-----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, GmPVdXmVzBuo32LOL5H6YIvfVp3p1d+TsUcl3GapVXEbNEPNMtv3+m3IFkAekRg2 OLYunJC/OVbNK0nHxMZgnQ== 0000840467-95-000009.txt : 19951030 0000840467-95-000009.hdr.sgml : 19951030 ACCESSION NUMBER: 0000840467-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951027 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BECKMAN INSTRUMENTS INC CENTRAL INDEX KEY: 0000840467 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 951040600 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10109 FILM NUMBER: 95585053 BUSINESS ADDRESS: STREET 1: 2500 HARBOR BLVD CITY: FULLERTON STATE: CA ZIP: 92634 BUSINESS PHONE: 7148714848 10-Q 1 10-Q REPORT TO SEC FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 (Mark One) (X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1995 OR ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission File Number 001-10109 BECKMAN INSTRUMENTS, INC. (Exact name of registrant as specified in its charter) Delaware 95-104-0600 (State of Incorporation) (I.R.S. Employer Identification No.) 2500 Harbor Boulevard, Fullerton, California 92634 (Address of principal executive offices) (Zip Code) (714) 871-4848 (Registrant's telephone number including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ). APPLICABLE ONLY TO CORPORATE ISSUERS: Outstanding shares of common stock, $0.10 par value, as of October 19, 1995: 28,862,421 shares. PART I FINANCIAL INFORMATION Item 1. Financial Statements Page Condensed Consolidated Statements of Earnings for the three and nine month periods ended September 30, 1995 and 1994 3 Condensed Consolidated Balance Sheets as of September 30, 1995 and December 31, 1994 4 Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 1995 and 1994 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial 9 Condition and Results of Operations PART II OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes In Securities 13 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security-Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 BECKMAN INSTRUMENTS THIRD QUARTER REPORT CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in Millions, Except Amounts Per Share) Unaudited
Three Months Ended Nine Months Ended September 30, September 30, 1995 1994 1995 1994 ------ ------ ------ ------ Sales $229.9 $217.8 $665.5 $638.6 Operating costs and expenses: Cost of sales 106.9 103.0 312.1 303.3 Marketing, administrative and general 73.1 65.7 212.1 198.3 Research, development and engineering 22.9 23.9 67.0 68.4 Restructuring charge 4.1 4.8 10.6 7.1 ------ ------ ------ ------ 207.0 197.4 601.8 577.1 ------ ------ ------ ------ Operating income 22.9 20.4 63.7 61.5 Nonoperating income (expense): Interest income 1.7 1.2 4.1 3.5 Interest expense (3.8) (3.5) (9.6) (9.5) Other, net 0.2 (0.7) (0.7) (3.1) ------ ------ ------ ------ (1.9) (3.0) (6.2) (9.1) ------ ------ ------ ------ Earnings before income taxes 21.0 17.4 57.5 52.4 Income tax provision 7.1 6.1 19.5 18.3 ------ ------ ------ ------ Net earnings before cumulative effect of change in accounting principles 13.9 11.3 38.0 34.1 Cumulative effect of change in accounting principles: Accounting for postemployment benefits (net of tax benefit of $3.0) - - - (5.1) ------ ------ ------ ------ Net earnings $ 13.9 $ 11.3 $ 38.0 $ 29.0 ====== ====== ====== ====== Weighted average common shares and common share equivalents - (thousands) 28,691 28,175 28,730 28,030 Net earnings per share before cumulative effect of change in accounting principles$ 0.48 $ 0.40 $ 1.32 $ 1.21 Cumulative effect of change in accounting principles: Accounting for postemployment benefits (net of tax benefit of $3.0) - - - (0.18) ------ ------ ------ ------ Net earnings per share $ 0.48 $ 0.40 $ 1.32 $ 1.03 ====== ====== ====== ======
See accompanying notes to condensed consolidated financial statements. BECKMAN INSTRUMENTS,INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Millions) Unaudited
September 30, December 31, 1995 1994 ------------ ----------- Assets Current assets: Cash and equivalents $ 17.9 $ 44.2 Short-term investments 8.6 0.7 Trade receivables 269.6 265.9 Inventories 172.6 150.7 Deferred income taxes 38.6 37.8 Other current assets 20.9 12.7 ------ ------ Total current assets 528.2 512.0 Property, plant and equipment, net 243.8 232.6 Deferred income taxes 57.8 56.6 Other assets 46.0 27.9 ------ ------ Total assets $875.8 $829.1 ====== ====== Liabilities and Stockholders' Equity Current liabilities: Notes payable $ 17.4 $ 12.2 Accounts payable and accrued expenses 175.5 202.9 Income taxes 60.3 53.7 ------ ------ Total current liabilities 253.2 268.8 Long-term debt, less current maturities 159.7 117.3 Other liabilities 118.1 126.0 ------ ------ Total liabilities 531.0 512.1 Stockholders' equity 344.8 317.0 ------ ------ Total liabilities and stockholders' equity $875.8 $829.1 ====== ======
See accompanying notes to condensed consolidated financial statements. BECKMAN INSTRUMENTS,INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Millions) Unaudited
Nine Months Ended September 30, 1995 1994 ---- ---- Cash Flows from Operating Activities Net earnings $ 38.0 $ 29.0 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 55.9 51.5 Deferred income taxes (1.7) (1.7) Changes in assets and liabilities: Trade receivables (1.8) 12.3 Inventories (21.1) 4.5 Accounts payable and accrued expenses (10.3) - Restructuring reserve (17.7) (29.9) Income taxes 6.6 9.7 Other (35.6) 5.1 ------ ------ Net cash provided by operating activities 12.3 80.5 ------ ------ Cash Flows from Investing Activities Additions to property, plant and equipment (70.4) (66.5) Net disposals of property, plant and equipment 9.3 13.0 Sale (purchase) of short-term investments (7.8) 21.7 ------ ------ Net cash used by investing activities (68.9) (31.8) ------ ------ Cash Flows from Financing Activities Dividends to stockholders (9.3) (8.4) Proceeds from issuance of stock 11.6 9.9 Purchase of treasury stock (12.3) (0.4) Notes payable borrowings 11.4 2.3 Notes payable reductions (9.5) (30.2) Long-term debt borrowings 39.7 4.2 Long-term debt reductions - (3.3) Other (1.3) (0.6) ------ ------ Net cash provided (used) by financing activities 30.3 (26.5) Effect of exchange rates on cash and equivalents - 0.6 ------ ------ Increase (decrease) in cash and equivalents (26.3) 22.8 Cash and equivalents -- beginning of period 44.2 24.2 ------ ------ Cash and equivalents -- end of period $ 17.9 $ 47.0 ====== ====== Supplemental Disclosures of Cash Flow Information Cash paid during the period for: Interest $ 6.5 $ 9.4 Income taxes $ 14.9 $ 7.9
See accompanying notes to condensed consolidated financial statements. BECKMAN INSTRUMENTS, INC. Notes To Condensed Consolidated Financial Statements (Dollars in Millions, Except Amounts Per Share) 1 Report by Management In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results for the periods. The statements are prepared in accordance with the requirements of Form 10-Q and do not include all disclosures required by generally accepted accounting principles or those made in the Annual Report on Form 10-K for 1994 which is on file with the Securities and Exchange Commission. The results of operations for the three and nine month periods ended September 30, 1995 are not necessarily indicative of the results to be expected for the year ending December 31, 1995. 2 Earnings Per Share In 1995, earnings per share is computed including common share equivalents. Common share equivalents represent the dilutive effect of outstanding stock options. Common share equivalents were excluded in periods prior to 1995 as they were less than three percent dilutive. Primary earnings per share approximates fully diluted earnings per share. Earnings per share are calculated as follows:
Quarter Ended Quarter Ended September 30, 1995 September 30, 1994 Earnings Earnings (In thousands,except amounts per share) Shares Per Share Shares Per Share ------ --------- ------ --------- Weighted average shares of common stock outstanding 28,076 $0.49 28,175 $0.40 Common share equivalents 615 (0.01) * * ------ ------ ------ ------ Weighted average common and common share equivalents 28,691 $0.48 28,175 $0.40 ====== ====== ====== ======
*Less than 3% dilutive
Nine Months Ended Nine Months Ended September 30, 1995 September 30, 1994 Earnings Earnings (In thousands,except amounts per share) Shares Per Share Shares Per Share ------ --------- ------ --------- Weighted average shares of common stock outstanding 28,074 $1.35 28,030 $1.03 Common share equivalents 656 (0.03) * * ------ ------ ------ ------ Weighted average common and common share equivalents 28,730 $1.32 28,030 $1.03 ====== ====== ====== ======
*Less than 3% dilutive 3 Inventories Inventories are comprised of the following:
September 30, December 31, 1995 1994 ------------ ------------ Finished products $119.2 $104.1 Raw materials, parts and assemblies 44.9 41.3 Work in-process 8.5 5.3 ------ ------ $172.6 $150.7 ====== ======
4 Investments In September 1995, the Company agreed to acquire Hybritech Inc., a San Diego- based life sciences and diagnostic company, effective January 2, 1996. The acquisition will expand the Company's capabilities for the development and manufacture of high sensitivity immunoassays, including cancer tests. The acquisition will be accounted for as a purchase. In May 1995, the Company agreed to acquire Genomyx Corporation of Foster City, California. Genomyx is a developer and manufacturer of advanced DNA sequencing products and is expected to complement the Company's biotechnology business. The acquisition will be accounted for as a step-acquisition. In March 1995, the Company formed a marketing and service alliance with BioSepra Inc. (BioSepra), a biochromatography systems manufacturer, to offer systems for high speed, high resolution separation of biomolecules. The Company paid $3.0 million for the exclusive rights to market and sell certain of BioSepra's products. Also in March 1995, the Company made a $5.0 million investment in Sepracor Inc. (Sepracor), receiving exchangeable preferred stock and certain rights in regard to the disposition of Sepracor's shares of its subsidiary, BioSepra. 5 Change in Accounting Principles Postemployment benefits Effective January 1, 1994, the Company adopted Statement of Financial Accounting Standards No. 112 ("SFAS 112") "Employers' Accounting for Postemployment Benefits". This statement requires the Company to recognize an obligation for postemployment benefits provided to former or inactive employees, their beneficiaries and covered dependents after employment but before retirement. Accordingly, the Company recognized a transition obligation of $8.1 million and a net expense of $5.1 million (net of tax benefit of $3.0) as the cumulative effect of the accounting change. 6 Contingencies Environmental As previously reported in our 1995 second quarter report on Form 10-Q, the Company is obligated to contribute to any resolution of a lawsuit filed in 1991 concerning property the Company sold in 1984. The Company's obligation arises from its 1990 settlement of earlier litigation between the Company and the original purchaser. A verdict was rendered in July 1995 in favor of the original purchaser. No damages or other compensation of any kind were awarded to the plaintiffs. The plaintiffs have filed a motion for a new trial and are expected to file an appeal if unsuccessful in securing a new trial. Litigation In September 1995, the Company was served with a lawsuit filed in the Superior Court of Orange County, California by two of its former employees alleging breach of contract relating to the commercial development of certain technology. The plaintiffs seek monetary damages of not less than $150 million and a declaratory judgment terminating certain exclusive licenses entered into between the plaintiffs and the Company. The Company believes that the plaintiff's claims are without merit and that the Company has good and sufficient defenses to each such claim. As previously reported in our 1994 annual report on Form 10-K, the public prosecutor in Palermo (Sicily), Italy is investigating the past activities of officials at a local government hospital and laboratory and representatives of the principal worldwide companies marketing diagnostic equipment in Palermo, including the Company's Italian subsidiary (the "Subsidiary"). The inquiry of the Subsidiary focuses on past leasing practices for the placement of diagnostic equipment which were common industrywide practices throughout Italy, but now are alleged to be improper. Recently a court hearing was scheduled for November 7, 1995 (postponement not uncommon in Italy) in Palermo for the prosecutor to present evidence of alleged improper conduct by representatives of these diagnostic companies (including two individuals from the Subsidiary). The lodging of any formal charges will depend on the results of the hearing. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions, except per share amounts) Operations Sales for the third quarter and nine month period ended September 30, 1995 were $229.9 and $665.5, an increase of $12.1 and $26.9 as compared with the same periods from the prior year. Excluding the impact of changes in foreign currency exchange rates, third quarter sales were higher by 2% and the nine months remained comparable to the same period in 1994. Sales for the North American diagnostic and bioresearch business increased over the prior year. The international diagnostic and bioresearch markets continue to be impacted by the European recession and cost containment initiatives in several European health care systems. The weakness in the international markets, particularly in Europe, is expected to continue. Operating income for the third quarter and nine months ended September 30, 1995 before restructuring charges were $27.0 and $74.3, representing an increase of 7.1% and 8.3% over the same periods in 1994. Cost of sales for the third quarter and nine months increased over the same periods in the prior year, but are comparable as a percent of sales. Marketing, general and administrative expenses in the third quarter and first nine months of 1995 increased, compared to the same period last year, primarily as a result of increased marketing efforts and foreign currency fluctuations. Research and development expenses were comparable to the third quarter and first nine months of last year. After giving effect to its 1995 restructuring charges, the Company reported operating income of $22.9 and $63.7 for the third quarter and nine months ended September 30, 1995. The reorganization and restructuring plan announced in the fourth quarter of 1993 has resulted in year-to-date 1995 savings of about $34 which are mainly attributable to the reduction of more than 1,100 personnel from 1993. The Company anticipates savings from the restructuring program to be $45 in 1995, but not incremental to earnings due to certain transition costs, general salary and cost increases, as well as fluctuating foreign currencies. Nonoperating expenses decreased by $1.1 for the third quarter and $2.9 for the first nine months compared to prior year as a result of foreign currency exchange gains. Earnings before income taxes for the third quarter and first nine months compared to the same period of the prior year, excluding the restructuring charge, increased by $2.9 and $8.6. Including the restructuring charge, 1995 earnings before taxes were $21.0 for the quarter and $57.5 for the nine months. The effective tax rate decreased to 34% from 35% in the prior year as a result of increased income in lower tax rate jurisdictions. Net earnings for the third quarter and first nine months of 1995 before restructuring charges and change in accounting principles increased to $16.5 and $44.9 or $0.58 and $1.57 per share ($0.59 and $1.60 per share before the dilutive effect of common share equivalents), compared to $14.4 and $38.7, or $0.51 and $1.38 per share for the prior year. In the first quarter of 1994, the Company adopted Statement of Financial Accounting Standards No. 112 ("SFAS 112") "Employers' Accounting for Postemployment Benefits". This statement requires the Company to recognize a prior service obligation resulting from the Company's commitment to provide benefits to former or inactive employees, their beneficiaries and covered dependents after employment but before retirement. Adoption of SFAS 112 resulted in the Company recording an after tax charge of $5.1 in the first quarter of 1994. Net earnings for the third quarter and first nine months of 1995 were $13.9 and $38.0, or $0.48 and $1.32 per share ($0.49 and $1.35 per share before the dilutive effect of common share equivalents) compared to $11.3 and $29.0 or $0.40 and $1.03 per share in 1994. The following tables summarize the impact of the dilutive effect of common share equivalents, restructuring charges and the cumulative effect of change in accounting principles on net earnings and earnings per share.
Quarter Ended September 30, 1995 1994 - -------------------------- ----------------- ------------------ Per Per Shares Amt Share Shares Amt Share Net earnings before restructuring charge and cumulative effect of change in accounting principles 28,076 $16.5 $0.59 28,175 $14.4 $0.51 Common share equivalents 615 - (0.01) * - - ------ ----- ----- ------ ----- ----- Net earnings before restructuring charge and cumulative effect of change in accounting principles 28,691 16.5 0.58 28,175 14.4 0.51 Restructuring charge, net of tax benefit 28,691 (2.6) (0.10) 28,175 (3.1) (0.11) Cumulative effect of change in accounting principles 28,691 - - 28,175 - - ----- ---- ----- ----- Net earnings 28,691 $13.9 $0.48 28,175 $11.3 $0.40 ====== ===== ==== ====== ===== =====
* Less than 3% dilutive
Nine Months Ended September 30, 1995 1994 - ------------------------------- --------------------- --------------------- Per Per Shares Amt Share Shares Amt Share Net earnings before restructuring charge and cumulative effect of change in accounting principles 28,074 $44.9 $1.60 28,030 $38.7 $1.38 Common share equivalents 656 - (0.03) * - - ------ ----- ----- ------ ----- ----- Net earnings before restructuring charge and cumulative effect of change in accounting principles 28,730 44.9 1.57 28,030 38.7 1.38 Restructuring charge, net of tax benefit 28,730 (6.9) (0.25) 28,030 (4.6) (0.17) Cumulative effect of change in accounting principles 28,730 - - 28,030 (5.1) (0.18) ----- ----- ----- ----- Net earnings 28,730 $38.0 $1.32 28,030 $29.0 $1.03 ====== ===== ===== ====== ===== =====
* Less than 3% dilutive Financial Condition For the nine months ended September 30, 1995, the Company had negative cash flow from operating and investing activities of $56.6. This represents a decrease in cash flows of $105.3 from the same period in 1994. Contributing to the decrease was increased pension plan funding, incentive compensation payments and investments compared to 1994. The ratio of debt to capitalization at September 30, 1995 was 33.9% compared to 29.0% at December 31, 1994. The ratio of current assets to current liabilities at September 30, 1995 of 2.1 is slightly higher than December 31, 1994. The Company believes it has adequate financial resources to meet expected cash flow requirements for the foreseeable future. On September 1, 1995, the Company paid a quarterly cash dividend of $0.11 per share of common stock for a total of $3.1. On October 4, 1995, the Board of Directors declared a $0.11 per share dividend payable on November 30, 1995 to shareholders of record on November 10, 1995. PART II OTHER INFORMATION Item 1. Legal Proceedings In September, 1995, the Company was served with a lawsuit filed in the Superior Court of Orange County, California by two of its former employees alleging breach of contract relating to the commercial development of certain technology (Cercek v. Beckman Instruments, Inc.). The plaintiffs seek monetary damages of not less than $150 million and a declaratory judgment terminating certain exclusive licenses entered into between the plaintiffs and the Company. The Company believes that the plaintiffs' claims are without merit and that the Company has good and sufficient defenses to each such claim. The Company has retained counsel to defend it and is preparing its defense. As previously reported in our second quarter report on Form 10-Q, the Company is obligated to contribute to any resolution of a lawsuit filed by Forest City Properties Corporation and FC Irvine, Inc. (collectively, "Forest City") against The Prudential Insurance Company of America ("Prudential") in 1991 concerning property in Irvine, California formerly owned by the Company. The Company's obligation arises from its 1990 settlement of earlier litigation between the Company and Prudential concerning the same property. The trial of this matter was conducted before a jury in Los Angeles County Superior Court, California in May, June and July, 1995. The case was submitted to the jury on July 13, 1995. A verdict was rendered by the jury in favor of Prudential on or about July 28, 1995. No damages or other compensation of any kind were awarded the plaintiffs. The plaintiffs have filed a motion for a new trial which is scheduled for hearing in late October, 1995. The plaintiffs are expected to file an appeal if unsuccessful in securing a new trial. As previously reported in our 1994 annual report on Form 10-K, the public prosecutor in Palermo (Sicily), Italy is investigating the past activities of officials at a local government hospital and laboratory and representatives of the principal worldwide companies marketing diagnostic equipment in Palermo, including the Company's Italian subsidiary (the "Subsidiary"). The inquiry of the Subsidiary focuses on past leasing practices for the placement of diagnostic equipment which were common industrywide practices throughout Italy, but now are alleged to be improper. Recently a court hearing was scheduled for November 7, 1995 (postponement not uncommon in Italy) in Palermo for the prosecutor to present evidence of alleged improper conduct by representatives of these diagnostic companies (including two individuals from the Subsidiary). The lodging of any formal charges will depend on the results of the hearing. The Subsidiary's Italian attorney is reviewing documents received from the Palermo prosecutor. As previously reported in our first quarter report on Form 10-Q, since 1992 four toxic tort lawsuits have been filed in Maricopa County Superior Court, Arizona by a number of residents of the Phoenix/Scottsdale area against the Company and a number of other defendants, including Motorola, Inc., Siemens Corporation, the cities of Phoenix and Scottsdale and others. In July 1995 the Company, and a number of other defendants, including Motorola, Inc., Siemens Corporation, and the cities of Phoenix and Scottsdale, were served with another toxic tort action in Maricopa County Superior Court, Arizona (Wilkins v. Motorola, Inc., et. al.) by a number of residents of the Phoenix/Scottsdale area. The suit seeks damages for alleged personal injury, emotional distress, lost earnings and medical expenses, as well as punitive and other damages (no dollar amount is specified) in connection with alleged groundwater contamination in an area in Scottsdale, Arizona close to a former Company manufacturing facility. The Company is indemnified by SmithKline Beecham p.l.c., the successor of its former controlling stockholder, for any costs incurred in these matters in excess of applicable insurance, and thus the outcome of these litigations, even if unfavorable to the Company, should have no effect on the Company's earnings or financial position. Item 2. Changes In Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security-Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K a) Exhibits 10. Restricted Stock Agreement and Election (Cycle Two - Economic Value Added Incentive Plan), adopted by the Company in 1995. 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 2 Earnings Per Share of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, October 20, 1995 27. Financial Data Schedule b) Reports on Form 8-K None. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BECKMAN INSTRUMENTS, INC. (Registrant) Date: October 25, 1995 by WILLIAM H. MAY ----------------------- William H. May Vice President, General Counsel and Secretary Date: October 25, 1995 by DENNIS K. WILSON ----------------------- Dennis K. Wilson Vice President, Finance and Chief Financial Officer EXHIBIT INDEX FORM 10-Q, THIRD QUARTER, 1995 Exhibit Number Description ----------- ------------------------------------------- 10. Restricted Stock Agreement and Election (Cycle Two - Economic Value Added Incentive Plan), adopted by the Company in 1995. 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 2 Earnings Per Share of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, October 20, 1995 27. Financial Data Schedule EX-10 2 RESTRICTED STOCK AGREEMENT AND ELECTION Exhibit 10 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. BECKMAN INSTRUMENTS, INC. RESTRICTED STOCK AGREEMENT AND ELECTION (CYCLE TWO - ECONOMIC VALUE ADDED INCENTIVE PLAN) This Restricted Stock Agreement and Election ("Agreement") is entered into between Beckman Instruments, Inc., a Delaware corporation (the "Company"), and _________________________________, an employee of the Company or a Subsidiary of the Company ("Employee"). RECITALS A. The Company has established the Beckman Instruments, Inc. Incentive Compensation Plan of 1990 as amended (the "Plan"), the terms of which are hereby incorporated by reference and made a part of this Agreement, which provides for the issuance of shares of the Company's Common Stock, $.10 par value, subject to certain restrictions thereon; B. The Company has established the Beckman Instruments, Inc. Economic Value Added Incentive Plan Cycle Two Beginning FY94 ("Cycle Two Incentive"), with the Committee administering the Plan approving a Restricted Stock Award Alternative to any cash payment of the Cycle Two Incentive. C. Employee has requested that any award determined pursuant to the Cycle Two Incentive, and the additional premium amount determined pursuant to the Restricted Stock Award Alternative, be made in the form of the Company's Common Stock issued under the Plan subject to certain restrictions; and D. The Committee administering the Plan has determined that it would be to the advantage and best interest of the Company and its stockholders to issue the Restricted Stock under the Plan and the terms and conditions provided for herein to Employee in consideration of past services to the Company or its Subsidiaries, has accepted Employee's request, has advised the Company thereof, and has instructed the undersigned officer to cause said Restricted Stock to be issued; THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1 - Definitions. Whenever the following terms are used in this Agreement they shall have the meaning specified below unless the context clearly indicates to the contrary. "Board" means the Board of Directors of the Company. "Change of Control" shall be deemed to occur if any of the following events occur: (A) any "person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 as amended (the "Exchange Act"), other than an employee benefit plan of the Company, or a trustee or other fiduciary holding securities under an employee benefit plan of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding voting securities; (B) individuals who, as of the date hereof, constitute the Board of the Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a- 11 of Regulation 14A promulgated under the Exchange Act) shall be considered as though such person were a member of the Incumbent Board of the Company; (C) the stockholders of the Company approve a merger or consolidation with any other corporation, other than (1) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of another entity) more than 80% of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires 20% or more of the combined voting power of the Company's then outstanding voting securities; or (D) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. Notwithstanding the preceding sentence, a Change of Control shall not be deemed to have occurred if the "person" described in the preceding sentence is an underwriting syndicate which has acquired the ownership of 20% or more of the combined voting power of the Company's then outstanding voting securities solely in connection with a public offering of the Company's securities. "Code" means the Internal Revenue Code of 1986, as amended. "Committee" means the Organization and Compensation Committee of the Company's Board of Directors. "Restricted Stock" shall mean Common Stock of the Company, $.10 par value, issued under the Plan and the terms of this Agreement and subject to the Restrictions imposed hereunder. "Restriction Period" means the twenty-four (24) month period beginning on the date of issuance of Restricted Stock hereunder and ending on the date that is twenty-four (24) months from the date the Restricted Stock is issued. "Restrictions" shall mean the restrictions on sale, transfer or other disposition and the exposure to forfeiture imposed upon the Restricted Stock under this Agreement. "Retirement" means Termination of Employment of Employee due to "Early Retirement", "Normal Retirement" or "Late Retirement" as such terms are defined under the provisions of the Beckman Instruments, Inc. Pension Plan, or if such plan is not applicable to Employee then under the applicable retirement policy or plan or as determined by the Committee in its discretion. "Secretary" shall mean the Secretary of the Company. "Subsidiary" shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. "Termination of Employment" shall mean that the employee-employer relationship between Employee and the Company or a Subsidiary has ended for any reason, but excluding any termination where there is a simultaneous reemployment by the Company or a Subsidiary. "Total Disability" shall mean that Employee has satisfied the criteria for determination of disability (without regard to any age requirement) for extended basic life insurance under the Company's life insurance program; provided, however, that such determination shall in no way be construed to mean or imply that Employee is otherwise eligible for extended basic life insurance. "Treasurer" shall mean the Treasurer of the Company. ARTICLE II ELECTION FOR RESTRICTED STOCK IN LIEU OF CASH Section 2.1 - Election Employee hereby irrevocably elects to receive the award, if any, determined pursuant to the Cycle Two Incentive and the premium described in Section 2.2(b) below, in the form of whole shares of Restricted Stock under a grant from the Plan subject to the provisions of the Plan and the terms and conditions herein, in lieu of a cash payment. Section 2.2 - Acknowledgements With regard to the election in Section 2.1 above, Employee acknowledges and agrees as follows: (a) This election, irrevocable once made, is not effective unless received by the Company on or before August 1, 1995; (b) This election to receive Restricted Stock in lieu of cash payment is made for the full amount of any award under the Cycle Two Incentive and such amount will be increased by and shall include a thirty-three and one-third percent (33-1/3%) premium. Such sum shall then be converted into whole shares of Restricted Stock based on the closing price of Beckman stock on the last trading day of the two-year Cycle Two Incentive cycle; and (c) Amounts which would otherwise result in fractional shares will be paid in cash on the regular Cycle Two Incentive payment date. ARTICLE III ISSUANCE OF RESTRICTED STOCK Section 3.1 - Issuance of Restricted Stock In consideration of Employee's agreement to remain in the employ of the Company or a Subsidiary and for other good and valuable consideration, the Company agrees to issue to Employee the number of shares of Restricted Stock, determined pursuant to Section 2.2(b) above and set forth in Schedule A, upon the terms and conditions set forth in this Agreement. Schedule A shall be distributed to Employee on or about the regular payment date for the Cycle Two Incentive. The date of issuance of the Restricted Stock shall be the date shown on Schedule A. Section 3.2 - Consideration to Company As partial consideration for the issuance of Restricted Stock by the Company, Employee agrees to render faithful and efficient services to the Company or a Subsidiary with such duties and responsibilities as the Company shall from time to time prescribe. Nothing in this Agreement or in the Plan shall confer upon Employee any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, to terminate employment of Employee at any time for any reason, with or without cause . ARTICLE IV RESTRICTIONS Section 4.1 - Forfeiture of Restricted Stock (a) All shares of Restricted Stock shall be forfeited to the Company immediately upon a voluntary Termination of Employment or an Early Retirement occurring within twenty-four (24) months from the date of issuance; provided, however, that where Employee terminates employment due to Early Retirement and has made a prior Code Section 83(b) election, no forfeiture shall occur but Restrictions on sale, transfer or other disposition pursuant to Sections 4.2 and 5.2 will remain in effect for any remainder of the Restriction Period. (b) Notwithstanding Section 4.1(a) above, no shares shall be forfeited to the Company in the event of a Termination of Employment due to Normal or Late Retirement, Total Disability, or death. In the event of an involuntary Termination of Employment, for cause or otherwise, no shares shall be forfeited but the restrictions on sale, transfer or other disposition pursuant to Sections 4.2 and 5.2 shall remain in effect for any remainder of the Restriction Period. Section 4.2 - Legend Certificates representing shares of Restricted Stock issued pursuant to this Agreement shall, until all restrictions lapse and new certificates are issued pursuant to Section 4.3, bear the following legend: "The shares represented by this certificate are subject to reacquisition by Beckman Instruments, Inc., and such shares may not be sold or otherwise transferred except pursuant to the provisions of the Restricted Stock Agreement by and between Beckman Instruments, Inc. and the registered owner of such shares." Section 4.3 - Lapse of Restrictions (a) If no forfeiture pursuant to Section 4.1(a) has occurred, the Restrictions shall lapse with respect to 100% of the shares of Restricted Stock on the date which is twenty-four (24) months from the date the Restricted Stock is issued. (b) Notwithstanding subsection 4.3(a) above, all Restrictions will lapse with respect to 100% of the shares of Restricted Stock in the following events: (i) A Termination of Employment by death, Normal or Late Retirement (but not Early Retirement) or Total Disability; (ii) Death or Total Disability of Employee during the Restriction Period where during the Restriction Period Employee had terminated employment due to Early Retirement and had made a prior Code Section 83(b) election or where an involuntary Termination of Employment had previously occurred during the Restriction Period; or (iii) A Change of Control of the Company or other occurrence of events as described in Sections 4.4 or 4.5 below if the Committee deems the lapse of Restrictions appropriate. (c) As soon as practicable, the Company shall, upon the lapse of the Restrictions, cause new certificates to be issued and delivered to Employee or his or her legal representative, free from the legend provided for in Section 4.2. Notwithstanding the foregoing, no such new certificate shall be delivered to Employee or his or her legal representative unless and until Employee or such legal representative shall have paid to the Company (or other employer corporation), in cash, the full amount of all federal, state or local income tax withholdings and other employment taxes applicable to the taxable income of Employee resulting from the lapse of Restrictions. Section 4.4 - Merger, Consolidation, Exchange, Acquisition, Liquidation or Dissolution In the event that the Company is succeeded by another corporation in a reorganization, merger, consolidation, acquisition of property or stock, separation or liquidation, the Board or the Committee may, in its absolute discretion and on such terms and conditions as it deems appropriate, provide, by a resolution adopted prior to the occurrence of the reorganization, merger, consolidation, acquisition of property or stock, separation, or liquidation, that (i) for some period of time prior to such event, all Restrictions on such shares of Restricted Stock shall lapse or expire, (ii) obligations of the Company in relation to such shares of Restricted Stock shall be assumed by such successor corporation, (iii) such shares of Restricted Stock shall be canceled and replaced by substitute shares of Restricted Stock of the successor corporation, or (iv) such sharesof Restricted Stock shall be forfeited to the Company in consideration for a cash payment in an amount to be determined by the Committee. Section 4.5 - Restrictions on New Shares In the event that the outstanding shares of the Company's Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation pursuant to a merger of the Company into another corporation, or the exchange of all or substantially all of the assets of the Company for the securities of another corporation, or the acquisition by another corporation of 80% or more of the Company's then outstanding voting stock, or the liquidation or dissolution of the Company, or a stock split-up or stock dividend, such new or additional or different shares or securities which are attributable to Employee in his or her capacity as the owner of the Restricted Stock, shall be considered to be Restricted Stock and shall be subject to all of the Restrictions, unless the Committee provides, pursuant to Section 4.4 or Section 4.3(b), for the expiration of the Restrictions on the shares of Restricted Stock underlying the distribution of the new or additional shares or securities. ARTICLE V MISCELLANEOUS Section 5.1 - Administration The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. Any dispute or disagreement which shall arise under or as a result of or pursuant to this Agreement or the grant or issuance of Restricted Stock shall be determined by the Committee in its sole discretion. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final, binding and conclusive upon Employee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or the Restricted Stock. Section 5.2 - Restricted Stock Not Transferable Neither the Restricted Stock nor any interest or right therein or part thereof shall be liable for the debts, contracts, or engagements of Employee or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) and any attempted disposition of such Restricted Stock, interest or right therein or part thereof, shall be null and void and of no effect; provided, however, that this Section 5.2 shall not prevent transfers by will or by the applicable laws of descent and distribution. Section 5.3 - Conditions to Issuance of Stock Certificates The Company shall not be required to issue or deliver any certificate or certificates for shares of stock pursuant to this Agreement prior to fulfillment of all of the following conditions: (a) The admission of such shares to listing on all stock exchanges on which such class of stock is then listed; (b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and (d) The compliance with all other requirements, including but not limited to the payment or withholding of income, employment or other taxes, as legally required or which the Committee shall, in its absolute discretion, determine to be necessary or advisable. (e) The lapse of such reasonable period of time as the Committee may from time to time establish for reasons of administrative convenience. Section 5.4 - Escrow The Treasurer or such other escrow holder as the Committee may appoint shall retain physical custody of the certificates representing the Restricted Stock, including shares of Restricted Stock issued pursuant to Section 4.5, until all of the Restrictions expire or shall have been removed; provided, however, that in no event shall Employee retain physical custody of any certificates representing Restricted Stock issued to him or her. Section 5.5 - Notices Any notice required or permitted hereunder shall be effective when addressed to the Company in care of its Secretary at 2500 Harbor Boulevard, Fullerton, CA. 92634-3100, or to the Employee at the Employee's last known address shown on Company records, as the case may be, and deposited, postage prepaid and registered or certified, in the United States mail. Either party may, by notice to the other given in the above-described manner, change such party's address for future notices. Any notice which is required to be given to Employee shall, if Employee is then deceased, be given to Employee's personal representative if such representative has previously informed the Company of his or her status and address by written notice in the manner described in this Section. Section 5.6 - Rights as Stockholder Except as otherwise provided herein, Employee shall have all the rights of a stockholder with respect to the Restricted Stock, including the right to vote the Restricted Stock and the right to receive all dividends or other distributions paid or made with respect to the Restricted Stock. Section 5.7 - Entire Agreement; Modification This Agreement constitutes the entire agreement between the parties hereto and supersedes any and all other written or oral agreements, understandings, representations or proposals which may have been made prior to or concurrently with the execution of the Agreement. No modification or amendment of this Agreement or any additional agreement concerning Restricted Stock will take effect unless it is approved by the Committee and is in writing and signed by Employee and the Vice President of Human Resources. Any modification, amendment, or additional agreement must expressly state the intention of the parties to modify or supplement the terms of this Agreement. Section 5.8 - Receipt of Documents Employee acknowledges the receipt of Cycle Two Incentive plan with restricted stock award alternative, the Incentive Compensation Plan of 1990 as amended and restated May 6, 1992, Plan prospectus appendix, and tax information. Employee acknowledges that he has been encouraged to seek tax and securities counsel before making the election herein. Section 5.9 - Titles Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto. EMPLOYEE BECKMAN INSTRUMENTS, INC. ____________________________ By ______________________________ Vice President - Human Resources Date:_______________________ EX-15 3 INDEPENDENT ACCOUNTANTS' REVIEW REPORT Exhibit 15 KPMG Peat Marwick LLP Certified Public Accountants Orange County Office Center Tower 650 Town Center Drive Costa Mesa, CA 92626 Independent Accountants' Review Report The Stockholders and Board of Directors Beckman Instruments, Inc: We have reviewed the condensed consolidated balance sheet of Beckman Instruments, Inc. and subsidiaries as of September 30, 1995, and the related condensed consolidated statements of earnings and cash flows for the three-month and nine-month periods ended September 30, 1995 and 1994. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an option. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Beckman Instruments, Inc. and subsidiaries as of December 31, 1994, and the related consolidated statements of operations and cash flows for the year then ended (not presented herein); and in our report dated January 19, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet from which it has been derived. As discussed in Note 5 to the condensed consolidated financial statements, the Company changed its method of accounting for postemployment benefits in 1994. (KPMG Peat Marwick LLP) Orange County, California October 20, 1995 EX-27 4 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Earnings and is qualified in its entirety by reference to such financial statements. 1,000,000 9-MOS DEC-31-1995 SEP-30-1995 18 9 279 9 173 528 621 377 876 253 160 3 0 0 342 876 552 666 237 312 0 0 10 58 20 38 0 0 0 38 1.32 1.32
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