-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R07RBurWpoepSf7T93LmEjtX3yGLTTnivKDY4V7VdbSAQkJ1GsWfsYebMzBN/tLb bUPx/Ze4DP9YAQXiNo5qrQ== 0000077551-95-000012.txt : 19951002 0000077551-95-000012.hdr.sgml : 19951002 ACCESSION NUMBER: 0000077551-95-000012 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950927 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERKIN ELMER CORP CENTRAL INDEX KEY: 0000077551 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 060490270 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04389 FILM NUMBER: 95576617 BUSINESS ADDRESS: STREET 1: 761 MAIN AVE CITY: NORWALK STATE: CT ZIP: 06859-0001 BUSINESS PHONE: 2037621000 MAIL ADDRESS: STREET 1: 761 MAIN AVENUE CITY: NORWALK STATE: CT ZIP: 06859-0001 10-K 1 ANNUAL REPORT ON FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [ X ] Annual Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 [Fee Required] For the Fiscal Year Ended June 30, 1995 OR [ ] Transition Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 [No Fee Required] For the transition period from to Commission File Number 1-4389 The Perkin-Elmer Corporation (Exact name of registrant as specified in its charter) NEW YORK 06-0490270 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 761 Main Avenue, Norwalk, Connecticut 06859-0001 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 203-762-1000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of class on which registered Common Stock (par value New York Stock Exchange $1.00 per share) Pacific Stock Exchange Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of September 11, 1995, 42,167,407 shares of Registrant's Common Stock were outstanding, and the aggregate market value of shares of such Common Stock (based upon the average sales price) held by non-affiliates was approximately $1,457,411,004. DOCUMENTS INCORPORATED BY REFERENCE Annual Report to Shareholders for Fiscal Year ended June 30, 1995 - Parts I, II, and IV. Proxy Statement for Annual Meeting of Shareholders dated September 13, 1995 - Part III. PART I Item 1. BUSINESS (a) General Development of Business. The Perkin-Elmer Corporation was incorporated in 1939 under the laws of the State of New York. Together with its consolidated subsidiaries, The Perkin-Elmer Corporation (hereinafter collectively referred to as "Registrant" or the "Corporation") develops, manufactures, and sells products in the industry segment described in sub-item (c) below. On February 18, 1993, the shareholders of Registrant and Applied Biosystems, Inc. ("ABI"), a supplier of automated systems for life science research and related applications, approved the merger of a subsidiary of Registrant with and into ABI which resulted in ABI becoming a wholly-owned subsidiary of Registrant. Effective July 1, 1994, ABI was merged into Registrant and is now the Applied Biosystems division of Registrant. On April 18, 1994, Registrant entered into an agreement with Sulzer Inc. to sell its Material Sciences segment consisting of its Metco Division ("Metco") headquartered in Westbury, New York. Registrant completed the sale on September 30, 1994. The consolidated financial statements and schedules reflect the merger with ABI as a pooling of interests and present the Corporation's Material Sciences segment as a discontinued operation. On May 18, 1993, Registrant amended its By-laws to change Registrant's fiscal year end from July 31 to June 30. Prior to fiscal year 1993, the financial statements of ABI and Registrant's subsidiaries outside the United States were for the years ended June 30, while Registrant's domestic operations were reported on a July 31 fiscal year end. (b) Financial Information About Industry Segments. Registrant is engaged in one business segment, which is generally described as analytical instruments and includes life science systems. Accordingly, separate segment financial information is not provided. -1- (c) Narrative Description of Business. BUSINESS Registrant develops, manufactures, markets, sells, and services analytical instrument systems. Included in this industry segment are biochemical analytical instrument systems, consisting of instruments and associated consumable products, for life science research and related applications. These automated systems are used for synthesis, amplification, purification, isolation, analysis and sequencing of nucleic acids, proteins, and other biological molecules. This industry segment also includes analytical instrument systems for determining the composition and molecular structure of chemical substances (both organic and inorganic) and measuring the concentration of materials in a sample. These instruments include: spectrophotometers utilizing a number of analytical techniques; gas and liquid chromatographs; thermal analyzers; thermal cyclers; analytical balances; flame photometers; polarimeters; data-handling devices that are principally designed for use with analytical instruments; and data systems for applications in analytical chemistry. In a joint venture, Perkin-Elmer Sciex Instruments, Registrant is engaged in the manufacture and sale of mass spectrometry instrument systems. Registrant also develops, manufactures, markets, and services on-line, real time, process analysis systems to monitor process quality and environmental purity. Registrant's instruments are used by private industry, educational and research institutions, and governmental entities for fundamental research, applied industrial research, quality control, medical research, hospital clinical testing, pollution analysis, drug identification, and forensics. MARKETING AND DISTRIBUTION In the United States, Registrant markets the largest portion of its products directly through its own sales and distribution organization, although certain analytical instruments are marketed through independent distributors and sales representatives. Sales to major markets outside of the United States are generally made by the Registrant's foreign based sales and service staff, although some sales are made directly from the United States to foreign customers. In certain foreign countries, sales are made through various representative and distributorship arrangements. Registrant owns or leases sales and service offices in strategic regional locations in the United States, and in foreign countries through its foreign sales subsidiaries and distribution operations. None of Registrant's products is distributed through retail outlets. RAW MATERIALS There are no specialized raw materials that are particularly essential to the operation of Registrant's business. Registrant's manufacturing operations require a wide variety of raw materials, electronic and mechanical components, chemical and biochemical materials, and other supplies, some of which are occasionally found to be in short supply. Registrant has multiple commercial sources for most components and supplies but is dependent on single sources for a limited number of such items, in which case Registrant normally secures long-term supply contracts. -2- PATENTS, LICENSES, AND FRANCHISES Registrant has pursued a policy of seeking patent protection in the United States and other countries for developments, improvements, and inventions originating within its organization which are incorporated in Registrant's products or which fall within its fields of interest. Certain licenses under patents have been granted to, and received from, other entities. Registrant has certain rights from Hoffmann-La Roche Inc. under patents relating to polymerase chain reaction technology ("PCR"), which patents expire in 2004. Registrant also has rights under a patent issued to the California Institute of Technology relating to DNA sequencing, which patent expires in 2009. In Registrant's opinion, however, no other single patent or license, or group of patents or licenses, or any franchise, is material to its business as a whole. From time to time, Registrant has asserted that various competitors and others are infringing Registrant's patents and similarly, from time to time, others have asserted that Registrant was infringing patents owned by them. Generally, such claims are settled by mutual agreement on a satisfactory basis and result in the granting of licenses by Registrant or the granting of licenses to Registrant. SEASONAL FLUCTUATIONS Registrant's business is not subject to pronounced seasonal fluctuations. BACKLOG Registrant's recorded backlog was $167.0 million at June 30, 1995 and $154.5 million at June 30, 1994. It is Registrant's general policy to include in backlog only purchase orders or production releases which have firm delivery dates within one year. Recorded backlog may not result in sales because of cancellation or other factors. It is anticipated that all orders included in the current backlog will be delivered before the close of fiscal year 1996. UNITED STATES GOVERNMENT SALES No material portion of Registrant's business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the United States Government. COMPETITION The industry segment in which Registrant operates is highly competitive and is characterized by the application of advanced technology. There are numerous companies which specialize in, and a number of larger companies which devote a significant portion of their resources to, the development, manufacture, and sale of products which compete with those manufactured or sold by Registrant. Many of Registrant's competitors are well-known manufacturers with a high degree of technical proficiency. In addition, competition is intensified by the ever-changing nature of the technologies in the industry in which Registrant is engaged. The markets for Registrant's products are characterized by specialized manufacturers that often have strength in narrow segments of these markets. While the absence of reliable statistics makes it difficult to determine Registrant's relative market position, Registrant is confident it is one of the principal manufacturers in its field, marketing a broad line of analytical instruments and life science systems. In addition to competing in terms of the technology that Registrant offers, Registrant competes in terms of price, service, and quality. -3- RESEARCH, DEVELOPMENT, AND ENGINEERING Registrant is actively engaged in basic and applied research, development, and engineering programs designed to develop new products and to improve existing products. During fiscal years 1995, 1994, and 1993, Registrant spent $95.1 million, $94.2 million, and $83.8 million, respectively, on company sponsored research, development, and engineering activities. ENVIRONMENTAL MATTERS Registrant is subject to federal, state, and local laws and regulations regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, in those jurisdictions where Registrant operates or maintains facilities. Registrant does not believe that compliance with all environmental provisions will have a material effect on its business, and no material capital expenditures are expected for environmental control. EMPLOYEES As of June 30, 1995, Registrant employed 5,890 persons worldwide. None of Registrant's United States employees is subject to collective bargaining agreements. (d) Financial Information About Foreign and Domestic Operations and Export Sales. A summary of net revenues to unaffiliated customers, operating income, and identifiable assets attributable to each of Registrant's geographic areas and export sales for the fiscal years 1995, 1994, and 1993 is incorporated herein by reference to Note 6 on Pages 38-39 of the Annual Report to Shareholders for the fiscal year ended June 30, 1995. Registrant's consolidated net revenues to unaffiliated customers in countries other than the United States for the fiscal years 1995, 1994, and 1993 were $669.8 million, $606.7 million, and $606.8 million, or 63.0%, 59.2%, and 60.0%, respectively, of Registrant's consolidated net revenues. All of the Registrant's manufacturing facilities outside of the continental United States are located in Germany, the United Kingdom, the Commonwealth of Puerto Rico, Japan, and the Peoples Republic of China. The manufacturing facility in Puerto Rico is expected to be closed by December 31, 1995. There are currently no material foreign exchange controls or similar limitations restricting the repatriation to the United States of capital or earnings from operations outside the United States. (e) Discontinued Operations. On September 30, 1994, Registrant sold Metco, comprising its Material Sciences segment, headquartered in Westbury, New York to Sulzer Inc., a wholly-owned subsidiary of Sulzer, Ltd., Winterthur, Switzerland. The consolidated financial statements and schedules present Registrant's Material Sciences segment as a discontinued operation. Item 2. PROPERTIES Listed below are the principal facilities of Registrant as of June 30, 1995. Registrant considers all facilities listed below to be reasonably appropriate for the purpose(s) -4- for which they are used, including manufacturing, research and development, and administrative purposes. All properties are maintained in good working order and, except for those held for sale or lease, are substantially utilized on the basis of at least one shift. None of the leased facilities is leased from an affiliate of Registrant. Approximate Owned or Expiration Floor Area Location Leased Date of Leases In Sq. Ft. Norwalk, CT Owned 402,000 Wilton, CT Owned 219,000 San Jose, CA Owned 81,000 Beaconsfield, England Owned 70,000 Ueberlingen, Germany Owned 62,000 Warrington, England Owned 58,000 Narita, Japan Owned 24,000 Irvine, CA Owned 22,000 Foster City, CA Leased 2000-2002 324,000 Ueberlingen, Germany Leased 1995-2001 204,000 Llantrinsant, Wales Leased 1996 113,000 Mayaguez, Puerto Rico* Leased 1997-1998 34,000 Meersburg, Germany Leased 2000 24,000 Farnborough, England Leased 2001 21,000 Beaconsfield, England Leased 2005 8,000 Beijing, China Leased 1996 350 * The manufacturing facility in Mayaguez, Puerto Rico is expected to be closed by December 31, 1995. In addition to the facilities listed above, Registrant leases space in certain industrial centers for use as regional sales and service offices, technical demonstration centers, and warehousing. Registrant also owns undeveloped land in Redding, Connecticut, Vacaville, California, and Ueberlingen, Germany. In addition to the properties used by Registrant in its operations, Registrant owns three facilities in Wilton, Connecticut (aggregating approximately 248,000 square feet) which are currently leased to SVG Lithography Systems, Inc. for a term expiring in 2010, a facility in Garden Grove, California (approximately 82,000 square feet) which is currently leased to OCA Applied Optics, Inc. for a term expiring in 2002, and a facility in Pomona, California (approximately 135,000 square feet) which is currently leased to Orbital Sciences Corporation for a term expiring in 2003. Registrant also owns a facility in Ridgefield, Connecticut (approximately 201,000 square feet), two facilities in Wilton, Connecticut (approximately 51,000 square feet and 42,000 square feet), and a facility in San Jose, California (approximately 67,000 square feet) which are held for sale or lease. One of the facilities in Wilton is leased on a long- term basis, and the facility in San Jose and a portion of the remaining facility in Wilton are leased on a short-term basis. Item 3. LEGAL PROCEEDINGS The Corporation has been named as a defendant in various legal actions arising from the conduct of its normal business activities. Although the amount of any liability that might arise with respect to any of these matters cannot be accurately predicted, the resulting liability, if any, will not, in the opinion of management of Registrant, have a material adverse effect on the consolidated financial statements of Registrant. -5- Registrant is one of approximately 125 third party defendants named in a third party complaint dated February 19, 1993 in United States of America v. Davis et al., which is pending in the United States District Court for the District of Rhode Island. The third party plaintiffs, who were named as defendants and potentially responsible parties in the Government's initial complaint, sought equitable contribution and indemnification in the event they were found liable for remediation costs relating to the removal of hazardous substances from a site located in Smithfield, Rhode Island (such costs initially were estimated by the Government to be $27.8 million, but most recent estimates of such costs appear to be in the $40 million range). All but one of the third party plaintiffs settled with the Government for a total of approximately $6 million, and a trial on the question of the remaining third party plaintiff's liability to the Government resulted in an April 22, 1995 Memorandum and Order in which the Court found such plaintiff, United Technologies Corporation, liable as a "generator" of hazardous wastes deposited at the site. A trial on the amount of such liability currently is scheduled for October 1995. Until the amount of liability of all of the third party plaintiffs (including United Technologies) has been established by litigation or settlement of that issue, the Court will not consider the validity of any third party claims. While the Registrant contends that it should have no liability in this case, because of the uncertainty of all litigation it cannot definitively state that it will incur less than $100,000 in monetary liability. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report. -6- PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) Market Information. The principal United States market where Registrant's Common Stock is traded is the New York Stock Exchange, although such stock is also traded on the Pacific Stock Exchange. The following information, which appears in Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1995, is hereby incorporated by reference in this Form 10- K: the high and low sales prices of Registrant's Common Stock for each quarterly period during the fiscal years 1995 and 1994 (Note 13, Page 43 of the Annual Report to Shareholders). (b) Holders. On September 11, 1995, the approximate number of holders of Common Stock of Registrant was 8,313. The approximate number of record holders is based upon the actual number of holders registered in the books of Registrant at such date and does not include holders of shares in "street name" or persons, partnerships, associations, corporations, or other entities identified in security position listings maintained by depositary trust companies. Note: the calculation of the number of shares of Registrant's Common Stock held by non- affiliates shown on the cover of this Form 10-K was made on the assumption that there were no affiliates other than executive officers and directors. (c) Dividends. The following information which appears in Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1995, is hereby incorporated by reference in this Form 10- K: the amount of quarterly dividends paid during the fiscal years 1995 and 1994 (Note 13, Page 43 of the Annual Report to Shareholders). Item 6. SELECTED FINANCIAL DATA Registrant hereby incorporates by reference in this Form 10-K Page 22 of Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1995. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Registrant hereby incorporates by reference in this Form 10-K Pages 23-27 of Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1995. -7- Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following financial statements and the supplementary financial information included in Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1995 are incorporated by reference in this Form 10-K: the Consolidated Financial Statements and the report thereon of Price Waterhouse LLP dated July 25, 1995, and Pages 28-45 of said Annual Report, including Note 13, Page 43, which contains unaudited quarterly financial information. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Registrant has not changed its public accounting firm within 24 months prior to June 30, 1995, the date of Registrant's most recent financial statements. -8- PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) Identification and Background of Directors. Registrant hereby incorporates by reference in this Form 10-K Pages 2-4 of Registrant's Proxy Statement dated September 13, 1995, in connection with its Annual Meeting of Shareholders to be held on October 19, 1995. (b) Identification of Executive Officers. The following is a list of Registrant's executive officers, their ages, and their positions and offices with the Registrant, as of September 14, 1995.
Name Age Present Positions and Year First Elected Peter Barrett.......... 42 Vice President, Worldwide Sales and Service (1994) David P. Binkley....... 42 Vice President, Analytical Instruments Division (1995) Julianne A. Grace...... 57 Vice President (1986),Corporate Relations (1990) Michael W. Hunkapiller. 46 Vice President, Applied Biosystems Division (1995) Stephen O. Jaeger...... 51 Vice President, Finance and Chief Financial Officer (1995) Joseph E. Malandrakis.. 49 Vice President, Worldwide Operations (1993) John B. McBennett...... 57 Corporate Controller (1993) Michael J. McPartland.. 46 Vice President, Human Resources (1993) William B. Sawch....... 41 Vice President, General Counsel and Secretary (1993) Rhonda L. Seegal....... 45 Vice President (1991), Treasurer (1988) Tony L. White.......... 49 Chairman, President, and Chief Executive Officer (1995)
Each of the foregoing named officers was either elected at the last organizational meeting of the Board of Directors held on October 20, 1994 or was elected by the Board since that date. The term of each officer will expire on October 19, 1995, the date of the next scheduled organizational meeting of the Board of Directors, unless renewed for another year. (c) Identification of Certain Significant Employees. Not applicable. (d) Family Relationships. To the best of Registrant's knowledge and belief, there is no family relationship between any of Registrant's directors, executive officers, or persons nominated or chosen by Registrant to become a director or an executive officer. (e) Business Experience. With respect to the business experience of Registrant's directors and persons nominated to become directors, Registrant hereby incorporates by reference in this Report on Form 10-K Pages 2-4 of Registrant's Proxy Statement dated September 13, 1995, in connection with its Annual Meeting of Shareholders to be held on October 19, 1995. With respect to the executive officers of Registrant, each such officer has been employed by Registrant or a subsidiary in one or more executive or managerial capacities for at least the past five years, with the exception of Dr. -9- Hunkapiller, and Messrs. Jaeger, McPartland and White. Dr. Hunkapiller was elected Vice President of Registrant on September 15, 1994. Prior to his employment by Registrant in February, 1993, Dr. Hunkapiller was employed by ABI as Executive Vice President. Dr. Hunkapiller joined ABI in 1983 as a member of the Research and Development group and was later appointed Vice President, Research and Development. He also served as Vice President, Science and Technology, and General Manager, DNA Business Unit. Mr. Jaeger was elected Vice President of Registrant on March 16, 1995. Prior to his employment by Registrant in March, 1995, Mr. Jaeger was employed by Houghton Mifflin and Company from 1987 to 1995, most recently as Executive Vice President, Chief Financial Officer and Treasurer, and served on its board of directors. Prior to joining Houghton Mifflin, he served as Senior Vice President and Chief Financial Officer of British Petroleum North America, Inc. from 1979 to 1987. Mr. McPartland was elected Vice President of Registrant on February 18, 1993. Prior to his employment by Registrant in January, 1993, Mr. McPartland was employed by SmithKline Beecham plc, from 1980 to 1993, most recently as Senior Vice President and Director, Corporate Personnel. Mr. White was elected Chairman, Chief Executive Officer and President of Registrant on September 12, 1995. Prior to his employment by Registrant, Mr. White was employed by Baxter International, Inc. in various executive positions, most recently as Executive Vice President. (f) Involvement in Certain Legal Proceedings. To the best of Registrant's knowledge and belief, none of Registrant's directors, persons nominated to become directors, or executive officers has been involved in any proceedings during the past five years that are material to an evaluation of the ability or integrity of such persons to be directors or executive officers of Registrant. (g) Compliance with Section 16(a) of the Securities Exchange Act of 1934. Information concerning compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to Page 8 of Registrant's Proxy Statement dated September 13, 1995, in connection with its Annual Meeting of Shareholders to be held on October 19, 1995. Item 11. EXECUTIVE COMPENSATION Registrant hereby incorporates by reference in this Form 10-K Pages 7-10 and 12-15 of Registrant's Proxy Statement dated September 13, 1995, in connection with its Annual Meeting of Shareholders to be held on October 19, 1995. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) Security Ownership of Certain Beneficial Owners. Registrant hereby incorporates by reference in this Form 10-K Page 7 of Registrant's Proxy Statement dated September 13, 1995, in connection with its Annual Meeting of Shareholders to be held on October 19, 1995. -10- (b) Security Ownership of Management. Information concerning the security ownership of management is hereby incorporated by reference to Pages 2-4 and 6-10 of Registrant's Proxy Statement dated September 13, 1995, in connection with its Annual Meeting of Shareholders to be held on October 19, 1995. (c) Changes in Control. Registrant knows of no arrangements, including any pledge by any person of securities of Registrant, the operation of which may at a subsequent date result in a change in control of Registrant. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. -11- PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. Financial Statements. The following consolidated financial statements, together with the report thereon of Price Waterhouse LLP dated July 25, 1995, appearing on Pages 28 through 45 of Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1995, are incorporated by reference in this Form 10-K. With the exception of the aforementioned information and that which is specifically incorporated in Parts I and II, the Annual Report to Shareholders for the fiscal year ended June 30, 1995, is not to be deemed filed as part of this report on Form 10-K. 10-K Annual Page No. Report Page No. Consolidated Statements of Operations - fiscal years 1995, 1994, and 1993 ................... -- 28 Consolidated Statements of Financial Position - fiscal years 1995 and 1994........................... -- 29 Consolidated Statements of Cash Flows - fiscal years 1995, 1994, and 1993 ................... -- 30 Consolidated Statements of Shareholders' Equity - fiscal years 1995, 1994, and 1993................... -- 31 Notes to Consolidated Financial Statements.............................. -- 32-43 Statement of Financial Responsibility.......................... -- 44 Report of Price Waterhouse LLP................... -- 45 -12- (a) 2. Financial Statement Schedules. The following additional financial data should be read in conjunction with the consolidated financial statements in said Annual Report to Shareholders for the fiscal year ended June 30, 1995. Schedules not included with this additional financial data have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. Annual Report 10-K Page No. Page No. Report of Independent Accountants on Financial Statement Schedule.......... 18 -- Schedule II - Valuation and Qualifying Accounts and Reserves......... 19 -- -13- (a) 3. Exhibits. Exhibit No. 2(1) Acquisition Agreement dated July 19, 1991, among the Corporation, Hoffmann-LaRoche Inc., and Roche Probe, Inc. (Incorporated by reference to Exhibit 1 to Current Report on Form 8-K of the Corporation dated July 19, 1991 (Commission file number 1-4389).) 2(2) Acquisition Agreement dated July 19, 1991, between the Corporation and F. Hoffmann-La Roche Ltd. (Incorporated by reference to Exhibit 2 to Current Report on Form 8-K of the Corporation dated July 19, 1991 (Commission file number 1-4389)). 2(3) Agreement and Plan of Merger, by and among Registrant, Sequence Acquisition Company and Applied Biosystems, Inc. dated as of October 6, 1992. (Incorporated by reference to Exhibit 2 to Current Report on Form 8-K of the Corporation dated October 6, 1992 (Commission file number 1-4389).) 2(4) Agreement dated April 18, 1994 between Sulzer Inc. and The Perkin-Elmer Corporation, as amended through August 31, 1994. (Incorporated by reference to Exhibit 2(4) to Annual Report on Form 10-K of the Corporation for fiscal year ended June 30, 1994 (Commission file number 1-4389).) 3(i) Restated Certificate of the Corporation as amended through July 1, 1994. (Incorporated by reference to Exhibit 3(I) to Annual Report on Form 10-K of the Corporation for fiscal year ended June 30, 1994 (Commission file number 1-4389).) 3(ii) Amended and Restated By-laws of the Corporation, as amended through July 15, 1993. (Incorporated by reference to Exhibit 3(ii) to Annual Report on Form 10-K of the Corporation for fiscal year ended June 30, 1993 (Commission file number 1-4389).) 4(1) Three Year Credit Agreement dated June 1, 1994, among Morgan Guaranty Trust Company, certain banks named in such Agreement, and the Corporation, as amended July 20, 1995. 4(2) Shareholder Protection Rights Agreement dated April 30, 1989, between The Perkin-Elmer Corporation and The First National Bank of Boston. (Incorporated by reference to Exhibit 4 to Current Report on Form 8-K of the Corporation dated April 20, 1989 (Commission file number 1-4389).) 10(1) The Perkin-Elmer Corporation 1984 Stock Option Plan for Key Employees, as amended through May 21, 1987. (Incorporated by reference to Exhibit 28(c) to Post Effective Amendment No. 1 to the Corporation's Registration Statement on Form S-8 (No. 2-95451).) 10(2) The Perkin-Elmer Corporation 1988 Stock Incentive Plan for Key Employees. (Incorporated by reference to Exhibit 10(4) to Annual Report on Form 10-K of the Corporation for the fiscal year ended July 31, 1988 (Commission file number 1-4389).) 10(3) The Perkin-Elmer Corporation 1993 Stock Incentive Plan for Key Employees. (Incorporated by reference to Exhibit 99 to the Corporation's Registration Statement on Form S-8 (No. 33-50847).) 10(4) Contingent Compensation Plan for Key Employees of The Perkin-Elmer Corporation, as amended through August 1, 1990. (Incorporated by reference to Exhibit 10(5) to Annual Report on Form 10-K of the Corporation for the fiscal year ended July 31, 1992 (Commission file number 1-4389).) 10(5) The Perkin-Elmer Corporation Supplemental Retirement Plan as amended through August 1, 1991. (Incorporated by reference to Exhibit 10(6) to Annual Report on Form 10-K of the Corporation for the fiscal year ended July 31, 1991 (Commission file number 1-4389).) 10(6) Deferred Compensation Contract dated July 29, 1974, as amended through January 20, 1994, between Registrant and Gaynor N. Kelley. (Incorporated by reference to Exhibit 10(8) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1994 (Commission file number 1-4389).) 10(7) Deferred Compensation Contract dated September 15, 1994, between Registrant and Michael W. Hunkapiller. 10(8) Deferred Compensation Contract dated February 18, 1993, between Registrant and Michael J. McPartland. 10(9) Deferred Compensation Contract dated September 15, 1994, between Registrant and Peter Barrett. 10(10) Deferred Compensation Contract dated January 21, 1993, between Registrant and Joseph E. Malandrakis. (Incorporated by reference to Exhibit 10(11) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1993 (Commission file number 1-4389).) -14- 10(11) Employment Agreement dated November 21, 1991, between Registrant and Gaynor N. Kelley. (Incorporated by reference to Exhibit 10(1) to Quarterly Report on Form 10-Q of the Corporation for the fiscal quarter ended January 31, 1992 (Commission file number 1- 4389).) 10(12) Employment Agreement dated September 15, 1994, between Registrant and Michael W. Hunkapiller. 10(13) Employment Agreement dated September 15, 1994, between Registrant and Peter Barrett. 10(14) Employment Agreement dated February 18, 1993, between Registrant and Michael J. McPartland. 10(15) Employment Agreement dated November 21, 1991, between Registrant and Joseph E. Malandrakis. (Incorporated by reference to Exhibit 10(16) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1993 Commission file number 1-4389).) 10(16) Change of Control Agreement dated September 12, 1995, between Registrant and Tony L. White. 10(17) Consulting Agreement dated April 1, 1995, between Registrant and Robert H. Hayes. 10(18) The Excess Benefit Plan of The Perkin-Elmer Corporation dated August 1, 1984 as amended through June 30, 1993. (Incorporated by reference to Exhibit 10(18) to Annual Report on Form 10-K of the Corporation for the fiscal year ended June 30, 1993 (Commission file number 1-4389).) 10(19) 1993 Director Stock Purchase and Deferred Compensation Plan. (Incorporated by reference to Exhibit 99 to the Corporation's Registration Statement on Form S-8 (No. 33-50849).) 10(20) Agreement dated May 5, 1995, between Registrant and Riccardo Pigliucci. 10(21) Employment Agreement dated September 12, 1995, between Registrant and Tony L. White. 11 Computation of Net Income (Loss) per Share for the five years ended June 30, 1995. 13 Annual Report to Shareholders for 1995. 21 List of Subsidiaries. 23 Consent of Price Waterhouse LLP. 27 Financial Data Schedule. Note: None of the Exhibits listed in Item 14(a) 3 above, except Exhibits 11 and 23 are included with this Form 10-K Annual Report. Registrant will furnish a copy of any such Exhibit upon written request to the Secretary at the address on the cover of this Form 10-K Annual Report accompanied by payment of $3 for each Exhibit requested. (b) Reports on Form 8-K. Registrant did not file a report on Form 8-K during the last quarter of the period covered by this report. -15- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE PERKIN-ELMER CORPORATION By /s/ W. B. Sawch William B. Sawch Vice President, General Counsel and Secretary Date: September 21, 1995 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities and on the dates indicated. /s/ Tony L. White September 21, 1995 Tony L. White Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) /s/ Stephen O. Jaeger September 21, 1995 Stephen O. Jaeger Vice President, Finance, Chief Financial Officer (Principal Financial Officer) /s/ John B. McBennett September 21, 1995 John B. McBennett Corporate Controller (Principal Accounting Officer) /s/ Joseph F. Abely, Jr. September 21, 1995 Joseph F. Abely, Jr. Director -16- /s/ Richard H. Ayers September 21, 1995 Richard H. Ayers Director /s/ Jean-Luc Belingard September 21, 1995 Jean-Luc Belingard Director /s/ Robert H. Hayes September 21, 1995 Robert H. Hayes Director /s/ G. N. Kelley September 21, 1995 Gaynor N. Kelley Director /s/ Donald R. Melville September 21, 1995 Donald R. Melville Director /s/ Burnell R. Roberts September 21, 1995 Burnell R. Roberts Director /s/ John S. Scott September 21, 1995 John S. Scott Director /s/ Carolyn W. Slayman September 21, 1995 Carolyn W. Slayman Director /s/ Orin R. Smith September 21, 1995 Orin R. Smith Director /s/ Richard F. Tucker September 21, 1995 Richard F. Tucker Director -17- REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors of The Perkin-Elmer Corporation Our audits of the consolidated financial statements referred to in our report dated July 25, 1995, appearing on Page 45 of the 1995 Annual Report to Shareholders of The Perkin-Elmer Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a)2 of this Form 10-K. Based upon our audits, the Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PRICE WATERHOUSE LLP Stamford, Connecticut July 25, 1995 -18- THE PERKIN-ELMER CORPORATION VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE FISCAL YEARS ENDED JUNE 30, 1995, 1994 AND 1993 (Amounts in thousands) ALLOWANCE FOR DOUBTFUL ACCOUNTS Balance at July 31, 1992 .................... $ 7,758 Charged to income in fiscal year 1993........ 4,229 Deductions from reserve in fiscal year 1993.. (3,761) Balance at June 30, 1993...................... 8,226 Charged to income in fiscal year 1994......... 2,927 Deductions from reserve in fiscal year 1994... (3,906) Balance at June 30,1994 ...................... 7,247 (1) Charged to income in fiscal year 1995........ 2,086 Deductions from reserve in fiscal year 1995... (384) Balance at June 30, 1995...................... $ 8,949 (1) (1) Deducted in the Consolidated Statements of Financial Position from accounts receivable. SCHEDULE II -19- THE PERKIN-ELMER CORPORATION COMPUTATION OF NET INCOME (LOSS) PER SHARE (Dollar amounts in thousands, except per share amounts)
June 30, June 30, June 30, July 31, July 31, 1995 1994 1993 1992 1991 Weighted average number of common shares 42,129 43,857 43,780 43,526 42,091 Common stock equivalents - stock options 515 816 1,173 1,169 Weighted average number of common shares used in calculating primary earnings per share 42,644 44,673 44,953 44,695 42,091 Additional dilutive stock options under paragraph #42 APB #15 120 172 97 280 Shares used in calculating earnings per share - fully diluted basis 42,764 44,845 45,050 44,975 42,091 Calculation of primary and fully diluted earnings per share: PRIMARY AND FULLY DILUTED: Income (loss) from continuing operations $ 66,877 $ 73,978 $ 24,444 $ 24,296 $ (16,384) Income (loss) from discontinued operations (22,851) 1,714 10,941 (2,020) Income (loss) before cumulative effect of accounting changes $ 66,877 $ 51,127 $ 26,158 $ 35,237 $ (18,404) Cumulative effect of accounting changes (83,098) Net income (loss) used in the calculation of primary and fully diluted earnings per share $ 66,877 $ 51,127 $ (56,940) $ 35,237 $ (18,404) PRIMARY: Per share amounts: Income (loss) from continuing operations $ 1.57 $ 1.66 $ .54 $ .54 $ (.39) Income (loss)from discontinued operations (.52) .04 .25 (.05) Income (loss) before cumulative effect of accounting changes 1.57 1.14 $ .58 $ .79 $ (.44) Loss from cumulative effect of accounting changes (1.85) Net income (loss) $ 1.57 $ 1.14 $ (1.27) $ .79 $ (.44) FULLY DILUTED: Per share amounts: Income (loss) from continuing operations $ 1.56 $ 1.65 $ .54 $ .54 $ (.39) Income (loss) from discontinued operations (.51) .04 .24 (.05) Income (loss) before cumulative effect of accounting changes 1.56 1.14 .58 .78 (.44) Loss from cumulative effect of accounting changes (1.84) Net income (loss) $ 1.56 $ 1.14 $ (1.26) $ .78 $ (.44)
EXHIBIT 11 -20- CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements on Form S-8 (Nos. 2-95451, 33-25218, 33-44191, 33- 50847, 33-50849, and 33-58778) of The Perkin-Elmer Corporation of our report dated July 25, 1995, appearing on page 45 of the Annual Report to Shareholders for 1995 of The Perkin-Elmer Corporation which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 18 of this Form 10-K. PRICE WATERHOUSE LLP Stamford, Connecticut September 26, 1995 EXHIBIT 23 -21- EX-4 2 EXHIBIT 4(1) 3 YEAR CREDIT AGREEMENT [CONFORMED COPY] $100,000,000 THREE-YEAR CREDIT AGREEMENT dated as of June 1, 1994 among THE PERKIN-ELMER CORPORATION The Banks Listed Herein and Morgan Guaranty Trust Company of New York, as Agent TABLE OF CONTENTS Page ARTICLE I DEFINITIONS SECTION 1.01 Definitions. . . . . . . . . . . . . . . 1 1.02 Accounting Terms and Determinations. . . 13 1.03 Types of Borrowings. . . . . . . . . . . 13 ARTICLE II THE CREDITS SECTION 2.01 Commitments to Lend. . . . . . . . . . . 13 2.02 Notice of Committed Borrowing. . . . . . 14 2.03 Money Market Borrowings. . . . . . . . . 14 2.04 Notice to Banks; Funding of Loans. . . . 18 2.05 Notes. . . . . . . . . . . . . . . . . . 19 2.06 Maturity of Loans. . . . . . . . . . . . 20 2.07 Interest Rates . . . . . . . . . . . . . 20 2.08 Fees . . . . . . . . . . . . . . . . . . 24 2.09 Optional Termination or Reduction of Commitments . . . . . . . . 25 2.10 Scheduled Termination of Commitments . . . . . . . . . . . . . 25 2.11 Optional Prepayments . . . . . . . . . . 25 2.12 General Provisions as to Payments. . . . 26 2.13 Funding Losses . . . . . . . . . . . . . 27 2.14 Computation of Interest and Fees . . . . 27 ARTICLE III CONDITIONS SECTION 3.01 Effectiveness. . . . . . . . . . . . . . 27 3.02 Borrowings . . . . . . . . . . . . . . . 28 ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01 Corporate Existence and Power. . . . . . 29 4.02 Corporate and Governmental Authorization; No Contravention. . . . . 29 4.03 Binding Effect . . . . . . . . . . . . . 30 4.04 Financial Information. . . . . . . . . . 30 4.05 Litigation.. . . . . . . . . . . . . . . 30 4.06 Compliance with ERISA. . . . . . . . . . 31 4.07 Environmental Matters. . . . . . . . . . 31 4.08 Taxes. . . . . . . . . . . . . . . . . . 31 4.09 Subsidiaries.. . . . . . . . . . . . . . 32 4.10 Not an Investment Company. . . . . . . . 32 4.11 Full Disclosure. . . . . . . . . . . . . 32 ARTICLE V COVENANTS SECTION 5.01 Information. . . . . . . . . . . . . . . 32 5.02 Payment of Obligations . . . . . . . . . 35 5.03 Maintenance of Property; Insurance . . . 35 5.04 Conduct of Business and Maintenance of Existence . . . . . . . . 35 5.05 Compliance with Laws.. . . . . . . . . . 36 5.06 Inspection of Property, Books and Records. . . . . . . . . . . . 36 5.07 Minimum Consolidated Net Worth. . . . . . . . . . . . . . . . 36 5.08 Negative Pledge. . . . . . . . . . . . . 36 5.09 Consolidations, Mergers and Sales of Assets. . . . . . . . . . . . . 37 5.10 Use of Proceeds. . . . . . . . . . . . . 37 5.11 Interest Coverage. . . . . . . . . . . . 38 ARTICLE VI DEFAULTS SECTION 6.01 Events of Default. . . . . . . . . . . . 38 6.02 Notice of Default. . . . . . . . . . . . 40 ARTICLE VII THE AGENT SECTION 7.01 Appointment and Authorization. . . . . . 41 7.02 Agent and Affiliates.. . . . . . . . . . 41 7.03 Action by Agent. . . . . . . . . . . . . 41 7.04 Consultation with Experts. . . . . . . . 41 7.05 Liability of Agent . . . . . . . . . . . 41 7.06 Indemnification. . . . . . . . . . . . . 42 7.07 Credit Decision. . . . . . . . . . . . . 42 7.08 Successor Agent. . . . . . . . . . . . . 42 7.09 Agent's Fee. . . . . . . . . . . . . . . 43 ARTICLE VIII CHANGE IN CIRCUMSTANCES SECTION 8.01 Basis for Determining Interest Rate Inadequate or Unfair. . . . . . . . 43 8.02 Illegality . . . . . . . . . . . . . . . 44 8.03 Increased Cost and Reduced Return. . . . 44 8.04 Taxes. . . . . . . . . . . . . . . . . . 46 8.05 Base Rate Loans Substituted for Affected Fixed Rate Loans. . . . . . . . 48 8.06 Substitution of Bank . . . . . . . . . . 48 ARTICLE IX MISCELLANEOUS SECTION 9.01 Notices. . . . . . . . . . . . . . . . . 49 9.02 No Waivers . . . . . . . . . . . . . . . 49 9.03 Expenses; Indemnification. . . . . . . . 49 9.04 Sharing of Set-Offs. . . . . . . . . . . 50 9.05 Amendments and Waivers . . . . . . . . . 50 9.06 Successors and Assigns . . . . . . . . . 51 9.07 Collateral . . . . . . . . . . . . . . . 53 9.08 Governing Law; Submission to Juris- diction . . . . . . . . . . . . . . . . 53 9.09 Counterparts; Integration. . . . . . . . 53 9.10 WAIVER OF JURY TRIAL . . . . . . . . . . 53 Pricing Schedule Exhibit A - Note Exhibit B - Form of Money Market Quote Request Exhibit C - Form of Invitation for Money Market Quotes Exhibit D - Form of Money Market Quote Exhibit E - Opinion of Counsel for the Borrower Exhibit F - Opinion of Davis Polk & Wardwell Special Counsel for the Agent Exhibit G - Assignment and Assumption Agreement THREE-YEAR CREDIT AGREEMENT AGREEMENT dated as of June 1, 1994 among THE PERKIN-ELMER CORPORATION, the BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent. The parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. The following terms, as used herein, have the following meanings: "Absolute Rate Auction" means a solicitation of Money Market Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03. "Adjusted CD Rate" has the meaning set forth in Section 2.07(b). -1- "Adjusted London Interbank Offered Rate" has the meaning set forth in Section 2.07(c). -2- "Administrative Questionnaire" means, with respect to each Bank, an administrative questionnaire in the form prepared by the Agent and submitted to the Agent (with a copy to the Borrower) duly completed by such Bank. "Agent" means Morgan Guaranty Trust Company of New York in its capacity as agent for the Banks hereunder, and its successors in such capacity. "Applicable Lending Office" means, with respect to any Bank, (i) in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its Money Market Loans, its Money Market Lending Office. "Assessment Rate" has the meaning set forth in Section 2.07(b). "Assignee" has the meaning set forth in Section 9.06(c). "Bank" means each bank listed on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective successors. "Base Rate" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day. "Base Rate Loan" means a Committed Loan to be made by a Bank as a Base Rate Loan in accordance with the applicable Notice of Committed Borrowing or pursuant to Article VIII. "Benefit Arrangement" means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group. "Borrower" means The Perkin-Elmer Corporation, a New York corporation, and its successors. "Borrower's 1993 Form 10-K" means the Borrower's annual report on Form 10-K for the transition period from August 1, 1992 through June 30, 1993, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. "Borrower's Latest Form 10-Q" means the Borrower's quarterly report on Form 10-Q for the quarter ended March 31, 1994 as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. "Borrowing" has the meaning set forth in Section 1.03. "CD Base Rate" has the meaning set forth in Section 2.07(b). "CD Loan" means a Committed Loan to be made by a Bank as a CD Loan in accordance with the applicable Notice of Committed Borrowing. "CD Margin" has the meaning set forth in Section 2.07(b). "CD Reference Banks" means Citibank, N.A., Credit Suisse and Morgan Guaranty Trust Company of New York. "Commitment" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof, as such amount may be reduced from time to time pursuant to Sections 2.09 and 2.10. "Committed Loan" means a loan made by a Bank pursuant to Section 2.01. "Consolidated EBIT" means, for any period, the sum (without duplication) of (i) the net operating income of the Borrower for such period plus (ii) interest income of the Borrower for such period, determined in each case on a consolidated basis for the Borrower and its Consolidated Subsidiaries. "Consolidated Interest Expense" means, for any period, the Interest Expense of the Borrower and its Consolidated Subsidiaries determined on a consolidated basis for such period. "Consolidated Subsidiary" means at any date any Subsidiary or other entity the accounts of which would be consolidated with those of the Borrower in its consolidated financial statements if such statements were prepared as of such date. "Consolidated Net Worth" means at any date the consolidated stockholders' equity of the Borrower and its Consolidated Subsidiaries, determined as of such date. "Debt" of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee which are capitalized in accordance with generally accepted accounting principles, (v) all non-contingent obligations (and, for purposes of Section 5.08 and the definitions of Material Debt and Material Financial Obligations, all contingent obligations) of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (vi) all Debt secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person, and (vii) all Debt of others Guaranteed by such Person. -3- "Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Derivatives Obligations" of any Person means all obligations of such Person in respect of any rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions. "Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close. "Domestic Lending Office" means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Agent; provided that any Bank may so designate separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and its CD Loans, on the other hand, in which case all references herein to the Domestic Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require. "Domestic Loans" means CD Loans or Base Rate Loans or both. "Domestic Reserve Percentage" has the meaning set forth in Section 2.07(b). "Effective Date" means the date this Agreement becomes effective in accordance with Section 3.01. "Environmental Laws" means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to the environment, the effect of the environment on human health or to emissions, discharges or -4- releases of pollutants, contaminants, Hazardous Substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Substances or wastes or the clean-up or other remediation thereof. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. "ERISA Group" means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Internal Revenue Code. "Euro-Dollar Business Day" means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London. "Euro-Dollar Lending Office" means, as to each Bank, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Agent. "Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a Euro-Dollar Loan in accordance with the applicable Notice of Committed Borrowing. "Euro-Dollar Margin" has the meaning set forth in Section 2.07(c). "Euro-Dollar Reference Banks" means the principal London offices of Citibank, N.A., Credit Suisse and Morgan Guaranty Trust Company of New York. "Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.07(c). "Event of Default" has the meaning set forth in Section 6.01. -5- "Existing Credit Agreement" means the Credit Agreement dated as of June 7, 1991 among the Borrower, the lenders parties thereto and Bankers Trust Company, as agent, as amended to the Effective Date. "Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Morgan Guaranty Trust Company of New York on such day on such transactions as determined by the Agent. "Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base Rate pursuant to Section 8.01(a)) or any combination of the foregoing. "Guarantee" by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the holder of such Debt of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Hazardous Substances" means any toxic, radioactive, caustic or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics. -6- "Indemnitee" has the meaning set forth in Section 9.03(b). "Interest Coverage Ratio" means, for any period, the ratio of Consolidated EBIT for such period to Consolidated Interest Expense for such period. "Interest Expense" means, with respect to any Person, for any period, the sum, for such Person and its Consolidated Subsidiaries determined on a consolidated basis (without duplication), of all interest on Debt and Derivatives Obligations (including, without limitation, imputed interest on capital lease obligations). "Interest Period" means: (1) with respect to each Euro-Dollar Borrowing, the period commencing on the date of such Borrowing and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable Notice of Borrowing; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall, subject to clause (c) below, be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and (c) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. (2) with respect to each CD Borrowing, the period commencing on the date of such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower may elect in the applicable Notice of Borrowing; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall, subject to clause (b) below, be extended to the next succeeding Euro-Dollar Business Day; and -7- (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. (3) with respect to each Base Rate Borrowing, the period commencing on the date of such Borrowing and ending 30 days thereafter; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall, subject to clause (b) below, be extended to the next succeeding Euro-Dollar Business Day; and (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. (4) with respect to each Money Market LIBOR Borrowing, the period commencing on the date of such Borrowing and ending such whole number of months thereafter as the Borrower may elect in accordance with Section 2.03; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall, subject to clause (c) below, be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and (c) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. (5) with respect to each Money Market Absolute Rate Borrowing, the period commencing on the date of such Borrowing and ending such number of days thereafter (but not less than 14 days) as the Borrower may elect in accordance with Section 2.03; provided that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall, subject to clause (b) below, be extended to the next succeeding Euro-Dollar Business Day; and -8- (b) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, or any successor statute. "Leverage Ratio" means, at any date, the ratio of Total Borrowed Funds at such date to Total Capitalization at such date. "LIBOR Auction" means a solicitation of Money Market Quotes setting forth Money Market Margins based on the London Interbank Offered Rate pursuant to Section 2.03. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset. For the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market Loans or any combination of the foregoing. "London Interbank Offered Rate" has the meaning set forth in Section 2.07(c). "Material Debt" means Debt (other than the Notes) of the Borrower and/or one or more of its Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate principal or face amount exceeding $15,000,000. "Material Financial Obligations" means (i) Material Debt or (ii) net payment obligations in respect of Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate amount exceeding $25,000,000. "Material Plan" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $5,000,000. -9- "Money Market Absolute Rate" has the meaning set forth in Section 2.03(d). "Money Market Absolute Rate Loan" means a loan to be made by a Bank pursuant to an Absolute Rate Auction. "Money Market Lending Office" means, as to each Bank, its Domestic Lending Office or such other office, branch or affiliate of such Bank as it may hereafter designate as its Money Market Lending Office by notice to the Borrower and the Agent; provided that any Bank may from time to time by notice to the Borrower and the Agent designate separate Money Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other hand, in which case all references herein to the Money Market Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require. "Money Market LIBOR Loan" means a loan to be made by a Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant to Section 8.01(a)). "Money Market Loan" means a Money Market LIBOR Loan or a Money Market Absolute Rate Loan. "Money Market Margin" has the meaning set forth in Section 2.03(d). "Money Market Quote" means an offer by a Bank to make a Money Market Loan in accordance with Section 2.03. "Multiemployer Plan" means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period. "Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder. "Notice of Borrowing" means a Notice of Committed Borrowing (as defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in Section 2.03(f)). -10- "Parent" means, with respect to any Bank, any Person controlling such Bank. "Participant" has the meaning set forth in Section 9.06(b). "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Plan" means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group. "Pricing Schedule" means the Schedule attached hereto identified as such. "Prime Rate" means the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York City from time to time as its Prime Rate. "Reference Banks" means the CD Reference Banks or the Euro-Dollar Reference Banks, as the context may require, and "Reference Bank" means any one of such Reference Banks. "Refunding Borrowing" means a Committed Borrowing which, after application of the proceeds thereof, results in no net increase in the outstanding principal amount of Committed Loans made by any Bank. "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Required Banks" means at any time Banks having at least 66 2/3% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes -11- evidencing at least 66 2/3% of the aggregate unpaid principal amount of the Loans. "Revolving Credit Period" means the period from and including the Effective Date to but excluding the Termination Date. "Significant Subsidiary" has the meaning set forth in Regulation S-X promulgated by the Securities and Exchange Commission, as in effect on the date hereof. "Subsidiary" means, as to any Person, any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person; unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower. "Termination Date" means May 30, 1997, or, if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day. "Total Borrowed Funds" means, at any date, the aggregate amount which would appear under the captions "Loans Payable" and "Long-Term Debt" on a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries prepared in accordance with generally accepted accounting principles as of such date. "Total Capitalization" means, at any date, the sum of Total Borrowed Funds at such date plus Consolidated Net Worth at such date. "Unfunded Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA. "United States" means the United States of America, including the States and the District of Columbia, but excluding its territories and possessions. -12- SECTION 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the Borrower's independent public accountants) with the most recent audited consolidated financial statements of the Borrower and its Consolidated Subsidiaries delivered to the Banks; provided that, if the Borrower notifies the Agent that the Borrower wishes to amend any covenant in Article V to eliminate the effect of any change in generally accepted accounting principles on the operation of such covenant (or if the Agent notifies the Borrower that the Required Banks wish to amend Article V for such purpose), then the Borrower's compliance with such covenant shall be determined on the basis of generally accepted accounting principles in effect immediately before the relevant change in generally accepted accounting principles became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Banks. SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the aggregation of Loans of one or more Banks to be made to the Borrower pursuant to Article II on a single date and for a single Interest Period. Borrowings are classified for purposes of this Agreement either by reference to the pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions of Article II under which participation therein is determined (i.e., a "Committed Borrowing" is a Borrowing under Section 2.01 in which all Banks participate in proportion to their Commitments, while a "Money Market Borrowing" is a Borrowing under Section 2.03 in which the Bank participants are determined on the basis of their bids in accordance therewith). ARTICLE II THE CREDITS SECTION 2.01. Commitments to Lend. During the Revolving Credit Period each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make loans to the Borrower pursuant to this Section from time to -13- time in amounts such that the aggregate principal amount of Committed Loans by such Bank at any one time outstanding shall not exceed the amount of its Commitment. Each Borrowing under this Section shall be in an aggregate principal amount of $10,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing may be in the aggregate amount available in accordance with Section 3.02(b)) and shall be made from the several Banks ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, repay, or to the extent permitted by Section 2.11, prepay Loans and reborrow at any time during the Revolving Credit Period under this Section. SECTION 2.02. Notice of Committed Borrowing. The Borrower shall give the Agent notice (a "Notice of Committed Borrowing") not later than 10:15 A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y) the second Domestic Business Day before each CD Borrowing and (z) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying: (a) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing, (b) the aggregate amount of such Borrowing, (c) whether the Loans comprising such Borrowing are to be CD Loans, Base Rate Loans or Euro-Dollar Loans, and (d) in the case of a Fixed Rate Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. SECTION 2.03. Money Market Borrowings. (a) The Money Market Option. In addition to Committed Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this Section, request the Banks during the Revolving Credit Period to make offers to make Money Market Loans to the Borrower. The Banks may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section. (b) Money Market Quote Request. When the Borrower wishes to request offers to make Money Market Loans -14- under this Section, it shall transmit to the Agent by telex or facsimile transmission a Money Market Quote Request substantially in the form of Exhibit B hereto so as to be received no later than 10:00 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic Business Day next preceding the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Agent shall have mutually agreed and shall have notified the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying: (i) the proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate Auction, (ii) the aggregate amount of such Borrowing, which shall be $10,000,000 or a larger multiple of $1,000,000, (iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, and (iv) whether the Money Market Quotes requested are to set forth a Money Market Margin or a Money Market Absolute Rate. The Borrower may request offers to make Money Market Loans for more than one Interest Period in a single Money Market Quote Request. No Money Market Quote Request shall be given within five Euro-Dollar Business Days (or such other number of days as the Borrower and the Agent may agree) of any other Money Market Quote Request. (c) Invitation for Money Market Quotes. Promptly upon receipt of a Money Market Quote Request, the Agent shall send to the Banks by telex or facsimile transmission an Invitation for Money Market Quotes substantially in the form of Exhibit C hereto, which shall constitute an invitation by the Borrower to each Bank to submit Money Market Quotes offering to make the Money Market Loans to which such Money Market Quote Request relates in accordance with this Section. (d) Submission and Contents of Money Market Quotes. (i) Each Bank may submit a Money Market Quote -15- containing an offer or offers to make Money Market Loans in response to any Invitation for Money Market Quotes. Each Money Market Quote must comply with the requirements of this subsection (d) and must be submitted to the Agent by telex or facsimile transmission at its offices specified in or pursuant to Section 9.01 not later than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:15 A.M. (New York City time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Agent shall have mutually agreed and shall have notified the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective); provided that Money Market Quotes submitted by the Agent (or any affiliate of the Agent) in the capacity of a Bank may be submitted, and may only be submitted, if the Agent or such affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than (x) one hour prior to the deadline for the other Banks, in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the other Banks, in the case of an Absolute Rate Auction. Subject to Articles III and VI, any Money Market Quote so made shall be irrevocable except with the written consent of the Agent given on the instructions of the Borrower. (ii) Each Money Market Quote shall be in substantially the form of Exhibit D hereto and shall in any case specify: (A) the proposed date of Borrowing, (B) the principal amount of the Money Market Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Commitment of the quoting Bank, (x) must be $5,000,000 or a larger multiple of $1,000,000, (y) may not exceed the principal amount of Money Market Loans for which offers were requested and (z) may be subject to an aggregate limitation as to the principal amount of Money Market Loans for which offers being made by such quoting Bank may be accepted, (C) in the case of a LIBOR Auction, the margin above or below the applicable London Interbank Offered Rate (the "Money Market Margin") offered for each such Money Market Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate, -16- (D) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market Absolute Rate") offered for each such Money Market Loan, and (E) the identity of the quoting Bank. A Money Market Quote may set forth up to five separate offers by the quoting Bank with respect to each Interest Period specified in the related Invitation for Money Market Quotes. (iii) Any Money Market Quote shall be disregarded if it: (A) is not substantially in conformity with Exhibit D hereto or does not specify all of the information required by subsection (d)(ii); (B) contains qualifying, conditional or similar language; (C) proposes terms other than or in addition to those set forth in the applicable Invitation for Money Market Quotes; or (D) arrives after the time set forth in subsection (d)(i). (e) Notice to Borrower. The Agent shall promptly notify the Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is in accordance with subsection (d) and (y) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Bank with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote. The Agent's notice to the Borrower shall specify (A) the aggregate principal amount of Money Market Loans for which offers have been received for each Interest Period specified in the related Money Market Quote Request, (B) the respective principal amounts and Money Market Margins or Money Market Absolute Rates, as the case may be, so offered and (C) if applicable, limitations on the aggregate principal amount of Money Market Loans for which offers in any single Money Market Quote may be accepted. (f) Acceptance and Notice by Borrower. Not later than 10:15 A.M. (New York City time) on (x) the third -17- Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Agent shall have mutually agreed and shall have notified the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective), the Borrower shall notify the Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to subsection (e). In the case of acceptance, such notice (a "Notice of Money Market Borrowing") shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Money Market Quote in whole or in part; provided that: (i) the aggregate principal amount of each Money Market Borrowing may not exceed the applicable amount set forth in the related Money Market Quote Request, (ii) the principal amount of each Money Market Borrowing must be $10,000,000 or a larger multiple of $1,000,000, (iii) acceptance of offers may only be made on the basis of ascending Money Market Margins or Money Market Absolute Rates, as the case may be, and (iv) the Borrower may not accept any offer that is described in subsection (d)(iii) or that otherwise fails to comply with the requirements of this Agreement. (g) Allocation by Agent. If offers are made by two or more Banks with the same Money Market Margins or Money Market Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which such offers are accepted for the related Interest Period, the principal amount of Money Market Loans in respect of which such offers are accepted shall be allocated by the Agent among such Banks as nearly as possible (in multiples of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate principal amounts of such offers. Determinations by the Agent of the amounts of Money Market Loans shall be conclusive in the absence of manifest error. SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of the contents -18- thereof and of such Bank's share (if any) of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower. (b) Not later than 12:00 Noon (New York City time) on the date of each Borrowing, each Bank participating therein shall (except as provided in subsection (c) of this Section) make available its share of such Borrowing, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.01. Unless the Agent determines that any applicable condition specified in Article III has not been satisfied, the Agent will make the funds so received from the Banks available to the Borrower at the Agent's aforesaid address. (c) If any Bank makes a new Loan hereunder on a day on which the Borrower is to repay all or any part of an outstanding Loan from such Bank, such Bank shall apply the proceeds of its new Loan to make such repayment and only an amount equal to the difference (if any) between the amount being borrowed and the amount being repaid shall be made available by such Bank to the Agent as provided in subsection (b), or remitted by the Borrower to the Agent as provided in Section 2.12, as the case may be. (d) Unless the Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Agent such Bank's share of such Borrowing, the Agent may assume that such Bank has made such share available to the Agent on the date of such Borrowing in accordance with subsections (b) and (c) of this Section 2.04 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Agent, such Bank and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.07 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. SECTION 2.05. Notes. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Applicable Lending Office -19- in an amount equal to the aggregate unpaid principal amount of such Bank's Loans. (b) Each Bank may, by notice to the Borrower and the Agent, request that its Loans of a particular type be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Loans. Each such Note shall be in substantially the form of Exhibit A hereto with appropriate modifications to reflect the fact that it evidences solely Loans of the relevant type. Each reference in this Agreement to the "Note" of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require. (c) Upon receipt of each Bank's Note pursuant to Section 3.01(a), the Agent shall forward such Note to such Bank. Each Bank shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required. SECTION 2.06. Maturity of Loans. Each Loan included in any Borrowing shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Borrowing. SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable for each Interest Period on the last day thereof. Any overdue principal of or interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such day. (b) Each CD Loan shall bear interest on the outstanding principal amount thereof, for each day during the Interest Period applicable thereto, at a rate per annum equal to the sum of the CD Margin for such day plus the -20- Adjusted CD Rate applicable to such Interest Period; provided that if any CD Loan or any portion thereof shall, as a result of clause (2)(b) or (2)(c)(i) of the definition of Interest Period, have an Interest Period of less than 30 days, such portion shall bear interest during such Interest Period at the rate applicable to Base Rate Loans during such period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than 90 days, at intervals of 90 days after the first day thereof. Any overdue principal of or interest on any CD Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the higher of (i) the sum of the CD Margin for such day plus the Adjusted CD Rate applicable to the Interest Period for such Loan and (ii) the rate applicable to Base Rate Loans for such day. "CD Margin" means a rate per annum determined in accordance with the Pricing Schedule. The "Adjusted CD Rate" applicable to any Interest Period means a rate per annum determined pursuant to the following formula: [ CDBR ]* ACDR = [ ---------- ] + AR [ 1.00 - DRP ] ACDR = Adjusted CD Rate CDBR = CD Base Rate DRP = Domestic Reserve Percentage AR = Assessment Rate __________ * The amount in brackets being rounded upward, if necessary, to the next higher 1/100 of 1% The "CD Base Rate" applicable to any Interest Period is the rate of interest determined by the Agent to be the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the first day of such Interest Period by two or more New York certificate of deposit dealers of recognized standing for the purchase at face value from each CD Reference Bank of its certificates of deposit in an amount comparable to the principal amount of the CD Loan of such CD Reference Bank to which such Interest Period applies and having a maturity comparable to such Interest Period. -21- "Domestic Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of new non-personal time deposits in dollars in New York City having a maturity comparable to the related Interest Period and in an amount of $100,000 or more. The Adjusted CD Rate shall be adjusted automatically on and as of the effective date of any change in the Domestic Reserve Percentage. "Assessment Rate" means for any day the annual assessment rate in effect on such day which is payable by a member of the Bank Insurance Fund classified as adequately capitalized and within supervisory subgroup "A" (or a comparable successor assessment risk classification) within the meaning of 12 C.F.R. section 327.3(d) (or any successor provision) to the Federal Deposit Insurance Corporation (or any successor) for such Corporation's (or such successor's) insuring time deposits at offices of such institution in the United States. The Adjusted CD Rate shall be adjusted automatically on and as of the effective date of any change in the Assessment Rate. (c) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during the Interest Period applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such day plus the Adjusted London Interbank Offered Rate applicable to such Interest Period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof. "Euro-Dollar Margin" means a rate per annum determined in accordance with the Pricing Schedule. The "Adjusted London Interbank Offered Rate" applicable to any Interest Period means a rate per annum equal to the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage. The "London Interbank Offered Rate" applicable to any Interest Period means the average (rounded upward, if -22- necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which deposits in dollars are offered to each of the Euro-Dollar Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period. "Euro-Dollar Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). The Adjusted London Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage. (d) Any overdue principal of or interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such day plus the Adjusted London Interbank Offered Rate applicable to the Interest Period for such Loan and (ii) the sum of 2% plus the Euro-Dollar Margin for such day plus the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which one day (or, if such amount due remains unpaid more than three Euro-Dollar Business Days, then for such other period of time not longer than six months as the Agent may select) deposits in dollars in an amount approximately equal to such overdue payment due to each of the Euro-Dollar Reference Banks are offered to such Euro-Dollar Reference Bank in the London interbank market for the applicable period determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day). -23- (e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the London Interbank Offered Rate for such Interest Period (determined in accordance with Section 2.07(c) as if the related Money Market LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the Bank making such Loan in accordance with Section 2.03. Each Money Market Absolute Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by the Bank making such Loan in accordance with Section 2.03. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof. Any overdue principal of or interest on any Money Market Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the Base Rate for such day. (f) The Agent shall determine each interest rate applicable to the Loans hereunder. The Agent shall give prompt notice to the Borrower and the participating Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. (g) Each Reference Bank agrees to use its best efforts to furnish quotations to the Agent as contemplated by this Section. If any Reference Bank does not furnish a timely quotation, the Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.01 shall apply. SECTION 2.08. Fees. (a) Commitment Fee. During the Revolving Credit Period, the Borrower shall pay to the Agent for the account of the Banks ratably in proportion to their Commitments a commitment fee at the Commitment Fee Rate (determined daily in accordance with the Pricing Schedule) on the daily amount by which the aggregate amount of the Commitments exceeds the aggregate outstanding principal amount of the Loans. Such commitment fee shall accrue from and including the Effective Date to but excluding the Termination Date (or earlier date of termination of the Commitments in their entirety). -24- (b) Facility Fee. The Borrower shall pay to the Agent for the account of the Banks ratably a facility fee at the Facility Fee Rate (determined daily in accordance with the Pricing Schedule). Such facility fee shall accrue (i) from and including the Effective Date to but excluding the Termination Date (or earlier date of termination of the Commitments in their entirety), on the daily aggregate amount of the Commitments (whether used or unused) and (ii) from and including the Termination Date or such earlier date of termination to but excluding the date the Loans shall be repaid in their entirety, on the daily aggregate outstanding principal amount of the Loans. (c) Payments. Accrued fees under this Section shall be payable quarterly on each March 31, June 30, September 30 and December 31, and upon the date of termination of the Commitments in their entirety (and, if later, the date the Loans shall be repaid in their entirety). SECTION 2.09. Optional Termination or Reduction of Commitments. During the Revolving Credit Period, the Borrower may, upon at least three Domestic Business Days' notice to the Agent, (i) terminate the Commitments at any time, if no Loans are outstanding at such time or (ii) ratably reduce from time to time by an aggregate amount of $10,000,000 or any larger multiple thereof, the aggregate amount of the Commitments in excess of the aggregate outstanding principal amount of the Loans. SECTION 2.10. Scheduled Termination of Commitments. The Commitments shall terminate on the Termination Date, and any Loans then outstanding (together with accrued interest thereon) shall be due and payable on such date. SECTION 2.11. Optional Prepayments. (a) Subject in the case of any Fixed Rate Borrowing to Section 2.13, the Borrower may, upon at least one Domestic Business Day's notice to the Agent, prepay any Base Rate Borrowing (or any Money Market Borrowing bearing interest at the Base Rate pursuant to Section 8.01(a)), upon at least three Domestic Business Days' notice to the Agent, prepay any CD Borrowing or upon at least three Euro-Dollar Business Days' notice to the Agent, prepay any Euro-Dollar Borrowing, in each case in whole at any time, or from time to time in part in amounts aggregating $10,000,000 or any larger multiple of $1,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied -25- to prepay ratably the Loans of the several Banks included in such Borrowing. (b) Except as provided in Section 2.11(a), the Borrower may not prepay all or any portion of the principal amount of any Money Market Loan prior to the maturity thereof. (c) Upon receipt of a notice of prepayment pursuant to this Section, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share (if any) of such prepayment and such notice shall not thereafter be revocable by the Borrower. SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 12:00 Noon (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 9.01. The Agent will promptly distribute to each Bank its ratable share of each such payment received by the Agent for the account of the Banks. Whenever any payment of principal of, or interest on, the Domestic Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. Whenever any payment of principal of, or interest on, the Money Market Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. (b) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Agent forthwith on demand such amount -26- distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.13. Funding Losses. If the Borrower makes any payment of principal with respect to any Fixed Rate Loan (pursuant to Article II, VI or VIII or otherwise) on any day other than the last day of the Interest Period applicable thereto, or the last day of an applicable period fixed pursuant to Section 2.07(d), or if the Borrower fails to borrow or prepay any Fixed Rate Loans after notice has been given to any Bank in accordance with Section 2.04(a) or 2.11(c), the Borrower shall reimburse each Bank within 15 days after demand for any resulting loss or expense incurred by it (or by an existing or prospective Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or failure to borrow or prepay, provided that such Bank shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. SECTION 2.14. Computation of Interest and Fees. Interest based on the Prime Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). ARTICLE III CONDITIONS SECTION 3.01. Effectiveness. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 9.05): (a) receipt by the Agent of counterparts hereof signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Agent in form satisfactory to it of telegraphic, telex or other -27- written confirmation from such party of execution of a counterpart hereof by such party); (b) receipt by the Agent of a duly executed Note for the account of each Bank dated on or before the Effective Date complying with the provisions of Section 2.05; (c) receipt by the Agent of an opinion of the General Counsel of the Borrower, substantially in the form of Exhibit E hereto and covering such additional matters relating to the transactions contemplated hereby as the Required Banks may reasonably request; (d) receipt by the Agent of an opinion of Davis Polk & Wardwell, special counsel for the Agent, substantially in the form of Exhibit F hereto and covering such additional matters relating to the transactions contemplated hereby as the Required Banks may reasonably request; (e) receipt by the Agent of all documents the Agent may reasonably request relating to the existence of the Borrower, the corporate authority for and the validity of this Agreement and the Notes, and any other matters relevant hereto, all in form and substance satisfactory to the Agent; and (f) receipt by the Agent of evidence satisfactory to it of the payment of all principal of and interest on any loans outstanding under and of all other amounts payable under, and of the termination of all lending commitments under, the Existing Credit Agreement; provided that this Agreement shall not become effective or be binding on any party hereto unless all of the foregoing conditions are satisfied not later than June 7, 1994. The Agent shall promptly notify the Borrower and the Banks of the Effective Date, and such notice shall be conclusive and binding on all parties hereto. SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions: (a) receipt by the Agent of a Notice of Borrowing as required by Section 2.02 or 2.03, as the case may be; (b) the fact that, immediately after such Borrowing, the aggregate outstanding principal amount -28- of the Loans will not exceed the aggregate amount of the Commitments; (c) the fact that, immediately before and after such Borrowing, no Default shall have occurred and be continuing; and (d) the fact that the representations and warranties of the Borrower contained in this Agreement (except, in the case of a Refunding Borrowing, the representations and warranties set forth in Sections 4.04(c) and 4.05 as to any matter which has theretofore been disclosed in writing by the Borrower to the Banks) shall be true on and as of the date of such Borrowing. Each Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section. ARTICLE IV REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants that: SECTION 4.01. Corporate Existence and Power. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of New York, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. SECTION 4.02. Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by the Borrower of this Agreement and the Notes are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or any of its Significant Subsidiaries or result in the creation or imposition of any Lien on any asset of the Borrower or any of its Significant Subsidiaries. -29- SECTION 4.03. Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower and each Note, when executed and delivered in accordance with this Agreement, will constitute a valid and binding obligation of the Borrower, in each case enforceable in accordance with its terms. SECTION 4.04. Financial Information. (a) The consolidated statement of financial position of the Borrower and its Consolidated Subsidiaries as of June 30, 1993 and the related consolidated statements of operations and cash flows for the fiscal year then ended, reported on by Price Waterhouse and set forth in the Borrower's 1993 Form 10-K, a copy of which has been delivered to each of the Banks, fairly present, in conformity with generally accepted accounting principles, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year. (b) The unaudited consolidated statement of financial position of the Borrower and its Consolidated Subsidiaries as of March 31, 1994 and the related unaudited consolidated statements of operations and cash flows for the nine months then ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has been delivered to each of the Banks, fairly present, in conformity with generally accepted accounting principles applied on a basis consistent with the financial statements referred to in subsection (a) of this Section, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such nine month period (subject to normal year-end adjustments). (c) Since March 31, 1994 there has been no material adverse change in the business, financial position or results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole. SECTION 4.05. Litigation. There is no action, suit or proceeding pending against, or to the knowledge of the Borrower threatened against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered -30- as a whole, or which in any manner draws into question the validity of this Agreement or the Notes. SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA. SECTION 4.07. Environmental Matters. In the ordinary course of its business, the Borrower reviews the effect of Environmental Laws on the business, operations and properties of the Borrower and its Subsidiaries, in the course of which it identifies and evaluates associated liabilities and costs (including, without limitation, any capital or operating expenditures required for clean-up or closure of properties presently or previously owned, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, including any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operations conducted thereat, any costs or liabilities in connection with off-site disposal of wastes or Hazardous Substances, and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). On the basis of this review, the Borrower has reasonably concluded that such associated liabilities and costs, including the costs of compliance with Environmental Laws, are unlikely to have a material adverse effect on the business, financial condition, results of operations or prospects of the Borrower and its Consolidated Subsidiaries, considered as a whole. SECTION 4.08. Taxes. The Borrower and its Subsidiaries have filed all United States Federal income tax returns and all other material tax returns which are required to be filed by them and have paid all taxes due -31- pursuant to such returns or pursuant to any assessment received by the Borrower or any Subsidiary, except taxes being contested in good faith and by appropriate proceedings. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate. SECTION 4.09. Subsidiaries. Each of the Borrower's Significant Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. SECTION 4.10. Not an Investment Company. The Borrower is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. SECTION 4.11. Full Disclosure. All information heretofore furnished by the Borrower to the Agent or any Bank for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Borrower to the Agent or any Bank will be, true and accurate in all material respects on the date as of which such information is stated or certified. The Borrower has disclosed to the Banks in writing any and all facts which materially and adversely affect or may affect (to the extent the Borrower can now reasonably foresee), the business, operations or financial condition of the Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to perform its obligations under this Agreement. ARTICLE V COVENANTS The Borrower agrees that, so long as any Bank has any Commitment hereunder or any amount payable under any Note remains unpaid: SECTION 5.01. Information. The Borrower will deliver to each of the Banks: (a) as soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, a consolidated statement of financial -32- position of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of operations and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner acceptable to the Securities and Exchange Commission by independent public accountants of nationally recognized standing; (b) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Borrower, a consolidated statement of financial position of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of operations and cash flows for such quarter and for the portion of the Borrower's fiscal year ended at the end of such quarter, setting forth in the case of such statements of operations and cash flows in comparative form the figures for the corresponding quarter and the corresponding portion of the Borrower's previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation, generally accepted accounting principles and consistency by the chief financial officer or the chief accounting officer of the Borrower; (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer or the chief accounting officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.07 and 5.11 on the date of such financial statements, (ii) setting forth a calculation of the Leverage Ratio as at the date of such financial statements and the Interest Coverage Ratio for the period of four consecutive fiscal quarters then ended and (iii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (d) within five days after any officer of the Borrower obtains knowledge of any Default, if such Default is then continuing, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth the details thereof and the -33- action which the Borrower is taking or proposes to take with respect thereto; (e) promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed; (f) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower shall have filed with the Securities and Exchange Commission; (g) if and when any member of the ERISA Group (i) gives, either on a mandatory or a voluntary basis, notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given, either on a mandatory or a voluntary basis, notice of any such reportable event, a copy of the notice of such reportable event given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth details as to such occurrence and action, if any, which the Borrower or applicable member of the ERISA Group is required or proposes to take; and -34- (h) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries as the Agent, at the request of any Bank, may reasonably request. SECTION 5.02. Payment of Obligations. The Borrower will pay and discharge, and will cause each Significant Subsidiary to pay and discharge, at or before maturity, all their respective material obligations and liabilities, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings, and will maintain, and will cause each Significant Subsidiary to maintain, in accordance with generally accepted accounting principles, appropriate reserves for the accrual of any of the same. SECTION 5.03. Maintenance of Property; Insurance. (a) The Borrower will keep, and will cause each Significant Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted. (b) The Borrower will, and will cause each Significant Subsidiary to, maintain (either in the name of the Borrower or in such Significant Subsidiary's own name) with financially sound and responsible insurance companies, insurance on all their respective properties in at least such amounts and against at least such risks (and with such risk retention) as are usually insured against in the same general area by companies of established repute engaged in the same or a similar business. SECTION 5.04. Conduct of Business and Maintenance of Existence. The Borrower will continue, and will cause each Significant Subsidiary to continue, to engage in business of the same general type as now conducted by the Borrower and its Subsidiaries, and will preserve, renew and keep in full force and effect, and will cause each Significant Subsidiary to preserve, renew and keep in full force and effect their respective corporate existence and their respective rights, privileges and franchises necessary or desirable in the normal conduct of business; provided that nothing in this Section 5.04 shall prohibit (i) the merger of a Subsidiary into the Borrower or the merger or consolidation of a Subsidiary with or into another Person if the corporation surviving such consolidation or merger is a Subsidiary and if, in each case, after giving effect thereto, no Default shall have occurred and be continuing or (ii) the termination of the corporate existence of any Subsidiary if the Borrower in good faith determines that -35- such termination is in the best interest of the Borrower and is not materially disadvantageous to the Banks. SECTION 5.05. Compliance with Laws. The Borrower will comply, and cause each Subsidiary to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, Environmental Laws and ERISA and the rules and regulations thereunder) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings. SECTION 5.06. Inspection of Property, Books and Records. The Borrower will keep, and will cause each Significant Subsidiary to keep, proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities; and will permit, and will cause each Significant Subsidiary to permit, representatives of any Bank at such Bank's expense to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants, all at such reasonable times and as often as may reasonably be desired. SECTION 5.07. Minimum Consolidated Net Worth. Consolidated Net Worth will at no time be less than $200,000,000. SECTION 5.08. Negative Pledge. Neither the Borrower nor any Significant Subsidiary will create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except: (a) Liens existing on the date of this Agreement securing Debt outstanding on the date of this Agreement in an aggregate principal or face amount not exceeding $25,000,000; (b) any Lien existing on any asset of any corporation at the time such corporation becomes a Subsidiary and not created in contemplation of such event; (c) any Lien on any asset securing Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring such asset, provided that such Lien attaches to such asset concurrently with or within 90 days after the acquisition thereof; -36- (d) any Lien on any asset of any corporation existing at the time such corporation is merged or consolidated with or into the Borrower or a Subsidiary and not created in contemplation of such event; (e) any Lien existing on any asset prior to the acquisition thereof by the Borrower or a Subsidiary and not created in contemplation of such acquisition; (f) any Lien arising out of the refinancing, extension, renewal or refunding of any Debt secured by any Lien permitted by any of the foregoing clauses of this Section, provided that such Debt is not increased and is not secured by any additional assets; (g) Liens arising in the ordinary course of its business which (i) do not secure Debt or Derivatives Obligations, (ii) do not secure any obligation in an amount exceeding $25,000,000 and (iii) do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business; (h) Liens on cash and cash equivalents securing Derivatives Obligations, provided that the aggregate amount of cash and cash equivalents subject to such Liens may at no time exceed $10,000,000; and (i) Liens not otherwise permitted by the foregoing clauses of this Section securing Debt in an aggregate principal or face amount at any date not to exceed 7.5% of Consolidated Net Worth. SECTION 5.09. Consolidations, Mergers and Sales of Assets. The Borrower will not (i) consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer, directly or indirectly, all or substantially all of its assets to any other Person; provided, that the Borrower may merge with another Person if (A) the Borrower is the corporation surviving such merger and (B) immediately after giving effect to such merger, no Default shall have occurred and be continuing. SECTION 5.10. Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for its general corporate purposes. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any "margin stock" within the meaning of Regulation U. -37- SECTION 5.11. Interest Coverage. The Interest Coverage Ratio will not, for any period of four consecutive fiscal quarters, be less than 2.0 to 1. ARTICLE VI DEFAULTS SECTION 6.01. Events of Default. If one or more of the following events ("Events of Default") shall have occurred and be continuing: (a) the Borrower shall fail to pay when due any principal of any Loan or shall fail to pay within five days of the due date thereof any interest on any Loan, any fees or any other amount payable hereunder; (b) the Borrower shall fail to observe or perform any covenant contained in Sections 5.07 to 5.11, inclusive; (c) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a) or (b) above) for 10 days after notice thereof has been given to the Borrower by the Agent at the request of any Bank; (d) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made (or deemed made); (e) the Borrower or any Subsidiary shall fail to make any payment in respect of any Material Financial Obligations when due or, if later, within any applicable grace period; (f) any event or condition shall occur which results in the acceleration of the maturity of or the termination of the commitment in respect of any Material Financial Obligations or enables the holder of such Material Financial Obligations or any Person acting on such holder's behalf to accelerate the maturity thereof or terminate the commitment in respect thereof; -38- (g) the Borrower or any Significant Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; (h) an involuntary case or other proceeding shall be commenced against the Borrower or any Significant Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Borrower or any Significant Subsidiary under the federal bankruptcy laws as now or hereafter in effect; (i) any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $5,000,000 which it shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more -39- members of the ERISA Group to incur a current payment obligation in excess of $5,000,000; (j) judgments or orders for the payment of money in excess of $20,000,000 in the aggregate shall be rendered against the Borrower or any Subsidiary and such judgments or orders shall continue unsatisfied and unstayed for a period of 10 days; or (k) any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) of 20% or more of the outstanding shares of common stock of the Borrower; or, during any period of 12 consecutive calendar months, individuals who were directors of the Borrower on the first day of such period shall cease to constitute a majority of the board of directors of the Borrower; then, and in every such event, the Agent shall (i) if requested by Banks having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Banks holding Notes evidencing more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Notes (together with accrued interest thereon) to be, and the Notes shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided that in the case of any of the Events of Default specified in clause (g) or (h) above with respect to the Borrower, without any notice to the Borrower or any other act by the Agent or the Banks, the Commitments shall thereupon terminate and the Notes (together with accrued interest thereon) shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. SECTION 6.02. Notice of Default. The Agent shall give notice to the Borrower under Section 6.01(c) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks thereof. -40- ARTICLE VII THE AGENT SECTION 7.01. Appointment and Authorization. Each Bank irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the Notes as are delegated to the Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company of New York shall have the same rights and powers under this Agreement as any other Bank and may exercise or refrain from exercising the same as though it were not the Agent, and Morgan Guaranty Trust Company of New York and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or affiliate of the Borrower as if it were not the Agent hereunder. SECTION 7.03. Action by Agent. The obligations of the Agent hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, the Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article VI. SECTION 7.04. Consultation with Experts. The Agent may consult with legal counsel (who may be counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 7.05. Liability of Agent. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower; (iii) the satisfaction of any condition specified -41- in Article III, except receipt of items required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes or any other instrument or writing furnished in connection herewith. The Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex, facsimile transmission or similar writing) believed by it to be genuine or to be signed by the proper party or parties. SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance with its Commitment, indemnify the Agent, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or any action taken or omitted by such indemnitees hereunder. SECTION 7.07. Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement. SECTION 7.08. Successor Agent. The Agent may resign at any time by giving notice thereof to the Banks and the Borrower. Upon any such resignation, the Required Banks shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within 30 days after the retiring Agent gives notice of resignation, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of its appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After -42- any retiring Agent's resignation hereunder as Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent. SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent for its own account fees in the amounts and at the times previously agreed upon between the Borrower and the Agent. ARTICLE VIII CHANGE IN CIRCUMSTANCES SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period for any Fixed Rate Borrowing: (a) the Agent is advised by the Reference Banks that deposits in dollars (in the applicable amounts) are not being offered to the Reference Banks in the relevant market for such Interest Period, or (b) in the case of a Committed Borrowing, Banks having 50% or more of the aggregate amount of the Commitments advise the Agent that the Adjusted CD Rate or the Adjusted London Interbank Offered Rate, as the case may be, as determined by the Agent will not adequately and fairly reflect the cost to such Banks of funding their CD Loans or Euro-Dollar Loans, as the case may be, for such Interest Period, the Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Banks to make CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended. Unless the Borrower notifies the Agent at least two Domestic Business Days before the date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, (i) if such Fixed Rate Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear interest for each day from and including the first day to but excluding the last day of the Interest Period applicable thereto at the Base Rate for such day. -43- SECTION 8.02. Illegality. If, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice to the Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine that it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower shall immediately prepay in full the then outstanding principal amount of each such Euro-Dollar Loan, together with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate Loan. SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after (x) the date hereof, in the case of any Committed Loan or any obligation to make Committed Loans or (y) the date of the related Money Market Quote, in the case of any Money Market Loan, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, -44- without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding (i) with respect to any CD Loan any such requirement included in an applicable Domestic Reserve Percentage and (ii) with respect to any Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar Reserve Percentage), special deposit, insurance assessment (excluding, with respect to any CD Loan, any such requirement reflected in an applicable Assessment Rate) or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office) or on the United States market for certificates of deposit or the London interbank market any other condition affecting its Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction. (b) If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction. -45- (c) Each Bank will promptly notify the Borrower and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Bank may use any reasonable averaging and attribution methods. SECTION 8.04. Taxes. (a) For purposes of this Section 8.04, the following terms have the following meanings: "Taxes" means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings with respect to any payment by the Borrower pursuant to this Agreement or under any Note, and all liabilities with respect thereto, excluding (i) in the case of each Bank and the Agent, taxes imposed on its income, and franchise or similar taxes imposed on it, by a jurisdiction under the laws of which such Bank or the Agent (as the case may be) is organized or in which its principal executive office is located or, in the case of each Bank, in which its Applicable Lending Office is located and (ii) in the case of each Bank, any United States withholding tax imposed on such payments but only to the extent that such Bank is subject to United States withholding tax at the time such Bank first becomes a party to this Agreement. "Other Taxes" means any present or future stamp or documentary taxes and any other excise or property taxes, or similar charges or levies, which arise from any payment made pursuant to this Agreement or under any Note or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note. (b) Any and all payments by the Borrower to or for the account of any Bank or the Agent hereunder or under any Note shall be made without deduction for any Taxes or Other Taxes; provided that, if the Borrower shall be required by law to deduct any Taxes or Other Taxes from any such payments, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 8.04) such Bank or the Agent (as the case -46- may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) the Borrower shall furnish to the Agent, at its address referred to in Section 9.01, the original or a certified copy of a receipt evidencing payment thereof. (c) The Borrower agrees to indemnify each Bank and the Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 8.04) paid by such Bank or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be paid within 15 days after such Bank or the Agent (as the case may be) makes demand therefor. (d) Each Bank organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Bank listed on the signature pages hereof and on or prior to the date on which it becomes a Bank in the case of each other Bank, and from time to time thereafter if requested in writing by the Borrower (but only so long as such Bank remains lawfully able to do so), shall provide the Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Bank is entitled to benefits under an income tax treaty to which the United States is a party which exempts the Bank from United States withholding tax or reduces the rate of withholding tax on payments of interest for the account of such Bank or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States. (e) For any period with respect to which a Bank has failed to provide the Borrower with the appropriate form pursuant to Section 8.04(d) (unless such failure is due to a change in treaty, law or regulation occurring subsequent to the date on which such form originally was required to be provided), such Bank shall not be entitled to indemnification under Section 8.04(b) or (c) with respect to Taxes imposed by the United States; provided that if a Bank, which is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrower -47- shall take such steps as such Bank shall reasonably request to assist such Bank to recover such Taxes. (f) If the Borrower is required to pay additional amounts to or for the account of any Bank pursuant to this Section 8.04, then such Bank will change the jurisdiction of its Applicable Lending Office if, in the judgment of such Bank, such change (i) will eliminate or reduce any such additional payment which may thereafter accrue and (ii) is not otherwise disadvantageous to such Bank. SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03 or 8.04 with respect to its CD Loans or Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such Bank through the Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist: (a) all Loans which would otherwise be made by such Bank as CD Loans or Euro-Dollar Loans, as the case may be, shall be made instead as Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Fixed Rate Loans of the other Banks), and (b) after each of its CD Loans or Euro-Dollar Loans, as the case may be, has been repaid, all payments of principal which would otherwise be applied to repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans instead. SECTION 8.06. Substitution of Bank. If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03 or 8.04, the Borrower shall have the right, with the assistance of the Agent, to seek a mutually satisfactory substitute bank or banks (which may be one or more of the Banks) to purchase the Note and assume the Commitment of such Bank. -48- ARTICLE IX MISCELLANEOUS SECTION 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower or the Agent, at its address, facsimile number or telex number set forth on the signature pages hereof, (y) in the case of any Bank, at its address, facsimile number or telex number set forth in its Administrative Questionnaire or (z) in the case of any party, such other address, facsimile number or telex number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in this Section and the appropriate answerback is received, (ii) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received, (iii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address specified in this Section; provided that notices to the Agent under Article II or Article VIII shall not be effective until received. SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank in exercising any right, power or privilege hereunder or under any Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent, including fees and disbursements of special counsel for the Agent, in connection with the preparation and administration of this Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by the Agent and each Bank, including (without duplication) the fees and disbursements of outside counsel and the allocated cost of inside counsel, in connection with such Event of Default and -49- collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. (b) The Borrower agrees to indemnify the Agent and each Bank, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or any actual or proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct as determined by a court of competent jurisdiction. SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest due with respect to any Note held by it which is greater than the proportion received by any other Bank in respect of the aggregate amount of principal and interest due with respect to any Note held by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Notes held by the other Banks, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks shall be shared by the Banks pro rata; provided that nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness hereunder. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Note, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation. SECTION 9.05. Amendments and Waivers. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks -50- (and, if the rights or duties of the Agent are affected thereby, by the Agent); provided that no such amendment or waiver shall, unless signed by all the Banks, (i) increase or decrease the Commitment of any Bank (except for a ratable decrease in the Commitments of all Banks) or subject any Bank to any additional obligation, (ii) reduce the principal of, accrued interest on, or rate of interest on any Loan or any fees hereunder, (iii) postpone the date fixed for any payment of principal of or interest on any Loan or any fees hereunder or for any reduction or termination of any Commitment, (iv) change the aggregate amount by which or to which the Commitments are required to be reduced on or prior to any Commitment Reduction Date or (v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement. SECTION 9.06. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of all Banks. (b) Any Bank may at any time grant to one or more banks or other institutions (each a "Participant") participating interests in its Commitment or any or all of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Agent, such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii), (iii) or (iv) of Section 9.05 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article VIII with respect to its participating interest. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given -51- effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (b). (c) Any Bank may at any time assign to one or more banks or other institutions (each an "Assignee") all, or a proportionate part of all, of its rights and obligations under this Agreement and the Notes, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit G hereto executed by such Assignee and such transferor Bank, with (and subject to) the subscribed consent of the Borrower and the Agent; provided that if an Assignee is an affiliate of such transferor Bank or was a Bank immediately prior to such assignment, no such consent shall be required; and provided further that such assignment may, but need not, include rights of the transferor Bank in respect of outstanding Money Market Loans. Upon execution and delivery of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to the Assignee. In connection with any such assignment, the transferor Bank shall pay to the Agent an administrative fee for processing such assignment in the amount of $2,500. If the Assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to the Borrower and the Agent certification as to exemption from deduction or withholding of any United States federal income taxes in accordance with Section 8.04. (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and its Note to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder. (e) No Assignee, Participant or other transferee of any Bank's rights shall be entitled to receive any greater payment under Section 8.03 or 8.04 than such Bank would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the Borrower's prior written consent or by reason of the -52- provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to designate a different Applicable Lending Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist. SECTION 9.07. Collateral. Each of the Banks represents to the Agent and each of the other Banks that it in good faith is not relying upon any "margin stock" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement. SECTION 9.08. Governing Law; Submission to Jurisdiction. This Agreement and each Note shall be governed by and construed in accordance with the laws of the State of New York. The Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 9.09. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. -53- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. THE PERKIN-ELMER CORPORATION By /s/ William F. Emswiler Title: Vice President, Finance 761 Main Avenue Norwalk, Connecticut 06859-0001 Telex number: 965954 Facsimile number: (203) 761-5000 Commitments $20,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Sandra J.S. Kurek Title: Associate $20,000,000 CITIBANK, N.A. By /s/ James M. Walsh Title: Attorney-in-Fact $20,000,000 CREDIT SUISSE By /s/ Lynn Allegaert Title: Member of Senior Management By /s/ Demian M. Gage Title: Associate $10,000,000 BANQUE NATIONALE DE PARIS By /s/ Eric Vigne Title: Senior Vice President By /s/ Sophie Revillard Kaufman Title: Vice President $10,000,000 CHEMICAL BANK By /s/ Edmond DeForest Title: Vice President $10,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED By /s/ Takeshi Kawano Title: Senior Vice President $10,000,000 WACHOVIA BANK OF GEORGIA, N.A. By /s/ Linda M. Harris Title: Senior Vice President _________________ Total Commitments $100,000,000 ================= MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Sandra J.S. Kurek Title: Associate 60 Wall Street New York, New York 10260-0060 Attention: Loan Department Telex number: 177615 MGT UT Facsimile number: (212) 648-5014 PRICING SCHEDULE The "Euro-Dollar Margin", "CD Margin", "Commitment Fee Rate" and "Facility Fee Rate" for any day are the respective percentages set forth below in the applicable row under the column corresponding to the Status that exists on such day: Level Level Level Level Level Status I II III IV V Euro-Dollar Margin 0.2375% 0.275% 0.350% 0.375% 0.500% CD Margin 0.3625% 0.400% 0.475% 0.500% 0.625% Commitment Fee Rate 0.025% 0.025% 0.050% 0.050% 0.0625% Facility Fee Rate 0.075% 0.100% 0.100% 0.175% 0.250% For purposes of this Schedule, the following terms have the following meanings: "Level I Status" exists at any date if, at such date, the Applicable Leverage Ratio is equal to or less than 0.25 and the Applicable Interest Coverage Ratio is equal to or greater than 8.0. "Level II Status" exists at any date if, at such date, (i) the Applicable Leverage Ratio is equal to or less than 0.33 and the Applicable Interest Coverage Ratio is equal to or greater than 6.0 and (ii) Level I Status does not exist. "Level III Status" exists at any date if, at such date, (i) the Applicable Leverage Ratio is equal to or less than 0.375 and the Applicable Interest Coverage Ratio is equal to or greater than 4.5 and (ii) neither Level I Status nor Level II Status exists. -1- "Level IV Status" exists at any date if, at such date, (i) the Applicable Leverage Ratio is equal to or less than 0.47 and the Applicable Interest Coverage Ratio is equal or greater than 3.0 and (ii) none of Level I Status, Level II Status and Level III Status exists. "Level V Status" exists at any date if, at such date, no other Status exists. "Applicable Interest Coverage Ratio" means, with respect to each day during any Quarter, the Interest Coverage Ratio for the period of four consecutive Quarters ending with the immediately preceding Quarter. "Applicable Leverage Ratio" means, for each day during any Quarter, the Leverage Ratio as at the last day of the immediately preceding Quarter. "Quarter" means each period of three consecutive calendar months consisting of (i) January, February and March; (ii) April, May and June; (iii) July, August and September and (iv) October, November and December. "Status" refers to the determination of which of Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status exists at any date. The Applicable Leverage Ratio and Applicable Interest Coverage Ratio for each Quarter shall be determined initially on the basis of an estimate which shall be furnished by the Borrower to the Agent not later than the earlier of (i) the 60th day of such Quarter and (ii) the tenth day prior to the first day (if any) during such Quarter on which interest is payable in respect of Euro- Dollar Loans or CD Loans. If when finally determined the actual Applicable Leverage Ratio or Applicable Interest Coverage Ratio differs from the estimate, appropriate adjustments shall be made as determined by the Agent. -2- EXHIBIT A NOTE New York, New York , 19 For value received, The Perkin-Elmer Corporation, a New York corporation (the "Borrower"), promises to pay to the order of (the "Bank"), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below on the last day of the Interest Period relating to such Loan. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, New York. All Loans made by the Bank, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Bank and, if the Bank so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This note is one of the Notes referred to in the Three-Year Credit Agreement dated as of June 1, 1994 among -1- the Borrower, the banks listed on the signature pages thereof and Morgan Guaranty Trust Company of New York, as Agent (as the same may be amended from time to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof. THE PERKIN-ELMER CORPORATION By________________________ Title: -2- Note (cont'd) LOANS AND PAYMENTS OF PRINCIPAL __________________________________________________________________ Amount of Amount of Type of Principal Maturity Notation Date Loan Loan Repaid Date Made By __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ -3- EXHIBIT B Form of Money Market Quote Request [Date] To: Morgan Guaranty Trust Company of New York (the "Agent") From: The Perkin-Elmer Corporation Re: Three-Year Credit Agreement (the "Credit Agreement") dated as of June 1, 1994 among the Borrower, the Banks listed on the signature pages thereof and the Agent We hereby give notice pursuant to Section 2.03 of the Credit Agreement that we request Money Market Quotes for the following proposed Money Market Borrowing(s): Date of Borrowing: __________________ Principal Amount Interest Period $ Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.] -1- Terms used herein have the meanings assigned to them in the Credit Agreement. THE PERKIN-ELMER CORPORATION By________________________ Title: -2- EXHIBIT C Form of Invitation for Money Market Quotes To: [Name of Bank] Re: Invitation for Money Market Quotes to The Perkin-Elmer Corporation (the "Borrower") Pursuant to Section 2.03 of the Three-Year Credit Agreement dated as of June 1, 1994 among the Borrower, the Banks parties thereto and the undersigned, as Agent, we are pleased on behalf of the Borrower to invite you to submit Money Market Quotes to the Borrower for the following proposed Money Market Borrowing(s): Date of Borrowing: __________________ Principal Amount Interest Period $ Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.] Please respond to this invitation by no later than [2:00 P.M.] [9:15 A.M.] (New York City time) on [date]. MORGAN GUARANTY TRUST COMPANY OF NEW YORK By______________________ Authorized Officer EXHIBIT D Form of Money Market Quote To: Morgan Guaranty Trust Company of New York, as Agent Re: Money Market Quote to The Perkin-Elmer Corporation (the "Borrower") In response to your invitation on behalf of the Borrower dated _____________, 19__, we hereby make the following Money Market Quote on the following terms: 1. Quoting Bank: ________________________________ 2. Person to contact at Quoting Bank: _____________________________ 3. Date of Borrowing: ____________________* 4. We hereby offer to make Money Market Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates: Principal Interest Money Market Amount** Period*** [Margin****] [Absolute Rate*****] $ $ [Provided, that the aggregate principal amount of Money Market Loans for which the above offers may be accepted shall not exceed $____________.]** __________ * As specified in the related Invitation. ** Principal amount bid for each Interest Period may not exceed principal amount requested. Specify aggregate limitation if the sum of the individual offers exceeds the amount the Bank is willing to lend. Bids must be made for $5,000,000 or a larger multiple of $1,000,000. (notes continued on following page) We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Three-Year Credit Agreement dated as of June 1, 1994 among the Borrower, the Banks listed on the signature pages thereof and yourselves, as Agent, irrevocably obligates us to make the Money Market Loan(s) for which any offer(s) are accepted, in whole or in part. Very truly yours, [NAME OF BANK] Dated:_______________ By:__________________________ Authorized Officer __________ *** Not less than one month or not less than 30 days, as specified in the related Invitation. No more than five bids are permitted for each Interest Period. **** Margin over or under the London Interbank Offered Rate determined for the applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%) and specify whether "PLUS" or "MINUS". ***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%). EXHIBIT E OPINION OF WILLIAM B. SAWCH COUNSEL FOR THE BORROWER To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: I am Vice President, General Counsel and Secretary of, and have acted as counsel to, The Perkin-Elmer Corporation (the "Borrower") in connection with the Three- Year Credit Agreement (the "Credit Agreement") dated as of June 1, 1994 among the Borrower, the banks listed on the signature pages thereof and Morgan Guaranty Trust Company of New York, as Agent. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you at the request of my client pursuant to Section 3.01(c) of the Credit Agreement. I, or persons acting under my supervision, have examined originals or copies, certified or otherwise identified to my satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, I am of the opinion that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of New York, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. -1- 2. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument known by me to be binding upon the Borrower or any of its Significant Subsidiaries or result in the creation or imposition of any Lien on any asset of the Borrower or any of its Significant Subsidiaries. 3. The Credit Agreement constitutes a valid and binding agreement of the Borrower and each Note constitutes a valid and binding obligation of the Borrower, in each case enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and by general principles of equity. 4. There is no action, suit or proceeding pending against, or to the best of my knowledge threatened against or affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official, in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or consolidated results of operations of the Borrower and its Consolidated Subsidiaries, considered as a whole or which in any manner draws into question the validity of the Credit Agreement or the Notes. 5. Each of the Borrower's Significant Subsidiaries is a corporation validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. Very truly yours, -2- EXHIBIT F OPINION OF DAVIS POLK & WARDWELL, SPECIAL COUNSEL FOR THE AGENT To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: We have participated in the preparation of the Three-Year Credit Agreement (the "Credit Agreement") dated as of June 1, 1994 among The Perkin-Elmer Corporation, a New York corporation (the "Borrower"), the banks listed on the signature pages thereof (the "Banks") and Morgan Guaranty Trust Company of New York, as Agent (the "Agent"), and have acted as special counsel for the Agent for the purpose of rendering this opinion pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined. We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that: 1. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower's corporate powers and have been duly authorized by all necessary corporate action. -1- 2. The Credit Agreement constitutes a valid and binding agreement of the Borrower and each Note constitutes a valid and binding obligation of the Borrower, in each case enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and by general principles of equity. We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York and the federal laws of the United States of America. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other person without our prior written consent. Very truly yours, -2- EXHIBIT G ASSIGNMENT AND ASSUMPTION AGREEMENT AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"), THE PERKIN-ELMER CORPORATION (the "Borrower") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates to the Three-Year Credit Agreement dated as of June 1, 1994 among the Borrower, the Assignor and the other Banks party thereto, as Banks, and the Agent (the "Credit Agreement"); WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Loans to the Borrower in an aggregate principal amount at any time outstanding not to exceed $__________; WHEREAS, Committed Loans made to the Borrower by the Assignor under the Credit Agreement in the aggregate principal amount of $__________ are outstanding at the date hereof; and WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor under the Credit Agreement in respect of a portion of its Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"), together with a corresponding portion of its outstanding Committed Loans, and the Assignee proposes to accept assignment of such rights and assume the corresponding obligations from the Assignor on such terms; NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows: SECTION 1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement. -1- SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount, and the Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the Assignor under the Credit Agreement to the extent of the Assigned Amount, including the purchase from the Assignor of the corresponding portion of the principal amount of the Committed Loans made by the Assignor outstanding at the date hereof. Upon the execution and delivery hereof by the Assignor, the Assignee[, the Borrower and the Agent] and the payment of the amounts specified in Section 3 required to be paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the obligations of a Bank under the Credit Agreement with a Commitment in an amount equal to the Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced by a like amount and the Assignor released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee. The assignment provided for herein shall be without recourse to the Assignor. SECTION 3. Payments. As consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds the amount heretofore agreed between them. It is understood that commitment and/or facility fees with respect to the Assigned Amount accrued to the date hereof are for the account of the Assignor and such fees accruing from and including the date hereof are for the account of the Assignee. Each of the Assignor and the Assignee hereby agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party's interest therein and shall promptly pay the same to such other party. [SECTION 4. Consent of the Borrower and the Agent. This Agreement is conditioned upon the consent of the Borrower and the Agent pursuant to Section 9.06(c) of the Credit Agreement. The execution of this Agreement by -2- the Borrower and the Agent is evidence of this consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and deliver a Note payable to the order of the Assignee to evidence the assignment and assumption provided for herein.] SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in connection with, and shall have no responsibility with respect to, the solvency, financial condition, or statements of the Borrower, or the validity and enforceability of the obligations of the Borrower in respect of the Credit Agreement or any Note. The Assignee acknowledges that it has, independently and without reliance on the Assignor, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making its own independent appraisal of the business, affairs and financial condition of the Borrower. SECTION 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. [ASSIGNOR] By_________________________ Title: [ASSIGNEE] By__________________________ Title: THE PERKIN-ELMER CORPORATION By__________________________ Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By__________________________ Title: -3- AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT dated as of July 20, 1995 among THE PERKIN- ELMER CORPORATION (the "Borrower"), the BANKS party hereto (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent"). W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Three-Year Credit Agreement dated as of June 1, 1994 (the "Agreement"); and WHEREAS, the parties hereto desire to amend the Agreement to modify the rates of interest and fees payable thereunder and to extend the term thereof; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendment of the Agreement. The Agreement is amended as follows: (a) The phrase "Three-Year Credit Agreement" appearing on the cover page of the Agreement is changed to "Five-Year Credit Agreement", and each other reference to "Three-Year Credit Agreement" in the Agreement is changed to "Five-Year Credit Agreement." (b) The following definition of "Consolidated Unrestricted Excess Cash" is added to Section 1.01: "Consolidated Unrestricted Excess Cash" means, at any date, the excess, if any, of (i) the consolidated cash and cash equivalents of the Borrower and its Consolidated Subsidiaries, exclusive of (x) any portion thereof the availability of which to the Borrower is subject to any material contractual or other legal restriction, whether or not constituting a Lien or (y) in the case of cash held in jurisdictions with a withholding or similar tax in excess of 35%, the portion thereof which would be required to be applied to payment of such taxes upon remittance thereof to the Borrower, all determined as of such date over (ii) $30,000,000. -1- (c) The term "Total Borrowed Funds" appearing in the definition of "Leverage Ratio" in Section 1.01 is changed to "Total Net Borrowed Funds." (d) The date "May 30, 1997" appearing in the definition of "Termination Date" in Section 1.01 is changed to "June 1, 2000." (e) The definition of "Total Borrowed Funds" in Section 1.01 is replaced with the following definition of "Total Net Borrowed Funds": "Total Net Borrowed Funds" means, at any date, (i) the aggregate amount which would appear under the captions "Loans Payable" and "Long-Term Debt" on a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries prepared in accordance with generally accepted accounting principles as of such date minus (ii) Consolidated Unrestricted Excess Cash at such date. (f) The term "Total Borrowed Funds" appearing in the definition of "Total Capitalization" in Section 1.01 is changed to "Total Net Borrowed Funds." (g) The Pricing Schedule is amended to read in its entirety as set forth in Exhibit I to this Amendment. SECTION 3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 4. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and each of the Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. -2- THE PERKIN-ELMER CORPORATION By /s/ Stephen O. Jaeger Title: Vice President, Finance Commitments: $20,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Penelope J. B. Cox Title: Vice President $20,000,000 CITIBANK, N.A. By /s/ James Walsh Title: Attorney-in-fact $20,000,000 CREDIT SUISSE By /s/ Lynn Allegaert Title: Member of Senior Management By /s/ David W. Kratovil Title: Member of Senior Management $10,000,000 BANQUE NATIONAL DE PARIS By /s/ Sophie Kaufman Title: Vice President -3- By /s/ Richard L. Sted Title: Senior Vice President $10,000,000 CHEMICAL BANK By /s/ John J. Huber Title: Managing Director $10,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED By /s/ John V. Veltri Title: Senior Vice President $10,000,000 WACHOVIA BANK OF GEORGIA, N.A. By /s/ Samuel P. Moss Title: Senior Vice President Total Commitments $100,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Penelope J. B. Cox Title: Vice President -4- EX-10 3 EXHIBIT 10(7) DEFERRED COMPENSATION CONTRACT DEFERRED COMPENSATION CONTRACT AGREEMENT entered into as of September 15, 1994, between THE PERKIN-ELMER CORPORATION, a New York corporation having its principal place of business at Norwalk, Connecticut (hereinafter referred to as the "Company") and Dr. Michael W. Hunkapiller, of 1333 Pebble Drive, San Carlos, CA 94070 (hereinafter referred to as the "Employee"). WHEREAS, the Employee has rendered valuable service to the Company, and it is regarded as essential by the Company that it shall have the benefit of his services during future years, and WHEREAS, it is the desire of the Company to assist the Employee in providing for the contingencies of death and old age dependency, and WHEREAS, it appears desirable to provide for retirement at an age prior to the current normal retirement age of 65 years in appropriate cases so as to facilitate an orderly succession in senior management positions of the Company. NOW, THEREFORE, it is hereby mutually agreed as follows: (1) Should the Employee still be in the employ of the Company at age 65, the Company (beginning on a date to be determined by the Company but within 6 months from the Employee's retirement date) will pay him $25,000 each year for a continuous period of 10 years. Payment of this amount shall be made in quarterly installments on the first day of the fiscal quarters of the Company. Should the Employee be in the employ of the Company at age 65 and thereafter die before the entire said 10 annual payments have been paid, the unpaid balance of the 10 annual payments will continue to be paid by the Company to that person designated by the Employee in a written notice of election as the Employee's beneficiary hereunder (hereinafter referred to as the "Beneficiary"). The Employee may change such designation at any time by giving the Company written notice of such intent; and -1- such change shall become effective only upon being received and acknowledged by the Company. If the Beneficiary shall die after receiving benefits under this Agreement and further payments are payable, such further payments shall be paid to the estate of the Beneficiary. If the Employee shall survive the Beneficiary without designating another Beneficiary, any payments hereunder shall be paid to the estate of the Employee. The Employee may elect in writing at any time prior to his normal retirement date one of the following optional forms of payment in lieu of the normal form of payment set forth above, with the annual value of such optional form of payment being actuarially reduced from such normal form of payment; provided, however, that such optional forms of payment are not available to an Employee in the event he dies or terminates his employment and is covered by Paragraphs (2), (4), (5), or (6) of this Agreement: Option 1. Reduced annual payments payable during his life with the provision that if he shall not survive a period of ten years, such reduced annual payments shall continue to be paid after the death of the Employee and during the remainder of such ten-year period to the Beneficiary. Option 2. Reduced annual payments payable during his life, with the provision that after his death such reduced annual payments shall continue during the life of, and shall be paid to the Beneficiary (provided the Beneficiary survives the Employee). Option 3. Reduced annual payments payable during his life, with the provision that after his death annual payments equal to 50% of such reduced annual payments shall continue during the life of, and shall be paid to, the Beneficiary (provided the Beneficiary survives the Employee). Option 4. Reduced annual payments payable to the Employee during his life. Notwithstanding any contrary provisions herein, the Employee may not change his Beneficiary in Options 2 and 3, above, after the Employee has begun to receive payments hereunder. -2- (2) Should the Employee die before age 65 while in the employ of the Company, the Company (beginning on a date to be determined by the Company but within 6 months from the date of death) will pay the Beneficiary $25,000 each year for a continuous period of 10 years. Payment of this amount shall be made in quarterly installments on the first day of the fiscal quarters of the Company. (3) If the Employee shall retire on or after age 60 and before age 65, with the written consent or at the request of the Company, payments will be made by the Company in the amount and in the manner provided in Paragraph (1) to commence within 6 months of the date of retirement. (4) Should the Employee's employment be terminated at any time after the date hereof and prior to his attaining age 60, with the written consent or by the act of the Company, the Company will make payments in the manner provided in Paragraph (1) to commence when the Employee attains age 60 or the date of his prior death in an amount determined by multiplying the benefit set forth in Paragraph (1) by a fraction, the numerator of which shall be the number of whole months or major part thereof from the date hereof to the date of termination of employment, and the denominator of which shall be the number of whole months or major part thereof from the date hereof to the date he attains age 60. (5) Unless the Company shall consent in writing, the Employee, if his employment be terminated other than by death or disability or as provided in Paragraphs (3) or (4) prior to his attaining age 65, shall forfeit all right to benefits hereunder and the Company shall have no liability for any payment to the Employee or the Beneficiary. Notwithstanding any other provision of this Agreement, if within three years of a Change in Control the employment of the Employee is terminated by the Employee for Good Reason or by the Company without Cause, then the Company will pay Employee the amount referred to in Paragraph (1) of this Agreement within 60 days of such termination of employment. For purposes hereof: (a) A "Change in Control" shall have occurred if (i) any "person" within the meaning of Section 14 (d) of the Securities Exchange Act of 1934 becomes the "beneficial -3- owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) any "person" acquires by proxy or otherwise, other than pursuant to solicitations by the Incumbent Board (as hereinafter defined), the right to vote more than 35% of the Company's Common Stock for the election of directors, for any merger or consolidation of the Company or for any other matter or question, (iii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three-quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (iii), considered as though such person were a member of the Incumbent Board, or (iv) the Company's Stockholders approve the sale of all or substantially all of the assets of the Company. (b) Termination by the Company of the employment of the Employee for "Cause" shall mean termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company, (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for substantial performance is delivered to the employee by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this subparagraph (b), no act or failure to act on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon -4- authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth in sections (i) or (ii) of this subparagraph (b) and specifying the particulars thereof in detail. (c) Termination by the employee of employment for "Good Reason" shall mean termination based on: (i) an adverse change in the status of the Employee (other than any such change primary attributable to the fact that the Company may no longer be publicly owned) or the Employee's position(s) as an officer of the Company as in effect immediately prior to the Change in Control, or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgement, are inconsistent with such status or position(s), or any removal of the Employee from, or any failure to reappoint or reelect him to, such position(s) (except in connection with the termination of the Employee's employment for Cause, total disability, or retirement on or after attaining age 65 or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company in the Employee's base salary as in effect immediately prior to the Change in Control; -5- (iii) A material reduction in the Employee's total annual compensation; a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to other executives shall be considered "material"; provided, however, the failure of the Company to adopt or renew a stock option plan or to grant stock options to the Employee shall not be considered a reduction; and (iv) the Company's requiring the employee to be more than fifty miles from Norwalk, Connecticut, except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the Change in Control. (6) In the event the Employee shall become disabled so that he is unable to perform his duties as an employee and so that he is entitled to benefits under a long range disability insurance program made available by the Company, or so that he would have been eligible for such benefits had he elected to insure himself thereunder, the Company will make payments as provided in Paragraph (1) above to commence at age 65. In the event the Employee should die at any time after becoming disabled and before attaining age 65, payments as provided in this Paragraph (6) will be made to the Beneficiary commencing as of the date of the Employee's death. (7) The Company has or may procure a policy or policies of life insurance upon the life of the Employee to aid it in meeting its obligations under this Agreement. It is understood, however, that such policy or policies held by the Company and the proceeds therefrom shall be treated as the general assets of the Company; that they shall in no way represent any vested, secured, or preferred interest of the Employee or his beneficiaries under this Agreement; and that the Company shall be under no obligation either to procure or to continue life insurance in force upon the life of the Employee. The employee hereby agrees that he already has or will submit to a physical examination and answer truthfully and completely without mental reservation or concealment any question or request for information by any insurance company in connection with the issuance of any policy procured by the Company under -6- this Paragraph. (7). In the event the Employee fails to do so or in the event the Employee dies by suicide, and the liability of the insurer under such policy is restricted as a result of such failure or suicide, then the Company shall thereby be released from all of its obligations under Paragraph (2) above. (8) If the Company shall procure any policy or policies of life insurance in accordance with Paragraph (7) above and shall have the option of including in any such policy an accidental death or so-called "double indemnity" provision, the Company will so advise the Employee and, if the Employee requests and agrees to pay any additional premium resulting therefrom, will include in the policy such accidental death or double indemnity provisions as may be available and will further provide or cause to be provided that any benefit payable under or by reason of such provisions shall be paid as a death benefit to the beneficiary designated by the Employee hereunder; provided that in the event the Employee shall cease to pay such additional premium the Company may cancel any accidental death or double indemnity provision; and further provided that the inclusion of such a provision shall in no way affect the Company's right to cancel or otherwise dispose of the policy, even though such action may have the effect of terminating such provision. (9) If during a period of 10 years from the termination of his employment with the Company the Employee shall: engage in a business competitive with any business activity engaged in by the Company at any time while he was employed; enter into the service of any organization so engaged in such business (or any subsidiary or affiliate of such an organization); or personally engage in or enter the service of any organization that is engaged in consulting work or research or development or engineering activities for any organization so engaged in such business (or any subsidiary or affiliate of such an organization), then any liability of the Company to make any further payments hereunder shall cease. The investment of funds by the Employee in securities of a corporation listed on a recognized stock exchange shall not be considered to be a breach of this Paragraph. -7- (10) The Company may in its sole discretion grant the Employee a leave of absence for a period not to exceed one year during which time the Employee will be considered to be still in the employ of the Company for the purposes of this Agreement. (11) The Company in its sole discretion and without the consent of the Employee, his estate, his beneficiaries, or any other person claiming through or under him, may commute any payments which are due hereunder at the rate of 4% per annum to a lump sum and pay such lump sum to the Employee or to the beneficiary or beneficiaries entitled to receive payment at the date of commutation, and such payment shall be a full discharge of the Company's liabilities hereunder. The Company may also in its sole discretion and without the consent of any other person accelerate the payment of any of the sums payable hereunder. (12) The right to receive payments under this Agreement shall not be assignable or subject to anticipation, nor shall such right be subject to garnishment, attachment, or any other legal process of creditors of the Employee or of any person or persons designated as beneficiaries hereunder except to the extent that this provision may be contrary to law. (13) This Agreement creates no rights in the Employee to continue in the employ of the Company for any length of time nor does it create any rights in the Employee or obligations on the part of the Company other than those set forth herein. (14) If the Company, or any corporation surviving or resulting from any merger or consolidation to which the Company may be a party or to which substantially all the assets of the Company shall be sold or otherwise transferred, shall at any time be merged or consolidated with or into any other corporation or corporations or shall otherwise transfer substantially all its assets to another corporation, the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the corporation surviving or resulting from such merger or consolidation or to which such assets shall be so sold or otherwise transferred. Except as herein provided, this Agreement shall not be assignable by the Company or the Employee. This Agreement is solely between the Company and the Employee. The Employee and his beneficiaries shall have recourse only against the Company for enforcement, and the Agreement shall -8- be binding upon the beneficiaries, heirs, executors, and administrators of the Employee and upon the successors and assigns of the Company. (15) This Agreement has been made, executed, and delivered in the State of Connecticut; and shall be governed in accordance with the laws thereof. IN WITNESS WHEREOF, the parties hereto have set their hands and affixed the seal of the Corporation as of the date first written above. THE PERKIN-ELMER CORPORATION By: /s/ G. N. Kelley Gaynor N. Kelley Chairman and Chief Executive Officer ATTEST: By: /s/ W. B. Sawch William B. Sawch Vice President General Counsel & Secretary ACCEPTED AND AGREED: By: /s/ Michael W. Hunkapiller Dr. Michael W. Hunkapiller -9- EX-10 4 EXHIBIT-10(8) DEFERRED COMPENSATION CONTRACT DEFERRED COMPENSATION CONTRACT AGREEMENT entered into as of February 18, 1993, between THE PERKIN-ELMER CORPORATION, a New York corporation having its principal place of business at Norwalk, Connecticut (hereinafter referred to as the "Company") and Michael J. McPartland, of 540 Warner Hill Road, Southport, CT 06940 (hereinafter referred to as the "Employee"). WHEREAS, the Employee has rendered valuable service to the Company, and it is regarded as essential by the Company that it shall have the benefit of his services during future years, and WHEREAS, it is the desire of the Company to assist the Employee in providing for the contingencies of death and old age dependency, and WHEREAS, it appears desirable to provide for retirement at an age prior to the current normal retirement age of 65 years in appropriate cases so as to facilitate an orderly succession in senior management positions of the Company. NOW, THEREFORE, it is hereby mutually agreed as follows: (1) Should the Employee still be in the employ of the Company at age 65, the Company (beginning on a date to be determined by the Company but within 6 months from the Employee's retirement date) will pay him $25,000 each year for a continuous period of 10 years. Payment of this amount shall be made in quarterly installments on the first day of the fiscal quarters of the Company. Should the Employee be in the employ of the Company at age 65 and thereafter die before the entire said 10 annual payments have been paid, the unpaid balance of the 10 annual payments will continue to be paid by the Company to that person designated by the Employee in a written notice of -1- election as the Employee's beneficiary hereunder (hereinafter referred to as the "Beneficiary"). The Employee may change such designation at any time by giving the Company written notice of such intent; and such change shall become effective only upon being received and acknowledged by the Company. If the Beneficiary shall die after receiving benefits under this Agreement and further payments are payable, such further payments shall be paid to the estate of the Beneficiary. If the Employee shall survive the Beneficiary without designating another Beneficiary, any payments hereunder shall be paid to the estate of the Employee. The Employee may elect in writing at any time prior to his normal retirement date one of the following optional forms of payment in lieu of the normal form of payment set forth above, with the annual value of such optional form of payment being actuarially reduced from such normal form of payment; provided, however, that such optional forms of payment are not available to an Employee in the event he dies or terminates his employment and is covered by Paragraphs (2), (4), (5), or (6) of this Agreement: Option 1. Reduced annual payments payable during his life with the provision that if he shall not survive a period of ten years, such reduced annual payments shall continue to be paid after the death of the Employee and during the remainder of such ten-year period to the Beneficiary. Option 2. Reduced annual payments payable during his life, with the provision that after his death such reduced annual payments shall continue during the life of, and shall be paid to the Beneficiary (provided the Beneficiary survives the Employee). Option 3. Reduced annual payments payable during his life, with the provision that after his death annual payments equal to 50% of such reduced annual payments shall continue during the life of, and shall be paid to, the Beneficiary (provided the Beneficiary survives the Employee). Option 4. Reduced annual payments payable to the Employee during his life. -2- Notwithstanding any contrary provisions herein, the Employee may not change his Beneficiary in Options 2 and 3, above, after the Employee has begun to receive payments hereunder. (2) Should the Employee die before age 65 while in the employ of the Company, the Company (beginning on a date to be determined by the Company but within 6 months from the date of death) will pay the Beneficiary $25,000 each year for a continuous period of 10 years. Payment of this amount shall be made in quarterly installments on the first day of the fiscal quarters of the Company. (3) If the Employee shall retire on or after age 60 and before age 65, with the written consent or at the request of the Company, payments will be made by the Company in the amount and in the manner provided in Paragraph (1) to commence within 6 months of the date of retirement. (4) Should the Employee's employment be terminated at any time after the date hereof and prior to his attaining age 60, with the written consent or by the act of the Company, the Company will make payments in the manner provided in Paragraph (1) to commence when the Employee attains age 60 or the date of his prior death in an amount determined by multiplying the benefit set forth in Paragraph (1) by a fraction, the numerator of which shall be the number of whole months or major part thereof from the date hereof to the date of termination of employment, and the denominator of which shall be the number of whole months or major part thereof from the date hereof to the date he attains age 60. (5) Unless the Company shall consent in writing, the Employee, if his employment be terminated other than by death or disability or as provided in Paragraphs (3) or (4) prior to his attaining age 65, shall forfeit all right to benefits hereunder and the Company shall have no liability for any payment to the Employee or the Beneficiary. Notwithstanding any other provision of this Agreement, if within three years of a Change in Control the employment of the Employee is terminated by the Employee for Good -3- Reason or by the Company without Cause, then the Company will pay Employee the amount referred to in Paragraph (1) of this Agreement within 60 days of such termination of employment. For purposes hereof: (a) A "Change in Control" shall have occurred if (i) any "person" within the meaning of Section 14 (d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) any "person" acquires by proxy or otherwise, other than pursuant to solicitations by the Incumbent Board (as hereinafter defined), the right to vote more than 35% of the Company's Common Stock for the election of directors, for any merger or consolidation of the Company or for any other matter or question, (iii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three-quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (iii), considered as though such person were a member of the Incumbent Board, or (iv) the Company's Stockholders approve the sale of all or substantially all of the assets of the Company. (b) Termination by the Company of the employment of the Employee for "Cause" shall mean termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company, (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for substantial performance is delivered to the employee by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct -4- which is materially and demonstrably injurious to the Company. For purposes of this subparagraph (b), no act or failure to act on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of not less than three- quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth in sections (i) or (ii) of this subparagraph (b) and specifying the particulars thereof in detail. (c) Termination by the employee of employment for "Good Reason" shall mean termination based on: (i) an adverse change in the status of the Employee (other than any such change primary attributable to the fact that the Company may no longer be publicly owned) or the Employee's position(s) as an officer of the Company as in effect immediately prior to the Change in Control, or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgement, are inconsistent with such status or position(s), or any removal of the Employee from, or any failure to reappoint or reelect him to, such position(s) (except in connection with the termination of the Employee's employment for Cause, total disability, or retirement on or after attaining age 65 or as a result of death or by the Employee other than for Good Reason); -5- (ii) a reduction by the Company in the Employee's base salary as in effect immediately prior to the Change in Control; (iii) A material reduction in the Employee's total annual compensation; a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to other executives shall be considered "material"; provided, however, the failure of the Company to adopt or renew a stock option plan or to grant stock options to the Employee shall not be considered a reduction; and (iv) the Company's requiring the employee to be more than fifty miles from Norwalk, Connecticut, except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the Change in Control. (6) In the event the Employee shall become disabled so that he is unable to perform his duties as an employee and so that he is entitled to benefits under a long range disability insurance program made available by the Company, or so that he would have been eligible for such benefits had he elected to insure himself thereunder, the Company will make payments as provided in Paragraph (1) above to commence at age 65. In the event the Employee should die at any time after becoming disabled and before attaining age 65, payments as provided in this Paragraph (6) will be made to the Beneficiary commencing as of the date of the Employee's death. (7) The Company has or may procure a policy or policies of life insurance upon the life of the Employee to aid it in meeting its obligations under this Agreement. It is understood, however, that such policy or policies held by the Company and the proceeds therefrom shall be treated as the general assets of the Company; that they shall in no way represent any vested, secured, or preferred interest of the Employee or his beneficiaries under this Agreement; and that the Company shall be under no obligation either to procure or to continue life insurance in force upon the life of the Employee. -6- The employee hereby agrees that he already has or will submit to a physical examination and answer truthfully and completely without mental reservation or concealment any question or request for information by any insurance company in connection with the issuance of any policy procured by the Company under this Paragraph (7). In the event the Employee fails to do so or in the event the Employee dies by suicide, and the liability of the insurer under such policy is restricted as a result of such failure or suicide, then the Company shall thereby be released from all of its obligations under Paragraph (2) above. (8) If the Company shall procure any policy or policies of life insurance in accordance with Paragraph (7) above and shall have the option of including in any such policy an accidental death or so-called "double indemnity" provision, the Company will so advise the Employee and, if the Employee requests and agrees to pay any additional premium resulting therefrom, will include in the policy such accidental death or double indemnity provisions as may be available and will further provide or cause to be provided that any benefit payable under or by reason of such provisions shall be paid as a death benefit to the beneficiary designated by the Employee hereunder; provided that in the event the Employee shall cease to pay such additional premium the Company may cancel any accidental death or double indemnity provision; and further provided that the inclusion of such a provision shall in no way affect the Company's right to cancel or otherwise dispose of the policy, even though such action may have the effect of terminating such provision. (9) If during a period of 10 years from the termination of his employment with the Company the Employee shall: engage in a business competitive with any business activity engaged in by the Company at any time while he was employed; enter into the service of any organization so engaged in such business (or any subsidiary or affiliate of such an organization); or personally engage in or enter the service of any organization that is engaged in consulting work or research or development or engineering activities -7- for any organization so engaged in such business (or any subsidiary or affiliate of such an organization), then any liability of the Company to make any further payments hereunder shall cease. The investment of funds by the Employee in securities of a corporation listed on a recognized stock exchange shall not be considered to be a breach of this Paragraph. (10) The Company may in its sole discretion grant the Employee a leave of absence for a period not to exceed one year during which time the Employee will be considered to be still in the employ of the Company for the purposes of this Agreement. (11) The Company in its sole discretion and without the consent of the Employee, his estate, his beneficiaries, or any other person claiming through or under him, may commute any payments which are due hereunder at the rate of 4% per annum to a lump sum and pay such lump sum to the Employee or to the beneficiary or beneficiaries entitled to receive payment at the date of commutation, and such payment shall be a full discharge of the Company's liabilities hereunder. The Company may also in its sole discretion and without the consent of any other person accelerate the payment of any of the sums payable hereunder. (12) The right to receive payments under this Agreement shall not be assignable or subject to anticipation, nor shall such right be subject to garnishment, attachment, or any other legal process of creditors of the Employee or of any person or persons designated as beneficiaries hereunder except to the extent that this provision may be contrary to law. (13) This Agreement creates no rights in the Employee to continue in the employ of the Company for any length of time nor does it create any rights in the Employee or obligations on the part of the Company other than those set forth herein. (14) If the Company, or any corporation surviving or resulting from any merger or consolidation to which the Company may be a party or to which substantially all the assets of the Company shall be sold or otherwise transferred, shall at any time be merged or consolidated with or into any other corporation or corporations or shall otherwise transfer substantially all its assets to another -8- corporation, the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the corporation surviving or resulting from such merger or consolidation or to which such assets shall be so sold or otherwise transferred. Except as herein provided, this Agreement shall not be assignable by the Company or by the Employee. This Agreement is solely between the Company and the Employee. The Employee and his beneficiaries shall have recourse only against the Company for enforcement, and the Agreement shall be binding upon the beneficiaries, heirs, executors, and administrators of the Employee and upon the successors and assigns of the Company. This Agreement has been made, executed, and delivered in the State of Connecticut; and shall be governed in accordance with the laws thereof. IN WITNESS WHEREOF, the parties hereto have set their hands and affixed the seal of the Corporation as of the date first written above. THE PERKIN-ELMER CORPORATION By /s/ G. N. Kelley Gaynor N. Kelley Chairman and President Chief Executive Officer ATTEST: By /s/ C. W. Bergere, Jr. ACCEPTED AND AGREED: /s/ Michael J. McPartland (B) -9- EX-10 5 EXHIBIT-10(9) DEFERRED COMPENSATION CONTRACT DEFERRED COMPENSATION CONTRACT AGREEMENT entered into as of September 15, 1994 between THE PERKIN-ELMER CORPORATION, a New York corporation having its principal place of business at Norwalk, Connecticut (hereinafter referred to as the "Company") and Dr. Peter Barrett, of 10 Arbol Grande Court, Menlo Park, CA 94025 (hereinafter referred to as the "Employee"). WHEREAS, the Employee has rendered valuable service to the Company, and it is regarded as essential by the Company that it shall have the benefit of his services during future years, and WHEREAS, it is the desire of the Company to assist the Employee in providing for the contingencies of death and old age dependency, and WHEREAS, it appears desirable to provide for retirement at an age prior to the current normal retirement age of 65 years in appropriate cases so as to facilitate an orderly succession in senior management positions of the Company. NOW, THEREFORE, it is hereby mutually agreed as follows: (1) Should the Employee still be in the employ of the Company at age 65, the Company (beginning on a date to be determined by the Company but within 6 months from the Employee's retirement date) will pay him $25,000 each year for a continuous period of 10 years. Payment of this amount shall be made in quarterly installments on the first day of the fiscal quarters of the Company. Should the Employee be in the employ of the Company at age 65 and thereafter die before the entire said 10 annual payments have been paid, the unpaid balance of the 10 annual payments will continue to be paid by the Company to that person designated by the Employee in a written notice of election as the Employee's beneficiary hereunder (hereinafter referred to as the "Beneficiary"). The Employee may change such designation at any time by giving the Company written notice of such intent; and such change shall become effective only upon being received and acknowledged by the Company. -1- If the Beneficiary shall die after receiving benefits under this Agreement and further payments are payable, such further payments shall be paid to the estate of the Beneficiary. If the Employee shall survive the Beneficiary without designating another Beneficiary, any payments hereunder shall be paid to the estate of the Employee. The Employee may elect in writing at any time prior to his normal retirement date one of the following optional forms of payment in lieu of the normal form of payment set forth above, with the annual value of such optional form of payment being actuarially reduced from such normal form of payment; provided, however, that such optional forms of payment are not available to an Employee in the event he dies or terminates his employment and is covered by Paragraphs (2), (4), (5), or (6) of this Agreement: Option 1. Reduced annual payments payable during his life with the provision that if he shall not survive a period of ten years, such reduced annual payments shall continue to be paid after the death of the Employee and during the remainder of such ten-year period to the Beneficiary. Option 2. Reduced annual payments payable during his life, with the provision that after his death such reduced annual payments shall continue during the life of, and shall be paid to the Beneficiary (provided the Beneficiary survives the Employee). Option 3. Reduced annual payments payable during his life, with the provision that after his death annual payments equal to 50% of such reduced annual payments shall continue during the life of, and shall be paid to, the Beneficiary (provided the Beneficiary survives the Employee). Option 4. Reduced annual payments payable to the Employee during his life. Notwithstanding any contrary provisions herein, the Employee may not change his Beneficiary in Options 2 and 3, above, after the Employee has begun to receive payments hereunder. (2) Should the Employee die before age 65 while in the employ of the Company, the Company (beginning on a date to be determined by the Company but within 6 months from the date of -2- death) will pay the Beneficiary $25,000 each year for a continuous period of 10 years. Payment of this amount shall be made in quarterly installments on the first day of the fiscal quarters of the Company. (3) If the Employee shall retire on or after age 60 and before age 65, with the written consent or at the request of the Company, payments will be made by the Company in the amount and in the manner provided in Paragraph (1) to commence within 6 months of the date of retirement. (4) Should the Employee's employment be terminated at any time after the date hereof and prior to his attaining age 60, with the written consent or by the act of the Company, the Company will make payments in the manner provided in Paragraph (1) to commence when the Employee attains age 60 or the date of his prior death in an amount determined by multiplying the benefit set forth in Paragraph (1) by a fraction, the numerator of which shall be the number of whole months or major part thereof from the date hereof to the date of termination of employment, and the denominator of which shall be the number of whole months or major part thereof from the date hereof to the date he attains age 60. (5) Unless the Company shall consent in writing, the Employee, if his employment be terminated other than by death or disability or as provided in Paragraphs (3) or (4) prior to his attaining age 65, shall forfeit all right to benefits hereunder and the Company shall have no liability for any payment to the Employee or the Beneficiary. Notwithstanding any other provision of this Agreement, if within three years of a Change in Control the employment of the Employee is terminated by the Employee for Good Reason or by the Company without Cause, then the Company will pay Employee the amount referred to in Paragraph (1) of this Agreement within 60 days of such termination of employment. For purposes hereof: (a) A "Change in Control" shall have occurred if (i) any "person" within the meaning of Section 14 (d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) any "person" acquires by proxy or otherwise, other -3- than pursuant to solicitations by the Incumbent Board (as hereinafter defined), the right to vote more than 35% of the Company's Common Stock for the election of directors, for any merger or consolidation of the Company or for any other matter or question, (iii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three-quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (iii), considered as though such person were a member of the Incumbent Board, or (iv) the Company's Stockholders approve the sale of all or substantially all of the assets of the Company. (b) Termination by the Company of the employment of the Employee for "Cause" shall mean termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company, (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for substantial performance is delivered to the employee by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this subparagraph (b), no act or failure to act on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall conclusively presumed to be done, or omitted -4- to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth in sections (i) or (ii) of this subparagraph (b) and specifying the particulars thereof in detail. (c) Termination by the employee of employment for "Good Reason" shall mean termination based on: (i) an adverse change in the status of the Employee (other than any such change primary attributable to the fact that the Company may no longer be publicly owned) or the Employee's position(s) as an officer of the Company as in effect immediately prior to the Change in Control, or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgement, are inconsistent with such status or position(s), or any removal of the Employee from, or any failure to reappoint or reelect him to, such position(s) (except in connection with the termination of the Employee's employment for Cause, total disability, or retirement on or after attaining age 65 or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company in the Employee's base salary as in effect immediately prior to the Change in Control; (iii) A material reduction in the Employee's total annual compensation; a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to other executives shall be considered "material"; provided, -5- however, the failure of the Company to adopt or renew a stock option plan or to grant stock options to the Employee shall not be considered a reduction; and (iv) the Company's requiring the employee to be more than fifty miles from Norwalk, Connecticut, except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the Change in Control. (6) In the event the Employee shall become disabled so that he is unable to perform his duties as an employee and so that he is entitled to benefits under a long range disability insurance program made available by the Company, or so that he would have been eligible for such benefits had he elected to insure himself thereunder, the Company will make payments as provided in Paragraph (1) above to commence at age 65. In the event the Employee should die at any time after becoming disabled and before attaining age 65, payments as provided in this Paragraph (6) will be made to the Beneficiary commencing as of the date of the Employee's death. (7) The Company has or may procure a policy or policies of life insurance upon the life of the Employee to aid it in meeting its obligations under this Agreement. It is understood, however, that such policy or policies held by the Company and the proceeds therefrom shall be treated as the general assets of the Company; that they shall in no way represent any vested, secured, or preferred interest of the Employee or his beneficiaries under this Agreement; and that the Company shall be under no obligation either to procure or to continue life insurance in force upon the life of the Employee. The employee hereby agrees that he already has or will submit to a physical examination and answer truthfully and completely without mental reservation or concealment any question or request for information by any insurance company in connection with the issuance of any policy procured by the Company under this Paragraph. (7). In the event the Employee fails to do so or in the event the Employee dies by suicide, and the liability of the insurer under such policy is restricted as a result of such -6- failure or suicide, then the Company shall thereby be released from all of its obligations under Paragraph (2) above. (8) If the Company shall procure any policy or policies of life insurance in accordance with Paragraph (7) above and shall have the option of including in any such policy an accidental death or so-called "double indemnity" provision, the Company will so advise the Employee and, if the Employee requests and agrees to pay any additional premium resulting therefrom, will include in the policy such accidental death or double indemnity provisions as may be available and will further provide or cause to be provided that any benefit payable under or by reason of such provisions shall be paid as a death benefit to the beneficiary designated by the Employee hereunder; provided that in the event the Employee shall cease to pay such additional premium the Company may cancel any accidental death or double indemnity provision; and further provided that the inclusion of such a provision shall in no way affect the Company's right to cancel or otherwise dispose of the policy, even though such action may have the effect of terminating such provision. (9) If during a period of 10 years from the termination of his employment with the Company the Employee shall: engage in a business competitive with any business activity engaged in by the Company at any time while he was employed; enter into the service of any organization so engaged in such business (or any subsidiary or affiliate of such an organization); or personally engage in or enter the service of any organization that is engaged in consulting work or research or development or engineering activities for any organization so engaged in such business (or any subsidiary or affiliate of such an organization), then any liability of the Company to make any further payments hereunder shall cease. The investment of funds by the Employee in securities of a corporation listed on a recognized stock exchange shall not be considered to be a breach of this Paragraph. (10) The Company may in its sole discretion grant the Employee a leave of absence for a period not to exceed one year during which time the Employee will be considered to be still in the employ of the Company for the purposes of this Agreement. -7- (11) The Company in its sole discretion and without the consent of the Employee, his estate, his beneficiaries, or any other person claiming through or under him, may commute any payments which are due hereunder at the rate of 4% per annum to a lump sum and pay such lump sum to the Employee or to the beneficiary or beneficiaries entitled to receive payment at the date of commutation, and such payment shall be a full discharge of the Company's liabilities hereunder. The Company may also in its sole discretion and without the consent of any other person accelerate the payment of any of the sums payable hereunder. (12) The right to receive payments under this Agreement shall not be assignable or subject to anticipation, nor shall such right be subject to garnishment, attachment, or any other legal process of creditors of the Employee or of any person or persons designated as beneficiaries hereunder except to the extent that this provision may be contrary to law. (13) This Agreement creates no rights in the Employee to continue in the employ of the Company for any length of time nor does it create any rights in the Employee or obligations on the part of the Company other than those set forth herein. (14) If the Company, or any corporation surviving or resulting from any merger or consolidation to which the Company may be a party or to which substantially all the assets of the Company shall be sold or otherwise transferred, shall at any time be merged or consolidated with or into any other corporation or corporations or shall otherwise transfer substantially all its assets to another corporation, the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the corporation surviving or resulting from such merger or consolidation or to which such assets shall be so sold or otherwise transferred. Except as herein provided, this Agreement shall not be assignable by the Company or the Employee. This Agreement is solely between the Company and the Employee. The Employee and his beneficiaries shall have recourse only against the Company for enforcement, and the Agreement shall be binding upon the beneficiaries, heirs, executors, and administrators of the Employee and upon the successors and assigns of the Company. -8- (15) This Agreement has been made, executed, and delivered in the State of Connecticut; and shall be governed in accordance with the laws thereof. IN WITNESS WHEREOF, the parties hereto have set their hands and affixed the seal of the Corporation as of the date first written above. THE PERKIN-ELMER CORPORATION By: /s/ G. N. Kelley Gaynor N. Kelley Chairman and Chief Executive Officer ATTEST: By: /s/ W. B. Sawch William B. Sawch Vice President General Counsel & Secretary ACCEPTED AND AGREED: By: /s/ Peter Barrett Dr. Peter Barrett -9- EX-10 6 EXHIBIT-10(12) EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT entered into as of the 15th of September, 1994, between THE PERKIN-ELMER CORPORATION, a New York corporation having its principal place of business at Norwalk, Connecticut (hereinafter referred to as the "Company") and Dr. Michael W. Hunkapiller of 1333 Pebble Drive, San Carlos, CA 94070 (hereinafter referred to as the "Employee"). WHEREAS, the Employee has rendered and/or will render valuable services to the Company and it is regarded essential by the Company that it have the benefit of his services in future years; and WHEREAS, the Board of Directors of the Company believes that it is essential that, in the event of the possibility of a change in control of the Company, the Employee be able to continue his attention and dedication to his assigned duties and to assess and advise the Board of Directors whether such proposal would be in the best interests of the Company and its shareholders without distraction regarding an uncertainty concerning his future with the Company; and WHEREAS, the Employee is willing to agree to continue to serve the Company in the future; NOW, THEREFORE, it is mutually agreed as follows: 1. Employment. The Company agrees to employ the Employee, and the Employee agrees to serve as an employee of the Company or one or more of its subsidiaries during the Period of Employment (as defined in Section 2 hereof) in such executive capacity as Employee served immediately prior to the commencement of the Period of Employment. The Employee also agrees to serve during the Period of Employment, if elected or appointed thereto, as a Director of the Board of Directors of the Company and as a member of any committee of the Board of Directors. -1- 2. Period of Employment. (a) The "Period of Employment" shall be the period of thirty-six (36) months commencing on the date of a Change in Control (as defined in Section 3 hereof) and the period of any extension or extensions thereof in accordance with the provisions of this Section. The Period of Employment shall be extended automatically by one week for each week in which the Employee's employment continues after the date of a Change in Control, subject to the provisions of paragraph (b) hereof. (b) Notwithstanding the provisions of paragraph (a) hereof, the Period of Employment shall terminate upon the occurrence of (i) the Employee's attainment of age 65, or the election by the Employee to retire early from the Company under any of its retirement plans, (ii) the death of the Employee, (iii) the Disability of the Employee (as defined in Section 4 hereof), (iv) any other termination of Employee's employment with the Company, regardless of whether for Cause (as defined in Section 5 hereof), or for Good Reason (as defined in Section 9(c) hereof) or not for Good Reason, or (v) the sixth anniversary of the commencement of the Period of Employment. (c) In the case of termination of the Period of Employment pursuant to Section 2(b)(iv), "Termination Date" means the date of receipt by the Employee or the Company of notice of termination given by the other party, or such later date (but not more than 30 days thereafter) as may be specified in such notice. 3. Change in Control. For purposes of this Agreement, a "Change in Control" shall have occurred if an event occurs that would be required to be reported (assuming such event has not been "previously 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; provided that, without limitation, such a Change in Control shall be deemed to have occurred at such time as (i) any "person" within the meaning of section 14(d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) during any two-year period, -2- individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three-quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (ii), considered as though such person were a member of the Incumbent Board, or (iii) the approval by the Company's stockholders of the sale of all or substantially all of the assets of the Company. 4. Disability. For purposes of this Agreement, "Disability" means the absence of the Employee from his duties with the Company on a full-time basis for one hundred eighty (180) consecutive days as a result of incapacity due to physical or mental illness. 5. Cause. For purposes of this Agreement, termination by the Company of the employment of the Employee for "Cause" shall mean termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for a substantial performance is delivered to the Employee by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this Section 5, no act, or failure to act, on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed -3- to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth above in (i) or (ii) of this Section 5 and specifying the particulars thereof in detail. 6. Duties During the Period of Employment. The Employee shall devote his full business time, attention and best efforts to the affairs of the Company and its subsidiaries during the Period of Employment; provided, however, that the Employee may engage in other activities, such as activities involving charitable, educational, religious and similar types of organizations, speaking engagements, membership on the board of directors of other organizations, and similar type activities to the extent that such other activities do not prohibit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of the Company and its subsidiaries. 7. Current Cash Compensation. (a) Base Annual Salary. The Company will pay to the Employee during the Period of Employment a base annual salary in an amount determined by the Board of Directors or its Compensation Committee which shall in no event be less than the higher of (i) his base annual salary prior to the commencement of the Period of Employment or (ii) his base annual salary during the preceding year of the Period of Employment; provided, however, it is agreed between the parties that the Company shall review annually, and in light of such review may, in the discretion of the Board of Directors or its Compensation Committee, increase such Base Annual Salary taking into account the Employee's responsibilities, inflation in the cost of living, increases in compensation of other executives of the Company and its subsidiaries, increase in salaries of executives of other corporations, performance by the Employee, and other pertinent factors. The Base Annual Salary shall be paid in substantially equal biweekly installments during the Period of Employment. -4- (b) Incentive Compensation. During the Period of Employment the Employee shall continue to participate in such of the Company's incentive compensation programs for executives that he participated in prior to the commencement of the Period of Employment. Any amount awarded to the Employee under such programs shall be paid to Employee in accordance with the terms thereof. 8. Employee Benefits. (a) Vacation and Sick Leave. The Employee shall be entitled to a paid annual vacation of not less than four (4) weeks during each calendar year in the Period of Employment and to reasonable sick leave. (b) Regular Reimbursed Business Expenses. The Company shall reimburse the Employee for all expenses and disbursements reasonably incurred by the Employee in the performance of his duties during the Period of Employment. (c) Employee Benefit Plans or Arrangements. In addition to the cash compensation provided for in Section 7 hereof and the benefits provided in this Section, the Employee, during the Period of Employment, subject to meeting eligibility provisions and to the provisions of this Agreement, shall be entitled to participate in all employee benefit plans or arrangements of the Company as presently in effect or as they may be modified or added to by the Company from time to time, which provide benefits to officers or employees of the Company. For purposes of this Agreement, such benefit plans or arrangements, herein "Benefit Plans", shall mean any compensation plan such as an incentive, deferred, stock option or restricted stock plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, dental, disability, salary continuation, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees. 9. Termination of Employment. (a) Termination by the Company for Cause or Termination by the Employee Other Than for Good Reason. If the Company terminates the employment of the Employee for Cause (as defined in Section 5 hereof), or if the Employee terminates his -5- employment other than for Good Reason (as defined in paragraph (c) of this Section) the Company will pay the Employee (i) his Base Annual Salary, as provided in paragraph (a) of Section 7 hereof, through the end of the month in which the Termination Date occurs, (ii) any Incentive Compensation payable to him pursuant to paragraph (b) of Section 7 hereof, including a pro rata share for any partial year, (iii) any accrued vacation pay, and (iv) any benefits payable to him pursuant to the Company's employee benefit plans and arrangements as provided in paragraph (c) of Section 8 hereof through the end of the month in which the Termination Date occurs. (b) Termination by the Company Without Cause or by the Employee for Good Reason. If the Company terminates the Employee's employment with the Company without Cause, or if the Employee terminates his employment with the Company for Good Reason, the Company will pay or provide to the Employee the following: (i) The Company will pay to the Employee within thirty (30) days after the Termination Date a lump sum equal to (x) times (y), where (x) equals the Employee's Base Annual Salary; and (y) equals the greater of either (A) one year, or (B) the number of years, including partial years, remaining in the Period of Employment as of the Employee's Termination Date. (ii) The Company will pay to the Employee within thirty (30) days after the Termination Date a lump sum equal to (x) times (y), where (x) equals the Employee's average annual Incentive Compensation paid for the two calendar years immediately preceding the calendar year in which occurs (A) the Termination Date, or (B) the first day of the Period of Employment, whichever is higher; and (y) equals the greater of either (A) one year, or (B) the number of years, including partial years, remaining in the Period of Employment as of the Employee's Termination Date. (iii) For a period of three years immediately following his Termination Date, the Employee and his family shall continue to participate in all employee Benefit Plans of the Company (as defined in Section 8(c) hereof) in which he or his family -6- participated at any time during the one-year period ending on the date immediately preceding his Termination Date, provided that (a) such continued participation is possible under the terms of such Benefit Plans, and (b) the Employee continues to pay contributions for such participation at the rates paid for similar participation by active Company employees in similar positions to that held by the Employee immediately prior to the Termination Date. If such continued participation is not possible, the Company shall provide, at its sole cost and expense, identical benefits to the Employee plus pay an additional amount to the Employee equal to the Employee's liability for federal, state and local income taxes on such amounts. The amounts payable to the Employee under this paragraph (b) shall be absolutely owing and shall not be subject to reduction or mitigation as a result of employment of the Employee elsewhere after the Termination Date. (c) Good Reason. Termination by the Employee of employment for "Good Reason" shall mean termination based on: (i) an adverse change in the status of the Employee (other than any such change primarily attributable to the fact that the Company may no longer be publicly owned) or position(s) as an officer of the Company as in effect immediately prior to the commencement of the Period of Employment or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgement, are inconsistent with such status or position(s), or any removal of the Employee from or any failure to reappoint or reelect him to such position(s) (except in connection with the termination of the Employee's employment for Cause, Disability or upon attaining age 65 or upon taking early retirement under any of the Company's retirement plans, or as a result of death or by the Employee other than for Good Reason); -7- (ii) a reduction by the Company in the Employee's Base Annual Salary; (iii) a material reduction in the Employee's total annual compensation; a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to all other executives participating in incentive compensation plans shall be considered "material", provided, however, the failure of the Company to adopt or renew a stock option plan or to grant stock options to the Employee shall not be considered a reduction; (iv) the failure by the Company to continue in effect any Benefit Plan (as defined in Section 8(c) hereof) in which Employee was participating at the time of the Change in Control (or Benefit Plans providing Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such Benefit Plan in accordance with its terms as in effect at the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect Employee's continued participation in any such Benefit Plans on at least as favorable a basis to Employee as is the case on the date of the Change in Control or which would materially reduce Employee's benefits in the future under any of such Benefit Plans or deprive Employee of any material benefit enjoyed by Employee at the time of the Change in Control; (v) the failure by the Company to provide and credit Employee with the number of paid vacation days to which Employee was then entitled in accordance with the Company's normal vacation policy as in effect immediately prior to the Change in Control; or (vi) the Company's requiring the Employee to be based more than fifty miles from Norwalk, Connecticut, except for required travel on the Company's business to an extent substantially consistent with the business travel obligations -8- which he undertook on behalf of the Company prior to the commencement of the Period of Employment. 10. Governing Law. This Agreement is governed by, and is to be construed and enforced in accordance with, the laws of the State of Connecticut. If under such law any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation or ordinance, such portion shall be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement; and the invalidity of any such portion shall not affect the force, effect and validity of the remaining portion hereof. 11. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company's case, to its Secretary) or seventy-two (72) hours after deposit thereof in the U.S. mails, postage prepaid, for delivery as registered or certified mail -- addressed, in the case of the Employee, to him at this residential address, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as the Employee or the Company may designate in writing at any time or from time to time to the other party. In lieu of personal notice or notice by deposit in the U.S. mail, a party may give notice by telegram, fax or telex. 12. Miscellaneous. This Agreement constitutes the entire understanding between the Company and the Employee relating to the employment of the Employee by the Company and cancels all prior written and oral agreements and understandings with respect to the subject matter of this Agreement. This Agreement may be amended only by a subsequent written agreement of the Employee and the Company. This Agreement shall be binding upon and shall inure to the benefit of the Employee, his heirs, executors, administrators, beneficiaries and assigns and to the benefit of the Company and its successors. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate if Employee or the Company terminate Employee's employment prior to a Change in Control of the Company. 13. Fees and Expenses/Arbitration. -9- (a) The Company shall pay all reasonable legal fees and related expenses incurred by the Employee in connection with the Agreement following a Change in Control of the Company, including, without limitation, all such fees and expenses, if any, incurred in connection with: (i) contesting or disputing any termination of the Employee's employment hereunder; or (ii) the Employee seeking to obtain or enforce any right or benefit provided by the Agreement. (b) Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Connecticut by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgement may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that Employee shall be entitled to seek specific performance of Employee's right to be paid until the Termination Date during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 13(b). IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By: /s/ G. N. Kelley Gaynor N. Kelley Chairman and Chief Executive Officer ATTEST: By: /s/ W. B. Sawch ACCEPTED AND AGREED: William B. Sawch Vice President General Counsel & Secretary /s/ Michael W. Hunkapiller Dr. Michael W. Hunkapiller -10- EX-10 7 EXHIBIT-10(13) EMPLOYMENT AGRERMENT EMPLOYMENT AGREEMENT AGREEMENT entered into as of the 15th of September, 1994, between THE PERKIN-ELMER CORPORATION, a New York corporation having its principal place of business at Norwalk, Connecticut (hereinafter referred to as the "Company") and Dr. Peter Barrett of 10 Arbol Grande Court, Menlo Park, CA 94025 (hereinafter referred to as the "Employee"). WHEREAS, the Employee has rendered and/or will render valuable services to the Company and it is regarded essential by the Company that it have the benefit of his services in future years; and WHEREAS, the Board of Directors of the Company believes that it is essential that, in the event of the possibility of a change in control of the Company, the Employee be able to continue his attention and dedication to his assigned duties and to assess and advise the Board of Directors whether such proposal would be in the best interests of the Company and its shareholders without distraction regarding an uncertainty concerning his future with the Company; and WHEREAS, the Employee is willing to agree to continue to serve the Company in the future; NOW, THEREFORE, it is mutually agreed as follows: 1. Employment. The Company agrees to employ the Employee, and the Employee agrees to serve as an employee of the Company or one or more of its subsidiaries during the Period of Employment (as defined in Section 2 hereof) in such executive capacity as Employee served immediately prior to the commencement of the Period of Employment. The Employee also agrees to serve during the Period of Employment, if elected or appointed thereto, as a Director of the Board of Directors of the Company and as a member of any committee of the Board of Directors. 2. Period of Employment. (a) The "Period of Employment" shall be the period of thirty-six (36) months commencing on the date of a Change in Control (as defined in Section 3 hereof) and the period of any -1- extension or extensions thereof in accordance with the provisions of this Section. The Period of Employment shall be extended automatically by one week for each week in which the Employee's employment continues after the date of a Change in Control, subject to the provisions of paragraph (b) hereof. (b) Notwithstanding the provisions of paragraph (a) hereof, the Period of Employment shall terminate upon the occurrence of (i) the Employee's attainment of age 65, or the election by the Employee to retire early from the Company under any of its retirement plans, (ii) the death of the Employee, (iii) the Disability of the Employee (as defined in Section 4 hereof), (iv) any other termination of Employee's employment with the Company, regardless of whether for Cause (as defined in Section 5 hereof), or for Good Reason (as defined in Section 9(c) hereof) or not for Good Reason, or (v) the sixth anniversary of the commencement of the Period of Employment. (c) In the case of termination of the Period of Employment pursuant to Section 2(b)(iv), "Termination Date" means the date of receipt by the Employee or the Company of notice of termination given by the other party, or such later date (but not more than 30 days thereafter) as may be specified in such notice. 3. Change in Control. For purposes of this Agreement, a "Change in Control" shall have occurred if an event occurs that would be required to be reported (assuming such event has not been "previously 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; provided that, without limitation, such a Change in Control shall be deemed to have occurred at such time as (i) any "person" within the meaning of section 14(d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period -2- whose election or nomination for election by the Company's stockholders was approved by a vote of at least three-quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (ii), considered as though such person were a member of the Incumbent Board, or (iii) the approval by the Company's stockholders of the sale of all or substantially all of the assets of the Company. 4. Disability. For purposes of this Agreement, "Disability" means the absence of the Employee from his duties with the Company on a full-time basis for one hundred eighty (180) consecutive days as a result of incapacity due to physical or mental illness. 5. Cause. For purposes of this Agreement, termination by the Company of the employment of the Employee for "Cause" shall mean termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for a substantial performance is delivered to the Employee by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this Section 5, no act, or failure to act, on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the -3- Employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth above in (i) or (ii) of this Section 5 and specifying the particulars thereof in detail. 6. Duties During the Period of Employment. The Employee shall devote his full business time, attention and best efforts to the affairs of the Company and its subsidiaries during the Period of Employment; provided, however, that the Employee may engage in other activities, such as activities involving charitable, educational, religious and similar types of organizations, speaking engagements, membership on the board of directors of other organizations, and similar type activities to the extent that such other activities do not prohibit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of the Company and its subsidiaries. 7. Current Cash Compensation. (a) Base Annual Salary. The Company will pay to the Employee during the Period of Employment a base annual salary in an amount determined by the Board of Directors or its Compensation Committee which shall in no event be less than the higher of (i) his base annual salary prior to the commencement of the Period of Employment or (ii) his base annual salary during the preceding year of the Period of Employment; provided, however, it is agreed between the parties that the Company shall review annually, and in light of such review may, in the discretion of the Board of Directors or its Compensation Committee, increase such Base Annual Salary taking into account the Employee's responsibilities, inflation in the cost of living, increases in compensation of other executives of the Company and its subsidiaries, increase in salaries of executives of other corporations, performance by the Employee, and other pertinent factors. The Base Annual Salary shall be paid in substantially equal biweekly installments during the Period of Employment. (b) Incentive Compensation. During the Period of Employment the Employee shall continue to participate in such of the Company's incentive compensation programs for executives that he participated in prior to the commencement of the Period of -4- Employment. Any amount awarded to the Employee under such programs shall be paid to Employee in accordance with the terms thereof. 8. Employee Benefits. (a) Vacation and Sick Leave. The Employee shall be entitled to a paid annual vacation of not less than four (4) weeks during each calendar year in the Period of Employment and to reasonable sick leave. (b) Regular Reimbursed Business Expenses. The Company shall reimburse the Employee for all expenses and disbursements reasonably incurred by the Employee in the performance of his duties during the Period of Employment. (c) Employee Benefit Plans or Arrangements. In addition to the cash compensation provided for in Section 7 hereof and the benefits provided in this Section, the Employee, during the Period of Employment, subject to meeting eligibility provisions and to the provisions of this Agreement, shall be entitled to participate in all employee benefit plans or arrangements of the Company as presently in effect or as they may be modified or added to by the Company from time to time, which provide benefits to officers or employees of the Company. For purposes of this Agreement, such benefit plans or arrangements, herein "Benefit Plans", shall mean any compensation plan such as an incentive, deferred, stock option or restricted stock plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, dental, disability, salary continuation, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees. 9. Termination of Employment. (a) Termination by the Company for Cause or Termination by the Employee Other Than for Good Reason. If the Company terminates the employment of the Employee for Cause (as defined in Section 5 hereof), or if the Employee terminates his employment other than for Good Reason (as defined in paragraph (c) of this Section) the Company will pay the Employee (i) his Base Annual Salary, as provided in paragraph (a) of Section 7 hereof, through the end of the month in which the Termination Date occurs, (ii) any Incentive Compensation payable to him -5- pursuant to paragraph (b) of Section 7 hereof, including a pro rata share for any partial year, (iii) any accrued vacation pay, and (iv) any benefits payable to him pursuant to the Company's employee benefit plans and arrangements as provided in paragraph (c) of Section 8 hereof through the end of the month in which the Termination Date occurs. (b) Termination by the Company Without Cause or by the Employee for Good Reason. If the Company terminates the Employee's employment with the Company without Cause, or if the Employee terminates his employment with the Company for Good Reason, the Company will pay or provide to the Employee the following: (i) The Company will pay to the Employee within thirty (30) days after the Termination Date a lump sum equal to (x) times (y), where (x) equals the Employee's Base Annual Salary; and (y) equals the greater of either (A) one year, or (B) the number of years, including partial years, remaining in the Period of Employment as of the Employee's Termination Date. (ii) The Company will pay to the Employee within thirty (30) days after the Termination Date a lump sum equal to (x) times (y), where (x) equals the Employee's average annual Incentive Compensation paid for the two calendar years immediately preceding the calendar year in which occurs (A) the Termination Date, or (B) the first day of the Period of Employment, whichever is higher; and (y) equals the greater of either (A) one year, or (B) the number of years, including partial years, remaining in the Period of Employment as of the Employee's Termination Date. (iii) For a period of three years immediately following his Termination Date, the Employee and his family shall continue to participate in all employee Benefit Plans of the Company (as defined in Section 8(c) hereof) in which he or his family participated at any time during the one-year period ending on the date immediately preceding his Termination Date, provided that (a) such -6- continued participation is possible under the terms of such Benefit Plans, and (b) the Employee continues to pay contributions for such participation at the rates paid for similar participation by active Company employees in similar positions to that held by the Employee immediately prior to the Termination Date. If such continued participation is not possible, the Company shall provide, at its sole cost and expense, identical benefits to the Employee plus pay an additional amount to the Employee equal to the Employee's liability for federal, state and local income taxes on such amounts. The amounts payable to the Employee under this paragraph (b) shall be absolutely owing and shall not be subject to reduction or mitigation as a result of employment of the Employee elsewhere after the Termination Date. (c) Good Reason. Termination by the Employee of employment for "Good Reason" shall mean termination based on: (i) an adverse change in the status of the Employee (other than any such change primarily attributable to the fact that the Company may no longer be publicly owned) or position(s) as an officer of the Company as in effect immediately prior to the commencement of the Period of Employment or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgement, are inconsistent with such status or position(s), or any removal of the Employee from or any failure to reappoint or reelect him to such position(s) (except in connection with the termination of the Employee's employment for Cause, Disability or upon attaining age 65 or upon taking early retirement under any of the Company's retirement plans, or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company in the Employee's Base Annual Salary; -7- (iii) a material reduction in the Employee's total annual compensation; a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to all other executives participating in incentive compensation plans shall be considered "material", provided, however, the failure of the Company to adopt or renew a stock option plan or to grant stock options to the Employee shall not be considered a reduction; (iv) the failure by the Company to continue in effect any Benefit Plan (as defined in Section 8(c) hereof) in which Employee was participating at the time of the Change in Control (or Benefit Plans providing Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such Benefit Plan in accordance with its terms as in effect at the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect Employee's continued participation in any such Benefit Plans on at least as favorable a basis to Employee as is the case on the date of the Change in Control or which would materially reduce Employee's benefits in the future under any of such Benefit Plans or deprive Employee of any material benefit enjoyed by Employee at the time of the Change in Control; (v) the failure by the Company to provide and credit Employee with the number of paid vacation days to which Employee was then entitled in accordance with the Company's normal vacation policy as in effect immediately prior to the Change in Control; or (vi) the Company's requiring the Employee to be based more than fifty miles from Norwalk, Connecticut, except for required travel on the Company's business to an extent substantially consistent with the business travel obligations -8- which he undertook on behalf of the Company prior to the commencement of the Period of Employment. 10. Governing Law. This Agreement is governed by, and is to be construed and enforced in accordance with, the laws of the State of Connecticut. If under such law any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation or ordinance, such portion shall be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement; and the invalidity of any such portion shall not affect the force, effect and validity of the remaining portion hereof. 11. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company's case, to its Secretary) or seventy-two (72) hours after deposit thereof in the U.S. mails, postage prepaid, for delivery as registered or certified mail -- addressed, in the case of the Employee, to him at this residential address, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as the Employee or the Company may designate in writing at any time or from time to time to the other party. In lieu of personal notice or notice by deposit in the U.S. mail, a party may give notice by telegram, fax or telex. 12. Miscellaneous. This Agreement constitutes the entire understanding between the Company and the Employee relating to the employment of the Employee by the Company and cancels all prior written and oral agreements and understandings with respect to the subject matter of this Agreement. This Agreement may be amended only by a subsequent written agreement of the Employee and the Company. This Agreement shall be binding upon and shall inure to the benefit of the Employee, his heirs, executors, administrators, beneficiaries and assigns and to the benefit of the Company and its successors. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate if Employee or the Company terminate Employee's employment prior to a Change in Control of the Company. 13. Fees and Expenses/Arbitration. -9- (a) The Company shall pay all reasonable legal fees and related expenses incurred by the Employee in connection with the Agreement following a Change in Control of the Company, including, without limitation, all such fees and expenses, if any, incurred in connection with: (i) contesting or disputing any termination of the Employee's employment hereunder; or (ii) the Employee seeking to obtain or enforce any right or benefit provided by the Agreement. (b) Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Connecticut by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgement may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that Employee shall be entitled to seek specific performance of Employee's right to be paid until the Termination Date during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 13(b). IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By: /s/ G. N. Kelley Gaynor N. Kelley Chairman and Chief Executive Officer ATTEST: By: /s/ W. B. Sawch ACCEPTED AND AGREED: William B. Sawch Vice President General Counsel & Secretary /s/ Peter Barrett Dr. Peter Barrett -10- EX-10 8 EXHIBIT-10(14) EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT entered into as of the 18th day of February, 1993, between THE PERKIN-ELMER CORPORATION, a New York corporation having its principal place of business at Norwalk, Connecticut (hereinafter referred to as the "Company") and Michael J. McPartland of 540 Warner Hill Road, Southport, CT 06940 (hereinafter referred to as the "Employee"). WHEREAS, the Employee has rendered and/or will render valuable services to the Company and it is regarded essential by the Company that it have the benefit of his services in future years; and WHEREAS, the Board of Directors of the Company believes that it is essential that, in the event of the possibility of a change in control of the Company, the Employee be able to continue his attention and dedication to his assigned duties and to assess and advise the Board of Directors whether such proposal would be in the best interests of the Company and its shareholders without distraction regarding an uncertainty concerning his future with the Company; and WHEREAS, the Employee is willing to agree to continue to serve the Company in the future; NOW, THEREFORE, it is mutually agreed as follows: 1. Employment. The Company agrees to employ the Employee, and the Employee agrees to serve as an employee of the Company or one or more of its subsidiaries during the Period of Employment (as defined in Section 2 hereof) in such executive capacity as Employee served immediately prior to the commencement of the Period of Employment. The Employee also agrees to serve during the Period of -1- Employment, if elected or appointed thereto, as a Director of the Board of Directors of the Company and as a member of any committee of the Board of Directors. 2. Period of Employment. (a) The "Period of Employment" shall be the period of thirty-six (36) months commencing on the date of a Change in Control (as defined in Section 3 hereof) and the period of any extension or extensions thereof in accordance with the provisions of this Section. The Period of Employment shall be extended automatically by one week for each week in which the Employee's employment continues after the date of a Change in Control, subject to the provisions of paragraph (b) hereof. (b) Notwithstanding the provisions of paragraph (a) hereof, the Period of Employment shall terminate upon the occurrence of (i) the Employee's attainment of age 65, or the election by the Employee to retire early from the Company under any of its retirement plans, (ii) the death of the Employee, (iii) the Disability of the Employee (as defined in Section 4 hereof), (iv) any other termination of Employee's employment with the Company, regardless of whether for Cause (as defined in Section 5 hereof), or for Good Reason (as defined in Section 9(c) hereof) or not for Good Reason, or (v) the sixth anniversary of the commencement of the Period of Employment. (c) In the case of termination of the Period of Employment pursuant to Section 2(b)(iv), "Termination Date" means the date of receipt by the Employee or the Company of notice of termination given by the other party, or such later date (but not more than 30 days thereafter) as may be specified in such notice. 3. Change in Control. For purposes of this Agreement, a "Change in Control" shall have occurred if an event occurs that would be required to be reported (assuming such event has not been "previously 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; provided that, without limitation, such a Change in Control shall be deemed to have occurred at such time as (i) any "person" within the -2- meaning of section 14(d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three-quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (ii), considered as though such person were a member of the Incumbent Board, or (iii) the approval by the Company's stockholders of the sale of all or substantially all of the assets of the Company. 4. Disability. For purposes of this Agreement, "Disability" means the absence of the Employee from his duties with the Company on a full-time basis for one hundred eighty (180) consecutive days as a result of incapacity due to physical or mental illness. 5. Cause. For purposes of this Agreement, termination by the Company of the employment of the Employee for "Cause" shall mean termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for a substantial performance is delivered to the Employee by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this Section 5, no act, or failure to act, on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best -3- interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three- quarters of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth above in (i) or (ii) of this Section 5 and specifying the particulars thereof in detail. 6. Duties During the Period of Employment. The Employee shall devote his full business time, attention and best efforts to the affairs of the Company and its subsidiaries during the Period of Employment; provided, however, that the Employee may engage in other activities, such as activities involving charitable, educational, religious and similar types of organizations, speaking engagements, membership on the board of directors of other organizations, and similar type activities to the extent that such other activities do not prohibit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of the Company and its subsidiaries. 7. Current Cash Compensation. (a) Base Annual Salary. The Company will pay to the Employee during the Period of Employment a base annual salary in an amount determined by the Board of Directors or its Compensation Committee which shall in no event be less than the higher of (i) his base annual salary prior to the commencement of the Period of Employment or (ii) his base annual salary during the preceding year of the Period of Employment; provided, however, it is agreed between the parties that the Company shall review annually, and in light -4- of such review may, in the discretion of the Board of Directors or its Compensation Committee, increase such Base Annual Salary taking into account the Employee's responsibilities, inflation in the cost of living, increases in compensation of other executives of the Company and its subsidiaries, increase in salaries of executives of other corporations, performance by the Employee, and other pertinent factors. The Base Annual Salary shall be paid in substantially equal biweekly installments during the Period of Employment. (b) Incentive Compensation. During the Period of Employment the Employee shall continue to participate in such of the Company's incentive compensation programs for executives that he participated in prior to the commencement of the Period of Employment. Any amount awarded to the Employee under such programs shall be paid to Employee in accordance with the terms thereof. 8. Employee Benefits. (a) Vacation and Sick Leave. The Employee shall be entitled to a paid annual vacation of not less than four (4) weeks during each calendar year in the Period of Employment and to reasonable sick leave. (b) Regular Reimbursed Business Expenses. The Company shall reimburse the Employee for all expenses and disbursements reasonably incurred by the Employee in the performance of his duties during the Period of Employment. (c) Employee Benefit Plans or Arrangements. In addition to the cash compensation provided for in Section 7 hereof and the benefits provided in this Section, the Employee, during the Period of Employment, subject to meeting eligibility provisions and to the provisions of this Agreement, shall be entitled to participate in all employee benefit plans or arrangements of the Company as presently in effect or as they may be modified or added to by the Company from time to time, which provide benefits to officers or employees of the Company. For purposes of this Agreement, such benefit plans or arrangements, herein "Benefit Plans", shall mean any compensation plan such as an incentive, -5- deferred, stock option or restricted stock plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, dental, disability, salary continuation, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees. 9. Termination of Employment. (a) Termination by the Company for Cause or Termination by the Employee Other Than for Good Reason. If the Company terminates the employment of the Employee for Cause (as defined in Section 5 hereof), or if the Employee terminates his employment other than for Good Reason (as defined in paragraph (c) of this Section) the Company will pay the Employee (i) his Base Annual Salary, as provided in paragraph (a) of Section 7 hereof, through the end of the month in which the Termination Date occurs, (ii) any Incentive Compensation payable to him pursuant to paragraph (b) of Section 7 hereof, including a pro rata share for any partial year, (iii) any accrued vacation pay, and (iv) any benefits payable to him pursuant to the Company's employee benefit plans and arrangements as provided in paragraph (c) of Section 8 hereof through the end of the month in which the Termination Date occurs. (b) Termination by the Company Without Cause or by the Employee for Good Reason. If the Company terminates the Employee's employment with the Company without Cause, or if the Employee terminates his employment with the Company for Good Reason, the Company will pay or provide to the Employee the following: (i) The Company will pay to the Employee within thirty (30) days after the Termination Date a lump sum equal to (x) times (y), where (x) equals the Employee's Base Annual Salary; and (y) equals the greater of either (A) one year, or (B) the number of years, including partial years, remaining in -6- the Period of Employment as of the Employee's Termination Date. (ii) The Company will pay to the Employee within thirty (30) days after the Termination Date a lump sum equal to (x) times (y), where (x) equals the Employee's average annual Incentive Compensation paid for the two calendar years immediately preceding the calendar year in which occurs (A) the Termination Date, or (B) the first day of the Period of Employment, whichever is higher; and (y) equals the greater of either (A) one year, or (B) the number of years, including partial years, remaining in the Period of Employment as of the Employee's Termination Date. (iii) For a period of three years immediately following his Termination Date, the Employee and his family shall continue to participate in all employee Benefit Plans of the Company (as defined in Section 8(c) hereof) in which he or his family participated at any time during the one-year period ending on the date immediately preceding his Termination Date, provided that (a) such continued participation is possible under the terms of such Benefit Plans, and (b) the Employee continues to pay contributions for such participation at the rates paid for similar participation by active Company employees in similar positions to that held by the Employee immediately prior to the Termination Date. If such continued participation is not possible, the Company shall provide, at its sole cost and expense, identical benefits to the Employee plus -7- pay an additional amount to the Employee equal to the Employee's liability for federal, state and local income taxes on such amounts. The amounts payable to the Employee under this paragraph (b) shall be absolutely owing and shall not be subject to reduction or mitigation as a result of employment of the Employee elsewhere after the Termination Date. (c) Good Reason. Termination by the Employee of employment for "Good Reason" shall mean termination based on: (i) an adverse change in the status of the Employee (other than any such change primarily attributable to the fact that the Company may no longer be publicly owned) or position(s) as an officer of the Company as in effect immediately prior to the commencement of the Period of Employment or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgement, are inconsistent with such status or position(s), or any removal of the Employee from or any failure to reappoint or reelect him to such position(s) (except in connection with the termination of the Employee's employment for Cause, Disability or upon attaining age 65 or upon taking early retirement under any of the Company's retirement plans, or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company in the Employee's Base Annual Salary; (iii) a material reduction in the Employee's total annual compensation, a reduction for any year of over 10% of total compensation measured by the preceding year without a substantially similar reduction to all other executives participating in incentive compensation plans shall be considered "material", provided, however, -8- the failure of the Company to adopt or renew a stock option plan or to grant stock options to the Employee shall not be considered a reduction; and (iv) the failure by the Company to continue in effect any Benefit Plan (as defined in Section 8(c) hereof) in which Employee was participating at the time of the Change in Control (or Benefit Plans providing Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such Benefit Plan in accordance with its terms as in effect at the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect Employee's continued participation in any such Benefit Plans on at least as favorable a basis to Employee as is the case on the date of the Change in Control or which would materially reduce Employee's benefits in the future under any of such Benefit Plans or deprive Employee of any material benefit enjoyed by Employee (v) the failure by the Company to provide and credit Employee at the time of the Change in Control; with the number of paid vacation days to which Employee was then entitled in accordance with the Company's normal vacation policy as in effect immediately prior to the Change in Control; and (vi) the Company's requiring the Employee to be based more than fifty miles from Norwalk, Connecticut, except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the commencement of the Period of Employment. -9- 10. Governing Law. This Agreement is governed by, and is to be construed and enforced in accordance with, the laws of the State of Connecticut. If under such law any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation or ordinance, such portion shall be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement; and the invalidity of any such portion shall not affect the force, effect and validity of the remaining portion hereof. 11. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company's case, to its Secretary) or seventy-two (72) hours after deposit thereof in the U.S. mails, postage prepaid, for delivery as registered or certified mail -- addressed, in the case of the Employee, to him at this residential address, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as the Employee or the Company may designate in writing at any time or from time to time to the other party. In lieu of personal notice or notice by deposit in the U.S. mail, a party may give notice by telegram, fax or telex. 12. Miscellaneous. This Agreement constitutes the entire understanding between the Company and the Employee relating to the employment of the Employee by the Company and cancels all prior written and oral agreements and understandings with respect to the subject matter of this Agreement. This Agreement may be amended only by a subsequent written agreement of the Employee and the Company. This Agreement shall be binding upon and shall inure to the benefit of the Employee, his heirs, executors, administrators, beneficiaries and assigns and to the benefit of the Company and its successors. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate if Employee or the Company terminate Employee's employment prior to a Change in Control of the Company. -10- 13. Fees and Expenses/Arbitration. (a) The Company shall pay all reasonable legal fees and related expenses incurred by the Employee in connection with the Agreement following a Change in Control of the Company, including, without limitation, all such fees and expenses, if any, incurred in connection with: (i) contesting or disputing any termination of the Employee's employment hereunder; or (ii) the Employee seeking to obtain or enforce any right or benefit provided by the Agreement. (b) Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Connecticut by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgement may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that Employee shall be entitled to seek specific performance of Employee's right to be paid until the Termination Date during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 13(b). IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By: /s/ G. N. Kelley Gaynor N. Kelley Chairman and Chief Executive Officer -11- ATTEST: By: /s/ C. W. Bergere, Jr. C. Wendell Bergere, Jr. Vice President General Counsel & Secretary ACCEPTED AND AGREED: /s/ Michael J. McPartland -12- EX-10 9 EXHIBIT-10(16) CHANGE IN CONRTOL AGREEMENT CHANGE IN CONTROL AGREEMENT AGREEMENT entered into as of September 12, 1995, between THE PERKIN-ELMER CORPORATION, a New York corporation having its principal place of business at Norwalk, Connecticut (the "Company") and TONY L. WHITE (the "Employee") presently residing at 575 Stable Lane, Lake Forest, Illinois 60045. WHEREAS, the Employee has rendered and/or will render valuable services to the Company and it is regarded as essential by the Company that it have the benefit of his services in future years; and WHEREAS, the Board of Directors of the Company (the "Board") believes that it is essential that, in the event of the possibility of a Change in Control of the Company (as defined herein), the Employee be able to continue his attention and dedication to his duties and to assess and advise the whether such proposals would be in the best interest of the Company and its shareholders without distraction regarding any uncertainty concerning his future with the Company; and WHEREAS, the Employee is willing to agree to continue to serve the Company in the future; NOW, THEREFORE, it is mutually agreed as follows: 1. Employment. The Company agrees to employ Employee, and the Employee agrees to serve as an employee of the Company or one or more of its subsidiaries during the Period of Employment (as defined in Section 2 hereof) in such executive capacity as -1- Employee served immediately prior to the commencement of the Period of Employment. The Employee also agrees to serve during the Period of Employment as Chairman of the Board of the Company and as a member of any committee of the Board. 2. Period of Employment. (a) The "Period of Employment" shall be the period of thirty-six (36) months commencing on the date of a Change in Control and the period of any extension or extensions thereof in accordance with the terms of this Section 2. The Period of Employment shall be extended automatically by one week for each week in which the Employee's employment continues after the date of a Change in Control, subject to the provisions of paragraph (b) hereof. (b) Notwithstanding the provisions of paragraph (a) hereof, the Period of Employment shall terminate upon the occurrence of the earlier of (i) the Employee's attainment of age 65, or the election by the Employee to retire early from the Company under any of its retirement plans, (ii) the death of the Employee, (iii) the Disability of the Employee (as defined in Section 3 hereof), (iv) any termination of Employee's employment with the Company for Cause or without Good Reason or (v) the sixth anniversary of the commencement of the Period of Employment. (c) In the case of termination of the Period of Employment pursuant to Section 2(b)(iv), "Termination Date" means the date -2- of receipt by the Employee or the Company of notice of termination given by the other party, or such later date (but not more than 30 days thereafter) as may be specified in such notice. 3. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth in this Section 3. (a) Cause. "Cause" means termination upon (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a demand for a substantial performance is delivered to the Employee by the Board which specifically identifies the manner in which the Board believes that the Employee has not substantially performed his duties, or (ii) the willful engaging by the Employee in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this Section 3(a), no act, or failure to act, on the part of the Employee shall be considered "willful" unless done, or omitted to be done, by the Employee in bad faith and without reasonable belief that the Employee's action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the -3- Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Employee and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth above in (i) or (ii) of this Section 3(a) and specifying the particulars thereof in detail. (b) Cash Compensation. "Cash Compensation" shall mean the sum of (i) Employee's Base Salary (determined in accordance with the provisions of Section 5(a) hereof) and (ii) the average Incentive Compensation (provided for under Section 5(b) hereof) which shall be an amount equal to the greater of (x) the average of the amount of Employee's Incentive Compensation for the last three completed fiscal years immediately prior to the Employee's termination of employment or (y) the target amount of such Employee's Incentive Compensation for the fiscal year in which his termination of employment occurs; provided, however, that if the Employee was not employed by the Company for the entirety of the three completed fiscal years immediately prior to the Employee's termination of employment, the Employee's average -4- Incentive Compensation shall be deemed to be the target amount of such Employee's Incentive Compensation for the fiscal year in which his termination of employment occurs. (c) Change in Control. "Change in Control" means the occurrence of any of the following: an event that would be required to be reported (assuming such event has not been "previously 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; provided that, without limitation, such a Change in Control shall be deemed to have occurred at such time as (i) any "person" within the meaning of Section 14(d) of the Securities Exchange Act of 1934 becomes the "beneficial owner" as defined in Rule 13d-3 thereunder, directly or indirectly, of more than 25% of the Company's Common Stock, (ii) during any two-year period, individuals who constitute the Board of Directors of the Company (the "Incumbent Board") as of the beginning of the period cease for any reason to constitute at least a majority thereof, provided that any person becoming a director during such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least three quarters of the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination) shall be, for purposes of this clause (ii), considered as though -5- such person were a member of the Incumbent Board or (iii) the approval by the Company's stockholders of the sale of all or substantially all of the stock or assets of the Company. (d) Disability. "Disability" means the absence of the Employee from his duties with the Company on a full-time basis for one hundred eighty (180) consecutive days as a result of incapacity due to physical or mental illness. (e) Good Reason. "Good Reason" means: (i) an adverse change in the status of the Employee (other than any such change primarily attributable to the fact that the Company may no longer be publicly owned) or position(s) as an officer of the Company as in effect immediately prior to the commencement of the Period of Employment or the assignment to the Employee of any duties or responsibilities which, in his reasonable judgment, are inconsistent with such status or position(s), or any removal of the Employee from or any failure to reappoint or reelect him to such position(s) (except in connection with the termination of the Employee's employment for Cause, Disability or upon attaining age 65 or upon taking early retirement under any of the Company's retirement plans, or as a result of death or by the Employee other than for Good Reason); (ii) a reduction by the Company in the Employee's Base Salary; (iii) a material reduction in the Employee's total annual compensation, a reduction for any year of over 10% of total -6- compensation measured by the preceding year without a substantially similar reduction to all other executives participating in incentive compensation plans shall be considered "material." The failure of the Company to adopt or renew a stock option plan or to grant amounts of restricted stock or stock options, which are consistent with the Company's prior practices, to the Employee shall be considered a reduction, unless the Employee participates in substitute programs that provide substantially equivalent economic value to the Employee; (iv) the failure by the Company to continue in effect any Benefit Plan in which Employee was participating at the time of the Change in Control (or Benefit Plans providing Employee with at least substantially similar benefits) other than as a result of the normal expiration of any such Benefit Plan in accordance with its terms as in effect at the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect Employee's continued participation in any such Benefit Plans on at least as favorable a basis to Employee as is the case immediately prior to the Change in Control or which would materially reduce Employee's benefits in the future under any of such Benefit Plans or deprive Employee of any material benefit enjoyed by Employee immediately prior to the Change in Control; (v) the failure by the Company to provide and credit Employee with the number of paid vacation days to which Employee was then -7- entitled in accordance with the Company's normal vacation policy as in effect immediately prior to the Change in Control; and (vi) the Company's requiring the Employee to be based more than fifty miles from Norwalk, Connecticut except for required travel on the Company's business to an extent substantially consistent with the business travel obligations which he undertook on behalf of the Company prior to the commencement of the Period of Employment. 4. Duties During the Period of Employment. The Employee shall devote his full business time, attention and best efforts to the affairs of the Company and its subsidiaries during the Period of Employment; provided, however, that the Employee may engage in other activities, such as activities involving charitable, educational, religious and similar types of organizations, speaking engagements, membership on the boards of directors of other organizations, and similar type activities to the extent that such other activities do not prohibit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of the Company and its subsidiaries. 5. Current Cash Compensation. (a) Base Salary. The Company will pay to the Employee while employed by the Company an annual base salary ("Base Salary") in an amount determined by the Board or its Compensation Committee -8- which shall in no event be less than the higher of (i) his Base Salary immediately prior to the commencement of the Period of Employment or (ii) his Base Salary during the last completed fiscal year of the Company ("Fiscal Year") preceding the Period of Employment; provided, however, that for purposes of this Section 5(a), the Employee's Base Salary under clauses (i) and (ii) of this Section 5(a) shall be deemed to include an amount which is equal to the greater of (x) the fair market value of 12,000 shares of Company common stock immediately prior to a Change in Control or (y) $400,000; provided, further, that it is agreed between the parties that the Company shall review annually, and in light of such review may, in the discretion of the Board or its Compensation Committee, increase such Base Salary taking into account the Employee's responsibilities, inflation in the cost of living, compensation of other executives of the Company and its subsidiaries, increase in salaries of executives of other corporations, performance by the Employee, and other pertinent factors. The Base Salary shall be paid in substantially equal biweekly installments while employed hereunder. (b) Incentive Compensation. While employed hereunder, the Employee shall continue to participate in such of the Company's incentive compensation programs for executives as he participated in prior to the commencement of the Period of Employment. Any amount awarded to the Employee under such programs shall be paid -9- to Employee in accordance with the terms thereof. 6. Employee Benefits. (a) Vacation and Sick Leave. The Employee shall be entitled to a paid annual vacation of not less than twenty (20) business days during each calendar year while employed hereunder and to reasonable sick leave. (b) Regular Reimbursed Business Expenses. The Company shall reimburse the Employee for all expenses and disbursements reasonably incurred by the Employee in the performance of his duties while employed hereunder. (c) Employee Benefit Plans, Programs or Arrangements. While employed hereunder, Employee shall be entitled to participate in all employee benefit plans, programs or arrangements ("Benefit Plans") of the Company, in accordance with the terms thereof, as presently in effect or as they may be modified by the Company from time to time, which the Company makes available to senior executives of the Company. For purposes of this Agreement, Benefit Plans shall include, without limitation, any compensation plan such as an incentive, deferred, stock option or restricted stock plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, dental, disability, salary continuation, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees. -10- (d) Auto Allowance and Other Perquisites. While employed hereunder, Employee shall receive an automobile allowance of $20,000 per year, and the Company shall also reimburse Employee for the reasonable costs of financial planning and tax preparation in accordance with Company policy as in effect from time to time. In addition, Employee shall be entitled, while employed hereunder, to any other perquisites and fringe benefits not specifically mentioned herein that are made available to senior executives of the Company, subject to the terms of this Agreement and commensurate with his position with the Company. (e) Supplemental Pension Benefit. It is understood that Employee has been employed by his prior employer for a period of twenty-five years ("Prior Service Period"). In addition to receiving credit under the Company's qualified defined benefit plan ("Pension Plan") and the Company's non-qualified Supplemental Retirement Plan and Contingent Compensation Plan for Key Executives (collectively, "Non-Qualified Plans") for Employee's service with the Company under the terms of this Agreement, the Company shall pay Employee a special supplemental pension benefit equal to the amount which he would receive under the Pension Plan and the Non-Qualified Plans if Employee were credited with his Prior Service Period under the Pension Plan and the Non-Qualified Plans; provided, however, that Employee shall vest in 50 percent of his benefits hereunder at the commencement -11- of the Employee's employment and in the remaining benefits hereunder at the rate of 10 percent per year commencing on the first anniversary of the date the Employee's employment commenced. Employee's benefit hereunder shall be calculated in the manner set forth in Exhibit A hereto. Any benefits payable to Employee hereunder shall be reduced by $111,528 per year, and shall also be reduced by any amounts paid to Employee under the Pension Plan or the Non-Qualified Plans. 7. Termination of Employment. (a) Termination by the Company for Cause or Termination by the Employee Other Than for Good Reason. If the Company terminates the employment of the Employee for Cause or if the Employee terminates his employment other than for Good Reason the Company shall pay the Employee (i) his Base Annual Salary, as provided in paragraph (a) of Section 5 hereof, through the end of the month in which the date of termination occurs, (ii) any Incentive Compensation payable to him pursuant to paragraph (b) of Section 5 hereof, including a pro rata share for any partial year, (iii) any accrued vacation pay, and (iv) benefits payable to him pursuant to the Company's Benefit Plans through the end of the month in which the termination of employment occurs. The amounts and benefits set forth in clauses (i), (ii), (iii), and (iv) of the preceding sentence shall hereinafter be referred to as "Accrued Benefits." -12- (b) Termination by the Company Without Cause or by the Employee for Good Reason. If the Company terminates the Employee's employment with the Company without Cause, or if the Employee terminates his employment with the Company for Good Reason, the Company will pay to Employee all Accrued Benefits and, in addition, pay or provide to the Employee the following: (i) within thirty (30) days after the Termination Date a lump sum equal to 300 percent of Employee's Cash Compensation; and (ii) for a period of three years immediately following his Termination Date, the Employee and his family shall continue to participate in any Benefit Plans of the Company (as defined in Section 6(c) hereof) in which he or his family participated at any time during the one-year period ending on the day immediately preceding his termination of employment, provided that (a) such continued participation is possible under the terms of such Benefit Plans, and (b) the Employee continues to pay contributions for such participation at the rates paid for similar participation by active Company employees in similar positions to that held by the Employee immediately prior to the -13- Termination Date. If such continued participation is not possible, the Company shall provide, at its sole cost and expense, identical benefits to the Employee plus pay an additional amount to the Employee equal to the Employee's liability for federal, state and local income taxes on such amounts; (iii) three years of additional vesting credit for purposes of Section 6(e) hereof and three additional years of service credit under the Company's Non-Qualified Plans and, for purposes of such plans, Employee's final average pay shall be deemed to be the sum of his then current Base Salary and his Target Bonus for the year in which the Termination Date occurs; (iv) the Company shall take all reasonable actions to cause any Restricted Stock granted to Employee to become fully vested and any Options granted to Employee to become fully exercisable and in the event the Company cannot effect such vesting or acceleration, the Company shall pay to Employee (i) with respect to each Option, an amount equal to the product of (x) the number -14- of unvested shares subject to such Option, multiplied by (y) the excess of the fair market value of a share of Company common stock on the date of Employee's termination of employment, over the per share exercise price of such Option and (ii) with respect to each unvested share of Restricted Stock an amount equal to the fair market value of a share of Company common stock on the date of Employee's termination of employment. The amounts payable to the Employee under this paragraph (b) shall be absolutely owing and shall not be subject to reduction or mitigation as a result of employment of the Employee elsewhere after the Termination Date. 8. Gross-Up. In the event any amounts due to the Employee under this Agreement, under the terms of any Benefit Plan or otherwise payable by the Company or an affiliate of the Company are subject to excise taxes under Section 4999 of the Internal Revenue Code of 1986, as amended ("Excise Taxes"), the Company shall pay to the Employee, in addition to any other payments due under other provisions of this Agreement, an amount equal to the amount of such Excise Taxes plus the amount of any federal, state and local income or other taxes and Excise Taxes attributable to all amounts, including income taxes, payable under this Section 8. -15- 9. Governing Law. This Agreement is governed by, and is to be construed and enforced in accordance with the laws of the State of Connecticut. If under such law any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation or ordinance, such portion shall be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement; and the invalidity of any such portion shall not affect the force, effect and validity of the remaining portion hereof. 10. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company's case, to its Secretary) or seventy-two (72) hours after deposit thereof, in the U.S. mail, postage prepaid, for delivery as registered or certified mail --addressed, in the case of the Employee, to him at his residential address, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as the Employee or the Company may designate in writing at any time or from time to time to the other party. In lieu of personal notice or notice by deposit in the U.S. mail, a party may give notice by telegram, fax or telex. 11. Miscellaneous. Upon a Change in Control, this Agreement shall constitute the entire understanding between the Company and the Employee relating to the employment of the Employee by the Company and shall supersede all prior written and oral agreements -16- and understandings with respect to the subject matter of this Agreement. This Agreement may be amended only by a subsequent written agreement of the Employee and the Company. This Agreement shall be binding upon and shall inure to the benefit of the Employee, his heirs, executors, administrators, beneficiaries and assigns and to the benefit of the Company and its successors. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate if Employee or the Company terminate Employee's employment prior to a Change in Control of the Company. 12. Fees and Expenses. The Company shall pay all reasonable legal fees and related expenses incurred by the Employee in connection with the Agreement following a Change in Control of the Company, including without limitation, all such fees and expenses, if any, incurred in connection with: (i) contesting or disputing, any termination of the Employee's employment hereunder; or (ii) the Employee seeking to obtain or enforce any right or benefit provided by the Agreement. -17- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By:/s/ Gaynor N. Kelley Gaynor N. Kelley Chairman, President and Chief Executive Officer ACCEPTED AND AGREED: /s/ Tony L. White TONY L. WHITE EX-10 10 EXHIBIT-10(17) CONSULTING AGREEMENT PERKIN-ELMER [LOGO] The Perkin-Elmer Corporation 761 Main Avenue Norwalk, CT 06859-0199 CONSULTING AGREEMENT The undersigned agrees to serve as a consultant to The Perkin- Elmer Corporation upon the following terms: 1. A. Fee: $15,000 per year B. Term: April 1, 1995 - March 31, 1996 C. Reporting Relationship: Riccardo Pigliucci D. Field of Consultancy: Membership on the ACE Board and other general management consulting services. 2. You are free to do work for others and yourself during the time which you do not devote to our projects and your duties under this Agreement will not interfere nor be in conflict with any government rules or regulations or your duties to other parties; however, you agree to promptly notify Perkin-Elmer if and when you perform work related to the work to be performed under this Agreement for any third parties who compete or may compete with Perkin-Elmer. All work which results from performance of services under this agreement shall belong exclusively to Perkin-Elmer. 3. You agree to keep us fully informed of any scientific advances you may make during the term of this Agreement which result from, or are suggested by, any work you may do for Perkin- Elmer. Any inventions, patentable developments, copyrightable materials and designs arising out of any such work are to be assigned to Perkin-Elmer without further compensation, and you agree to cooperate in obtaining patents and copyrights thereon. Copyrighted materials including computer programs shall be considered work made for hire and owned by Perkin-Elmer. You agree not to disclose to others, without Perkin-Elmer's permission, either during or after the term of this Agreement, any scientific development, trade secret or manufacturing technique of Perkin-Elmer which is not generally known to the public. Prior to publication, you will make available for review all disclosures, written contributions to periodicals and scientific papers concerning or referring to the subject matter within the purview of this Agreement. 4. You agree that: proprietary information of Perkin-Elmer will remain the trade secret and confidential property of Perkin-Elmer and will be held by you in secrecy and confidence; you will not use it for any purpose other than performance of assigned tasks under this Consulting Agreement; you will not make any record or copy of any proprietary information; and that upon the request of Perkin-Elmer or the termination of your Consulting Agreement, whichever occurs first, you will return all material furnished to you by Perkin-Elmer. Your obligations of confidentiality under this Agreement will not extend to any information that (a) is known to you at the date of this Agreement from a source other than one having an obligation of confidentiality to Perkin-Elmer, (b) hereafter becomes known to you independently of the disclosure by Perkin-Elmer except from a source having an obligation of non-disclosure to Perkin- Elmer, or (c) becomes publicly known as by public use or by publication or otherwise ceases to be secret or confidential through no fault of yours. 5. Nothing in this Agreement will be construed as granting you any license, for any purpose, under any patent or other intellectual property rights of Perkin-Elmer. As a basis for payment, you will submit on the tenth of each month an invoice showing the number of hours of service during the previous month requested by your Reporting Relationship and actually performed, a brief statement of work done by project, and the amount due you. It is not expected that it will be necessary for Perkin- Elmer to provide any special facilities or supplies for your use, although you will be reimbursed for supplies and for expenses in connection with traveling which is requested in advance and authorized in writing by your Reporting Relationship. Either party may terminate this Agreement without cause at anytime upon five (5) days prior written notice. Thereafter, neither party shall have any further obligation under this Agreement except for the obligations relating to confidentiality and assistance in obtaining patents and copyrights. If the foregoing arrangements are satisfactory, please sign below. ACCEPTED AND AGREED: /s/ Robert H. Hayes NAME: Robert H. Hayes SSN: ###-##-#### ADDRESS: 53 Cedar Road Belmont, MA 02178 DATE: April 1, 1995 THE PERKIN-ELMER CORPORATION BY: /s/ Riccardo Pigliucci Reviewed, and Approved, Office of the General Counsel: BY: /s/ W. B. Sawch Consulting Fees Deferral Election The undersigned, pursuant to a Consulting Agreement dated April 1, 1995, with The Perkin-Elmer Corporation, and covering the term April 1, 1995 through March 31, 1996, hereby elects to defer receipt of all consulting fees under the Agreement until the completion of services under such Agreement and any renewal thereof. Upon ceasing to provide consulting services to the Corporation I will be paid such deferred fees in ten equal annual installments on October 1 of each year commencing in the year in which I cease providing services. This deferral election is irrevocable. Should I die before all payments due hereunder are made, I designate Priscilla J. Hayes as my beneficiary to receive the remainder of the payments due hereunder. The right to receive future payments hereunder is not assignable. Attest: /s/ WB Sawch /s/ Robert H. Hayes Dated: April 1, 1995 EX-10 11 EXHIBIT-10(20) AGREEMENT AGREEMENT This Agreement is entered as of May 5, 1995, between The Perkin-Elmer Corporation (herein referred to as the "Company") and Riccardo Pigliucci (herein referred to as "Employee"). WHEREAS, Employee has rendered valuable services to the Company during the past 29 years, and during that time has been uniquely disadvantaged due to his work location being in various countries where his pension benefits have not consistently accrued as they otherwise would have; and WHEREAS, the Board of Directors of the Company regards the services of Employee, who currently holds the position of President and Chief Operating Officer of the Company, as having been uniquely important to the Company's operations; and WHEREAS, the Board of Directors of the Company and Employee wish to terminate the Employee's employment with the Company on the terms hereinafter set forth; NOW, THEREFORE, in consideration of Employee's past service to the Company and the other mutual covenants contained herein, the parties agree as follows: 1. The Company shall obtain, within ten days following execution of this Agreement, an irrevocable annuity payable to the Employee consistent with the terms set forth in Exhibit A to this Agreement. 2. A. Immediately upon execution of this Agreement by both the Company and Employee, Employee shall tender to the Board of Directors of the Company his resignation as an employee, officer, and director of the Company and its subsidiaries, such resignation to be in the form attached hereto as Exhibit B. Such resignation, when effective, is hereinafter referred to as the "Termination." Employee also agrees to cooperate with the Company's reasonable requests in -1- connection with effectuating such resignation, such as, for example, executing resignation letters for subsidiaries of the Company. B. Commencing with the Termination, the Company agrees to: i) Pay to Employee seventy-eight (78) equal biweekly installments of $17,308 each, commencing with the payroll period immediately following the Termination and ending at a date three years thereafter. Employee understands that the Company will deduct from these payments withholding taxes and other deductions in accordance with normal Company practices. ii)Consider Employee on a personal leave of absence from the Company for a period of 24 months following the Termination solely in order to be eligible for the following benefits and any other similar benefits in effect at the time of Termination: a) Coverage under the applicable provisions of the Company's CHOICE Program for medical, dental, and basic life insurance; and b) Participation in the Retirement Plan, Supplemental Retirement Plan, and Profit Sharing and Savings Plan. iii) Provide medical insurance benefits to Employee and Employee's eligible family comparable to (including cost sharing) those provided under the Company's CHOICE Program, during the period of time between the end of the leave of absence period referenced in Section 2.B(ii) and Employee's sixty- fifth birthday and following Employee's sixty-fifth birthday provide medical insurance benefits to Employee and Employee's eligible family comparable to (including cost sharing) those provided under the Company's medical insurance plans (including any -2- plans supplemental to Medicare or any program that is a successor to Medicare) to the Company's retirees as if Employee had continued in employment with the Company until his sixty-fifth birthday and retired on that date. Medical insurance benefits prior to age 65 shall terminate if and when Employee commences work for another employer with similar coverage, and the obligation to provide medical insurance benefits subsequent to age 65 will terminate when Employee commences work for another employer that provides any post-65 retiree medical benefits for which Employee is eligible. iv)All benefits under Sections 2.B(ii) and (iii) will be provided in accordance with the benefit plan provisions in effect at the time such benefits are provided to Employee and/or Employee's eligible family. Employee acknowledges that the Company has reserved the right to alter, amend or terminate such plans, but for purposes of any such alteration, amendment or termination, Employee should be treated comparably to other senior officers of the Company and as if he had continued in employment with the Company until his 65th birthday and retired on that date. C. Immediately following the Termination, the stock options previously granted to Employee pursuant to the Company's stock option plans shall become fully vested. The last day of the above-described leave of absence (the "Leave Termination Date") will be treated as Employee's termination date for purposes of rights associated with any options held by the Employee under the Company's Stock Option Plans and Stock Purchase Plan. D. Employee's Deferred Compensation Contract with the Company shall be fully vested and non-forfeitable upon Employee's attainment of age sixty (or upon his earlier death) -3- and shall be paid over a period of ten years commencing on Employee's sixtieth birthday (or on the date of his earlier death). E. For a period of 36 months following the Termination, the Company shall provide Employee with use of a company car and reimbursement of operating expenses as provided under current Company policy and consistent with Employee's prior position as President and Chief Operating Officer. During the 37th month following the Termination, the Company shall permit Employee to purchase said car at its then market value, such value to be determined in good faith by the Company. In the event Employee commences work for another Employer which provides Employee with use of a comparable car, the above stated 36 month period will be deemed to have elapsed. F. Immediately following Termination, the Company shall make available to Employee the services of an outplacement consultant in accordance with the Company's standard arrangements with Drake Beam Morin Inc. or with whatever substantially similar firm with whom the Company is doing business at the time of Termination and will provide financial planning and tax preparation services consistent with the Company's practice for senior management personnel for a period of 36 months following the Termination. -4- G. The Company shall pay to Employee a share of the Contingent Compensation award for fiscal year 1995 that would otherwise be made to Employee on a prorata basis for that portion of the fiscal year prior to Employee's Termination. Such payment shall be made on or about the time Contingent Compensation awards for that fiscal year are made to other eligible employees. Employee shall not be eligible for any Contingent Compensation award associated with fiscal years following the Termination. 3. Employee acknowledges and agrees that the benefits provided under Section 2 are in lieu of and in excess of the Company's standard severance benefits. Employee understands and agrees that, except for pension or other retirement benefits to which the Employee may be entitled under the Company's standard retirement programs, Employee shall receive no further wage, vacation, severance or other benefits from the Company beyond those described in Section 2. Furthermore, upon Employee's commencing receipt of benefits pursuant to Section 2, Employee's Employment Agreement dated November 21, 1991 with the Company shall immediately terminate. 4. A. Employee agrees not to: i) for a period of 36 months following the Termination, solicit for employment, either directly or through any corporation or other business entity of which Employee may become an officer, director, employee, or agent, any then current employee(s) of the Company, who were employed by the Company prior to the Termination, for any business activities, whether competitive or not; ii) make any derogatory statement, public or otherwise, concerning the Company, its officers, or its directors; iii) criticize, denigrate, or disparage the Company, its officers, or its directors; iv) assist or participate in any activities that would trigger a "Change in Control" as such term is defined in Employee's former Employment Agreement dated November 21, 1991 with the Company; v) initiate, participate, or assist in any activity specifically directed toward, and not solicited by, the Company, its officers, or its directors other than good faith, commercially acceptable activities between business competitors; and -5- vi) engage in any other activities, directly or indirectly, which may be deemed contrary to the best interests of the Company, its officers, or its directors. Notwithstanding Section 4.A(vi) but subject to the other restrictions in this Section 4, the parties acknowledge and agree that Employee shall not be prevented from entering into employment with, and carrying out his legitimate obligations to, business associations which may be competitive with the Company's businesses. B. The Company, its officers, and its directors agree not to make any derogatory statement, public or otherwise, concerning Employee. The Company and Employee also agree to the Company making a press release in the form attached hereto as Exhibit C. The Company shall not make any other press releases regarding the Employee without Employee's prior consent, such consent not to be withheld unreasonably. C. Employee is reminded of the terms of Employee's confidentiality agreement with the Company, which, among other things, prohibits Employee from using, or disclosing to others, any confidential business or technical information belonging to the Company, and Employee expressly acknowledges his understanding and agreement that such confidentiality agreement remains in full force and effect. Employee also acknowledges that, in his capacity as an officer of the Company, he has regularly been privy to confidential or proprietary information that he will not disclose or misuse following the Termination. Employee also agrees to return promptly to the Company all files, documents, records, credit cards, keys, and any other Company property in his possession, custody or control. This paragraph shall be deemed a material term of this Agreement. D. In consideration of the benefits under this Agreement, Employee releases, waives, and forever discharges the Company, any related companies, any Company insurer or benefit plan, -6- and the past or present employees, officers, representatives, agents and directors of any of them from all claims, demands, actions, suits, covenants, contracts, agreements, promises and liabilities of any kind whatsoever, known or unknown which Employee, Employee's heirs, executors or assigns may have had, now have or could in the future have including, without limitation, those based on Employee's employment with the Company, or the termination of that employment. This includes, for example, but is not limited to a release of any rights or claims Employee may have under the Age Discrimination in Employment Act, which prohibits age discrimination in employment; Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, national origin, religion or sex, the Equal Pay Act, which prohibits paying men and women unequal pay for equal work, or any other federal, state or local laws or regulations prohibiting employment discrimination. This also includes, but is not limited to, a release by Employee of any tort or contract claims, and any claims for wrongful discharge. The foregoing release ("Release") covers both claims that Employee knows about and those he may not know about. This Release does not include, however, a release of Employee's right, if any, to benefits under the Company's pension and profit sharing plans, whether qualified or non- qualified for federal income tax purposes, a release of any claim made by Employee under any welfare benefit plan prior to the signing of this Agreement, or a release of any rights or claims that Employee may have under the Age Discrimination in Employment Act which arise after the date the Employee signs this Release. Furthermore, this Release does not include a release of any rights of Employee or Employee's heirs, executors, or assigns relating to enforcement of obligations of the Company: (i) under this Agreement; or (ii) pertaining to indemnification of Employee as an officer, director, or employee of the Company. -7- Employee further promises never to file or join in a lawsuit or other proceeding asserting any claims that are released hereby. Nothing in this Agreement shall be inferred to be an admission of any fault by the Company. E. Employee understands that Employee has been given a period of 21 days to review and consider this Agreement before signing it. Employee further understands that Employee may use as much of this 21 day period as Employee wishes prior to signing. EMPLOYEE IS STRONGLY ENCOURAGED TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT. EMPLOYEE REPRESENTS THAT HE HAS DONE SO AND ACKNOWLEDGES THAT HE HAS BEEN REPRESENTED BY COUNSEL IN THE PREPARATION OF THIS AGREEMENT. F. Employee may revoke this Agreement within seven (7) days of signing it by hand delivering a written notice of revocation to the Secretary of the Company. If Employee revokes this Agreement, it will not become effective, the letter of resignation will be considered rescinded, and Employee will not receive the benefits specified in this Agreement. 5. All of the Company's obligations hereunder beyond those otherwise required by law are specifically subject to Employee fulfilling completely each of the promises and requirements set forth in this Agreement. Employee's failure to comply with each promise and requirement herein shall be cause for the immediate termination of any remaining payments or benefits accorded Employee by the terms of this Agreement. In addition, the Company expressly reserves the right to exercise any other legal remedies to which it may be entitled. 6. The Employee shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by -8- any compensation earned by the Employee as the result of employment by another employer after the Termination, or otherwise. 7. This Agreement is governed by, and is to be construed and enforced in accordance with, the laws of the State of Connecticut. If under such law any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation or ordinance, such portion shall be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement; and the invalidity of any such portion shall not affect the force, effect and validity of the remaining portion hereof. However, in connection with the enforceability of the Release, should the Employee attempt to challenge the enforceability of the Release, the Employee shall initially tender to the payor, by certified checks delivered to the Company, all cash amounts received pursuant to this Agreement, plus interest, and invite the Company to cancel this Agreement. In the event the Company accepts this offer, this Agreement shall be canceled. In the event the Company does not accept this offer, the Company shall so notify the Employee and the amount tendered by the Employee shall be placed in an interest-bearing account pending a determination of the enforceability of the Release. If the Release is determined to be enforceable, the amount in the account shall be repaid to the Employee, minus the attorneys fees and court costs incurred by the Company in responding to the challenge, which the Company shall retain. If the Release is determined not to be enforceable, the amount in the account shall be retained by the Company or its designee. 8. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company's case, to its Secretary) or seventy-two (72) hours after deposit thereof in the U.S. mails, postage prepaid, for delivery as registered or certified mail -- addressed, in the case of the Employee, to him at the last address recorded in -9- Employee's personnel file, and in the case of the Company, to its corporate headquarters, attention of the Secretary, or to such other address as Employee or the Company may designate in writing at any time or from time to time to the other party. In lieu of personal notice or notice by deposit in the U.S. mail, a party may give notice by telegram, confirmed facsimile or telex. 9. The Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Employee, expressly, absolutely and unconditionally to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. Any failure of the Company to obtain such agreement prior to the effectiveness of any such succession or assignment shall be a material breach of this Agreement and shall entitle the Employee to the immediate receipt of all amounts not yet paid pursuant to Section 2.B(i) and the net present value of the fully vested Deferred Compensation Contract in lieu of the benefit specified in Section 2.D. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor or assign to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 9 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. 10. This Agreement shall be binding on and inure to the benefit of and be enforceable by the Employee's personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amounts are still payable to him under Section 2.B(i) and 2.G, all such amounts, unless otherwise -10- provided herein, shall be paid in accordance with the terms of this Agreement to the Employee's devisee, legatee, or other designee or, if there be no such designee, to the Employee's estate. 11. This Agreement may be amended only by a subsequent written agreement of Employee and the Company. 12. To the extent Employee has been successful on the merits in seeking to obtain or enforce any right or benefit provided by the Agreement following Termination, the Company shall reimburse Employee for all actual and reasonable legal fees and related expenses incurred by Employee in connection therewith. Additionally, in the event of a "Change in Control" as such term is defined within Employee's former Employment Agreement dated November 21, 1991, the Company and/or its successor or assignee shall thereafter reimburse Employee for all actual and reasonable legal fees and related expenses incurred by Employee in seeking to obtain or enforce any right or benefit provided by the Agreement following Termination unless Employee's action has been determined by arbitration, as hereinafter provided, to have been frivolous. Any dispute or controversy arising out of or related to this Agreement shall be settled exclusively by binding arbitration as provided in the Arbitration Agreement attached as Exhibit D. -11- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By: /s/ Richard H. Ayers Richard H. Ayers ATTEST: By: /s/ W. B. Sawch ACCEPTED AND AGREED: /s/ Riccardo Pigliucci Riccardo Pigliucci -12- EX-10 12 EXHIBIT-10(21) EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT AGREEMENT entered into as of September 12, 1995, between THE PERKIN-ELMER CORPORATION (the "Company"), a New York corporation, and TONY L. WHITE ("Executive"), presently residing at 575 Stable Lane, Lake Forest, Illinois 60045. WHEREAS, the Company desires to employ Executive on the terms and conditions set forth herein; and WHEREAS, the Executive desires to render services to the Company on the terms and conditions set forth herein; NOW, THEREFORE, the parties hereto agree as follows: 1. Employment. (a) The Company agrees to employ Executive, and the Executive agrees to serve as Chairman, President and Chief Executive Officer of the Company during the Term (as defined in Section 2 hereof). In such capacities, Executive shall report to the Board of Directors of the Company (the "Board") and shall have the customary powers, responsibilities and authority of chief executive officers of corporations of the size, type and nature of the Company, as it exists from time to time, as are assigned by the Board. Executive also agrees to serve during the Term as Chairman of the Board and as a member of any committee of the Board. -1- (b) As soon as practicable after the date hereof, Executive shall devote his full business time, attention and best efforts to the affairs of the Company and its subsidiaries during the Term; provided, however, that nothing in this Agreement shall preclude Executive from engaging, so long as, in the reasonable determination of the Board, such activities do not interfere with his duties and responsibilities hereunder, in religious, charitable and community affairs, from managing any passive investment made by him in publicly traded equity securities or other property (provided that no such investment may exceed 1% of the equity of any entity, without the prior approval of the Board) or from serving, subject to the prior approval of the Board, as a member of boards of directors or as a trustee of any other corporation, association or entity. 2. Term of Employment. Subject to the provisions of Section 1(b) hereof Executive's term of employment (the "Term") under this Agreement shall commence (the "Commencement Date") as soon as practicable after the date hereof, but in no event later than September 15, 1995 and, subject to the terms hereof, shall terminate (the "Termination Date") on the earlier of (i) the third anniversary of the Commencement Date or (ii) termination of Executive's employment pursuant to this Agreement; provided, however, that the Term shall automatically renew for consecutive one-year periods, unless either party gives at least 180 days written notice of its intent not to renew the Agreement and any -2- such extension shall constitute part of the Term. Any termination of employment by Executive (other than for death, Permanent Disability or Good Reason) may only be made upon 90 days prior written notice to the Company and any termination of employment by Executive for Good Reason may only be made upon 30 days prior written notice to the Company. 3. Compensation. (a) Base Salary. The Company will pay to the Executive a base salary ("Base Salary") at the rate of $550,000 per annum for the period commencing on the beginning of Executive's term of employment hereunder and ending on the Termination Date. Base Salary shall be payable in accordance with the ordinary payroll practices of the Company. Any increase in Base Salary shall be in the discretion of the Board and, as so increased, shall constitute "Base Salary" hereunder. It is understood that the Company shall review Executive's Base Salary annually, and in light of such review may, in the discretion of the Board of Directors or its Compensation Committee, increase such Base Salary taking into account the Executive's responsibilities, compensation of other executives of the Company and its subsidiaries, increase in salaries of executives of other corporations, performance by the Executive, and other pertinent factors. (b) Bonus Arrangements. During the Term, Executive shall be eligible to receive an annual bonus (a "Bonus") in respect of -3- each Fiscal Year of the Company ("Fiscal Year") under, and subject to the terms of, the Company Contingent Compensation Plan (the "Bonus Plan") to the extent not inconsistent with the terms hereof. Executive's target bonus (the "Target Bonus") under the Bonus Plan will be equal to 100 percent of Executive's Base Salary and will be payable in accordance with the provisions of the Bonus Plan; provided, however, that with respect to Fiscal Year 1996, Executive shall receive total cash compensation of Base Salary plus Bonus of not less than $875,000. 4. Stock Arrangements. (a) Restricted Stock. (i) Upon Executive's commencement of employment with the Company, Executive shall be granted 30,000 shares of restricted stock of the Company ("Restricted Stock") pursuant to the Company 1993 Stock Incentive Plan for Key Executives (the "Stock Plan"). Except as otherwise specifically provided for herein, the terms of the Restricted Stock Agreement governing the Restricted Stock granted pursuant to this Agreement shall be no less favorable to Executive than the terms of the form of Restricted Stock Agreement currently used by the Company. The Restricted Stock will vest on the third anniversary of the date of grant based on the per share price of Company common stock on such date as follows: Per Share Price Vested Percentage less than $40 0% $40 or greater 50% -4- $46 or greater 75% $52 or greater 100% (i) In addition to the foregoing grant of Restricted Stock, the Company, subject to the approval of the shareholders of the Company, will endeavor to implement a Restricted Stock performance program (the "Program") based on financial measures of corporate success ("Performance Targets") beginning in Fiscal Year 1997. Under the Program, the Board intends that Executive would be granted 36,000 shares of Restricted Stock on or about July 1, 1996 (the "Performance Stock"). Performance Stock would vest as follows: 6,000 shares upon the attainment of 90 percent or less of the Performance Target with respect to a Fiscal Year; 600 shares per percentage point over 90 percent of Performance Target up to 110 percent for a possible maximum per Fiscal Year of 18,000 shares. Upon the grant of the Performance Shares, Executive would be entitled to receive dividends and exercise voting rights with respect thereto, whether or not the Performance Shares have vested. In the event of Executive's termination of employment pursuant to Sections 7(a) or 7(b) hereof, all unvested Performance Shares would be forfeited. The terms of any Performance Shares would be governed by the terms of the Program. In the event that the Program is not approved by the shareholders of the Company, the Company shall establish a -5- performance unit plan under which Executive shall be entitled to receive, in performance units, substantially equivalent economic value to the Performance Stock set forth in this Section 4(a)(ii), subject to the same terms and conditions that the Performance Stock would have been subject to had the Program been approved by shareholders. (b) Stock Options. (i) Upon Executive's commencement of employment with the Company, the Company shall grant Executive an option (an "Option") to purchase at fair market value on the date of grant 120,000 shares of common stock of the Company under the Stock Plan. The Option shall vest with respect to 50% of the shares subject thereto on each of the first and second anniversaries of the date of grant and shall expire ten years following the date of grant. Except as otherwise specifically provided for herein, the terms of the Option shall be no less favorable to Executive than the terms of the form of Stock Option Agreement currently used by the Company. (i) In addition to the foregoing Option grant, the Company, subject to the approval of the Board, anticipates making annual Option grants to Executive with respect to about 40,000 to 50,000 shares per year. (c) Stock Plan Governs. Unless otherwise specified in this Section 4, the terms of all Restricted Stock and Options granted to Executive hereunder, including, without limitation, terms relating to vesting and forfeiture, shall be governed by the -6- Stock Plan; provided, however, that in the event of Executive's termination under Section 7(b) hereof the Company shall take all reasonable actions to cause the Restricted Stock granted under the terms hereof to become fully vested and the Options granted under the terms hereof to become fully exercisable. In the event the Company cannot effect the vesting and acceleration contemplated in the preceding sentence, the Company shall pay to Executive (i) with respect to each Option, an amount equal to the product of (x) the number of unvested shares subject to such Option, multiplied by (y) the excess of the fair market value of a share of Company common stock on the date of Executive's termination of employment, over the per share exercise price of such Option and (ii) with respect to each unvested share of Restricted Stock an amount equal to the fair market value of a share of Company common stock on the date of Executive's termination of employment. (d) Stock Ownership. It is understood that Company policy anticipates that Executive will maintain a level of stock ownership in the Company equal to three times Executive's Base Salary. Grants of Restricted Stock (including Performance Stock) under the terms of this Agreement and shares of Company stock acquired upon exercise of an Option shall be credited towards Executive's stock ownership. Executive is expected to achieve the foregoing level of Company stock ownership no later than five years after the date hereof. -7- 5. Make Whole Payment. In the event Executive forfeits or otherwise loses (i) any restricted stock with respect to the 22,000 shares of restricted stock which would have been granted on or about the end of calendar year 1995 or (ii) bonus payments with respect to calendar year 1995 from his prior employer as a result of his resignation from such employer in order to commence employment with the Company, the Company shall pay to Executive an amount, up to a maximum of $1.2 million, equal to the losses Executive incurs with respect to such restricted stock or bonus. The obligation of the Company to make such payment is contingent upon Executive's use of his best efforts to obtain payment of such amounts and after substantiation of Executive's losses to the reasonable satisfaction of the Board. 6. Employee Benefits. (a) Employee Benefit Plans, Programs or Arrangements. During the Term, Executive shall be entitled to participate in all employee benefit plans, programs or arrangements ("Benefit Plans") of the Company, in accordance with the terms thereof, as presently in effect or as they may be modified by the Company from time to time, which the Company makes available to senior executives of the Company. (b) Vacation; Sick Leave. During the Term, the Executive shall be entitled to a paid annual vacation of not less than -8- twenty (20) business days during each calendar year and to reasonable sick leave. (c) Auto Allowance and Other Perquisites. During the Term, Executive shall receive an automobile allowance of $20,000 per year and the Company shall also reimburse Executive for the reasonable costs of financial planning and tax preparation in accordance with Company policy as in effect from time to time. In addition, Executive shall be entitled, during the Term, to any other perquisites and fringe benefits not specifically mentioned herein that are made available to senior executives of the Company, subject to the terms of this Agreement and commensurate with his position with the Company. (d) Supplemental Pension Benefit. It is understood that Executive has been employed by his prior employer for a period of twenty-five years ("Prior Service Period"). In addition to receiving credit under the Company's qualified defined benefit plan ("Pension Plan") and the Company's non-qualified Supplemental Retirement Plan and Contingent Compensation Plan for Key Executives (collectively, the "Non-Qualified Plans") for Executive's service with the Company under the terms of this Agreement, the Company shall pay Executive a special supplemental pension benefit equal to the amount which he would receive under the Pension Plan and the Non-Qualified Plans if Executive were credited with his Prior Service Period under the Pension Plan and the Non-Qualified Plans; provided, however, that Executive shall -9- vest in 50 percent of his benefits hereunder on Executive's Commencement Date and in the remaining benefits hereunder at the rate of 10 percent per year commencing on the first anniversary of the Executive's Commencement Date. Executive's benefit hereunder shall be calculated in the manner set forth in Exhibit A hereto. Any benefits payable to Executive hereunder shall be reduced by $111,528 per year, and shall also be reduced by any amounts paid to Executive under the Pension Plan or the Non- Qualified Plans. (e) Relocation and Payment of Relocation Expenses. Executive agrees that he and his family shall relocate to the Wilton, Connecticut area. In order to assist Executive with such relocation, the Company shall reimburse Executive for all reasonable expenses incurred by Executive in connection with such relocation, including, without limitation, the cost of relocation consulting. 7. Termination of Employment. (a) Termination by the Company for Cause or Termination by the Executive Other Than for Good Reason. If the Company terminates the employment of the Executive for Cause, if the Executive terminates his employment other than for Good Reason or if Executive's employment is terminated due to Executive's death, Permanent Disability or retirement, the Company shall only be obligated to pay Executive (i) any accrued but unpaid portion of his Base Salary, (ii) any accrued vacation pay, and (iii) any -10- benefits to which he is entitled to be paid in connection with such a termination under, and subject to, the terms of the Company's Benefit Plans. The amounts and benefits set forth in clauses (i), (ii), and (iii) of the preceding sentence shall hereinafter be referred to as "Accrued Benefits." (b) Termination by the Company Without Cause or by the Executive for Good Reason. If the Company terminates the Executive's employment with the Company without Cause, or if the Executive terminates his employment with the Company for Good Reason, the Company shall pay to Executive, in satisfaction of all the obligations of the Company with respect to Executive, all Accrued Benefits and, in addition, pay or provide to the Executive the following: (i) an amount equal to the sum of (x) three times the sum of (A) Executive's Base Salary at the rate in effect on Executive's Termination Date and (B) the amount of Executive's Target Bonus for the year in which the Termination Date occurs, (y) the fair market value of 36,000 shares of Company common stock on the Termination Date and (z) an amount equal to the product of (i) the Target Bonus in respect of the year in which such termination occurs, multiplied by (ii) a fraction the numerator of which is the number of days in the calendar year through Executive's Termination Date and the denominator of which -11- is 365, payable in equal installments over a period of thirty-six months commencing on the Termination Date; (ii) for a period ending on the earlier of (x) three years following Executive's Termination Date or (y) the date on which Executive is covered under similar plans of a subsequent employer, Executive and his eligible dependents shall continue to participate in the welfare benefits plans of the Company (including, without limitation, medical, dental and life insurance coverage) in which he or his eligible dependents participated at any time during the one-year period ending on the date immediately preceding his Termination Date; provided, however, that (A) such continued participation is possible under the terms of such benefit plans, and (B) Executive continues to pay contributions for such participation at the rates paid for similar participation by active Company employees in similar positions to that held by the Executive immediately prior to the Termination Date. If such continued participation is not possible, the Company shall provide, at its sole cost and expense, substantially identical benefits to the Employee and shall pay an additional amount (reduced by the amount of any contributions required under subparagraph (B) above) to the Employee equal to the Employee's liability for federal, state and local income taxes on such amounts; -12- (iii) the vesting or alternative cash payment provided for under Section 4(c) hereof with respect to Restricted Stock and Options granted to Executive under the terms hereof; and (iv) three years of additional vesting credit for purposes of Section 6(d) and three years of additional service credit under the Company's Non-Qualified Plans and for purposes of such plans, Executive's final average pay shall be deemed to be the sum of his then current Base Salary and his Target Bonus for the year in which the Termination Date occurs. (c) Waiver and Release. The obligation of the Company to make any payments or provide any benefits provided for under Section 5(b) hereof is contingent upon the execution, by Executive, of a waiver and release in substantially the form attached hereto as Exhibit B. (d) Termination of Employment Due To Death or Permanent Disability, or Retirement. In the event of Executive's termination of employment hereunder due to Executive's death, Permanent Disability or retirement, the Company will pay to Executive (or his designated beneficiaries) all Accrued Benefits and an amount equal to the product of (i) the Target Bonus in respect of the year in which such termination occurs, multiplied by (ii) a fraction the numerator of which is the number of days in the calendar year through Executive's Termination Date and the -13- denominator of which is 365; provided, however, that no retirement shall be deemed to have taken place prior to Executive's attainment of age 65, unless the Board approves such retirement. (e) Good Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any of the following, other than with the Consent of Executive: (i) any failure to continue Executive as Chairman, President or Chief Executive Officer of the Company or any material reduction by the Company of Executive's duties or responsibilities (except in connection with the termination of Executive's employment for Cause, as a result of Permanent Disability, as a result of Executive's death or by Executive other than for Good Reason); (ii) a reduction by the Company in Executive's Base Salary, other than a reduction which is part of a general salary reduction program affecting senior executives of the Company. (iii) any material breach by the Company of the provisions of this Agreement; and (iv) the Company's requiring the Employee to be based more than fifty miles from Norwalk, Connecticut except for required travel on the Company's business to an extent substantially consistent with the business travel obligations of Executive hereunder. -14- (f) Cause. For purposes of this Agreement, "Cause" shall mean (i) willful malfeasance or willful misconduct by Executive in connection with his employment, (ii) continuing refusal by Executive to perform his duties hereunder or any lawful direction of the Board of Directors of the Company (other than due to Executive's physical or mental incapacity), after a demand for a substantial performance is delivered to the Executive by the Board which identifies the manner in which the Executive has not performed his duties, (iii) any breach of the provisions of Section 9 of this Agreement by Executive or any other material breach of this Agreement by Executive, (iv) the willful engaging by the Executive in conduct which is materially injurious to the Company or (v) the indictment of Executive for (A) any felony or (B) a misdemeanor involving moral turpitude. Termination of Executive for Cause shall be made by delivery to Executive of a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the Directors at a meeting of the Board of Directors of the Company called and held for the purpose (after 30 days prior written notice to Executive and reasonable opportunity for Executive to be heard before the Board prior to such vote), finding that in the reasonable judgment of such Board, Executive was guilty of the conduct set forth in any of clauses (i) through (iv) above and specifying the particulars thereof; provided, however, that with respect to clause (v) herein the Board shall determine in good faith that Executive's -15- indictment is reasonably likely to have a material adverse effect on Executive's ability to perform his duties hereunder as the Chief Executive Officer of the Company. (g) Permanent Disability. For purposes of this Agreement, "Permanent Disability" means the absence of the Executive from his duties with the Company on a full-time basis for one hundred and eighty (180) consecutive days as a result of incapacity due to physical or mental illness, such that executive would be entitled to long term disability benefits under the long term disability plan of the Company in effect at such time. 8. Notices. All notices or communications hereunder shall be in writing, addressed as follows: To the Company: The Perkin-Elmer Corporation 761 Main Avenue Norwalk, Connecticut 06859 Attn: Corporate Secretary To Executive: Tony L. White with a copy to: Schmiege, Daley & Mohan, P.C. at the addresses they provide to the Company for these purposes. 9. Nondisclosure of Confidential Information; Non- Competition. (i) Executive shall not, without the prior written consent of the Company, use, divulge, disclose or make accessible to any other person, firm, partnership, corporation or other -16- entity any Confidential Information pertaining to the business of the Company or any of its affiliates, except (i) while employed by the Company, in the business of and for the benefit of the Company, or (ii) when required to do so by a court of competent jurisdiction, by any governmental agency having supervisory authority over the business of the Company, or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order Executive to divulge, disclose or make accessible such information. For purposes of this Section 9, "Confidential Information" shall mean non-public information concerning the financial data, strategic business plans, product development (or other proprietary product data), customer lists, marketing plans and other non-public, proprietary and confidential information of the Company, its affiliates or customers, that, in any case, is not otherwise available to the public (other than by Executive's breach of the terms hereof). (i) During the period of his employment hereunder and for two years thereafter, Executive agrees that, without the prior written consent of the Company, (A) he will not, directly or indirectly, either as principal, manager, agent, consultant, officer, stockholder, partner, investor, lender or employee or in any other capacity, carry on, be engaged in or have any financial interest in, any business which is in competition with the business of the Company and (B) he shall not, on his own behalf -17- or on behalf of any person, firm or company, directly or indirectly, solicit or offer employment to any person who has been employed by the Company at any time during the 12 months immediately preceding such solicitation. (ii) For purposes of this Section 9, a business shall be deemed to be in competition with the Company if it is principally involved in the purchase, sale or other dealing in any property or the rendering of any service purchased, sold, dealt in or rendered by the Company as a material part of the business of the Company within the same geographic area in which the Company or its affiliates effects such purchases, sales or dealings or renders such services. Nothing in this Section 9 shall be construed so as to preclude Executive from investing in any publicly or privately held company, provided Executive's beneficial ownership of any class of such company's securities does not exceed 1% of the outstanding securities of such class. (iii) Executive and the Company agree that this covenant not to compete is a reasonable covenant under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction such restraint is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this covenant as to the court shall appear not reasonable and to enforce the -18- remainder of the covenant as so amended. Executive agrees that any breach of the covenants contained in this Section 9 would irreparably injure the Company. Accordingly, Executive agrees that the Company may, in addition to pursuing any other remedies it may have in law or in equity, cease making any payments otherwise required by this Agreement and obtain an injunction against Executive from any court having jurisdiction over the matter restraining any further violation of this Agreement by Executive. 10. Beneficiaries; References. Executive shall be entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive's death, and may change such election, in either case by giving the Company written notice thereof. In the event of Executive's death or a judicial determination of his incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative. Any reference to the masculine gender in this Agreement shall include, where appropriate, the feminine. 11. Arbitration. Other than the Company's rights under Section 9 hereof, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Connecticut by three arbitrators in accordance with the rules of the American Arbitration Association. Judgement -19- may be entered on the arbitrator's award in any court having jurisdiction. 12. Separability; Legal Fees. If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect. Each party shall bear the costs of any legal fees and other fees and expenses which may be incurred in respect of enforcing its respective rights under this Agreement; provided, however, that the Company shall pay the costs of any reasonable legal fees incurred by Executive in good faith in enforcing his rights or entitlements under this Agreement if Executive prevails in such enforcement action. 13. Assignment. This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of Executive and the assigns and successors of the Company, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by Executive (except by will or by operation of the laws of intestate succession) or by the Company, except that the Company may assign this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially all of the stock, assets or businesses of the Company, if such successor expressly agrees to assume the obligations of the Company hereunder. -20- 14. No Obligation to Mitigate Damages. Except as specifically provided in this Agreement, Executive shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor will any payments under this Agreement be subject to offset in respect of any amounts which Executive earns or becomes entitled to from any other employer or other person after termination of his employment with the Company. 15. Amendment. This Agreement may only be amended by written agreement of the parties hereto. 16. Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations. The provisions of this Section 15 are in addition to the survivorship provisions of any other section of this Agreement. 17. Governing Law. This Agreement shall be construed, interpreted and governed in accordance with the laws of the State of New York, without reference to rules relating to conflicts of law. 18. Effect on Prior Agreements. This Agreement and the Change-in-Control Agreement (executed concurrently herewith entitling Executive to benefits thereunder) (the "Change in Control Agreement") contain the entire understanding between the -21- parties hereto and supersede in all respects any prior or other agreement or understanding between the Company and Executive. 19. Withholding. The Company shall be entitled to withhold from payment any amount of withholding required by law. 20. Survival. Notwithstanding the expiration of the Term, the provisions of Section 9 hereof shall remain in effect as long as is necessary to give effect thereto. 21. Supersession. Notwithstanding any other provision of this Agreement, in the event of a Change in Control of the Company, as defined under the Change in Control Agreement, the provisions of this Agreement shall be superseded by the provisions of the Change in Control Agreement. 22. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original. -22- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day first above written. THE PERKIN-ELMER CORPORATION By:/s/ Gaynor N. Kelley Gaynor N. Kelley Chairman, President and Chief Executive Officer ACCEPTED AND AGREED: /s/ Tony L. White TONY L. WHITE -23- EX-11 13 EXHIBIT-11 EARNINGS PER SHARE THE PERKIN-ELMER CORPORATION COMPUTATION OF NET INCOME (LOSS) PER SHARE (Dollar amounts in thousands, except per share amounts)
June 30, June 30, June 30, July 31, July 31, 1995 1994 1993 1992 1991 Weighted average number of common shares 42,129 43,857 43,780 43,526 42,091 Common stock equivalents - stock options 515 816 1,173 1,169 Weighted average number of common shares used in calculating primary earnings per share 42,644 44,673 44,953 44,695 42,091 Additional dilutive stock options under paragraph #42 APB #15 120 172 97 280 Shares used in calculating earnings per share - fully diluted basis 42,764 44,845 45,050 44,975 42,091 Calculation of primary and fully diluted earnings per share: PRIMARY AND FULLY DILUTED: Income (loss) from continuing operations $ 66,877 $ 73,978 $ 24,444 $ 24,296 $ (16,384) Income (loss) from discontinued operations (22,851) 1,714 10,941 (2,020) Income (loss) before cumulative effect of accounting changes $ 66,877 $ 51,127 $ 26,158 $ 35,237 $ (18,404) Cumulative effect of accounting changes (83,098) Net income (loss) used in the calculation of primary and fully diluted earnings per share $ 66,877 $ 51,127 $ (56,940) $ 35,237 $ (18,404) PRIMARY: Per share amounts: Income (loss) from continuing operations $ 1.57 $ 1.66 $ .54 $ .54 $ (.39) Income (loss)from discontinued operations (.52) .04 .25 (.05) Income (loss) before cumulative effect of accounting changes 1.57 1.14 $ .58 $ .79 $ (.44) Loss from cumulative effect of accounting changes (1.85) Net income (loss) $ 1.57 $ 1.14 $ (1.27) $ .79 $ (.44) FULLY DILUTED: Per share amounts: Income (loss) from continuing operations $ 1.56 $ 1.65 $ .54 $ .54 $ (.39) Income (loss) from discontinued operations (.51) .04 .24 (.05) Income (loss) before cumulative effect of accounting changes 1.56 1.14 .58 .78 (.44) Loss from cumulative effect of accounting changes (1.84) Net income (loss) $ 1.56 $ 1.14 $ (1.26) $ .78 $ (.44)
EXHIBIT 11 EX-13 14 EXHIBIT-13 ANNUAL REPORT SELECTED FINANCIAL DATA The Perkin-Elmer Corporation
(Dollar amounts in thousands except per share amounts) June 30, June 30, June 30, July 31, July 31, For the years ended 1995 (a) 1994 (b) 1993 (c) 1992 (d) 1991 (e) Financial Operations Net revenues $ 1,063,506 $ 1,024,467 $ 1,011,297 $ 970,054 $ 893,499 Operating costs and expenses 995,610 928,451 967,836 907,490 892,174 Operating income 67,896 96,016 43,461 62,564 1,325 Income (loss) before income taxes 82,564 89,132 43,929 49,283 (10,389) Income (loss) from continuing operations 66,877 73,978 24,444 24,296 (16,384) Cumulative effect of accounting changes (83,098) Net income (loss) 66,877 51,127 (56,940) 35,237 (18,404) Income (loss) per share from continuing operations 1.57 1.66 .54 .54 (.39) Loss per share from cumulative effect of accounting changes (1.85) Net income (loss) per share 1.57 1.14 (1.27) .79 (.44) Dividends per share .68 .68 .68 .68 .68 Other Information Average common shares including dilutive equivalents (in thousands) 42,644 44,673 44,953 44,695 42,091 Current ratio 1.61 1.36 1.27 1.36 1.32 Working capital $ 227,644 $ 136,400 $ 100,929 $ 140,456 $ 116,802 Capital expenditures 28,863 34,512 28,378 30,698 38,359 Total assets 893,038 884,500 851,070 948,953 898,248 Long-term debt 34,124 34,270 7,069 67,011 65,881 Shareholders' equity 304,700 290,432 306,605 429,007 411,034 Shareholders' equity per share 7.24 6.76 6.98 9.87 9.50 Orders 1,070,066 1,048,350 995,379 983,568 914,409
(a) Includes a $23.0 million charge related to worldwide staff reductions and facility consolidations (see Note 10), and a $20.8 million gain on the sale of an investment (see Note 2). (b) Includes a $22.9 million after-tax charge for discontinued operations (see Note 2). (c) Includes $41.0 million in one-time charges in connection with the merger with ABI (see Note 2), and an $83.1 million charge representing the cumulative effect of adopting SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," SFAS No. 112, "Employers' Accounting for Postemployment Benefits" and SFAS No. 109, "Accounting for Income Taxes." Prior years were not restated for SFAS Nos. 106, 112 or 109 (see Notes 4 and 5). (d) Includes a $22.0 million charge related to product line discontinuance and facility relocation, as well as a $3.3 million gain on the sale of a joint venture. (e) Includes a $50.2 million charge related to the consolidation of manufacturing, engineering and marketing functions worldwide. -22- Management's Discussion and Analysis Management's Discussion of Operations The following discussion should be read in conjunction with the consolidated financial statements and related notes included on pages 28 through 43. Historical results and percentage relationships are not necessarily indicative of operating results for any future periods. Events Impacting Comparability In the fourth quarter of fiscal 1995, The Perkin-Elmer Corporation (PE or the Company) recorded a $23.0 million before-tax restructuring charge for actions to improve operating efficiencies and reduce future costs and expenses. The restructuring charge on an after- tax basis was $18.6 million, or $.44 per share (see Note 10). During the third quarter of fiscal 1995, the Company sold its 7% equity interest in Silicon Valley Group, Inc. (SVG), resulting in a before-tax gain of $20.8 million, or $.40 per share after-tax (see Note 2). In the first quarter of fiscal 1995, the Company concluded the sale of its Material Sciences segment consisting of the Company's Metco division. The Company announced its plan to divest Metco in July 1993. Consequently, Metco's net assets and operating results are presented in the accompanying consolidated financial statements as a discontinued operation (see Note 2). The Company sold its Applied Science Operation (ASO) in the first quarter of fiscal 1994 and its minority equity investment in MRJ, Inc. during the second quarter of fiscal 1994. In addition, the Physical Electronics Division (PHI) was sold as of the end of the third quarter of fiscal 1994 (see Note 2). On February 18, 1993, the shareholders of PE and Applied Biosystems, Inc. (ABI) approved the merger of the two companies. The transaction was accounted for as a pooling of interests (see Note 2). Effective June 30, 1993, the Company changed its fiscal year end from July 31 to June 30. Prior to fiscal 1993, the financial statements of PE's operations outside the United States and ABI were for fiscal years ended June 30, while PE's domestic operations reported on a July 31 year end. Fiscal 1993 includes PE's U.S. operations for eleven months compared with a full year for fiscal years 1995 and 1994. Results of Continuing Operations - 1995 Compared to 1994 Net revenues were $1,063.5 million in fiscal 1995 compared with $1,024.5 million in fiscal 1994. Included in the prior year were ASO and PHI net revenues totaling $39.2 million. These operations were sold during fiscal 1994. Excluding the effects of these two business units, net revenues increased $78.2 million, or 7.9%, over the prior year. Approximately $48 million of the increase was due to currency changes, primarily the U.S. dollar's weakness against the Japanese yen and certain European currencies. Overall, while the traditional analytical instrument products experienced lower demand in fiscal 1995, the Company continued to benefit from strong sales of life science products, especially PCR related instruments and consumables, and DNA sequencing systems and consumables. Excluding the effects of currency, net revenues from life science products increased $33.4 million over the prior year. Excluding the effects of ASO and PHI, net revenues in all geographic markets, with the exception of the Far East, increased over the prior year. U.S. net revenues increased 2.6%, as a result of an increase in biotechnology product sales. Europe's net revenues increased $64.7 million, or 18.1% over the prior year (approximately $30 million, or 8%, excluding the effects of currency). In the Far East, net revenues were unchanged for the year, following fiscal 1994's increase of 35.2%. During fiscal 1995, the Far East market was adversely impacted by decreased Japanese public and private funding in the biotechnology and environmental product areas. Other worldwide markets experienced modest improvements over the prior year due primarily to bioresearch products. Gross margin as a percentage of net revenues was 47.3% in fiscal 1995 compared with 48.1% in fiscal 1994, excluding ASO and PHI. Improvements in the U.S. market gross margin were offset by continued competitive pricing pressures worldwide and a less favorable product mix in the Far East. The change in product mix reflected lower sales volume of higher gross margin bioresearch products. Selling, general and administrative (SG&A) expenses were $317.1 million in fiscal 1995, an increase of 6% over fiscal 1994. When measured on a comparable basis, excluding the expenses of ASO and PHI, SG&A expenses increased to 29.8% of net revenues from 29.6% in fiscal 1994. A decline in administrative expenses of approximately 2% was offset by the negative effects of currency translation in Europe and the Far East, and increased worldwide marketing expenses, primarily due to new product introductions. Research, development and engineering expenses (R&D) were $95.1 million in fiscal 1995 compared with $94.2 million in fiscal 1994. Excluding the expenses of ASO and PHI, R&D expenses for the current year increased 6.8%. Spending, primarily in bioresearch programs and applications, as well as the effects of currency translation in Europe, accounted for the increase. -23- Operating income for fiscal 1995, inclusive of the $23.0 million before-tax charge for restructuring actions, was $67.9 million compared to $96.0 million in fiscal 1994. The restructuring plan focuses primarily on reducing the analytical instruments business infrastructure. The charge includes $20.7 million of severance and benefit costs for workforce reductions and $2.3 million of closure and facility consolidation expenses. All costs will result in cash outlays and these actions are expected to be substantially completed by December 31, 1995. The workforce reductions total 227 employees. These actions will be accomplished through involuntary reductions worldwide as well as a voluntary retirement incentive plan in the U.S. The workforce reductions will affect all geographic areas of operation and all disciplines ranging from production labor to executive management. This includes product departments, manufacturing, engineering, sales, service and support as well as corporate administrative staff. The voluntary retirement incentive plan was accepted by 91 employees, which is included in the total, at a cost of $6.8 million. Approximately 43 of these positions will have to be replaced, but at a lower overall cost basis. All costs associated with hiring or training of new employees were excluded from the charge and will be recognized in the period incurred. The planned closure and facility consolidation costs total $2.3 million. These actions include the shutdown of the Company's Puerto Rico manufacturing facility, consolidation of sales offices in the Far East and consolidation of administrative departments in the U.S. The closure of operations in Puerto Rico, expected to be completed within six months, includes severance costs for 46 employees, lease termination payments and other related costs. The Far East costs include lease penalties and restoration of vacated offices. Any costs associated with relocation of existing employees and moving expenses for inventory and equipment have been excluded from the charge and will be recognized in the period incurred. As of June 30, 1995, the Company made severance and benefit payments of $3.6 million to 55 employees separated under the aforementioned plan and payments of $.9 million were made for closure and facility consolidation costs. The balance of the cost to complete the restructuring plan was $18.5 million at June 30, 1995. Benefits from this restructuring program will be offset in part by the costs of hiring and training of new employees, moving and relocation. The before-tax savings from these actions approximates $20 million in costs and cash flow for fiscal 1996 and $25 million in succeeding years. Excluding the effects of the restructuring, ASO and PHI, operating income in the U.S. decreased $7.8 million. Increased marketing and R&D spending in biotechnology programs primarily accounted for fiscal 1995's decreased operating income. Operating income in Europe increased 38.7% over the prior year while operating income in the Far East decreased 16.5%. The Far East decline was due principally to a decrease in Japanese public funding for bioresearch products, competitive pricing pressures, increased marketing expenses and a less favorable sales product mix. Interest expense was $8.2 million in fiscal 1995 compared with $7.1 million in fiscal 1994. Higher borrowing levels in the first quarter and increased short-term interest rates for the current year contributed to the higher interest expense in fiscal 1995. Interest income was $3.5 million in fiscal 1995 compared with $2.4 million in fiscal 1994. The increase was the result of interest income on notes received from the sale of divested operations and increased cash balances. During the third quarter of fiscal 1995, the Company sold its equity interest in SVG resulting in a before- tax net gain of $20.8 million, $16.8 million after- tax, or $.40 per share. The effective income tax rate was 19% in fiscal 1995 compared with 17% for fiscal 1994. During the first quarter of fiscal 1994, the Company received a favorable ruling from the U.S. Tax Court which essentially concurred with the Company's pricing method on intercompany sales with respect to its operations in Puerto Rico. The resolution of this matter with the U.S. government contributed to a lower effective tax rate for fiscal 1994 when compared to fiscal 1995. An analysis of the differences between the federal statutory income tax rate and the effective rate is provided in Note 4. -24- Results of Continuing Operations - 1994 Compared to 1993 Fiscal 1994 net revenues of $1,024.5 million increased $13.2 million from $1,011.3 million in fiscal 1993. The effect of selling ASO and PHI decreased net revenues by $37.0 million compared with the prior year. Foreign currency effects, resulting from the stronger U.S. dollar compared to the major European currencies, decreased net revenues approximately $25 million in fiscal 1994 when compared with fiscal 1993. Stronger worldwide demand for biotechnology products led to increased net revenues of $53.5 million (including the negative effects of currency) in fiscal 1994 and offset slower demand experienced in traditional analytical instrument product lines. Net revenues for U.S. operations in fiscal 1993 included only eleven months of results due to the change in the Company's fiscal year end. Management estimates this decreased fiscal 1993 net revenues by approximately $35 million. The change in year end and the loss of ASO and PHI net revenues approximately offset each other in the U.S. on a year-to-year comparison. The U.S., Far East and other worldwide markets improved during fiscal 1994 as demand for biotechnology products increased. Net revenues in the Far East increased 35.2%, showing improvement in both traditional analytical instrument products and bioresearch products. In Europe, the recessionary environment and strong competition resulted in net revenues at a lower level than the prior year. Net revenues in other countries increased 16.5% year-to-year as sales were strong in all analytical instrument product lines. Gross margin as a percentage of net revenues was 47.8% in fiscal 1994 compared with 47.1% in fiscal 1993. The improvement in gross margin reflected higher sales of biotechnology products in fiscal 1994 and only partial year sales of lower margin products from ASO and PHI. The increase in life science net revenues was particularly strong in the Far East, yielding improved gross margins which partially offset lower margins resulting from the poor economic conditions in Europe. SG&A expenses decreased $8.8 million in fiscal 1994 when compared to fiscal 1993. Favorable currency effects during fiscal 1994 accounted for approximately $7 million of the decrease. Fiscal 1993 included a $3.0 million one-time charge to write-down the value of certain receivables due from customers in Eastern Bloc countries. R&D expenses of $94.2 million in fiscal 1994 increased 12.3% over fiscal 1993, as a result of increased investment, primarily in life science programs. The Company recorded merger-related charges in the third quarter of fiscal 1993 of $12.5 million for transaction costs and $28.5 million to combine the operations of PE and ABI. The transaction costs included expenses for investment banker and professional fees. The costs to combine operations included provisions for streamlining marketing and distribution arrangements, consolidation of field sales and service offices worldwide, relocation of certain product lines and key personnel and severance- related costs. Interest expense was $7.1 million in fiscal 1994 compared with $13.1 million in fiscal 1993. The decrease was primarily the result of reduced borrowing levels and lower short-term interest rates. Interest income was $2.4 million in fiscal 1994 compared with $7.5 million in fiscal 1993. During fiscal 1993, the Company carried a 7% promissory note from F. Hoffmann-La Roche Ltd. which was sold in June 1993. The elimination of interest earnings from this note accounted for most of the decrease in interest income in fiscal 1994. Other expense, net was $2.1 million in fiscal 1994 compared with other income, net of $6.1 million in fiscal 1993. In fiscal 1993, other income included an $8.5 million gain from the sale of the 7% promissory note and higher joint venture income, partially offset by a $5.0 million charge to reduce the carrying value of certain unoccupied properties (see Note 9). The effective income tax rate was 17% in fiscal 1994 compared with 44% in fiscal 1993. Fiscal 1993 included merger-related charges of $41.0 million which were not fully deductible for tax purposes, resulting in a higher tax rate. During the first quarter of fiscal 1994, the Company received a favorable ruling from the U.S. Tax Court which essentially concurred with the Company's pricing method on intercompany sales with respect to its operations in Puerto Rico. The resolution of this matter with the U.S. government and the additional tax benefits realized from the inclusion of ABI domestic results for a full year also reduced the Company's effective tax rate for fiscal 1994 when compared with the prior year. -25- Discontinued Operations In the first quarter of fiscal 1995, the Company completed the sale of Metco to Sulzer Inc., a wholly- owned subsidiary of Sulzer, Ltd., Winterthur, Switzerland, for $64.8 million in cash. Metco's operating profits had declined from fiscal 1992 to fiscal 1994, primarily due to the weakness in the aircraft turbine engine market and significant downsizing that has occurred in the airline industry in recent years. In the fourth quarter of fiscal 1994, the Company recorded a $7.7 million after-tax loss on disposal of, including a provision of $5.0 million (less applicable income taxes of $.8 million) for Metco's operating losses during the phase-out period. The sale allows the Company to concentrate on growth opportunities in its core businesses and focus its financial and operational resources in life science and analytical instruments. Loss from discontinued operations in fiscal 1994 also included the after-tax settlement of $15.2 million, including legal costs, related to the Hubble Space Telescope mirror (see Note 2). Changes in Accounting Principles The Company adopted Statement of Financial Accounting Standard (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," in fiscal 1995. The impact of adopting the statement was not material to the consolidated financial statements. The Company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," No. 109, "Accounting for Income Taxes" and No. 112, "Employers' Accounting for Postemployment Benefits" as of August 1, 1992. A charge of $83.1 million, or $1.85 per share, was recorded in fiscal 1993, representing the cumulative after-tax effect of the new standards. SFAS No. 121, "Accounting for the Impairment of Long- Lived Assets and for Long-Lived Assets to Be Disposed Of," is required to be adopted no later than fiscal 1997. The Company is currently analyzing the statement to determine the impact, if any, on the consolidated financial statements. Foreign Currency The results of the Company's international operations are subject to foreign currency fluctuations. The Company's risk management policy is to reduce the effects of fluctuations in foreign currency exchange rates. The Company utilizes foreign exchange forward contracts and foreign exchange option contracts to minimize its risk of loss from fluctuations in exchange rates on the settlement of intercompany receivables and payables, firm commitments and certain intercompany loans. Management believes any reasonably likely change in the level of underlying major currencies being hedged will not have a material adverse effect on the consolidated financial statements. A discussion of the Company's foreign currency hedging activities is provided in Note 12. Management's Discussion of Financial Resources and Liquidity The following discussion of financial resources and liquidity focuses on the Consolidated Statements of Financial Position (page 29) and the Consolidated Statements of Cash Flows (page 30). Consolidated Statements of Financial Position Cash and short-term investments are primarily cash, cash equivalents, time deposits and certificates of deposit with original maturity dates of three months to one year (collectively "cash"). The Company's cash balance increased $55.0 million in fiscal 1995 to $80.0 million at June 30, 1995. This increase was primarily provided by operations, which accounted for $35.0 million of the increase. The Company's accounts receivable balance at June 30, 1995 totaled $234.2 million compared with $231.6 million at June 30, 1994. In fiscal 1995, the Company expanded the sale of the accounts receivable program in Japan (see Note 1). Accounts receivable sold under this program more than offset an increase of approximately $13 million from foreign currency translation. Inventories were $212.9 million at June 30, 1995 compared with $201.4 million a year ago. The effects of foreign currency translation accounted for approximately $10 million of the increase. Prepaid expenses and other current assets increased to $74.6 million at June 30, 1995 from $56.7 million at the end of fiscal 1994. The increase of $17.9 million was primarily due to increased current deferred tax assets and higher royalty receivables. Total other long-term assets decreased from $164.5 million at June 30, 1994 to $136.0 million at June 30, 1995. Other long-term assets primarily consist of marketable securities maturing beyond one year, goodwill, investments in equity securities, investments in affiliated companies, deferred tax assets and other long-term assets. The primary reason for the decrease in long-term assets was the sale of the Company's equity interest in SVG. The net cash proceeds from the sale were $49.8 million. -26- Net assets of discontinued operations of $56.2 million at June 30, 1994 comprised the net assets of the Company's Metco division, sold in the first quarter of fiscal 1995 for $64.8 million in cash. Other accrued expenses increased $18.7 in fiscal 1995. Fiscal 1995 other accrued expenses included $18.5 million related to the provision for restructured operations. This increase was partially offset by the payment of $9.4 million of costs related to the merger with ABI. Total long and short-term borrowings were $88.9 million at June 30, 1995 compared with $117.8 million at the end of fiscal 1994. Excluding the effects of currency translation, total borrowings decreased approximately $43 million. The Company's debt to total capitalization was 23% at June 30, 1995 compared with 29% at June 30, 1994. The Company believes its cash and short-term investments, funds generated from operating activities and available borrowing facilities are sufficient to provide for financing needs in the foreseeable future. The Company has unused credit facilities totaling $280 million. PE has consistently maintained a strong financial position and conservative capital structure. Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows depict cash flows by three broad categories: operating activities, investing activities and financing activities. Operating activities are the principal source of the Company's cash flows. Investment in property, plant and equipment represents the Company's ongoing capital investing activity. Major ongoing activities reported under financing activities include payment of dividends to shareholders and transactions involving the Company's various employee stock plans. PE's capital expenditures for fiscal 1995 were $28.9 million compared with $34.5 million for fiscal 1994 and $28.4 million for fiscal 1993. Net cash provided by operating activities was $72.0 million for fiscal 1995 compared with $37.0 million for fiscal 1994 and $66.4 million for fiscal 1993. Lower inventory levels, and higher accounts receivable collections in fiscal 1995 were the primary reasons for the increased cash from operations. During fiscal 1995, cash was used for accounts payable disbursements, tax payments, funding for the Company's U.S. pension and profit sharing plans, funding of restructuring costs and payments related to the fiscal 1993 merger with ABI. During fiscal 1995, the Company generated $119.3 million from the sale of discontinued operations and assets. In addition, $10.3 million was received from the exercise of stock options. Cash was used to reduce short-term borrowings, pay dividends, fund capital expenditures and repurchase shares of the Company's common stock. Approximately 1.4 million shares of common stock, at a cost of $40.3 million, were repurchased during fiscal 1995. Common stock purchases for the treasury were made in support of the Company's various stock plans and as part of a share repurchase authorization. In addition, cash was used for the fourth quarter purchase of Photovac Inc. As previously mentioned, the Company recorded a $23.0 million before-tax restructuring provision in the fourth quarter of fiscal 1995. The funding for the restructuring, which will be substantially completed in fiscal 1996, will be from current cash balances. The before-tax benefit from these actions is expected to be approximately $20 million in fiscal 1996 and approximately $25 million in succeeding years. Impact of Inflation and Changing Prices Inflation and changing prices are continually monitored. The Company attempts to minimize the impact of inflation by improving productivity and efficiency through continual review of both manufacturing capacity and operating expense levels. When operating and manufacturing costs increase, the Company attempts to recover such costs by increasing, over time, the selling price of its products and services. The Company believes the effects of inflation have been appropriately managed and therefore have not had a material impact on its historic operations and resulting financial position. Outlook Expectations for fiscal 1996 are tied to economic and political uncertainties in the Company's key markets around the world. While Europe has experienced a gradual upturn, management remains cautious since this recovery has not been as strong in certain countries where the Company's market position, specifically in analytical instruments, is significant. In addition, the uncertainty in Japanese public and private funding remains an area of concern and competitive pricing pressures continue to be a factor in all markets. The Company is conducting a full review of its analytical instruments product lines and supporting infrastructure, including but not limited to the possible sale of product lines, closure of operations and outsourcing of non-strategic functions. The Company has already implemented actions to benefit the cost structure in analytical instruments in response to the decreased market demand and continues to maximize its leadership position in worldwide biotechnology markets. -27- CONSOLIDATED STATEMENTS OF OPERATIONS The Perkin-Elmer Corporation
(Dollar amounts in thousands except per share amounts) For the years ended June 30, 1995 1994 1993 Net revenues $ 1,063,506 $ 1,024,467 $ 1,011,297 Cost of sales 560,402 535,178 535,137 Gross margin 503,104 489,289 476,160 Selling, general and administrative 317,120 299,101 307,852 Research, development and engineering 95,088 94,172 83,847 Provision for restructured operations 23,000 Costs to combine operations 28,500 Transaction costs 12,500 Operating income 67,896 96,016 43,461 Gain on sale of investment 20,800 Interest expense 8,180 7,145 13,139 Interest income 3,500 2,382 7,468 Other income (expense), net (1,452) (2,121) 6,139 Income before income taxes 82,564 89,132 43,929 Provision for income taxes 15,687 15,154 19,485 Income from continuing operations 66,877 73,978 24,444 Income (loss) from discontinued operations, net of income taxes (22,851) 1,714 Income before cumulative effect of accounting changes 66,877 51,127 26,158 Cumulative effect of accounting changes: Postretirement healthcare benefits, net of income taxes of $0 (88,847) Income taxes 19,929 Postemployment benefits, net of income taxes of $800 (14,180) Net income (loss) $ 66,877 $ 51,127 $ (56,940) Per share amounts: Income from continuing operations $ 1.57 $ 1.66 $ .54 Income (loss) from discontinued operations (.52) .04 Income before cumulative effect of accounting changes 1.57 1.14 .58 Loss from cumulative effect of accounting changes (1.85) Net income (loss) $ 1.57 $ 1.14 $ (1.27)
See accompanying Notes to Consolidated Financial Statements. -28- CONSOLIDATED STATEMENTS OF FINANCIAL POSITION The Perkin-Elmer Corporation
(Dollar amounts in thousands) At June 30, 1995 1994 Assets Current assets Cash and cash equivalents $ 73,010 $ 25,003 Short-term investments 7,000 Accounts receivable, less allowances for doubtful accounts of $8,949 ($7,247 - 1994) 234,153 231,564 Inventories 212,859 201,436 Prepaid expenses and other current assets 74,606 56,695 Total current assets 601,628 514,698 Property, plant and equipment, net 155,441 149,071 Other assets Other long-term assets 135,969 164,524 Net assets of discontinued operations 56,207 Total other assets 135,969 220,731 Total assets $ 893,038 $ 884,500 Liabilities and Shareholders' Equity Current liabilities Loans payable $ 54,757 $ 83,552 Accounts payable 85,342 73,221 Accrued salaries and wages 38,862 41,809 Accrued taxes on income 34,676 38,073 Other accrued expenses 160,347 141,643 Total current liabilities 373,984 378,298 Long-term debt 34,124 34,270 Other long-term liabilities 180,230 181,500 Commitments and contingencies (see Note 11) Shareholders' equity Capital stock Preferred stock $1 par value: 1,000,000 shares authorized; none issued Common stock $1 par value: 90,000,000 shares authorized; 45,599,755 shares issued 45,600 45,600 Capital in excess of par value 176,699 178,739 Retained earnings 215,363 181,130 Foreign currency translation adjustments 9,805 5,521 Minimum pension liability adjustment (34,445) (36,259) Treasury stock, at cost (shares: 1995 - 3,489,649; 1994 - 2,651,049) (108,322) (84,299) Total shareholders' equity 304,700 290,432 Total liabilities and shareholders' equity $ 893,038 $ 884,500
See accompanying Notes to Consolidated Financial Statements. -29- CONSOLIDATED STATEMENTS OF CASH FLOWS The Perkin-Elmer Corporation
(Dollar amounts in thousands) For the years ended June 30, 1995 1994 1993 Operating Activities Income from continuing operations $ 66,877 $ 73,978 $ 24,444 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 40,670 42,679 42,021 Deferred income taxes (4,568) 1,750 5,679 Gains from the sale of assets (22,129) Provision for restructured operations 23,000 Costs to combine operations and transaction costs 41,000 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable 13,675 (21,527) (4,240) (Increase) decrease in inventories 1,540 (25,360) (6,889) (Increase) decrease in prepaid expenses and other assets (16,056) (15,043) 16,922 Increase (decrease) in accounts payable and other liabilities (31,003) 2,973 (56,505) Divestitures (6,934) 4,003 Legal settlement (15,550) Net cash provided by operating activities 72,006 36,966 66,435 Investing Activities Additions to property, plant and equipment (net of disposals of $1,733, $2,185 and $3,264, respectively) (27,130) (32,327) (25,114) Marketable securities and short-term investments 1,778 8,409 Proceeds from sale of assets, net 54,499 31,850 53,412 Proceeds from sale of discontinued operations 64,847 Purchase of Photovac Inc., net of cash acquired (10,898) Investment in Lynx Therapeutics, Inc. (9,581) Other, net (930) (1,429) Net cash provided by investing activities 81,318 371 25,697 Financing Activities Proceeds from long-term debt 26,992 32 Principal payments on long-term debt (1,901) (1,886) (60,707) Net change in loans payable (40,850) 5,053 (19,982) Dividends declared (28,618) (29,813) (26,417) Purchases of common stock for treasury (40,297) (59,615) (14,012) Stock issued for stock plans, net of cancellations 10,279 17,426 17,685 Net cash used by financing activities (101,387) (41,843) (103,401) Effect of exchange rate changes on cash (3,930) 927 (3,255) Net change in cash and cash equivalents 48,007 (3,579) (14,524) Cash and cash equivalents beginning of year 25,003 28,582 43,106 Cash and cash equivalents end of year $ 73,010 $ 25,003 $ 28,582
See accompanying Notes to Consolidated Financial Statements. -30- CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY The Perkin-Elmer Corporation
Foreign Minimum Common Capital In Currency Pension Stock $1.00 Excess Of Retained Translation Liability Treasury Stock (Dollar amounts and shares in thousands) Par Value Par Value Earnings Adjustments Adjustment At Cost Shares Balance at July 31, 1992 $ 45,233 $ 171,603 $ 256,926 $ 16,277 $ (15,591) $ (45,441) (1,776) Net loss (56,940) Cash dividends (26,417) Affiliate stock distribution (6,959) Share repurchases (14,012) (443) Shares issued under stock plans 367 6,419 (2,749) 14,597 602 Minimum pension liability adjustment (16,268) Restricted stock plan cost and withholdings 717 (949) (39) Foreign currency translation adjustments (20,208) Balance at June 30, 1993 $ 45,600 $ 178,739 $ 163,861 $ (3,931) $ (31,859) $ (45,805) (1,656) Net income 51,127 Cash dividends (29,813) Affiliate stock distribution (350) Share repurchases (59,615) (1,841) Shares issued under stock plans (3,695) 21,121 846 Minimum pension liability adjustment (4,400) Foreign currency translation adjustments 9,452 Balance at June 30, 1994 $ 45,600 $ 178,739 $ 181,130 $ 5,521 $ (36,259) $ (84,299) (2,651) Net income 66,877 Cash dividends (28,618) Affiliate stock distribution (40) Share repurchases (40,297) (1,386) Shares issued under stock plans 34 (3,929) 14,208 477 Minimum pension liability adjustment 1,814 Unearned compensation - restricted stock (2,074) 8 2,066 70 Unrealized holding loss on investments (65) Foreign currency translation adjustments 4,284 Balance at June 30, 1995 $ 45,600 $ 176,699 $ 215,363 $ 9,805 $ (34,445) $ (108,322) (3,490)
See accompanying Notes to Consolidated Financial Statements. -31- Notes to Consolidated Financial Statements Note 1 Accounting Policies and Practices Principles of Consolidation. The consolidated financial statements include the accounts of all majority-owned subsidiaries of The Perkin-Elmer Corporation (PE or the Company), reflect the fiscal 1993 acquisition of Applied Biosystems, Inc. (ABI) as a pooling of interests and present the Company's former Material Sciences segment as a discontinued operation (see Note 2). Effective June 30, 1993, the Company changed its fiscal year end from July 31 to June 30. Prior to fiscal 1993, the financial statements of ABI and PE's operations outside the United States were for fiscal years ended June 30, while PE's domestic operations reported on a July 31 fiscal year end. Fiscal 1993, therefore, includes PE's domestic operations for eleven months. Certain amounts in the consolidated financial statements and notes have been reclassified for comparative purposes. Changes in Accounting Principles. The Company adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," in fiscal 1995. The impact of adopting the statement was not material to the consolidated financial statements. The Company is required to implement SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," no later than fiscal 1997. The statement requires that long- lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company is currently analyzing the statement to determine the impact, if any, on the consolidated financial statements. Foreign Currency. Assets and liabilities of foreign operations, where the functional currency is the local currency, are translated into U.S. dollars at the fiscal year end exchange rates. The related translation adjustments are recorded as a separate component of shareholders' equity. Revenues and expenses are translated using average exchange rates prevailing during the year. Foreign currency transaction gains and losses, as well as translation adjustments of foreign operations where the functional currency is the dollar, are included in net income (loss). Cash, Short-Term Investments and Marketable Securities. Cash equivalents consist of highly liquid debt instruments, time deposits and certificates of deposit with original maturities of three months or less. Time deposits and certificates of deposit with original maturities of three months to one year are classified as short-term investments. Short-term investments and marketable securities are recorded at cost which approximates market value. Accounts Receivable. The Company periodically sells accounts receivable arising from business conducted in Japan. During the fiscal years ended 1995, 1994 and 1993, the Company received cash proceeds of $101.4 million, $43.8 million, and $17.8 million, respectively. The Company believes it has adequately provided for any risk of loss which may occur under these arrangements. Investments. The equity method of accounting for investments in 50% or less owned joint ventures is used. Investments where ownership is less than 20% are carried at cost. Inventories. Inventories are stated at the lower of cost (on a first-in, first-out basis) or market. Inventories at June 30, 1995 and 1994 included the following components: (Dollar amounts in millions) 1995 1994 Raw materials and supplies $ 29.2 $ 24.9 Work-in-process 18.9 16.4 Finished products 164.8 160.1 Total inventories $ 212.9 $ 201.4 Property, Plant and Equipment and Depreciation. Property, plant and equipment are recorded at cost and consisted of the following at June 30, 1995 and 1994: (Dollar amounts in millions) 1995 1994 Land $ 24.1 $ 20.8 Buildings and leasehold improvements 132.9 124.6 Machinery and equipment 205.3 183.7 Property, plant and equipment, at cost 362.3 329.1 Accumulated depreciation and amortization 206.9 180.0 Property, plant and equipment, net $ 155.4 $ 149.1 Provisions for depreciation of owned property, plant and equipment are based upon the expected useful lives of the assets and computed primarily by the straight- line method. Leasehold improvements are amortized over their estimated useful lives or the term of the applicable lease, whichever is less, using the straight-line method. Major renewals and improvements that significantly add to productive capacity or extend the life of an asset are capitalized. Repairs, maintenance and minor renewals and improvements are expensed when incurred. Intangible Assets. The excess of purchase price over the net asset value of companies acquired is amortized on a straight-line method over periods not exceeding 40 years. Patents and trademarks are amortized using the straight-line method over their expected useful lives. The accumulated amortization of intangibles at June 30, 1995 and 1994 was $19.0 million and $15.5 million, respectively. Revenues. The Company recognizes revenues when products are shipped or services are rendered. Revenues from service contracts are recorded as deferred service contract revenues and reflected in net revenues over the term of the contract. -32- Research, Development and Engineering. Research, development and engineering costs are expensed when incurred. Income Taxes. The Company intends to permanently reinvest substantially all of the undistributed earnings of its foreign subsidiaries. Net Income (Loss) Per Share. Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. Common stock equivalents include stock options. The difference between weighted average shares for primary and fully diluted net income (loss) per share was not significant for the years presented. Supplemental Cash Flow Information. Cash paid for interest and income taxes and noncash investing and financing activities excluded from the Consolidated Statements of Cash Flows for the fiscal years ended 1995, 1994 and 1993 were as follows: (Dollar amounts in millions) 1995 1994 1993 Interest $ 8.0 $ 7.0 $12.5 Income taxes $27.3 $16.1 $18.5 Noncash investing and financing activities: Long-term note received from the sale of assets (see Note 2) $ 7.2 Affiliate stock distribution $ .4 $ 7.0 Minimum pension liability adjustment $ (1.8) $ 4.4 $ 16.3 Note 2 Acquisitions and Dispositions Photovac Inc. On April 12, 1995, the Company acquired Photovac Inc., a leading developer and manufacturer of field portable analytical instrumentation, for $11.0 million in cash. Under the terms of the agreement, additional payments over a 3 year period are required if certain specified performance levels are achieved. The acquisition was accounted for as a purchase. The net assets and results of operations have been included in the consolidated financial statements since the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired, or goodwill, is included in other long-term assets and will be amortized over a 20 year period. The pro forma effect of the acquisition on the Company's consolidated financial statements was not significant. Applied Biosystems, Inc. On February 18, 1993, the shareholders of PE and ABI approved the merger of the two companies. Under the terms of the agreement, ABI shareholders received .678 of a share of the Company's common stock for each ABI share. Accordingly, the Company issued 10.2 million shares of its common stock for all the outstanding shares of ABI common stock. Additionally, outstanding options to acquire ABI common stock were converted to options to acquire 1.5 million shares of the Company's common stock. ABI, founded in 1981, is a leading supplier of automated systems for life science research and related applications. ABI develops, manufactures and markets systems, instruments and associated chemicals used to purify, analyze, interpret results and synthesize biological molecules such as DNA, RNA and proteins. The merger qualified as a tax-free reorganization and was accounted for as a pooling of interests. Accordingly, the Company's financial statements include the results of ABI for all periods presented. Combined and separate results of PE and ABI during the period preceding the merger were as follows (in millions): Six months ended January 31, 1993 (unaudited) PE ABI Combined Net revenues $420.2 $100.9 $521.1 Net income(loss) $(54.5) $ 5.7 $(48.8) Intercompany transactions between the two companies for the period presented were not material. In connection with the merger, the Company recorded one-time charges in the third quarter of fiscal 1993 for transaction costs ($12.5 million) and to reflect the costs to combine operations of the two companies ($28.5 million). The transaction costs included expenses for investment banker and professional fees. The costs to combine operations included provisions for streamlining marketing and distribution arrangements, consolidation of field sales and service offices worldwide, relocation of certain product lines and key personnel and severance-related costs. Discontinued Operations Legal Settlement. During the first quarter of fiscal 1994, the Company paid $15.5 million to settle potential claims related to the Hubble Space Telescope mirror. This amount, which included legal costs, resulted in an after-tax charge of $15.2 million and is recorded in discontinued operations in the fiscal 1994 Consolidated Statement of Operations. In 1989, the Company had sold the unit which performed the work on the telescope to a subsidiary of Hughes Aircraft Company. Material Sciences Segment. On July 29, 1993, the Company announced its plans to divest its Material Sciences segment which consisted of the Company's Metco division headquartered in Westbury, New York. Metco produces combustion, electric arc and plasma thermal spray equipment and supplies. On September 30, 1994, the Company concluded the sale of Metco to Sulzer Inc., a wholly-owned subsidiary of Sulzer, Ltd., Winterthur, Switzerland. The Company received cash proceeds of $64.8 million as a result of the sale. The Company recorded an after-tax loss on the disposal of $7.7 million during the fourth quarter of fiscal 1994, including a provision of $5.0 million (less applicable income taxes of $.8 million) for operating losses during the phase-out period. The net assets and operating results of Metco are presented in the fiscal 1994 and 1993 consolidated financial statements as a discontinued operation. -33- Lynx Therapeutics, Inc. On October 5, 1992, prior to its merger with PE, ABI announced the decision to distribute to its shareholders approximately 82% of the stock of its subsidiary, Lynx Therapeutics, Inc. (Lynx). The accompanying Consolidated Statement of Operations for fiscal 1993 reflects the Lynx operating results as a discontinued operation. The net assets of Lynx were not significant. Summary results of the aforementioned discontinued operations were as follows: (Dollar amounts in millions) For the years ended June 30, 1994 1993 Net revenues $106.7 Costs and expenses 103.2 Provision for income taxes .2 Income from discontinued operations - Metco prior to the measurement date 3.3 Loss on disposal of Metco including a provision of $5.0 for operating losses during the phase-out period, less applicable income taxes of $.8 $ (7.7) Loss from discontinued operations, net of income taxes of $(.2) - Lynx (1.6) Legal settlement, less applicable income taxes of $.3 (15.2) Income (loss) from discontinued operations $ (22.9) $ 1.7 The net assets of Metco have been segregated in the June 30, 1994 Consolidated Statement of Financial Position and are summarized below: (Dollar amounts in millions) 1994 Assets: Accounts receivable, net $25.6 Inventories 26.3 Prepaid expenses and other current assets 1.2 Property, plant and equipment, net 20.1 Other long-term assets 3.9 Total assets 77.1 Liabilities: Accounts payable $ 5.3 Other accrued expenses 3.1 Other current liabilities 3.5 Long-term liabilities 4.3 Total liabilities 16.2 Foreign currency translation adjustments 4.7 Net assets $56.2 Dispositions Silicon Valley Group, Inc. During the third quarter of fiscal 1995, the Company sold its equity interest in Silicon Valley Group, Inc. for net cash proceeds of $49.8 million, resulting in a before-tax gain of $20.8 million, or $.40 per share after-tax. Applied Science Operation. During the first quarter of fiscal 1994, the Company sold the net assets of its Applied Science Operation (ASO) to Orbital Sciences Corporation. The Company received cash proceeds of $.6 million and 320,000 shares of Orbital Sciences Corporation common stock which were subsequently disposed of in the second quarter of fiscal 1994 for proceeds of approximately $5 million. MRJ, Inc. During the second quarter of fiscal 1994, the Company sold its minority equity investment in MRJ, Inc. to MRJ Group, Inc. for $3.3 million in cash. In addition, two subordinated notes due from MRJ Group, Inc. were repaid to the Company. Physical Electronics Division. During the fourth quarter of fiscal 1994, the Company completed the sale of its Physical Electronics Division (PHI) to the management of PHI and Chemical Venture Partners. The unit was sold for approximately net book value. The Company received cash proceeds of $23.0 million and a 10% interest-bearing note with a face value of $7.2 million in connection with the sale. Note 3 Debt and Lines of Credit Loans payable and long-term debt at June 30, 1995 and 1994 are summarized below: (Dollar amounts in millions) 1995 1994 Loans payable, United States: Commercial paper $15.8 Loans payable, foreign: Notes payable, banks $50.3 $65.9 Current maturities of long-term debt 4.5 1.9 Total loans payable, foreign 54.8 67.8 Total loans payable $54.8 $83.6 Long-term debt: 3.255% Yen term loan maturing in fiscal 1997 $33.2 $28.4 Yen denominated bank notes with maturities through fiscal 2005 5.7 Other .9 .2 Total long-term debt $34.1 $34.3 -34- The weighted average interest rates at June 30, 1995 and 1994 for bank borrowings were 7.2% and 6.2%, respectively. There were no commercial paper borrowings outstanding at June 30, 1995. The commercial paper borrowing rate at June 30, 1994 was 4.5%. On June 1, 1994, the Company entered into a $150 million credit agreement consisting of a $50 million, 364 day revolving credit agreement and a $100 million, three year revolving credit agreement. The $50 million, 364 day revolving credit agreement expired in fiscal 1995. The $100 million three year revolving credit agreement was amended to extend the maturity an additional three years to June 1, 2000. Commitment and facility fees are based on the leverage and interest coverage ratios. Interest rates on amounts borrowed vary depending on whether borrowings are undertaken in the domestic or Eurodollar markets. There were no borrowings under the facility at June 30, 1995. The Company's subsidiary, Perkin-Elmer Japan, has a three year credit agreement under which it borrowed 2.8 billion Yen at a fixed interest rate of 3.255%. The final maturity date is scheduled for February 1997. At June 30, 1995, the Company had unused credit facilities for short-term borrowings from domestic and foreign banks in various currencies totaling $280 million. Yen denominated bank notes, with fixed interest rates of 5.4% and 6.2%, and original maturity dates of 2004, were repaid in July 1995. Under various debt and credit agreements, the Company is required to maintain certain minimum net worth and interest coverage ratios. Annual maturities of long-term debt for fiscal years 1996 and 1997 are $4.5 million and $33.2 million, respectively. Maturities for fiscal years 1998, 1999, 2000 and beyond total $.9 million. Note 4 Income Taxes Effective August 1, 1992, the Company adopted the provisions of SFAS No. 109, "Accounting for Income Taxes." The statement requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. The cumulative effect of the change in the method of accounting for income taxes attributable to fiscal years prior to 1993 was to increase net income by $19.9 million. The tax benefit primarily resulted from the recognition of deferred tax assets relating to future tax amortization of foreign intangibles. The impact of this change on fiscal 1993 operating results, after recording the cumulative effect, was to recognize additional tax expense of $2 million. Income before income taxes for fiscal years ended 1995, 1994 and 1993 was as follows: (Dollar amounts in millions) 1995 1994 1993 United States $58.8 $65.0 $16.1 Foreign 23.8 24.1 27.8 Total $82.6 $89.1 $43.9 The components of the provision for income taxes for fiscal years ended 1995, 1994 and 1993 consisted of the following: (Dollar amounts in millions) 1995 1994 1993 Currently payable: Federal $ 2.2 $(1.3) $ 2.4 Foreign 17.2 12.6 10.4 State and local .9 2.1 1.0 Total currently payable 20.3 13.4 13.8 Deferred: Federal (7.5) 2.3 Foreign 2.9 1.8 3.4 Total deferred (4.6) 1.8 5.7 Total provision for income taxes $15.7 $15.2 $19.5 Significant components of deferred tax assets and liabilities at June 30, 1995 and 1994 are summarized below: Deferred Tax Assets (Dollar amounts in millions) 1995 1994 Intangibles $ 12.4 $ 13.8 Inventories 9.4 7.7 Postretirement and postemployment benefits 35.6 38.2 Other reserves and accruals 62.6 56.8 Tax credit carryforwards 10.6 20.7 Foreign loss carryforwards 16.4 6.8 Subtotal 147.0 144.0 Valuation allowance (116.6) (119.6) Total deferred tax asset $ 30.4 $ 24.4 Deferred Tax Liabilities (Dollar amounts in millions) 1995 1994 Inventories $ 1.1 $ 1.0 Other reserves and accruals 4.2 6.6 Total deferred tax liability 5.3 7.6 Total deferred tax asset, net $ 25.1 $ 16.8 -35- A reconciliation of the federal statutory tax provision to the Company's tax provision for the fiscal years ended 1995, 1994 and 1993 was as follows: (Dollar amounts in millions) 1995 1994 1993 Federal statutory rate 35% 35% 34% Tax at federal statutory rate $28.9 $31.2 $14.9 State income taxes (net of federal benefit) .6 1.4 .6 Effect on income from foreign operations 13.4 (.2) (.5) Merger expenses 4.3 Utilization of tax benefit carryforwards (18.3) (16.5) (8.8) U.S. gain from foreign reorganization 4.6 Alternative minimum tax 1.1 Domestic temporary differences for which (benefit is recognized)/no benefit is provided (5.4) (7.4) 5.7 Other (3.5) 2.1 2.2 Total provision for income taxes $15.7 $15.2 $19.5 At June 30, 1995, the Company has an available alternative minimum tax credit of $9.9 million which has an indefinite carryforward period. The Company has loss carryforwards of approximately $28 million in various foreign countries, primarily Germany and Japan, with varying expiration dates. The Company's federal tax returns have been examined by the Internal Revenue Service (IRS) for the years 1975 through 1989, and the IRS is beginning its examination of 1990 through 1992. The issues for the years 1975 through 1981, primarily the Company's method of intercompany pricing on sales with its subsidiary in Puerto Rico, have been litigated and opinions rendered by the United States Tax Court. The judgment by the Tax Court, which essentially upheld the Company's intercompany pricing methods, contributed to the lower effective tax rate in fiscal 1994. While the years 1982 through 1987 are at the IRS appeals level, most major issues have been tentatively settled. The Company has filed a protest with the IRS with regard to the 1988 and 1989 years. It is the Company's opinion that it has adequately provided in the financial statements for any potential IRS assessments or Tax Court deficiencies relating to these years. Note 5 Retirement and Other Benefits Pension Plans. Substantially all employees worldwide are covered by either PE or government sponsored retirement plans. Total pension expense for its domestic plans and significant foreign plans was $15.0 million for fiscal 1995, $17.3 million for fiscal 1994 and $13.8 million for fiscal 1993. The Company has a noncontributory pension plan covering substantially all of its domestic employees. Pension benefits are generally based on years of service and compensation during active employment. Plan assets are invested in various securities including U.S. government and federal agency obligations, corporate debt, preferred and common stocks, foreign government obligations, real estate and foreign equities. The Company provides funds to the plan in accordance with statutory funding requirements. In addition, the Company has nonqualified supplemental and deferred compensation plans for certain officers and key employees which are unfunded and paid directly by the Company. Employees outside of the U.S. generally receive retirement benefits under various pension plans based upon such factors as years of service and employee compensation levels which conform to the practice common in the country in which PE conducts business. The following assumptions and components were used for the fiscal years ended 1995, 1994 and 1993 in the determination of net pension expense: Domestic Plans (Dollar amounts in millions) 1995 1994 1993 Assumptions: Discount rate 8 1/2% 8 1/2% 8 1/2% Increase in future compensation 4% 4% 4% Expected long-term rate of return on assets 8 1/2-9 1/4% 8 1/2-10% 8 1/2-10% Components: Service cost $ 7.8 $ 9.1 $ 6.2 Interest cost 30.7 30.6 25.6 Actual return on assets (29.9) (19.5) (29.0) Net amortization and deferral (.9) (9.8) 3.5 Net pension expense $ 7.7 $ 10.4 $ 6.3 Foreign Plans (Dollar amounts in millions) 1995 1994 1993 Assumptions: Discount rate 6 1/2-8% 6-8 1/2% 6 1/2-9 1/2% Increase in future compensation 4 1/4-4 1/2% 4 1/2% 4 1/2-5% Expected long-term rate of return on assets 6 1/2-10% 6 1/2-10% 7-10 1/2% Components: Service cost $ 3.0 $ 2.9 $ 3.1 Interest cost 6.2 6.0 6.3 Actual return on assets (2.6) (1.7) (4.3) Net amortization and deferral .7 ( .3) 2.4 Net pension expense $ 7.3 $ 6.9 $ 7.5 -36- The following table sets forth the funded status of the plans and amounts recognized in the Company's Consolidated Statements of Financial Position at June 30, 1995 and 1994: Domestic Plans (Dollar amounts in millions) 1995 1994 Plan assets at fair value $ 368.4 $ 339.3 Projected benefit obligation 392.1 379.1 Excess of projected benefit obligation over plan assets (23.7) (39.8) Unrecognized items: Net actuarial loss 55.2 57.2 Prior service cost (5.3) 4.7 Net transition asset (11.3) (13.7) Minimum pension liability adjustment (37.4) (37.9) Accrued pension liability $ (22.5) $ (29.5) Actuarial present value of accumulated benefits $ 390.8 $ 368.8 Accumulated benefit obligation related to vested benefits $ 381.6 $ 362.7 The recognition of an additional minimum pension liability is required when the actuarial present value of accumulated benefits exceeds plan assets and accrued pension liabilities. The minimum liability adjustment, less allowable intangible assets net of tax benefit, is reported as a reduction of shareholders' equity. Foreign Plans Assets Exceed Accumulated Accumulated Benefits Benefits Exceed Assets (Dollar amounts in millions) 1995 1994 1995 1994 Plan assets at fair value $ 25.6 $ 25.2 Projected benefit obligation 25.8 24.8 $ 72.8 $ 59.7 Plan assets in excess of (less than) projected benefit obligation (.2) .4 (72.8) (59.7) Unrecognized items: Net actuarial (gain) loss 4.6 3.8 (2.5) (1.0) Prior service cost .3 .4 Net transition (asset) obligation (2.7) (3.4) 7.8 7.4 Pension asset (liability) $ 2.0 1.2 $(67.5) $(53.3) Actuarial present value of accumulated benefits $ 23.6 $ 23.1 $ 58.7 $ 47.1 Accumulated benefit obligation related to vested benefits $ 53.8 $ 43.0 Savings Plan. PE has a domestic profit sharing and savings plan whereby, when before-tax earnings per share of the common stock outstanding exceed $.3125 per share, the Company is required to fund the plan in an amount equal to 8% of consolidated before-tax earnings, as defined by the plan, provided the amount of such payment does not reduce the balance of such earnings below $.3125 per share of common stock. The profit sharing payment by the Company is allocated among its domestic employees (ABI employees were covered as of July 1, 1993) in direct proportion to their earnings. PE's contribution was $7.6 million for fiscal 1995, $7.5 million for fiscal 1994 and $6.7 million for fiscal 1993. Effective October 1, 1995, the Company's profit sharing and savings plan will be replaced with a 401k savings plan. The new plan provides Company contributions in the amount of 2% of regular compensation, as well as dollar-for-dollar matching Company contributions up to 4% of regular compensation. Retiree Health Care and Life Insurance Benefits. PE provides certain health care and life insurance benefits to domestic employees, hired prior to January 1, 1993, who retire from the Company and satisfy certain service and age requirements. Generally, the medical coverage pays a stated percentage of most medical expenses reduced for any deductible and payments made by Medicare or other group coverage. Benefits are administered through an insurance carrier paid by PE. The cost of providing these benefits is shared with retirees. The cost sharing provisions will vary depending on the retirement date, age and years of service. The plan is unfunded. In fiscal 1993, the Company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." This statement requires the accrual of the cost of providing postretirement benefits, including medical and life insurance coverage, during the active service period of the employee. The Company elected to immediately recognize the accumulated liability, measured as of August 1, 1992. This resulted in an after-tax charge of $88.8 million, or $1.98 per share. The effect of this change on fiscal 1993 operating results, after recording the cumulative effect for fiscal years prior to 1993, was to recognize additional after-tax expense of $3.0 million, or $.07 per share. The pro forma effect of the change on fiscal years prior to 1993 was not determinable. Prior to fiscal 1993, the Company recognized expense for these benefits in the year of payment. -37- The following table sets forth the accrued postretirement benefit liability recognized in the Company's Consolidated Statements of Financial Position at June 30, 1995 and 1994: (Dollar amounts in millions) 1995 1994 Actuarial present value of postretirement benefit obligation: Retirees $ 68.2 $ 68.8 Fully eligible active participants 1.4 7.5 Other active participants 10.2 10.9 Accumulated postretirement benefit obligation (APBO) 79.8 87.2 Unrecognized net gain 16.5 6.6 Accrued postretirement benefit liability $ 96.3 $ 93.8 The net postretirement benefit cost for fiscal 1995 and 1994 included the following components: (Dollar amounts in millions) 1995 1994 Service cost $ .7 $ 1.2 Interest cost 6.8 7.2 Amortization of unrecognized gain (.1) Net postretirement benefit cost $ 7.4 $ 8.4 The discount rate used in determining the APBO was 8.5% in fiscal 1995 and 1994. The assumed health care cost trend rate used for measuring the APBO was divided into three categories: 1995 1994 Pre-65 participants 11.6% 12.3% Post-65 participants 8.4% 8.7% Medicare 8.4% 7.8% All three rates were assumed to decline to 5.5% over 10 and 11 years in fiscal 1995 and 1994, respectively. If the health care cost trend rate was increased 1%, the APBO, as of June 30, 1995, would have increased 11%. The effect of this change on the aggregate of service and interest cost for fiscal 1995 would be an increase of 10%. As a result of the Company's decision to sell its Applied Science Operation, Physical Electronics Division and Material Sciences segment, PE recognized a $2.9 million gain related to the curtailment of its postretirement benefit obligation during fiscal 1994. Foreign employees are primarily covered under government sponsored programs and therefore, the impact of SFAS No. 106 was not material. No significant expense for foreign retiree medical benefits was incurred by the Company in any of the years presented. Postemployment Benefits. The Company provides certain postemployment benefits to eligible employees. These benefits generally include severance, disability and medical-related costs paid after employment but before retirement. The Company also adopted, effective as of the beginning of fiscal 1993, SFAS No. 112, "Employers' Accounting for Postemployment Benefits." This statement requires an accrual method of accounting for the related costs. Prior to the adoption of this statement, the Company recognized such costs at the time the benefits were paid. The adoption of the statement in fiscal 1993 resulted in a one-time after- tax charge to net income of $14.2 million in the first quarter of the year, representing the cumulative effect on prior years of adopting the new standard. Note 6 Geographic Area Information The Company operates in one industry segment: the development, manufacture, marketing, sales and service of analytical instrument systems. Included in this industry segment are bioresearch instrument systems, consisting of instruments and associated consumable products for life science research and related applications, instrument systems for determining the composition and molecular structure of chemical substances (both organic and inorganic), data handling devices, and real time, process analysis systems to monitor process quality and environmental purity. In addition, through a joint venture, the Company is engaged in the manufacture and sale of mass spectrometry instrument systems. Revenues between geographic areas are primarily comprised of the sale of instruments and reagents by the Company's manufacturing units. The sale amounts reflect the rules and regulations of the respective governing tax authorities. Third party export net revenues and operating profits are reported in the region of destination. Operating income is determined by deducting from net revenues the related costs and operating expenses attributable to the region. R&D expenses are reflected in the area where the activity was performed. Identifiable assets include all assets directly identified with those geographic areas. Corporate assets consist primarily of cash and cash equivalents, short-term investments, certain other current and long-term assets and certain investments in affiliated companies. Export net revenues for the fiscal years ended June 30, 1995, 1994 and 1993 were $45.4 million, $63.8 million and $76.1 million, respectively. -38- An analysis of the Company's operations by geographic region follows:
Eliminations United Far Other and Corporate (Dollar amounts in millions) States Europe East Countries Expenses Consolidated Fiscal 1995: Net revenues $ 393.7 $ 422.3 $ 195.3 $ 52.2 $ 1,063.5 Interarea transfers 54.0 119.7 101.3 19.1 $ (294.1) $ 447.7 $ 542.0 $ 296.6 $ 71.3 $ (294.1) $ 1,063.5 Operating income (loss) (a) $ (18.9) $ 59.2 $ 50.6 $ 9.4 $ (32.4) $ 67.9 Identifiable assets $ 316.3 $ 257.6 $ 102.4 $ 32.2 $ 708.5 Corporate assets 184.5 Total assets $ 893.0 Fiscal 1994: (b) Net revenues $ 417.8 $ 362.6 $ 195.3 $ 48.8 $ 1,024.5 Interarea transfers 43.5 114.3 102.2 19.1 $ (279.1) $ 461.3 $ 476.9 $ 297.5 $ 67.9 $ (279.1) $ 1,024.5 Operating income (loss) $ 1.9 $ 48.5 $ 62.3 $ 9.7 $ (26.4) $ 96.0 Identifiable assets $ 319.3 $ 224.6 $ 102.6 $ 23.3 $ 669.8 Corporate assets 158.5 Net assets of discontinued operations 56.2 Total assets $ 884.5 Fiscal 1993: (b) Net revenues $ 404.5 $ 420.4 $ 144.5 $ 41.9 $ 1,011.3 Interarea transfers 49.1 122.8 64.2 15.0 $ (251.1) $ 453.6 $ 543.2 $ 208.7 $ 56.9 $ (251.1) $ 1,011.3 Operating income (loss) (c) $ (26.7) $ 55.5 $ 43.9 $ 8.3 $ (37.5) $ 43.5 Identifiable assets $ 332.4 $ 215.8 $ 70.5 $ 20.9 $ 639.6 Corporate assets 150.8 Net assets of discontinued operations 60.7 Total assets $ 851.1 <\table) (a) The provision for restructured operations of $23.0 million is included in operating income (loss) of the United States ($9.4 million), Europe ($8.3 million), Far East ($1.4 million), other countries ($.1 million) and corporate expense ($3.8 million). (b) The financial data by geographic area for prior years has been reclassified to appropriately reflect amounts in the specific geographic location. (c) The $28.5 million of costs to combine operations with ABI are included in operating income (loss) of the United States ($15.4 million), Europe ($11.4 million), Far East ($1.4 million) and other countries ($.3 million). The $12.5 million of ABI merger transaction costs are reflected as a corporate expense. -39- Note 7 Shareholders' Equity Treasury Stock. Common stock purchases were made in support of the Company's various stock plans and as part of a share repurchase authorization. The Company has no specific share repurchase targets but expects to make periodic open market purchases from time to time. For the years ended June 30, 1995, 1994 and 1993, the Company purchased .5 million, .8 million and .4 million shares, respectively, to support its various stock plans. The remaining number of shares available under the purchase authorization at June 30, 1995 is 4.2 million. Shareholders' Protection Rights Plan. PE has adopted a Shareholders' Protection Rights Plan designed to protect shareholders against abusive takeover tactics by declaring a dividend of one right on each outstanding share of common stock. Each right entitles shareholders to buy one one-hundredth of a newly issued share of participating preferred stock having economic and voting terms similar to those of one share of common stock at an exercise price of $90.00, subject to adjustment. The rights will be exercisable only if a person or a group: (a) acquires 20% or more of the Company's shares or (b) commences a tender offer that will result in such person or group owning 20% or more of the Company's shares. Before that time, the rights trade with the common stock, but thereafter they become separately tradeable. Upon exercise, after a person or a group acquires 20% or more of the Company's shares, each right (other than rights held by the acquiring person) will entitle the shareholder to purchase a number of shares of preferred stock of the Company having a market value of two times the exercise price. If PE is acquired in a merger or other business combination, each right will entitle the shareholder to purchase at the then exercise price a number of shares of common stock of the acquiring company having a market value of two times such exercise price. If any person or group acquires between 20% and 50% of PE's shares, the Company's Board of Directors may, at its option, exchange one share of the Company's common stock for each right. The rights are redeemable at PE's option at one cent per right prior to a person or group becoming an acquiring person. Common Stock. In fiscal 1994, the Company's shareholders approved an increase in the number of authorized shares of Common Stock from 60 million to 90 million. Note 8 Stock Plans Stock Option Plans. Under PE's stock option plans, officers and other key employees may be granted options, each of which allows for the purchase of common stock at a price of not less than 100% of fair market value at the date of grant. In connection with the ABI merger in fiscal 1993, all unexpired and unexercised stock options under ABI's stock option plans were converted to options to acquire .678 of a share of the Company's common stock, and the obligations with respect to such options have been assumed by PE. Each ABI option assumed by PE is subject to the same terms and conditions which existed prior to the merger. Transactions relating to the stock option plans of the Company are summarized below. The table reflects the pooled activity of PE and ABI options for fiscal 1993 as if all ABI options were granted, exercised, or cancelled at .678 of a PE share. Number of Options Outstanding at July 31, 1992 4,014,001 Granted at $20.47-$37.75 per share 1,387,417 Exercised at $9.96-$35.88 per share 841,752 Cancelled 199,523 Outstanding at June 30, 1993 4,360,143 Granted at $30.25-$37.75 per share 970,150 Exercised at $10.70-$35.32 per share 763,085 Cancelled 253,458 Outstanding at June 30, 1994 4,313,750 Granted at $28.81-$31.25 per share 543,300 Exercised at $10.70-$35.13 per share 424,017 Cancelled 315,742 Outstanding at June 30, 1995 4,117,291 Options exercisable at June 30, 1995 3,012,476 At June 30, 1995, .5 million shares remained available for option grant. Employee Stock Purchase Plan. The Employee Stock Purchase Plan offers domestic employees the right to purchase, over a two year period, shares of common stock on an annual offering date. The purchase price is equal to the lower of 85% of the average market price of the common stock on the offering date or 85% of the average market price of the common stock on the last day of the 24 month purchase period. Common stock issued under the Employee Stock Purchase Plans, assuming ABI stock was issued at .678 of a PE share prior to the merger, was approximately .1 million shares in fiscal 1995, 1994 and 1993, respectively. At June 30, 1995, .8 million shares are reserved for issuance. Director Stock Purchase and Deferred Compensation Plan. In fiscal 1993, PE adopted the Director Stock Purchase and Deferred Compensation Plan which requires non-employee directors of the Company to apply at least 50% of their annual retainer to the purchase of common stock. The purchase price is the fair market value on the first calendar day of the third month of each fiscal quarter. At June 30, 1995, approximately .1 million shares were available for issuance. -40- Restricted Stock. As part of PE's 1993 Stock Incentive Plan, a total of 100,000 shares of common stock may be granted to key employees pursuant to restricted stock awards. Such stock will not vest until certain continuous employment restrictions and specified performance goals are achieved. During fiscal 1995, 70,000 shares of restricted stock were granted to key employees. In fiscal 1994 and 1993, no shares were granted. Note 9 Additional Information The following table provides the major components of selected accounts of the Consolidated Statements of Financial Position: (Dollar amounts in millions) At June 30, 1995 1994 Other long-term assets Investments in affiliated companies $ 11.9 $ 34.0 Assets held for sale 39.1 45.0 Other 85.0 85.5 Total other long-term assets $136.0 $164.5 Other accrued expenses Deferred service contract revenues $ 42.5 $ 37.3 Accrued pension liabilities 21.1 24.7 Restructuring provision 18.5 Other 78.2 79.6 Total other accrued expenses $160.3 $141.6 Other long-term liabilities Accrued pension liabilities $ 72.1 $ 60.5 Accrued postretirement benefits 91.3 89.9 Other 16.8 31.1 Total other long-term liabilities $180.2 $181.5 The following table provides the significant components of other income (expense), net in the Consolidated Statement of Operations for the year ended June 30, 1993. The components of other income (expense), net for fiscal years 1995 and 1994 were not material. (Dollar amounts in millions) 1993 Gain on sale of 7% promissory note $8.5 Reduction in carrying value of certain unoccupied properties (5.0) Other, net 2.6 Total other income, net $6.1 In the fourth quarter of fiscal 1993, the Company sold a 7% promissory note which was received from the sale of a joint venture in fiscal 1992. The transaction resulted in a before-tax gain of $8.5 million. In addition, during fiscal 1993, because of the continued softness in the commercial real estate market, the Company reduced the carrying value of certain unoccupied properties by $5.0 million. Note 10 Provision for Restructured Operations During the fourth quarter of fiscal 1995, the Company recorded a $23.0 million before-tax charge for restructuring actions. The restructuring plan focuses primarily on reducing the analytical instruments business infrastructure. The charge includes $20.7 million of severance and benefit costs for workforce reductions and $2.3 million of closure and facility consolidation expenses. All costs will result in cash outlays and these actions are expected to be substantially completed by December 31, 1995. The workforce reductions total 227 employees. These actions will be accomplished through involuntary reductions worldwide as well as a voluntary retirement incentive plan in the U.S. The workforce reductions will affect all geographic areas of operation and all disciplines ranging from production labor to executive management. This includes product departments, manufacturing, engineering, sales, service and support as well as corporate administrative staff. The voluntary retirement incentive plan was accepted by 91 employees, which is included in the total, at a cost of $6.8 million. Approximately 43 of these positions will have to be replaced, but at a lower overall cost basis. All costs associated with hiring or training of new employees were excluded from the charge and will be recognized in the period incurred. The planned closure and facility consolidation costs total $2.3 million. These actions include the shutdown of the Company's Puerto Rico manufacturing facility, consolidation of sales offices in the Far East and consolidation of administrative departments in the U.S. The closure of operations in Puerto Rico, expected to be completed within six months, includes severance costs for 46 employees, lease termination payments and other related costs. The Far East costs include lease penalties and restoration of vacated offices. Any costs associated with relocation of existing employees and moving expenses for inventory and equipment have been excluded from the charge and will be recognized in the period incurred. As of June 30, 1995, the Company made severance and benefit payments of $3.6 million to 55 employees separated under the aforementioned plan and payments of $.9 million were made for closure and facility consolidation costs. The balance of the cost to complete the restructuring plan was $18.5 million at June 30, 1995. Benefits from this restructuring program will be offset in part by the costs of hiring and training of new employees, moving and relocation. The before-tax savings from these actions approximates $20 million in costs and cash flow for fiscal 1996 and $25 million in succeeding years. -41- Note 11 Commitments and Contingencies Future minimum payments at June 30, 1995 under noncancellable operating leases for real estate and equipment were as follows: (Dollar amounts in millions) 1996 $26.5 1997 21.5 1998 17.3 1999 11.9 2000 8.9 2001 and thereafter 4.1 Total $90.2 Rental expense was $32.5 million in fiscal 1995, $32.9 million in fiscal 1994 and $31.9 million in fiscal 1993. The Company has been named as a defendant in several legal actions arising from the conduct of its normal business activities. Although the amount of any liability that might arise with respect to any of these matters cannot be accurately predicted, the resulting liability, if any, will not in the opinion of management have a material adverse effect on the financial statements of the Company. Note 12 Financial Instruments Derivatives. The Company manages exposure to fluctuations in foreign exchange rates by creating offsetting positions through the use of derivative financial instruments, primarily forward or purchased option foreign exchange contracts. The Company does not use derivative financial instruments for trading or speculative purposes, nor is the Company a party to leveraged derivatives. Foreign exchange contracts are accounted for as hedges of net investments, firm commitments, and foreign currency transactions. Gains and losses on hedges of net investments are reported as equity adjustments from translation on the balance sheet. The gains and losses on hedges of firm commitments are deferred and included in the basis of the transaction underlying the commitment. Gains and losses on transaction hedges are recognized in income and offset the foreign exchange gains and losses on the related transaction. The costs associated with entering into these contracts are amortized over the life of the contract. Realized and deferred gains and losses on hedge contracts were not material for the years presented. Concentrations of Credit Risk. The forward contracts and options used by the Company in managing its foreign currency positions contain an element of risk that the counterparties may be unable to meet the terms of the agreements. However, the Company minimizes such risk exposure by limiting the counterparties to highly rated major domestic or international financial institutions. Management does not expect to record any losses as a result of counterparty default. The Company does not require and is not required to place collateral for these financial instruments. Fair Value. The following methods are used in estimating the fair value of significant financial instruments held or owed by the Company. Cash and short-term investments approximate their carrying amount due to the short duration of these instruments. Fair values of marketable securities beyond one year, minority equity investments and notes receivable are estimated based on quoted market prices, if available, or quoted market prices of financial instruments with similar characteristics. The fair value of debt is based on the current rates offered to the Company for debt of similar remaining maturities. Fiscal year end foreign currency exchange rates are used to estimate the fair value of foreign currency contracts. The following table presents the carrying amounts and estimated fair values of the Company's financial instruments at June 30, 1995 and 1994: Carrying Fair Carrying Fair Amount Value Amount Value (Dollar amounts in millions) 1995 1994 Cash and short-term investments $80.0 $80.0 $25.0 $25.0 Marketable securities maturing beyond one year 7.0 7.0 Minority equity investments 5.1 4.7 27.3 30.0 Notes receivable 15.5 15.9 13.4 13.7 Short-term debt 54.8 54.8 83.6 83.6 Long-term debt 34.1 35.1 34.3 34.3 Foreign currency contracts 70.1 73.8 89.2 90.8 -42- Note 13 Quarterly Financial Information (Unaudited) The following is a summary of quarterly financial results for the fiscal years ended June 30, 1995 and 1994:
First Quarter Second Quarter Third Quarter Fourth Quarter (Dollar amounts in millions except per share amounts) 1995 1994 1995 1994 1995 1994 1995 1994 Net revenues $247.3 $243.3 $261.0 $256.8 $274.6 $263.5 $280.6 $260.9 Gross margin 118.3 113.6 123.2 123.6 128.7 128.9 132.9 123.1 Income (loss) from continuing operations 14.9 13.5 17.1 22.2 36.7 20.4 (1.8) 17.9 Loss from discontinued operations (12.5) (10.4) Net income (loss) 14.9 1.0 17.1 22.2 36.7 20.4 (1.8) 7.5 Per share amounts: Income (loss) from continuing operations $ .35 $ .30 $ .40 $ .50 $ .86 $ .45 $(.04) $ .41 Loss from discontinued operations (.28) (.24) Net income (loss) $ .35 $ .02 $ .40 $ .50 $ .86 $ .45 $(.04) $ .17
In the third quarter of fiscal 1995, the Company recorded a before- tax gain of $20.8 million, or $.40 per share after-tax, on the sale of its equity interest in Silicon Valley Group, Inc. During the fourth quarter of fiscal 1995, the Company recorded a $23.0 million before- tax charge, or $.44 per share after-tax, for restructuring (see Note 10). Stock Prices and Dividends 1995 1994 Stock prices High Low High Low First Quarter $32 1/4 $26 1/2 $33 7/8 $30 Second Quarter $33 1/8 $25 1/4 $39 $28 1/2 Third Quarter $29 7/8 $25 3/4 $39 1/2 $31 Fourth Quarter $37 1/4 $29 $33 $27 Dividends per share 1995 1994 First Quarter $.17 $.17 Second Quarter $.17 $.17 Third Quarter $.17 $.17 Fourth Quarter $.17 $.17 Total dividends per share $.68 $.68 -43- STATEMENT OF FINANCIAL RESPONSIBILITY To the Shareholders of The Perkin-Elmer Corporation The Company is responsible for the preparation and integrity of the accompanying consolidated financial statements. The statements have been prepared in conformity with generally accepted accounting principles appropriate in the circumstances and include amounts based upon management's best estimates and judgments. These accounting principles have been consistently applied. The financial statements are believed to reflect, in all material respects, the substance of events and transactions that should be included. Financial information presented elsewhere in this annual report is consistent with that in the financial statements. In meeting its responsibility for preparing reliable financial statements, the Company depends on its system of internal accounting controls. This system is designed to provide reasonable assurance assets are safeguarded and transactions are executed in accordance with the appropriate corporate authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. The Company believes its accounting controls provide reasonable assurance that errors or irregularities that could be material to the financial statements are prevented or would be detected within a timely period by employees in the normal course of performing their assigned functions. The concept of reasonable assurance is based on the recognition that judgments are required to assess and balance the costs and expected benefits of a system of internal accounting controls. Written internal accounting controls and other operating policies and procedures supporting this system are communicated throughout the Company. Adherence to these policies and procedures is reviewed through a coordinated audit effort of the Company's internal audit staff and independent accountants. The independent accountants review and test the system of internal accounting controls to the extent they consider necessary to support their opinion on the consolidated financial statements of the Company. Their report is the result of an independent and objective review of management's discharge of its responsibilities relating to the fairness of reported operating results and financial condition. The Company's Board of Directors has an Audit Committee composed solely of outside directors. The committee meets periodically with the Company's independent accountants, management and internal auditors to review matters relating to the quality of financial reporting and internal accounting controls, the nature and extent of internal and external audit plans and results, and certain other matters. The independent accountants, whose appointment is recommended by the Audit Committee to the Board of Directors, have full and free access to this committee. A statement of business ethics policy is communicated to all Company employees. The Company monitors compliance with this policy to help assure operations are conducted in a responsible and professional manner with a commitment to the highest standard of business conduct. Stephen O. Jaeger Vice President, Finance Chief Financial Officer Gaynor N. Kelley Chairman, President and Chief Executive Officer -44- REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The Perkin-Elmer Corporation In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of operations, of shareholders' equity and of cash flows present fairly, in all material respects, the financial position of The Perkin-Elmer Corporation and its subsidiaries at June 30, 1995 and 1994, and the results of their operations and their cash flows for each of the three fiscal years in the period ended June 30, 1995, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As discussed in Note 4 and Note 5 to the financial statements, the Company changed its method of accounting for income taxes, postretirement benefits and postemployment benefits in fiscal 1993. Stamford, Connecticut July 25, 1995 -45- EX-21 15 EXHIBIT-21 SUBSIDIARIES - PERKIN-ELMER CORP. EXHIBIT 21 LIST OF SUBSIDIARIES SUBSIDIARIES OF THE PERKIN-ELMER CORPORATION State or Jurisdiction Name of Incorporation Organization PKN Overseas Corporation (New York, USA) Perkin-Elmer (UK) Limited (UK) Perkin-Elmer (UK) Pension Trustees Limited (UK) Perkin-Elmer Limited (UK) Applied Biosystems Ltd. (UK) Spartan Ltd. (Channel Isles) Perkin-Elmer Pty Limited (Australia) Perkin-Elmer (Canada) Ltd. (Canada) Perkin-Elmer Sciex * (Canada) Photovac International, Incorporated (New York) Photovac Europa AS (Denmark) Perkin-Elmer Taiwan Corporation (Delaware,USA) Perkin-Elmer (Thailand) Limited (Thailand) Perkin-Elmer AG (Switzerland) Perkin-Elmer Japan Co. Ltd. (Japan) Perkin-Elmer SA (France) Perkin-Elmer (Sweden) AB (Sweden) Perkin-Elmer AB (Sweden) Perkin-Elmer OY (Finland) Perkin-Elmer Nederland BV (The Netherlands) Applied Biosystems, BV (The Netherlands) Perkin-Elmer Belgium NV (Belgium) Perkin-Elmer Sro (Czech Republic) Perkin-Elmer Hungaria Kft (Hungary) Perkin-Elmer Polska Spolka zoo (Poland) Spartan Ltd. + (Channel Isles) Listronagh Company (Ireland) Perkin-Elmer Instruments Asia Pte. Ltd. (Singapore) Perkin-Elmer Instruments Pte. Ltd. (Malaysia) Perkin-Elmer Holding GmbH (Germany) Bodenseewerk Perkin-Elmer GmbH (Germany) Perkin-Elmer GmbH (Austria) Note: Persons directly owned by subsidiaries of The Perkin- Elmer Corporation are indented and listed below their immediate parent. * 50% ownership + 49% ownership SUBSIDIARIES OF THE PERKIN-ELMER CORPORATION (cont'd) PKN Overseas Corporation Perkin-Elmer Italia SpA (Italy) Perkin-Elmer Hong Kong, Ltd. (Hong Kong) Perkin-Elmer Analytical and Biochemical Instruments (Beijing) Co., Ltd. (China) Perkin-Elmer International, Inc. (Delaware, USA) Analitica de Centroamerica, S.A. (Costa Rica) Perkin-Elmer Industria e Comercio Ltda. (Brazil) Perkin-Elmer Korea Corporation (Delaware, USA) Perkin-Elmer de Mexico SA (Mexico) Perkin-Elmer Overseas Ltd. (Cayman Islands) PECO Insurance Company Limited (Bermuda) Perkin-Elmer Caribbean Corporation (Delaware, USA) Perkin-Elmer China, Inc. (Delaware, USA) Perkin-Elmer FSC, Inc. (U.S.Virgin Islands) Perkin-Elmer Hispania SA (Spain) Hitachi Perkin-Elmer, Ltd. + (Japan) +49% ownership EX-23 16 EXHIBIT-23 CONSENT OF INDEPENDENT ACCOUNTANTS CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements on Form S-8 (Nos. 2-95451, 33-25218, 33-44191, 33- 50847, 33-50849, and 33-58778) of The Perkin-Elmer Corporation of our report dated July 25, 1995, appearing on page 45 of the Annual Report to Shareholders for 1995 of The Perkin-Elmer Corporation which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 18 of this Form 10-K. PRICE WATERHOUSE LLP Stamford, Connecticut September 26, 1995 EXHIBIT 23 EX-27 17 EXHIBIT-27 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Condensed Consolidated Statement of Operations for the Twelve Months Ended June 30, 1995 and the Condensed Consolidated Statement of Financial Position at June 30, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 12-MOS JUN-30-1995 JUN-30-1995 73,010 0 243,102 (8,949) 212,859 601,628 362,312 (206,871) 893,038 373,984 0 45,600 0 0 259,100 893,038 1,063,506 1,063,506 560,402 560,402 0 2,086 8,180 82,564 (15,687) 66,877 0 0 0 66,877 1.57 1.56
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