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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
For the fiscal year ended December 31, 1998
OR
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________________
Commission file number 1-7928
BIO-RAD LABORATORIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 94-1381833
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1000 Alfred Nobel Drive, Hercules, CA 94547
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (510) 724-7000
Securities registered pursuant to Section 12(b) of the Act:
Market Value on
Name of Each Exchange Shares Outstanding March 1, 1999 of Stocks
Title of Each Class on Which Registered March 1, 1999 Held by Non-Affiliates
------------------- --------------------- ------------------ ------------------------
Class A Common Stock
Par Value $1.00 per share American Stock Exchange 9,977,862 $242,363,239
Class B Common Stock
Par Value $1.00 per share American Stock Exchange 2,500,266 $ 10,215,330
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____
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. [ ]
Documents Incorporated by Reference
Document Form 10-K Parts
_________________________________________ ____________________
(1) Annual Report to Stockholders for the
fiscal year ended December 31, 1999
(specified portions) I, II, IV
(2) Definitive Proxy Statement to be mailed
to stockholders in connection with the
registrant's 2000 Annual Meeting of
Stockholders (specified portions) III
P A R T I
ITEM 1. BUSINESS
General
Founded in 1957, Bio-Rad Laboratories, Inc. ("Bio-Rad" or the
"Company") was initially engaged in the development and
production of specialty chemicals used in biochemical,
pharmaceutical and other life science research applications. In
1967, the Company entered the field of clinical diagnostics with
the development of its first test kit based on separation
techniques and materials developed for life science research.
Recognizing that the fields of clinical diagnostics and life
science research were evolving toward more automated techniques,
Bio-Rad expanded into the field of analytical and measuring
instrument systems through internal research and development
efforts and acquisitions in the late 1970's and 1980's.
As Bio-Rad broadened its product lines, it also expanded its
geographical market. The Company controls its distribution
channels in thirty countries outside the U.S.A. through
subsidiaries whose primary focus is customer service and
product distribution.
During 1996 and 1997, the Company made five acquisitions. The
assets acquired from Chiron Diagnostics Corporation and Chiron
Corporation on December 5, 1997, enhanced the product line
offering for diagnostic controls. The remaining acquisitions
broadened product line offerings within the Analytical
Instruments and Life Science segments.
On October 1, 1999 Bio-Rad acquired the stock of Pasteur Sanofi
Diagnostics ("PSD") and the rights to certain ancillary assets
for $210 million. PSD was founded by the Institut Pasteur to
commercialize its diagnostic research, and holds certain
exclusive licenses from the Institut Pasteur in the HIV and
infectious disease diagnostic product market. PSD also expanded
the geographic reach and market penetration for the Company's
product particularly in Latin America, Africa and France.
Bio-Rad manufactures and supplies the life science research,
healthcare, analytical chemistry, semiconductor and other markets
with a broad range of products and systems used to separate
complex chemical and biological materials and to identify,
analyze and purify their components.
Description of Business
Business Segments
The Company operates in three industry segments designated Life
Science, Clinical Diagnostics and Analytical Instruments. Each
operates in both the U.S. and international markets. For a
description of business and financial information on industry and
geographic segments, see Note 13 on pages 19 through 22 of
Exhibit 13.1, which is incorporated herein by reference.
1
Life Science Segment.
Life science is the study of the characteristics, behavior, and
structure of living organisms and their component systems. Life
science researchers use a variety of products and systems--
including reagents, instruments, software and apparatus-- to
advance the study of life processes, drug discovery and
biotechnology, primarily within a laboratory setting.
We focus on selected segments of the life science market--
laboratory devices, biomaterials, imaging products and microscopy
systems-- for which we estimate 1999 worldwide sales totaled
approximately $1.6 billion. The primary technological
applications that we supply to these segments are diverse and
consist of electrophoresis, image analysis and microplate
readers, chromatography, gene transfer and sample preparation and
amplification. The primary end-users in our sectors of the
market are universities and medical schools, industrial research
organizations, government agencies, pharmaceutical manufacturers
and biotechnology researchers.
Clinical Diagnostics Segment.
The clinical diagnostics industry encompasses a broad array of
technologies incorporated into a variety of tests used to detect,
identify and quantify substances in blood or other bodily fluids
and tissues. The test results are used as aids for medical
diagnosis, detection, evaluation, monitoring and treatment of
diseases and other medical conditions. The bulk of tests are
performed in vitro (literally, "in glass"), while the remainder
consists of in vivo ("in the body") tests. The most common type
of in vitro tests are routine chemistry tests that measure
important health parameters, such as glucose, cholesterol or
sodium, as part of routine blood checks. A second type of
diagnostic tests, on which we focus, are more specialized and
require more sophisticated equipment and materials than do
routine tests. These specialized tests are also lower-volume and
higher-priced than routine tests. We estimate that in 1999,
sales to the global clinical diagnostics industry totaled
approximately $20 billion.
The primary end-users in the areas of the clinical diagnostics
industry we target are hospital laboratories, reference
laboratories, physician office laboratories, government agencies
and other diagnostics manufacturers.
Analytical Instruments Segment.
The analytical instruments segment develops, manufacturers, sells
and services FT-IR spectroscopy systems, semiconductor tests and
manufacturing instruments, spectral reference publications and
software.
Spectrometers measure the infrared spectra of materials,
providing quantitative and qualitative information about their
chemical composition. The primary end-users for spectrometers
are scientists and researchers in a wide range of industries,
2
including chemicals, pharmaceuticals, biotechnology and food.
Applications for the products are varied but range from general
analytical purposes to research and development and quality
control.
Our semiconductor division designs, manufactures, and sells
instruments and systems that measure the critical dimensions of
integrated circuits ("ICs") and the characterization of silicon
wafers and compound semiconductor materials. The primary end-
users for these instruments and systems include IC, silicon
substrate and compound semiconductor manufacturers, as well as
universities and research institutes.
The primary end-users for spectral databases, chemists and
spectroscopists, use them to identify a sample through the
spectrum it produces against a spectra of known compounds. A
variety of market segments use these products, including the
chemical, pharmaceutical, biotechnology, forensic and
environmental chemistry industries, as well as academic
researchers.
Raw Materials and Components
The Company utilizes a wide variety of chemicals, biological
materials, electronic components, machined metal parts, optical
parts, minicomputers and peripheral devices. Most of these
materials and components are available from numerous sources and
the Company has not experienced difficulty in securing adequate
supplies.
Patents and Trademarks
We own numerous U.S. and international patents and patent
licenses. We believe, however, that our ability to develop and
manufacture our products depends primarily on our knowledge,
technology and special skills. Under several patent license
agreements, we pay royalties on the sales of certain products.
We view these patents and license agreements as valuable assets.
The clinical diagnostics segment has a broad portfolio of
intellectual property which it uses to advance and promote its
competitive position within the market of blood viruses,
bacteriology, immuno-hematology, infectious diseases and
cardiovascular testing. Its portfolio is comprised of owned
patents, patent rights licensed from Institut Pasteur and other
rights secured under third-party licensing agreements.
Additionally, this segment has a wide array of patents and patent
applications which are owned and licensed in the area of HIV
testing. These include patents on purified virus proteins,
antigens used for detection of HIV, monoclonal antibodies, cloned
DNA sequences, primers and probes.
Seasonal Operations and Backlog
The Company's business is not inherently seasonal, however, the
European custom of concentrating vacation during the summer
3
months usually has had a negative impact on third quarter sales
volume and operating income.
For the most part, the Company operates in markets characterized
by short lead times and the absence of significant backlogs. The
Company produces several analytical instruments against an order
backlog. Management has concluded that backlog information is
not material to the Company's business as a whole.
Sales and Marketing
Each of Bio-Rad's segments maintains a sales force to sell its
products on a direct basis. Each sales force is technically
trained in the disciplines associated with its products. Sales
are also generated through direct mail advertising, exhibits at
trade shows and technical meetings, telemarketing, and by
extensive advertising in technical and trade publications. Sales
and marketing efforts are augmented by technical service
departments that assist customers in effective product
utilization and in new product applications. Bio-Rad also
produces and distributes technical literature and holds seminars
for customers on the use of its products.
Our customer base is broad and diversified. In 1999, no single
customer accounted for more than 2% of our total net sales. Our
sales are affected by certain external factors. For example, a
number of our customers, particularly in the life science
segment, are substantially dependent on government grants and
research contracts for their funding, and a portion of the
analytical instruments segment depends on contracts with large
semiconductor manufacturers. Thus, the loss of government
funding or a large contract or a severe downturn in the
semiconductor market would have a detrimental effect on the
results of these segments.
Most of the Company's international sales are generated by
wholly-owned subsidiaries and their branch offices in Australia,
Austria, Belgium, Canada, Denmark, England, Finland, France,
Germany, Hong Kong, Hungary, India, Israel, Italy, Japan, Korea,
Mexico, the Netherlands, New Zealand, Norway, People's Republic
of China, Poland, Portugal, Russia, Singapore, South Africa,
Spain, Sweden, Switzerland and Thailand. Certain of these
subsidiaries also have manufacturing facilities. While Bio-Rad's
international operations are subject to certain risks common to
foreign operations in general, such as changes in governmental
regulations, import restrictions and foreign exchange
fluctuations, the Company's international operations are
principally in developed nations, which the Company regards as
presenting no significantly greater risks to its operations than
are present in the United States.
Competition
Most markets served by our product groups are competitive. Our
competitors range in size from start-ups to large multinational
corporations. Reliable independent information on sales and
market share of products produced by our competitors is not
4
generally available. We believe, however, based on our on
marketing information, that while some competitors are dominant
with respect to certain individual products, no one company,
including us, is dominant with respect to a material portion of
any segment of our business.
Life Science Segment. Because of the breadth of its product
lines, Life Science does not face the same competitor for all of
its products. Competitors in this market include Amersham
Pharmacia Biotech, Life Technologies, Qiagen, Zeiss and PE
Applied Biosystems. We compete primarily on meeting performance
specifications.
Clinical Diagnostics Segment. Competitors in this segment range
in size from small private companies to large multinational
corporations. We compete only in very specific market niches and
do not attempt to pursue the most competitive general diagnostics
markets. We compete based on our technological ability to
provide customers with very specific tests and believe we are
usually a significant competitor within our market niche.
Competitors include Abbott Laboratories, bioMerieux, Inc., Roche
Diagnostics, BioChem Pharma, Inova, diaSorin and Medical Analysis
Systems.
Analytical Instruments Segment. We compete in the high-end
analytical instruments market primarily on the basis of
technology and features. Competitors in this segment include
Nicolet Instruments (a division of Thermo Instruments) and EG&G
(formerly Perkin-Elmer) in spectroscopy; and Hitachi and KLA-
Tencor in semiconductor measurement instruments.
Product Research and Development
The Company conducts extensive product research and development
activities in all areas of our business, employing approximately
475 people worldwide in these activities. Research and
development have played a major role in Bio-Rad's growth and are
expected to continue to do so in the future. Our research teams
are continuously developing new products and new applications for
existing products. In our development and testing of new
products and applications, we consult with scientific and medical
professionals at universities, hospitals and medical schools, and
in industry, most notably with the Institut Pasteur. We spent
approximately $51.2 million (excluding $15.5 million of purchased
in-process research and development expense), $41.4 million and
$46.4 million on research and development activities during the
years ended December 31, 1999, 1998 and 1997, respectively.
Regulatory Matters
The manufacturing, marketing and labeling of certain of our
products (primarily diagnostic products) are subject to
regulation in the United States by the Center for Devices and
Radiological Health of the United States Food and Drug
Administration ("FDA") and in other jurisdictions by state and
foreign government authorities. FDA regulations require that
some new products have pre-marketing approval by the FDA and
5
require certain products to be manufactured in accordance with
"good manufacturing practices," to be extensively tested and to
be properly labeled to disclose test results and performance
claims and limitations.
As a multinational manufacturer and distributor of sophisticated
instrumentation equipment, we must meet a wide array of
electromagnetic compatibility and safety compliance requirements
to satisfy regulations in the United States, the European
Community and other jurisdictions. The FDA must approve an
export permit application before companies can market products
outside the U.S. prior to the products' receipts of FDA approval.
The requirements relating to testing and trials, product
licensing, pricing and reimbursement vary widely among countries.
Our operations are subject to federal, state, local and foreign
environmental laws and regulations that govern such activities as
emissions to air and discharges to water, as well as handling and
disposal practices for solid, hazardous and medical wastes. In
addition to environmental laws that regulate our operations, we
are also subject to environmental laws and regulations that
create liabilities and clean-up responsibility for spills,
disposals or other releases of hazardous substances into the
environment as a result of our operations or otherwise impacting
real property that we own or operate. The environmental laws and
regulations also subject us to claims by third parties for
damages resulting from any spills, disposals or releases
resulting from our operations or at any of our properties.
Employees
At December 31, 1999, Bio-Rad had approximately 4,100 full-time
employees. Fewer than 7% of Bio-Rad's 1,900 U. S. employees are
covered by a collective bargaining agreement which will expire on
November 7, 2002. Many of Bio-Rad's non-U.S. full-time
employees, especially in France, are covered by collective
bargaining agreements. The Company is currently working with the
representative unions of these employees to achieve workforce
reductions where duplication or redundancies exist as a result of
the PSD acquisition. Bio-Rad considers its employee relations
in general to be good.
ITEM 2. PROPERTIES
We own our Corporate headquarters located in Hercules,
California. The principal manufacturing and research locations
for each segment are as follows:
Approximate
Segment Location Square Ftg. Owned/Leased
Life Science Richmond, California 191,000 Owned/Leased
Hercules, California 95,400 Owned
Hemel Hempstead, England 102,000 Leased
Milan, Italy 50,000 Leased
6
Clinical
Diagnostics Hercules, California 112,000 Owned/Leased
Irvine, California 137,000 Leased
Greater Seattle,
Washington 127,600 Owned/Leased
Lille, France 182,000 Owned
Paris, France 162,000 Leased
Munich, Germany 55,000 Leased
Nazareth-Eke, Belgium 30,000 Leased
Analytical
Instruments Cambridge, Massachusetts 76,000 Owned
York, England 144,000 Owned
Philadelphia, Pennsylvania 28,000 Owned
Most manufacturing and research facilities also house
administration, sales and distribution activities. In addition,
we lease office and warehouse facilities in a variety of
locations around the world. The facilities are used principally
for sales, service, distribution and administration for all three
segments.
The Life Science segment's Richmond, California distribution and
instrument manufacturing facility lease expires in November 2000.
While we are currently negotiating a renewal, the lease is not
automatically renewable. The Marnes la Coquette facility near
Paris, France which served as the corporate headquarters for PSD,
as well as a significant manufacturing and research facility is
currently being renegotiated as the lease expired December 31,
1999. In the interim, the space is being occupied on a month to
month basis.
We believe all of our other facilities are adequate to support
our current and anticipated production requirements.
Historically, adequate space to expand sales and distribution
channels has been available and we have leased space as needed.
We have received several offers to purchase our facility located
in Cambridge, Massachusetts. This facility houses a portion of
the manufacturing and distribution for the analytical instruments
segment, which we will relocate if the building is sold.
ITEM 3. LEGAL PROCEEDINGS
Note 12, "Legal Proceedings," appearing on page 19 of Exhibit
13.1 is incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Company's
security holders during the fourth quarter of the fiscal year
covered by this report.
7
P A R T II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
Note 16, "Information Concerning Common Stock," appearing on page
23 of Exhibit 13.1 is incorporated herein by reference.
The Company subsequent to year-end, effective February 17, 2000
has sold $150 million of 11-5/8% Senior Subordinated Notes
("Notes") due February 15, 2007. The initial purchasers for the
Notes were Warburg Dillon Read LLC and ABN Amro Incorporated.
The offering price was 98.832% and the initial purchaser's
discount was 3%. Proceeds before expenses were $143.8 million
and were used to repay the $100 million Senior Subordinated
Credit Agreement, retire $20 million of the $100 million term
loan and with substantially all of the residual proceeds, reduce
the amount outstanding under the revolving facility. The
obligations under the notes are not secured, rank junior to all
of our existing and future senior debt, rank equally with all of
our existing and future senior subordinated debt and rank senior
to all our existing and future subordinated indebtedness. Our
current and future domestic subsidiaries that are material to our
business guarantee the notes, but our foreign subsidiaries do
not.
The Notes have not been registered under the Securities Act.
Accordingly the initial purchasers will offer the Notes only to
"Qualified Institutional Buyers" as defined under Rule 144A of
the Securities Act and non-U.S. persons outside the United States
in reliance upon Regulation S of the Securities Act.
ITEM 6. SELECTED FINANCIAL DATA
The table headed "Summary of Operations" appearing on page 1 of
Exhibit 13.1 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The section headed "Management's Discussion and Analysis of
Results of Operations and Financial Condition" appearing on pages
25 through 33 of Exhibit 13.1 is incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The section headed "Financial Risk Management" appearing on page
32 of Exhibit 13.1 is incorporated herein by reference.
8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and Notes thereto and the
Report of Independent Public Accountants appearing on pages 1
through 33 of Exhibit 13.1 are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
P A R T III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The sections labeled "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" of the definitive
Proxy Statement mailed to stockholders in connection with the
2000 Annual Meeting of Stockholders ("the 2000 Proxy Statement")
are incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The sections labeled "Executive Compensation and Other
Information," "Compensation of Directors," "Compensation
Committee Interlocks and Insider Participation," "Report of the
Compensation Committee of the Board of Directors" and "Stock
Performance Graph" of the 2000 Proxy Statement are incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The section labeled "Principal and Management Stockholders" of
the 2000 Proxy Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section labeled "Compensation of Directors" of the 2000 Proxy
Statement is incorporated herein by reference.
9
P A R T IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. Index to Financial Statements
The following Consolidated Financial Statements are
included in the 1999 Annual Report and are incorporated
herein by reference pursuant to Item 8:
Page in
Exhibit 13.1
Consolidated Balance Sheets
at December 31, 1999 and 1998 2-3
Consolidated Statements of Income
for each of the three years in the
period ended December 31, 1999 4
Consolidated Statements of Cash Flows
for each of the three years in the period
ended December 31, 1999 5
Consolidated Statements of Changes in
Stockholders' Equity for each of the three
years in the period ended December 31, 1999 6
Notes to Consolidated Financial Statements 7-23
Report of Independent Public Accountants 24
2. Index to Financial Statement Schedule
Page in
Form 10-K
Schedule II Valuation and Qualifying Accounts 12
Report of Independent Public Accountants
on Schedule II 13
All other financial statement schedules are omitted because
they are not required or because the required information is
included in the Consolidated Financial Statements or the Notes
thereto.
3. Index to Exhibits
The exhibits listed in the accompanying Index to Exhibits on
pages 15 and 16 of this report are filed or incorporated by
reference as part of this report.
10
(b) Reports on Form 8-K
Bio-Rad filed Form 8-K dated October 1, 1999, announcing that Bio-Rad
completed the acquisition of 100% of the capital stock of Pasteur
Sanofi Diagnostics from Sanofi-Synthelabo S.A. and Institut Pasteur
pursuant to the terms of the Purchase Agreement (previously filed as
Exhibit 2.1 to Form 8-K dated July 15, 1999).
11
BIO-RAD LABORATORIES, INC,.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1999, 1998 and 1997
(In thousands)
Reserve for doubtful accounts receivable
Additions
Balance at Charged to Balance
Beginning Costs and at End
of Year Expenses Deductions Other of Year
1999 . . . $3,629 $3,123 $(2,449) $5,279(A) $9,582
1998 . . . $3,374 $1,616 $(1,361) $ - $3,629
1997 . . . $3,688 $1,088 $(1,402) $ - $3,374
Valuation allowance for deferred tax assets
Deductions
Balance at Charged to Balance
Beginning Costs and at End
of Year Additions Expenses Other of Year
1999 . . . . $5,342 $ -- $ (553) $19,342(A) $24,131
1998 . . . . $3,285 $2,057 $ -- $ -- $5,342
1997 . . . . $5,572 $ -- $(2,287) $ -- $3,285
(A) Valuation arising from the acquisition of PSD.
12
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE II
To Bio-Rad Laboratories, Inc.
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements included in
Bio-Rad Laboratories, Inc.'s annual report to stockholders
incorporated by reference in this Form 10-K, and have issued our
report thereon dated February 9, 2000. Our audit was made for
the purpose of forming an opinion on those statements taken as a
whole. The schedule listed in the index, Item 14(a)2, is the
responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Francisco, California
February 9, 2000
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BIO-RAD LABORATORIES, INC.
By: /s/ Sanford S. Wadler
Sanford S. Wadler
Secretary
Date: March 28, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Principal Executive Officer:
/s/ David Schwartz President and Director March 28, 2000
(David Schwartz)
Principal Financial Officer:
/s/ T. C. Chesterman Vice President, March 28, 2000
(Thomas C. Chesterman) Chief Financial Officer
Principal Accounting Officer:
/s/ James R. Stark Corporate Controller March 28, 2000
(James R. Stark)
Other Directors:
/s/ James J. Bennett Director March 28, 2000
(James J. Bennett)
/s/ Albert J. Hillman Director March 28, 2000
(Albert J. Hillman)
/s/ Philip L. Padou Director March 28, 2000
(Philip L. Padou)
/s/ Alice N. Schwartz Director March 28, 2000
(Alice N. Schwartz)
/s/ Norman Schwartz Director March 28, 2000
(Norman Schwartz)
/s/ Burton A. Zabin Director March 28, 2000
(Burton A. Zabin)
14
BIO-RAD LABORATORIES, INC.
INDEX TO EXHIBITS
ITEM 14(a)3
The following documents are filed as part of this report:
Exhibit No.
3.1 Restated Certificate of Incorporation, as of
September 15, 1988. (1)
3.2 Bylaws of the Registrant, as amended February 19,
1980. (2)
4.1 Credit Agreement dated as of September 30, 1999 among
Bio-Rad Laboratories, Inc., the lenders named therein,
Bank One, N.A., as Administrative Agent, ABN Amro Bank
N.V. as Syndication Agent and Union Bank of California,
N.A. as Documentation Agent. (3)
4.1.1 Amendment dated as of January 31, 2000, to the Credit
Agreement dated as of September 30, 1999, by and among
Bio-Rad Laboratories, Inc. the lenders named therein,
and Bank One, N.A. as Agent.
4.2 Senior Subordinated Credit Agreement dated as of
September 30, 1999 among Bio-Rad Laboratories, Inc.,
the lenders named therein and Bank One Capital Markets,
Inc., as agent. (3)
4.4 Senior Subordinated Credit Agreement dated as of
January 31, 2000 among Bio-Rad Laboratories, Inc., the
lenders names therein and UBS AG, Stamford Branch, as
Agent.
4.5 The Indenture dated as of February 17, 2000 for 11.625%
Senior Subordinated Notes due 2007 among Bio-Rad
Laboratories, Inc., as Issuer, and Norwest Bank
Minnesota, N.A., as Trustee.
4.6 The Registration Rights Agreement dated as of February
17, 2000 by and among Bio-Rad Laboratories, Inc. and
Warburg Dillon Reed LLC and ABN AMRO Incorporated.
10.4 1994 Stock Option Plan. (4)
10.5 Amended and Restated 1988 Employee Stock Purchase Plan.
(5)
10.6 Employees' Deferred Profit Sharing Retirement Plan
(Amended and Restated effective January 1, 1997). (6)
10.10 Non-competition and employment continuation agreement
with James J. Bennett. (7)
10.11 Employment and non-compete agreement with Dr. Burton A.
Zabin. (8)
15
10.12 Split Dollar Life Insurance Agreement dated
September 17, 1999 between the Schwartz Irrevocable
Descendants Trust and Bio-Rad Laboratories, Inc.
13.1 Excerpt from Annual Report to Stockholders' for the
fiscal year ended December 31, 1999, (to be deemed
filed only to the extent required by the instructions
to exhibits for reports on Form 10-K).
21.1 Listing of Subsidiaries.
23.1 Consent of Independent Public Accountants.
27.1 Financial Data Schedule.
________________________________________________________________
(1) Incorporated by reference from the Exhibits to the
Company's Form 10-K filing for the fiscal year ended
December 31, 1992, dated March 26, 1993.
(2) Incorporated by reference from the Exhibits to the
Company's Registration Statement on Form S-7
Registration No. 2-66797, which became effective
April 22, 1980.
(3) Incorporated by reference from Exhibits to the
Company's Form 8-K dated October 1, 1999.
(4) Incorporated by reference from the Exhibits to the
Company's Form S-8 filing, dated April 28, 1994.
(5) Incorporated by reference from the Exhibits to the
Company's September 30, 1998, Form 10-Q filing dated
November 10, 1998.
(6) Incorporated by reference from the Exhibits to the
Company's September 30, 1997, Form 10-Q filing dated
November 13, 1997.
(7) Incorporated by reference from the Exhibits to the
Company's Form 10-K filing for the fiscal year ended
December 31, 1996, dated March 26, 1997.
(8) Incorporated by reference from the Exhibits to the
Company's June 30, 1998, Form 10-Q filing dated
August 6, 1998.
16
EX-4.1.1
2
EXHIBIT 14.1.1 - AMENDMENT TO CREDIT AGREEMENT
Exhibit 4.1.1
EXECUTION COPY
AMENDMENT NO. 1 TO CREDIT AGREEMENT
This Amendment No. 1 (this "Amendment") is entered into as
of January 31, 2000 by and among BIO-RAD LABORATORIES, INC., a
Delaware corporation (the "Borrower"), the undersigned lenders
(collectively, the "Lenders") and BANK ONE, NA, having its
principal office in Chicago, Illinois, as one of the Lenders and
in its capacity as contractual representative (the "Agent") on
behalf of itself and the other Lenders.
RECITALS:
WHEREAS, the Borrower, the Lenders and the Agent have
entered into that certain Credit Agreement dated as of September
30, 1999 (the "Credit Agreement");
WHEREAS, the Borrower seeks to amend the Credit Agreement to
permit the refinancing of the Bridge Loan (as defined in the
Credit Agreement); and
WHEREAS, the Lenders and the Agent are willing to amend the
Credit Agreement on the terms and conditions herein set forth;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to
such terms in the Credit Agreement.
2. Amendments to Credit Agreement. Upon the effectiveness
of this Amendment in accordance with the provisions of Section 4
below, the Credit Agreement is hereby amended as follows:
(a) Article I of the Credit Agreement is amended by adding
thereto the following new definitions:
"New Bridge Loan" means the bridge loan in the initial
principal amount of $100,000,000 made to the Borrower on or
about January 31, 2000 pursuant to the New Bridge Loan
Agreement to refinance the Bridge Loan in its entirety,
including any increase in such principal amount as a result
of the capitalization of interest thereon and including any
Rollover Bridge Notes and Exchange Notes, as defined in the
New Bridge Loan Agreement; provided that the Exchange Notes
shall be issued pursuant to an indenture all of the terms
and conditions of which are reasonably acceptable to the
Agent and the Required Lenders, and provided further that
terms and conditions substantially
similar to those contained in the Description of Notes shall
be deemed to be reasonably acceptable.
"New Bridge Loan Agreement" means the Senior
Subordinated Credit Agreement dated as of January 31, 2000
among the Borrower, the lenders named therein and UBS AG,
Stamford Branch, as agent for such lenders, together with
any notes issued pursuant thereto.
(b) Article I of the Credit Agreement is further amended by
amending and restating in their entirety the following
definitions as follows:
"Consolidated EBITDA" means, with reference to any
period, Consolidated Net Income for such period plus, to
the extent deducted from revenues in determining
Consolidated Net Income (without duplication), (i)
Consolidated Interest Expense and all non-cash interest
expense, (ii) expense for income taxes paid or accrued,
(iii) depreciation, (iv) amortization, (v) extraordinary
losses incurred other than in the ordinary course of
business and losses from discontinued operations, (vi) any
extraordinary, unusual or non-recurring non-cash expenses or
non-cash losses, and (vii) non-recurring cash charges,
including any capitalized non-recurring cash charges, taken
on or prior to March 31, 2000 resulting from severance,
integration and other adjustments made as a result of the
PSD Acquisition (provided that the amounts referred to in
this clause (vii) shall not, in the aggregate, exceed
$25,000,000), and minus, to the extent included in
Consolidated Net Income, extraordinary gains and gains from
discontinued operations, all net of tax, realized other than
in the ordinary course of business, all calculated for the
Borrower and its Subsidiaries on a consolidated basis for
such period; provided that the items to be added to and
subtracted from Consolidated Net Income with respect to any
Subsidiary shall be added or subtracted only to the extent
and in the same proportions that (a) the net income of such
Subsidiary was included in the calculation of Consolidated
Net Income, if such Subsidiary is not a Wholly-Owned
Subsidiary and (b) the Consolidated EBITDA of such
Subsidiary (calculated as if such Subsidiary were the
"Borrower") is permitted to be paid or distributed as a
dividend, advance, loan or other distribution to the
Borrower.
"Consolidated Net Income" means, with reference to any
period, the net income (or loss) of the Borrower and its
Subsidiaries calculated on a consolidated basis for such
period, provided that Consolidated Net Income shall exclude
the net income, if positive, of any of the Borrower's
consolidated Subsidiaries to the extent that the declaration
or payment of dividends of similar distributions is not at
the time permitted by operation of the terms of its charter
or by-laws or any other agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation
applicable to such Subsidiary.
"Description of Notes" means the Description of Notes
attached hereto as Exhibit D, provided that the amount "$155
million" in clause (3) of the description of "Limitation on
Incurrence of Additional Indebtedness and Disqualified
Capital Stock" in such Description
of Notes shall be deleted
and the amount "$180 million" substituted therefor.
"Financing" means, with respect to any Person, the
issuance or sale by such Person of any Equity Interests of
such Person or any Indebtedness consisting of debt
securities of such Person pursuant to a registered offering
or private placement, but excluding the issuance or sale of
(i) any Indebtedness permitted to be incurred pursuant to
Section 6.11, including, without limitation, the
Subordinated Indebtedness, except that the first $20,000,000
of Permitted Subordinated Indebtedness incurred in excess of
the amount required to refinance the New Bridge Loan shall
be deemed to be a Financing, (ii) Equity Interests by the
Borrower to the extent that the proceeds thereof are used to
refinance the New Bridge Loan in its entirety, (iii) Equity
Interests by the Borrower to any officer, director or
employee of the Borrower or any of its Subsidiaries pursuant
to any incentive compensation plan or program and (iv)
Equity Interests or Indebtedness by any Subsidiary of the
Borrower to the Borrower or any Wholly-Owned Subsidiary of
the Borrower.
"Permitted Subordinated Indebtedness" means
Indebtedness of the Borrower, the payment of which is
subordinated to payment of the Secured Obligations and all
of the terms and conditions of which are reasonably
acceptable to the Agent and the Required Lenders, issued in
an aggregate principal amount not to exceed $150,000,000,
the proceeds of which are used, in whole or in part, to
refinance the New Bridge Loan in its entirety; provided that
terms and conditions substantially similar to those
contained in the Description of Notes shall be deemed to be
reasonably acceptable.
"Subordinated Indebtedness" means the Bridge Loan, the
New Bridge Loan and the Permitted Subordinated Indebtedness.
(c) Section 6.1 of the Credit Agreement is amended by
deleting the figure "100" in Section 6.1(i) and substituting
the figure "90" therefor, by deleting the figure "60" in
Section 6.1(ii) and substituting the figure "45" therefor,
and by deleting the phrase "Together with the financial
statements required under Sections 6.1(i) and (ii)," in
Section 6.1(iv) and substituting the following phrase
therefor:
Within 10 days after the delivery of the financial
statements required under Section 6.1(i) and within 15 days
after the delivery of the financial statements required
under Section 6.1(ii),
(d) Section 6.21 of the Credit Agreement is amended by
deleting the term "Bridge Loan Agreement" both places it
appears in clause (i) thereof and substituting the term "New
Bridge Loan Agreement" therefor and by deleting the term
"Bridge Loan" in clause (ii) thereof and substituting the
term "New Bridge Loan" therefor.
(e) Section 6.22 of the Credit Agreement is amended by
adding to the last sentence thereof after the phrase "the
Bridge Loan" the phrase "and the New Bridge Loan".
(f) Section 7.5 of the Credit Agreement is amended by
amending and restating the parenthetical phrase in the third
clause thereof in its entirety to read as follows:
(other than by a regularly scheduled payment and other than
in connection with the refinancing of the Bridge Loan with
the proceeds of the New Bridge Loan and the refinancing of
the New Bridge Loan with the proceeds of Permitted
Subordinated Indebtedness or Equity Interests of the
Borrower)
(g) The Credit Agreement is amended by adding a new Exhibit
D thereto in the form of Exhibit D attached to this
Amendment.
3. Consent. The Lenders hereby consent to the terms of
the Senior Subordinated Credit Agreement dated as of January 31,
2000 among the Borrower, the lenders named therein and UBS AG,
Stamford Branch, as agent for such lenders (the "New Bridge Loan
Agreement"), provided that such terms are substantially the same
as those contained in the draft dated January 26, 2000 (12:50
P.M.) of such Senior Subordinated Credit Agreement furnished to
the Lenders, and consent to the refinancing of the Bridge Loan
with the proceeds of the loans made pursuant to the New Bridge
Loan Agreement.
4. Conditions of Effectiveness. This Amendment shall
become effective and be deemed effective as of the date hereof
(the "Effective Date") if, and only if, the Agent shall have
received duly executed originals of this Amendment from the
Borrower and the Required Lenders.
5. Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Lenders that, as of the
Effective Date:
(a) there exists no Default or Unmatured Default; and
(b) the representations and warranties contained in
Article V of the Credit Agreement are true and correct as of
the Effective Date except to the extent any such
representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty
was true and correct on and as of such earlier date.
6. Reference to and Effect on the Credit Agreement.
6.1 Upon the effectiveness of this Amendment pursuant to
Section 4 hereof, on and after the Effective Date each reference
in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import and each reference to
the Credit Agreement in each Loan Document shall mean and be a
reference to the Credit Agreement as modified hereby.
6.2 Except as specifically waived or amended herein, all of
the terms, conditions and covenants of the Credit Agreement and
the other Loan Documents shall remain in full force and effect
and are hereby ratified and confirmed.
6.3 The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate
as a waiver of (a) any right, power or remedy of any Lender or
the Agent under the Credit Agreement or any of the Loan
Documents, or (b) any Default or Unmatured Default under the
Credit Agreement.
7. CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET
SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
8. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed shall be
deemed an original and all of which taken together shall
constitute one and the same agreement.
9. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
[Signature Pages Follow]
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders
have executed this Amendment No. 1 as of the date first above
written.
BIO-RAD LABORATORIES, INC.
By: /s/ Ronald W. Hutton
Name: Ronald W. Hutton
Title: Treasurer
BANK ONE, NA, as a Lender and as Agent
By: /s/ Kandis A. Jaffrey
Name: Kandis A. Jaffrey
Title: Vice President
ABN AMRO BANK N.V., as a Lender
By: /s/ Amanda C. Cox
Name: Amanda C. Cox
Title: Vice President
By: /s/ Gina M. Brusatori
Name: Gina M. Brusatori
Title: Group Vice President
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: /s/ Michael E. Cooper
Name: Michael E. Cooper
Title: Vice President
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/ M. Van Otterloo
Name: M. Van Otterloo
Title: Managing Director, Corporate
BANQUE NATIONALE DE PARIS,
as a Lender
By: /s/ Debra Wright
Name: Debra Wright
Title:Vice President
By: /s/ Sandra Bertram
Name: Sandra Bertram
Title:Assistant Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
INTERNATIONAL", NEW YORK BRANCH,
as a Lender
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
WELLS FARGO BANK,
as a Lender
By: /s/ Brian S. O'Melveny
Name: Brian S. O'Melveny
Title: Vice President
COMERICA BANK-CALIFORNIA,
as a Lender
By: /s/ R. Michael Law
Name: R. Michael Law
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ Robert Ivosevich
Name: Robert Ivosevich
Title: Senior Vice President
LLOYDS TSB BANK PLC, as a Lender
By:/s/ Ian Dimmock
Name: Ian Dimmock
Title: Vice President
By: /s/ Daivd Rodway
Name: David Rodway
Title: Assistant Director
THE NORTHERN TRUST COMPANY,
as a Lender
By: /s/ Candelario Martinez
Name: Candelario Martinez
Title: Vice President
U.S. BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Meredith N. Davis
Name: Meredith N. Davis
Title:Assistant Vice President