-----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, PJaFtNEFKiC0j+7SUDKhyN547jKirvWqo1aLSiGy/3i6BTXKquBw859LCz1sMO9D gX9L9GFRMrR2KyuyWPuUCw== 0000840467-98-000012.txt : 19980515 0000840467-98-000012.hdr.sgml : 19980515 ACCESSION NUMBER: 0000840467-98-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BECKMAN COULTER 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: SEC FILE NUMBER: 001-10109 FILM NUMBER: 98619866 BUSINESS ADDRESS: STREET 1: 2500 HARBOR BLVD CITY: FULLERTON STATE: CA ZIP: 92634 BUSINESS PHONE: 7148714848 MAIL ADDRESS: STREET 1: 2500 HARBOR BLVD CITY: FULLERTON STATE: CA ZIP: 92834 FORMER COMPANY: FORMER CONFORMED NAME: BECKMAN INSTRUMENTS INC DATE OF NAME CHANGE: 19920703 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 March 31, 1998 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 COULTER, INC. (Exact name of registrant as specified in its charter) Delaware 95-104-0600 (State of Incorporation) (I.R.S. Employer Identification No.) 4300 N. Harbor Boulevard, P.O. Box 3100, Fullerton, California 92834-3100 (Address of principal executive offices) (Zip Code) (714) 871-4848 (Registrant's telephone number including area code) Beckman Instruments, Inc. 2500 Harbor Boulevard, Fullerton, California 92834-3100 (Former Name, Former Address and Former Fiscal year, if Changed Since Last Report) 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 April 14, 1998: 28,489,675 shares. PART I FINANCIAL INFORMATION Item 1. Financial Statements Page Condensed Consolidated Statements of Operations for the three month periods ended March 31, 1998 and March 31, 1997 3 Condensed Consolidated Balance Sheets as of March 31, 1998 and March 31, 1997 4 Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 1998 and March 31, 1997 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II OTHER INFORMATION Item 1. Legal Proceedings 14 Item 2. Changes In Securities 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security-Holders 15 Item 5. Other Information 15 Item 6. Exhibits and Reports on Form 8-K 16 BECKMAN COULTER, INC. FIRST QUARTER REPORT CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in Millions, Except Amounts Per Share) Unaudited
Three Months Ended March 31, 1998 1997 Sales $399.4 $231.9 Operating costs and expenses: Cost of sales 229.8 109.6 Marketing, general and administrative 119.7 74.8 Research and development 41.6 24.0 ------ ----- 391.1 208.4 ------ ----- Operating income 8.3 23.5 Nonoperating (income) expense: Interest income (3.2) (1.9) Interest expense 26.2 2.8 Other, net (2.3) 0.3 ------ ----- 20.7 1.2 ------ ----- (Loss) earnings before income taxes (12.4) 22.3 Income tax (benefit)expense (4.0) 6.7 ------ ----- Net (loss) earnings $ (8.4) $ 15.6 ====== ===== Weighted average number of shares outstanding -(in thousands) 27,704 27,908 Basic (loss) earnings per share $(0.30) $ 0.56 Weighted average number of shares and dilutive shares outstanding - (in thousands) 27,704 28,861 Diluted (loss) earnings per share $(0.30) $ 0.54 Dividends declared per share $ 0.15 $ 0.15
See accompanying notes to condensed consolidated financial statements. BECKMAN COULTER, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in Millions, Except Amounts Per Share) Unaudited
March 31, December 31, 1998 1997 Assets Current assets: Cash and equivalents $ 31.2 $ 33.5 Trade receivables and other 495.8 524.6 Inventories 339.8 332.3 Deferred income taxes 54.1 53.0 Other current assets 35.2 33.3 -------- -------- Total current assets 956.1 976.7 Property, plant and equipment, net 389.2 410.9 Intangibles, less accumulated amortization of $14.9 in 1998 and $10.6 in 1997 439.8 444.9 Goodwill, less accumulated amortization of $9.3 in 1998 and $6.0 in 1997 400.5 402.8 Other assets 89.7 95.7 ------- ------- Total assets $2,275.3 $2,331.0 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Notes payable and current maturities of long-term debt $ 83.0 $ 68.9 Accounts payable, accrued expenses and other liabilities 637.6 756.4 Income taxes 62.4 69.6 -------- -------- Total current liabilities 783.0 894.9 Long-term debt, less current maturities 1,248.7 1,181.3 Other liabilities 175.8 173.0 -------- -------- Total liabilities 2,207.5 2,249.2 Stockholders' equity Preferred stock, $0.10 par value; authorized 10.0 shares; none issued - - Common stock, $0.10 par value; authorized 75.0 shares; shares issued 29.1 at 1998 and 1997; Shares outstanding 27.8 at 1998 and 27.6 2.9 2.9 at 1997 Additional paid-in capital 126.9 126.6 Retained earnings 6.3 19.0 Accumulated other comprehensive loss (19.6) (13.8) Treasury stock, at cost (48.7) (52.9) -------- -------- Total stockholders' equity 67.8 81.8 -------- -------- Total liabilities and stockholders' equity $2,275.3 $2,331.0 ======== ========
See accompanying notes to condensed consolidated financial statements. BECKMAN COULTER, INC. FIRST QUARTER REPORT CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Millions) Unaudited
Three Months Ended March 31, 1998 1997 Cash Flows from Operating Activities Net (loss) earnings $ (8.4) $ 15.6 Adjustments to reconcile net (loss) earnings to netcash (used) provided by operating activities: Depreciation and amortization 29.3 21.4 Net deferred income taxes (0.7) (0.4) Proceeds from sale of sales type lease receivables 31.5 - Changes in assets and liabilities: Trade receivables and other 18.1 19.1 Inventories (5.9) (11.0) Accounts payable and accrued expenses (102.4) (22.1) Restructuring reserve (2.9) (0.5) Accrued income taxes (7.2) 15.1 Other (22.0) (11.5) ------ ------ Net cash (used) provided by operating activities (70.6) 25.7 ------ ------ Cash Flows from Investing Activities Additions to property, plant and equipment (18.3) (19.4) Net disposals of property, plant and equipment (0.6) 3.5 Sales of short-term investments - 3.9 Sales (purchases) of long-term investments 9.7 (0.5) ------ ------ Net cash used by investing activities (9.2) (12.5) ------ ------ Cash Flows from Financing Activities Dividends to stockholders (4.3) (4.2) Proceeds from issuance of stock 3.8 3.7 Purchase of treasury stock - (12.4) Notes payable borrowings, net 8.6 4.4 Long-term debt borrowings 447.2 0.1 Long-term debt reductions (377.6) - ------ ------ Net cash provided (used) by financing activities 77.7 (8.4) ------ ------ Effect of exchange rates on cash and equivalents (0.2) 0.3 ------ ------ (Decrease) increase in cash and equivalents (2.3) 5.1 Cash and equivalents -- beginning of period 33.5 34.6 ------ ------ Cash and equivalents -- end of period $ 31.2 $ 39.7 ====== ====== Supplemental Disclosures of Cash Flow Information Cash paid during the period for: Interest $ 27.3 $ 10.9 Income taxes $ 11.1 $ 3.8 Noncash investing and financing activities: Purchase of equipment under capital lease obligation $ 2.4 $ 2.5
See accompanying notes to condensed consolidated financial statements. BECKMAN COULTER, INC. First Quarter 1998 Report Notes To Condensed Consolidated Financial Statements Unaudited 1 Report by Management In the opinion of Beckman Coulter, Inc. (formerly known as Beckman Instruments, Inc. and hereafter referred to as "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. They do not include all disclosures required by generally accepted accounting principles or those made in the Annual Report of Beckman Instruments, Inc. on Form 10-K for 1997 which is on file with the Securities and Exchange Commission. The results of operations for the period ended March 31, 1998 are not necessarily indicative of the results to be expected for the year ending December 31, 1998. 2 Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates. 3 Acquisition On October 31, 1997, the Company acquired all of the outstanding capital stock of Coulter Corporation for $850.2 million, net of Coulter's cash on hand of $24.8 million at the date of acquisition. Coulter is the leading manufacturer of in-vitro diagnostic systems for blood cell analysis. Details of the transaction and the accounting effects were disclosed in the Company's annual report for the year ended December 31, 1997. The first quarter 1998 results include only January and February Coulter sales outside the United States as reporting of Coulter international sales has been lagged by one month to be consistent with the rest of the Company. 4 Comprehensive Income (Loss) The Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130), in the first quarter 1998. SFAS 130 establishes standards for the reporting and display of comprehensive income. Components of comprehensive income include net earnings (loss) and foreign currency translation adjustments. Comprehensive loss was $5.8 million for the three months ended March 31, 1998 and comprehensive income was $4.7 million for the three months ended March 31, 1997. The adoption of SFAS 130 required additional disclosure but did not have a material effect on the Company's financial position or results of operations. 5 Net Earnings (Loss) Per Share The Company adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128) in the fourth quarter of 1997. SFAS 128 simplifies the computation of earnings per share ("EPS") previously required in Accounting Principles Board (APB) Opinion No. 15, "Earnings Per Share," by replacing primary and fully diluted EPS with basic and diluted EPS. Earnings Per Share for the three months ended March 31, 1997, have been restated in accordance with SFAS 128. The following table summaries the computation of EPS (in millions, except amounts per share):
Three Months Ended March 31, 1998 1997 Net Per Net Per Loss Shares Share Earnings Shares Share Amount Amount Basic EPS Net (Loss) earnings $(8.4) 27.7 $(0.30) $ 15.6 27.9 $ 0.56 Effect of dilutive stock options 1.0 (0.02) ----- ----- ------ ------ ----- ----- Diluted EPS Net (Loss) earnings $(8.4) 27.7 $(0.30) $ 15.6 28.9 $ 0.54
Under generally accepted accounting principles, as the Company was in a net loss position in the current quarter, 1.2 million common share equivalents were not used to compute diluted loss per share, as the effect was antidilutive. 6 Sale of Receivables In March 1998, the Company sold $31.9 million of sales type lease receivables, net of allowances, for cash proceeds of $31.5 million. Under the provisions of Statement of Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" (SFAS 125), the transaction was accounted for as a sale and as a result the related receivables have been excluded from the accompanying Consolidated Balance Sheets. The sale is subject to certain recourse provisions and as such the Company established a reserve for potential losses. Proceeds from the transaction were used to reduce outstanding borrowings. 7 Inventories Inventories are comprised of the following (in millions):
March 31, December 31, 1998 1997 Finished products $216.4 $206.5 Raw materials, parts and assemblies 100.6 99.1 Work in-process 22.8 26.7 ------ ------ $339.8 $332.3 ====== ======
8. Provision for Restructuring Operations The Company recorded a restructuring charge of $59.4 million, $36.4 million after taxes or $1.32 per share, in the fourth quarter of 1997. This provision is for severance related costs and facility consolidation. The following table details the activity within the accrued liability in the first quarter of 1998 (in millions):
Facility consolidation and asset related Personnel write-offs Total Balance at December 31, 1997 Consolidation of sales, general administrative and technical functions $26.5 $13.2 $39.7 Changes in manufacturing operations 3.0 3.9 6.9 ----- ----- ----- Total Accrued Liability 29.5 17.1 46.6 First Quarter 1998 Activity Consolidation of sales, general administrative and technical functions 0.4 2.5 2.9 Changes in manufacturing operations - - - ----- ----- ----- Total First Quarter Activity 0.4 2.5 2.9 Balance at March 31, 1998 Consolidation of sales, general administrative and technical functions 26.1 10.7 36.8 Changes in manufacturing operations 3.0 3.9 6.9 ----- ----- ----- Balance at March 31, 1998 $29.1 $14.6 $43.7
9. Long-term debt In March, the Company issued $160.0 million of 7.10% Senior Notes due 2003 and $240.0 million of 7.45% Senior Notes due 2008. The net proceeds of $394.3 million were used to pay down existing debt balances and for operating purposes. 10. Contingencies As previously reported, in January, 1996, Coulter Corporation, then unrelated to the Company, notified Hematronix, a competitive reagent manufacturer, that Hematronix was selling certain reagents and controls that infringed upon certain of Coulter's patents. In response, in April, 1996, Hematronix filed a complaint against Coulter in the United States District Court for the Eastern District of California. The complaint sought a declaratory judgment to invalidate the patents. The complaint also included antitrust and related business tort claims directed at Coulter's business and leasing activities, and sought actual, treble, and punitive damages in an unspecified amount, as well as injunctive relief. Coulter answered the complaint by denying violations of the antitrust laws and business tort claims and counterclaimed that Hematronix willfully infringed the patents at issue. Trial was scheduled for October, 1998. In March, 1998, the matter was resolved and the lawsuit was dismissed without material adverse effect on the Company's earnings or financial position. As previously reported, in 1991, Forest City Properties Corporation and F.C. Irvine, Inc. (collectively, "Forest City"), filed suit against the Prudential Insurance Co. in the California Superior Court for the County of Los Angeles alleging breach of contract and damages caused by pollution of property that Forest Cities had bought from Prudential. Although the Company was not a named defendant in the Forest City action, it was obligated to contribute to any resolution of that action pursuant to a 1990 settlement agreement with Prudential. The trial of the matter was conducted in 1995, resulting in a jury verdict in favor of Prudential. The Court granted Forest City's motion for a new trial, which Prudential appealed. Prior to the Court's consideration of the appeal, Prudential settled the lawsuit with Forest City and requested the Company to pay a portion of the settlement pursuant to the 1990 settlement agreement. The Company did not agree with Prudential's claims and has negotiated a settlement for an amount not material to the Company's earnings or financial position. The Company and its subsidiaries are involved in a number of other lawsuits which the Company considers normal in view of its size and the nature of its business. The Company does not believe that any liability resulting from any such lawsuits, or the matters described above, will have a material adverse effect on its earnings or financial position. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Beckman Coulter, Inc. (formerly known as Beckman Instruments, Inc. and hereafter referred to as "the Company")is a world leader in providing systems that simplify and automate laboratory processes. The Company designs, manufactures and services a broad range of laboratory systems consisting of instruments, reagents and related products that customers use to conduct basic scientific research, drug discovery research and diagnostic analysis of patient samples. On October 31, 1997, the Company acquired Coulter Corporation ("Coulter"). The acquisition of Coulter represented a significant milestone in accomplishing the Company's strategy to solidify its position as a leading provider of laboratory systems, adding Coulter's leading market position in hematology and number two position in flow cytometry. As previously discussed in some detail in the Company's 1997 Annual Report to Stockholders, incorporated by reference in the Company's Annual Report on Form 10-K for the Fiscal year Ended December 31, 1997 under the heading "Management's Discussion and Analysis" (the "10-K MD&A"), the acquisition of Coulter and the related financing have had numerous consequences that affect the comparability of the Company's results of operations and financial position for periods prior to and after the acquisition. In particular, the acquisition and related financing are expected to lower the net earnings of the Company through 1998 as a result of a substantial increase in interest expense, amortization of intangible assets and goodwill and various other adjustments resulting from purchase accounting. As anticipated, the integration and consolidation of Coulter is requiring substantial management, financial and other resources. While the Company believes the early results of this effort are encouraging, the acquisition of Coulter necessarily involves a number of significant risks, including potential difficulties in assimilating the technologies, services and products of Coulter or in achieving the expected synergies and cost reductions, as well as other unanticipated risks and uncertainties. As a result, there can be no assurance as to the extent to which the anticipated benefits with respect to the acquisition will be realized, or the timing of any such realization. Operations Sales growth of 72%, 77% in constant currency, over the first quarter of the prior year, resulted primarily from the addition of Coulter operations. These results were depressed due to the inclusion of only January and February Coulter sales outside the United States as reporting of Coulter international sales has been lagged by one month to be consistent with the rest of the Company. Excluding Coulter, sales grew 5% primarily as a result of increased market share, partially offset by an unfavorable change in foreign currency exchange rates which negatively affected reported international sales by approximately 5%. As discussed in the 10-K MD&A, the Company derives approximately 50% of its sales from sources outside of the United States, and appreciation of the U.S. dollar against the Company's major trading currencies has a negative impact on the Company's results of operations. Gross profit as a percentage of sales decreased due to lower margins for Coulter products, a hardware mix shift associated with new product introductions and competitive pricing pressures. An unfavorable change in foreign currency exchange rates also negatively affected the gross profit. The purchase accounting treatment for acquired Coulter inventory required that it be written up to fair value. This had the effect of increasing cost of sales in the first quarter by $5.7 million as inventory was delivered to customers. Marketing, general and administrative expenses as a percentage of sales decreased to 30.0% from 32.3% for the first quarter of 1997. The improvement was achieved by spreading fixed costs over a larger sales volume and through the early successes of Coulter integration objectives. Research and development expenses as a percentage of sales remained consistent at 10.4% and 10.3% for the first quarters of 1998 and 1997, respectively. Operating income decreased $15.2 million over the comparable quarter in 1997 primarily due to the lower gross profit as a percentage of sales as discussed above. Net loss for the first quarter was $8.4 million or $0.30 per diluted share, compared to net earnings for the first quarter of 1997 of $15.6 million or $0.54 per diluted share. The decrease is largely the result of decreased operating income as discussed above and increased interest expense as a result of larger outstanding borrowings due to funding of the Coulter acquisition. Financial Condition As discussed in greater detail in the 10-K MD&A, the Company is highly leveraged, with a debt-to-capital ratio of 95.2% at March 31, 1998. Among other things, the Company's high level of debt increases the Company's vulnerability to general adverse economic and industry conditions, could limit the Company's ability to obtain additional financing on favorable terms, exposes the Company to the risk of increased interest rates and requires the dedication of a substantial portion of the Company's cash flow from operations to the payment of principal and interest on its indebtedness. In addition, the Company's agreements with its lenders contain a number of covenants that significantly restrict the operations of the Company and require it to comply with specified financial ratios and tests. As discussed in the 10-K MD&A, the Company is in the process of executing a plan to reduce its debt and provide additional funds for the integration of Coulter. As part of this plan, during the first quarter of fiscal 1998, the Company sold $31.9 million of sale type lease receivables, net of allowances, for cash proceeds of $31.5 million. The sale was subject to certain recourse provisions and, as a result, the Company established a reserve for potential losses. The proceeds from the sale were used to reduce outstanding borrowing. The Company is continuing to evaluate opportunities to provide additional cash flow by monetizing other assets during 1998 and beyond. The Company intends to consummate several sale leaseback transactions with respect to some of its real estate assets. If these sales are consummated as expected, the Company believes that they will generate proceeds to the Company of approximately $200 million during the balance of 1998 and approximately $30 million in 1999, less any costs to complete the transactions. If completed, these sales are expected to marginally reduce operating income while decreasing nonoperating expenses, resulting in a slightly negative impact on the Company's pretax results. Net cash used in operating activities for the first three months of 1998 was $70.6 million. Net cash provided by operating activities was $25.7 million for the comparable period in 1997. The primary reasons for this change were a $24.0 million decrease in net earnings, reduction of trade payables and the payment of $77.7 million in bonus, severance and related costs which were accrued as part of the purchase liability at December 31, 1997. This decrease was partially offset by proceeds of $31.5 million from the sale of sales type lease receivables. Net cash used in investing activities decreased to $9.2 million, from $12.5 million in the first quarter of 1997. Net cash provided by financing activities increased to $77.7 million, an increase of $86.1 million from the first quarter of 1997. This was primarily the result of additional borrowings, net of repayments. In March, the Company issued $160.0 million of 7.10% Senior Notes due 2003 and $240.0 million of 7.45% Senior Notes due 2008. The net proceeds of this issuance were used to pay down existing debt balances and for operating purposes. The ratio of debt-to-total capital at March 31, 1998 was 95.2% compared to 93.9% at December 31, 1997. The change is due mainly to a net increase in borrowings and the net loss reported for the first quarter. The ratio of current assets to current liabilities at March 31, 1998 of 1.2 is comparable to the 1.1 ratio at December 31, 1997. Based upon current levels of operations and anticipated cost savings and future growth, the Company believes that its cash flow from operations, together with available borrowings under the credit facility and its other sources of liquidity will be adequate to meet its anticipated requirements until the maturity of its credit facility in 2002. There can be no assurance, however, that the Company's business will continue to generate cash flow at or above current levels or that estimated cost savings or growth can be achieved. The Company's future operating performance and ability to service or refinance its existing indebtedness, including the credit facility, will be subject to future economic conditions and to financial, business and other factors, many of which are beyond the Company's control. On March 12, 1998, the Company paid a quarterly cash dividend of $0.15 per share of common stock for a total of $4.3 million. On April 2, 1998, the Board of Directors declared a $0.15 per share dividend payable on June 4, 1998 to stockholders of record on May 15, 1998. Business Climate The general U.S. economic environment is showing signs of improvement in both the life science and diagnostic markets. The Asia Pacific market, including Japan, continues to be affected by the prevailing economic conditions which are suppressing investment in the research and development market segments. In general, the European diagnostics and life sciences markets continue to be unfavorably impacted by cost containment initiatives as part of governmental fiscal management policies. These policies are driven by the requirements for the impending European monetary union. Forward Looking Statements This 10-Q report contains forward-looking statements, including statements regarding, among other items, (i) the Company's business strategy; (ii) anticipated trends in the Company's business and its plans to consummate sale leaseback transactions; (iii) the Company's liquidity requirements and capital resources; (iv) anticipated synergies; and (v) future cost reductions. These forward-looking statements are based largely on the Company's expectations and are subject to a number of risks and uncertainties, certain of which are beyond the Company's control. These risks and uncertainties include, but are not limited to, (i) the complexity and uncertainty regarding development of new high-technology products; (ii) the loss of market share through aggressive competition in the clinical diagnostics and life sciences markets; (iii) the Company's dependence on capital spending policies and government funding; (iv) the effect of potential health-care reforms; (v) fluctuations in foreign exchange rates and interest rates; (vi) reliance on patents and other intellectual property; (vii) difficulties, delays or failure in effectively integrating worldwide operations; and (viii) other factors that cannot be identified at this time. Although the Company believes that it has the product offerings and resources required to achieve its objectives, actual results could differ materially from those anticipated by these forward- looking statements as there can be no assurance that events anticipated by these forward-looking statements will in fact transpire as anticipated. PART II OTHER INFORMATION Item 1. Legal Proceedings As previously reported, in January, 1996, Coulter, then unrelated to Beckman, notified Hematronix, a competitive reagent manufacturer, that Hematronix was selling certain reagents and controls that infringed upon certain of Coulter's patents. In response, in April, 1996, Hematronix filed a complaint against Coulter in the United States District Court for the Eastern District of California. The complaint sought a declaratory judgment to invalidate the patents. The complaint also included antitrust and related business tort claims directed at Coulter's business and leasing activities, and sought actual, treble, and punitive damages in an unspecified amount, as well as injunctive relief. Coulter answered the complaint by denying violations of the antitrust laws and business tort claims and counterclaimed that Hematronix willfully infringed the patents at issue. Trial was scheduled for October, 1998. In March, 1998, the matter was resolved and the lawsuit was dismissed without material adverse effect on the Company's earnings or financial position. As previously reported, in 1991, Forest City Properties Corporation and F.C. Irvine, Inc. (collectively "Forest City"), filed suit against Prudential Insurance Company in the California Superior Court for the County of Los Angeles alleging breach of contract and damages caused by pollution of property that Forest Cities had bought from Prudential. Although the Company was not a named defendant in the Forest City action, it was obligated to contribute to any resolution of that action pursuant to a 1990 settlement agreement with Prudential. The trial of the matter was conducted in 1995, resulting in a jury verdict in favor of Prudential. The Court granted Forest City's motion for a new trial, which Prudential appealed. Prior to the Court's consideration of the appeal, Prudential settled the lawsuit with Forest City and requested Beckman to pay a portion of the settlement pursuant to the 1990 settlement agreement. Beckman did not agree with Prudential's claims and negotiated a settlement for an amount not material to 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 The annual meeting of the Stockholders of the Company (the "Annual Meeting") was held on April 2, 1998. Four members of the Board of Directors whose terms expired at the 1998 Annual Meeting were elected to new terms expiring at the 2001 Annual Meeting. The number of shares voting were as follows: Votes For Votes Withheld --------- -------------- Carolyne K. Davis 24,551,355 422,951 Dennis C. Fill 24,553,417 420,889 Charles A. Haggerty 24,551,946 422,360 William N. Kelley 24,553,500 420,806 Francis P. Lucier, whose term expired at the 1999 Annual Meeting, has retired. Van B. Honeycutt has been elected by the Board to fill Mr. Lucier's position among the class of directors with terms expiring in 1999. The remaining members of the Board of Directors who will continue in office and the year in which their terms expire are: Term expiring in 1999: Hugh K. Coble, John P. Wareham, and Betty Woods; Term expiring in 2000: Peter B. Dervan, Gavin S. Herbert, C. Roderick O'Neil, and Louis T. Rosso. A proposed amendment to the Company's Third Restated Certificate of Incorporation, which had been approved by the Board of Directors at its August 7, 1997 meeting, was presented to the Stockholders at the Annual Meeting. The amendment proposed to change the Corporation Name to Beckman Coulter, Inc. The number of shares voting on the proposed amendments were as follows: For Against Abstain --- ------- ------- 24,850,168 42,512 81,626 A proposal to approve the Company's 1998 Incentive Compensation Plan (the "1998 Plan") also was presented to and approved by the Stockholders at the Annual Meeting. The proposed plan, which was adopted by the Board of Directors at its regular meeting on February 5, 1998, replaces a plan approved by the Stockholders in 1990 and last amended at the 1997 Annual Meeting. For the 1998 Plan, the Company requested an initial 2,000,000 shares reserved under the 1998 Plan as well as continuation of the formula used in the 1990 Plan for granting incentive stock options. The number of shares voting on the proposed amendments were as follows: For Against Abstain --- ------- ------- 15,149,601 6,863,344 134,614 Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K a) Exhibits 3. Fourth Restated Certificate of Incorporation dated April 2, 1998 10.1. Amendment No. 1 dated April 3, 1998 to the Credit Agreement by and among the Company, as borrower, the Initial Lenders and the Issuing Banks named therein, and Citicorp USA,Inc. as Agent dated October 31, 1997 10.2. Amendment No. 1998-1, adopted and effective as of April 2, 1998 to the Company's 1998 Incentive Compensation Plan 10.3. 1998 Annual Incentive Plan (AIP) 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 5, Net Earnings (Loss) Per Share, of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, April 17, 1998 27. Summary Financial Information for the three month period ended March 31, 1998 27.1 Restated Summary Financial Information for the three month period ending March 31, 1997 27.2 Restated Summary Financial Information for the period ending December 31, 1996 27.3 Restated Summary Financial Information for the period ending December 31, 1995 b) Reports on Form 8-K 1. Item 5. Other Events. Summary of the Acquisition of Coulter Corporation and Related Financial Information, February 20, 1998 2. Item 5. Other Events. Beckman Coulter, Inc. Restructures Acquisition Debt, February 26, 1998 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 COULTER, INC. (Registrant) Date: May 13, 1998 by WILLIAM H. MAY William H. May Vice President,General Counsel and Secretary Date: May 13, 1998 by JAMES T. GLOVER James T. Glover Vice President and Controller EXHIBIT INDEX FORM 10-Q, THIRD QUARTER, 1997 Exhibit Number Description - ------- ----------- 3. Fourth Restated Certificate of Incorporation dated April 2, 1998 10.1. Amendment No. 1 dated April 3, 1998 to the Credit Agreement by and among the Company, as borrower, the Initial lenders and the Issuing Banks named therein, and Citicorp USA, Inc. as Agent dated October 31, 1997 10.2. Amendment No. 1998-1, adopted and effective as of April 2, 1998 to the Company's 1998 Incentive Compensation Plan 10.3. 1998 Annual Incentive Plan (AIP) 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 5, Net Earnings (Loss) Per Share, of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, April 17, 1998 27. Summary Financial Information for the three month period ended March 31, 1998 27.1. Restated Summary Financial Information for the three month period ending March 31, 1997 27.2. Restated Summary Financial Information for the period ending December 31, 1996 27.3. Restated Summary Financial Information for the period ending December 31, 1995 EX-3 2 FOURTH RESTATED CERTIFICATE OF INCORPORATION EXHIBIT 3 FOURTH RESTATED CERTIFICATE OF INCORPORATION OF BECKMAN INSTRUMENTS, INC. ***** BECKMAN INSTRUMENTS, INC. (the "Corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: 1. The corporation was originally incorporated on July 11, 1988, under the name of BII DELAWARE INC. Pursuant to an Agreement and Plan of Merger filed on July 28, 1988, the name of the Corporation was changed to BECKMAN INSTRUMENTS, INC. 2. A Third Restated Certificate of Incorporation as of June 11, 1992 restates and integrates and further amends the Second Restated Certificate of Incorporation of the Corporation to amend Article 7 to delete the clause which prohibits a director from serving beyond the age of 70 years. 3. This Fourth Restated Certificate of Incorporation amends the Third Restated Certificate of Incorporation to change the name of the Corporation to: BECKMAN COULTER, INC. 4. The text of the Certificate of Incorporation as amended is set forth in full and reads as follows: 1. The name of the corporation is Beckman Coulter, Inc. 2. The address of its registered office in the State of Delaware is The Prentice-Hall Corporation System, Inc., 1013 Centre Road, in the City of Wilmington, County of New Castle, Delaware 19805. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc. 3. The nature of the business or purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The aggregate number of shares which the corporation shall have authority to issue is 85,000,000, to be divided into (a) 75,000,000 shares of Common Stock, par value $.10 per share, and (b) 10,000,000 shares of Preferred Stock, par value $.10 per share. The Board of Directors is hereby empowered to cause the Preferred Stock to be issued from time to time for such consideration as it may from time to time fix, and to cause such Preferred Stock to be issued in series with such voting powers and such designations, preferences and relative, participating, optional or other special rights as designated by the Board of Directors in the resolution providing for the issue of such series. Shares of Preferred Stock of any one series shall be identical in all respects. 5. The corporation is to have perpetual existence. 6. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to make, alter or repeal the bylaws of the corporation. 7. The directors of the corporation shall be divided into three classes, as nearly equal in number as reasonably possible, with the directors in each class to hold office until their successors are elected and qualified. At each annual meeting of stockholders of the corporation, the successors to the class of directors whose term shall then expire shall be elected to hold office for a three year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional directors of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Notwithstanding the foregoing, no person shall be elected or serve as a director if such person is in a management position with or a director of a direct competitor of the Company. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation or the resolution or resolutions adopted by the Board of Directors pursuant to Paragraph 4 hereof, and such directors so elected shall not be divided into classes pursuant to this Paragraph 7 unless expressly provided by such terms. Meetings of stockholders may be held within or without the State of Delaware, as the bylaws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the bylaws of the corporation. Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide. 8. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any or all of the directors of the corporation may be removed from office by the stockholders at any annual or special meeting of stockholders of the corporation, the notice of which shall state that the removal of a director or directors is among the purposes of the meeting, but only for cause, by the affirmative vote of at least 66-2/3% of the outstanding shares of Common Stock of the corporation. 9. Newly created directorships resulting from any increase in the number of directors or any vacancy on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum, or by a sole remaining director. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director's successor shall have been elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. 10. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. 11. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of the stockholders at an annual or special meeting duly called and may not be taken by written consent of the stockholders. 12. Special meetings of the stockholders of the corporation for any purpose or purposes may be called at any time by the Board of Directors, the Chairman of the Board of Directors or the President of the corporation. Special meetings of the stockholders of the corporation may not be called by any other person or persons. 13. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. 14. (a) Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in subparagraph (b) hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors of the corporation. The right to indemnification conferred in this Paragraph 14 shall be a contract right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made upon delivery to the corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Paragraph 14 or otherwise. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. (b) If a claim under subparagraph (a) of this Paragraph 14 is not paid in full by the corporation within thirty days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (c) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Paragraph 14 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the certificate of incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. (d) The corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. 15. At an annual meeting of stockholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been brought before the annual meeting (a) by, or at the direction of, a majority of the directors, or (b) by any stockholder of the corporation who complies with the notice procedures set forth in this Paragraph 15. For a proposal to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of the corporation not less than 60 days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than 70 days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the stockholder, to be timely, must be so delivered or received not later than the close of business on the tenth day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the corporation's books, of the stockholder proposing such business and any other stockholders known by such stockholder to be supporting such proposal, (c) the class and number of shares of the corporation's stock which are beneficially owned by the stockholder on the date of such stockholder notice and by any other stockholders known by such stockholder to be supporting such proposal on the date of such stockholder notice, and (d) any financial interest of the stockholder in such proposal. The presiding officer of the annual meeting shall determine and declare at the annual meeting whether the stockholder proposal was made in accordance with the terms of this Paragraph 15. If the presiding officer determines that a stockholder proposal was not made in accordance with the terms of this Paragraph 15, he or she shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting. This provision shall not prevent the consideration and approval or disapproval at the annual meeting of reports of officers, directors and committees of the Board of Directors, but, in connection with such reports, no new business shall be acted upon at such annual meeting unless stated, filed and received as herein provided. 16. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the corporation may be made at a meeting of stockholders by or at the direction of the Board of Directors by any nominating committee or person appointed by the Board or by any stockholder of the corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Paragraph 16. Such nominations, other than those made by or at the direction of the Board, shall be made pursuant to timely notice in writing to the Secretary of the corporation. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of the corporation not less than 60 days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than 70 days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the stockholder, to be timely, must be so delivered or received not later than the close of business on the tenth day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. A stockholder's notice to the Secretary shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of the corporation which are beneficially owned by the person and (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Rule 14a under the Securities Exchange Act of 1934, as amended; and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the corporation's books, of the stockholder and (ii) the class and number of shares of the corporation's stock which are beneficially owned by the stockholder on the date of such stockholder notice. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as director of the corporation. The presiding officer of the annual meeting shall determine and declare at the annual meeting whether the nomination was made in accordance with the terms of this Paragraph 16. If the presiding officer determines that a nomination was not made in accordance with the terms of this Paragraph 16, he or she shall so declare at the annual meeting and any such defective nomination shall be disregarded. 17. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of at least 66-2/3% of the outstanding shares of Common Stock of the corporation shall be required to amend or repeal Paragraphs 7, 8, 9, 11, 12 or 17 of this Certificate of Incorporation or to adopt any provision inconsistent therewith. 5. This Fourth Restated Certificate of Incorporation was duly adopted by a vote of stockholders at the annual meeting of stockholders held April 2, 1998 in accordance with the provisions of Sections 242 and 245 of the Delaware General Corporation Law. IN WITNESS WHEREOF, BECKMAN INSTRUMENTS, INC. has caused this Fourth Restated Certificate of Incorporation to be signed by Louis T. Rosso, its Chief Executive Officer, and attested by William H. May, its Secretary, dated April 2, 1998. ATTEST: BECKMAN INSTRUMENTS, INC. By: WILLIAM H. MAY By: LOUIS T. ROSSO Secretary Chief Executive Officer EX-10.1 3 AMENDMENT NO. 1 TO CREDIT AGREEMENT EXHIBIT 10.1 EXECUTION COPY AMENDMENT NO. 1 TO CREDIT AGREEMENT This AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of April 3, 1998, is entered into by and among Beckman Instruments, Inc., a Delaware corporation (the "Borrower"), the banks, financial institutions and other institutional lenders party to the Credit Agreement referred to below (each a "Lender Party", and, collectively, the "Lender Parties") whose signatures appear below, Citicorp USA, Inc., a Delaware corporation, as agent for such Lender Parties (the "Agent"), and Citicorp Securities, Inc., a Delaware corporation, as arranger (the "Arranger"). PRELIMINARY STATEMENTS: (1) The Borrower, the Lender Parties, the Agent and the Arranger have entered into a Credit Agreement dated as of October 31, 1997 (such Credit Agreement, as amended, supplemented or otherwise modified through the date hereof, being hereinafter referred to as the "Credit Agreement"). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement. (2) Subject to the terms and conditions noted below, the Borrower and the Required Lenders have agreed to amend the Credit Agreement as hereinafter set forth. NOW THEREFORE, the Borrower and the Required Lenders hereby agree as follows: SECTION 1. Amendments to Credit Agreement. The Credit Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2, hereby amended as follows: (a) The definition of "Net Cash Proceeds" in Section 1.01 thereof is hereby amended by inserting in clause (i) of the second sentence thereof after the phrase "or Equipment for Resale or leases, bailment arrangements or rental agreements with respect thereto", the following phrase: "(with the exception of any Net Cash Proceeds from the sale by the Borrower or any Guarantor Subsidiary of any Equipment for Resale in accordance with Section 5.02(d)(v)(A) hereof)". (b) Section 2.06(b)(iv) thereof is hereby deleted in its entirety and replaced by the following: "(iv) [Intentionally Deleted]." (c) Section 5.02(a)(xv) thereof is hereby deleted in its entirety and replaced by the following Section: "(xv) any Liens arising as a result of a sale of assets by the Borrower or any Subsidiary of the Borrower pursuant to Section 5.02(d)(v) or (vi), provided that (A) in the case of clause (B) of Section 5.02(d)(v) and Section 5.02(d)(vi), such Liens shall cover only the assets sold and the proceeds thereof, and (B) in the case of clause (A) of Section 5.02(d)(v), such Liens shall only cover the assets sold and the proceeds thereof and any leases, bailment arrangements, rental agreements or other contracts covering such assets or any services, materials or supplies furnished in connection therewith;". (d) Section 5.02(d)(v) thereof is hereby deleted in its entirety and replaced by the following Section: "(v) (A) the sale by the Borrower or any Guarantor Subsidiary of any Equipment for Resale for cash in an amount not less than the net book value thereof, provided that such property is simultaneously leased back to the Borrower or such Guarantor Subsidiary (pursuant to a lease that is not a Capitalized Lease) by the buyer thereof, and (B) the sale or securitization by the Borrower or any Guarantor Subsidiary of customer leases and other receivables for cash in an amount not less than the fair market value thereof (after taking into account customary reserves for losses, yield protection, fees and similar matters);". (e) Section 5.04(a) thereof is hereby amended by deleting the table appearing in the middle of such Section and inserting in lieu thereof the following table: "Fiscal Quarter Ending Amount ---------------------- ------ December 31, 1997 $69,000,000 March 31, 1998 $69,000,000 June 30, 1998 $84,000,000 September 30, 1998 $99,000,000 December 31, 1998 $134,000,000 March 31, 1999 $149,000,000 June 30, 1999 $174,000,000 September 30, 1999 $199,000,000 December 31, 1999 $234,000,000;". SECTION 2. Conditions of Effectiveness. This Amendment shall become effective as of the date first above written when, and only when, the Agent shall have received counterparts of this Amendment executed by the Borrower and the Required Lenders (or as to any of the Lender Parties, advice satisfactory to the Agent that such Lender party has executed this Amendment) and counterparts of the consent attached hereto (the "Consent") executed by each Guarantor Subsidiary. Section 1 hereof shall become effective when, and only when, the Agent shall have additionally received all of the following documents, in form and substance satisfactory to the Agent and insufficient copies for each Lender party: (a) Certified copies of (i) the resolutions of the Board of Directors of (A) the Borrower approving this Amendment and the matters contemplated hereby and (B) each Guarantor Subsidiary evidencing approval of the Consent and the matters contemplated hereby and thereby and (ii) all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Amendment, the Consent and the matters contemplated hereby and thereby. (b) A certificate of the Secretary or an Assistant Secretary of the Borrower and each Guarantor Subsidiary certifying the names and true signatures of the officers of the Borrower and each Guarantor Subsidiary authorized to sign this Amendment and the Consent and the other documents to be delivered hereunder and thereunder. (c) A favorable opinion of corporate counsel for the Borrower, to the effect that this Amendment has been duly authorized, executed and delivered by the Borrower and a favorable opinion of corporate counsel for the Guarantor Subsidiaries to the effect that the Consent has been duly authorized, executed and delivered by each Guarantor Subsidiary. (d) A certificate signed by a duly authorized officer of the Borrower stating that: (i) The representations and warranties contained in each Loan Document are correct on and as of the date of such certificate as though made on and as of such date other than any such representations or warranties that, by their terms, refer to a date other than the date of such certificate; and (ii) No event has occurred and is continuing that constitutes a Default. SECTION 3. Reference to and Effect on the Loan Documents. (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement, and each reference in the Notes and each of the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment. (b) The Credit Agreement, as specifically amended by this Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender Party or the Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. SECTION 4. Costs, Expenses. The Borrower agrees to pay on demand all costs and expenses of the Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Agent) in accordance with the terms of Section 8.04 of the Credit Agreement. SECTION 5. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be a original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. SECTION 6. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. BECKMAN INSTRUMENTS, INC., As Borrower By /s/ PAUL GLYER Paul Glyer Title: Treasurer EX-10.2 4 AMENDMENT NO. 1998-1 - INCENTIVE COMPENSATION EXHIBIT 10.2 AMENDMENT 1998-1 BECKMAN COULTER, INC. 1998 INCENTIVE COMPENSATION PLAN WHEREAS, Beckman Coulter, Inc. (the "Company") maintains the Beckman Coulter, Inc. 1998 Incentive Compensation Plan (the "1998 Plan"); WHEREAS the Board of Directors has the authority to amend the 1998 Plan and approved an amendment thereto in order to assure that its intent with regard to adjustments of exercise price of an outstanding award is stated in the 1998 Plan; NOW, THEREFORE, the 1998 Plan is amended, effective as of April 2, 1998, as follows: 1. Section 4.3(d) is amended to read as follows: "(d) adjust the exercisability, term (subject to other limits) or vesting schedule of any or all outstanding awards, adjust the number of Common Shares subject to any award, change previously imposed terms and conditions, in the circumstances referenced in clause (b) above or in other circumstances or upon the occurrence of other events (including events of a personal nature) as deemed appropriate by the Administrator, by amendment of an outstanding award, by substitution of an outstanding award, by waiver or by other legally valid means (which may result, among other changes, in a greater or lesser number of shares subject to the award, or a shorter or longer vesting or exercise period), in each case subject to Sections 3, 8 and 9; provided that without stockholder approval, the Administrator shall not reduce by amendment the exercise price of an outstanding award;" 2. Section 4.3(e) is amended to read as follows: "(e) authorize (subject to Sections 8, 9, and 11) the adjustments, conversion, succession or substitution of one or more outstanding awards upon the occurrence of an event of the type described in Section 8 or in other circumstances or upon the occurrence of other similar events as deemed appropriate by the Administrator; and/or" IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Amendment to the 1998 Plan on this 20th day of April, 1998. BECKMAN COULTER, INC. By: /s/ FIDENCIO M. MARES Fidencio M. Mares Its: Vice President, Human Resources EX-10.3 5 1998 ANNUAL INCENTIVE PLAN Exhibit 10.3 Beckman 1998 ANNUAL INCENTIVE PLAN (AIP) WHO PARTICIPATES: Key executives designated by the Chairman of the Board and the President based on qualifying factors established by the Organization and Compensation Committee (the Committee) of the Board of Directors. FUNDING THE AIP: The company must achieve a minimum of (minimum amount) EPS for any funding of AIP awards, regardless of any other financial or non-financial results or individual performance. WHAT IS MEASURED - THE AIP COMPONENTS: There are four financial measurements, as well as the individual performance evaluation, which comprise the 1998 AIP award opportunity. The financial metrics have been selected because they directly align with the company's overall goals and objectives: - Earnings Per Share (EPS) - Company Sales - Pre-tax Margin - Debt/EBITDA The individual performance evaluation is linked to the achievement of your essential work outcomes established and measured through the EXCEL management process. INDIVIDUAL AIP AWARD DETERMINATION: Individual incentive awards are determined by adding the percentages earned based on the level of achievement for financial measurements and your individual performance evaluation. A pro rata incentive award percentage is calculated for gradations between achievement levels for financial results. The sum of the percentages is multiplied by your annual base pay as of December 31, 1998 to arrive at your award amount. For participants with an individual performance rating of "Expectations partially Met/Improvement Needed", the total incentive award for financial results may be reduced by up to 100%. AIP ADMINISTRATION GUIDELINES: The Committee administers the AIP on behalf of the company. This responsibility includes interpretation of the plan and the sole and absolute discretion to establish plan provisions, performance measures, performance targets, specific award levels and participation eligibility. All Committee interpretations, determinations, and actions will be final, conclusive and binding on all participants. AIP TERMS AND CONDITIONS: 1. All financial results will be measured on an "as reported" basis with no adjustment for any effect of currency fluctuations. 2. To be eligible for an AIP award, a participant must be in active pay status continuously through the last company-scheduled workday of the year. Partial payments may be considered, at the full discretion of the Committee, for retirees as defined by the company's retirement plan, who leave before the end of the plan year. 3. The Committee may determine in its sole and absolute discretion, the status and incentive award level for any participant whose responsibilities are changed, and of any key employee who becomes eligible to participate in the plan after the beginning of the performance period. 4. The Committee at any time and from time to time may terminate, suspend, modify or amend the plan. Nothing in this plan or any award granted shall confer on a participant any right to continue in the employ of the company or interfere in any way with the right of the company to terminate any employment. EX-15 6 INDEPENDENT ACCOUNTANTS' REVIEW REPORT Exhibit 15 Independent Auditors' Review Report The Stockholders and Board of Directors Beckman Coulter, Inc: We have reviewed the condensed consolidated balance sheet of Beckman Coulter, Inc. and subsidiaries as of March 31, 1998, and the related condensed consolidated statements of operations and cash flows for the three-month periods ended March 31, 1998 and 1997. 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 opinion. 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 Coulter, Inc. (formerly known as Beckman Instruments, Inc.) and subsidiaries as of December 31, 1997, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated January 23, 1998, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1997, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. KPMG Peat Marwick LLP Orange County, California April 17, 1998 EX-27 7 SUMMARY FINANCIAL INFORMATION 3-31-98
5 This schedule contains summary financial information extracted from the Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Operations and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1998 MAR-31-1998 31 0 513 17 340 956 887 498 2275 783 1249 0 0 3 65 2275 399 399 230 230 0 1 26 (12) (4) (8) 0 0 0 (8) (.30) (.30)
EX-27.1 8 RESTATED SUMMARY FINANCIAL INFORMATION 3-31-97
5 This schedule contains restated summary financial information extracted from the Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Operations and is qualified in its entirety by reference to such financial statements. 1,000,000 3-MOS DEC-31-1997 MAR-31-1997 40 4 294 9 199 565 664 409 937 276 176 0 0 3 388 937 232 232 110 110 0 0 3 22 6 16 0 0 0 16 .56 .54
EX-27.2 9 RESTATED SUMMARY FINANCIAL INFORMATION 12-31-96
5 This schedule contains restated summary financial information extracted from the Consolidated Balance Sheet and the Consolidated Statement of Operations and is qualified in its entirety by reference to such financial statements. 1,000,000 12-MOS DEC-31-1996 DEC-31-1996 35 8 320 10 190 579 674 410 960 279 177 0 0 3 396 960 872 1028 377 478 0 1 18 112 37 75 0 0 0 75 2.66 2.58
EX-27.3 10 RESTATED SUMMARY FINANCIAL INFORMATION 12-31-95
5 This schedule contains restated summary financial information extracted from the Consolidated Balance Sheet and the Consolidated Statement of Operations and is qualified in its entirety by reference to such financial statements. 1,000,000 12-MOS DEC-31-1995 DEC-31-1995 26 8 298 9 166 533 627 375 908 251 163 0 0 3 345 908 776 930 328 427 0 1 13 72 24 49 0 0 0 49 1.74 1.70
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