UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended June 30, 1994
Commission File Number 1-1511
FEDERAL-MOGUL CORPORATION
(Exact name of Registrant as specified in its charter)
Michigan 38-0533580
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26555 Northwestern Highway, Southfield, Michigan 48034
(Address of principal executive offices) (Zip Code)
(810) 354-7700
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Common Stock: 35,536,910 shares as August 8, 1994<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
- - ------------------------------
Item 1. Financial Statements
<TABLE>
<CAPTION>
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings (Unaudited)
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30 June 30
------------------- ----------------
1994 1993 1994 1993
---- ---- ---- ----
(Millions of Dollars, Except Per Share Amounts)
Net sales $474.8 $401.8 $935.1 $812.3
Cost of products sold 369.9 323.0 733.6 654.6
Selling, distribution and 64.9 56.6 129.6 113.7
administrative expenses ------ ------ ------ ------
Operating earnings 40.0 22.2 71.9 44.0
Other income (expense):
Amortization of
intangible assets (2.3) (2.2) (4.5) (4.2)
Interest expense (4.2) (5.8) (9.3) (14.3)
Interest income 2.1 1.6 3.8 3.6
International currency
exchange losses (2.7) (.7) (5.4) (1.8)
Gain on sale of business - 4.9 - 4.9
Other, net - 2.4 .6 2.7
------ ------ ------ ------
Earnings Before Income Taxes 32.9 22.4 57.1 34.9
Income taxes 12.5 7.1 21.7 12.1
------ ------ ------ ------
Net Earnings 20.4 15.3 35.4 22.8
Preferred stock dividends,
net of tax benefits 2.3 2.3 4.6 4.6
------ ------ ------ ------
Net Earnings Available
for Common Shares $ 18.1 $ 13.0 $ 30.8 $ 18.2
====== ====== ====== ======
Earnings Per Common Share
Primary $ .50 $ .47 $ .89 $ .72
====== ====== ====== ======
Fully Diluted $ .47 $ .43 $ .84 $ .69
====== ====== ====== ======
See accompanying notes.<PAGE>
<PAGE> 3
</TABLE>
<TABLE>
<CAPTION>
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Millions of Dollars)
<S> <S> <S>
June 30, December 31,
1994 1993
-------- ------------
(Unaudited)
Assets
- - ------
Current Assets:
Cash and equivalents $ 22.6 $ 24.2
Accounts receivable 255.1 186.9
Inventories 318.6 322.3
Prepaid expenses and income tax benefits 42.2 40.6
Total Current Assets 638.5 574.0
Property, Plant and Equipment 422.6 399.8
Intangible Assets 202.2 199.3
Business Investments and Other Assets 118.5 118.7
-------- --------
Total Assets $1,381.8 $1,291.8
Liabilities and Shareholders' Equity
- - ------------------------------------
Current Liabilities:
Short-term debt $ 42.5 $ 39.2
Accounts payable 128.3 94.5
Accrued compensation 39.2 31.7
Other accrued liabilities 117.7 117.9
Total Current Liabilities 327.7 283.3
Long-Term Debt 192.8 382.5
Postretirement Benefits Other than Pensions 153.2 149.9
Other Accrued Liabilities 94.7 92.0
Deferred Income Taxes 9.5 13.0
Total Liabilities 777.9 920.7
Shareholders' Equity:
Series D preferred stock 76.6 76.6
Series C ESOP preferred stock 60.2 60.2
Unearned ESOP compensation (41.5) (44.6)
Common stock 177.6 147.5
Additional paid-in capital 284.6 117.2
Retained earnings 67.9 46.4
Currency translation and other (21.5) (32.2)
------- -------
Total Shareholders' Equity 603.9 371.1
------- -------
Total Liabilities and Shareholders'
Equity $1,381.8 $1,291.8
======== ========
</TABLE>
See accompanying notes.<PAGE>
<PAGE> 4
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Condensed Consolidated Statements of Cash Flows (Unaudited)
<S> <C> <C>
Six Months Ended
June 30,
1994 1993
---- ----
(Millions of Dollars)
Cash Provided From Operating Activities $ 31.3 $ 18.9
Cash Provided From (Used By) Investing Activities
Expenditures for property, plant and equipment (34.2) (23.0)
Proceeds from sale of business investment .4 16.4
Business investments and other 2.9 (6.6)
------ ------
Net Cash Used By Investing Activities (30.9) (13.2)
Cash Provided From (Used By) Financing Activities
Issuance of common stock 196.8 116.7
Net decrease in debt (185.3) (148.8)
Sale of accounts receivable - 39.6
Dividends (13.8) (11.6)
Other .3 1.4
------ ------
Net Cash Used By Financing Activities (2.0) (2.7)
------ ------
Increase (Decrease) in Cash and Equivalents (1.6) 3.0
Cash and Equivalents at Beginning of Period 24.2 19.1
------ ------
Cash and Equivalents at End of Period $ 22.6 $ 22.1
====== ======
</TABLE>
See accompanying notes.<PAGE>
<PAGE> 5
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1994
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
three and six month periods ended June 30, 1994 are not
necessarily indicative of the results that may be expected for
the year ended December 31, 1994. For further information,
refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K
for the year ended December 31, 1993.
Certain items in the prior period financial statements have
been reclassified to conform with the presentation used in
1994.
2. ISSUANCE OF COMMON STOCK
------------------------
In February 1994, Federal-Mogul sold in a public offering
5,750,000 shares of its common stock which generated net
proceeds of $191 million. The Company used approximately $190
million of the net proceeds from the offering to repay bank
debt outstanding, including debt incurred for the acquisition
of SPX Corporation's automotive aftermarket business in
October 1993.
3. EARNINGS PER COMMON SHARE
-------------------------
The computation of primary earnings per share is based on the
weighted average number of outstanding common shares during
the period plus, when their effect is dilutive, common stock
equivalents consisting of certain shares subject to stock
options. Fully diluted earnings per share additionally
assumes the conversion of outstanding Series C ESOP and Series
D preferred stock and the contingent issuance of common stock
to satisfy the Series C ESOP preferred stock redemption price
guarantee. The number of contingent shares used in the fully
diluted calculation is based on the common stock market price
on June 30, 1994, and the number of preferred shares held by
the Employee Stock Ownership Plan (ESOP) that were allocated
to participants' accounts as of June 30 of each of the
respective years.
<PAGE>
<PAGE> 6
The primary weighted average number of common and equivalent
shares outstanding (in thousands) was 35,855 and 34,428 for
the three and six month periods ended June 30, 1994, and
27,809 and 25,105 for the three and six month periods ended
June 30, 1993. The fully diluted weighted average number of
common and equivalent shares outstanding (in thousands) was
42,241 and 40,820 for the three and six month periods ended
June 30, 1994 and 34,271 and 31,602 for the three and six
month periods ended June 30, 1993, respectively.
Net earnings used in the computations of primary earnings per
share are reduced by preferred stock dividend requirements.
Net earnings used in the computation of fully diluted earnings
per share are reduced by amounts representing the additional
after-tax contribution that would be necessary to meet ESOP
debt service requirements under an assumed conversion of the
Series C ESOP preferred stock.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
THREE MONTHS ENDED JUNE 30, 1994 COMPARED WITH THREE MONTHS
ENDED JUNE 30, 1993
Sales for the quarter ended June 30, 1994 totalled $474.8
million as compared to $401.8 million for the same 1993
quarter. The 18.2 percent increase was largely attributable
to increased aftermarket sales due to the Company's
acquisition of Sealed Power Replacement ("SPR") automotive
aftermarket business in October, 1993. Base North American
aftermarket sales were relatively flat on a quarter-to-quarter
basis. Domestic original equipment sales increased as a
result of continued strength in North American auto builds and
better than expected European vehicle production. Overall,
1994 second quarter sales to original equipment customers
increased approximately $26 million over the same quarter in
1993.
Operating earnings for the quarter increased $17.8 million
over the same 1993 quarter to $40 million, or 8.4 percent of
sales. The 80 percent improvement resulted primarily from
higher than average F-M margins on product lines obtained as
part of the SPR acquisition, and cost savings from the
integration of aftermarket businesses acquired during the last
two years. Global sourcing activities and manufacturing
productivity gains also favorably impacted margins.
Pretax earnings for the 1994 second quarter were $32.9
million, an improvement from the $22.4 million level achieved
in the same 1993 period. Net earnings amounted to $20.4
million or $.47 per common share for 1994 as compared to $15.3
million or $.43 per common share for the second quarter of
1993.
The 1993 second quarter was enhanced by the Company's sale of
the net assets and business of its non-strategic Westwind Air
Bearings Ltd. (Westwind) subsidiary. The sale of Westwind
resulted in a second quarter gain of $4.7 million or $.15 per
common share, on a fully diluted basis.
<PAGE>
<PAGE> 7
SIX MONTHS ENDED JUNE 30, 1994 COMPARED WITH SIX MONTHS ENDED
JUNE 30, 1993
Sales for the six month period ended June 30, 1994 were $935.1
million compared to $812.3 million for the first half of 1993.
Nearly all product lines contributed to the 15.1 percent sales
improvement, with the largest increases the result of the SPR
aftermarket business acquisition. Aftermarket sales in the
first half of 1994 exceeded comparable 1993 sales in excess of
$85 million, or 17 percent.
Net earnings were $35.4 million, or $.84 per common share for
the first half of 1994, as compared to 1993 earnings of $22.8
million, or $.69 per common share.
LIQUIDITY AND SOURCES OF CAPITAL
- - --------------------------------
Cash flows from operations were $31.3 million for the six
month period ended June 30, 1994 as compared to $18.9 million
in the comparable period of 1993. Comparative year-to-year
changes include the six month net earnings increase offset by
an increase in accounts receivable as a result of the higher
sales volume attained in 1994 and the seasonally low level of
accounts receivable at December 31. Spending against
rationalization reserves totaled approximately $21 million in
1994 and $9 million in 1993.
Net cash used by investing activities in 1994 included
significant property, plant and equipment expenditures
incurred to facilitate the change process in manufacturing,
the continuing consolidation of former SPR facilities, and new
product introduction in original equipment markets. The
Company believes cash from operations will fund all capital
expenditures in 1994.
In February 1994, the Company issued 5.75 million shares of
common stock which generated net proceeds of $191 million.
The proceeds were used to repay debt outstanding. In 1993,
the sale of 6.25 shares of common stock, the disposition of
the Westwind business and the $40 million sale and
securitization of certain trade receivables enabled the
Company to reduce its debt outstanding by $148.8 million from
December 31, 1992.
<PAGE>
<PAGE> 8
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders.
The Corporation held its Annual Meeting of Shareholders
on May 11, 1994, at which the shareholders considered and
voted on (i) the election of eight directors, (ii) the
approval of certain amendments to the Corporation's
Supplemental Compensation Plan, (iii) the approval of the
Corporation's Non-Employee Director Stock Award Plan, and
(iv) the approval of the appointment of Ernst & Young as
independent accountants for 1994.
Each of the nominees for director at the meeting was an
incumbent and all nominees were elected. The following
table sets forth the number of shares voted for and
withheld with respect to each nominee:
Nominee Votes For Votes Withheld
D. J. Gormley 33,940,376 181,827
J. J. Fannon 33,902,771 181,827
R. M. Hills 33,912,488 172,110
A. Madero 33,905,513 179,085
W. J. McCarthy, Jr. 33,917,500 167,098
Robert S. Miller, Jr. 33,913,952 170,646
J. C. Pope 33,890,561 194,037
H. M. Sekyra 33,884,745 199,853
The amendment to the 1977 Supplemental Compensation Plan
was approved. The results of the voting were as follows:
For Against Abstain
30,170,170 1,564,221 442,730
The Federal-Mogul Corporation Non-Employee Director Stock
Award Plan was approved. The results of the voting were
as follows:
For Against Abstain
29,493,973 2,113,898 569,250
The appointment of Ernst & Young LLP as independent
accountants for 1994 was approved. The results of the
voting were as follows:
For Against Abstain
33,726,597 140,441 217,560
<PAGE>
<PAGE> 9
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
4.11 Revolving Credit and Competitive Advance
Facility Agreement dated as of June 30,
1994 among the Corporation, various banks
and Chemical Bank, as administrative
agent, filed as Exhibit 4.11 to a Pre-
Effective Amendment No. 1 to a
Registration Statement on Form S-3, No.
33-54717 dated as of August 3, 1994.
10.27 Federal-Mogul Corporation 1977
Supplemental Compensation Plan, as
amended, filed herewith.
10.28 Federal-Mogul Corporation Non-Employee
Director Stock Plan, filed as Exhibit 4 to
the Corporation's Registration Statement
on Form S-8, No. 33-54301 dated June 24,
1994 and incorporated herein by reference.
11.1 Statement Re: Computation of Per Share
Earnings for the three months ended June
30, 1994, filed herewith.
11.2 Statement Re: Computation of Per Share
Earnings for the six months ended June 30,
1994, filed herewith.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for
which this report is filed.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FEDERAL-MOGUL CORPORATION
By: /s/ James B. Carano
--------------------------
James B. Carano
Vice President and Controller,
Chief Accounting Officer
Dated: August 11, 1994
<PAGE>
EXHIBIT 10.27 - FEDERAL-MOGUL CORPORATION 1977
SUPPLEMENTAL COMPENSATION PLAN
FEDERAL-MOGUL CORPORATION
1977 SUPPLEMENTAL COMPENSATION PLAN
As Amended and Restated Effective as of
January 1, 1994
Federal-Mogul Corporation, a Michigan corporation
with principal offices in Southfield, Michigan, adopted
the Federal-Mogul Corporation 1977 Supplemental
Compensation Plan (the "Plan") in 1977. By resolutions
adopted at its meeting on November 30, 1983, the Board of
Directors of the Corporation amended the Plan effective
January 1, 1984. The Plan was amended and restated
effective January 1, 1986 to reflect a February 6, 1985
Board amendment to the charter of the Compensation
Committee, deleting the requirement that it approve
awards of Supplemental Compensation (and the formula for
determining the amount of such awards) for Management
Employees. The Plan was amended and restated again,
effective February 4, 1988, to eliminate any deferral of
payment of awards granted hereunder. The Board of
Directors on February 9, 1994 approved the amendment and
restatement of the Plan effective January 1, 1994 to
eliminate stock payments under the Plan and to comply
with the performance goal requirements of Section 162(m)
of the Internal Revenue Code of 1986, as amended.
1. Purposes of Plan. The purposes of the Plan are
to provide personal incentive and financial reward to
Management, Executive Group and Advisory Board Employees
who, because of the extent of their responsibilities, can
and do make significant contributions to the success of
the Corporation by their ability, industry, loyalty and
exceptional services, by making them participants in that
success.
2. Definitions; Number and Gender.
a. "Advisory Board Employee" shall mean an
Employee who is a member of the Corporation's Advisory
Board, but excluding for purposes of this Plan Employees
who are also members of the Executive Group, as defined
below.
b. "Board": shall mean the Board of
Directors of the Corporation.
c. "Code" shall mean the Internal Revenue
Code of 1986, as amended.
d. "Compensation Committee" shall mean the
committee of two or more outside directors, as defined in
Section 162(m) of the Code, that is appointed by the
Board to administer the Plan.
<PAGE>
e. "Corporation" shall mean Federal-Mogul
Corporation, a Michigan corporation, and its consolidated
subsidiaries.
f. "Designated Beneficiary" shall mean the
person or persons designated by the Employee on a form
prescribed by the Corporation as the person or persons to
whom any amounts are payable under this Plan if the
Employee dies before such amounts have been paid.
g. "Earnings Per Share" shall mean the
Corporation's Primary Earnings per share of common stock
as reported in the annual report to shareholders.
h. "Employee" shall mean a person
(including an officer, but not an outside director),
regularly employed by Federal-Mogul Corporation or one or
its domestic subsidiaries on a full-time salaried basis.
i. "Executive Group Employee" shall mean
the Chief Executive Officer and the four next most highly
compensated executive officers.
j. "Management Committee" shall mean the
Policy Committee established by the Corporation.
k. "Management Employee" shall mean an
Employee who is not an Executive Group or Advisory Board
Employee but whose annual basic salary and salary grade
on January 1 of each year equal or exceed the minimum
established by the Management Committee for that year.
l. "Plan" shall mean the January 1, 1994
amendment and restatement of the Federal-Mogul
Corporation 1977 Supplemental Compensation Plan, as it
may be amended from time to time.
m. "Representative" shall mean any
Designated Beneficiary of an Employee or the conservator
or guardian of the estate of any incapacitated Employee,
or if no Designated Beneficiary was named at the time,
the personal representative, executor or administrator of
the estate of any deceased Employee, his trustee, or the
person to whom the Employee's personal property shall
have passed by will or the laws of descent and
distribution.
n. "Retirement" shall mean cessation of
employment with the Corporation under one of the forms of
retirement set forth in the Federal-Mogul Corporation
Retirement Plan for Salaried Employees (as such plan may
be amended from time to time) or such other form of
retirement as may be determined by the Board or the
Compensation Committee.
<PAGE>
o. "Return on Beginning Equity" shall mean
the percent figure resulting from dividing the
Corporation's net earnings for a year (as reported int he
annual report to shareholders for that year) by the
Corporation's total shareholders' equity as of the last
day of the immediately preceding year (as reported in
such annual report).
Other terms shall have the respective meaning given
them in other sections of the Plan.
Wherever words are used in this Plan in the singular
form, they shall, where appropriate, be construed so as
to include the plural. Wherever masculine pronouns are
used in this Plan, they shall be construed so as to
include the feminine gender as well.
3. Plan Formulae.
a. Executive Group Employees. Prior to
April 1, 1994 for 1994 calendar year awards, prior to
December 31, 1994 for 1995 calendar awards and prior to
December 31 of each succeeding calendar year, the
Compensation Committee shall establish the annual
performance goal targets under the Plan for Executive
Group Employees. The performance goal targets must be
objective and substantially uncertain to be met at the
time that they are set and shall be based on one or more
of the following criteria: earnings per share; return on
investments; return on equity; cash flow and specific
increases in productivity. Once set by the Compensation
Committee, the annual performance goal targets shall be
ratified by the Board. No Executive Group Employee's
annual award may exceed three times his annual base
salary for the calendar year immediately preceding the
calendar year of the award. Although the Compensation
Committee does not have the authority to change the
criteria on which the performance goals are based without
shareholder approval, it shall have the authority to
change the targets on an annual basis.
b. Advisory Board Employees. The
Compensation Committee shall establish a Plan formula
each year not later than March 31 to determine the amount
available for awards to Advisory Board Employees who are
not also Executive Group Employees. The formula for the
Advisory Board Employees shall contain a profit objective
(the "Standard Return") expressed as a Return on
Beginning Equity for that year. Once the Advisory Board
formula has been established by the Compensation
Committee, it must be submitted, together with the (i)
current proposed Return on Beginning Equity objective,
(ii) associated maximum award amount, and (iii) schedule
of maximum award amounts for returns greater or lesser
than such objectives, to the Board for approval.
c. Management Employees. The Management
Committee shall establish a Plan formula each year not
later than March 31 to determine the amount available and
the amount to be paid for awards to Management Employees.
Board approval is not required for the Management
Employee formulae.
d. Awards Adjustment. Neither the
Compensation Committee nor the Management Committee shall
be obliged to make awards totalling the full amounts that
their formulae produce. Any unused portion may, except
to the extent otherwise directed by the Committees, be
carried forward and may be available in a future year or
years.
4. Eligibility.
a. Employees who make significant
contributions to the success of the Corporation, in the
sole discretion of the Compensation Committee in the case
of Executive Group and Advisory Board Employees, and in
the sole discretion of the Management Committee in the
case of Management Employees, shall be eligible for
consideration for Plan awards.
b. Consideration may be given to
recommendations of awards to individuals who do not meet
the foregoing eligibility requirements but who have made
unusual contributions to the success of the Corporation <PAGE>
during the year or are regarded as outstanding candidates
for greater responsibilities in the future.
c. In the event employment ceases during
the year for any reason other than misconduct,
dishonesty, or insubordination, or if an Employee has
been on a leave of absence during the year, he may be
considered for an award, the amount of which shall depend
upon his contribution during the year to the success of
the Corporation.
5. Administration of Plan. Full power and
authority to construe, interpret and administer the Plan
shall be vested in the Compensation Committee, except to
the extent such power and authority are otherwise herein
specifically given to the Management Committee. Either
the Management Committee or the Compensation Committee
may alter any determination it has made under Section 3
before awards are paid for any year, provided that such
administrative action would further the purposes of the
Plan and that Board approval is obtained for Compensation
Committee actions. Notwithstanding the foregoing, awards
to Executive Group Employees only may be reduced, in
accordance with Section 162(m) of the Code. These
adjustments shall include, but are not limited to:
a. adjusting either or both of the
Committees' respective (i) profit objectives, and (ii)
Plan formulae, which had been determined for that year as
provided in Section 3 of the Plan, and
<PAGE>
b. adding to or subtracting from the amount
available for awards under the formulae for that year
such sum or sums as the respective Committees may
determine.
6. Recommendation for Awards. The Compensation
Committee and Management Committee shall have sole
discretion with respect to the determination of their
respective awards, except that awards to Advisory Board
Employees must be approved by the Board, and awards to
Executive Group Employees must be ratified by the Board.
Recommendations for Advisory Board and Management
Employee awards shall be made to both Committees by the
Chief Executive Officer of the Corporation under such
procedures as may be prescribed by the Committees.
However, the Chief Executive Officer shall not make a
recommendation with respect to himself or the other
members of the Executive Group. The awards for the Chief
Executive Officer and the other Executive Group Employees
shall be determined by the Compensation Committee,
subject to ratification by the Board.
7. Form and Payment of Awards. Awards to
Advisory Board and Management Employees shall be made
when it can be determined with reasonable certainty that
there are or shall be sufficient amounts available under
the provisions of Section 3 of the Plan. Awards to
Executive Group Employees shall be made only when the
Compensation Committee has certified that the performance
goal targets have been attained. Awards shall be made in
cash and shall be payable in a lump sum.
All awards shall be paid from the general funds of
the Corporation and no special or separate fund shall be
established and no other segregation of assets shall be
made to assure the payment of awards hereunder. An
Employee shall have no right, title, or interest whatever
in or to any investments which the Corporation may make
to aid it in meeting its obligations hereunder. Nothing
contained in this instrument, and no action taken
pursuant to its provisions, shall create or be construed
to create a trust of any kind, or a fiduciary
relationship, between the Corporation and an Employee or
any other person. To the extent that any person acquires
a right to receive payments from the Corporation, such
right shall be no greater than the right of an unsecured
creditor.
If an Employee dies or becomes incapacitated, any
award so made shall be paid to his Representative at such
time an in such manner as if he were living or not
incapacitated.
8. Modification or Suspension. The Corporation
shall have the right from time to time to modify,
suspend, or terminate the Plan.
9. Amendment. The Board retains the authority
to amend the Plan, subject to the shareholder approval
requirements of Section 162(m) of the Code.
10. Effective Date. The amended and restated
Plan shall be effective with the fiscal year beginning
January 1, 1994. No awards under the Plan shall be
payable to Executive Group Employees unless the amended
and restated Plan receives shareholder approval at the
Corporation's 1994 annual meeting.
IN WITNESS WHEREOF, Federal-Mogul Corporation has
caused this amendment and restatement to be executed by
an appropriate officer as of the ------day of--------,
1994.
FEDERAL-MOGUL CORPORATION
By:
------------------------
Its:
------------------
Subscribed in the presence of:
EXHIBIT 11.1 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
FOR THE THREE MONTHS ENDED PRIMARY FULLY DILUTED
JUNE 30 1994 1993 1994 1993
- - -------------------------- ------------ -------------
EARNINGS: (In Millions)
Net earnings $ 20.4 $ 15.3 $ 20.4 $ 15.3
Series C preferred dividend requirements (.7) (.7)
Series D preferred dividend requirements (1.6) (1.6)
Additional required ESOP contribution (1) (.6) (.6)
------ ------ ------ ------
Net earnings available for common
and equivalent shares $ 18.1 $ 13.0 $ 19.8 $ 14.7
====== ====== ====== ======
WEIGHTED AVERAGE SHARES: (In Millions)
Common shares outstanding 35.5 27.8 35.5 27.8
Dilutive stock options outstanding .4 .4 .1
Conversion of Series C preferred stock (3) 1.9 1.9
Contingent issuance of common stock to
satisfy the redemption price guarantee (2)(4) .1 .1
Conversion of Series D preferred stock (3) 4.4 4.4
------ ------ ------ ------
Common and equivalent shares outstanding 35.9 27.8 42.3 34.3
PER COMMON AND EQUIVALENT SHARE: $ .50 $ .47 $ .47 $ .43
====== ====== ====== ======
(1) Amount represents the additional after-tax contribution that would be necessary to meet the
ESOP debt service requirements under an assumed conversion of the Series C preferred stock.
(2) Calculations consider the June 30, 1994 common stock market price in accordance with Emerging
Issues Task Force Abstract No. 89-12.
(3) Amount represents the weighted average number of common shares issued assuming conversion of
preferred stock outstanding.
(4) Amount represents the additional number of common shares that would be issued in order to satisfy
the Series C preferred stock redemption price guarantee. This calculation considers only the number of
preferred shares held by the ESOP that have been allocated to participants' accounts as of June 30,
of the respective years.
</TABLE>
<TABLE>
EXHIBIT 11.2 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
< CAPTION>
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
<S> <C> <C>
FOR THE SIX MONTHS ENDED PRIMARY FULLY DILUTED
JUNE 30 1994 1993 1994 1993
- - ------------------------- --------------- ---------------
EARNINGS: (In Millions)
Net earnings $ 35.4 $ 22.8 $ 35.4 $ 22.8
Series C preferred dividend requirements (1.5) (1.5)
Series D preferred dividend requirements (3.1) (3.1)
Additional required ESOP contribution (1) (1.1) (1.1)
------ ------ ------ ------
Net earnings available for common
and equivalent shares $ 30.8 $ 18.2 $ 34.3 $ 21.7
====== ====== ====== ======
WEIGHTED AVERAGE SHARES: (In Millions)
Common shares outstanding 34.0 25.1 34.0 25.1
Dilutive stock options outstanding .4 .4 .1
Conversion of Series C preferred stock (3) 1.9 1.9
Contingent issuance of common stock to
satisfy the redemption price guarantee (2)(4) .1 .1
Conversion of Series D preferred stock (3) 4.4 4.4
------ ------ ------ ------
Common and equivalent shares outstanding 34.4 25.1 40.8 31.6
====== ====== ====== ======
PER COMMON AND EQUIVALENT SHARE: $ .89 $ .72 $ .84 $ .69
====== ====== ====== ======
(1) Amount represents the additional after-tax contribution that would be necessary to meet the ESOP
debt service requirements under an assumed conversion of the Series C preferred stock.
(2) Calculations consider the June 30, 1994 common stock market price in accordance with Emerging Issues
Task Force Abstract No. 89-12.
(3) Amount represents the weighted average number of common shares issued assuming conversion of preferred
stock outstanding.
(4) Amount represents the additional number of common shares that would be issued in order to satisfy the
Series C preferred stock redemption price guarantee. This calculation considers only the number of
preferred shares held by the ESOP that have been allocated to participants' accounts as of June 30 of
the respective years.
</TABLE>
