SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
Commission File Number 1-6926
C. R. BARD, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1454160
(State of incorporation) (I.R.S. Employer Identification No.)
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Registrant's telephone number, including area code: (908) 277-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock - $.25 par value 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 amendments to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the registrant was approximately $1,466,900,000 based on the closing price of stock traded on the New York Stock Exchange on February 28, 1994. As of February 28, 1994, there were 52,158,171 shares of Common Stock, $.25 par value per share, outstanding.
The Company's definitive Proxy Statement dated March 10, 1994 has been incorporated by reference with respect to certain information contained therein in Part III and Part IV of this Form 10-K.
The exhibit index is located in Part IV, Item 14, Page IV-1.
PART I
Item 1. Business
General Development of Business
The Company was started by Charles Russell Bard in 1907. One of its first medical products was the silk urethral catheter imported from France. In 1923, the Company was incorporated as C. R. Bard, Inc. and distributed an assortment of urological and surgical products. Bard became a publicly-traded company in 1963 and five years later was traded on the New York Stock Exchange.
In 1966, Bard acquired its supplier of urological and cardiovascular specialty products - the United States Catheter & Instrument Co. In 1980 Bard acquired its major source of the Foley catheter - Davol Inc. Numerous other acquisitions were made over the last thirty-three years broadening Bard's product lines. Today, C. R. Bard, Inc. is a leading multinational developer, manufacturer and marketer of health care products.
1993 sales of $970.8 million decreased 2% from 1992. Net income for 1993 totaled $56 million or $1.07 per share, and both decreased 25 percent against 1992.
Product Group Information
Bard is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. Hospitals, physicians and nursing homes purchase approximately 90% of the Company's products, most of which are used once and discarded.
The following table sets forth for the last three years ended December 31, 1993, the approximate percentage contribution to Bard's consolidated net sales. The figures are on a worldwide basis.
Years Ended December 31,
1993 1992 1991
Cardiovascular 40% 41% 41%
Urological 26% 25% 25%
Surgical 34% 34% 34%
Total 100% 100% 100%
I-1
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Narrative Description of Business |
General
Traditionally, Bard has been known for its products in the urological field, where its Foley catheter is the leading device for bladder drainage. Today, Bard's largest product group is in cardiovascular care devices, contributing approximately 40% of consolidated net sales, with a wide range of products, including USCI balloon angioplasty catheters used for nonsurgical treatment of obstructed arteries. Additionally, Bard has important positions in the area of surgical products.
Bard continually expands its research toward the improvement of existing products and the development of new ones. It has pioneered in the development of disposable medical products for standardized procedures.
Bard's domestic sales may be grouped into three principal product lines: cardiovascular, urological and surgical. International sales include most of the same products manufactured and sold by Bard's domestic operations. Domestic and international sales are combined for product group sales presentation.
Cardiovascular - Bard's line of cardiovascular products includes balloon angioplasty catheters, steerable guidewires, guide catheters and inflation devices; angiography catheters and accessories; introducer sheaths; electrophysiology products including cardiac mapping and electrophysiology laboratory systems, and diagnostic and temporary pacing electrode catheters; cardiopulmonary support systems; and blood oxygenators and related products used in open-heart surgery.
Urological - Bard offers a complete line of urological products including Foley catheters, procedural kits and trays and related urine monitoring and collection systems; biopsy and other cancer detection products; ureteral stents; and specialty devices for incontinence, ureteroscopic procedures and stone removal.
Surgical - Bard's surgical products include specialty access catheters and ports; implantable blood vessel replacements; fabrics and meshes for vessel and hernia repair; surgical suction and irrigation devices; wound and chest drainage systems; devices for endoscopic, orthopaedic and laparoscopic surgery; blood management devices; products for wound management and skin care; and percutaneous feeding devices.
International - Bard markets cardiovascular, urological and surgical products throughout the world. Principal markets are Japan, Canada, the United Kingdom and Continental Europe. Approximately two-thirds of the sales in this segment are of
products manufactured by Bard in its facilities in the United Kingdom, Ireland and Malaysia. The balance of the sales are from products manufactured in the United States, Puerto Rico or Mexico, for export. Bard's foreign operations are subject to the usual risks of doing business abroad, including restrictions on currency transfer, exchange fluctuations and possible adverse government regulations. See footnote 10 in the Notes to Consolidated Financial Statements for additional information.
Product Recalls - In February 1990 the Mini-Profile and Probe balloon angioplasty catheters were withdrawn from the U.S. market due to claims from the FDA that the Company had failed to follow appropriate legal and regulatory procedures. In March 1990, the Company voluntarily withdrew its Sprint and Solo angioplasty catheters from the U.S. market after an internal investigation revealed the commercial versions had not received proper regulatory approval. These withdrawals, accompanied with the withdrawal in 1989 of the New Probe angioplasty catheter, had effectively withdrawn the Company from the U.S. balloon angioplasty market. In 1991 the Company received approval from the FDA to market the New Probe, Force and Sprint balloon angioplasty catheters in the U.S. During the fourth quarter of 1992 the Solo balloon angioplasty catheter was approved for U.S. marketing. See Item 3. Legal Proceedings for additional information.
Competition
The Company knows of no published statistics permitting a general industry classification which would be meaningful as applied to the Company's variety of products. However, products sold by the Company are in substantial competition with those of many other firms, including a number of larger well-established companies. The Company depends more on its consistently reliable product quality and dependable service and its ability to develop products to meet market needs than on patent protection, although some of its products are patented or are the subject of patent applications.
Marketing
The Company's products are distributed domestically directly to hospitals and other institutions as well as through numerous hospital/surgical supply and other medical specialty distributors with whom the Company has distributor agreements. In international markets, products are distributed either directly or through distributors with the practice varying by country. Sales promotion is carried on by full-time representatives of the Company in domestic and international markets.
In 1993 no commercial customer accounted for more than 8% of the Company's sales and the five largest commercial customers combined accounted for approximately 22% of such sales. Combined sales to federal agencies accounted for less than 2% of sales in 1993.
In order to service its customers, both in the U.S. and outside the U.S., the Company maintains inventories at distribution facilities in most of its principal marketing areas. Orders are normally shipped within a matter of days after receipt of customer orders, except for items temporarily out of stock, and backlog is normally not significant in the business of the Company.
Most of the products sold by the Company, whether manufactured by it or by others, are sold under the BARD trade name or trademark or other trademarks owned by the Company. Such products manufactured for the Company by outside suppliers are produced according to the Company's specifications.
Regulation
The development, manufacture, sale and distribution of the Company's products are subject to comprehensive government regulation. Government regulation by various federal, state and local agencies, which includes detailed inspection of and controls over research and laboratory procedures, clinical investigations, manufacturing, marketing, sampling, distribution, recordkeeping, storage and disposal practices, substantially increases the time, difficulty, and costs incurred in obtaining and maintaining the approval to market newly developed and existing products. Government regulatory actions can result in the seizure or recall of products, suspension or revocation of the authority necessary for their production and sale, and other civil or criminal sanctions.
In the United States comprehensive legislation has been proposed that would make significant changes to the availability, delivery and payment for healthcare products and services. It is the intent of such proposed legislation to provide health and medical insurance for all United States citizens and to reduce the rate of increases in United States healthcare expenditures. The Company believes it is not possible to predict the extent to which the Company or the healthcare industry in general might be affected by the enactment of such or similar legislation.
Raw Materials
The Company uses a wide variety of readily available plastic, textiles, alloys and rubbers for conversion into its devices. Two large, U.S.-based chemical suppliers have sought to restrict the sale of certain of their materials to the device industry for use in implantable products. Although one guiding principle in the
adoption of this policy is the avoidance of negative economic effect on the health care industry, a small portion of our product lines may face a short-term threat to the continuity of their raw material supply. The companies have indicated that their action is based on product liability concerns. Bard and the medical device industry are working to resolve this problem in general and with these suppliers to assure a continuing supply of necessary raw materials.
Environment
The Company continues to address current and pending environmental regulations relating to its use of Ethylene Oxide and CFC's for the sterilization of some of its products. The Company is complying with regulations reducing permitted EtO emissions by installing scrubbing equipment and adjusting its processes. The Company recognizes the Montreal Protocol Treaty which plans for the reduction of CFC use worldwide and the Company has established a goal of reducing its own use of CFC's for sterilization more rapidly than is required by this treaty. Facilities, processes and equipment are required to achieve these goals and meet these regulations. The Company has eliminated over 95% of CFC use for sterilization. The Company intends to continue to reduce this use of CFC's faster than treaty goals. Capital expenditures required will not significantly adversely affect the Company's earnings or competitive position.
Employees
The Company employs approximately 8,450 persons. Seasonality
The Company's business is not affected to any material extent by seasonal factors.
Research and Development
The Company's research and development expenditures amounted to approximately $66,300,000 in 1993, $60,500,000 in 1992 and $55,600,000 in 1991.
Item 2. Properties
The executive offices of the Company are located in Murray Hill, New Jersey in facilities which the Company owns. Domestic manufacturing and development units are located in California, Georgia, Kansas, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Puerto Rico, Rhode Island, South Carolina, Utah, Washington and Wisconsin. Sales offices and distribution points are in these locations as well as others.
Outside the U.S., the Company has plants or offices in Australia, Belgium, Canada, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Mexico, Netherlands, Portugal, Singapore, Spain and the United Kingdom.
The Company owns approximately 2,267,000 square feet in 21 locations and leases approximately 1,272,000 square feet of space in 61 locations.
All these facilities are well maintained and suitable for the operations conducted in them.
Item 3. Legal Proceedings
On October 14, 1993, the Company entered into a Plea Agreement with the Department of Justice in connection with charges stemming from violations, primarily during the 1980s by the Company's USCI division, of the Federal Food, Drug and Cosmetic Act and other statutes. The Agreement, which is subject to approval by the court, requires the Company to pay a fine and civil damages totaling $61 million, senior management approval of all pre-market applications made by the Company's USCI division to the Food and Drug Administration (the "FDA") for the next four years, oversight of the USCI division by an outside consultant and the hiring of an officer with responsibility for regulatory and medical programs. The Company has also received notice of suspension by the Defense Logistics Agency (DLA) relative to any new federal government contracts. The Company's existing contracts, representing less than 2% of consolidated revenues, will continue to run until their expiration dates. Furthermore, the Company will continue discussions with the DLA to explore a possible resolution of this matter, but these discussions await approval by the court of the Plea Agreement. In January 1994 the Company received notification that the FDA had determined that provisions of the Applications Integrity Policy should be applied to the Company's USCI division. Consequently, the FDA suspended its review of pending pre-market applications that have been submitted by the USCI division. Based upon regulatory compliance audits to be conducted by the Company, the FDA will assess the validity of data and information in USCI's pending pre-market applications. The Company cannot predict how long the FDA's suspension of the USCI division's pre-market applications from review will last or the extent of the impact such suspension could have on USCI's competitive position. The Company is continuing discussions in certain related areas raised by the FDA to finally conclude this matter.
As previously discussed, in January 1992 a civil complaint was filed in federal court regarding the Company's efforts to obtain FDA approval for and market an atherectomy device. In July 1992 the federal court dismissed certain provisions of the complaint. In January 1993 the court granted the Company's motion and entered a stay of the case. The court subsequently dissolved its previous
order staying the proceedings in this case, and discovery is now under way. In late 1993 the plaintiffs filed an amended complaint which claims a breach of contract and realleges claims of fraud. The Company has answered the amended complaint and seeks to dismiss the fraud charges.
During 1991 the Company settled all previously disclosed shareholder litigation brought against the Company and certain present and former officers and directors in connection with the withdrawal from the U.S. market of certain of the Company's angioplasty catheters. All claims were dismissed without any admission of liability or wrong doing. The settlement involved the payment of approximately $18 million and had no material impact on the 1991 earnings of the Company because it had been previously provided for through established reserves and insurance coverages. In November 1993, a shareholder moved in the Superior Court of New Jersey to set aside the settlement as inadequate based upon the amount which the Company had agreed to pay as a fine and civil damages in the criminal procedures as set forth above. This petition was dismissed and a notice of appeal was filed. The appeal has now been dismissed by the Appellate Division of the Superior Court and the shareholder has 20 days from March 24 to appeal to the N.J. Supreme Court.
During 1992 the Company was notified by the United States Environmental Protection Agency that it had been identified as a potentially responsible party in connection with an ongoing investigation of the Solvents Recovery Service of New England site in Southington, Connecticut. Although the full extent of liability in this case is unknown, the Company has been identified with less than one-half percent of the total gallonage of waste materials. The final resolution of this matter is not expected to have a material adverse financial impact on the Company.
The Company is also subject to other legal proceedings and claims which arise in the ordinary course of business.
Item 4. Results of Votes of Security Holders
Not applicable.
Executive Officers of the Registrant
Set forth below is the name, age, position, five year business history and other information with respect to each executive officer of the Company as of February 28, 1994. No family relationships exist among the officers of the Company.
Name Age Position
William H. Longfield 55 President and
Chief Operating Officer
and Director
Benson F. Smith 46 Executive Vice President -
Operations
William C. Bopp 50 Senior Vice President and
Chief Financial Officer
Timothy M. Ring 36 Group Vice President
Richard J. Thomas 44 Group Vice President
William T. Tumber 59 Group Vice President
Terence C. Brady, Jr. 62 Senior Vice President and
Controller
E. Robert Ernest 53 Vice President - Business
Development
Gerald L. Messerschmidt, M.D. 43 Vice President - Scientific
Affairs
Richard A. Flink 59 Vice President, General
Counsel and Secretary
Earle L. Parker 50 Treasurer
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All officers of the Company are elected annually by the Board of Directors. Mr. Longfield has been delegated the duties and responsibilities of Chairman and Chief Executive Officer by the Board of Directors.
Mr. Longfield joined the Company in 1989 and was elected executive vice president and chief operating officer. In 1991 he was elected to his present position. Prior to joining the Company, he was chief executive officer since 1984 of the Cambridge Group, Inc., a provider of long term health services for the elderly. Prior to joining Cambridge, he was employed by Lifemark, Inc., a health care management company, and for over 20 years with American Hospital Supply Corporation.
Mr. Smith joined Bard in 1980. Subsequently he was appointed general manager of Bard Electro Medical Systems, Inc. and in 1986 became vice president and general manager of Bard Home Health division. In 1987, he was promoted to president of Bard Urological division. In 1990, he was appointed to the position of group executive. In 1991, he was elected group vice president. In December 1993, he was elected to the position of executive vice president with worldwide responsibility for operations.
Mr. Bopp joined the Company in 1980 as controller of Bard International, Inc., was promoted to assistant corporate controller in 1983 and was elected to the position of treasurer later that year. He was named vice president and treasurer in 1989. In 1992 he was elected to his present position.
Mr. Ring joined the Company in 1992 and was elected vice president- human resources. Prior to joining the Company he had been with Abbott Laboratories Inc., a pharmaceutical company, since 1982 and his last position with their Hospital Products division had been director of personnel. In December 1993, he was elected to the position of group vice president.
Mr. Thomas joined Bard in 1984. In 1986 he was promoted to vice president and general manager of the Bard Cardiovascular Ventures division. In 1990 he was appointed to the position of group executive. In October 1991, he was elected to his present position.
Mr. Tumber joined Bard in 1980. In 1988 he was promoted to vice president and general manager of Davol Inc. In 1990 he was promoted to president of Davol Inc. and subsequently appointed to the position of group executive. In September 1991, he was elected to his present position.
Mr. Brady joined the Company in 1969, was elected corporate controller in 1973 and vice president and controller in 1979. He was elected to his present position in 1987.
Mr. Ernest joined the Company in 1977 and was elected to his present position in 1979.
Dr. Messerschmidt joined the Company in January 1994 and was elected to his present position. Prior to joining the Company he had been with DNX Corporation, a molecular engineering company, where he was vice president of medical and regulatory affairs. Prior to DNX he held various positions with the Pharmaceuticals Division of Ciba Geigy Corporation, the University of Michigan Medical Center, Wilford Hall U.S.A.F. Medical Center and the National Cancer Institute of the National Institutes of Health.
Mr. Flink joined the Company in 1970, was elected vice president and general counsel in 1973 and was elected to his present position in 1985.
Mr. Parker joined the Company in 1979. In 1985 he was promoted to vice president and controller of the USCI division. In December 1990 he was promoted to vice president-operations for the USCI division and, later that year, was promoted to vice president and general manager of the USCI Angiography division. In 1992 he was elected to his present position.
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters
Market and Market Prices of Common Stock
The Company's common stock is traded on the New York Stock Exchange
using the symbol: BCR. The following table illustrates the high
and low sales prices as traded on the New York Stock Exchange for
each quarter during the last two years.
Quarters
1st 2nd 3rd 4th Year
1993
High 35-1/4 28 27-5/8 26-7/8 35-1/4
Low 22-7/8 21-1/4 20-1/2 21-3/4 20-1/2
1992
High 34 28-5/8 31-1/2 35-7/8 35-7/8
Low 26-1/8 22-1/2 23-3/4 25-1/2 22-1/2
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Approximate Number of Equity Security Holders
Approximate Number
of Record Holders
Title of Class as of February 28, 1994
Common Stock - $.25 par value 8,280*
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*Included in the number of shareholders of record are shares held in "nominee" name.
Dividends
The Company paid cash dividends of $28,200,000 or $.54 per share in 1993 and $26,500,000 or $.50 per share in 1992. The following table illustrates the quarterly rate of dividends paid per share.
Quarters
1st 2nd 3rd 4th Year
1993 $ .13 $ .13 $ .14 $ .14 $ .54
1992 $ .12 $ .12 $ .13 $ .13 $ .50
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In January 1994, the first quarter dividend of $.14 per share was declared, indicating an annual rate of $.56 per share. The first quarter dividend was paid on February 4, 1994 to shareholders of record on January 24.
II-1
Item 6. Selected Financial Data
(Thousands of dollars except per share amounts)
For the Years Ended December 31,
1993 1992 1991 1990 1989
INCOME STATEMENT DATA
Net sales $970,800 $990,200 $876,000 $785,300 $777,800
Operating income 128,500 122,400 93,000 66,800 115,900
Net income 56,000 75,000 57,200 40,300 65,400
BALANCE SHEET DATA
Total assets $798,600 $712,500 $657,600 $612,800 $562,600
Working capital 157,200 201,900 184,000 170,600 181,800
Net property, plant
and equipment 168,900 162,800 157,600 147,500 139,600
Long-term debt 68,500 68,600 68,900 69,800 70,300
Total debt 153,000 133,000 128,700 123,200 95,000
Shareholders'
investment 383,100 392,400 365,700 342,200 333,600
COMMON STOCK DATA
Net income
per share $ 1.07 $ 1.42 $ 1.08 $ .76 $ 1.18
Cash dividends
per share .54 .50 .46 .42 .36
Cash dividend
payout ratio 50.4% 35.3% 42.7% 55.6% 30.6%
Shareholders'
investment per
share $ 7.35 $ 7.43 $ 6.90 $ 6.45 $ 6.12
Avg. shares out-
standing (000's) 52,197 52,909 53,063 53,266 55,419
SUPPLEMENTARY DATA
Return on average
shareholders'
investment 14.4% 19.8% 16.2% 11.9% 19.8%
Operating income/
net sales 13.2% 12.4% 10.6% 8.5% 14.9%
Net income/
net sales 5.8% 7.6% 6.5% 5.1% 8.4%
Days-accounts
receivable 61.0 63.0 62.7 65.5 62.3
Days-inventory 131.0 128.1 135.8 142.6 130.0
Current ratio 1.6-1 1.9-1 2.0-1 2.0-1 2.5-1
Total debt/total
capitalization 28.5% 25.3% 26.0% 26.5% 22.2%
Interest expense $ 11,400 $ 12,600 $ 14,100 $ 14,900 $ 10,900
R&D expense $ 66,300 $ 60,500 $ 55,600 $ 44,100 $ 36,200
Number of employees 8,450 8,850 9,100 8,750 8,300
Net sales per
employee $ 114.9 $ 111.9 $ 96.3 $ 89.7 $ 93.7
Net income
per employee $ 6.6 $ 8.5 $ 6.3 $ 4.6 $ 7.9
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II-2
Item 7. Management's Discussion and Analysis of Results of Operations and of Financial Conditions
General
Bard is a leading multinational developer, manufacturer and marketer of products for the large and growing health care industry. Worldwide health care expenditures approximated $1.9 trillion in 1993 with about half that amount spent in the United States. Bard's segment of this industry, itself a multi-billion dollar market, is primarily specialized products used primarily in hospitals, in outpatient centers and in physician's offices to meet the needs of the medical profession in caring for their patients. The Company seeks to focus and concentrate on selected markets with cost-effective, innovative products and specialized sales forces to maximize the opportunities in these markets.
Operating Results
Net sales decreased 2% in 1993, reflecting the sale of the MedSystems division, the impact of foreign currency translations and the dramatic changes in the industry. Net income decreased 25%, reflecting several nonrecurring items, primarily the $61 million pretax provision for the settlement with the Justice Department.
1993 Sales Data
Consolidated net sales totaled $970.8 million in 1993, a decrease of $19.4 million or 2% for the year. Sales were lowered a total of 4% by the impact of the sale of the Bard MedSystems division in February 1993 (3%) and the impact of generally lower foreign currency values (1%). Sales in 1993 were also negatively affected by a slowdown in U.S. procedural rates, consolidations of health care providers, limited FDA approvals, increasingly conservative medical practices fostered by the growth of managed care and weaker European economies.
Worldwide sales increased 1% in the urological product group. Good increases in several relatively new specialty devices were partially offset by declines in other areas. Sales of surgical products decreased 1% but increased 8% after adjusting for the sale of the MedSystems division. Specialty access, endoscopic, laparo- scopic and blood management products contributed significantly to this increase. Cardiovascular product sales decreased 5% worldwide with most product areas in this group showing declines.
Sales in the United States decreased 1% in 1993 to $687.9 million, representing 71% of total sales. Urological product sales increased while sales of surgical products (due to the sale of MedSystems) and cardiovascular products decreased.
II-3
Sales outside the U.S. were $282.9 million in 1993, a decline of 3% from 1992 and represented 29% of total sales. Changes in foreign currency values in 1993 lowered these sales by nearly 5%. Growth in sales of surgical products were more than offset by decreases in urological and cardiovascular sales. Sales increases were good in Japan and Germany.
The geographic breakdown of sales outside the U.S. for 1993 is:
Europe, Middle East, Africa - 56%; Japan, Asia/Pacific - 37% and
Western Hemisphere, excluding the United States - 7%.
1992 Sales Data
In 1992 consolidated net sales totaled $990.2 million, an increase of $114.2 million or 13% from the prior year. U.S. sales, which were 70% of total consolidated sales, increased 13% while sales outside the U.S. increased 12% for the year. Changes in foreign currency values in 1992 accounted for approximately 2 percentage points of the sales growth outside the U.S.
Operating Income
Gross profit margins rose in 1993 for the third straight year. The rates were 50.9% in 1993, 48.4% in 1992 and 46.6% in 1991. Productivity gains, cost reductions and a favorable product mix in many product areas contributed to this improvement in the last three years. A pretax charge of $2.6 million for severance costs related to a plant closing is included in 1993 cost of goods sold.
Bard uses the LIFO method of valuing substantially all U.S. inventories, which results in current costs (higher in a period of inflation) being charged to cost of goods sold. Bard generally has been able to recover these costs through its strong product position in its markets. The Company also strives to offset the effect of inflation through its cost reduction programs.
Marketing, selling and administrative expenses (which exclude research and development) increased $2.9 million in 1993, or less than 1%. R&D expenses increased nearly 10% in 1993 as the Company works toward new technologies and enhancements for the future.
Operating income of $128.5 million increased 5.0% in 1993, reflecting the increased gross profit margin and, as a percent of net sales, was 13.2% compared with 12.4% in 1992. Operating income in 1992 increased 31.6% from 1991 due primarily to a higher gross profit margin.
II-4
Other Expense, Net
The 1993 results included a third quarter pretax provision for the Justice Department settlement of $61 million, a fourth quarter pretax gain of $32.7 million from the sale of shares of the common stock of Ventritex, Inc., and a first quarter pretax gain of $10.9 million from the sale of the MedSystems division net of several nonrecurring charges. The 1992 results included a gain of $5.9 million from the sale of common stock of Ventritex and a comparable amount for provisions for expenses associated with legal and regulatory matters.
Income Tax
The effective income tax rate was 37.2% in 1993, 29.9% in 1992 and 25.6% in 1991. The increase in 1993 was primarily due to the $61 million Justice Department settlement, which was not fully deductible, and a 1% tax rate increase to 35% effective January 1, 1993. The increase in the 1992 rate was primarily due to a reduction in the portion of Bard's taxable income being generated outside the United States at lower effective tax rates. The tax benefit from operations in Puerto Rico and Ireland favorably affected the tax rate in each year.
As a result of the Omnibus Tax Reconciliation Act of 1993, the effective tax rate in 1994 will be affected slightly, primarily due to a reduction in the tax benefit derived from the Company's manufacturing operations in Puerto Rico.
Income
Net income for 1993 totaled $56 million, or $1.07 per share, which was 25% lower than in 1992. As a percent of sales, net income was 5.8% in 1993 compared with 7.6% in 1992 and 6.5% in 1991.
Nonrecurring items that affected net income in 1993 were (in
millions):
Gain on sale of Ventritex stock $ 19.4 Gain on sale of MedSystems division and other one-time charges 6.0 Severance costs related to plant closing (1.8) Effect of accounting change for postretirement benefits (6.1) Provision for the Justice Department settlement agreement (45.4) Net income effect of nonrecurring items $(27.9) |
After adjusting for these items, net income would have been higher than reported by $27.9 million, or $.53 per share. In 1992 net income was $1.42 per share, or $75 million in total, which was 31% higher than 1991.
II-5
Financial Condition
Bard's financial condition remained strong in 1993. Net cash provided by operating activities increased to $124 million in 1993 from $103.6 million in 1992. While the Company had cash outlays totaling $101.4 million for acquisitions of businesses, patents, trademarks and other long-term investments, total debt increased a modest $20 million from $133 million to $153 million in 1993. The ratio of total debt to total capitalization increased from 25.3% to 28.5% with total capitalization increasing $10.7 million to $536.1 million. Long-term debt was essentially unchanged at $68.5 million at the end of 1993, with $60 million of it at a fixed rate of 8.69% until scheduled repayment in September 1999.
Bard maintains credit lines with banks for short-term cash needs. These facilities were used as needed during 1993. The current unused lines of credit total $141 million. As now structured, the Company should generate substantially all funds needed for operations and capital expenditures. The Company believes it could borrow adequate funds at competitive terms and rates, should it be necessary, including the payments to the Justice Department required as a result of the plea agreement reached in October 1993. Under the terms of the settlement, $30.5 million is payable 30 days after court approval plus two annual instalments of $15.25 million each.
As presented in the Consolidated Statements of Cash Flows on page II-11 of this report, net cash flows from operating activities totaled $124 million in 1993. Net income, depreciation and amortization provided a total of $91.5 million, and included the gain on disposal of assets of $50.4 million. Increases in current liabilities, excluding debt, provided a total of $27 million, including $30.5 million of the $61 million payable under the Justice Department settlement. Other long-term liabilities increased by $46.2 million, of which $30.5 million is the balance of the settlement amount and $10 million is the accumulated postretirement benefit obligation charged to income in the first quarter of 1993. All other operating activities provided $9.7 million net including a total of $12.9 million provided from decreases in accounts receivable and inventories.
Investing activities used $67.1 million in 1993. Capital expenditures totaled $30.7 million and proceeds from the sale of assets provided $65 million. $101.4 million was used for the acquisition of businesses, patents, trademarks and other related items, and long-term investments.
Financing activities in 1993 used a total of $30.4 million. Common stock purchases used $24.4 million and dividends used $28.2 million. Other financing activities, primarily proceeds from short-term borrowings, provided $22.2 million net.
II-6
Total cash flows, including a $1.3 million translation adjustment, resulted in an increase in cash and short-term investments of $25.2 million.
As noted, capital expenditures in 1993 were $30.7 million compared with $30 million in the prior year. Expenditures for 1994 are anticipated at $35-$40 million.
Research and development spending was $66.3 million in 1993, up 9.6% from 1992. Planned expenditures for 1994 are about $80 million, a 20% increase.
Purchases of Bard common stock by the Company totaled (in millions) $24.4, $14.0 and $6.4 in 1993, 1992 and 1991, respectively. In January 1993 the Board of Directors authorized the purchase from time to time of up to 2 million shares of which 1 million were purchased in 1993.
The Board of Directors declared dividends of 13 cents per share for the first two quarters of 1993 and in July 1993 increased the dividend to 14 cents per share. At February 1994 the indicated annual dividend rate is 56 cents per share. Dividends for 1993 of 54 cents per share were up from 50 cents per share paid in 1992.
Legal Proceedings
For a discussion of pending legal proceedings and related matters, please see Note 5, Commitments and Contingencies, of the Notes to Consolidated Financial Statements on page II-16.
Acquisitions and Dispositions
In 1993 the Company acquired the operations of Solco Hospital Products Group, Inc., Pilot Cardiovascular Systems, Inc. and Bainbridge Sciences, Inc. in separate transactions for a total of $70 million. The Bard MedSystems division was sold in 1993 with a pretax gain of $15.9 million. The 1993 acquisitions, and several other investments and acquisitions in 1993, 1992 and 1991 were not significant to the Company's operations as a whole.
II-7
Item 8. Financial Statements and Supplementary Data
Report of Independent Public Accountants
To the Shareholders and Board of Directors of C. R. Bard, Inc.:
We have audited the accompanying consolidated balance sheets of C. R. Bard, Inc. (a New Jersey corporation) and subsidiaries as of December 31, 1993 and 1992 and the related consolidated statements of income, retained earnings and cash flows for each of the three years in the period ended December 31, 1993. These financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of C. R. Bard, Inc. and subsidiaries as of December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles.
As discussed in Note 8 to the consolidated financial statements, effective January 1, 1993 the Company changed its method of accounting for postretirement benefits other than pensions.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in Item 14(a) 2 are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Roseland, New Jersey
February 9, 1994
II-8
C. R. BARD, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
For the Years Ended December 31,
(Thousands of dollars except per share amounts)
1993 1992 1991
Net sales $970,800 $990,200 $876,000
Costs and expenses:
Cost of goods sold 476,700 510,900 467,500
Marketing, selling and
administrative 299,300 296,400 259,900
Research and development 66,300 60,500 55,600
842,300 867,800 783,000
Operating income 128,500 122,400 93,000
Interest expense 11,400 12,600 14,100
Other expense, net 18,200 2,800 2,000
Income before taxes and effect of
accounting change 98,900 107,000 76,900
Provision for income taxes 36,800 32,000 19,700
Income before effect of
accounting change 62,100 75,000 57,200
Effect of change in accounting
principle, net of taxes (6,100) --- ---
Net income $ 56,000 $ 75,000 $ 57,200
Income per share before effect
of accounting change $ 1.19 $ 1.42 $ 1.08
Net income per share $ 1.07 $ 1.42 $ 1.08
|
C. R. BARD, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
For the Years Ended December 31,
(Thousands of dollars except per share amounts)
1993 1992 1991
Balance, beginning of year $368,800 $344,300 $322,300
Net income 56,000 75,000 57,200
Cash dividends (per share
1993, $.54; 1992, $.50;
1991, $.46) (28,200) (26,500) (24,400)
Excess of cost over par value
of treasury stock retired
(1993-1,000,000 shares,
1992-500,000 shares and
1991-250,000 shares) (24,200) (13,900) (6,400)
Translation adjustment (16,100) (10,100) (4,400)
Restricted stock award (1,400) --- ---
Balance, end of year $354,900 $368,800 $344,300
The accompanying notes to consolidated financial statements are an
integral part of these statements.
II-9
|
C. R. BARD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
(Thousands of dollars) 1993 1992
Assets
Current assets:
Cash $ 4,100 $ 2,800
Short-term investments 70,900 47,000
Accounts receivable, less reserve of
$7,100 and $5,300 167,300 178,800
Inventories 173,500 181,800
Other current assets 5,700 6,500
Total current assets 421,500 416,900
Long-term investments 17,700 13,300
Property, plant and equipment, at cost
Land 8,800 9,000
Buildings and improvements 106,700 106,700
Machinery and equipment 145,400 137,300
260,900 253,000
Less - Accumulated depreciation
and amortization 92,000 90,200
Net property, plant and equipment 168,900 162,800
Intangible assets, net of amortization 149,100 78,500
Other assets 41,400 41,000
$798,600 $712,500
Liabilities and Shareholders' Investment
Current liabilities:
Short-term borrowings and current
maturities of long-term debt $ 84,500 $ 64,400
Accounts payable 39,300 45,600
Accrued expenses 124,500 81,400
Federal and foreign income taxes 16,000 23,600
Total current liabilities 264,300 215,000
Long-term debt 68,500 68,600
Other long-term liabilities 82,700 36,500
Shareholders' investment:
Preferred stock, $1 par value, authorized
5,000,000 shares; none issued --- ---
Common stock, $.25 par value, authorized
300,000,000 shares; issued and
outstanding 52,098,124 shares in 1993,
52,838,681 shares in 1992 13,000 13,200
Capital in excess of par value 15,200 10,400
Retained earnings 354,900 368,800
Total shareholders' investment 383,100 392,400
$798,600 $712,500
The accompanying notes to consolidated financial statements are an
integral part of these balance sheets.
II-10
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C. R. BARD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Years Ended December 31,
(Thousands of dollars)
1993 1992 1991
Cash flows from operating activities:
Net income $ 56,000 $ 75,000 $ 57,200
Adjustments to reconcile net income
to net cash provided from operating
activities:
Depreciation and amortization 35,500 35,600 29,500
Deferred income taxes (7,100) (1,900) 1,900
Expenses under stock plans 1,200 1,100 900
Gain on disposal of assets, net (50,400) (3,700) (600)
Changes in assets and liabilities
net of acquired businesses:
Accounts receivable 9,900 (21,400) (14,200)
Inventories 3,000 (4,900) (4,800)
Other current and long-term
assets 2,700 200 500
Current liabilities, excluding
debt 27,000 20,200 12,700
Other long-term liabilities 46,200 3,400 3,100
Net cash provided from operating
activities 124,000 103,600 86,200
Cash flows from investing activities:
Capital expenditures (30,700) (30,000) (31,000)
Proceeds from sale of assets 65,000 8,300 1,900
Payments made for purchases of
businesses (70,000) (3,600) (1,400)
Patents, trademarks and other (22,700) (26,700) (15,900)
Long-term investments (8,700) (15,900) (600)
Net cash used in investing
activities (67,100) 67,900) (47,000)
Cash flows from financing activities:
Common stock issued for options and
benefit plans 2,200 1,300 600
Purchase of common stock (1,000,000
shares in 1993, 500,000 shares in
1992 and 250,000 shares in 1991) (24,400) (14,000) (6,400)
Proceeds from long-term borrowings --- 16,000 ---
Principal payments of long-term
borrowings (400) (700) (1,300)
Proceeds from short-term borrowings,
net 20,400 5,000 6,800
Dividends paid (28,200) (26,500) (24,400)
Net cash used in financing
activities (30,400) (18,900) (24,700)
Translation adjustment (1,300) (800) (600)
Increase in cash and short-term
investments $ 25,200 $ 16,000 $ 13,900
The accompanying notes to consolidated financial statements are an
integral part of these statements.
II-11
|
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
Consolidation All subsidiaries are consolidated and intercompany transactions have been eliminated.
Income Per Share The computations of income per share are based on the weighted average number of shares outstanding: 52,196,645 in 1993, 52,909,360 in 1992 and 53,062,933 in 1991. The effect of outstanding stock options and stock awards is not material and has been excluded from the computations.
Inventories Inventories are stated at the lower of cost or market. Substantially all domestic inventories are accounted for using the LIFO method of determining costs. All other inventories are accounted for using the FIFO method. Inventories valued under the LIFO method were $127,000,000 in 1993, $127,000,000 in 1992 and $116,000,000 in 1991; under the FIFO method such inventories would have been higher by $15,800,000, $13,000,000 and $16,400,000, respectively. Inventories were approximately 58% and 60% finished goods at year end 1993 and 1992, 30% and 27% work in process at year end 1993 and 1992, and 12% and 13% raw materials at year end 1993 and 1992.
Depreciation Property, plant and equipment are depreciated on a straight-line basis over the useful lives of the various classes of assets.
Investments Long-term investments include long-term bonds and equity securities accounted for on the cost basis. The fair value of such investments, determined primarily by market quotes, approximated their carrying value at December 31, 1993 and was approximately $46,000,000 at December 31, 1992. For purposes of the Consolidated Statements of Cash Flows all short-term investments which have a maturity of ninety days or less are considered cash equivalents. Such investments are stated at cost which approximates their fair value.
Intangible Assets Intangible assets are recorded at cost and are amortized using the straight-line method over appropriate periods not exceeding 40 years. As of December 31, 1993 and 1992, intangible assets include the following:
(Thousands of dollars) 1993 1992
Goodwill net of amortization $ 76,500 $ 51,600
Other intangibles (primarily patents) 72,600 26,900
Intangible assets, net $149,100 $ 78,500
II-12
|
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Federal Income Taxes The Company has not provided for Federal income taxes on the undistributed earnings of its foreign operations (primarily in Ireland) as it is the Company's intention to permanently reinvest undistributed earnings (approximately $177,000,000 as of December 31, 1993). Effective January 1, 1993 the Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." This statement did not have a significant effect on the Company's financial position or results of operations.
Translation of Foreign Currencies Annual foreign currency translation adjustments are included in retained earnings. As of December 31, 1993 the cumulative adjustment has decreased retained earnings by $11,100,000.
Research and Development Research and development costs are charged to operations as incurred.
New Accounting Pronouncements Effective January 1, 1994, the Company is required to adopt SFAS No. 112 "Employers' Accounting for Postemployment Benefits" and SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities." Adoption of these statements will not have a significant effect on the Company's financial position or results of operations.
2. Acquisitions and Dispositions
In 1993, the Company acquired three separate businesses for approximately $70,000,000 which served to enhance or expand upon the Company's existing product lines. Assets acquired in these acquisitions were primarily patents and other intangibles. These acquisitions together with several other minor investments made during 1992 and 1991 did not have a significant effect on the Company's results of operations. The Company sold its MedSystems division in 1993 resulting in a pretax gain of approximately $15,900,000 which is recorded in other expense, net, in the statement of consolidated income.
In the fourth quarter of 1993 and 1992, the Company sold certain long-term investments resulting in pretax gains of approximately $32,700,000 and $5,900,000, respectively which are recorded in other expense, net, in the statements of consolidated income.
II-13
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Income Tax Expense
Income tax expense consists of the following:
(Thousands of dollars)
1993 1992 1991
Currently payable:
Federal $31,900 $20,300 $ 4,100
Foreign 8,100 9,500 11,100
State 3,900 4,100 2,600
43,900 33,900 17,800
Deferred:
Federal (6,600) (1,700) 2,900
Foreign (500) (200) (1,000)
(7,100) (1,900) 1,900
$36,800 $32,000 $19,700
|
During 1993, the Company adopted SFAS No. 109 "Accounting for Income Taxes." The cumulative effect of the change was not significant to the Company's results of operations and the Company has not restated prior periods. The standard requires a change from the deferred to the liability method of computing deferred income taxes. Deferred income taxes are recognized for tax consequences of "temporary differences" by applying enacted statutory tax rates, applicable to future years, to differences between the financial reporting and the tax basis of assets and liabilities. At December 31, 1993, the Company's net deferred tax asset amounted to approximately $8,000,000 which is recorded in other assets. This amount is principally composed of differences between tax and financial accounting treatment of depreciation ($7,000,000) and employee benefits ($15,000,000).
The following is a reconciliation between the effective tax rates and the statutory rates:
1993 1992 1991
Tax based on statutory rate 35% 34% 34%
State income taxes net of
Federal income tax benefits 3 2 2
Operations taxed at less than
statutory rate, primarily
Ireland and Puerto Rico (11) (10) (9)
Justice Department settlement 7 -- --
Other, net 3 4 (1)
Effective tax rate 37% 30% 26%
|
Cash payments for income taxes were $31,400,000, $28,600,000 and $17,500,000 in 1993, 1992 and 1991, respectively.
II-14
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Short-Term Borrowings and Long-Term Debt
Short-term bank borrowings amounted to $84,400,000 and $64,000,000 at December 31, 1993 and 1992, respectively. The maximum amount outstanding during 1993 was approximately $110,500,000 with an average outstanding balance of $80,100,000 and an effective interest rate of 3.7%. The maximum amount outstanding during 1992 was approximately $84,900,000 with an average outstanding balance of $75,100,000 and an effective interest rate of 5.1%. The maximum outstanding during 1991 was approximately $82,000,000 with an average outstanding balance of $72,300,000 and an effective interest rate of 7.8%. Unused lines of credit amounted to $141,000,000 at December 31, 1993.
The following is a summary of long-term debt:
(Thousands of dollars) 1993 1992
8.69% Unsecured Notes due 1999 $ 60,000 $ 60,000
Other, primarily 5.75% to 11.75%
industrial development revenue bonds 8,600 9,000
68,600 69,000
Less: amounts classified as current 100 400
$ 68,500 $ 68,600
|
Under three deposit loan agreements with a bank, $55,000,000 has been borrowed at floating rates (4.0% at December 31, 1993) with maturity dates of September 1996, December 1999 and December 2002. At maturity, the loans are to be repaid through matured certificates of deposit held by the Company at the same bank. Since the Company has the right of offset under these agreements and it is the Company's intention to present certain certificates of deposit for repayment of these loans at their maturity, these borrowings have been offset against these certificates of deposit in the accompanying consolidated balance sheets at December 31, 1993 and 1992. The related interest income has been offset against the interest expense.
The Company's long-term debt agreements contain restrictions which, among other things, require the maintenance of minimum net worth levels and limitations on the amounts of debt.
The aggregate maturities of long-term debt for the five year period from 1994 through 1998 are approximately $200,000 in total and from 1999 and thereafter - $68,400,000. The fair value of the Company's long-term debt is not significantly different from its recorded value.
II-15
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Commitments and Contingencies
On October 14, 1993, the Company entered into a Plea Agreement with the Department of Justice in connection with charges stemming from violations, primarily during the 1980s by the Company's USCI division, of the Federal Food, Drug and Cosmetic Act and other statutes. The Agreement, which is subject to approval by the court, requires the Company to pay a fine and civil damages totaling $61 million. In accordance with the terms of the Agreement, a provision has been made for this amount in the quarter ended September 30, 1993, with one-half of the amount reflected as a short-term obligation in accrued expenses and the balance reflected in other long-term liabilities. The Company has also received notice of suspension by the Defense Logistics Agency (DLA) relative to any new Federal Government contracts. The Company's existing contracts, representing less than 2% of consolidated revenues, will continue to run until their expiration dates. Furthermore, the Company is continuing discussions with the DLA to explore a possible resolution of this matter. In January 1994, the Company received notification that the Food and Drug Administration (FDA) had determined that provisions of the Applications Integrity Policy should be applied to the Company's USCI division. Consequently, the FDA suspended its review of pending pre-market applications that have been submitted by the USCI division. Based upon regulatory compliance audits to be conducted by the Company, the FDA will assess the validity of data and information in USCI's pending pre-market applications. The Company is continuing discussions in certain related areas raised by the FDA to finally conclude this matter.
As previously discussed, in January 1992, a civil complaint was filed in federal court regarding the Company's efforts to obtain FDA approval for and market an atherectomy device. In July 1992, the federal court dismissed certain provisions of the complaint. In January 1993, the court granted the Company's motion and entered a stay of the case. The court subsequently dissolved its previous order staying the proceedings in this case, and discovery is now under way. In late 1993, the plaintiffs filed an amended complaint which claims a breach of contract and realleges claims of fraud. The Company has answered the amended complaint and seeks to dismiss the fraud charges.
During 1991 the Company settled all previously disclosed shareholder litigation brought against the Company and certain present and former officers and directors in connection with the withdrawal from the U.S. market of certain of the Company's angioplasty catheters. All claims were dismissed without any
II-16
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Commitments and Contingencies (continued) admission of liability or wrong doing. The settlement involved the payment of approximately $18 million and had no material impact on the 1991 earnings of the Company because it had been previously provided for through established reserves and insurance coverages.
The Company is also subject to other legal proceedings and claims which arise in the ordinary course of business.
The Company believes that the pending legal proceedings and other matters discussed in this Note will likely be disposed of over an extended period of time and should not have a material adverse impact on the Company's financial position or results of operations.
The Company is committed under noncancelable operating leases involving certain facilities and equipment. The minimum annual rentals under the terms of these leases are as follows: 1994 - $18,300,000; 1995 - $12,400,000; 1996 - $8,300,000; 1997 - $4,100,000; 1998 - $2,800,000; and thereafter - $2,600,000. Total rental expense for all leases amounted to $26,500,000 in 1993, $26,600,000 in 1992 and $27,500,000 in 1991.
6. Stock Rights
In 1985 the Board of Directors declared a dividend distribution of one Common Share Purchase Right for each outstanding share of Bard common stock. These Rights will expire in October 1995 and trade with the common stock. They are not presently exercisable and have no voting power. In the event a person acquires 20% or more, or makes a tender or exchange offer for 30% or more of the common stock, the Rights detach from the common stock and become exercisable and entitle a holder to buy one share of common stock at $31.25 (adjustable to prevent dilution). If, after the Rights become exercisable, Bard is acquired or merged, each Right will entitle its holder to purchase $62.50 market value of the surviving company's stock for $31.25, based upon the current exercise price of the Rights. The Company may redeem the Rights, at its option, at $.025 per Right, prior to a public announcement that any person has acquired beneficial ownership of at least 20% of the common stock. These Rights are designed primarily to encourage anyone interested in acquiring Bard to negotiate with the Board of Directors.
7. Shareholders' Investment
The Company has stock option, stock award and restricted stock plans under which certain directors, officers and employees are participants. At December 31, 1993, 1,938,498 shares were reserved for future issuance under these plans.
II-17
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Shareholders' Investment (continued)
Under the Company's stock option plans, options have been granted
to certain directors, officers and employees at prices equal to the
market value of the shares at the date of grant, become exercisable
in four annual instalments and expire not more than 10 years after
the date of grant. A summary of option transactions during 1993
follows:
Number Option
Of Price
Shares Per Share*
Options outstanding, January 1 2,291,169 $20.60
Granted 558,822 26.70
Exercised (187,291) 15.98
Canceled (75,508) ---
Options outstanding, December 31 2,587,192 $22.22
(1,442,773 currently exercisable)
|
* Weighted average price
Under the Company's stock award plans for key employees and directors, shares are granted at no cost to the recipients and distributed in three separate instalments. During 1993, awards for 37,860 shares (net of cancelations) were granted and 37,685 shares were issued. Awards are charged to income over the vesting period. At December 31, 1993, 43,205 awarded shares (aggregate market price at date of grant $1,142,000) have not been issued.
Under the Company's restricted stock plan that was established in 1993, common stock may be granted at no cost to certain officers and key employees. Shares are issued to the participants at the date of grant entitling the participants to cash dividends and the right to vote their respective shares. Restrictions limit the sale or transfer of these shares during a five year period from the grant date. Upon issuance of stock under the plan, unearned compensation equivalent to the market value of the stock at the date of grant is reflected as a reduction in retained earnings and subsequently amortized to expense over the five year restriction period. During 1993, 60,720 restricted shares were granted, net of forfeitures.
Additions to capital in excess of par value of $4,800,000 in 1993 and $2,300,000 in 1992 represents the cost of shares issued under these plans in excess of the related par value of the shares.
II-18
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Shareholders' Investment (continued)
For shares purchased by the Company, common stock is charged for the par value of the shares retired and retained earnings is charged for the excess of the cost over the par value of shares retired.
8. Postretirement Benefits
The Company has defined benefit pension plans which cover substantially all domestic and certain foreign employees and its policy is to fund accrued pension expense for these plans up to the full funding limitations. These plans provide for benefits based upon individual participants' compensation and years of service. The Company also has a supplemental defined contribution plan for certain officers and key employees. Individual participant accounts under the supplemental plan are credited annually based upon a percentage of compensation. The amounts charged to income for these plans amounted to $7,800,000 in 1993, $5,400,000 in 1992 and $5,000,000 in 1991.
The following table sets forth the funded status of the defined benefit pension plans as of September 30, 1993 and 1992 and amounts recognized in the Company's consolidated balance sheets at December 31, 1993 and 1992:
(Thousands of dollars)
1993 1992
Actuarial present value of accumulated
benefit obligation, including vested
benefits of $67,700 in 1993 and
$53,300 in 1992 $ 76,300 $ 60,800
Plan assets at fair value, primarily
investment securities $ 71,900 $ 63,500
Less: Actuarial present value of projected
benefit obligation for service rendered
to date 95,400 71,400
Projected benefit obligation in excess of
plan assets (23,500) (7,900)
Unrecognized (gain) loss 14,400 (500)
Unrecognized prior service cost 7,200 7,700
Unrecognized net asset at transition
amortized over 12 years (6,400) (7,700)
Accrued pension cost included in other
liabilities $ (8,300) $ (8,400)
II-19
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C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Postretirement Benefits (continued)
Pension costs related to the defined benefit pension plans for the years ended December 31, 1993, 1992 and 1991 are as follows:
(Thousands of dollars) 1993 1992 1991 Net pension cost includes: Service cost $ 6,300 $ 5,400 $ 4,600 Interest cost 5,800 4,700 4,400 Actual return on assets - (gain) loss (8,200) (3,900) (11,200) Net amortization and deferral 2,100 (2,300) 5,300 Net pension cost $ 6,000 $ 3,900 $ 3,100 |
The average discount rate used was 7% in 1993 and 8% in 1992. The decrease in the discount rate used between years is the primary factor for the increase in the Plans' projected benefit obligation and the unrecognized loss at December 31, 1993. The rate of increase in future salary levels ranged from 4% to 7% in determining the projected benefit obligation. The expected long-term rate of return on assets used in determining net pension cost ranged from 8.5% to 9.5%.
The Company also provides postretirement health care benefits and life insurance coverage to a limited number of employees at a subsidiary. The health care benefits include cost-sharing features based on years of service for future retirees.
Effective January 1, 1993, the Company adopted the provisions of SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions." SFAS 106 requires the Company to recognize expense as employees earn postretirement benefits, rather than on the cash basis as paid. The Company elected to recognize the accumulated postretirement benefit obligation as a cumulative catch-up adjustment in the first quarter of 1993. This resulted in a one-time charge of approximately $10,000,000 pretax or $6,100,000 net of taxes.
Postretirement benefit expense for 1993, exclusive of the accumulated postretirement benefit obligation, amounted to $850,000 which is composed of $100,000 of service cost and $750,000 of interest cost.
II-20
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Postretirement Benefits (continued)
Actuarial assumptions included a discount rate of 7%. Health care cost trends have been projected at annual rates beginning at 13% for 1994 decreasing gradually down to 6% in 2001 and later years. The effect of a 1% annual increase in these assumed cost trend rates would increase the accumulated postretirement benefit obligation at December 31, 1993 by $1,000,000 and postretirement benefit cost by $100,000.
9. Supplementary Income Statement Information
Royalty expense amounted to $8,600,000 in 1993, $10,200,000 in 1992 and $7,500,000 in 1991. Interest income amounted to $4,600,000 in 1993, $3,900,000 in 1992 and $3,300,000 in 1991.
II-21
C. R. BARD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Segment Information
The Company is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. Hospitals, physicians and nursing homes purchase approximately 90% of the Company's products, most of which are used once and discarded. Information pertaining to domestic and foreign operations as of December 31, 1993, 1992 and 1991 and for the years then ended is given below.
(Thousands of dollars)
United Elimi- Consoli-
States Foreign nation dation
1993
Sales:
Trade $687,900 $259,600 $ --- $947,500
Export 23,300 --- --- 23,300
Intersegment 75,700 1,600 (77,300) ---
Total $786,900 $261,200 $(77,300) $970,800
Operating income $ 83,400 $ 55,200 $(10,100) $128,500
Identifiable assets:
December 31, 1993 $600,200 $198,400 $ --- $798,600
1992
Sales:
Trade $697,200 $265,700 $ --- $962,900
Export 27,300 --- --- 27,300
Intersegment 56,700 600 (57,300) ---
Total $781,200 $266,300 $(57,300) $990,200
Operating income $ 80,900 $ 51,200 $ (9,700) $122,400
Identifiable assets:
December 31, 1992 $526,300 $186,200 $ --- $712,500
1991
Sales:
Trade $615,400 $236,800 $ --- $852,200
Export 23,800 --- --- 23,800
Intersegment 45,100 800 (45,900) ---
Total $684,300 $237,600 $(45,900) $876,000
Operating income $ 54,100 $ 48,800 $ (9,900) $ 93,000
Identifiable assets:
December 31, 1991 $485,700 $171,900 $ --- $657,600
The majority of the elimination of operating income is related to
the foreign operations.
II-22
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C. R. BARD, INC. AND SUBSIDIARIES
Supplementary Financial Data
(thousands of dollars except per share amounts)
QUARTERLY FINANCIAL DATA
1993
1st 2nd 3rd 4th Year
(Thousands of dollars
except per share amounts)
Net sales $236,400 $243,900 $243,500 $247,000 $970,800
Operating income 29,900 32,700 33,800 32,100 128,500
Income(loss)
before taxes 39,500 29,000 (32,100) 62,500 98,900
Income(loss)
before effect
of accounting
change 26,900 20,300 (25,200) 40,100 62,100
Net income(loss) $ 20,800 $ 20,300 $(25,200) $ 40,100 $ 56,000
Per share information:
Income(loss)
before effect of
accounting change $ .51 $ .39 $ (.48) $ .77 $ 1.19
Net income(loss) .39 .39 (.48) .77 1.07
Dividends $ .13 $ .13 $ .14 $ .14 $ .54
1992
1st 2nd 3rd 4th Year
Net sales $237,500 $245,000 $252,200 $255,500 $990,200
Operating income 27,600 30,300 31,800 32,700 122,400
Income before
taxes 24,000 25,700 27,200 30,100 107,000
Net income $ 16,800 $ 18,000 $ 19,100 $ 21,100 $ 75,000
Per share information:
Net income $ .32 $ .34 $ .36 $ .40 $ 1.42
Dividends $ .12 $ .12 $ .13 $ .13 $ .50
|
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
II-23
C. R. BARD, INC. AND SUBSIDIARIES
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors of the Registrant
Information with respect to Directors of the Company is incorporated herein by reference to the material contained under the heading "Proposal No. 1 - Election of Directors" appearing on pages 1 through 3 of the Company's definitive Proxy Statement dated March 10, 1994.
Executive Officers of the Registrant
Information with respect to Executive Officers of the Registrant are on pages I-8 through I-10 of this filing.
Item 11. Executive Compensation
The information contained under the caption "Executive Compensation" appearing on Pages 5 through 14 of the Company's definitive Proxy Statement dated March 10, 1994 is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information contained under the caption "Securities Ownership of Management" on pages 3 and 4 of the Company's definitive Proxy Statement dated March 10, 1994 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information contained under the caption "Compensation Committee Interlocks and Insider Participation" on page 11 of the Company's definitive Proxy Statement dated March 10, 1994 is incorporated herein by reference.
III-1
C. R. BARD, INC. AND SUBSIDIARIES
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) l. Financial Statements and Supplementary Data
Included in Part II Item 8 of this report:
Page
II- 8 Report of Independent Public Accountants.
II- 9 Statements of Consolidated Income and Statements of
Consolidated Retained Earnings for the three years
ended December 31, 1993.
II-10 Consolidated Balance Sheets at December 31, 1993 and
1992.
II-11 Consolidated Statements of Cash Flows for the three
years ended December 31, 1993.
II-12 Notes to Consolidated Financial Statements.
II-23 Quarterly Financial Data.
2. Financial Statement Schedules
|
Included in Part IV of this report:
Page
IV-5 Schedule I - Marketable Securities
IV-6 Schedule V - Property, Plant and Equipment
IV-7 Schedule VI - Accumulated Depreciation and Amortization - Property, Plant and Equipment
IV-8 Schedule VIII - Valuation and Qualifying Accounts
Schedules other than those listed above are omitted because they are not applicable or are not required or the information required is included in the financial statements or notes thereto.
3. Exhibits, No.
3a Registrant's Restated Certificate of Incorporation, as amended, as of April 19, 1989. (p. IV-11).
IV-1
C. R. BARD, INC. AND SUBSIDIARIES
3. Exhibits, No. (Continued)
3b Registrant's Bylaws revised as of April 18, 1990.
(p. IV-23).
4 Rights Agreement dated as of October 9, 1985 between
C. R. Bard, Inc. and Morgan Guaranty Trust Company of
New York as Rights Agent. (p. IV-48)
10 Plea Agreement with attachments and Civil Settlement
Agreement between United States of America and C. R.
Bard, Inc. dated October 14, 1993, filed as Exhibit 10
to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, File No. 1-6926 is
incorporated herein by reference.
10a* George T. Maloney Severance Agreement dated as of
August 18, 1981. (p. IV-105)
10b* William H. Longfield Severance Agreement dated as of
July 12, 1989. (p. IV-112)
10c* William C. Bopp Severance Agreement dated as of
January 14, 1991. (p. IV-139)
10d* Terence C. Brady, Jr. Severance Agreement dated as of
February 22, 1988. (p. IV-166)
10e* Richard A. Flink Severance Agreement dated as of
February 22, 1988. (p. IV-193)
10f* E. Robert Ernest Severance Agreement dated as of
January 21, 1991. (p. IV-220)
10g* William H. Longfield Supplemental Executive Retirement
Agreement dated as of January 12, 1994. (p. IV-258)
10h* 1990 Stock Option Plan. (p. IV-258)
10i* 1989 Employee Stock Appreciation Rights Plan.
(p. IV-265)
10j* C. R. Bard, Inc. Agreement and Plans Trust.
(p. IV-272)
IV-2
|
C. R. BARD, INC. AND SUBSIDIARIES
|
3. Exhibits, No. (Continued)
10k* Supplemental Insurance/Retirement Plan, Plan I - For
new corporate officer when previous agreement as non-
officer exists, Plan II - For new corporate officer
when no previous agreement exists. (p. IV-290)
10l* Retirement Plan for Outside Directors of C. R. Bard,
Inc. (p. IV-309)
10m* Deferred Compensation Contract Deferral of Directors'
Fees, as amended entered into with directors William
T. Butler, M.D., Regina E. Herzlinger, and Robert P.
Luciano. (p. IV-319)
10n* 1988 Directors Stock Award Plan, as amended in October
1991. (p. IV-361)
10o* Excess Benefit Plan. (p. IV-364)
10p* Supplemental Executive Retirement Plan. (p. IV-370)
10q* 1993 Executive Bonus Plan. (p. IV-380)
10r* Long Term Performance Incentive Plan. (p. IV-383)
10s* Deferred Compensation Contract Deferral of
Discretionary Bonus. (p. IV-389).
10t* Deferred Compensation Contract Deferral of Salary. (p.
IV-396)
10u* 1993 Long Term Incentive Plan. (p. IV-403)
21 Parents and subsidiaries of registrant. (p. IV-415)
23 Arthur Andersen & Co. consent to the incorporation by
reference of their report on Form 10-K as amended into
previously filed Forms S-8. (p. IV-416)
99 Indemnity agreement between the Company and each of
its directors and officers. (p. IV-417)
|
* Each of these exhibits listed under the number 10 constitutes a management contract or a compensatory plan or arrangement.
All other exhibits are not applicable.
IV-3
C. R. BARD, INC. AND SUBSIDIARIES
(b) Reports on Form 8-K
Registrant filed a Current Report on Form 8-K dated October 8, 1993 with respect to confirming Company discussions with the Department of Justice concerning a possible disposition of the subject matter of the Boston Federal grand jury investigation into its angioplasty operations.
Registrant filed a Current Report on Form 8-K dated October 15, 1993 announcing it had entered into a plea agreement in connection with charges stemming from violations of the Federal Food, Drug and Cosmetic Act.
Registrant filed a Current Report on Form 8-K dated October 18, 1993 disclosing the financial impact of the Justice Department settlement on the third quarter earnings.
Registrant filed a Current Report on Form 8-K dated November 15, 1993 announcing the Company's decision to close its Fitzwilliam, New Hampshire facility.
IV-4
SCHEDULE I
C. R. BARD, INC. AND SUBSIDIARIES
MARKETABLE SECURITIES
DECEMBER 31, 1993
(Thousands of Dollars)
Obligations of the Republic
of Ireland Government $ 38,600
European bank deposits 14,500
Other foreign bank deposits 5,200
Puerto Rico bank deposits and
government obligations 12,600
$ 70,900
The original cost of these marketable securities is equal to their
fair market value. These securities mature within six months of
December 31, 1993 and have a weighted average interest rate of
4.1%.
IV - 5
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SCHEDULE V
C. R. BARD, INC. AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
Column A Col. B Col. C Col. D Col. E Col. F
Balance Retire- Other
at ments Currency Balance
Beginning Additions Sales or Transla- at End
of Year at Cost Transfers tion of Year
Year Ended December 31, 1993
Land $ 9,000 $ --- $ (200) $ --- $ 8,800
Build.&imp. 106,700 4,500 (3,500) (1,000) 106,700
Mach.&equip. 137,300 26,800 (16,500) (2,200) 145,400
(a) (c)
Total $253,000 $31,300 $(20,200) $(3,200) $260,900
Year Ended December 31, 1992
Land $ 9,000 $ --- $ --- $ --- $ 9,000
Build.&imp. 102,700 9,800 (4,600) (1,200) 106,700
Mach.&equip. 132,700 20,500 (14,300) (1,600) 137,300
(b)
Total $244,400 $30,300 $(18,900) $(2,800) $253,000
Year Ended December 31, 1991
Land $ 8,900 $ 100 $ --- $ --- $ 9,000
Build.&imp. 98,400 7,500 (2,500) (700) 102,700
Mach.&equip. 123,200 23,400 (13,200) (700) 132,700
Total $230,500 $31,000 $(15,700) $(1,400) $244,400
(a) Includes $600 of property, plant and equipment of acquired
companies.
(b) Includes $300 of property, plant and equipment of acquired
companies.
(c) Includes $3,400 of property, plant and equipment disposed of
with the sale of the Bard MedSystems division.
IV-6
|
SCHEDULE VI
C. R. BARD, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
Column A Col. B Col. C Col. D Col. E Col. F
Balance Retire- Other
at Additions ments Currency Balance
Beginning Charged Sales or Transla- at End
of Year to Cost Transfers tion of Year
Year Ended December 31, 1993
Build.&imp. $ 28,600 $ 5,000 $ (3,100) $ (300) $ 30,200
Mach.&equip. 61,600 15,400 (14,000) (1,200) 61,800
(a)
Total $ 90,200 $ 20,400 $(17,100) $ (1,500) $ 92,000
Year Ended December 31, 1992
Build.&imp. $ 26,400 $ 6,100 $ (3,600) $ (300) $ 28,600
Mach.&equip. 60,400 15,100 (12,900) (1,000) 61,600
Total $ 86,800 $ 21,200 $(16,500) $ (1,300) $ 90,200
Year Ended December 31, 1991
Build.&imp. $ 23,500 $ 5,100 $ (2,100) $ (100) $ 26,400
Mach.&equip. 59,500 13,700 (12,400) (400) 60,400
Total $ 83,000 $ 18,800 $(14,500) $ (500) $ 86,800
(a) Includes $2,200 of accumulated depreciation for property, plant
and equipment sold with the Bard MedSystems division.
IV-7
|
SCHEDULE VIII
C. R. BARD, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
Column A Col. B Col. C Col. D Col. E Col. F
Additions Deductions
Balance Charged Charged Write-Off
at to Costs to Uncol- Balance
Beginning and Other lectable at End
of Year Expenses Accounts Accounts of Year
Year Ended December 31, 1993
Reserve for doubtful
accounts $ 5,300 $ 2,400 $ (300) $ (300) $ 7,100
Year Ended December 31, 1992
Reserve for doubtful
accounts $ 5,000 $ 2,200 $ (200) $(1,700) $ 5,300
Year Ended December 31, 1991
Reserve for doubtful
accounts $ 4,600 $ 1,600 $ (200) $(1,000) $ 5,000
IV-8
|
C. R. BARD, INC. AND SUBSIDIARIES
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.
C. R. BARD, INC.
(Registrant)
By: William C. Bopp /s/
William C. Bopp
Senior Vice President and
Chief Financial Officer
Date: March 28, 1994
|
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.
Signatures Title Date
William H. Longfield /s/ President and March 28, 1994
William H. Longfield Chief Operating Officer
and Director
(Principal Executive
Officer)
William C. Bopp /s/ Senior Vice President March 28, 1994
William C. Bopp and Chief Financial
Officer
(Principal Financial
Officer)
Terence C. Brady, Jr. /s/ Senior Vice President March 28, 1994
Terence C. Brady, Jr. and Controller
(Principal Accounting
Officer)
IV-9
|
C. R. BARD, INC. AND SUBSIDIARIES
Signatures Title Date
Joseph F. Abely, Jr. /s/ Director March 28, 1994
Joseph F. Abely, Jr.
William T. Butler, M.D. /s/ Director March 28, 1994
William T. Butler, M.D.
Raymond B. Carey, Jr. /s/ Director March 28, 1994
Raymond B. Carey, Jr.
Daniel A. Cronin, Jr. /s/ Director March 17, 1994
Daniel A. Cronin, Jr.
Regina E. Herzlinger /s/ Director March 28, 1994
Regina E. Herzlinger
Robert P. Luciano /s/ Director March 18, 1994
Robert P. Luciano
Robert H. McCaffrey /s/ Director March 28, 1994
Robert H. McCaffrey
Ralph H. O'Brien /s/ Director March 28, 1994
Ralph H. O'Brien
IV-10
|
C. R. BARD, INC. Exhibit 3a
RESTATED CERTIFICATE OF INCORPORATION
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-5, Corporations, General, of the New Jersey Statutes, the undersigned Corporation hereby executes the following Restated Certificate of Incorporation:
FIRST: The name of the corporation is
C. R. BARD, INC.
SECOND: The purpose or purposes for which the Corporation is organized are to engage in any activity within the lawful business purposes for which corporations may be organized under the New Jersey Business Corporation Act.
THIRD: The aggregate number of shares which the Corporation is authorized to issue is 305,000,000 shares, consisting of 300,000,000 shares of Common Stock, par value $.25 (Twenty Five Cents) per share, and 5,000,000 shares of Preferred Stock, par value $1.00 (One Dollar) per share. The designations, relative rights, preferences and limitations of the shares of each class shall be as follows:
Subject to the provisions hereof, the Board of Directors is hereby expressly authorized to divide shares of Preferred Stock into classes and into series within any class or classes, to issue the shares of Preferred Stock in such class or classes and in series within any class or classes, and to fix from time to time, before issuance, the number of shares to be included in each class or series within a class and the designation, relative rights, preferences and limitations of all shares of each class or series within a class. The authority of the Board of Directors with respect to each class or series within a class shall include, without limitation the determination of any or all of the following matters:
(a) The number of shares constituting such class or series within a class and the designation thereof to distinguish the shares of such class or series within a class from the shares of all other classes or series;
(b) The annual dividend rate on the shares of such class or series within a class and whether such dividends shall be cumulative and, if cumulative, the date from which dividends shall accumulate;
IV - 11
(c) The redemption price or prices for shares of such class or
series within a class, if redeemable, and the terms and conditions
of such redemption;
(d) The preference, if any, of shares of such class or series within a class in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation;
(e) The voting rights, if any, of shares of such class or series within a class in addition to the voting rights prescribed by law and the terms of exercise of such voting rights;
(f) The rights, if any, of shares of such class or series within a class to be converted into shares of any other class or series, including Common Stock, and the terms and conditions of such conversion;
(g) The terms or amount of any sinking fund provided for the purchase or redemption of such class or series within a class; and
(h) Any other relative rights, preferences and limitations of such class or series within a class.
The shares of each class and of each series within a class may vary from the shares of any other class or series as to any of such matters.
Dividends on all outstanding shares of Preferred Stock must be declared and paid, or set aside for payment, before any dividends may be declared and paid, or set aside for payment, on shares of Common Stock with respect to the same dividend period.
Each share of Common Stock shall be equal in all respects to every other share of Common Stock.
FOURTH: No holder of any shares of the Corporation, now or hereafter authorized, shall have any right as such holder to purchase or subscribe for or otherwise acquire any shares or any securities or obligations convertible into, or exchangeable for, or any right, warrant or option to purchase, any shares of any class which the Corporation may at any time hereafter issue or sell, whether now or hereafter authorized, but any and all such shares, securities, obligations, rights, warrants and options may be issued and disposed of by the Board of Directors to such persons, firms, corporations and associations, and for such lawful consideration, and on such terms, as the Board of Directors in its discretion may determine, without first offering the same, or any thereof, to the shareholders.
FIFTH: The address of the Corporation's current registered office is 730 Central Avenue, Murray Hill, New Jersey 07974, and the name of the Corporation's current registered agent at such address is Richard A. Flink.
SIXTH: The directors of the Corporation shall be divided into three classes, namely, Classes I II and III, with each class consisting of not less than one nor more than seven directors, as determined in accordance with the By-Laws of the Corporation. At each annual meeting of shareholders commencing with the 1976 annual meeting, the successors to any class of directors whose terms shall then expire shall be elected to serve until the third annual meeting following their election and until their successors shall be elected and qualified. Directors elected as hereinbefore provided may not be removed prior to the expiration of their respective terms of office without cause.
Notwithstanding any provision of this Restated Certificate of Incorporation to the contrary, (I) no amendment to this Restated Certificate of Incorporation shall amend, alter, change or repeal any provision of this Article SIXTH except upon the affirmative vote of the holders of at least seventy-five percent of the outstanding shares of all classes of capital stock of the Corporation entitled to vote thereon, and (2) no amendment to this Restated Certificate of Incorporation shall be adopted empowering shareholders to remove directors without cause except upon the affirmative vote of the holders of at least seventy-five percent of the outstanding shares of all classes of capital stock of the Corporation entitled to vote thereon.
The number of directors constituting the current Board of Directors is twelve and their names, addresses, and classes are as follows:
CLASS I
Names Addresses
Milton P. Brown 11 Coach Road
Exeter, NH 03833
William T. Butler, M.D 1617 South Boulevard
Houston, TX 77006
Daniel A. Cronin, Jr Lindsay Pond Road
Concord, MA 01742
George T. Maloney 22 Normandy Court
Basking Ridge, NJ 07920
|
CLASS II
Names Addresses
Joseph Abely, Jr 2 Dorchester Road
Summit, NJ 07901
Laurence E. Lindars 199 Woodland Avenue
Summit, NJ 07901
Robert P. Luciano P.O. Box 605
Morgan Drive
New Vernon, NJ 07976
Robert H. McCaffrey 483 Mark Road
Allendale, NJ 07401
CLASS III
Thomas O. Boucher 790 Andrews Avenue
Delray Beach, FL 33483
George A. Davis 10 Rotary Drive
Summit, NJ 07901
Ralph H. O'Brien Tall Pines Road
New Vernon, NJ 07976
John F. Willits 3375 Highway 17 North
Mt. Pleasant, SC 29464
|
SEVENTH: The Corporation shall indemnify its directors, officers and employees in the manner and to the extent permitted by the laws of the State of New Jersey.
EIGHTH: Subject to the provisions of the New Jersey Business Corporation Act, contracts or other transactions between the Corporation and its directors or between the Corporation and other firms or associations in which its directors are interested in any way, shall not be void or voidable due solely to such common interest.
NINTH: Subject to the provisions of the New Jersey Business Corporation Act, the directors, and committee members appointed by the Board of Directors, shall not be liable in the discharge of their duties when relying in good faith upon the corporate records and/or competent advice of any type.
TENTH: Except for actions required or permitted to be taken at a meeting of shareholders by Chapter 10 of the New Jersey Business Corporation Act, any action required or permitted to be taken at a meeting of shareholders may be taken without a meeting upon the written consent of shareholders who would have been
entitled to cast the minimum number of votes which would be required to take such action at a meeting at which all shareholders entitled to vote thereon are present.
ELEVENTH: Except as set forth below, the affirmative vote of
the holders of at least seventy-five percent of the outstanding
shares of all classes of capital stock of the Corporation entitled
to vote thereon, shall be required in order to authorize or adopt
(a) any agreement for the merger or consolidation of the
Corporation with or into any other corporation which is required by
law to be approved by shareholders, (b) any sale, lease, transfer
or other disposition by the Corporation of all or any substantial
part of the assets of the Corporation to any other corporation,
person or other entity, or (c) any issuance or delivery of
securities of the Corporation in exchange or payment for any
securities, properties or assets of any other person in a
transaction in which the authorization or approval of shareholders
of the Corporation is required by law or by any agreement to which
the Corporation is a party, if as of the record date for the
determination of shareholders entitled to notice thereof and to
vote thereon or consent thereto, such other corporation, person or
entity which is a party to such transaction is the beneficial
owner, directly or indirectly, of more than 5% of the outstanding
shares of stock of the Corporation.
For the purpose of this Article ELEVENTH (a) any corporation,
person or other entity shall be deemed to be the beneficial owner
of any shares of stock of the Corporation (i) which it owns
directly, whether or not of record, or (ii) which it has the right
to acquire pursuant to any agreement or understanding or upon
exercise of conversion rights, warrants or options, or otherwise,
or (iii) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (ii)
above), by an "affiliate" or "associate" (as defined below) or (Iy)
which are beneficially owned, directly or indirectly (including
shares deemed owned through application of clause (ii) above), by
any other corporation, person or entity with which it or its
"affiliate" or "associate" has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of stock of the Corporation, and (b) the outstanding
shares of any class of stock of the Corporation shall include
shares deemed owned through application of clauses (a) (ii), (iii)
and (iv), above but shall not include any other shares which may be
issuable pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise. The term "affiliate" is
defined as:
An "affiliate" of, or a person "affiliated" with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the persons specified.
The term "associate" is defined as:
The term "associate" used to indicate a relationship with any person, means ( I ) any corporation or organization (other than this Corporation or a majority-owned subsidiary of this Corporation) of which such person is an owner or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities, (2) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and (3) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of this Corporation or any of its parents or subsidiaries.
The provisions of this Article ELEVENTH shall not be applicable to
(i) any merger or consolidation of the Corporation with or into any
other corporation, or any sale or lease of all or any substantial
part of the assets of the Corporation to any other corporation,
person or entity, if the Board of Directors of the Corporation
shall by resolution have approved a memorandum of understanding,
letter of intent or agreement with such other corporation, person
or entity with respect to and substantially consistent with such
transaction, prior to the time that such other corporation, person
or entity shall have become a beneficial owner of more than 5% of
the outstanding shares of stock of the Corporation; or (ii) any
merger or consolidation of the Corporation with, or any sale to the
Corporation or any subsidiary thereof of any of the assets of, any
corporation of which a majority of the outstanding shares of stock
is owned of record or beneficially by the Corporation and its
subsidiaries.
The Board of Directors shall have the power and duty to determine for the purposes of this Article ELEVENTH on the basis of information known to the Corporation, whether (i) such other corporation, person, or other entity beneficially owns more than 5% of the outstanding shares of stock of the Corporation, (ii) such corporation, person or entity is an "affiliate" or "associate" (as defined above) of another, and (iii) the memorandum of understanding, letter of intent or agreement referred to above is substantially consistent with the transaction covered thereby. Any such determination shall be conclusive and binding for all purposes of this Article ELEVENTH.
No amendment to this Restated Certificate of Incorporation shall amend, alter, change or repeal any of the provisions of this Article ELEVENTH, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote of the holders of at least seventy-five percent of the outstanding shares of all classes of capital stock of the Corporation entitled to vote thereon.
TWELFTH: The provisions of this Article TWELFTH shall be
applicable to any transaction to which Article ELEVENTH is
applicable (each such transaction being referred to hereinafter in
this Article TWELFTH as a "Special Business Combination");
provided, however, that the provisions of this Article TWELFTH
shall not be applicable to any Special Business Combination which
shall have been approved by a majority of those members of the
Corporation's Board of Directors who were in office immediately
prior to the time when any shareholder of the Corporation which is
a party to such Special Business Combination became an Interested
Shareholder (as such term is defined below). No Special Business
Combination to which this Article TWELFTH is applicable shall be
authorized or adopted unless the conditions specified in clauses
(i) and (ii) below are satisfied:
(i) Minimum Price and Form of Consideration
(A) The holders of shares of each class or series of the outstanding shares of all classes of capital stock of the Corporation entitled to vote thereon ("Voting Shares") are to receive in such Special Business Combination an aggregate amount of cash and fair value of consideration per share other than cash that either shall be solely in cash or shall be in the same form and of the same kind as the consideration paid by the Interested Shareholder and its "affiliates" and "associates" (as such terms are defined in Article ELEVENTH) in acquiring the majority of the outstanding Voting Shares beneficially owned by them at the time of such Special Business Combination; and
(B) The holders of shares of Common Stock of the Corporation are to receive in such Special Business Combination an aggregate amount of cash and fair value of consideration per share other than cash that shall be at least equal to the higher of the following:
(1) the highest per share price (with appropriate adjustments for recapitalizations and for stock splits, stock dividends and similar distributions) paid by such Interested Shareholder and its affiliates and associates for any shares of Common Stock acquired by them within the three-year period prior to the record date of the meeting of shareholders called to consider and vote upon the proposed Special Business Combination; or
(2) the per share book value of the Common Stock at the end of the fiscal quarter immediately preceding the record date of the meeting of shareholders called to consider and vote upon the proposed Special Business Combination; and
(C) The holders of shares of each class or series of Voting Shares other than Common Stock, if any, are to receive in such
Special Business Combination an aggregate amount of cash and fair value of consideration per share other than cash that shall be at least equal to the highest per share price (with appropriate adjustments for recapitalizations and for stock splits, stock dividends and similar distributions) paid by such Interested Shareholder and its affiliates and associates for any shares of such class or series of Voting Shares acquired by them within the three-year period prior to the record date of the meeting of shareholders called to consider and vote upon the proposed Special Business Combination.
(ii) Procedural Requirement.
(A) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Special Business
Combination, (I) there shall have been no failure to declare and
pay at the regular date therefor any full periodic dividends
(whether or not cumulative) on any Preferred Stock issued and
outstanding pursuant to this Restated Certificate of Incorporation,
(2) there shall have been (x) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect
any subdivision of the Common Stock) and (y) an increase in such
annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split), recapitaliza-
tion, reorganization or any similar transaction that has the effect
of reducing the number of outstanding shares of the Common Stock,
and (3) such Interested Shareholder shall not have become the
beneficial owner of any additional shares of Voting Shares except
as part of the transaction that results in such Interested
Shareholder's becoming an Interested Shareholder.
(B) After such Interested Shareholder has become an Interested Shareholder, such Interested Shareholder shall not have received the benefit, directly or indirectly (except proportionately as a shareholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation.
(C) A proxy or information statement describing the proposed Special Business Combination and complying with the requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to public shareholders of the Corporation at least 30 days prior to the consummation of such Special Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions). Any such proxy or information statement shall also contain the recommendations of each of the members of the Board of Directors as to the advisability of the proposed Special Business
Combination as well as the opinion of an investment banker selected by a majority of the members of the Board of Directors as to the fairness of the terms of the proposed Special Business Combination to the Corporation and its shareholders.
The Board of Directors shall have the power and duty to determine for the purposes of this Article TWELFTH on the basis of information known to the Corporation (i) whether any corporation, person, or other entity beneficially owns more than 5% of the outstanding shares of stock of the Corporation, (ii) whether any corporation, person or entity is an "affiliate or associate (as defined in Article ELEVENTH) of another; (iii) whether a Special Business Combination has been proposed; (iv) the fair value of any consideration other than cash to be received by holders of shares of any class or series of Voting Shares in a Special Business Combination; and (v) any other relevant facts necessary to determine the applicability of any provision of this Article TWELFTH to a Special Business Combination. Any such determination shall be conclusive and binding for all purposes of this Article TWELFTH.
For the purposes of this Article TWELFTH, the term "Interested Shareholder" is defined as the beneficial owner, directly or indirectly (including shares deemed owned by an "affiliate" or "associate" of such person as described in Article ELEVENTH), of more than 5% of the outstanding shares of stock of the Corporation.
No amendment to this Restated Certificate of Incorporation shall amend, alter, change or repeal any of the provisions of this Article TWELFTH, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote of the holders of at least a majority of the voting power of each class of capital stock of the Corporation; provided, however, that if on the record date for the meeting at which such proposed action is submitted to shareholders there is an Interested Shareholder who has proposed a Special Business Combination, or on whose behalf a Special Business Combination has been proposed, then the votes of such Interested Shareholder and its affiliates and associates shall not be counted in calculating the requisite vote for approval of the proposed action.
THIRTEENTH: Except as expressly permitted in the next succeeding paragraph of this Article THIRTEENTH, any purchase by the Company, or any Subsidiary (as hereinafter defined), of shares of Voting Stock (as hereinafter defined) from a 5% Shareholder (as hereinafter defined) at a per share price in excess of the Market Price (as hereinafter defined) at the time of such purchase of the shares so purchased shall require the affirmative vote of the holders of that amount of the voting power of the Voting Stock equal to the sum of (i) the voting
power of the shares of Voting Stock of which the 5% Shareholder is the beneficial owner (as hereinafter defined) and (ii) a majority of the voting power of the remaining outstanding shares of Voting Stock, voting together as a single class.
The provisions of the first paragraph of this Article THIRTEENTH shall not be applicable to any purchase of shares of Voting Stock pursuant to (i) an offer, made available on the same terms, to the holders of all of the outstanding shares of the same class of Voting Stock as those so purchased or (ii) a purchase program effected on the open market and not as a result of a privately-negotiated transaction.
For the purposes of this Article THIRTEENTH:
(i) A "person" shall mean any individual, firm, corporation or other entity.
(ii) "Voting Stock" shall mean the outstanding shares of all classes of capital stock of the Company entitled to vote generally in the election of directors.
(iii) "5% Shareholder" shall mean any person (other than the Company or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of more than 5% of the voting power of the outstanding shares of Voting Stock; or
(b) is an affiliate (as such term is defined in Article ELEVENTH) of the Company and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly. of more than 5% of the voting power of the then outstanding shares of Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any 5% Shareholder. if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.
(iv) A person shall be a "beneficial owner" of any shares of Voting Stock:
(a) which such person or any of its affiliates or associates (as such term is defined in Article ELEVENTH) beneficially owns, directly or indirectly; or
(b) which such person or any of its affiliates or associates has (I) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (2) the right to vote pursuant to any agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its affiliates or associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.
(v) For the purpose of determining whether a person is a "5% Shareholder" pursuant to clause (iii) above, (the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of clause (iv) above, but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
(vi) "Subsidiary" shall mean any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Company; provided, however, that for the purpose of the definition of a "5% Shareholder" set forth in clause (iii) above the term "Subsidiary" shall mean only a corporation of which a majority of the voting power of the capital stock entitled to vote generally in the election of directors is owned, directly or indirectly, by the Company.
(vii) "Market Price" shall mean the last closing sale price immediately preceding the time in question of a share of the stock in question on the Composite Tape for New York Stock ExchangeListed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the last closing bid quotation with respect to a share of such stock immediately preceding the time in question on the National Association of Securities Dealers, Inc. Automated Quotations System of any comparable system then in use (or any other system of reporting or ascertaining quotations then available), or, if such stock is not so quoted, the fair market value at the time in question of a share of such stock as determined by a majority of the entire Board of Directors in good faith.
The Board of Directors of the Company shall have the power and duty to determine for the purposes of this Article THIRTEENTH, on the basis of information known to them after reasonable inquiry, (i) whether the provisions of this Article THIRTEENTH are applicable to a particular transaction, (ii) whether a person is a 5% Shareholder, (iii) the number of shares of Voting Stock beneficially owned by any person and (iv) whether a person is an affiliate or an associate of another person. The good faith determination of the Board of Directors shall be conclusive and binding for all purposes of this Article THIRTEENTH.
Notwithstanding any other provision of this Restated Certificate of Incorporation or the By-Laws, as amended, of the Company (and notwithstanding the fact that a lesser percentage may be specified by law, this Restated Certificate of Incorporation or the By-Laws, as amended, of the Company), the affirmative vote of the holders of at least seventy-five percent of the voting power of the outstanding Voting Stock, voting together as a single class, shall be required to alter, amend or repeal, or adopt any provision inconsistent with, this Article THIRTEENTH.
FOURTEENTH: A director or officer of the Corporation shall not be personally liable to the Corporation or its shareholders for breach of duty as a director or officer, except to the extent and for the duration of any period of time such personal liability may not be eliminated or limited under the New Jersey Business Corporation Act as the same exists or may hereafter be amended.
Dated this 19th day of April, 1989.
C. R. BARD, INC.
By /s/ ROBERT H. McCAFFREY
Robert H. McCaffrey,
Chairman of the Board
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Exhibit 3b
BY-LAWS
of
C. R. BARD, INC.
(A New Jersey Corporation)
(Amended April 18,1990)
ARTICLE I
Offices
The principal office of the Corporation shall be in the Borough of New Providence, County of Union, State of New Jersey. The Corporation may also establish and have such other offices needed for the conduct of its business at such other place or places within or without the State of New Jersey as may from time to time be designated by the Board of Directors.
ARTICLE II
Seal
The Corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization, and the words, "CORPORATE SEAL, NEW JERSEY".
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ARTICLE III
Stockholders' Meetings
SECTION 1. Place of Meetings. Meetings of the stockholders may be held at the principal office in New Jersey or at such other place within or without the State of New Jersey as from time to time may be designated by the Board of Directors and stated in the notice of meeting.
SECTION 2. Annual Meetings. The annual meeting of stockholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held on the third Wednesday in April in each year. If this date shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day which is not a legal holiday.
SECTION 3. Business Transacted - Annual Meetings. At any
annual meeting of the stockholders of the Corporation, only such
business shall be conducted as shall have been brought before the
meeting (a) by or at the direction of the Board of Directors or
(b) by any stockholder of the Corporation who complies with the
procedures set forth in this Section 3. For business properly to
be brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in proper
written form to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 30 days nor more than 60 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. To be in proper written form, a stockholder's notice to the Secretary shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder and (d) any material interest of the stockholder in such business. Notwithstanding anything in the By-Laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 3. The chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the
provisions of this Section 3, and, if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
SECTION 4. Special Meetings. Except as otherwise
provided by law, special meetings of the stockholders may be
called at any time by the Chairman of the Board, the President,
or a majority of the Board of Directors.
SECTION 5. Business Transacted--Special Meetings.
Business transacted at any special meeting shall be confined to
the purpose or purposes stated in the notice thereof.
SECTION 6. Notice of Meetings. Written notice of the annual meeting or of a special meeting, stating the time, place, and purpose or purposes of the meeting, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by mail, to each stockholder of record entitled to vote at such meeting.
SECTION 7. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, represented in person or by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders present in person or represented by proxy shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.
SECTION 8. Voting. If a quorum is present, the affirmative vote of a majority of the shares of stock represented at the meeting shall be the act of the stockholders unless the vote of a greater number of shares of stock is required by law or the Certificate of Incorporation. Each outstanding share of stock having voting power and entitled to vote with respect to the matter shall be entitled to one (1) vote on each matter submitted to a vote at a meeting of stockholders, unless otherwise provided in the Certificate of Incorporation.
SECTION 9. Proxies. Any stockholder of record entitled to vote may be represented at any annual or special meeting of the stockholders by a duly appointed proxy. All proxies shall be written and properly signed, but shall require no other attestation and shall be filed with the Secretary of the meeting before being voted.
SECTION 10. Consents to Corporate Action. (a) Action by
Written Consent. Unless otherwise provided in the Certificate of
Incorporation, any action required or permitted to be taken at
any annual or special meeting of stockholders of the Corporation,
subject to the provisions of subsections (b) and (c) of this
Section 10, may be taken without a meeting upon the written
consent (which shall set forth the action to be so taken) of less
than all the stockholders entitled to cast at least the minimum
number of votes which would be required to take such action at a
meeting at which all stockholders entitled to vote thereon are
present; provided, however, that prompt notice of the taking of
corporate action without a meeting and by less than unanimous
written consent shall be given to those stockholders who have not
consented in writing.
(b) Determination of Record Date for Action by Written Consent. The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting shall be fixed by the Board of Directors of the Company. Any stockholder seeking to have the stockholders of the Corporation authorize or take corporate action by written consent without a meeting shall, by written notice to the Secretary of the Corporation, request the Board of Directors to fix a record date. Upon receipt of such a request, the Secretary shall, as promptly as practicable, call a special meeting of the Board of Directors
to be held as promptly as practicable. At such meeting, the Board of Directors shall fix a record date within the limitations provided in Section 14A:5-7 (or its successor provision) of the New Jersey Business Corporation Act. Notice of the record date shall be published in accordance with the rules and policies of any stock exchange on which securities of the Company are then listed. Should the Board of Directors fail to fix a record date as provided for in this paragraph (b), then the record date shall be the close of business on the day next preceding the day on which notice of the meeting is given or, if no notice is given, the day next preceding the day on which the meeting is held.
(c) Procedures for Written Consent. In the event of the delivery to the Company of a written consent or consents purporting to represent the requisite voting power to authorize or take corporate action and/or related revocations, the Secretary of the Corporation shall provide for the safe-keeping of such consents and revocations and shall engage nationally recognized independent inspectors of elections for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. No action by written consent without a meeting shall be effective until such inspectors have completed their review, have determined that the requisite number of valid and unrevoked consents has been obtained to authorize the action specified in the consents, and have certified such determination
for entry into the records of the Corporation kept for the purpose of recording the proceedings of meetings of stockholders.
ARTICLE IV
Directors
SECTION 1. Number and Term of Directors. The Directors of the Corporation shall be divided into three classes, namely Classes I, II, and III, with each class consisting of not less than one nor more than seven Directors, as the Board of Directors shall from time to time determine. In the absence of such determination by the Board of Directors, the number shall be the number of Directors elected at the preceding Annual Meeting of Stockholders. Class I Directors elected at the 1975 Annual Meeting of Stockholders shall initially serve until the second Annual Meeting following their election and until their respective successors shall have been duly elected and qualified. Class II Directors elected at the 1975 Annual Meeting of Stockholders shall initially serve until the second Annual Meeting following their election and until their respective successors shall have been duly elected and qualified. Class III Directors elected at the 1975 Annual Meeting of Stockholders shall initially serve until the third Annual Meeting following their election and until their respective successors shall have been duly elected and qualified. At each Annual Meeting of
Stockholders commencing with the 1976 Annual Meeting, the successors to any class of Directors whose terms shall then expire shall be elected to serve three year terms. Directors elected as hereinbefore provided may not be removed prior to the expiration of their respective terms of office without cause. Directors need not be residents of the State of New Jersey nor stockholders of the Corporation.
SECTION 2. Vacancies. Any vacancy occurring in the Board of Directors, including any vacancy resulting from an increase in the number of Directors, may be filled until the next succeeding Annual Meeting of Stockholders by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors.
SECTION 3. Notice of Stockholder Nominees. Only persons who are nominated in accordance with the procedures set forth in this Section 3 shall be eligible for election as Directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation entitled to vote for the election of Directors at such meeting who complies with the procedures set forth in this Section 3. All nominations by stockholders shall be made pursuant to timely notice in proper
written form to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 30 days nor more than 60 days prior to the meeting; provided, however, that in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. To be in proper written form, such stockholder's notice shall set forth in writing (a) as to each person whom the stockholder proposes to nominate for election or re-election as a Director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, including, without limitation, such person's written consent to being named in the proxy statement as a nominee and to serving as a Director if elected; and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the Corporation's books, of such stockholder and (ii) the class and number of shares of the Corporation which are beneficially owned by such stockholder. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a
Director shall furnish to the Secretary of the Corporation that
information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee. In the event that a
stockholder seeks to nominate one or more Directors, the
Secretary shall appoint two inspectors, who shall not be
affiliated with the Corporation, to determine whether a
stockholder has complied with this Section 3. If the inspectors
shall determine that a stockholder has not complied with this
Section 3, the inspectors shall direct the chairman of the
meeting to declare to the meeting that a nomination was not made
in accordance with the procedures prescribed by the By-Laws of
the Corporation, and the chairman shall so declare to the meeting
and the defective nomination shall be disregarded.
SECTION 4. Duties and Powers. The Board of Directors
shall have the control and management of the affairs of the
Corporation and shall exercise all such powers of the Corporation
and do all such lawful acts and things necessary or expedient in
the control and management thereof as are not by statute or by
the Certificate of Incorporation or by these By-Laws directed or
required to be exercised or done by the stockholders. The
Directors may adopt such rules and regulations for the conduct of
their meetings and the management of the Corporation as they may
deem proper, not inconsistent with the laws of the State of New
Jersey.
SECTION 5. Meetings of the Board of Directors. Meetings of the Board of Directors shall be held at the office of the Corporation or at any other place within or without the State of New Jersey which the Chairman of the Board, or the President or a majority of the Board of Directors may from time to time designate. There shall be an annual meeting of the Board of Directors held without notice upon the day of their election or as soon thereafter as convenient and such regular meetings, with- out notice, as the Board of Directors may by resolution establish. The Chairman of the Board or the President shall call a special meeting of the Board of Directors whenever requested in writing by five (5) or more Directors so to do. Two (2) days notice shall be given to each Director by the Secretary of each special meeting of the Board of Directors. Such notice may be given by mail, telegram or in person.
A majority of the number of Directors shall constitute a quorum for the transaction of business, but the Director or Directors present, if less than a quorum, may adjourn any meeting from time to time until such quorum be present. All questions coming before the Board shall be determined and decided by a majority vote of Directors present. Each Director shall be entitled to one (1) vote at all meetings of Directors.
SECTION 6. Compensation of Directors. Directors, as such, shall not receive any stated salary for their services, but the Board may, from time to time, by resolution, fix the fees or compensation of the Directors for services as such to the Corporation, including attendance at meetings of the Board of Directors or any Committee thereof. Nothing herein contained shall be construed to preclude any Director from serving the Cor- poration in any other capacity and receiving compensation therefor.
SECTION 7. Executive Committee. The Board of Directors shall appoint an Executive Committee from the Directors, consisting of not less than three (3) members, to constitute an Executive Committee, which Committee shall have and exercise all of the authority of the Board of Directors in the management of the Corporation, except as otherwise required by law. Vacancies in the membership of the Committee shall be filled by the Board of Directors at a regular or special meeting of the Board of Directors. The Executive Committee shall keep regular Minutes of its proceedings and report the same to the Board when required. A majority of the Committee shall be necessary to constitute a quorum, and in every case the vote of the majority of the members present shall be necessary for the passage of any resolution.
SECTION 8. Other Committees. The Board of Directors may appoint any other committees, standing or special, from time to time, from among its own members or otherwise and confer powers on such committees and revoke such powers and terminate the existence of such committees at pleasure. Each such committee shall keep Minutes of its proceedings and report same to the Board when required.
ARTICLE V
Notices
SECTION 1. Giving of Notice. Whenever, under the provision of the law or of the Certificate of Incorporation or of these By-Laws, notice is required to be given to any Director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such Director or stockholder at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to Directors may also be given by telegram.
SECTION 2. Waiver. Whenever any notice whatever is required to be given under the provisions of the statutes or under the provisions of the Certificate of Incorporation or of
these By-Laws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE VI
Officers
SECTION 1. Election of Officers. The officers of the Corporation shall be a Chairman of the Board; a Chief Executive Officer; a President; a Chief Operating Officer; a Chief Financial Officer; one or more Executive Vice Presidents; one or more Vice Presidents; a Secretary and a Treasurer. The Corporation may also have, at the discretion of the Board, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers, agents and employees as it shall deem neces- sary. Any two (2) of the aforesaid offices may be held by the same person. Every officer shall perform such duties as the Board of Directors may from time to time designate.
The Directors, immediately after each annual meeting of
stockholders, shall appoint from their number a Chairman of the
Board, a Chief Executive Officer, and a President. At such
meeting the Directors shall also choose one or more Vice
Presidents, a Secretary and a Treasurer, none of whom need be a
member of the Board.
The Board of Directors may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.
SECTION 2. Compensation. The salaries of all officers of the Corporation earning more than $100,000 shall be fixed by the Board of Directors.
SECTION 3. Term and Removal. The officers of the Corporation shall hold office for one (1) year and until their successors are chosen and qualified in their stead. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Directors. If the office of any officer becomes vacant for any reason, the vacancy shall be filled by the Board of Directors.
SECTION 4. Chairman of the Board. The Chairman of the Board shall be an Officer of the Corporation and shall preside at all meetings of the Board of Directors and stockholders. He shall assist the Board of Directors and other officers in the formulation of the policies of the Corporation and shall be available to other officers for consultation and advice. He shall have such other powers and duties as may be from time to time prescribed by the Board of Directors.
SECTION 5. Chief Executive Officer. The Chief Executive Officer shall be either the Chairman of the Board or the President as designated by the Board of Directors. Under the direction of the Board of Directors, he shall have responsibility for the general direction of the Corporation's business, policies and affairs. The Chief Executive Officer shall be empowered at any time and from time to time to issue and promulgate rules, regulations and directives relating to the conduct and the business and affairs of the Corporation. The Chief Executive Officer may hold such other offices of the Corporation as shall be designated by the Board of Directors. In the absence or disability of the Chairman of the Board, he shall preside over meetings of the Board of Directors and shareholders.
SECTION 6. President. The President shall be an officer and shall perform such duties as assigned to him by the Board of Directors or Chairman of the Board. Subject to the above, he shall have the general powers and duties of management usually vested in the office of President of the Corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or the By-Laws.
SECTION 7. Chief Operating Officer. The Chief Operating Officer shall be an officer and shall have responsibility for the active executive management and direction of the operating
divisions of the Corporation, subject to the overall direction of the Chief Executive Officer and to the control of the Board of Directors and the Executive Committee. He shall have such additional powers and duties as the Chief Executive Officer or the Board of Directors may from time to time assign to him.
SECTION 8. Chief Financial Officer. The Chief Financial Officer shall be an officer, elected and designated by the Board of Directors as Chief Financial Officer, who shall be responsible: (a) for the receipt, custody and disbursement of all funds and securities of the Corporation; (b) to receive and give receipts for monies due and payable to the Corporation from any source whatsoever and deposit all such monies in the name of the Corporation in such banks, trust companies or other depositories as shall from time to time be selected; (c) to disburse the funds of the Corporation as ordered by the Chief Executive Officer or as required in the ordinary conduct of the business of the Corporation; (d) to render to the Chief Executive Officer or the Board of Directors, upon request, an account of all transactions and on the financial condition of the Corporation; and (e) in general, to perform all the duties incident to the office of Chief Financial Officer and such other duties as from time to time may be assigned by the Chief Executive Officer, or the Board of Directors.
SECTION 9. Executive Vice President. The Corporation may have one or more Executive Vice Presidents. Such Executive Vice Presidents shall, under the direction of the President, exercise general supervision over those functions of the Corporation designated to such Executive Vice President. He may act for the President in other ways as specifically directed by the President. In the absence of the President, an Executive Vice President so designated shall have and exercise all powers and duties of the President and perform such other duties as may be prescribed by the Board of Directors.
SECTION 10. Vice President. The Vice President, or if there shall be more than one (1), shall have such powers and perform such duties as may be assigned by the President or Board of Directors. Vice Presidents may be so designated by seniority and by function.
SECTION 11. Secretary. The Secretary shall attend all meetings of the Board of Directors and of the stockholders, and shall record all votes and the Minutes of all proceedings in a book to be kept for that purpose. The Secretary shall give or cause to be given notice of all meetings of the stockholders and the Board of Directors and shall affix the seal of the Corporation to all certificates of stock, and to such other doc- uments as may require it, and shall have charge of the
Corporation's seal, and the stock certificate book, and such other books and papers as the Board of Directors may direct, and shall cancel all surrendered stock certificates before issuing new certificates, and shall preserve such canceled certificates. The Secretary shall also perform such other duties as the Board of Directors may from time to time prescribe.
SECTION 12. Assistant Secretary. An Assistant Secretary shall have and exercise all the powers and duties of the Secretary in case of the Secretary's absence or inability to act and shall have such other powers and perform such other duties as may be assigned to the Secretary by the Board of Directors.
SECTION 13. Treasurer. The Treasurer shall have the
custody of the Corporate funds and securities and shall deposit
all monies and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be
authorized by the Board of Directors. The Treasurer shall
disburse the funds of the Corporation as may be ordered by the
Board, taking proper vouchers for such disbursements and shall
render to the Corporation an account of all transactions and of
the financial condition of the Corporation. The Treasurer shall
perform such other duties and have such other powers as the
Board, the Chief Executive Officer, the Chief Financial Officer,
or the officer to whom he shall report may from time to time
prescribe.
SECTION 14. Assistant Treasurer. An Assistant Treasurer shall have and exercise all the powers and duties of the Treasurer in case of the Treasurer's absence or inability to act and shall have such other powers and perform such other duties as may be assigned by the Board of Directors.
SECTION 15. Controller. The Controller shall be the chief accounting officer of the Corporation and shall keep or cause to be kept correct records of the business and transactions of the Corporation and shall, upon request, at all reasonable times exhibit or cause to be exhibited such records at the place where such records are kept. He shall perform such other duties as from time to time may be assigned to him by the Chief Executive Officer, the President, the Chief Financial Officer or the officer to whom he shall report.
SECTION 16. General Counsel. The General Counsel shall be the chief legal officer of the Corporation and shall have, subject to the control of the Board of Directors and the Chief Executive Officer, general and active supervision and direction over the legal affairs of the Corporation. He shall have such other powers and perform such other duties as may be assigned to him by the Board of Directors, the Chief Executive Officer, or the officer to whom he shall report.
SECTION 1. Form. The certificates of stock of the Corporation shall be numbered and entered in the books of the Corporation as they are issued. They shall exhibit the holder's name and the number of shares and shall be signed by the Chairman of the Board or the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and shall bear the Corporate seal. Such seal may be a facsimile. engraved or printed. Where certificates are manually signed by a Transfer Agent or Registrar who is not an officer or employee of the Corporation, all other signatures on the certificates may be facsimile.
SECTION 2. Transfer of Stock. Upon surrender to the Corporation or the Transfer Agent of the Corporation of a certificate of stock duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto and cancel the old certificates; every such transfer of stock shall be entered on the stock books of the Corporation.
SECTION 3. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof, and, accordingly, shall not be bound to recognize any equitable or other claims to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of New Jersey.
ARTICLE VIII
General Provisions
SECTION 1. Stockholders' Record Date. Except as otherwise provided in these By-Laws, in order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the day of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 2. Dividends. Dividends upon the capital stock of the Corporation, subject to any provisions of the Certificate of Incorporation relating thereto, may be declared by the Board of Directors at any regular or special meeting, pursuant to law.
Before payment of any dividend, there may be set aside out of the net profits of the Corporation available for dividends such sum or sums as the Directors from time to time in their absolute discretion think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.
SECTION 3. Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
SECTION 4. Fiscal Year. The fiscal year of the
Corporation shall be fixed by resolution of the Board of
Directors.
ARTICLE IX
Amendments
These By-Laws may be altered, amended, or repealed or new By-Laws may be adopted by the affirmative vote of a majority of the Board of Directors at any regular or special meeting of the Board, subject to any provisions in the Certificate of Incorporation or the statutes, reserving to the stockholders the power to adopt, amend, or repeal By-Laws, provided, however, that By-Laws made by the Board may be altered or repealed and new By-Laws made by the stockholders. The stockholders may prescribe that any By-Law made by them shall not be altered or repealed by the Board.
IV - 47
Exhibit 4
C. R. BARD, INC.
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Rights Agent
Rights Agreement
Dated as of October 9, 1985
IV - 48
RIGHTS AGREEMENT
Agreement, dated as of October 9, 1985, between C. R. Bard,
Inc., a New Jersey corporation (the "Company"), and Morgan Guaranty
Trust Company of New York, a New York banking association (the
"Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one Right for each share of Common Stock,
$.25 par value, of the Company ("Common Share") outstanding on
October 21, 1985 and has authorized the issuance of one Right with
respect to each Common Share that shall become outstanding between
October 21, 1985 and the earlier of the Distribution Date, the
Expiration Date and the Final Expiration Date (as such terms are
defined in Sections 3 and 7 hereof), each right representing the
right to purchase one Common Share.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined)
of 20% or more of the Common Shares then outstanding, but shall not
include any employee benefit plan of the Company or an entity
holding Common Shares for or pursuant to the terms of any such
plan.
(b) "Affiliate" and "Associate" shall have.the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on October 21, 1985.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for purchase; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; PROVIDED, HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to
close.
(e) "Close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; PROVIDED, HOWEVER, that if
such date is.not a Business Day it shall mean 5:00 P.M., New York
City time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the shares of Common Stock, $.25 par value, of the
Company. "Common Shares" when used with reference to any Person
other than the Company shall mean the capital stock with the
greatest voting power of such Person or, if such Person is a
subsidiary of another Person, the Person which ultimately controls
such firstmentioned Person.
(g) "Person" shall mean any individual, firm, corporation or
other entity.
(h) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Shares) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the
earlier of (i) the tenth day after the Shares Acquisition Date or
(ii) the tenth day after the date of the commencement of, or first
public announcement of the intent of any Person (other than the
Company or any employee benefit plan of the Company) to commence,
a tender or exchange offer for 30% or more of the outstanding
Common Shares (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for Common
Shares registered in the names of the holders thereof (which
certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Rights Agent will
send, by first-class, postage prepaid mail, to each record holder
of Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit
A hereto, evidencing one Right for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) On October 21, 1985 or as soon a-s practicable
thereafter, the Company will send a copy of a Summary of Rights to
Purchase Common Shares, in substantially the form attached hereto
as Exhibit B (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of Common Shares as of the
close of business on October 21, 1985 at the address of such holder
shown on the records of the Company. With respect to certificates
for Common Shares outstanding as of October 21, 1985, until the
Distribution Date, the Rights will be evidenced by such
certificates for Common Shares registered in the names of the
holders thereof (together with a copy of the Summary of Rights).
Until the Distribution Date (or the earlier Expiration Date or
Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on October 21, 1985, with
or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(c) Certificates for Common Shares issued after October 21,
1985 but prior to the earlier of the Distribution Date or the
Expiration Date or the Final Expiration Date (as such terms are
defined in Section 7 hereof) shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
C. R. Bard, Inc. and Morgan Guaranty Trust Company of New York
dated as of October 9, 1985 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices
of C. R. Bard, Inc. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. C. R. Bard, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge
within five days after receipt of a written request therefor.
Under certain circumstances, Rights issued to Acquiring
Persons (as defined in the Rights Agreement) may become null
and void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of election to purchase shares and of assignment to
be printed on the reverse thereof) shall be substantially the same
as Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of
Section 22 hereof, the Right Certificates, whenever issued, shall
be dated as of October 21, 1985, and on their face shall entitle
the holders thereof to purchase such number of Common Shares as
shall be set forth therein at the price per share set forth therein
(the "Purchase Price"), but the number of such shares and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by its
Chairman of the Board or President or any Vice President, either
manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before counter-
signature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of
the Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Company
to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at one of its offices in New York, New York,
books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES. Subject to the provisions of Section 14 hereof, at
any time after the close of business on the Distribution Date, and
at or prior to the close of business on the earlier of the
Expiration Date or the Final Expiration Date, any Right Certificate
or Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of Common Shares as the
Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and
shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal
office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to
them, and, at the Company's request, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company will make and deliver
a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Right Certificate
so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS. (a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election
to purchase on the reverse side thereof duly executed, to the
Rights Agent at the principal office of the Rights Agent in New
York, New York, together with payment of the Purchase Price for
each Common Share as to which the Rights are exercised, at or prior
to the earlier of (i) the close of business on October 21, 1995
(the "Final Expiration Date"), or (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (such earlier time
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each Common Share pursuant to the
exercise of a Right shall initially be $125, shall be subject to
adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax in cash, or by certified check or bank draft payable
to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Common
Shares (or make available, if the Rights Agent is the transfer
agent) certificates for the number of Common Shares to be purchased
and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14, (iii) promptly
after receipt of such certificates, cause the same to be delivered
to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated
by such holder and (iv) when appropriate, after receipt promptly
deliver such cash to or upon the order of the registered holder of
such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section
14 hereof.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered
to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF COMMON SHARES. The
Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Common Shares or
any authorized and issued Common Shares held in its treasury, the
number of Common Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.
So long as the Common Shares issuable upon the exercise of
Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all such shares reserved for
such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares
delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery
of the Right Certificates or of any Common Shares upon the exercise
of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates for the Common Shares in a
name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue
or deliver any certificates for Common Shares upon the exercise of
any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. COMMON SHARES RECORD DATE. Each person in whose
name any certificate for Common Shares is issued upon the exercise
of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and
such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment
is a date upon which the Common Shares transfer books of the
Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be
dated, the next succeeding business day on which the Common Shares
transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any right-s of a stockholder of the
Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number of shares covered
by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Shares
payable in Common Shares, (B) subdivide the outstanding Common
Shares, (C) combine the outstanding Common Shares into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section ll(a), the Purchase
Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Common Shares transfer
books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both Section ll(a)(i) and
Section ll(a)(ii), the adjustment provided for in this Section
ll(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii)
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, (1) shall merge into the Company or other-
wise combine with the Company and the Company shall be the
continuing or surviving corporation of such merger or combination
and the Common Shares of the Company shall remain outstanding and
unchanged, (2) shall, in one or more transactions, transfer any
assets to the Company in exchange (in whole or in part) for Common
Shares or for securities exercisable for or convertible into Common
Shares or otherwise obtain from the Company, with or without
consideration, any additional Common Shares or securities
exercisable for or convertible into Common Shares (other than as
part of a pro rata distribution to all holders of Common Shares),
(3) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise dispose (in one or more transactions), to,
from or with, as the case may be, the Company or any of its
subsidiaries, assets on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party, (4) shall receive any
compensation from the Company or any of the Company's subsidiaries
other than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its
subsidiaries') past practices, or (5) shall receive the benefit,
directly or indirectly (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage provided by
the Company or any of its subsidiaries, or
(B) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any
merger or consolidation of the Company with any of its subsidiaries
or any other transaction or series of transactions (whether or not
with or into or otherwise involving an Acquiring Person) which has
the effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class of
equity securities or of securities exercisable for or convertible
into securities of the Company or any of its subsidiaries which is
directly or indirectly owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, then, and in each
such case, proper provision shall be made so that each holder of a
Right, except as provided below, shall thereafter have a right to
receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of
Common Shares as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of Common Shares
for which a Right is then exercisable and dividing that product by
(y) 50% of the current per share market price of the Common Shares
(determined pursuant to Section ll(d)) on the date of the
occurrence of any one of the events listed above in this
subparagraph (ii). Notwithstanding the foregoing, upon the
occurrence of any of the events listed above in this subparagraph
(ii), any Rights that are or were at any time beneficially owned by
the Acquiring Person or any Associate or Affiliate of the Acquiring
Person shall become void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any
provision of this Agreement. Any Right Certificate issued pursuant
to Section 3 hereof that represents Rights beneficially owned by an
Acquiring Person or any Associate or Affiliate thereof and any
Right Certificate issued at any time upon the transfer of any
Rights to an Acquiring Person or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate,
and any Right Certificate issued pursuant to Section 6 or this
Section 11 upon transfer, exchange, replacement or adjustment of
any other Right Certificate referred to in this sentence, shall
contain the following legend:
The Rights represented by this Right Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person. This Right Certificate and
the Rights represented hereby may become void in the circum-
stances specified in Section ll(a)(ii) of the Rights
Agreement.
For the purposes of this section, "subsidiaries" shall mean any
corporations or other entities of which a majority of the voting
power of the voting equity securities or equity interests is owned,
directly or indirectly, by the Company.
(iii) In the event that there shall not be sufficient
authorized but unissued Common Shares or Treasury shares to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon
exercise of the Rights.
(b) In the case the Company shall fix a record date for the
issuance of rights or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Shares (or
securities convertible into Common Shares) at a price per Common
Share (or having a conversion price per Common Share, if a security convertible into Common Shares) less than the current per share market price of the Common Shares (as defined in Section ll(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such record date plus the number of Common Shares which the aggregate offering price of the total number of Common Shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Common Shares outstanding on such record date plus the number of additional Common Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. Common Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend at a rate not in
excess of 140% of the rate of the last regular periodic cash
dividend theretofore paid or a dividend payable in Common Shares)
or subscription rights or warrants (excluding those referred to in
Section ll(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of
the Common Shares (as defined in Section ll(d)) on such record
date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to one Common Share and the denominator of which shall be such
current per share market price of the Common Shares. Such
adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date
shall be deemed to be the average of the daily closing prices per
share of such Common Shares for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date;
PROVIDED, HOWEVER, that in the event that the current per share
market price of the Common Shares is determined during a period
following the announcement by the issuer of such Common Shares of
(i) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common
Shares or (ii) any subdivision, combination or reclassification of
such Common Shares, and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or re-
classification, then, and in each such case, the "current market
price" shall be appropriately adjusted to reflect the current
market price per Common Share. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Common Shares are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Shares are listed or admitted to trading or, if the Common Shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date the Common Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Shares selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Shares, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Common Shares are listed or admitted to trading is open for the transaction of business or, if the Common Shares are not listed or admitted to trading on any national securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in the State of New York are not authorized or obligated by law or executive order to close. If the Common Shares
are not publicly held or not so listed or traded, "current per
share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with
the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; PROVIDED, HOWEVER, that any adjustments
which by reason of this Section ll(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share as
the case may be. Notwithstanding the first sentence of this Section
ll(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
ll(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company
other than Common Shares, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
shares contained in Section ll(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 hereof with respect to the
Common Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the
number of Common Shares purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section ll(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Section ll(b) and
(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of shares (calculated to the
nearest ten-thousandth) obtained by (i) multiplying (x) the number
of shares covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of Common Shares
issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of Common Shares for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section ll(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Common Shares issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the
number of shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the Common Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Common Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any
Right exercised after such record date the Common Shares and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the Common Shares and other capital
stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED, HOWEVER, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Common Shares,
issuance wholly for cash of any of the Common Shares at less than
the current market price, issuance wholly for cash of Common Shares
or securities which by their terms are convertible into or
exchangeable for Common Shares, stock dividends or issuance of
rights, options or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of its Common Shares
shall not be taxable to such stockholders.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Sections
11 and 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Common Shares
a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25
hereof.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER. In the event, directly or indirectly, (a)
the Company shall consolidate with, or merge with and into, any
other Person, (b) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall
be changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (c) the Company
shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its subsidiaries
(taken as a whole) to any other Person, then, and in each such
case, proper provision shall be made so that (i) each holder of a
Right shall thereafter have the right to receive, upon the exercise
thereof at the then-current Purchase Price in accordance with the
terms of this Agreement, such number of Common Shares of such other
Person as shall be equal to the result obtained by (x) multiplying
the then-current Purchase Price by the number of Common Shares for
which a Right is then exercisable and dividing that product by (y)
50% of the current per share market price of the Common Shares of
such other Person (determined pursuant to Section ll(d) hereof) on
the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares shall thereafter be
liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer
shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights. The Company shall not consummate any
such consolidation, merger, sale or transfer unless prior thereto
the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement so providing. The
provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If
on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares upon exercise of the Rights or to distribute certificates
which evidence fractional shares. In lieu of fractional shares,
the Company may pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction-of the current market value of
one Common Share. For purposes of this Section 14(b), the current
market value of a Common Share shall be the closing price of a
Common Share (as determined pursuant to the second sentence of
Section ll(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder
of any Right Certificate (or, prior to the Distribution Date, of
the Common Shares), without the consent of the Rights Agent or of
the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of
the Common Shares or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except
as provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees
to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against
any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate for
the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by any one of the Chairman
of the Board, the President, a Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except as to its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment); nor shall
it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Common
Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Common Shares will, when so
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President,
a Vice President, the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Shares by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Shares by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such
a court, shall be a corporation organized and doing business under
the laws of the United States or of the State of New York (or of
any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of
New York), in good standing, having a principal office in the State
of New York, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination
by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares, and mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price per share and the number or kind or
class of shares or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of
this Agreement.
Section 23. REDEMPTION. (a) The Board of Directors of the
Company may, at its option, at any time prior to 5:00 P.M., New
York City time, on the earlier of the Shares Acquisition Date or
the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $.05 per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price").
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. Within 10 days
after the action of the Board of Directors ordering the redemption
of the Rights, the Company shall give notice of such redemption to
the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common
Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS. In case the Company
shall propose (a) to pay any dividend payable in stock of any class
to the holders of Common Shares or to make any other distribution
to the holders of Common Shares (other than a regular periodic cash
dividend at a rate not in excess of 140% of the rate of the last
regular periodic cash dividend theretofore paid), or (b) to offer
to the holders of Common Shares rights or warrants to subscribe for
or to purchase any additional Common Shares or shares of stock of
any class or any other securities, rights or options, or (c) to
effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding
Common Shares), or (d) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one
or more of its subsidiaries to effect any sale or other transfer),
in one or more transactions, of more than 50% of the assets or earning power of the Company and its subsidiaries (taken as a whole) to, any other Person, or (e) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a Right certificate, in accordance with Section 25 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock-dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (a) or (b) above at least 20 days prior to the record date for determining holders of the Common Shares for purposes of such action, and in the case of any such other action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares whichever shall be the earlier. In case any of the events set forth in Section ll(a)(ii) of this Agreement shall occur, then, in any such case, the Company shall as soon as practicable thereafter give to each holder of a Right certificate, in accordance with Section 25 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section ll(a)(ii) hereof.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder
of any Right Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the
Rights Agent) as follows:
C. R. Bard, Inc.
731 Central Avenue
Murray Hill, New Jersey 07974
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Morgan Guaranty Trust Company of New York
30 West Broadway
New York, New York 10015
Attention: Tenders and Exchanges Department
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. The Company and the
Rights Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Right Certificates
in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions
in regard to matters or questions arising hereunder which the
Company and the Rights Agent may deem necessary or desirable and
which shall not adversely affect the interests of the holders of
Right Certificates.
Section 27. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 28. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corPoration
other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates.
Section 29. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 30. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall
be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely
within such State.
Section 31. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 32. DESCRIPTION HEADINGS. Descriptive headings of the
several sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
C. R. BARD, INC.
Attest:
By: Richard A. Flink /s/ By: Robert H. McCaffrey /s/
Secretary Chairman of the Board and
Chief Executive Officer
Attest:
|
By: By: Henry J. Walsh Assistant Secretary Vice President
Exhibit A
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER OCTOBER 21, 1995 OR EARLIER IF
NOTICE OF REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.05 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
[THE RIGHTS REPRESENTED BY THIS CERTIFICATE WERE ISSUED
TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE OF AN ACQUIRING PERSON. THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION ll(a)(ii)
OF THE RIGHTS AGREEMENT.]*
Right Certificate
C. R. BARD, INC.
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of
October 9, 1985 (the "Rights Agreement") between C. R. Bard, Inc.,
a New Jersey corporation (the "Company"), and Morgan Guaranty Trust
Company of New York, a New York banking association (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M. (New York City time) on October 21, 1995, at
the principal office of the Rights Agent, or its successors as
* The portion of the legend in brackets shall be inserted only
if applicable.
IV - 96
Rights Agent, in New York, New York, one fully paid, non-assessable
share of the Common Stock, $.25 par value (the "Common Shares"), of
the Company, at a purchase price of $125 per share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of October 21, 1985, based on the
Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of Common Shares which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights
Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of Common Shares as the
Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.05 per Right.
No fractional Common Shares will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the
Common Shares or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate
action,-or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of October 21, 1985.
ATTEST: C. R. BARD, INC.
Secretary By:
Title
|
Countersigned:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
Dated: , 19
Signature
Signature Guaranteed:
NOTICE
|
The signature to the foregoing Assignment must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
IV - 100
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right
Certificate.)
To C. R. BARD, INC.:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: , 19
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
|
Signature Guaranteed:
IV - 101
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On October 9, 1985, the Board of Directors of C. R. Bard, Inc. (the "Company") declared a dividend distribution of one Right for each outstanding share of common stock, $.25 par value (the "Common Shares"), of the Company. The distribution is payable on October 21, 1985 to the shareholders of record on October 21, 1985. Each Right entitles the registered holder to purchase from the Company one Common Share at a price of $125 per share (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement") dated as of October 9, 1985 between the Company and Morgan Guaranty Trust Company of New York, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the outstanding Common Shares or (ii) 10 days following the commencement or announcement of an intention to make a tender offer or exchange offer for 30% or more of such outstanding Common Shares (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with respect to any of the Common Share certificates outstanding as of October 21, 1985, by such Common Share certificate with a copy of this Summary of Rights attached thereto. The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Common Shares. Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Share certificates issued after October 21, 1985 upon transfer or new issuance of the Common Shares will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates for Common Shares outstanding as of October 21, 1985, even without a copy of this Summary of Rights attached thereto, will also constitute the transfer of the Rights associated with the Common Shares represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Common Shares as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights.
IV - 102
The Rights are not exercisable until the Distribution Date.
The Rights will expire on October 21, 1995, unless earlier redeemed
by the Company as described below.
The Purchase Price payable, and the number of Common Shares or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of the Common Shares, (ii) upon the grant to holders of the Common Shares of certain rights or warrants to subscribe for Common Shares or convertible securities at less than th-e current market price of the Common Shares or (iii) upon the distribution to holders of the Common Shares of evidences of indebtedness or assets (excluding regular periodic cash dividends out of earnings or retained earnings at a rate not in excess of 140% of the rate of the last cash dividend theretofore paid or dividends payable in Common Shares) or of subscription rights or warrants (other than those referred to above).
In the event that the Company were acquired in a merger or other business combination transaction or 50% or more of its assets or earning power were sold, proper provision shall be made so that each holder of a Right shall thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring com- pany which at the time of such transaction would have a market value of two times the exercise price of the Right. In the event that the Company were the surviving corporation in a merger and its Common Shares were not changed or exchanged, or in the event that an Acquiring Person engages in one of a number of self-dealing transactions specified in the Rights Agreement, proper provision shall be made so that each holder of a Right, other than Rights that were beneficially owned by the Acquiring Person on the Distribution Date (which will thereafter be void), will thereafter have the right to receive upon exercise that number of Common Shares having a market value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares will be issued and in lieu thereof, an adjustment in cash will be made based on the market price of the Common Shares on the last trading date prior to the date of exercise.
At any time prior to the public announcement that a person or group of affiliated or associated persons has acquired beneficial ownership of 20% or more of the outstanding Common Shares, the Company may redeem the Rights in whole, but not in part, at a price of $.05 per Right (the "Redemption Price"). Immediately upon the action of the Board of Directors of the Company electing to redeem
the Rights, the Company shall make announcement thereof, and upon such election, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated October 11, 1985. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated herein by reference.
IV - 104
Exhibit 10a
SEVERANCE AGREEMENT
Agreement dated August 18, 1981 by and between C. R. BARD, INC., a New Jersey corporation (the "Company") and GEORGE T. MALONEY ("Executive").
W I T N E S S E T H :
WHEREAS Executive has been employed by the Company since
March 2, 1959, and is currently the Chief Operating Officer of the
Company; and
WHEREAS the Company desires to induce Executive to remain in
its employ by protecting Executive against certain employment
risks;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, and as an inducement to Executive, the
parties hereto agree as follows:
1. Right to Severance Payment
Executive shall have the right, subsequent to any Change of
Control, as defined in Section 3, to receive the Severance Payment
provided for in Section 4 and the benefits described in Section 6
if (i) his employment terminates (whether voluntarily or
involuntarily) prior to any
IV - 105
termination of this Agreement and (ii) he delivers to the Company,
prior to any termination of this Agreement, written notice of his
intent to invoke the provisions of this Agreement (the "Severance
Notice").
2. Term of Agreement
Subject to the next sentence of this Section 2, this Agreement
shall continue in effect indefinitely unless there shall be a
Change of Control, in which event this Agreement shall terminate on
the third anniversary of the date of such Change of Control;
provided, however, that if Executive ceases to hold his present or
any higher office in the Company prior to any Change of Control,
this Agreement may be terminated by the Board of Directors of the
Company by mailing written notice of such termination to Executive
at least 30 days prior to such Change of Control. Notwithstanding
the foregoing, this Agreement shall terminate upon the earliest to
occur of the following: (i) the death or permanent disability of
Executive; (ii) termination of his employment at any time for
willful misconduct, or (iii) the date which is two years prior to
his earliest eligibility for normal retirement pursuant to the
Company's retirement plan.
3. Change of Control
For purposes of this Agreement, a Change of Control shall mean
(a) the beneficial ownership at any time hereafter by any person,
as defined herein, of capital stock of the Company, the voting
power of which constitutes 20% or more of the general voting power
of all of the Company's outstanding capital stock; or (b) a change
in a majority of the Board of Directors of the Company during any
period of two years or less. No sale to underwriters or private
placement of its capital stock by the Company, nor any acquisition
by the Company, through merger, purchase of assets or otherwise,
effected in whole or in part by issuance or reissuance of shares of
its capital stock, shall constitute a Change of Control. For
purposes of this Agreement, the following definitions shall be
applicable:
(i) The term "person" shall mean any individual, corporation
or other entity.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Company
(A) which that person owns directly, whether or not of record, or
(B) which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise,
(C) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933) of that person, or
(D) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "Associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Company,
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through application of clauses
(ii) (B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise,
but which are not actually outstanding.
(iv) Shares of capital stock held by The Chase Manhattan Bank
N.A. under the Indenture and the Escrow Agreement dated as of
November 1, 1971 between International Paper Company and said bank
shall not be deemed owned by International Paper Company or by said
bank for purposes of this Agreement, so long as they are held by
said Bank under said Escrow Agreement, but said shares shall be
deemed outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the Company.
4. Severance Payment
The Severance Payment shall be an amount equal to three times
the sum of
(i) Executive's highest annual rate of base salary in the
three year period immediately preceding a Change of Control; and
(ii) the average of the annual bonuses earned by Executive in
the three fiscal years of the Company immediately preceding the
year in which a Change of Control occurs.
The Severance Payment shall be in addition to and, except as
provided in Section 6 with respect to other severance plans or
programs maintained by the Company, shall in no way diminish,
offset or reduce any other benefits or payments to which Executive
may be entitled by reason of his employment with the Company and
its subsidiaries.
5. Method of Payment
The Severance Payment shall be made to Executive in full on
the tenth (10th) business day the ("Payment Date") following the
later of (i) receipt by the Company of the Severance Notice or (ii)
Executive's termination of employment, unless in the Severance
Notice Executive shall elect to have the Severance Payment made in
installments. If Executive chooses the installment method,
one-quarter of the Severance Payment shall be paid to him on the
Payment Date and one-quarter on each of the next three
anniversaries thereof and, in the case of the latter three
payments, the amounts to be paid shall include interest from the
Payment Date on the remaining unpaid balance of the Severance Pay-
ment calculated at the Morgan Guaranty Trust Company prime rate as
in effect from time to time.
6. Continuation of Welfare Benefits
The Company shall continue, for a period of one year after the
date the Severance Notice is given to cover Executive under those
welfare benefit plans including, but not limited to, life, health,
and disability coverage, but not including any severance pay plan
or program other than severance pay provided by this Agreement)
which were applicable to him on the date of the Severance Notice at
the same benefit levels then in effect (or shall provide their
equivalent); provided that the coverage provided to Executive shall
be no less favorable than that to which he was entitled immediately
prior to the Change of Control.
7. Miscellaneous
(a) This Agreement shall be binding on the Company's
successors and assigns. This Agreement shall not be assignable by
Executive nor inure to the benefit of his heirs, except that after
any Change of Control has occurred and Executive has given a
Severance Notice, his right to receive the Severance Payment shall
be freely transferable and shall inure to the benefit of his heirs
and assigns.
(b) Any notice, request, or other communication given
hereunder shall be in writing and if given by Executive to the
Company, shall be sent by certified or registered mail, postage
prepaid, addressed to the Company at 731 Central Avenue, Murray
Hill, New Jersey 07974, Attention: Secretary, and if given by the
Company to Executive, shall be delivered personally or sent by
certified or registered mail, postage prepaid, addressed to
Executive at 22 Normandy Court, at Basking Ridge, New Jersey.
Either party may change the address to which notices, requests and
other communications are to be addressed by notice given to the
other in accordance with the provisions of this Section 7. Notices,
requests and other communications shall be deemed to be given when
received, which, in the case of notice given by mail, shall be the
time indicated on the receipt therefor.
(c) Nothing in this Agreement shall confer any right to
continue in the employ of the Company or any of its affiliates or
interfere in any way with the right of the Company or any of its
affiliates to terminate Executive's employment at any time, subject
to Executive's right to receive the payments and other benefits
hereunder.
(d) If Executive should find it necessary to initiate any
suit or proceeding or employ an attorney to enforce his rights
under this Agreement, and if Executive is successful in such
litigation, then he shall be entitled to recover from the Company,
in addition to all other sums and relief granted in such
litigation, reasonable attorney's fees plus all costs and expenses
of such action.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
IN WITNESS WHEREOF, this Agreement has been duly executed by Executive and on behalf of the Company by its duly authorized officer, all as of the day and year first above written.
George T. Maloney /s/ Executive |
C. R. BARD, INC.
By: Robert H. McCaffrey /s/ |
IV - 111
Exhibit 10b
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey corporation (the "Corporation"), and William H. Longfield (the "Executive"), dated as of the 12th day of July, 1989.
WHEREAS, the Corporation, on behalf of itself and its shareholders, wishes to assure that the Corporation will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below) of the Corporation. The Board of Directors of the Corporation the "Board") believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage his attention and dedication to his assigned duties currently and in the event of any threatened or pending Change of Control, and to provide the Executive with competitive compensation arrangements; therefore, the Board has caused the Corporation to enter into this Agreement (i) to ensure the Executive of individual financial security in the event of a Change of Control, and (ii) to provide such protection in a manner which is competitive with that of other corporations.
IV - 112
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
l. Certain Definitions. (a) The "Effective Date" shall be
the first date during the "Change of Control Period" (as defined in
Section l(b)) on which a Change of Control occurs. Anything in
this Agreement to the contrary notwithstanding, if the Executive's
employment with the Corporation is terminated prior to the date on
which a Change of Control occurs, and the Executive can reasonably
demonstrate that such termination (l) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
of Control or (2) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination.
(b) The "Change of Control Period" is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Executive's normal retirement date ("Normal Retirement Date") under the Corporation's retirement plan; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as
the "Renewal Date"), the Change of Control Period shall be auto- matically extended so as to terminate on the earlier of (x) two years from such Renewal Date or (y) the first day of the month coinciding with or next following the Executive's Normal Retirement Date, unless at least 60 days prior to the Renewal Date the Corporation shall give notice that the Change of Control Period shall not be so extended.
2. Change of Control. (a) For purposes of this Agreement, a "Change of Control" shall be deemed to have occurred if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") occurs, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (i) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Corporation, constitutes 20 percent or more of the general voting power of all of the Corporation's outstanding capital or (ii) individuals who, as of the date hereof, constitute the Board (as of the date hereof, the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least three-quarters of
the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Corporation, nor any acquisition initiated by the Corporation, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control.
(b) For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is used in
Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or not of record, or
B. which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
C. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as amended) of that person, or
D. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation.
(iii) The outstanding shares of capital stock of the Corporation shall include shares deemed owned through application of clauses (ii) (B), (C) and (D), above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Corporation and said bank shall not be deemed owned by International Paper Corporation or by said bank for purposes of this definition, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Corporation.
3. Employment Period. The Corporation hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Corporation, for the period commencing on the Effective Date and ending on the earlier to occur of (a) the third anniversary of such date or (b) the first day of the month coinciding with or next following the Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than thirty-five (35) miles from such location.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Corporation and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Corporation in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Base Salary")
at a monthly rate at least equal to the highest monthly base salary
paid to the Executive by the Corporation during the twelve-month
period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and
from time to time as shall be consistent with increases in base
salary awarded in the ordinary course of business to other key
executives of the Corporation. Any increase in Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. Base Salary shall not be reduced after any
such increase.
(ii) Annual Bonus. In addition to Base Salary, the Executive
shall be awarded, for each fiscal year during the Employment
Period, an annual bonus (an "Annual Bonus") in cash at least equal
to the average bonus received by the Executive from the Corporation
in respect of the three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual Bonus payable as hereinabove provided, the Executive shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans and programs, whether qualified or non-qualified, then applicable to other key
executives of the Corporation and its affiliates (including the Corporation's 1981 Stock Option Plan, the Long-Term Performance Incentive Plan, the 1986 Stock Award Plan, the 1981 Employee Stock Appreciation Rights Plan, the Employees' Stock Ownership Plan and the Employees' Retirement Savings Plan, in each case to the extent then in effect or as subsequently amended); provided, however, that such plans and programs, in the aggregate, shall provide the Executive with compensation, benefits and reward opportunities at least as favorable as the most favorable such compensation benefits and reward opportunities provided by the Corporation for the Executive under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans provided by the Corporation (including, without limitation, medical, prescription, dental, disability, salary continuance, executive life, group life, accidental death and travel accident insurance plans and programs), at least comparable to those in effect at any time during the 90-day period immediately preceding the Effective Date which would be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies and procedures of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including use of an automobile and payment of related expenses, in accordance with the most favorable policies of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to those provided to the Executive at any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable policies of the Corporation and its affiliates as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
5. Termination. (a) Death or Disability. This Agreement shall terminate automatically upon the Executive's death. The Corporation may terminate this Agreement, after having established the Executive's Disability (pursuant to the definition of "Disability" set forth below), by giving to the Executive written notice of its intention to terminate the Executive's employment. In such a case, the Executive's employment with the Corporation shall terminate effective on the 180th day after receipt of such notice (the "Disability Effective Date"), provided that, within 180 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means disability which, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its
insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the Executive's
employment for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the
Executive at the expense of the Corporation, (ii) repeated
violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and
deliberate on the Executive's part and which are not remedied after
the receipt of notice from the Corporation or (iii) the conviction
of the Executive of a felony.
(c) Termination by Executive for Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or (B) any other action by the Corporation which results in a diminution in such position, authority, duties
or responsibilities, other than an insubstantial and inadvertent action which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive:
(ii) any failure by the Corporation to comply with any of the provisions of Section 4(b) of this Agreement, other than an insubstantial and inadvertent failure which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably required in
the performance of the Executive's responsibilities;
(iv) any purported termination by the Corporation of the Executive's employment otherwise than as permitted by this Agreement; or
(v) any failure by the Corporation to comply with and satisfy Section ll(c) of this Agreement.
Anything in this Agreement to the contrary notwithstanding, any termination by the Executive for any reason whatsoever during the six month period immediately following the first anniversary of
the date of a Change of Control shall be a termination for "Good Reason". For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Corporation for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the termination date is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be. If the Executive's employment is terminated by the Corporation other than for Cause or Disability, the Date of Termination shall be the date on which the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon termination. (a) Death. If the Executive's employment is terminated by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than those obligations accrued or earned by the Executive hereunder at the date of the Executive's death. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Corporation to surviving families of executives of the Corporation under such plans, programs and policies relating to family death benefits, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive, other than those obligations accrued or earned by the Executive hereunder as of the Disability Effective Date. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the
Corporation to disabled employees and/or their families in accor- dance with such plans, programs and policies relating to disability, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause or the Executive terminates his employment other than for Good Reason, the Corporation shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and shall have no further obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason; Termination by Corporation Other Than for Cause or Disability. If, during the Employment Period, the Corporation shall terminate the Executive's employment other than for Cause or Disability, or the employment of the Executive shall be terminated by the Executive for Good Reason:
(i) the Corporation shall pay to the Executive ln a lump sum in cash within 10 days after the Date of Termination (the "Payment Date") the aggregate of the following amounts:
A. to the extent not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest rate in effect at any time within the three year period preceding the Effective Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual bonuses paid to the Executive for the three full fiscal years prior to the Effective Date (the "Recent Bonus") and (y) the fraction obtained by dividing (i) the number of days between the Date of Termination and the last day of the last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of (i) the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously deferred by the Executive, all amounts previously deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the Corporation shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs and policies described in Section 4(b)(iv) of this Agreement if the
Executive's employment had not been terminated, including health insurance and life insurance, if and as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives and their families and for purposes of eligibility for retiree benefits pursuant to such plans, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to retired on the last day of such period.
Anything herein to the contrary notwithstanding, the Executive may elect in his Notice of Termination to receive the payment provided for pursuant to Section 6(d)(i)(C) hereof (the "Severance Payment") in installments. If the Executive elects the installment method, one-quarter of the Severance Payment shall be paid to the Executive on the Payment Date and one-quarter of the severance payment shall be paid to the Executive on each of the next three anniversaries thereof and, in the case of the latter three payments, the amounts to be paid shall include interests from the Payment Date on the remaining unpaid balance of the Severance Payment calculated at the Morgan Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program.
8. Full Settlement. The Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Corporation agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Corporation or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof or as a result of
any contest by the Executive about the amount of any payment pursuant to Section 9 of this Agreement, plus in each case interest at the Federal Rate (as defined below).
9. Certain Reduction of Payments by the Corporation. (a)
For purposes of this section, (1) a Payment shall mean any payment
or distribution in the nature of compensation to or for the benefit
of Executive, whether paid or payable pursuant to this Agreement or
otherwise; (ii) Agreement Payment shall mean a Payment paid or
payable pursuant to this Agreement (disregarding this Section 9);
(iii) Net After Tax Receipt shall mean the Present Value of a
Payment net of all taxes imposed on Executive with respect thereto
under Sections 1 and 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), determined by applying the highest marginal
rate under Section 1 of the Code applicable to the Executive's
taxable income; (iv) "Present Value" shall mean such value
determined in accordance with Section 280G(d)(4) of the Code; and
(v) "Reduced Amount" shall mean the smallest aggregate amount of
Payments which (a) is less than the sum of all Payments and (b)
results in aggregate Net After Tax Receipts which are equal to or
greater than the Net After Tax Receipts which would result if the
aggregate Payments were any other amount less than the sum of all
Payments.
(b) Anything in this Agreement to the contrary
notwithstanding, in the event Arthur Andersen & Co. (the
"Accounting Firm") shall determine that receipt of all Payments would subject Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a "Reduced Amount." If said firm determines that there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such Reduced Amount; provided, however, that if the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate Payments shall, after the reduction of all Agreement Payments, be reduced (but not below zero) in the amount of such excess.
(c) If the Accounting Firm determines that aggregate Agreement Payments or Payments, as the case may be, should be reduced to the Reduced Amount, the Corporation shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect, in his sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Corporation in writing of his election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Corporation may elect which of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced (as long as after such election the present value of the aggregate Agreement Payments or Payments, as the case
may be, equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Section shall be binding upon the Corporation and Executive and shall be made within 60 days of a termination of employment of the Executive. As promptly as practicable following such determination, the Corporation shall pay to or distribute for the benefit of Executive such Payments as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such Payments as become due to Executive under this Agreement.
(d) While it is the intention of the Corporation and the Executive to reduce the amounts payable or distributable to Executive hereunder only if the aggregate Net After Tax Receipts to Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will not have been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based either upon the assertion of a deficiency by
the Internal Revenue Service against the Corporation or Executive
which the Accounting Firm believes has a high probability of
success determines that an Overpayment has been made, any such
Overpayment paid or distributed by the Corporation to or for the
benefit of Executive shall be treated for all purposes as a loan to
Executive which Executive shall repay to the Corporation together
with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no such
loan shall be deemed to have been made and no amount shall be
payable by Executive to the Corporation if and to the extent such
deemed loan and payment would not either reduce the amount on which
the Executive is subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. In the event that the
Accounting Firm, based upon controlling precedent or substantial
authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of the Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code.
10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Corporation or
any of its affiliated companies and which shall not be public
knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After termination
of the Executive's employment with the Corporation, the Executive
shall not, without the prior written consent of the Corporation,
communicate or divulge any such information, knowledge or data to
anyone other than the Corporation and those designated by it. In
no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Corporation shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors.
(c) The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. As used in this Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
William H. Longfield
900 Kimball Avenue
Westfield, New Jersey 07090
If to the Corporation:
C.R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of the Corporation and the Executive with respect to the subject matter hereof.
(g) The Executive and the Corporation acknowledge that the employment of the Executive by the Corporation is "at will", and, prior to the Effective Date, may be terminated by either the Executive or the Corporation at any time. Upon a termination of the Executive's employment or upon the Executive's ceasing to be an officer of the Corporation, in each case, prior to the Effective Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Corporation has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
William H. Longfield /s/ |
C. R. BARD, INC.
By: George T. Maloney /s/
President and Chief Executive
Officer
Attest: Jean F. Barber /s/
Assistant Secretary
|
IV - 138
Exhibit 10c
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey corporation (the "Corporation"), and William C. Bopp (the "Executive"), dated as of the 14th day of January, 1991.
WHEREAS, the Corporation, on behalf of itself and its shareholders, wishes to assure that the Corporation will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below) of the Corporation. The Board of Directors of the Corporation the "Board") believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage his attention and dedication to his assigned duties currently and in the event of any threatened or pending Change of Control, and to provide the Executive with competitive compensation arrangements; therefore, the Board has caused the Corporation to enter into this Agreement (i) to ensure the Executive of individual financial security in the event of a Change of Control, and (ii) to provide such protection in a manner which is competitive with that of other corporations.
IV - 139
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
l. Certain Definitions. (a) The "Effective Date" shall be
the first date during the "Change of Control Period" (as defined in
Section l(b)) on which a Change of Control occurs. Anything in
this Agreement to the contrary notwithstanding, if the Executive's
employment with the Corporation is terminated prior to the date on
which a Change of Control occurs, and the Executive can reasonably
demonstrate that such termination (l) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
of Control or (2) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination.
(b) The "Change of Control Period" is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Executive's normal retirement date ("Normal Retirement Date") under the Corporation's retirement plan; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as
the "Renewal Date"), the Change of Control Period shall be auto- matically extended so as to terminate on the earlier of (x) two years from such Renewal Date or (y) the first day of the month coinciding with or next following the Executive's Normal Retirement Date, unless at least 60 days prior to the Renewal Date the Corporation shall give notice that the Change of Control Period shall not be so extended.
2. Change of Control. (a) For purposes of this Agreement, a "Change of Control" shall be deemed to have occurred if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") occurs, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (i) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Corporation, constitutes 20 percent or more of the general voting power of all of the Corporation's outstanding capital or (ii) individuals who, as of the date hereof, constitute the Board (as of the date hereof, the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least three-quarters of
the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Corporation, nor any acquisition initiated by the Corporation, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control.
(b) For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is used in
Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or not of record, or
B. which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
C. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as amended) of that person, or
D. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation.
(iii) The outstanding shares of capital stock of the Corporation shall include shares deemed owned through application of clauses (ii) (B), (C) and (D), above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Corporation and said bank shall not be deemed owned by International Paper Corporation or by said bank for purposes of this definition, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Corporation.
3. Employment Period. The Corporation hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Corporation, for the period commencing on the Effective Date and ending on the earlier to occur of (a) the third anniversary of such date or (b) the first day of the month coinciding with or next following the Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than thirty-five (35) miles from such location.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Corporation and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Corporation in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Base Salary")
at a monthly rate at least equal to the highest monthly base salary
paid to the Executive by the Corporation during the twelve-month
period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and
from time to time as shall be consistent with increases in base
salary awarded in the ordinary course of business to other key
executives of the Corporation. Any increase in Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. Base Salary shall not be reduced after any
such increase.
(ii) Annual Bonus. In addition to Base Salary, the Executive
shall be awarded, for each fiscal year during the Employment
Period, an annual bonus (an "Annual Bonus") in cash at least equal
to the average bonus received by the Executive from the Corporation
in respect of the three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual Bonus payable as hereinabove provided, the Executive shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans and programs, whether qualified or non-qualified, then applicable to other key
executives of the Corporation and its affiliates (including the Corporation's 1981 Stock Option Plan, the Long-Term Performance Incentive Plan, the 1986 Stock Award Plan, the 1981 Employee Stock Appreciation Rights Plan, the Employees' Stock Ownership Plan and the Employees' Retirement Savings Plan, in each case to the extent then in effect or as subsequently amended); provided, however, that such plans and programs, in the aggregate, shall provide the Executive with compensation, benefits and reward opportunities at least as favorable as the most favorable such compensation benefits and reward opportunities provided by the Corporation for the Executive under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans provided by the Corporation (including, without limitation, medical, prescription, dental, disability, salary continuance, executive life, group life, accidental death and travel accident insurance plans and programs), at least comparable to those in effect at any time during the 90-day period immediately preceding the Effective Date which would be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies and procedures of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including use of an automobile and payment of related expenses, in accordance with the most favorable policies of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to those provided to the Executive at any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable policies of the Corporation and its affiliates as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
5. Termination. (a) Death or Disability. This Agreement shall terminate automatically upon the Executive's death. The Corporation may terminate this Agreement, after having established the Executive's Disability (pursuant to the definition of "Disability" set forth below), by giving to the Executive written notice of its intention to terminate the Executive's employment. In such a case, the Executive's employment with the Corporation shall terminate effective on the 180th day after receipt of such notice (the "Disability Effective Date"), provided that, within 180 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means disability which, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its
insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the Executive's
employment for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the
Executive at the expense of the Corporation, (ii) repeated
violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and
deliberate on the Executive's part and which are not remedied after
the receipt of notice from the Corporation or (iii) the conviction
of the Executive of a felony.
(c) Termination by Executive for Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or (B) any other action by the Corporation which results in a diminution in such position, authority, duties
or responsibilities, other than an insubstantial and inadvertent action which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive:
(ii) any failure by the Corporation to comply with any of the provisions of Section 4(b) of this Agreement, other than an insubstantial and inadvertent failure which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably required in
the performance of the Executive's responsibilities;
(iv) any purported termination by the Corporation of the Executive's employment otherwise than as permitted by this Agreement; or
(v) any failure by the Corporation to comply with and satisfy Section ll(c) of this Agreement.
Anything in this Agreement to the contrary notwithstanding, any termination by the Executive for any reason whatsoever during the six month period immediately following the first anniversary of
the date of a Change of Control shall be a termination for "Good Reason". For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Corporation for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the termination date is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be. If the Executive's employment is terminated by the Corporation other than for Cause or Disability, the Date of Termination shall be the date on which the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon termination. (a) Death. If the Executive's employment is terminated by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than those obligations accrued or earned by the Executive hereunder at the date of the Executive's death. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Corporation to surviving families of executives of the Corporation under such plans, programs and policies relating to family death benefits, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive, other than those obligations accrued or earned by the Executive hereunder as of the Disability Effective Date. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the
Corporation to disabled employees and/or their families in accor- dance with such plans, programs and policies relating to disability, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause or the Executive terminates his employment other than for Good Reason, the Corporation shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and shall have no further obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason; Termination by Corporation Other Than for Cause or Disability. If, during the Employment Period, the Corporation shall terminate the Executive's employment other than for Cause or Disability, or the employment of the Executive shall be terminated by the Executive for Good Reason:
(i) the Corporation shall pay to the Executive ln a lump sum in cash within 10 days after the Date of Termination (the "Payment Date") the aggregate of the following amounts:
A. to the extent not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest rate in effect at any time within the three year period preceding the Effective Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual bonuses paid to the Executive for the three full fiscal years prior to the Effective Date (the "Recent Bonus") and (y) the fraction obtained by dividing (i) the number of days between the Date of Termination and the last day of the last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of (i) the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously deferred by the Executive, all amounts previously deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the Corporation shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs and policies described in Section 4(b)(iv) of this Agreement if the
Executive's employment had not been terminated, including health insurance and life insurance, if and as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives and their families and for purposes of eligibility for retiree benefits pursuant to such plans, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to retired on the last day of such period.
Anything herein to the contrary notwithstanding, the Executive may elect in his Notice of Termination to receive the payment provided for pursuant to Section 6(d)(i)(C) hereof (the "Severance Payment") in installments. If the Executive elects the installment method, one-quarter of the Severance Payment shall be paid to the Executive on the Payment Date and one-quarter of the severance payment shall be paid to the Executive on each of the next three anniversaries thereof and, in the case of the latter three payments, the amounts to be paid shall include interests from the Payment Date on the remaining unpaid balance of the Severance Payment calculated at the Morgan Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program.
8. Full Settlement. The Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Corporation agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Corporation or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof or as a result of
any contest by the Executive about the amount of any payment pursuant to Section 9 of this Agreement, plus in each case interest at the Federal Rate (as defined below).
9. Certain Reduction of Payments by the Corporation. (a)
For purposes of this section, (1) a Payment shall mean any payment
or distribution in the nature of compensation to or for the benefit
of Executive, whether paid or payable pursuant to this Agreement or
otherwise; (ii) Agreement Payment shall mean a Payment paid or
payable pursuant to this Agreement (disregarding this Section 9);
(iii) Net After Tax Receipt shall mean the Present Value of a
Payment net of all taxes imposed on Executive with respect thereto
under Sections 1 and 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), determined by applying the highest marginal
rate under Section 1 of the Code applicable to the Executive's
taxable income; (iv) "Present Value" shall mean such value
determined in accordance with Section 280G(d)(4) of the Code; and
(v) "Reduced Amount" shall mean the smallest aggregate amount of
Payments which (a) is less than the sum of all Payments and (b)
results in aggregate Net After Tax Receipts which are equal to or
greater than the Net After Tax Receipts which would result if the
aggregate Payments were any other amount less than the sum of all
Payments.
(b) Anything in this Agreement to the contrary
notwithstanding, in the event Arthur Andersen & Co. (the
"Accounting Firm") shall determine that receipt of all Payments would subject Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a "Reduced Amount." If said firm determines that there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such Reduced Amount; provided, however, that if the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate Payments shall, after the reduction of all Agreement Payments, be reduced (but not below zero) in the amount of such excess.
(c) If the Accounting Firm determines that aggregate Agreement Payments or Payments, as the case may be, should be reduced to the Reduced Amount, the Corporation shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect, in his sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Corporation in writing of his election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Corporation may elect which of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced (as long as after such election the present value of the aggregate Agreement Payments or Payments, as the case
may be, equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Section shall be binding upon the Corporation and Executive and shall be made within 60 days of a termination of employment of the Executive. As promptly as practicable following such determination, the Corporation shall pay to or distribute for the benefit of Executive such Payments as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such Payments as become due to Executive under this Agreement.
(d) While it is the intention of the Corporation and the Executive to reduce the amounts payable or distributable to Executive hereunder only if the aggregate Net After Tax Receipts to Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will not have been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based either upon the assertion of a deficiency by
the Internal Revenue Service against the Corporation or Executive
which the Accounting Firm believes has a high probability of
success determines that an Overpayment has been made, any such
Overpayment paid or distributed by the Corporation to or for the
benefit of Executive shall be treated for all purposes as a loan to
Executive which Executive shall repay to the Corporation together
with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no such
loan shall be deemed to have been made and no amount shall be
payable by Executive to the Corporation if and to the extent such
deemed loan and payment would not either reduce the amount on which
the Executive is subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. In the event that the
Accounting Firm, based upon controlling precedent or substantial
authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of the Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code.
10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Corporation or
any of its affiliated companies and which shall not be public
knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After termination
of the Executive's employment with the Corporation, the Executive
shall not, without the prior written consent of the Corporation,
communicate or divulge any such information, knowledge or data to
anyone other than the Corporation and those designated by it. In
no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Corporation shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors.
(c) The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. As used in this Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
William C. Bopp
85 Maple Street
Summit, New Jersey 07901
If to the Corporation:
C.R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of the Corporation and the Executive with respect to the subject matter hereof.
(g) The Executive and the Corporation acknowledge that the employment of the Executive by the Corporation is "at will", and, prior to the Effective Date, may be terminated by either the Executive or the Corporation at any time. Upon a termination of the Executive's employment or upon the Executive's ceasing to be an officer of the Corporation, in each case, prior to the Effective Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Corporation has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
William C. Bopp /s/ |
C. R. BARD, INC.
By: George T. Maloney /s/
President and Chief Executive
Officer
Attest: Richard A. Flink /s/
Secretary
|
IV - 165
Exhibit 10d
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey corporation (the "Corporation"), and Terence C. Brady, Jr. (the "Executive"), dated as of the 22nd day of February, 1988.
WHEREAS, the Corporation, on behalf of itself and its shareholders, wishes to assure that the Corporation will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below) of the Corporation. The Board of Directors of the Corporation the "Board") believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage his attention and dedication to his assigned duties currently and in the event of any threatened or pending Change of Control, and to provide the Executive with competitive compensation arrangements; therefore, the Board has caused the Corporation to enter into this Agreement (i) to ensure the Executive of individual financial security in the event of a Change of Control, and (ii) to provide such protection in a manner which is competitive with that of other corporations.
IV - 166
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
l. Certain Definitions. (a) The "Effective Date" shall be
the first date during the "Change of Control Period" (as defined in
Section l(b)) on which a Change of Control occurs. Anything in
this Agreement to the contrary notwithstanding, if the Executive's
employment with the Corporation is terminated prior to the date on
which a Change of Control occurs, and the Executive can reasonably
demonstrate that such termination (l) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
of Control or (2) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination.
(b) The "Change of Control Period" is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Executive's normal retirement date ("Normal Retirement Date") under the Corporation's retirement plan; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as
the "Renewal Date"), the Change of Control Period shall be auto- matically extended so as to terminate on the earlier of (x) two years from such Renewal Date or (y) the first day of the month coinciding with or next following the Executive's Normal Retirement Date, unless at least 60 days prior to the Renewal Date the Corporation shall give notice that the Change of Control Period shall not be so extended.
2. Change of Control. (a) For purposes of this Agreement, a "Change of Control" shall be deemed to have occurred if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") occurs, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (i) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Corporation, constitutes 20 percent or more of the general voting power of all of the Corporation's outstanding capital or (ii) individuals who, as of the date hereof, constitute the Board (as of the date hereof, the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least three-quarters of
the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Corporation, nor any acquisition initiated by the Corporation, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control.
(b) For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is used in
Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or not of record, or
B. which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
C. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as amended) of that person, or
D. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation.
(iii) The outstanding shares of capital stock of the Corporation shall include shares deemed owned through application of clauses (ii) (B), (C) and (D), above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Corporation and said bank shall not be deemed owned by International Paper Corporation or by said bank for purposes of this definition, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Corporation.
3. Employment Period. The Corporation hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Corporation, for the period commencing on the Effective Date and ending on the earlier to occur of (a) the third anniversary of such date or (b) the first day of the month coinciding with or next following the Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than thirty-five (35) miles from such location.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Corporation and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Corporation in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Base Salary")
at a monthly rate at least equal to the highest monthly base salary
paid to the Executive by the Corporation during the twelve-month
period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and
from time to time as shall be consistent with increases in base
salary awarded in the ordinary course of business to other key
executives of the Corporation. Any increase in Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. Base Salary shall not be reduced after any
such increase.
(ii) Annual Bonus. In addition to Base Salary, the Executive
shall be awarded, for each fiscal year during the Employment
Period, an annual bonus (an "Annual Bonus") in cash at least equal
to the average bonus received by the Executive from the Corporation
in respect of the three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual Bonus payable as hereinabove provided, the Executive shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans and programs, whether qualified or non-qualified, then applicable to other key
executives of the Corporation and its affiliates (including the Corporation's 1981 Stock Option Plan, the Long-Term Performance Incentive Plan, the 1986 Stock Award Plan, the 1981 Employee Stock Appreciation Rights Plan, the Employees' Stock Ownership Plan and the Employees' Retirement Savings Plan, in each case to the extent then in effect or as subsequently amended); provided, however, that such plans and programs, in the aggregate, shall provide the Executive with compensation, benefits and reward opportunities at least as favorable as the most favorable such compensation benefits and reward opportunities provided by the Corporation for the Executive under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans provided by the Corporation (including, without limitation, medical, prescription, dental, disability, salary continuance, executive life, group life, accidental death and travel accident insurance plans and programs), at least comparable to those in effect at any time during the 90-day period immediately preceding the Effective Date which would be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies and procedures of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including use of an automobile and payment of related expenses, in accordance with the most favorable policies of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to those provided to the Executive at any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable policies of the Corporation and its affiliates as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
5. Termination. (a) Death or Disability. This Agreement shall terminate automatically upon the Executive's death. The Corporation may terminate this Agreement, after having established the Executive's Disability (pursuant to the definition of "Disability" set forth below), by giving to the Executive written notice of its intention to terminate the Executive's employment. In such a case, the Executive's employment with the Corporation shall terminate effective on the 180th day after receipt of such notice (the "Disability Effective Date"), provided that, within 180 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means disability which, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its
insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the Executive's
employment for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the
Executive at the expense of the Corporation, (ii) repeated
violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and
deliberate on the Executive's part and which are not remedied after
the receipt of notice from the Corporation or (iii) the conviction
of the Executive of a felony.
(c) Termination by Executive for Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or (B) any other action by the Corporation which results in a diminution in such position, authority, duties
or responsibilities, other than an insubstantial and inadvertent action which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive:
(ii) any failure by the Corporation to comply with any of the provisions of Section 4(b) of this Agreement, other than an insubstantial and inadvertent failure which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably required in
the performance of the Executive's responsibilities;
(iv) any purported termination by the Corporation of the Executive's employment otherwise than as permitted by this Agreement; or
(v) any failure by the Corporation to comply with and satisfy Section ll(c) of this Agreement.
Anything in this Agreement to the contrary notwithstanding, any termination by the Executive for any reason whatsoever during the six month period immediately following the first anniversary of
the date of a Change of Control shall be a termination for "Good Reason". For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Corporation for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the termination date is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be. If the Executive's employment is terminated by the Corporation other than for Cause or Disability, the Date of Termination shall be the date on which the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon termination. (a) Death. If the Executive's employment is terminated by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than those obligations accrued or earned by the Executive hereunder at the date of the Executive's death. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Corporation to surviving families of executives of the Corporation under such plans, programs and policies relating to family death benefits, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive, other than those obligations accrued or earned by the Executive hereunder as of the Disability Effective Date. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the
Corporation to disabled employees and/or their families in accor- dance with such plans, programs and policies relating to disability, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause or the Executive terminates his employment other than for Good Reason, the Corporation shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and shall have no further obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason; Termination by Corporation Other Than for Cause or Disability. If, during the Employment Period, the Corporation shall terminate the Executive's employment other than for Cause or Disability, or the employment of the Executive shall be terminated by the Executive for Good Reason:
(i) the Corporation shall pay to the Executive ln a lump sum in cash within 10 days after the Date of Termination (the "Payment Date") the aggregate of the following amounts:
A. to the extent not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest rate in effect at any time within the three year period preceding the Effective Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual bonuses paid to the Executive for the three full fiscal years prior to the Effective Date (the "Recent Bonus") and (y) the fraction obtained by dividing (i) the number of days between the Date of Termination and the last day of the last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of (i) the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously deferred by the Executive, all amounts previously deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the Corporation shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs and policies described in Section 4(b)(iv) of this Agreement if the
Executive's employment had not been terminated, including health insurance and life insurance, if and as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives and their families and for purposes of eligibility for retiree benefits pursuant to such plans, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to retired on the last day of such period.
Anything herein to the contrary notwithstanding, the Executive may elect in his Notice of Termination to receive the payment provided for pursuant to Section 6(d)(i)(C) hereof (the "Severance Payment") in installments. If the Executive elects the installment method, one-quarter of the Severance Payment shall be paid to the Executive on the Payment Date and one-quarter of the severance payment shall be paid to the Executive on each of the next three anniversaries thereof and, in the case of the latter three payments, the amounts to be paid shall include interests from the Payment Date on the remaining unpaid balance of the Severance Payment calculated at the Morgan Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program.
8. Full Settlement. The Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Corporation agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Corporation or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof or as a result of
any contest by the Executive about the amount of any payment pursuant to Section 9 of this Agreement, plus in each case interest at the Federal Rate (as defined below).
9. Certain Reduction of Payments by the Corporation. (a)
For purposes of this section, (1) a Payment shall mean any payment
or distribution in the nature of compensation to or for the benefit
of Executive, whether paid or payable pursuant to this Agreement or
otherwise; (ii) Agreement Payment shall mean a Payment paid or
payable pursuant to this Agreement (disregarding this Section 9);
(iii) Net After Tax Receipt shall mean the Present Value of a
Payment net of all taxes imposed on Executive with respect thereto
under Sections 1 and 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), determined by applying the highest marginal
rate under Section 1 of the Code applicable to the Executive's
taxable income; (iv) "Present Value" shall mean such value
determined in accordance with Section 280G(d)(4) of the Code; and
(v) "Reduced Amount" shall mean the smallest aggregate amount of
Payments which (a) is less than the sum of all Payments and (b)
results in aggregate Net After Tax Receipts which are equal to or
greater than the Net After Tax Receipts which would result if the
aggregate Payments were any other amount less than the sum of all
Payments.
(b) Anything in this Agreement to the contrary
notwithstanding, in the event Arthur Andersen & Co. (the
"Accounting Firm") shall determine that receipt of all Payments would subject Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a "Reduced Amount." If said firm determines that there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such Reduced Amount; provided, however, that if the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate Payments shall, after the reduction of all Agreement Payments, be reduced (but not below zero) in the amount of such excess.
(c) If the Accounting Firm determines that aggregate Agreement Payments or Payments, as the case may be, should be reduced to the Reduced Amount, the Corporation shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect, in his sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Corporation in writing of his election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Corporation may elect which of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced (as long as after such election the present value of the aggregate Agreement Payments or Payments, as the case
may be, equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Section shall be binding upon the Corporation and Executive and shall be made within 60 days of a termination of employment of the Executive. As promptly as practicable following such determination, the Corporation shall pay to or distribute for the benefit of Executive such Payments as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such Payments as become due to Executive under this Agreement.
(d) While it is the intention of the Corporation and the Executive to reduce the amounts payable or distributable to Executive hereunder only if the aggregate Net After Tax Receipts to Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will not have been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based either upon the assertion of a deficiency by
the Internal Revenue Service against the Corporation or Executive
which the Accounting Firm believes has a high probability of
success determines that an Overpayment has been made, any such
Overpayment paid or distributed by the Corporation to or for the
benefit of Executive shall be treated for all purposes as a loan to
Executive which Executive shall repay to the Corporation together
with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no such
loan shall be deemed to have been made and no amount shall be
payable by Executive to the Corporation if and to the extent such
deemed loan and payment would not either reduce the amount on which
the Executive is subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. In the event that the
Accounting Firm, based upon controlling precedent or substantial
authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of the Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code.
10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Corporation or
any of its affiliated companies and which shall not be public
knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After termination
of the Executive's employment with the Corporation, the Executive
shall not, without the prior written consent of the Corporation,
communicate or divulge any such information, knowledge or data to
anyone other than the Corporation and those designated by it. In
no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Corporation shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors.
(c) The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. As used in this Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Terence C. Brady, Jr.
302-D Clark Street
Westfield, New Jersey 07090
If to the Corporation:
C.R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of the Corporation and the Executive with respect to the subject matter hereof.
(g) The Executive and the Corporation acknowledge that the employment of the Executive by the Corporation is "at will", and, prior to the Effective Date, may be terminated by either the Executive or the Corporation at any time. Upon a termination of the Executive's employment or upon the Executive's ceasing to be an officer of the Corporation, in each case, prior to the Effective Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Corporation has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
Terence C. Brady, Jr. /s/ |
C. R. BARD, INC.
By: Robert H. McCaffrey /s/
Chairman and Chief Executive
Officer
Attest: Richard A. Flink /s/
Secretary
|
IV - 192
Exhibit 10e
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey corporation (the "Corporation"), and Richard A. Flink (the "Executive"), dated as of the 22nd day of February, 1988.
WHEREAS, the Corporation, on behalf of itself and its shareholders, wishes to assure that the Corporation will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below) of the Corporation. The Board of Directors of the Corporation the "Board") believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage his attention and dedication to his assigned duties currently and in the event of any threatened or pending Change of Control, and to provide the Executive with competitive compensation arrangements; therefore, the Board has caused the Corporation to enter into this Agreement (i) to ensure the Executive of individual financial security in the event of a Change of Control, and (ii) to provide such protection in a manner which is competitive with that of other corporations.
IV - 193
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
l. Certain Definitions. (a) The "Effective Date" shall be
the first date during the "Change of Control Period" (as defined in
Section l(b)) on which a Change of Control occurs. Anything in
this Agreement to the contrary notwithstanding, if the Executive's
employment with the Corporation is terminated prior to the date on
which a Change of Control occurs, and the Executive can reasonably
demonstrate that such termination (l) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
of Control or (2) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination.
(b) The "Change of Control Period" is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Executive's normal retirement date ("Normal Retirement Date") under the Corporation's retirement plan; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as
the "Renewal Date"), the Change of Control Period shall be auto- matically extended so as to terminate on the earlier of (x) two years from such Renewal Date or (y) the first day of the month coinciding with or next following the Executive's Normal Retirement Date, unless at least 60 days prior to the Renewal Date the Corporation shall give notice that the Change of Control Period shall not be so extended.
2. Change of Control. (a) For purposes of this Agreement, a "Change of Control" shall be deemed to have occurred if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") occurs, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (i) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Corporation, constitutes 20 percent or more of the general voting power of all of the Corporation's outstanding capital or (ii) individuals who, as of the date hereof, constitute the Board (as of the date hereof, the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least three-quarters of
the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Corporation, nor any acquisition initiated by the Corporation, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control.
(b) For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is used in
Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or not of record, or
B. which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
C. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as amended) of that person, or
D. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation.
(iii) The outstanding shares of capital stock of the Corporation shall include shares deemed owned through application of clauses (ii) (B), (C) and (D), above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Corporation and said bank shall not be deemed owned by International Paper Corporation or by said bank for purposes of this definition, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Corporation.
3. Employment Period. The Corporation hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Corporation, for the period commencing on the Effective Date and ending on the earlier to occur of (a) the third anniversary of such date or (b) the first day of the month coinciding with or next following the Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than thirty-five (35) miles from such location.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Corporation and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Corporation in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Base Salary")
at a monthly rate at least equal to the highest monthly base salary
paid to the Executive by the Corporation during the twelve-month
period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and
from time to time as shall be consistent with increases in base
salary awarded in the ordinary course of business to other key
executives of the Corporation. Any increase in Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. Base Salary shall not be reduced after any
such increase.
(ii) Annual Bonus. In addition to Base Salary, the Executive
shall be awarded, for each fiscal year during the Employment
Period, an annual bonus (an "Annual Bonus") in cash at least equal
to the average bonus received by the Executive from the Corporation
in respect of the three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual Bonus payable as hereinabove provided, the Executive shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans and programs, whether qualified or non-qualified, then applicable to other key
executives of the Corporation and its affiliates (including the Corporation's 1981 Stock Option Plan, the Long-Term Performance Incentive Plan, the 1986 Stock Award Plan, the 1981 Employee Stock Appreciation Rights Plan, the Employees' Stock Ownership Plan and the Employees' Retirement Savings Plan, in each case to the extent then in effect or as subsequently amended); provided, however, that such plans and programs, in the aggregate, shall provide the Executive with compensation, benefits and reward opportunities at least as favorable as the most favorable such compensation benefits and reward opportunities provided by the Corporation for the Executive under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans provided by the Corporation (including, without limitation, medical, prescription, dental, disability, salary continuance, executive life, group life, accidental death and travel accident insurance plans and programs), at least comparable to those in effect at any time during the 90-day period immediately preceding the Effective Date which would be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies and procedures of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including use of an automobile and payment of related expenses, in accordance with the most favorable policies of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to those provided to the Executive at any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable policies of the Corporation and its affiliates as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
5. Termination. (a) Death or Disability. This Agreement shall terminate automatically upon the Executive's death. The Corporation may terminate this Agreement, after having established the Executive's Disability (pursuant to the definition of "Disability" set forth below), by giving to the Executive written notice of its intention to terminate the Executive's employment. In such a case, the Executive's employment with the Corporation shall terminate effective on the 180th day after receipt of such notice (the "Disability Effective Date"), provided that, within 180 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means disability which, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its
insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the Executive's
employment for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the
Executive at the expense of the Corporation, (ii) repeated
violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and
deliberate on the Executive's part and which are not remedied after
the receipt of notice from the Corporation or (iii) the conviction
of the Executive of a felony.
(c) Termination by Executive for Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or (B) any other action by the Corporation which results in a diminution in such position, authority, duties
or responsibilities, other than an insubstantial and inadvertent action which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive:
(ii) any failure by the Corporation to comply with any of the provisions of Section 4(b) of this Agreement, other than an insubstantial and inadvertent failure which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably required in
the performance of the Executive's responsibilities;
(iv) any purported termination by the Corporation of the Executive's employment otherwise than as permitted by this Agreement; or
(v) any failure by the Corporation to comply with and satisfy Section ll(c) of this Agreement.
Anything in this Agreement to the contrary notwithstanding, any termination by the Executive for any reason whatsoever during the six month period immediately following the first anniversary of
the date of a Change of Control shall be a termination for "Good Reason". For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Corporation for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the termination date is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be. If the Executive's employment is terminated by the Corporation other than for Cause or Disability, the Date of Termination shall be the date on which the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon termination. (a) Death. If the Executive's employment is terminated by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than those obligations accrued or earned by the Executive hereunder at the date of the Executive's death. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Corporation to surviving families of executives of the Corporation under such plans, programs and policies relating to family death benefits, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive, other than those obligations accrued or earned by the Executive hereunder as of the Disability Effective Date. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the
Corporation to disabled employees and/or their families in accor- dance with such plans, programs and policies relating to disability, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause or the Executive terminates his employment other than for Good Reason, the Corporation shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and shall have no further obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason; Termination by Corporation Other Than for Cause or Disability. If, during the Employment Period, the Corporation shall terminate the Executive's employment other than for Cause or Disability, or the employment of the Executive shall be terminated by the Executive for Good Reason:
(i) the Corporation shall pay to the Executive ln a lump sum in cash within 10 days after the Date of Termination (the "Payment Date") the aggregate of the following amounts:
A. to the extent not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest rate in effect at any time within the three year period preceding the Effective Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual bonuses paid to the Executive for the three full fiscal years prior to the Effective Date (the "Recent Bonus") and (y) the fraction obtained by dividing (i) the number of days between the Date of Termination and the last day of the last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of (i) the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously deferred by the Executive, all amounts previously deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the Corporation shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs and policies described in Section 4(b)(iv) of this Agreement if the
Executive's employment had not been terminated, including health insurance and life insurance, if and as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives and their families and for purposes of eligibility for retiree benefits pursuant to such plans, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to retired on the last day of such period.
Anything herein to the contrary notwithstanding, the Executive may elect in his Notice of Termination to receive the payment provided for pursuant to Section 6(d)(i)(C) hereof (the "Severance Payment") in installments. If the Executive elects the installment method, one-quarter of the Severance Payment shall be paid to the Executive on the Payment Date and one-quarter of the severance payment shall be paid to the Executive on each of the next three anniversaries thereof and, in the case of the latter three payments, the amounts to be paid shall include interests from the Payment Date on the remaining unpaid balance of the Severance Payment calculated at the Morgan Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program.
8. Full Settlement. The Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Corporation agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Corporation or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof or as a result of
any contest by the Executive about the amount of any payment pursuant to Section 9 of this Agreement, plus in each case interest at the Federal Rate (as defined below).
9. Certain Reduction of Payments by the Corporation. (a)
For purposes of this section, (1) a Payment shall mean any payment
or distribution in the nature of compensation to or for the benefit
of Executive, whether paid or payable pursuant to this Agreement or
otherwise; (ii) Agreement Payment shall mean a Payment paid or
payable pursuant to this Agreement (disregarding this Section 9);
(iii) Net After Tax Receipt shall mean the Present Value of a
Payment net of all taxes imposed on Executive with respect thereto
under Sections 1 and 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), determined by applying the highest marginal
rate under Section 1 of the Code applicable to the Executive's
taxable income; (iv) "Present Value" shall mean such value
determined in accordance with Section 280G(d)(4) of the Code; and
(v) "Reduced Amount" shall mean the smallest aggregate amount of
Payments which (a) is less than the sum of all Payments and (b)
results in aggregate Net After Tax Receipts which are equal to or
greater than the Net After Tax Receipts which would result if the
aggregate Payments were any other amount less than the sum of all
Payments.
(b) Anything in this Agreement to the contrary
notwithstanding, in the event Arthur Andersen & Co. (the
"Accounting Firm") shall determine that receipt of all Payments would subject Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a "Reduced Amount." If said firm determines that there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such Reduced Amount; provided, however, that if the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate Payments shall, after the reduction of all Agreement Payments, be reduced (but not below zero) in the amount of such excess.
(c) If the Accounting Firm determines that aggregate Agreement Payments or Payments, as the case may be, should be reduced to the Reduced Amount, the Corporation shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect, in his sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Corporation in writing of his election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Corporation may elect which of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced (as long as after such election the present value of the aggregate Agreement Payments or Payments, as the case
may be, equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Section shall be binding upon the Corporation and Executive and shall be made within 60 days of a termination of employment of the Executive. As promptly as practicable following such determination, the Corporation shall pay to or distribute for the benefit of Executive such Payments as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such Payments as become due to Executive under this Agreement.
(d) While it is the intention of the Corporation and the Executive to reduce the amounts payable or distributable to Executive hereunder only if the aggregate Net After Tax Receipts to Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will not have been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based either upon the assertion of a deficiency by
the Internal Revenue Service against the Corporation or Executive
which the Accounting Firm believes has a high probability of
success determines that an Overpayment has been made, any such
Overpayment paid or distributed by the Corporation to or for the
benefit of Executive shall be treated for all purposes as a loan to
Executive which Executive shall repay to the Corporation together
with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no such
loan shall be deemed to have been made and no amount shall be
payable by Executive to the Corporation if and to the extent such
deemed loan and payment would not either reduce the amount on which
the Executive is subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. In the event that the
Accounting Firm, based upon controlling precedent or substantial
authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of the Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code.
10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Corporation or
any of its affiliated companies and which shall not be public
knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After termination
of the Executive's employment with the Corporation, the Executive
shall not, without the prior written consent of the Corporation,
communicate or divulge any such information, knowledge or data to
anyone other than the Corporation and those designated by it. In
no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Corporation shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors.
(c) The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. As used in this Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Richard A. Flink
523 Summer Lane
Califon, New Jersey 07830
If to the Corporation:
C.R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of the Corporation and the Executive with respect to the subject matter hereof.
(g) The Executive and the Corporation acknowledge that the employment of the Executive by the Corporation is "at will", and, prior to the Effective Date, may be terminated by either the Executive or the Corporation at any time. Upon a termination of the Executive's employment or upon the Executive's ceasing to be an officer of the Corporation, in each case, prior to the Effective Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Corporation has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
Richard A. Flink /s/ |
C. R. BARD, INC.
By: Robert H. McCaffrey /s/
Chairman and Chief Executive
Officer
Attest: Richard A. Flink /s/
Secretary
|
Exhibit 10f
AGREEMENT
AGREEMENT by and between C. R. BARD, INC., a New Jersey corporation (the "Corporation"), and E. Robert Ernest (the "Executive"), dated as of the 21st day of January, 1991.
WHEREAS, the Corporation, on behalf of itself and its shareholders, wishes to assure that the Corporation will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below) of the Corporation. The Board of Directors of the Corporation the "Board") believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage his attention and dedication to his assigned duties currently and in the event of any threatened or pending Change of Control, and to provide the Executive with competitive compensation arrangements; therefore, the Board has caused the Corporation to enter into this Agreement (i) to ensure the Executive of individual financial security in the event of a Change of Control, and (ii) to provide such protection in a manner which is competitive with that of other corporations.
IV - 220
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
l. Certain Definitions. (a) The "Effective Date" shall be
the first date during the "Change of Control Period" (as defined in
Section l(b)) on which a Change of Control occurs. Anything in
this Agreement to the contrary notwithstanding, if the Executive's
employment with the Corporation is terminated prior to the date on
which a Change of Control occurs, and the Executive can reasonably
demonstrate that such termination (l) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
of Control or (2) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination.
(b) The "Change of Control Period" is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Executive's normal retirement date ("Normal Retirement Date") under the Corporation's retirement plan; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as
the "Renewal Date"), the Change of Control Period shall be auto- matically extended so as to terminate on the earlier of (x) two years from such Renewal Date or (y) the first day of the month coinciding with or next following the Executive's Normal Retirement Date, unless at least 60 days prior to the Renewal Date the Corporation shall give notice that the Change of Control Period shall not be so extended.
2. Change of Control. (a) For purposes of this Agreement, a "Change of Control" shall be deemed to have occurred if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") occurs, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (i) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Corporation, constitutes 20 percent or more of the general voting power of all of the Corporation's outstanding capital or (ii) individuals who, as of the date hereof, constitute the Board (as of the date hereof, the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least three-quarters of
the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Corporation, nor any acquisition initiated by the Corporation, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control.
(b) For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual,
corporation or other entity and any group as such term is used in
Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Corporation:
A. which that person owns directly, whether or not of record, or
B. which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
C. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as amended) of that person, or
D. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation.
(iii) The outstanding shares of capital stock of the Corporation shall include shares deemed owned through application of clauses (ii) (B), (C) and (D), above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Corporation and said bank shall not be deemed owned by International Paper Corporation or by said bank for purposes of this definition, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Corporation.
3. Employment Period. The Corporation hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Corporation, for the period commencing on the Effective Date and ending on the earlier to occur of (a) the third anniversary of such date or (b) the first day of the month coinciding with or next following the Executive's Normal Retirement Date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than thirty-five (35) miles from such location.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Corporation and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Corporation in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Corporation.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive a base salary ("Base Salary")
at a monthly rate at least equal to the highest monthly base salary
paid to the Executive by the Corporation during the twelve-month
period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and
from time to time as shall be consistent with increases in base
salary awarded in the ordinary course of business to other key
executives of the Corporation. Any increase in Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. Base Salary shall not be reduced after any
such increase.
(ii) Annual Bonus. In addition to Base Salary, the Executive
shall be awarded, for each fiscal year during the Employment
Period, an annual bonus (an "Annual Bonus") in cash at least equal
to the average bonus received by the Executive from the Corporation
in respect of the three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual Bonus payable as hereinabove provided, the Executive shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans and programs, whether qualified or non-qualified, then applicable to other key
executives of the Corporation and its affiliates (including the Corporation's 1981 Stock Option Plan, the Long-Term Performance Incentive Plan, the 1986 Stock Award Plan, the 1981 Employee Stock Appreciation Rights Plan, the Employees' Stock Ownership Plan and the Employees' Retirement Savings Plan, in each case to the extent then in effect or as subsequently amended); provided, however, that such plans and programs, in the aggregate, shall provide the Executive with compensation, benefits and reward opportunities at least as favorable as the most favorable such compensation benefits and reward opportunities provided by the Corporation for the Executive under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans provided by the Corporation (including, without limitation, medical, prescription, dental, disability, salary continuance, executive life, group life, accidental death and travel accident insurance plans and programs), at least comparable to those in effect at any time during the 90-day period immediately preceding the Effective Date which would be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key executives.
(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies and procedures of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, in accordance with the most favorable policies of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to those provided to the Executive at any time during the 90-day period immediately preceding the
Effective Date which would be most favorable to the Executive or, if more favorable to the Executive, as provided at any time thereafter with respect to other key executives.
(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable policies of the Corporation and its affiliates as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives.
5. Termination. (a) Death or Disability. This Agreement shall terminate automatically upon the Executive's death. The Corporation may terminate this Agreement, after having established the Executive's Disability (pursuant to the definition of "Disability" set forth below), by giving to the Executive written notice of its intention to terminate the Executive's employment. In such a case, the Executive's employment with the Corporation shall terminate effective on the 180th day after receipt of such notice (the "Disability Effective Date"), provided that, within 180 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means disability which, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its
insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the Executive's
employment for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the
Executive at the expense of the Corporation, (ii) repeated
violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and
deliberate on the Executive's part and which are not remedied after
the receipt of notice from the Corporation or (iii) the conviction
of the Executive of a felony.
(c) Termination by Executive for Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or (B) any other action by the Corporation which results in a diminution in such position, authority, duties
or responsibilities, other than an insubstantial and inadvertent action which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive:
(ii) any failure by the Corporation to comply with any of the provisions of Section 4(b) of this Agreement, other than an insubstantial and inadvertent failure which is remedied by the Corporation promptly after receipt of notice thereof given by the Executive;
(iii) the Corporation's requiring the Executive to be
based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for travel reasonably required in
the performance of the Executive's responsibilities;
(iv) any purported termination by the Corporation of the Executive's employment otherwise than as permitted by this Agreement; or
(v) any failure by the Corporation to comply with and satisfy Section ll(c) of this Agreement.
Anything in this Agreement to the contrary notwithstanding, any termination by the Executive for any reason whatsoever during the six month period immediately following the first anniversary of
the date of a Change of Control shall be a termination for "Good Reason". For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Corporation for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the termination date is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be. If the Executive's employment is terminated by the Corporation other than for Cause or Disability, the Date of Termination shall be the date on which the Corporation notifies the Executive of such termination.
6. Obligations of the Corporation upon termination. (a) Death. If the Executive's employment is terminated by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than those obligations accrued or earned by the Executive hereunder at the date of the Executive's death. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Corporation to surviving families of executives of the Corporation under such plans, programs and policies relating to family death benefits, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other key executives and their families.
(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive, other than those obligations accrued or earned by the Executive hereunder as of the Disability Effective Date. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the
Corporation to disabled employees and/or their families in accor- dance with such plans, programs and policies relating to disability, if any, as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other key executives and their families.
(c) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause or the Executive terminates his employment other than for Good Reason, the Corporation shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and shall have no further obligations to the Executive under this Agreement.
(d) Termination by Executive for Good Reason; Termination by Corporation Other Than for Cause or Disability. If, during the Employment Period, the Corporation shall terminate the Executive's employment other than for Cause or Disability, or the employment of the Executive shall be terminated by the Executive for Good Reason:
(i) the Corporation shall pay to the Executive ln a lump sum in cash within 10 days after the Date of Termination (the "Payment Date") the aggregate of the following amounts:
A. to the extent not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest rate in effect at any time within the three year period preceding the Effective Date (the "Highest Base Salary"); and
B. the product of (x) the average of the annual bonuses paid to the Executive for the three full fiscal years prior to the Effective Date (the "Recent Bonus") and (y) the fraction obtained by dividing (i) the number of days between the Date of Termination and the last day of the last full fiscal year and (ii) 365; and
C. the product of (x) three and (y) the sum of (i) the Highest Base Salary and (ii) the Recent Bonus; and
D. in the case of compensation previously deferred by the Executive, all amounts previously deferred and not yet paid by the Corporation; and
(ii) for one year after the Date of Termination, the Corporation shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs and policies described in Section 4(b)(iv) of this Agreement if the
Executive's employment had not been terminated, including health insurance and life insurance, if and as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other key executives and their families and for purposes of eligibility for retiree benefits pursuant to such plans, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to retired on the last day of such period.
Anything herein to the contrary notwithstanding, the Executive may elect in his Notice of Termination to receive the payment provided for pursuant to Section 6(d)(i)(C) hereof (the "Severance Payment") in installments. If the Executive elects the installment method, one-quarter of the Severance Payment shall be paid to the Executive on the Payment Date and one-quarter of the severance payment shall be paid to the Executive on each of the next three anniversaries thereof and, in the case of the latter three payments, the amounts to be paid shall include interests from the Payment Date on the remaining unpaid balance of the Severance Payment calculated at the Morgan Guaranty Trust Company prime rate as in effect from time to time.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any stock option or other agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program.
8. Full Settlement. The Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Corporation agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Corporation or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof or as a result of
any contest by the Executive about the amount of any payment pursuant to Section 9 of this Agreement, plus in each case interest at the Federal Rate (as defined below).
9. Certain Reduction of Payments by the Corporation. (a)
For purposes of this section, (1) a Payment shall mean any payment
or distribution in the nature of compensation to or for the benefit
of Executive, whether paid or payable pursuant to this Agreement or
otherwise; (ii) Agreement Payment shall mean a Payment paid or
payable pursuant to this Agreement (disregarding this Section 9);
(iii) Net After Tax Receipt shall mean the Present Value of a
Payment net of all taxes imposed on Executive with respect thereto
under Sections 1 and 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), determined by applying the highest marginal
rate under Section 1 of the Code applicable to the Executive's
taxable income; (iv) "Present Value" shall mean such value
determined in accordance with Section 280G(d)(4) of the Code; and
(v) "Reduced Amount" shall mean the smallest aggregate amount of
Payments which (a) is less than the sum of all Payments and (b)
results in aggregate Net After Tax Receipts which are equal to or
greater than the Net After Tax Receipts which would result if the
aggregate Payments were any other amount less than the sum of all
Payments.
(b) Anything in this Agreement to the contrary
notwithstanding, in the event Arthur Andersen & Co. (the
"Accounting Firm") shall determine that receipt of all Payments would subject Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a "Reduced Amount." If said firm determines that there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such Reduced Amount; provided, however, that if the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate Payments shall, after the reduction of all Agreement Payments, be reduced (but not below zero) in the amount of such excess.
(c) If the Accounting Firm determines that aggregate Agreement Payments or Payments, as the case may be, should be reduced to the Reduced Amount, the Corporation shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect, in his sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Corporation in writing of his election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Corporation may elect which of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced (as long as after such election the present value of the aggregate Agreement Payments or Payments, as the case
may be, equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Section shall be binding upon the Corporation and Executive and shall be made within 60 days of a termination of employment of the Executive. As promptly as practicable following such determination, the Corporation shall pay to or distribute for the benefit of Executive such Payments as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such Payments as become due to Executive under this Agreement.
(d) While it is the intention of the Corporation and the Executive to reduce the amounts payable or distributable to Executive hereunder only if the aggregate Net After Tax Receipts to Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will not have been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will have not been paid or distributed by the Corporation to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based either upon the assertion of a deficiency by
the Internal Revenue Service against the Corporation or Executive
which the Accounting Firm believes has a high probability of
success determines that an Overpayment has been made, any such
Overpayment paid or distributed by the Corporation to or for the
benefit of Executive shall be treated for all purposes as a loan to
Executive which Executive shall repay to the Corporation together
with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no such
loan shall be deemed to have been made and no amount shall be
payable by Executive to the Corporation if and to the extent such
deemed loan and payment would not either reduce the amount on which
the Executive is subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. In the event that the
Accounting Firm, based upon controlling precedent or substantial
authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Corporation to or for
the benefit of the Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code.
10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the
Executive during the Executive's employment by the Corporation or
any of its affiliated companies and which shall not be public
knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). After termination
of the Executive's employment with the Corporation, the Executive
shall not, without the prior written consent of the Corporation,
communicate or divulge any such information, knowledge or data to
anyone other than the Corporation and those designated by it. In
no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Corporation shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors.
(c) The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. As used in this Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
E. Robert Ernest
12 Gerard Court
New Providence, New Jersey 07974
If to the Corporation:
C.R. BARD, INC.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of the Corporation and the Executive with respect to the subject matter hereof.
(g) The Executive and the Corporation acknowledge that the employment of the Executive by the Corporation is "at will", and, prior to the Effective Date, may be terminated by either the Executive or the Corporation at any time. Upon a termination of the Executive's employment or upon the Executive's ceasing to be an officer of the Corporation, in each case, prior to the Effective Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Corporation has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
E. Robert Ernest /s/ |
C. R. BARD, INC.
By: George T. Maloney /s/
President and Chief Executive
Officer
Attest: Richard A. Flink /s/
Secretary
|
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Exhibit 10g
C.R. BARD, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
WITH
WILLIAM H. LONGFIELD
Effective as of January 12, 1994
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TABLE OF CONTENTS
Page
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
II. ELIGIBILITY FOR SUPPLEMENTAL RETIREMENT
BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . 2
III. SUPPLEMENTAL RETIREMENT BENEFIT . . . . . . . . . . . . 3
IV. CHANGE IN CONTROL OF THE COMPANY. . . . . . . . . . . . 4
|
V. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . 6
IV - 248
C.R. BARD, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT
AGREEMENT WITH WILLIAM H. LONGFIELD
THIS AGREEMENT, effective as of January 12, 1994, is between C.R. BARD, INC., a New Jersey corporation with offices at 730 Central Avenue, Murray Hill, New Jersey 07974 (hereinafter referred to as the "Company"), and WILLIAM H. LONGFIELD, residing at 4 Kimball Circle, Westfield, NJ (hereinafter referred to as the "Executive").
WHEREAS, the Company has the strongest interest in retaining the Executive because of his outstanding performance and competence; and
WHEREAS, the Company desires to provide an additional incentive for the Executive to devote his best efforts to the service of the Company, and, to this end, the Company deems it appropriate to enter into this written agreement with the Executive providing a basis for incentive compensation.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
I. DEFINITIONS The parties agree that the terms herein contained shall have the following meanings:
1.1. "Agreement" shall mean the C.R. Bard, Inc. Supplemental Executive Retirement Agreement with William H. Longfield as set forth herein, and as from time to time amended.
1.2. "Annual Supplemental Retirement Benefit" shall have the meaning set forth in Section 3.1.
1.3. "Average Compensation" shall mean the Compensation of the Executive averaged over the five completed calendar years which provide the highest average of all of the completed calendar years ending before the Executive's Benefit Eligibility Date.
1.4. "Beneficiary" shall mean the person or persons, estates or trusts most recently designated by the Executive in a writing filed with the Company on a form prescribed by the Board, or if no such designation shall have been made or if no such Beneficiary shall have survived the Executive or shall survive the payment period for receipt of the Supplemental Retirement Benefit, the Beneficiary shall mean the Executive's estate.
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1.5. "Benefit Eligibility Date" shall have the meaning set forth in Section 2.1.
1.6. "Board of Directors" or "Board" shall mean the Board of Directors of the Company.
1.7. "Change in Control" shall have the meaning set forth in
Section 4.1.
1.8. "Compensation" shall mean the salary and bonus compensation of the Executive in each calendar year.
1.9. "Disability" shall mean the total and permanent disability of the Executive as defined under the C.R. Bard, Inc. Long Term Disability Income Plan.
1.10."Discharge(d) For Cause" shall mean the termination of the Executive's employment by the Company by reason of chronic insubordination, fraud, embezzlement, dishonesty or defalcation in connection with his employment or any one or more transactions with the Company.
1.11."Normal Retirement Date" shall mean the date on which the Executive attains age sixty-two (62).
1.12."Other Retirement Benefits" shall mean the C.R. Bard, Inc. benefits actually received by the Executive under the C.R. Bard, Inc. Long Term Performance Incentive Plan, the C.R. Bard, Inc. Supplemental Insurance/Retirement Plan, the C.R. Bard, Inc. Retirement Savings Plan, the C.R. Bard, Inc. Employees' Retirement Plan, the C.R. Bard, Inc. Excess Benefit Plan, and the C.R. Bard, Inc. Supplemental Executive Retirement Plan.
1.13."Supplemental Retirement Benefit" shall mean the aggregate of the Annual Supplemental Retirement Benefit payments payable hereunder pursuant to Article III.
II. ELIGIBILITY FOR SUPPLEMENTAL RETIREMENT BENEFIT
2.1. The Executive shall become entitled to a Supplemental Retirement Benefit upon the first to occur of the following events (the date on which such event occurs hereinafter referred to as the "Benefit Eligibility Date"):
(a) Termination of the Executive's employment by the Company (other than by reason of a Discharge For Cause).
(b) Voluntary termination of employment by the Executive on or after his Normal Retirement Date for any reason.
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(c) Voluntary termination of employment by the Executive prior to reaching his Normal Retirement Date, but within the two-year period following a Change in Control, as defined in Article IV.
(d) Executive's Disability.
(e) Executive's death.
2.2. Notwithstanding anything herein to the contrary, the Executive's participation hereunder shall cease immediately and he shall forfeit all rights hereunder to a Supplemental Retirement Benefit if prior to reaching his Normal Retirement Date, the Executive is Discharged for Cause, or voluntarily terminates his employment other than pursuant to Section 2.1(c) hereof.
III. SUPPLEMENTAL RETIREMENT BENEFIT
3.1. Amount. The Annual Supplemental Retirement Benefit shall equal 50% of the Executive's Average Compensation as of the Benefit Eligibility Date, reduced by the sum of any Other Retirement Benefits received by the Executive or his Beneficiary, as the case may be, during the applicable calendar year.
3.2. Form of Benefit. The Annual Supplemental Retirement Benefit shall be paid to the Executive each year for a period of fifteen (15) years in twelve (12) equal monthly installments, commencing on the first day of the month next following the Benefit Eligibility Date.
3.3. Death Before Distributions Commence. If the Executive
shall die before distribution of the Supplemental Retirement
Benefit commences, then the Annual Supplemental Retirement Benefit
shall be paid to the Beneficiary each year for a period of fifteen
(15) years in twelve (12) equal monthly installments, commencing on
the first day of the month next following the Executive's date of
death.
3.4 Death After Distributions Commence. If the Executive
shall die after distributions commence but prior to receipt of the
Annual Supplemental Retirement Benefit for the period specified in
Section 3.2 above, any remaining payments of such benefit shall be
made to the Executive's Beneficiary.
3.5. Board's Option to Prepay. Notwithstanding anything herein to the contrary, the Board, at its option, may accelerate payment of the Supplemental Retirement Benefit to the Executive or the Executive's Beneficiary, as the case may be.
IV - 251
IV. CHANGE IN CONTROL OF THE COMPANY
4.1 Change in Control. (a) For the purposes of this Agreement, a "change in control of the Company" (a "Change in Control") shall mean the occurrence of an event of a nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K, as in effect on the date hereof,
pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); provided, however, that a Change in Control shall, in any event, conclusively be deemed to have occurred upon the first to occur of either of the following events:
(i) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Company, constitutes 20 percent or more of the general voting power of all of the Company's outstanding capital stock; or
(ii) individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Board" generally and as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election, by the Company's shareholders, was approved by a vote of at least three-quarters of the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board.
(b) Notwithstanding anything in the foregoing Section 4.1(a) to the contrary, no Change in Control shall be deemed to have occurred for the purposes of this Agreement by virtue of a sale to underwriters or private placement of its capital stock by the Company, nor any acquisition by the Company, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock.
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(c) For the purposes of the Article IV, the following definitions shall apply:
(i) The term "person" shall mean any individual, group, corporation or other entity;
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of record, or
(B) which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as amended) of that person, or
(D) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Company;
(iii) The outstanding shares of capital stock
of the Company shall include shares deemed
owned through application of clauses (ii) (B),
(C) and (D) above, but shall not include any
other shares which may be issuable pursuant to
any agreement or upon exercise of conversion
rights, warrants or options, or otherwise, but
which are not actually outstanding; and
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(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Company and said bank shall not be deemed owned by International Paper Company or by said bank for purposes of this definition, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Company.
4.2 The Executive and the Company understand that payments hereunder pursuant to Section 2.1(c) may constitute "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
V. GENERAL PROVISIONS
5.1. Unsecured General Creditor. The Executive and his Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest, or other claims in any property or assets of the Company, nor shall they be beneficiaries of, or have any rights, claims or interest in, any life insurance policies, annuity contracts, or other policies therefrom owned or which may be acquired by the Company to help fund the Company's obligation hereunder ("policies"). Such policies or other assets of the Company shall not be held under any trust for the benefit of the Executive, his Beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Agreement; provided, however, that assets to provide benefits set forth herein may be held in a trust, the assets of which are subject to the claims of the Company's creditors in the event of bankruptcy or insolvency. Otherwise, any and all of the Company's assets and policies shall be and remain general, unpledged, unrestricted assets of the Company. The Company's obligations under the Agreement shall be that of an unfunded and unsecured promise of the Company to the Executive to pay money in the future.
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5.2. Non-Assignability. Neither the Executive nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer, hypothecate, or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by the Executive or any other person, nor be transferable by operation of law in the event of the Executive's or any other person's bankruptcy or insolvency.
5.3. Construction. All references made and all names and pronouns used herein shall be construed in the singular or plural and in such gender as the sense and circumstances require.
5.4. Tax Consequences. (a) The Executive acknowledges that any payment of the Supplemental Retirement Benefit made to him pursuant to the terms of the Agreement represents additional compensation to him for his services to the Company; that the amount of such payments has been fixed between the Company and the Executive in reliance upon the fact that it will be taxed as ordinary income to the Executive; and the Executive does hereby covenant and agree that any and all such Supplemental Retirement Benefit payments shall be treated as additional compensation by him for Federal and State income tax purposes, recognizing that the Company will be deducting all such Supplemental Retirement Benefit payments in the computation of its Federal and State income tax liabilities.
(b) The Company shall have the right to deduct from all payments of the Supplemental Retirement Benefit any Federal, State or local taxes required by law to be withheld with respect to such payments.
5.5. Merger of Documents. All understandings and agreements heretofore between the parties regarding the subject matter hereof are merged into this Agreement which alone fully and completely expresses the understanding of the parties with respect to the subject matter hereof.
5.6. Employment Not Guaranteed. Nothing contained in this Agreement nor any action taken hereunder shall be construed as a contract of employment or as giving the Executive any right to be retained in the employ of the Company.
5.7. Compensation Not Guaranteed. Nothing contained in this Agreement nor any action taken hereunder shall be construed as a contract or agreement that compensation shall be awarded or paid to the Executive.
5.8. Amendment. This Agreement may not be amended, modified, altered or changed in any respect whatsoever except by a further agreement, in writing, jointly entered into by the parties hereto.
5.9. Notice. Any notice required or permitted to be given to the Company shall be sufficient if in writing and hand- delivered, or sent by registered or certified mail, to the principal office of the Company, directed to the attention of the Chief Executive Officer of the Company, and any notice required or permitted to be given to the Executive shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the Executive at his residence address. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.
5.10. Applicable Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New Jersey.
5.11. Validity. The invalidity of one or more of the phrases, sentences, clauses, sections or paragraphs contained in this Agreement shall not affect the remaining portions so long as the material purposes of this Agreement can be determined and effectuated.
5.12. No Guarantee of Benefits. Nothing contained in this Agreement shall constitute a guarantee by the Company or any other entity or person that the assets of the Company will be sufficient to pay any benefit hereunder.
5.13. Captions. The captions of this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of any provision hereof.
5.14. Limitations on LiabilitY. Notwithstanding any of the preceding provisions of this Agreement, neither the Company nor any individual acting as an employee or agent of the Company shall be liable to the Executive or any other person for any claim, loss, liability or expense incurred in connection with this Agreement.
5.15. Binding on Assigns. Except as herein provided, this Agreement shall be binding upon the parties hereto, their heirs, executors, administrators, successors (including but not limited to successors resulting from any corporate merger or acquisition) or assigns.
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IN WITNESS WHEREOF, the parties have hereunto set their hand and seals effective as the date first above written.
ATTEST: C.R. BARD, INC. Richard A. Flink /s/ By: Timothy M. Ring /s/ Secretary Vice President |
WITNESS:
William H. Longfield /s/ |
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C.R. BARD, INC. Exhibit 10h 1990 Stock Option Plan
The Purpose of the 1990 Stock Option Plan (the "Plan") is to enable key employees of C.R. Bard, Inc. (the "Corporation") and its subsidiaries, including officers, to purchase Common Stock of the Corporation pursuant to options, including "incentive stock options" within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the "Code") and nonstatutory options ("non-qualified stock options").
l. Stock Subject to the Plan
The total number of shares of Common Stock of the Corporation subject to the Plan shall be limited so that the aggregate number of shares issuable upon the exercise of options granted under the Plan shall not exceed 1,800,000 shares of the Common Stock of the Corporation as presently constituted.
The Corporation hereby reserves for the purposes of the Plan a number of its authorized but unissued shares of Common Stock equivalent to the maximum number of shares as to which options may be issued hereunder. However, issued shares which have been or may be reacquired by the Corporation, either especially for use under the Plan or otherwise, may be used for the purposes of the Plan from time to time in place of the shares so reserved if the Board of Directors so determines. Any of the reserved shares which remain upon the termination of all options under the Plan shall thereupon cease to be reserved. In the event that any options granted under the Plan shall terminate, in whole or in part, without having been exercised, the number of shares subject thereto may again be optioned under the Plan.
2. Administration
The Plan shall be administered by a committee (the "Committee") consisting of no fewer than three directors of the Corporation who shall be disinterested within the meaning of Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, and who shall serve at the pleasure of the Board of Directors. Subject to the provisions of the Plan, the Committee shall have full authority to interpret the Plan, to establish and amend rules and regulations relating to it, to determine the terms and provisions of the respective option agreements (which need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan.
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3. Participation
From time to time the Committee may, in its sole discretion, select those key employees (including officers and directors who are employees) of the Corporation or its subsidiaries who shall be granted options under the Plan and the number of shares subject to each option, and the Committee shall thereupon grant such options. As used in the Plan, "subsidiary" means any company of which the Corporation owns, directly or indirectly, at least 50% of the voting stock.
4. Option Price
The purchase price (also referred to as the "option price") per share of Common Stock purchased under options granted pursuant to the Plan shall be not less than the mean between the high and low sale price, regular way, on the New York Stock Exchange-- Composite Transactions on the date the option was granted, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported.
The option price shall be paid in full by certified or bank cashier's check payable to the order of the Corporation, and/or, to the extent permitted by law, the surrender or delivery to the Corporation of shares of its Common Stock, or, in any other form acceptable to the Corporation, upon the exercise of the option and the stock purchased shall thereupon be promptly delivered, provided, however, that the holder of an option shall be required, as a condition to exercising any option, to make such arrangements with the Corporation as the Committee shall determine for withholding taxes, including, but not limited to, the retention of shares by the Corporation or the return to the Corporation of shares, in each case equal in value to the amount of all or any portion of the withholding tax obligation pursuant to such rules as may be prescribed by the Committee. The value of any shares of Common Stock of the Corporation so surrendered or delivered shall be the mean between the high and low sale price, regular way, on the New York Stock Exchange - Composite Transactions on the date the option was exercised, or, if there is no sale on that date, then on the last preceding date on which such a sale was reported. No holder of any option or his legal representatives, legatees or distributees, as the case may be, will be deemed to be a holder of any shares pursuant to exercise of an option until the date of the issuance of a stock certificate to him for such shares. Unless the holder of the option has exercised the option by surrender or delivery of shares of Common Stock of the Corporation, the proceeds of the sale of stock subject to the options are to be added to the general funds of the Corporation and used for its general corporate purposes.
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5. Period of Option and Its Exercise
Except as otherwise specifically set forth in the grant thereof in accordance with the second sentence of this paragraph, each option shall be for a term of up to ten years as determined by the Committee; provided that, no option shall be exercisable within 12 months after the granting thereof, and thereafter 25% may be exercised within 24 months, 50% within 36 months, 7% within 48 months, and 100% after 48 months. Notwithstanding anything to the contrary in this paragraph, the Committee may, when granting options to any person under the Plan, grant options that are exercisable according to a schedule different from that set forth in the preceding sentence. In addition, notwithstanding any of the foregoing, in the event of a "Change of Control," as hereinafter defined, all options shall be immediately exercisable. Notwithstanding anything to the contrary contained in this paragraph, the committee may, in its discretion, accelerate the vesting date and allow retiring employees to exercise outstanding options which would not otherwise be exercisable under the plan on the date of such employee's retirement. The right of a holder of an option to purchase shares subject to any accrued installment may be exercised in whole at any time or in part from time to time after the accrual of such installment and prior to the tenth anniversary of the date of grant thereof. In no case may a fraction of a share be purchased under the Plan.
No Option shall be exercisable (except as otherwise provided herein in the case of retirement, termination or death) unless the holder at the time of such exercise is, and at all times from the date of the granting of the option to the date of exercise has been, in the employ of the Corporation or a subsidiary.
The holder of an option who shall retire from the service of the Corporation or a subsidiary after the first anniversary of the date of grant shall be permitted to exercise his option (a) within three months after the day on which such retirement occurs, if an incentive stock option or (b) within three years from the last day of the month in which retirement occurs if a non-qualified stock option; but in no event later than the expiration date of the option, with respect to all or any part of the entire balance of shares to the extent exercisable by the holder of such option at the date of such retirement, provided, however, that if the holder shall die after the date of his retirement, the option shall be exercisable to the extent, and during the period that it would, but for his death, have been otherwise exercisable after retirement by the holder thereof.
If the holder of an option shall die while in the employ of the Corporation or a subsidiary, the option shall be exercisable to the extent the option was exercisable by the holder thereof on the date of death; provided that if the option was then exercisable
with respect to less than 100% of the shares subject thereto, the number of shares with respect to which the option is exercisable shall be increased to 100% of the total number of shares subject thereto. The period during which the option is exercisable shall commence on the date of death and end on the first anniversary of the month in which the date of death occurred, but in no event shall the period extend beyond the expiration date of the option.
If employment with the Corporation of the holder of an option shall terminate, the holder shall be permitted to exercise the option, to the extent such option was exercisable on his termination date until 60 days following the date of such termination, but in no event beyond the expiration date of the option.
The Committee may require, as a condition to the right to exercise an option, that the option holder covenant and agree as to the method of disposal of the shares being acquired upon exercise and represent in writing that he will not dispose of such shares in transactions which, in the opinion of counsel to the Corporation, would violate the Securities Act of 1933, as then amended, and the rules and regulations thereunder.
In the event the Employee disposes of (whether by sale, exchange, gift or otherwise) any shares of Common Stock acquired pursuant to the exercise of this Option within two years from the date of the granting of this Option or within one year after the transfer of such shares to him upon the exercise of this Option, he shall notify the Company in writing within 30 days after such disposition.
6. Terms of Acquisition of Options
Each grantee of an option shall enter into an individual option agreement with the Corporation which shall contain such provisions consistent with the Plan as may be prescribed by the Committee. Nothing in the Plan or any option granted hereunder shall confer any right to continue in the employ of the Corporation or any of its subsidiaries or interfere in any way with the right of the Corporation or any of its subsidiaries to terminate any employment at any time. Such option agreement shall state whether the options granted are incentive stock options or non-qualified stock options.
7. Non-transferability of Options
No option granted under the Plan shall be transferable otherwise than by will or the laws of descent and distribution; and an option may be exercised during the lifetime of the holder thereof only by him.
8. Death of a Holder of Option
In the event of the death of a holder of an option under the Plan, an option granted to him may be exercised by the person or persons to whom his rights under the option pass by will or the laws of descent and distribution (including his estate during the period of administration) as and to the extent provided in paragraph 5 hereof, but in no event later than the expiration date of the option.
9. Adjustments Upon Changes in Capitalization
Notwithstanding any other provision of the Plan, in the event of any change in the outstanding Common Stock of the Corporation by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination or exchange of shares, or the like, the aggregate number and class of shares available under the Plan and the maximum number of shares as to which options may be granted to an individual and the number and class of shares subject to each outstanding option and the option prices shall be proportionately adjusted by the Board of Directors of the Corporation whose determination shall be conclusive. Any fractional shares resulting from computation pursuant to this paragraph shall be eliminated from the option.
l0. Limitation on Grants of Incentive Stock Options
The aggregate fair market value (determined as of the date the option is granted) of the common stock with respect to which incentive stock options first become exercisable in any one calendar year shall not exceed $100,000. The excess, if any, shall be treated as nonqualified stock options.
ll. Change of Control
Change of Control shall occur if a change of control of the nature that would be required to be reported in response to item 1(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (a) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Company, the voting power of which constitutes 20% or more of the general voting power of all of the Company's outstanding capital or (b) individuals who, as of the date hereof, constitute the Board of Directors of the Corporation (the "Board" generally and as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of a least
three-quarters of the directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of the Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Company, nor any acquisition by the Company, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control. For purposes of the definition of "Change of Control," the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group,
corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of any
shares of capital stock of the Company:
(A) which that person owns directly, whether or not of
record, or
(B) which that person has the right to acquire pursuant to
any agreement or understanding or upon exercise of
conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (B) above), by an "affiliate" or "associate" (as
defined in the rules of the Securities and Exchange
Commission under the Securities Act of 1933) of that
person, or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (B) above), by any other person with which that
person or his "affiliate" or "associate" (defined as
aforesaid) has any agreement, arrangement or
understanding for the purpose of acquiring, holding,
voting or disposing of capital stock of the Company.
(iii) The outstanding shares of capital stock of the Company shall
include shares deemed owned through application of clauses
(ii)(B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any agreement or
upon exercise of conversion rights, warrants or options, or
otherwise, but which are not actually outstanding. (iv)
Shares of capital stock, if any, held by The Chase Manhattan
Bank N.A. under the Indenture and the Escrow Agreement dated
as of November 1, 1971 between International Paper Company
and said bank shall not be deemed owned by International
Paper Company or by said bank for purposes of this Plan, so
long as they are held by said bank under said Escrow
Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Company.
12. Special Rules Regarding Incentive Stock Options Granted to Certain Employees
Notwithstanding the provision of paragraph 4 and 5 of this Plan, no incentive stock option shall be granted to any employee who, at the time the option is granted, owns (directly, or within the meaning of Section 425(d) of the Code) more than ten percent of the total combined voting power of all classes of stock of the Corporation or any subsidiary corporation, unless (a) the option price under such option is at least 110 percent of the fair market value of the stock subject to the option at the time of the grant and (b) such option by its terms is not exercisable after the expiration of ten years from the date it is granted.
13. Amendment and Termination
Unless the Plan shall theretofore have been terminated as hereinafter provided, the Plan shall terminate on April 1, 1995, and no option under it shall be granted thereafter. The Board of Directors of the Corporation at any time may terminate the Plan, or make such changes in it and additions to it as the Board of Directors deems advisable, provided, however, that except as provided in paragraph 9 hereof the Board of Directors may not, without further approval by the holders of a majority of the shares of Common Stock of the Corporation voting thereon, increase the maximum number of shares as to which options may be granted under the Plan either in the aggregate or to any individual employee, or reduce the option price, or extend the period during which options may be granted or exercised or grant options to any persons other than key employees, including officers. No termination or amendment of the Plan may, without the consent of the holder of an existing option, materially and adversely affect his rights under such option.
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Exhibit 10i
C.R. BARD, INC.
1989 Employee Stock Appreciation Rights Plan, as amended(1)
The purpose of the 1989 Employee Stock Appreciation Rights Plan (the "Plan") is to promote the growth and profitability of C.R. Bard, Inc. (the "Corporation") by providing a means whereby it may continue to be able, by granting stock appreciation rights with respect to shares of Common Stock of the Corporation, to attract and retain persons of exceptional ability as key employees to serve as officers of the Corporation.
1. Shares Available for, and Upon Exercise of Stock Appreciation Rights
The total number of shares of Common Stock of the Corporation upon which Stock Appreciation Rights can be calculated, and which may be issued under this Plan shall not exceed the total number of shares with respect to which options (i) have been granted or may be granted under the 1981 Stock Option Plan (the "1981 Option Plan"), (ii) have been granted or may be granted under the 1990 Stock Option Plan (the "1990 Option Plan"), and (iii) which have been granted under the 1975 Stock Option Plan (the "1975 Stock Option Plan"), (collectively referred to as the "Option Plans"). The exercise of a Stock Appreciation Right granted hereunder shall decrease the amount of shares which may be issued pursuant to the applicable Option Plan by the number of shares with respect to which such Stock Appreciation Right has been calculated.
2. Administration
The Plan shall be administered by a committee (the "Committee") which, unless otherwise permitted under Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "1934 Act"), shall be comprised of no fewer than three directors of the Corporation who shall be disinterested within the meaning of Rule 16b-3 under the 1934 Act, and who shall serve at the pleasure of the Board of Directors. Subject to the provisions of the Plan, the Committee shall have full authority to interpret the Plan, to establish and amend rules and regulations relating to it, to prescribe the form or forms of the instruments evidencing any Stock Appreciation Rights granted under the Plan, and to make all other determinations necessary or advisable for the administration of the Plan.
3. Participation
Stock Appreciation Rights may only be granted hereunder to officers of the Corporation who were or are granted options under the 1981 Option Plan or the 1990 Option Plan or were granted
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options under the 1975 Option Plan, and may only be calculated with
respect to shares to which such options have been granted. From
time to time the Committee may, in its sole discretion, (i) select
those officers of the Corporation who shall be granted Stock
Appreciation Rights under the Plan and (ii) designate those options
granted under the 1981 Option Plan or the 1975 Option Plan to which
such Stock Appreciation Rights relate.
4. Exercise of Stock Appreciation Rights
(a) Except as otherwise provided in paragraph 9 hereof, upon the exercise of a Stock Appreciation Right, the holder thereof shall be entitled to receive an amount equal to the excess of the mean between the high and low sale price, regular way, on the New York Stock Exchange - Composite Transactions on the date of exercise (the "Fair Market Value") of the shares of the Common Stock of the Corporation with respect to which the Stock Appreciation Right was exercised over the option price of such shares under the Option Plan pursuant to which the option was granted; provided, however, that no payment in respect of any Stock Appreciation Right (other than a Limited Stock Appreciation Right) shall exceed in the aggregate on the date of the exercise of the Stock Appreciation Right, an amount equal in value to three times the option price of the shares with respect to which the Stock Appreciation Right is to be exercised.
(b) Except as otherwise provided in paragraph 9 hereof, a Stock Appreciation Right may only be exercised during the same period, and subject to the same limitations as to exercise, as are applicable to the option to which it relates; provided, however, that in no event may any Stock Appreciation Right be exercised on or after the tenth anniversary of the grant of the option to which the Stock Appreciation Right relates.
(c) Upon the exercise of a Stock Appreciation Right, the option or the portion thereof to which the exercised Stock Appreciation Right relates shall be deemed to have been surrendered by the holder thereof and canceled. Similarly, upon the exercise of an option, the Stock Appreciation Right relating to the option or any portion thereof which was exercised shall be deemed to have been surrendered by the holder thereof and canceled.
(d) The Committee shall, in its sole discretion, fix the date of the grant of any Stock Appreciation Rights hereunder and determine the method for exercising such rights, and shall thereupon grant such Stock Appreciation Rights. Stock Appreciation Rights shall, at the discretion of the Committee, entitle the holder thereof to receive therefor cash, Common Stock, provided that payment of cash shall be made in lieu of any fractional share interest, or any combination of cash and full shares. Except for cash payments to the holder in lieu of fractional shares and except
as otherwise provided in paragraph 9 hereof, no cash may be paid in respect of a Stock Appreciation Right to the holder, unless the exercise of the Stock Appreciation Right occurs (i) more than six months after the Stock Appreciation Right was granted, and (ii) during the period beginning on the third business day following the release of annual or quarterly financial information to the public and ending on the twelfth business day following such date.
(e) The number of shares to be issued in respect of a Stock Appreciation Right on the date of exercise shall be computed as follows:
Fair Market Value per share less option price per share multiplied by number of shares covered by Option being surrendered divided by Fair Market Value per share equals Number of Shares to be issued (which shall then be multiplied by the appropriate percentage determined pursuant to subparagraph (d) above).
5. Non-transferability of Rights; Restrictions Upon Option Shares
No Stock Appreciation Right granted under the Plan shall be transferable otherwise than by will or the laws or descent and distribution; and a Stock Appreciation Right may be exercised, during the lifetime of the holder thereof, only by him.
6. Death of a Holder of Stock Appreciation Right
In the event of the death of a holder of a Stock Appreciation Right under the Plan, a Stock Appreciation Right granted to him may be exercised by the person or persons to whom his rights under the Stock Appreciation Right pass by will or the laws of descent and distribution (including his estate during the period of administration) as and to the extent provided in Section 4 hereof, but in no event later than the expiration date of the Stock Appreciation Right.
7. Adjustments Upon Changes in Capitalization
Notwithstanding any other provision of the Plan, in the event of any change in the outstanding Common Stock of the Corporation by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination or exchange of shares, or the like, the aggregate number and class of shares available under the Plan and the maximum number of shares as to which Stock Appreciation Rights may be granted to an individual and the number and class of shares subject to each outstanding Stock Appreciation Right shall be proportionately adjusted by the Board Directors of the Corporation whose determination shall be conclusive. Any fractional shares resulting from computation pursuant to this paragraph shall not be subject to the Stock Appreciation Right.
8. No Contract of Employment
Nothing in the Plan or any Stock Appreciation Right granted hereunder shall confer any right to continue in the employ of the corporation or any of its subsidiaries or interfere in any way with the right of the Corporation or any of its subsidiaries to terminate any employment at any time.
9. Limited Stock Appreciation Rights Exercisable Only Upon Change of Control
The Committee may, in its discretion, grant Stock Appreciation Rights (the "Limited Stock Appreciation Rights") that, notwithstanding any other provision of the Plan, may on;v, be exercised during the 60-day period (the "Change of Control Exercise Period") commencing upon the date of the first public disclosure of a "Change of Control," as hereinafter defined, and such Limited Stock Appreciation Right shall be so exercisable during the Change of Control Exercise Period whether or nol; such person is then employed by the Corporation. Upon exercise of a Limited Stock Appreciation Right, the holder thereof shall be entitled to receive an amount in cash equal to the greater of (i) the Fair Market Value of the shares of the Common Stock of the Corporation with respect to which the Limited Stock Appreciation Right was exercised over the option price of such shares under the Option Plan pursuant to which the option was granted and (ii) if the Change of Control is the result of a transaction or a series of transactions, the highest price per share of Common Stock of the Corporation paid in such transaction or transactions during the Change of Control Exercise Period up to the date of exercise over the option price of such shares under the Option Plan pursuant to which the option was granted. Notwithstanding the foregoing, no Limited Stock Appreciation Right shall be exercisable by an Insider within six months of the date of grant of such Limited Stock Appreciation Right if such exercise would result in liability under section 16 of the 1934 Act. In the event a Change of Control shall occur within six months of the date of grant of a Limited Stock Appreciation Right to an Insider, the Change of Control Exercise Period shall be deemed to commence on the first day following such six month period. For purposes of this paragraph, "Insider" shall mean any person who is directly or indirectly the beneficial owner of more than 10 percent of any class of equity security of the Corporation (other than an exempted security) which is required to be registered pursuant to section 12 of the 1934 Act, or who is a director or officer of the Corporation, all as such terms are used in the 1934 Act.
10. Change of Control
A Change of Control shall occur if an event of the nature that would be required to be reported in response to item 1(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the 1934 Act shall have occurred, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (a) any person (other than an employee benefit plan of the Corporation) shall become the beneficial owner, as those terms are defined herein, at any time hereafter, of capital stock of the Company, the voting power of which constitutes 20% or more of the general voting power of all of the Company's outstanding capital stock or (b) individuals who, as of the date hereof, constitute the Board of Directors of the Corporation (the "Board" generally and as of the date hereof "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholder, was approved by a vote of at least three-quarters of the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Company, nor any acquisition by the Company or any benefit plan of the Company, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control.
For purposes of the definition of "Change of Control" the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group, corporation or other entity.
(ii) Any person shall be deemed to,be the beneficial owner of any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of record, or
(B) which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly (including shares deemed owned through
application of clause (B) above) by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933) of that person, or
(D) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above) by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Company.
(iii) The outstanding shares of capital stock of the Company shall include shares deemed owned through application of clauses (ii)(B), (C) and (D) above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Company and said bank shall not be deemed owned by International Paper Company or by said bank for purposes of this Plan, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Company.
11. Amendment and Termination
Unless the Plan shall theretofore have been terminated as hereinafter provided, the Plan shall terminate on February 9, 1999, and no Stock Appreciation Right under it shall be granted thereafter. The Board of Directors of the Corporation at any time may terminate the Plan, or make such changes in it and additions to it as the Board of Directors deems advisable, provided, however, that except as provided in paragraph 7 hereof or as otherwise permitted under Rule 16b-3 of the General Rules and Regulations under the 1934 Act, the Board of Directors may not, without further approval by the holders of a majority of the shares of Common Stock of the Corporation voting thereon, increase the maximum number of shares as to which Stock Appreciation Rights may be granted under the Plan either in the aggregate or to any individual employee, or reduce the option price of any share to which a Stock Appreciation Right applies, or extend the period during which a Stock Appreciation Right may be granted or exercised, or grant a Stock
Appreciation Right to any person other than an officer. No termination or amendment of the Plan may, without the consent of the holder of an existing Stock Appreciation Right, materially and adversely affect his rights under such Stock Appreciation Right.
(1) The underscored language shows the changes to be considered by Shareholders under "Proposal No. - Approval of an Amendment to the 1989 Employee Stock Appreciation Rights Plan."
Exhibit 10j
C. R. BARD, INC. AGREEMENT AND PLANS TRUST
This Trust Agreement amended and restated as of the 8th day of February, 1989, by and between C. R. Bard, Inc., a New Jersey corporation (the "Company"), Chase Manhattan Bank, N.A. (the "Trustee") and The Andesa Companies, Inc., a Pennsylvania corporation (the "Consulting Firm"). This Trust Agreement provides for the establishment of a trust to be known as the C. R. Bard, Inc. Agreement and Plans Trust (hereinafter called the "Trust") to provide a source for payments required to be made under the contracts, agreements and plans listed on Exhibit A as amended from time to time (the "Agreements") between the Company and certain of its key management personnel or members of its Board of Directors (the "Participants").
WITNESSETH:
WHEREAS, the Company wishes to establish the Trust and to transfer to the Trust certain assets to be held therein, subject to the claims of the Company's creditors in the event of the Company's insolvency or bankruptcy, until paid to the Participants in such manner and at such time as specified in this Trust Agreement; and
WHEREAS, it is the intention of the Company to make contributions in addition to the Initial Contribution (as defined below) (such additional contributions are referred to herein as the "Additional Contributions" and, together with the Initial Contributions, collectively known as "Contributions") to the Trust upon or in anticipation of the occurrence of a Change of Control of the Company;
NOW, THEREFORE, the parties hereto do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows:
Section 1. Trust Fund
(a) Subject to the claims of its creditors as set forth in
Section 5, the Company hereby deposits with the Trustee in trust
One Hundred Dollars ($100.00) (the "Initial Contribution") which
shall become the initial principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this
Trust Agreement. The Trustee shall have no obligation to invest the
Initial Contribution in an interest bearing account.
(b) The Trust is intended to be a grantor trust, within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended (the "Code"), and shall be construed accordingly. The
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purpose of the Trust is to assure that the Company's obligations to
the Participants pursuant to the Agreements are fulfilled. The
Trust is not designed to qualify under Section 401(a) of the Code.
(c) The principal of the Trust, and any earnings thereon (such principal, together with any earnings thereon, reduced by any losses and distributions from the Trust and any other reductions thereof, is sometimes referred to herein as the "Trust Assets"), shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes herein set forth. The Participants shall not have any preferred claim on, or any beneficial ownership interest in, any of the Trust Assets prior to the time such Trust Assets are paid to the Participants pursuant to the terms of this Trust Agreement, and all rights created under the Agreements and this Trust Agreement shall be mere unsecured contractual rights of the Participants against the Company.
(d) The Trustee shall have full discretion in and sole responsibility for investment, management and control of the Trust Assets. The nature of this Trust is such that the Trustee should only make short-term investments with a stated maturity of twelve months or less from the date of purchase by the Trustee. The Trust Assets shall only be invested in obligations of or guaranteed by the United States of America in commercial paper obligations receiving the highest rating from either Moody's Investors Service, Inc. or Standard & Poor's Corporation or a similar rating service or in certificates of deposit, bank repurchase agreements or bankers acceptances (including those of the Trustee) of commercial banks with capital exceeding $1,000,000,000 the securities of which or the securities of the holding company of which are rated in the highest category by a nationally-recognized credit agency ("Permitted Investments") or in moneymarket funds which are invested solely in Permitted Investments.
Section 2. Contributions
(a) The Company may make such Contributions to the Trust as the Board of Directors of the Company deems appropriate from time to time.
(b) As soon as practicable following a Change of Control (as
defined in Section 3(c) hereof), the Consulting Firm (as defined in
Section 3(e) hereof) shall calculate the aggregate amount due
pursuant to each Agreement without regard to any reduction required
under such Agreements to avoid any such payment being nondeductible
to the Company pursuant to Section 280G of the Code (the aggregate
of such amounts for all the Agreements, plus an amount sufficient
to pay the estimated expenses of the Trust for its estimated term,
is hereinafter referred to as the "Maximum Amount Payable"). The
Consulting Firm shall promptly furnish such calculation to the
Company (in the case of the calculation regarding the expenses of
the Trust, after consultation with the Trustee) and the Company shall have the obligation to make Additional Contributions to the Trust, and shall make Additional Contributions to the Trust, within three business days of the receipt of such calculation, in an amount equal to the excess (the "Excess"), if any, of the Maximum Amount Payable over the then fair market value of the Trust Assets or shall direct the Trustee to draw down a letter of credit held by the Trust in such amount. If at any time following a Change of Control a valuation of the Trust Assets occurs pursuant to this Trust Agreement and it is determined by the Consulting Firm that an Excess shall exist, the Company shall promptly contribute such amount to the Trust as is necessary to eliminate the Excess or direct the Trustee to draw down a letter of credit held by the Trust in such amount.
(c) Anything in Section 2(b) hereof to the contrary notwithstanding, in the event of a Potential Change of Control (as defined in Section 3(d) hereof), the Company shall have the obligation to make additional contributions to the Trust in an amount equal to the Excess or direct the Trustee to draw down a letter of credit held by the Trust in such amount. If a Change of Control shall not have occurred within ninety (90) days of a Contribution made pursuant to this Section 2(c) and the Board of Directors adopts a resolution to the effect that, for purposes of this Trust Agreement, a Change of Control is not imminent, any amounts contributed to the Trust pursuant to this Section 2(c), together with any earnings thereon, shall be paid by the Trustee to the Company.
(d) The Company shall make all required Contributions to the Trust in cash. Alternatively, the Company may at any time provide the Trustee with an irrevocable and unconditional letter of credit sufficient for the Trustee to draw down an amount equal to all required Contributions. If at any time the Trust has been provided with a letter of credit by the Company, the Company will direct the Trustee (i) when to draw down on such letter of credit and in what amount and (ii) whether, if necessary, to renew the Letter of Credit or change its amount or terms. All Contributions so received (including any cash received on the draw down of a Letter of Credit), together with the income therefrom and any increment thereon, shall be held, managed and administered by the Trustee as a single commingled Trust pursuant to the terms of this Trust without distinction between principal and income. Neither the Trustee nor the Consulting Firm shall have any duty to require any Contributions to be made to the Trust by the Company or to determine that a Change of Control or Potential Change of Control has occurred.
(e) Anything in Section 2 to the contrary notwithstanding, the Trustee shall return to the Company as soon as feasible following the close of each calendar quarter within each calendar
year the excess, if any, of (i) the then aggregate fair market value of the Trust Assets over (ii) 150% of the Maximum Amount Payable, as determined by the Consulting Firm at the request of the Company.
(f) The Company may at any time or from time to time make additional deposits of cash or other property in Trust with the Trustee to augment the Trust Assets to be held, administered and disposed of by Trustee as provided in this Trust Agreement.
(g) The Company shall have a duty to inform the Trustee whenever a Change of Control or Potential Change of Control has occurred. If any two Participants notify the Trustee in writing that a Change of Control has occurred, then, unless, in the opinion of nationally recognized counsel to the Company (which opinion may be based on representations of fact as long as counsel does not know that such representations are untrue) such a Change of Control has not occurred, a Change of Control will be deemed to have occurred for purposes of this Trust Agreement.
Section 3. Accounting by the Trustee and Consulting Firm
(a) The Trustee shall keep accurate and detailed records of
all investments, receipts, disbursements, and all other
transactions required to be done, including such specific records
as shall be agreed upon in writing between the Company and the
Trustee. All such accounts, books and records as well as the
accounts and records of the Consulting Firm maintained pursuant to
Section 3(b) shall be opened to inspection and audit at all
reasonable times by the Company and on an annual basis, after
receipt of the written account described in the next sentence, by
the Participants; provided, however, that no Participant shall have
access to information about another Participant's Account (as
established pursuant to Section 3(b) hereof) other than in the
normal course of performing his duties as an employee of the
Company. Within sixty (60) days following the close of each
calendar year and within sixty (60) days after the removal or
resignation of the Trustee, the Trustee shall deliver to the
Company and the Consulting Firm a written account of its adminis-
tration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or
resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or
net proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), showing all cash, securities
and other property held in the Trust at the end of such year or as
of the date of such removal or resignation, as the case may be, and
the book and fair market value of any such asset. The Consulting
Firm shall send a copy of such written account to each Participant
at the address provided by the Company.
(b) As soon as practicable following a "Change of Control" of the Company (as defined below), the Consulting Firm shall establish and maintain a memorandum account for each Participant and with respect to each Agreement applicable to the Participant or with respect to which the Participant is a participant (the "Participant's Account"). The Consulting Firm shall credit each Participant's Account in an amount equal to the amount which would be due to the Participant pursuant to each Agreement applicable to such Participant or pursuant to which the Participant is a participant upon satisfaction of the conditions under such Agreement which give rise to the obligation of the Company to pay such amount to the Participant (the "Agreement Payments"). The Consulting Firm shall calculate the Agreement Payments with respect to each Participant as soon as practicable following a Change of Control. The Trustee shall notify the Consulting Firm of any payment made from the Trust to the Participant or the Participant's beneficiaries pursuant to the terms of an Agreement applicable to a Participant or pursuant to which such Participant is a partici- pant and the Company shall notify the Consulting Firm of any other payment pursuant to the terms of an Agreement, in each case, so that the Consulting Firm may debit the Participant's Account.
(c) For purposes of this Trust Agreement, a "Change of Control" shall occur if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") occurs, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (a) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Company, constitutes 20 percent or more of the general voting power of all of the Company's outstanding capital or (b) individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Board" generally and as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election, by the Company's shareholders, was approved by a vote of at least three-quarters of the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company. as which are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Company, nor any acquisition by the Company, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock,
shall constitute a Change of Control. For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group, corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Company:
A. which that person owns directly, whether or not of record, or
B. which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
C. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as amended) of that person, or
D. which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Company.
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through application of clauses
(ii) (B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise,
but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank, N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Company and said bank shall not be deemed owned by International Paper Company or by said bank for purposes of this definition, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Company.
(d) For purposes of this Agreement, a Potential Change of Control shall be deemed to have occurred if (i) any third person commences a tender of exchange offer for 20% of more of the combined voting power of the Company's outstanding voting securities ordinarily having the right to vote for the election of directors of the Company; (ii) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change of Control; (iii) any person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change of Control; or (iv) the Board of Directors adopts a resolution to the effect that, for purposes of this Trust Agreement, a Change of Control is imminent.
(e) The Consulting Firm shall be The Andesa Companies, Inc., or such successor firm of consulting actuaries as the Company shall select prior to a Change of Control, or after a Change of Control, such successor firm of consulting actuaries as the Trustee shall select. It is not intended that the Consulting Firm act in a fiduciary capacity under the Agreements or the Trust.
(f) The Company shall furnish the Consulting Firm with copies of each Agreement and any and all amendments thereto. The Company will promptly provide the Consulting Firm with a copy of any notice of termination required pursuant to the terms of any of the Agreements with respect to any Participant and will also promptly provide the Consulting Firm with any and all additional information the Consulting Firm reasonably requests or the Company believes would be useful to the Consulting Firm in order to enable the Consulting Firm to determine the amount of Agreement Payments with respect to each Participant and will promptly update such information as it changes. The Company will use its best efforts to cause each Participant to provide the Consulting Firm with all information that it may reasonably request in order to determine the amount of Agreement Payments with respect to the Participant.
(g) The fair market value of the Trust Assets shall be determined by the Trustee whenever required pursuant to this Trust Agreement, but in any event not less than quarterly. The Trustee may base such determination upon such sources of information as it may deem reliable including, but not limited to, information reported in (I) newspapers of general circulation, (2) standard financial periodicals or publications, (3) statistical and valuation services, (4) the records of securities exchanges or brokerage firms deemed by the Trustee to be reliable, or any combination thereof. The Trustee shall promptly inform the Consulting Firm of any such valuation.
Section 4. Payments to the Participants
(a) The Trustee shall make payments to the Participants from the Trust Assets, if and to the extent such Trust Assets are available for distribution, in accordance with the provisions of this Trust Agreement, provided that the Company is not Insolvent (as defined is Section 5(a)) at the time any such payment is required to be made.
(b) Subject to Section 4(a) hereof, upon written demand for payment by a Participant accompanied with a copy of a "Notice of Qualification" (as defined below) with respect to such Participant (or by the Participant's beneficiary or beneficiaries), the Consulting Firm shall, within five business days of such demand, direct the Trustee to pay the Participant (or such beneficiary or beneficiaries) an amount equal to the lesser of the amount so demanded for payment or the then credit balance in the Participant's Account; provided, however, that if the aggregate of the then credit balances in the Participants' Accounts exceeds the then fair market value of the Trust Assets, then the Consulting Firm shall direct the Trustee to pay to the Participant (or beneficiary or beneficiaries) the lesser of the amount so demanded or such portion of the credit balance in the Participant's Account which is equal to (a) the full credit balance in the Participant's Account multiplied by (b) a fraction (i) the numerator of which is the then fair market value of the Trust Assets and (ii) the denominator of which is the aggregate of the then credit balances in the Participants' Accounts. The Trustee shall pay the Participant (or beneficiary or beneficiaries) the amount set forth in the notice from the Consulting Firm within five business days of receiving notice from the Consulting Firm. Whenever the Consulting Firm notifies the Trustee that it has received a Notice of Qualification and a demand for payment from a Participant or beneficiary, the Trustee shall supply the Consulting Firm with the current fair market value of the Trust Assets within 2 business days so that the Consulting Firm may make the determination required hereunder. For the purposes of this Trust Agreement, a "Notice of Qualification" shall be a written statement by the Participant or the Participant's beneficiary or beneficiaries that states that pursuant to the terms of the Agreement applicable to such Participant or pursuant to which the Participant is a participant, the Participant or the Participant's beneficiary or beneficiaries is entitled to payment thereunder. The Trustee shall be under no duty to make inquiry as to whether the determination made by Participant or the Participant's beneficiary or beneficiaries is correct or whether any payment so demanded and determined is proper and correct. Nothing in this Section 4(b) shall be construed to limit the obligation of the Company to make all contributions to the Trust required by Section 2(b).
(c) Anything in this Trust Agreement to the contrary notwithstanding, all payments pursuant to this Section 4 may be made without the approval or direction of the Company, shall be made despite any direction to the contrary by the Company and shall be made upon the direction of the Consulting Firm.
(d) If the Trust Assets are not sufficient to make all payments to the Participants required to be made pursuant to the terms of the Agreements, the Company shall pay to each Participant the balance of each such payment as it falls due. If such payments are not made by the Company, and the Trust later contains sufficient Trust Assets to make such payments, they shall be made from the Trust Assets, together with interest at the rate determined pursuant to Section 1274(d) of the Code, subject to the requirements of Sections 4(a) and 4(b) hereof.
Section 5. Trustee Responsibility Regarding Payments to Trust Beneficiary When Company Insolvent
(a) The Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to pay its debts as they mature, or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code or any similar law of any state.
(b) At all times during the continuance of this Trust, the principal and income of the Trust shall be subject to claims of general creditors of the Company as hereinafter set forth, and at any time the Trustee has actual knowledge, or has determined, that the Company is Insolvent, the Trustee shall deliver any undistributed Trust Assets to satisfy such claims as a court of competent jurisdiction may direct. The Board and the chief executive officer of the Company shall have the duty to inform the Trustee of the Company's Insolvency. If the Company or a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall independently determine, within thirty (30) days after receipt of such notice, whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payments to the Participants, shall hold the Trust Assets for the potential benefit of the Company's general creditors, and shall resume payments to the Participants in accordance with Section 4 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent, if the Trustee initially determines the Company to be Insolvent). If the Trustee, after the expiration of such thirty (30) days, in good faith and with the advice of such advisors as may be retained pursuant to Section 6 hereof is unable to determine whether the Company is Insolvent, the Trustee (i) shall so notify the Company and the Consulting Firm in writing (and the Consulting Firm shall promptly notify the Participants and their beneficiaries at the address supplied by the
Company) and any of the Trustee, the Company or any of the Participants or any of their beneficiaries may apply to any court of competent jurisdiction for a determination, for purposes of this Trust, as to whether or not the Company is Insolvent, and (ii) the Trustee shall thereupon hold the Trust Assets pursuant to the terms of this Trust Agreement pending the determination of such court. Unless the Trustee has actual knowledge of the Company's Insolvency, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company's solvency as may be furnished to the Trustee as will give the Trustee a reasonable basis for making a determination concerning the Company's solvency. For purposes of this Trust Agreement, the Trustee shall be considered to possess any knowledge and information concerning the Company that is in the possession of the Trustee's Banking Department or other department and can reasonably be imputed to the Trustee under normal bank procedures. Nothing in this Trust Agreement shall in any way diminish any rights of a Participant to pursue his rights as a general creditor of the Company with respect to the Agreements or otherwise.
(c) If the Trustee discontinues payments from the Trust to any Participant or beneficiary pursuant to Section 5(b) and subsequently resumes such payments, the first payment following such discontinuance shall, subject to Sections 4(a) and 4(b) hereof, include the aggregate amount of all payments which would have been made to the Participant or beneficiary (together with interest at the rate determined pursuant to Section 1274 of the Code on the amount delayed) during the period of such discontinuance, less the aggregate amount of payments made to each such Participant or beneficiary by the Company in lieu of the payments provided for hereunder during any such period of discontinuance, as certified to the Trustee by the Consulting Firm.
Section 6. Responsibility of Trustee and Consulting Firm
(a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to anyone for any action taken pursuant to a direction, request, or approval given by the Company or any Participant contemplated by and complying with the terms of this Trust Agreement. The Trustee shall discharge its responsibility for the investment, management and control of the Trust Assets solely in the interest of the Participants and for the exclusive purpose of assuring that, to the extent of available Trust Assets, all Agreement Payments are paid when due to the ParticiPants.
(b) The Trustee and the Consulting Firm shall not be required to undertake or to defend any litigation arising in connection with this Trust Agreement, unless it be first indemnified by the Company against its prospective costs, expenses and liability, and the Company hereby agrees to indemnify the Trustee and the Consulting Firm for such costs, expenses, and liability.
(c) The Trustee and the Consulting Firm may consult with legal counsel (who may also be counsel for the Trustee and the Consulting Firm, as the case may be, generally) with respect to any of its duties or obligations hereunder, and shall be fully protected in acting or refraining from acting in accordance with the advice of such counsel.
(d) The Trustee and the Consulting Firm may each hire agents, accountants, and financial consultants.
(e) The Trustee is authorized and empowered:
(i) To purchase, hold, sell, invest and reinvest the assets of the Trust, together with income therefrom;
(ii) To hold, manage and control all property at any time forming part of the assets of the Trust;
(iii) To sell, convey, transfer, exchange and otherwise dispose of the assets of the Trust from time to time in such manner, for such consideration and upon such terms and conditions as it shall determine:
(iv) To make payments from the Trust as provided hereunder; and
(v) To exercise all the further rights, powers, options and privileges granted, provided for or vested in trustees generally under applicable Federal or State of New Jersey law, as amended from time to time, it being intended that, except as herein otherwise provided, the powers conferred upon the Trustee herein shall not be construed as being in limitation of any authority conferred by law, but shall be construed as in addition thereto.
(f) The Trustee in any and all events is authorized and empowered to do all other acts necessary or desirable for the proper administration of the assets of the Trust, as though the absolute owner thereof, including, but not limited to, authorization and power:
(i) To cause any property of the Trust to be issued,
held or registered in the individual name of the
Trustee, or in the name of its nominee, or in
such form that title will pass by delivery,
provided, the records of the Trustee shall
indicate the true ownership of such property;
(ii) To employ such agents and counsel as may be
reasonably necessary in managing and protecting
the Trust assets and to pay them reasonable
compensation; and
(iii) To settle, compromise or abandon with the
consent of the Company all claims and demands
from other than the Participants or the Company
in favor of or against the assets of the Trust.
Section 7. Compensation and Expenses of Trustee and Consulting Firm
The Trustee and the Consulting Firm shall each be entitled to
receive such reasonable compensation for their services as shall be
agreed upon by the Company and the Trustee or the Consulting Firm,
as the case may be. The Trustee and the Consulting Firm shall each
also be entitled to receive their reasonable expenses incurred with
respect to the administration of the Trust, including counsel fees
and fees incurred by the Trustee and the Consulting Firm pursuant
to Sections 6(c) and 6(d) of this Trust Agreement. Prior to a
Change of Control such compensation and expenses shall be payable
by the Company and if not so paid, shall be paid by the Trustee
from the Trust Assets. After a Change of Control such compensation
and expenses shall be paid by the Trustee from the Trust Assets and
if not so paid, shall be paid by the Company.
Section 8. Resignation and Replacement of Trustee
(a) The Trustee may resign at any time during the term of
this Trust by delivering to the Company a written notice of the
proposed resignation. The Consulting Firm shall deliver a copy of
any such notice to each Participant and beneficiary at the address
supplied by the Company. Such resignation shall take effect upon
the qualification of a successor Trustee and such successor Trustee
commencing to act as such.
(b) In the event that, prior to a Change of Control, the
Trustee notifies the Company of its intention to resign, in
accordance with the foregoing provisions of this Section 8, the
Company shall appoint a successor Trustee which shall be a bank or
trust company. The Trustee hereunder shall thereupon deliver to the
successor Trustee all property of this Trust, together with such
records and documents as may be reasonably required to enable the
successor Trustee to properly administer the Trust, reserving such
funds as it reasonably deems necessary to cover its unpaid bills
and expenses, and closing costs.
(c) Upon qualification of a successor Trustee, all right, title and interest of the resigning Trustee in the Trust Assets and all rights and privileges under this Trust Agreement theretofore vested in such resigning Trustee shall vest in the successor Trustee where applicable, and thereupon all future liability of said resigning Trustee shall terminate; provided, however, that the Trustee shall execute, acknowledge and deliver all documents and written instruments which are necessary to transfer and convey the right, title and interest in the Trust Assets, and all rights and privileges to the successor Trustee.
(d) Nothing in this Trust Agreement shall be interpreted as depriving the Trustee or the Company of the right to have a judicial settlement of the Trustee's accounts, and upon any proceeding for a judicial settlement of the Trustee's accounts or for instructions the only necessary parties thereto will be the Trustee and the Company.
Section 9. Amendment or Termination
(a) This Trust Agreement may be amended any time prior to the time any Additional Contribution is made (or, after the time any Additional Contribution is made if such Additional Contribution is returned to the Company in accordance with Section 2(c) hereof) and to any extent (including amendments to Exhibit A hereto) by a written instrument executed by the Trustee, the Consulting Firm and the Company.
(b) This Trust shall be revocable by the Company prior to the time any Additional Contribution is made or required to be made pursuant to the terms hereof by the Company to the Trust and may be terminated by the Company prior thereto (or, after the time any Additional Contribution is made if such Additional Contribution is returned to the Company in accordance with Section 2(c) hereof). After the occurrence of a Change of Control, the Trust shall remain in effect until the receipt by the Trustee of a certification from the Consulting Firm that all liabilities under all the Agreements have been satisfied; provided that, if any payment made from the Trust or to be made pursuant to any of the Agreements is being contested or litigated, the Trust shall remain in effect until such contest, litigation or dispute is resolved.
(c) At the termination of the Trust pursuant to Section
9(b), the Trustee shall as soon as practicable but in any event
within ninety days of the date of such termination, transfer to the
Company in cash the value of the Trust Assets as of the termination
date.
Section 10 Protection of Trustee and Consulting Firm
(a) The Company agrees, to the extent permitted by applicable law, to indemnify the Trustee and the Consulting Firm and hold them harmless from and against any claim or liability that may be asserted against them by reason of their taking or refraining from taking any action under this Trust Agreement, including, without limiting the generality of the foregoing, any claim brought against the Trustee or the Consulting Firm by the Company, in any case, otherwise than on account of the Trustee's or the Consulting Firm's own gross negligence or willful misconduct
(b) The Trustee shall be fully protected in relying upon a certification of an authorized representative of the Company or the Consulting Firm with respect to any instruction, direction or approval of the Company or the Consulting Firm until a subsequent certification is filed with the Trustee.
(c) The Trustee and the Consulting Firm shall each be fully protected in acting upon any instrument, certificate, or paper believed by them to be genuine and to be signed or presented by the proper person or persons, and neither the Trustee nor the Consulting Firm shall be under any duty to make any investigation or inquiry as to any statement contained in any such writing but may accept the same as conclusive evidence of the Trust and accuracy of the statements therein contained.
(d) The Trustee shall not be liable for the proper application of any part of the Trust Fund if distributions are made in accordance with the terms of this Trust Agreement and information furnished to the Trustee by the Consulting Firm. All persons dealing with the Trustee are released from inquiry into the decision or authority of the Trustee and from seeing to the application of any monies, securities or other property paid or delivered to the Trustee.
Section 11. Communication
(a) Communications to the Company shall be addressed to the
Company at:
C. R. BARD, INC.
731 Central Avenue
Murray Hill, New Jersey 07974
Attn: General Counsel
(b) Communications to the Trustee shall be addressed to it
at:
Chase Manhattan Bank, N.A.
1211 Avenue of the Americas
New York, New York 10036
Attn: Trust and Estates Management Division
(c) Communications to the Consulting Firm shall be addressed to it at:
The Andesa Companies, Inc.
1621 North Cedar Crest Boulevard
Suite 102
Allentown, PA 18104
Attn: John E. Walker
Section 12. Severability and Alienation
(a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition without invalidating or in any other way limiting provisions hereof.
(b) The rights, benefits and payments of a Participant payable from the Trust Assets may not be anticipated, assigned (either at law or in equity), alienated or subject to attachment, garnishment, levy, execution or other legal or equitable process except as required by law. Any attempt by a Participant to anticipate, alienate, assign, sell, transfer, pledge, encumber or charge the same shall be void. The Trust Assets shall not in any manner be subject to the debts, contracts, liabilities, engagements or torts of any Participant and payments hereunder shall not be considered an asset of the Participant in the event of his insolvency or bankruptcy.
Section 13. Governing Law
This Trust Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflicts of law.
Section 14. Miscellaneous
(a) The Trustee shall not be either individually or severally liable for any taxes of any kind levied or assessed under the existing or future laws against the Trust Assets. The Trustee shall withhold from each payment to any Participant or beneficiary any Federal, state or local withholding taxes which is from time to time required to be deducted under applicable laws, as directed by the Consulting Firm, and shall pay such amount to the Company promptly. The Company shall pay over such withheld amount to the appropriate government authority. To the extent that any taxes levied or assessed upon the Trust are not paid by the Company, the Trustee shall pay such taxes out of the Trust Assets.
(b) Expenses and fees of the Company for the administration of this Trust and services in relation thereto for actuarial, legal and accounting and other similar expenses, including any costs with respect to the creation of the Trust, shall be paid in accordance with Section 7 hereof.
(c) Participation in this Trust shall not give any Participant any right to be retained as an employee of the Company nor any rights other than those specifically enumerated herein or in any Agreement applicable to any Participant or pursuant to which such Participant is a participant.
(d) Any payment to any Participant or his beneficiary in accordance with the provisions of this Trust shall, to the extent thereof, be in full satisfaction of all claims against the Trustee and the Company under the Agreements. Nothing in this Trust shall relieve the Company of its liability to pay benefits under the Agreements except to the extent such liabilities are met through the use of the Trust Assets.
(e) Headings in this Trust Agreement are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.
(f) This Trust Agreement may be executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument, which may be sufficiently evidenced by any one counterpart.
(g) This Trust Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their successors and assigns.
(h) As used in this Trust Agreement, the masculine gender shall include the feminine and neuter genders.
(i) Any action of the Company pursuant to this Trust Agreement, including all orders, requests, data, directions, instructions and other related information shall be in writing signed on behalf of the Company by an officer or named designee of the Company.
(j) In the event that a Participant and his beneficiary shall both be deceased prior to the time payment is due the Participant or his beneficiary, then payment shall be made if due to the estate of the deceased Participant.
IN WITNESS WHEREOF, the Company, the Trustee and the Consulting Firm have executed this Agreement as of the date first above written.
C. R. BARD, INC.
By: /s/ RICHARD A. FLINK
Name: Richard A. Flink
Title: Secretary
|
CHASE MANHATTAN BANK, N.A.
By: /s/ JOHN P. MCVEY
Name: John P. McVey
Title: Vice President
|
THE ANDESA COMPANIES. INC.
By: /s/ JOHN E. WALKER
Name: John E. Walker
Title: Executive Vice President
|
EXHIBIT A
To Agreement
and Plans Trust
C. R. BARD, INC.
CONTRACTS, AGREEMENTS AND PLANS
Retirement Plan for Outside Directors of C. R. Bard, Inc.
Deferred Compensation Contract Deferral of Directors' Fees
Supplemental Insurance/Retirement Plan--Officers
Deferred Compensation Contract Deferral of Discretionary Bonus
Deferred Compensation Contract Deferral of Salary
Long Term Performance Incentive Plan
Excess Benefit Plan
Supplemental Executive Retirement Plan
IV - 289
Exhibit lOk Plan I - For new corporate officer when previous agreement as non-officer exists.
Supplemental Insurance/Retirement Plan
AGREEMENT effective this day of , 198
by and between C. R. BARD, INC., a domestic corporation organized
and existing under the laws of the State of New Jersey (hereinafter
called the "Company"), and
residing at (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Company in an
executive capacity and has discharged duties of Employee in a
capable efficient manner; and
WHEREAS, the Company desires to continue to retain the
services of the Employee; and
WHEREAS, the Company and the Employee have previously entered
into an Agreement dated , 19 to provide the Employee
additional benefits in the event of death during employment and
certain supplemental benefits after retirement, subject to the
Employee's continued performance of duties and satisfaction of
other requirements of that Agreement; and
WHEREAS, the Company and the Employee wish to amend and
restate that Agreement in full;
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements herein set forth, the parties hereto
covenant and agree as follows:
IV - 290
1. In the event the Employee dies prior to termination of
employment, the Company shall pay to Employee's designated bene-
ficiary or in the absence of a beneficiary, to the Employee's
estate, the amount as set forth on Rider A as Pre-Retirement Death
Benefit, payable in equal monthly installments over a period of
sixty (60) consecutive months, with the first payment to begin on
or after the first day of the month following Employee's death.
2. If the Employee terminates employment with the Company after
becoming eligible for early retirement as defined in the Employee
Retirement Plan of C. R. Bard, Inc. ("The Bard Pension Plan"), the
Company shall pay to the Employee the amount of benefits set forth
on Rider A in accordance with the Retirement Benefit schedule
related to Attained Age.
3. Payment of benefits described in Paragraph 2 shall commence on
the first of the month following the month in which the Employee's
employment with the Company shall terminate. In the event the
Employee's death occurs after Employee's termination of employment
under Paragraph 2 but prior to the receipt of one hundred eighty
(180) monthly payments, the remaining unpaid monthly payments will
be paid to the Employee's designated beneficiary or in the absence
of a beneficiary, to the Employee's estate.
4. In the event the Employee (prior to becoming eligible for
early retirement under the Bard Pension Plan) becomes totally and
permanently disabled (as defined under the C. R. Bard, Inc. Long
Term Disability Income Plan) while in the employ of the Company,
then (a) if the Employee remains disabled on Employee's normal
retirement date (as defined in the Bard Pension Plan) then Employee
shall be eligible to receive benefits under Paragraph 2 hereof as
if Employee had terminated employment with the Company on
Employee's normal retirement date, or (b) if the Employee's
disability ceases after the Employee becomes eligible for early
retirement under the Bard Pension Plan (but prior to the Employee's
attainment of Employee's normal retirement date under such Plan)
and Employee does not return to active employment, then Employee
shall be eligible to receive benefits under Paragraph 2 hereof as
if Employee had terminated employment with the Company on the date
Employee's disability ceased. In the event the Employee becomes
totally and permanently disabled, as the same is defined under the
terms of the C. R. Bard, Inc. Long Term Disability Income Plan, and
should death occur prior to the Employee's normal retirement age
(as defined under the Bard Pension Plan), while the Employee
remains totally and permanently disabled, the benefit as stated in
Paragraph 1 hereof shall be paid to the Employee's designated
beneficiary.
5. If a Change of Control occurs prior to the date the Employee
is eligible for normal retirement under the Bard Pension Plan and
the Employee's employment with the Company or its successor shall
terminate within two (2) years after the date of the Change of
Control but prior to the date Employee is eligible for normal
retirement under the Bard Pension Plan otherwise be entitled to
full benefits (so that Employee would not under this Agreement),
the Employee or Employee's designated Beneficiary or estate in the
event employee shall not survive until age 65 shall be entitled to
receive
as benefits under this Agreement, the amount set forth on Rider A (the Retirement Benefit) which would have been payable had Employee retired on the day after Employee's 65th birthday. The benefits shall be payable over a period of 180 consecutive months commencing on the first of the month following the month in which the Employee attains (or would have attained had Employee survived) age 65, provided, however, Employee (or Employee's designated beneficiary or estate in the event Employee shall not survive until age 65) shall be entitled to receive the reduced Retirement Benefit related to Attained Age set forth on Rider A, (a) if said Change of Control occurs prior to the date Employee is eligible for normal retirement under the Bard Pension Plan and (b) Employee's employment with the Company or its successor shall terminate within two (2) years after the date of the Change of Control but prior to the date Employee is eligible for normal retirement under the Bard Pension Plan and (c) Employee or employee's designated beneficiary or estate elects to receive such retirement Benefit after Employee's 55th birthday, but prior to Employee's 65th birthday. In such event the said benefits shall be payable over a period of 180 consecutive months commencing on the first of the month following the month in which Employee attains (or would have attained if Employee survived) age 55 or such age prior to age 65. For purposes of this Paragraph 5, "Change of Control" shall mean (a) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Company, the voting power of which constitutes 25% or more of the general voting power of all of the Company's outstanding capital or (b) a change
in a majority of the Board of Directors of the Company during any
period of two years or less. No sale to underwriters or private
placement of its capital stock by the Company, nor any acquisition
by the Company, through merger, purchase of assets or otherwise,
effected in whole or in part by issuance or reissuance of shares of
its capital stock, shall constitute a Change of Control. For
purposes of the definition of "Change of Control", the following
definitions shall be applicable:
(i) The term "person" shall mean any individual, corporation
or other entity.
(ii) Any person shall be deemed to be the beneficial owner of
any shares of capital stock of the Company;
(A) which that person owns directly, whether or not of
record, or
(B) which that person has the right to acquire pursuant
to any agreement or understanding or upon exercise of
conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (B) above), by an "affiliate" or "associate" (as
defined in the rules of the Securities and Exchange
Commission under the Securities Act of 1933) of that
person or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (B) above), by any other person with which that
person or his "affiliate" or "associate" (defined as
aforesaid) has any agreement, arrangement or
understanding for the purpose of acquiring, holding,
voting or disposing of capital stock of the Company,
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through application of clauses
(ii) (B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any other agreement or
upon exercise of conversion rights, warrants or options, or
otherwise, but which are not actually outstanding.
(iv) Shares of capital stock held by The Chase Manhattan Bank
N.A. under the Indenture and the Escrow Agreement dated as of
November 1, 1971 between International Paper Company and said bank
shall not be deemed owned by International Paper Company or by said
bank for purposes of this Agreement, so long as they are held by
said bank under said Escrow Agreement, but said shares shall be
deemed outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the Company.
6. This Agreement shall not be construed as granting to Employee
any right with respect to continuance of employment by the Company
or a subsidiary thereof. The right of the Company or any sub-
sidiary thereof to terminate the Employee's employment with it at
any time at will is specifically reserved. The right of the
Employee to terminate Employee's employment with the Company at any
time at will is specifically reserved.
7. The benefits to Employee and/or Employee's designated
beneficiary or estate under this Agreement may, at the option of
the Company, be accelerated in whole or in part.
8. Upon the commencement of the retirement benefits as herein
provided, the Employee agrees following such commencement of
retirement benefits to hold himself available, on reasonable notice
and at the request of the Board of Directors of the Company, to
render consulting services.
9. The Employee agrees that, in consideration of the benefits
under this Agreement, he will not directly or indirectly enter into
or in any manner take part in any business, profession or other
endeavor, either as an employee, agent, independent contractor or
owner, which, in the opinion of the Board of Directors of the
Company, shall be in competition with the business of the Company,
which opinion of the Board of Directors shall be final and
conclusive for the purposes hereof.
10. The Employee shall not divulge any trade or business secrets
or any other confidential information of the Company to any person
not employed by the Company unless so authorized by the Company.
11. If the Employee shall fail to observe any of the covenants of
Paragraphs 8, 9 and 10 and shall continue to breach any covenant
therein contained for a period of thirty days after the Company
shall have advised Employee of such breach by written notice, then
any of the provisions hereof to the contrary notwithstanding, the
Employee agrees that no further payments shall be due or payable by
the Company hereunder either to the Employee or to the Employee's
designated beneficiary and that the Company shall have no further
liability hereunder.
12. Neither the Employer nor the Employee's designated beneficiary
or estate shall have any right to commute, sell, assign, transfer
or otherwise convey the rights to receive any payment hereunder,
which payments and all the rights thereto are expressly declared to
be non-assignable and non-transferable, and in the event of any
attempted assignment or transfer, the Company shall have no further
liability hereunder.
13. No benefit payment shall, in any manner be subject to
garnishment, attachment, execution, levy , debts, contracts,
liabilities, engagements or torts of the Employee or Employee's
designated beneficiary or estate.
14. Except as herein provided, this Agreement shall be binding
upon the parties hereto, their heirs, executors, administrators,
successors (including but not limited to successors resulting from
any corporate merger or acquisition) or assigns.
15. The employee may designate a beneficiary or beneficiaries who,
in the event of the Employee's death prior to full payment of
benefits hereunder, shall receive any benefits remaining to be paid
to the Employee under this Agreement. Such designation shall be
made by the Employee on a form prescribed by the Board of Directors
of the Company. The Employee may at any time change or revoke such
designation by written notice to the Company. If the Employee has
no living designated beneficiary on the date of Employee's death,
then the benefits otherwise payable to the designated beneficiary
under this Agreement shall be paid to the Employee's estate. If
the beneficiary survives the Employee but dies prior to receiving
full payment of the benefits remaining to be paid to the employee,
the amounts remaining to be paid to the beneficiary shall be paid
to the estate of the beneficiary.
16. During the lifetime of the Employee, this Agreement may be
amended or revoked at any time or times, in whole or in part, by
the mutual written agreement of the Employee and the Company.
17. This Agreement shall be executed in duplicate, each copy of
which so executed and delivered shall be an original, but both
copies shall together constitute one and the same document.
18. This Agreement shall be construed in accordance with the laws of the State of New Jersey. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year above written.
WITNESS:
(L.S.)
ATTEST: C. R. BARD, INC.
By:
(Title)
|
AMENDMENT AGREEMENT
THIS Amendment Agreement shall be effective on the date
executed and shall be deemed to be an amendment to the Agreement
dated (the "AGREEMENT") between C. R.
Bard, Inc., a domestic corporation organized and existing under the
laws of the State of New Jersey (the "Company"), and
residing at
(hereinafter called the "Employee").
WITNESSETH:
WHEREAS, Employee and the Company entered into the AGREEMENT
as above set forth, and
WHEREAS, the Employee and the Company desire to amend said
AGREEMENT,
NOW, THEREFORE, the parties agree as follows:
1. Paragraphs "1." and "2." are hereby amended by deleting the
existing Rider A and attaching the Rider A attached to this
Amendment Agreement in place thereof.
2. The AGREEMENT as amended by this Amendment Agreement is hereby
restated in its entirety and the new Rider A attached to this
Amendment Agreement is incorporated therein.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals to this Amendment Agreement on the dates indicated.
(Date) Employee
C. R. BARD, INC.
(Date) Vice President - Personnel E. B. Schultz
Supplemental Insurance/Retirement Plan
AGREEMENT effective this day of , 198
by and between C. R. BARD, INC., a domestic corporation organized
and existing under the laws of the State of New Jersey (hereinafter
called the "Company"), and
residing at (hereinafter
called the "Employee")
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Company in an
executive capacity and has discharged duties of Employee in a
capable and efficient manner; and
WHEREAS, the Company desires to continue to retain the
services of the Employee; and
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements herein set forth, the parties hereto
covenant and agree as follows:
1. In the event the Employee dies prior to termination of
employment, the Company shall pay to Employee's designated bene-
ficiary or in the absence of a beneficiary, to the Employee's
estate, the amount as set forth on Rider A as Pre-Retirement Death
Benefit, payable in equal monthly installments over a period of
sixty (60) consecutive months, with the first payment to begin on
or after
IV - 300
the first day of the month following Employee's death.
2. If the Employee terminates employment with the Company after
becoming eligible for early retirement as defined in the Employee
Retirement Plan of C. R. Bard, Inc. ("The Bard Pension Plan"), the
Company shall pay to the Employee the amount of benefits set
forth on Rider A in accordance with the Retirement Benefit schedule
related to Attained Age.
3. Payment of benefits described in Paragraph 2 shall commence on
the first of the month following the month in which the Employee's
employment with the Company shall terminate. In the event the
Employee's death occurs after Employee's termination of
employment under Paragraph 2 but prior to the receipt of one
hundred eighty (180) monthly payments, the remaining unpaid monthly
payments will be paid to the Employee's designated beneficiary or
in the absence of a beneficiary, to the Employee's estate.
4. In the event the Employee becomes totally and permanently
disabled (as defined under the C. R. Bard, Inc. Long Term
Disability Income Plan) while in the employ of the Company, then
(a) if the Employee remains disabled on Employee's normal
retirement date (as defined in the Bard Pension Plan) then Employee
shall be eligible to receive benefits under Paragraph 2 hereof as
if Employee had terminated employment with the Company on
Employee's normal retirement date, or (b) if the Employee's
disability ceases after the Employee becomes eligible for early
retirement under the Bard Pension Plan (but prior to the Employee's
attainment of Employee's normal retirement date under such Plan)
and Employee
does not return to active employment, then Employee shall be
eligible to receive benefits under Paragraph 2 hereof as if
Employee had terminated employment with the Company on the date
Employee's disability ceased. In the event the Employee becomes
totally and permanently disabled, as the same is defined under the
terms of the C. R. Bard, Inc. Long Term Disability Income Plan, and
should death occur prior to the Employee's normal retirement age
(as defined under the Bard Pension Plan), while the Employee
remains totally and permanently disabled, the benefit as stated in
Paragraph 1 hereof shall be paid to the Employee's designated
beneficiary
5. If a Change of Control occurs prior to the date the Employee
is eligible for normal retirement under the Bard Pension Plan and
the Employee's employment with the Company or its successor shall
terminate within two (2) years after the date of the Change of
Control but prior to the date Employee is eligible for normal
retirement under the Bard Pension Plan (so that Employee would not
otherwise be entitled to full benefits under this Agreement), the
Employee or Employee's designated Beneficiary or estate in the
event employee shall not survive until age 65 shall be entitled to
receive as benefits under this Agreement, the amount set forth on
Rider A (the Retirement Benefit) which would have been payable had
Employee retired on the day after Employee's 65th birthday. The
benefits shall be payable over a period of 180 consecutive months
commencing on the first of the month following the month in which
the Employee attains (or would have attained had Employee survived)
age 65, provided, however, Employee (or Employee's
designated beneficiary or estate in the event Employee shall not
survive until age 65) shall be entitled to receive the reduced
Retirement Benefit related to Attained Age set forth on Rider A,
(a) if said Change of Control occurs prior to the date Employee is
eligible for normal retirement under the Bard Pension Plan and (b)
Employee's employment with the Company or its successor shall
terminate within two (2) years after the date of the Change of
Control but prior to the date Employee is eligible for normal
retirement under the Bard Pension Plan and (c) Employee or
employee's designated beneficiary or estate elects to receive such
retirement Benefit after Employee's 55th birthday, but prior to
Employee's 65th birthday. In such event the said benefits shall be
payable over a period of 180 consecutive months commencing on the
first of the month following the month in which Employee attains
(or would have attained if Employee survived) age 55 or such age
prior to age 65.
For purposes of this Paragraph 5, "Change of Control" shall
mean (a) the beneficial ownership at any time hereafter by any
person, as defined herein, of capital stock of the Company, the
voting power of which constitutes 25% or more of the general voting
power of all of the Company's outstanding capital or (b) a change
in a majority of the Board of Directors of the Company during any
period of two years or less. No sale to underwriters or private
placement of its capital stock by the Company, nor any acquisition
by the Company, through merger, purchase of assets or otherwise,
effected in whole or in part by issuance or reissuance of shares of
its capital stock, shall constitute a Change of Control.
For purposes of the definition of "Change of Control", the
following definitions shall be applicable:
(i) The term "person" shall mean any individual, corporation
or other entity.
(ii) Any person shall be deemed to be the beneficial owner
of any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of
record, or
(B) which that person has the right to acquire pursuant
to any agreement or understanding or upon exercise of
conversion rights, warrants, or options, or otherwise,
or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (B) above), by an "affiliate" or "associate" (as
defined in the rules of the Securities and Exchange
Commission under the Securities Act of 1933) of that
person or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
clause (B) above), by any other person with which that
person or "affiliate" or "associate" (defined as
aforesaid) has any agreement, arrangement or
understanding for the purpose of acquiring, holding,
voting or disposing of capital stock of the Company,
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through application of clauses
(ii) (B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise,
but which are not actually outstanding.
(iv) Shares of capital stock held by The Chase Manhattan Bank
N.A. under the Indenture and the Escrow Agreement dated as of
November 1, 1971 between International Paper Company and said
bank shall not be deemed owned by International Paper Company or by
said bank for purposes of this Agreement, so long as they are held
by said bank under said Escrow Agreement, but said shares shall be
deemed outstanding for the purpose of determining the aggregate
number of outstanding shares of capital stock of the Company.
6. This Agreement shall not be construed as granting to Employee
any right with respect to continuance of employment by the Company
or a subsidiary thereof. The right of the Company or any sub-
sidiary thereof to terminate the Employee's employment with it at
any time at will is specifically reserved. The right of the
Employee to terminate Employee's employment with the Company at any
time at will is specifically reserved.
7. The benefits to Employee and/or Employee's designated
beneficiary or estate under this Agreement may, at the option of
the Company, be accelerated in whole or in part.
8. Upon the commencement of the retirement benefits as herein
provided, the Employee agrees following such commencement of
retirement benefits to hold himself available, on reasonable notice
and at the request of the Board of Directors of the Company, to
render consulting services.
9. The Employee agrees that, in consideration of the benefits
under this Agreement, he will not directly or indirectly enter into
or in any manner take part in any business, profession or other
endeavor, either as an employee, agent, independent
contractor or owner, which, in the opinion of the Board of
Directors of the Company, shall be in competition with the business
of the Company, which opinion of the Board of Directors shall be
final and conclusive for the purposes hereof.
10. The Employee shall not divulge any trade or business secrets
or any other confidential information of the Company to any person
not employed by the Company unless so authorized by the Company.
11. If the Employee shall fail to observe any of the covenants of
Paragraphs 8, 9 and 10 and shall continue to breach any covenant
therein contained for a period of thirty days after the Company
shall have advised Employee of such breach by written notice, then
any of the provisions hereof to the contrary notwithstanding, the
Employee agrees that no further payments shall be due or payable by
the Company hereunder either to the Employee or to the Employee's
designated beneficiary and that the Company shall have no further
liability hereunder.
12. Neither the Employer nor the Employee's designated beneficiary
or estate shall have any right to commute, sell, assign, transfer
or otherwise convey the rights to receive any payment hereunder,
which payments and all the rights thereto are expressly declared to
be non-assignable and non-transferable, and in the event of any
attempted assignment or transfer, the Company shall have no further
liability hereunder.
13. No benefit payment shall, in any manner be subject to
garnishment, attachment, execution, levy, debts, contracts,
liabilities, engagements or torts of the Employee or Employee's
designated beneficiary or estate.
14. Except as herein provided, this Agreement shall be binding
upon the parties hereto, their heirs, executors, administrators,
successors (including but not limited to successors resulting from
any corporate merger or acquisition) or assigns.
15. The Employee may designate a beneficiary or beneficiaries who,
in the event of the Employee's death prior to full payment of
benefits hereunder, shall receive any benefits remaining to be paid
to the Employee under this Agreement. Such designation shall be
made by the Employee on a form prescribed by the Board of Directors
of the Company. The Employee may at any time change or revoke such
designation by written notice to the Company. If the Employee has
no living designated beneficiary on the date of Employee's death,
then the benefits otherwise payable to the designated beneficiary
under this Agreement shall be paid to the Employee's estate. If
the beneficiary survives the Employee but dies prior to receiving
full payment of the benefits remaining to be paid to the Employee,
the amounts remaining to be paid to the beneficiary shall be paid
to the estate of the beneficiary.
16. During the lifetime of the Employee, this Agreement may be
amended or revoked at any time or times, in whole or in part, by
the mutual written agreement of the Employee and the Company.
17. This Agreement shall be executed in duplicate, each copy of
which so executed and delivered shall be an original, but both
copies shall together constitute one and the same document.
18. This Agreement shall be construed in accordance with the laws
of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year above written.
WITNESS:
(L.S.)
ATTEST: C. R. BARD, INC.
By:
(Title)
|
IV - 308
Exhibit lOl
Retirement Plan for Outside Directors of
C. R. Bard, Inc.
(As Amended and Restated Effective as of September 9, 1992)
1. PURPOSE. By providing Outside Directors with the opportunity
for retirement income, C. R. Bard, Inc. (the Corporation) intends
to enhance the Corporation's ability to attract and retain the
services of experienced Outside Directors and to have available
their continuing counsel following retirement from the Board of
Directors. The Plan is intended to be an unfunded plan maintained
for the purpose of providing deferred compensation for Outside
Directors (who are not employees of the Corporation) and as such is
exempt from the Employee Retirement Income Security Act of 1974.
The Plan is hereby amended and completely restated in this
instrument effective as of September 9, 1992.
2. DEFINITIONS. Except as otherwise specified, or as the context
may otherwise require, the following have the meanings indicated
below for all Plan purposes.
(a) ANNUAL RETAINER is the annual amount, exclusive of any
Meeting Fees, received by an Outside Director as may from time to
time be set by the Board of Directors.
(b) CHANGE OF CONTROL shall mean and be deemed to occur if a
change of control of the nature that would be required to be
reported in response to Item l(a) of the Current Report on Form 8-K
as in effect on the date hereof, September 9, 1992, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), provided that, without limitation, a "Change of
Control" shall be deemed to have occurred if (1) the beneficial
ownership at any time hereafter by any "person," as defined herein,
of capital stock of the Corporation, the voting power of which
constitutes 20% or more of the general voting power of all of the
Corporation's outstanding capital or (2) individuals who, as of the
date hereof, September 9, 1992, constitute the Board of Directors
of the Corporation (the "Board" generally and as of
IV - 309
the date hereof the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose
election or nomination for election by the Corporation's
shareholders was approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of the directors of the
Corporation, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of
this Plan, considered as though such person were a member of the
Incumbent Board. No sale to underwriters or private placement of
its capital stock by the Corporation, nor any acquisition by the
Corporation, through merger, purchase of assets or otherwise,
effected in whole or in part by issuance or reissuance of shares of
its capital stock, shall constitute a Change of Control. For
purposes of this definition of "Change of Control," the following
definitions and rules shall be applicable:
(i) The term "person" shall mean any individual, group,
corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of
any shares of capital stock of the Corporation:
(A) which that person owns directly, whether or not of
record, or
(B) which that person has the right to acquire pursuant
to any agreement or understanding or upon exercise of conversion
rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (B)
above), by an "affiliate" or "associate" (as defined in the rules
of the Securities and Exchange Commission under the Securities Act
of 1933) of that person or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (B)
above), by any other person with which that person or his
"affiliate" or "associate" (defined as aforesaid) has any
agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital stock of the
Corporation.
(iii) The outstanding shares of capital stock of the
Corporation shall include shares deemed owned through application
of clauses (ii)(B), (C) and (D), above, but shall not include any
other shares which may be issuable pursuant to any agreement or
upon exercise of conversion rights, warrants or options, or
otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase
Manhattan Bank N.A. under the Indenture and the Escrow Agreement
dated as of November 1, 1971 between International Paper Company
and said Bank shall not be deemed owned by International Paper
Company or by said Bank for purposes of this Plan, so long as they
are held by said Bank under said Escrow Agreement, but said shares
shall be deemed outstanding for the purpose of determining the
aggregate number of outstanding shares of capital stock of the
Corporation.
(c) EFFECTIVE DATE of the Plan means January 1, 1984.
(d) MEETING FEE is the fee paid to an Outside Director for
attendance at each meeting of the Board of Directors and each
meeting of any Committee of the Board of Directors, but shall not
include the additional fee paid to a Committee Chairman.
(e) OUTSIDE DIRECTOR means a member of the Board of
Directors of the Corporation who is not also an employee of the
Corporation.
(f) PLAN is the "Retirement Plan for Outside Directors of
C. R. Bard, Inc." The Plan shall be administered by the Policy,
Procedures and Organization Committee of the Board of Directors.
(g) RETIREMENT INCOME shall be an amount equal to the amount
of the Annual Retainer received by an Outside Director at the time
his Service ceases, together with 12 times the amount of the
Meeting Fee received by the outside Director at the time his
service ceases. In the event that the Outside Director's Service
shall cease prior to July 1 of any year, then for purposes of
computing the Annual Retainer and Meeting Fee, such amount shall be
deemed to be the amount of the Annual Retainer or Meeting Fee which
was in effect on July 1 of the year in which such Outside
Director's Service shall have ceased.
(h) SERVICE is the number of years that the Outside Director
has served on the Board at retirement. Effective as of September
9, 1992, in the event that an Outside Director's Service shall
include a partial year, such partial year shall be rounded up to a
full year.
(i) VESTED BENEFITS means the amount of Retirement Income
which an Outside Director shall have become entitled to by reason
of his Service.
3. ELIGIBILITY.
(a) All Outside Directors of the Corporation who serve on
the Board of the Corporation on or after the Effective Date of the
Plan, and other retired Outside Directors, are eligible to receive
Retirement Income subject to the terms of the Plan contained
herein, except that no Outside Director shall be entitled to
participate in or to receive any amounts pursuant to this Plan if
such Outside Director is receiving benefits under the Employees'
Retirement Plan of C. R. Bard, Inc.
(b) If a Change of Control occurs prior to the date an
Outside Director is eligible to receive Retirement Income, then for
purposes of this Plan, the amount of retirement income which the
Outside Director would have been entitled to receive had he retired
on the date of the Change of Control shall be irrevocably vested in
the Outside Director, and he shall be entitled to receive same
together with any additional amounts earned since the date of the
Change of Control in accordance with the provision of this Plan.
4. AMOUNT OF RETIREMENT INCOME. For an Outside Director who retires on or after September 9, 1992, the annual amount of Retirement Income shall be the Percentage of Retirement Income in accordance with the schedule below for the period specified in section 5. hereinafter.
SERVICE AT TERMINATION PERCENTAGE OF RETIREMENT INCOME Less than 5 years 0% 5 years or more 100% |
5. COMMENCEMENT AND DURATION OF RETIREMENT INCOME. Retirement
Income shall be paid in quarterly installments and shall commence
as of the first day of the calendar quarter next following the
latest of (a) the date of the Outside Director ceases Service or
(b) the date the Outside Director attains age 55 or (c) the
Effective Date of the Plan. Payments of Retirement Income will
continue for a period of calendar years which is equal to the
number of years of Service of the Outside Director or until his
death, whichever first occurs, subject to section 7. below.
6. INCREASES IN RETIREMENT INCOME. If the Annual Retainer and/or
Meeting Fees paid to active Outside Directors are increased to an
amount higher than that in effect as of the date an Outside
Director ceased his Service, the Corporation may, in its sole
discretion, prospectively increase the amount of Retirement Income
to be paid, or then being paid, to a retired Outside Director.
7. DEATH BENEFIT FOR SPOUSE. In the event of the death of a
retired Outside Director on or after the Effective Date of the
Plan, the surviving spouse shall be entitled to receive the same
Vested Benefits that the Outside Director would have received had
the Outside Director survived.
In the event of the death of an active Outside Director on or
after the Effective Date of the Plan, the surviving spouse shall be
entitled to receive the same Vested Benefits that the Outside
Director would have received had the Outside Director retired on
the date of death.
Such Vested Benefits payments shall continue until the first
to occur of (a) the death of the surviving spouse, or (b) the
expiration of the duration of the Retirement Income as set forth in
section 5. hereinabove as if the Outside Director had survived.
8. REMOVAL FOR CAUSE. In the event an Outside Director is
removed for cause, as determined by the Board, there shall be no
payments under the Plan. For purposes of this provision, "cause"
shall mean any act or omission (a) in breach of the Outside
Director's duty of loyalty to the Corporation or its shareholders,
(b) not in good faith or involving a knowing violation of law, or
(c) resulting in receipt by the Outside Director of an improper
personal benefit.
9. OBLIGATIONS OF RETIRED OUTSIDE DIRECTORS. Anything in the
Plan to the contrary notwithstanding, Retirement Income shall
commence, and continue to be paid, only if the Outside Director
remains available to provide advice and counsel to the Corporation,
and does not engage in business activity with other firms which the
Corporation deems is competitive to its interests following such
resignation or retirement; provided, however, that the obligations
set forth hereinabove shall be deemed waived in the event of a
Change of Control.
10. PROVISION OF BENEFITS. All benefits payable hereunder shall
be provided from the general assets of the Corporation. No Outside
Director shall acquire any interest in any specific assets of the
Corporation by reason of this Plan.
11. AMENDMENT AND TERMINATION. The Corporation reserves the right
to terminate this Plan or amend this Plan in any respect at any
time, provided, however, that no termination or amendment may
reduce the Vested Benefits of any Outside Director.
12. ARBITRATION. The parties agree that any dispute or claim
concerning this Plan or the terms thereof, including whether such
dispute or claim is arbitrable, will be settled by arbitration.
The arbitration proceedings shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association in effect
at the time a demand for arbitration under the rules is made.
Either party shall make a demand for arbitration by giving a demand
in writing to the other party.
The parties may agree upon one arbitrator, but in the event that they cannot agree, there shall be three, one named in writing by each of the parties and a third chosen by the two arbitrators. Should either party refuse or neglect to join in the appointment of the arbitrator(s) or to furnish the arbitrator(s) with any papers or information demanded, the arbitrator(s) are empowered by both parties to proceed ex parte. Arbitration shall take place in the Borough of New Providence, State of New Jersey, and the hearing before the arbitrator(s) of the matter to be arbitrated shall be at the time and place within said Borough as is selected by the arbitrator(s). At the hearing, any relevant evidence may be presented by either party, and the formal rules of evidence and discovery applicable to judicial proceedings shall not be applicable. Evidence may be admitted or excluded in the sole discretion of the arbitrator(s). Said arbitrator(s) shall hear and determine the matter and shall execute and acknowledge their binding award in writing and cause a copy thereof to be delivered to each of the parties. The decision of the arbitrator(s) including determination of amount of any damages suffered shall be exclusive, final and binding upon both parties, their heirs, executors, administrators, successors, and assigns.
A judgment confirming the award of the arbitrator(s) may be
rendered by any court having jurisdiction; or such court may
vacate, modify, or correct the award in accordance with the
prevailing law of the State of New Jersey.
The costs of such arbitration shall be borne by the
Corporation.
To the extent that any language contained in this arbitration
clause shall be inconsistent with any provision of NJS 2A:24-1 et
seq or any provision of the Commercial Arbitration Rules referred
to herein, it is the intention of the parties hereto that the
subsequent inconsistent provision of this clause shall control.
Notwithstanding anything contrary in this Plan, this section
is in no way an attempt to limit discovery which shall be at the
sole discretion and prior approval of the arbitrator(s) and his
(their) rulings on discovery shall be binding; however, he (they)
is (are) to be guided by the most expeditious manner in resolving
disputes under this Plan.
13. ATTORNEYS' FEES. In the event that the Outside Director shall
be the prevailing party in any arbitration or any action at law or
in equity to enforce an arbitration award, the Corporation shall
pay the Outside Director all costs, expenses and reasonable
attorneys' fees incurred therein by such Outside Director
including, without limitation, such costs, expenses and fees on any
appeals.
14. MISCELLANEOUS. Nothing herein contained shall be deemed to give to any Outside Director the right to be retained as a Director nor shall it interfere with the Outside Director's right to terminate his directorship at any time. No benefit payable hereunder shall be subject to alienation or assignment. The retirement benefits herein contained are in addition to any other award, arrangement, contract or benefits, if any, that any Outside Director may have by virtue of service for the Corporation, unless and to the extent that any such other award, arrangement, contract or benefit provides otherwise. 15. This Plan shall be construed according to the laws of the State of New Jersey. Revised 2/93
IV - 318
Exhibit 10m
Deferred Compensation Contract
Deferral of Directors' Fees
THIS AGREEMENT made this 2nd day of December, 1988, by and
between C. R. BARD, INC., a New Jersey corporation,
hereinafter referred to as the "Company" and William T. Butler,
M.D. residing at 1617 South Boulevard, Houston, Texas
hereinafter referred to as the "Director".
WITNESSETH:
WHEREAS, the Company has adopted by Act of its Board of
Directors a program whereby Directors of the Company are paid fees
as compensation for services rendered to the Company; and
WHEREAS, the Company is willing to enter into an arrangement
with the Director whereby the Director may defer receipt of such
fees otherwise payable to the Director: and the Director is
desirous of entering into such an arrangement.
NOW, THEREFORE, in consideration of the premises, and in
consideration of the mutual covenants and agreements herein
contained, the Company and the Director agree as follows:
1. During the period of the Director's active service as
hereinafter defined, the Director agrees to serve the Company
faithfully and, to the best of the Director's ability, to perform
such services and duties as shall be assigned to the Director by
the Company's Board of Directors.
For purposes of this Agreement, the period of the Director's
active service shall mean the period commencing with the date of
IV - 319
election or appointment of the Director and expiring on the date on
which occurs the termination of the Director's service by reason of
expiration of term or the date of resignation, removal or death of
the Director whichever shall occur first.
2. (a) Prior to the thirty-first day of December of each
calendar year during the period of the Director's active service
the Director may instruct the Company by delivery to it of written
notice to withhold any fees otherwise payable to Director for
services rendered in the following calendar year (the "Deferred
Amounts"). The Deferred Amounts shall be credited when otherwise
due to be paid to an account or accounts (the "Deferred Account")
established on the books of the Company for this purpose. The
Director shall by written notice designate which Deferred Account
or Accounts the Director elects the Company to establish for said
Director and the percentage (but not less than 25%) of the Deferred
Amount to be credited to each such Deferred Account all as more
fully set forth in Subparagraphs 2(b)(i) and 2(b)(ii) hereinafter.
(b)(i)
(A) The amount credited by the Company to this Deferred
Account by election of Director shall immediately be converted to
that number of share units equal to the number of shares (to the
nearest hundredth of a share) of common stock of the Company which
could have been purchased at the composite closing price on the New
York Stock Exchange for shares of common stock of the Company on
such date (the "Share Units") with the Deferred Amount.
(B) During the period that the Company shall maintain
such Deferred Account, on each date on which the Company pays
dividends on shares of its common stock, it shall credit the
Deferred Account with an additional number of share units equal to
the number of shares (to the nearest hundredth of a share) of
common stock of the Company which could have been purchased at the
composite closing price on the New York Stock Exchange for shares
of common stock of the Company on such date, with the amount of
dividends that would have been received on the number of shares of
common stock equal to the number of shares units in such Director's
Deferred Account.
(C) In the event of any stock dividend, stock split,
combination of shares, recapitalization or the like of the common
stock of the Company, the Company shall make appropriate adjustment
in the number of share units entered in each Deferred Account.
(b)(ii) At the end of each calendar quarter during the
period of the Director's active service the Company agrees to
credit this Deferred Account by election of Director with simple
interest equal to the average percentage of interest earned by the
Company on its marketable securities portfolio during the preceding
three (3) months. In the event that Company fails to have a
marketable securities portfolio then the Company agrees to credit
the Employee's account with simple interest equal to the prime rate
as of the end of each calendar quarter. For purposes of this
Agreement, the prime interest rate shall mean the annual interest
rate offered by Morgan Guaranty Trust Company, New York, New York,
to its preferred commercial borrowers as of the end of each
calendar quarter.
(c) The amounts credited to the Director's Deferred Account
pursuant to this Agreement shall constitute an unsecured claim
against the general funds of the Company.
3. (a) Not later than ninety (90) days prior to the
expiration of the period of Director's active service, Director may
advise the Company in writing of Director's desire to receive the
amounts in the Deferred Account in cash as a lump sum payment. In
the event of such notice, and provided that Company shall agree,
said lump sum payment shall be made to Director on the first day of
the month next following the expiration of the period of Director's
active service.
(b) In the event the Director does not notify the Company
pursuant to paragraph 3 (a) or if the Company in its sole
discretion shall elect not to pay Director a lump sum, the amount
in the Deferred Account of the Director shall be paid to Director,
in annual installments commencing with the first day of the month
next following the date of expiration of the period of Director's
active service, in accordance with a payout schedule adopted by the
Board of Directors of the Company which shall under no
circumstances cover a period of time in excess of ten (10) years.
The Company reserves the right at all times throughout the term of
this Agreement to alter the schedule for the payment of the
Deferred Amount and may at its election pay the entire Deferred
Amount or any part thereof standing to the credit of the Director
or his beneficiary or estate, as lump sum. In the event, however,
that there is a Change of Control as hereinafter defined, then this
subparagraph (b) shall be rendered null and void and all amounts
due Director shall be made in a lump sum on the first day of the
month next following the expiration of the period of Director's
active service.
(c) For purposes of this Agreement, "Change of Control" shall
mean and be deemed to occur if a change of control of the nature
that would be required to be reported in response to Item la) of
the Current Report on Form 8-K as in effect on the date hereof
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, provided that, without limitation, a "Change of Control"
shall be deemed to have occurred if (a) the beneficial ownership at
any time hereafter by any person, as defined herein, of capital
stock of the Company, the voting power of which constitutes 20% or
more of the general voting power of all of the Company's
outstanding capital or (b) individuals who, as of the date hereof,
constitute the Board of Directors of the Corporation (the "Board"
generally and as of the date hereof the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board,
provided that any person becoming a Director subsequent to the date
hereof whose election, or nomination for election by
the Corporation's shareholders, was approved by a vote of at least
three-quarters of the Directors comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the
Directors of the Corporation, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for
purposes of this Agreement, considered as though such person were
a member of the Incumbent Board. No sale to underwriters or
private placement of its capital stock by the Company, nor any
acquisition by the Company, through merger, purchase of assets or
otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of
Control. For purposes of the definition of "Change of Control",
the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group,
corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner or
any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of
record, or
(B) which that person has the right to acquire pursuant
to any agreement or understanding or upon exercise of
conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause
(B) above), by an "affiliate" or "associate" (as defined in
the rules of the Securities and Exchange Commission under the
Securities Act of 1933) of that person or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause
(B) above), by any other person with which that person or his
"affiliate" or "associate" (defined as aforesaid) has any
agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital stock of
the Company,
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through application of clauses
(ii) (B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise,
but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase
Manhattan Bank N.A. under the Indenture and the Escrow Agreement
dated as of November 1, 1971 between International Paper Company
and said bank shall not be deemed owned by International Paper
Company or by said bank for purposes of this Plan, so long as they
are held by said bank under said Escrow Agreement, but said shares
shall be deemed outstanding for the purpose of determining the
aggregate number of outstanding shares of capital stock of the
Company.
4. In the event of the death of the Director during the
term of this Agreement, the Company shall pay in one lump sum
within 60 days thereafter the amount in the Deferred Account to
such beneficiary or beneficiaries as Director may have designated
in writing to the Company or, in the event a beneficiary is not so
designated by the Director, to the Director's estate.
5. Notwithstanding anything herein to the contrary, in the
event any amendment to the Internal Revenue Code or Treasury
regulations or judicial or administrative interpretation thereof
should disallow the deferral of compensation as required in this
Agreement, the Company shall in its sole discretion be permitted to
distribute to the Director such compensation so affected, or
terminate this Agreement in whole or in part.
6. No rights or interest of the Director, his beneficiary,
or estate established herein, shall be assignable or transferable
in whole or in part either directly or by operation of law or
otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy, or in any other
manner, and no right or interest established herein shall be liable
for, or subject to, any obligation or liability of the Director.
7. Except as herein provided, this Agreement shall be
binding upon the parties hereto, their heirs, executors,
administrators, successors (including but not limited to successors
resulting from any corporate merger) or assigns.
8. The parties agree that any dispute or claim concerning
this Agreement or the terms thereof, including whether such dispute
or claim is arbitrable, will be settled by arbitration. The
arbitration proceedings shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association in effect
at the time a demand for arbitration under the rules is made.
Either party shall make a demand for arbitration by giving a demand
in writing to the other party.
The parties may agree upon one arbitrator, but in the event
that they cannot agree, there shall be three, one named in writing
by each of the parties and a third chosen by the two arbitrators.
Should either party refuse or neglect to join in the appointment of
the arbitrator(s) or to furnish the arbitrator(s) with any papers
or information demanded, the arbitrator(s) are empowered by both
parties to proceed ex parte.
Arbitration shall take place in the Borough of New Providence,
State of New Jersey, and the hearing before the arbitrator(s) of
the matter to be arbitrated shall be at the time and place within
said Borough as is selected by the arbitrator(s).
At the hearing, any relevant evidence may be presented by
either party, and the formal rules of evidence and discovery
applicable to judicial proceedings shall not be applicable.
Evidence may be admitted or excluded in the sole discretion of the
arbitrator(s). Said arbitrator(s) shall hear and determine the
matter and shall execute and acknowledge their binding award in
writing and cause a copy thereof to be delivered to each of the
parties.
The decision of the arbitrator(s) including determination of
amount of any damages suffered shall be exclusive, final and
binding upon both parties, their heirs, executors, administrators,
successors, and assigns.
A judgment confirming the award of the arbitrator(s) may be
rendered by any Court having jurisdiction or such Court may
vacate, modify, or correct the award in accordance with the
prevailing law of the state of New Jersey.
The costs of such arbitration shall be borne by the
Corporation.
To the extent that any language contained in this arbitration
clause shall be inconsistent with any provision of NJS 2A:24-1 et
seq or any provision of the Commercial Arbitration Rules referred
to herein, it is the intention of the parties hereto that the
subsequent inconsistent provision of this clause shall control.
Notwithstanding anything contrary in this Agreement, this
Section is in no way an attempt to limit discovery which shall be
at the sole discretion and prior approval of the arbitrator(s) and
his (their) rulings on discovery shall be binding; however, he
(they) is (are) to be guided by the most expeditious manner in
resolving disputes under this Agreement.
9. In the event that Director shall be the prevailing party
in any arbitration or any action at law or in equity to enforce an
arbitration award, the Company shall pay the Director all costs,
expenses and reasonable attorneys' fees incurred therein by such
Director including, without litigation, such costs, expenses and
fees on any appeals.
10. This Agreement shall be executed in duplicate, each copy
of which when so executed and delivered shall be an original, but
both copies shall together constitute one of the same document.
11. This Agreement may at any time be amended by the
Company, but no such amendment shall diminish the value of any
amounts then credited to the Director under the Agreement.
12. This Agreement shall be construed in accordance with the
law of the state of New Jersey.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals the day and year first above written.
WITNESS:
William T. Butler /s/ (L.S.)
ATTEST:
Jean F. Barber /s/ By: Richard A. Flink /s/
Revised 7/87
|
Amended by the Board of Directors at its meeting on June 12,
1991, by resolution as follows:
RESOLVED that the existing Deferred Compensation Contract
Deferral of Directors' Fees, and the form of future contracts, be,
and they hereby are, amended to delete from such contracts
Paragraph 5 thereof and to renumber Paragraphs 6, 7, 8, 9, 10, 11
and 12 to be 5, 6, 7, 8, 9, 10 and 11, respectively.
Deferred Compensation Contract Deferral of Directors' Fees
THIS AGREEMENT made this 24 day of April, 1991, by and
between C. R. BARD, INC., a New Jersey corporation, hereinafter
referred to as the "Company" and Regina E. Herzlinger residing at
560 Concord Avenue, Belmont, MA, hereinafter referred to as the
"Director".
WITNESSETH:
WHEREAS, the Company has adopted by Act of its Board of
Directors a program whereby Directors of the Company are paid fees
as compensation for services rendered to the Company; and
WHEREAS, the Company is willing to enter into an arrangement
with the Director whereby the Director may defer receipt of such
fees otherwise payable to the Director; and the Director is
desirous of entering into such an arrangement.
NOW, THEREFORE, in consideration of the premises, and in
consideration of the mutual covenants and agreements herein
contained, the Company and the Director agree as follows:
1. During the period of the Director's active service as
hereinafter defined, the Director agrees to serve the Company
faithfully and, to the best of the Director's ability, to perform
such services and duties as shall be assigned to the Director by
the Company's Board of Directors.
For purposes of this Agreement, the period of the Director's
active service shall mean the period commencing with the date of
IV - 331
election or appointment of the Director and expiring on the date on
which occurs the termination of the Director' 8 service by reason
of expiration of term or the date of resignation, removal or death
of the Director whichever shall occur first.
2. (a) Prior to the thirty-first day of December of each
calendar year during the period of the Director's active service
the Director may instruct the Company by delivery to it of written
notice to withhold any fees otherwise payable to Director for
services rendered in the following calendar year (the "Deferred
Amounts"). The Deferred Amounts shall be credited when otherwise
due to be paid to an account or accounts (the "Deferred Account")
established on the books of the Company for this purpose. The
Director shall by written notice designate which Deferred Account
or Accounts the Director elects the Company to establish for said
Director and the percentage (but not less than 25%) of the Deferred
Amount to be credited to each such Deferred Account all as more
fully set forth in Subparagraphs 2(b)(i) and 2(b)(ii) hereinafter.
(b)(i)
(A) The amount credited by the Company to this Deferred
Account by election of Director shall immediately be converted to
that number of share units equal to the number of shares (to the
nearest hundredth of a share) of common stock of the Company which
could have been purchased at the composite closing price on the New
York Stock Exchange for shares of common stock of the Company on
such date (the "Share Units") with the Deferred Amount.
(B) During the period that the Company shall maintain
such Deferred Account, on each date on which the Company pays
dividends on shares of its common stock, it shall credit the
Deferred Account with an additional number of share units equal to
the number of shares (to the nearest hundredth of a share) of
common stock of the Company which could have been purchased at the
composite closing price on the New York Stock Exchange for shares
of common stock of the Company on such date, with the amount of
dividends that would have been received on the number of shares of
common stock equal to the number of share units in such Director's
Deferred Account.
(C) In the event of any stock dividend, stock split,
combination of shares, recapitalization or the like of the common
stock of the Company, the Company shall make appropriate adjustment
in the number of share units entered in each Deferred Account.
(b)(ii) At the end of each calendar quarter during the
period of the Director's active service the Company agrees to
credit this Deferred Account by election of Director with simple
interest equal to the average percentage of interest earned by the
Company on its marketable securities portfolio during the preceding
three (3) months. In the event that Company fails to have a
marketable securities portfolio then the company agrees to credit
the Employee's account with simple interest equal to the prime rate
as of the end of each calendar quarter. For purposes of this
Agreement, the prime interest rate shall mean the annual interest
rate offered by Morgan Guaranty Trust Company, New York, New York,
to its preferred commercial borrowers as of the end of each
calendar quarter.
(c) The amounts credited to the Director's Deferred Account
pursuant to this Agreement shall constitute an unsecured claim
against the general funds of the Company.
3. (a) Not later than ninety (90) days prior to the
expiration of the period of Director's active service, Director may
advise the Company in writing of Director's desire to receive the
amounts in the Deferred Account in cash as a lump sum payment. In
the event of such notice, and provided that Company shall agree,
said lump sum payment shall be made to Director on the first day of
the month next following the expiration of the period of Director's
active service.
(b) In the event the Director does not notify the Company
pursuant to paragraph 3 (a) or if the Company in its sole
discretion shall elect not to pay Director a lump sum, the amount
in the Deferred Account of the Director shall be paid to Director,
in annual installments commencing with the first day of the month
next following the date of expiration of the period of Director's
active service, in accordance with a payout schedule adopted by the
Board of Directors of the Company which shall under no
circumstances cover a period of time in excess of ten (10) years.
The Company reserves the right at all times throughout the term of
this Agreement to alter the schedule for the payment of the
Deferred Amount and may at its election pay the entire Deferred
Amount or any part thereof standing to the credit of the Director
or his beneficiary or estate, as lump sum. In the event, however,
that there is a Change of Control as hereinafter defined, then this
subparagraph (b) shall be rendered null and void and all amounts
due Director shall be made in a lump sum on the first day of the
month next following the expiration of the period of Director's
active service.
c) For purposes of this Agreement, "Change of Control
shall mean and be deemed to occur if a change of control of the
nature that would be required to be reported in response to Item
l(a) of the Current Report on Form 8-X 8s in effect on the date
hereof pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, provided that, without limitation, a "Change of
Control" shall be deemed to have occurred if (a) the beneficial
ownership at any time hereafter by any person, as defined herein,
of capital stock of the Company, the voting power of which
constitutes 20% or more of the general voting power of all of the
Company's outstanding capital or (b) individuals who, as of the
date hereof, constitute the Board of Directors of the Corporation
(the "Board" generally and as of the date hereof the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a Director subsequent
to the date hereof whose election, or nomination for election by
the Corporation's shareholders, was approved by a vote of at least,
three-quarters of the Directors comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the
Directors of the Corporation, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Fxchange Act) shall be, for
purposes of this Agreement, considered as though such person were
a member of the Incumbent Board. No sale to underwriters or
private placement of its capital stock by the Company, nor any
acquisition by the Company, through merger, purchase of assets or
otherwise, effected in whole or in part by issuance or reissuance
of shares of its capital stock, shall constitute a Change of
Control. For purposes of the definition of "Change of Control",
the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group,
corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of
any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of
record, or
B) which that person has the right to acquire pursuant
to any agreement or understanding or upon exercise of
conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause
(B) above), by an "affiliate" or "associate" (as defined in
the rules of the Securities and Exchange Commission under the
Securities Act of 1933) of that person or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause
(B) above), by any other person with which that person or his
"affiliate" or "associate" (defined as aforesaid) has any
agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital stock of
the Company,
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through application of clauses
(ii) (B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise,
but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase
Manhattan Bank N.A. under the Indenture and the Escrow Agreement
dated as of November 1, 1971 between International Paper Company
and said bank shall not be deemed owned by International Paper
Company or by said bank for purposes of this Plan, so long as they
are held by said bank under said Escrow Agreement, but said shares
shall be deemed outstanding for the purpose of determining the
aggregate number of outstanding shares of capital stock of the
Company.
4. In the event of the death of the Director during the
term of this Agreement, the Company shall pay one lump sum within
60 days thereafter the amount in the Deferred Account to such
beneficiary or beneficiaries as Director may have designated in
writing to the Company or, in the event a beneficiary is not so
designated by the Director, to the Director's estate.
5. Notwithstanding anything herein to the contrary, in the
event any amendment to the Internal Revenue Code or Treasury
Regulations or judicial or administrative interpretation thereof
should disallow the deferral of compensation as required in this
Agreement, the Company shall in its sole discretion be permitted to
distribute to the Director such compensation so affected, or
terminate this Agreement in whole or in part.
6. No rights or interest of the Director, his beneficiary,
or estate established herein, shall be assignable or transferable
in whole or in part either directly or by operation of law or
otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy, or in any other
manner, and no right or interest established herein shall be liable
for, or subject to, any obligation or liability of the Director.
7. Except as herein provided, this Agreement shall be
binding upon the parties hereto, their heirs, executors,
administrators, successors (including but not limited to successors
resulting from any corporate merger) or assigns.
8. The parties agree that any dispute or claim concerning
this Agreement or the terms thereof, including whether such dispute
or claim is arbitrable, will be settled by arbitration. The
arbitration proceedings shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association in effect
at the time a demand for arbitration under the rules is made.
Either party shall make a demand for arbitration by giving a demand
in writing to the other party.
The parties may agree upon one arbitrator, but in the event
that they cannot agree, there shall be three, one named in writing
by each of the parties and a third chosen by the two arbitrators.
Should either party refuse or neglect to join in the appointment of
the arbitrator(s) or to furnish the arbitrator(s) with any papers
or information demanded, the arbitrator(sJ are empowered by both
parties to proceed ex parte.
Arbitration shall take place in the Borough of New Providence,
State of New Jersey, and the hearing before the arbitrator(s) of
the matter to be arbitrated shall be at the time and place within
said Borough as is selected by the arbitrator(s).
At the hearing, any relevant evidence may be presented by
either party, and the formal rules of evidence and discovery
applicable to judicial proceedings shall not be applicable.
Evidence may be admitted or excluded in the sole discretion of the
arbitrator(s). Said arbitrator(s) shall hear and determine the
matter and shall execute and acknowledge their binding award in
writing and cause a copy thereof to be delivered to each of the
parties.
The decision of the arbitrator(s) including determination of
amount of any damages suffered shall be exclusive, final and
binding upon both parties, their heirs, executors, administrators,
successors, and assigns.
A judgment confirming the award of the arbitrator(s) may be
rendered by any Court having jurisdiction; or such Court may
vacate, modify, or correct the award in accordance with the
prevailing law of the state of New Jersey.
The costs of such arbitration shall be borne by the
Corporation.
To the extent that any language contained in this arbitration
clause shall be inconsistent with any provision of NJS 2A:24-1 et
seq or any provision of the Commercial Arbitration Rules referred
to herein, it is the intention of the parties hereto that the
subsequent inconsistent provision of this clause shall control.
Notwithstanding anything contrary in this Agreement, this
Section is in no way an attempt to limit discovery which shall be
at the sole discretion and prior approval of the arbitrator(s) and
his (their) rulings on discovery shall be binding: however, he
(they) is (are) to be guided by the most expeditious manner in
resolving disputes under this Agreement.
9. In the event that Director shall be the prevailing party
in any arbitration or any action at law or in equity to enforce an
arbitration award, the Company shall pay the Director all costs,
expenses and reasonable attorneys' fees incurred therein by such
Director including, without limitation, such costs, expenses and
fees on any appeals.
10. This Agreement shall be executed in duplicate, each copy
of which when 80 executed and delivered shall be an original, but
both copies shall together constitute one of the same document.
11. This Agreement may at any time be amended by the
Company, but no such amendment shall diminish the value of any
amounts then credited to the Director under the Agreement.
12. This Agreement shall be construed in accordance with the
law of the state of New Jersey.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals the day and year first above written.
WITNESS:
Regina E. Herzlinger /s/ (L.S.)
ATTEST: C. R. BARD, INC.
Jean F. Barber /s/ By: Richard A. Flink /s/
Assistant Secretary Vice President
|
Revised 7/87
IV - 341
Amended by the Board of Directors at its meeting on June 12, 1991,
by resolution as follows:
RESOLVED that the existing Deferred Compensation Contract
Deferral of Directors' Fees, and the form of future contracts, be,
and they hereby are, amended to delete from such contracts
Paragraph 5 thereof and to renumber Paragraphs 6, 7, 8, 9, 10, 11
and 12 to be 5, 6, 7, 8, 9, 10 and 11, respectively.
C. R. BARD, INC.
731 Central Avenue
Murray Hill, NJ 07974
July 24, 1987
Mr. Robert P. Luciano
4 Park Lane
Madison, New Jersey 07940
Dear Bob:
With respect to that certain Agreement entitled "Deferred Compensation Contract Deferral of Directors' Fees" entered into between yourself and C. R. Bard, Inc. (the "Company") dated December 10, 1980, it is, by mutual consent, amended as follows:
1. The following two sentences have been added to paragraph
2.(b)(ii):
"In the event that Company fails to have a marketable
securities portfolio then the Company agrees to credit the
Employee's account with simple interest equal to the prime
rate as of the end of each calendar quarter. For purposes of
this Agreement, the prime interest rate shall mean the annual
interest rate offered by Morgan Guaranty Trust Company, New
York, New York, to its preferred commercial borrowers as of
the end of each calendar quarter."
2. The second sentence of Paragraph 3.(a) has been amended to read in its entirety:
"In the event of such notice, and provided that Company shall agree, said lump sum payment shall be made to Director on the first day of the month next following the expiration of the period of Director's active service."
Paragraph 3.(b) has been amended to read in its entirety:
"(b) In the event the Director does not notify the Company pursuant to paragraph 3(a) or if the Company in its sole discretion shall elect not to pay Director a lump sum, the amount in the Deferred Account of the Director shall be paid to Director, in annual installments commencing with the first day of the month next following the date of expiration of the period of Director's active service, in accordance with a payout schedule adopted by the Board of Directors of the
IV - 343
Company which shall under no circumstances cover a period of
time in excess of ten (10) years. The Company reserves the
right at all times throughout the term of this Agreement to
alter the schedule for the payment of the Deferred Amount and
may at its election pay the entire Deferred Amount or any part
thereof standing to the credit of the Director or his
beneficiary or estate, as lump sum. In the event, however,
that there is a Change of Control as hereinafter defined, then
this subparagraph (b) shall be rendered null and void and all
amounts due Director shall be made in a lump sum on the first
day of the month next following the expiration of the period
of Director's active service."
A new Paragraph 3.(c) has been added as follows:
"(C) For purposes of this Agreement, "Change of Control" shall mean and be deemed to occur if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (a) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Company, the voting power of which constitutes 20% or more of the general voting power of all of the Company's outstanding capital or (b) individuals who, as of the date hereof, constitute the Board of Directors of the Corporation (the "Board" generally and as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least three-quarters of the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Company, nor any acquisition by the Company, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control. For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group,
corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of
any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of
record, or
(B) which that person has the right to acquire pursuant
to any agreement or understanding or upon exercise of
conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause
(B) above), by an "affiliate" or "associate" (as defined in
the rules of the Securities and Exchange Commission under the
Securities Act of 1933) of that person or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause
(B) above), by any other person with which that person or his
"affiliate" or "associate" (defined as aforesaid) has any
agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital stock of
the Company,
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through application of clauses
(ii) (B), (C) and (D), above, but shall not include any other
shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise,
but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase
Manhattan Bank N.A. under the Indenture and the Escrow Agreement
dated as of November 1, 1971 between International Paper Company
and said bank shall not be deemed owned by International Paper
Company or by said bank for purposes of this Plan, so long as they
are held by said bank under said Escrow Agreement, but said shares
shall be deemed outstanding for the purpose of determining the
aggregate number of outstanding shares of capital stock of the
Company.
Paragraph 3.(c) of prior Agreement is now Paragraph 3.(d).
3. Paragraphs 5., 6. and 7. of prior Agreement have been deleted.
4. Paragraph 8. of prior Agreement is now Paragraph 5.
5. Paragraph 9. of prior Agreement is now Paragraph 6.
6. Paragraph 10. of prior Agreement is now Paragraph 7.
7. A new Paragraph 8. has been added to read in its entirety:
"8. The parties agree that any dispute or claim concerning
this Agreement or the terms thereof, including whether such dispute
or claim is arbitrable, will be settled by arbitration. The
arbitration proceedings shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association in effect
at the time a demand for arbitration under the rules is made.
Either party shall make a demand for arbitration by giving a demand
in writing to the other party.
The parties may agree upon one arbitrator, but in the event
that they cannot agree, there shall be three, one named in writing
by each of the parties and a third chosen by the two arbitrators.
Should either party refuse or neglect to join in the appointment of
the arbitrator(s) or to furnish the arbitrator(s) with any papers
or information demanded, the arbitrator(s) are empowered by both
parties to proceed ex parte.
Arbitration shall take place in the Borough of New Providence,
State of New Jersey, and the hearing before the arbitrator(s) of
the matter to be arbitrated shall be at the time and place within
said Borough as is selected by the arbitrator(s).
At the hearing, any relevant evidence may be presented by
either party, and the formal rules of evidence and discovery
applicable to judicial proceedings shall not be applicable.
Evidence may be admitted or excluded in the sole discretion of the
arbitrator(s). Said arbitrator(s) shall hear and determine the
matter and shall execute and acknowledge their binding award in
writing and cause a copy thereof to be delivered to each of the
parties.
The decision of the arbitrator(s) including determination of
amount of any damages suffered shall be exclusive, final and
binding upon both parties, their heirs, executors, administrators,
successors, and assigns.
A judgment confirming the award of the arbitrator(s) may be
rendered by any Court having jurisdiction; or such Court may
vacate, modify, or correct the award in accordance with the
prevailing law of the state of New Jersey.
The costs of such arbitration shall be borne by the
Corporation.
To the extent that any language contained in this arbitration
clause shall be inconsistent with any provision of NJS 2A:24-1 et
seq or any provision of the Commercial Arbitration Rules referred
to herein, it is the intention of the parties hereto that the
subsequent inconsistent provision of this clause shall control.
Notwithstanding anything contrary in this Agreement, this
Section is in no way an attempt to limit discovery which shall be
at the sole discretion and prior approval of the arbitrator(s) and
his (their) rulings on discovery shall be binding; however, he
(they) is (are) to be guided by the most expeditious manner in
resolving disputes under this Agreement."
8. Paragraph 11. of prior Agreement is now Paragraph 10.
9. Paragraph 12. of prior Agreement is now Paragraph 11.
10. Paragraph 13. of prior Agreement is now Paragraph 12.
11. All of the remaining Paragraphs of said Agreement not otherwise amended shall continue in full force and effect.
For your convenience attached is a copy of the Deferred Compensation Contract Deferral of Directors' Fees in which all of the above amendments have been incorporated.
Sincerely,
Laurence E. Lindars /s/ |
Agreed to:
IV - 347
C. R. BARD, INC. MURRAY HILL, NJ 07974
HEALTH, CARE PRODUCTS
February 19, 1981
Mr, Robert P. Luciano
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Dear Mr, Luciano:
With respect to that Agreement entitled "DEFERRED COMPENSATION CONTRACT DEFERRAL OF DIRECTORS' FEES" entered into between yourself and C. R. BARD, INC. (the "Company") dated 1/14/81 , it is, by mutual consent, amended as follows:
1. Paragraph "2.(b) (ii)" is hereby deleted in its entirety and the following is substituted in its place and stead:
"2.(b) (ii) At the end of each calendar quarter during the period of the Director's active service the Company agrees to credit this Deferred Account by election of Director with simple interest equal to the average percentage of interest earned by the Company on its Marketable Securities Portfolio during the preceding three (3) months."
2. The above revised Paragraph "2.(b) (ii)" shall be effective commencing January 1, 1981,
3. All of the remaining Paragraphs of said Agreement shall continue in full force and effect.
Sincerely,
C. R. BARD, INC.
Laurence E. Lindars /s/
Executive Vice President and
Chief Financial Officer
Agreed to
2/23/81
|
I do not wish to defer payment of
Directors' Fees
Robert P. Luciano /s/
IV - 348
DEFERRED COMPENSATION CONTRACT
DEFERRAL OF DIRECTORS' FEES
|
THIS AGREEMENT made this 14 day of JANUARY 1981 by and between C. R. BARD, INC., a New Jersey Corporation, hereinafter referred to as the 'Company and ROBERT P. LUCIANO residing at 4 PARK LANE, MADISON, NEW JERSEY 07940 hereinafter referred to as the "Director"
WITNESSETH:
WHEREAS, the Company has adopted by Act of its Board of
Directors a program whereby Directors of the Company are paid fees
as compensation for services rendered to the Company; and
WHEREAS, the Company is willing to enter into an arrangement
with the Director whereby the Director may defer receipt of such
fees otherwise payable to the Director; and the Director is
desirous of entering into such an arrangement.
NOW, THEREFORE, in consideration of the premises, and in
consideration of the mutual covenants and agreements herein con-
tained, the Company and the Director agree as follows:
1. During the period of the Director's active service as
hereinafter defined, the Director agrees to serve the Company
faithfully and, to the best of the Director's ability, to perform
such services and duties as shall be assigned to the Director by
c the Company's Board of Directors.
IV - 349
For purposes of this Agreement the period of the Director's
active service shall mean the period commencing with the date of
election or appointment of the Director and expiring on the date on
which occurs the termination of the Director's service by reason of
expiration of term or the date of resignation, removal or death of
the Director, whichever shall occur first.
2. (a) Prior to the thirty-first day of December of each
calendar year during the period of the Director's active
service the Director may instruct the Company by
delivery to it of written notice to withhold any fees
otherwise payable to Director for services rendered in
the following calendar year (the "Deferred Amounts").
The Deferred Amounts shall be credited when otherwise
due to be paid to an account or accounts (the "Deferred
Account") established on the books of the Company for
this purpose. The Director shall by written notice
designate which Deferred Account or accounts the
Director elects the Company to establish for said
Director and the percentage (but not less than 25%) of
the Deferred Amount to be credited to each such Deferred
Account all as more fully set forth in Subparagraphs !
2(b)(i) and 2(b) (ii) hereinafter.
(a) The amount credited by the Company to this Deferred
Account by election of Director shall immediately be
converted to that number of share units equal to the
number of shares (to the nearest hundredth of a share)
of common stock of the Company which could have been
purchased at the composite closing price on the New York
Stock Exchange for shares of common stock of the Company
on such date (the "Share Units") with the Deferred
Amount.
(b) During the period that the Company shall maintain
such Deferred Account, on each date on which the Company
pays dividends on shares of its common stock, it shall
credit the Deferred Account with an additional number of
share units equal to the number of shares (to the
nearest hundredth of a share) of common stock of the
Company which could have been purchased at the composite
closing price on the New York Stock Exchange for shares
of common stock of the Company on such date, with the
amount of dividends that would have been received on the
number of shares of common stock equal to the number of
shares units in such Director's Deferred Account.
(c) In the event of any stock dividend, stock split,
combination of shares, re-capitalization or the like of
the common stock of the Company, the Company shall make
appropriate adjustment in the number of share units
entered in each Deferred Account.
(b) (ii) At the end of each calendar quarter during the
period of the Director's active service the Company agrees to
credit this Deferred Account by election of Director with
simple interest equal to the "prime interest rate" (as
hereinafter defined). For purposes of this Agreement, the
prime interest rate shall mean the interest rate offered by
Morgan Guaranty Trust Company, New York, New York, to their
respective preferred commercial borrowers, as published by
said bank. The calculation of such prime interest rate shall
be on a time weighted basis covering the quarterly period
during which such computation shall be made. (c) The amounts
credited to the Director's Deferred Account pursuant to this
Agreement shall constitute an unsecured claim against the
general funds of the Company.
3. (a) Not later than ninety (90) days prior to the expiration
of the period of Director's active service, Director may
advise the Company in writing of Director's desire to receive
the amounts in the Deferred Account in cash as a lump sum
payment. In the event of such notice, said lump sum payment
may be made to Director on the fifteenth day of January next
following the expiration of the period of Director's active
service.
(b) In the event the Director does not notify the Company
pursuant to Paragraph 3 (a) or if the Company in its sole
discretion shall elect not to pay Director a lump sum, the
amount in the Deferred Account of the Director shall be paid
within 15 days to Director, in annual installments commencing
with the first day of January next following the date of
expiration of the period of Director's active service, in
accordance with a pay out schedule adopted by the Board of
Directors of the Company which ! shall under no circumstances
cover a period of time in excess of ten (10) years. The
Company reserves the right at all times throughout the term of
this Agreement to alter the schedule for the payment of the
Deferred Amount and may at its election pay the entire
Deferred Amount or any part thereof standing to the credit of
the Director or his beneficiary or estate, a-s lump sum.
(c) The amount which shall be due Director pursuant to the
Paragraph 2(b)(i) at the termination of Director's active
service, and payable to such Director in accordance with
Paragraph 3 (a) or 3 (b) hereinabove shall be the product of
the number of share units in the Director's Deferred Account
on the last day of the month immediately preceding the month
in which payment is to be made, multiplied by the average
composite closing prices for the common stock of the Company
on the New York Stock Exchange during such immediately
preceding month.
4. In the event of the death of the Director during the term of
this Agreement, the Company shall pay in one lump sum within 60
days thereafter the amount in the Deferred Account to such
beneficiary or beneficiaries as Director may have designated in
writing to the Company or, in the event a beneficiary is not so
designated by the Director, to the Director's estate.
5. The Director agrees that, he will not directly or indirectly
enter into or in any manner take part in any business, profession
or other endeavor, either as an employee, Director, agent,
independent contractor or owner, which, in the opinion of the Board
of Directors of the Company, shall be in competition with the
business of the Company, which opinion of the Board of Directors
shall be final and conclusive for the purposes hereof.
6. The Director shall not divulge any trade or business secrets
or any other confidential information of the Company to any person
not employed by the Company unless so authorized by the Company.
7. If the Director shall fail to observe any of the covenants of
Paragraphs 5 and 6 and shall continue to breach any covenant
therein contained for a period of thirty (30) days after the
Company shall have advised Director of such breach by written
notice, then, any of the provisions hereof to the contrary
notwithstanding, the Director agrees that no further payments shall
be due or payable by the Company hereunder either to the Director,
his beneficiary, or his estate, and that the Company shall have no
further liability hereunder.
8. Notwithstanding anything herein to the contrary, in the event
any amendment to the Internal Revenue Code or Treasury Regulations
or judicial or administrative interpretation thereof should
disallow the deferral of compensation as required in this
Agreement, the Company shall in its sole discretion be permitted to
distribute to the Director such compensation so affected, or
terminate this Agreement in whole or in part.
9. No rights or interest of the Director, his beneficiary, or
estate established herein, shall be assignable or transferable in
whole or in part, either directly or by operation of law or
otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruPtcy, or in any other
manner, and no right or interest established herein shall be liable
for, or subject to, any obligation or liability of the Director.
10. Except as herein provided, this Agreement shall be binding
upon the parties hereto, their heirs, executors, administrators,
successors (including but not limited to successors resulting from
any corporate merger) or assigns.
11. This Agreement shall be executed in duplicate, each copy of
which when so executed and delivered shall be an original, but both
copies shall together constitute one of the same document.
12. This Agreement may at any time be amended by the Company, but
no such amendment shall diminish the value of any amounts then
credited to the Director under the Agreement.
13. This Agreement shall be construed in accordance with the law
of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year first above written.
WITNESS:
(L.S.)
ATTEST: C. R. BARD, INC.
Henrietta A. Norsk /s/ By:Emily D. Lawrence /s/
Secretary
|
January 14, 1981
C. R. Bard, Inc.
731 Central Avenue
Murray Hill, New Jersey
Gentlemen:
Pursuant to Paragraph "2" of the Deferred Compensation Contract - Deferral of Directors' Fees agreement dated January 14, 1981 between the undersigned and C. R. Bard, Inc., you are hereby directed to retain Directors' fees which may be paid to the undersigned by the Company for services rendered in the calendar year 1981 , and credit percent ( %) of such fee to a Deferred Account established pursuant to Paragraph 2(b)(i) and percent ( %) of such fee to a Deferred Account established pursuant to Paragraph 2(b)(ii).
Very truly yours,
Robert P. Luciano /s/
1/23/81
|
I do not wish to defer
payment of Directors Fees.
IV - 358
January 14, 1981
C. R. Bard, Inc.
731 Central Avenue
Murray Hill, New Jersey 07974
Gentlemen:
Pursuant to Paragraph "4" of the Deferred Compensation Contract - Deferral of Directors' Fees agreement dated January 14, 1981, between the undersigned and C. R. Bard, Inc., you are hereby advised that my beneficiary for purposes of the deferred compensation agreement is as follows:
Very truly yours,
ROBERT P. LUCIANO
IV - 359
Amended by the Board of Directors at its meeting on June 12,
1991, by resolution as follows:
RESOLVED that the existing Deferred Compensation Contract
Deferral of Directors' Fees, and the form of future contracts, be,
and they hereby are, amended to delete from such contracts
Paragraph 5 thereof and to renumber Paragraphs 6, 7, 8, 9, lo, 11
and 12 to be 5, 6, 7, 8, 9, 10 and 11, respectively.
IV - 360
EXHIBIT 10n
C. R. BARD, INC. 1988 DIRECTORS STOCK AWARD PLAN
1. The purposes of the C. R. Bard, Inc. 1988 Directors Stock
Award Plan (the "Plan") are (a) to attract and retain highly
qualified individuals to serve as Directors of C.R. Bard, Inc.
("Bard"), (b) to relate non-employee Directors' compensation more
closely to Bard's performance and its shareholders' interests, and
(c) to increase non-employee Directors' stock ownership in Bard.
2. The Plan shall become effective when it is adopted by the Board (the "Effective Date"); provided, however, if within one year after the Plan is adopted by the Board the Plan is not approved by the vote of a majority of the holders of the outstanding shares of Common Stock of Bard present, or represented, and entitled to vote, at a meeting of stockholders where the total vote cast on whether to adopt the Plan represents a majority of the Common Stock of Bard entitled to vote on such matter (such approval is referred to herein as "Stockholder Approval"), then the Plan (and any entitlement of non-employee Directors to receive shares of Common Stock of Bard hereunder) shall terminate at the time of such meeting, or, if no meeting is held, after the passage of one year from the date the Plan was adopted by the Board.
3. Participation in the Plan shall be restricted to those Directors who are not employees of Bard ("non-employee Director").
4. On the first business day in October following the Effective Date, each non-employee Director shall be granted the right to receive, subject to Stockholder Approval, 200 shares of Common Stock of Bard, for each year or partial year remaining in his or her current term of directorship, which shares shall only be transferred by Bard to such Director subject to and in accordance with the terms of this Section 4. Any grant of shares of Common Stock of Bard to a non-employee Director pursuant to the immediately preceding sentence shall be transferred in installments (or an installment to the extent only one year remains under the term of office of a non-employee Director) of 200 shares as follows: (A) the transfer of shares of Common Stock of Bard covered by the first installment shall occur promptly following the date of Stockholder Approval, and (B) the transfer of shares of Common Stock of Bard covered by the second and third installments, if any, shall occur on the first business day in October during each year of such Director's term of office; provided, however, with respect to such second and third installments, such Director shall not be entitled to any such installment of shares and such shares shall not, under any circumstances, be transferred to such Director in the event that for any reason such Director is not a non-employee Director of Bard on the date on which an installment of shares of Common Stock of Bard would otherwise have been transferable hereunder.
IV - 361
5. After the Effective Date upon the election of any
non-employee Director, he or she shall be granted the right to
receive, subject to Section 8, 200 shares of Common Stock of Bard
for each year or partial year remaining in his or her current term
of directorship (other than a partial year resulting from the
election of a Director subsequent to the October 1st immediately
preceding the annual meeting at which the term of office of such
Director will expire), which shares shall only be transferred by
Bard to such Director subject to and in accordance with the terms
of this Section 5. Any grant of shares of Common Stock of Bard to
a non-employee Director pursuant to the terms of this Section 5
shall be transferred in equal installments of 200 shares each,
which shares shall be transferred on, or promptly following, the
first business day in October during each year of such Director's
term of office; provided, however, such Director shall not be
entitled to any such installment of shares and such shares shall
not, under any circumstances, be transferred in the event that for
any reason such Director is not a non-employee Director of Bard on
the date on which an installment of shares of Common Stock of Bard
would otherwise have been transferable hereunder.
6. No shares of Common Stock transferred to a non-employee Director under the Plan may be sold, pledged, assigned, transferred or otherwise encumbered or disposed of until the expiration of two years from the date of the transfer of such shares to the non-employee Director (the "Transfer Restriction"); provided, however, such Transfer Restriction shall cease to apply upon the death or permanent disability (as that term is defined in the C.R. Bard, Inc. Long Term Disability Plan) of the non-employee Director.
7. If the outstanding Common Stock of Bard shall at any time be changed or exchanged by declaration of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation or other corporate reorganization in which Bard is the surviving corporation, the number of shares distributable pursuant to Sections 4 and 5 shall be appropriately and equitably adjusted.
8. All shares of Common Stock of Bard to be used for purposes of this Plan shall be authorized but unissued shares. Notwithstanding anything to the contrary contained herein, no shares of Common Stock of Bard shall be transferred by Bard pursuant to this Plan prior to the date of Stockholder Approval, and no non-employee Director shall be entitled to any rights as a stockholder with respect to any shares of Common Stock of Bard granted hereunder, including, without limitation voting rights and the right to receive dividends, until such shares have been transferred.
9. Any certificate representing shares transferred pursuant to this Plan shall include the following legend:
"The Shares represented by this certificate have not been registered under the Securities Act of 1933 (the "Act") and, accordingly, may not be offered, sold or otherwise pledged, hypothecated or transferred unless (A) pursuant to an effective registration statement under the Act or (B) an applicable exemption from the registration requirements of the Act is available. In addition, the transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions contained in the C. R. Bard, Inc. 1988 Directors Stock Award Plan."
10. This Plan shall be construed in accordance with the laws of the State of New Jersey and may be amended, suspended or terminated at any time or from time to time by action of the Board of Directors of Bard; provided, however, that no such amendment shall be made, which would, without approval of the stockholders:
a. materially increase the number of shares that may be transferred under this Plan;
b. materially modify the requirements as to eligibility for participation in this Plan; or
c. otherwise materially increase the benefits accruing to the non-employee Directors.
11. The Plan provisions governing the eligibility for participation and the amount and timing of awards, including the timing of the delivery of shares in installments, shall not be amended more than once every six months, other than to comport with changes in the Internal Revenue Code, the Employee Retirement Income Security Act, or the rules thereunder.
10/91
EXHIBIT 10o
C. R. BARD, INC
EXCESS BENEFIT PLAN
as of July 13, 1988
Section 1. PURPOSE
1.1 The purpose of this Excess Benefit Plan is to aid in the
recruiting and retention of key Bard employees by establishing a
means of providing unfunded benefits for employees (and their
spouses) which are in excess of the limitations on benefits payable
from a retirement plan imposed by Section 415 of the Internal
Revenue Code. The Plan is intended to be, and shall be
administered as, an excess benefit plan within the meaning of
Section 3(36) of the Employee Retirement Income Security Act of
1974, as amended.
Section 2. DEFINITIONS
2.1 As used herein the following terms shall have the
following meanings unless a different meaning is plainly required
by the context:
(a) "Bard" means C.R. Bard, Inc and its affiliates and
subsidiaries.
(b) board of Directors means the Board of Directors of Bard.
(c) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(d) "Committee" means the Retirement Committee appointed by
the Board of Directors to administer the
Retirement Plan.
IV - 364
(e) Effective Date means July 13, 1988. This Plan shall only
apply to persons who retire under the Retirement Plan after July
13, 1988.
(f) participant means any person included in the membership
of the Retirement Plan who has been designated a Participant by the
Board of Directors or its delegate.
(g) "Plan" means this Excess Benefit Plan as set forth
herein, or if hereafter amended, as so amended.
(h) "Retirement Plan" means the Employees' Retirement Plan of
C.R. Bard, Inc as the same may be in effect from time to time.
(i) "Surviving Spouse" means the widow or widower of a
deceased Participant who is married to the Participant on the date
of the Participant's death.
2.2 Other terms used herein which are defined in the
Retirement Plan shall have the same meaning when used in this Plan
Section 3. ADMINISTRATION AND PARTICIPATION
3.1 The Board of Directors or its delegate shall designate,
from time to time at its discretion, those employees of Bard who
are Participants hereunder. 3.2 The Plan shall be administered by
the Committee. It shall be the duty of the Committee to maintain
such records as will enable the Board of Directors or its delegate
to determine those officers and employees who are entitled to
participate in the Plan. The Committee may adopt, subject to the
approval of the Board of Directors, such rules and regulations as
it may deem necessary for the proper administration of this Plan,
and
its decisions in all matters shall be final, conclusive and
binding.
3.3 The provisions in the Retirement Plan relating to the
Committee shall be applicable to the powers, rights, duties and
immunities of the Committee in the conduct of its affairs under
this Plan.
3.4 Notwithstanding the foregoing, upon the occurrence of a
Potential Change of Control or a Change of Control (as defined in
Section 4.3 of the C.R. Bard, Inc. Supplemental Executive
Retirement Plan) no amendment or action of the Committee or the
Board of Directors or its delegate which affects any Participant is
valid and enforceable without the prior written consent of such
Participant.
Section 4. EXCESS BENEFITS
4.1 If at any time after the Effective Date the pension
payable to any Participant under the Retirement Plan is or shall
become limited by a provision included in the Retirement Plan for
the purpose of complying with Section 415 of the Code, the amount
by which such pension benefit is so limited shall be provided for
such Participant (and, if applicable, the Participant's Surviving
Spouse) under this Plan.
4.2 Payments of benefits under this Plan shall be made at the
same time and in the same manner as the corresponding benefit under
the Retirement Plan. Any actuarial adjustment of the amount
payable to such Participant (and, if applicable, the Participant's
Surviving Spouse) under this Plan shall be in
the same basis as actuarial adjustments on the corresponding
benefit under the Retirement Plan.
Section 5. SOURCE OF EXCESS BENEFITS
5.1 Except as provided in Section 5.2, payment of benefits
shall be made by Bard, and in all events Bard shall remain liable
to make such payment.
5.2 All payments under the Plan shall be made from the
general funds of Bard. No assets of Bard shall be segregated or
earmarked to represent the liability for accrued retirement
benefits. The rights of any person to receive benefits under the
Plan shall be only those of a general unsecured creditor.
Notwithstanding the foregoing, upon the occurrence of a Potential
Change of Control or a Change of Control (as defined in the C.R.
Bard, Inc. Supplemental Executive Retirement Plan) assets may be
placed in the C.R. Bard, Inc. Agreement and Plans Trust
(hereinafter called the "Trust") to provide a source for the
payments required to be made under the Plan.
Section 6. AMENDMENT AND TERMINATION
6.1 The Board of Directors may amend the Plan in any respect
and at any time; provided, however, that no such amendment shall
have the effect of reducing the benefits theretofore accrued by a
Participant under the Plan. The accrued benefit under the Plan at
any time is the amount payable under Section 4 if the Participant's
employment terminated on that date. Notwithstanding the foregoing,
upon a
Potential Change of Control or a Change of Control, no amendment or
action of the Board of Directors which affects any Participant is
valid and enforceable without the prior written consent of the
Participant.
6.2 The Board of Directors may terminate the Plan at any
time. In the event of plan termination, each Participant on whose
behalf amounts have accrued under this Plan shall be fully vested.
The benefit then being paid to any person under Section 4 shall
continue to be paid, and all vested benefits under the Plan which
have not yet commenced shall be paid subject to the terms of the
Plan. Notwithstanding the foregoing, following a Potential Change
of Control or a Change of Control no termination of the Plan shall
have the effect of reducing any benefits accrued under the Plan
prior to such termination.
Section 7. MISCELLANEOUS
7.1 No person entitled to an benefit under the Plan shall
have any power to assign, transfer, pledge, hypothecate or
otherwise encumber the right to receive such payment and any
attempt to do so shall be void and will not be recognized by the
Committee.
7.2 Bard shall withhold therefrom such amounts as may be
required by federal, state or local law, and the amount payable
under the Plan to the person entitled thereto shall be reduced by
the amount so withheld.
7.3 This Plan shall be construed and administered in
accordance with the laws of the State of New Jersey applicable to
persons performing services in New Jersey.
7.4 Nothing in this Plan shall be construed to confer upon
any person any legal right to be continued as an employee of Bard;
Bard expressly reserves the right to discharge any employee
whenever the interest of Bard in its sole judgment may so require,
without any liability on the part of Bard or the Committee.
IV - 369
EXHIBIT 10p
C.R. BARD, INC.
Supplemental Executive Retirement Plan
as of July 13. 1988
Section 1. PURPOSE
1.1 The purpose of this Supplemental Executive Retirement
Plan is to aid in the recruiting and retention of key Bard
employees by establishing a means of providing unfunded benefits
for certain eligible employees (and their spouses) which are in
excess of the amounts otherwise provided under the Retirement Plan
and Excess Plan (both as defined below) due to limitations imposed
as a result of certain provisions of the Internal Revenue Code of
1986, as amended.
Section 2. DEFINITIONS
2.1 As used herein the following terms shall have the
following meanings unless a different meaning is plainly required
by the context.
(a) "Bard" means C.R. Bard, Inc and its affiliates and
subsidiaries.
(b) "Board of Directors" means the Board of Directors of Bard.
(c) Change of Control means a change of control as defined in
Section 4.3.
(d) Code means the Internal Revenue Code of 1986, as amended from time to time.
(e) "Committee" means the Retirement Committee appointed by the Board of Directors to administer the Retirement Plan.
IV - 370
(f) "Effective Date" means July 13, 1988. This Plan shall
only apply to persons who retire under the Retirement Plan after
July 13, 1988.
(g) "Excess Plan" means the C.R. Bard, Inc. Excess Benefit Plan as the same may be in effect from time to time .
(h) "Participant" means any person included in the membership of the Retirement Plan who has been designated as a Participant by the Board of Directors or its delegate.
(i) "plan" means this Supplemental Executive Retirement Plan as set forth herein, or if hereafter amended, as so amended.
(j) "Potential Change of Control means a potential change of control as defined in Section 4.3.
(k) "Retirement Plain means the Employee's Retirement Plan of C.R. Bard, Inc as the same may be in effect from time to time.
(l) "Surviving Spouse" means the widow or widower of a deceased Participant who is married to the Participant on the date of the Participant's death.
2.2 Other terms used herein which are defined in the
Retirement Plan shall have the same meaning when used in this Plan.
Section 3. ADMINISTRATION AND PARTICIPATION
3.1 The Board of Directors or its delegate shall designate,
from time to time at its discretion, those employees of Bard who
are Participants hereunder.
3.2 The Plan shall be administered by the Committee. It
shall be the duty of the Committee to maintain such records as will
enable the Board of Directors, or its delegate, to determine those
officers and employees who are entitled to
participate in the Plan. The Committee may adopt, subject to the
approval of the Board of Directors, such rules and regulations as
it may deem necessary for the proper administration of this Plan,
and its decision in all matters shall be final, conclusive and
binding.
3.3 The provisions in the Retirement Plan relating to the
Committee shall be applicable to the powers, rights, duties and
immunities of the Committee in the conduct of its affairs under
this Plan.
3.4 Notwithstanding the foregoing, upon the occurrence of a
Potential Change of Control or a Change of Control (as defined in
Section 4.3) no amendment of the Plan or action of the Committee or
the Board of Directors or its delegate which affects any
Participant is valid and enforceable without the prior written
consent of such Participant.
Section 4. SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFITS
4.1 With respect to any Participant who retires from Bard or
dies while employed by Bard after the Effective Date of the Plan,
the benefit provided under this Plan to the Participant (and, if
applicable, the Participant's Surviving Spouse) shall be equal to:
(a) The total annual pension that the Participant (or the
Participant's Surviving Spouse, if applicable) would receive
under the terms of the Retirement Plan (taking into account
any election as to form of benefit made by the Participant
under the Retirement Plan and the Participant's vesting status
under the Retirement Plan) computed on the basis of the
Participant's full salary and bonus accrued for the applicable
periods under the Retirement Plan benefit formula and computed
without
IV - 372
regard to any limitation in benefits imposed as a result of any provision of the Code (including, but not limited to, Section 401(a)(17) and 415 thereof); minus
(b) The total annual pension actually provided under the
Retirement Plan and the Excess Plan.
4.2 Payments of benefits under this Plan shall be made at the
same time and in the same manner as the corresponding benefit under
the Retirement Plan. Any actuarial adjustment of the amount
payable to such person under this Plan shall be in the same basis
as actuarial adjustments on the corresponding benefit under the
Retirement Plan. Prior to a Change of Control, the Board of
Directors may determine, in its sole discretion, that any or all
benefits paid under this Plan shall be paid in one lump sum after
termination of a Participant's employment with Bard and shall
prescribe actuarial factors for converting the benefit to a lump
sum.
4.3 Notwithstanding the foregoing, upon a Change of Control,
each Participant who is not fully vested under the Retirement Plan,
shall become entitled to the benefit computed under Section 4.1(a)
of this Plan as if the Participant were fully vested in his or her
Retirement Plan benefit. No such presumption of full vesting shall
apply to Section 4.1(b).
For purposes of this Plan, a "Change of Control" shall occur
if a change of control of the nature that would be required to be
reported in response to Item l(a) of the Current Report on Form 8-K
as in effect on the date hereof pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") occurs,
Provided that, without
limitation, a "Change of Control" shall be deemed to have occurred if (a) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Company, constitutes 20 percent or more of the general voting power of all of the Company's outstanding capital or (b) individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Board" generally and as of the date hereof the incumbent Board) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least three-quarters of the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Company, nor any acquisition by the Company, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control. For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group,
corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of
any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of
record, or
(B) which that person has the right to acquire pursuant to
any agreement or understanding or upon exercise of conversion
rights, warrants, or options, or otherwise,-or
(C) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (B)
above), by an "affiliate" or "associate" (as defined in the rules
and regulations of the Securities and Exchange Commission under the
Securities Act of 1933, as amended) of that person, or
(D) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause (B)
above), by any other person with which that person or his
"affiliate" or "associate" (defined as aforesaid) has any
agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of capital stock of the
Company.
(iii) The outstanding shares of capital stock of the Company
shall include shares deemed owned through
application of clauses (ii) (B), (C) and (D), above, but shall not
include any other shares which may be issuable pursuant to any
agreement or upon exercise of conversion rights, warrants or
options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase
Manhattan Bank N.A. under the Indenture and the Escrow Agreement
dated as of November 1, 1971 between International Paper Company
and said bank shall not be deemed owned by International Paper
Company or by said bank for purposes of this definition, so long as
they are held by said bank under said Escrow Agreement, but said
shares shall be deemed outstanding for the purpose of determining
the aggregate number of outstanding shares of capital stock of the
Company.
(d) For purposes of this Plan, a Potential Change of Control
shall be deemed to have occurred if (i) any third person commences
a tender or exchange offer for 20% or more of the combined voting
power of the Company's outstanding voting securities ordinarily
having the right to vote for the election of directors of the
Company: (ii) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change of
Control; (iii) any person (including the Company) publicly
announces an intention to take or the consider taking actions which
if consummated would constitute a Change of Control: or (iv) the
Board of Directors adopts a
resolution to the effect that, for purposes of this Plan, a Change
of Control is imminent.
Section 5. SOURCE OF SUPPLEMENTAL EXECUTIVE RETIREMENT
BENEFITS
5.1 Except as provided in Section 5.2, payment of benefits
shall be made by Bard, and in all events Bard shall remain liable
to make such payment.
5.2 All payments under the Plan shall be made from the
general funds of Bard. No assets of Bard shall be segregated or
earmarked to represent the liability for accrued retirement
benefits. The rights of any person to receive benefits under the
Plan shall be only those of a general unsecured creditor.
Notwithstanding the foregoing, upon the occurrence of a Potential
Change of Control or Change of Control assets may be placed in the
C.R. Bard, Inc. Agreement and Plans Trust (hereafter called the
trust) to provide a source for the payments required to be made
under the Plan.
Section 6. AMENDMENT AND TERMINATION
6.1 The Board of Directors may amend the Plan in any respect
and at any time; provided, however, that no such amendment shall
have the effect of reducing the benefits theretofore accrued by a
Participant under the Plan. The accrued benefit under this Plan at
any time is the amount payable under Section 4 if the Participant's
employment terminated on that date. Notwithstanding the foregoing,
upon the occurrence of a Potential Change of Control or a Change of
Control, no amendment or action of the Board of Directors which
affects any Participant is valid and enforceable without the prior
written consent of the Participant.
6.2 The Board of Directors may terminate the Plan at any
time. In the event of plan termination, each Participant on whose
behalf amounts have accrued under this Plan shall be fully vested.
The benefit then being paid to any person under Section 4 shall
continue to be paid and all vested benefits under this Plan which
have not yet commenced shall be paid subject to the terms of the
Plan. Notwithstanding the foregoing, upon the occurrence of a
Potential Change of Control or a Change of Control, no termination
of the Plan shall have the effect of reducing any benefits accrued
under the Plan prior to such termination.
Section 7. MISCELLANEOUS
7.1 No person entitled to a benefit under the Plan shall
have any power to assign, transfer, pledge, hypothecate or
otherwise encumber the right to receive such payment and any
attempt to do so shall be void and will not be recognized by the
Committee.
7.2 Bard shall withhold therefrom such amounts as may be
required by federal, state or local law, and the amount payable
under the Plan to the person entitled thereto shall be reduced by
the amount so withheld.
7.3 This Plan shall be construed and administered in
accordance with the laws of the State of New Jersey applicable to
persons performing services in New Jersey.
7.4 Nothing in this Plan shall be construed to confer upon
any person any legal right to be continued as an employee of Bard;
Bard expressly reserves the right to discharge any employee
whenever the interest of Bard in its sole judgment may so require,
without any liability on the part of Bard or the Committee
IV - 379
C. R. BARD. INC. EXHIBIT 10q
1993 Executive Bonus Plan
This is the C. R. Bard, Inc. 1993 Executive Bonus Plan as authorized by the Board of Directors for the payment of incentive compensation to designated employees.
1. Objectives
The Objectives of the Plan are to:
- Help attract, retain and motivate the executives required to manage the Corporation;
- Promote the achievement of rigorous but realistic financial goals and encourage intensive facts-based business planning;
- Recognize the accomplishment of key non-financial objectives of particular importance to the stages-of-development of the Corporation and its Divisions.
2. Administration
The Plan will be administered by the Compensation and Stock Option Committee of the Board of Directors. Subject to the provisions of the Plan, the Committee will have full authority to interpret the Plan, to establish and amend rules and regulations relating to it, to determine the terms and provisions for making awards, and to make all other determinations necessary or advisable for the administration of the Plan.
3. Participation
Participation in the Plan will be limited to full-time employees of the Corporation who are in key positions and who have the capacity to materially influence, through their job responsibilities, the achievement of financial objectives of the Corporation and/or one or more of its Divisions. Prospective participants will be identified by the Chief Executive Officer of the Corporation and proposed to the Committee, which will determine whom among those so proposed may be eligible to participate. Current participation includes Corporate Officers, Group Executives, Division Heads, Division Management Boards, and Corporate Staff MPL 13 and above. Personnel in the functional areas of Medical Affairs, Regulatory Affairs and Quality Assurance are specifically excluded.
IV - 380
4. Performance Standards and Goals
Each year the Chief Executive Officer will identify particular financial and nonfinancial standards to which specific goals will be ascribed and against which performance for each participant will be measured in determining bonus award levels. The standards may be changed from year-to-year to address business priorities and appropriate goals will be established annually.
One or more standards will be identified for bonus award purposes, but the number will be sufficiently limited so that each participant recognizes these as particularly critical events to be accomplished during the year. The performance standards and goals are to be agreed upon at the beginning of each year by the Committee.
5. Target Bonus Rates
Each participant will have a target bonus percentage rate as determined by the Chief Executive Officer based on position and other job responsibility factors. The target bonus rates coupled with base salaries are intended to match the Corporation's desired total cash compensation competitive levels.
Proportions of each participant's target bonus percentage rate will be allocated among the established performance standards. This allocation will vary depending on participant's organization placement, i.e., Corporate, Group or Division.
6. Measuring Performance
For the purpose of determining individual bonus awards each year, the goals established for the performance standards will have a specific target level of achievement together with a specified upside level of performance above the goal set at a realistic but extreme performance potential, and a specified downside level of performance below the goal set at the lowest tolerable performance for which a bonus award for that performance standard could reasonably be made. For financial goals, these upside and downside levels are to be expressed as a percentage deviation from the goal; performance levels will be interpolated between the upside and downside performance extremes and the target performance goal for the purpose of determining awards above and below target rates. For non-financial goals, the results expected will be established along with a notation of what constitutes exceptional to minimally acceptable performance.
7. Determining Award Percentages
Individual awards will be a function of each
participant's target bonus rate, the allocation of the
bonus rate among performance standards, the goals and
performance range around each standard, and the actual
performance during the year in terms of the goals.
Each performance standard will be considered separately
in determining an award. The accumulation of percentage
award rates from each standard will be used as the
primary reference in determining actual bonus rates.
The final percentage rate will be established by the
Chief Executive Officer and recommended to the
Committee for approval. The Committee will retain the
authority to make further adjustments in individual
awards as deemed appropriate based on their evaluation
of the performance of the Corporation and/or its
Divisions in terms of business expectations for the
year and the environment in which the Corporation
conducted its business.
8. Participating Salary
All computations used to arrive at amount of bonus to
be earned will be based on salary rate paid as of the
end of the Plan year.
9. Time and Form of Payment
Awards when earned will be paid as soon as practicable
following the closing of the financial accounts for the
year and the evaluation of performance against
non-financial goals. This will normally occur in
February.
10. Change of Status
a. An employee who is not a participant in the Plan
who is promoted to a position that qualifies
he/she for participation in the Plan may be
recommended for participation on a pro-rata basis
for that year. New hires will be treated in a
similar manner.
A participant who is promoted to a position with a
higher bonus potential will derive a bonus based
on the amount of time spent in each position, and
levels of performance achieved.
b. Terminations
A participant who terminates before the end of the
calendar year for any reason other than death,
disability or authorized retirement will not be
eligible for a bonus.
IV - 382
Exhibit 10r
C. R. BARD, INC.
Long Term Performance Incentive Plan
1. Purpose.
The purpose of the Long Term Performance Incentive Plan (the "Plan") is to further the long-term growth of C. R. Bard, Inc. (the "Company") and its subsidiaries (collectively "Bard") by awarding to a select group of senior management employees, who are responsible for such growth, additional performance related compensation (the "Performance Unit Awards"), thereby stimulating in such individuals an increased desire to render greater service which will contribute to the continued growth and success of Bard.
2. Performance Units.
Awards under this Plan shall be granted to an employee designated pursuant to Section 4 hereof in the form of Performance Units, which shall be credited to a Performance Unit Account maintained for such designated employee. A Performance Unit is a quantity for determining and recording participation in the Plan
3. Effective Date and Term of Plan.
The Plan shall become effective as of January 1, 1977. The Board of Directors of the Company (the "Board") may at any time terminate or from time to time amend, modify or suspend, in whole or in part, and if suspended, may reinstate, any or all of the provisions of this Plan, except that no amendment, modification or termination of this Plan by the Board shall adversely affect awards theretofore made hereunder.
The Board shall have the authority in their discretion and from time to time to exchange Performance Units issued under this Plan and held by current employees for Performance Units under successor plans and programs of Bard upon such terms and conditions and for such consideration as the Board in their discretion deem advisable.
4. Administration.
The Plan shall be administered by the Compensation Committee (the "Committee") of the Board and composed of not less than three members who are non-employee directors of the Company. No member of the Committee, while serving as such, shall be eligible for
IV - 383
participation in the Plan. Decisions and determinations by the
Committee shall be final and binding upon all parties, including
Bard, shareholders, participants and other employees.
The Committee shall have the authority to interpret the Plan, to adopt and revise rules and regulations relating to the Plan and to make any other determinations which it believes necessary or advisable for the administration of the Plan. Subject to the terms and conditions of the Plan, the Committee shall have, in its sole discretion, the exclusive power to:
(a) designate the senior executives of Bard to receive Performance Unit Awards (the "Participants");
(b) determine the dollar amount of the award and the number of Performance Units that a Participant is to receive pursuant to the formula set forth in Section 6 hereof; and
(c) determine the time or times when Performance Unit Awards may be awarded.
5. Eligibility.
Participation in the Plan shall be restricted to senior executives (including officers and directors who are employees) of Bard whose performances have a material effect on the earnings and profitability of Bard.
6. Conversion Formula.
In order to determine the number of Performance Units included in a specific award, the Committee shall divide the dollar amount of such award by the net book value of a share of the Company's Common Stock, par value $.25 per share (the "Common Stock"), determined from the consolidated balance sheet of the Company as of the end of the fiscal year immediately preceding the fiscal year in which the Performance Unit Award is granted. For the purposes of the Plan, any determination by the Committee of the net book value of a share of Common Stock shall be final.
7. Vesting Date.
(a) With respect to each award of Performance Units, 20 per cent of the total number of Performance Units granted shall vest one year from the date on which the award was made (the "Award Date"), an additional 20 per cent shall vest on each of the next three anniversaries of the Award Date and the final 20 per cent shall vest on the fifth anniversary of the Award Date.
(b) Notwithstanding the provisions of subsection (a) above,
(i) upon normal retirement or retirement at an earlier or later age
with the consent of the Committee, Change of Control, or permanent
disability, a Participant shall become fully vested in all
Performance Units credited to his Performance Unit Account and (ii)
at death, a Participant's successors shall become fully vested in
all Performance Units which would have become vested, assuming
continued employment of the Participant, within the one year period
commencing on the date of death. No Performance Units shall vest
following termination or notice of termination of a Participant's
employment except as set forth in this subsection (b).
8. Payment Date.
Payment with respect to Performance Units which have become vested in accordance with Section 7 shall be made to a Participant upon termination of employment at the discretion of the Committee either in a lump sum or in any number of equal annual installments over a period of from one to ten years.
9. Amount of Payment.
The amount to be paid to any Participant on any payment date shall be the product of the number of vested Performance Units credited to such Participant's Performance Unit Account multiplied by the net book value of a share of Common Stock as determined by the Committee from the consolidated balance sheet of the Company as of the end of the fiscal year immediately preceding termination of employment.
10. Adjustments to Performance Units.
In the event of (a) a reorganization, recapitalization, stock split, stock dividend, combination of shares, rights offering, merger, consolidation or other like change in the corporate structure or capital stock of the Company, (b) changes in generally accepted principles of accounting, (c) an extraordinary, nonrecurring event, such as a merger or sale or purchase of assets, resulting in an adjustment to the net book value of a share of the Company's Common Stock, which, in the opinion of the Committee, inequitably affects the value of a Performance Unit, or (d) a Change of Control, the Committee shall have the power and authority to make such adjustment, as it may deem appropriate, in the number of Performance Units then credited to a Participant's Performance Unit Account or in the net book value in order to preserve for each Participant rights substantially proportionate to such Participant's rights existing prior to such event, provided however that in the event of a Change of Control in no event shall the net book value be an amount less than the net book value immediately preceding the Change of Control.
11. Nontransferability.
Amounts payable under this Plan shall be transferable only by will or by the laws of descent or distribution. Any attempt to transfer, assign, pledge or encumber amounts payable under this Plan shall be void.
12. Voting.
No Participant shall be entitled to any voting rights with respect to any Performance Units credited to his Account.
13. Dividend Equivalents.
The Committee shall annually award to each Participant an amount reflective of the cash dividends, if any, paid on the Company's Common Stock (the "Dividend Equivalent") during the current fiscal year, providing such Participant was employed by Bard throughout such fiscal year. A Participant's Dividend Equivalent for a given fiscal year shall be calculated by multiplying the number of Performance Units in a Participant's Performance Unit Account as of the date of payment of the last regular cash dividend, if any, on the Common Stock during such fiscal year by the aggregate cash dividends per share of Common Stock declared and paid during such fiscal year. Dividend Equivalent for each Participant shall be paid in cash to each Participant prior to the end of the fiscal year for which such Dividend Equivalent was calculated.
14. Change of Control.
Change of Control shall occur if a change of control of the nature that would be required to be reported in response to Item l(a) of the Current Report on Form 8-K as in effect on the date hereof pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, provided that, without limitation, a "Change of Control" shall be deemed to have occurred if (a) the beneficial ownership at any time hereafter by any person, as defined herein, of capital stock of the Company, the voting power of which constitutes 20% or more of the general voting power of all of the Company's outstanding capital or (b) individuals who, as of the date hereof, constitute the Board of Directors of the Corporation (the "Board" generally and as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to the date hereof whose election, or nomination for election by the Corporations's shareholders, was approved by a vote of at least three-quarters of the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the
Directors of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Company, nor any acquisition by the Company, through merger, purchase of assets or otherwise, effected in whole or in part by issuance or reissuance of shares of its capital stock, shall constitute a Change of Control. For purposes of the definition of "Change of Control", the following definitions shall be applicable:
(i) The term "person" shall mean any individual, group, corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Company:
(A) which that person owns directly, whether or not of record, or
(B) which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933) of that person or
(D) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or his "affiliate" or "associate" (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Company,
(iii) The outstanding shares of capital stock of the Company shall include shares deemed owned through application of clauses (ii) (B), (C) and (D), above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow
Agreement dated as of November 1, 1971 between International Paper Company and said bank shall not be deemed owned by International Paper Company or by said bank for purposes of this Plan, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purposes of determing the aggregate number of outstanding shares of capital stock of the ComPany.
15. Miscellaneous.
(a) Nothing contained in the Plan shall be construed to: (i) give any employee any right to be offered participation in the Plan other than in the sole discretion of the Committee, (ii) give any Participant any rights whatsoever with respect to shares of Common Stock of the Company, (iii) entitle any Participant, with respect to one Performance Unit Award, to any future award without specific designation by the Committee, (iv) limit in any way the right of Bard to terminate a Participant's employment at any time or (v) be evidence of any agreement or understanding, express or implied, that Bard will employ a Participant in any particular position or at any particular rate of remuneration.
(b) The value of any award granted or delivered to a Participant or dividend equivalents under this Plan shall not enter in any way into the computation of such Participant's compensation for the purpose of any insurance, retirement or other employee benefit plan of Bard.
(c) Bard shall have the right to deduct and withhold from all payments such amounts as are required by applicable federal and state tax laws.
December, 1987
IV - 388
Exhibit 10s
DEFERRED COMPENSATION CONTRACT
DEFERRAL OF DISCRETIONARY BONUS
THIS AGREEMENT made this day of by and between C. R. BARD, INC., a New Jersey Corporation, hereinafter referred to as the "Company" and residing at hereinafter referred to as the "Employee".
WITNESSETH
WHEREAS, the Company has adopted by Act of its Board of
Directors a bonus program whereby select officers and employees of
the Company are awarded, at the discretion of the Board of
Directors, bonuses for exceptional service to the Company; and
WHEREAS, the Company is willing to enter into an arrangement
with the Employee whereby the Employee may defer a percentage of
any bonus which may be awarded to Employee, and the Employee is
desirous of entering into such an arrangement.
NOW, THEREFORE, in consideration of the premises, and in con-
sideration of the mutual covenants and agreements herein contained,
the Company and Employee agree as follows:
1. During the period of Employee's active employment, as
such term is defined herein, by the Company, the Employee agrees to
work for the Company faithfully and, to the best of Employee's
ability to perform such services and duties as shall be assigned to
Employee by the Company's Board of Directors or Officers.
IV - 389
For purposes of this Agreement the period of Employee's active
employment shall mean the period commencing with the first day of
January of the calendar year next following the execution of this
Agreement and expiring on the day on which occurs the termination
of Employee's employment or the date of retirement of the Employee,
whichever shall occur first.
For purposes of this Agreement, the date of retirement shall
mean the Employee's normal retirement date or earlier retirement
date.
2. Employee agrees that the Company shall, during the period
of Employee's active employment under this Agreement, retain that
percent, which shall be not less than 25% of the amount of all
awards made to the Employee under the discretionary bonus plan of
the Company in effect at any time during the term of this
Agreement, (hereinafter referred to as the "Plan"), which Employee
designates pursuant to written notice given to Company, and pay the
same to Employee under this Agreement, and Employee hereby
irrevocably relinquishes and releases any and all rights to receive
payment of such deferred bonus during the period of Employee's
active employment under this Agreement.
3. Upon the expiration of the period of Employee's active
employment, the Company agrees to pay Employee the amount
calculated in accordance with Paragraph 4 herein. Said amount shall
be paid to Employee in accordance with Paragraph 5 herein.
4. The amount of deferred bonus to be paid to Employee
hereunder shall be determined as follows, and an account
established on the books of the Company for the purpose of
recording entries to be used in computing such deferred bonus as
follows: (a) Prior to the thirty-first day of December of each
calendar year during the period of Employee's active employment,
Employee shall give written notice to Company of the percentage to
be withheld by the Company from any award made to Employee under
the Plan for services rendered in the following calendar year, and
such amount shall be entered in Employee's account as a credit when
awarded. If notice is not given in accordance with this Paragraph
4 (a) no withholding will occur pursuant to this Agreement from any
award made for services rendered in the calendar year for which
said notice would have been applicable. (b) At the end of each
calendar quarter during the term of this Agreement, the Company
agrees to credit the Employee's account with simple interest equal
to the "prime interest rate" (as hereinafter defined). For
purposes of this Agreement, the prime interest rate shall mean the
interest rate offered by Morgan Guaranty Trust Company, New York,
New York to their respective preferred commercial borrowers, as
published by said bank. The calculation of such prime interest
rate shall be on a time weighted basis covering the quarterly
period during which such computation shall be made. For purposes
of this Agreement the term of-this Agreement shall mean that period
of time commencing with the first day of the period of Employee's
active employment and expiring with the last installment of
deferred bonus to be made hereunder. (c) The amounts credited to
the Employee pursuant to this Agreement shall constitute a
liability against the general funds of the Company.
5. (a) Not later than ninety (90) days prior to the
expiration of the period of Employee's active employment, Employee
may advise the Company in writing of Employee's election to receive
the amount of deferred bonus as a lump sum payment. In the event of
such election, said lump sum payment shall be made to Employee on
the first day of January next following the expiration of the
period of Employee's active employment, (b) In the event the
Employee does not exercise the election granted pursuant to
Paragraph 5 (a) above, the amount of deferred bonus in the account
of the Employee shall be paid to Employee, commencing with the
first day of January next following the date of expiration of the
period of employee's active employment, in accordance with a pay
out schedule adopted by the Board of Directors of the Company which
shall under no circumstances cover a period of time in excess of
ten (10) years. The Company reserves the right at all times
throughout the term of this Agreement to alter the schedule for the
payment of the deferred bonus and may at its election pay the
entire amount of deferred bonus or any part thereof standing to the
credit of the Employee or his beneficiary or estate, as a lump sum.
6. In the event of the death of the Employee during the term
of this Agreement, the Company shall pay, in accordance with
paragraph 5 (a) hereinabove, the deferred bonus to such beneficiary
or beneficiaries as Employee may have designated in writing to the
Company, or, in the event a beneficiary is not so designated by the
Employee, to the Employee's estate.
7. The Employee agrees that, he will not directly or
indirectly enter into or in any manner take part in any business,
profession or other endeavor, either as an employee, agent,
independent contractor or owner, which, in the opinion of the Board
of Directors of the Company, shall be in competition with the
business of the Company, which opinion of the Board of Directors
shall be final and conclusive for the purposes hereof.
8. The Employee shall not divulge any trade or business
secrets or any other confidential information of the Company to any
person not employed by the Company unless so authorized by the
Company.
9. If the Employee shall fail to observe any of the
covenants of Paragraphs 7 and 8 and shall continue to breach any
covenant therein contained for a period of thirty (30) days after
the Company shall have advised Employee of such breach by written
notice, then, any of the provisions hereof to the contrary
notwithstanding, the Employee agrees that no further payments shall
be due or payable by the Company hereunder either to the Employee,
his beneficiary, or his estate, and that the Company shall have no
further liability hereunder,
10. This Agreement shall not be construed as granting to
Employee any right with respect to continuance of employment by the
Company or a subsidiary thereof. The right of the Company or any
subsidiary thereof to terminate the Employee's employment with it
at any time at will is specifically reserved. The right of the
Employee to terminate his employment with the Company at any time
at will is specifically reserved.
11. Notwithstanding anything herein to the contrary, in the
event any amendment to the Internal Revenue Code or Treasury
Regulations or judicial or administrative interpretation thereof,
should disallow the deferral of compensation as required in this
Agreement, the Company shall in its sole discretion be permitted to
distribute to the Employee such compensation so affected, or
terminate this plan in whole or in part.
12. No rights or interest of the Employee, his beneficiary,
or estate established herein, shall be assignable or transferable
in whole or in part, either directly or by operation of law or
otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy, or in any other
manner, and no right or interest established herein shall be liable
for, or subject to, any obligation or liability of the Employee.
13. Except as herein provided, this Agreement shall be
binding upon the parties hereto, their heirs, executors,
administrators, successors (including but not limited to successors
resulting from any corporate merger) or assigns.
14. This Agreement shall be executed in duplicate, each copy
of which when so executed and delivered shall be an original, but
both copies shall together constitute one and the same document.
15. This Agreement shall be construed in accordance with the
law of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year above written.
WITNESS:
ATTEST: C. R. BARD, INC.
IV - 395
Exhibit 10t
DEFERRED COMPENSATION CONTRACT
DEFERRAL OF SALARY
THIS AGREEMENT made this day of by and between C. R.
BARD, INC., a New Jersey Corporation, hereinafter referred to as
the "Company" and residing at hereinafter referred to as the
"Employee".
WITNESSETH
WHEREAS, the Company has adopted Savings Plan of C. R. Bard,
Inc.; and
WHEREAS, the Company is willing to enter into a non-qualified
salary deferral arrangement with any employee of the Company who
participates in the Employees' Retirement Savings Plan of C. R.
Bard, Inc. ("the Plan") and who elects a deferral on or before
January 1st each year of not less than the permissible amount for
each Plan year; and
WHEREAS, Employee has elected to defer pursuant to the Plan
not less than the permissible amount for each Plan year.
NOW, THEREFORE, in consideration of the premises, and in
consideration of the mutual covenants and agreements herein
contained, the Company and Employee agree as follows:
1. During the period of Employee's active employment by the
Company, as such term is defined herein, the Employee agrees to
work for the Company faithfully, and, to the best of Employee's
ability to perform such services and duties as shall be assigned to
Employee by the Company's Board of Directors or Officers.
IV - 396
For purposes of this Agreement the period of Employee's active
employment shall mean the period commencing with the first day of
January of the calendar year next following the execution of this
Agreement and expiring on the day on which occurs the termination
of Employee's employment or the date of retirement of the Employee,
whichever shall occur first.
For purposes of this Agreement, the date of retirement shall
mean the Employee's normal retirement date or earlier retirement
date.
2. Employee agrees that in each Plan year in which Employee
shall elect to defer not less than the permissible amount the
Company shall, during the period of Employee's active employment
under this Agreement, retain that amount of Employee's salary which
Employee designates pursuant to written notice given to Company,
but in no event shall such amount be less than $50.00 per semi-
monthly pay period. Employee hereby irrevocably relinquishes and
releases any and all rights to receive payment of such deferred
salary during the period of Employee's active employment under this
Agreement.
3. Upon the expiration of the period of Employee's active
employment, the Company agrees to pay Employee the amount
calculated in accordance with Paragraph 4 herein. Said amount
shall be paid to Employee in accordance with Paragraph 5 herein.
4. The amount of deferred salary to be paid to Employee
hereunder shall be determined as follows, and an account
established on the books of the Company for the purpose of
recording entries to be used in computing such deferred salary as
follows:
(a) Prior to the thirty-first day of December or the thirtieth day
of June of each calendar year during the period of Employee's
active employment, Employee shall give written notice to
Company of the amount to be withheld by the Company from any
salary earned by Employee for services rendered in the
following calendar year or partial year, and such amount shall
be entered in Employee's account as a credit when withheld.
If notice is not given in accordance with this Paragraph 4 (a)
no withholding will occur pursuant to this Agreement from any
salary paid to Employee for services rendered in the calendar
year for which said notice would have been applicable.
(b) At the end of each calendar quarter during the term of this
Agreement the Company agrees to credit the Employees account
with simple interest equal to the average percentage of
interest earned by the Company on its Marketable Securities
Portfolio during the preceding three (3) months. For purposes
of this Agreement the term of this Agreement shall mean that
period of time commencing with the first day of the period of
Employee's active employment and expiring with the last
installment of deferred bonus to be made hereunder.
(c) The amounts credited to the Employee pursuant to this
Agreement shall constitute a liability against the general
funds of the Company.
5. (a) Not later than ninety (90) days prior to the
expiration of the period of Employee's active employment,
Employee may advise the Company in writing the Employee's
election to receive the amount of deferred salary and credited
interest as a lump sum payment. In the event of such election,
said lump sum payment shall be made to Employee on the first day
of January next following the expiration of the period of
Employee's active employment.
(b) In the event the Employee does not exercise the
election granted pursuant to Paragraph 5 (a) above, the amount of
deferred salary and credited interest in the account of the
Employee shall be paid to Employee, commencing with the first day
of January next following the date of expiration of the period of
Employee's active employment, in accordance with a pay out
schedule adopted by the Board of Directors of the Company
which shall under no circumstances cover a period of time in
excess of ten (l0) years. The Company reserves the right at all
times throughout the term of this Agreement to alter the
schedule for the payment of the deferred salary and may at its
election pay the entire amount of deferred salary or any part
thereof standing to the credit of the Employee or his beneficiary
or estate, as a lump sum.
6. In the event of the death of the Employee during the
term of this Agreement, the Company shall pay, in accordance
with Paragraph 5 (a) hereinabove, the deferred salary and
credited interest to such beneficiary or beneficiaries as
Employee may have designated in writing to the Company, or, in
the event a beneficiary is not so designated by the Employee,
to the Employee's estate.
7. The Employee agrees that, he will not directly
or indirectly enter into or in any manner take part in any
business, profession or other endeavor, either as an
employee, agent, independent contractor or owner, which, in the
opinion of the Board of Directors of the Company, shall be in
competition with the business of the Company, which opinion of
the Board of Directors shall be final and conclusive for the
purposes hereof.
8. The Employee shall not divulge any trade or business
secrets or any other confidential information of the Company to
any person not employed by the Company unless so authorized by
the Company.
9. If the Employee shall fail to observe any of the
covenants of Paragraphs 7 and 8 and shall continue to breach any
covenant therein contained for a period of thirty (30) days
after the Company shall have advised Employee of such breach by
written notice, then, any of the provisions hereof to the
contrary notwithstanding, the Employee agrees that no further
payments shall be due or payable by the Company hereunder either
to the Employee, his beneficiary, or his estate, and that the
Company shall have no further liability hereunder.
l0. This Agreement shall not be construed as granting to
Employee any right with respect to continuance of employment by
the Company or a subsidiary thereof. The right of the Company or
any subsidiary thereof to terminate the Employee's employment
with it at any time at will is specifically reserved. The right
of the Employee to terminate his employment with the Company at
any time at will is specifically reserved.
ll. Notwithstanding anything herein to the contrary, in the
event any amendment to the Internal Revenue Code or Treasury
Regulations or judicial or administrative interpretation thereof,
should disallow the deferral of compensation as required in this
Agreement, the Company shall in it sole discretion be permitted
to distribute to the Employee such compensation so affected, or
terminate this plan in whole or in part.
12. No rights or interest of the Employee, his beneficiary,
or estate established herein, shall be assignable or transferable
in whole or in part, either directly or by operation of law or
otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy, or in any
other manner, and no right or interest established herein shall
be liable for, or subject to, any obligation or liability of the
Employee.
13. Except as herein provided, this Agreement shall be
binding upon the parties hereto, their heirs, executors,
administrators, successors (including but not limited to
successors resulting from any corporate merger) or assigns.
14. This Agreement shall be executed in duplicate, each
copy of which when so executed and delivered shall be an
original, but both copies shall together constitute one and the
same document.
15. This Agreement shall be construed in accordance with
the law of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals the day and year above written.
WITNESS:
(L.S.)
ATTEST: C. R. BARD, INC.
(Title)
IV - 402
Exhibit 10u
1993 LONG TERM INCENTIVE PLAN
OF
C. R. BARD, INC.
SECTION 1--PURPOSE AND TERM OF PLAN
The Long Term Incentive Plan of C. R. Bard, Inc. is designed to attract and retain the services of selected key employees of the Corporation and its Subsidiaries who are in a position to make a material contribution to the successful operation of the business of the Corporation and its Subsidiaries. Awards under the Plan shall be made to selected key employees in the form of Options. Restricted Stock and Stock Appreciation Rights. The Plan shall be effective on April 21, 1993. No awards may be made under the Plan after April 20, 2003.
Section 2--DEFINITIONS
For purposes of the Plan, the following terms shall have the indicated meanings:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Change of Control Event" means a change of control of the nature that would be required to be reported in response to item I (a) of the Current Report on Form 8-K as in effect on April 21, 1993 pursuant to Section 13 or 15(d) of the Exchange Act, provided that, without limitation, a "Change of Control Event" shall be deemed to have occurred if (i) any person shall become the beneficial owner, as those terms are defined herein, of capital stock of the Corporation, the voting power of which constitutes 20% or more of the general voting power of all of the Corporation's outstanding capital stock or (ii) individuals who. as of April 21. 1993, constitute the Board (the "Incumbent Board") cease for any reasons to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to April 21, 1993 whose election or nomination for election by the Corporation's shareholders, was approved by a vote of at least three quarters of the Directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Corporation, which is or would be subject to Rule 14a-11 of the Regulation 14A promulgated under the Exchange Act) shall be, for purposes of the Plan, considered as though such person were a member of the Incumbent Board. No sale to underwriters or private placement of its capital stock by the Corporation nor any
IV - 403
acquisition by the Corporation, through merger, purchase of assets
or otherwise, effected in whole or in part by issuance or
reissuance of shares of its capital stock, shall constitute a
Change of Control Event. For purposes of the definition of "Change
of Control Event", the following definitions shall be applicable:
(i) The term ' person" shall mean any individual, group, corporation or other entity.
(ii) Any person shall be deemed to be the beneficial owner of any shares of capital stock of the Corporation:
(A) which that person owns directly, whether or not of record, or
(B) which that person has the right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise, or
(C) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by an "affiliate" or "associate" (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933) of that person, or
(D) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (B) above), by any other person with which that person or such person's "affiliate" or "associate'' (defined as aforesaid) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation.
(iii) The outstanding shares of capital stock of the Corporation shall include shares deemed owned through application of clauses (ii) (B), (C) and (D), above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise, but which are not actually outstanding.
(iv) Shares of capital stock, if any, held by The Chase Manhattan Bank N.A. under the Indenture and the Escrow Agreement dated as of November 1, 1971 between International Paper Company and said bank shall not be deemed owned by International Paper Company or by said bank for purposes of this Plan, so long as they are held by said bank under said Escrow Agreement, but said shares shall be deemed outstanding for the purpose of determining the aggregate number of outstanding shares of capital stock of the Corporation.
(c) "Change of Control Exercise Period" means the 60-day period commencing upon the date of the first public disclosure of a Change of Control Event.
(d) "Committee" means the Compensation and Stock Option Committee of the Board or such other committee as may be designated by the Board.
(e) "Common Stock" means the Common Stock of the Corporation, par value $0.25 per share.
(f) "Corporation" means C. R. Bard, Inc., a New Jersey corporation.
(g) "Director" means a member of the Board.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(i) "Fair Market Value" of the Common Stock on a specified day means the mean between the high and low sales price, regular way, on that day as reported on the New York Stock Exchange-- Composite Transactions Tape or, if no sale of the Common Stock shall have occurred on the New York Stock Exchange on that day, on the next preceding day on which there was a sale. If the Common Stock is not traded on the New York Stock Exchange, the Fair Market Value shall be the amount that is reasonably determined by the Committee.
(j) 'Option" means an Option to purchase Common Stock awarded to a Participant as provided in Section 5.
(k) "Option Period" means the period from the date of the
grant of an Option to the date of its expiration as provided in
Section 5.3.
(l) "Optionee" means a Participant who has been granted an Option under the Plan.
(m) "Participant" means a key employee. including officers and directors who are employees, of the Corporation or any of its Subsidiaries who has been selected by the Committee to receive an award under the Plan.
(n) "Plan" means the 1993 Long Term Incentive Plan of C. R. Bard. Inc.
(o) "Restricted Period" means the vesting period, if any, of up to 10 years specified by the Committee pursuant to Section 4.2.
IV - 405
(p) "Restricted Stock" means Common Stock awarded to a Participant subject to restrictions as provided in Section 4 as long as those restrictions are in effect.
(q) "Retirement" means normal or early retirement under the terms of a pension plan of the Corporation or voluntary termination of employment, provided that in each case the Corporation must have given its prior consent to treat the person's termination of employment as a retirement.
(r) "Stock Appreciation Right" means a right awarded to a Participant as provided in Section 5 to receive in the form of Common Stock or. with the consent of the Committee, cash, an amount equal to the excess of the Fair Market Value of a share of Common Stock on the day the right is exercised over the price at which the Participant could exercise an Option to purchase that share.
(s) "Stock Award" means an award of Common Stock delivered in installments as specified by the Committee pursuant to Section 4.8.
(t) "Subsidiary" means any corporation or other legal entity, domestic or foreign, more than 50% of the voting power of which is owned or controlled, directly or indirectly, by the Corporation.
(u) "Unrestricted Stock" means Common Stock awarded to a Participant which Common Stock is not subject to a vesting period or installment delivery specified by the Committee.
SECTION 3--GENERAL PROVISIONS
3.1 The Committee in its sole discretion shall select those key employees to whom awards are made under the Plan and shall specify the type of awards made, the number of Options, shares of Restricted Stock, stock awards, unrestricted stock and Stock Appreciation Rights which in each case are awarded, the Restricted Period, number of installments or Option Period applicable to the awards and any other conditions relating to the awards that are consistent with the Plan and that the Committee deems appropriate. Participants shall be selected from among the key employees of the Corporation and its Subsidiaries who are in a position to have a material impact on the future results of operations of the Corporation and its Subsidiaries. Participants may be selected and awards may be made at any time during the period that awards may be granted under the Plan. Participants do not have to be selected and awards do not have to be made at the same time by the Committee. Any award made to a Participant shall not obligate the Committee to make any subsequent awards to that Participant.
3.2 Shares of Common Stock acquired under the Plan may be authorized and unissued shares of Common Stock or authorized and issued shares of Common Stock held in the Corporation's treasury. Subject to Section 8.7, the total number of shares of Common Stock which may be acquired under the Plan shall not exceed 2,550,000. The number of shares of Common Stock available at any time for awards under the Plan shall be determined in a manner which reflects the number of shares of Common Stock then subject to outstanding awards and the number of shares of Common Stock previously acquired under the Plan. For purposes of such determinations. shares of Common Stock returned to the Corporation as a result of the forfeiture of Restricted Stock, stock awards or Options which expire or terminate, other than by reason of the exercise of Stock Appreciation Rights, shall again be available for awards under the Plan.
SECTION 4--RESTRICTED STOCK, STOCK AWARDS AND UNRESTRICTED STOCK
4.1 An award of Restricted Stock, Stock Awards and
Unrestricted Stock to a Participant shall entitle the Participant
to receive the number of shares of Common Stock specified by the
Committee in accordance with the terms and conditions of this
Section 4.
4.2 During the Restricted Period specified by the Committee, Restricted Stock awarded to a Participant may not be sold, assigned, transferred, pledged or otherwise encumbered, except as hereinafter provided. Except as provided in this Section 4.2 and/or as otherwise provided by the Committee, a Participant, as the owner of Restricted Stock, shall have all the rights of a holder of Common Stock, including but not limited to the right, subject to the provisions of Sections 8.7 and 8.8, to receive all dividends or dividend equivalents paid on and the right to vote such Restricted Stock. Notwithstanding anything to the contrary in the Plan, upon the occurrence of a Change of Control Event the Restricted Period applicable to Restricted Stock shall end and all restrictions on Restricted Stock shall expire.
4.3 If a Participant holding Restricted Stock ceases to be an employee of the Corporation or any of its Subsidiaries during the Restricted Period for any reason other than death or Retirement, the Committee may at the time of cessation of employment terminate the Restricted Period with respect to any or all of such Restricted Stock. If the Committee does not terminate the Restricted Period with respect to such Restricted Stock at the time of cessation of employment, such Restricted Stock shall be forfeited.
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4.4 If a Participant holding Restricted Stock ceases to be an employee of the Corporation or any of its Subsidiaries during the Restricted Period by reason of death or Retirement, Restricted Stock held by that Participant shall become free of all restrictions thereon and, pursuant to Section 4.7, the Corporation shall deliver that Restricted Stock to that Participant or that Participant's beneficiary. as the case may be, within 60 days
4.5 Each Participant awarded Restricted Stock, Stock Awards or Unrestricted Stock shall enter into such agreement with the Corporation as may be specified by the Committee in which the Participant agrees to the terms and conditions of the award and such other matters as the Committee in its sole discretion shall specify.
4.6 Each certificate representing Restricted Stock awarded under the Plan shall be registered in the name of the Participant to whom the Restricted Stock was awarded, deposited by the Participant with the Corporation together with a stock power endorsed in blank and bear the following, or a substantially similar, legend:
The transferability of this Certificate and the Common Stock represented hereby is subject to the terms and conditions, including forfeiture, contained in Section 4 of the 1993 Long Term Incentive Plan of C. R. Bard, Inc. and an Agreement entered into between the registered owner and C. R. Bard, Inc. Copies of the Plan and Agreement are on file in the executive office of C. R. Bard, Inc. 730 Central Avenue. Murray Hill, New Jersey 07974.
4.7 When the restrictions imposed by Section 4.2 and any related restrictions on Restricted Stock have expired or have otherwise been satisfied. the Corporation shall deliver to the Participant holding that Restricted Stock, or the Participant's legal representative, beneficiary or heir, a certificate or certificates, without the legend referred to in Section 4.6. for the number of shares of Restricted Stock deposited with the Corporation by the Participant pursuant to Section 4.6 with respect to which all restrictions have expired or been satisfied. At that time, the Agreement referred to in Section 4.5 shall terminate forthwith as to those shares.
4.8 Stock Awards shall be made by the Committee in numbers of shares, and, unless otherwise specified by the Committee and subject to Section 4.9, a Stock Award shall be delivered to a Participant in three approximately equal installments (in order to avoid the issuance of fractional shares) on the date of the Stock Award and on the following anniversaries of the date of the Stock Award.
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4.9 No installment of shares shall be delivered on any
anniversary of the date of the Stock Award to a Participant whose
employment has been terminated, or who has, or has been, served
notice of termination prior to the award or anniversary date of
such installment; provided, however, that where such termination
has occurred due to a Participant's death or retirement, the
Committee may, in its discretion, waive this condition precedent to
delivery of awarded but undelivered shares. Any shares not
delivered to a Participant pursuant to this Section 4.9 may be
subsequently awarded to another Participant. A Participant shall
have no voting rights with respect to, and shall not be entitled to
any dividends declared in respect of, any awarded but undelivered
shares.
4.10 The Committee may award Unrestricted Stock to a
participant, which Common Stock shall not be subject to forfeiture
pursuant to this Section 4. Certificates representing Unrestricted
Stock shall be delivered to the Participant as soon as practicable
following the grant thereof.
SECTION 5--OPTIONS AND STOCK APPRECIATION RIGHTS
5.1 Subject to the provisions of this Section 5, the
Committee may grant incentive Options and nonqualified Options with
or without Stock Appreciation Rights to selected key employees of
the Corporation and its Subsidiaries. Each Option shall be
evidenced by a Stock Option Agreement between the Corporation and
the Optionee which contains the terms and conditions specified by
this Section 5 and such other terms and conditions as the Committee
in its sole discretion shall specify.
5.2 The exercise price per share of Common Stock with
respect to each Option shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the day the Option is
granted.
5.3 Except as otherwise specifically set forth in the grant
thereof in accordance with this paragraph, each Option shall be for
a term of up to ten years as determined by the Committee, and no
Option shall be exercisable during the 12 months following the date
of the grant. After the 12 month period, 25% of the total number of
options granted are exercisable; after 24 months from the date of
grant, 50% are exercisable; after 36 months, 75% are exercisable;
and, after 48 months, l00% of the options granted are exercisable.
Notwithstanding anything to the contrary in this paragraph, the
Committee may, when granting Options to any person under the Plan,
grant Options that are exercisable immediately or Options that are
exercisable according to a schedule different from that set forth
in the preceding sentence. In addition, notwithstanding any of the
foregoing, upon the occurrence of a Change of Control Event, all
Options shall be immediately exercisable. Accrued installments of
Options may be exercised in whole or in part, and in no case may a
fraction of a share be purchased under the Plan.
5.4 At the time any Option is exercised in whole or in part, the Optionee or other person exercising the Option shall pay to the Corporation, by certified or bank cashier's check payable to the order of the Corporation, and/or, to the extent permitted by law, Common Stock or other form of consideration acceptable to the Corporation, the full exercise price of the shares purchased, and the purchased shares shall be delivered to the Optionee promptly. No Optionee or his or her legal representatives, legatees or distributees, as the case may be, shall be deemed to be a holder of any shares upon the exercise of an Option until the date of issuance of a stock certificate to the Optionee for those shares. The proceeds from the sale of shares upon the exercise of Options shall be added to the general funds of the Corporation and used for general corporate purposes.
5.5 If an Optionee shall cease to be employed by the Corporation or any of its Subsidiaries prior to the end of the Option Period by reason of Retirement, each Option then held by the Optionee shall, to the extent that it was exercisable at the time of Retirement, remain exercisable for a period of (a) three months from the date of Retirement, if an incentive Option or (b) three years from the last day of the month of Retirement, if a non-qualified Option, and thereafter, such Option shall terminate; provided, however, if an Optionee shall die after Retirement. each Option then held by the Optionee shall be exercisable to the extent, and during the period, that it would, but for the Optionee's death, have otherwise been exercisable after Retirement. Notwithstanding anything to the contrary contained in this paragraph, the Committee may, in its discretion, accelerate the vesting date and allow retiring employees to exercise outstanding Options which would not otherwise be exercisable under the Plan on the date of such employee's Retirement. If an Optionee shall cease to be employed by the Corporation or any of its Subsidiaries prior to the end of the Option Period by reason of death, each Option then held by the Optionee shall, without regard to the extent that it was exercisable at the time of death, be fully exercisable for a period of one year from the first day of the month in which the Optionee died, and thereafter, such Option shall terminate. If the employment of an Optionee with the Corporation shall terminate, each Option then held by the Optionee shall, to the extent it was exercisable on the date of termination, be exercisable until 60 days following the date of termination and thereafter, such Option shall terminate. Notwithstanding anything to the contrary contained in this paragraph, the Committee may, in its discretion, accelerate the vesting date and allow terminated employees to exercise outstanding Options which would not otherwise be exercisable under the Plan on the date of such employee's termination. Notwithstanding the foregoing, no Option shall be exercisable later than the end of the Option Period relating thereto.
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5.6 The Committee may grant Stock Appreciation Rights to Optionees in tandem with non-qualified Options so that exercise of a Stock Appreciation Right will have the effect of terminating the Option or portion thereof to which it relates, and exercise of an Option or portion thereof to which a Stock Appreciation Right relates will have the effect of terminating the Stock Appreciation Right. Stock Appreciation Rights shall be exercisable in the same installments and be subject to the same terms and conditions as the Options to which they relate and to such other terms and conditions as the Committee in its sole discretion shall specify.
5.7 The aggregate Fair Market Value, determined as of the date an Option is granted, of the Common Stock for which any Participant may be awarded incentive Options which are first exercisable by the Participant during any calendar year under the Plan or any other stock Option plan maintained by the Corporation or its Subsidiaries shall not exceed $100,000.
5.8 The Committee may, in its discretion, grant limited
stock appreciation rights ("Limited Stock Appreciation Rights")
that, notwithstanding any other provision of the Plan, may only be
exercised during a Change of Control Exercise Period, and such
Limited Stock Appreciation Rights shall be so exercisable during
the Change of Control Exercise Period whether or not such person is
then employed by the Corporation. Upon exercise of a Limited Stock
Appreciation Right, the holder thereof shall be entitled to receive
an amount in cash equal to the greater of (a) the Fair Market Value
of the shares of the Common Stock with respect to which the Limited
Stock Appreciation Right was exercised over the option price of
such shares under the Plan and (b) if the Change of Control Event
is the result of a transaction or a series of transactions, the
highest price per share of Common Stock paid in such transaction or
transactions during the Change of Control Exercise Period up to the
date of exercise over the exercise price per share of Common Stock
under the Plan. The Committee is authorized to amend the terms of
a Limited Stock Appreciation Right held by any employee subject to
Section 16 of the Exchange Act, as may be necessary so that the
holding and exercise of such Limited Stock Appreciation Right will
be exempt under such Section.
SECTION 6--ADMINISTRATION
6.1 The Plan shall be administered by the Committee, which shall consist of Directors who shall be disinterested within the meaning of Rule 16b-3 under the Exchange Act and who shall serve at the pleasure of the Board.
6.2 Subject to the provisions of the Plan, the Committee shall have exclusive power to select the key employees who shall be Participants and to determine the amount of, or method of determining, the awards to be made to Participants.
6.3 The Committee's interpretation of the Plan and of any
award granted under the Plan shall be final and binding on all
Participants.
6.4 The Committee shall have the authority to establish,
adopt or revise such rules and regulations relating to the Plan and
to make such determinations as it deems necessary or advisable for
the administration of the Plan.
SECTION 7--AMENDMENT OR TERMINATION
7.1 The Board may amend any provision of the Plan and any
agreement under the Plan at any time, provided that no amendment
may be made that would (a) increase the maximum number of shares of
Common Stock which may be acquired under the Plan, (b) extend the
term during which Options may be granted under the Plan or (c)
reduce the exercise price per share to less than the Fair Market
Value of the Common Stock on the date an Option was granted unless
the amendment has been approved by the shareholders of the
Corporation as provided in Rule 16b-3(b) under the Exchange Act, if
continuation of the exemption granted by Rule 16b-3 under the
Exchange Act requires such approval. The Board shall also have the
right to terminate the Plan at any time. Except with a
Participant's consent, no amendment, suspension or termination
shall impair the rights of the Participant in any Options,
Restricted Stock or Stock Appreciation Rights awarded to the
Participant under the Plan.
7.2 The Committee may refrain from designating Participants
and from making any awards, but that shall not be deemed a
termination of the Plan. No employee of the Corporation or any of
its Subsidiaries shall have any claim or right to be granted awards
under the Plan.
SECTION 8--MISCELLANEOUS
8.1 The fact that a key employee of the Corporation or any
of its Subsidiaries has been designated a Participant shall not
confer on that employee any right to be retained in the employ of
the Corporation or any of its Subsidiaries or to subsequent awards
under the Plan.
8.2 No award under the Plan shall be taken into account in
determining a Participant's compensation for purposes of any group
life insurance or other employee benefit or pension plan of the
Corporation, including the Company's Employees' Retirement Plan,
Excess Benefit Plan and Supplemental Executive Retirement Plan.
8.3 The Plan shall not be deemed an exclusive method of
providing incentive compensation for the officers and employees of
the Corporation and its Subsidiaries. and it shall not preclude the
Board from authorizing or approving other forms of incentive
compensation.
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8.4 All expenses and costs in connection with the operation of the Plan shall be borne by the Corporation.
8.5 Options, Restricted Stock and Stock Appreciation Rights awarded under the Plan shall not be transferable by a Participant other than by will or the laws of descent and distribution, and Options and Stock Appreciation Rights awarded under the Plan shall be exercisable during a Participant's lifetime only by the Participant.
8.6 A Participant may appoint a beneficiary, on a form supplied by the Committee, to exercise Options and Stock Appreciation Rights in the event of the Participant's death and may change that beneficiary at any time prior to the date of the Participant's death.
8.7 In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, the maximum aggregate number and class of shares in which awards may be granted under the Plan, the number of shares subject to outstanding Options and Stock Appreciation Rights shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of stock or other securities distributed to a Participant with respect to Restricted Stock shall be subject to the restrictions and requirements imposed by Section 4, including depositing the certificates therefor with the Corporation together with a stock power and bearing a legend as provided in Section 4.6.
8.8 If the Corporation shall be consolidated or merged with another corporation. each Participant who has received Restricted Stock that is still subject to restrictions imposed by Section 4.2 may be required to deposit with the successor corporation the certificates for the stock or securities or the other property that the Participant is entitled to receive by reason of ownership of Restricted Stock in a manner consistent with Section 4.6, and such stock, securities or other property shall become subject to the restrictions and requirements imposed by Section 4, and the certificates therefor or other evidence thereof shall bear a legend similar in form and substance to the legend set forth in Section 4.6.
8.9 The Corporation shall be entitled to withhold from any award payable under the Plan the amount of taxes the Corporation deems necessary to satisfy any applicable federal, state and local income tax or other withholding obligations arising from the payment of the award or to make other appropriate arrangements with Participants to satisfy such obligations.
8.10 The Plan shall be construed in accordance with the laws of the State of New Jersey. Notwithstanding anything to the contrary in the Plan, nothing in the Plan shall be construed to prevent the transfer of funds to a grantor trust for the purpose of paying benefits under the Plan.
8.11 If in the opinion of counsel for the Corporation, any issuance or delivery of shares of Common Stock to a Participant will violate the requirements of any applicable federal or state laws, rules and regulations (including, without limitation, the provisions of the Securities Act of 1933, as amended, or the Exchange Act), such issuance or delivery may be postponed until the Corporation is satisfied that the distribution will not violate such laws, rules or regulations. Certificates delivered to Participants pursuant to Section 4 hereof or issued on exercise of Options or Stock Appreciation Rights may bear such legends as the Corporation may deem advisable to reflect restrictions which may be imposed by law, including, without limitation. the Securities Act of 1933.
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C. R. BARD. INC. AND SUBSIDIARIES
EXHIBIT 21
Parents and Subsidiaries of Registrant
The following table lists, as of December 31, 1993, the Company and its significant subsidiaries and indicates the jurisdiction of organization of each subsidiary, by indentation, the immediate parent of such subsidiary and the percentage of voting securities owned by the immediate parent of each subsidiary.
Where % of
Incorporated Voting Stock
C. R. Bard, Inc. New Jersey (Registrant)
Bainbridge Science, Inc. Washington 100
Bard Access Systems, Inc. Utah 100
Bard Canada Inc. Canada 100
Bard Cardiopulmonary, Inc. Delaware 100
Bard Devices, Inc. Delaware 100
Davol Inc. Delaware 100
Bard Implants, Inc. Delaware 100
Bard International, Inc. Delaware 100
Bard Japan Limited Japan 100
Bard Shannon Limited Ireland 100
Bard de Espana, S.A. Spain 100
C. R. Bard GmbH Germany 100
Bard Portugal Portugal 100
Bard Belgium N.V. Belgium 100
Bard Galway Limited Ireland 100
Bard Holdings Limited England 100
Bard Limited England 100
Bard Nederland B.V. Netherlands 100
Bard S.P.A. Italy 100
C. R. Bard Ireland Limited Ireland 100
Laboratoires Bard S.A. France 100
BCP Puerto Rico, Inc. Delaware 100
Catalina Acquisition Corp. Delaware 100
CRB Delaware, Inc. Delaware 100
Pilot Cardiovascular Systems, Inc. Delaware 100
Roberts Laboratories, Inc. Arizona 100
|
The Consolidated Financial Statements include the accounts of the Registrant and all its wholly-owned subsidiaries.
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Exhibit 23
ARTHUR ANDERSEN & CO.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by reference of our report dated February 9, 1994, included in this Form 10-K, into C. R. Bard, Inc.'s previously filed Registration Statements on Form S-8 for its Employees' Retirement Savings Plan of C. R. Bard, Inc., Registration No. 2-86291; the 1990 Employee Stock Option Plan, as amended, Registration No. 33-35544; and the C. R. Bard, Inc. 1988 Directors Stock Award Plan, as amended and the 1993 Long Term Incentive Plan of C. R. Bard, Inc., Registration No. 33-64874.
Arthur Andersen & Co.
Roseland, New Jersey
March 28, 1994
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Exhibit 99
INDEMNITY AGREEMENT
This Agreement is made as of the day of . 198, by and between C.R. Bard, Inc., a New Jersey corporation (the "Company"), and ("Indemnitee"), with reference to the following facts:
WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available; and
WHEREAS, the substantial increase in corporate litigation subjects directors and officers to expensive litigation risks at the same time that the availability of directors' and officers' liability insurance has been severely limited; and
WHEREAS, it is now and has been the express policy of the Company to indemnify its directors and officers so as to provide them with the maximum protection permitted by law; and
WHEREAS, Indemnitee has indicated that he does not regard the indemnification provisions available under the Company's Restated Certificate of Incorporation as adequate to protect him against the risks associated with his service to the Company, and may not be willing to continue in office without adequate protection.
NOW THEREFORE, the Company and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as a director or officer of the Company for so long as he is duly elected or appointed or until such time as he tenders his resignation in writing.
2. Indemnification. The Company shall indemnify Indemnitee and his estate, heirs, legal representatives or assigns, against any amount which he becomes legally obligated to pay on account of any claim(s) made against him, individually or otherwise, for any error, misstatement or misleading statement, act or omission, or neglect or breach of duty committed, attempted or allegedly committed or attempted by Indemnitee, individually or otherwise, in the discharge of his duties to the Company and/or one of its Subsidiaries, in his capacity as a director or officer of the Company and/or one of its Subsidiaries, or any matter claimed against him solely by reason of his serving as such director or officer. The payments which the Company will be obligated to make hereunder shall include, but not be limited to, damages, judgments, penalties, fines, settlements and costs, including costs, charges
IV - 417
and expenses incurred in the defense of legal actions, claims or
proceedings and appeals therefrom, and the cost of appeal
attachment or similar bonds; provided, however, that the Company
shall not be obligated to pay judgments, fines or penalties imposed
by law or otherwise which it is prohibited by applicable law from
paying as indemnity.
3. Right of Indemnitee to Indemnification Upon Application;
Procedure.
(a) Any indemnification under Paragraph 2 shall be made no
later than 45 days after receipt by the Company of the written
request of Indemnitee, unless a determination is made within said
45-day period by (1) the Board of Directors by a majority vote of
a quorum consisting of disinterested directors or (2) independent
legal counsel in a written opinion (which counsel shall be
appointed if such a quorum is not obtainable), that the Indemnitee
has not met the relevant standards for indemnification set forth in
Paragraph 2.
(b) The right to indemnification or advances as provided by
this Agreement shall be enforceable by Indemnitee in any court of
competent jurisdiction. The burden of proving that indemnification
is not appropriate shall be on the Company. Neither the failure of
the Company (including its Board of Directors or independent legal
counsel) to have made a determination prior to the commencement of
such action that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company (including its Board of
Directors or independent legal counsel) that Indemnitee has not met
such applicable standard of conduct shall be a defense to the
action or create a presumption that Indemnitee has not met the
applicable standard of conduct. Indemnitee's expenses reasonably
incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such proceeding shall
also be indemnified by the Company.
4. Subrogation. In the event of payment under this
Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit
to enforce such rights.
5. Exclusions. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made
against Indemnitee:
(a) for which payment is actually made to Indemnitee under a
valid and collectible insurance policy, except with respect to any
excess beyond the amount of payment under such insurance;
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(b) for which Indemnitee is indemnified by the Company otherwise than pursuant to this Agreement;
(c) for the return by the Indemnitee of any remuneration paid in fact to him without the previous approval of the shareholders of the Company if it shall be determined by a judgment or other final adjudication that such remuneration is in violation of law of if such remuneration is to be repaid to the Company under a settlement agreement;
(d) for an accounting of profits made from the purchase of sale by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934 and amend- ments thereto or similar provisions of any federal, state or local statutory law or common law;
(e) for which payment results from a judgment or final
adjudication that Indemnitee's acts or omissions (i) where in
breach of his duty of loyalty to the Company or its shareholders,
(ii) were not in good faith or involved a knowing violation of law
or (iii) resulted in receipt by Indemnitee of an improper personal
benefit.
6. Settlements. The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee's written consent. Neither the Company nor Indemnitee will unreasonably withhold his, her, or its consent to any proposed settlement.
7. Reimbursement. If, when and to the extent it is determined that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who agrees to reimburse the Company) for all such amounts theretofore paid; provided that any obligation to reimburse the Company shall be deferred until the conclusion of any legal proceedings brought by Indemnitee in a court of competent jurisdiction to determine whether such reimbursement is legally required.
8. Saving Clause. If this Agreement or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, the Company shall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated of any other applicable law.
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9. Notice. Indemnitee, as a condition precedent to his right
to be indemnified under this Agreement, shall give to the Company
notice in writing as soon as practicable of any claim made against
him for which indemnity will or could be sought under this
Agreement. Notice to the Company shall be directed to C. R. Bard,
Inc., 731 Central Avenue, Murray Hill, New Jersey 07974. Attention:
Secretary (or such other address as the Company shall designate in
writing to Indemnitee); notice shall be deemed received if sent by
prepaid mail properly addressed, the date of such notice being the
date postmarked. In addition, Indemnitee shall give the Company
such information and cooperation as it may reasonably require and
as shall be within Indemnitee's power.
10. Effectiveness. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director or officer of the Company and/or one of its Subsidiaries and shall continue thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal or investigative, by reason of the fact that indemnitee was a director of officer of the Company.
11. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one instrument.
12. Other Rights. Nothing herein shall be deemed to diminish or otherwise restrict Indemnitee's right to indemnification under any provision of the Restated Certificate of Incorporation or Bylaws of the Company, or under New Jersey law.
13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and signed as of the day and year first above written.
C. R. BARD, INC.
By:
INDEMNITEE
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