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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
[ X ] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Rockwell International Corporation
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Rockwell International Corporation
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-1 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------
(5) Total fee paid:
------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------
(2) Form, Schedule or Registration No.:
--------------------------
(3) Filing Party:
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(4) Date Filed:
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ROCKWELL LOGO
------------------------------------------------------------------------
December 29, 1997
Dear Shareowner:
You are cordially invited to attend the annual meeting of shareowners of the
Corporation.
The meeting will be held in The Plaza Ballroom at The Westin South Coast Plaza,
686 Anton Boulevard, Costa Mesa, California, on Wednesday, February 4, 1998, at
10 a.m. At the meeting there will be a current report on the activities of the
Corporation followed by discussion and action on the matters described in the
Proxy Statement. Shareowners will have an opportunity to comment on or to
inquire about the affairs of the Corporation that may be of interest to
shareowners generally.
If you plan to attend the meeting, please mark the box on the enclosed proxy or
direction card when you return it, indicate your intention to attend when voting
by telephone or call our transfer agent's toll-free number (1-800-204-7800) to
request an admittance card. An admittance card will be forwarded to you
promptly.
It is sincerely hoped that as many shareowners as can conveniently attend will
do so. However, if you cannot attend you will later receive a report to be
mailed to all shareowners concerning action taken at the meeting.
Sincerely yours,
/s/ DONALD R. BEALL /s/ DON H. DAVIS, JR.
Donald R. Beall Don H. Davis, Jr.
Chairman of the Board President and
Chief Executive Officer
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ROCKWELL INTERNATIONAL CORPORATION
_________________________________________________
600 Anton Boulevard, Suite 700, Costa Mesa, California 92626
Notice of 1998 Annual Meeting of Shareowners
TO THE SHAREOWNERS OF
ROCKWELL INTERNATIONAL CORPORATION:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareowners of
Rockwell International Corporation will be held in The Plaza Ballroom at The
Westin South Coast Plaza, 686 Anton Boulevard, Costa Mesa, California, on
Wednesday, February 4, 1998, at 10 a.m. (Pacific Standard Time) for the
following purposes:
(a) to elect four members of the Board of Directors of the Corporation with
terms expiring at the Annual Meeting in 2001;
(b) to consider and vote upon a proposal to approve the selection by the
Board of Directors of the firm of Deloitte & Touche LLP as auditors of
the Corporation; and
(c) to transact such other business as may properly come before the
meeting.
Only shareowners of record at the close of business on December 11, 1997,
will be entitled to notice of, and to vote at, the meeting.
By order of the Board of Directors.
/s/ WILLIAM J. CALISE, JR.
William J. Calise, Jr.
Secretary
December 29, 1997
NOTE: THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND PROMPT RETURN OF
THE ACCOMPANYING PROXY. A RETURN ENVELOPE IS ENCLOSED.
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Proxy Statement
The 1998 Annual Meeting of Shareowners of Rockwell International
Corporation will be held on February 4, 1998, for the purposes set forth in the
accompanying Notice of 1998 Annual Meeting of Shareowners. This statement and
the accompanying proxy, which are first being sent to shareowners on or about
December 29, 1997, are furnished in connection with the solicitation by the
Board of Directors of proxies to be used at such meeting and at any adjournment
thereof. If a proxy in the accompanying form is duly executed and returned, the
shares represented thereby will be voted as specified therein, and if no
specification is made, the shares will be voted in accordance with the
recommendations of the Board of Directors. The proxy may, nevertheless, be
revoked prior to its exercise by delivering written notice of revocation to the
Secretary of the Corporation, by executing a later dated proxy or by attending
the meeting and voting in person.
The Corporation, which was incorporated in 1996, is the successor to the
former Rockwell International Corporation, which was incorporated in 1928, as
the result of a tax-free reorganization completed December 6, 1996. In
connection with that reorganization, the directors and all but one of the
executive officers of the predecessor corporation became directors and executive
officers of the Corporation, serving in the same capacities. References in this
Proxy Statement to the Corporation, Board of Directors and executive officers of
the Corporation with respect to periods on or prior to December 6, 1996 shall
mean, unless otherwise stated, the predecessor corporation and its Board of
Directors and executive officers.
It is the Corporation's policy to keep confidential proxy cards, ballots
and voting tabulations that identify individual shareowners except as may be
necessary to meet any applicable legal requirements and, in the case of any
contested proxy solicitation, as may be necessary to permit proper parties to
verify the propriety of proxies presented by any person and the results of the
voting. The judges of election and any employees associated with processing
proxy cards or ballots and tabulating the vote are required to acknowledge their
responsibility to comply with this policy of confidentiality.
For shareowners participating in the ChaseMellon Investor Services Program
for Rockwell shareowners, the administering bank will vote the shares that it
holds for the participant's account only in accordance with the proxy returned
by the participant to the Corporation, or in accordance with instructions given
pursuant to the Corporation's telephone voting procedures or in accordance with
other written instructions.
VOTING SECURITIES
On December 11, 1997, the Corporation had outstanding 203,719,814 shares of
Common Stock. Each holder of Common Stock is entitled to one vote for each share
held. On December 11, 1997, Wells Fargo Bank, N.A., Los Angeles, California, as
trustee under the Corporation's Savings Plan for its participating employees,
held 40,258,435 shares of Common Stock, representing approximately 19.8% of the
total outstanding Common Stock. Shares held by the trustee on account of
participants will be voted by the trustee in accordance with written
instructions from the participants, or instructions from the participants given
pursuant to the Corporation's telephone voting procedures, and where no
instructions are received, as the trustee deems proper.
ELECTION OF DIRECTORS
The Corporation's Restated Certificate of Incorporation provides that the
Board of Directors shall consist of three classes of directors with overlapping
three-year terms. One class of directors is to be elected each year with terms
extending to the third succeeding Annual Meeting after election. The Restated
Certificate of Incorporation provides that the Board shall maintain the three
classes so as to be as nearly equal in number as the then total number of
directors permits.
There are five directors whose terms expire at the 1998 Annual Meeting,
including Dr. Lew Allen, Jr., a member of the Science and Technology and the
Environmental and Social Responsibility Committees of the Board, who is not
standing for re-election in accordance with the Board's policy on retirement of
directors. The Board of Directors has decreased the number of directors of the
Corporation to twelve, effective immediately prior to the Annual Meeting, four
of whom will be directors in the class with terms extending to the 2001 Annual
Meeting and until their successors are elected and qualify.
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It is intended that proxies in the accompanying form properly executed and
returned to the Corporation's proxy tabulator or properly voted in accordance
with the Corporation's telephone voting procedures will be voted at the meeting,
unless authority to do so is withheld, for the election as directors of the four
nominees specified in Nominees for Directors with Terms Expiring in 2001 below,
all of whom now serve as directors with terms extending to the 1998 Annual
Meeting and until their successors are elected and qualify. If for any reason
any of those nominees is not a candidate (which is not expected) when the
election occurs, it is expected that proxies in the accompanying form will be
voted at the meeting for the election of the other nominees and may be voted for
the election of a substitute nominee or, in lieu thereof, the Board of Directors
may reduce the number of directors.
INFORMATION AS TO NOMINEES FOR DIRECTORS AND CONTINUING DIRECTORS
There is shown below for each nominee for director and each continuing
director, as reported to the Corporation, the name, age and principal
occupation; the position, if any, with the Corporation; the period of service as
a director of the Corporation (or a predecessor corporation); other
directorships held; and the committees of the Board of Directors on which the
nominee or continuing director serves.
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NOMINEES FOR DIRECTORS WITH TERMS EXPIRING IN 2001
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GEORGE L. ARGYROS DIRECTOR SINCE 1997 AGE 60
Chairman and Chief Executive Officer, Arnel & Affiliates
(Diversified Investment Company). Mr. Argyros has been
Chairman and Chief Executive Officer of Arnel & Affiliates
since 1968. Currently he is also a General Partner and the
(Photo) principal financial partner of Westar Capital, a private
investment company. Mr. Argyros was a co-owner of AirCal from
1981 to 1987 and owner of the Seattle Mariners Baseball Team
from 1981 to 1989. From 1990 to 1993, he served on the Board
of the Federal Home Loan Mortgage Corporation. Mr. Argyros is
a board member of First American Financial Corporation, The
Newhall Land and Farming Company, Apria Healthcare Group, and
U.S. Computer Services. He also serves as a board member of a
number of civic and community organizations.
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DON H. DAVIS, JR. DIRECTOR SINCE 1995 AGE 58
President and Chief Executive Officer. Mr. Davis was elected
President in July 1995 and Chief Executive Officer in October
1997. The Board of Directors has announced its intention to
elect him Chairman and Chief Executive Officer following the
1998 Annual Meeting. Mr. Davis joined Allen-Bradley
(automation) as an engineering sales trainee in 1963 and after
(Photo) serving in a number of increasingly responsible management
positions, became a Senior Vice President in 1985 and
President in July 1989. He was named Senior Vice
President--Automation of the Corporation in June 1993 and an
Executive Vice President and Chief Operating Officer in
January 1994. Mr. Davis is a director of Ingram Micro, Inc.
and Sybron International Corporation. He is a member of The
Business Roundtable, former Chairman of the Board of Governors
of the National Electrical Manufacturers Association and also
a director, trustee or member of a number of other business,
educational and civic organizations.
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WILLIAM H. GRAY, III DIRECTOR SINCE 1994 AGE 56
President and Chief Executive Officer, The College Fund/UNCF
(Educational Assistance). Mr. Gray is a member of the Board
Composition and Environmental and Social Responsibility
Committees of the Board. He has been President of The College
Fund/UNCF since September 1991 and senior minister, Bright
(Photo) Hope Baptist Church in Philadelphia since 1972. He served in
Congress from 1979 to 1991, as House Majority Whip, Chair of
the Democratic Caucus and the House Budget Committee and on
the House Appropriations Committee. In addition, he has taught
at St. Peter's College and Temple University. Mr. Gray is a
director of CBS Corporation, Chase Manhattan Corporation,
Electronic Data Systems Corporation, MBIA, Inc., Prudential
Insurance Company of America, Union Pacific Corporation and
Warner-Lambert Company.
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WILLIAM T. MCCORMICK, JR. DIRECTOR SINCE 1989 AGE 53
Chairman of the Board and Chief Executive Officer, CMS Energy
Corporation (Diversified Energy Company). Mr. McCormick is a
member of the Compensation and Management Development and
Science and Technology Committees of the Board. He has been
(Photo) Chairman of the Board and Chief Executive Officer of CMS
Energy Corporation since November 1985. Before joining CMS, he
had been Chairman and Chief Executive Officer of American
Natural Resources Company and Executive Vice President and a
director of its parent corporation, The Coastal Corporation.
Mr. McCormick is a director of First Chicago NBD, Inc. and
Schlumberger Ltd. Among his other activities, he serves as a
director of the American Gas Association, the Edison Electric
Institute and the National Petroleum Council.
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CONTINUING DIRECTORS WITH TERMS EXPIRING IN 1999
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DONALD R. BEALL DIRECTOR SINCE 1978 AGE 59
Chairman of the Board. Mr. Beall retired as Chief Executive
Officer on September 30, 1997 after serving as Chairman and
Chief Executive Officer since February 1988. Mr. Beall will
retire as Chairman of the Board immediately following the 1998
Annual Meeting, and the Board of Directors has announced its
intention to form an Executive Committee of which he will be
(Photo) Chairman. Mr. Beall was elected President and Chief Operating
Officer in 1979 following service in a number of other
increasingly responsible senior management positions since he
joined the Corporation in 1968. He is a director of Amoco
Corporation, Meritor Automotive, Inc., The Procter & Gamble
Company and The Times Mirror Company. He is a trustee of the
California Institute of Technology and a member of the
University of California-Irvine Board of Overseers and the
Board of Visitors of its Graduate School of Management as well
as The Business Council, the Chief Executives' Organization
and the Council on Competitiveness.
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BRUCE M. ROCKWELL DIRECTOR SINCE 1969 AGE 58
Senior Vice President, First of Michigan Corporation
(Investment Banking). Mr. Rockwell is Chairman of the
Environmental and Social Responsibility Committee and a member
of the Compensation and Management Development and Board
Composition Committees of the Board. He joined First of
Michigan Corporation in 1961 and in 1965 was appointed
(Photo) Assistant Vice President and manager of the bond underwriting
department. Mr. Rockwell was elected Vice President in 1967,
and Senior Vice President-Fixed Income in 1983, assuming his
present position in April 1988. He is past chairman of the
Municipal Advisory Council of Michigan and past President of
the Bond Club of Detroit. He also serves as a board member of
a number of civic and community organizations.
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WILLIAM S. SNEATH DIRECTOR SINCE 1979 AGE 71
Retired Chairman of the Board and Chief Executive Officer,
Union Carbide Corporation (Chemicals). Mr. Sneath is Chairman
of the Compensation and Management Development Committee and a
member of the Audit and Board Composition Committees of the
Board. He joined Union Carbide Corporation in 1950, was
(Photo) elected Treasurer in 1961, became a Vice President and Chief
Financial Officer in 1965, a director in 1969 and President
and Chief Operating Officer in 1971. Mr. Sneath served as
Chairman of the Board and Chief Executive Officer of Union
Carbide from January 1977 until his retirement in December
1981. Mr. Sneath is a director of Union Carbide Corporation
and Metropolitan Life Insurance Company and is a member of The
Business Council.
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JOSEPH F. TOOT, JR. DIRECTOR SINCE 1977 AGE 62
President and Chief Executive Officer, The Timken Company
(Tapered Roller Bearings and Specialty Steel). Mr. Toot is
Chairman of the Audit Committee and a member of the
Compensation and Management Development and Board Composition
Committees of the Board. He joined The Timken Company in 1962
and served in various senior executive positions until his
(Photo) election as Vice President-International Operations in 1967.
Mr. Toot became a director of Timken in 1968, was elected
Executive Vice President in 1973, President in 1979 and Chief
Executive Officer in 1992. He is retiring as President and
Chief Executive Officer at the end of December 1997 and will
serve as Chairman of the Executive Committee of Timken's Board
of Directors. Mr. Toot also serves as a director, officer,
trustee or member of various community, charitable and
philanthropic organizations.
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CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2000
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RICHARD M. BRESSLER DIRECTOR SINCE 1986 AGE 67
Retired Chairman of the Board, El Paso Natural Gas Company
(Natural Gas Operations). Mr. Bressler is Chairman of the
Board Composition Committee and a member of the Audit and
Compensation and Management Development Committees of the
Board. He served as Chief Executive Officer of Burlington
Northern Inc. (rail transportation) from 1980 through 1988.
(Photo) Mr. Bressler retired in October 1990 as Chairman of both
Burlington Northern Inc. and Burlington Resources Inc.
(natural resources operations), positions he had held since
1982 and 1989, respectively. He served as Chairman of the Plum
Creek Management Company (timber operations) from April 1989
to January 1993. He was Chairman of the El Paso Natural Gas
Company from October 1990 through December 1993. Mr. Bressler
is a director of H. F. Ahmanson and Company and General Mills,
Inc. and is active in a number of business and civic
organizations.
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JUDITH L. ESTRIN DIRECTOR SINCE 1994 AGE 43
President and Chief Executive Officer, Precept Software, Inc.
(Networking Software). Ms. Estrin is a member of the
Environmental and Social Responsibility and Science and
Technology Committees of the Board. She has been President and
Chief Executive Officer of Precept Software since March 1995.
Previously she was a computer industry consultant from
(Photo) September 1994 to March 1995 and served Network Computer
Devices as President and Chief Executive Officer from October
1993 to September 1994 and as Executive Vice President from
July 1988 to October 1993. In 1981 Ms. Estrin co-founded
Bridge Communications, serving initially as Vice President,
Engineering and subsequently as Executive Vice President and
Senior Vice President and General Manager of 3Com Corp.'s
Bridge Communications Division after 3Com acquired Bridge in
September 1987. She also serves as a director of Federal
Express Corporation and Sun Microsystems, Inc.
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JAMES CLAYBURN LA FORCE, JR. DIRECTOR SINCE 1980 AGE 69
Dean Emeritus, John E. Anderson Graduate School of Management,
University of California, Los Angeles. Dr. La Force is a
member of the Audit, Environmental and Social Responsibility
and Science and Technology Committees of the Board. After
joining the UCLA faculty as an Assistant Professor of
Economics in 1962, he became an Associate Professor in 1967
(Photo) and a full Professor in 1971. He was Chairman, Department of
Economics from 1969 until 1978, and Dean, John E. Anderson
Graduate School of Management from 1978 until June 1993. He is
a director of The BlackRock Funds, Eli Lilly & Company,
Imperial Credit Industries, Inc., Jacobs Engineering Group,
Inc., Motor Cargo Industries, Inc., Payden & Rygel Investment
Trust, Provident Investment Council Mutual Funds and The
Timken Company.
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JOHN D. NICHOLS DIRECTOR SINCE 1988 AGE 67
Retired Chairman of the Board and Chief Executive Officer,
Illinois Tool Works Inc. (Engineered Components and Industrial
Systems and Consumables). Mr. Nichols is Chairman of the
Science and Technology Committee and a member of the Audit and
Compensation and Management Development Committees of the
(Photo) Board. He joined Illinois Tool Works in 1980 as Executive Vice
President and was named President, Chief Operating Officer and
a director in 1981 and Chairman in 1986. He served as Chief
Executive Officer from 1982 through August 1995. From 1969
through 1979, he was Executive Vice President and Chief
Operating Officer of Aerojet-General Corporation. He is a
director of Household International, Philip Morris Companies
Inc. and Stone Container Corp. He serves as Chairman of the
Art Institute of Chicago and an Overseer of Harvard
University.
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BOARD OF DIRECTORS AND COMMITTEES
The business of the Corporation is managed by or under the direction of the
Board of Directors. The Board has established several committees whose principal
functions are briefly described below. In the 1997 fiscal year, the Board held
nine meetings. Average attendance by incumbent directors at Board and Committee
meetings was 98% and all of the directors attended 89% or more of the meetings
of the Board and the Committees on which they served.
The Audit Committee is composed of five non-employee directors. Among its
functions, it reviews the scope and effectiveness of audits of the Corporation
by the independent public accountants and by the Corporation's internal
auditors; selects and recommends to the Board of Directors the employment of
independent public accountants for the Corporation, subject to approval of the
shareowners; reviews the audit plans of the independent public accountants and
the Corporation's internal auditors; reviews and approves the fees charged by
the independent public accountants; reviews the Corporation's annual financial
statements before their release; reviews the adequacy of the Corporation's
system of internal controls and recommendations of the independent public
accountants with respect thereto; reviews and acts on comments and suggestions
by the independent public accountants and by the internal auditors with respect
to their audit activities; and monitors compliance by the employees of the
Corporation with the Corporation's standards of business conduct policies. The
Committee met four times during the 1997 fiscal year.
The principal functions of the Board Composition Committee are to consider
and recommend to the Board qualified candidates for election as directors of the
Corporation and periodically to prepare and submit to the Board for adoption the
Committee's selection criteria for director nominees. The Committee also
periodically assesses the performance of the Board of Directors and reports
thereon to the Board. The Committee, which is composed of five non-employee
directors, met twice during the 1997 fiscal year. Shareowners wishing to
recommend candidates for consideration by the Committee can do so by writing to
the Secretary of the Corporation at its World Headquarters in Costa Mesa,
California, giving the candidate's name, biographical data and qualifications.
Any such recommendation should be accompanied by a written statement from the
individual of his or her consent to be named as a candidate and, if nominated
and elected, to serve as a director.
The six members of the Compensation and Management Development Committee
are non-employee directors and are ineligible to participate in any of the plans
or programs which are administered by the Committee except the Directors Stock
Plan. The principal functions of the Compensation and Management Development
Committee are to evaluate the performance of the Corporation's senior executives
and plans for management succession and development, to consider the design and
competitiveness of the Corporation's compensation plans, to review and approve
senior executive compensation and to administer the Corporation's incentive,
deferred compensation, stock option and long-term incentives plans including the
Annual Incentive Compensation Plan for Senior Executive Officers, pursuant to
the terms of the respective plans. The Committee met five times during the 1997
fiscal year.
The Environmental and Social Responsibility Committee, which is composed of
five non-employee directors, reviews and assesses the Corporation's policies and
practices in the following areas: employee
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relations, with emphasis on equal employment opportunity and advancement; the
protection and enhancement of the environment and energy resources; product
integrity and safety; employee health and safety; and community and civic
relations including programs for and contributions to health, educational,
cultural and other social institutions. The Committee met two times during the
1997 fiscal year.
The principal function of the Science and Technology Committee, which is
composed of five non-employee directors, is to review and monitor science and
technological activities of the Corporation. The Committee met twice during the
1997 fiscal year.
The Board of Directors has announced its intention to form an Executive
Committee following the 1998 Annual Meeting. That Committee will have and be
empowered to exercise, when the Board of Directors is not in session, such
powers as the Board may delegate to it.
During the 1997 fiscal year, non-employee directors of the Corporation
received an annual retainer of $33,000 for Board service, together with a
retainer for service on each Board committee at the annual rate of $4,000
($5,000 for Chairmen) for service on the Audit and Compensation and Management
Development Committees and $2,000 ($3,000 for Chairmen) for service on each
other Board committee. Each non-employee director (except Mr. Argyros) also
received a grant of 400 shares of Common Stock immediately after the 1997 Annual
Meeting of Shareowners. At the same date, each non-employee director (other than
Messrs. Allen, La Force and Sneath, who are ineligible by reason of age for
option grants, and Mr. Argyros) received a grant of options under the Directors
Stock Plan to purchase 1,000 shares of Common Stock. Mr. Argyros, who was first
elected a director in May 1997, received a grant of 300 shares of Common Stock
and options to purchase 750 shares of Common Stock on the date of his election.
In accordance with the Directors Stock Plan, the options granted to Mr. Argyros
and each other director to whom an option grant was made were exercisable at
$66.875 per share and $64.75 per share, respectively, the closing market price
on the respective dates of grant, and become exercisable in three substantially
equal installments on the first, second and third anniversaries of the grant
date. In connection with the distribution of shares of Meritor Automotive, Inc.
to shareowners of the Corporation on September 30, 1997, all outstanding stock
options under the Corporation's plans, including the Directors Stock Plan, were
adjusted to preserve the intrinsic value of those options. As a result, the
options granted under the Directors Stock Plan in 1997 now entitle Mr. Argyros
to purchase 855 shares at $58.6147 per share and each other director to whom a
grant was made to purchase 1,140 shares at $56.7522 per share. Ms. Estrin also
receives a retainer of $5,000 per year for serving as a technology adviser. The
average of retainer fees paid or deferred to non-employee directors for the 1997
fiscal year was $66,900 (including valuing the February and May 1997 stock grant
at $64.75 and $66.875 per share, respectively, the closing price on the
respective dates the shares were issued). In addition, the stock options granted
under the Directors Stock Plan to Mr. Argyros and to each other director to whom
a grant was made had a grant date value of $21.59 and $20.14 per option share,
respectively, based on the number of option shares granted (without regard to
the adjustment of the number of option shares subject to those options
subsequently made in connection with the Meritor distribution) and Black-Scholes
option pricing methodology using the following assumptions and inputs: options
exercised after 7 1/2 years, five-year weighted average stock price volatility
and dividend yield of 0.2477 and 2.41% (for the May grant) and 0.2477 and 2.49%
(for the February grant), respectively, and an interest rate of 6.81% (for the
May grant) and 6.47% (for the February grant), which was the zero coupon 7 1/2
year Treasury bond rate at the respective dates of grant.
Under the terms of the directors' deferred compensation plan, a director
may elect to defer all or part of the cash payment of retainer fees until such
time as shall be specified, with interest on deferred amounts accruing quarterly
at 120% of the federal long-term rate set each month by the Secretary of the
Treasury. In addition, under the Directors Stock Plan, each director has the
opportunity each year to defer all the annual grant of shares and all or any
portion of the cash retainers by electing to receive restricted shares valued at
the closing price of the New York Stock Exchange--Composite Transactions on the
date of the annual grant and the date each retainer payment would otherwise be
made in cash.
Under the directors' retirement policy in effect prior to December 1995 and
continued only for then retired directors and then current directors who were at
least age 67 (including Messrs. Allen, La Force and Sneath) and thus not
eligible to receive stock option grants under the Directors Stock Plan, the
Corporation enters into consulting agreements with retired directors who had at
least five years of Board service and had not been employees of the Corporation
during the ten years prior to retirement. The consulting agreements
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provide an annual fee equal to the Board retainer fee and continue for the
lesser of ten years (or if less, the number of years of Board service of a
director who retires before age 72) or life.
The Corporation has entered into an agreement with Mr. Beall providing for
his continued availability as an advisor to the Corporation's management
following his retirement through September 30, 1999 (subject to extension) with
compensation at an annual rate of $600,000. In addition, Mr. Beall will continue
to be covered under certain medical benefit plans, to have the use of an
automobile and, subject to availability, the use of the Corporation's aircraft
for business travel. He also will be reimbursed for memberships in certain clubs
and will have the use of office facilities and secretarial assistance.
The Corporation and its subsidiaries during the 1997 fiscal year had
purchases of approximately $16,331,000 in the normal course of business from The
Timken Company, of which Mr. Toot was President and Chief Executive Officer.
Based on the Corporation's knowledge of prevailing market conditions and prices
for the goods and services involved, the Corporation believes that such
transactions were on terms as favorable to the Corporation as those which might
have been obtained from entities with which directors of the Corporation were
not associated.
OWNERSHIP BY MANAGEMENT OF EQUITY SECURITIES
The following table shows the beneficial ownership, reported to the
Corporation as of December 5, 1997, of the Corporation's Common Stock, including
shares as to which a right to acquire ownership within 60 days exists (for
example, through the exercise of stock options, conversions of securities or
through various trust arrangements) within the meaning of Rule 13d-3(d)(1) under
the Securities Exchange Act, of each director, each executive officer listed in
the table on page 11 and, as a group, of such persons and other executive
officers.
<TABLE>
<CAPTION>
Beneficial Ownership on
December 5, 1997
----------------------------------
Percent of
Name Shares(1) Class(2)
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<S> <C> <C>
Lew Allen, Jr.......................................................... 2,400 (3) --
George L. Argyros...................................................... 10,300 --
Donald R. Beall........................................................ 1,583,610(4:5:6) 0.8
Richard M. Bressler.................................................... 6,244 (5:8) --
Don H. Davis, Jr....................................................... 512,719 (4:5:7) 0.3
Judith L. Estrin....................................................... 1,803 (5) --
William H. Gray, III................................................... 2,252 (5:8) --
James Clayburn La Force, Jr............................................ 2,700 (3:8) --
William T. McCormick, Jr............................................... 7,003 (5:8) --
John D. Nichols........................................................ 7,493 (5:8) --
Bruce M. Rockwell...................................................... 42,315 (5) --
William S. Sneath...................................................... 3,000 --
Joseph F. Toot, Jr..................................................... 13,624 (5:8) --
W. Michael Barnes...................................................... 458,363 (4:5:8) 0.2
William J. Calise, Jr.................................................. 115,085 (4:5:8) 0.1
Dwight W. Decker....................................................... 46,997 (4:5:9) --
Jodie K. Glore......................................................... 134,445 (4:5:9) 0.1
All of the above and other executive
officers as a group (30 persons)..................................... 3,700,330(3:4:5) 1.8
</TABLE>
- ---------
(1) Each person has sole voting and investment power with respect to the shares
listed unless otherwise indicated.
(2) The shares owned by each person, and by the group, and the shares included
in the number of shares outstanding have been adjusted, and the percentage
of shares owned (where such percentage exceeds 0.1%) has been computed, in
accordance with Rule 13d-3(d)(1) under the Securities Exchange Act.
(3) Includes shares held jointly, or in other capacities, as to which in some
cases beneficial ownership is disclaimed.
(4) Includes shares held under the Corporation's savings plans as of November
30, 1997. Does not include 11,092, 5,051, 1,622, 526, 1,179, 709 and 23,989
share equivalents for Messrs. Beall, Davis, Barnes, Calise, Decker, Glore
and the group, respectively, held under the Corporation's supplemental
savings plans as of November 30, 1997.
(5) Includes shares which may be acquired upon the exercise of outstanding stock
options within 60 days as follows: 989,757, 3,644, 425,656, 403, 403, 403,
3,644, 403, 2,024, 407,325, 102,529, 41,905, 100,386, and 2,936,978 for
9
<PAGE> 11
Messrs. Beall, Bressler, Davis, Ms. Estrin, Messrs. Gray, McCormick,
Nichols, Rockwell, Toot, Barnes, Calise, Decker, Glore and the group,
respectively.
(6) Includes shares, as to which beneficial ownership is disclaimed, as follows:
251,013 shares (including 230,859 shares underlying stock options) held for
the benefit of family members and 10,000 shares owned by the Beall Family
Foundation, of which Mr. Beall is President and a director. Does not include
288,209 shares that may be acquired on exercise of stock options assigned to
family members who are the beneficial owners.
(7) Includes 14,166 shares granted as restricted stock in partial payment of a
bonus for fiscal year 1995 and a long-term incentive payment earned for a
three-year performance period ended September 30, 1995 and 7,792 shares
granted as restricted stock in partial payment of a bonus for fiscal year
1997.
(8) Includes 400, 167, 800, 800, 1,149 and 400 shares granted as restricted
stock under the Directors Stock Plan for Messrs. Bressler, Gray, La Force,
McCormick, Nichols and Toot, respectively, and 4,000 shares granted in
December 1996 as restricted stock under the 1995 Long-Term Incentives Plan
to each of Messrs. Barnes and Calise.
(9) Includes 8,205 and 23,359 shares granted to Messrs. Decker and Glore,
respectively, as restricted stock in partial payment of long-term incentive
payments earned for three-year performance periods ended September 30, 1997.
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Corporation for the fiscal
years ended September 30, 1997, 1996, and 1995, of those persons who were (i)
the chief executive officer at any time during fiscal 1997, (ii) the other five
most highly compensated executive officers of the Corporation at September 30,
1997 and (iii) any other persons who were executive officers at any time during
fiscal 1997 and would have been included under clause (ii) if they had remained
executive officers at September 30, 1997 (the Named Officers):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
All Other
Annual Compensation Long-Term Compensation Compensation(1)
--------------------------------------------- ------------------------------------ ---------------
Awards Payouts
------------------------ ----------
Restricted
Other Stock Stock Long-Term
Name and Principal Annual Awards Options Incentive
Position Year Salary Bonus(2) Compensation (Shares) (Shares)(3) Payouts(4)
- ------------------------ ----- ---------- ---------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald R. Beall......... 1997 $1,000,000 $2,250,000 $ 45,110 -- 273,821 $ -0- $1,586,488(6)
Chairman of the Board 1996 907,500 2,000,000 99,493 -- 321,987 -0- 180,260
& Chief Executive 1995 815,000 2,000,000 36,611 -- 291,610 -0- 203,008
Officer(5)
Don H. Davis, Jr........ 1997 641,667 875,000(7) 26,005 -- 131,205 -0- 64,709
President & Chief 1996 600,000 760,000 35,189 -- 151,879 -0- 57,234
Operating Officer(8) 1995 530,000 660,000(9) 425,566(10) -- 127,578 525,000(9) 43,575
W. Michael Barnes....... 1997 417,500 525,000 62,293(11) 4,000 79,864 -0- 78,243
Senior Vice President, 1996 393,333 475,000 25,220 -- 97,203 -0- 37,406
Finance & Planning 1995 360,000 420,000 20,459 -- 85,051 -0- 32,611
& Chief Financial
Officer
William J. Calise, 1997 345,417 360,000 23,525 4,000 51,341 -0- 29,686
Jr....................
Senior Vice President, 1996 328,333 325,000 22,354 -- 54,676 -0- 18,437
General Counsel and 1995 288,750 265,000 13,993 -- 54,676 -0- -0-
Secretary
Dwight W. Decker........ 1997 305,039 300,000 17,278 -- 85,568 1,041,013(12) 39,558
Senior Vice President 1996 247,116 350,000 9,952 -- 127,577 600,000 18,504
and President, 1995 203,414 200,000 5,960 -- -- -- 14,680
Rockwell
Semiconductor Systems
& Electronic Commerce(13)
Jodie K. Glore.......... 1997 385,000 375,000 16,610 -- 39,931 1,715,225(12) 29,640
Senior Vice President 1996 361,667 300,000 16,596 -- 48,601 560,000 23,620
and President and 1995 318,333 375,000 49,455 -- 36,450 337,501 9,186
Chief Operating
Officer, Rockwell
Automation(14)
</TABLE>
- ---------
(1) Amounts contributed or accrued for fiscal years 1997, 1996 and 1995 for the
Named Officers (other than Mr. Glore) under the Corporation's Savings Plan
and the related supplemental savings plan and amounts contributed or
accrued for Mr. Glore under Allen-Bradley's Employee Savings Plan for
Salaried Employees and the related supplemental savings plan.
10
<PAGE> 12
(2) Amounts awarded, even if deferred, under the Annual Incentive Compensation
Plan for Senior Executive Officers for Messrs. Beall, Davis, Barnes, Decker
and Glore for fiscal 1997 and for Messrs. Beall, Davis, Barnes, Calise and
Glore for fiscal 1996, under the Incentive Compensation Plan for Mr. Calise
for fiscal 1997, for Mr. Decker for fiscal 1996 and for Messrs. Beall,
Davis, Barnes, Calise and Decker for fiscal 1995 and, under Allen-Bradley's
Management Incentive Plan for Mr. Glore for fiscal 1995.
(3) Shares reflect anti-dilution adjustments made December 6, 1996 and
September 30, 1997 to preserve the intrinsic value of options following the
reorganization of the Corporation in connection with the divestiture of the
Aerospace and Defense businesses and the pro-rata distribution of shares of
Meritor Automotive, Inc., respectively.
(4) Cash and market value of Common Stock paid in respect of performance units
granted under business unit long-term incentive plans for the three-year
performance periods ended September 30, 1997, 1996 and 1995 for Mr. Glore,
September 30, 1997 and 1996 for Mr. Decker and September 30, 1995 for Mr.
Davis.
(5) Retired as Chief Executive Officer effective September 30, 1997.
(6) Includes special bonus of $1,250,000 in recognition of Mr. Beall's pivotal
role in guiding the transformation of the Corporation.
(7) Mr. Davis's bonus for 1997 was paid in part by delivery of 7,792 shares of
restricted Common Stock, valued at the closing price on the New York Stock
Exchange--Composite Transactions on December 3, 1997, the date of the bonus
award and payment ($48.125).
(8) Chief Executive Officer since October 1, 1997; Executive Vice President &
Chief Operating Officer prior to July 1995.
(9) Mr. Davis's bonus for fiscal year 1995 and a long-term incentive payment
for a three-year performance period ended September 30, 1995 were paid in
part by the delivery to him of 14,166 shares of restricted Common Stock
valued at the closing price on the New York Stock Exchange--Composite
Transactions on December 6, 1995, the date of the incentive compensation
award and payment ($51.875).
(10) Includes amounts paid in connection with the relocation of Mr. Davis from
Milwaukee, Wisconsin to the Corporation's World Headquarters in California,
consisting of $252,081 in respect of a portion of the loss on the sale of
his residence in Milwaukee and $146,115 in respect of taxes incurred on
certain payments under the Corporation's relocation policy. These amounts
were paid in addition to amounts payable under the Corporation's relocation
policy applicable to all salaried employees.
(11) Includes amounts paid in connection with the relocation of Mr. Barnes's
residence as a result of the relocation of the Corporation's World
Headquarters from Seal Beach to Costa Mesa, California, consisting of
$18,877 in respect of a portion of the loss on the sale of his residence
and $17,217 in respect of taxes incurred on that payment under the
Corporation's relocation policy. These were paid in addition to amounts
payable under the Corporation's relocation policy applicable to all
eligible salaried employees in connection with the relocation of the
Corporation's World Headquarters.
(12) Long-term incentive payments to Messrs. Decker and Glore for three-year
performance periods ended September 30, 1997 were paid in part by delivery
of 8,205 and 23,359 shares, respectively, of restricted Common Stock,
valued at the closing price on the New York Stock Exchange--Composite
Transactions on November 28, 1997, the date specified for that purpose in
the Corporation's 1995 Long-Term Incentives Plan ($48.75).
(13) President, Rockwell Semiconductor Systems prior to March 1997.
(14) President of Allen-Bradley prior to October 1995.
OPTION GRANTS
Shown below is further information on grants to the Named Officers of stock
options pursuant to the 1995 Long-Term Incentives Plan during the fiscal year
ended September 30, 1997, which are reflected in the Summary Compensation Table
on page 10. No stock appreciation rights were granted during fiscal 1997.
<TABLE>
<CAPTION>
Individual Grants
- ---------------------------------------------------------------------------------------------------------
Number of
Securities Percentage of Grant Date
Underlying Total Options Value
Options Granted to Exercise or -----------------
Granted Employees in Base Price Expiration Grant Date
Name (Shares)(1)(2) Fiscal 1997 (Per Share)(1) Date Present Value(3)
- -------------------------------------- ------------- -------------- --------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Donald R. Beall....................... 273,821 16.90% $ 53.90 12/9/06 $ 4,386,612
Don H. Davis, Jr...................... 131,205 8.10% 53.90 12/9/06 2,101,904
W. Michael Barnes..................... 79,864 4.93% 53.90 12/9/06 1,279,421
William J. Calise, Jr................. 51,341 3.17% 53.90 12/9/06 822,483
Dwight W. Decker...................... 28,522 1.76% 53.90 12/9/06 456,922
57,046 3.52% 50.45 7/2/07 917,870
Jodie K. Glore........................ 39,931 2.46% 53.90 12/9/06 639,695
</TABLE>
- ---------
(1) The number of shares and exercise prices reflect anti-dilution adjustments
made September 30, 1997 to preserve the intrinsic value of the options
following the Corporation's pro-rata distribution of shares of Meritor
Automotive, Inc.
(2) All the Named Officers were granted options on December 9, 1996 that become
exercisable in three substantially equal annual installments beginning
December 9, 1997. In addition, Mr. Decker was granted an option on July 2,
1997 that becomes exercisable as to all shares covered by that grant on
October 1, 2000 unless the Corporation terminates his employment without
cause before that date, in which case the options become exercisable in
three substantially equal annual installments on the first three
anniversaries of the grant date.
11
<PAGE> 13
(3) These values are based on the Black-Scholes option pricing model which
produces a per option share value (after adjustment in the number of shares
subject to the options shown in the table made in connection with the
pro-rata distribution to the Corporation's shareowners of shares of Meritor
Automotive, Inc.) of $16.02 for the December 9, 1996 grant and $16.09 for
the July 2, 1997 grant, using the following assumptions and inputs: options
exercised after 7 1/2 years, five-year weighted average stock price
volatility and dividend yield of 0.2477 and 2.59% (for December grant) and
0.2477 and 2.37% (for July grant), respectively, and an interest rate of
6.08% (for December grant) and 6.5% (for July grant), which was the zero
coupon 7 1/2-year Treasury bond rate at date of grant. The actual value, if
any, the executive officer may realize from these options will depend solely
on the gain in stock price over the exercise price when the options are
exercised.
The Black-Scholes option pricing methodology, on which the present value of
the stock options granted to the Named Officers is based, attempts to portray
the value of an option at the date of grant. While the options have no value if
the stock price does not increase, were the $16.02 present value of the possible
future gains on the options granted December 9, 1996 used to derive a future
stock price at the end of the 7 1/2-year period when it is assumed the options
would be exercised, the shareowners of the approximately 219 million shares
outstanding on the grant date of those options (assuming that number of shares
remains outstanding) would realize aggregate appreciation of $5,462 million
compared to aggregate appreciation on the options of $15 million for the Named
Officers (assuming that they held their options or the shares acquired on
exercise thereof for the whole 7 1/2-year period).
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to (i) exercises by the Named
Officers during fiscal 1997 of options to purchase the Corporation's Common
Stock granted under the 1995 Long-Term Incentives Plan, the 1988 Long-Term
Incentives Plan or the 1981 Incentive Stock Option Plan for Key Employees and
(ii) the unexercised options to purchase the Corporation's Common Stock granted
to the Named Officers in fiscal 1997 and prior years under any of those plans
and held by them at September 30, 1997.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options Held At In-the-Money Options At
Shares September 30, 1997 September 30, 1997(1)
Acquired Value ------------------------------ -------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald R. Beall.......... -- -- 1,022,014(2:3) 488,479(3) $29,106,002(2:3) $ 3,021,730(3)
Don H. Davis, Jr......... -- -- 325,219 238,534(3) 8,357,659 1,584,937(3)
W. Michael Barnes........ -- -- 319,952 173,018 8,801,141 1,641,412
William J. Calise, Jr.... 2,023 $26,379 48,966 106,017 1,052,593 990,224
Dwight W. Decker......... -- -- 22,274 203,020 497,725 1,129,296
Jodie K. Glore........... -- -- 58,723 84,484 1,207,232 768,383
</TABLE>
- ---------
(1) Based on the closing price on the New York Stock Exchange--Composite
Transactions of the Corporation's Common Stock for shares traded without
entitlement to the pro-rata distribution of shares of Meritor Automotive,
Inc. on September 30, 1997 ($55.1635).
(2) Includes 230,859 options with a value of $5,813,284, held by Mr. Beall for
the benefit of family members and as to which beneficial ownership is
therefore disclaimed.
(3) Excludes options for 288,209 (of which 97,204 were unexercisable) and 36,451
shares granted to Messrs. Beall and Davis, respectively, during fiscal 1995
that have been assigned to or for the benefit of family members and are not
attributable to them pursuant to Rule 13d-3(d)(1) under the Securities
Exchange Act.
LONG-TERM INCENTIVE PLAN
Shown below is information with respect to grants made to Messrs. Decker
and Glore under the Rockwell Semiconductor Systems and Rockwell Automation
business unit long-term incentive plans,
12
<PAGE> 14
respectively, during the fiscal year ended September 30, 1997. No grants of
performance units under any long-term incentive plan were made to any of the
other Named Officers during fiscal 1997.
<TABLE>
<CAPTION>
Performance
Number of or Other Estimated Future Payouts Under
Shares, Units Period Until Non-Stock-Price Based Plans
or Other Maturation ------------------------------------
Name Rights(1:2) or Payment Threshold Target(2) Maximum(2)
- ----------------------------------- ------------------- --------------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Dwight W. Decker................... $ 500,000 10/1/96-9/30/99 $ 0 $500,000 $1,638,000
Jodie K. Glore..................... $ 560,000 10/1/96-9/30/99 $ 0 560,000 1,680,000
</TABLE>
- ---------
(1) Potential awards for target performance expressed as cash payouts.
(2) Before application of stock price change modifier.
Under the plans, which are supplementary performance plans established
pursuant to the Corporation's 1995 Long-Term Incentives Plan, the Corporation's
Compensation and Management Development Committee establishes performance
periods of at least three fiscal years duration and performance objectives
therefor and grants potential awards expressed as cash payouts to key employees
of the respective businesses. Participants, including Messrs. Decker and Glore,
earn awards upon conclusion of the applicable performance period (which may vary
from 0% to 327.6% and 300% of the potential award for the Rockwell Semiconductor
Systems and Rockwell Automation plans, respectively) based on achieving levels
of consolidated net sales and return on sales, modified by levels of return on
assets, set by the Compensation Committee for the performance period, provided
that these businesses achieve at least minimum threshold levels established by
the Committee. The award payouts are further modified by the percentage change
in Rockwell's stock price over the three-year performance period of the plans,
which may increase or decrease the payout finally awarded. At the discretion of
the Committee, payouts may be made wholly or partly by delivering shares of the
Corporation's stock valued at the current fair market value on the payment date.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Management Development Committee of the Board of
Directors, which consists entirely of non-employee directors (see page 7), has
furnished the following report on executive compensation:
COMPENSATION PHILOSOPHY AND OBJECTIVES
Under the Committee's supervision, the Corporation has developed and
implemented compensation policies, plans and programs intended to "pay for
performance" through meeting three fundamental objectives:
- foster the creation of shareowner value through close alignment of the
financial interests of executives with those of the Corporation's
shareowners
- recognize individual and team performance through evaluation of each
executive's effectiveness in meeting strategic and operating plan goals
- pay competitively to attract, motivate and retain the high caliber of
executives necessary for the Corporation's continuing leadership and
growth
EMPLOYEE STOCK OWNERSHIP
The Committee believes the focus on "pay for performance" is sharpened by
aligning closely the financial interests of the Corporation's key executives
with those of the shareowners. Accordingly, it has set the following minimum
Ownership Guidelines (multiple of base salary):
<TABLE>
<CAPTION>
COMMON STOCK
MARKET VALUE
-------------
<S> <C>
- - Chief Executive Officer 5
- - Major Business Unit Heads and Senior
Vice Presidents 3
- - Other Business Unit Heads and other
senior executives 1.5
</TABLE>
13
<PAGE> 15
Only shares owned directly (including restricted shares) or through the
Corporation's savings plans, but not shares subject to unexercised stock
options, are considered for determining whether an executive meets the
Guidelines. At September 30, 1997, the 24 executives subject to the Guidelines
owned an aggregate of 732,720 shares (including share equivalents under the
Corporation's supplemental savings plans) of the Corporation's Common Stock,
with an aggregate market value of $43.5 million (before giving effect to the
pro-rata distribution of shares of Meritor Automotive, Inc.). The ownership by
46% of the executives meets the Guidelines. All of the executives who do not
meet the Guidelines had received a significant promotion or were newly hired and
thus were within the eight-year transition period for meeting the Guidelines.
COMPONENTS OF THE CORPORATION'S COMPENSATION PLANS
- Strategy--In order to carry out its "pay for performance" philosophy, the
Committee sets base salaries generally somewhat below the median of other major
U.S. industrial companies, and provides opportunity for above-median
compensation through the Corporation's annual and long-term incentive plans
which depend heavily on corporate, business unit and individual performance. The
Committee considers the total compensation (earned or potentially available) of
each of the Named Officers and the other senior executives in establishing each
element of compensation. For the Named Officers, base compensation in a period
of acceptable performance (both by the individual and the Corporation) would
constitute about 20 to 30%, annual incentives about 20 to 30%, and long-term
incentives about 40 to 55% of total compensation.
In its deliberations, the Committee reviews data from industry, peer group
and national surveys of other major U.S. industrial companies. The surveys used
by the Corporation provide reference data on large samples of industrial
companies participating in national surveys that include all of the companies
included in the S&P Electrical Equipment Index (the Electrical Equipment Index),
a group of 11 diversified large industrial companies (two of which are included
in the Electrical Equipment Index) that the Corporation believes compete with
its businesses, and a group of 25 large industrial companies (three of which in
addition to the Corporation are included in the Electrical Equipment Index) that
through compensation consultants share relevant data. In addition, the Committee
reviews data biannually from a group of 15 diversified large industrial
companies, three of which are included in the Electrical Equipment Index. In
determining the components of compensation based in part on survey and
peer-company data, the Committee also considers the performance of other
companies whose data is included in such surveys.
The Committee periodically is advised by independent compensation
consultants concerning the Corporation's compensation programs in comparison to
those of other companies which the consultants believe compete with the
Corporation for executive talent.
Under Internal Revenue Code Section 162(m), a publicly held company may not
deduct in any taxable year compensation in excess of one million dollars paid in
that year to its Named Officers unless the compensation is "performance based".
Grants of stock options and awards under the Annual Incentive Compensation Plan
for Senior Executive Officers are considered "performance based" compensation.
Since the Committee retains discretion with respect to base salaries and awards
under the Incentive Compensation Plan and the business unit long-term incentive
plans for the officers covered under those plans, those elements would not
qualify as "performance based" compensation for these purposes. Accordingly, to
avoid loss of the tax deduction, the Committee has adopted a formal policy
whereby any portion of the base, non-performance based incentive or other
compensation of any person whose compensation is subject to the limitation on
deductibility under Section 162(m) exceeds one million dollars shall be deferred
until the executive's retirement or other termination of employment. In
accordance with that policy, Messrs. Decker and Glore received 8,205 and 23,359
shares, respectively, of restricted stock that will vest after termination of
service with the Corporation or under certain other permitted circumstances for
the excess over one million dollars of fiscal 1997 base salary,
non-performance-based incentive awards and other compensation.
- Base Salary--In the early part of the 1997 fiscal year, the Committee
reviewed with the Chairman of the Board and Chief Executive Officer, the
President and the senior human resources executive and approved an annual salary
plan for the Corporation's senior executives (other than the Chairman of the
Board and Chief Executive Officer and the President, whose salaries were
separately reviewed and approved by the Committee). This salary plan is
developed based on the survey data and consultants' reports described above and
performance judgments as to the past and expected future contributions of the
individual senior executives.
14
<PAGE> 16
- Annual Incentives--Near the beginning of the 1997 fiscal year, the
Committee reviewed with the Chairman of the Board and Chief Executive Officer
and the President the Corporate Goals and Objectives for that year, including
measurable financial return and shareowner value creation objectives as well as
long-term leadership goals that in part require more subjective assessments.
Principal 1997 financial goals included increasing earnings per share to $3.55,
achieving a return on equity of 16% and generating operating cash flow of $1.0
billion. In 1997 the Corporation achieved a primary earnings per share increase
to $3.50 (excluding special charges for purchased research and development,
restructuring and spin-off related costs) in spite of softness in portions of
the modem market, a return on equity of 16% and had operating cash flow of $958
million (including the operating cash flow of discontinued businesses).
Shareowner value goals included achieving a total return (stock price
appreciation and dividends) exceeding over the long term a composite of the peer
companies selected by the Corporation, and utilizing inter-business sharing of
competencies, technology, product development and facilities to achieve added
leverage for competitive advantage. The Corporation's long-term leadership goals
included implementing more flexible and efficient organizations with less
vertical integration through resource sharing, strategic alliances, outsourcing
and focus on core competencies, continuing to shape the Corporation's culture
and operating environment for high performance and operating the Corporation's
facilities with a view to achieving recognition as a leader in sound
environmental and safety management.
After the end of the year, performance against the Corporate Goals and
Objectives is evaluated and the results are considered by the Committee in
awarding annual incentive compensation (see "Bonus" in the table on page 10) to
corporate executives who were not directly responsible for the management of a
business unit. Individual awards to members of the senior management group,
including the Named Officers other than the Chairman of the Board and Chief
Executive Officer and the President (whose awards were separately determined by
the Committee), are determined by the Committee after reviewing with the
Chairman of the Board and Chief Executive Officer and the President the
recommended awards, taking into account the contributions made and the levels of
responsibility of each of the participants. While the Committee believes
achievement of the financial, shareowner value and long-term leadership goals
are each important, it accords greater significance to the first two in
determining the total amount available for annual incentive payments.
The incentive compensation for executives responsible for the management of
business units is largely determined by the extent to which the respective
business unit achieves goals established at the beginning of each year tailored
to the particular business unit. For all continuing businesses after the
restructuring actions in fiscal 1997, the measure is generally determined by
year-over-year sales growth and current-year returns on sales and assets.
Achievement of established goals is intended to provide incentive compensation
at or above 100% of target levels established through broad industry surveys;
and these business unit plans include significant upward and downward leverage
dependent on performance. In fiscal year 1997, the annual incentive compensation
for executives for all three major business units averaged 132% (and ranged from
73% to 158%) of target incentive compensation levels. The Committee believes
these average awards are about in the median of companies with which the
Corporation competes for executive talent. Within each business unit, the amount
earned by that unit under its plan is allocated among individual executives
based on levels of responsibility, performance of their business units and an
assessment of their individual performance by the business unit President in
consultation with the President and Chief Operating Officer.
The Annual Incentive Compensation Plan for Senior Executive Officers
provides the exclusive source of annual incentive compensation for the Chairman
of the Board and Chief Executive Officer and four other senior executive
officers who are designated by the Committee before fiscal year end. Under that
Plan, a Covered Employees Performance Fund equal to 1% of the Corporation's net
income before provision for taxes on the Corporation's income is allocated 35%
to the Chairman of the Board and Chief Executive Officer, 20% to the President
and Chief Operating Officer and 15% to each other covered senior executive
officer, subject in each case to reduction at the Committee's discretion. The
Committee has administered and intends to continue to administer the Plan so
that each covered senior executive officer receives annual incentive
compensation that is consistent with the objective of providing a competitive
executive compensation program.
The amount available for annual incentives is determined for the
Corporation's other senior executives and other key management under the
Corporation's Incentive Compensation Plan. Under the Corporation's Plan, the
addition to the incentive fund for a fiscal year cannot exceed either the
aggregate amount of dividends declared on the Corporation's outstanding stock
during the year or an aggregate amount
15
<PAGE> 17
computed by adding 2% of the first $100 million of the applicable net earnings
(defined as net income, before provision for domestic and foreign taxes based on
income, of the Corporation and its consolidated subsidiaries) for the year, 3%
of the next $50 million of such earnings, 4% of the next $25 million of such
earnings, and 5% of the balance of such earnings. The incentive fund available
for awards for any fiscal year is reduced by the aggregate awards for that
fiscal year under the Annual Incentive Compensation Plan for Senior Executive
Officers. Generally, the Committee makes awards under the Corporation's Plan in
an aggregate amount well below the amount available thereunder.
- Long-Term Incentives--The Corporation's 1995 Long-Term Incentives Plan
provides the flexibility to grant long-term incentives in a variety of forms,
including performance units, stock options, stock appreciation rights and
restricted stock. Annually, the Committee evaluates the type of long-term
incentive it believes is most likely to achieve the Corporation's total
compensation objectives.
The Committee has established four plans under which potential compensation
is determined by achieving levels of sales growth, return on sales and return on
assets and further modified by the change in the Rockwell stock price during the
performance period.
In determining the grants of stock options to the individual senior
management group, including the Named Officers other than the Chairman of the
Board and Chief Executive Officer and the President (whose awards were
separately determined by the Committee), the Committee reviewed with the
Chairman of the Board and Chief Executive Officer and the President the
recommended individual awards, taking into account relevant survey data and the
respective scope of accountability, strategic and operational goals, and
anticipated contributions of each of the members of the senior management group.
The long-term incentives for Messrs. Decker and Glore were provided through
stock option grants and through participation in the business unit performance
plans.
COMPENSATION OF THE CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Mr. Beall's base salary, which has been in effect since April 1996, is
$1,000,000. His total annual compensation continues to be substantially
dependent on annual incentive compensation tied to the Committee's assessment of
his and the Corporation's performance.
In determining Mr. Beall's annual incentive compensation for 1997, the
Committee concluded that the Corporation had again, as in 1995 and 1996,
performed exceptionally under Mr. Beall's leadership, meeting or closely
approaching its financial goals (in spite of softness in portions of the modem
market) and shareowner value creation goals (including particularly through the
strategic repositioning of the Corporation's business portfolio with the
disposition of its Aerospace & Defense and Graphic Systems businesses and the
distribution of its Automotive businesses) and making significant progress on
each of its long-term leadership objectives. Consistent with the Corporation's
pay for performance philosophy, the Committee recognized the third consecutive
year of extraordinary performance by awarding Mr. Beall an annual incentive
award of $2,250,000.
In addition, the Committee awarded Mr. Beall a special bonus of $1,250,000
in recognition of his pivotal role as Chief Executive Officer from February 1988
through September 1997 in guiding the transformation of the Corporation from a
broadly diversified concern into an enterprise sharply focused on commercial
electronics markets. The Committee also reviewed and approved arrangements to
secure the continuing benefit of Mr. Beall's counsel. The Committee took into
account that Mr. Beall will not receive a stock option grant in fiscal 1998 or
annual incentive compensation for that year.
The Board in Executive Session (when Mr. Beall was not present), as
provided in the Corporation's Corporate Governance Guidelines, received and
discussed the Committee's evaluation of the Corporation's and Mr. Beall's
performance in the 1997 fiscal year and its proposed actions as to Mr. Beall's
incentive compensation for that year, the special recognition bonus and
arrangements to retain for the Corporation the benefit of his advice and counsel
after his retirement as Chairman.
Compensation and Management Development Committee
William S. Sneath, Chairman
Richard M. Bressler
William T. McCormick, Jr.
John D. Nichols
Bruce M. Rockwell
Joseph F. Toot, Jr.
16
<PAGE> 18
SHAREOWNER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the cumulative total shareowner
return on the Corporation's Common Stock against the cumulative total return of
the S&P Composite-500 Stock Index and the S&P Electrical Equipment Index for the
period of five fiscal years which commenced October 1, 1992 and ended September
30, 1997, assuming in each case a fixed investment of $100 at the respective
closing prices on September 30, 1992, reinvestment of all cash dividends and
retention of all stock distributions.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
ROCKWELL COMMON, S&P COMPOSITE-500 & S&P ELECTRICAL EQUIPMENT INDICES
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P ELECTRICAL
(FISCAL YEAR COVERED) ROCKWELL COMMON* EQUIPMENT INDEX S&P 500 INDEX
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 145.59 118.75 111.82
1994 142.36 124.10 115.94
1995 201.62 160.31 150.43
1996 245.62 228.96 181.02
1997 299.38 332.34 254.24
</TABLE>
THE CUMULATIVE TOTAL RETURNS ON ROCKWELL COMMON STOCK AND EACH INDEX AS OF EACH
SEPTEMBER 30, 1992-1997 PLOTTED IN THE ABOVE GRAPH ARE AS FOLLOWS:
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Rockwell Common*.................... $100.00 $145.59 $142.36 $201.62 $245.62 $299.38
S&P 500 Index....................... 100.00 111.82 115.94 150.43 181.02 254.24
S&P Electrical Equipment Index...... 100.00 118.75 124.10 160.31 228.96 332.34
Closing market price at fiscal year
end.................................. 25.50 36.00 34.25 47.25 56.38 67.51**
Dividends per common share during
fiscal year ended September 30....... 0.92 0.96 1.02 1.08 1.16 1.20***
</TABLE>
- ---------
* Includes the value of 0.084 share of Boeing common stock which was received
on December 6, 1996 (adjusted for the 2 for 1 Boeing stock split on June 6,
1997) for each Rockwell share then owned, and dividends thereon.
** Includes the value of 0.084 share of Boeing common stock.
*** Includes dividends earned on 0.042 share (0.084 share after June 6, 1997) of
Boeing common stock.
17
<PAGE> 19
RETIREMENT PLANS
The following table shows the estimated annual retirement benefits payable
on a straight life annuity basis to participating employees, including officers,
in the earnings and years of service classifications indicated, under the
Corporation's retirement plans which cover most officers and other salaried
employees on a non-contributory basis. Such benefits reflect a reduction to
recognize in part the Corporation's cost of Social Security benefits related to
service for the Corporation. The Corporation's plans also provide for the
payment of benefits to an employee's surviving spouse or other beneficiary.
<TABLE>
<CAPTION>
Average Estimated Annual Retirement Benefits for Years of Service Indicated
Annual -------------------------------------------------------------------------------------
Earnings 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 ................. $ 132,017 $ 197,999 $ 210,132 $ 222,266 $ 234,400 $ 246,533
1,000,000 ................. 265,367 397,999 422,632 447,266 471,900 496,533
1,500,000 ................. 398,717 597,999 635,132 672,266 709,400 746,533
2,000,000 ................. 532,067 797,999 847,632 897,266 946,900 996,533
2,500,000 ................. 665,417 997,999 1,060,132 1,122,266 1,184,400 1,246,533
3,000,000 ................. 798,767 1,197,999 1,272,632 1,347,266 1,421,900 1,496,533
3,500,000 ................. 932,117 1,397,999 1,485,132 1,572,266 1,659,400 1,746,533
4,000,000 ................. 1,065,467 1,597,999 1,697,632 1,797,266 1,896,900 1,996,533
</TABLE>
Covered compensation includes salary and annual bonus. The calculation of
retirement benefits under the plans generally is based upon average earnings for
the highest five consecutive years of the ten years preceding retirement.
The credited years of service for Messrs. Beall, Davis, Barnes, Calise and
Decker are 29, 35, 29, 3 and 9, respectively.
The following table shows the estimated annual retirement benefits payable
on a straight life annuity basis to participating employees of the Corporation's
Rockwell Automation business, in the earnings and years of service
classifications indicated, under its retirement plans, which cover certain
Rockwell Automation officers, including Mr. Glore, on a non-contributory basis.
Such benefits reflect a reduction to recognize in part Rockwell Automation's
cost of Social Security benefits related to service for Rockwell Automation and
also reflect supplemental benefits payable out of Rockwell Automation's general
funds to provide eligible officers with at least 20 years of service an annual
retirement benefit that is at least 50% of final average covered compensation.
Rockwell Automation's plans also provide for the payment of benefits to an
employee's surviving spouse or other beneficiary.
<TABLE>
<CAPTION>
Average Estimated Annual Retirement Benefits for Years of Service Indicated
Annual -------------------------------------------------------------------------
Earnings 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
---------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 ................ $167,690 $221,460 $255,181 $255,181 $255,181 $280,694
1,000,000 ................ 344,977 456,706 527,931 527,931 527,931 567,081
</TABLE>
Covered compensation includes salary and bonus. The calculation of
retirement benefits under the plans generally is based upon average earnings for
the highest five years of the ten years preceding retirement. Mr. Glore has 12
credited years of service.
In addition, Rockwell Automation plans provide that Mr. Glore's beneficiary
is to receive (a) continued payment of his base salary ($405,000 per year as of
September 1997) for ten years if he dies before age 65 while a participating
officer or (b) $1,000,000 if he dies after retirement under a Rockwell
Automation retirement plan.
Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as
amended, limit the annual benefits which may be paid from a tax-qualified
retirement plan. As permitted by the Employee Retirement Income Security Act of
1974, the Corporation has supplemental plans which authorize the payment out of
general funds of the Corporation of any benefits calculated under provisions of
the applicable retirement plan which may be above the limits under these
sections.
18
<PAGE> 20
SELECTION OF AUDITORS
The directors of the Corporation have selected the firm of Deloitte &
Touche LLP as the auditors of the Corporation subject to the approval of the
shareowners. Deloitte & Touche LLP, and its predecessors, have acted for the
Corporation as auditors since 1934.
Before the Audit Committee recommended to the full Board the appointment of
Deloitte & Touche LLP, it carefully considered the qualifications of that firm,
including their performance in prior years and their reputation for integrity
and for competence in the fields of accounting and auditing. Representatives of
Deloitte & Touche LLP are expected to be present at the meeting to respond to
appropriate questions and to make a statement if they desire to do so.
VOTE REQUIRED
The four nominees for election as directors to succeed the directors whose
terms expire at the 1998 Annual Meeting of Shareowners who receive the greatest
number of votes cast for the election of directors at that meeting by the
holders of the Corporation's Common Stock entitled to vote at the meeting, a
quorum being present, shall become directors at the conclusion of the tabulation
of votes. An affirmative vote of the holders of a majority of the voting power
of the Corporation's Common Stock, present in person or represented by proxy and
entitled to vote at the meeting, a quorum being present, is necessary to approve
the action proposed in item (b) of the accompanying Notice of 1998 Annual
Meeting of Shareowners.
Under Delaware law and the Corporation's Restated Certificate of
Incorporation and By-Laws, the aggregate number of votes entitled to be cast by
all shareowners present in person or represented by proxy at the meeting,
whether those shareowners vote "for", "against" or abstain from voting
(including broker non-votes), will be counted for purposes of determining the
minimum number of affirmative votes required for approval of item (b) and the
total number of votes cast "for" that matter will be counted for purposes of
determining whether sufficient affirmative votes have been cast. The shares of a
shareowner who abstains from voting on a matter or whose shares are not voted by
reason of a broker non-vote on a particular matter will be counted for purposes
of determining whether a quorum is present at the meeting so long as the
shareowner is present in person or represented by proxy. An abstention from
voting or a broker non-vote on a matter by a shareowner present in person or
represented by proxy at the meeting has no effect in the election of directors
(assuming a quorum is present) and has the same legal effect as a vote "against"
any other matter even though the shareowner or interested parties analyzing the
results of the voting may interpret such a vote differently.
OTHER MATTERS
The Board of Directors does not know of any other matters which may be
presented at the meeting.
In the event of a vote on any matters other than those referred to in items (a)
and (b) of the accompanying Notice of 1998 Annual Meeting of Shareowners, it is
intended that proxies in the accompanying form will be voted thereon in
accordance with the judgment of the person or persons voting such proxies. The
Corporation contemplates sending to all shareowners after the meeting a report
of the action taken at the meeting.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires the Corporation's
officers and directors, and persons who own more than ten percent of a
registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (SEC) and the New York Stock Exchange. Officers, directors
and greater than ten percent shareowners are required by SEC regulation to
furnish the Corporation with copies of all Forms 3, 4 and 5 they file.
Based solely on the Corporation's review of the copies of such forms it has
received and written representations from certain reporting persons confirming
that they were not required to file Forms 5 for specified fiscal years, the
Corporation believes that all its officers, directors and greater than ten
percent beneficial owners complied with all filing requirements applicable to
them with respect to transactions during fiscal 1997 except that Mr. Calise
inadvertently filed late one Form 4, relating to the acquisition of shares of
the Corporation's Common Stock (which he still holds) upon exercise of an
employee stock option.
19
<PAGE> 21
ANNUAL REPORT
The Corporation's Annual Report on Form 10-K, including financial
statements, for the fiscal year ended September 30, 1997, has been mailed to
shareowners in advance of this Proxy Statement.
1999 SHAREOWNER PROPOSALS
To be eligible for inclusion in the Corporation's proxy statement,
shareowner proposals for the 1999 Annual Meeting of Shareowners must be received
on or before August 31, 1998 at the Office of the Secretary at the Corporation's
World Headquarters, 600 Anton Boulevard, Suite 700, P.O. Box 5090, Costa Mesa,
California 92628-5090. In addition, the Corporation's By-Laws require a
shareowner desiring to propose any matter for consideration of the shareowners
at the 1999 Annual Meeting of Shareowners to notify the Corporation's Secretary
in writing at the address listed in the preceding sentence on or after November
6, 1998 and on or before December 6, 1998.
EXPENSES OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Corporation.
In addition to the use of the mails, proxies may be solicited personally, or by
telephone or by telegraph, by a few regular employees of the Corporation without
additional compensation. The Corporation does not expect to pay any compensation
for the solicitation of proxies but will reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for their expenses
for sending proxy material to principals and obtaining their proxies.
December 29, 1997
If you plan to attend the Annual Meeting of Shareowners TO BE HELD IN COSTA
MESA, CALIFORNIA on February 4, 1998, please be sure to request an admittance
card by:
- - marking the appropriate box on the proxy card and mailing the card using the
enclosed envelope;
- - indicating your desire to attend the meeting through the Corporation's
telephone voting procedure; or
- - calling the Corporation's transfer agent, ChaseMellon Shareholder Services, at
1-800-204-7800.
20
<PAGE> 22
PROXY
ROCKWELL INTERNATIONAL CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints D.R. Beall, D.H. Davis and W.S. Sneath,
jointly and severally, proxies, with full power of substitution, to vote shares
of capital stock which the undersigned is entitled to vote at the Annual Meeting
of Shareowners to be held at The Westin South Coast Plaza, 686 Anton Boulevard,
Costa Mesa, California, on February 4, 1998, or any adjournment thereof; such
proxies being directed to vote as specified or, if no specification is made, FOR
the election of four nominees proposed for election as directors with terms
expiring at the Annual Meeting in 2001 and FOR proposal (b), and to vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
To vote in accordance with the Board of Directors' recommendations just
sign and date the other side; no boxes need to be checked.
Comments:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(If you have written in the above space, please mark the
"Comments" box on the other side)
(continued and to be signed, on the other side)
================================================================================
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone Telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
<PAGE> 23
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
[ X ]
COMMENTS
NOTED ON
OTHER SIDE
[ ]
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposal (b) and will vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (a) AND (b).
<TABLE>
<CAPTION>
FOR WITHHOLD
all nominees AUTHORITY to vote
listed for all nominees listed
<S> <C> <C>
(a) The election of four directors-Nominees: [ ] [ ]
01 G.L. Argyros 02 D.H. Davis
03 W.H. Gray 04 W.T. McCormick
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space provided below.)
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(b) The selection of auditors [ ] [ ] [ ]
YES NO
I/we plan to attend the meeting. [ ] [ ]
Please send Admittance Card.
</TABLE>
- ---------------------- -------------------------------- ---------------------
Signature Signature if held jointly Date: , 1998
In signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, please give your
title. When shares are in the name of more than one person each should sign the
proxy. PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
================================================================================
* FOLD AND DETACH HERE *
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
YOUR TELEPHONE INSTRUCTION WILL AUTHORIZE THE NAMED PROXIES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD
o You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
o After voting your shares you will be asked if you wish to attend the
meeting. If you indicate yes, you will automatically be mailed an
admittance card and DO NOT need to mail in the attached Card.
After entering your Control Number you will hear these instructions.
- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
- --------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to
WITHHOLD FOR ALL nominees, press 9
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the
instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail in your proxy.
THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
CALL **TOLL FREE** ON A TOUCH TONE TELEPHONE
1-800-840-1208 - ANYTIME
THERE IS NO CHARGE TO YOU FOR THIS CALL.
<PAGE> 24
WELLS FARGO
December 29, 1997
TO PARTICIPANTS IN THE:
ALLEN-BRADLEY EMPLOYEE SAVINGS AND INVESTMENT PLANS
RELIANCE ELECTRIC COMPANY SAVINGS AND INVESTMENT PLAN
ROCKWELL INTERNATIONAL CORPORATION SAVINGS PLAN
ROCKWELL RETIREMENT SAVINGS PLAN FOR CERTAIN EMPLOYEES
In connection with the Annual Meeting of Shareowners of Rockwell International
Corporation to be held February 4, 1998, enclosed are the following:
* Rockwell International Corporation Notice of 1998 Annual Meeting and
Proxy Statement, together with a Direction Card and a return envelope.
The enclosed Direction Card should be used to instruct us with respect to our
voting of the shares which we are holding for your account in the Rockwell
International Corporation Savings Plans (Rockwell International Corporation
Savings Plan, Rockwell Retirement Savings Plan for Certain Employees,
Allen-Bradley Employee Savings and Investment Plans And Reliance Electric
Company Savings and Investment Plan).
You should note that telephone voting has been made available to you. Please
follow the telephone instructions on the Direction Card or sign, date and return
the Direction Card in the enclosed pre-addressed stamped envelope by January
30, 1998 so that we may vote the shares of Rockwell International Corporation
that are held for your account in accordance with your instructions. If you do
not properly complete you telephone vote or properly complete and return the
enclosed Direction Card by the above date, Wells Fargo Bank, N.A., as Trustee,
will vote such shares as it deems proper.
Sincerely,
/s/ SUSANA R. RYAN
Susana R. Ryan
Vice President
<PAGE> 25
DIRECTION CARD
ROCKWELL INTERNATIONAL CORPORATION SAVINGS PLAN
TO: WELLS FARGO BANK, N.A., TRUSTEE
You are hereby directed to vote, with respect to the proposals listed on
the other side of this Direction Card, the number of shares of Rockwell capital
stock held for my account in the Rockwell International Corporation Savings Plan
at the Annual Meeting of Shareowners of Rockwell International Corporation to be
held at The Westin South Coast Plaza, 686 Anton Boulevard, Costa Mesa,
California, on February 4, 1998, and at any adjournment thereof, as follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS CHECK
THE BOXES FOR EACH PROPOSAL LISTED ON THE OTHER SIDE, THEN SIGN, DATE AND RETURN
CARD.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
================================================================================
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone Telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Mark, sign and date your direction card and return it promptly in the
enclosed envelope.
<PAGE> 26
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
[ x ]
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposal (b) and will vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (a) AND (b).
<TABLE>
<CAPTION>
FOR WITHHOLD
all nominees AUTHORITY to vote
listed for all nominees listed
<S> <C> <C>
(a) The election of four directors-Nominees: [ ] [ ]
01 G.L. Argyros 02 D.H. Davis
03 W.H. Gray 04 W.T. McCormick
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space provided below.)
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(b) The selection of auditors [ ] [ ] [ ]
YES NO
I/we plan to attend the meeting. [ ] [ ]
Please send Admittance Card.
</TABLE>
- ---------------------- -------------------------------- ---------------------
Signature Signature if held jointly Date: , 1998
In signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, please give your
title. When shares are in the name of more than one person each should sign the
proxy. PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
================================================================================
FOLD AND DETACH HERE
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
YOUR TELEPHONE INSTRUCTION WILL AUTHORIZE THE NAMED PROXIES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR DIRECTION CARD
o You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
o After voting your shares you will be asked if you wish to attend the
meeting. If you indicate yes, you will automatically be mailed an admittance
card and DO NOT need to mail in the attached Card.
After entering your Control Number you will hear these instructions.
- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
- --------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9 To WITHHOLD FOR AN INDIVIDUAL nominee,
Press 0 and listen to the instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail
in your direction card.
THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
CALL **TOLL FREE** ON A TOUCH TONE TELEPHONE
1-800-840-1208 - ANYTIME
THERE IS NO CHARGE TO YOU FOR THIS CALL.
<PAGE> 27
DIRECTION CARD
ALLEN-BRADLEY SAVINGS AND INVESTMENT PLAN FOR SALARIED EMPLOYEES
TO: WELLS FARGO BANK, N.A., TRUSTEE
You are hereby directed to vote, with respect to the proposals listed on
the other side of this Direction Card, the number of shares of Rockwell Salaried
capital stock held for my account in the Allen-Bradley Savings and Investment
Plan for Salaried Employees at the Annual Meeting of Shareowners of Rockwell
International Corporation to be held at The Westin South Coast Plaza, 686 Anton
Boulevard, Costa Mesa, California, on February 4, 1998, and at any adjournment
thereof, as follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS CHECK
THE BOXES FOR EACH PROPOSAL LISTED ON THE OTHER SIDE, THEN SIGN, DATE AND RETURN
CARD.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
================================================================================
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone Telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Mark, sign and date your direction card and return it promptly in the
enclosed envelope.
<PAGE> 28
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
[ X ]
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposal (b) and will vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (a) AND (b).
<TABLE>
<CAPTION>
FOR WITHHOLD
all nominees AUTHORITY to vote
listed for all nominees listed
<S> <C> <C>
(a) The election of four directors-Nominees: [ ] [ ]
01 G.L. Argyros 02 D.H. Davis
03 W.H. Gray 04 W.T. McCormick
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space provided below.)
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(b) The selection of auditors [ ] [ ] [ ]
YES NO
I/we plan to attend the meeting. [ ] [ ]
Please send Admittance Card.
</TABLE>
- ---------------------- -------------------------------- ---------------------
Signature Signature if held jointly Date: , 1998
In signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, please give your
title. When shares are in the name of more than one person each should sign the
proxy. PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
================================================================================
* FOLD AND DETACH HERE *
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
YOUR TELEPHONE INSTRUCTION WILL AUTHORIZE THE NAMED PROXIES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR DIRECTION CARD
o You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
o After voting your shares you will be asked if you wish to attend the
meeting. If you indicate yes, you will automatically be mailed an admittance
card and DO NOT need to mail in the attached Card.
After entering your Control Number you will hear these instructions.
- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
- --------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9 To WITHHOLD FOR AN INDIVIDUAL nominee,
Press 0 and listen to the instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail
in your direction card.
THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
CALL **TOLL FREE** ON A TOUCH TONE TELEPHONE
1-800-840-1208 - ANYTIME
THERE IS NO CHARGE TO YOU FOR THIS CALL.
<PAGE> 29
DIRECTION CARD
ALLEN-BRADLEY SAVINGS AND INVESTMENT PLAN FOR NON-REPRESENTED HOURLY EMPLOYEES
TO: WELLS FARGO BANK, N.A., TRUSTEE
You are hereby directed to vote, with respect to the proposals listed on
the other side of this Direction Card, the number of shares of Rockwell capital
stock held for my account in the Allen-Bradley Savings and Investment Plan for
Non-Represented Hourly Employees at the Annual Meeting of Shareowners of
Rockwell International Corporation to be held at The Westin South Coast Plaza,
686 Anton Boulevard, Costa Mesa, California, on February 4, 1998, and at any
adjournment thereof, as follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS CHECK
THE BOXES FOR EACH PROPOSAL LISTED ON THE OTHER SIDE, THEN SIGN, DATE AND RETURN
CARD.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
================================================================================
YOUR VOTE IS IMPORTANT!
YOU CON VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone Telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Mark, sign and date your direction card and return it promptly in the
enclosed envelope.
<PAGE> 30
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
[ X ]
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposal (b) and will vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (a) AND (b).
<TABLE>
<CAPTION>
FOR WITHHOLD
all nominees AUTHORITY to vote
listed for all nominees listed
<S> <C> <C>
(a) The election of four directors-Nominees: [ ] [ ]
01 G.L. Argyros 02 D.H. Davis
03 W.H. Gray 04 W.T. McCormick
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space provided below.)
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(b) The selection of auditors [ ] [ ] [ ]
YES NO
I/we plan to attend the meeting. [ ] [ ]
Please send Admittance Card.
</TABLE>
- ---------------------- -------------------------------- --------------------
Signature Signature if held jointly Date: , 1998
In signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, please give your
title. When shares are in the name of more than one person each should sign the
proxy. PLEASE SIGN, DATE, AND RETURN THE DIRECTION CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
==============================================================================
FOLD AND DETACH HERE
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
YOUR TELEPHONE INSTRUCTION WILL AUTHORIZE THE NAMED PROXIES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR DIRECTION CARD
o You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
o After voting your shares you will be asked if you wish to attend the
meeting. If you indicate yes, you will automatically be mailed an admittance
card and DO NOT need to mail in the attached Card.
After entering your Control Number you will hear these instructions.
- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
- --------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9 To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to
the instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail
in your direction card.
THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
CALL **TOLL FREE** ON A TOUCH TONE TELEPHONE
1-800-840-1208 - ANYTIME
THERE IS NO CHARGE TO YOU FOR THIS CALL.
<PAGE> 31
DIRECTION CARD
ALLEN-BRADLEY SAVINGS AND INVESTMENT PLAN FOR REPRESENTED HOURLY EMPLOYEES
TO: WELLS FARGO BANK, N.A., TRUSTEE
You are hereby directed to vote, with respect to the proposals listed on
the other side of this Direction Card, the number of shares of Rockwell capital
stock held for my account in the Allen-Bradley Savings and Investment Plan for
Represented Hourly Employees at the Annual Meeting of Shareowners of Rockwell
International Corporation to be held at The Westin South Coast Plaza, 686 Anton
Boulevard, Costa Mesa, California, on February 4, 1998, and at any adjournment
thereof, as follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS CHECK
THE BOXES FOR EACH PROPOSAL LISTED ON THE OTHER SIDE, THEN SIGN, DATE AND
RETURN CARD.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
==============================================================================
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone Telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Mark, sign and date your direction card and return it promptly in the
enclosed envelope.
<PAGE> 32
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
[ X ]
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposal (b) and will vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (a) AND (b).
<TABLE>
<CAPTION>
FOR WITHHOLD
all nominees AUTHORITY to vote
listed for all nominees listed
<S> <C> <C>
(a) The election of four directors-Nominees: [ ] [ ]
01 G.L. Argyros 02 D.H. Davis
03 W.H. Gray 04 W.T. McCormick
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space provided below.)
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(b) The selection of auditors [ ] [ ] [ ]
YES NO
I/we plan to attend the meeting. [ ] [ ]
Please send Admittance Card.
</TABLE>
- ---------------------- -------------------------------- ---------------------
Signature Signature if held jointly Date: , 1998
In signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, please give your
title. When shares are in the name of more than one person each should sign the
proxy. PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
================================================================================
* FOLD AND DETACH HERE *
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
YOUR TELEPHONE INSTRUCTION WILL AUTHORIZE THE NAMED PROXIES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR DIRECTION CARD
o You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
o After voting your shares you will be asked if you wish to attend the
meeting. If you indicate yes, you will automatically be mailed an
admittance card and DO NOT need to mail in the attached Card.
After entering your Control Number you will hear these instructions.
- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
- --------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9 To WITHHOLD FOR AN INDIVIDUAL nominee,
Press 0 and listen to the instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail
in your direction card.
THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
CALL **TOLL FREE** ON A TOUCH TONE TELEPHONE
1-800-840-1208 - ANYTIME
THERE IS NO CHARGE TO YOU FOR THIS CALL.
<PAGE> 33
DIRECTION CARD
RELIANCE ELECTRIC COMPANY SAVINGS AND INVESTMENT PLAN
TO: WELLS FARGO BANK, N.A., TRUSTEE
You are hereby directed to vote, with respect to the proposals listed on
the other side of this Direction Card, the number of shares of Rockwell capital
stock held for my account in the Reliance Electric Company Savings and
Investment Plan at the Annual Meeting of Shareowners of Rockwell International
Corporation to be held at The Westin South Coast Plaza, 686 Anton Boulevard,
Costa Mesa, California, on February 4, 1998, and at any adjournment thereof, as
follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS CHECK
THE BOXES FOR EACH PROPOSAL LISTED ON THE OTHER SIDE, THEN SIGN, DATE AND RETURN
CARD.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
================================================================================
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone Telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Mark, sign and date your direction card and return it promptly in the
enclosed envelope.
<PAGE> 34
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
[ x ]
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposal (b) and will vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (a) AND (b).
<TABLE>
<CAPTION>
FOR WITHHOLD
all nominees AUTHORITY to vote
listed for all nominees listed
<S> <C> <C>
(a) The election of four directors-Nominees: [ ] [ ]
01 G.L. Argyros 02 D.H. Davis
03 W.H. Gray 04 W.T. McCormick
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space provided below.)
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(b) The selection of auditors [ ] [ ] [ ]
YES NO
I/we plan to attend the meeting. [ ] [ ]
Please send Admittance Card.
</TABLE>
- ---------------------- -------------------------------- ---------------------
Signature Signature if held jointly Date: , 1998
In signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, please give your
title. When shares are in the name of more than one person each should sign the
proxy. PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
================================================================================
FOLD AND DETACH HERE
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
YOUR TELEPHONE INSTRUCTION WILL AUTHORIZE THE NAMED PROXIES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR DIRECTION CARD
o You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
o After voting your shares you will be asked if you wish to attend the
meeting. If you indicate yes, you will automatically be mailed an admittance
card and DO NOT need to mail in the attached Card.
After entering your Control Number you will hear these instructions.
- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
- --------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9 To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to
the instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail
in your direction card.
THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
CALL **TOLL FREE** ON A TOUCH TONE TELEPHONE
1-800-840-1208 - ANYTIME
THERE IS NO CHARGE TO YOU FOR THIS CALL.
<PAGE> 35
DIRECTION CARD
ROCKWELL SAVINGS PLAN FOR CERTAIN EMPLOYEES
TO: WELLS FARGO BANK, N.A., TRUSTEE
You are hereby directed to vote, with respect to the proposals listed on
the other side of this Direction Card, the number of shares of Rockwell capital
stock held for my account in the Rockwell Savings Plan for Certain Employees at
the Annual Meeting of Shareowners of Rockwell International Corporation to be
held at The Westin South Coast Plaza, 686 Anton Boulevard, Costa Mesa,
California, on February 4, 1998, and at any adjournment thereof, as follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS CHECK
THE BOXES FOR EACH PROPOSAL LISTED ON THE OTHER SIDE, THEN SIGN, DATE AND RETURN
CARD.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
================================================================================
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone Telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Mark, sign and date your direction card and return it promptly in the
enclosed envelope.
<PAGE> 36
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
[ x ]
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposal (b) and will vote in
accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (a) AND (b).
<TABLE>
<CAPTION>
FOR WITHHOLD
all nominees AUTHORITY to vote
listed for all nominees listed
<S> <C> <C>
(a) The election of four directors-Nominees: [ ] [ ]
01 G.L. Argyros 02 D.H. Davis
03 W.H. Gray 04 W.T. McCormick
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name
in the space provided below.)
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
(b) The selection of auditors [ ] [ ] [ ]
YES NO
I/we plan to attend the meeting. [ ] [ ]
Please send Admittance Card.
</TABLE>
- ---------------------- -------------------------------- ---------------------
Signature Signature if held jointly Date: , 1998
In signing as attorney, executor, administrator, trustee or guardian, please
give full title as such, and, if signing for a corporation, please give your
title. When shares are in the name of more than one person each should sign the
proxy. PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
================================================================================
FOLD AND DETACH HERE
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
YOUR TELEPHONE INSTRUCTION WILL AUTHORIZE THE NAMED PROXIES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR DIRECTION CARD
o You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
o After voting your shares you will be asked if you wish to attend the
meeting. If you indicate yes, you will automatically be mailed an admittance
card and DO NOT need to mail in the attached Card.
After entering your Control Number you will hear these instructions.
- --------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
- --------------------------------------------------------------------------------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
- --------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9 To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to
the instructions
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
- --------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail
in your direction card.
THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
CALL **TOLL FREE** ON A TOUCH TONE TELEPHONE
1-800-840-1208 - ANYTIME
THERE IS NO CHARGE TO YOU FOR THIS CALL.
