-----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, FFFMC5yEHJsLR72mDCIP9x+3rxa5FnmYqS6f9tiCsAw/9pfr5Mz8Qp/Ackn//EHh BIAS31Ax0Wz6jSWlpdJIiQ== 0000840467-97-000010.txt : 19970721 0000840467-97-000010.hdr.sgml : 19970721 ACCESSION NUMBER: 0000840467-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970718 SROS: NYSE 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: 97642468 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 June 30, 1997 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 92834 (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 July 9, 1997: 28,337,367 shares. PART I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Earnings for the three and six month periods ended June 30, 1997 and 1996 Condensed Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996 Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 1997 and 1996 Notes to Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes In Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security-Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K BECKMAN INSTRUMENTS, INC. SECOND QUARTER REPORT CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in Millions, Except Amounts Per Share) Unaudited
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 ---- ---- ---- ---- Sales $270.6 $265.2 $502.5 $490.0 Operating costs and expenses: Cost of sales 130.7 123.6 240.3 228.5 Selling, general and administrative 79.7 83.3 154.5 157.0 Research and development 28.6 27.3 52.6 52.0 ------ ------ ------ ------ 239.0 234.2 447.4 437.5 ------ ------ ------ ------ Operating income 31.6 31.0 55.1 52.5 Nonoperating expense: Interest income (0.3) (1.4) (2.2) (2.7) Interest expense 4.3 4.5 7.1 7.6 Other, net (2.1) (0.4) (1.8) (1.2) ------ ------ ------ ------ 1.9 2.7 3.1 3.7 ------ ------ ------ ------ Earnings before income taxes 29.7 28.3 52.0 48.8 Income tax provision 8.9 9.3 15.6 16.1 ------ ------ ------ ------ Net earnings $ 20.8 $ 19.0 $ 36.4 $ 32.7 ====== ====== ====== ====== Weighted average common shares and common share equivalents - 28,698 29,034 28,788 29,147 (thousands) Net earnings per share $ 0.72 $ 0.65 $ 1.26 $ 1.12 Dividends declared per share $ 0.15 $ 0.13 $ 0.30 $ 0.26
See accompanying notes to condensed consolidated financial statements. BECKMAN INSTRUMENTS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Millions) Unaudited
June 30, December 31, 1997 1996 ---- ---- Assets Current assets: Cash and equivalents $ 17.3 $ 34.6 Short-term investments 0.4 8.1 Trade receivables and other 330.7 309.5 Inventories 211.7 190.4 Deferred income taxes 22.0 21.4 Other current assets 18.0 15.4 ------- ------ Total current assets 600.1 579.4 Property, plant and equipment, net 295.0 263.5 Deferred income taxes 50.6 50.8 Other assets 69.9 66.4 ------- ------ Total assets $1,015.6 $960.1 ======== ====== Liabilities and Stockholders' Equity Current liabilities: Notes payable $ 28.1 $ 19.4 Accounts payable and accrued expenses 196.2 208.2 Income taxes 67.9 51.7 ------- ------ Total current liabilities 292.2 279.3 Long-term debt, less current maturities 252.4 176.6 Other liabilities 84.5 105.3 ------- ------ Total liabilities 629.1 561.2 Stockholders' equity 386.5 398.9 ------- ------ Total liabilities and stockholders' equity $1,015.6 $960.1 ======== ======
See accompanying notes to condensed consolidated financial statements. BECKMAN INSTRUMENTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Millions) Unaudited
Six Months Ended June 30, 1997 1996 ---- ---- Cash Flows from Operating Activities Net earnings $ 36.4 $ 32.7 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation and amortization 45.7 41.3 Net deferred income taxes (1.0) 0.1 Changes in assets and liabilities (net of acquisitions): Trade receivables and other (18.8) ( 2.0) Inventories (4.0) (33.0) Accounts payable and accrued expenses (21.2) 5.4 Restructuring reserve (0.8) ( 5.5) Accrued income taxes 16.2 7.0 Other (27.6) (25.9) ------ ------ Net cash provided by operating activities 24.9 20.1 ------ ------ Cash Flows from Investing Activities Additions to property, plant and equipment (42.6) (47.5) Net disposals of property, plant and equipment 6.8 5.4 Purchases of short-term investments 7.6 (1.5) Investments 0.3 (1.0) Acquisition of product lines (35.0) - ------ ------ Net cash used by investing activities (62.9) (44.6) ------ ------ Cash Flows from Financing Activities Dividends to stockholders (8.4) (7.4) Proceeds from issuance of stock 11.6 10.6 Purchase of treasury stock (40.6) (27.3) Notes payable borrowings, net 5.2 5.6 Long-term debt borrowings 52.5 107.7 Long-term debt reductions - (80.5) Other - 0.1 Net cash provided ------ ------ by financing activities 20.3 8.8 Effect of exchange rates on cash and equivalents 0.4 0.2 ------ ------ Decrease in cash and equivalents (17.3) (15.5) Cash and equivalents -- beginning of period 34.6 26.2 ------ ------ Cash and equivalents -- end of period $ 17.3 $ 10.7 ====== ====== Supplemental Disclosures of Cash Flow Information Cash paid during the period for: Interest $ 6.0 $ 8.4 Income taxes $ 12.1 $ 8.5
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. They do not include all disclosures required by generally accepted accounting principles or those made in the Annual Report on Form 10-K for 1996 which is on file with the Securities and Exchange Commission. The results of operations for the period ended June 30, 1997 are not necessarily indicative of the results to be expected for the year ending December 31, 1997. 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 Stock-Based Compensation The Company implemented Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS 123) in 1996. As permitted by SFAS 123, the Company continues to follow the guidance of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Consequently, compensation related to stock options is the difference between the grant price and the fair market value of the underlying common shares at the grant date. Generally, the Company issues stock options with a grant price equal to the fair market value of the Company's common shares. The Company provides proforma disclosures as required by SFAS 123 for its Annual Report on Form 10-K. 4 Net Earnings Per Share The net earnings per share includes the effect of common share equivalents. Common share equivalents represent the dilutive effect of outstanding stock options. The following table summarizes the impact of the dilutive effect of common share equivalents on net earnings per share:
Six Months ended June 30, 1997 1996 ---- ---- Net Net Earnings Earnings Shares Per Share Shares Per Share ------ --------- ------ --------- Weighted average shares of common stock outstanding 27.8 $ 1.31 28.2 $ 1.16 Common share equivalents 1.0 (0.05) 0.9 (0.04) ---- ------ ---- ------ Weighted average common and common share equivalents 28.8 $ 1.26 29.1 $ 1.12 ==== ====== ==== ======
In February 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per Share." SFAS 128 simplifies the computation of earnings per share ("EPS") currently required in Accounting Principles Board (APB) Opinion No. 15, "Earnings Per Share," by replacing primary and fully diluted EPS with basic and diluted EPS. Under SFAS 128, basic EPS is calculated by dividing net earnings by the weighted- average common shares outstanding during the period. Diluted EPS reflects the potential dilution to basic EPS that could occur upon conversion or exercise of securities, options, or other such items, to common shares using the treasury stock method based upon the weighted-average fair value of the Company's common shares during the period. SFAS 128 is required to be adopted by the Company in its year-end 1997 Annual Report. Had the Company been required to adopt SFAS 128 currently, the second quarter basic EPS for 1997 and 1996, would have been $0.75 and $0.68 respectively, and diluted EPS would have equaled the current and historically reported net (primary) earnings per share. 5 Inventories Inventories are comprised of the following:
June 30, December 31, 1997 1996 ---- ---- Finished products $126.3 $123.8 Raw materials, parts and assemblies 72.0 53.0 Work in-process 13.4 13.6 ------ ------ $211.7 $190.4 ====== ======
6 Acquisition On April 30, 1997, the Company consummated an agreement to purchase the Access immunoassay product line, including the related manufacturing facility, from Sanofi Diagnostics Pasteur. The acquisition also established an ongoing alliance in immunochemistry between Beckman and Sanofi Diagnostic Pasteur. The acquisition purchase price was not material to the Company and the transaction has been accounted for as a purchase. 7 Contingencies As previously reported, although not a named defendant, the Company is obligated to contribute to any resolution of a lawsuit filed by one of the previous owners and developers of property in Irvine, California formerly owned by the Company. The Company was recently informed that the lawsuit was settled. The Company is currently disputing its portion of the settlement and believes that any additional liability beyond that provided for will not have a material adverse effect on the Company's operations or financial position. The Company and its subsidiaries are involved in a number of 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 operations or financial position. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions, except per share amounts) Second quarter earnings and earnings per share were $20.8 and $0.72, representing an increase of 9% and 11% over the comparable period in the prior year. Earnings and earnings per share in the first six months were $36.4 and $1.26, representing an increase of 11% and 12.5% over the comparable period in the prior year. We experienced sales growth of 2%, 6% in constant currency, over the second quarter of the prior year and 3%, 5% in constant currency, over the first six months of the prior year. Sales growth resulted from our ability to penetrate selected markets. Sales attributable to sales-type leases for the second quarter were consistent with the comparable quarter in 1996. However, we placed more instruments with customers using operating-type leases versus sales-type leases in the six month period ended June 30, 1997, when compared to the prior year. This caused a 1% decrease in sales attributable to sales-type leases, as revenues are recognized over the lease term for operating-type leases and at inception, for sales-type leases. Gross profit as a percentage of sales decreased slightly for the second quarter and for the six months ended June 30, 1997. This was due to unfavorable foreign currency fluctuations and pricing pressures from market competition. As a result of our ability to manage operating costs and expenses and non-operating expenses, while at the same time to grow sales, earnings before income taxes increased. In the second quarter, earnings before income taxes increased $1.4 or 5% over the prior year. For the half year, earnings before income taxes increased $3.2 or 7%. Financial Condition In the first six months of 1997, net cash provided by operating activities was $24.9 compared with $20.1 for the comparable period in the prior year. Increased net earnings and depreciation, offset by fluctuations in trade receivables, accounts payable, accrued expenses and inventory levels contributed to the increase. Net cash used by investing activities for the first six months of 1997 increased $18.3 from the comparable period in 1996, to $62.9. The acquisition of the Access immunoassay product line was the main contributor to this increase. This increase was offset by decreases in the purchases of property, plant and equipment, as well as proceeds from the sale of short term investments that did not occur in the prior year. Net cash provided by financing activities increased $11.5 for the first six months of 1997 when compared to the same period in the prior year. This was caused by an increase in net borrowings to fund operations offset by an increase in the purchase of treasury stock. At June 30, 1997 the ratio of debt-to-capital was 42% compared to 33% at December 31, 1996. The increase was driven by our continuing process to repurchase Company shares. Additionally, the purchase of the Access immunoassay product line, contributed to the increase. The ratio of current assets to current liabilities at June 30, 1997 of 2.1 is comparable to December 31, 1996. On June 5, 1997, the Company paid a quarterly cash dividend of $0.15 per share of common stock for a total of $4.3. Business Climate The European recession and cost containment initiatives in several European governmental and health care systems continue to unfavorably impact both the diagnostics and the life sciences markets. Delays in pharmaceutical capital spending due to company consolidations and constraints on research and development spending, continue to affect the life sciences market. Consequently, sales in the short term may be affected by cost containment initiatives in both the U.S. and European health care systems. PART II OTHER INFORMATION Item 1. Legal Proceedings None. 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 4.1 Amendment 1996-2 to the Company's Savings and Investment Plan, adopted effective December 3, 1996, filed in connection with the Form S-8 Registration Statement filed with the Securities and Exchange Commission on September 1, 1992 and Amendment No. 1 thereto filed December 17, 1992, File No. 33-51506. 4.2 Amendment 1997-1 to the Company's Savings and Investment Plan, adopted June 9, 1997, filed in connection with the Form S-8 Registration Statement filed with the Securities and Exchange Commission on September 1, 1992 and Amendment No. 1 thereto filed December 17, 1992, File No. 33-51506. 4.3 Amendment 1997-2 to the Company's Savings and Investment Plan, adopted June 9, 1997, filed in connection with the Form S-8 Registration Statement filed with the Securities and Exchange Commission on September 1, 1992 and Amendment No. 1 thereto filed December 17, 1992, File No. 33-51506. 10.1 The Company's Annual Incentive Plan for 1997, adopted by the Company in 1997. 10.2 Form of Restricted Stock Agreement, effective as of January 3, 1997, between the Company and certain of its Executive Officers and certain other key employees. 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 4 Net Earnings Per Share of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, July 16, 1997 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: July 17, 1997 by WILLIAM H. MAY William H. May Vice President, General Counsel and Secretary Date: July 17, 1997 by D. K. WILSON Dennis K. Wilson Vice President, Finance and Chief Financial Officer EXHIBIT INDEX FORM 10-Q, FIRST QUARTER, 1997 Exhibit Number Description - ------- ----------- 4.1 Amendment 1996-2 to the Company's Savings and Investment Plan, adopted effective December 3, 1996, filed in connection with the Form S-8 Registration Statement filed with the Securities and Exchange Commission on September 1, 1992 and Amendment No. 1 thereto filed December 17, 1992, File No. 33-51506. 4.2 Amendment 1997-1 to the Company's Savings and Investment Plan, adopted June 9, 1997, filed in connection with the Form S-8 Registration Statement filed with the Securities and Exchange Commission on September 1, 1992 and Amendment No. 1 thereto filed December 17, 1992, File No. 33-51506. 4.3 Amendment 1997-2 to the Company's Savings and Investment Plan, adopted June 9, 1997, filed in connection with the Form S-8 Registration Statement filed with the Securities and Exchange Commission on September 1, 1992 and Amendment No. 1 thereto filed December 17, 1992, File No. 33-51506. 10.1 The Company's Annual Incentive Plan for 1997, adopted by the Company in 1997. 10.2 Form of Restricted Stock Agreement, dated as of January 3, 1997, between the Company and certain of its Executive Officers and certain other key employees. 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 4 Net Earnings Per Share of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, July 16, 1997 27. Financial Data Schedule EX-10.1 2 ANNUAL INCENTIVE PLAN EXHIBIT 10.1 BECKMAN INSTRUMENTS, INC. FY '97 ANNUAL INCENTIVE PLAN (AIP) Eligibility Participation in the Annual Incentive Plan (AIP) is limited to key senior executives designated by the Chief Executive Officer and Chief Operating Officer under requirements established by the Organization and Compensation Committee of the Board of Directors. By copy of this document, you have been approved for participation in the plan for Fiscal year 1997. Plan Elements Your incentive award opportunity is directly linked to four financial measures deemed critical to the company's strategy for growth and increased profitability, plus there is an individual performance compensation which focuses on your achievements as measured through the EXCEL performance management process. The benchmark financial measures are: 1) Growth in Earnings per Share (EPS) 2) Growth in Company Sales 3) Pretax margin, and 4) Growth in Economic Value Added (EVA) Because of its importance, a threshold level of EPS growth must be attained before there is incentive award eligibility for any of the four financial measures and individual performance. Achievement of this gate opens up each element of the plan on a stand-alone basis. Range of Awards Depending upon the level of company performance achieved for the four financial measures listed above and the employee's performance as measured through EXCEL, the resulting incentive award will range from a minimum of 13% to a maximum of 75% of the employee's annual base earnings. The incentive award range for the Chief Executive Officer and the Chief Operating Officer is 19% to 115%. No incentive award will be paid if the company fails to achieve at least two-thirds of the targeted growth in earnings per share. Plan Administration The AIP is administered on behalf of the company by the Board Organization and Compensation Committee. 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. General Provisions 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 incentive award, a participant must be in active pay status at the end of the measurement period. Partial payments may be considered, at the full discretion of the Organization and Compensation Committee, for retirees as defined by the company's pension plan, who leave before the end of the fiscal 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. *The acronym EVA for economic value added is attributed to Stern Stewart & Co. EX-10.2 3 RESTRICTED STOCK AGREEMENT EXHIBIT 10.2 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. RESTRICTED STOCK AGREEMENT THIS RESTRICTED STOCK AGREEMENT (the "Agreement") is made and entered into as of the ___ day of ________, 1997, between Beckman Instruments, Inc., a Delaware corporation (the "Company"), and ______________, an employee of the Company or a Subsidiary of the Company ("Employee"). WITNESSETH WHEREAS, 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; WHEREAS, the Plan provides for the issuance of shares of the Company's Common Stock, subject to certain restrictions thereon; and WHEREAS, pursuant to the Plan, the Organization and Compensation Committee of the Company's Board of Directors (the "Committee") has determined that it would be in the best interests of the Company and its stockholders to grant to the Employee effective as of January 3, 1997 (the "Award Date"), a Restricted Stock award ("Restricted Stock Award" or "Award") upon the terms and conditions hereinafter set forth; WHEREAS, the Organization and Compensation Committee established the performance goals which are required to trigger the lapse of restrictions, in January 1997 at which time the outcome of such performance goals was substantially uncertain and remains uncertain at this time; NOW, THEREFORE, in consideration of past services rendered to the Company and/or its Subsidiaries and the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties hereto agree as follows: 1. Definitions. Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise. 1.1 "Change of Control" shall have the meaning stated herein and 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 of this Agreement, 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 composing 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 was 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 (A) 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 (B) 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. 1.2 "Common Stock" means common stock of the Company, par value $.10 per Share. 1.3 "Restricted Stock" means Common Stock of the Company awarded under this Agreement and subject to the Restrictions imposed hereunder. 1.4 "Restrictions" means the Transferability Restrictions and Vesting Restrictions. 1.5 "Retirement" means "Early Retirement," "Normal Retirement" or "Late Retirement" as such terms are defined under the provisions of the Beckman Instruments, Inc. Pension Plan or other applicable retirement policy or plan as determined by the Committee in its sole discretion without regard to whether Employee commences to receive retirement benefits under such plan. 1.6 "Secretary" means the Secretary of the Company. 1.7 "Share" or "Shares" means shares of Common Stock of the Company. 1.8 "Subsidiary" means 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. 1.9 "Termination of Employment" means 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. 1.10 "Total Disability" shall mean that the Employee (1) has terminated employment with the Company and all its Subsidiaries, and (2) at the date of such termination, is disabled within the meaning of Section 22(e)(3) of the Code. Employee must furnish proof of disability in such form and manner, and at such times, as the Company may require. A consideration of disability hereunder does not mean or imply that Employee qualifies for any disability-related benefits under any other plan or program of the Company or any Subsidiary, and each such other plan or program is or may be governed by separate requirements which differ from those applied herein. 1.11 "Transferability Restrictions" means the restrictions on sale or other transfer imposed upon the Restricted Stock under this Agreement. 1.12 "Treasurer" shall mean the Treasurer of the Company. 1.13 "Vesting Restrictions" means the risk of forfeiture imposed upon the Restricted Stock under this Agreement. 2. Grant of Award. 2.1 Issuance of Restricted Stock. Subject to the terms of this Agreement, the Company hereby grants to the Employee this Award with respect to an aggregate of ______ Shares (subject to adjustment as described in Section 7) of Restricted Stock. 2.2 Consideration to Company. As partial consideration for the grant 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 for (i) a period of one year from the Award Date or (ii) the period which commences on the Award Date and ends on the date that the Restrictions first lapse under Section 4.1(a), whichever period is less. Nothing contained 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 constitute any contract or agreement of employment. In addition, nothing contained in this Agreement or in the Plan shall interfere in any way with the right of the Company to (i) terminate the employment of the Employee at any time for any reason whatsoever, with or without cause, or (ii) reduce the compensation or other benefits received by the Employee from the rate in existence on the Award Date. 3. Restrictions. 3.1 Forfeiture of Restricted Stock. All Shares of Restricted Stock set forth in Section 2.1 shall be forfeited immediately upon a Termination of Employment for any reason, except to the extent any Vesting Restrictions have lapsed as provided in Sections 4.1 and 4.2 below. 3.2 Legend. The Company shall issue a certificate or certificates for the Shares of Restricted Stock, registered in the name of the Employee, which certificate(s) shall be held in accordance with Section 5. Certificates representing Shares of Restricted Stock shall, until all Restrictions lapse and new certificates are issued pursuant to Section 6 below, 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." 3.3 Restricted Stock Not Transferable. Prior to the lapse of Transferability Restrictions, 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 thereof shall be null and void and of no effect; provided, however, that this Section 3.3 shall not prevent transfers by will or by the applicable laws of descent and distribution. 3.4 Rights as Stockholder. Except as otherwise provided herein, the holder of the Restricted Stock shall have the voting rights of a stockholder with respect to the Restricted Stock; provided, however, there is no right to accrue or to receive dividends or other distributions paid or made with respect to the Restricted Stock until all Restrictions have lapsed. 4. Removal of Restrictions. 4.1 Conditions for Removal. (a) The Restrictions shall lapse with respect to 50% of the number of Shares of Restricted Stock set forth in Section 2.1 as of the last day of any 30-consecutive calendar day period during which the average of the closing prices per share of the Common Stock (as reported on the principal securities exchange (the "Exchange") on which the Common Stock is then trading) on all trading days in such period is at least an amount determined by the Organization and Compensation Committee of the Board of Directors that is significantly higher than the stock price on the award date, provided, however, that such 30-consecutive calendar day period must end no later than December 31, 1998. Furthermore, if no shares of Common Stock of the Company trade on any Exchange business days during which securities are normally traded, then the 30-consecutive calendar day period shall be extended by that number of Exchange business days on which the Company's Common Stock is not traded. Notwithstanding the preceding, if there is a Termination of Employment of Employee for any reason prior to the lapse of Restrictions under this Section 4.1(a), all Shares of Restricted Stock set forth in Section 2.1(a) shall be immediately forfeited. In addition, if the Restrictions fail to lapse in accordance with this Section 4.1(a) by December 31, 1998, then all of the Shares of Restricted Stock set forth in Section 2.1 shall be immediately forfeited. (b) If the Restrictions lapse with respect to 50% of the number of Shares set forth in Section 2.1 in accordance with Section 4.1(a), the Restrictions may lapse with respect to the remaining 50% of the Shares set forth in Section 2.1 in accordance with this Section 4.1(b). The Vesting Restrictions applicable to the remaining 50% of the Shares of Restricted Stock shall lapse as of the earlier of (i) the date which is 365 days from the date of removal of the Restrictions under Section 4.1(a) or (ii) the date that Employee is eligible for Retirement. The Transferability Restrictions applicable to the remaining 50% of the Shares of Restricted Stock shall lapse as of the date that is 365 days from the date of removal of the Restrictions under Section 4.1(a). Notwithstanding the two preceding sentences, if there is a Termination of Employment for any reason other than death or Total Disability prior to the lapse of the Vesting Restrictions under this Section 4.1(b), the Shares of Restricted Stock described in this Section 4.1(b) shall be forfeited. In the event of Employee's Termination of Employment by reason of death or Total Disability during the 365 day period described in this Section 4.1(b), all Shares of Restricted Stock which are then subject to Restrictions shall immediately become vested and transferable. 4.2 Change of Control. Notwithstanding anything else contained herein to the contrary, in the event that a Change of Control occurs while the Employee is employed by the Company or one of its Subsidiaries and before any forfeiture of Shares of Restricted Stock has occurred, all Restrictions on the Restricted Stock shall be removed that are remaining on the effective date of the Change of Control. 5. 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 Sections 7 or 8, until the Restrictions shall have been removed. In no event shall Employee retain physical custody of any certificates representing Restricted Stock. 6. Delivery of Certificates; Payment of Taxes. The Company shall cause new certificates to be issued and delivered to Employee or Employee's legal representative, free from the legend provided for in Section 3.2, as soon as practicable after: (a) Restrictions are removed with regard to 50% of the number of Shares of Restricted Stock in accordance with Section 4.1(a), if the Treasurer receives a written request for issuance and delivery of new certificates by Employee or Employee's legal representative; and (b) after the removal of Restrictions with regard to the remaining 50% of the number of Shares of Restricted Stock in accordance with Section 4.1(b) or 4.2. Notwithstanding the foregoing, no such new certificate shall be delivered to Employee or Employee's legal representative unless and until Employee or Employee's legal representative shall have paid to the Company (or other employer corporation) in cash the full amount of all federal, state or local withholding or other employment taxes applicable to the taxable income of Employee resulting from the removal of Restrictions. In addition, notwithstanding the foregoing, no such new certificate shall be delivered to Employee or Employee's legal representative until the Committee has certified in writing that the average closing price requirement set forth in Section 4.1(a) has been satisfied. 7. 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 organization, merger, consolidation, acquisition of property or stock, separation or liquidation, that for some period of time prior to such event with respect to any such Shares of Restricted Stock that are still subject to Restrictions: (i) all Restrictions on such Shares of Restricted Stock shall terminate 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 shares of Restricted Stock shall be forfeited to the Company in consideration for a cash payment in an amount to be determined by the Committee. 8. 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 7, for the expiration of the Restrictions on the shares of Restricted Stock underlying the distribution of the new or additional shares or securities. 9. Miscellaneous. 9.1 Administration. The Award and this Agreement are subject to, and the Company and the Employee agree to be bound by, all of the terms and conditions of the Plan. 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. 9.2 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; and (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; and (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 lapse of such reasonable period of time as the Committee may from time to time establish for reasons of administrative convenience. 9.3 Notices. Any notice, except written request to the Treasurer pursuant to Section 6, to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary and any notice to be given to the Employee shall be addressed to the Employee at the address given beneath his or her signature hereto. Written requests to the Treasurer pursuant to Section 6 shall be addressed to the Company in care of its Treasurer. By a notice given pursuant to this Section, either party may hereafter designate a different address for notices to be given. 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/her status and address by written notice under this Section. Any notice shall have been deemed duly given when enclosed in a properly sealed envelope addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 9.4 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 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. 9.5 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 duly executed by the parties hereto as of the day and year first written above. BECKMAN INSTRUMENTS, INC. By /s/FIDENCIO M. MARES Fidencio M. Mares Its: Vice President-Human Resources EMPLOYEE: _______________________________ (Signature) _______________________________ (Name: Typed or Printed) _______________________________ (Address) _______________________________ (City, State, Zip Code) EX-15 4 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 June 30, 1997, and the related condensed consolidated statements of earnings and cash flows for the three-month and six-month periods ended June 30, 1997 and 1996. 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 Instruments, Inc. and subsidiaries as of December 31, 1996, and the related consolidated statements of earnings, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated January 17, 1997, 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, 1996, 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 July 16, 1997 EX-27 5 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. 6-MOS DEC-31-1997 JUN-30-1997 17 0 338 7 212 600 738 443 1016 292 252 0 0 3 384 1016 502 502 240 240 0 0 7 52 16 36 0 0 0 36 1.26 1.26
EX-4.1 6 AMENDMENT 1996-2 TO SAVINGS AND INVESTMENT PLAN Exhibit 4.1 AMENDMENT 1996-2 BECKMAN INSTRUMENTS, INC. SAVINGS AND INVESTMENT PLAN WHEREAS, Beckman Instruments, Inc. (the "Company") maintains the Beckman Instruments, Inc. Savings and Investment Plan (the "Plan"); and WHEREAS, the Company recently acquired the assets of Sagian Incorporated (excluding the Camile product line) ("Sagian"); and WHEREAS, the Company's Corporate Benefits Committee ("Committee") now wishes to amend the Plan to clarify certain provisions with respect to former Sagian employees who are now or may become employed by the Company; and WHEREAS, the Committee has the right to amend the Plan as provided under Appendix C of the Plan; NOW, THEREFORE, Appendix C of the Plan is hereby amended by restating the table contained therein as follows: Approximate Date of "Prior Employer Acquisition by Company --------------- ---------------------- Porton Instruments, Inc. May 31, 1991 Hybritech Incorporated January 1, 1996 Genomyx Corporation October 21, 1996 Sagian Incorporated December 3, 1996" IN WITNESS WHEREOF, this Amendment 1996-2 is hereby adopted effective December 3, 1996. BECKMAN INSTRUMENTS, INC. CORPORATE BENEFITS COMMITTEE By /s/FIDENCIO M. MARES Fidencio M. Mares Its Vice President - Human Resources, and Chairman, Corporate Benefits Committee EX-4.2 7 AMENDMENT 1997-1 SAVINGS AND INVESTMENT PLAN Exhibit 4.2 AMENDMENT 1997-1 BECKMAN INSTRUMENTS, INC. SAVINGS AND INVESTMENT PLAN WHEREAS, Beckman Instruments, Inc. (the "Company") maintains the Beckman Instruments, Inc. Savings and Investment Plan (the "Plan"); and WHEREAS, the Company recently acquired the ACCESS product line of Sanofi Diagnostics Pasteur, Inc. ("Sanofi"), and now wishes to amend the Plan to clarify certain provisions with respect to former Sanofi employees who are now or may become employed by the Company; and WHEREAS, the Company has the right to amend the Plan; and NOW, THEREFORE, the Plan is hereby amended by adding the following Appendix E thereto: "APPENDIX E SPECIAL PROVISIONS FOR FORMER PARTICIPANTS IN THE SANOFI SAVINGS AND INVESTMENT PLAN 1. Covered Employees Subject to this Appendix. Each Covered Employee who was an employee of Sanofi Diagnostics Pasteur, Inc. ("Sanofi") immediately prior to the Company's acquisition of the ACCESS product line from Sanofi (the "Acquisition") is subject to the provisions of this Appendix E (a "Former Sanofi Employee"). 2. Plan Loans. Pursuant to the terms of the Acquisition, certain Former Sanofi Employees may rollover their account balances under the Sanofi, Inc. Savings and Investment Plan (the "Sanofi Plan") to the Plan, subject to Section 3.6 of the Plan. Upon such a rollover, if the Former Sanofi Employee has a loan or loans outstanding under the Sanofi Plan, such loan(s) shall become a Plan loan(s), subject to the provisions of Section 9.12 of the Plan (each a "Former Sanofi Loan"). Notwithstanding any other provision of the Plan to the contrary, a Former Sanofi Employee may, at any one time, have more than one Former Sanofi Loan outstanding under the Plan. However, no Participant may receive a loan under Section 9.12 of the Plan until all outstanding Former Sanofi Loans have been paid in full. Former Sanofi Loans may be prepaid only if all Former Sanofi Loans will be paid in full upon receipt of such payment (partial prepayments are not permitted and full prepayment of one Former Sanofi Loan is not permitted if any other Former Sanofi Loan remains outstanding)." IN WITNESS WHEREOF, this Amendment 1997-1 is hereby adopted this 9 day of June, 1997. BECKMAN INSTRUMENTS, INC. By /s/FIDENCIO M. MARES Fidencio M. Mares Its Vice President - Human Resources EX-4.3 8 AMENDMENT 1997-2 SAVINGS AND INVESTMENT PLAN Exhibit 4.3 AMENDMENT 1997-2 BECKMAN INSTRUMENTS, INC. SAVINGS AND INVESTMENT PLAN WHEREAS, Beckman Instruments, Inc. (the "Company") maintains the Beckman Instruments, Inc. Savings and Investment Plan (the "Plan"); and WHEREAS, the Company recently acquired the ACCESS product line of Sanofi Diagnostics Pasteur, Inc. ("Sanofi"); and WHEREAS, the Company's Corporate Benefits Committee ("Committee") now wishes to amend the Plan to clarify certain provisions with respect to former Sanofi employees who are now or may become employed by the Company; and WHEREAS, the Committee has the right to amend the Plan as provided under Appendix C of the Plan; NOW, THEREFORE, Appendix C of the Plan is hereby amended by restating the table contained therein as follows: Approximate Date of "Prior Employer Acquisition by Company --------------- ---------------------- Porton Instruments, Inc. May 31, 1991 Hybritech Incorporated January 1, 1996 Genomyx Corporation October 21, 1996 Sagian Incorporated December 3, 1996 Sanofi Diagnostics Pasteur, Inc. May 1, 1997" IN WITNESS WHEREOF, this Amendment 1997-2 is hereby adopted this 9 day of June, 1997. BECKMAN INSTRUMENTS, INC. CORPORATE BENEFITS COMMITTEE By /s/FIDENCIO M. MARES Fidencio M. Mares Its Vice President - Human Resources, and Chairman, Corporate Benefits Committee -----END PRIVACY-ENHANCED MESSAGE-----