UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997 Commission file number 1-996
OR
( ) TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
GENERAL SIGNAL CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-0445660
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
High Ridge Park,
Box 10010, Stamford, Connecticut 06904-2010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (203) 329-4100
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X
(Yes) (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, par value $1.00 50,203,552
(Class) (Outstanding at April 17, 1997)
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION:
Statement of Earnings -
Three Months Ended March 31, 1997 and 1996 3
Balance Sheet -
As of March 31, 1997 and December 31, 1996 4
Condensed Statement of Cash Flow -
Three Months Ended March 31, 1997 and 1996 6
Notes to Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION: 14
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Statement of Earnings
(In millions, except per-share data)
(Unaudited)
Three Months Ended March 31,
1997 1996
Net sales $505.6 $481.7
-------- -------
Cost of sales 357.3 351.4
Selling, general and administrative
expenses 104.4 102.0
Gain on disposition - - (20.8)
-------- ---------
461.7 432.6
-------- ---------
Operating earnings 43.9 49.1
Interest expense, net 3.4 6.8
-------- ---------
Earnings before income taxes 40.5 42.3
-------- ---------
Income taxes 16.2 16.9
-------- ---------
Net earnings $24.3 $25.4
======== =========
Net earnings per share $0.47 $0.51
======== =========
Dividends declared per share $0.255 $0.24
======== =========
Average shares outstanding 52.2 49.5
======== =========
See accompanying notes to financial statements.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Balance Sheet
(In millions)
(Unaudited) (Audited)
March 31, December 31,
Assets 1997 1996
Current assets:
Cash and cash equivalents $ 40.0 $ 17.7
Accounts receivable, net 352.8 353.0
Inventories, net 247.1 240.6
Prepaid expenses and other
current assets 23.7 24.7
Deferred income taxes 54.4 55.9
------- -------
Total current assets 718.0 691.9
Property, plant and equipment, net of
accumulated depreciation and amortization 305.3 310.0
Intangibles, net of accumulated amortization 372.5 381.3
Other assets 170.0 167.8
------- -------
Total assets $1,565.8 $1,551.0
========= =========
See accompanying notes to financial statements.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Balance Sheet - Continued
(In millions)
(Unaudited) (Audited)
March 31, December 31,
Liabilities and Shareholders' Equity 1997 1996
Current liabilities:
Short-term borrowings and current
maturities of long-term debt $ 8.4 $ 5.6
Accounts payable 189.8 187.3
Accrued expenses 198.0 214.6
Income taxes 26.4 31.7
-------- -------
Total current liabilities 422.6 439.2
-------- -------
Long-term debt, less current maturities 241.8 201.3
Accrued post-retirement and post-employment
obligations 130.7 133.2
Deferred income taxes 20.7 17.3
Other liabilities 18.2 16.2
-------- -------
Total long-term liabilities 411.4 368.0
-------- -------
Shareholders' equity:
Common stock 78.4 78.2
Additional paid-in capital 359.4 337.1
Retained earnings 678.5 667.4
Cumulative translation adjustments (5.5) (1.4)
Common stock in treasury (379.0) (337.5)
-------- --------
Total shareholders' equity 731.8 743.8
-------- --------
Total liabilities and shareholders' equity $1,565.8 $1,551.0
========= =========
See accompanying notes to financial statements.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statement of Cash Flow
(In millions)
(Unaudited)
Three Months Ended
March 31,
1997 1996
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings $ 24.3 $ 25.4
Adjustments to reconcile net earnings
to net cash from operating activities:
Gain on disposition - - (20.8)
Asset write down and other charges - - 19.7
Deferred income taxes 5.5 4.9
Depreciation and amortization 17.7 17.4
Pension credits (3.6) (2.7)
Other, net (0.6) 3.9
Changes in assets and liabilities, net of
effects from acquisitions and divestitures (23.4) (0.7)
------- -------
Net cash from operating activities 19.9 47.1
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Divestitures 2.4 71.8
Capital expenditures (11.5) (11.4)
Other, net 2.5 0.6
Net cash from investing activities (6.6) 61.0
-------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Net change in short and long-term
borrowings 82.6 (83.5)
Dividends paid (13.6) (11.8)
Issuance of common stock 7.2 3.0
Purchase of common stock (67.2) (0.9)
-------- -------
Net cash from financing activities 9.0 (93.2)
-------- -------
Net change in cash and cash equivalents 22.3 14.9
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17.7 1.0
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 40.0 $ 15.9
======== =========
See accompanying notes to financial statements.
GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES
Notes to Financial Statements
(Unaudited)
1. The accompanying unaudited financial statements reflect
all adjustments (consisting of normal, recurring items)
necessary for the fair presentation of results for these
interim periods. These results are based upon generally
accepted accounting principles consistently applied with
those used in the preparation of the company's 1996 Annual
Report on Form 10-K.
2. Certain reclassifications have been made to the 1996
financial statements to conform with the 1997 presentation.
3. Inventories March 31, December 31,
1997 1996
(In millions)
Finished goods $ 76.1 $ 80.8
Work in process 70.4 63.2
Raw material and purchased parts 121.5 117.1
-------- --------
Total FIFO cost 268.0 261.1
Excess of FIFO cost over LIFO
inventory value (20.9) (20.5)
-------- ---------
Net carrying value $ 247.1 $ 240.6
======== =========
4. Business Segment Information Three Months Ended March 31,
1997 1996
(In millions)
Net sales:
Process Controls $ 174.7 $ 173.1
Electrical Controls 236.0 222.6
Industrial Technology 94.9 86.0
-------- --------
$ 505.6 $ 481.7
======== ========
Operating earnings:
Process Controls $ 17.1 $ 38.5 a
Electrical Controls 18.7 10.5 b
Industrial Technology 18.3 7.2 c
-------- --------
Total operating earnings before
unallocated expenses and interest 54.1 56.2
Interest expense, net (3.4) (6.8)
Unallocated expenses (10.2) (7.1)
-------- ---------
Earnings before income taxes $ 40.5 $ 42.3
======== =========
a Includes a $20.8 gain on disposition of Kinney Vacuum
and a charge of $4.0 for product warranty costs.
b Includes an $11.1 charge related to plant closure costs, asset
valuations and environmental costs.
c Includes a $4.6 charge for asset valuations.
5. Property, Plant and Equipment March 31, December 31,
1997 1996
(In millions)
Property, plant and equipment, $ 753.7 $ 747.3
at cost
Accumulated depreciation and
amortization (448.4) (437.3)
---------- --------
Property, plant and equipment,
net $ 305.3 $ 310.0
========== ========
6. Capital Stock
March 31, December 31,
1997 1996
(In millions)
Common stock:
Shares authorized 150.0 150.0
Shares issued 64.8 64.6
Treasury stock:
Shares issued 13.8 13.2
7. Supplemental Information - Statement of Cash Flow
Three Months Ended
March 31,
1997 1996
(In millions)
Cash paid for:
Interest $ 3.9 $ 6.8
Income taxes $ 10.6 $ 4.7
The company had the following non-cash
financing activity:
Conversion of convertible debt
into common stock $ 39.3 $ - -
8. Repurchase of Shares
In December 1996, the Board of Directors approved a stock
buy-back program of up to $100.0 million to offset any
shares issued in relation to the call for the redemption
of the 5.75 percent convertible subordinated notes. These
shares are being purchased systematically in open market
transactions. Through March 31, 1997, 1.7 million shares
had been repurchased under the program. As of April 17,
1997, the program was completed with the total of 2.5
million shares repurchased for $100.0 million.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in millions, except per-share data)
Results of Operations - First Quarter 1997 Compared With First Quarter 1996
1997 1996
Reported Reported Change
Net sales $505.6 $481.7 5.0%
Gross profit 148.3 130.3 13.8%
Selling, general and
administrative expenses 104.4 102.0 2.4%
Operating earnings 43.9 49.1 (10.6%)
Interest expense, net 3.4 6.8 (50.0%)
Net earnings 24.3 25.4 (4.3%)
Net earnings per share $0.47 $0.51 (7.8%)
To facilitate a more meaningful comparison of the results of
operations for the first quarter of 1997 with the same period
in 1996, the following items reported in the first quarter
1996 net earnings should be excluded.
Gain on disposition: In January 1996, the company disposed of
Kinney Vacuum Company, a unit previously included in the
Process Controls sector, for $29.0 and recorded a pre-tax gain
of $20.8. Included in the gain was a LIFO liquidation of
approximately $1.1 and transaction costs of approximately
$0.5.
Product warranty: In March 1996, the company extended
warranty service to certain products sold by the Process
Controls sector which were not covered by warranty. The
company recorded $4.0 to cover the cost of such repairs.
Through March 31, 1997, payments made against this reserve
were $2.2. It is anticipated that the remaining amount will
be expended in 1997.
Capitalized software: The company reviews on an ongoing basis
the carrying amount of company assets. As part of this
review, in the first quarter of 1996, the future market
potential of capitalized software in the Industrial Technology
sector was determined to be impaired. Accordingly the company
wrote off $4.6 of such software.
Factory closure and other: As part of the company's ongoing
review of operations, the company decided in March 1996 to
close a factory in the Electrical Controls sector and provided
$4.7 primarily for lease termination costs, asset write-downs
and severance. In connection with this review, the company
identified property, plant and equipment that will not be
utilized in future operations, and, therefore, recorded a $4.4
charge to write-off the assets.
Environmental: During the first quarter of 1996, the company
changed its estimate of environmental costs to be incurred at
one of its facilities in the Electrical Controls sector. The
change in estimate of $2.0 was a result of additional
information received about the method and extent of
remediation required.
The following table summarizes the results of operations for
the first quarter of 1997 and 1996 excluding the items
discussed above.
1997 1996
Reported Adjusted Change
Net sales $505.6 $481.7 5.0%
Gross profit 148.3 143.3 3.5%
Margin percent 29.3% 29.7%
Selling, general and
administrative expenses 104.4 95.3 9.5%
Percent of sales 20.6% 19.8%
Operating earnings 43.9 48.0 (8.5%)
Interest expense, net 3.4 6.8 (50.0%)
Net earnings 24.3 24.7 (1.6%)
Net earnings per share $0.47 $0.50 (6.0%)
Net sales: Sales increased 5.0 percent over 1996 levels due
to strong sales of electrical distributor and
telecommunications products. International sales in 1997
represented approximately 23 percent of total net sales versus
22 percent in the same period of 1996. Both export and
foreign sales increased approximately 10 percent, versus the
same period last year, primarily as a result of improvements
in international mixer and pump sales.
Process Control sector sales were $174.7 in the first quarter
of 1997 as compared to $173.1 in the same period in 1996. The
small increase was primarily the result of strong
international mixer sales and higher laboratory product sales.
The increases were partially offset by lower sales volume of
crystal growing furnaces as a result of a cyclical downturn in
the semiconductor equipment market in late 1996 and continuing
into 1997.
Sales in the Electrical Controls sector increased 6.0 percent
to $236.0 from $222.6, as compared to the same period last
year. Sales increases were reported by five of the six units
within the sector. The largest improvement was in the
electrical construction materials market. These sales
increases were partially offset by lower fire system sales.
Industrial Technology sector sales increased 10.3 percent to
$94.9 versus $86.0 in the same period in 1996. New networking
product sales of the CD9000TM ESCON Director product as well
as new application sales of an existing networking monitoring
product were the primary reasons for the increase. Increased
demand from North American automotive production also
contributed to the growth.
Gross profit: Gross profit as a percentage of sales decreased
from 29.7 percent to 29.3 percent. The decrease was largely
due to a shift to lower margin products, higher labor costs,
new product development and new information systems costs.
Selling, general and administrative expenses: Selling,
general and administrative expenses as a percentage of sales
increased in the first quarter from 19.8 percent in 1996 to
20.6 percent in 1997. This increase resulted from higher
marketing, sales commissions and information systems costs.
Included in selling, general and administrative expenses were
pension credits of $3.6 in 1997 and $2.7 in 1996.
Operating earnings: Operating earnings for the Process
Controls sector decreased 21.2 percent to $17.1, versus $21.7
in the same period in 1996. The decline is primarily due to a
shift in mix to lower margin products in the pump and coal
feeder systems businesses, and lower volume in the crystal
growing furnace business. 1996 operating earnings of the
Process Controls sector included $0.5 of environmental
insurance recoveries.
Electrical Controls sector operating earnings decreased 13.4
percent to $18.7, versus $21.6 in the same period in 1996.
The reduction was a result of higher manufacturing costs
(primarily uninterruptible power systems and fire systems),
new product development and information systems costs.
Included in 1997 operating earnings is approximately $0.6 of
pre-tax gain on the sale of a product line for approximately
$2.4. 1996 operating earnings of the Electrical Controls
sector included $0.9 of environmental insurance recoveries.
Industrial Technology sector operating earnings increased 55.1
percent to $18.3 versus $11.8 in the same period in 1996. All
units within this sector experienced higher operating
earnings, reflecting the higher sales volume, a shift toward
the higher margin CD9000TM ESCON Director product and
productivity improvements in automotive product lines.
Unallocated expenses increased to $10.2 in the first quarter
of 1997 from $7.1 in the same period in 1996. This increase
is primarily the result of higher expenses due to divested
businesses and higher benefit cost accruals.
Interest expense: Net interest expense decreased 50.0
percent to $3.4 due to the conversion of subordinated notes in
late 1996 and early 1997 as well as lower average debt levels.
Cash generated from operations and divestitures in 1996 was
used to pay down debt incurred in connection with acquisitions
made in 1995.
Net earnings: Net earnings were $24.3 or $0.47 per share in
1997 compared to $24.7 or $0.50 per share in 1996. The
company's effective tax rate was 40.0 percent in both 1997 and
1996.
Financial Condition - March 31, 1997 Compared to December 31, 1996
The following summarizes the cash flow activity for the first
three months of 1997 compared to the first three months of
1996.
1997 1996
Cash flow from operating activities $19.9 $47.1
Divestitures 2.4 71.8
Capital expenditures (11.5) (11.4)
Other investing activities 2.5 0.6
Cash flow from investing activities (6.6) 61.0
Debt borrowings/(repayments) 82.6 (83.5)
Dividends paid (13.6) (11.8)
Purchase of common stock (67.2) (0.9)
Issuance of common stock 7.2 3.0
Cash flow from financing activities 9.0 (93.2)
Included in operating cash flow for 1997 and 1996 were
expenditures of $2.0 and $9.3, respectively, related to
previously divested operations and $1.7 and $2.0,
respectively, for severance pay.
Operating cash flow at March 31, 1997 decreased in comparison
to first quarter 1996 primarily due to higher accounts
receivable balances resulting from the higher sales volume and
lower accrued expenses due to the utilization of disposition
and restructuring accruals, as well as lower earnings.
In December 1996, the company called for the redemption of its
$100.0 5.75 percent convertible subordinated notes. As of
December 31, 1996, notes with a face value of $57.4 had been
converted into 1.5 million shares of the company's common
stock. An additional $39.3 of notes was converted into 1.0
million shares of stock on January 2, 1997, while the
remaining balance of the notes of $3.3 was redeemed for cash.
Also in December 1996, the Board of Directors approved a stock
buy-back program of up to $100.0 to offset the dilutive impact
of shares issued in connection with the convertible notes
redemption. On April 17, 1997, the company concluded the buy-
back program with approximately 2.5 million shares
repurchased.
Total debt-to-total capitalization was 25.5 percent at March
31, 1997, up from 21.8 percent at year-end, due to higher long-
term debt at the end of the first quarter. The debt level
increased in the first quarter of 1997 in order to repurchase
common shares under the stock buy-back program. The company
is well positioned to finance future working capital
requirements and capital expenditures through current earnings
and available credit facilities.
On April 7, 1997, the company sold $25.0 million 7.114 percent
medium-term senior notes that are due on April 8, 2002. On
April 18, 1997, the company sold an additional $25.0 million
7.00 percent medium-term senior notes that are due on October
18, 2000. The proceeds were used to pay down floating rate
commercial paper.
Accounting Policies
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings per Share," which changes the methodology
of calculating earnings per share. SFAS No. 128 requires the
disclosure of diluted earnings per share regardless of its
difference from basic earnings per share. The company plans
to adopt SFAS No. 128 in December 1997. Early adoption is not
permitted. Had the company adopted SFAS No. 128 as of March
31, 1997, the related per share disclosure for both basic and
diluted earnings per share would have been $0.47 for the first
quarter ended March 31, 1997 and $0.51 for the same period for
1996.
Other Matters
Since the company is a producer of capital goods and
equipment, its results can vary with the relative strength of
the economy. Demand for products in the Process Controls
sector follows the demand for capital goods orders. The
Electrical Controls sector depends upon several markets,
principally the nonresidential construction and computer
equipment industries. The Industrial Technology sector
depends on several markets, primarily automotive, mass
transportation, and telecommunications equipment. Mass
transportation depends upon continued federal and local government
spending, and telecommunications is dependent upon continued research and
development and the continued success
of new products. While no one marketplace or industry has a
significant impact on the company's operations or results, the
inherent pace of technological changes presents certain risks
that the company monitors carefully. Success within all of
the company's businesses is dependent upon the timely
introduction and acceptance of new products.
Forward-looking Statements
The company may from time to time make projections concerning
future operations and earnings. The company's forward-looking
statements are based on the company's current expectations,
which are subject to a number of risks and uncertainties that
could materially affect or reduce such operations and
earnings. In addition to the general factors identified in
"Other Matters" above, the primary factors that could
specifically affect the company's expectations include the
failure of: (1) order rates increasing as expected, (2)
productivity improvements meeting or exceeding budget, and (3)
new products under development being produced and accepted as
anticipated.
PART II: OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of the
Registrant (the "Meeting") was held on April 17, 1997.
(b) The Registrant solicited proxies for the Meeting
pursuant to Regulation 14; there was no solicitation
in opposition to management's nominees for directors
as listed in the Proxy Statement, and all such
nominees were elected.
(c) The following describes the matters voted upon at the
Meeting and sets forth the number of votes cast for,
against or withheld and the number of abstentions as to
each such matter:
(i) Election of directors:
Nominee For Withheld
Van C. Campbell 42,613,046 299,844
Michael A. Carpenter 42,604,510 308,380
Robert D. Kennedy 42,613,867 299,023
The directors whose term of office as a director
continued after the Meeting are Ursula F. Fairbairn,
Ronald E. Ferguson, John R. Selby, H. Kent Bowen and
Michael D. Lockhart.
(ii) Approval of the General Signal Corporation 1997 Non-
Employee Directors' Stock Option Plan:
For Against Abstain
38,963,064 3,671,443 278,383
(iii) Authorization of appointment of Ernst & Young LLP
as independent auditors for 1997:
For Against Abstain
42,674,228 125,133 113,529
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
3.2 By-laws of General Signal Corporation as amended
through March 20, 1997.
10.1 General Signal Corporation Change in Control
Severance Pay Plan as amended and restated
October 17, 1996 and implemented by officer action
April 14, 1997.
10.2 General Signal Corporation Benefit Equalization Plan
as amended and restated October 17, 1996 and implemented
by officer action dated April 14, 1997.
10.3 General Signal Corporation 1997 Non-Employee Directors'
Stock Option Plan as approved by shareholders on
April 17, 1997.
27.0 Financial Data Schedule
(b) Reports on Form 8-K:
The Registrant did not file any reports on
Form 8-K during the quarter covered by this report.
SIGNATURES
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.
GENERAL SIGNAL CORPORATION
/s/ Raymond L. Arthur
Raymond L. Arthur
Vice President and Controller
Chief Accounting Officer
DATE: April 18, 1997
GENERAL SIGNAL CORPORATION
__________
BY-LAWS
__________
As Amended Through March 20, 1997
ARTICLE I
SHAREHOLDERS' MEETING
SECTION 1. Annual Meeting: The Annual Meeting of the
shareholders of this Corporation for the election of directors
and the transaction of such other business as may properly come
before such meeting shall be held each year on such date and at
such time and place, whether within or without the State of New
York, as shall be determined by the Board of Directors.
SECTION 2. Special Meeting: A Special Meeting of the
shareholders may be held at any time upon the call of the Board
of Directors or the Chairman of the Board and shall be called
by the Secretary at the written request of shareholders owning
at least two-thirds of the outstanding shares of stock entitled
to vote, which request shall specify the matters to be
presented to such meeting.
SECTION 3. Notice of Annual or Special Meeting: Written
notice of the holding of each Annual or Special Meeting of the
shareholders shall be given by the Secretary. Such notice
shall state the place, date and hour of the meeting, and the
purpose or purposes for which the meeting is called, and shall
be signed by the Secretary, and shall indicate that it is being
issued by or at the direction of the person or persons calling
the meeting. A copy of such notice shall be mailed, postage
prepaid, not less than ten nor more than fifty days before the
date of the meeting, to each shareholder of record as of such
record date, not less than ten nor more than fifty days before
the date of the meeting, as may be fixed by the Board of
Directors for determining the shareholders entitled to notice
of, or to vote at, the meeting. Such notice shall be directed
to the shareholder at his address as it appears on the record
of shareholders, or, if he shall have filed with the Secretary
a written request that notices to him be mailed to some other
address, then directed to him at such other address.
If, at any meeting, action is proposed to be taken which
would, if taken, entitle certain shareholders to receive
payment for their shares, the notice of such meeting shall
include a statement of that purpose and to that effect.
At any meeting of shareholders or any such adjourned
meeting, only such business shall be conducted as shall have
been properly brought before such meeting or any such adjourned
meeting. To be properly brought before any meeting of
shareholders or any such adjourned meeting, business must be
(a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before such meeting
or any such adjourned meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before
such meeting or any such adjourned meeting by a shareholder.
For business to be properly brought before any meeting of
shareholders or any such adjourned meeting by a shareholder,
the shareholder must have given timely notice thereof in
writing to the Secretary. To be timely, a shareholder's notice
must be delivered to or mailed and received at the principal
executive offices of the Corporation not less than forty-five
days nor more than sixty days prior to such meeting; provided,
however, that in the event less than fifty-five days prior
public disclosure of the date of such meeting is made to the
shareholders or in the event the only public disclosure of the
date of the meeting is written notice in accordance with this
Article 1, Section 3, notice by such shareholder to be timely
must be so received not later than the close of business on the
tenth day following the day on which such notice of the date of
such meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to
each matter the shareholder proposes to bring before such
meeting (a) a brief description of the business desired to be
brought before such meeting and the reasons for conducting such
business at such meeting, (b) the name and address, as they
appear on the Corporation's books, of the shareholder proposing
such business, (c) the class and number of shares of the
securities of the Corporation which are beneficially owned by
such shareholder, and (d) any material interest of such
shareholder in such business.
No business shall be conducted at any meeting of
shareholders or any such adjourned meeting except in accordance
with the procedures set forth in this Article 1, Section 3. In
the event that a shareholder seeks to bring one or more matters
before a meeting of shareholders or any such adjourned meeting,
the Board of Directors shall establish a committee consisting
of non-management directors for the purpose of reviewing
compliance with this Article 1, Section 3; provided, however,
that if the business to be brought before such meeting or any
such adjourned meeting by a shareholder relates to the removal,
replacement or election of one or more directors, the Secretary
shall appoint two or more inspectors, neither of whom shall be
an affiliate of the Corporation, to act in lieu of such
committee to review compliance with this Article 1, Section 3.
If the committee or the inspectors (as the case may be) shall
determine that a shareholder has not complied with this Article
1, Section 3, the committee or the inspectors (as the case may
be) shall direct the chairman of such meeting to declare to
such meeting or any such adjourned meeting that such business
was not properly brought before such meeting or any such
adjourned meeting in accordance with the provisions of this
Article 1, Section 3; and the chairman shall so declare to such
meeting or any such adjourned meeting and any such business not
properly brought before such meeting or any such adjourned
meeting shall not be transacted.
Only individuals who are nominated in accordance with the
procedures set forth in this Article 1, Section 3, shall be
eligible for election as directors. Nominations of individuals
for election to the Board of Directors may be made at a meeting
of shareholders or any such adjourned meeting by or at the
direction of the board of Directors or by any shareholder of
the Corporation entitled to vote for the election of directors
at such meeting or any such adjourned meeting who complies with
the notice procedures set forth in this Article 1, Section 3.
Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to
timely notice in writing to the Secretary. To be timely, a
shareholder's notice shall be delivered to or mailed and
received at the principal executive offices of the Corporation
not less than forty-five days nor more than sixty days prior to
such meeting; provided, however, that in the event less than
fifty-five days prior public disclosure of the date of such
meeting is made to the shareholders or in the event the only
public disclosure of the date of the meeting is written notice
in accordance with this Article 1, Section 3, notice by such
shareholder to be timely must be so received not later than the
close of business on the tenth day following the day on which
such notice of the date of such meeting was mailed or such
public disclosure was made. Such shareholder's notice shall
set forth (a) as to each individual whom such shareholder
proposes to nominate for election or re-election as director,
(i) the name, age, business address and residence address of
such individual, (ii) the principal occupation or employment of
such individual, (iii) the class and number of shares, or the
amount of any securities of the Corporation which are
beneficially owned by such individual and (iv) any other
information relating to such individual that is required to be
disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case, pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as
amended (including without limitation such individual's written
consent to being named in the proxy statement as a nominee and
to serving as a director if elected); and (b) as to the
shareholder giving the notice, (i) the name and address, as
they appear on the Corporation's books, of such shareholder and
(ii) the class and number of shares of the securities of the
Corporation which are beneficially owned by such shareholder.
At the request of the Board of Directors, any individual
nominated by the Board of Directors for election as a director
shall furnish to the Secretary that information required to be
set forth in a shareholder's notice of nomination which
pertains to the nominee. No individual shall be eligible for
election as a director of the Corporation unless nominated in
accordance with the procedures set forth in this Article 1,
Section 3. In the event that a shareholder seeks to nominate
one or more directors, the Secretary shall appoint two
inspectors, neither of whom shall be an affiliate of the
Corporation, to determine whether such shareholder has complied
with this Article 1, Section 3. If the inspectors shall
determine that such shareholder has not complied with this
Article 1, Section 3, the inspector shall direct the chairman
of such meeting or any such adjourned meeting to declare to
such meeting or any such adjourned meeting that a nomination
was not made in accordance with the prescribed procedures, and
the chairman shall so declare to such meeting or any such
adjourned meeting and the defective nomination shall be
disregarded.
SECTION 4. Presiding Officer: At all meetings of
shareholders the Chairman of the Board shall preside, or in his
absence, the Chairman of the Executive Committee, the President
or any Vice President may preside.
SECTION 5. Inspectors: Prior to each meeting of the
shareholders, the Board of Directors may appoint two Inspectors
of Election and two or more Alternate Inspectors, to serve at
such meeting and any adjournment thereof. If any Inspector
refuses to serve, or shall not be present at the meeting of the
shareholders, the Alternate Inspectors shall act in the order
of their appointment.
SECTION 6. Voting and Method of: Except as otherwise
provided in the Certificate of Incorporation, at all meetings
of the shareholders, each shareholder entitled to vote shall be
entitled to one vote for every share standing in his name on
the record of shareholders, and all questions to be decided by
the shareholders, except the question of election of directors
and such other questions the manner of deciding which is
specifically regulated by statute, shall be decided by a
majority of the votes cast at the meeting in person or by proxy
by the holders of shares entitled to vote thereon. All voting
shall be viva-voce, except that any qualified voter may require
a vote by ballot on any question to be decided. In case of a
vote by ballot, each ballot shall state the name of the
shareholder voting and the number, class and series (if any) of
shares owned by him, and in addition, if such ballot be cast by
a proxy, the name of the proxy shall be stated.
SECTION 7. Quorum: Except as may be otherwise provided
by law or by the Certificate of Incorporation, at all meetings
of the shareholders, the holders of a majority of the shares
entitled to vote thereat shall constitute a quorum for the
transaction of any business.
SECTION 8. Fiscal Year: The fiscal year of the
Corporation shall close on the 31st day of December in each
year. The officers of the Corporation shall prepare and cause
to be submitted to the shareholders at the Annual Meeting a
detailed statement showing the financial condition of the
Corporation.
ARTICLE II
DIRECTORS
SECTION 1. Election of Directors: The directors shall
be classified with respect to their terms of office by dividing
them into three classes. All classes shall be as nearly equal
in number as possible, and no class shall include less than
three directors. Subject to such limitations, the size of each
class may be fixed by action of the shareholders or of the
Board of Directors.
At each Annual Meeting of Shareholders, directors to
replace those whose terms expire at such Annual Meeting shall
be elected to hold office until the expiration of the term of
whatever class they are assigned to, provided that no director
may be assigned to a class the term of which will expire later
than the Annual Meeting next succeeding the director's
attaining age 72. Notwithstanding the foregoing, Ralph E.
Bailey, John P. Horgan and Roland W. Schmitt shall be permitted
to be nominated for a one-year term at the 1996 Annual Meeting
of Shareholders.
Each director shall hold office until the expiration of
the term for which he is elected, and until his successor has
been elected and qualified, provided, however, that a director
may be removed from office as a director, but only for cause,
by action of the shareholders or of the Board of Directors.
SECTION 2. Number of Directors: The number of the
directors of the Corporation shall be not less than 7 nor more
than 15 as shall be determined from time to time by the Board
of Directors.
SECTION 3. Newly Created Directorships and Vacancies:
Newly created directorships resulting from an increase in the
number of directors and vacancies occurring in the Board for
any reason may be filled by the vote of a majority of the
directors then in office, although less than a quorum may
exist. A director elected to fill a newly created directorship
or a vacancy shall be elected to hold office until the next
Annual Meeting of the shareholders, and (if he is to have a
successor) until his successor has been elected and qualified.
SECTION 4. Regular Meetings: Regular Meetings of the
Board of Directors shall be held at such times and places as
may be fixed by the Board of Directors provided that the
Organization Meeting of the newly elected Board of Directors
shall be held on the same day as the Annual Meeting of the
shareholders, at which time the Executive Committee and other
Committees of the Board and Officers shall be elected or
appointed. Unless otherwise required by appropriate resolution
of the Board of Directors, or by law, notice of any such
meetings need not be given.
SECTION 5. Special Meetings: Special Meetings of the
Board of Directors shall be called by the Secretary upon the
order of the Chairman of the Board, the President, or the
Chairman of the Executive Committee, or upon the written
request of five (5) directors.
SECTION 6. Presiding Officer: At all meetings of the
Board of Directors, the Chairman of the Board of Directors
shall preside, or in his absence, the Chairman of the
Executive Committee, the President or any Vice President who is
a member thereof may preside.
SECTION 7. Quorum: A majority of the directors then in
office or half of such number when the number of directors then
in office is even, but not less than one-third of the entire
Board, shall constitute a quorum for the transaction of
business at all meetings of the Board.
SECTION 8. Notice: The Secretary shall mail to each
director notice of any Special Meeting, or of any Regular
Meeting, if required, at least two days before the meeting, or
shall telegraph or telephone such notice not later than the day
before such meeting. Each director shall file with the
Secretary a designation of the address to which such notice to
him shall be sent, and any such notice to him thereafter shall
be addressed in accordance with his latest designation.
SECTION 9. Designation of Executive and Other
Committees: The Board of Directors shall by resolution
adopted by a majority of the entire Board, designate an
Executive Committee of not less than three of its members of
whom the Chairman of the Board, the Chairman of the Executive
Committee, and the President shall be ex officio members, and
said Executive Committee shall have authority to exercise and
shall exercise in the interim between the Regular and Special
meetings of the Board of Directors all of the rights, powers
and duties of the Board of Directors, except such as cannot be
lawfully delegated.
The Board of Directors may by resolution adopted by a
majority of the entire Board, designate one or more directors
as alternate members of the Executive Committee, who may
replace any absent member or members of the Executive
Committee, at any meeting thereof, when required to constitute
a quorum.
Meetings of the Executive Committee may be called by the
Secretary upon order by the Chairman of the Executive Committee
or in his absence by the Chairman of the Board, the President,
or upon written request of two (2) members of the Executive
Committee.
At all meetings of the Executive Committee, the Chairman
of the Executive Committee shall preside, or in his absence the
Chairman of the Board or the President may preside.
At all meetings of the Executive Committee, a majority of
the full membership of the Executive Committee, including
vacancies not filled or eliminated, shall constitute a quorum
for the transaction of business.
The Board of Directors may by resolution adopted by a
majority of the entire Board, designate other Committees, each
consisting of three or more directors, and delegate to them
such powers and duties of the Board as may be lawfully
delegated and determined to be appropriate by the Board.
The Executive Committee and each other Committee
designated pursuant to this Section, and each member or
alternate member thereof, shall serve until the next Annual
Meeting of the shareholders and at the pleasure of the Board of
Directors. Vacancies in the Executive Committee or any other
Committee, occurring for any reason, may by resolution adopted
by a majority of the entire Board at any meeting of the Board
of Directors, be filled or may be eliminated by reducing the
number constituting the membership of such Committee, provided,
however, that the membership of any Committee shall not be
reduced to less than three.
Notice of the time and place of any meeting of the
Executive Committee shall be given in the manner provided in
Section 8 of this Article for the giving of notice of meetings
of the Board of Directors. Meetings of any other Committee
designated pursuant to this Section 9 shall be held in such
manner, and at such times and places, and upon such notice, if
any, as shall be provided in the resolution of the Board
creating such Committee.
SECTION 10. Compensation: Each director who is not a
full-time employee of the Corporation or of any consolidated
subsidiary shall be paid such compensation for serving as a
director as the Board of Directors may, from time to time,
determine.
Section 11. Action by Unanimous Written Consent: Any
action required to be or permitted to be taken by the Board of
Directors or any Committee thereof may be taken without a
meeting if all members of the Board of Directors or the
Committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and written consents
thereto by the members of the Board of Directors or Committee
shall be filed with the minutes of the proceedings of the Board
of Directors or Committee.
Section 12. Participation in Meetings by Means of
Conference Telephone: Any one or more members of the Board of
Directors or any Committee thereof may participate in a meeting
of the Board of Directors or Committee by means of a conference
telephone or similar communication equipment allowing all
persons participating in the meeting to hear each other at the
same time. Participation by such means shall constitute
presence in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. Executive Officers: The Officers of the
Corporation shall consist of a Chairman of the Board of
Directors, a President, a Vice President-Finance, one or more
other Vice Presidents, one or more of whom may also be
designated Executive Vice President or Senior Vice President, a
Secretary, a Treasurer and a Controller, all of whom shall be
elected annually by the Board at a meeting following the Annual
Meeting of the shareholders. The Board may also elect one or
more Assistant Treasurers and one or more Assistant Secretaries
and such subordinate officers and agents of the Corporation as
it may from time to time determine. The same person may hold
two or more offices, except that the Chairman of the Board and
President shall not hold the office of Secretary.
SECTION 2. Duties of Chairman of the Board: The
Chairman of the Board shall be a director and shall be chief
executive officer of the Corporation and, subject to the
direction of the Board, shall exercise general supervision over
the business and affairs of the Corporation and shall perform
such other duties as may be assigned to him from time to time
by the Board. If the office of the President is not
independently established, he shall perform all duties of that
office. He shall preside at all meetings of the Board of
Directors and shall also preside at all meetings of the
shareholders of the Corporation.
SECTION 3. Duties of President: The President shall be
a director and shall be the chief operating officer of the
Corporation and, subject to the direction of the Board of
Directors and the Chairman of the Board, shall direct and
supervise the business operations of the Corporation and shall
perform such other duties as from time to time the Board of
Directors may prescribe or the Chairman of the Board may assign
to him. The office of the President will normally be vested in
the Chairman of the Board, provided, however, that in the
discretion of the Board of Directors, the position of President
may be established independent of, but reporting to, the
Chairman of the Board.
SECTION 4. Duties of Vice President-Finance, and other
Vice Presidents: The Vice President-Finance shall serve as
principal financial officer of the Corporation and shall
perform such other duties as shall from time to time be
prescribed by the Board of Directors or assigned to him by the
Chairman of the Board or by the President. Each other Vice
President shall perform such duties as from time to time may be
prescribed by the Board of Directors or assigned to him by the
Chairman of the Board or the Officer to whom he reports.
SECTION 5. Duties of Treasurer and Controller: The
Treasurer shall have the care and custody of all the funds and
securities of the Corporation and, in general, shall perform
all the duties incident to the office of Treasurer including
the appointment of depository and disbursement banks. The
Controller shall have charge of the books of account of the
Corporation and, in general, perform all the duties incident to
the office of Controller. The Treasurer and the Controller
shall also discharge such other duties as from time to time the
Board of Directors may prescribe or the Chairman of the Board,
the President, or the Vice President-Finance may assign.
SECTION 6. Duties of Secretary: The Secretary shall
keep the minutes of the meetings of the Board of Directors, of
the Executive Committee and other Committees of the Board and
of the shareholders, and shall attend to the giving and service
of all notices for meetings of the Board of Directors, of the
Executive Committee and other Committees of the Board and of
the shareholders and otherwise whenever required, except to the
extent, that such duties shall have been specifically delegated
to another officer by the Board of Directors or by the Chairman
of the Board. He shall have the custody of such books and
papers as the Board of Directors, the Chairman of the Board, or
the President may provide. He shall also discharge such other
duties as from time to time the Board of Directors may
prescribe or the Chairman of the Board, or the President may
assign to him.
SECTION 7. Assistant Officers: The Board of Directors
may elect one or more Assistant Secretaries or one or more
Assistant Treasurers. Each Assistant Secretary, if any, and
each Assistant Treasurer, if any, shall have such authority and
perform such duties as from time to time the Board of Directors
may prescribe or the Chairman of the Board or the President may
assign.
SECTION 8. Subordinate Officers: The Board of
Directors may elect such subordinate officers as it may deem
desirable. Each such officer shall have such authority and
perform such duties as the Board of Directors may prescribe.
The Board of Directors may, from time to time, authorize any
officer to appoint and remove subordinate officers and
prescribe the powers and duties thereof.
SECTION 9. Surety Bonds of Officers: The Board of
Directors may require from any officer of the Corporation a
bond in such amount as it may determine for the faithful
discharge of the duties of any such officer; such bond to be
approved by the Board and to be obtained at the expense of the
Corporation.
SECTION 10. Compensation of Officers: The Chairman of
the Board, with the advice of the President of the Corporation,
shall have power to fix the compensation of all officers of the
Corporation, except the Chairman of the Board, the president
and the officers reporting directly to either of them. The
Board of Directors shall have power to fix the compensation of
the Chairman of the Board, the President and of the officers
reporting directly to either of them. The Board of Directors
may authorize any officer, upon whom the power of appointing
subordinate officers may have been conferred, to fix the
compensation of such subordinate officers. Notwithstanding the
foregoing, the Board of Directors may delegate to a Committee
of the Board the responsibility of determining the incentive
compensation and stock awards of the Chairman of the Board, the
President and the officers reporting directly to either of
them.
SECTION 11. Vacancy: Any vacancy of an office
occurring may be filled at any Regular or Special Meeting of
the Board of Directors.
SECTION 12. Removal of Officers: Any officer of the
Corporation may be removed, with or without cause, by the vote
of the Board of Directors at any meeting thereof.
SECTION 13. Checks and Obligations: All notes and all
checks, drafts, or other orders for the payment of money, and
all endorsements thereof, executed on behalf of the Corporation
shall be signed by any person or persons designated for the
purpose either by the Board or by an officer or officers of the
Corporation pursuant to authority delegated by the Board of
Directors.
SECTION 14. Execution of Contracts, Assignments, Deeds
and other Documents: All contracts, agreements, assignments,
transfers, guaranties, deeds, stock powers or other instruments
of the Corporation may be executed and delivered by the
Chairman of the Board, the President, or any Vice President or
by such other officer or officers, or agent or agents, of the
Corporation as shall be thereunto authorized from time to time
either by the Board or by power of attorney executed by the
Chairman of the Board, the President, any Senior Vice
President, or by any person pursuant to authority granted by
the Board; and the Secretary or any Assistant Secretary, the
Treasurer or any Assistant Treasurer may affix the seal of the
Corporation thereto and attest same.
SECTION 15. Execution of Proxies: The Chairman of the
Board, the President, or any Vice President or any other
person designated by the Board of Directors, may authorize from
time to time the execution and issuance of proxies to vote upon
shares of stock of other corporations owned by the corporation,
or authorize the execution of a consent to action taken or to
be taken by such other corporation. All such proxies or
consents may be signed in the name of the Corporation by any of
the persons above-mentioned in this Section 15 or by any other
person or persons designated for the purpose either by the
Board of Directors or by power of attorney executed by any
person pursuant to authority granted by the Board.
SECTION 16. Facsimile Signatures: Any signature which
is authorized by Section 13, 14 or 15 of this Article may be
facsimile, if so determined by the Board of Directors, or by an
officer or officers of the Corporation pursuant to authority
delegated by the Board of Directors.
ARTICLE IV
CREATION OF DIVISIONS
SECTION 1. Creation of Divisions: The Board of
Directors may from time to time create divisions and may set
apart to such divisions such aspects or portions of the
business, affairs and properties of the Corporation as the
Board may from time to time determine. Each division of the
Corporation shall be organized and regulated as hereinafter
provided in this Article IV. As used in the succeeding
Sections of this Article, the term "Company" shall refer to any
division of the Corporation.
SECTION 2. Executive Officers of Company: The Chairman
of the Board of the Corporation may appoint, with the advice of
the President of the Corporation, as Executive Officers of the
Company, a President, one or more Vice Presidents, appropriate
Financial Officers and a Secretary and in his discretion, one
or more Assistant Secretaries and Assistant Financial Officers
and such subordinate officers as may from time to time be
deemed desirable. Such officers shall be appointed as soon as
practicable following the creation of the Company and
thereafter shall hold office at the discretion of the Chairman
of the Board of the Corporation. The same person may hold two
or more offices of the Company, except the offices of President
and Secretary of the Company, and any person holding an office
of the Company may also be elected by the Board as an officer
of the Corporation. Vacancies occurring in any office may be
filled at any time by the Chairman of the Board of the
Corporation, with the advice of the President of the
Corporation. The Executive Officers and all other persons who
shall serve the Company in the capacities set forth in this
Article are hereby appointed agents of the Corporation with the
powers and duties herein set forth. However, the authority of
said agents shall be limited to matters related to the
properties, business and affairs of the Company, and shall not
extend to any other portion of the properties, business and
affairs of the Corporation nor are such Executive Officers or
other persons to be considered officers of the Corporation.
SECTION 3. Authority of the Executive Officers of the
Company: The President of the Company shall be the Chief
Executive Officer of the Company. He shall exercise general
supervision over the business, affairs and properties of the
Company and shall be directly responsible to, and shall perform
such other duties as may be assigned to him from time to time
by, the Chairman of the Board or the assigned Officer or other
employee of the Corporation to whom the President of the
Company reports. All Executive Officers other than the
President of the Company, and any subordinate officers, shall
be directly responsible to the President of the Company and any
Officer or other employee of the Corporation as the Chairman of
the Board or the assigned Officer or other employee of the
Corporation to whom the President of the Company reports shall
direct.
SECTION 4. Use of Divisional Names: In executing any
document on behalf of any division of the Corporation, the name
of such division shall be followed by the words "a division of
General Signal Corporation." In any instance in which a
division of the Corporation shall use the name of the division
followed by the words, "a unit of General Signal," such words
shall have the same meaning as "a division of General Signal
Corporation."
ARTICLE V
INDEMNIFICATION
SECTION 1. Indemnification: Except to the extent
expressly prohibited by the New York Business Corporation Law,
the Corporation shall indemnify each person made or threatened
to be made a party to any action or proceeding, whether civil
or criminal, and whether by or in the right of the Corporation
or otherwise, by reason of the fact that such person or such
person's testator or intestate is or was a director or officer
of the Corporation, or serves or served at the request of the
Corporation any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any
capacity while he or she was such a director or officer
(hereinafter referred to as "Indemnified Person"), against
judgments, fines, penalties, amounts paid in settlement and
reasonable expenses, including attorneys' fees, incurred in
connection with such action or proceeding, or any appeal
therein, provided that no such indemnification shall be made if
a judgment or other final adjudication adverse to such
Indemnified Person establishes that either (a) his or her acts
were committed in bad faith, or were the result of active and
deliberate dishonesty, and were material to the cause of action
so adjudicated, or (b) that he or she personally gained in fact
a financial profit or other advantage to which he or she was
not legally entitled.
The Corporation shall advance or promptly reimburse upon
request any Indemnified Person for all expenses, including
attorneys' fees, reasonably incurred in defending any action or
proceeding in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of such Indemnified
Person to repay such amount if such Indemnified Person is
ultimately found not to be entitled to indemnification or,
where indemnification is granted, to the extent the expenses so
advanced or reimbursed exceed the amount to which such
Indemnified Person is entitled.
Nothing herein shall limit or affect any right of any
Indemnified Person otherwise than hereunder to indemnification
or expenses, including attorneys' fees, under any statute,
rule, regulation, certificate of incorporation, by-law,
insurance policy, contract or otherwise.
Anything in these by-laws to the contrary
notwithstanding, no elimination of this by-law, and no
amendment of this by-law adversely affecting the right of any
Indemnified Person to indemnification or advancement of
expenses hereunder shall be effective until the 60th day
following notice to such Indemnified Person of such action, and
no elimination of or amendment to this by-law shall thereafter
deprive any Indemnified Person of his or her rights hereunder
arising out of alleged or actual occurrences, acts or failures
to act prior to such 60th day.
The Corporation shall not, except by elimination or
amendment of this by-law in a manner consistent with the
preceding paragraph, take any corporate action or enter into
any agreement which prohibits, or otherwise limits the rights
of any Indemnified Person to, indemnification in accordance
with the provisions of this by-law. The indemnification of any
Indemnified Person provided by this by-law shall be deemed to
be a contract between the Corporation and each Indemnified
Person and shall continue after such Indemnified Person has
ceased to be a director or officer of the Corporation and shall
inure to the benefit of such Indemnified Person's heirs,
executors, administrators and legal representatives. If the
Corporation fails timely to make any payment pursuant to the
indemnification and advancement or reimbursement of expenses
provisions of this Article V and an Indemnified Person
commences an action or proceeding to recover such payment, the
Corporation in addition shall advance or reimburse such
Indemnified Person for the legal fees and other expenses of
such action or proceeding.
The Corporation is authorized to enter into agreements
with any of its directors or officers extending rights to
indemnification and advancement of expenses to such Indemnified
Person to the fullest extent permitted by applicable law, but
the failure to enter into any such agreement shall not affect
or limit the rights of such Indemnified Person pursuant to this
by-law, it being expressly recognized hereby that all directors
or officers of the Corporation, by serving as such after the
adoption hereof, are acting in reliance hereon and that the
Corporation is estopped to contend otherwise. Persons who are
not directors or officers of the Corporation shall be similarly
indemnified and entitled to advancement or reimbursement of
expenses to the extent authorized at any time by the Board of
Directors.
In case any provision in this by-law shall be determined
at any time to be unenforceable in any respect, the other
provisions shall not in any way be affected or impaired
thereby, and the affected provision shall be given the fullest
possible enforcement in the circumstances, it being the
intention of the Corporation to afford indemnification and
advancement of expenses to its directors or officers, acting in
such capacities or in the other capacities mentioned herein, to
the fullest extent permitted by law whether arising from
alleged or actual occurrences, acts or failures to act
occurring before or after the adoption of this Article V.
For purposes of this by-law, the Corporation shall be
deemed to have requested an Indemnified Person to serve an
employee benefit plan where the performance by such Indemnified
Person of his or her duties to the Corporation also imposes
duties on, or otherwise involves services by, such Indemnified
Person to the plan or participants or beneficiaries of the
plan, and excise taxes assessed on an Indemnified Person with
respect to an employee benefit plan pursuant to applicable law
shall be considered indemnifiable fines. For purposes of this
by-law, the term "Corporation" shall include any legal
successor to the Corporation, including any corporation which
acquires all or substantially all of the assets of the
Corporation in one or more transactions.
ARTICLE VI
CAPITAL STOCK
SECTION 1. Certificates of Capital Stock: All
certificates of stock of the Corporation, both preferred and
common, shall be separately numbered and the facsimile
signature of the Chairman of the Board, or the President, or a
Vice President and the facsimile counter-signature of the
Treasurer, or an Assistant Treasurer, or the Secretary or an
Assistant Secretary and the facsimile seal of the Corporation
shall appear thereon, all in manner as authorized under the
laws of the State of New York and approved by the New York
Stock Exchange.
SECTION 2. Transfer Agent and Registrar: All
certificates of stock of the Corporation shall be issued only
through a Transfer Agent of the Corporation's stock, consisting
of a Bank or Trust Company, duly appointed by the Board of
Directors to act as Transfer Agent and bear the counter-
signature of the Registrar of the Corporation's stock duly
appointed by the Board of Directors to act as Registrar.
Endorsement to the foregoing effect shall be made upon all
certificates issued.
SECTION 3. Transfer of Shares: Shares of stock shall
be transferable only on the books of the Corporation by the
holder thereof in person or pursuant to a power of attorney
duly executed and filed with the Transfer Agent, upon the
surrender of the certificate representing the shares to be
transferred, properly endorsed. All certificates surrendered
for transfer shall be cancelled by the Transfer Agent.
SECTION 4. Lost, Destroyed or Stolen Certificates: No
certificate for shares of stock of the Corporation shall be
issued in place of any certificate alleged to have been lost,
destroyed or stolen except on production of such evidence of
such loss, destruction or theft and on delivery to the
Corporation, if the Board of Directors shall so require, of a
bond of indemnity upon such terms and secured by such surety as
the Board of Directors may in its discretion determine to be
satisfactory.
SECTION 5. Seal of Corporation: The seal of the
Corporation shall be circular in form and bear the words
"GENERAL SIGNAL CORPORATION" next inside the line of its
circumference and the words "Incorporated June 13th, 1904" in
the center within the line of an inner circle.
ARTICLE VII
AMENDMENTS
SECTION 1. Amendments: Except as otherwise provided by the
Certificate of Incorporation, any provision or provisions of
these By-Laws, including any amendment thereof, regardless of
the manner in which any such provision or amendment may have
been adopted, may be deleted or amended in any respect at any
Annual Meeting of the shareholders, or at any Special Meeting
called for that purpose, by a majority of the votes cast at
such meeting in person or by proxy by the holders of shares
entitled to vote thereon, or with the exception of this Section
1 of Article VII, by a majority of the Board of Directors then
in office at any meeting thereof.
ARTICLE VIII
WAIVER OF NOTICE
SECTION 1. Waiver of Notice: Any notice required by
these By-Laws may be waived in writing, either before or after
the action requiring such notice is taken.
word\sevrance\plans\chctr48.doc
GENERAL SIGNAL CORPORATION
CHANGE IN CONTROL SEVERANCE PAY PLAN
As Amended and Restated October 17, 1996
GENERAL SIGNAL CORPORATION
CHANGE IN CONTROL SEVERANCE PAY PLAN
Table of Contents
Section Page
1 Purpose 1
2 Definitions 1
3 Benefits 3
4 Payments 5
5 Administration of the Plan 5
6 Litigation Expenses 6
7 Amendment, Suspension, or Termination of the Plan 6
8 Miscellaneous 6
SECTION 1. PURPOSE
The purpose of the General Signal Corporation
Change in Control Severance Pay Plan is to encourage
Employees to make and continue careers with General
Signal Corporation by providing eligible Employees with
certain severance pay benefits upon such Employees'
Involuntary Termination of employment following a
Change in Control, as set forth herein. This Plan was
adopted by the Board of Directors on February 12, 1987
and was amended from time to time thereafter.
SECTION 2. DEFINITIONS
When used herein the following terms shall
have the following meanings:
2.1 "Board of Directors" means the Board of
Directors of General Signal Corporation.
2.2 "Change in Control" shall be deemed to
have occurred if:
(a) the shareholders of the Corporation
approve a merger or consolidation of the Corporation
with any other corporation, other than a merger or
consolidation which would result in the Voting
Securities of the Corporation held by such shareholders
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by
converting into Voting Securities of the surviving
entity) at least 51 percent of the total voting power
represented by the Voting Securities of the Corporation
or such surviving entity outstanding immediately after
such merger or consolidation;
(b) the shareholders of the Corporation
approve an agreement providing for the sale, exchange
or other disposition of all or substantially all the
assets of the Corporation for the securities of another
entity, cash or other property;
(c) the shareholders of the Corporation
approve a plan of liquidation or dissolution of the
Corporation;
(d) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than a trustee or other
fiduciary holding securities under an employee benefit
plan of the Corporation or other than a corporation
owned directly or indirectly by the shareholders of the
Corporation in substantially the same proportions as
their ownership of Voting Securities of the
Corporation, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or
indirectly, of Voting Securities of the Corporation
representing at least 20 percent of the total voting
power represented by the Voting Securities of the
Corporation then outstanding; or
(e) during any period of two consecutive
years, individuals who at the beginning of such period
constitute the Board of Directors of the Corporation
and any new director whose election by the Board of
Directors of the Corporation or nomination for election
by the Corporation's shareholders was approved by a
vote of at least two thirds of the directors then still
in office who either were directors at the beginning of
the period or whose election or nomination for election
was previously so approved, cease for any reason to
constitute a majority thereof.
2.3 "Corporate Benefits Committee" means the
Corporate Benefits Committee provided for in Section 5.
2.4 "Corporation" means General Signal
Corporation and its successors and assigns.
2.5 "Employee" means any executive officer
of the Corporation, any exempt salaried employee in
Position Level 15 or above employed at the
Corporation's headquarters in Connecticut and any
President of a unit of the Corporation; provided,
however, that an Employee shall not include any
employee who has a severance agreement with the
Corporation providing for a designated termination date
set forth in such agreement.
2.6 "Involuntary Termination" shall mean any
termination of an Employee's employment by the
Corporation, or by one of its subsidiaries, within two
years after a Change in Control; provided, however,
such term shall not include a termination by the
Corporation or any of its subsidiaries, for (i)
serious, willful misconduct in respect of the
Employee's obligations to the Corporation or its
subsidiaries, which has caused demonstrable and serious
injury to the Corporation, monetary or otherwise, as
evidenced by a determination in a binding and final
judgment, order or decree of a court or administrative
agency of competent jurisdiction, in effect after
exhaustion or lapse of all rights of appeal, in an
action, suit or proceeding, whether civil, criminal,
administrative or investigative; or (ii) conviction of
a felony, which has caused demonstrable and serious
injury to the Corporation, monetary or otherwise, as
evidenced by binding and final judgment, order, or
decree of a court of competent jurisdiction, in effect
after exhaustion or lapse of all rights of appeal.
In addition to actual termination of
employment, as and when so declared to be by the
Employee the following shall be deemed an Involuntary
Termination: (i) a reduction or change in an Employee's
responsibilities, duties, authority, powers, functions,
title, working conditions or status from those in
effect immediately prior to the Change in Control; or
(ii) a reassignment to another geographic location more
than 50 miles from the Employee's place of employment
immediately prior to the Change in Control; or (iii) a
reduction in base salary and incentive compensation, if
any, from those in effect immediately prior to the
Change in Control. For purposes of the preceding
sentence, a reduction in incentive compensation will be
deemed to have occurred if and only if the percentage
of salary paid as incentive compensation under the
Corporation's Incentive Compensation Plan for any
calendar year is less than the average percentage of
salary paid to the Employee as incentive compensation
under such Plan for the three calendar years preceding
the Change in Control.
Notwithstanding the foregoing, an
Employee's failure to object in writing to the changes
listed in subsections (i), (ii) and (iii) within 180
days of any such change shall constitute a waiver of
such change being deemed an Involuntary Termination.
2.7 "Plan" means the General Signal
Corporation Change in Control Severance Pay Plan as may
be amended from time to time.
2.8 "Subsidiary" means a "subsidiary
corporation" as defined in Section 425(f) of the
Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
2.9 "Voting Securities" means any securities
of the Corporation which vote generally in the election
of directors.
SECTION 3. BENEFITS
3.1 In the event of Involuntary Termination
of any Employee who is an executive officer of the
Corporation, the Corporation shall pay such officer 36
months of Compensation.
3.2 In the event of Involuntary Termination
of any Employee who is not an executive officer of the
Corporation or a President of a unit of the
Corporation, the Corporation shall pay such person 24
months of Compensation.
3.3 In the event of Involuntary Termination
of any President of a unit of the Corporation, the
Corporation shall pay such person 12 months of the
Employee's annual base salary in effect immediately
prior to the date of Involuntary Termination.
3.4 For purposes of this Section,
Compensation is calculated using the Employee's annual
base salary in effect immediately prior to the date of
Involuntary Termination plus the average of the three
highest payments made to the Employee under the
Corporation's Incentive Compensation Plan or any other
applicable bonus plans in the five calendar years
preceding the calendar year of Involuntary Termination.
3.5 Any payments pursuant to Sections 3.1,
3.2 or 3.3 of this Plan shall be paid in a lump sum
within thirty (30) days following Involuntary
Termination and such payments shall be reduced by the
amount paid to the Employee pursuant to any other
severance pay policy of the Corporation.
3.6 Within thirty (30) days following
Involuntary Termination, the Corporation shall pay to
an Employee described in Sections 3.1 or 3.2 a lump sum
cash amount equal to the present value of the
retirement benefit the Employee would have been
entitled to receive under the terms of the Corporate
Retirement Plan for Employees of General Signal
Corporation as in effect on the day preceding the
Change in Control (without regard to vesting
thereunder) and the Benefit Equalization Plan as in
effect on the day preceding the Change in Control had
the Employee accumulated additional service equal to
the period for which the Employee is paid under
Sections 3.1 or 3.2 of this Plan. For purposes of
calculating the lump sum cash payments provided by this
Section, the present value shall be determined by using
the lump sum factors contained in such Corporate
Retirement Plan on the date of Involuntary Termination.
3.7 Within thirty (30) days following
Involuntary Termination, the Corporation shall pay to
an Employee described in Sections 3.1 or 3.2 a lump sum
cash amount equal to the present value of the aggregate
Matching Contributions that would have been made by the
Corporation under the terms of the General Signal
Corporation Savings and Stock Ownership Plan as in
effect on the day preceding the Change in Control if
the Employee had continued to be employed and to
participate in such Savings Plan to the same extent as
he participated in the year of such Involuntary
Termination during the period for which the Employee is
paid under Sections 3.1 or 3.2 of this Plan. For
purposes of calculating the lump sum cash payments
provided by this Section, the present value shall be
determined by using the Pension Benefit Guaranty
Corporation interest rate for immediate annuities on
the date of Involuntary Termination.
3.8 During the period for which an Employee
is paid under Sections 3.1 or 3.2 of this Plan, the
Employee shall be deemed to be on layoff status and
continue to be entitled to all benefits and service
credit for benefits under medical, insurance, and other
welfare benefit plans, programs and arrangements of the
Corporation as if he were actively employed during such
period (including meeting any age and service
requirements for post retirement benefits). With
respect to such welfare benefit plans, an Employee
shall be entitled to purchase continued coverage for
himself and all covered family members and the
Corporation shall arrange for, and make available, such
coverage as of his Involuntary Termination. Such
coverage shall be no less in scope than that provided
to the covered Employee (and covered family members) at
the time of Change in Control. The cost of such
coverage shall be shared by the Corporation and the
Employee in the same proportion as exists at the time
of Change in Control. With respect to medical
(including HMO) and dental coverage, such coverage
shall be in lieu of the Corporation's practice of
affording health care continuation coverage to
terminating employees and covered family members
pursuant to the Consolidated Omnibus Reconciliation
Budget Act of 1986, as amended, ("COBRA"), to the
extent that the availability of such coverage to such
Employee (and covered family members) satisfies the
Corporation's legal obligations under COBRA.
3.9 If, by reason of the requirements for
tax qualification or any other reason, benefits or
service credits under any welfare benefit plan shall
not be payable or provided under any such plan to the
Employee or his dependents, beneficiaries or estate
despite the provisions of Section 3.8 above, the
Corporation itself shall, to the extent necessary, pay
or provide for payment of such benefits and service
credit for such benefits to the Employee or his
dependents, beneficiaries or estate.
SECTION 4. PAYMENTS
4.1 All severance payments shall be made
from the general assets of the Corporation; provided,
however, that such payments shall be reduced by the
amount of any payments made to an Employee from any
trust or special or separate fund established by the
Corporation to assure such payments. The Corporation
shall not be required to establish a special or
separate fund or other segregation of assets to assure
such payments, and, if the Corporation shall make any
investments to aid it in meeting its obligations
hereunder, Employees shall have no right, title or
interest whatever in or to any such investments except
as may otherwise be expressly provided in a separate
written instrument relating to such investments.
Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be
construed to create a trust of any kind between the
Corporation and any Employees. To the extent that any
Employee acquires a right to receive payments from the
Corporation hereunder, such right shall be no greater
than the right of an unsecured creditor of the Corpora-
tion.
4.2 The Corporation may deduct from
severance payments any Federal, state or local
withholding or other taxes or charges which is required
to deduct under applicable laws.
SECTION 5. ADMINISTRATION OF THE PLAN
5.1 The Corporate Benefits Committee shall
have general responsibility for the administration and
interpretation of the Plan.
5.2 The Corporate Benefits Committee may
arrange for the engagement of such legal counsel, who
may be counsel for the Corporation, and make use of
such agents and clerical or other personnel as it shall
require or may deem advisable for purposes of the Plan.
The Corporate Benefits Committee may rely upon the
written opinions of such counsel, may delegate to any
agent or to any sub-committee or member of the
Corporate Benefits Committee its authority to perform
any act, including without limitation those matters
involving the exercise of a discretion; provided,
however, that such delegation shall be subject to
revocation at any time at the discretion of the
Corporate Benefits Committee.
5.3 If any claim for benefits under the Plan
is wholly or partially denied, the Corporate Benefits
Committee shall give written notice by registered or
certified mail of such denial to the claimant within 90
days after receipt of the written claim by the
Corporate Benefits Committee. Notice must be written
in a manner calculated to be understood by the
claimant, setting forth the specific reasons for such
denial, specific reference to pertinent Plan provisions
on which the denial is based, a description of any
additional material or information necessary for the
claimant to perfect the claim and an explanation of why
such material or information is necessary, and an
explanation of the Plan's claim review procedure. The
Corporate Benefits Committee shall also advise the
claimant that he or his duly authorized representative
may request a review by the Corporate Benefits
Committee of the decision to deny the claim by filing
with the Corporate Benefits Committee, within 65 days
after such notice has been received by the claimant, a
written request for such review. The claimant may
review pertinent documents and submit issues and
comments in writing within the same 65 day period. If
such request is so filed, such review shall be made by
the Corporate Benefits Committee within 60 days after
receipt of such request, unless special circumstances
(including, but not limited to, a need to hold a
hearing) require an extension of time for processing,
in which case a decision shall be rendered not later
than 120 days after receipt of the request for review.
The claimant shall be given written notice within such
60 day period of the decision resulting from such
review, which shall include specific reasons for the
decision, written in a manner calculated to be
understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision was
based.
SECTION 6. LITIGATION EXPENSES
6.1 In the event of any litigation or other
proceeding between the Corporation and the Employee
with respect to the subject matter of this Plan and the
enforcement of his rights hereunder, the Corporation
shall reimburse the Employee for all of his reasonable
costs and expenses relating to such litigation or other
proceeding, including his reasonable attorney's fees
and expenses, provided that such litigation or
proceeding results in any (a) settlement requiring the
Corporation to make a payment to the Employee, or (b)
judgment or order in whole or in part in favor of the
Employee, regardless of whether such judgment or order
is subsequently reversed on appeal or in a collateral
proceeding. In no event shall the Employee be required
to reimburse the Corporation for any of the costs and
expenses relating to such litigation or other
proceeding. The obligation of the Corporation under
this section shall survive the termination for any
reason of this Plan.
SECTION 7. AMENDMENT, SUSPENSION, OR
TERMINATION OF THE PLAN
7.1 At any time prior to the occurrence, if
any, of a Change in Control, the Board of Directors
shall have the power to amend, suspend or terminate the
Plan in whole or in part and for any reason.
7.2 For at least two years after the
occurrence of a Change in Control, the Plan may not be
amended, suspended or terminated.
SECTION 8. MISCELLANEOUS
8.1 Nothing contained in the Plan shall give
any Employee the right to be retained in the employment
of the Corporation or any of its affiliated or
associated corporations or affect the right of any such
Employer to dismiss any Employee.
8.2 If the Corporate Benefits Committee
shall find that any person to whom any amount is
payable under the Plan is unable to care for his or her
affairs because of illness or accident, or is a minor,
or has died, then any payment due him or her or his or
her estate (unless a prior claim therefor has been made
by a duly appointed legal representative) may, if the
Corporate Benefits Committee so elects, be paid to his
or her spouse, a child, a relative, an institution
maintaining or having custody of such person, or any
other person deemed by the Corporate Benefits Committee
to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall
be a complete discharge of the liability of the Plan
therefor.
8.3 Except insofar as may otherwise be
required by law, no amount payable at any time under
the Plan shall be subject in any manner to alienation
by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance
of any kind or in any manner be subject to the debts or
liabilities of any person and any attempt so to
alienate or subject any such amount, whether at the
time or thereafter payable, shall be void. If any
person shall attempt to, or shall, alienate, sell,
transfer, assign, pledge, attach, charge or otherwise
encumber any amount payable under the Plan, or any part
thereof, or if by reason of his or her bankruptcy or
other occurrence at any time such amount would be made
subject to his debts or liabilities or would otherwise
not be enjoyed by him or her, then the Corporate
Benefits Committee, if it so elects, may direct that
such amount be withheld and that the same amount or any
part thereof be paid or applied to or for the benefit
of such person, in such manner and proportion as the
Corporate Benefits Committee may deem proper.
8.4 The captions preceding the Sections of
the Plan have been inserted solely as a matter of
convenience and in no way define or limit the scope or
intent of any provisions of the Plan.
8.5 The Plan and all rights thereunder shall
be governed by and construed in accordance with the
laws of the State of New York.
File: 4.67 - emplbnft\pension.bep
GENERAL SIGNAL CORPORATION
BENEFIT EQUALIZATION PLAN
As Amended and Restated
October 17, 1996
GENERAL SIGNAL CORPORATION
BENEFIT EQUALIZATION PLAN
TABLE OF CONTENTS
PAGE
ARTICLE I Purpose 1
ARTICLE II Definitions 1
ARTICLE III Eligibility 2
ARTICLE IV Pension Benefits 3
ARTICLE V Source of Payment 3
ARTICLE VI Designation of Beneficiaries 4
ARTICLE VII Administration of the Plan 4
ARTICLE VIII Amendment and Termination 6
ARTICLE IX General Provisions 6
GENERAL SIGNAL CORPORATION
BENEFIT EQUALIZATION PLAN
ARTICLE I
Purpose
1.1 General Signal Corporation established this
amended and restated Benefit Equalization Plan
effective as of October 14, 1993 solely for the purpose
of providing to its eligible employees benefits which
would have been payable from the tax-exempt trust under
the tax-qualified pension benefit plan known as the
Corporate Retirement Plan of General Signal Corporation
but for the limitations placed by the Internal Revenue
Code on benefits payable made with respect to such
employees under such plan. This Plan constitutes an
amendment and continuation of the Plan in effect prior
to this restatement.
The portions of the Plan providing benefits
without regard to the limitation on compensation under
Section 401(a)(17) of the Code ($150,000 for 1994), and
taking into account deferrals under the General Signal
Corporation Deferred Compensation Plan, constitutes an
unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of
management or highly compensated employees. The
portion of the Plan providing benefits above the
limitations prescribed under Section 415 of the Code
constitutes an "excess benefit plan" as defined in
Section 3(36) of the Employee Retirement Security Act
of 1974.
ARTICLE II
Definitions
When used herein, the following terms shall have
the following meanings:
2.1 "Act" means the Employee Retirement Income
Security Act of 1974 as amended from time to time.
2.2 "Beneficiary" means the beneficiary or
beneficiaries designated in accordance with Article VI
of the Plan to receive the amount, if any, payable upon
the death of an Employee who participates in the Plan.
2.3 "Benefit Limitations" means (a) the maximum
"annual benefit" payable under the Corporate Retirement
Plan in accordance with Section 415 of the Code, and
(b) the maximum amount of pension plan benefits that
could have been provided under the Corporate Retirement
Plan without regard to the limitation prescribed under
Section 401(a)(17) of the Code on the amount of annual
compensation that can be taken into account under the
Corporate Retirement Plan.
2.4 "Board of Directors" means the Board of
Directors of the Company.
2.5 "Code" means the Internal Revenue Code, as
amended from time to time.
2.6 "Company" means General Signal
Corporation, a New York corporation, and its successors
or assigns.
2.7 "Corporate Benefits Committee" means the
committee appointed to administer and be the named
fiduciary for administration of the Corporate
Retirement Plan.
2.8 "Corporate Retirement Plan" means the
Corporate Retirement Plan of General Signal
Corporation, as amended and restated from time to time.
2.9 "Employee" means any person employed by an
Employer who is eligible to receive a benefit under the
Corporate Retirement Plan.
2.10 "Employer" means the Company and each
subsidiary thereof that participates in the Corporate
Retirement Plan.
2.11 "Human Resources Officer" means the chief
human resources officer of the Company.
2.12 Investment Committee means the committee
appointed to be responsible for all assets and be the
named fiduciary for all assets of the Corporate
Retirement Plan.
2.13 "Pension Benefits" means the benefits
described in Article IV of the Plan.
2.14 "Plan" means the General Signal Corporation
Benefit Equalization Plan as set forth herein and as
amended and restated from time to time.
ARTICLE III
Eligibility
3.1 Each Employee with respect to whom benefits
are reduced under the Corporate Retirement Plan as a
result of any of the Benefit Limitations shall
participate in the Plan.
ARTICLE IV
Pension Benefits
4.1 The amount of Pension Benefits payable to
or in respect of an Employee shall be equal to the
actuarial value of the difference between (a) the
amount of benefits which would have been payable to or
in respect of the Employee under the Corporate
Retirement Plan without regard to the Benefit
Limitations and (b) the amount of benefits actually
payable to or in respect of the Employee thereunder.
In addition, the amount of Pension Benefits
shall be increased in the amount of additional benefits
to which the Employee would have been entitled under
the Corporate Retirement Plan had the deferral of any
compensation under the General Signal Corporation
Deferred Compensation Plan been included as part of the
Employee's earnings and paid to the Employee during the
applicable calendar year.
4.2 Subject to Section 4.3, Pension Benefits
shall be payable in the form of a life annuity for a
single Employee and in the form of a 50% joint and
survivor annuity for a married Employee, beginning on
the individual's retirement date, unless the Corporate
Benefits Committee authorizes another manner or time of
payment.
The Company reserves the right to limit
payments in any given year to such amount as would not
cause a loss of deductibility pursuant to Section
162(m) of the Code.
4.3 In the event that the lump sum value of the
Pension Benefits under the Plan shall be $20,000 or
less, such Pension Benefits shall be payable in a lump
sum settlement of Actuarially Equivalent (as defined in
the Corporate Retirement Plan) value in full discharge
of all liability in respect of such Pension Benefits.
The lump sum payment shall be made as soon as
administratively practicable following the Employee's
termination of service or death. The Pension Benefits
of any Employee who receives such a lump sum payment
and who subsequently accrues Pension Benefits under
this Plan shall be reduced by the Actuarial Equivalent
of the Pension Benefits on which the lump sum amount
was so paid.
ARTICLE V
Source of Payment
5.1 All payments provided for under the Plan
shall be paid in cash from the general funds of the
Company; provided, however, that such payments shall be
reduced by the amount of any payments made to the
Employee or his or her dependents, beneficiaries or
estate from any trust or special or separate fund
established by the Company to assure such payments.
The Company shall not be required to establish a
special or separate fund or other segregation of assets
to assure such payments, and, if the Company shall make
any investments to aid it in meeting its obligations
hereunder, a participant shall have no right, title, or
interest whatever in or to any such investments except
as may otherwise be expressly provided in a separate
written instrument relating to such investments.
Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be
construed to create a trust of any kind between the
Company and any participants. To the extent that any
participant acquires a right to receive payments from
the Company hereunder, such right shall be no greater
than the right of an unsecured creditor of the Company.
5.2 The Investment Committee may, for financial
reasons, establish a grantor trust for the benefit of
participants in the Plan. The assets of said trust
will be held separate and apart from other Company
funds and shall be used exclusively for the purposes
set forth in the Plan and the applicable trust
agreement, subject to the following conditions:
(a) the creation of said trust shall not
cause the Plan to be other than "unfunded" for purposes of Title I
of the Act:
(b) the Company shall be treated as the
"grantor" of said trust for purposes of Sections 671 and 677 of the Code;
and
(c) said trust agreement shall provide that its assets may be used to
satisfy claims of the Company's general creditors, provided that the
rights of such general creditors are enforceable under federal and state
law.
ARTICLE VI
Designation of Beneficiaries
6.1 Unless an Employee who participates in the
Plan otherwise files with the Corporate Benefits
Committee a written designation of one or more persons
as the Beneficiary who shall be entitled to receive the
amount, if any, payable under the Plan upon such
Employee's death, the Employee's beneficiary under the
Corporate Retirement Plan shall be deemed to have been
designated the Beneficiary for Pension Benefits. If the
Corporate Benefits Committee is in doubt as to the
right of any person to receive such amount, the
Corporate Benefits Committee may retain such amount,
without liability for any interest thereon, until the
rights thereto are determined, or the Corporate
Benefits Committee may pay such amount into any court
of appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Plan and the
Company therefor.
ARTICLE VII
Administration of the Plan
7.1 The Plan shall be administered by the
Corporate Benefits Committee which shall have full
power and authority to interpret, construe and
administer the Plan, and review claims for benefits
under the Plan, and the Corporate Benefits Committee's
interpretations and constructions of the Plan and
actions thereunder shall be binding and conclusive on
all persons and for all purposes.
7.2 The members of the Corporate Benefits
Committee shall be the named fiduciaries of the Plan
for administration of the Plan (including but not
limited to complying with reporting and disclosure
requirements and establishing and maintaining Plan
records), and shall engage such certified public
accountants, who may be accountants for the Company, as
it shall require or may deem advisable for purposes of
administration of the Plan. The Corporate Benefits
Committee may arrange for the engagement of such legal
counsel, who may be counsel for the Company, and make
use of such agents and clerical or other personnel as
they each shall require or may deem advisable for
purposes of the Plan. The Corporate Benefits Committee
may rely upon the written opinion of such counsel and
the accountants engaged by the Corporate Benefits
Committee and may delegate to any such agent or to any
sub-committee or member of the Corporate Benefits
Committee its authority to perform any act hereunder,
including without limitation those matters involving
the exercise of discretion, provided that such
delegation shall be subject to revocation at any time
at the discretion of the Corporate Benefits Committee.
7.3 To the maximum extent permitted by law, no
member of the Corporate Benefits Committee or
Investment Committee shall be personally liable by
reason of any contract or other instrument executed by
such member or on such member's behalf in his or her
capacity as a member of said Committees nor for any
mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless, directly from its
own assets (including the proceeds of any insurance
policy the premiums of which are paid from the
Company's own assets), each member of the Corporate
Benefits Committee, Investment Committee and each other
officer, employee or director of the Company to whom
any duty or power relating to the administration or
interpretation of the Plan, or to the management and
control of the assets of the Plan, may be delegated or
allocated, against any cost or expense (including
counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Company)
arising out of any act or omission to act in connection
with the Plan unless arising out of such person's own
fraud or willful misconduct. Each Employer will pay
such proportion of any claim and/or expense as the
Company directs.
7.4 If any claim for benefits under the Plan is
wholly or partially denied, the Corporate Benefits
Committee shall give written notice by registered or
certified mail of such denial to the claimant within 90
days after receipt of the written claim by the
Corporate Benefits Committee. Notice must be written
in a manner calculated to be understood by the
claimant, setting forth the specific reasons for such
denial, specific reference to pertinent Plan provisions
on which the denial is based, a description of any
additional material or information necessary for the
claimant to perfect the claim and an explanation of why
such material or information is necessary, and an
explanation of the Plan's claim review procedure. The
Corporate Benefits Committee shall also advise the
claimant that the claimant or the claimant's duly
authorized representative may request a review by the
Corporate Benefits Committee of the decision to deny
the claim by filing with the Corporate Benefits
Committee, within 65 days after such notice has been
received by the claimant, a written request for such
review. The claimant may review pertinent documents
and submit issues and comments in writing within the
same 65 day period. If such request is so filed, such
review shall be made by the Corporate Benefits
Committee with 60 days after receipt of such request,
unless special circumstances (including, but not
limited to, a need to hold a hearing) require an
extension of time for processing, in which case a
decision shall be rendered not later than 120 days
after receipt of the request for review. The claimant
shall be given written notice within such 60 day period
of the decision resulting from such review, which shall
include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and
specific references to the pertinent Plan provisions on
which the decision was based.
ARTICLE VIII
Amendment and Termination
8.1 The Company expects and intends to maintain
the Plan in force indefinitely, but the Company, by
action of the Board of Directors, may change, suspend
or terminate the Plan at any time. The Human Resources
Officer may adopt amendments to the Plan which it deems
necessary or appropriate to comply with applicable laws
or government regulations or which do not materially
increase the annual cost of the Plan. Notwithstanding
the foregoing, no such action shall retroactively
impair or otherwise adversely affect the rights of any
person to benefits under the Plan which have accrued
prior to the date of any such action, as determined by
the Corporate Benefits Committee.
ARTICLE IX
General Provisions
9.1 This Plan shall be binding upon and inure
to the benefit of the Company and its successors and
assigns and the Employee and the designees and the
estate of the Employee. Nothing in this Plan shall
preclude the Company from consolidating or merging into
or with, or transferring all or substantially all of
its assets to, another corporation which assumes this
Plan and all obligations of the Company hereunder.
Upon such a consolidation, merger or transfer of assets
and assumption, the term "Company" shall refer to such
other corporation and this Plan shall continue in full
force and effect.
9.2 Neither the Plan nor any action taken
hereunder shall be construed as giving to an Employee
the right to be retained in the employ of the Employer
or as affecting the right of the Employer to dismiss
any Employee.
9.3 The Company may withhold from any benefits
payable under this Plan all Federal, state, city or
other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
9.4 Except insofar as may otherwise be required
by law, no amount payable at any time under the Plan
and the Fund shall be subject in any manner to
alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance
of any kind nor in any manner be subject to the debts
or liabilities of any person and any attempt to so
alienate or subject any such amount, whether presently
or thereafter payable, shall be void. If any person
shall attempt to, or shall alienate, sell, transfer,
assign, pledge, attach, charge or otherwise encumber
any amount payable under the Plan and Fund, or any part
thereof, or if by reason of such person's bankruptcy or
other event happening at any such time such amount
would be made subject to such person's debts or
liabilities or would otherwise not be enjoyed by the
such person, then the Corporate Benefits Committee, if
it so elects, may direct that such amount be withheld
and that the same or any part thereof be paid or
applied to or for the benefit of such person, such
person's spouse, children or other dependents, or any
of them, in such manner and proportion as the Corporate
Benefits Committee may deem proper.
9.5 If the Corporate Benefits Committee shall
find that any person to whom any amount is or was
payable hereunder is unable to care for such person's
affairs because of illness or accident, or has died,
then the Company, if it so elects, may direct that any
payment due such person or such person's estate (unless
a prior claim therefor has been made by a duly
appointed legal representative) or any part thereof be
paid or applied for the benefit of such person or to or
for the benefit of such person's spouse, children or
other dependents, an institution maintaining or having
custody of such person, any other person deemed by the
Corporate Benefits Committee to be a proper recipient
on behalf of such person otherwise entitled to payment,
or any of them, in such manner and proportion as the
Company may deem proper. Any such payment shall be in
complete discharge of the liability of the Corporate
Benefits Committee therefor.
9.6 Whenever, under this Plan, it is necessary
to determine whether one benefit is less than, equal
to, or larger than another, whether or not such
benefits are provided under this Plan, such
determination shall be made by the Company's
independent consulting actuary, using mortality,
interest and any other assumptions normally used at the
time by such actuary in determining actuarial
equivalents under the Corporate Retirement Plan.
9.7 All elections, designations, requests,
notices, instructions, and other communications from an
Employee, Beneficiary or other person to the Corporate
Benefits Committee required or permitted under the Plan
shall be in such form as is prescribed from time to
time by the Corporate Benefits Committee, shall be
mailed by first-class mail or delivered to such
location as shall be specified by the Corporate
Benefits Committee, and shall be deemed to have been
given and delivered only upon actual receipt thereof at
such location.
9.8 The benefits payable under this Plan shall
be in addition to all other benefits provided for
Employees of the Company.
9.9 The captions preceding the sections and
articles hereof have been inserted solely as a matter
of convenience and in no way define or limit the scope
or intent of any provisions of the Plan.
9.10 This Plan shall be governed by the laws of
the State of New York from time to time in effect.
GENERAL SIGNAL CORPORATION
1997 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. Purpose
The purpose of this Plan is to align further the
interests of non-employee directors with other
shareholders of General Signal Corporation (the
"Corporation").
2. Administration
The Plan shall be administered by the Committee on
Directors (the "Committee") of the Board of Directors.
The Committee shall act by a majority vote or by a
written statement signed by all of the members.
Subject to the express provisions of this Plan, the
Committee shall grant stock options to non-employee
directors, and determine the number of shares to be
subject to each grant and the terms and conditions
thereof.
3. Stock Subject to Plan
The shares to be issued under this Plan shall be
made available, at the discretion of the Board of
Directors or the Committee, either from the authorized
but unissued shares of Common Stock of the Corporation
or from shares of Common Stock reacquired by the
Corporation, including shares purchased in the open
market.
Subject to adjustment as provided in the last
paragraph of this Section 3:
(a) the aggregate number of shares of Common Stock
reserved and available for issuance under this
Plan, subject to Section 3(b) below, shall be
125,000 shares; and
(b) the shares available for granting awards in
any year shall be increased by any shares
represented by options that expire unexercised
for any reason.
In the event that the number of outstanding shares
of Common Stock of the Corporation shall be changed by
reason of split-ups, combinations of shares,
recapitalization, stock dividends or equity
distributions, the Board of Directors shall
appropriately adjust the number of shares for which
awards may thereafter be granted under this Plan either
in the aggregate or to any single participant, the
number of shares then subject to awards granted
previously under this Plan, and the price per share
payable upon exercise of such awards. Awards may also
contain provisions for their continuation or for other
equitable adjustments after changes in shares of Common
Stock resulting from reorganization, sale, merger,
consolidation or similar occurrence.
4. Eligibility and Participation
Awards under this Plan may be granted only to a
director of the Corporation who is not also an officer
or other employee of the Corporation or of one of its
subsidiaries, and who has been elected, re-elected or
is continuing as a member of the Board following the
applicable Annual Meeting of Shareholders of the
Corporation ("Eligible Director").
5. Stock Options
Grant
Each year, as of the date of the Annual Meeting of
Shareholders of the Corporation, each Eligible Director
shall be eligible to receive a non-qualified stock
option to purchase shares of Common Stock of the
Corporation. Subject to shareholder approval, each
Eligible Director shall receive an option to purchase
2,000 shares on the date of the 1997 Annual Meeting of
Shareholders. On each successive Annual Meeting of
Shareholders, each Eligible Director may be granted an
additional option to purchase shares in an amount as
determined by the Committee.
Option Prices
The purchase price of the Common Stock under each
option shall be equal to 100% of the fair market value
of the stock on the date the option is granted. The
purchase price is to be paid in full upon the exercise
of the option, and payment shall be made in cash, or by
check, bank draft or money order payable to the order
of the Corporation, or by delivering shares of Common
Stock of the Corporation of equivalent fair market
value on the day before the option is exercised. Fair
market value shall be the closing price on the New York
Stock Exchange or, in the event that no sale shall have
taken place, the mean between the closing bid and asked
prices.
Form of Option
Options granted pursuant to this Plan to Eligible
Directors shall be evidenced by Stock Option Agreements
in such form as the Committee shall from time to time
adopt.
Option Period
The options granted hereunder shall expire on a
date which is ten years after the date of grant of the
options.
Vesting
Each option granted to an Eligible Director shall
vest and be exercisable on the date of the grant.
Termination of Options
If an Eligible Director ceases to serve on the
Board of Directors for any reason other than death,
disability or retirement, any outstanding options not
yet exercised at the time the Eligible Director so
ceases to serve may be exercised within one week
following the date the Eligible Director so ceases to
serve, but in no event later than the expiration date
of the option.
In the event of the death or disability of an
Eligible Director while a member of the Board of
Directors, any outstanding options may be exercised (in
the case of death by the optionee's personal
representative, heir or legatee) during the period
ending one year after the date of such death or
disability, but in no event later than the expiration
date of the option. In the event of retirement, any
outstanding options may be exercised during the period
ending 5 years after the date of such retirement, but
in no event later than the expiration date of the
option. In the event of a retired Director's death
during the fifth year after retirement, his or her
heirs or estate may exercise any outstanding options
during the period ending one year after such death, but
in no event later than the expiration date of the
option.
Non-Transferability of Option
No option granted under this Plan to an Eligible
Director shall be transferable otherwise than by will
or the laws of descent and distribution, and an option
may be exercised during the lifetime of the Eligible
Director thereof, only by him or her; provided,
however, that the Committee may permit limited
transferability in conformance with rules promulgated
by the Securities and Exchange Commission [,and
provided further, however, that following retirement of
an Eligible Director, the options held by such Eligible
Director may be transferred by gift.]
6. Governing Law
The validity, construction and effect of this
Plan, any rules and regulations relating to this Plan,
and any awards under this Plan, shall be determined in
accordance with the laws of New York without giving
effect to principles of conflict of laws.
7. Effective Period of Plan
This Plan shall become effective upon the date of
its approval by the shareholders of the Corporation.
Unless earlier terminated by the Board of Directors,
this Plan shall terminate on April 17, 2002; provided,
however, that any such termination shall not affect
awards granted prior thereto.
8. Amendment of Plan
The Board of Directors of the Corporation may from
time to time make such amendments of this Plan as it
shall deem advisable; provided, however, that the Board
of Directors may not, without further approval of the
holders of a majority of all outstanding shares of the
Corporation entitled to vote thereon, (i) increase the
maximum number of shares as to which awards may be
granted under this Plan (except as otherwise provided
in Section 3), (ii) permit the granting of options at
less than 100% of fair market value at time of grant,
(iii) change the class of persons eligible to receive
awards under this Plan, or (iv) make any other
amendment for which shareholder approval is required.
No amendment of this Plan may, without the consent of
the holder of an existing award, adversely affect such
holder's rights thereunder.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000040834
<NAME> GENERAL SIGNAL CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 40000
<SECURITIES> 90
<RECEIVABLES> 367800
<ALLOWANCES> 15000
<INVENTORY> 247100
<CURRENT-ASSETS> 718000
<PP&E> 753700
<DEPRECIATION> 448400
<TOTAL-ASSETS> 1565800
<CURRENT-LIABILITIES> 422600
<BONDS> 241800
0
0
<COMMON> 78400
<OTHER-SE> 653400
<TOTAL-LIABILITY-AND-EQUITY> 1565800
<SALES> 505600
<TOTAL-REVENUES> 505600
<CGS> 357300
<TOTAL-COSTS> 461700
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 823
<INTEREST-EXPENSE> 3400
<INCOME-PRETAX> 40500
<INCOME-TAX> 16200
<INCOME-CONTINUING> 24300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24300
<EPS-PRIMARY> 0.47
<EPS-DILUTED> 0
</TABLE>
