SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
Commission File Number 1-6926
C. R. BARD, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1454160
(State of incorporation) (I.R.S. Employer Identification No.)
730 Central Avenue, Murray Hill, New Jersey 07974
(Address of principal executive offices)
Registrant's telephone number, including area code: (908) 277-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock - $.25 par value 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 amendments to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by
nonaffiliates of the registrant was approximately $2,059,900,000
based on the closing price of stock traded on the New York Stock
Exchange on February 29, 1996. As of February 29, 1996, there were
57,419,373 shares of Common Stock, $.25 par value per share,
outstanding.
The Company's definitive Proxy Statement dated March 8, 1996 has
been incorporated by reference with respect to certain information
contained therein in Part III and Part IV of this Form 10-K.
The exhibit index is located in Part IV, Item 14, Page IV-1.
<PAGE>
PART I
Item 1. Business
General Development of Business
The Company was started by Charles Russell Bard in 1907. One of
its first medical products was the silk urethral catheter imported
from France. In 1923, the Company was incorporated as C. R. Bard,
Inc. and distributed an assortment of urological and surgical
products. Bard became a publicly-traded company in 1963 and five
years later was traded on the New York Stock Exchange.
In 1966, Bard acquired its supplier of urological and
cardiovascular specialty products - the United States Catheter &
Instrument Co. In 1980 Bard acquired its major source of the Foley
catheter - Davol Inc. Numerous other acquisitions were made over
the last thirty-five years broadening Bard's product lines. Today,
C. R. Bard, Inc. is a leading multinational developer, manufacturer
and marketer of health care products.
1995 sales of $1.138 billion increased 7% from 1994. 1994 sales of
$1.065 billion increased 6% from 1993. Net income for 1995 totaled
$86.8 million or $1.53 per share, and increased 15% and 14%
respectively against 1994. Net income for 1994 totaled $75.6
million or $1.34 per share, an increase of 31% against 1993.
Acquisitions
In September 1995, the Company completed a merger with MedChem
Products, Inc. (MedChem) issuing 3,192,345 shares of its common
stock in exchange for all outstanding common stock of MedChem. In
October 1995, the Company completed a merger with American Hydro-
Surgical Instruments, Inc. (AHS) issuing 1,338,446 shares of its
common stock in exchange for all outstanding common stock of AHS.
These mergers have been accounted for as poolings of interests, and
accordingly, the Company's information contained in this Annual
Report on Form 10-K has been restated to include the accounts and
operations of MedChem and AHS for all periods presented.
During 1994 the Company spent $118.2 million acquiring new
businesses. Angiomed AG, a German company with products marketed
in the areas of urology, radiology, vascular surgery and
gastroenterology was purchased in October 1994. VasCath, Inc., a
Canadian company with a strong position in specialty catheter
products was acquired in December 1994.
In 1993 acquisition spending totalled $70 million. Pilot
Cardiovascular, Inc., a California company with deflectable tipped
angioplasty guidewire technology, was purchased in September 1993.
Bainbridge Sciences, Inc., a Washington company, was purchased in
October 1993 while in its developmental stages. Bainbridge was
renamed Bard Diagnostic Sciences early in 1995. Bard Diagnostic
Sciences is an "in vitro" diagnostics company with products focused
on cancer detection.
I-1
<PAGE>
Product Group Information
Bard is engaged in the design, manufacture, packaging, distribution
and sale of medical, surgical, diagnostic and patient care devices.
Hospitals, physicians and nursing homes purchase approximately 90%
of the Company's products, most of which are used once and
discarded.
The following table sets forth for the last three years ended
December 31, 1995, the approximate percentage contribution by
product line to Bard's consolidated net sales. The figures are on
a worldwide basis.
Years Ended December 31,
1995 1994 1993
Cardiovascular 33% 35% 38%
Urological 28% 27% 25%
Surgical 39% 38% 37%
Total 100% 100% 100%
Narrative Description of Business
General
Historically, Bard has been known for its products in the
urological field, where its Foley catheter is the leading device
for bladder drainage. Today, Bard's largest product group is in
surgical devices, contributing approximately 39% of consolidated
net sales.
Bard continually expands its research toward the improvement of
existing products and the development of new ones. It has
pioneered in the development of disposable medical products for
standardized procedures.
Bard's domestic sales may be grouped into three principal product
lines: cardiovascular, urological and surgical. International
sales include most of the same products manufactured and sold by
Bard's domestic operations. Domestic and international sales are
combined for product group sales presentation.
Cardiovascular - Bard's line of cardiovascular products includes
balloon angioplasty catheters, steerable guidewires, guide
catheters and inflation devices; angiography catheters and
accessories; introducer sheaths; electrophysiology products
including cardiac mapping and electrophysiology laboratory systems,
and diagnostic and temporary pacing electrode catheters;
cardiopulmonary support systems; and blood oxygenators and related
products used in open-heart surgery. See the first paragraph of
Item 3. Legal Proceedings on Page I-5 for additional information.
Urological - Bard offers a complete line of urological products
including Foley catheters, procedural kits and trays and related
urine monitoring and collection systems; biopsy and other cancer
detection products; ureteral stents; and specialty devices for
incontinence, endoscopic procedures and stone removal.
I-2
<PAGE>
Surgical - Bard's surgical products include specialty access
catheters and ports; implantable blood vessel replacements; fabrics
and meshes for vessel and hernia repair; surgical suction and
irrigation devices; wound and chest drainage systems; devices for
endoscopic, orthopaedic and laparoscopic surgery; blood management
devices; products for wound management and skin care; and
percutaneous feeding devices.
International - Bard markets cardiovascular, urological and
surgical products throughout the world. Principal markets are
Japan, Canada, the United Kingdom and continental Europe.
Approximately two-thirds of the sales in this segment are of
products manufactured by Bard in its facilities in Canada, France,
Germany, Ireland, Malaysia and the United Kingdom. The balance of
the sales are from products manufactured in the continental United
States, Puerto Rico or Mexico for export. Bard's foreign
operations are subject to the usual risks of doing business abroad,
including restrictions on currency transfer, exchange fluctuations
and possible adverse government regulations. See p. II-23 Note 10
in the Notes to Consolidated Financial Statements for additional
information.
Competition
The Company knows of no published statistics permitting a general
industry classification which would be meaningful as applied to the
Company's variety of products. However, products sold by the
Company are in substantial competition with those of many other
firms, including a number of larger well-established companies.
The Company depends more on its consistently reliable product
quality, dependable service and its ability to develop products to
meet market needs than on patent protection, although some of its
products are patented or are the subject of patent applications.
Marketing
The Company's products are distributed domestically directly to
hospitals and other institutions as well as through numerous
hospital/surgical supply and other medical specialty distributors
with whom the Company has distributor agreements. In international
markets, products are distributed either directly or through
distributors with the practice varying by country. Sales promotion
is carried on by full-time representatives of the Company in
domestic and international markets.
Sales to a distributor, which supplies the Company's products to
many end-users, accounted for approximately 9% of the Company's
sales and the five largest distributors combined accounted for
approximately 22% of such sales. Combined sales to federal
agencies accounted for approximately 1% of sales in 1995 (See Item
3. Legal Proceedings).
I-3
<PAGE>
In order to service its customers, both in the U.S. and outside the
U.S., the Company maintains inventories at distribution facilities
in most of its principal marketing areas. Orders are normally
shipped within a matter of days after receipt of customer orders,
except for items temporarily out of stock, and backlog is normally
not significant in the business of the Company.
Most of the products sold by the Company, whether manufactured by
it or by others, are sold under the BARD trade name or trademark
or other trademarks owned by the Company. Such products
manufactured for the Company by outside suppliers are produced
according to the Company's specifications.
Regulation
The development, manufacture, sale and distribution of the
Company's products are subject to comprehensive government
regulation. Government regulation by various federal, state and
local agencies, which includes detailed inspection of and controls
over research and laboratory procedures, clinical investigations,
manufacturing, marketing, sampling, distribution, recordkeeping,
storage and disposal practices, substantially increases the time,
difficulty, and costs incurred in obtaining and maintaining the
approval to market newly developed and existing products.
Government regulatory actions can result in the seizure or recall
of products, suspension or revocation of the authority necessary
for their production and sale, and other civil or criminal
sanctions.
Raw Materials
The Company uses a wide variety of readily available plastic,
textiles, alloys and rubbers for conversion into its devices. Two
large, U.S.-based chemical suppliers have sought to restrict the
sale of certain of their materials to the device industry for use
in implantable products. Although one guiding principle in the
adoption of this policy is the avoidance of negative economic
effect on the health care industry, a small portion of our product
lines may face a short-term threat to the continuity of their raw
material supply. The companies have indicated that their action is
based on product liability concerns. Bard and the medical device
industry are working to resolve this problem in general and with
these suppliers to assure a continuing supply of necessary raw
materials. Bard is working to maintain a supply of qualified
materials by developing new supplies and increasing inventories of
important stocks.
Environment
The Company continues to address current and pending environmental
regulations relating to its use of Ethylene Oxide and CFC's for the
sterilization of some of its products. The Company is complying
with regulations reducing permitted EtO emissions by
installing scrubbing equipment and adjusting its processes.
I-4
<PAGE>
The Company recognizes the Montreal Protocol Treaty which plans for
the reduction of CFC use worldwide, and the Company has reduced its
own use of CFC's for sterilization more rapidly than is required by
this treaty. Facilities, processes and equipment are required to
achieve these goals and meet these regulations. The Company has
eliminated over 95% of CFC use for sterilization. The Company
intends to continue to reduce this use of CFC's. Capital
expenditures required will not significantly adversely affect the
Company's earnings or competitive position.
Employees
The Company employs approximately 9,400 persons.
Seasonality
The Company's business is not affected to any material extent by
seasonal factors.
Research and Development
The Company's research and development expenditures amounted to
approximately $75,600,000 in 1995, $71,600,000 in 1994 and
$67,500,000 in 1993.
Item 2. Properties
The executive offices of the Company are located in Murray Hill,
New Jersey in facilities which the Company owns. Domestic
manufacturing and development units are located in California,
Florida, Georgia, Kansas, Massachusetts, Michigan, New Jersey, New
York, Ohio, Puerto Rico, Rhode Island, South Carolina, Texas, Utah
and Washington. Sales offices and distribution points are in
these locations as well as others.
Outside the U.S., the Company has plants or offices in Australia,
Austria, Belgium, Canada, France, Germany, Hong Kong, India,
Ireland, Italy, Japan, Korea, Malaysia, Mexico, Netherlands,
Portugal, Singapore, Spain and the United Kingdom.
The Company owns approximately 2,530,000 square feet in 22
locations and leases approximately 1,408,000 square feet of space
in 63 locations.
All these facilities are well maintained and suitable for the
operations conducted in them.
Item 3. Legal Proceedings
On October 14, 1993, the Company entered into a Plea Agreement with
the Department of Justice in connection with charges stemming from
violations, primarily during the 1980s by the Company's USCI
division, of the Federal Food, Drug and Cosmetic Act and other
statutes. In connection with such violations, the Defense
Logistics Agency debarred the USCI division from entering into new
contracts with the U.S. Government. Such debarment will expire on
June 19, 1996.
I-5
<PAGE>
Item 3. Legal Proceedings (continued)
On November 21, 1994 an action was commenced against the Company by
Surgical Laser Technologies, Inc. (SLT) in the United States
District Court for the Eastern District of Pennsylvania. The
Amended Complaint alleged that the Company has repudiated, refused
to perform and breached an alleged contract with SLT, and further
alleges a breach of the duty of good faith and fair dealing in the
conduct of contract negotiations between the parties and unfair
competition. Damages of an unspecified amount are sought together
with injunctive relief. The Company has answered the Amended
Complaint, denying that there was ever agreement to the alleged
contract, or that the Company otherwise breached any duty owed to
SLT. Discovery has recently commenced and no trial date has yet
been set. The Company believes it has meritorious defenses to this
action.
On October 6, 1995, Trimedyne, Inc. filed a complaint in State
Court in California alleging breach of contract, fraud and
negligent misrepresentation by the Company in connection with its
performance under a Development, Supply and License Agreement dated
June 28, 1991, concerning side-firing laser products (Urolase).
In addition, the complaint alleges that the Company has failed to
pay for product purchased, along with certain other charges.
Trimedyne, Inc. seeks damages totalling $72 million plus punitive
damages. The case has been removed to the Federal District Court
and transferred to the District of New Jersey. The Company
believes it has some liability to the plaintiff for certain goods
ordered; however, the amount is in dispute. Except as to this
claim, the Company believes that it has meritorious defenses to
this action.
On October 3, 1995, Oliver Lipman & Associates, a firm specializing
in the medical device industry, filed a compliant in the State
Court in New Jersey alleging that it was instrumental in
facilitating the negotiations which led to the merger between Bard
and MedChem Products, Inc. The plaintiff is demanding judgement
against Bard and MedChem Products, Inc. for compensatory damages.
An answer denying the allegations has been filed. The Company
believes it has meritorious defenses to this action.
During 1993, the United States Environmental Protection Agency (the
"EPA") notified the Company's Urological division that it may be a
potentially responsible party relative to clean-up of the Frontier
Chemical site in Niagara Falls, New York. In September, 1993, the
Company entered into a consent order concerning the first phase of
the clean-up, which was a drum removal action. The Company's
liability for the first phase was $119,000. A second phase of
remedial action involves removal of waste in several large tanks.
The Company's liability for this phase was assessed at less than
I-6
<PAGE>
Item 3. Legal Proceedings (continued)
$14,000. The third phase of remedial action involves soil and
groundwater contamination which may be significant in view of the
age of this industrial site. The Company's responsibility for
clean up of this phase is unknown at this time, but it is believed
that the final resolution of this matter is not expected to have a
material adverse financial impact on the Company.
During 1992, the EPA notified the Company that it had been
identified as a potentially responsible party in connection with an
ongoing investigation of the Solvents Recovery Service of New
England site in Southington, Connecticut. Although the full extent
of liability in this case is unknown, the Company has been
identified with less than one-half percent of the total gallonage
of waste materials. In June of 1995, the Company accepted the
EPA's invitation to enter into negotiations concerning the Group's
undertaking the remedial investigation and feasibility study.
Negotiations concerning a Consent Order to allow the Group to
undertake the remedial investigation and feasibility study are
ongoing. The final resolution of this matter is not expected to
have a material adverse financial impact on the Company.
The Company is also subject to other legal proceedings and claims
which arise in the ordinary course of business.
Item 4. Results of Votes of Security Holders
Not applicable.
I-7
<PAGE>
Executive Officers of the Registrant
Set forth below is the name, age, position, five year business
history and other information with respect to each executive
officer of the Company as of March 1, 1996. No family
relationships exist among the officers of the Company.
Name Age Position
William H. Longfield 57 Chairman and
Chief Executive Officer
and Director
Benson F. Smith 48 President and
Chief Operating Officer
and Director
William C. Bopp 52 Executive Vice President
and Chief Financial
Officer
Timothy M. Ring 38 Group Vice President
William T. Tumber 61 Group Vice President
John H. Weiland 40 Group Vice President
E. Robert Ernest 55 Vice President - Planning
and Development
Richard A. Flink 61 Vice President, General
Counsel and Secretary
Christopher D. Ganser 43 Vice President - Quality
Assurance
Hope Greenfield 45 Vice President - Human
Resources
Charles P. Grom 48 Vice President and
Controller
Earle L. Parker 52 Vice President and
Treasurer
All officers of the Company are elected annually by the Board of
Directors.
I-8
<PAGE>
Mr. Longfield joined the Company in 1989 and was elected executive
vice president and chief operating officer. In 1991 he was elected
president. In June 1994 he was elected president and chief
executive officer. In September 1995 he was elected to his present
position. Prior to joining the Company, he was chief executive
officer since 1984 of the Cambridge Group, Inc., a provider of long
term health services for the elderly. Prior to joining Cambridge,
he was employed by Lifemark, Inc., a health care management
company, and for over 20 years with American Hospital Supply
Corporation.
Mr. Smith joined Bard in 1980. In 1990, he was appointed to the
position of group executive. In 1991, he was elected group vice
president. In 1993, he was elected to the position of executive
vice president with worldwide responsibility for operations. In
1994 he was elected to the additional post of chief operating
officer. In October 1995 he was elected to his present position.
Mr. Bopp joined the Company in 1980. In 1983 he was elected to the
position of treasurer. He was named vice president and treasurer
in 1989. In 1992 he was elected senior vice president and chief
financial officer. In October 1995 he was elected to his present
position.
Mr. Ring joined the Company in 1992 and was elected vice president-
human resources. Prior to joining the Company he had been with
Abbott Laboratories Inc., a pharmaceutical company, since 1982 and
his last position with their Hospital Products division had been
director of personnel. In December 1993, he was elected to the
position of group vice president.
Mr. Tumber joined Bard in 1980. In 1988 he was promoted to vice
president and general manager of Davol Inc. In 1990 he was
promoted to president of Davol Inc. and subsequently appointed to
the position of group executive. In September 1991, he was elected
to his present position.
Mr. Weiland joined the Company in February 1996 as group vice
president. Prior to joining the Company, since 1991 he was senior
vice president, North American Group, with Dentsply International,
the nation's largest manufacturer of professional dental products.
Prior to that he was president and chief executive officer of
Pharmacia Diagnostics, Inc., a manufacturer of medical diagnostic
supplies and in various positions with Baxter International, Inc.,
a manufacturer of health care products and services.
Mr. Ernest joined the Company in 1977 and was elected to his
present position in 1979.
Mr. Flink joined the Company in 1970, was elected vice president
and general counsel in 1973 and was elected to his present position
in 1985.
I-9
<PAGE>
Mr. Ganser joined the Company in 1989 as Manager, Quality Assurance
in the Moncks Corner facility. In April, 1994 he was elected to
his present position.
Ms. Greenfield joined the Company in October 1995 as corporate vice
president, human resources. Prior to joining the Company she had
been with Digital Equipment Corporation, a supplier of information
systems and hardware, as vice president development and learning
and in various human resource positions.
Mr. Grom joined the Company in 1977. In 1989 he was promoted to
assistant corporate controller and in 1994 was elected corporate
controller. In April 1995 he was elected to his present position.
Mr. Parker joined the Company in 1979. In December 1990 he was
promoted to vice president-operations for the USCI division and,
later that year, was promoted to vice president and general manager
of the USCI Angiography division. In 1992 he was elected Treasurer
and effective January 1, 1995 he was elected to his present
position.
I-10
<PAGE>
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters
Market and Market Prices of Common Stock
The Company's common stock is traded on the New York Stock Exchange
using the symbol: BCR. The following table illustrates the high
and low sales prices as traded on the New York Stock Exchange for
each quarter during the last two years.
Quarters
1st 2nd 3rd 4th Year
1995
High 28-1/8 31-1/8 31-7/8 32-1/4 32-1/4
Low 25-1/2 27-1/4 29-1/4 27-7/8 25-1/2
Close 27-5/8 30 30-1/2 32-1/4 32-1/4
1994
High 30-1/2 26-1/4 28-1/4 27-1/2 30-1/2
Low 23-7/8 22-3/8 22-1/4 23-5/8 22-1/4
Close 24-1/4 23-7/8 25 27 27
Approximate Number of Equity Security Holders
Approximate Number
of Record Holders
Title of Class as of February 29, 1996
Common Stock - $.25 par value 7,502*
*Included in the number of shareholders of record are shares held
in "nominee" name.
Dividends
The Company paid cash dividends of $33,100,000 or $.62 per share in
1995 and $30,100,000 or $.58 per share in 1994. The following
table illustrates the quarterly rate of dividends paid per share.
Quarters
1st 2nd 3rd 4th Year
1995 $ .15 $ .15 $ .16 $ .16 $ .62
1994 $ .14 $ .14 $ .15 $ .15 $ .58
In January 1996, the first quarter dividend of $.16 per share was
declared, indicating an annual rate of $.64 per share. The first
quarter dividend was paid on February 2, 1996 to shareholders of
record on January 22.
II-1
<PAGE>
<TABLE>
Item 6. Selected Financial Data
(Thousands of dollars except per share amounts)
<CAPTION>
For the Years Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales $1,137,800 $1,064,600 $1,008,800 $1,033,800 $903,500
Gross profit 587,800 551,100 519,700 510,000 429,600
Operating income 139,900 153,000 132,000 136,300 104,600
Net income 86,800 75,600 57,800 83,400 65,600
BALANCE SHEET DATA
Total assets $1,091,000 $1,043,100 $ 881,400 $ 789,200 $736,600
Working capital 230,600 72,300 165,200 213,200 192,900
Long-term debt 198,400 93,400 82,100 84,000 80,000
Total debt 265,300 294,000 171,000 148,300 142,000
Shareholders'
investment 564,600 495,400 439,900 444,900 424,300
COMMON STOCK DATA
Net income
per share $ 1.53 $ 1.34 $ 1.02 $ 1.45 $ 1.14
Cash dividends
per share .62 .58 .54 .50 .46
Shareholders'
investment
per share $ 9.89 $ 8.77 $ 7.77 $ 7.75 $ 7.37
Average shares
outstanding
(000's) 56,731 56,461 56,692 57,422 57,609
SUPPLEMENTARY DATA
Return on average
shareholders'
investment 16.4% 16.2% 13.1% 19.2% 16.1%
Gross profit/
net sales 51.7% 51.8% 51.5% 49.3% 47.5%
Operating income/
net sales 12.3% 14.4% 13.1% 13.2% 11.6%
Net income/net
sales 7.6% 7.1% 5.7% 8.1% 7.3%
Days-accts rec. 66.7 62.3 60.7 63.1 63.5
Days-inventory 149.4 143.6 135.9 129.4 137.2
Total debt/total
capitalization 32.0% 37.2% 28.0% 25.0% 25.1%
Interest exp. $ 24,200 $ 16,300 $ 12,500 $ 13,400 $ 13,900
R&D expense $ 75,600 $ 71,600 $ 67,500 $ 62,300 $ 56,700
# of employees 9,400 8,900 8,650 9,000 9,250
Net sales per
employee $ 121.0 $ 119.6 $ 116.6 $ 114.9 $ 97.7
Net income per
employee $ 9.2 $ 8.5 $ 6.7 $ 9.3 $ 7.0
<FN>
</TABLE>
II-2
<PAGE>
Item 7. Management's Discussion and Analysis of Results
of Operations and of Financial Conditions
General
Bard is a leading multinational developer, manufacturer and
marketer of products for the large and growing health care
industry. Worldwide health care expenditures approximated $2.2
trillion in 1995 with about half that amount spent in the United
States. Bard's segment of this industry, itself a multi-billion
dollar market, is primarily specialized products used mainly in
hospitals, in outpatient centers and in physician's offices to meet
the needs of the medical profession in caring for their patients.
We seek to focus and concentrate on selected markets with cost-
effective, innovative products and specialized sales forces to
maximize our opportunities in these markets.
Operating Results
Consolidated net sales increased 7% in 1995, restated for two
acquisitions that were accounted for as poolings of interests.
Good growth in many areas was partially offset by a lack of growth
in the domestic cardiovascular product group. Net income and
earnings per share increased 15% and 14%, respectively. Income for
1994 and 1995 was significantly affected by one-time charges,
described on page II-6 in this financial review.
Sales
Net sales totaled $1.138 billion in 1995, an increase of 12% over
the $1.018 billion originally reported for 1994. This 12% increase
includes 5% from new sales as a result of the two acquisitions Bard
made in 1995. Since they were accounted for as poolings of
interests, Bard's restated sales for 1994 are $1.065 billion,
resulting in a 7% increase to $1.138 billion in 1995. Worldwide
revenue growth of 10% in 1995 in the urological and surgical
product groups combined with a 1% increase in cardiovascular sales,
resulted in the consolidated increase of 7%. All of the growth
came from sales outside the U.S. as U.S. sales approximated the
prior year's level. Price reductions totaled 2% on a worldwide
basis in 1995 while higher foreign currency values increased total
sales by 2%.
Consolidated net sales (restated for the 1995 acquisitions) totaled
$1.065 billion in 1994, a 6% increase over 1993. Significant
factors in this growth were good increases in sales of Foley
catheters and related procedure trays, vascular access catheters,
vascular fabric and mesh products and gastroenterological specialty
devices as well as a substantial increase in sales of the Bard
Contigen implant. These areas, along with sales from our 1994
acquisitions and an increase of less than 1% from the effects of
foreign currency translations, more than offset some continued
weakness in certain cardiovascular product lines and price
reductions which totaled 2.6% on a worldwide basis.
II-3
<PAGE>
Consolidated net sales (restated) totaled $1.009 billion in 1993,
a decrease of $25 million or 2% for the year. Sales were lowered
3% as a result of the sale of the Bard MedSystems division in
February 1993 and 1% by the negative impact of lower foreign
currency values. Sales in 1993 were also negatively affected by a
slowdown in U.S. procedural rates, consolidations of health care
providers, limited FDA approvals, increasingly conservative medical
practices fostered by the growth of managed care and weaker
European economies.
In the urological product group, worldwide sales increased 10% in
1995, all of it from outside the U.S., with a substantial portion
the result of a full year's sales of Angiomed products in 1995 vs.
two months of sales following the acquisition in 1994. Urological
sales in 1994 increased 16% with a majority of the increase a
result of sales of the Contigen implant. 1993 urological sales
increased 1%. Good increases in several relatively new specialty
devices were partially offset by declines in other areas.
Surgical product group sales increased 10% in 1995, a majority of
which was outside the U.S. A full year of sales of Angiomed and
Vas-Cath products (acquired in 1994) benefited this area
substantially, as did strong growth in sales of vascular access
catheters and ports, fabrics and mesh products for hernia repair
and gastroenterological devices. Sales in 1994 of surgical
products increased 6% with the areas of vascular access, vascular
fabrics and mesh and gastroenterology showing good gains.
Adjusting for the sale of the MedSystems division in February 1993,
sales in this group increased 7% in 1994. Sales of surgical
products in 1993 decreased 1% but increased 8% after adjusting for
the sale of the MedSystems division. Vascular access, endoscopic,
laparoscopic and blood management products contributed
significantly to this increase.
Sales of cardiovascular products increased just 1% in 1995. A full
year of Angiomed product sales benefited this area along with good
increases in interventional radiology and the FemoStop device.
U.S. sales continued to decline as the Company had delays obtaining
clearance from the Food and Drug Administration (FDA) for new
products from our USCI division. In 1994, continued weakness in
certain cardiovascular product areas resulted in a 3% decline in
sales in this group. Increased sales outside the U.S. were more
than offset by declines in the U.S. which continued to be affected
by the lack of approvals by the FDA of new products from our USCI
division. Cardiovascular product sales decreased 5% worldwide in
1993 with most product areas in this group showing declines.
Sales in the United States declined slightly in 1995 vs. 1994 and
represented 66% of total sales. Total surgical product sales in
the U.S. showed good growth with significant increases in sales of
specialty access, gastroenterological, Marlex mesh fabric and new
MedChem products. Urological product sales in the U.S. were level
with 1994 while sales of cardiovascular products declined. Sales
in the United States increased 4% in 1994 and represented 71% of
total sales. Sales of the Contigen implant were the most important
contributor to this growth. U.S. sales decreased 2% in 1993 and
represented 71% of total sales. Urological product sales increased
II-4
<PAGE>
while sales of surgical products (due to the sale of MedSystems)
and cardiovascular products decreased. Sales growth outside the
U.S. continued to be strong with a 24% increase over 1994, a
significant portion from a full year of sales of Angiomed and Vas-
Cath products. Higher foreign currency values in 1995 contributed
7% of the increase. Numerous products in all three product groups
showed significant gains in revenue in 1995. Sales outside the
U.S. increased 9% in 1994 with a little more than 1% of that growth
the result of higher foreign currency values. The growth was
broad-based throughout our product areas and major geographic
markets. Acquisitions accounted for 3% of this growth. In 1993
sales outside the U.S. declined 3%. Changes in foreign currency
values in 1993 lowered these sales by nearly 5%. Growth in sales
of surgical products were more than offset by decreases in
urological and cardiovascular sales.
The geographic breakdown of sales outside the U.S. for the last
three years is:
1995 1994 1993
Europe, Middle East,
Africa 62% 56% 56%
Asia/Pacific area and
Western hemisphere,
excluding U.S. 38% 44% 44%
100% 100% 100%
Operating Income
The gross profit margin at 51.7% slipped 0.1% in 1995 as the rate
of increase in cost of goods sold was slightly higher than the
increase in sales. Cost reductions in many areas were not enough
to offset overall price reductions. Gross profit margins had
increased for four years prior to 1995 as a result of productivity
gains, cost reductions and a favorable product mix.
Bard uses the LIFO method of valuing substantially all U.S.
inventories, which results in current costs (higher in a period of
inflation) being charged to cost of goods sold. Bard generally has
been able to recover these costs through its strong product
position in its markets or by offsetting the effect of inflation
through its cost reduction programs.
Marketing, selling and administrative expenses increased by 8.6% as
we invested in programs to boost future sales revenue. The
synergies from our two mergers closed late in 1995 have yet to be
fully realized as well as the effect of our fourth quarter
divisional reorganization. In the two years prior to 1995, these
expenses increased by less than 1% in total spending each year. As
a percent to sales, these expenses represented 31.2% in 1995, 30.7%
in 1994 and 31.7% in 1993.
Research and development spending continues to increase as we work
on new technologies and applications for the future. The level of
spending as a percent of sales has been approximately 7% each of
the last three years.
II-5
<PAGE>
Operating income was 12.3% of sales in 1995 and was affected
substantially by $17.7 million in costs (primarily legal and
investment banking) to combine the operations of MedChem Products
and American Hydro-Surgical into Bard. Excluding the costs of
combining, operating income as a percent of sales would have been
13.9% in 1995 vs. 14.4% in 1994 and 13.1% in 1993.
Other Income(Expense), Net
Please refer to Note 9, Other Income (Expense), Net, of the Notes
to Consolidated Financial Statements on page II-22 of this report
for a summary of items in this category in the last three years.
In 1994 there was a fourth quarter charge of $28.2 million. This
covered the settlement of a 1992 lawsuit by the inventor of an
atherectomy device which Bard is developing and provided for the
anticipated legal and other costs related to the USCI division.
Other Income (Expense), Net in 1993 included a third quarter
provision for the Justice Department settlement of $61 million, a
fourth quarter gain of $32.7 million from the sale of shares of the
common stock of Ventritex, Inc. and a first quarter gain of $10.9
million from the sale of the MedSystems division net of
nonrecurring charges.
Income Tax
The effective income tax rate was 30% in 1995, 27% in 1994 and 37%
in 1993. The lower tax rate in 1994 is primarily due to the fourth
quarter charge which is tax effected at U.S. rates. The higher
1993 rate was primarily due to the $61 million Justice Department
settlement, which was not fully deductible. The tax benefit from
operations in Puerto Rico and Ireland favorably affected the tax
rate in each year, even though the benefit from operations in
Puerto Rico was reduced slightly in 1994 and 1995.
Net Income
Net income increased 15% in 1995 and 31% in 1994 after declining
31% in 1993. The effect on net income and earnings per share of
the costs to combine operations in 1995, the unusual or
nonrecurring items in 1994 and 1993 that are discussed above in
Other Income (Expense), Net and the after-tax charge of $6.1
million in the first quarter of 1993 for postretirement benefits
were (in millions except per share amounts):
1995
Costs to combine operations $(13.5)
Equivalent per share $( .24)
1994
Legal fees and settlements $(16.9)
Equivalent per share $ (.30)
II-6
<PAGE>
1993
Gain on sale of Ventritex stock $ 19.4
Gain on sale of MedSystems
net of nonrecurring charges 6.0
Effect of accounting change
for postretirement benefits (6.1)
Justice Department settlement (45.4)
Total 1993 $ (26.1)
Equivalent per share $ (.46)
After adjusting for the items shown above, net income and earnings
per share (EPS) would have been:
Net Income
(millions) EPS
1995 $100.3 $1.77
1994 $ 92.5 $1.64
1993 $ 83.9 $1.48
Financial Condition
Bard's financial condition remains strong. On a restated basis,
total debt decreased by $29 million and the ratio of total debt to
total capitalization decreased from 37% to 32%. Bard's equity base
was increased with the issuance of common stock for the
acquisitions of MedChem Products and American Hydro-Surgical. In
June the Company completed the arrangement of a $350 million
syndicated, committed credit agreement with a group of 15 banks.
Based on this agreement and as described in Note 4 of the Notes to
Consolidated Financial Statements on Page II-16 of this report,
$120 million in borrowings under the Company's uncommitted lines of
credit have been classified as long-term debt. This overall
financial strength gives Bard sufficient financing flexibility.
In addition to the $350 million committed credit agreement, Bard
maintains uncommitted credit lines with banks for short-term cash
needs and these lines were used as needed during the last three
years. The current unused uncommitted lines of credit total $202
million. As now structured, the Company expects cash flow from
operating activities to exceed capital expenditures and dividend
payments. The Company believes it could borrow adequate funds at
competitive terms and rates, should it be necessary, and is
considering a public offering of long-term debt in 1996.
Total cash outlays made for purchases of businesses, patents,
trademarks and other related items were $19 million in 1995, $148
million in 1994 and $105 million in 1993 for a total over the last
three years of $272 million. The majority of these investments
were for intangible items. The $19 million in 1995 outlays was
financed from cash from operations and exclude common stock valued
at $135 million issued for the acquisitions of MedChem Products and
American Hydro-Surgical. More than half of the 1994 and 1993
outlays was financed with additional debt ($146 million) with the
balance coming from cash from operations and proceeds from sales of
assets. Cash from operations contributed to an increase in short-
term investments in 1993, a substantial portion of which was used
in 1994, primarily for acquisitions.
II-7
<PAGE>
Over a period of time, the Company purchases at least enough of its
common stock in the open market to replace shares issued under
various employee stock plans. Net shares issued under the plans
were 597,283 in 1995; 299,400 in 1994 and 259,443 in 1993. Total
shares purchased were 75,000 in 1995; 350,000 in 1994, and
1,000,000 in 1993. In January 1993 the Board of Directors
authorized the purchase from time to time of up to 2 million shares
of which 1,425,000 had been purchased as of December 31, 1995.
Foreign Currency Risk
The Company periodically enters into foreign exchange contracts to
reduce its exposure to fluctuations in currency values. Contracts
have been exclusively for the forward purchase of currencies in
which the Company has known or anticipated payments. These are
primarily for intercompany transactions, resulting in a high degree
of confidence that the anticipated transactions will take place.
Monetary assets of the Company held in foreign currencies have
relatively short maturities and are denominated in currencies that
have not experienced wide short-term fluctuations in their
equivalent U.S. dollar values. Please refer to Note 4 of the Notes
to Consolidated Financial Statements starting on Page II-16 of this
report for current details of the Company's foreign exchange
contracts.
Legal Proceedings
For a discussion of pending legal proceedings and related matters,
please see Note 5, Commitments and Contingencies, of the Notes to
Consolidated Financial Statements on page II-18.
Acquisitions
For information on the Company's acquisitions of businesses, please
see Note 2 of the Notes to Consolidated Financial Statements on
page II-14.
II-8
<PAGE>
Report of Independent Public Accountants
To the Shareholders and Board of
Directors of C. R. Bard, Inc.:
We have audited the accompanying consolidated balance sheets
of C. R. Bard, Inc. (a New Jersey corporation) and subsidiaries as
of December 31, 1995 and 1994 and the related consolidated
statements of income, retained earnings and cash flows for each of
the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We 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 financial statements referred to above present
fairly, in all material respects, the financial position of
C. R. Bard, Inc. and subsidiaries as of December 31, 1995 and 1994,
and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.
As discussed in Note 8 to the consolidated financial statements,
effective January 1, 1993 the Company changed its method for
accounting for postretirement benefits other than pensions.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
January 24, 1996
II-9
<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
<CAPTION>
(Thousands of dollars except
per share amounts)
For the Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Net sales $1,137,800 $1,064,600 $1,008,800
Costs and expenses:
Cost of goods sold 550,000 513,500 489,100
Marketing, selling
and administrative 354,600 326,500 320,200
Research and development 75,600 71,600 67,500
Costs to combine opera-
tions 17,700 --- ---
997,900 911,600 876,800
Operating income 139,900 153,000 132,000
Interest expense 24,200 16,300 12,500
Other income(expense),
net 7,800 (32,600) (18,100)
Income before taxes and
effect of accounting
change 123,500 104,100 101,400
Provision for income
taxes 36,700 28,500 37,500
Income before effect of
accounting change 86,800 75,600 63,900
Effect of change in
accounting principle,
net of taxes --- --- (6,100)
Net income $ 86,800 $ 75,600 $ 57,800
Income per share before
effect of accounting
change $ 1.53 $ 1.34 $ 1.13
Net income per share $ 1.53 $ 1.34 $ 1.02
</TABLE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
<CAPTION>
(Thousands of dollars except
per share amounts)
For the Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Balance, beginning of year $ 427,300 $ 392,800 $ 387,400
Net income 86,800 75,600 57,800
Cash dividends (per share
1995, $.62; 1994, $.58;
1993, $.54) (33,100) (30,100) (28,200)
Excess of cost over par value
of treasury stock retired
(1995-75,000 shares,
1994-350,000 shares and
1993-1,000,000 shares) (2,100) (8,900) (24,200)
Adjustment to give
effect to change in report-
ing period for MedChem --- (2,100) ---
Balance, end of year $ 478,900 $ 427,300 $ 392,800
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these statements.
II-10
<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(Thousands of dollars)
December 31,
1995 1994
<S> <C> <C>
Assets
Current assets:
Cash $ 9,300 $ 7,700
Short-term investments 42,000 26,800
Accounts receivable, less reserve of
$9,700 and $8,700 215,700 194,100
Inventories 228,200 212,400
Other current assets 8,700 9,200
Total current assets 503,900 450,200
Property, plant and equipment, at cost
Land 11,200 11,200
Buildings and improvements 147,500 145,000
Machinery and equipment 179,200 169,900
337,900 326,100
Less - Accumulated depreciation and
amortization 123,700 116,100
Net property, plant and equipment 214,200 210,000
Intangible assets, net of amortization 315,500 319,500
Other assets 57,400 63,400
$1,091,000 $1,043,100
Liabilities and shareholders'investment
Current liabilities:
Short-term borrowings and current
maturities of long-term debt $ 66,900 $ 200,600
Accounts payable 62,700 43,100
Accrued compensation and benefits 39,800 31,900
Accrued expenses 91,600 94,800
Federal and foreign income taxes 12,300 7,500
Total current liabilities 273,300 377,900
Long-term debt 198,400 93,400
Other long-term liabilities 54,700 76,400
Commitments and contingencies
Shareholders' investment:
Preferred stock, $1 par value, authorized
5,000,000 shares; none issued --- ---
Common stock, $.25 par value, authorized
300,000,000 shares; issued
and outstanding 57,100,598 shares
in 1995, 56,526,655 shares in 1994 14,300 14,100
Capital in excess of par value 63,300 51,000
Retained earnings 478,900 427,300
Other 8,100 3,000
Total shareholders' investment 564,600 495,400
$1,091,000 $1,043,100
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these balance sheets.
II-11
<PAGE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
(Thousands of dollars)
For the Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 86,800 $ 75,600 $ 57,800
Adjustments to reconcile net
income to net cash provided
from operating activities:
Depreciation and amortization 50,600 43,400 39,100
Deferred income taxes (1,600) (4,400) (7,300)
Expenses under stock plans 2,000 1,400 1,200
Gain on disposal of assets,
net --- --- (50,400)
Changes in assets and
liabilities net of acquired
businesses:
Accounts receivable (21,600) (7,600) 12,700
Inventories (15,800) (16,300) (1,200)
Other assets 8,900 9,400 1,100
Current liabilities, excluding
debt 29,100 (23,100) 27,500
Other long-term liabilities (21,700) (7,200) 45,900
Net cash provided from operating
activities 116,700 71,200 126,400
Cash flows from investing activities:
Capital expenditures (39,600) (37,100) (33,400)
Proceeds from sale of assets --- --- 65,000
Payments made for purchases of
businesses (300) (122,200) (74,000)
Patents, trademarks and other (18,600) (25,500) (31,400)
Net cash used in investing
activities (58,500) (184,800) (73,800)
Cash flows from financing activities:
Common stock issued for options
and benefit plans 9,500 2,900 3,000
Purchase of common stock (2,100) (9,000) (24,400)
Proceeds from long-term
borrowings 126,300 3,300 700
Principal payments of long-term
borrowings (22,000) (1,100) (1,000)
Proceeds from (repayments of)
short-term borrowings, net (133,700) 102,000 22,800
Dividends paid (33,100) (30,100) (28,200)
Net cash provided by (used in)
financing activities (55,100) 68,000 (27,100)
Translation adjustment (200) 4,300 (1,300)
Cash and cash equivalents:
Increase(decrease) during the
year 2,900 (41,300) 24,200
Balance at January 1, 34,500 75,800 51,600
Balance at December 31, $ 37,400 $ 34,500 $ 75,800
<FN>
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these statements.
II-12
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
C. R. Bard, Inc. is a leading multinational developer, manufacturer
and marketer of health care products. The Company markets its
products worldwide to hospitals, individual health care
professionals, extended care facilities and alternate site
facilities. The Company holds strong positions in cardiovascular,
urological and surgical products.
1. Significant Accounting Policies
Consolidation The consolidated financial statements include the
accounts of the Company and its majority-owned subsidiaries. All
significant intercompany accounts and transactions are eliminated
in consolidation. The consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles and necessarily include amounts based on judgments and
estimates made by management.
Income Per Share The computations of income per share are based on
the weighted average number of shares outstanding: 56,730,542 in
1995, 56,460,762 in 1994 and 56,692,267 in 1993. The effect of
outstanding stock options and stock awards is not material and has
been excluded from the computations.
Inventories Inventories are stated at the lower of cost or market.
Substantially all domestic inventories are accounted for using the
LIFO method of determining costs. All other inventories are
accounted for using the FIFO method. Inventories valued under the
LIFO method were $140,000,000 in 1995, $138,000,000 in 1994 and
$127,000,000 in 1993; under the FIFO method such inventories would
have been higher by $15,700,000, $13,300,000 and $15,800,000,
respectively. The following is a summary of inventories at
December 31:
(Thousands of dollars) 1995 1994
Finished goods $130,700 $116,000
Work in process 72,600 60,100
Raw materials 24,900 36,300
$228,200 $212,400
Depreciation Property, plant and equipment are depreciated on a
straight-line basis over the useful lives of the various classes of
assets.
Short-term Investments Short-term investments which have a maturity
of ninety days or less are considered cash equivalents and amounted
to $28,100,000 and $26,800,000 as of December 31, 1995 and 1994.
Short-term investments are stated at cost which approximates their
fair value.
II-13
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies (continued)
Intangible Assets Goodwill is amortized using the straight-line
method over periods of 15-40 years as appropriate and other
intangible assets are amortized over their useful lives. The
Company evaluates whether changes have occurred that would require
revision of the remaining estimated useful life assigned to the
intangible or render the intangible not recoverable.
As of December 31, 1995 and 1994, intangible assets include the
following:
(Thousands of dollars) 1995 1994
Goodwill $231,900 $230,400
Other intangibles (primarily 173,500 157,300
patents)
Less accumulated amortization (89,900) (68,200)
Intangible assets, net $315,500 $319,500
Federal Income Taxes The Company has not provided for federal
income taxes on the undistributed earnings of its foreign
operations (primarily in Ireland) as it is the Company's intention
to permanently reinvest undistributed earnings (approximately
$229,000,000 as of December 31, 1995).
Research and Development Research and development costs are
charged to operations as incurred.
New Accounting Pronouncements Effective January 1, 1996, the
Company is required to adopt SFAS No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" and SFAS No. 123 "Accounting for Stock-Based
Compensation". The effect of adopting these standards is not
expected to be significant.
2. Acquisitions
In September 1995, the Company completed a merger with MedChem
Products, Inc. (MedChem) issuing 3,192,345 shares of its common
stock in exchange for all outstanding common stock of MedChem. In
October 1995, the Company completed a merger with American Hydro-
Surgical Instruments, Inc. (AHS) issuing 1,338,446 shares of its
common stock in exchange for all outstanding common stock of AHS.
II-14
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Acquisitions (continued)
These mergers have been accounted for as poolings of interests and,
accordingly, the Company's consolidated financial statements and
related notes thereto have been restated to include the accounts
and operations of MedChem and AHS for all periods presented.
The premerger results of MedChem and AHS for 1994 were net sales
$46,400,000 and net income $800,000; and for 1993 were net sales
$38,000,000 and net income $1,800,000.
In connection with the mergers, $17,700,000 of merger related costs
and expenses ($13,500,000 after-tax or $.24 per share) were
incurred and have been charged to expense in 1995. These one-time
charges include expenses primarily related to investment bankers
and professional fees, and key personnel and severance related
costs.
During 1994 the Company acquired several companies which are
primarily located outside the United States. These acquisitions,
along with the acquisitions made in 1993 have been accounted for
under the purchase method of accounting and enhance or expand the
Company's existing product lines and further develop international
markets. The cost of these acquisitions amounted to $118,200,000
in 1994 and $70,000,000 in 1993 and were financed through
internally generated cash and available credit lines. These
acquisitions did not have a significant effect on the Company's
results of operations.
3. Income Tax Expense
Income tax expense consists of the following:
(Thousands of dollars)
1995 1994 1993
Currently payable:
Federal $ 23,600 $ 22,300 $ 32,600
Foreign 8,900 8,100 8,200
State 5,800 2,500 4,000
38,300 32,900 44,800
Deferred:
Federal (1,700) (3,300) (6,800)
Foreign 100 (1,100) (500)
(1,600) (4,400) (7,300)
$ 36,700 $ 28,500 $ 37,500
II-15
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Income Tax Expense (continued)
Deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates,
applicable to future years, to differences between the financial
reporting and the tax basis of assets and liabilities. At
December 31, 1995, the Company's net deferred tax asset amounted to
approximately $15,000,000 which is recorded in other assets. This
amount principally comprises the tax effects of the differences
between tax and financial accounting treatment of employee benefits
of $16,000,000 and other temporary differences offset by the effect
of accelerated depreciation ($7,000,000).
The following is a reconciliation between the effective tax rates
and the statutory rates:
1995 1994 1993
U.S. federal statutory rate 35% 35% 35%
State income taxes net of federal
income tax benefits 3 2 3
Operations taxed at less than
statutory rate, primarily Ireland
and Puerto Rico (11) (10) (11)
Legal settlement --- --- 7
Other, net 3 --- 3
Effective tax rate 30% 27% 37%
Cash payments for income taxes were $34,100,000, $47,400,000 and
$32,800,000 in 1995, 1994 and 1993, respectively.
4. Short-Term Borrowings and Long-Term Debt
Short-term bank borrowings amounted to $66,800,000 and $197,500,000
at December 31, 1995 and 1994 respectively. The maximum amount
outstanding during 1995 was approximately $215,200,000 with an
average outstanding balance of $141,700,000 and an effective rate
of 6.17%. Unused uncommitted lines of credit available to the
Company amounted to $202,100,000 at December 31, 1995.
The following is a summary of long-term debt:
(Thousands of dollars) 1995 1994
8.69% Unsecured notes due 1999 $ 60,000 $ 60,000
7.8% Mortgage loan 9,100 8,400
Term loan payable to bank, interest
at the bank's prime rate plus one-
half of one percent, secured by
tangible and intangible property --- 9,000
Borrowings under lines of credit 120,000 ---
Other 9,400 19,100
198,500 96,500
Less: amounts classified as current 100 3,100
$198,400 $ 93,400
II-16
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Short-Term Borrowings and Long-Term Debt (continued)
In 1995, the Company entered into a Credit Agreement (The Credit
Agreement) with 15 banks which provides a committed line of credit
of up to $350,000,000 through June 2000 at rates slightly above
LIBOR. The Company had no borrowings under The Credit Agreement at
December 31, 1995. Borrowings of $120,000,000 under the Company's
uncommitted lines of credit have been classified as long-term debt
since the Company has both the intention and the ability, through
The Credit Agreement to refinance these amounts on a long-term
basis.
The Company's long-term debt agreements contain restrictions which,
among other things, require the maintenance of minimum net worth
and operating cash flow levels and limitations on the amounts of
debt.
Under three deposit loan agreements with a bank, $55,000,000 has
been borrowed at floating rates (6.52% at December 31, 1995) with
maturity dates of September 1996, December 1999 and December 2002.
At maturity, the loans are to be repaid through matured
certificates of deposit held by the Company at the same bank.
Since the Company has the right of offset under these agreements
and it is the Company's intention to present certain certificates
of deposit for repayment of these loans at their maturity, these
borrowings have been offset against these certificates of deposit
in the accompanying consolidated balance sheets at December 31,
1995 and 1994. The related interest income has been offset against
the interest expense.
The Company enters into foreign exchange contracts to help reduce
the exposure to fluctuations between certain currencies. As of
December 31, 1995 the contracts relate to the anticipated normal
purchases by a subsidiary in Japan from a subsidiary in Ireland.
At December 31, 1995, there were Irish pound contracts outstanding
payable in Japanese yen equivalent to $5,800,000. Early in 1996
the Company entered into similar contracts equivalent to
$15,700,000. Gains and losses which are required to be reflected
on a mark-to-market basis are not significant.
As of December 31, 1995, the aggregate maturities of long-term debt
were as follows: 1996-$100,000; 1997-$2,000,000; 1998-$1,200,000;
1999-$61,200,000; 2000-$121,200,000; 2001 and thereafter-
$12,700,000. The fair value of the Company's long-term debt is not
significantly different from its recorded value. Interest expense
in 1995, 1994 and 1993 approximated the cash outlay in each year.
II-17
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Commitments and Contingencies
On October 14, 1993, the Company entered into a Plea Agreement with
the Department of Justice related to charges stemming from
violations, primarily during the 1980's by the Company's USCI
division, of the Federal Food, Drug and Cosmetic Act and other
statutes. On April 5, 1994, the U.S. District Court in Boston
approved the Plea Agreement. In accordance with the terms of the
Agreement, a provision of $61 million was recorded in 1993.
During 1994 the Company recorded a $28.2 million pretax charge
($16.9 million charge after taxes). This charge related to the
settlement of a 1992 lawsuit by the inventor of an atherectomy
device and includes a provision for legal costs, and other costs
related to the USCI division.
The Company is involved in two lawsuits which allege breaches of
agreements where substantial amounts have been claimed. In
addition, judgments have been rendered against the Company
potentially aggregating as much as $9 million. The Company is
presently appealing these judgments. The Company is also subject
to other legal proceedings and claims involving product liability
and disputes on agreements which arise in the ordinary course of
business. The Company believes that these legal matters will
likely be disposed of over an extended period of time and should
not have a material adverse impact on the Company's financial
position or results of operations.
The Company is committed under noncancelable operating leases
involving certain facilities and equipment. The minimum annual
rentals under the terms of these leases are as follows: 1996 -
$19,500,000; 1997 - $14,000,000; 1998 - $10,000,000; 1999 -
$4,900,000; 2000 -$3,700,000; and thereafter - $3,400,000. Total
rental expense for all leases amounted to $31,600,000 in 1995,
$29,300,000 in 1994 and $27,100,000 in 1993.
6. Stock Rights
In October 1995 the Company's Board of Directors declared a
dividend distribution of one Common Share Purchase Right for each
outstanding share of Bard common stock. These Rights, which
replace similar rights that expired in 1995, will expire in October
2005 and trade with the common stock. Such Rights are not
presently exercisable and have no voting power. In the event a
person acquires 20% or more, or makes a tender or exchange offer
for 30% or more of Bard's common stock, the Rights detach from the
common stock and become exercisable and entitle a holder to buy one
share of common stock at $120.00 (adjustable to prevent dilution).
II-18
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Stock Rights (continued)
If, after the Rights become exercisable, Bard is acquired or
merged, each Right will entitle its holder to purchase $240 market
value of the surviving Company's stock for $120, based upon the
current exercise price of the Rights. The Company may redeem the
Rights, at its option, at $.05 per Right, prior to a public
announcement that any person has acquired beneficial ownership of
at least 20% of the common stock. These Rights are designed
primarily to encourage anyone interested in acquiring Bard to
negotiate with the Board of Directors. There are 60 million shares
of common stock reserved for the rights.
7. Shareholders' Investment
The Company has stock option, stock award and restricted stock
plans under which certain directors, officers and employees are
participants. At December 31, 1995, 324,726 shares were reserved
for future issuance under these plans.
Under the Company's stock option plans, options have been granted
to certain directors, officers and employees at prices equal to the
market value of the shares at the date of grant, become exercisable
in four annual installments and expire not more than 10 years after
the date of grant. A summary of all option transactions follows:
Number Option
Of Price Range
Shares Per Share
Options outstanding,
December 31, 1992 2,694,635 $ 5.63-50.01
Granted 673,953 22.71-36.91
Exercised (194,880) 5.63-26.88
Cancelled (111,388) --- ---
Options outstanding,
December 31, 1993 3,062,320 5.63-44.20
Granted 1,065,885 16.63-29.44
Exercised (225,855) 5.63-26.88
Cancelled (261,088) --- ---
Options outstanding,
December 31, 1994 3,641,262 7.89-44.20
Granted 852,795 17.03-30.44
Exercised (563,444) 8.92-27.56
Cancelled (175,269) --- ---
Options outstanding,
December 31, 1995 3,755,344 $ 7.89-44.20
(2,038,844 exercisable)
II-19
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Shareholder's Investment (continued)
These option transactions have been restated to include the
equivalent options (at prices ranging from $7.89 to $50.01) held by
officers, directors and employees of MedChem prior to the merger.
Under the Company's stock award plans for key employees and
directors, shares are granted at no cost to the recipients and
distributed in three separate installments. During 1995 awards for
25,992 shares (net of cancellations) were granted and 31,730 shares
were issued. Awards are charged to income over the vesting period.
At December 31, 1995, 30,249 awarded shares (aggregate market price
at date of grant $827,000) have not been issued.
Under the Company's restricted stock plan, which was established in
1993, common stock may be granted at no cost to certain officers
and key employees. Shares are issued to the participants at the
date of grant entitling the participants to cash dividends and the
right to vote their respective shares. Restrictions limit the sale
or transfer of these shares during a five year period from the
grant date. Upon issuance of stock under the plan, unearned
compensation ($4,300,000 at December 31, 1995) equivalent to the
market value of the stock at the date of grant is reflected in
Shareholders' Investment and subsequently amortized to expense over
the five year restriction period. During 1995, 92,690 restricted
shares were granted, net of forfeitures.
Additions to capital in excess of par value of $12,300,000 in 1995
and $5,500,000 in 1994 relates to shares issued under these plans
in excess of the related par value of the shares.
For shares purchased by the Company, common stock is charged for
the par value of the shares retired and retained earnings is
charged for the excess of the cost over the par value of shares
retired.
Cumulative foreign currency translation included in Other
Shareholders' Investment amounted to $12,400,000 at December 31,
1995, and increased by $6,600,000 during the year.
8. Postretirement Benefits
The Company has defined benefit pension plans which cover
substantially all domestic and certain foreign employees and its
policy is to fund accrued pension expense for these plans up to the
full funding limitations. These plans provide for benefits based
upon individual participants' compensation and years of service.
II-20
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Postretirement Benefits (continued)
The Company also has a supplemental defined contribution plan for
certain officers and key employees and a savings plan for
substantially all domestic employees. Individual participant
accounts under the supplemental plan are credited annually based
upon a percentage of compensation. The amounts charged to income
for these plans amounted to $12,800,000 in 1995, $13,600,000 in
1994 and $11,400,000 in 1993.
The following table sets forth the funded status of the defined
benefit pension plans as of September 30, 1995 and 1994 and amounts
recognized in the Company's consolidated balance sheets at
December 31, 1995 and 1994:
(Thousands of dollars)
1995 1994
Actuarial present value of accumulated
benefit obligation, including vested
benefits of $68,000 in 1995 and $66,800
in 1994 $ 76,400 $ 74,700
Plan assets at fair value, primarily
investment securities $ 77,300 $ 73,400
Less: Actuarial present value of
projected benefit obligation for
service rendered to date 92,500 91,200
Projected benefit obligation in excess
of plan assets (15,200) (17,800)
Unrecognized loss 6,400 8,300
Unrecognized prior service cost 7,600 7,000
Unrecognized net asset at transition
amortized over 12 years (3,400) (5,300)
Accrued pension cost included in other
liabilities $ (4,600) $ (7,800)
Pension costs related to the defined benefit pension plans for the
years ended December 31, 1995, 1994 and 1993 are as follows:
(Thousands of dollars) 1995 1994 1993
Net pension cost includes:
Service cost $ 6,800 $ 8,000 $ 6,300
Interest cost 6,700 6,700 5,800
Actual return on plan
assets (12,800) (2,600) (8,200)
Net amortization and deferral 6,000 (3,500) 2,100
Net pension cost $ 6,700 $ 8,600 $ 6,000
II-21
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Postretirement Benefits (continued)
The range of assumed discount rates used was 6% to 8.5% with the
rate on domestic plans at 7.75% in 1995. The rate of increase in
future salary levels ranged from 4% to 6.5% in determining the
projected benefit obligation. The expected long-term rate of
return on assets used in determining net pension cost ranged from
8.5% to 9.0%.
The Company also provides postretirement health care benefits and
life insurance coverage to a limited number of employees at a
subsidiary. The health care benefits include cost-sharing features
based on years of service for future retirees.
Effective January 1, 1993, the Company adopted the provisions of
SFAS No. 106 "Employers' Accounting for Postretirement Benefits
Other Than Pensions." SFAS 106 requires the Company to recognize
expense as employees earn postretirement benefits, rather than on
the cash basis as paid. The Company elected to recognize the
accumulated postretirement benefit obligation as a cumulative
catch-up adjustment in the first quarter of 1993. This resulted in
a one-time charge of approximately $10,000,000 pretax or $6,100,000
net of taxes. The amounts charged to income for this plan were
approximately $800,000 in 1995 and 1994 ($100,000 of service cost
and $700,000 of interest cost) and $850,000 in 1993.
Actuarial assumptions included a discount rate of 7.75%. Health
care cost trends have been projected at annual rates beginning at
12% for 1995 decreasing gradually down to 6% in 2001 and later
years. The effect of a 1% annual increase in these assumed cost
trend rates would increase the accumulated postretirement benefit
obligation at December 31, 1995, by $800,000 and postretirement
benefit cost by $100,000.
9. Other Income(Expense), Net
Other income(expense), net in the Statements of Consolidated Income
is summarized as follows:
(Thousands of dollars)
1995 1994 1993
Interest income $ 3,400 $ 4,600 $ 4,600
Foreign exchange gains 3,300 400 1,700
Legal fees and settlements
(Note 5) --- (28,200) (61,000)
Gain on sale of assets --- --- 48,600
Other, net 1,100 (9,400) (12,000)
Total $ 7,800 $(32,600) $(18,100)
II-22
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Segment Information
The Company is engaged in the design, manufacture, packaging,
distribution and sale of medical, surgical, diagnostic and patient
care devices. Hospitals, physicians and nursing homes purchase
approximately 90% of the Company's products, most of which are used
once and discarded. Information pertaining to domestic and foreign
operations as of December 31, 1995, 1994 and 1993 and for the years
then ended is given below.
<TABLE>
<CAPTION>
United Elimi- Consoli-
(000's of dollars) States Foreign nations dated
<S> <C> <C> <C> <C>
1995
Sales:
Trade $749,000 $353,500 $ --- $1,102,500
Export 35,300 --- --- 35,300
Intersegment 95,800 10,400 (106,200) ---
Total $880,100 $363,900 $(106,200) $1,137,800
Operating income $102,800 $ 66,600 $ (29,500)(a) $ 139,900
Identifiable assets:
December 31, 1995 $747,000 $344,000 $ --- $1,091,000
(a) Includes nonrecurring acquisition costs of $17,700
1994
Sales:
Trade $751,500 $283,500 $ --- $1,035,000
Export 29,600 --- --- 29,600
Intersegment 97,700 4,400 (102,100) ---
Total $878,800 $287,900 $(102,100) $1,064,600
Operating income $106,700 $ 59,000 $ (12,700) $ 153,000
Identifiable assets:
December 31, 1994 $734,000 $309,100 $ --- $1,043,100
1993
Sales:
Trade $720,900 $259,900 $ --- $ 980,800
Export 28,000 --- --- 28,000
Intersegment 75,700 1,600 (77,300) ---
Total $824,600 $261,500 $ (77,300) $1,008,800
Operating income $ 86,900 $ 55,200 $ (10,100) $ 132,000
Identifiable assets:
December 31, 1993 $683,000 $198,400 $ --- $ 881,400
II-23
<PAGE>
</TABLE>
<TABLE>
C. R. BARD, INC. AND SUBSIDIARIES
Supplementary Financial Data
QUARTERLY FINANCIAL DATA
<CAPTION>
(Thousands of dollars except per share amounts)
1995
1st 2nd 3rd 4th Year
<S> <C> <C> <C> <C> <C>
Net sales $278,100 $291,100 $277,600 $291,000 $1,137,800
Cost of goods
sold 134,200 140,600 134,200 141,000 550,000
Operating
Income 39,700 40,900 24,800 34,500 139,900
Income before
taxes 35,400 35,900 21,200 31,000 123,500
Net income 24,900 25,000 14,100 22,800 86,800
Per share
information:
Net income $ .44 $ .44 $ .25 $ .40 $ 1.53
Dividends $ .15 $ .15 $ .16 $ .16 $ .62
</TABLE>
Note: The third quarter results include a $12,500
charge ($9,900 after-tax charge or 18 cents per
share) for costs associated with the merger of
MedChem Products, Inc. The fourth quarter
results include a $5,200 charge ($3,600 after-tax
charge or 6 cents per share) for costs associated
with the merger of American Hydro-Surgical
Instruments, Inc.
<TABLE>
<CAPTION>
1994
1st 2nd 3rd 4th Year
<S> <C> <C> <C> <C> <C>
Net sales $258,000 $267,800 $263,900 $274,900 $1,064,600
Cost of goods
sold 125,000 128,300 127,100 133,100 513,500
Operating
income 37,400 39,300 37,900 38,400 153,000
Income before
taxes 33,500 34,600 33,200 2,800 104,100
Net income 22,900 24,000 23,300 5,400 75,600
Per share
information:
Net income $ .41 $ .42 $ .41 $ .10 $ 1.34
Dividends $ .14 $ .14 $ .15 $ .15 $ .58
<FN>
</TABLE>
Note: Reflected in the fourth quarter of 1994 is a
pretax charge of $28,200 ($16,900 or 30 cents per
share charge after taxes) for the settlement of
a lawsuit and for other costs related to the USCI
division which affected the fourth quarter tax
provision.
II-24
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
II-25
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors of the Registrant
Information with respect to Directors of the Company is
incorporated herein by reference to the material contained under
the heading "Proposal No. 1 - Election of Directors" appearing on
pages 1 through 4 of the Company's definitive Proxy Statement dated
March 8, 1996.
Executive Officers of the Registrant
Information with respect to Executive Officers of the Registrant
are on pages I-8 through I-10 of this filing.
Item 11. Executive Compensation
The information contained under the caption "Executive
Compensation" appearing on Pages 6 through 15 of the Company's
definitive Proxy Statement dated March 8, 1996 is incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information contained under the captions "Securities Ownership
of Certain Beneficial Owners" and "Securities Ownership of
Management" on pages 4 and 5 of the Company's definitive Proxy
Statement dated March 8, 1996 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information contained under the caption "Compensation of
Outside Directors - Related Transactions" on page 12 of the
Company's definitive Proxy Statement dated March 8, 1996 is
incorporated herein by reference.
III-1
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) l. Financial Statements and Supplementary Data
Included in Part II Item 8 of this report:
Page
II- 9 Report of Independent Public Accountants.
II-10 Statements of Consolidated Income and Statements of
Consolidated Retained Earnings for the three years
ended December 31, 1995.
II-11 Consolidated Balance Sheets at December 31, 1995 and
1994.
II-12 Consolidated Statements of Cash Flows for the three
years ended December 31, 1995.
II-13 Notes to Consolidated Financial Statements.
II-24 Quarterly Financial Data.
2. Financial Statement Schedules
Schedules are omitted because they are not applicable, are
not required or the information required is included in the
financial statements or notes thereto.
3. Exhibits, No.
3a Registrant's Restated Certificate of Incorporation, as
amended, as of April 19, 1989, filed as Exhibit 3a to
the Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
3b Registrant's Bylaws revised as of April 18, 1990,
filed as Exhibit 3b to the Company's 1993 Annual
Report on Form 10-K is incorporated herein by
reference.
4 Rights Agreement dated as of October 11, 1995 between
C. R. Bard, Inc. and First Chicago Trust Company of
New York as Rights Agent, filed as Exhibit 1
on Form 8-A is incorporated herein by reference.
IV-1
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
10 Plea Agreement with attachments and Civil Settlement
Agreement between United States of America and C. R.
Bard, Inc. dated October 14, 1993, filed as Exhibit 10
to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, File No. 1-6926 is
incorporated herein by reference.
10a* Benson F. Smith Severance Agreement dated as of
June 29, 1994 filed as Exhibit 10a to the 1994 Annual
Report on Form 10-K is incorporated herein by
reference.
10b* William H. Longfield Severance Agreement as amended
dated as of July 13, 1994 filed as Exhibit 10b to the
1994 Annual Report on Form 10-K is incorporated herein
by reference.
10c* William C. Bopp Severance Agreement as amended dated
as of August 31, 1994 filed as Exhibit 10c to the 1994
Annual Report on Form 10-K is incorporated herein by
reference.
10d* Hope Greenfield Severance Agreement dated as of March
6, 1996. (p.IV-7).
10e* Richard A. Flink Severance Agreement as amended dated
as of July 22, 1994 filed as Exhibit 10a to the 1994
Annual Report on Form 10-K is incorporated herein by
reference.
10f* E. Robert Ernest Severance Agreement as amended dated
as of July 19, 1994 filed as Exhibit 10f to the 1994
Annual Report on Form 10-K is incorporated herein by
reference.
10g* William H. Longfield Supplemental Executive Retirement
Agreement dated as of January 12, 1994, filed as
Exhibit 10g to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
10h* 1990 Stock Option Plan, filed as Exhibit 10h to the
Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10i* 1989 Employee Stock Appreciation Rights Plan, filed as
Exhibit 10i to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
10j* C. R. Bard, Inc. Agreement and Plans Trust, filed as
Exhibit 10j to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
IV-2
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
10k* Supplemental Insurance/Retirement Plan, Plan I - For
new corporate officer when previous agreement as non-
officer exists, Plan II - For new corporate officer
when no previous agreement exists, filed as Exhibit
10k to the Company's 1993 Annual Report on Form 10-K
is incorporated herein by reference.
10l* Retirement Plan for Outside Directors of C. R. Bard,
Inc., filed as Exhibit 10l to the Company's 1993
Annual Report on Form 10-K is incorporated herein by
reference.
10m* Deferred Compensation Contract Deferral of Directors'
Fees, as amended entered into with directors William
T. Butler, M.D., Regina E. Herzlinger, and Robert P.
Luciano, filed as Exhibit 10m to the Company's 1993
Annual Report on Form 10-K is incorporated herein by
reference.
10n* 1988 Directors Stock Award Plan, as amended in October
1991, filed as Exhibit 10n to the Company's 1993
Annual Report on Form 10-K is incorporated herein by
reference.
10o* Excess Benefit Plan, filed as Exhibit 10o to the
Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10p* Supplemental Executive Retirement Plan, filed as
Exhibit 10p to the Company's 1993 Annual Report on
Form 10-K is incorporated herein by reference.
10q* 1994 Executive Bonus Plan, filed as Exhibit 10 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994, File No. 1-6926 is
incorporated herein by reference.
10r* Long Term Performance Incentive Plan, filed as Exhibit
10r to the Company's 1993 Annual Report on Form 10-K
is incorporated herein by reference.
10s* Deferred Compensation Contract Deferral of
Discretionary Bonus, filed as Exhibit 10s to the
Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10t* Deferred Compensation Contract Deferral of Salary,
filed as Exhibit 10t to the Company's 1993 Annual
Report on Form 10-K is incorporated herein by
reference.
IV-3
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
10u* 1993 Long Term Incentive Plan, filed as Exhibit 10u to
the Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
10v* Earle L. Parker Severance Agreement dated as of
June 29, 1994 filed as Exhibit 10v to the Company's
1994 Annual Report on Form 10-K is incorporated herein
by reference.
10w* John H. Weiland Severance Agreement dated as of
March 11, 1996. (p.IV-21).
10x* William T. Tumber Severance Agreement dated as of
March 13, 1996. (p.IV-35).
10y* Timothy M. Ring Severance Agreement dated as of March
12, 1996. (p.IV-49).
21 Parents and subsidiaries of registrant. (p. IV-63).
23 Arthur Andersen LLP consent to the incorporation by
reference of their report on Form 10-K into previously
filed Forms S-8. (P.IV-65).
27 Financial data schedule
99 Indemnity agreement between the Company and each of
its directors and officers, filed as Exhibit 99 to
the Company's 1993 Annual Report on Form 10-K is
incorporated herein by reference.
* Each of these exhibits listed under the number 10 constitutes
a management contract or a compensatory plan or arrangement.
All other exhibits are not applicable.
(b) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K dated
October 12, 1995 announcing that on October 11, 1995, the Board
of Directors declared a dividend of one common share purchase
right on each outstanding share of Company common stock.
The Registrant filed a Current Report on Form 8-K dated
October 17, 1995 announcing a complaint filed by a medical
device manufacturer in state court in California alleging breach
of contract, fraud and misrepresentation by the Company in
connection with its performance under a development, supply and
license agreement.
The Registrant filed a Current Report on Form 8-K dated
December 15, 1995 announcing the completion of a stock-for-stock
merger with American Hydro-Surgical Instruments, Inc. and
certain post-merger financial results.
IV-4
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
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.
C. R. BARD, INC.
(Registrant)
By: William C. Bopp /s/
William C. Bopp
Executive Vice President and
Chief Financial Officer
Date: March 14, 1996
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signatures Title Date
William H. Longfield /s/ Chairman and March 14,1996
William H. Longfield Chief Executive Officer
and Director
(Principal Executive
Officer)
William C. Bopp /s/ Executive Vice President March 14, 1996
William C. Bopp and Chief Financial
Officer and Director
(Principal Financial
Officer)
Charles P. Grom /s/ Vice President and March 14, 1996
Charles P. Grom Controller
(Principal Accounting
Officer)
Benson F. Smith /s/ President and March 14, 1996
Benson F. Smith Chief Operating
Officer and Director
IV-5
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
Signatures Title Date
Joseph F. Abely, Jr. /s/ Director March 15, 1996
Joseph F. Abely, Jr.
William T. Butler, M.D. /s/ Director March 15, 1996
William T. Butler, M.D.
Raymond B. Carey, Jr. /s/ Director March 15, 1996
Raymond B. Carey, Jr.
Daniel A. Cronin, Jr. /s/ Director March 22, 1996
Daniel A. Cronin, Jr.
T. Kevin Dunnigan /s/ Director March 15, 1996
T. Kevin Dunnigan
Regina E. Herzlinger /s/ Director March 15, 1996
Regina E. Herzlinger
Robert P. Luciano /s/ Director March 15, 1996
Robert P. Luciano
Robert H. McCaffrey /s/ Director March 14, 1996
Robert H. McCaffrey
IV-6
<PAGE>
EXHIBIT 10d
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey
corporation (the "Corporation"), and Hope Greenfield (the
"Executive"), dated as of the 6th day of March, 1996.
WHEREAS, the Corporation, on behalf of itself and its
shareholders, wishes to assure that the Corporation will have the
continued dedication of the Executive, notwithstanding the
possibility, threat, or occurrence of a Change of Control (as
defined below) of the Corporation. The Board of Directors of the
Corporation (the "Board") believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage his attention and
dedication to his assigned duties currently and in the event of
any threatened or pending Change of Control, and to provide the
Executive with competitive compensation arrangements; therefore,
the Board has caused the Corporation to enter into this Agreement
(i) to ensure the Executive of individual financial security in
the event of a Change of Control, and (ii) to provide such
protection in a manner which is competitive with that of other
corporations.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date"
shall be the first date during the "Change of Control Period" (as
defined in Section l(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with the Corporation is terminated
prior to the date on which a Change of Control occurs, and the
Executive can reasonably demonstrate that such termination (1)
was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2)
otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the "Effective
Date" shall mean the date immediately prior to the date of such
termination.
(b) The "Change of Control Period" is the period
commencing on the date hereof and ending on the earlier to occur
of (i) the third anniversary of such date or (ii) the first day
of the month next following the Executive's normal retirement
date ("Normal Retirement Date") under the Corporation's
retirement plan; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of
Control Period shall be automatically extended so as to terminate
on the earlier of (x) two years from such Renewal Date or (y) the
first day of the month coinciding with or next following the
Executive's Normal Retirement Date, unless at least 60 days prior
to the Renewal Date the Corporation shall give notice that the
Change of Control Period shall not be so extended.
IV-7
<PAGE>
2. Change of Control. (a) For purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred
if a change of control of the nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form
8-K as in effect on the date hereof pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
occurs, provided that, without limitation, a "Change of Control"
shall be deemed to have occurred if (i) the beneficial ownership
at any time hereafter by any person, as defined herein, of
capital stock of the Corporation, constitutes 20 percent or more
of the general voting power of all of the Corporation's
outstanding capital or (ii) individuals who, as of the date
hereof, constitute the Board (as of the date hereof, 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 Corporation's shareholders, was
approved by a vote of at least three-quarters of the Directors
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 Corporation, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent
Board. No sale to underwriters or private placement of its
capital stock by the Corporation, nor any acquisition initiated
by the Corporation, through merger, purchase of assets or
otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of
Control.
(b) For purposes of the definition of "Change of
Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is
used in Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial
owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or
not of record, or
B. which that person has the right to acquire
pursuant to any agreement or understanding or upon
exercise of conversion rights, warrants, or options, or
otherwise, or
C. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by an "affiliate" or
"associate" (as defined in the rules of the Securities
and Exchange Commission under the Securities Act of
1933, as amended) of that person, or
IV-8
<PAGE>
D. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by any other person
with which that person or his "affiliate" or
"associate" (defined as aforesaid) has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital
stock of the Corporation.
(iii) The outstanding shares of capital stock of the
Corporation shall include shares deemed owned through
application of clauses (ii) (B), (C) and (D), above, but
shall not include any other shares which may be issuable
pursuant to any agreement or upon exercise of conversion
rights, warrants or options, or otherwise, but which are not
actually outstanding.
(iv) Shares of capital stock, if any, held by The
Chase Manhattan Bank N.A. under the Indenture and the Escrow
Agreement dated as of November 1, 1971 between International
Paper Corporation and said bank shall not be deemed owned by
International Paper Corporation or by said bank for purposes
of this definition, so long as they are held by said bank
under said Escrow Agreement, but said shares shall be deemed
outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the
Corporation.
3. Employment Period. The Corporation hereby agrees
to continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Corporation, for the period
commencing on the Effective Date and ending on the earlier to
occur of (a) the third anniversary of such date or (b) the first
day of the month coinciding with or next following the
Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the
90-day period immediately preceding the Effective Date and (B)
the Executive's services shall be performed at the location where
the Executive was employed immediately preceding the Effective
Date or any office or location less than thirty-five (35) miles
from such location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of
the Corporation and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
IV-9
<PAGE>
Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive
to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's
responsibilities as an employee of the Corporation in accordance
with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the
Employment Period, the Executive shall receive a base salary
("Base Salary") at a monthly rate at least equal to the highest
monthly base salary paid to the Executive by the Corporation
during the twelve-month period immediately preceding the month in
which the Effective Date occurs. During the Employment Period,
the Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be
consistent with increases in base salary awarded in the ordinary
course of business to other key executives of the Corporation.
Any increase in Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Base
Salary shall not be reduced after any such increase.
(ii) Annual Bonus. In addition to Ease Salary,
the Executive shall be awarded, for each fiscal year during the
Employment Period, an annual bonus (an "Annual Bonus") in cash at
least equal to the average bonus received by the Executive from
the Corporation in respect of the three fiscal years immediately
preceding the fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans.
In addition to Base Salary and Annual Bonus payable as
hereinabove provided, the Executive shall be entitled to
participate during the Employment Period in all incentive,
savings and retirement plans and programs, whether qualified or
non-qualified, then applicable to other key executives of the
Corporation and its affiliates (including the Corporation's 1981
Stock Option Plan, the Long-Term Performance Incentive Plan, the
1986 Stock Award Plan, the 1981 Employee Stock Appreciation
Rights Plan, the Employees' Stock Ownership Plan and the
Employees' Retirement Savings Plan, in each case to the extent
then in effect or as subsequently amended); provided, however,
that such plans and programs, in the aggregate, shall provide the
Executive with compensation, benefits and reward opportunities at
least as favorable as the most favorable such compensation
benefits and reward opportunities provided by the Corporation for
the Executive under such plans and programs as in effect at any
time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Executive, as provided at any
time thereafter with respect to other key executives.
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<PAGE>
(iv) Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans provided
by the Corporation (including, without limitation, medical,
prescription, dental, disability, salary continuance, executive
life, group life, accidental death and travel accident insurance
plans and programs), at least comparable to those in effect at
any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or,
if more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the most favorable policies and procedures of the
Corporation and its affiliates in effect at any time during the
90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits, in
accordance with the most favorable policies of the Corporation
and its affiliates in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office
or offices of a size and with furnishings and other appointments,
and to secretarial and other assistance, at least equal to those
provided to the Executive at any time during the 90-day period
immediately preceding the Effective Date which would be most
favorable to the Executive or, if more favorable to the
Executive, as provided at any time thereafter with respect to
other key executives.
(viii) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance
with the most favorable policies of the Corporation and its
affiliates as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
5. Termination. (a) Death or Disability. This
Agreement shall terminate automatically upon the Executive's
death. The Corporation may terminate this Agreement, after
having established the Executive's Disability (pursuant to the
definition of "Disability" set forth below), by giving to the
Executive written notice of its intention to terminate the
Executive's employment. In such a case, the Executive's
employment with the Corporation shall terminate effective on the
180th day after receipt of such notice (the "Disability Effective
Date"), provided that, within 180 days after such receipt, the
IV-11
<PAGE>
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability"
means disability which, at least 26 weeks after its commencement,
is determined to be total and permanent by a physician selected
by the Corporation or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement
as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the
Executive's employment for "Cause." For purposes of this
Agreement, "Cause" means (i) an act or acts of dishonesty taken
by the Executive and intended to result in substantial personal
enrichment of the Executive at the expense of the Corporation,
(ii) repeated violations by the Executive of the Executive's
obligations under Section 4(a) of this Agreement which are
demonstrably willful and deliberate on the Executive's part and
which are not remedied after the receipt of notice from the
Corporation or (iii) the conviction of the Executive of a felony.
(c) Termination by Executive for Good Reason. The
Executive's employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or (B) any
other action by the Corporation which results in a
diminution in such position, authority, duties or
responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Corporation
promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Corporation to comply with
any of the provisions of Section 4(b) of this Agreement,
other than an insubstantial and inadvertent failure which is
remedied by the Corporation promptly after receipt of notice
thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably
required in the performance of the Executive's
responsibilities;
(iv) any purported termination by the Corporation of
the Executive's employment otherwise than as permitted by
this Agreement; or
(v) any failure by the Corporation to comply with
and satisfy Section 11(c) of this Agreement.
IV-12
<PAGE>
Anything in this Agreement to the contrary
notwithstanding, any termination by the Executive for any reason
whatsoever during the six month period immediately following the
first anniversary of the date of a Change of Control shall be a
termination for "Good Reason". For purposes of this Section
5(c), any good faith determination of "Good Reason" made by the
Executive shall be conclusive.
(d) Notice of Termination. Any termination by the
Corporation for Cause or by the Executive for Good Reason shall
be communicated by Notice of Termination to the other party
hereto given in accordance with Section 12(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the termination date is other
than the date of receipt of such notice, specifies the
termination date (which date shall be not more than fifteen (15)
days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means
the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be. If the Executive's
employment is terminated by the Corporation other than for Cause
or Disability, the Date of Termination shall be the date on which
the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon Termination.
(a) Death. If the Executive's employment is terminated by
reason of the Executive's death, this Agreement shall terminate
without further obligations to the Executive's legal
representatives under this Agreement, other than those
obligations accrued or earned by the Executive hereunder at the
date of the Executive's death. Anything in this Agreement to the
contrary notwithstanding, the Executive's family shall be
entitled to receive benefits at least equal to the most favorable
benefits provided by the Corporation to surviving families of
executives of the Corporation under such plans, programs and
policies relating to family death benefits, if any, as in effect
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the
Executive's family, as in effect on the date of the Executive's
death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability, this
Agreement shall terminate without further obligations to the
Executive, other than those obligations accrued or earned by the
Executive hereunder as of the Disability Effective Date.
Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled after the Disability Effective Date
to receive disability and other benefits at least equal to the
most favorable of those provided by the Corporation to disabled
employees and/or their families in accordance with such plans,
IV-13
<PAGE>
programs and policies relating to disability, if any, as in
effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive and/or
the Executive's family, as in effect at any time thereafter with
respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause or the
Executive terminates his employment other than for Good Reason,
the Corporation shall pay the Executive his full Base Salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given and shall have no further
obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason;
Termination by Corporation Other Than for Cause or Disability.
If, during the Employment Period, the Corporation shall terminate
the Executive's employment other than for Cause or Disability, or
the employment of the Executive shall be terminated by the
Executive for Good Reason:
(i) the Corporation shall pay to the Executive in a
lump sum in cash within 10 days after the Date of
Termination (the "Payment Date") the aggregate of the
following amounts:
A. to the extent not theretofore paid, the
Executive's Base Salary through the Date of Termination
at the rate in effect on the Date of Termination or, if
higher, at the highest rate in effect at any time
within the three year period preceding the Effective
Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual
bonuses paid, or payable to the extent deferred, to the
Executive for the three full fiscal years prior to the
Effective Date (the "Recent Bonus") and (y) the
fraction obtained by dividing (i) the number of days
between the Date of Termination and the last day of the
last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of
the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously
deferred by the Executive, all amounts previously
deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the
Corporation shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would
have been provided to them in accordance with the plans,
programs and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been
terminated, including health insurance and life insurance,
if and as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more
IV-14
<PAGE>
favorable to the Executive, as in effect at any time thereafter
with respect to other key executives and their families and for
purposes of eligibility for retiree benefits pursuant to such
plans, programs and policies, the Executive shall be considered
to have remained employed until the end of the Employment Period
and to have retired on the last day of such period.
Anything herein to the contrary notwithstanding, the
Executive may elect in his Notice of Termination to receive the
payment provided for pursuant to Section 6(d)(i)(C) hereof (the
"Severance Payment") in installments. If the Executive elects
the installment method, one-quarter of the Severance Payment
shall be paid to the Executive on the Payment Date and
one-quarter of the severance payment shall be paid to the
Executive on each of the next three anniversaries thereof and, in
the case of the latter three payments, the amounts to be paid
shall include interests from the Payment Date on the remaining
unpaid balance of the Severance Payment calculated at the Morgan
Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other
plan or program provided by the Corporation or any of its
affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option or other agreements
with the Corporation or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Corporation
or any of its affiliated companies at or subsequent to the Date
of Termination shall be payable in accordance with such plan or
program.
8. Full Settlement. The Corporation's obligation to
make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right
or action which the Corporation may have against the Executive or
others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of
the amounts payable to the Executive under any of the provisions
of this Agreement. The Corporation agrees to pay, to the full
extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Corporation or others
of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance
thereof or as a result of any contest by the Executive about the
amount of any payment pursuant to Section 9 of this Agreement,
plus in each case interest at the Federal Rate (as defined
below).
IV-15
<PAGE>
9. Gross-up.
(a) In the event it shall be determined that any
payment, benefit or distribution (or combination thereof) by the
Corporation to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement, or otherwise) (a "Payment") would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any interest or
penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and
penalties, hereinafter collectively referred to as the "Excise
Tax"), Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after
payment by Executive of the Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
Arthur Andersen & Co. (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Corporation and
Executive within fifteen (15) business days of the receipt of
notice from Executive that there has been a Payment, or such
earlier time as is requested by the Corporation. In the event
that the Accounting Firm is serving as accountant or auditor for
an individual, entity or group effecting the change in ownership
or effective control (within the meaning of Section 280G of the
Code), Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Corporation. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall
be paid by the Corporation to Executive within five (5) days
after the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by
Executive, it shall so indicate to Executive in writing. Any
determination by the Accounting Firm shall be binding upon the
Corporation and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Corporation should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder.
In the event that the Corporation exhausts its remedies pursuant
to Section 9(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of Executive.
(c) Executive shall notify the Corporation in writing
of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Corporation of the Gross-Up
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<PAGE>
Payment. Such notification shall be given as soon as practicable
but no later than ten (10) business days after Executive is
informed in writing of such claim and shall apprise the
Corporation of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such
claim prior to the expiration of the thirty (30) day period
following the date on which it gives such notice to the
Corporation (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Corporation notifies Executive in writing prior to the expiration
of such period that it desires to contest such claim, Executive
shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to such claim;
(ii) take such action in connection with contesting
such claim as the Corporation shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Corporation;
(iii) cooperate with the Corporation in good faith
in order to effectively contest such claim; and
(iv) permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for
any Excise Tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing
provisions of this Section 9(c), the Corporation shall control
all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Corporation shall determine; provided, however, that if the
Corporation directs Executive to pay such claim and sue for a
refund, the Corporation shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise
Tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided,
further, that if Executive is required to extend the statute of
limitations to enable the Corporation to contest such claim,
Executive may limit this extension solely to such contested
amount.
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<PAGE>
(d) If, after the receipt by Executive of an amount
advanced by the Corporation pursuant to Section 9(c), Executive
becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to the Corporation's complying
with the requirements of Section 9(c)) promptly pay to the
Corporation the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the
Corporation pursuant to Section 9(c), a determination is made
that Executive shall not be entitled to any refund with respect
to such claim and the Corporation does not notify Executive in
writing of its intent to contest such denial of refund prior to
the expiration of thirty (30) days after such determination, then
such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
10. Confidential Information. The Executive shall
hold in a fiduciary capacity for the benefit of the Corporation
all secret or confidential information, knowledge or data
relating to the Corporation or any of its affiliated companies,
and their respective businesses, which shall have been obtained
by the Executive during the Executive's employment by the
Corporation or any of its affiliated companies and which shall
not be public knowledge (other than by acts by the Executive or
his representatives in violation of this Agreement). After
termination of the Executive's employment with the Corporation,
the Executive shall not, without the prior written consent of the
Corporation, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those
designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under
this Agreement.
11. Successors. (a) This Agreement is personal to
the Executive and without the prior written consent of the
Corporation shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors.
(c) The Corporation will require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that the Corporation would be required to perform it if no such
succession had taken place. As used in this Agreement,
"Corporation" shall mean the Corporation as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation
of law, or otherwise.
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12. Miscellaneous. (a) This Agreement shall be
governed by and construed in accordance with the laws of the
State of New Jersey, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Hope Greenfield
124 South Great Road
Lincoln, MA 01773
If to the Corporation:
C. R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes
as shall be required to be withheld pursuant to any applicable
law or regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding
of the Corporation and the Executive with respect to the subject
matter hereof.
(g) The Executive and the Corporation acknowledge that
the employment of the Executive by the Corporation is "at will",
and, prior to the Effective Date, may be terminated by either the
Executive or the Corporation at any time. Upon a termination of
the Executive's employment or upon the Executive's ceasing to be
an officer of the Corporation, in each case, prior to the
Effective Date, there shall be no further rights under this
Agreement.
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<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his
hand and, pursuant to the authorization from its Board of
Directors, the Corporation has caused these presents to be
executed in its name on its behalf, all as of the day and year
first above written.
/s/ Hope Greenfield
Hope Greenfield
C. R. BARD, INC.
By:/s/ William H. Longfield
Name: William H. Longfield
Title: Chairman and
Chief Executive Officer
Attest:/s/ Jean F. Miller
Assistant Secretary
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EXHIBIT 10w
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey
corporation (the "Corporation"), and John H. Weiland (the
"Executive"), dated as of the 11th day of March, 1996.
WHEREAS, the Corporation, on behalf of itself and its
shareholders, wishes to assure that the Corporation will have the
continued dedication of the Executive, notwithstanding the
possibility, threat, or occurrence of a Change of Control (as
defined below) of the Corporation. The Board of Directors of the
Corporation (the "Board") believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage his attention and
dedication to his assigned duties currently and in the event of
any threatened or pending Change of Control, and to provide the
Executive with competitive compensation arrangements; therefore,
the Board has caused the Corporation to enter into this Agreement
(i) to ensure the Executive of individual financial security in
the event of a Change of Control, and (ii) to provide such
protection in a manner which is competitive with that of other
corporations.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date"
shall be the first date during the "Change of Control Period" (as
defined in Section l(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with the Corporation is terminated
prior to the date on which a Change of Control occurs, and the
Executive can reasonably demonstrate that such termination (1)
was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2)
otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the "Effective
Date" shall mean the date immediately prior to the date of such
termination.
(b) The "Change of Control Period" is the period
commencing on the date hereof and ending on the earlier to occur
of (i) the third anniversary of such date or (ii) the first day
of the month next following the Executive's normal retirement
date ("Normal Retirement Date") under the Corporation's
retirement plan; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of
Control Period shall be automatically extended so as to terminate
on the earlier of (x) two years from such Renewal Date or (y) the
first day of the month coinciding with or next following the
Executive's Normal Retirement Date, unless at least 60 days prior
to the Renewal Date the Corporation shall give notice that the
Change of Control Period shall not be so extended.
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2. Change of Control. (a) For purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred
if a change of control of the nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form
8-K as in effect on the date hereof pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
occurs, provided that, without limitation, a "Change of Control"
shall be deemed to have occurred if (i) the beneficial ownership
at any time hereafter by any person, as defined herein, of
capital stock of the Corporation, constitutes 20 percent or more
of the general voting power of all of the Corporation's
outstanding capital or (ii) individuals who, as of the date
hereof, constitute the Board (as of the date hereof, 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 Corporation's shareholders, was
approved by a vote of at least three-quarters of the Directors
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 Corporation, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent
Board. No sale to underwriters or private placement of its
capital stock by the Corporation, nor any acquisition initiated
by the Corporation, through merger, purchase of assets or
otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of
Control.
(b) For purposes of the definition of "Change of
Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is
used in Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial
owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or
not of record, or
B. which that person has the right to acquire
pursuant to any agreement or understanding or upon
exercise of conversion rights, warrants, or options, or
otherwise, or
C. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by an "affiliate" or
"associate" (as defined in the rules of the Securities
and Exchange Commission under the Securities Act of
1933, as amended) of that person, or
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D. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by any other person
with which that person or his "affiliate" or
"associate" (defined as aforesaid) has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital
stock of the Corporation.
(iii) The outstanding shares of capital stock of the
Corporation shall include shares deemed owned through
application of clauses (ii) (B), (C) and (D), above, but
shall not include any other shares which may be issuable
pursuant to any agreement or upon exercise of conversion
rights, warrants or options, or otherwise, but which are not
actually outstanding.
(iv) Shares of capital stock, if any, held by The
Chase Manhattan Bank N.A. under the Indenture and the Escrow
Agreement dated as of November 1, 1971 between International
Paper Corporation and said bank shall not be deemed owned by
International Paper Corporation or by said bank for purposes
of this definition, so long as they are held by said bank
under said Escrow Agreement, but said shares shall be deemed
outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the
Corporation.
3. Employment Period. The Corporation hereby agrees
to continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Corporation, for the period
commencing on the Effective Date and ending on the earlier to
occur of (a) the third anniversary of such date or (b) the first
day of the month coinciding with or next following the
Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the
90-day period immediately preceding the Effective Date and (B)
the Executive's services shall be performed at the location where
the Executive was employed immediately preceding the Effective
Date or any office or location less than thirty-five (35) miles
from such location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and
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time during normal business hours to the business and affairs of
the Corporation and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive
to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's
responsibilities as an employee of the Corporation in accordance
with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the
Employment Period, the Executive shall receive a base salary
("Base Salary") at a monthly rate at least equal to the highest
monthly base salary paid to the Executive by the Corporation
during the twelve-month period immediately preceding the month in
which the Effective Date occurs. During the Employment Period,
the Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be
consistent with increases in base salary awarded in the ordinary
course of business to other key executives of the Corporation.
Any increase in Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Base
Salary shall not be reduced after any such increase.
(ii) Annual Bonus. In addition to Ease Salary,
the Executive shall be awarded, for each fiscal year during the
Employment Period, an annual bonus (an "Annual Bonus") in cash at
least equal to the average bonus received by the Executive from
the Corporation in respect of the three fiscal years immediately
preceding the fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans.
In addition to Base Salary and Annual Bonus payable as
hereinabove provided, the Executive shall be entitled to
participate during the Employment Period in all incentive,
savings and retirement plans and programs, whether qualified or
non-qualified, then applicable to other key executives of the
Corporation and its affiliates (including the Corporation's 1981
Stock Option Plan, the Long-Term Performance Incentive Plan, the
1986 Stock Award Plan, the 1981 Employee Stock Appreciation
Rights Plan, the Employees' Stock Ownership Plan and the
Employees' Retirement Savings Plan, in each case to the extent
then in effect or as subsequently amended); provided, however,
that such plans and programs, in the aggregate, shall provide the
Executive with compensation, benefits and reward opportunities at
least as favorable as the most favorable such compensation
benefits and reward opportunities provided by the Corporation for
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the Executive under such plans and programs as in effect at any
time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Executive, as provided at any
time thereafter with respect to other key executives.
(iv) Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans provided
by the Corporation (including, without limitation, medical,
prescription, dental, disability, salary continuance, executive
life, group life, accidental death and travel accident insurance
plans and programs), at least comparable to those in effect at
any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or,
if more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the most favorable policies and procedures of the
Corporation and its affiliates in effect at any time during the
90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits, in
accordance with the most favorable policies of the Corporation
and its affiliates in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office
or offices of a size and with furnishings and other appointments,
and to secretarial and other assistance, at least equal to those
provided to the Executive at any time during the 90-day period
immediately preceding the Effective Date which would be most
favorable to the Executive or, if more favorable to the
Executive, as provided at any time thereafter with respect to
other key executives.
(viii) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance
with the most favorable policies of the Corporation and its
affiliates as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
5. Termination. (a) Death or Disability. This
Agreement shall terminate automatically upon the Executive's
death. The Corporation may terminate this Agreement, after
having established the Executive's Disability (pursuant to the
definition of "Disability" set forth below), by giving to the
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Executive written notice of its intention to terminate the
Executive's employment. In such a case, the Executive's
employment with the Corporation shall terminate effective on the
180th day after receipt of such notice (the "Disability Effective
Date"), provided that, within 180 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability"
means disability which, at least 26 weeks after its commencement,
is determined to be total and permanent by a physician selected
by the Corporation or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement
as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the
Executive's employment for "Cause." For purposes of this
Agreement, "Cause" means (i) an act or acts of dishonesty taken
by the Executive and intended to result in substantial personal
enrichment of the Executive at the expense of the Corporation,
(ii) repeated violations by the Executive of the Executive's
obligations under Section 4(a) of this Agreement which are
demonstrably willful and deliberate on the Executive's part and
which are not remedied after the receipt of notice from the
Corporation or (iii) the conviction of the Executive of a felony.
(c) Termination by Executive for Good Reason. The
Executive's employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or (B) any
other action by the Corporation which results in a
diminution in such position, authority, duties or
responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Corporation
promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Corporation to comply with
any of the provisions of Section 4(b) of this Agreement,
other than an insubstantial and inadvertent failure which is
remedied by the Corporation promptly after receipt of notice
thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably
required in the performance of the Executive's
responsibilities;
(iv) any purported termination by the Corporation of
the Executive's employment otherwise than as permitted by
this Agreement; or
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(v) any failure by the Corporation to comply with
and satisfy Section 11(c) of this Agreement.
Anything in this Agreement to the contrary
notwithstanding, any termination by the Executive for any reason
whatsoever during the six month period immediately following the
first anniversary of the date of a Change of Control shall be a
termination for "Good Reason". For purposes of this Section
5(c), any good faith determination of "Good Reason" made by the
Executive shall be conclusive.
(d) Notice of Termination. Any termination by the
Corporation for Cause or by the Executive for Good Reason shall
be communicated by Notice of Termination to the other party
hereto given in accordance with Section 12(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the termination date is other
than the date of receipt of such notice, specifies the
termination date (which date shall be not more than fifteen (15)
days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means
the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be. If the Executive's
employment is terminated by the Corporation other than for Cause
or Disability, the Date of Termination shall be the date on which
the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon Termination.
(a) Death. If the Executive's employment is terminated by
reason of the Executive's death, this Agreement shall terminate
without further obligations to the Executive's legal
representatives under this Agreement, other than those
obligations accrued or earned by the Executive hereunder at the
date of the Executive's death. Anything in this Agreement to the
contrary notwithstanding, the Executive's family shall be
entitled to receive benefits at least equal to the most favorable
benefits provided by the Corporation to surviving families of
executives of the Corporation under such plans, programs and
policies relating to family death benefits, if any, as in effect
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the
Executive's family, as in effect on the date of the Executive's
death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability, this
Agreement shall terminate without further obligations to the
Executive, other than those obligations accrued or earned by the
Executive hereunder as of the Disability Effective Date.
Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled after the Disability Effective Date
to receive disability and other benefits at least equal to the
most favorable of those provided by the Corporation to disabled
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employees and/or their families in accordance with such plans,
programs and policies relating to disability, if any, as in
effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive and/or
the Executive's family, as in effect at any time thereafter with
respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause or the
Executive terminates his employment other than for Good Reason,
the Corporation shall pay the Executive his full Base Salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given and shall have no further
obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason;
Termination by Corporation Other Than for Cause or Disability.
If, during the Employment Period, the Corporation shall terminate
the Executive's employment other than for Cause or Disability, or
the employment of the Executive shall be terminated by the
Executive for Good Reason:
(i) the Corporation shall pay to the Executive in a
lump sum in cash within 10 days after the Date of
Termination (the "Payment Date") the aggregate of the
following amounts:
A. to the extent not theretofore paid, the
Executive's Base Salary through the Date of Termination
at the rate in effect on the Date of Termination or, if
higher, at the highest rate in effect at any time
within the three year period preceding the Effective
Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual
bonuses paid, or payable to the extent deferred, to the
Executive for the three full fiscal years prior to the
Effective Date (the "Recent Bonus") and (y) the
fraction obtained by dividing (i) the number of days
between the Date of Termination and the last day of the
last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of
the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously
deferred by the Executive, all amounts previously
deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the
Corporation shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would
have been provided to them in accordance with the plans,
programs and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been
terminated, including health insurance and life insurance,
if and as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more
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favorable to the Executive, as in effect at any time
thereafter with respect to other key executives and their
families and for purposes of eligibility for retiree
benefits pursuant to such plans, programs and policies, the
Executive shall be considered to have remained employed
until the end of the Employment Period and to have retired
on the last day of such period.
Anything herein to the contrary notwithstanding, the
Executive may elect in his Notice of Termination to receive the
payment provided for pursuant to Section 6(d)(i)(C) hereof (the
"Severance Payment") in installments. If the Executive elects
the installment method, one-quarter of the Severance Payment
shall be paid to the Executive on the Payment Date and
one-quarter of the severance payment shall be paid to the
Executive on each of the next three anniversaries thereof and, in
the case of the latter three payments, the amounts to be paid
shall include interests from the Payment Date on the remaining
unpaid balance of the Severance Payment calculated at the Morgan
Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other
plan or program provided by the Corporation or any of its
affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option or other agreements
with the Corporation or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Corporation
or any of its affiliated companies at or subsequent to the Date
of Termination shall be payable in accordance with such plan or
program.
8. Full Settlement. The Corporation's obligation to
make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right
or action which the Corporation may have against the Executive or
others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of
the amounts payable to the Executive under any of the provisions
of this Agreement. The Corporation agrees to pay, to the full
extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Corporation or others
of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance
thereof or as a result of any contest by the Executive about the
amount of any payment pursuant to Section 9 of this Agreement,
plus in each case interest at the Federal Rate (as defined
below).
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9. Gross-up.
(a) In the event it shall be determined that any
payment, benefit or distribution (or combination thereof) by the
Corporation to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement, or otherwise) (a "Payment") would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any interest or
penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and
penalties, hereinafter collectively referred to as the "Excise
Tax"), Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after
payment by Executive of the Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
Arthur Andersen & Co. (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Corporation and
Executive within fifteen (15) business days of the receipt of
notice from Executive that there has been a Payment, or such
earlier time as is requested by the Corporation. In the event
that the Accounting Firm is serving as accountant or auditor for
an individual, entity or group effecting the change in ownership
or effective control (within the meaning of Section 280G of the
Code), Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Corporation. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall
be paid by the Corporation to Executive within five (5) days
after the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by
Executive, it shall so indicate to Executive in writing. Any
determination by the Accounting Firm shall be binding upon the
Corporation and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Corporation should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder.
In the event that the Corporation exhausts its remedies pursuant
to Section 9(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of Executive.
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(c) Executive shall notify the Corporation in writing
of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Corporation of the Gross-Up
Payment. Such notification shall be given as soon as practicable
but no later than ten (10) business days after Executive is
informed in writing of such claim and shall apprise the
Corporation of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such
claim prior to the expiration of the thirty (30) day period
following the date on which it gives such notice to the
Corporation (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Corporation notifies Executive in writing prior to the expiration
of such period that it desires to contest such claim, Executive
shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to such claim;
(ii) take such action in connection with contesting
such claim as the Corporation shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Corporation;
(iii) cooperate with the Corporation in good faith
in order to effectively contest such claim; and
(iv) permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for
any Excise Tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing
provisions of this Section 9(c), the Corporation shall control
all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Corporation shall determine; provided, however, that if the
Corporation directs Executive to pay such claim and sue for a
refund, the Corporation shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise
Tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided,
further, that if Executive is required to extend the statute of
limitations to enable the Corporation to contest such claim,
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Executive may limit this extension solely to such contested
amount.
(d) If, after the receipt by Executive of an amount
advanced by the Corporation pursuant to Section 9(c), Executive
becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to the Corporation's complying
with the requirements of Section 9(c)) promptly pay to the
Corporation the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the
Corporation pursuant to Section 9(c), a determination is made
that Executive shall not be entitled to any refund with respect
to such claim and the Corporation does not notify Executive in
writing of its intent to contest such denial of refund prior to
the expiration of thirty (30) days after such determination, then
such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
10. Confidential Information. The Executive shall
hold in a fiduciary capacity for the benefit of the Corporation
all secret or confidential information, knowledge or data
relating to the Corporation or any of its affiliated companies,
and their respective businesses, which shall have been obtained
by the Executive during the Executive's employment by the
Corporation or any of its affiliated companies and which shall
not be public knowledge (other than by acts by the Executive or
his representatives in violation of this Agreement). After
termination of the Executive's employment with the Corporation,
the Executive shall not, without the prior written consent of the
Corporation, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those
designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under
this Agreement.
11. Successors. (a) This Agreement is personal to
the Executive and without the prior written consent of the
Corporation shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors.
(c) The Corporation will require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that the Corporation would be required to perform it if no such
succession had taken place. As used in this Agreement,
"Corporation" shall mean the Corporation as hereinbefore defined
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and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation
of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be
governed by and construed in accordance with the laws of the
State of New Jersey, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
John H. Weiland
3657 Cimmeron Road
York, PA 17402
If to the Corporation:
C. R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes
as shall be required to be withheld pursuant to any applicable
law or regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding
of the Corporation and the Executive with respect to the subject
matter hereof.
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(g) The Executive and the Corporation acknowledge that
the employment of the Executive by the Corporation is "at will",
and, prior to the Effective Date, may be terminated by either the
Executive or the Corporation at any time. Upon a termination of
the Executive's employment or upon the Executive's ceasing to be
an officer of the Corporation, in each case, prior to the
Effective Date, there shall be no further rights under this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his
hand and, pursuant to the authorization from its Board of
Directors, the Corporation has caused these presents to be
executed in its name on its behalf, all as of the day and year
first above written.
/s/ John H. Weiland
John H. Weiland
C. R. BARD, INC.
By: /s/ William H. Longfield
Name: William H. Longfield
Title: Chairman and
Chief Executive Officer
Attest:/s/ Jean F. Miller
Assistant Secretary
IV-34
EXHIBIT 10x
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey
corporation (the "Corporation"), and William T. Tumber (the
"Executive"), dated as of the 13th day of March, 1996.
WHEREAS, the Corporation, on behalf of itself and its
shareholders, wishes to assure that the Corporation will have the
continued dedication of the Executive, notwithstanding the
possibility, threat, or occurrence of a Change of Control (as
defined below) of the Corporation. The Board of Directors of the
Corporation (the "Board") believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage his attention and
dedication to his assigned duties currently and in the event of
any threatened or pending Change of Control, and to provide the
Executive with competitive compensation arrangements; therefore,
the Board has caused the Corporation to enter into this Agreement
(i) to ensure the Executive of individual financial security in
the event of a Change of Control, and (ii) to provide such
protection in a manner which is competitive with that of other
corporations.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date"
shall be the first date during the "Change of Control Period" (as
defined in Section l(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with the Corporation is terminated
prior to the date on which a Change of Control occurs, and the
Executive can reasonably demonstrate that such termination (1)
was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2)
otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the "Effective
Date" shall mean the date immediately prior to the date of such
termination.
(b) The "Change of Control Period" is the period
commencing on the date hereof and ending on the earlier to occur
of (i) the third anniversary of such date or (ii) the first day
of the month next following the Executive's normal retirement
date ("Normal Retirement Date") under the Corporation's
retirement plan; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of
Control Period shall be automatically extended so as to terminate
on the earlier of (x) two years from such Renewal Date or (y) the
first day of the month coinciding with or next following the
Executive's Normal Retirement Date, unless at least 60 days prior
to the Renewal Date the Corporation shall give notice that the
Change of Control Period shall not be so extended.
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<PAGE>
2. Change of Control. (a) For purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred
if a change of control of the nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form
8-K as in effect on the date hereof pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
occurs, provided that, without limitation, a "Change of Control"
shall be deemed to have occurred if (i) the beneficial ownership
at any time hereafter by any person, as defined herein, of
capital stock of the Corporation, constitutes 20 percent or more
of the general voting power of all of the Corporation's
outstanding capital or (ii) individuals who, as of the date
hereof, constitute the Board (as of the date hereof, 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 Corporation's shareholders, was
approved by a vote of at least three-quarters of the Directors
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 Corporation, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent
Board. No sale to underwriters or private placement of its
capital stock by the Corporation, nor any acquisition initiated
by the Corporation, through merger, purchase of assets or
otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of
Control.
(b) For purposes of the definition of "Change of
Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is
used in Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial
owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or
not of record, or
B. which that person has the right to acquire
pursuant to any agreement or understanding or upon
exercise of conversion rights, warrants, or options, or
otherwise, or
C. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by an "affiliate" or
"associate" (as defined in the rules of the Securities
and Exchange Commission under the Securities Act of
1933, as amended) of that person, or
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<PAGE>
D. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by any other person
with which that person or his "affiliate" or
"associate" (defined as aforesaid) has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital
stock of the Corporation.
(iii) The outstanding shares of capital stock of the
Corporation shall include shares deemed owned through
application of clauses (ii) (B), (C) and (D), above, but
shall not include any other shares which may be issuable
pursuant to any agreement or upon exercise of conversion
rights, warrants or options, or otherwise, but which are not
actually outstanding.
(iv) Shares of capital stock, if any, held by The
Chase Manhattan Bank N.A. under the Indenture and the Escrow
Agreement dated as of November 1, 1971 between International
Paper Corporation and said bank shall not be deemed owned by
International Paper Corporation or by said bank for purposes
of this definition, so long as they are held by said bank
under said Escrow Agreement, but said shares shall be deemed
outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the
Corporation.
3. Employment Period. The Corporation hereby agrees
to continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Corporation, for the period
commencing on the Effective Date and ending on the earlier to
occur of (a) the third anniversary of such date or (b) the first
day of the month coinciding with or next following the
Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the
90-day period immediately preceding the Effective Date and (B)
the Executive's services shall be performed at the location where
the Executive was employed immediately preceding the Effective
Date or any office or location less than thirty-five (35) miles
from such location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of
the Corporation and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
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<PAGE>
Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive
to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's
responsibilities as an employee of the Corporation in accordance
with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the
Employment Period, the Executive shall receive a base salary
("Base Salary") at a monthly rate at least equal to the highest
monthly base salary paid to the Executive by the Corporation
during the twelve-month period immediately preceding the month in
which the Effective Date occurs. During the Employment Period,
the Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be
consistent with increases in base salary awarded in the ordinary
course of business to other key executives of the Corporation.
Any increase in Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Base
Salary shall not be reduced after any such increase.
(ii) Annual Bonus. In addition to Ease Salary,
the Executive shall be awarded, for each fiscal year during the
Employment Period, an annual bonus (an "Annual Bonus") in cash at
least equal to the average bonus received by the Executive from
the Corporation in respect of the three fiscal years immediately
preceding the fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans.
In addition to Base Salary and Annual Bonus payable as
hereinabove provided, the Executive shall be entitled to
participate during the Employment Period in all incentive,
savings and retirement plans and programs, whether qualified or
non-qualified, then applicable to other key executives of the
Corporation and its affiliates (including the Corporation's 1981
Stock Option Plan, the Long-Term Performance Incentive Plan, the
1986 Stock Award Plan, the 1981 Employee Stock Appreciation
Rights Plan, the Employees' Stock Ownership Plan and the
Employees' Retirement Savings Plan, in each case to the extent
then in effect or as subsequently amended); provided, however,
that such plans and programs, in the aggregate, shall provide the
Executive with compensation, benefits and reward opportunities at
least as favorable as the most favorable such compensation
benefits and reward opportunities provided by the Corporation for
the Executive under such plans and programs as in effect at any
time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Executive, as provided at any
time thereafter with respect to other key executives.
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<PAGE>
(iv) Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans provided
by the Corporation (including, without limitation, medical,
prescription, dental, disability, salary continuance, executive
life, group life, accidental death and travel accident insurance
plans and programs), at least comparable to those in effect at
any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or,
if more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the most favorable policies and procedures of the
Corporation and its affiliates in effect at any time during the
90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits, in
accordance with the most favorable policies of the Corporation
and its affiliates in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office
or offices of a size and with furnishings and other appointments,
and to secretarial and other assistance, at least equal to those
provided to the Executive at any time during the 90-day period
immediately preceding the Effective Date which would be most
favorable to the Executive or, if more favorable to the
Executive, as provided at any time thereafter with respect to
other key executives.
(viii) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance
with the most favorable policies of the Corporation and its
affiliates as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
5. Termination. (a) Death or Disability. This
Agreement shall terminate automatically upon the Executive's
death. The Corporation may terminate this Agreement, after
having established the Executive's Disability (pursuant to the
definition of "Disability" set forth below), by giving to the
Executive written notice of its intention to terminate the
Executive's employment. In such a case, the Executive's
employment with the Corporation shall terminate effective on the
180th day after receipt of such notice (the "Disability Effective
Date"), provided that, within 180 days after such receipt, the
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<PAGE>
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability"
means disability which, at least 26 weeks after its commencement,
is determined to be total and permanent by a physician selected
by the Corporation or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement
as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the
Executive's employment for "Cause." For purposes of this
Agreement, "Cause" means (i) an act or acts of dishonesty taken
by the Executive and intended to result in substantial personal
enrichment of the Executive at the expense of the Corporation,
(ii) repeated violations by the Executive of the Executive's
obligations under Section 4(a) of this Agreement which are
demonstrably willful and deliberate on the Executive's part and
which are not remedied after the receipt of notice from the
Corporation or (iii) the conviction of the Executive of a felony.
(c) Termination by Executive for Good Reason. The
Executive's employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or (B) any
other action by the Corporation which results in a
diminution in such position, authority, duties or
responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Corporation
promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Corporation to comply with
any of the provisions of Section 4(b) of this Agreement,
other than an insubstantial and inadvertent failure which is
remedied by the Corporation promptly after receipt of notice
thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably
required in the performance of the Executive's
responsibilities;
(iv) any purported termination by the Corporation of
the Executive's employment otherwise than as permitted by
this Agreement; or
(v) any failure by the Corporation to comply with
and satisfy Section 11(c) of this Agreement.
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<PAGE>
Anything in this Agreement to the contrary
notwithstanding, any termination by the Executive for any reason
whatsoever during the six month period immediately following the
first anniversary of the date of a Change of Control shall be a
termination for "Good Reason". For purposes of this Section
5(c), any good faith determination of "Good Reason" made by the
Executive shall be conclusive.
(d) Notice of Termination. Any termination by the
Corporation for Cause or by the Executive for Good Reason shall
be communicated by Notice of Termination to the other party
hereto given in accordance with Section 12(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the termination date is other
than the date of receipt of such notice, specifies the
termination date (which date shall be not more than fifteen (15)
days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means
the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be. If the Executive's
employment is terminated by the Corporation other than for Cause
or Disability, the Date of Termination shall be the date on which
the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon Termination.
(a) Death. If the Executive's employment is terminated by
reason of the Executive's death, this Agreement shall terminate
without further obligations to the Executive's legal
representatives under this Agreement, other than those
obligations accrued or earned by the Executive hereunder at the
date of the Executive's death. Anything in this Agreement to the
contrary notwithstanding, the Executive's family shall be
entitled to receive benefits at least equal to the most favorable
benefits provided by the Corporation to surviving families of
executives of the Corporation under such plans, programs and
policies relating to family death benefits, if any, as in effect
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the
Executive's family, as in effect on the date of the Executive's
death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability, this
Agreement shall terminate without further obligations to the
Executive, other than those obligations accrued or earned by the
Executive hereunder as of the Disability Effective Date.
Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled after the Disability Effective Date
to receive disability and other benefits at least equal to the
most favorable of those provided by the Corporation to disabled
employees and/or their families in accordance with such plans,
programs and policies relating to disability, if any, as in
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effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive and/or
the Executive's family, as in effect at any time thereafter with
respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause or the
Executive terminates his employment other than for Good Reason,
the Corporation shall pay the Executive his full Base Salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given and shall have no further
obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason;
Termination by Corporation Other Than for Cause or Disability.
If, during the Employment Period, the Corporation shall terminate
the Executive's employment other than for Cause or Disability, or
the employment of the Executive shall be terminated by the
Executive for Good Reason:
(i) the Corporation shall pay to the Executive in a
lump sum in cash within 10 days after the Date of
Termination (the "Payment Date") the aggregate of the
following amounts:
A. to the extent not theretofore paid, the
Executive's Base Salary through the Date of Termination
at the rate in effect on the Date of Termination or, if
higher, at the highest rate in effect at any time
within the three year period preceding the Effective
Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual
bonuses paid, or payable to the extent deferred, to the
Executive for the three full fiscal years prior to the
Effective Date (the "Recent Bonus") and (y) the
fraction obtained by dividing (i) the number of days
between the Date of Termination and the last day of the
last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of
the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously
deferred by the Executive, all amounts previously
deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the
Corporation shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would
have been provided to them in accordance with the plans,
programs and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been
terminated, including health insurance and life insurance,
if and as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more
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favorable to the Executive, as in effect at any time
thereafter with respect to other key executives and their
families and for purposes of eligibility for retiree
benefits pursuant to such plans, programs and policies, the
Executive shall be considered to have remained employed
until the end of the Employment Period and to have retired
on the last day of such period.
Anything herein to the contrary notwithstanding, the
Executive may elect in his Notice of Termination to receive the
payment provided for pursuant to Section 6(d)(i)(C) hereof (the
"Severance Payment") in installments. If the Executive elects
the installment method, one-quarter of the Severance Payment
shall be paid to the Executive on the Payment Date and
one-quarter of the severance payment shall be paid to the
Executive on each of the next three anniversaries thereof and, in
the case of the latter three payments, the amounts to be paid
shall include interests from the Payment Date on the remaining
unpaid balance of the Severance Payment calculated at the Morgan
Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other
plan or program provided by the Corporation or any of its
affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option or other agreements
with the Corporation or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Corporation
or any of its affiliated companies at or subsequent to the Date
of Termination shall be payable in accordance with such plan or
program.
8. Full Settlement. The Corporation's obligation to
make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right
or action which the Corporation may have against the Executive or
others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of
the amounts payable to the Executive under any of the provisions
of this Agreement. The Corporation agrees to pay, to the full
extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Corporation or others
of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance
thereof or as a result of any contest by the Executive about the
amount of any payment pursuant to Section 9 of this Agreement,
plus in each case interest at the Federal Rate (as defined
below).
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9. Gross-up.
(a) In the event it shall be determined that any
payment, benefit or distribution (or combination thereof) by the
Corporation to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement, or otherwise) (a "Payment") would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any interest or
penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and
penalties, hereinafter collectively referred to as the "Excise
Tax"), Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after
payment by Executive of the Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
Arthur Andersen & Co. (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Corporation and
Executive within fifteen (15) business days of the receipt of
notice from Executive that there has been a Payment, or such
earlier time as is requested by the Corporation. In the event
that the Accounting Firm is serving as accountant or auditor for
an individual, entity or group effecting the change in ownership
or effective control (within the meaning of Section 280G of the
Code), Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Corporation. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall
be paid by the Corporation to Executive within five (5) days
after the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by
Executive, it shall so indicate to Executive in writing. Any
determination by the Accounting Firm shall be binding upon the
Corporation and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Corporation should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder.
In the event that the Corporation exhausts its remedies pursuant
to Section 9(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of Executive.
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(c) Executive shall notify the Corporation in writing
of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Corporation of the Gross-Up
Payment. Such notification shall be given as soon as practicable
but no later than ten (10) business days after Executive is
informed in writing of such claim and shall apprise the
Corporation of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such
claim prior to the expiration of the thirty (30) day period
following the date on which it gives such notice to the
Corporation (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Corporation notifies Executive in writing prior to the expiration
of such period that it desires to contest such claim, Executive
shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to such claim;
(ii) take such action in connection with contesting
such claim as the Corporation shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Corporation;
(iii) cooperate with the Corporation in good faith
in order to effectively contest such claim; and
(iv) permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for
any Excise Tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing
provisions of this Section 9(c), the Corporation shall control
all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Corporation shall determine; provided, however, that if the
Corporation directs Executive to pay such claim and sue for a
refund, the Corporation shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise
Tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided,
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further, that if Executive is required to extend the statute of
limitations to enable the Corporation to contest such claim,
Executive may limit this extension solely to such contested
amount.
(d) If, after the receipt by Executive of an amount
advanced by the Corporation pursuant to Section 9(c), Executive
becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to the Corporation's complying
with the requirements of Section 9(c)) promptly pay to the
Corporation the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the
Corporation pursuant to Section 9(c), a determination is made
that Executive shall not be entitled to any refund with respect
to such claim and the Corporation does not notify Executive in
writing of its intent to contest such denial of refund prior to
the expiration of thirty (30) days after such determination, then
such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
10. Confidential Information. The Executive shall
hold in a fiduciary capacity for the benefit of the Corporation
all secret or confidential information, knowledge or data
relating to the Corporation or any of its affiliated companies,
and their respective businesses, which shall have been obtained
by the Executive during the Executive's employment by the
Corporation or any of its affiliated companies and which shall
not be public knowledge (other than by acts by the Executive or
his representatives in violation of this Agreement). After
termination of the Executive's employment with the Corporation,
the Executive shall not, without the prior written consent of the
Corporation, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those
designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under
this Agreement.
11. Successors. (a) This Agreement is personal to
the Executive and without the prior written consent of the
Corporation shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors.
(c) The Corporation will require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that the Corporation would be required to perform it if no such
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succession had taken place. As used in this Agreement,
"Corporation" shall mean the Corporation as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation
of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be
governed by and construed in accordance with the laws of the
State of New Jersey, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
William T. Tumber
45 Hawthorne Avenue
Barrington, RI 02806
If to the Corporation:
C. R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes
as shall be required to be withheld pursuant to any applicable
law or regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding
of the Corporation and the Executive with respect to the subject
matter hereof.
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(g) The Executive and the Corporation acknowledge that
the employment of the Executive by the Corporation is "at will",
and, prior to the Effective Date, may be terminated by either the
Executive or the Corporation at any time. Upon a termination of
the Executive's employment or upon the Executive's ceasing to be
an officer of the Corporation, in each case, prior to the
Effective Date, there shall be no further rights under this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his
hand and, pursuant to the authorization from its Board of
Directors, the Corporation has caused these presents to be
executed in its name on its behalf, all as of the day and year
first above written.
/s/ William T. Tumber
William T. Tumber
C. R. BARD, INC.
By:/s/ William H. Longfield
Name: William H. Longfield
Title: Chairman and
Chief Executive Officer
Attest:/s/ Jean F. Miller
Assistant Secretary
IV-48
EXHIBIT 10y
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey
corporation (the "Corporation"), and Timothy M. Ring (the
"Executive"), dated as of the 12th day of March, 1996.
WHEREAS, the Corporation, on behalf of itself and its
shareholders, wishes to assure that the Corporation will have the
continued dedication of the Executive, notwithstanding the
possibility, threat, or occurrence of a Change of Control (as
defined below) of the Corporation. The Board of Directors of the
Corporation (the "Board") believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or
threatened Change of Control, to encourage his attention and
dedication to his assigned duties currently and in the event of
any threatened or pending Change of Control, and to provide the
Executive with competitive compensation arrangements; therefore,
the Board has caused the Corporation to enter into this Agreement
(i) to ensure the Executive of individual financial security in
the event of a Change of Control, and (ii) to provide such
protection in a manner which is competitive with that of other
corporations.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date"
shall be the first date during the "Change of Control Period" (as
defined in Section l(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with the Corporation is terminated
prior to the date on which a Change of Control occurs, and the
Executive can reasonably demonstrate that such termination (1)
was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2)
otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the "Effective
Date" shall mean the date immediately prior to the date of such
termination.
(b) The "Change of Control Period" is the period
commencing on the date hereof and ending on the earlier to occur
of (i) the third anniversary of such date or (ii) the first day
of the month next following the Executive's normal retirement
date ("Normal Retirement Date") under the Corporation's
retirement plan; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of
Control Period shall be automatically extended so as to terminate
on the earlier of (x) two years from such Renewal Date or (y) the
first day of the month coinciding with or next following the
Executive's Normal Retirement Date, unless at least 60 days prior
to the Renewal Date the Corporation shall give notice that the
Change of Control Period shall not be so extended.
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2. Change of Control. (a) For purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred
if a change of control of the nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form
8-K as in effect on the date hereof pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
occurs, provided that, without limitation, a "Change of Control"
shall be deemed to have occurred if (i) the beneficial ownership
at any time hereafter by any person, as defined herein, of
capital stock of the Corporation, constitutes 20 percent or more
of the general voting power of all of the Corporation's
outstanding capital or (ii) individuals who, as of the date
hereof, constitute the Board (as of the date hereof, 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 Corporation's shareholders, was
approved by a vote of at least three-quarters of the Directors
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 Corporation, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent
Board. No sale to underwriters or private placement of its
capital stock by the Corporation, nor any acquisition initiated
by the Corporation, through merger, purchase of assets or
otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of
Control.
(b) For purposes of the definition of "Change of
Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is
used in Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial
owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or
not of record, or
B. which that person has the right to acquire
pursuant to any agreement or understanding or upon
exercise of conversion rights, warrants, or options, or
otherwise, or
C. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by an "affiliate" or
"associate" (as defined in the rules of the Securities
and Exchange Commission under the Securities Act of
1933, as amended) of that person, or
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D. which are beneficially owned, directly or
indirectly (including shares deemed owned through
application of clause (B) above), by any other person
with which that person or his "affiliate" or
"associate" (defined as aforesaid) has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital
stock of the Corporation.
(iii) The outstanding shares of capital stock of the
Corporation shall include shares deemed owned through
application of clauses (ii) (B), (C) and (D), above, but
shall not include any other shares which may be issuable
pursuant to any agreement or upon exercise of conversion
rights, warrants or options, or otherwise, but which are not
actually outstanding.
(iv) Shares of capital stock, if any, held by The
Chase Manhattan Bank N.A. under the Indenture and the Escrow
Agreement dated as of November 1, 1971 between International
Paper Corporation and said bank shall not be deemed owned by
International Paper Corporation or by said bank for purposes
of this definition, so long as they are held by said bank
under said Escrow Agreement, but said shares shall be deemed
outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the
Corporation.
3. Employment Period. The Corporation hereby agrees
to continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Corporation, for the period
commencing on the Effective Date and ending on the earlier to
occur of (a) the third anniversary of such date or (b) the first
day of the month coinciding with or next following the
Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the
90-day period immediately preceding the Effective Date and (B)
the Executive's services shall be performed at the location where
the Executive was employed immediately preceding the Effective
Date or any office or location less than thirty-five (35) miles
from such location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of
the Corporation and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
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Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive
to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's
responsibilities as an employee of the Corporation in accordance
with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the
Employment Period, the Executive shall receive a base salary
("Base Salary") at a monthly rate at least equal to the highest
monthly base salary paid to the Executive by the Corporation
during the twelve-month period immediately preceding the month in
which the Effective Date occurs. During the Employment Period,
the Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be
consistent with increases in base salary awarded in the ordinary
course of business to other key executives of the Corporation.
Any increase in Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Base
Salary shall not be reduced after any such increase.
(ii) Annual Bonus. In addition to Ease Salary,
the Executive shall be awarded, for each fiscal year during the
Employment Period, an annual bonus (an "Annual Bonus") in cash at
least equal to the average bonus received by the Executive from
the Corporation in respect of the three fiscal years immediately
preceding the fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans.
In addition to Base Salary and Annual Bonus payable as
hereinabove provided, the Executive shall be entitled to
participate during the Employment Period in all incentive,
savings and retirement plans and programs, whether qualified or
non-qualified, then applicable to other key executives of the
Corporation and its affiliates (including the Corporation's 1981
Stock Option Plan, the Long-Term Performance Incentive Plan, the
1986 Stock Award Plan, the 1981 Employee Stock Appreciation
Rights Plan, the Employees' Stock Ownership Plan and the
Employees' Retirement Savings Plan, in each case to the extent
then in effect or as subsequently amended); provided, however,
that such plans and programs, in the aggregate, shall provide the
Executive with compensation, benefits and reward opportunities at
least as favorable as the most favorable such compensation
benefits and reward opportunities provided by the Corporation for
the Executive under such plans and programs as in effect at any
time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Executive, as provided at any
time thereafter with respect to other key executives.
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(iv) Welfare Benefit Plans. During the
Employment Period, the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans provided
by the Corporation (including, without limitation, medical,
prescription, dental, disability, salary continuance, executive
life, group life, accidental death and travel accident insurance
plans and programs), at least comparable to those in effect at
any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or,
if more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the most favorable policies and procedures of the
Corporation and its affiliates in effect at any time during the
90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect at any time
thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits, in
accordance with the most favorable policies of the Corporation
and its affiliates in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office
or offices of a size and with furnishings and other appointments,
and to secretarial and other assistance, at least equal to those
provided to the Executive at any time during the 90-day period
immediately preceding the Effective Date which would be most
favorable to the Executive or, if more favorable to the
Executive, as provided at any time thereafter with respect to
other key executives.
(viii) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance
with the most favorable policies of the Corporation and its
affiliates as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect
to other key executives.
5. Termination. (a) Death or Disability. This
Agreement shall terminate automatically upon the Executive's
death. The Corporation may terminate this Agreement, after
having established the Executive's Disability (pursuant to the
definition of "Disability" set forth below), by giving to the
Executive written notice of its intention to terminate the
Executive's employment. In such a case, the Executive's
employment with the Corporation shall terminate effective on the
180th day after receipt of such notice (the "Disability Effective
Date"), provided that, within 180 days after such receipt, the
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Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability"
means disability which, at least 26 weeks after its commencement,
is determined to be total and permanent by a physician selected
by the Corporation or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement
as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the
Executive's employment for "Cause." For purposes of this
Agreement, "Cause" means (i) an act or acts of dishonesty taken
by the Executive and intended to result in substantial personal
enrichment of the Executive at the expense of the Corporation,
(ii) repeated violations by the Executive of the Executive's
obligations under Section 4(a) of this Agreement which are
demonstrably willful and deliberate on the Executive's part and
which are not remedied after the receipt of notice from the
Corporation or (iii) the conviction of the Executive of a felony.
(c) Termination by Executive for Good Reason. The
Executive's employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or (B) any
other action by the Corporation which results in a
diminution in such position, authority, duties or
responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Corporation
promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Corporation to comply with
any of the provisions of Section 4(b) of this Agreement,
other than an insubstantial and inadvertent failure which is
remedied by the Corporation promptly after receipt of notice
thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably
required in the performance of the Executive's
responsibilities;
(iv) any purported termination by the Corporation of
the Executive's employment otherwise than as permitted by
this Agreement; or
(v) any failure by the Corporation to comply with
and satisfy Section 11(c) of this Agreement.
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Anything in this Agreement to the contrary
notwithstanding, any termination by the Executive for any reason
whatsoever during the six month period immediately following the
first anniversary of the date of a Change of Control shall be a
termination for "Good Reason". For purposes of this Section
5(c), any good faith determination of "Good Reason" made by the
Executive shall be conclusive.
(d) Notice of Termination. Any termination by the
Corporation for Cause or by the Executive for Good Reason shall
be communicated by Notice of Termination to the other party
hereto given in accordance with Section 12(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the termination date is other
than the date of receipt of such notice, specifies the
termination date (which date shall be not more than fifteen (15)
days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means
the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be. If the Executive's
employment is terminated by the Corporation other than for Cause
or Disability, the Date of Termination shall be the date on which
the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon Termination.
(a) Death. If the Executive's employment is terminated by
reason of the Executive's death, this Agreement shall terminate
without further obligations to the Executive's legal
representatives under this Agreement, other than those
obligations accrued or earned by the Executive hereunder at the
date of the Executive's death. Anything in this Agreement to the
contrary notwithstanding, the Executive's family shall be
entitled to receive benefits at least equal to the most favorable
benefits provided by the Corporation to surviving families of
executives of the Corporation under such plans, programs and
policies relating to family death benefits, if any, as in effect
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the
Executive's family, as in effect on the date of the Executive's
death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability, this
Agreement shall terminate without further obligations to the
Executive, other than those obligations accrued or earned by the
Executive hereunder as of the Disability Effective Date.
Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled after the Disability Effective Date
to receive disability and other benefits at least equal to the
most favorable of those provided by the Corporation to disabled
employees and/or their families in accordance with such plans,
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programs and policies relating to disability, if any, as in
effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive and/or
the Executive's family, as in effect at any time thereafter with
respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause or the
Executive terminates his employment other than for Good Reason,
the Corporation shall pay the Executive his full Base Salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given and shall have no further
obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason;
Termination by Corporation Other Than for Cause or Disability.
If, during the Employment Period, the Corporation shall terminate
the Executive's employment other than for Cause or Disability, or
the employment of the Executive shall be terminated by the
Executive for Good Reason:
(i) the Corporation shall pay to the Executive in a
lump sum in cash within 10 days after the Date of
Termination (the "Payment Date") the aggregate of the
following amounts:
A. to the extent not theretofore paid, the
Executive's Base Salary through the Date of Termination
at the rate in effect on the Date of Termination or, if
higher, at the highest rate in effect at any time
within the three year period preceding the Effective
Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual
bonuses paid, or payable to the extent deferred, to the
Executive for the three full fiscal years prior to the
Effective Date (the "Recent Bonus") and (y) the
fraction obtained by dividing (i) the number of days
between the Date of Termination and the last day of the
last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of
the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously
deferred by the Executive, all amounts previously
deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the
Corporation shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would
have been provided to them in accordance with the plans,
programs and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been
terminated, including health insurance and life insurance,
if and as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more
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favorable to the Executive, as in effect at any time
thereafter with respect to other key executives and their
families and for purposes of eligibility for retiree
benefits pursuant to such plans, programs and policies, the
Executive shall be considered to have remained employed
until the end of the Employment Period and to have retired
on the last day of such period.
Anything herein to the contrary notwithstanding, the
Executive may elect in his Notice of Termination to receive the
payment provided for pursuant to Section 6(d)(i)(C) hereof (the
"Severance Payment") in installments. If the Executive elects
the installment method, one-quarter of the Severance Payment
shall be paid to the Executive on the Payment Date and
one-quarter of the severance payment shall be paid to the
Executive on each of the next three anniversaries thereof and, in
the case of the latter three payments, the amounts to be paid
shall include interests from the Payment Date on the remaining
unpaid balance of the Severance Payment calculated at the Morgan
Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other
plan or program provided by the Corporation or any of its
affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option or other agreements
with the Corporation or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Corporation
or any of its affiliated companies at or subsequent to the Date
of Termination shall be payable in accordance with such plan or
program.
8. Full Settlement. The Corporation's obligation to
make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right
or action which the Corporation may have against the Executive or
others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of
the amounts payable to the Executive under any of the provisions
of this Agreement. The Corporation agrees to pay, to the full
extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Corporation or others
of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance
thereof or as a result of any contest by the Executive about the
amount of any payment pursuant to Section 9 of this Agreement,
plus in each case interest at the Federal Rate (as defined
below).
IV-57
<PAGE>
9. Gross-up.
(a) In the event it shall be determined that any
payment, benefit or distribution (or combination thereof) by the
Corporation to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement, or otherwise) (a "Payment") would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any interest or
penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and
penalties, hereinafter collectively referred to as the "Excise
Tax"), Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after
payment by Executive of the Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
Arthur Andersen & Co. (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Corporation and
Executive within fifteen (15) business days of the receipt of
notice from Executive that there has been a Payment, or such
earlier time as is requested by the Corporation. In the event
that the Accounting Firm is serving as accountant or auditor for
an individual, entity or group effecting the change in ownership
or effective control (within the meaning of Section 280G of the
Code), Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Corporation. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall
be paid by the Corporation to Executive within five (5) days
after the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by
Executive, it shall so indicate to Executive in writing. Any
determination by the Accounting Firm shall be binding upon the
Corporation and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Corporation should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder.
In the event that the Corporation exhausts its remedies pursuant
to Section 9(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of Executive.
IV-58
<PAGE>
(c) Executive shall notify the Corporation in writing
of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Corporation of the Gross-Up
Payment. Such notification shall be given as soon as practicable
but no later than ten (10) business days after Executive is
informed in writing of such claim and shall apprise the
Corporation of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such
claim prior to the expiration of the thirty (30) day period
following the date on which it gives such notice to the
Corporation (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Corporation notifies Executive in writing prior to the expiration
of such period that it desires to contest such claim, Executive
shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to such claim;
(ii) take such action in connection with contesting
such claim as the Corporation shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Corporation;
(iii) cooperate with the Corporation in good faith
in order to effectively contest such claim; and
(iv) permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for
any Excise Tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing
provisions of this Section 9(c), the Corporation shall control
all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Corporation shall determine; provided, however, that if the
Corporation directs Executive to pay such claim and sue for a
refund, the Corporation shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and
hold Executive harmless, on an after-tax basis, from any Excise
Tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided,
IV-59
<PAGE>
further, that if Executive is required to extend the statute of
limitations to enable the Corporation to contest such claim,
Executive may limit this extension solely to such contested
amount.
(d) If, after the receipt by Executive of an amount
advanced by the Corporation pursuant to Section 9(c), Executive
becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to the Corporation's complying
with the requirements of Section 9(c)) promptly pay to the
Corporation the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the
Corporation pursuant to Section 9(c), a determination is made
that Executive shall not be entitled to any refund with respect
to such claim and the Corporation does not notify Executive in
writing of its intent to contest such denial of refund prior to
the expiration of thirty (30) days after such determination, then
such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be
paid.
10. Confidential Information. The Executive shall
hold in a fiduciary capacity for the benefit of the Corporation
all secret or confidential information, knowledge or data
relating to the Corporation or any of its affiliated companies,
and their respective businesses, which shall have been obtained
by the Executive during the Executive's employment by the
Corporation or any of its affiliated companies and which shall
not be public knowledge (other than by acts by the Executive or
his representatives in violation of this Agreement). After
termination of the Executive's employment with the Corporation,
the Executive shall not, without the prior written consent of the
Corporation, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those
designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under
this Agreement.
11. Successors. (a) This Agreement is personal to
the Executive and without the prior written consent of the
Corporation shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors.
(c) The Corporation will require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or
assets of the Corporation to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that the Corporation would be required to perform it if no such
IV-60
<PAGE>
succession had taken place. As used in this Agreement,
"Corporation" shall mean the Corporation as hereinbefore defined
and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation
of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be
governed by and construed in accordance with the laws of the
State of New Jersey, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Timothy M. Ring
6 Conifer Drive
Mendham, NJ 07945
If to the Corporation:
C. R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes
as shall be required to be withheld pursuant to any applicable
law or regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding
of the Corporation and the Executive with respect to the subject
matter hereof.
IV-61
<PAGE>
(g) The Executive and the Corporation acknowledge that
the employment of the Executive by the Corporation is "at will",
and, prior to the Effective Date, may be terminated by either the
Executive or the Corporation at any time. Upon a termination of
the Executive's employment or upon the Executive's ceasing to be
an officer of the Corporation, in each case, prior to the
Effective Date, there shall be no further rights under this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his
hand and, pursuant to the authorization from its Board of
Directors, the Corporation has caused these presents to be
executed in its name on its behalf, all as of the day and year
first above written.
/s/ Timothy M. Ring
Timothy M. Ring
C. R. BARD, INC.
By:/s/ William H. Longfield
Name: William H. Longfield
Title: Chairman and
Chief Executive Officer
Attest:/s/ Jean F. Miller
Assistant Secretary
IV-62
C. R. BARD, INC. AND SUBSIDIARIES
EXHIBIT 21
Parents and Subsidiaries of Registrant
The following table lists, as of December 31, 1995, the Company
and its significant subsidiaries and indicates the jurisdiction
of organization of each subsidiary and the percentage of voting
securities owned by the immediate parent of each subsidiary.
Where % of
Incorporated Voting Stock
C. R. Bard, Inc. New Jersey (Registrant)
American Hydro-Surgical
Instruments, Inc. Maryland 100
Bard Access Systems, Inc. Utah 100
Bard Canada Inc. Canada 100
Purchaseco Inc. Canada 100
Vas-Cath Holdings Ltd. Canada 100
Vas-Cath, Inc. Canada 100
Med-Pro Design Inc. Canada 100
Bard Cardiopulmonary, Inc. Delaware 100
Bard Devices, Inc. Delaware 100
Davol Inc. Delaware 100
Bard Diagnostic Sciences, Inc. Washington 100
Bard Fiberoptics Technologies,
Inc. Michigan 100
Bard Holdings Limited England 100
Bard Limited England 100
Bard Sendirian Berhad Malaysia 85
Angiomed UK Limited England 100
Bard Implants, Inc. Delaware 100
Bard International, Inc. Delaware 100
Bard Japan Limited Japan 100
Productos Bard de Mexico S.A.
de C.V. Mexico 100
Bard Shannon Limited Ireland 100
Angiomed GmbH Germany 100
Angiomed Netherlands Netherlands 100
Bard Benelux N.V. Belgium 100
Bard Dublin Ireland 100
Bard de Espana, S.A. Spain 100
Bard Portugal LDA Portugal 100
Bard Galway Limited Ireland 100
Bard Connaught Limited Ireland 100
Bard S.P.A. Italy 100
Angiomed Italy S.P.A. Italy 100
C. R. Bard GmbH Germany 100
Angiomed KG Germany 100
IV-63
<PAGE>
C. R. BARD, INC. AND SUBSIDIARIES
EXHIBIT 21
Parents and Subsidiaries of Registrant (continued)
Where % of
Incorporated Voting Stock
C. R. Bard Ireland Limited Ireland 100
Laboratories Bard S.A. France 100
Cardial S.A. France 100
BCP Puerto Rico, Inc. Delaware 100
Catalina Acquisition Corp. Delaware 100
CRB Delaware, Inc. Delaware 100
Laboratoires Bard, Inc. Delaware 100
Bard Nice S.N.C. France 100
Laparoscopic Devices Acquisition
Corp. Delaware 100
MedChem Products, Inc. Massachusetts 100
Gesco Internationa, Inc. Massachusetts 100
MedChem (P.R.) Inc. Massachusetts 100
Pilot Cardiovascular Systems, Inc. Delaware 100
Roberts Laboratories, Inc. Arizona 100
The Consolidated Financial Statements include the accounts of the
Registrant and all its wholly-owned subsidiaries.
IV-64
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To C. R. Bard, Inc.:
As independent public accountants, we hereby consent to the
incorporation by reference of our report dated January 24, 1996,
included in this Form 10-K, into C. R. Bard, Inc.'s previously
filed Registration Statements on Form S-8 for its Employees'
Retirement Savings Plan of C. R. Bard, Inc., Registration
No. 2-86291, the 1990 Employee Stock Option Plan, as amended,
Registration No. 33-35544 and the C. R. Bard, Inc. 1988 Directors
Stock Award Plan, as amended, and the 1993 Long Term Incentive Plan
of C. R. Bard, Inc., Registration No. 33-64874 and the MedChem
Products, Inc. 1994 Stock Option Plan, MedChem Products, Inc. 1993
Stock Option Plan, MedChem Products, Inc. 1993 Spin-off Stock
Option Plan, MedChem Products, Inc. 1993 Director Stock Option
Plan, MedChem Products, Inc. Amended and Restated Stock Option Plan
all formerly maintained by MedChem Products, Inc.,
Registration No. 33-63147.
Arthur Andersen LLP
Roseland, New Jersey
March 25, 1996
IV-65
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
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0
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<SALES> 1,137,800
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