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