March 29, 1990 to serve as the Company's independent accountant
for the year ended December 31, 1990.
Representatives of KPMG Peat Marwick are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.
ADDITIONAL INFORMATION
ANNUAL REPORT
A copy of the 1993 Annual Report to stockholders which includes the
financial statements and the financial statement schedules, but excludes Form
10-K exhibits, is being mailed to each stockholder of record as of February 1,
1994, together with the proxy materials.
DEADLINE FOR STOCKHOLDER PROPOSALS
Any proposal of an eligible stockholder intended to be presented at the
Company's 1995 annual meeting must be received in writing by the Secretary of
the Company on or before October 26, 1994, if the proposal is to be considered
by the Board for inclusion in the Company's proxy materials for that meeting.
OTHER BUSINESS
The Board does not intend to present at the Annual Meeting any business
other than as stated above. If any other matters properly come before the Annual
Meeting, the persons named in the accompanying proxy will have discretionary
authority to vote all proxies in accordance with their best judgment.
By Order of the Board of Directors
[SIG]
WILLIAM H. MAY
Secretary
February 23, 1994
16
<PAGE> 20
BECKMAN INSTRUMENTS, INC.
PROXY/VOTING INSTRUCTION CARD
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
THE CURTIS THEATRE AT THE BREA, CIVIC & CULTURAL CENTER, BREA CALIFORNIA
WEDNESDAY, MARCH 30, 1994, 10:00 A.M.
The undersigned hereby authorizes and appoints John P. Wareham and
David S. Tappan, Jr., and each of them, as true and lawful agents and proxies
with full power of substitution in each, to represent the undersigned as
indicated on the reverse side hereof and in their discretion on all matters as
may come before the 1994 Annual Meeting of Stockholders or any adjournments or
postponements thereof.
Nominees for Director for Term Expiring in 1997:
Earnest H. Clark, Jr., Gavin S. Herbert, C. Roderick O'Neil, Louis T. Rosso
This card provides voting instructions, as applicable, to (1) the
appointed proxies for shares held of record by the undersigned including those
held under the Company's Dividend Reinvestment Plan ("Common") and for shares
held in First Chicago book entry accounts for certain employee purchases
("FCBE"), and (2) the Trustee for shares held on behalf of the undersigned in
Company's Savings and Investment Plan ("SIP") (See "Savings and Investment Plan
Voting Information" sheet, enclosed if applicable). IF REGISTRATIONS ARE NOT
IDENTICAL, YOU MAY RECEIVE MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN,
DATE AND RETURN ALL CARDS YOU RECEIVE.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. SHARES CANNOT BE
VOTED FOR YOU UNLESS YOU SIGN, DATE AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 21
/X/ Please mark your
votes as in this 9830
example
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy
will be voted FOR Proposal 1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
1. Election FOR WITHHELD
of / / / /
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
Please check the box if you plan to attend the
Annual Meeting. You will be mailed an admittance
card.
/ /
The signer hereby revokes all proxies heretofore
given by the signer to vote at said meeting or
any adjournment thereof.
NOTE: Please date and sign exactly as name
appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such.
-------------------------------------------------
-------------------------------------------------
SIGNATURE(S) DATE
<PAGE> 22
INSTITUTIONAL TRUST SERVICES GROUP MELLON BANK
- -------------------------------------------------------------------------------
ATTENTION
SAVINGS AND INVESTMENT PLAN VOTING INFORMATION
PLEASE COMPLETE, DATE, SIGN AND RETURN THE "PROXY/VOTING INSTRUCTION
CARD," ENCLOSED IN THE OUTSIDE ENVELOPE WINDOW POCKET*, IN ORDER TO DIRECT THE
VOTING SHARES OF BECKMAN COMMON STOCK HELD IN YOUR SAVINGS AND INVESTMENT
PLAN BECKMAN STOCK FUND ACCOUNT(S). A RETURN ENVELOPE (U.S. POSTAGE PAID) IS
PROVIDED. IF YOU DO NOT PROVIDE PROPER INSTRUCTIONS TO US (E.G., NOT CORRECTLY
COMPLETED) BY MARCH 28, 1994, THE SHARES HELD IN YOUR ACCOUNT(S) WILL NOT BE
VOTED.
Your individual voting instructions are held in CONFIDENCE and will not be
disclosed to Beckman. If the card also indicates your vote relating to shares
owned by you of record outside of the Plan, that information also will be held
in confidence.
MELLON BANK, TRUSTEE
Beckman Instruments, Inc.
Savings and Investment Plan
February 1994
*The outside window envelope may contain a "Trustee Voting Instruction Card"
relating to voting instructions for the Beckman Benefit Equity Trust, which
will also be held in confidence and not disclosed to Beckman. Also you may
receive more than one set of proxy materials depending on differences in the
recording of your name on employee or stock registration records. You must
complete, date, sign and return ALL cards received in order for shares
represented thereby to be voted. Please use the same return envelope.
<PAGE> 23
INSTITUTIONAL TRUST SERVICES GROUP MELLON BANK
- -------------------------------------------------------------------------------
ATTENTION
TRUSTEE VOTING INSTRUCTION INFORMATION
BENEFIT EQUITY TRUST
PLEASE COMPLETE, DATE, SIGN AND RETURN THE "TRUSTEE VOTING INSTRUCTION
CARD," ENCLOSED IN THE OUTSIDE ENVELOPE WINDOW POCKET*, IN ORDER TO DIRECT THE
VOTING OF SHARES OF BECKMAN COMMON STOCK HELD IN THE BECKMAN BENEFIT EQUITY
TRUST. A RETURN ENVELOPE (U.S. POSTAGE PAID) IS PROVIDED. IT MUST BE
RECEIVED BY MARCH 28, 1994 TO ENSURE THAT IT IS TABULATED IN TIME FOR THE
1994 ANNUAL MEETING.
The Benefit Equity Trust was established to assist the Company in meeting
its stock-based obligation. It does not change benefit plans in any way for
you and it does not give you preferential claims to or beneficial ownership in
its assets. Shares are voted in the same proportions as the number of
instructions received.
WE ARE LOOKING FORWARD TO YOU (AS AN EMPLOYEE WHO HAS RECENTLY PURCHASED
SHARES UNDER THE BECKMAN EMPLOYEES' STOCK PURCHASE PLAN) TO GIVE US, THE
TRUSTEE, YOUR VOTING PREFERENCES. WE ENCOURAGE YOU TO COMPLETE AND RETURN THE
ENCLOSED TRUSTEE VOTING INSTRUCTION CARD. YOUR INDIVIDUAL VOTING INSTRUCTIONS
ARE HELD IN CONFIDENCE AND ARE NOT DISCLOSED TO BECKMAN.
MELLON BANK, TRUSTEE
Beckman Instruments, Inc.
Benefit Equity Trust
February 1994
*A "Proxy/Voting Instruction Card" may also be enclosed in the outside window
pocket, if shares are held for you in the Savings and Investment Plan or if
you own shares outside of that plan. Your vote indicated on that card will
also be held in confidence and not disclosed to Beckman. You also may receive
more than one set of proxy materials depending on differences in the recording
of your name on employee and stock registration records. You must complete,
date, sign and return ALL cards received in order for shares represented
thereby to be voted. Please use the same return envelope.
<PAGE> 24
TRUSTEE VOTING INSTRUCTION CARD
BECKMAN INSTRUMENTS, INC. ("BECKMAN") BENEFIT EQUITY TRUST
The Board of Directors of Beckman has solicited a proxy from Mellon Bank,
as Trustee for the Beckman Instruments, Inc. Benefit Equity Trust on matters
presented at the Beckman Annual Meeting of Stockholders, March 30, 1994, and
any adjournments or postponements thereof (see "Trustee Voting Instruction
Information - Benefit Equity Trust" enclosed with proxy materials). The
undersigned directs the Trustee, on the reverse side hereof, on the vote
upon the nominees for Director for the term expiring in 1997: Earnest H. Clark,
Jr., Gavin S. Herbert, C. Roderick O'Neil and Louis T. Rosso.
This card constitutes voting instructions to the Trustee only.
Completion of this card does not imply, create, or bestow on the undersigned
any ownership or other rights to assets in the Beckman Benefit Equity Trust.
All shares of Beckman Common Stock held in the Trust on the Record Date will be
voted as directed in proportion to the number of responses received by the
Trustee.
You may receive more than one set of proxy materials if you hold Beckman
Common Stock of record, in street name, in the Beckman Dividend Reinvestment
Plan, in a First Chicago book entry account for certain employee puchases, or
such stock is held on your behalf in the Beckman Savings and Investment Plan.
PLEASE COMPLETE, SIGN, DATE AND RETURN ALL CARDS THAT YOU RECEIVE.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
SEE REVERSE SIDE
<PAGE> 25
PLEASE MARK YOUR
X VOTES AS IN THE
EXAMPLE
THE INSTRUCTION CARD MUST BE PROPERLY EXECUTED IN ORDER FOR
SHARES TO BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED.
IF PROPERLY EXECUTED, BUT NO DIRECTION IS INDICATED, IT WILL BE COUNTED
AS A VOTE FOR PROPOSAL 1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
FOR WITHHELD
1. Election / / / /
of
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
NOTE: Please date and sign exactly as name appears hereon.
-----------------------------------------------------------
SIGNATURE DATE
