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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number 001-10109
BECKMAN INSTRUMENTS, INC.
2500 Harbor Boulevard, Fullerton, California 92834
(714) 871-4848 (Principal Executive Offices)
State of Incorporation: Delaware
I.R.S. Employer Identification No.: 95-104-0600
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Common Stock, $.10 par value
Name of each exchange on which registered: New York Stock Exchange
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 the
Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates of
the registrant as of January 31, 1997: $1,143,263,549.
Common Stock, $.10 par value, outstanding as of January 31, 1997:
28,943,381 shares.
Documents incorporated by reference in this report:
Documents incorporated Form 10-K part number
Annual Report to stockholders for
the fiscal year ended December 31, 1996 Part I and Part II
Proxy Statement for the 1997 Annual
Meeting of Stockholders to be held on
April 3, 1997 Part III
BECKMAN INSTRUMENTS, INC.
PART I
Item 1. Business
Beckman Instruments, Inc. ("Beckman" or "the Company") is
one of the world's leading manufacturers of instrument systems
and test kits that make laboratories more efficient by
simplifying and automating chemistry and biology based analytical
procedures. The Company designs, manufactures, markets and
services a broad range of laboratory instrument systems, reagents
and related products, which customers typically use to conduct
basic scientific research, new product research and development
or diagnostic analysis of patient samples. In 1996 approximately
63 percent of total sales were for diagnostic applications,
principally in hospital laboratories, while approximately 37
percent of sales were for life science applications in
universities, medical schools and research institutes, or new
product research and development in pharmaceutical and
biotechnology companies. Approximately 50% of reported sales
were to customers outside the United States.
Background
The Company was founded in 1934 by Dr. Arnold O. Beckman to
manufacture analytical instruments and became a publicly traded
corporation in 1952, subsequently being listed on the New York
Stock Exchange in 1955. In 1968 the Company expanded its
laboratory instrument focus to include health care applications
in clinical diagnostics. Beckman was acquired by SmithKline
Corporation to form SmithKline Beckman Corporation ("SmithKline
Beckman") in 1982, and the Company was operated as a subsidiary
of SmithKline Beckman until 1989 when it was divested as part of
a transaction involving the merger of SmithKline Beckman and
Beecham Group p.l.c. ("Beecham"). Since that time Beckman has
operated as a fully independent publicly owned company.
Simplification and Automation of Laboratory Processes
The Company's primary expertise and activity is the
integration of chemical, biological, engineering and software
sciences into complete systems that simplify and automate
biologically focused laboratory processes and the distribution
and support of those systems around the world. These laboratory
processes can generally be grouped into four categories:
Synthesis and Sample Preparation/Handling -
Synthesizing compounds useful in subsequent analysis
and scientific investigation or placing material into a
proper container, with necessary pretreatment,
dilution, measurement, weighing and identification.
Separation - Isolating materials of interest from
extraneous material or separating mixtures into
individual constituents, often in preparation for
subsequent processing and measurement.
Detection, Measurement and Characterization -
Determining the identity, structure, or quantity of
specific analytes (compounds or molecules of interest)
present in sample specimens.
Data Processing - Acquiring, reporting, analyzing,
archiving or calculating the results of laboratory
analysis.
Beckman's experience, knowledge and ability in simplifying
and automating these processes for biological laboratories forms
a technological continuum that extends across the Company. From
this common technical base comes a range of products that are
configured to meet specific needs of academic research,
pharmaceutical and biotechnology companies, hospitals,
physicians' offices and reference laboratories (large central
laboratories to which hospitals and physicians refer specialized
tests). By serving several customer groups with differing needs
related through common science, the Company has the opportunity
to broadly apply its technology.
There is a corresponding scientific and technical continuum
reflected in customer laboratories. Virtually all new analytical
methods and tests originate in academic research in universities
and medical schools. If the utility of a new method or test is
demonstrated by fundamental research, it often will then be used
by pharmaceutical investigators, biotechnology companies,
teaching hospitals or specialized clinical laboratories in an
investigatory mode. In some cases these new techniques
eventually emerge in routine, high volume clinical testing at
hospitals and reference labs. Generally instruments used at each
stage from research to routine clinical applications employ the
same fundamental processes but may differ in operating features
such as number of tests performed per hour and degree of
automation.
Markets
Beckman's products facilitate a wide range of laboratory
processes in facilities concerned with cells, sub-cellular
particles, biochemical compounds and analysis of patient samples.
In 1996 the worldwide market for the types of products the
Company provides was about $6 billion. Slightly over one-half of
this market was in clinical diagnostic applications, with the
remaining portion of the market in more general purpose life
science applications. Other similar or related product
categories not currently offered by the Company represent an
additional market potential which is estimated to be
approximately $10 billion. The size and growth of markets for
the Company's products are influenced by technological innovation
in bioanalytical practice, government funding for basic and
disease related research (for example, heart disease, AIDS and
cancer), research and development spending by biotechnology and
pharmaceutical companies, health care spending and physician
practice.
Products
The Company offers a wide range of instrument systems and
related products, including consumables, accessories, and support
services, which can be grouped into categories by type of
laboratory process or application:
Synthesis and Sample Preparation/Handling
Separation Processes
Detection, Measurement and Characterization
Data Processing
Automated General Chemistry for Clinical Diagnostics
Special Chemistry Applications for Clinical Diagnostics
PRODUCT SALES AS A PERCENT OF TOTAL PRODUCT SALES
FOR CATEGORIES REPRESENTING
MORE THAN 10 PERCENT OF SALES
1996 1995 1994
---- ---- ----
Separation Processes 22 26 28
Automated General Chemistry
for Clinical Diagnostics 38 41 40
Special Chemistry Applications
for Clinical Diagnostics 25 19 20
Synthesis and Sample Preparation/Handling
DNA Synthesizers
DNA synthesizers automate the process of making synthetic
oligonucleotides from organic chemicals. The Beckman Oligo
Series 1000 DNA Synthesizers include a single user one-column
system and a multi-user eight column system. Both systems reduce
the time required for synthesis and inform the user of synthesis
progress by providing reaction and reagents status throughout the
process. In 1995 the Company introduced its UltraFAST synthesis
chemistry in a packaging which is also compatible with certain
competitive DNA synthesizers. Oligo systems sell in the $18,000
to $30,000 price range.
Biorobotic Workstations
The Biomek(R) automated laboratory workstations perform
complex operations involving liquids, including dispensing
measured samples, adding reagents, diluting, mixing and
transferring small volumes between reaction vessels. The
workstations handle multiple samples in parallel and may be
equipped with a photometer for detection purposes. The second
generation Biomek 2000 workstation includes an easy-to-use
Windows*-based BioWorks(TM) operating system that can be easily
programmed to automate complex and repetitive tasks, including
sample preparation for DNA sequencing and automated screening of
chemical libraries for new pharmaceutical drugs. Several new
applications and tools were added to the Biomek during 1996,
including a kit to produce samples of pure DNA from plasmids and
a high density replication tool to speed up certain processes by
using new 384-well microtitre plates. Biomek systems range in
price from $40,000 to over $80,000. (*Windows is a trademark of
Microsoft Corporation.)
In December 1996 the Company acquired the laboratory
robotics division of Sagian Inc. of Indianapolis, Indiana. By
combining Sagian's scheduling software and robotics with its own
biorobotics systems, the Company enhanced its ability to serve
the pharmaceutical industry's need for high-throughput screening
(HTS) of candidate compounds for new drugs. Such systems
typically sell for $200,000 to $400,000.
Separation Processes
Centrifuges
Centrifuges separate liquid sample mixtures on the basis of
density (weight per unit volume) differences between the
mixture's components. Samples are put into tubes which are
placed in rotors and spun at speeds varying from a few thousand
to 120,000 revolutions per minute ("rpm"). The resulting
centrifugal forces, which can exceed 800,000 times the force of
gravity, cause sample components to separate according to their
density.
Centrifuges are used for the nondestructive separation of
protein and DNA fractions, cellular components and other
materials of interest in modern biology and biotechnology. In
addition to efficiency (low power consumption), reliability and
an environmentally friendly design (e.g., without freon) on many
models, Beckman centrifuges are distinguished from those of
competitors by the wide variety of unique rotor, tube and adapter
designs available to meet the precise needs of customer
applications, including the separation of blood cells from serum,
an important use in clinical diagnostic laboratories.
Beckman manufactures a broad line of centrifuges with
varying speed characteristics ranging from "low speed" (few
thousand rpm) to "high speed" (10,000 to 35,000 rpm) to
"ultracentrifuges" (35,000 to 120,000 rpm) and sample capacities
ranging from microliters (one millionth of a liter) to liters.
The Avanti(R) family of centrifuges being introduced by the
Company provides a revolutionary high-torque drive system which
accelerates and brakes in half the time of conventional high-
speed drives, thereby significantly reducing the time required to
process typical samples. Prices of the Company's centrifuges
vary from about $2,000 for a small low speed centrifuge to over
$50,000 for an ultracentrifuge and over $100,000 for an
analytical ultracentrifuge.
High Performance Liquid Chromatographs ("HPLC")
HPLC systems rely upon the difference in the rates of
passage of the components in a chemical mixture through a tubular
column filled with chemically active material. HPLC systems are
powerful separation devices for biologically active compounds,
since they are generally non-destructive, sensitive and capable
of resolving very complex mixtures of similar compounds. The
System Gold(R) Nouveau HPLC manufactured by Beckman is designed
to address the needs of the pharmaceutical, biotechnology, food,
beverage and agricultural industries as well as those of life
science researchers in academia. The system is modular, allowing
it to be configured for a wide range of applications. Beckman's
HPLC systems typically sell for $20,000 to $50,000.
Electrophoresis
Electrophoresis systems separate mixtures of proteins, DNA,
and other molecules principally on the basis of differences in
mass and electrical charge. The P/ACE(TM) capillary
electrophoresis product line represents a powerful extension of
electrophoresis technology by combining the discrimination power
of traditional electrophoresis with the speed of HPLC. With
several detection options, the result is an automated system for
high speed, high sensitivity separation of a wide variety of
compounds. In 1995 a new laser source for fluorescence detection
and several new chemistry kits were introduced by the Company to
expand the range of applications for capillary electrophoresis in
DNA, protein and pharmaceutical analysis. P/ACE systems typically
sell for $40,000 to $60,000.
Protein Sequencers
Beckman manufactures and sells protein sequencer systems and
related chemicals. Protein sequencing is used to determine the
primary structure, i.e., the amino acid sequence, of a protein.
Protein sequencer systems sell in the range of $90,000 to
$130,000.
Protein Separation and DNA Sequencing
In 1995 the Company formed a marketing and service alliance
with BioSepra Inc. (BioSepra), a biochromatography systems
manufacturer, which expands the Company's biotechnology product
line with systems that provide high speed, high resolution
separation of biomolecules. To further broaden these product
lines, in October 1996 the Company completed its acquisition of
Genomyx Corporation of Foster City, California. Genomyx is a
developer and manufacturer of advanced DNA sequencing products
and is expected to complement the Company's biotechnology
business.
Detection and Measurement
Spectrophotometer Systems
Spectrophotometers detect and measure the presence of
compounds in liquid mixtures by sensing the absorption of
specific wavelengths of light as that light passes through the
sample. Some Beckman spectrophotometers have the capability of
measuring changes in absorption during biological reactions.
These spectrophotometers, in conjunction with Beckman software,
automatically control the time, temperature and wavelength of the
measurement while computing and recording the results of the
experiment. In 1995, the DU(R) 640B, a flexible and affordable
bio-spectrophotometer system, was introduced to address the
specific needs in molecular biology laboratories and
biotechnology companies. Depending on the specific model,
accessories or software, Beckman spectrophotometers sell in the
$9,000 to $25,000 range.
Nuclear Counters
Radioactive "labeling," which is the substitution or
addition of a radioactive atom into a compound of interest, is a
powerful and accepted method for tracing the path of a
biochemical in a living system. A labeled compound which is fed
to or injected into a test animal or plant can then be traced to
specific tissue or waste product by detecting the presence of the
radioactive label by scintillation counting. Beckman
manufactures scintillation counters that incorporate
sophisticated software and system features that combine accurate
measurement with user convenience. The systems sell in the
$16,000 to $30,000 range.
Data Processing
In addition to the software associated directly with
Beckman's instrument systems, the Company produces computer
software programs to aid in the data processing functions of
analytical laboratories. These systems control laboratory
instruments, direct data acquisition from the instruments, and
compute, store and report the results in formats needed for
internal purposes and satisfaction of regulatory requirements.
Beckman's data management systems are characterized by several
features, including the capability to operate on a variety of
manufacturers' computers and applications flexibility which lets
customers configure the system to meet their individual needs.
These systems vary greatly in cost depending upon the customer's
requirements, but typically range from $50,000 to $250,000.
Automated General Chemistry for Clinical Diagnostics
Automated general chemistry systems automatically detect and
quantify various chemical substances of clinical interest
(analytes) in human blood, urine and other body fluids. Beckman
offers several general chemistry systems with a range of
capabilities to meet specific customer requirements, principally
for use in medium to large hospital laboratories, but also with
some application in reference laboratories.
SYNCHRON(R) Systems
The Company's SYNCHRON(R) line of automated general
chemistry systems is a family of modular automated diagnostic
instruments and the reagents, standards and other consumable
products required to perform commonly requested diagnostic tests.
The SYNCHRON line was developed in response to changes in
reimbursement policies for hospital and clinical laboratories
that required them to be more efficient. The SYNCHRON systems
have been designed as compatible modules which may be used
independently or in various combinations with each other to meet
the specific needs of individual customers.
The smallest of these modules, the SYNCHRON CX(R)3 analyzer,
determines the concentration of eight of the most commonly
measured analytes. The SYNCHRON CX3 DELTA, introduced in 1994, is
an extension of the original CX(R)3 that adds computer enhanced
software features, including positive sample identification and
up to nine "on-board" chemistries.
The SYNCHRON CX4CE, CX5CE, and CX7 are computer enhanced
models offering bi-directional communications with laboratory
information systems. The SYNCHRON series was further extended in
1995 by the introduction of the SYNCHRON CX4 DELTA, CX5 DELTA and
CX7 DELTA. These models offer industry leading, innovative
software features to enhance laboratory productivity and a menu
of over 65 different types of tests. The extensive menu includes
immunoproteins, therapeutic drugs, drugs of abuse, and a complete
listing of general chemistries. SYNCHRON systems range in price
from $49,000 to $185,000 and are sold principally based on their
ability to improve laboratory efficiency.
Other Automated Clinical Chemistry Products
The Company has a stand alone electrolyte analyzer, the
SYNCHRON EL-ISE(R), that provides automated analysis of patient
electrolyte concentrations such as sodium, potassium, chloride,
calcium and lithium. Beckman also offers a family of low cost
instruments that perform glucose, blood urea nitrogen or
creatinine analysis.
Special Chemistry Applications For Clinical Diagnostics
Immunochemistry Systems
The IMMAGE(TM) immunochemistry system, introduced at the
1996 International MEDICA Trade Show, represents an improved
technology, high throughput analyzer for specific proteins,
various immunologic markers and therapeutic drugs. This system
provides automated random access testing which allows the
operator to mix samples at random, eliminating the need to
analyze in batches. The system is expected to sell for $70,000
to $90,000.
The IMMAGE(TM) system builds on the extensive installed base
of our current immunochemistry analyzer, the ARRAY(R) 360 protein
and therapeutic drug monitoring system. The ARRAY 360 was the
world's first computer enhanced, positive sample identification,
bi-directional immunochemistry analyzer for determination of
specific proteins and therapeutic drugs.
In January 1996, the Company acquired Hybritech Incorporated
("Hybritech"), a San Diego based life sciences and diagnostics
company. The acquisition expanded the Company's capabilities for
the development and manufacture of high sensitivity immunoassays,
including cancer tests. Chief among these products is a test for
prostate specific antigen (PSA), utilized as an aid in the
detection (in conjunction with digital rectal examination) and
monitoring of prostate cancer. Currently this is the only FDA
approved test for such detection. Additionally, during 1996 the
Company obtained clearance to use its Ostase(R) assay for the
management of postmenopausal osteoporosis, making it the first
blood test cleared for such use.
Electrophoresis For Clinical Diagnostics
The Appraise(R) densitometer and the Paragon(R)
Electrophoresis Systems allow the Company to offer a full range
of electrophoresis products that provide specialized protein
analysis for clinical laboratories. Paragon reagent kits are
used in the diagnosis of diabetes, cardiac, liver and other
diseases. The Appraise densitometer can be used in conjunction
with Paragon kits. It ranges in price from $17,000 to $24,000.
In 1995 the Company introduced the first capillary
electrophoresis system specifically designed for the clinical
laboratory, the Paragon CZE(TM) 2000. This system is designed to
fully automate the manual and somewhat tedious conventional
electrophoresis analysis of serum protein electrophoresis (SPE)
and immunofixation electrophoresis (IFE). Positioned to
complement the Paragon gels and the Appraise, the Paragon CZE
2000 is targeted at high volume electrophoresis labs worldwide.
Point of Care - Rapid Test Products
The Company also produces single use self-contained
diagnostic test kits for use in physicians' offices, clinics,
hospitals and other medical settings. The Hemoccult(R) product
line is used as an aid in screening for gastrointestinal disease,
most importantly colorectal cancer. In 1994 the Company
introduced the FlexSure(R) HP test kit, a test used as an aid in
the diagnosis of H.pylori infection which is associated with
several gastrointestinal diseases, including peptic ulcers and
gastric cancer. A convenient whole blood version of the
FlexSure(R) HP was launched in 1996. Under terms of a 1995
agreement, Abbott Laboratories began worldwide marketing and
distribution of the H.pylori test manufactured by the Company
under the name FlexPack HP. In addition, through its Hybritech
subsidiary, the Company markets the ICON(R) test kits featuring a
high sensitivity pregnancy test widely used by health care
practitioners.
Competition
The markets for the Company's products are highly
competitive, with many companies participating in one or more
portions of the market. Competitors in the clinical laboratory
market include Bayer Diagnostics, Dade International, Inc.,
Hitachi LTD./Boehringer Mannheim GmbH collaboration, Hoechst
Corporation (Behring Diagnostics Division), Johnson & Johnson and
Abbott Laboratories. Competitors focused more directly on life
sciences include Amersham International plc, Bio-Rad
Laboratories, Inc., The Perkin-Elmer Corporation, Pharmacia
Biotech AB, and Sorvall Products LP. Competitors include
divisions or subsidiaries of corporations with substantial
resources. In addition, the Company competes with several
companies that sell reagents for laboratory instruments that are
manufactured by Beckman and others.
The Company competes primarily on the basis of improved
laboratory productivity, product quality, product bundling to
meet multiple instrument needs, and technology, service and
price. Discounting is used as a competitive tool when necessary.
Management believes that its extensive installed instrument base
provides the Company with a competitive advantage in obtaining
both instrument and after-market follow-on business.
Research and Development
The Company's new products originate from four sources:
internal research and development ("R&D") programs; external
collaborative efforts with individuals in academic institutions
and technology companies; devices or techniques that are
generated in customers' laboratories; and business acquisitions.
The Company's R&D teams are skilled in optics, chemistry,
electronics, software, mechanical and other engineering
disciplines, in addition to a broad range of biological and
chemical sciences. Research studies are usually conducted in
conjunction with individuals in academic institutions or other
outside scientists. Development programs focus on production of
new generations of existing product lines, such as the
SYNCHRON(R) analyzers, as well as new product categories not
currently offered by the Company. Other areas of pursuit include
innovative approaches to immunochemistry, molecular biology,
advanced electrophoresis technologies, automated sample
processing and information technologies
The Company's R&D expenditures for fiscal years 1996, 1995,
and 1994 were $108.4 million, $91.7 million and $91.5 million,
respectively. Management intends to maintain the level of the
Company's R&D spending in approximately the same relative range
of investment.
Sales and Service
The Company has sales in over 120 countries and maintains
its own marketing, service and sales forces throughout the world.
While nearly all of the Company's products are distributed by
Beckman sales groups, the Company employs independent
distributors to serve those markets that are more efficiently
reached through such channels.
Beckman's sales force is technically educated and trained in
the operation and application of the Company's products. The
sales force is supported by a staff of scientists and technical
specialists in each product line and in each major scientific
discipline served by the Company's products.
In addition to direct sales of its instruments, the Company
leases certain instruments to its customers, principally those
used for clinical diagnostic applications in hospitals. Beckman
provides accessory products, consumables and service for its
instruments worldwide. Service offices and inventory depots are
associated with sales offices, subsidiaries and dealer locations.
The Company considers its reputation for service responsiveness
and competence to be an important competitive asset.
Patents and Trademarks
To complement and protect the innovations created by the
Company's R&D efforts, the Company has an active patent
protection program which includes more than 500 active U.S.
patents and patent applications. The Company also files
important corresponding applications in principal foreign
countries. The Company has taken an aggressive posture in
protecting its patent rights; however, no one patent is
considered essential to the success of the business.
The Company's primary trademark is "Beckman", with the trade
name also being Beckman or Beckman Instruments, Inc. The Company
vigorously protects its primary trademark, which is used on the
Company's products and is recognized throughout the worldwide
scientific and diagnostic community. The Company owns and uses
secondary trademarks on various products, but none of these
secondary trademarks is considered of primary importance to the
business.
Government Regulations
Certain of the Company's products are subject to regulations
of the U.S. Food and Drug Administration (the "FDA") which
require such products to be manufactured in accordance with "good
manufacturing practices". Such laws and regulations also require
that such products be safe and effective and that the labeling of
those products conform with specific requirements. Testing is
conducted to demonstrate performance claims and to provide other
necessary assurances. Clinical systems and reagents must be
reviewed by the FDA before sale and, in some instances, are
subject to product standards, other special controls or a formal
FDA premarket approval process. New federal regulations under
the Clinical Laboratory Improvement Amendments of 1988 will, when
fully implemented, require regulatory review and approval of
quality assurance protocols for the Company's clinical reagent
products. While adding to the overall regulatory review process,
this is not expected to materially affect the sale of the
Company's products. Certain of the Company's products are
subject to comparable regulations in other countries as well.
In 1993 the member states of the European Union (EU) began
implementation of their plan for a new unified EU market with
reduced trade barriers and harmonized regulations. The EU
adopted a significant international quality standard, the
International Organization for Standardization Series 9000
Quality Standards ("ISO 9000"). The Company's manufacturing
operations in its Brea, Carlsbad, Fullerton, Palo Alto and
Porterville, California; Allendale, New Jersey; Sharon Hill,
Pennsylvania; Naguabo, Puerto Rico and Galway, Ireland facilities
have been certified as complying with the requirements of ISO
9000. Many of the Company's international sales and service
subsidiaries have also been certified, including those located in
Australia, Austria, Canada, France, Germany, Italy, The
Netherlands, Poland, Singapore, South Africa, Spain, Sweden,
Switzerland and the United Kingdom.
The design of the Company's products and the potential
market for their use may be directly or indirectly affected by
U.S. and foreign regulations concerning reimbursement for
clinical testing services. The configuration of new products,
such as the SYNCHRON(R) series of clinical analyzers, reflects
the Company's response to the changes in hospital capital
spending patterns such as those engendered by the Medicare
Diagnostic Related Groups ("DRGs"). Under the DRG system, a
hospital is reimbursed a fixed sum for the services rendered in
treating a patient, regardless of the actual cost of the services
provided.
Medicare reimbursement of inpatient capital costs incurred
by a hospital (to the extent of Medicare utilization) is in a 10-
year transition period begun in 1991 from the "capital cost pass-
through" payment methodology to a "prospective DRG based capital"
payment methodology. To date, the Company has not experienced,
and does not expect to experience in the future, any material
financial impact from the change in Medicare's payment for
inpatient capital costs.
The current health care reform efforts in the United States
and in some foreign countries are expected to further alter the
methods and financial aspects of doing business in the health
care field. The Company is closely following these developments
so that it may position itself to take advantage of them.
However, the Company cannot predict the effect on its business of
these reforms should they occur nor of any other future
government regulation.
Environmental Matters
The Company is subject to federal, state, local and foreign
environmental laws and regulations. The Company believes that
its operations comply in all material respects with applicable
federal, state, and local environmental laws and regulations.
Although the Company continues to make expenditures for
environmental protection, it does not anticipate any significant
expenditures in order to comply with such laws and regulations
which would have a material impact on the Company's operations or
financial position.
In 1983 the Company discovered organic chemicals in the
groundwater near a waste storage pond at a Company facility in
Porterville, California. SmithKline Beckman, the Company's
former controlling stockholder, agreed to indemnify the Company
with respect to this matter for any costs incurred by the Company
in excess of applicable insurance, eliminating any impact on the
Company's earnings or financial position. SmithKline Beecham
p.l.c., the surviving entity of the 1989 merger between
SmithKline Beckman and Beecham, assumed the obligations of
SmithKline Beckman in this respect.
In 1987 soil and groundwater contamination was discovered on
property in Irvine, California (the "property") formerly owned by
the Company. In 1988 The Prudential Insurance Company of America
("Prudential"), which purchased the property from the Company,
filed suit against the Company in U.S. District Court in
California for recovery of costs and other alleged damages with
respect to the soil and groundwater contamination. In 1990 the
Company entered into an agreement with Prudential for settlement
of the lawsuit and for sharing current and future costs of
investigation, remediation and other claims.
Soil and groundwater remediation have been in process since
1988. During 1994 the County formally acknowledged completion of
remediation of a major portion of the soil, although there remain
other areas of soil contamination that may require further
remediation. The Company and Prudential continued to operate a
groundwater treatment system throughout 1996.
Investigations on the property are continuing and there can
be no assurance that further investigation will not reveal
additional contamination or result in additional costs. The
Company believes that additional remediation costs, if any,
beyond those already provided for the contamination discovered by
the current investigations will not have a material adverse
effect on the Company's operations or financial position.
Employee Relations
The Company and its subsidiaries presently employ
approximately 6,100 persons throughout the world, including
approximately 4,500 in the United States. The Company considers
that its relations with its employees are generally good.
Geographic Area Information
Information with respect to the above-captioned item is
incorporated by reference to Note 11 Business Segment Information
of the Consolidated Financial Statements of the Company's Annual
Report to Stockholders for the year ended December 31, 1996.
Item 2. Properties
The Company's primary instrument assembly and manufacturing
facilities are located in Fullerton, Brea, and Palo Alto,
California. Component manufacturing support facilities for parts
and electronic subassemblies are located in Fullerton and
Porterville, California. An additional manufacturing facility is
located in Galway, Ireland. Reagents are manufactured in
Carlsbad, San Diego and Palo Alto, California, Naguabo, Puerto
Rico, and Galway, Ireland. The Company's computer software
products business is located in Allendale, New Jersey. The
Company's facility for the production of Hemoccult(R) test kits
and related products is located in Sharon Hill, Pennsylvania. A
portion of the Company's laboratory robotics operations (Sagian)
are conducted in leased facilities in Indianapolis, Indiana and
some of its DNA sequencing activities are performed in leased
facilities in Foster City, California.
All U.S. manufacturing facilities, including land and
buildings, are owned by the Company with the exception of
Allendale, Foster City, Indianapolis, San Diego and Sharon Hill
which are leased facilities, and Palo Alto, where the Company has
built and owns its buildings on a long-term land lease expiring
in 2054. All manufacturing facilities outside the U.S. are leased.
The component production facilities for the Company also include
plastics molding and machine shop capabilities in Fullerton to
serve the entire Company. This facility, in conjunction with
electronic subassembly work done in Porterville, supplies the
primary parts and subassemblies for the instrument systems to the
various instrument assembly locations in California. The
Company's principal distribution locations are in Brea and
Fullerton, California, Somerset, New Jersey, Frankfurt, Germany
and Paris, France. In 1994 the Company established a European
Administration Center at a facility in Nyon, Switzerland.
The Company believes that its production facilities meet
applicable government environmental, health and safety
regulations, and industry standards for maintenance, and that its
facilities in general are adequate for its current business.
Item 3. Legal Proceedings
As previously reported, in 1995 a lawsuit was filed against
the Company in the Superior Court of Orange County, California by
two of its former employees alleging breach of contract relating
to the commercial development of certain technology (Cercek v.
Beckman Instruments, Inc.). The plaintiffs seek monetary damages
of not less than $150 million. The Company believes that the
plaintiffs' claims are without merit and that the Company has
good and sufficient defenses to each such claim. The Company has
retained counsel to defend it and discovery is in progress. The
Company does not believe that any liability resulting from this
lawsuit will have a material adverse effect on its operations or
financial position.
Through its Hybritech acquisition the Company obtained a
patent, referred to as the Tandem Patent, that generates
significant royalty income. The Tandem Patent is involved in an
interference action in the U.S. Patent and Trademark Office with
a patent application owned by La Jolla Cancer Research Foundation
(the "Foundation"). If the Foundation wins the interference, the
Company would lose the Tandem Patent and the royalty income, and
a new patent would issue to the Foundation covering those
products. The Company believes it has the stronger case and will
prevail and does not expect this matter to have a material
adverse effect on its operations or financial position.
As previously reported, in 1991 Forest City Properties
Corporation and F.C. Irvine, Inc. (collectively, "Forest City"),
current owners and developers of a portion of the same real
property in Irvine referred to under the caption "Environmental
Matters" herein, filed suit against Prudential in the California
Superior Court for the County of Los Angeles, alleging breach of
contract and damages caused by the pollution of the property.
Forest City originally sought damages of more than $20 million
but subsequently increased its demand to $40 million. Forest
City also seeks additional remediation of the property. Although
the Company is not a named defendant in the Forest City action,
it is obligated to contribute to any resolution of that action
pursuant to the Company's 1990 settlement agreement with
Prudential. See "Environmental Matters" herein.
The trial of this matter was conducted in 1995, resulting in
a jury verdict in favor of Prudential. The Court subsequently
granted Forest City's motion for a new trial which Prudential has
appealed. The appeal is not expected to be heard for some time
because of the appellate court's backlog. Although the outcome
of this litigation cannot be predicted with certainty, the
Company believes that any additional liability beyond that
provided for will not have a material adverse effect on the
Company's operations or financial position.
As previously reported, since 1992 five toxic tort lawsuits(*)
have been filed in Maricopa County Superior Court, Arizona by a
number of residents of the Phoenix/Scottsdale area against the
Company (relating to a former Company manufacturing site) and a
number of other defendants, including Motorola, Inc., Siemens
Corporation, the cities of Phoenix and Scottsdale, and others.
The Company is indemnified by SmithKline Beecham p.l.c., the
successor of its former controlling stockholder, for any costs
incurred in these matters in excess of applicable insurance, and
thus the outcome of these litigations, even if unfavorable to the
Company, should have no material effect on the Company's
operations or financial position. These suits are currently in
the discovery phase. Preliminary settlement overtures were
received from the plaintiffs in 1996 but the parties remain far
apart.
(* Baker v. Motorola, Inc. et al (filed February 1992), Lofgren v.
Motorola, Inc. et al (filed April 1993), Betancourt v. Motorola, Inc.
et al (filed July 1993), Ford v. Motorola, Inc. et al (filed June
1994), and Wilkins v. Motorola, Inc., et. al. (filed July 1995).)
As previously reported, the public prosecutor in Palermo
(Sicily), Italy is investigating the activities of officials at a
local government hospital and laboratory as well as
representatives of the principal worldwide companies marketing
diagnostic equipment in Palermo, including the Company's Italian
subsidiary (the "Subsidiary"). The inquiry focuses on past
leasing practices for placement of diagnostic equipment which
were common industry-wide practices throughout Italy, but now are
alleged to be improper.
The Company believes the prosecutor's evidence is weak and
insufficient to support a criminal conviction against certain
identified employees (the Subsidiary is not a defendant). The
Court has appointed economic experts to evaluate and present a
comprehensive economic report on the leasing practices of the
industry. Although it is very difficult to evaluate the
political climate in Italy and the activities of the Italian
public prosecutors, the Company does not expect this matter to
have a material adverse effect on its operations or financial
position.
In addition, the Company and its subsidiaries are involved
in a number of lawsuits which the Company considers ordinary and
routine in view of its size and the nature of its business. The
Company does not believe that any ultimate liability resulting
from any such lawsuits will have a material adverse effect on the
operations or financial position of the Company. See also
"Environmental Matters" herein.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of stockholders during
the fourth quarter of the fiscal year covered by this report.
Executive Officers of the Company
The following is a list of the executive officers of the
Company as of February 7, 1997, showing their ages, present
positions and offices with the Company and their business
experience during the past five or more years. Officers are
elected by the Board of Directors and serve until the next annual
Organization Meeting of the Board. Officers may be removed by
the Board at will. There are no family relationships among any
of the named individuals, and no individual was selected as an
officer pursuant to any arrangement or understanding with any
other person.
Louis T. Rosso, 63, Chairman Mr. Rosso has been Chief
of the Board and Chief Executive Officer of the
Executive Officer Company since 1988 and
Chairman of the Board since
1989. He served as the
Company's President from 1982
until 1993. He also served as
a Vice President of SmithKline
Beckman from 1982 to 1989.
Mr. Rosso first joined the
Company in 1959 and was named
Corporate Vice President in
1974. He is a director of
Allergan, Inc. and American
Health Properties, Inc. He is
a member of the Board of
Trustees of St. Jude Heritage
Foundation in Fullerton,
California and of Harvey Mudd
College. Mr. Rosso has been a
director of the Company since
1988.
John P. Wareham, 55, Director, Mr. Wareham has been President
President, and Chief Operating and Chief Operating Officer of
Officer the Company since 1993. He
served as the Company's Vice
President, Diagnostic Systems
Group from 1984 to 1993. Prior
thereto, he had been President
of Norden Laboratories, Inc.,
a wholly owned subsidiary of
SmithKline Beckman engaged in
developing, manufacturing and
marketing veterinary
pharmaceuticals and vaccines.
Mr. Wareham first joined
SmithKline Corporation, a
predecessor of SmithKline
Beckman, in 1968. He is a
director of the Little Rapids
Corporation and the Health
Industry Manufacturers
Association. Mr. Wareham has
been a director of the Company
since 1993.
Dennis K. Wilson, 61, Vice Mr. Wilson has been Vice
President, Finance and Chief President, Finance and Chief
Financial Officer Financial Officer of the
Company since 1993. He served
as Vice President, Treasurer
of the Company from 1989 until
his current appointment.
Prior thereto he had been Vice
President, Corporate
Accounting and Assistant
Controller of SmithKline
Beckman since 1984. Mr. Wilson
first joined the Company in
1969.
James T. Glover, 46, Vice Mr. Glover has been Vice
President and Controller President and Controller of
the Company since 1993. From
1989 until assuming his
current position, he was Vice
President, Controller -
Diagnostic Systems Group. Mr.
Glover joined the Company in
1983, serving in several
management positions,
including a two-year term at
Allergan, Inc., then a Company
affiliate. Prior to 1983, he
held management positions with
KPMG Peat Marwick and another
Fortune 500 Company.
Fidencio M. Mares, 50, Vice Mr. Mares was named Vice
President, Human Resources President, Human Resources of
the Company in 1995. Prior
thereto he had been President
of The Gas Company of Hawaii.
Before that he was Senior Vice
President of Administration
and Human Resources for
Pacific Resources, Inc.,
Corporate Wage and Salary
Manager and Corporate Human
Resources Services Manager for
Getty Oil Company/Texaco,
Inc., and held various human
resources managerial positions
at Southern California Edison.
William H. May, 54, Vice Mr. May has been General
President, General Counsel and Counsel and Secretary of the
Secretary Company since 1984 and has
been Vice President, General
Counsel and Secretary of the
Company since 1985. Mr. May
first joined the Company in
1976.
Bruce A. Tatarian, 48, Vice Mr. Tatarian was named Vice
President, Field Operations - President, Field Operations -
Emerging Markets Emerging Markets of the
Company in 1995. He had been
Vice President, Bioresearch
Commercial Operations
International of the Company
since 1994. Prior thereto, he
had been Vice President,
Marketing Operations for the
Bioanalytical Systems Group
since 1991. From 1990 to 1991
he had been Vice President -
Manager, Analytical Business
Unit. Mr. Tatarian originally
joined the Company in 1973
when he served in a number of
marketing positions for a
period of ten years.
Arthur A. Torrellas, 66, Vice Mr. Torrellas was named Vice
President, Field Operations - President, Field Operations -
North America/Europe North America/Europe, of the
Company in 1995. He had been
Vice President, Diagnostic
Commercial Operations of the
Company since 1994. Prior
thereto, he had been Vice
President, International
Operations for the Diagnostic
Systems Group since 1985. Mr.
Torrellas first joined the
Company in 1977. He is a
director of The World Trade
Center Association of Orange
County and of the California
Manufacturing Technology
Center. He is also a member
of the Board of Visitors of
the University of California
at Irvine, College of
Medicine.
Albert R. Ziegler, 58, Vice Mr. Ziegler has been Vice
President, Diagnostics President, Diagnostics
Development Center Development Center of the
Company since 1994. He joined
the Company in 1986 as Vice
President, North America
Operations for the Diagnostic
Systems Group. Prior thereto
he had been President of
Branson Ultrasonics
Corporation, a manufacturer of
industrial ultrasound
instruments and a subsidiary
of SmithKline Beckman until
the divestiture of SmithKline
Beckman's industrial
instruments businesses in
1984. Mr. Ziegler first
joined SmithKline Beckman in
1971.
Paul Glyer, 40, Treasurer Mr. Glyer has been Treasurer
of the Company since 1993. In
1995 he additionally assumed
the position of Director,
Corporate Business
Development. He served as
Assistant Treasurer since 1989
when he first joined the
Company.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters
Information with respect to the above-captioned Item is
incorporated herein by reference to the section entitled "QUARTERLY
INFORMATION (Unaudited)" of the Company's Annual Report to
stockholders for the year ended December 31, 1996. During 1996
the Company paid four consecutive quarterly dividends of $.13 per
share of common stock, for a total of $.52 per share for the
year. During 1995 the Company paid four consecutive quarterly
dividends of $.11 per share of common stock, for a total of $.44
per share for the year. Under the terms of the Company's
revolving credit agreement, which expires on September 30, 1999,
aggregate dividend payments are limited to the sum of $45 million
and 30% of the consolidated cumulative net earnings of the
Company from June 30, 1992. To date this limitation has not had
an impact on the Company's dividends and is not expected to have
an impact in the foreseeable future. In addition, as of January
31, 1997, there were approximately 8,642 holders of record of the
Company's common stock.
Item 6. Selected Financial Data
Information with respect to the above-captioned Item is
incorporated herein by reference to the section entitled
"SELECTED FINANCIAL INFORMATION" of the Company's Annual Report
to Stockholders for the year ended December 31, 1996.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Information with respect to the above-captioned Item is
incorporated herein by reference to the section entitled
"FINANCIAL REVIEW" of the Company's Annual Report to Stockholders
for the year ended December 31, 1996.
Item 8. Financial Statements and Supplementary Data
Information with respect to the above-captioned Item is
incorporated herein by reference to the CONSOLIDATED FINANCIAL
STATEMENTS, including all the notes thereto, and the sections
entitled "REPORT BY MANAGEMENT", "INDEPENDENT AUDITORS' REPORT"
and "QUARTERLY INFORMATION (Unaudited)" of the Company's Annual Report
to Stockholders for the year ended December 31, 1996.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors - The information with respect to directors
required by this Item is incorporated herein by reference to
those parts of the Company's Proxy Statement for the Annual
Meeting of Stockholders to be held April 3, 1997 entitled
"ELECTION OF DIRECTORS" and "BOARD OF DIRECTORS INFORMATION."
Executive Officers - The information with respect to
executive officers required by this Item is set forth in Part I
of this report.
Item 11. Executive Compensation
The information with respect to executive compensation
required by this Item is incorporated by reference to that part
of the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held April 3, 1997 entitled "EXECUTIVE
COMPENSATION", excluding those sections entitled "Organization
and Compensation Committee Report on Executive Compensation" and
"Performance Graph".
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information with respect to security ownership required
by this Item is incorporated by reference to that part of the
Company's Proxy Statement for the Annual Meeting of Stockholders
to be held April 3, 1997 entitled "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
Item 13. Certain Relationships and Related Transactions
The information with respect to certain relationships and
related transactions required by this Item is incorporated by
reference to that part of the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held April 3, 1997 entitled
"BOARD OF DIRECTORS INFORMATION, Compensation Committee
Interlocks and Insider Participation."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a)(1), (a)(2) Financial Statements and Financial Statement
Schedules
The financial statements and financial statement schedules
filed as part of the report are incorporated by reference in the
"INDEX OF FINANCIAL STATEMENTS AND SCHEDULES" following this Part
IV.
(a)(3) Exhibits
Management contracts and compensatory plans or
arrangements are identified by *.
3.1 Third Restated Certificate of Incorporation of the
Company, June 5, 1992 (incorporated by reference
to Exhibit 3.1 of the Company's Annual Report to
the Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1992, File
No. 001-10109).
3.2 Amended and Restated By-Laws of the Company,
as of November 30, 1994 (incorporated by
reference to Exhibit 3.2 of the Company's Annual
Report to the Securities and Exchange Commission
on form 10-K for the fiscal year ended December
31, 1994, File No. 001-10109).
4.1 Specimen Certificate of Common Stock
(incorporated by reference to Exhibit 4.1 of
Amendment No. 1 to the Company's Form S-1
registration statement, File No. 33-24572).
4.2 Rights Agreement between the Company and
Morgan Shareholder Services Trust Company, as
Rights Agent, dated as of March 28, 1989
(incorporated by reference to Exhibit 4 of the
Company's current report on Form 8-K filed with
the Securities and Exchange Commission on April
25, 1989, File No. 1-10109).
4.3 First amendment to the Rights Agreement dated
as of March 28, 1989 between the Company and
First Chicago Trust Company of New York (formerly
Morgan Shareholder Services Trust Company), as
Rights Agent, dated as of June 24, 1992
(incorporated by reference to Exhibit 1 of the
Company's current report on Form 8-K filed with
the Securities and Exchange Commission on July 2,
1992, File No. 001-10109).
4.4 Amendment 1993-1 to the Company's Savings
and Investment Plan, adopted November 3,
1993, filed in connection with the Form S-8
Registration Statement filed with the Securities
and Exchange Commission on September 1, 1992, File
No. 33-51506 (incorporated by reference to Exhibit
4 of the Company's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q
for the quarterly period ended March 31, 1994,
File No. 001-10109).
4.5 Amendment 1995-1 to the Company's Savings
and Investment Plan, adopted December 20,
1995, filed in connection with the Form S-8
Registration Statement filed with the Securities
and Exchange Commission on September 1, 1992 and
Amendment No. 1 thereto filed December 17, 1992,
File No. 33-51506 (incorporated by reference to
Exhibit 4.5 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1995, File
No. 001-10109).
4.6 Amendment 1996-1 to the Company's Savings
and Investment Plan, adopted December 5,
1996, filed in connection with the Form S-8
Registration Statement filed with the Securities
and Exchange Commission on September 1, 1992 and
Amendment No. 1 thereto filed December 17, 1992,
File No. 33-51506.
4.7 Senior Indenture between the Company and The
First National Bank of Chicago as Trustee, dated
as of May 15, 1996, filed in connection with
the Form S-3 Registration Statement filed with the
Securities and Exchange Commission on April 5,
1996, File No. 333-02317 (incorporated by
reference to Exhibit 10.1 of the Company's
Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarterly period
ended June 30, 1996, File No. 001-10109).
4.8 7.05% Debentures Due June 1, 2026, filed in
connection with the Form S-3 Registration
Statement filed with the Securities and Exchange
Commission on April 5, 1996, File No. 333-02317
(incorporated by reference to Exhibit 10.2 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended June 30, 1996, File No. 001-10109).
10.1 Revolving Credit Agreement, dated as of September
26, 1994, among the Company, the lenders named
therein and Citicorp USA, Inc. as Agent (incorporated
by reference to Exhibit 10.1 of the Company's
Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarterly period
ended September 30, 1994, File No. 001-10109).
10.2 Note Agreement, dated as of February 5, 1993,
among the Company, Nationwide Life Insurance
Company and three other insurance companies named
therein (incorporated by reference to Exhibit
10.17 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1992, File
No. 001-10109).
10.3 Line of Credit Promissory Note in favor of
Mellon Bank, N.A., dated as of October 6, 1993
(incorporated by reference to Exhibit 10.21 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1992, File No. 001-10109).
10.4 Loan Agreement (Multiple Advance), dated
September 30, 1993, between Beckman Instruments
(Japan) Limited and the Industrial Bank of Japan,
Limited (English translation, including
certification as to accuracy; original document
executed in Japanese) (incorporated by reference
to Exhibit 10.21 of the Company's Annual Report to
the Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1993,
File No. 001-10109).
10.5 Term Loan Agreement, dated as of September 30,
1993, between Beckman Instruments (Japan)
Limited and Citibank, N.A., Tokyo Branch
(incorporated by reference to Exhibit 10.22 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December 31, 1993, File No. 001-10109).
10.6 Term Loan Agreement, dated as of December 9,
1993, between Beckman Instruments (Japan)
Limited and The Dai-Ichi Kangyo Bank
Limited (English translation, including
certification as to accuracy; original document
executed in Japanese) (incorporated by reference
to Exhibit 10.23 of the Company's Annual Report to
the Securities and Exchange Commission on Form 10-
K for the fiscal year ended December 31, 1993,
File No. 001-10109).
10.7 Trust Agreement between the Company and
The First National Bank of Chicago, as Trustee,
for assistance in meeting stock-based obligations
of the Company, dated as of May 31, 1995
(incorporated by reference to Exhibit 10.7 of the
Company's Annual Report to the Securities and
Exchange Commission on Form 10-K/A for the fiscal
year ended December 31, 1995, File No. 001-10109).
* 10.8 The Company's Executive Incentive Plan,
adopted by the Company in 1996 (incorporated by
reference to Exhibit 10 of the Company's Quarterly
Report to the Securities and Exchange Commission
on Form 10-Q for the quarterly period ended March
31, 1996, File No. 001-10109).
* 10.9 Amendment No. 1 to the Company's
Executive Incentive Plan, adopted in 1996.
* 10.10 The Company's Executive Incentive Plan,
adopted by the Company in 1995 (incorporated by
reference to Exhibit 10.1 of the Company's
Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarterly period
ended June 30, 1995, File No. 001-10109).
* 10.11 The Company's Incentive Compensation
Plan of 1990, as restated with amendments of
January 29, 1992, amendments approved by
stockholders May 6, 1992 (incorporated by
reference to Exhibit 10.20 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended December
31, 1992, File No. 001-10109).
* 10.12 Amendment 1996-1 to the Company's Incentive
Compensation Plan of 1990, dated October
11, 1996, filed in connection with the Form S-8
Registration Statement filed with the Securities
and Exchange Commission on August 5, 1993, File
No. 33-66990 (incorporated by reference to Exhibit
10.1 of the Company's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q
for the quarterly period ended September 30, 1996,
File No. 001-10109).
* 10.13 The Company's Incentive Compensation
Plan, as amended by the Company's Board of
Directors on October 26, 1988 and as amended and
restated by the Company's Board of Directors on
March 28, 1989 (incorporated by reference to
Exhibit 10.16 of the Company's Annual Report to
the Securities and Exchange Commission on Form
10-K for the fiscal year ended December, 31 1989,
File No. 001-10109).
* 10.14 Restricted Stock Agreement and Election
(Cycle Two - Economic Value Added Incentive Plan),
adopted by the Company in 1995 (incorporated by
reference to Exhibit 10 of the Company's Quarterly
Report to the Securities and Exchange Commission
on Form 10-Q for the quarterly period ended
September 30, 1995, File No. 001-10109).
* 10.15 Restricted Stock Agreement and Election
(Cycle Three - Economic Value Added Incentive
Plan), adopted by the Company in 1996.
* 10.16 Beckman Instruments, Inc. Supplemental
Pension Plan, adopted by the Company October 24,
1990 (incorporated by reference to Exhibit 10.4 of
the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K for the fiscal
year ended December, 31 1990, File No. 001-10109).
* 10.17 Amendment 1995-1 to the Company's Supplemental
Pension Plan, adopted by the Company in 1995,
effective as of October 1, 1993.
* 10.18 Amendment 1996-1 to the Company's Supplemental
Pension Plan, dated as of December 9, 1996.
* 10.19 Amendment 1996-1 to the Company's Stock
Option Plan for Non-Employee Directors, dated
October 11, 1996 and effective November 1, 1996
(incorporated by reference to Exhibit 10.2 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended September 30, 1996, File No. 001-10109).
* 10.20 The Company's Stock Option Plan for Non-
Employee Directors, amended and restated as of
November 1, 1996, filed in connection with the
Form S-8 Registration Statements filed with the
Securities and Exchange Commission on November 6,
1989, File No. 33-31862, and on August 5, 1993,
File No. 33-66988.
* 10.21 Form of Change in Control Agreement, dated as
of May 1, 1989, between the Company, each of
its Executive Officers and certain other key
employees (incorporated by reference to Exhibit
10.34 of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1989, File
No. 001-10109).
* 10.22 Agreement Regarding Retirement Benefits of
Arthur A. Torrellas, adopted December 1, 1993
and dated December 20, 1993, between the Company
and Arthur A. Torrellas (incorporated by reference
to Exhibit 10.24 of the Company's Annual Report to
the Securities and Exchange Commission on Form 10-K
for the fiscal year ended December 31, 1993,
File No. 001-10109).
* 10.23 Amendment to the December 1, 1993 Agreement
Regarding Retirement Benefits of Arthur A.
Torrellas, dated as of May 30, 1995, between
the Company and Arthur A. Torrellas (incorporated
by reference to Exhibit 10.2 of the Company's
Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarterly period
ended June 30, 1995, File No. 001-10109).
* 10.24 Second Amendment to the December 1, 1993 Agreement
Regarding Retirement Benefits of Arthur A.
Torrellas, dated as of December 16, 1996,
between the Company and Arthur A. Torrellas.
* 10.25 Agreement Regarding Retirement Benefits of
Albert Ziegler, dated June 16, 1995, between
the Company and Albert Ziegler (incorporated by
reference to exhibit 10.22 of the Company's Annual
Report to the Securities and Exchange Commission
on Form 10-K/A for the fiscal year ended December
31, 1995, File No. 001-10109).
* 10.26 Agreement Regarding Retirement Benefits of
Fidencio M. Mares, adopted and dated April 30,
1996, between the Company and Fidencio M. Mares
(incorporated by reference to Exhibit 10.3 of the
Company's Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for the quarterly
period ended June 30, 1996, File No. 001-10109).
* 10.27 Beckman Instruments, Inc. Deferred Directors'
Fee Program, adopted by the Company November 30,
1994 (incorporated by reference to Exhibit 10.21
of the Company's Annual Report to the Securities
and Exchange Commission on form 10-K for the fiscal
year ended December 31, 1994, File No. 001-10109).
* 10.28 Amendment 1996-1 to the Company's Deferred
Directors' Fee Program, dated October 11,
1996 and effective November 1, 1996 (incorporated
by reference to Exhibit 10.3 of the Company's
Quarterly Report to the Securities and Exchange
Commission on Form 10-Q for the quarterly period
ended September 30, 1996, File No. 001-10109).
10.29 The Company's Employees' Stock Purchase Plan,
amended and restated as of November 1, 1996,
filed in connection with the Form S-8 Registration
Statement filed with the Securities and Exchange
Commission on December 19, 1995, File No. 33-65155.
10.30 Distribution Agreement, dated as of
April 11, 1989, among SmithKline Beckman
Corporation the Company and Allergan, Inc.
(incorporated by reference to Exhibit 3 to
SmithKline Beckman Corporation's Current Report on
Form 8-K filed with the Securities and Exchange
Commission on April 14, 1989, File No. 1-4077).
10.31 Amendment to the Distribution Agreement
effective as of June 1, 1989 between SmithKline
Beckman Corporation, the Company and Allergan,
Inc. (incorporated by reference to Exhibit 10.26
of Amendment No. 2 to the Company's Form S-1
registration statement, File No. 33-28853).
10.32 Cross-Indemnification Agreement between
the Company and SmithKline Beckman Corporation
(incorporated by reference to Exhibit 10.1 of
Amendment No. 1 to the Company's Form S-1
registration statement, File No. 33-24572).
11. Statement regarding computation of
per share earnings: This information is
incorporated by reference to Note 1 Summary of
Significant Accounting Policies of the Company's
Annual Report to Stockholders for the year ended
December 31, 1996.
13. WORDS ON NUMBERS Section of the Company's Annual
Report to Stockholders for the year ended December
31, 1996.
21. Subsidiaries.
23. Consent of KPMG Peat Marwick LLP,
February 12, 1997.
27. Financial Data Schedule.
(b) Reports on Form 8-K During Fourth Quarter ended
December 31, 1996.
No Reports on Form 8-K were filed during the quarter ended
December 31, 1996.
Beckman Instruments, Inc.
INDEX TO
FINANCIAL STATEMENTS AND SCHEDULES
The consolidated financial statements of the Company and the
related report of KPMG Peat Marwick LLP, dated January 17, 1997
are incorporated by reference to the section entitled "WORDS ON
NUMBERS" of the Company's Annual Report to Stockholders for the
year ended December 31, 1996.
The information required to be reported in the Supplementary
Financial Schedule entitled, VIII Allowance for Doubtful
Accounts, for the three year period ended December 31, 1996 is
set forth in Note 12 Supplementary Information of the "NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS" of the Company's Annual Report
to Stockholders for the year ended December 31, 1996. Schedules
not included herein have been omitted because they are not
applicable, are no longer required or the required information is
presented in the consolidated financial statements or in the
notes to the consolidated financial statements.
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.
BECKMAN INSTRUMENTS, INC.
Date: February 6, 1997 By /s/ Louis T. Rosso
Louis T. Rosso
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board
and Chief Executive
Officer (Principal
/s/Louis T. Rosso Executive Officer)
Louis T. Rosso February 6, 1997
President,
Chief Operating Officer
/s/John P. Wareham and Director
John P. Wareham February 6, 1997
Vice President, Finance
and Chief Financial Officer
/s/D. K. Wilson (Principal Financial Officer)
Dennis K. Wilson February 6, 1997
Vice President and
Controller (Principal
/s/James T. Glover Accounting Officer)
James T. Glover February 6, 1997
/s/Earnest H. Clark, Jr. Director February 6, 1997
Earnest H. Clark, Jr.
/s/Hugh K. Coble Director February 6, 1997
Hugh K. Coble
Signature Title Date
--------- ----- ----
___________________ Director February _, 1997
Carolyne K. Davis, Ph.D.
/s/Dennis C. Fill Director February 6, 1997
Dennis C. Fill
/s/Charles A. Haggerty Director February 6, 1997
Charles A. Haggerty
/s/Gavin Herbert Director February 6, 1997
Gavin S. Herbert
/s/William N. Kelley Director February 6, 1997
William N. Kelley, M.D.
/s/Francis P. Lucier Director February 6, 1997
Francis P. Lucier
/s/C. Roderick O'Neil Director February 6, 1997
C. Roderick O'Neil
/s/Betty Woods Director February 6, 1997
Betty Woods
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
4.6 Amendment 1996-1 to the Company's Savings and
Investment Plan, adopted December 5, 1996,
filed in connection with the Form S-8
Registration Statement filed with the
Securities and Exchange Commission on September
1, 1992 and Amendment No. 1 thereto filed
December 17, 1992, File No. 33-51506.
10.9 Amendment No. 1 to the Company's Executive
Incentive Plan, adopted in 1996.
10.15 Restricted Stock Agreement and Election (Cycle
Three - Economic Value Added Incentive Plan),
adopted by the Company in 1996.
10.17 Amendment 1995-1 to the Company's Supplemental
Pension Plan, adopted by the Company in 1995,
effective as of October 1, 1993.
10.18 Amendment 1996-1 to the Company's Supplemental
Pension Plan, dated as of December 9, 1996.
10.20 The Company's Stock Option Plan for Non-Employee
Directors, amended and restated as of November
1, 1996, filed in connection with the Form S-8
Registration Statements filed with the
Securities and Exchange Commission on November
6, 1989, File No. 33-31862, and on August 5,
1993, File No. 33-66988.
10.24 Second Amendment to the December 1, 1993 Agreement
Regarding Retirement Benefits of Arthur A.
Torrellas, dated as of December 16, 1996,
between the Company and Arthur A. Torrellas.
10.29 The Company's Employees' Stock Purchase Plan,
amended and restated as of November 1, 1996,
filed in connection with the Form S-8
Registration Statement filed with the
Securities and Exchange Commission on December
19, 1995, File No. 33-65155.
13. WORDS ON NUMBERS Section of the Company's Annual
Report to Stockholders for the year ended December
31, 1996.
21. Subsidiaries.
23. Consent of KPMG Peat Marwick LLP, February 12, 1997.
27. Financial Data Schedule.