<PAGE>
--------------------------------------------------------------------------------
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER 1-4797
ILLINOIS TOOL WORKS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 36-1258310
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3600 W. LAKE AVENUE, GLENVIEW, ILLINOIS 60025-5811
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (708) 724-7500
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
--------------------------------------------------- ---------------------------------------------------
<S> <C>
COMMON STOCK NEW YORK STOCK EXCHANGE
CHICAGO STOCK EXCHANGE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES ____X____ NO ____________
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. / /
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF MARCH 7, 1995, WAS APPROXIMATELY $3,600,000,000.
SHARES OF COMMON STOCK OUTSTANDING AT MARCH 7, 1995 - 114,066,300.
------------------------
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<S> <C>
PARTS I, II,
1994 ANNUAL REPORT TO STOCKHOLDERS........................................... IV
PROXY STATEMENT DATED MARCH 27, 1995, FOR ANNUAL MEETING OF STOCKHOLDERS TO
BE HELD ON MAY 5, 1995...................................................... PART III
</TABLE>
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<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL --
Illinois Tool Works Inc. (the "Company") manufactures and markets a variety
of products and systems that provide specific, problem-solving solutions for a
diverse customer base worldwide. The Company has more than 260 operations in 33
countries. The Company's business units are divided into two segments:
Engineered Components, and Industrial Systems and Consumables. Products in the
Company's Engineered Components segment include short lead-time plastic and
metal components, fasteners and assemblies; industrial fluids and adhesives;
fastening tools and welding equipment. Industrial Systems and Consumables'
products include longer lead-time systems and related consumables for consumer
and industrial packaging; industrial spray coating equipment and systems and
quality assurance applications equipment and systems.
In March 1993, the Company acquired the Miller Group Ltd., a manufacturer of
arc welding equipment, through an exchange of ITW voting Common Stock for all of
the voting Common Stock of Miller. As a result, the acquisition has been
accounted for as a pooling of interests in conformity with Generally Accepted
Accounting Principles, specifically paragraphs 46 through 48 of Accounting
Principles Board Opinion No. 16. Accordingly, the results of operations have
been included in the Statement of Income as of the beginning of 1993. The impact
of Miller on consolidated operating revenues, net income and net income per
share for 1993 and 1992 was not significant. Therefore, the 1992 financial
statements have not been restated to reflect the acquisition of Miller.
In 1990, the Company acquired substantially all of the net assets of the
DeVilbiss Industrial/Commercial businesses of Eagle Industries, Inc.
("DeVilbiss"). The DeVilbiss businesses manufacture products and engineered
systems used for product finishing and coating applications, including
conventional air spray equipment, powder-coating devices and robotic finishing
systems. The acquisition has been accounted for as a purchase and, accordingly,
the results of operations have been included in the Statement of Income from the
acquisition date.
In 1991, the Company sold certain net assets and technology related to the
automotive finishing systems business. The revenues, income and net assets
related to the automotive finishing systems business were not material.
During the five-year period ending December 31, 1994, the Company acquired
and disposed of a number of other businesses, none of which individually had a
material impact on consolidated results.
CURRENT YEAR DEVELOPMENTS --
Refer to pages 19 through 21, Management's Discussion and Analysis, in the
Company's 1994 Annual Report to Stockholders.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS --
The percentage contributions to operating revenues for the last three years
by industry segment are as follows:
<TABLE>
<CAPTION>
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES
---------- -----------
<S> <C> <C>
1994.................................... 53% 47%
1993.................................... 52% 48%
1992.................................... 46% 54%
</TABLE>
Segment and geographic data are included on pages 19, 20 and 25 of the
Company's 1994 Annual Report to Stockholders.
1
<PAGE>
The principal markets served by the Company's two segments are as follows:
<TABLE>
<CAPTION>
% OF OPERATING REVENUES
------------------------
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES
---------- -----------
<S> <C> <C>
Construction............................ 36% 10%
Automotive.............................. 27 9
General Industrial...................... 17 27
Food and Beverage....................... 2 18
Industrial Capital Goods................ 3 11
Consumer Durables....................... 6 3
Paper Products.......................... -- 10
Electronics............................. 5 2
Other................................... 4 10
----- -----
100% 100%
----- -----
----- -----
</TABLE>
Operating results of the segments are described on pages 19, 20 and 25 of
the Company's 1994 Annual Report to Stockholders.
BACKLOG --
Backlog generally is not considered a significant factor in the Company's
businesses as relatively short delivery periods and rapid inventory turnover are
characteristic of many of its products.
The following summarizes backlog by industry segment as of December 31, 1994
and 1993:
<TABLE>
<CAPTION>
BACKLOG IN THOUSANDS OF DOLLARS
-------------------------------------
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES TOTAL
----------- ------------ ----------
<S> <C> <C> <C>
1994.................................................. $ 199,000 $ 156,000 $ 355,000
1993.................................................. $ 159,000 $ 142,000 $ 301,000
</TABLE>
Backlog orders scheduled for shipment beyond calendar year 1995 were not
material in either industry segment as of December 31, 1994.
The following information is equally applicable to both industry segments of
the business unless otherwise noted:
COMPETITION --
The Company's global competitive environment is complex because of the wide
diversity of products the Company manufactures and the markets it serves.
Depending on the product or market, the Company may compete with few other
companies or with many firms, some of which may be the Company's own licensees.
The Company is a leading producer of plastic and metal fastening components
and assemblies; adhesives and fluids; packaging systems and related consumables;
finishing and static control systems and products; quality assurance equipment;
tooling for specialty applications; and arc welding equipment.
RAW MATERIALS --
The Company uses raw materials of various types, primarily metals and
plastics that are available from numerous commercial sources. The availability
of materials and energy has not resulted in any business interruptions or other
major problems, nor are any such problems anticipated.
RESEARCH AND DEVELOPMENT --
The Company's growth has resulted from developing new and improved products,
broadening the application of established products, continuing efforts to
improve and develop new methods, processes and
2
<PAGE>
equipment, and from acquisitions. Many new products are designed to reduce
customers' costs by eliminating steps in their manufacturing processes, reducing
the number of parts in an assembly, or by improving the quality of customers'
assembled products. Typically, the development of such products is accomplished
by working closely with customers on specific applications. Identifiable
research and development costs are set forth on page 26 of the Company's 1994
Annual Report to Stockholders.
The Company owns approximately 1,640 unexpired United States patents
covering articles, methods and machines. Many counterparts of these patents have
also been obtained in various foreign countries. In addition, the Company has
approximately 333 applications for patents pending in the United States Patent
Office, but there is no assurance that any patent will be issued. The Company
maintains an active patent department for the administration of patents and
processing of patent applications.
The Company licenses some of its patents to other companies, from which the
Company collects royalties. The Company believes that many of its patents are
valuable and important. Nevertheless, the Company credits its leadership in the
markets it serves to engineering capability; manufacturing techniques, skills
and efficiency; marketing and sales promotion; and service and delivery of
quality products to its customers.
TRADEMARKS --
Many of the Company's products are sold under various trademarks owned or
licensed by the Company. Among the most significant are: ITW, Signode, Apex,
Buildex, Deltar, Devcon, DeVilbiss, Fastex, Hi-Cone, Keps, Magnaflux, Miller,
Minigrip, Paslode, Ransburg, Ramset, Shakeproof, Teks, Tenax, and Zip-Pak.
ENVIRONMENTAL PROTECTION --
The Company believes that its plants and equipment are in substantial
compliance with applicable environmental regulations. Additional measures to
maintain compliance are not expected to materially affect the Company's capital
expenditures, competitive position, financial position or results of operations.
Various legislative and administrative regulations concerning environmental
issues have become effective or are under consideration in many parts of the
world relating to manufacturing processes, and the sale or use of certain
products. To date, such developments have not had a substantial adverse impact
on the Company's sales or earnings. The Company has made considerable efforts to
develop and sell environmentally compatible products resulting in new and
expanding marketing opportunities.
EMPLOYEES --
The Company employed approximately 19,500 persons as of December 31, 1994
and considers its employee relations to be excellent.
INTERNATIONAL --
The Company's international operations include subsidiaries, joint ventures
and licensees in 33 countries on six continents. These operations serve such
markets as automotive, beverage and food, construction, general industrial,
packaging and others on a worldwide basis. The Company's international
subsidiaries contributed approximately 36% of operating revenues in both 1994
and 1993.
Refer to pages 19 and 20 in the Company's 1994 Annual Report to Stockholders
for additional information on international activities. International operations
are subject to certain risks inherent in conducting business in foreign
countries, including price controls, exchange controls, limitations on
participation in local enterprises, nationalization, expropriation and other
governmental action, and changes in currency exchange rates.
3
<PAGE>
EXECUTIVE OFFICERS --
Executive Officers of the Company as of March 7, 1995:
<TABLE>
<CAPTION>
NAME OFFICE AGE
--------------------------------- -------------------------------------------------------------- ---
<S> <C> <C>
Gunter A. Berlin Executive Vice President 62
Thomas W. Buckman Vice President, Patents and Technology 57
H. Richard Crowther Vice Chairman 62
W. James Farrell President 52
Russell M. Flaum Executive Vice President 44
Michael W. Gregg Senior Vice President and Controller, Accounting 59
Stewart S. Hudnut Senior Vice President, General Counsel and Secretary 55
Robert H. Jenkins Executive Vice President 52
John Karpan Senior Vice President, Human Resources 54
John D. Nichols Chairman and Chief Executive Officer 64
Frank S. Ptak Executive Vice President 51
F. Ronald Seager Executive Vice President 54
Harold B. Smith Chairman of the Executive Committee 61
Donald L. VanErden Vice President, Research and Advanced Development 59
</TABLE>
Except for Messrs. Hudnut and Karpan, each of the foregoing officers has
been employed by the Company in various executive capacities for more than five
years. The executive officers of the Company serve at the pleasure of the Board
of Directors. Mr. Hudnut joined the Company in January 1992 having previously
served as Senior Vice President, General Counsel and Secretary of MBIA Inc., a
financial guarantor, and Vice President, General Counsel and Secretary of
Scovill Inc., a diversified manufacturer. Mr. Karpan joined the Company in June
1990 having previously served as President and Chief Operating Officer of Butler
Fixture Company, a manufacturer of commercial fixtures, and Vice President,
Human Resources and Planning for Borg Warner Automotive, Inc., a manufacturer of
automotive components.
ITEM 2. PROPERTIES
As of December 31, 1994 the Company operated 172 plants and office
facilities in the United States, excluding regional sales offices and warehouse
facilities. Of the total U.S. floor space of 11.4 million square feet, 7.7
million is owned by the Company, with the remaining 3.7 million being leased.
Internationally, the Company operated 89 plants and office facilities excluding
regional sales offices and warehouse facilities. Of the total international
floor space of 5.3 million square feet, 3.8 million is owned by the Company,
with the remaining 1.5 million being leased. The principal international plants
and office facilities are in Australia, Belgium, Canada, France, Germany,
Ireland, Italy, Japan, Malaysia, Spain, Switzerland and the United Kingdom.
Of the worldwide plants and office facilities, 133 were operated by
businesses in the Engineered Components segment, 123 by businesses in the
Industrial Systems and Consumables segment, and 5 by corporate-related entities.
Of the company-wide square footage, 8.0 million are used by businesses in the
Engineered Components segment and 7.7 million are used by businesses in the
Industrial Systems and Consumables segment, with the remaining square footage
used as corporate-related facilities.
The Company's properties are primarily of steel, brick or concrete
construction and are maintained in good operating condition. Productive
capacity, in general, currently exceeds operating levels. Capacity levels are
somewhat flexible based on the number of shifts operated and on the number of
overtime hours worked. The Company adds productive capacity from time to time as
required by increased demand. Additions to capacity can be made within a
reasonable period of time due to the nature of the businesses.
ITEM 3. LEGAL PROCEEDINGS
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
4
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
This information is incorporated by reference to page 38 of the Company's
1994 Annual Report to Stockholders.
ITEM 6. SELECTED FINANCIAL DATA
This information is incorporated by reference to pages 36 and 37 of the
Company's 1994 Annual Report to Stockholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This information is incorporated by reference to pages 19 through 21 of the
Company's 1994 Annual Report to Stockholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and report thereon of Arthur Andersen LLP dated
January 31, 1995, as found on pages 22 through 35 and page 38 of the Company's
1994 Annual Report to Stockholders, are incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Information regarding the Directors of the Company is incorporated by
reference to the information under the caption "Election of Directors" in the
Company's Proxy Statement for the 1995 Annual Meeting of Stockholders.
Information regarding the Executive Officers of the Company can be found in
Part I of this Annual Report on Form 10-K on page 4.
ITEM 11. EXECUTIVE COMPENSATION
This information is incorporated by reference to the information under the
caption "Executive Compensation" in the Company's Proxy Statement for the 1995
Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This information is incorporated by reference to the information under the
caption "Security Ownership" in the Company's Proxy Statement for the 1995
Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
5
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The financial statements and report thereon of Arthur Andersen LLP dated
January 31, 1995 as found on pages 22 through 35 and page 38 of the Company's
1994 Annual Report to Stockholders, are incorporated by reference.
(2) Financial Statement Schedules
The following supplementary financial data should be read in conjunction
with the financial statements and comments thereto as presented in the Company's
1994 Annual Report to Stockholders. Schedules not included with this
supplementary financial data have been omitted because they are not applicable,
immaterial or the required information is included in the financial statements
or the related comments on financial statements.
<TABLE>
<CAPTION>
SCHEDULE NO. PAGE NO.
------------ ---------
<S> <C> <C>
Valuation and Qualifying Accounts.......................... II 9
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the period for which this
report is filed.
6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULE
To Illinois Tool Works Inc.:
We have audited, in accordance with generally accepted auditing standards,
the financial statements included in Illinois Tool Works Inc.'s 1994 Annual
Report to Stockholders, incorporated by reference in this Form 10-K, and have
issued our report thereon dated January 31, 1995. Our audits were made for the
purpose of forming an opinion on those statements taken as a whole. The schedule
listed in the accompanying index is the responsibility of the Company's
management and is presented for the purpose of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
The schedule has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
January 31, 1995
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on this 24th day of
March, 1995.
ILLINOIS TOOL WORKS INC.
By /s/ JOHN D. NICHOLS
------------------------------------
John D. Nichols
Director, Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities indicated on this 24th day of March, 1995.
SIGNATURES TITLE
--------------------------------- ---------------------------------------------
/s/ MICHAEL W. GREGG Senior Vice President and Controller,
--------------------------------- Accounting (Principal Accounting and
Michael W. Gregg Financial Officer)
Julius W. Becton, Jr. Director
Silas S. Cathcart Director
Susan Crown Director
Richard M. Jones Director
George D. Kennedy Director
Richard H. Leet Director
John D. Nichols Director
Robert C. McCormack Director
Phillip B. Rooney Director
Harold B. Smith Director
Ormand J. Wade Director
By /s/ JOHN D. NICHOLS
------------------------------------------
(John D. Nichols
as Attorney-in-Fact)
Original powers of attorney authorizing John D. Nichols to sign this Annual
Report on Form 10-K and amendments thereto on behalf of the above-named
directors of the registrant have been filed with the Securities and Exchange
Commission as part of this Annual Report on Form 10-K (Exhibit 24).
8
<PAGE>
ILLINOIS TOOL WORKS INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1992, 1993 AND 1994
SCHEDULE II
<TABLE>
<CAPTION>
DEDUCTIONS
-------------------------------------
RECEIVABLES
BALANCE AT PROVISIONS WRITTEN BALANCE
BEGINNING CHARGED TO OFF, NET OF AT END OF
OF PERIOD INCOME ACQUISITIONS RECOVERIES DISPOSITIONS OTHER PERIOD
----------- ----------- ----------- ----------- ------------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1992:
Allowances for uncollectible
accounts.......................... $ 18,900 $ 6,804 $ 528 $ (7,896) $ (140) $ (396) $ 17,800
Year Ended December 31, 1993:
Allowances for uncollectible
accounts.......................... 17,800 8,233 740 (7,496) -- (1,277) 18,000
Year Ended December 31, 1994:
Allowances for uncollectible
accounts.......................... 18,000 7,191 1,234 (6,983) (131) 289 19,600
</TABLE>
9
<PAGE>
EXHIBIT INDEX
ANNUAL REPORT ON FORM 10-K
1994
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------------- --------------------------------------------------------------------------------------------------------
<C> <S>
3(a) Restated Certificate of Incorporation of Illinois Tool Works Inc., as amended, filed as Exhibit 4(a) to
the Company's Registration Statement on Form S-8 (Registration Statement No. 33-53517) filed with the
Securities and Exchange Commission on May 6, 1994 and incorporated herein by reference.
3(b) By-laws of Illinois Tool Works Inc., as amended.
4(a) Indenture, dated as of November 1, 1986, between Illinois Tool Works Inc. and The First National Bank of
Chicago, as Trustee, filed as Exhibit 4 to the Company's Registration Statement on Form S-3
(Registration Statement No. 33-5780) filed with the Securities and Exchange Commission on May 14, 1986
and incorporated herein by reference.
4(b) Resignation of Trustee and Appointment of Successor under Indenture (Exhibit 4(a)), filed as Exhibit
4(b) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1989 (Commission
File No. 1-4797) and incorporated herein by reference.
4(c) First Supplemental Indenture, dated as of May 1, 1990 between Illinois Tool Works Inc. and Harris Trust
and Savings Bank, as Trustee, filed as Exhibit 4-3 to the Company's Post-Effective Amendment No. 1 to
Registration Statement on Form S-3 (Registration Statement No. 33-5780) filed with the Securities and
Exchange Commission on May 8, 1990 and incorporated herein by reference.
4(d) Credit agreement, dated as of August 14, 1992, among the Company, the Banks listed therein and the First
National Bank of Chicago, as agent, filed as Exhibit 4(d) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992 (Commission File No. 1-4797) and incorporated herein by
reference.
4(e) Officers' Certificate Pursuant to Sections 2.01 and 2.04 of the Indenture (Exhibit 4(a) as amended by
Exhibit 4(c)) related to the 5 7/8% Notes due March 1, 2000, filed as Exhibit 4(e) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1992 (Commission File No. 1-4797) and
incorporated herein by reference.
4(f) Form of 7 1/2% notes due December 1, 1998, filed as Exhibit 4 to the Company's Current Report on Form
8-K dated December 2, 1991 and incorporated herein by reference.
4(g) Form of 5 7/8% Notes due March 1, 2000, filed as Exhibit 4(f) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992 (Commission File No. 1-4797) and incorporated herein by
reference.
4(h) Amendment I to the Credit Agreement dated August 14, 1992 (Exhibit 4(d)), filed as Exhibit 4(a) to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1993 (Commission File
No. 1-4797) and incorporated herein by reference.
10(a) Illinois Tool Works Inc. Stock Incentive Plan and amendments thereto filed as Exhibit 10(a) to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988 (Commission File No.
1-4797) and incorporated herein by reference.
10(b) Amendment to the Illinois Tool Works Inc. Stock Incentive Plan dated December 8, 1994.
10(c) Contracts between Illinois Tool Works Inc. and John D. Nichols filed as Exhibit 10(b) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990 (Commission File No. 1-4797) and
incorporated herein by reference.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------------- --------------------------------------------------------------------------------------------------------
<C> <S>
10(d) Illinois Tool Works Inc. 1982 Executive Contributory Retirement Income Plan adopted December 13, 1982,
filed as Exhibit 10(c) to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1990 (Commission File No. 1-4797) and incorporated herein by reference.
10(e) Illinois Tool Works Inc. 1985 Executive Contributory Retirement Income Plan adopted December 1985, filed
as Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1990
(Commission File No. 1-4797) and incorporated herein by reference.
10(f) Illinois Tool Works Inc. Executive Incentive Program adopted August 1, 1979 and amendments thereto,
filed as Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1991 (Commission File No. 1-4797) and incorporated herein by reference.
10(g) Supplemental Plan for Employees of Illinois Tool Works Inc., effective January 1, 1989, filed as Exhibit
10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1989
(Commission File No. 1-4797) and incorporated herein by reference.
10(h) Phantom stock agreement between Illinois Tool Works Inc. and John D. Nichols dated January 1, 1986,
October 17, 1986 and January 1, 1991, respectively, filed as Exhibit 10(g) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1991 (Commission File No. 1-4797) and incorporated
herein by reference.
10(i) Amendment to the Phantom stock agreement between Illinois Tool Works Inc. and John D. Nichols, dated
January 1, 1991 (see 10(h) above), filed as Exhibit 10(h) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992 (Commission File No. 1-4797) and incorporated herein by reference.
10(j) Directors' deferred fee plan, retired directors' fee plan and non-officer directors' restricted stock
program, descriptions of which are under the caption "Directors' Compensation" in the Company's Proxy
Statement for the 1995 Annual Meeting of Stockholders, and incorporated herein by reference.
10(k) Underwriting Agreement dated November 20, 1991, related to the 7 1/2% Notes due December 1, 1998, filed
as Exhibit 1 to the Company's Current Report on Form 8-K dated December 2, 1991 and incorporated herein
by reference.
10(l) Underwriting Agreement dated February 23, 1993, related to the 5 7/8% Notes due March 1, 2000, filed as
Exhibit 10(j) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992
(Commission File No. 1-4797) and incorporated herein by reference.
10(m) Illinois Tool Works Inc. 1993 Executive Contributory Retirement Income Plan, filed as Exhibit 10(a) to
the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1993 (Commission
File No. 1-4797) and incorporated herein by reference.
10(n) Amendment to the Illinois Tool Works Inc. 1993 Executive Contributory Retirement Income Plan dated
December 5, 1994.
13 The Company's 1994 Annual Report to Stockholders, pages 19 - 38.
21 Subsidiaries of the Company.
22 Information under the captions "Election of Directors," "Security Ownership" and "Executive
Compensation" in the Company's Proxy Statement for the 1995 Annual Meeting of Stockholders.
23 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
27 Financial Data Schedule.
</TABLE>
11
<PAGE>
[LOGO]
THIS REPORT HAS BEEN PRINTED ON RECYCLED PAPER.
[LOGO]
<PAGE>
Exhibit 3(b)
BY-LAWS OF ILLINOIS TOOL WORKS INC.
ARTICLE I
Offices
SECTION 1. Registered Office. The registered office shall be in
the City of Wilmington, County of New Castle, State of Delaware.
SECTION 2. Other Offices. The corporation may also have offices
in Chicago, Illinois, and offices at such other places as the
Board of Directors or officers may from time to time determine.
ARTICLE II
Stockholders
SECTION 1. Annual Meeting. The annual meeting of the
stockholders shall be in the month of April or May of each year.
The place, date and time of the meeting shall be fixed by the
Board of Directors and stated in the notice of the meeting.
SECTION 2. Special Meetings. Special meetings of the
stockholders may be called by the chairman or by a majority of
the Board of Directors.
SECTION 3. Place of Meeting. The Board of Directors may
designate any place, either within or without Delaware, as the
place of meeting for any meeting of the stockholders (annual or
special) called by the Board of Directors. If a special meeting
is otherwise called, the place of meeting shall be in Chicago,
Illinois as designated in the notice.
SECTION 4. Notice of Meetings. Written or printed notice
stating the place, day and hour of the meeting shall be delivered
either personally or by mail, by or at the direction of the
chairman or persons calling the meeting to each stockholder of
record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United
States mails in a sealed envelope addressed to the stockholder at
his address as it appears on the records of the corporation, with
postage thereon prepaid.
SECTION 5. Voting of Shares by Certain Holders. Shares of stock
standing in the name of another corporation, domestic or foreign,
may be voted by such officer, agent or proxy as the by-laws of
such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such corporation may
determine.
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Shares of stock standing in the name of a deceased person may be
voted by his administrator or executor, either in person or by
proxy. Persons holding stock in a fiduciary capacity shall be
entitled to vote the shares so held. Persons whose stock is
pledged shall be entitled to vote, unless in the transfer by the
pledgor on the books of the corporation he has expressly
empowered the pledgee to vote thereon, in which case only the
pledgee, or his proxy, may represent such stock and vote thereon.
Shares of stock standing in the name of a receiver may be voted
by such receiver, and shares of stock held by or under the
control of a receiver may be voted by such receiver without the
transfer thereof into his name if authority so to do be contained
in an appropriate order of the court by which such receiver was
appointed.
SECTION 6. Fixing of Record Date. Unless any statute requires
otherwise, for the purpose of determining (a) stockholders
entitled to notice of or to vote at any meeting of stockholders,
or (b) stockholders entitled to receive payment of any dividend,
or (c) stockholders, with respect to any lawful action, the Board
of Directors may fix in advance a date as the record date for any
such determination of stockholders, such date in any case to be
not more than sixty days and, in case of a meeting of
stockholders, not less than ten days. If no record date is
fixed: (1) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at
the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting
is held; (2) the record date for determining stockholders for any
other purpose shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
SECTION 7. Quorum. The holders of a majority of the stock issued
and outstanding and entitled to vote thereat, present in person
or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business
except as otherwise provided by statute, by the Certificate of
Incorporation or by these by-laws. If, however, such quorum
shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time until a quorum shall be present or
represented. No notice other than an announcement at the meeting
need be given unless the adjournment is for more than thirty days
or a new record date is to be fixed for the adjourned meeting.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
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When a quorum is present at any meeting, the vote of the holders
of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before
such meeting, unless the question is one upon which by express
provision of the statutes or of the Certificate of Incorporation
or of these by-laws, a different vote is required in which case
such express provision shall govern and control the decision of
such question.
SECTION 8. Proxies. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the
stockholder or by his duly authorized attorney-in-fact. Such
proxy shall be filed with the secretary of the corporation before
or at the time of the meeting. Proxies shall be valid only with
respect to the meeting or meetings and any adjournment thereof,
for which they are given.
SECTION 9. Voting. Each stockholder shall have one vote in
person or by proxy for each share of stock having voting power
registered in his name on the books of the corporation at the
record date.
SECTION 10. Stockholder Nominations for Directors. Any
stockholder entitled to vote in the election of directors may
nominate one or more persons for election as directors, provided
written notice of such stockholder's nomination has been received
by the Secretary of the Company not later than (i) the close of
business on the last business day of December prior to the annual
meeting of stockholders in April or May, or (ii) the close of
business on the tenth day following the date on which notice of a
special meeting of stockholders is first given to stockholders
for an election of directors to be held at such meeting.
Such notice must contain: (a) the name and address of the
stockholder who intends to make the nomination; (b) the name,
age, and business and residential addresses of each person to be
nominated; (c) the principal occupation or employment of each
nominee; (d) the number of shares of capital stock of the
corporation beneficially owned by each nominee; (e) a statement
that the nominee is willing to be nominated and serve as a
director; and (f) such other information regarding each nominee
as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission had the Board of Directors nominated such nominee.
Nothing in this Section shall preclude the Board of Directors or
the Nominating Committee either from making nominations for the
election of directors or from excluding the person nominated by a
stockholder from the slate of directors presented to the meeting.
SECTION 11. Election of Directors. Directors shall be elected
by a plurality of the votes of the shares present in person or
represented by proxy at a meeting of stockholders and entitled to
voted on the election of directors.
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ARTICLE III
Directors
SECTION 1. General Powers. The business and affairs of the
corporation shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number of
Directors of the corporation is established at fourteen. Each
Director shall hold office for the term for which such Director
is elected or until a successor shall have been chosen and shall
have qualified or until such Director's earlier death,
resignation, retirement, disqualification or removal.
SECTION 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law,
immediately after, and at the same place as, the annual meeting
of stockholders. The Board of Directors may provide, by
resolution, the time and place, either within or without
Delaware, for the holding of additional regular meetings without
other notice than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the chairman or
any two directors. The person or persons authorized to call
special meetings of the Board of Directors may fix any place,
either within or without Delaware, as the place for holding any
special meeting of the Board of Directors called by them.
SECTION 5. Notice. Notice of any special meeting shall be given
at least two days previously thereto by written notice delivered
personally, by mail or telegram, to each Director at his business
address or at such other address as he shall have previously
requested in writing. If mailed, such notice shall be deemed to
be delivered two days after being deposited in the United States
mails in a sealed envelope so addressed, with postage thereon
prepaid. If notice is given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the
telegraph company. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of
Directors need be specified in the notice or waiver of notice of
such meeting, unless otherwise required by law.
SECTION 6. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any
meeting of the Board of Directors, provided that if less than a
majority of the Directors are present at said meeting, a majority
of the Directors present may adjourn the meeting from time to
time without further notice. The act of the majority of the
Directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors unless a greater number is
required by the Certificate of Incorporation or these by-laws.
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SECTION 7. Interested Directors. Except as may otherwise be
provided in the Certificate of Incorporation, no contract or
transaction between the corporation and one or more of its
Directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in
which one or more of its Directors or officers are Directors or
officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the Director or officer
is present at or participates in the meeting of the Board or
committee thereof which authorizes the contract or transaction,
or solely because his or their votes are counted for such
purpose, if:
(a) The material facts as to his
relationship or interest and as to the
contract or transaction are disclosed or are
known to the Board of Directors or the
committee, and the Board or committee in good
faith authorizes the contract or transaction
by the affirmative votes of a majority of the
disinterested Directors, even though the
disinterested Directors be less than a
quorum; or
(b) The material facts as to his
relationship or interest and as to the
contract or transaction are disclosed or are
known to the stockholders entitled to vote
thereon, and the contract or transaction is
specifically approved in good faith by the
vote of the stockholders; or
(c) The contract or transaction is fair as
to the corporation as of the time it is
authorized, approved or ratified, by the
Board of Directors, a committee thereof, or
the stockholders.
Common or interested Directors may be counted in
determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which
authorizes the contract or transaction.
SECTION 8. Vacancies. If vacancies occur in the Board of
Directors caused by death, resignation, retirement,
disqualification or removal from office of any Director or
Directors or otherwise, or if any new Directorship is created by
any increase in the authorized number of Directors, a majority of
the Directors then in office, though less than a quorum, may
choose a successor or successors, or fill the newly created
Directorship and the Directors so chosen shall hold office until
the next annual election of Directors and until their successors
shall be duly elected and qualified, unless sooner displaced.
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SECTION 9. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the
Directors of the corporation.
(a) The Board may designate one or more
directors as alternate members of any
committee, who may replace any absent or
disqualified member, at any meeting of the
committee. In the absence or
disqualification of a member of a committee,
the member or members thereof present at any
meeting and not disqualified from voting,
whether or not he or they constitute a
quorum, may unanimously appoint another
member of the Board of Directors to act at
the meeting in the place of any such absent
or disqualified member. Any such committee,
to the extent provided in the resolution of
the Board of Directors, shall have and may
exercise all the powers and authority of the
Board of Directors in the management of the
business and affairs of the corporation, and
may authorize the seal of the corporation to
be affixed to all papers which may require
it; but no such committee shall have the
power or authority in reference to amending
the certificate of incorporation, adopting an
agreement of merger or consolidation,
recommending to the stockholders the sale,
lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the
stockholders a dissolution of the corporation
or a revocation of a dissolution, or amending
the by-laws of the corporation; and, unless
the resolution or the certificate of
incorporation expressly so provide, no such
committee shall have the power or authority
to declare a dividend or to authorize the
issuance of stock. Such committee or
committees shall have such name or names as
may be determined from time to time by
resolution adopted by the Board of Directors.
Each committee shall keep regular minutes of
its meetings and report the same to the Board
of Directors when required.
(b) Executive Committee. The Board of
Directors, by resolution adopted by a
majority of the whole Board, may designate
two or more Directors to constitute an
Executive Committee and one or more Directors
as alternates thereof. Subject to the
limitations provided in these by-laws and
such further limitation as might be required
by law or by the Certificate of Incorporation
or by further resolution of the Board of
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Directors, the Executive Committee may,
during intervals between meetings of the
Board of Directors, exercise the powers of
the Board of Directors in the management of
the business and affairs of the corporation
(including the corporation's dealings with
its foreign subsidiaries, affiliates, and
licensees) and may authorize the seal of the
corporation to be affixed to all papers which
may require it. The Committee shall not be
empowered to take action with respect to:
issuing bonds, debentures; increasing or
reducing the capital of the corporation;
authorizing commitments and expenditures in
excess of the total amount or amounts
provided in the capital budgets approved or
otherwise authorized by the Board of
Directors; borrowing of monies, except within
limits expressly approved by the Board of
Directors; electing officers; fixing the
compensation of officers; establishment of
stock option plans, profit sharing or similar
types of compensation plans, filling
vacancies or newly-created directorships on
the Board of Directors; removing officers or
directors of the corporation; dissolution, or
any other action specifically reserved to the
Board of Directors including all matters
requiring the approval of stockholders. The
Committee may also from time to time
formulate and recommend to the Board for
approval general policies regarding
management of the business and affairs of the
corporation. The designation of the
Committee and the delegation thereto of
authority shall not operate to relieve the
Board of Directors or any member thereof of
any responsibility imposed upon it or him by
operation of law. The secretary of the
corporation (or in his absence a person
designated by the Executive Committee) shall
act as secretary at all meetings of the
Executive Committee. A majority of the
Committee, from time to time, shall
constitute a quorum for the transaction of
business and the act of a majority of the
Directors present at a meeting in which a
quorum is present shall be the act of the
Committee, provided that in the absence or
disqualification of any member of the
Committee, the member or members thereof
present at any meeting and not disqualified
from voting, whether or not he or they
constitute a quorum, may unanimously appoint
another member of the Board of Directors to
act at the meeting in the place of any such
absent or disqualified member. Regular
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meetings of the Committee may be held without
notice at such times and at such places as
shall be fixed by resolution adopted by a
majority of the Committee. Special meetings
may be called by any member of the Committee
on twenty-four hours' prior written or
telegraphic notice.
(c) Compensation Committee. The Board of
Directors, by resolution adopted by a
majority of the whole Board, may designate
not less than two Directors to constitute a
Compensation Committee and one or more
directors as alternate members thereof, none
of whom shall be employees of the
corporation. In the absence or
disqualification of any member of the
Committee, the member or members thereof
present at any meeting and not disqualified
from voting, whether or not he or they
constitute a quorum, may unanimously appoint
another member of the Board of Directors to
act at the meeting in the place of any such
absent or disqualified member, provided that
the majority of the Committee, as then
constituted, shall not be employees of the
corporation. The Compensation Committee
shall review and determine from time to time
the salaries and other compensation of all
elected officers of the corporation and shall
submit to the Board of Directors such reports
in such form and at such time as the Board of
Directors may request. The Compensation
Committee shall also submit recommendations
from time to time to the Board of Directors
as to the granting of stock options.
(d) Audit Committee. The Board of
Directors, by resolution adopted by a
majority of the whole Board, may designate
two or more Directors who are not employees of the
corporation to constitute an Audit Committee
and one or more Directors who are not
employees of the corporation as alternate
members thereof, which Committee shall review
the selection and qualifications of the
independent public accountants employed from
time to time to audit the financial
statements of the corporation and the scope
and adequacy of their audits. The Committee
shall also consider recommendations made by
such independent public accountants. The
Committee may also make such review of the
internal financial audits of the corporation
as it considers desirable and shall report to
the Board any additions or changes which it
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deems advisable. In the absence or
disqualification of any member of the
Committee, the member or members thereof
present at any meeting and not disqualified
from voting, whether or not he or they
constitute a quorum, may unanimously appoint
another member of the Board of Directors who
is not an employee of the corporation to act
at the meeting in the place of any such
absent or disqualified member.
(e) Employee Benefits Committee. The Board
of Directors, by resolution adopted by a
majority of the whole Board, may designate
three (3) or more individuals, any or all of
whom may be non-director employees of the
Company, to constitute an Employee Benefits
Committee. The Committee shall select,
retain or remove the investment managers,
advisors, consultants and persons otherwise
employed by the Company as named fiduciaries
under the Company's employee benefit plans,
which actions it shall report to the Board of
Directors. The Committee shall review the
performance of the trustee or trustees,
investment managers, advisors and consultants
under said plans with respect to the
investment of plan assets. The Committee
shall be responsible for the administration
of the Company's employee benefit plans and,
in fulfilling that responsibility, may
delegate to others, whether Company employees
or otherwise, specific assignments in
administering the plans.
(f) Nominating Committee. The Board of
Directors, by resolution adopted by a
majority vote of the whole Board, may
designate two or more Directors to constitute
a Nominating Committee. This Committee shall
establish procedures for the receipt and evaluation of
suggestions of candidates for membership on
the Board of Directors and shall make
recommendations to the Board concerning
nominees for such membership. The Committee
may evaluate the various committees of the
Board and make recommendations to the Board
of Directors concerning the number, size,
membership and responsibilities of such
committees. The Committee may also make
recommendations to the Board of Directors
concerning the number of Directors to serve
on the Board and may establish standards for
evaluation of the performance of the
Directors in order to make recommendations
with regard thereto.
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SECTION 10. Consent in Lieu of Meeting. Unless otherwise
restricted by the Certificate of Incorporation or these by-laws,
any action required or permitted to be taken at any meeting of
the Board of Directors or any committee thereof may be taken
without a meeting if all members of the Board or committee
thereof, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings
of the Board or committee.
SECTION 11. Compensation. Directors who are also full time
employees of the corporation shall not receive any compensation
for their services as Directors but they may be reimbursed for
reasonable expenses of attendance. By resolution of the Board of
Directors, all other Directors may receive, as compensation for
their services any combination of: an annual fee; a fee for each
meeting attended; shares of stock; or other forms of
compensation; together with reimbursement of expenses of
attendance, if any, at each regular or special meeting of the
Board of Directors or any committee of the Board of Directors;
provided, that nothing herein contained shall be construed to
preclude any Director from serving the corporation in any other
capacity and receiving compensation therefor.
SECTION 12. Meeting by Conference Telephone. Unless otherwise
restricted by the Certificate of Incorporation, members of the
Board of Directors or any committee designated by such Board may
participate in a meeting of such Board or committee by means of
conference telephone or similar communication equipment by means
of which all persons participating in the meeting can hear each
other, and participation in a meeting pursuant hereto shall
constitute presence in person at such meeting. Unless otherwise
required by law, no notice shall be required if a quorum of the
Board or any committee is participating.
ARTICLE IV
Officers
SECTION 1. Number. The officers of the corporation shall be a
chairman, vice chairman, president, chairman of the Executive
Committee, one or several vice presidents or executive vice
presidents (the number thereof to be determined by the Board of
Directors), one or several of the vice presidents may be
designated "senior vice president" by the Board of Directors and
one of whom may be elected as chief financial officer of the
corporation, a treasurer, a controller, a secretary, and other
such officers as may be elected in accordance with the provisions
of this article. Any two or more offices may be held by the same
person.
SECTION 2. Election and Term of Office. The officers of the
corporation shall be elected annually by the Board of Directors
at the first meeting of the Board of Directors held after each
annual meeting of stockholders. If the election of officers
shall not be held at such meeting, such election shall be held as
soon thereafter as conveniently may be. Vacancies may be filled
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or new offices created and filled at any meeting of the Board of
Directors. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until
his death or until he shall resign or shall have been removed in
the manner hereinafter provided.
SECTION 3. Removal. Any officer or agent elected or appointed
by the Board of Directors may be removed by the Board of
Directors whenever in its judgment the best interests of the
corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person
so removed.
SECTION 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may
be filled by the Board of Directors for the unexpired portion of
the term.
SECTION 5. Chairman. The chairman shall be the chief executive
officer of the corporation and shall have general supervision
over all of the affairs of the corporation and shall determine
and administer the policies of the corporation as established by
the Board of Directors or by the Executive Committee. The
chairman shall preside at all meetings of the stockholders, and
of the Board of Directors; and in the absence of the chairman of
the Executive Committee shall also preside at all meetings of the
Executive Committee; the chairman shall provide leadership to the
Board in reviewing and advising upon matters which exert major
influence on the manner in which the corporation's business is
conducted; and he shall perform such other duties as may be
conferred by law or assigned to him by the Board of Directors.
The chairman may sign, with the secretary or other proper officer
of the corporation thereunto authorized by the Board of
Directors, stock certificates of the corporation, any deeds,
mortgages, bonds, contracts, or other instruments, except in
cases where the signing or execution thereof shall be expressly
delegated by the Board of Directors or by these by-laws to some
other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed.
The chairman may also execute proxies on behalf of the
corporation with respect to the voting of any shares of stock
owned by the corporation. He shall have the power to appoint
agents or employees as in his judgment may be necessary or
appropriate for the transaction of the business of the
corporation, and in general shall perform all duties incident to
the office of chairman, and such other duties as may be
prescribed by the Board of Directors.
SECTION 6. Vice Chairman. The vice chairman shall assist the
chairman in supervising the affairs of the corporation, with
special responsibility for integrating acquired businesses into
the corporation. In the absence of the chairman, the vice
chairman shall preside at all meetings of the stockholders and
the Board of Directors. In the event of the absence or
disability of the chairman, the vice chairman shall assume all of
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the duties and responsibilities of that office. The vice
chairman may sign any deeds, mortgages, bonds, contracts or other
instruments, except in cases where the signing is required to be
by some other officer or agent of the corporation. The vice
chairman shall perform such other duties as may be designated by
the chairman of the Board of Directors.
SECTION 7. President. The president shall undertake and
faithfully discharge such duties as assigned by the Chairman and
shall administer the policies of the Company as established by
the Board or by the Executive Committee. In the absence of the
chairman and the vice chairman, the president shall preside at
all meetings of the stockholders and of the Board and shall
perform the duties and exercise the authority of the chairman.
In the absence of the chairman of the Executive Committee, the
president shall preside at all meetings of the Executive
Committee. The president may sign, with the secretary or other
proper officer of the corporation thereunto authorized by the
Board, stock certificates of the Company, any deeds, mortgages,
bonds, contracts or other instruments, except in cases where the
signing or execution thereof shall be expressly delegated by the
Board or by these by-laws to some other officer or agent of the
Company, or shall be required by law to be otherwise signed or
executed. The president may also execute proxies on behalf of
the Company with respect to the voting of any shares of stock
owned by the Company. The president shall have the power to
appoint agents or employees as in his/her judgment may be
necessary or appropriate for the transaction of the business of
the Company and in general shall perform all duties incident to
the office of president, and such other duties as may be
prescribed by the Chairman or the Board.
SECTION 8. Chairman of the Executive Committee. The chairman
of the Executive Committee shall preside at all meetings of the
Executive Committee; in the absence of the chairman and vice
chairman, he shall preside at all meetings of the stockholders
and the Board of Directors; he shall act in an advisory capacity
to the chairman in all matters concerning the interest and
management of the corporation, and he shall perform such other
duties as may be assigned to him by the Board of Directors, the
Executive Committee or the chairman. In the event of the absence
or disability of the chairman and vice chairman, he shall assume
all the duties and responsibilities of the office of the
chairman. The chairman of the Executive Committee may sign, with
the secretary or other proper officer of the corporation
thereunto authorized by the Board of Directors, stock
certificates of the corporation, any deeds, mortgages, bonds,
contracts, or other instruments delegated by the Board of
Directors or by these by-laws to some other officer or agent of
the corporation, or shall be required by law to be otherwise
signed or executed. The chairman of the Executive Committee may
also execute proxies on behalf of the corporation with respect to
the voting of any shares of stock owned by the corporation.
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SECTION 9. Executive Vice President(s). The executive vice
president or executive vice presidents (if elected by the Board
of Directors) shall perform such duties not inconsistent with
these by-laws as may be assigned to him or them by the chairman
or the Board of Directors. In the event of absence or disability
of the chairman, and vice chairman and chairman of the Executive
Committee, the executive vice president (or in the event there be
more than one, the executive vice president determined in the
order of election) shall assume all the duties and
responsibilities of the office of the chairman.
SECTION 10. Chief Financial Officer. The chief financial
officer (if elected by the Board of Directors) shall have general
supervision over the financial affairs of the corporation.
SECTION 11. The Vice President(s). The Board of Directors may
designate any vice president as a senior vice president. In the
event of absence or disability of the chairman and vice chairman,
the chairman of the Executive Committee and all executive vice
presidents, the senior vice president)) or the vice president(s)
in the order of election, shall assume all the duties and
responsibilities of the office of the chairman. Any senior vice
president or any vice president may sign, with the secretary or
an assistant secretary, stock certificates of the corporation;
and shall perform such other duties as from time to time may be
assigned to him by the chairman or by the Board of Directors. In
general, the vice president (or vice presidents, including the
senior vice president or senior vice presidents) shall perform
such duties not inconsistent with these by-laws as may be
assigned to him (or them) by the chairman, the executive vice
presidents or by the Board of Directors.
SECTION 12. The Treasurer. If required by the Board of
Directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or
sureties as the Board of Directors shall determine. He shall:
(a) have charge and custody of and be responsible for all funds
and securities of the corporation; receive and give receipts for
monies due and payable to the corporation from any source
whatsoever, and deposit all such monies in the name of the
corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of Article
VI of these by-laws; (b) in general perform all duties incident
to the office of treasurer and such other duties not inconsistent
with these by-laws as from time to time may be assigned to him by
the Board of Directors, or by the chairman, or any vice president
designated for such purpose by the chairman.
SECTION 13. The Secretary. The secretary shall: (a) keep the
minutes of the stockholders' and the Board of Directors' meetings
in one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these
by-laws or as required by law; (c) be custodian of the corporate
records and of the seal of the corporation and see that the seal
of the corporation is affixed to all stock certificates prior to
the issue thereof and to all documents, the execution of which on
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behalf of the corporation under its seal is required; (d) keep a
register of the post office address of each stockholder which
shall be furnished to the secretary by such stockholder; (e) sign
with a vice president, or the chairman, stock certificates of the
corporation, the issue of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of
the stock transfer books of the corporation; (g) act as secretary
at all meetings of the Executive Committee; and (h) in general
perform all duties incident to the office of secretary and such
other duties not inconsistent with these by-laws as from time to
time may be assigned to him by the chairman or by the Board of
Directors.
SECTION 14. The Controller. The controller shall provide
guidance and evaluation with respect to the corporation's
accounting and related functions, control and procedures systems,
budget programs, and coordinate same on a divisional and overall
corporate level. The controller shall report to such officer or
officers of the corporation and perform such other duties
incident to the office of controller as may be prescribed from
time to time by the chairman, chief financial officer, or by the
Board of Directors.
SECTION 15. Assistant Treasurers and Assistant Secretaries.
The chairman may appoint one or more assistant treasurers and one
or more assistant secretaries who shall serve as such until
removed by the chairman or the Board of Directors. The assistant
treasurers may be required to give bonds for the faithful
discharge of their duties in such sums and with such sureties as
the chairman shall determine. The assistant treasurers and
assistant secretaries, in general, shall perform such duties as
shall be assigned to them by the treasurer or the secretary,
respectively, or by the chairman, but shall not be considered to
be officers of the corporation solely by reason of such
appointments or titles.
SECTION 16. Appointive Presidents and Vice Presidents. The
chairman may from time to time designate employees of the
corporation who are managing one or several groups, divisions, or
other operations of the corporation as "President", "Vice
President", or similar title, which employees shall not be
considered to be officers of the corporation solely by reason of
such appointments or titles. The chairman shall report such
appointments to the Compensation Committee at least annually.
SECTION 17. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors on a monthly
basis and no officer shall be prevented from receiving such
salary by reason of the fact that he is also a Director of the
corporation.
14
<PAGE>
ARTICLE V
Indemnification of Officers, Directors, Employees and Agents
SECTION 1. Non-Derivative Actions and Criminal Prosecutions. To
the extent permitted by applicable law from time to time in
effect, the corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that
he is or was a Director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
SECTION 2. Derivative Actions. The corporation shall indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by
or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a Director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a Director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation
and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the
extent that the court in which such action or suit was brought
shall determine upon application that despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
SECTION 3. Right to Indemnification. To the extent that a
Director, officer, employee or agent of the corporation has been
successful on the merits or otherwise in defense of any action,
15
<PAGE>
suit or proceeding referred to in Sections 1 and 2 of this
Article, or in defense of any claim, issue or matter therein, he
shall be indemnified by the corporation against expenses
(including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
SECTION 4. Where No Adjudication. Any indemnification under
Sections 1 and 2 of this Article (unless ordered by a court)
shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the
Director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of
conduct set forth in said Sections 1 and 2. Such determination
shall be made (i) by the Board of Directors by a majority vote of
a quorum consisting of Directors who were not parties to such
action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable and a quorum of disinterested
Directors so directs, by independent legal counsel (compensated
by the corporation) in a written opinion, or (iii) by the
stockholders.
SECTION 5. Expenses. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of
the Director, officer, employee or agent to repay such amount
unless it shall ultimately be determined that he is entitled to
be indemnified by the corporation as authorized in this Article.
SECTION 6. Non-exclusive. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any by-
law, agreement, vote of stockholders or disinterested Directors
or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a Director,
officer, employee, or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 7. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a Director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a Director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the
provisions of this Article or of applicable law.
ARTICLE VI
Contracts, Loans, Checks and Deposits
16
<PAGE>
SECTION 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract
or execute and deliver any instrument in the name of any on
behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidence of indebtedness shall be issued in
its name unless authorized by a resolution of the Board of
Directors. Such authority may be general or confined to specific
instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or other
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of
the corporation in such banks, trust companies or other
depositaries as the Board of Directors may select.
ARTICLE VII
Stock Certificates
SECTION 1. Stock Certificates. Certificates representing shares
of stock of the corporation shall be in such form as may be
determined by the Board of Directors, shall be numbered and shall
be entered in the books of the corporation as they are issued.
They shall exhibit the holder's name and number of shares and
shall be signed by the chairman, the chairman of the Executive
Committee, or a vice president and the treasurer or an assistant
treasurer or the secretary or an assistant secretary, and shall
be sealed with the seal of the corporation. If a stock
certificate is countersigned (a) by a transfer agent other than
the corporation or its employee, or (b) by a registrar other than
the corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or regis-trar at the
date of issue.
SECTION 2. Lost Certificates. The Board of Directors may from
time to time make such provision as it deems appropriate for the
replacement of lost, stolen or destroyed stock certificates,
including the requirement to furnish an affidavit and an
indemnity.
SECTION 3. Transfers of Stock. Upon surrender to the
corporation of the transfer agent of the corporation of a stock
17
<PAGE>
certificate duly endorsed or accompanied by proper evidence of
succession, assignment of authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the
transaction upon the books of the corporation. The person in
whose name shares of stock stand on the books of the corporation
shall be deemed the owner thereof for all purposes as regards the
corporation.
SECTION 4. Transfer Agents and Registrars. The Board of
Directors may appoint one or more transfer agents and registrars
and may thereafter require all stock certificates to bear the
signature of a transfer agent and registrar.
SECTION 5. Rules of Transfer. The Board of Directors shall have
the power and authority to make all such rules and regulations as
they may deem expedient concerning the issue, transfer and
registration of stock certificates of the corporation.
ARTICLE VIII
Fiscal Year
The fiscal year of the corporation shall begin on the
first day of January in each year and end on the thirty-first of
December in each year.
ARTICLE IX
Dividends
The Board of Directors may from time to time, declare,
and the corporation may pay, dividends on its outstanding shares
of stock in the manner and upon the terms and conditions provided
by law and its Certificate of Incorporation.
ARTICLE X
Seal
The Board of Directors shall provide a corporate seal
which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate
Seal, Delaware".
ARTICLE XI
Waiver of Notice
Whenever any notice whatever is required to be given
under the provisions of these by-laws or under the provisions of
the Certificate of Incorporation or under the provisions of The
General Corporation Law of Delaware, waiver thereof in writing,
18
<PAGE>
signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance of any
person at a meeting for which any notice whatever is required to
be given under the provisions of these by-laws, the Certificate
of Incorporation or The General Corporation Law of Delaware shall
constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
19
<PAGE>
EXHIBIT 10(b)
AMENDMENT
TO THE ILLINOIS TOOL WORKS INC.
STOCK INCENTIVE PLAN
December 8, 1994
RESOLVED: that subparagraphs (i) and (ii) of Section 6(e) of the Illinois Tool
Works Inc. Stock Incentive Plan (the "Plan") are amended as follows:
"(i) If the Optionee dies (x) while in
the employ of the Company or a Subsidiary,
(y) within three months of the termination of
his or her employment with the Company or a
Subsidiary by reason of resignation with the
Company's prior written consent, or (z)
within the period described in subparagraph
(e)(ii) below that commences on the date on
which his or her employment with the Company
or a Subsidiary terminates by reason of
retirement, then the Option shall be
exercisable by the Optionee's beneficiary
designated pursuant to paragraph (h) of
Section 12 not later than the earlier of one
year after the date of death or the
expiration of the term of the Option.
(ii) If the employment of the Optionee by
the Company or a Subsidiary terminates by
reason of retirement and if the Optionee is
not then subject to the reporting and
liability provisions of Section 16 of the
Securities Exchange Act of 1934 (the "Act"),
then the Option shall be exercisable by the
Optionee not later than the earlier of five
years after the date of retirement or the
expiration of the term of the Option. If the
Optionee is then subject to the reporting and
liability provisions of Section 16 of the
Act, then the Option shall be exercisable by
the Optionee not later than the earlier of
three years after the date of retirement or
the expiration of the term of the Option.";
FURTHER RESOLVED: that subparagraph (i) of Section 7(c) of the Plan is amended
as follows:
"(i) If granted in connection with an
Option, Stock Appreciation Rights are
exercisable only at such times and to the
extent that the Option to which they relate
is exercisable. With respect to Stock
Appreciation Rights granted independent of an
Option, if the holder thereof dies (x) while
in the employ of the Company or a Subsidiary,
1
<PAGE>
(y) within three months of the termination of
his or her employment with the Company or a
Subsidiary by reason of resignation with the
Company's prior written consent, or (z)
within three years (or five years as provided
below) after termination of employment by
reason of retirement, then such Stock
Appreciation Rights shall be exercisable by
the beneficiary designated pursuant to
paragraph (h) of Section 12 not later than
the earlier of one year after the date of
death or the expiration of the term of the
Stock Appreciation Rights. If the employment
of the holder by the Company or a Subsidiary
terminates by reason of retirement and if the
holder is not then subject to the reporting
and liability provisions of Section 16 of the
Act, then the Stock Appreciation rights shall
be exercisable by the holder not later than
the earlier of five years after the date of
retirement or the expiration of the term of
the Stock Appreciation Rights. If the holder
is then subject to the reporting and
liability provisions of Section 16 of the
Act, then the Stock Appreciation Rights shall
be exercisable by the holder not later than
the earlier of three years after the date of
retirement or the expiration of the term of
the Option.";
FURTHER RESOLVED: that Section 6(g) of the Plan is amended by changing the
first sentence to read in its entirety as follows:
"The Option agreements or Option grants
authorized by the Plan may contain such other
provisions as the Committee shall deem
advisable, and may be amended from time to
time with the consent of the Optionee
provided that any such amendment is not
prohibited by this Plan.";
FURTHER RESOLVED: that Section 7 of the Plan is amended by adding the following
new subsection (f):
"(f) The Stock Appreciation Right agreements
or grants authorized by the Plan may contain
such other provisions as the Committee shall
deem advisable, and may be amended from time
to time with the consent of the holder
thereof provided that any such amendment is
not prohibited by this Plan.";
FURTHER RESOLVED: that the foregoing Plan amendments shall be effective with
respect to any Options and Stock Appreciation Rights outstanding as of the date
of these resolutions and any granted at any time hereafter; and
2
<PAGE>
FURTHER RESOLVED: that management is authorized for and on behalf of the
Company to take such actions as they deem necessary and appropriate to
effectuate the foregoing resolutions.
FURTHER RESOLVED: Paragraph (h) of Section 12 of the Company's Stock Incentive
Plan be amended to read as follows:
"(h) No stock incentive and no rights under
the Plan, contingent or otherwise, shall be
assignable or subject to any encumbrance,
pledge or charge of any nature, except as
follows:
(i) Under such rules and procedures
as the Committee may establish, the
holder of a stock incentive may
designate a beneficiary to whom any
rights with respect to such
incentive may be transferred upon
the holder's death, or, if such
beneficiary is the executor or
administrator of the estate of the
holder, any rights with respect to
the stock incentive may be
transferred to the person or persons
or entity (including a trust)
entitled thereto under the will of
the holder of the stock incentive
or, in case of intestacy, under the
laws relating to intestacy; or
(ii) Under such rules and procedures
as the Committee may establish, the
holder of a stock incentive may
transfer such incentive to members
of the holder's immediate family;
i.e., children, grandchildren and
spouse, or to one or more trusts for
the benefit of such family members
or to partnerships in which such
family members are the only
partners, provided that (A) the
agreement, if any, with respect to
such stock incentive, as approved by
the Committee, expressly so permits,
(B) the holder does not receive any
consideration for such transfer, and
(C) the holder provides such
documentation or other information
concerning any such transfer or
transferee as the Committee may from
time to time reasonably request. Any
stock incentives held by such
transferees shall continue to be
subject to the same terms and
conditions that were applicable to
such stock incentives immediately
prior to their transfer. The
Committee may also amend the
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<PAGE>
agreements applicable to any
outstanding stock incentives to
permit such transfers. Any stock
incentive not (A) granted pursuant
to any agreement expressly permitting
its transfer or (B) amended expressly
to permit its transfer shall not be
transferable. Such transfer rights
shall not apply to any incentive
stock option that is intended to
qualify under Code Section 422."
4
<PAGE>
EXHIBIT 10(j)
DIRECTORS' COMPENSATION
Compensation for non-employee directors consists of a $25,000 annual fee
plus $1,000 for each Board of Directors' meeting and committee meeting attended.
Committee Chairmen receive an additional $500 for each meeting chaired. The
Company's deferred fee plan permits non-employee directors to defer receipt of
all or any part of their fees. Amounts deferred are credited with interest at
current rates and are paid after an individual ceases to be a director. Retired
non-employee directors also receive an annual payment equal to one-half of the
annual retainer paid to an active director on the date of retirement so long as
the retired director serves the Company in an advisory capacity and refrains
from any activity adverse to the best interests of the Company. Harold B. Smith
has entered into a one-year agreement with the Company providing for an annual
consulting fee of $85,000.
In January 1995 incumbent non-officer directors also received, pursuant to
a restricted stock grant program, 900 shares of the Company's Common Stock,
one-third of which shares vest on the first business day in each of the years
1996 through 1998, except that all shares vest on the date of retirement in
accordance with Board policy or on the date of death. The shares granted to the
directors pursuant to this program are included in the table under "Security
Ownership", as are shares under an earlier tranche of the program effective in
1992. This program is being submitted to stockholders for approval at this
Annual Meeting and is further described in the next section.
4
<PAGE>
EXHIBIT 10(n)
AMENDMENTS EFFECTIVE DECEMBER 5, 1994
Pursuant to Section 7.1 of the Illinois Tool Works Inc. 1993 Executive
Contributory Retirement Income Plan effective April 1, 1993, Illinois Tool
Works Inc. hereby amends Sections 3.2, 3.5 and 4.11 of the Plan to read as
follows:
3.2 MINIMUM AND MAXIMUM DEFERRAL AND LENGTH OF PARTICIPATION. A
Participant may elect to defer between 5 and 20 percent of his/her Salary
in 1% increments during a Deferral Year. In addition, a Participant may
elect to defer up to 50% of his/her Bonus in 10% INCREMENTS earned during
a Deferral Year. At the time of election, a Participant may elect to
defer a different percentage of his/her Salary or Bonus for each Deferral
Year and may also elect not to defer any portion of his/her Salary or
Bonus in a Deferral Year.
The deferral opportunity shall extend through December 31, 1998, however
there shall be two separate deferral periods. The initial deferral
period shall be from the Plan Effective Date through December 31, 1995.
The second deferral period shall be from January 1, 1996 through December
31, 1998. A Participant shall complete a separate Agreement for each
deferral period. The deferral of bonus in 10% increments will only apply
to the second deferral period affecting bonuses earned in 1996, 1997 and
1998.
3.5 ALTERATION OF SALARY AND BONUS DEFERRAL. Except as provided in this
Section 3.5 and in Section 3.6 a Participant's election to defer Salary
and Bonus shall be irrevocable. Pursuant to this Section 3.5 a
Participant may increase or decrease his/her original Salary and Bonus
deferral percentage prior to December 1 of the year preceding the
Deferral Year for which such adjustment is requested. A Participant
may increase or decrease his/her original Salary deferral percentage
by up to 5 percent of Salary in 1% increments. In no event shall the
resulting percentage deferred be other than 0% or 5% through 20% of
Salary. In addition, a Participant may increase or decrease his/her
original Bonus deferral percentage by 10 PERCENT. However, in no event
shall the resulting percentage of Bonus deferred be other than 0%, 10,
20, 30, 40 or 50%. THE ALTERATION OF BONUS DEFERRAL AMOUNTS IN 10%
INCREMENTS SHALL ONLY APPLY TO THE SECOND DEFERRAL PERIOD AFFECTING
BONUSES PAID IN 1997, 1998 AND 1999.
4.11 RECIPIENTS OF PAYMENT: DESIGNATION OF BENEFICIARY. All payments to be
made by the Company under the Plan shall be made to the Participant
during his/her lifetime, provided that if the Participant dies prior to
the completion of such payments, then all subsequent payments under the
Plan shall be made by the Company to the Beneficiary determined in
accordance with this Section 4.11. The Participant may designate a
Beneficiary by filing a written notice of such designation with the
Committee in such form as the Company requires and may include contingent
Beneficiaries. The Participant may from time-to-time change the
designated Beneficiary by filing a new designation in writing with the
Committee. IF NO DESIGNATION IS IN EFFECT OR IF AN EXISTING DESIGNATION
IS DETERMINED TO BE INVALID AT THE TIME ANY BENEFITS PAYABLE UNDER THIS
PLAN SHALL BECOME DUE, THE BENEFICIARY SHALL BE THE SPOUSE OF THE
PARTICIPANT, OR IF NO SPOUSE IS THEN LIVING, THE REPRESENTATIVES OF THE
PARTICIPANT'S ESTATE.
Only Sections 3.2, 3.5 and 4.11 are affected by this Amendment.
ILLINOIS TOOL WORKS INC.
By: /s/ John Karpan
------------------------------
Its: Senior Vice President,
Human Resources
------------------------------
Date: December 5, 1994
------------------------------
<PAGE>
EXHIBIT 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
Introduction
Illinois Tool Works Inc. is a multinational manufacturer of industrial
components systems with two business segments: Engineered Components,and
Industrial Systems and Consumables. The markets served by these segments are
shown on pages six and seven of this report. These segments are described below.
Engineered Components Segment
Businesses in this segment manufacture short lead-time plastic and metal
components, fasteners and assemblies; industrial fluids and adhesives; fastening
tools and welding equipment. This segment primarily serves the construction,
automotive and general industrial markets.
Dollars in millions
<TABLE>
<CAPTION>
Operating
Revenues 1994 1993 1992
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $1,204 $1,083 $ 678
International 624 560 603
------ ------ ------
Total $1,828 $1,643 $1,281
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Operating 1994 1993 1992
Income Income Margin Income Margin Income Margin
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic $193 16.0% $153 14.1% $ 92 13.6%
International 82 13.1 55 9.8 68 11.3
---- ---- ----
Total $275 15.0 $208 12.7 $160 12.5
==== ==== ====
</TABLE>
Domestically, automotive businesses significantly contributed to the growth in
operating revenues in 1994 compared with 1993, followed closely by the
construction businesses. The automotive businesses grew as a result of improved
penetration with the "Big Three" automotive companies and a stronger domestic
car market. Residential and nonresidential construction markets were stronger in
1994, which resulted in increased volume in the construction business. Operating
income and margins increased primarily due to sales volume gains in both the
automotive and construction businesses. Miller also contributed to the overall
improved financial performance due to strong demand in welding markets and
internal cost reductions.
From 1992 to 1993, domestic operating revenues increased due to the Miller
acquisition, along with strengthening automotive and construction markets.
Operating income increased due to the Miller acquisition, along with cost
reductions in the automotive related businesses. Due mainly to Miller's lower
margins relative to the other businesses in this segment, margins improved only
slightly.
Internationally, the European automotive business mainly contributed to the
operating revenue growth in 1994 over 1993. Increased market penetration an an
11% increase in European car builds for the year caused revenues in the European
automotive businesses to grow significantly. In 1994, the European economy
picked up faster than anticipated, which resulted in larger than expected
international revenue growth in this segment. Approximately 76% of internation-
al revenues were generated from European operations. Operating income and
margins in 1994 were up compared with 1993 primarily due to increased sales
volume coupled with improved productivity in automotive businesses. Significant
cost reductions and successful product mix marketing in the European
construction markets also contributed to operating income and margin growth.
International operating revenues were down in 1993 versus 1992 due mainly to a
recessionary European economy. Operating income and margins suffered in 1993 due
to price pressure and soft European automotive and construction markets, along
with nonrecurring costs associated with some business units.
Industrial Systems and Consumables Segment
Businesses in this segment manufacture longer lead-time systems and related
consumables for consumer and industrial packaging, industrial spray coating
equipment and systems, and quality assurance application equipment and systems.
The largest markets served by this segment are general industrial, food and
beverage, and industrial capital goods.
Dollars in millions
<TABLE>
<CAPTION>
Operating
Revenues 1994 1993 1992
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $1,025 $ 936 $ 878
International 608 580 653
------ ------ ------
Total $1,633 $1,516 $1,531
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Operating 1994 1993 1992
Income Income Margin Income Margin Income Margin
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic $168 16.4% $133 14.2% $119 13.6%
International 56 9.2 45 7.8 65 10.0
---- ---- ----
Total $224 13.7 $178 11.7 $184 12.0
==== ==== ====
</TABLE>
19
<PAGE>
Domestically, operating revenues increased in 1994 versus 1993 due to increased
volume in the industrial packaging group and the finishing systems businesses
resulting from new product introductions and a growing U.S. economy. Operating
income and margins increased due to volume gains and new product introductions
in the industrial packaging and finishing systems businesses. The specialty
engineered products businesses, which serve the capital goods markets, slightly
moderated operating income growth.
Operating revenues increased in 1993 compared with 1992 due to good performances
in all domestic markets as a result of an improved U.S. economy. The finishing
systems businesses largely contributed to the increase in operating income
compared with the previous year due to benefits from significant cost reductions
implemented in 1992 and new product introductions in 1993.
Internationally, operating revenues in 1994 increased versus 1993 primarily due
to higher sales in the industrial packaging group. The consumer packaging group
also contri- buted to the revenue growth as beverage markets picked up in
Europe. Approximately 73% of international revenues in this segment are derived
from European operations. While the industrial packaging group showed revenue
growth in 1994, operating income and margins declined due to price belief given
to customers during the soft economic period in Europe. Margins are expected to
improve as the European economy strengthens and the benefits of cost reductions
are realized. The decline in the industrial packaging group's operating income
and margins was more than offset by improved profitability for the finishing
systems businesses related to new products and cost reductions.
International revenues were down in 1993 compared with with 1992 as a result of
the European recession, which significantly affected the industrial packaging
group. Operating income and margins were lower compared with 1992 as a result of
the decline in volume and increased price pressure in European markets. The
European finishing systems businesses moderated the decline in international
operating income and margins in 1993.
Operating Costs
Operating costs as a percentage of revenues were 66.2% in 1994 compared with
67.2% in 1993 and 66.1% in 1992. The decrease in 1994 versus 1993 was due to
increased sales volume coupled with the overall containment of manufacturing
costs. The increase in 1993 from 1992 was a result of European price pressure
and the acquisition of Miller, which had higher operating costs than the Company
average. 1992.
Selling, Administrative and R&D Expenses
Selling, administrative, and research and develop- ment expenses were 18.8% of
revenues in 1994 versus 19.9% in 1993 and 20.9% in 1992. This ratio was lower
because of expense reductions as a result of a Company-wide objective to reduce
administrative costs.
Interest Expense
Interest expense declined to $26.9 million in 1994, versus $35.0 million in
1993, primarily due to a reduction in commercial paper borrowings and foreign
borrowings. Interest expense declined in 1993 from $42.9 million in 1992. 1992
due to the reduction of foreign debt with higher interest rates and lower
domestic interest rates on commercial paper.
Other Income (Expense)
Other income(expense) increased to net expense of $14.6 million in 1994 versus
$7.7 million in 1993, primarily due to an increase in nonrecurring costs
unrelated to operations, partially offset by gains on sales of plant and
equipment in 1994 versus losses in 1993. Increased nonrecurring costs and lower
interest income resulted in net expense in 1993 compared with net other income
of $8.7 million in 1992.
Income Taxes
The effective tax rate was 38.3% in 1994, 38.5% in 1993 and 38.0% in 1992. See
the Provision for Income Taxes footnote for a reconciliation of the Federal
statutory rate to the effective tax rate. Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes, was adopted in 1993 and had no
material impact on earnings.
Net Income
Net income in 1994 of $277.8 million ($2.45 per share) was 34.5% higher than the
1993 net income of $206.6 million ($1.83 per share). Net income for 1993 was
7.5% higher than 1992 net income of $192.1 million ($1.72 per share).
Foreign Currency
Foreign currency had no material impact on earnings in 1994 versus 1993. The
strong U.S. dollar against European currency resulted in a reduction of net
income by 4 cents per share in 1993 compared with 1992.
20
<PAGE>
Financial Position
Net working capital at December 31, 1994 and 1993 is
summarized as follows:
<TABLE>
<CAPTION>
Increase
Dollars in thousands 1994 1993 (Decrease)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Current Assets:
Cash and equivalents $ 76,867 $ 35,395 $ 41,472
Trade receivables 612,638 544,226 68,412
Inventories 439,486 403,902 35,584
Other 133,942 110,125 23,817
---------- ---------- ---------
$1,262,933 $1,093,648 $ 169,285
---------- ---------- ---------
Current Liabilities:
Short-term debt 67,002 107,073 (40,071)
Accounts payable and
accrued expenses 491,779 383,137 108,642
Other 69,652 55,932 13,720
---------- ---------- ---------
628,433 546,142 82,291
---------- ---------- ---------
Net Working Capital $ 634,500 $ 547,506 $ 86,944
========== =========== =========
Current Ratio 2.01 2.00
==== ====
</TABLE>
The increase in trade receivables in 1994 was primarily due to higher operating
revenues in the fourth quarter of 1994 versus 1993. Inventories increased $35.6
million in 1994 mainly as a result of 1994 acquisitions.
Short-term debt decreased in 1994 as a result of the reduction of short-term
commercial paper borrowings of $63.9 million, partially offset by an increase in
bank overdrafts. Accounts payable and accrued expenses increased at December 31,
1994 versus year-end 1993 due to overall business growth and acquisitions.
Long-term debt at December 31, 1994 consisted of $125 million of 7-1/2% notes
due in 1998, $125 million of 5-7/8% notes due in 2000 and $23 million of
capitalized lease obligations and other debt. Long-term debt decreased $103
million from December 31, 1993, principally as a result of the repayment of all
commercial paper borrowings ($164 million) during 1994. The percentage of total
debt to total capitalization decreased to 18.1% at December 31, 1994, from 27.7%
at December 31, 1993.
Stockholders' equity was $1.542 billion at December 31, 1994 compared with
$1.259 billion at December 31, 1993. Affecting equity were earnings of $278
million, dividends declared of $64 million and favorable currency translation
adjustments of $37 million related to stronger European currencies.
The Statement of Cash Flows for the years ended December 31, 1994 and 1993 is
summarized below:
<TABLE>
<CAPTION>
Dollars in thousands 1994 1993
--------------------------------------------------------------------------------
<S> <C> <C>
Net income $ 277,783 $ 206,570
Depreciation and amortization 132,149 131,726
Acquisitions (43,365) (303,802)
Additions to plant and equipment (131,055) (119,931)
Cash dividends paid (61,162) (55,175)
Net proceeds (repayments) of
short-term debt (149,103) 20,906
Proceeds from long-term debt 1,885 128,119
Repayments of long-term debt (4,949) (15,939)
Other, net 19,289 11,728
--------- ---------
Net increase in cash and
equivalents $ 41,472 $ 4,202
========= =========
</TABLE>
Net cash provided by operating activities of $387 million in 1994 and $314
million in 1993 was used mainly for repayment of commercial paper borrowings in
1994 and for additions to plant and equipment and cash dividends in both years.
Cash provided by the proceeds from long-term debt in 1993 was used principally
to fund acquisitions.
Dividends paid per share increased 10.2% to $.54 per share in 1994 from $.49 in
1993. The Company expects to continue to meet its dividend payout objective of
25-30% of the average of the last three years' net income.
Management continues to believe that internally generated funds will be adequate
to service existing debt and maintain appropriate debt to total capitalization
and earnings to fixed charge ratios. Internally generated funds are also
expected to be adequate to finance internal growth and small-to-medium sized
acquisitions for cash. The Company has additional debt capacity for larger
acquisitions.
21
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Statement of Income
Illinois Tool Works Inc. and Subsidiaries
For the Years Ended December 31
--------------------------------------------
In thousands except for per share amounts 1994 1993 1992
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues $3,461,315 $3,159,181 $2,811,645
Operating costs 2,290,117 2,122,286 1,858,752
Selling, administrative, and research
and development expenses 650,069 629,459 586,801
Amortization of goodwill and other
intangible assets 22,344 21,874 22,169
---------- ---------- ----------
Operating Income 498,785 385,562 343,923
Interest expense (26,943) (35,025) (42,852)
Amortization of retiree health care (6,968) (6,968) --
Other income(expense) (14,591) (7,699) 8,709
---------- ---------- ----------
Income Before Income Taxes 450,283 335,870 309,780
Income taxes 172,500 129,300 117,700
---------- ---------- ----------
Net Income $ 277,783 $ 206,570 $ 192,080
========== ========== ==========
Net Income Per Share of Common Stock $2.45 $1.83 $1.72
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Statement of Income Reinvested in the Business
Illinois Tool Works Inc. and Subsidiaries
------------------------------------------------------------------------------------------------
For the Years Ended December 31
--------------------------------------------
In thousands 1994 1993 1992
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, Beginning of Year $1,129,435 $1,201,537 $1,060,931
Net income 277,783 206,570 192,080
Cash dividends declared (63,546) (56,443) (51,474)
Effect of pooling of interests acquisitions 500 (222,229) --
---------- ---------- ----------
Balance, End of Year $1,344,172 $1,129,435 $1,201,537
========== ========== ==========
The Comments on Financial Statements are an integral part of these statements.
------------------------------------------------------------------------------------------------------
</TABLE>
Report of Independent Public Accountants
To the Board of Directors of Illinois Tool Works Inc.:
We have audited the accompanying statement of financial position of Illinois
Tool Works Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1994 and 1993, and the related statements of income, income reinvested in the
business and cash flows for each of the three years in the period ended December
31, 1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Illinois Tool Works Inc. and
Subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Chicago, Illinois
January 31, 1995
22
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Statement of Financial Position
Illinois Tool Works Inc. and Subsidiaries
December 31
------------------------------
In thousands except shares 1994 1993
------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and equivalents $ 76,867 $ 35,395
Trade receivables 612,638 544,226
Inventories 439,486 403,902
Deferred income taxes 72,728 57,764
Prepaid expenses and other current assets 61,214 52,361
---------- ----------
Total current assets 1,262,933 1,093,648
---------- ----------
Plant and Equipment:
Land 66,577 65,134
Buildings 317,714 282,104
Machinery and equipment 915,198 771,066
Equipment leased to others 69,162 62,857
Construction in progress 32,143 24,718
---------- ----------
1,400,794 1,205,879
Accumulated depreciation (759,559) (622,114)
---------- ----------
Net plant and equipment 641,235 583,765
---------- ----------
Investment in Leveraged Leases 55,413 60,088
---------- ----------
Goodwill 394,233 363,769
---------- ----------
Other Assets 226,684 235,621
---------- ----------
$2,580,498 $2,336,891
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt $ 67,002 $ 107,073
Accounts payable 174,748 149,205
Accrued expenses 317,031 233,932
Cash dividends payable 17,094 14,710
Income taxes payable 52,558 41,222
---------- ----------
Total current liabilities 628,433 546,142
---------- ----------
Non-current Liabilities:
Long-term debt 272,987 375,641
Deferred income taxes 69,516 92,470
Other 68,041 63,969
---------- ----------
Total non-current liabilities 410,544 532,080
---------- ----------
Stockholders' Equity:
Preferred stock -- --
Common stock:
Issued-114,100,500 shares in 1994 and 113,292,888
shares in 1993 201,166 170,185
Income reinvested in the business 1,344,172 1,129,435
---------- ---------
1,545,338 1,299,620
Common stock held in treasury (1,952) (1,955)
Equity adjustment from foreign currency translation (1,865) (38,996)
---------- ----------
Total stockholders' equity 1,541,521 1,258,669
---------- ---------
$2,580,498 $2,336,891
========== ==========
</TABLE>
The Comments on Financial Statements are an integral part of this statement.
23
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Statement of Cash Flows
Illinois Tool Works Inc. and Subsidiaries
For the Years Ended December 31
------------------------------------------
In thousands 1994 1993 1992
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Provided by (Used for) Operating Activities:
Net income $277,783 $206,570 $192,080
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 132,149 131,726 122,631
Change in deferred income taxe (31,686) (13,332) (4,104)
(Gain)loss on sale of plant and
equipment, and investment 356 2,932 (351)
properties
(Gain)loss on sale of operations and
affiliates (379) 894 (1,973)
Other non-cash items, net 16,691 12,093 3,204
-------- --------- --------
Cash provided by operating
activities 394,914 340,883 311,487
Change in assets and liabilities:
(Increase) decrease in -
Trade receivables (81,180) (35,029) (15,807)
Inventories (8,053) 23,191 26,661
Prepaid expenses and other assets 9,515 (8,109) (14,114)
Increase (decrease) in -
Accounts payable 11,718 (3,569) (16,496)
Accrued expenses 45,839 (2,954) (16,601)
Income taxes payable 10,424 (4,079) 10,229
Other, net 4,280 3,741 1,430
-------- --------- --------
Net cash provided by operating
activities 387,457 314,075 286,789
-------- --------- ---------
Cash Provided by (Used for) Investing Activities:
Acquisition of subsidiaries (excluding
cash and equivalents) and additional
interest in affiliates (43,365) (303,802) (62,496)
Additions to plant and equipment (131,055) (119,931) (115,313)
Proceeds from sale of plant and equipment,
and investment properties 22,750 14,174 12,975
Proceeds from sale of operations and
affiliates 15,721 1,705 3,584
Other, net (6,224) 14,271 5,097
--------- -------- ---------
Net cash used for investing
activities (142,173) (393,583) (156,153)
--------- -------- ---------
Cash Provided by (Used for) Financing Activities:
Cash dividends paid (61,162) (55,175) (50,290)
Issuance of common stock 3,216 8,316 10,962
Net proceeds (repayments) of short-term
debt (149,103) 20,906 (96,014)
Proceeds from long-term debt 1,885 128,119 102,516
Repayments of long-term debt (4,949) (15,939) (158,274)
--------- --------- --------
Net cash provided by (used for)
financing activities (210,113) 86,227 (191,100)
--------- --------- --------
Effect of Exchange Rate Changes on Cash
and Equivalents 6,301 (2,517) (1,445)
--------- -------- --------
Cash and Equivalents:
Increase (decrease) during the year 41,472 4,202 (61,909)
Beginning of year 35,395 31,193 93,102
--------- -------- --------
End of year $ 76,867 $ 35,395 $ 31,193
========= ======== ========
Cash Paid During the Year for Interest $ 27,257 $ 33,052 $ 39,943
========= ======== ========
Cash Paid During the Year for Income Taxes $ 194,460 $139,344 $ 80,795
========= ======== ========
Liabilities Assumed from Acquisitions $ 28,438 $ 90,848 $ 5,094
========= ======== ========
</TABLE>
The Comments on Financial Statements are an integral part of this statement.
24
<PAGE>
Comments on Financial Statements
--------------------------------------------------------------------------------
Comments and Associated Schedules in this section furnish additional information
on items in the financial statements. The comments have been arranged in the
same order as the related items appear in the statements.
--------------------------------------------------------------------------------
Consolidation and Translation -- The financial statements include the Company
and its majority-owned subsidiaries. All significant intercompany transactions
are eliminated from the financial statements. The majority of the Company's
foreign subsidiaries have November 30 fiscal year-ends to facilitate inclusion
of their financial statements in the December 31 financial statements.
--------------------------------------------------------------------------------
Industry Segment and Geographic Information -- The Company's operations are
divided into two segments: Engineered Components, and Industrial Systems and
Consumables. See Management's Discussion and Analysis for a description of the
segments and information regarding operating revenues and operating income.
Significant accounting principles and policies of Illinois Tool Works Inc.
("the Company") are highlighted in italics. Certain reclassifications of prior
years' data have been made to conform with current year reporting.
Foreign subsidiaries' assets and liabilities are translated to U.S. dollars
at end-of-period exchange rates. Revenues and expenses are translated at average
rates for the period. Translation adjustments are not included in income but are
reported as a separate component of stockholders' equity.
No single customer accounted for more than 10% of consolidated revenues in
1994, 1993 or 1992. Export sales from the United States were less than 10% of
total operating revenues during these years.
Additional segment and geographic information for 1994, 1993 and 1992 was as
follows:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Identifiable Assets:
Domestic--
Engineered Components $ 551,603 $ 506,850 $ 382,271
Industrial Systems and Consumables 748,463 620,263 617,654
---------- ---------- ----------
1,300,066 1,127,113 999,925
---------- ---------- ----------
International--
Engineered Components 439,813 429,370 434,416
Industrial Systems and Consumables 510,965 517,869 529,808
---------- ---------- ----------
950,778 947,239 964,224
---------- ---------- ----------
Corporate 329,654 262,539 240,038
---------- ---------- ----------
$2,580,498 $2,336,891 $2,204,187
========== ========== ==========
Plant and Equipment Additions:
Engineered Components $ 85,553 $ 80,672 $ 73,226
Industrial Systems and Consumables 45,502 39,259 42,087
---------- ---------- ---------
$ 131,055 $ 119,931 $ 115,313
========== ========== =========
Depreciation:
Engineered Components $ 65,619 $ 67,746 $ 55,992
Industrial Systems and Consumables 44,186 42,106 44,470
---------- ---------- ---------
$ 109,805 $ 109,852 $ 100,462
========== ========== =========
</TABLE>
Identifiable assets by segment and geographic area are those assets that are
specifically used in that segment and geographic area.
Corporate assets are principally cash and equivalents, investments and other
general corporate assets.
25
<PAGE>
Acquisitions and Dispositions - In March 1993, the Company acquired the Miller
Group Ltd. (Miller), a manufacturer of arc welding equipment. The acquisition
has been accounted for as a pooling of interests, and accordingly, the results
of operations have been included in the Statement of Income as of the beginning
of 1993. The impact of Miller on consolidated revenues, net income and earnings
per share for 1993 and 1992 was not significant. Therefore, the 1992 financial
statements have not been restated to reflect the acquisition of Miller.
During 1994, 1993 and 1992, the Company acquired and disposed of other
operations which did not materially affect consolidated results.
--------------------------------------------------------------------------------
Depreciation was $109,805,000 in 1994 compared with $109,852,000 in 1993 and
$100,462,000 in 1992 and was reflected primarily in operating costs.
Depreciation of plant and equipment for financial reporting is computed
principally on an accelerated basis. Equipment leased to others is depreciated
over the noncancelable period of the related lease.
--------------------------------------------------------------------------------
Research and Development Costs are recorded as expense in the year incurred.
These costs were $47,500,000 in 1994, $47,200,000 in 1993 and $42,500,000 in
1992.
--------------------------------------------------------------------------------
Rental Expense was $29,720,000 in 1994, $30,550,000 in 1993 and $30,613,000 in
1992.
--------------------------------------------------------------------------------
Other Income(Expense) consisted of the following:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income $ 5,586 $ 6,596 $ 9,167
Income from unconsolidated affiliates 1,844 1,584 2,888
Net reserves for disposition and relocation of
certain facilities, restructuring costs,
revaluation of nonoperating assets to
realizable value, and nonrecurring costs
unrelated to operations (16,527) (9,101) (2,622)
Gain(loss) on sale of investment properties (617) -- 1,974
Gain(loss) on sale of operations and
affiliates 379 (894) 1,973
Gain(loss) on sale of plant and equipment 261 (2,932) (1,623)
Other, net (5,517) (2,952) (3,048)
-------- ------- -------
$(14,591) $(7,699) $ 8,709
======== ======= =======
</TABLE>
26
<PAGE>
The Provision For Income Taxes - Effective January 1, 1993, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes, using the current-year recognition approach. SFAS No. 109 utilizes
the liability method of accounting for income taxes. Deferred income taxes are
determined based on the estimated future tax effects of differences between the
financial and tax bases of assets and liabilities given the provisions of the
enacted tax laws. Prior to January 1, 1993, the income tax provision was
computed using Accounting Principles Board Opinion No. 11, which is based on the
income and expense in the Statement of Income. The adoption of SFAS No. 109 had
no material impact on the Company's results of operations in 1993.
The components of the provision for income taxes were as shown below:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Federal income taxes:
Current $120,606 $ 95,406 $ 73,465
Deferred (3,665) (14,383) (4,224)
Investment tax credits (810) (727) (544)
-------- -------- --------
116,131 80,296 68,697
-------- -------- --------
Foreign income taxes:
Current 40,290 28,239 37,915
Deferred (5,314) 4,515 (1,737)
-------- -------- --------
34,976 32,754 36,178
-------- -------- --------
State income taxes 21,393 16,250 12,825
-------- -------- --------
$172,500 $129,300 $117,700
======== ======== ========
</TABLE>
Income before income taxes for domestic and foreign operations was as follows:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $318,368 $253,068 $224,041
Foreign 131,915 82,802 85,739
-------- -------- --------
$450,283 $335,870 $309,780
======== ======== ========
</TABLE>
The reconciliation between the Federal statutory tax rate and the effective tax
rate was as follows:
<TABLE>
<CAPTION>
1994 1993 1992
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal statutory tax rate 35.0% 35.0% 34.0%
Increases(reductions):
State income taxes, net of Federal tax benefit 3.1 3.2 2.7
Amortization of goodwill and other intangible
assets .8 1.1 1.7
Difference between Federal statutory and
foreign tax rates (.4) 1.1 1.4
Other, net (.2) (1.9) (1.8)
---- ---- ----
Effective tax rate 38.3% 38.5% 38.0%
==== ==== ====
</TABLE>
27
<PAGE>
Deferred U.S. Federal income taxes and foreign withholding taxes have not
been provided on $413,100,000 of undistributed earnings of international
affiliates as of December 31, 1994. In the event these earnings were
distributed to the Company, the Federal income taxes payable would be reduced by
foreign tax credits based on income tax laws and circumstances at the time of
distribution. The net tax effect would not be expected to be material.
The components of deferred income tax assets and liabilities at December 31,
1994 and 1993 were as follows:
<TABLE>
<CAPTION>
In thousands 1994 1993
----------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Accrued expenses and reserves $ 38,787 $ 30,085
Inventory reserves and capitalized
tax cost 17,077 19,022
Employee benefit accruals 31,647 32,224
Net operating loss carryforwards 15,936 15,492
Accumulated depreciation 7,859 4,373
Allowances for uncollectible accounts 5,365 5,069
Other 23,306 8,141
-------- --------
Gross deferred tax assets 139,977 114,406
Valuation allowances (4,279) (8,189)
-------- --------
Net deferred tax assets 135,698 106,217
-------- --------
Deferred income tax liabilities:
Leveraged leases (40,656) (45,528)
Acquisition asset write-ups (21,592) (23,907)
Accumulated depreciation (25,648) (27,220)
Pension assets (11,904) (12,529)
LIFO inventory (9,036) (8,681)
Other (23,650) (23,058)
-------- --------
Deferred income tax
liabilities (132,486) (140,923)
-------- --------
Net deferred income tax
asset (liability) $ 3,212 $(34,706)
======== ========
</TABLE>
--------------------------------------------------------------------------------
Net Income Per Share of Common Stock is computed on the basis of the average
number of shares of common stock outstanding. The dilutive effect of shares of
common stock subject to issuance under stock option plans are excluded from the
computation since the effect is not material. The average number of shares
outstanding was 113,387,000, 112,979,000 and 111,746,000 for 1994, 1993, and
1992, respectively.
--------------------------------------------------------------------------------
Cash and Equivalents included interest-bearing deposits of $18,702,000 at
December 31, 1994 and $28,506,000 at December 31, 1993. Interest-bearing
deposits have maturities of 90 days or less and are stated at cost, which
approximates market.
--------------------------------------------------------------------------------
Trade Receivables as of December 31, 1994 and 1993 were net of allowances for
uncollectible accounts of $19,600,000 and $18,000,000, respectively.
28
<PAGE>
Inventories at December 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
In thousands 1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Raw material $126,730 $ 94,105
Work-in-process 66,505 61,314
Finished goods 246,251 248,483
-------- --------
$439,486 $403,902
======== ========
</TABLE>
Inventories are stated at the lower of cost or market and include material,
labor and factory overhead. The last-in, first-out (LIFO) method is used to
determine the cost of the inventories of most domestic operations. The first-in,
first-out (FIFO) method is used for all other inventories. Inventories priced at
LIFO were 43% and 46% of total inventories as of December 31, 1994 and 1993,
respectively. Under the FIFO method, which approximates current cost, total
inventories would have been approximately $40,700,000 and $42,800,000 higher
than reported at December 31, 1994 and 1993, respectively.
The LIFO inventory values of certain domestic subsidiaries of the Company
differ from the LIFO inventory values for tax purposes because of the
application of purchase accounting. Inventories for financial statement purposes
exceeded inventories for tax purposes by approximately $21,700,000 and
$22,000,000 at December 31, 1994 and 1993, respectively.
December 31, 1994 and 1993, respectively. Under the FIFO method, which
approximates current cost, total inventories would have been approximately
$40,700,000 and $42,800,000 higher than reported at Decemer 31, 1994 and 1993,
respectively.
--------------------------------------------------------------------------------
Plant and Equipment are stated at cost less accumulated depreciation. Renewals
and improvements that increase the useful life of property are capitalized.
Maintenance and repairs are charged to expense as incurred.
--------------------------------------------------------------------------------
Investment in Leveraged Leases - The Company has investments in leveraged leases
of equipment used primarily in the transportation, mining and paper processing
industries.
The components of the investment in leveraged leases at December 31, 1994 and
1993 were as shown below:
<TABLE>
<CAPTION>
In thousands 1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lease contracts receivable
(net of principal and interest on nonrecourse
financing) $ 46,798 $ 52,652
Estimated residual value of leased assets 21,548 21,548
Unearned and deferred income (12,933) (14,112)
-------- --------
Investment in leveraged leases 55,413 60,088
Deferred taxes arising from leveraged leases (40,656) (45,528)
-------- --------
Net investment in leveraged leases $ 14,757 $ 14,560
======== ========
</TABLE>
The components of the income from leveraged leases
for the years ended December 31, 1994, 1993
and 1992 were as shown below:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Leveraged lease income (expense) before
income taxes $ 65 $ 124 $(76)
Investment tax credits recognized 810 727 544
Income tax benefit (expense) 211 (543) 235
------ ----- ----
$1,086 $ 308 $703
====== ===== ====
</TABLE>
29
<PAGE>
Goodwill represents the excess cost over fair value of the net assets of
purchased businesses. Goodwill is being amortized on a straight-line basis over
15 to 40 years. The Company assesses the recoverability of unamortized goodwill
by reviewing the sufficiency of estimated future operating income or
undiscounted cash flows of the related entity to cover the amortization during
the remaining amortization period.
Amortization expense was $14,031,000 in 1994, $13,268,000 in 1993 and
$12,262,000 in 1992. Accumulated goodwill amortization was $79,672,000 and
$64,822,000, at December 31, 1994 and 1993, respectively.
--------------------------------------------------------------------------------
Other Assets as of December 31, 1994 and 1993 consisted of the following:
<TABLE>
<CAPTION>
In thousands 1994 1993
-------------------------------------------------------------------------------
<S> <C> <C>
Other intangible assets $134,083 $126,150
Accumulated amortization of other intangible assets (64,455) (62,395)
Investment properties 31,653 39,455
Investment in and advances to unconsolidated affiliates 25,481 31,051
Prepaid pension assets 28,566 33,206
Other 71,356 68,154
-------- --------
$226,684 $235,621
======== ========
</TABLE>
Other intangible assets represent patents, noncompete agreements and other
assets acquired with purchased businesses and are being amortized primarily on a
straight-line basis over three to 17 years.
Amortization expense was $8,313,000 in 1994, $8,606,000 in 1993 and
$9,907,000 in 1992.
Investment properties consist primarily of assets held for sale.
--------------------------------------------------------------------------------
Short-term Debt as of December 31, 1994 and 1993
consisted of the following:
<TABLE>
<CAPTION>
In thousands 1994 1993
-------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper $ -- $ 63,881
Current maturities of long-term debt 2,009 2,619
Bank overdrafts 45,968 18,034
Other borrowings by foreign subsidiaries 19,025 22,539
------- --------
$67,002 $107,073
======= ========
</TABLE>
The weighted average interest rate on other
foreign borrowings was 6.1% at December 31, 1994
and 7.2% at December 31, 1993.
--------------------------------------------------------------------------------
Accrued Expenses as of December 31, 1994 and 1993 consisted of accruals for:
<TABLE>
<CAPTION>
In thousands 1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Compensation $161,728 $135,855
Taxes, other than income taxes 17,727 15,310
Customer deposits 20,019 10,677
Other 117,557 72,090
-------- --------
$317,031 $233,932
======== ========
</TABLE>
30
<PAGE>
Retirement Plans - The Company sponsors defined contribution retirement plans
covering substantially all domestic employees. The Company's contributions to
these plans were $8,400,000 in 1994, $6,900,000 in 1993 and $6,200,000 in 1992.
The Company provides substantially all employees with pension benefits. The
Company's principal domestic plan provides benefits based on years of service
and compensation levels during the latter years of employment. Other domestic
and foreign plans provide benefits similar to the principal domestic plan.
In late 1992, the principal domestic pension plan was amended to provide an
early retirement supplement to be paid to future retirees from their early
retirement date to age 65. The pension supplement increased the prior service
cost as of December 31, 1992 by $25,700,000.
Subject to the limitation on deductibility imposed by Federal income tax
laws, the Company's policy has been to contribute funds to the plans annually in
amounts required to maintain sufficient plan assets to provide for accrued
benefits. Due to the current overfunded status of the principal plan, no
contributions to this plan were made in 1994, 1993 or 1992 and none are expected
to be made for the next several years. The previously mentioned amendment will
not significantly affect the status of future contributions. Other domestic plan
contributions were minimal in 1994, 1993 and 1992. Domestic plan assets consist
primarily of listed common stocks and debt securities.
The components of net pension expense for the years ended December 31, 1994,
1993 and 1992 were as shown below:
<TABLE>
<CAPTION>
In thousands 1994 1993 1992
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $21,622 $ 21,757 $ 19,889
Interest cost on projected benefit
obligation 32,800 29,832 25,348
Actual return on plan assets (4,655) (48,002) (38,009)
Net amortization and deferral (38,278) 7,879 (5,560)
-------- -------- --------
Net pension expense $11,489 $ 11,466 $ 1,668
======== ======== ========
</TABLE>
The following table sets forth the funded status and amounts recognized in the
Company's Statement of Financial Position at December 31, 1994 and 1993:
<TABLE>
<CAPTION>
1994 1993
--------------------------------------------------------
In thousands Domestic Foreign Domestic Foreign
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested $(244,931) $(65,919) $(271,698) $(47,817)
Non-vested (43,866) (13,389) (50,878) (10,262)
--------- -------- --------- --------
Accumulated benefit obligation (288,797) (79,308) (322,576) (58,079)
Effect of projected wage increases (36,099) (14,013) (38,644) (15,707)
--------- -------- --------- --------
Projected benefit obligation (324,896) (93,321) (361,220) (73,786)
Plan assets at fair value 375,632 97,771 399,770 87,369
--------- -------- --------- --------
Plan assets in excess of projected
benefit obligation 50,736 4,450 38,550 13,583
Unrecognized net gain (56,385) (6,909) (41,364) (4,501)
Unrecognized prior service cost 40,620 29 45,667 33
Unrecognized transition asset (24,461) (9,073) (28,534) (10,640)
Adjustment to recognize minimum liability (1,140) (587) (5,623) (745)
--------- -------- --------- ---------
Prepaid (accrued) pension asset (liability) $ 9,370 $(12,090) $ 8,696 $ (2,270)
========= ======== ========= ========
</TABLE>
The significant actuarial assumptions at December 31, 1994, 1993 and 1992 were
as follows:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic plans:
Discount rate 8.5% 7.6% 8.5%
Expected long-term rate of return on plan assets 10.0% 9.0% 9.0%
Rate of increase in future compensation levels 4.3% 4.3% 6.1%
Foreign plans:
Discount rate 5.5 -9.0% 5.5 - 9.0% 5.5 - 9.0%
Expected long-term rate of return on plan assets 5.5 -9.0% 5.5 - 9.0% 5.5 - 10.0%
</TABLE>
31
<PAGE>
Postretirement Health Care Benefits - The Company provides health care benefits
to substantially all retired domestic employees and their covered dependents.
Generally, employees who have reached age 55 and rendered 10 years of service
are eligible for these benefits, which are subject to retiree contributions,
deductibles, copayment provisions and other limitations.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions. This standard requires that the expected cost of
health care benefits be charged to expense during the service lives of employees
rather than the cash basis method previously used. The Company has elected to
amortize the unfunded accumulated postretirement benefit obligation (APBO) of
$145,500,000 as of January 1, 1993 over 20 years.
A one-percentage point increase in the health care cost trend rate would
increase the APBO as of December 31, 1994 by approximately $13,668,000 and the
sum of the 1994 annual service and interest cost by approximately $1,666,000.
Prior to 1993, the cost of providing postretirement health care benefits net
of retiree contributions was recognized as expense as claims were paid and
amounted to $8,900,000 in 1992.
The costs of postretirement health care benefits under SFAS No. 106 for the
years ended December 31, 1994 and 1993 were as shown below:
<TABLE>
<CAPTION>
In thousands 1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Service cost $ 2,187 $ 2,312
Interest cost on accumulated postretirement benefit obligation 10,715 11,912
Net amortization and deferral 7,519 6,968
------- -------
Net postretirement benefit cost $20,421 $21,192
======= =======
</TABLE>
The following table sets forth the amounts recognized in the Company's Statement
of Financial Position at December 31, 1994 and 1993:
<TABLE>
<CAPTION>
In thousands 1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ (91,691) $(112,876)
Active employees (29,661) (31,439)
--------- ---------
(121,352) (144,315)
Unrecognized transition obligation 129,764 137,283
Unrecognized net gain (28,689) (3,470)
--------- ---------
Accrued postretirement benefit cost $ (20,277) $ (10,502)
========= =========
</TABLE>
The significant actuarial assumptions at December 31, 1994 and 1993 were as
follows:
<TABLE>
<CAPTION>
1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Discount rate 8.5% 7.6%
Health care cost trend rate:
Current rate 8.0% 10.0%
Ultimate rate in 1999 5.0% 5.0%
</TABLE>
32
<PAGE>
Long-Term Debt at December 31, 1994 and 1993 consisted of the following:
<TABLE>
<CAPTION>
In thousands 1994 1993
------------------------------------------------------------------------------------------------------
<S> <C> <C>
7-1/2% notes due December 1, 1998 $125,000 $125,000
5-7/8% notes due March 1, 2000 125,000 125,000
Commercial paper -- 100,000
Other, including capitalized lease obligations 24,996 28,260
-------- --------
274,996 378,260
Current maturities (2,009) (2,619)
-------- --------
$272,987 $375,641
======== ========
</TABLE>
In December 1991, the Company issued $125,000,000 of 7-1/2% notes due
December 1, 1998 at 99.892% of face value. The notes may not be redeemed by the
Company prior to maturity. The effective interest rate of the notes is 7.6%.
In March 1993, the Company issued $125,000,000 of 5-7/8% notes due March 1,
2000 at 99.744% of face value. The notes may not be redeemed by the Company
prior to maturity. The effective interest rate of the notes is 5.9%
At December 31, 1994, the carrying values of the 7-1/2% and 5-7/8% notes
exceeded the quoted market prices by approximately $14,000,000.
In August 1992, the Company entered into a $300,000,000 revolving credit
facility (RCF) expiring on August 14, 1997, which provides for borrowings under
a number of options and which may be reduced or canceled at any time at the
Company's option. In July 1994, the Company canceled $150,000,000 of the RCF.
There were no amounts outstanding under this facility as of December 31, 1994.
The RCF contains financial covenants establishing a maximum total debt to
total capitalization percentage and a minimum consolidated tangible net worth.
The Company was in compliance with these covenants at December 31, 1994.
Commercial paper is issued at a discount and generally matures 30 to 90 days
from the date of issue. The Company maintains unused commitments under the RCF
equal to any commercial paper borrowings. No commercial paper was outstanding at
December 31, 1994. The weighted average interest rate on commercial paper
outstanding at December 31, 1993 was 3.3%.
Other debt bears interest at rates ranging from 3.5% to 13.9%, with
maturities through the year 2014. Some of the debt is collateralized by plant
and equipment.
Scheduled maturities of long-term debt for the years ended December 31 are as
follows:
<TABLE>
<CAPTION>
In thousands
------------------------------------------------
<S> <C>
1996 $ 2,560
1997 5,813
1998 126,368
1999 991
2000 and future years 137,255
--------
$272,987
========
</TABLE>
--------------------------------------------------------------------------------
Preferred Stock, without par value, of which 300,000 shares are authorized, is
issuable in series. The Board of Directors is authorized to fix by resolution
the designation and characteristics of each series of preferred stock. The
Company has no present commitments to issue any preferred stock.
33
<PAGE>
Common Stock, without par value, and Common Stock Held in Treasury transactions
during 1994, 1993 and 1992 were as shown below.
On May 7, 1993, the Board of Directors authorized a two-for-one split of the
Company's common stock, with a distribution date of June 18, 1993, at a rate of
one additional share for each common share held by stockholders of record on
June 1, 1993. All per-share data in this report is calculated on a post-split
basis.
<TABLE>
<CAPTION>
Common Stock
Common Stock Held in Treasury
--------------------------------------------
Dollars in thousands Shares Amount Shares Amount
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1991 55,792,374 $139,982 (74,284) $(2,034)
During 1992-
Stock options exercised 288,917 8,274 5,552 356
Shares surrendered on exercise
of stock options (3,000) (190) (5,552) (356)
Tax benefits related to stock
options exercised -- 2,776 -- --
Restricted stock grant -- 102 2,700 74
---------- -------- ------- -------
Balance, December 31, 1992 56,078,291 150,944 (71,584) (1,960)
During 1993-
Adjustment to reflect the June 1993
stock split 56,078,291 -- (71,584) --
Stock options exercised 403,558 5,693 27,348 991
Shares surrendered on exercise
of stock options (5,274) (194) (27,348) (991)
Tax benefits related to stock
options exercised -- 2,114 -- --
Shares issued for acquisitions 718,810 10,931 -- --
Shares issued for stock incentive
grants and restricted stock grants 19,212 697 400 5
----------- --------- --------- -------
Balance, December 31, 1993 113,292,888 170,185 (142,768) (1,955)
During 1994-
Stock options exercised 199,679 3,851 22,653 994
Shares surrendered on exercise
of stock options (14,531) (635) (22,653) (994)
Tax benefits related to stock
options exercised -- 1,212 -- --
Shares issued for acquisitions 476,464 20,726 -- --
Restricted stock grant 146,000 5,827 200 3
----------- -------- --------- -------
Balance, December 31, 1994 114,100,500 $201,166 (142,568) $(1,952)
=========== ======== ========= =======
Authorized, December 31, 1994 150,000,000
===========
</TABLE>
34
<PAGE>
Stock Options have been issued to officers and other employees under the
Company's 1979 Stock Incentive Plan. At December 31, 1994, 5,000,793 shares were
reserved for issuance under the plans. Option prices are 100% of the common
stock fair market value on the date of grant.
Stock option transactions during 1994, 1993 and 1992 were as shown below:
<TABLE>
<CAPTION>
Number of Shares Price per Share
----------------------------------------------------------------------------------------
<S> <C> <C>
Under option at December 31, 1991 2,727,584 $ 1.38 to 29.75
During 1992-
Granted 25,582 31.44 to 32.50
Exercised (588,938) 1.38 to 29.75
Canceled or expired (61,402) 16.13 to 29.75
---------
Under option at December 31, 1992 2,102,826 7.13 to 32.50
During 1993-
Granted 688,008 36.38 to 37.00
Exercised (430,906) 7.13 to 29.75
Canceled or expired (25,402) 20.69 to 29.75
---------
Under option at December 31, 1993 2,334,526 8.19 to 37.00
During 1994-
Granted 126,358 40.13 to 44.38
Exercised (222,332) 8.19 to 36.38
Canceled or expired (15,000) 29.75 to 36.38
---------
Under option at December 31, 1994 2,223,552 8.19 to 44.38
=========
Exercisable at December 31, 1994 1,406,591 8.19 to 37.00
Reserved for grant - December 31, 1993 3,011,946
- December 31, 1994 2,777,241
------------------------------------------------------------------------------------------------------
</TABLE>
Cash Dividends Declared were $.56 per share in 1994,
$.50 per share in 1993 and $.46 per share
in 1992.
35
<PAGE>
Thirteen Year Financial Summary
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Dollars and shares in thousands except per share amounts 1994 1993 1992 1991
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income:
Operating revenues $3,461,315 3,159,181 2,811,645 2,639,650
Operating costs $2,290,117 2,122,286 1,858,752 1,759,288
Selling, administrative, and research and
development expenses $ 650,069 629,459 586,801 552,874
Amortization of goodwill and other intangible
assets $ 22,344 21,874 22,169 23,979
Operating income $ 498,785 385,562 343,923 303,509
Interest expense $ (26,943) (35,025) (42,852) (44,342)
Amortization of retiree health care $ (6,968) (6,968) -- --
Other income (expense) $ (14,591) (7,699) 8,709 28,592
Income before income taxes $ 450,283 335,870 309,780 287,759
Income taxes $ 172,500 129,300 117,700 107,200
Net income $ 277,783 206,570 192,080 180,559
Per share $ 2.45 1.83 1.72 1.62
Financial Position:
Net working capital $ 634,500 547,506 492,118 442,041
Plant and equipment, net $ 641,235 583,765 524,116 525,695
Total assets $2,580,498 2,336,891 2,204,187 2,257,139
Long-term debt $ 272,987 375,641 251,979 307,082
Total debt $ 339,989 482,714 335,240 489,189
Stockholders' equity $1,541,521 1,258,669 1,339,673 1,212,051
Other Data:
Operating income:
Return on operating revenues % 14.4 12.2 12.2 11.5
Net income:
Return on operating revenues % 8.0 6.5 6.8 6.8
Return on average stockholders' equity % 19.8 15.9 15.1 15.7
Cash dividends paid $ 61,162 55,175 50,290 44,108
Per share - paid $ .54 .49 .45 .40
- declared $ .56 .50 .46 .42
Book value per share $ 13.53 11.12 11.96 10.88
Common stock market price at year-end $ 43.75 39.00 32.62 31.88
Long-term debt to total capitalization % 15.0 23.0 15.8 20.2
Total debt to total capitalization % 18.1 27.7 20.0 28.8
Shares outstanding:
At December 31 113,958 113,150 112,014 111,436
Average during year 113,387 112,979 111,746 111,178
Plant and equipment additions $ 131,055 119,931 115,313 106,036
Depreciation $ 109,805 109,852 100,462 91,414
Research and development expenses $ 47,500 47,200 42,500 40,300
Employees at December 31 19,500 19,000 17,800 18,700
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Dollars and shares in thousands except per share amounts 1990 1989 1988 1987
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income:
Operating revenues $2,544,153 2,172,747 1,929,805 1,698,353
Operating costs $1,686,423 1,450,116 1,287,297 1,117,990
Selling, administrative, and research and
development expenses $ 510,276 417,874 369,138 339,143
Amortization of goodwill and other intangible
assets $ 19,181 15,829 13,106 16,812
Operating income $ 328,273 288,928 260,264 224,408
Interest expense $ (39,190) (30,995) ( 26,109) (33,439)
Amortization of retiree health care $ -- -- -- --
Other income (expense) $ 10,800 11,089 (1,343) 8,815
Income before income taxes $ 299,883 269,022 232,812 199,784
Income taxes $ 117,500 105,200 92,800 93,600
Net income $ 182,383 163,822 140,012 106,184
Per share $ 1.68 1.53 1.33 1.03
Financial Position:
Net working capital $ 615,055 440,406 392,283 332,290
Plant and equipment, net $ 483,549 413,578 342,794 318,690
Total assets $2,150,307 1,687,985 1,380,237 1,334,063
Long-term debt $ 430,632 334,407 225,907 309,515
Total debt $ 495,952 370,507 257,597 357,249
Stockholders' equity $1,091,842 871,124 744,727 608,541
Other Data:
Operating income:
Return on operating revenues % 12.9 13.3 13.5 13.2
Net income:
Return on operating revenues % 7.2 7.5 7.3 6.3
Return on average stockholders' equity % 18.6 20.3 20.7 19.6
Cash dividends paid $ 35,861 28,747 23,027 20,144
Per share - paid $ .33 .27 .22 .20
- declared $ .35 .28 .23 .20
Book value per share $ 9.96 8.12 7.05 5.88
Common stock market price at year-end $ 24.13 22.44 17.25 16.50
Long-term debt to total capitalization % 28.3 27.7 23.3 33.7
Total debt to total capitalization % 31.2 29.8 25.7 37.0
Shares outstanding:
At December 31 109,610 107,332 105,588 103,560
Average during year 108,872 107,028 105,350 103,272
Plant and equipment additions $ 101,183 84,263 84,107 61,052
Depreciation $ 82,913 68,890 62,064 57,839
Research and development expenses $ 40,300 32,500 26,588 24,739
Employees at December 31 18,400 15,700 14,200 13,600
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in thousands except per share amounts 1986 1985 1984 1983 1982
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income:
Operating revenues $ 961,077 596,127 592,253 497,821 446,983
Operating costs $ 622,310 390,501 382,299 325,022 287,528
Selling, administrative, and research and
development expenses $ 223,765 123,292 115,845 104,594 97,195
Amortization of goodwill and other intangible
assets $ 8,635 715 630 317 264
Operating income $ 106,367 81,619 93,479 67,888 61,996
Interest expense $ (14,468) (1,917) (1,914) (2,433) (2,004)
Amortization of retiree health care $ -- -- -- -- --
Other income (expense) $ 51,384 (9,755) 7,139 17,433 9,698
Income before income taxes $ 143,283 69,947 98,704 82,888 69,690
Income taxes $ 63,700 38,400 38,700 33,300 29,600
Net income $ 79,583 31,547 60,004 49,588 40,090
Per share $ .78 .31 .60 .50 .41
Financial Position:
Net working capital $ 293,575 172,201 182,698 168,717 130,015
Plant and equipment, net $ 317,829 137,001 118,889 108,695 109,978
Total assets $1,309,886 521,850 483,953 449,811 394,509
Long-term debt $ 468,269 9,995 11,101 11,578 10,292
Total debt $ 503,998 17,618 17,457 17,328 17,196
Stockholders' equity $ 476,550 403,439 377,557 339,952 301,540
Other Data:
Operating income:
Return on operating revenues % 11.1 13.7 15.8 13.6 13.9
Net income:
Return on operating revenues % 8.3 5.3 10.1 10.0 9.0
Return on average stockholders' equity % 18.1 8.1 16.7 15.5 13.6
Cash dividends paid $ 18,295 17,095 15,648 14,375 13,511
Per share - paid $ .18 .17 .16 .15 .14
- declared $ .18 .18 .16 .15 .14
Book value per share $ 4.65 4.00 3.76 3.40 3.07
Common stock market price at year-end $ 12.97 8.75 7.06 6.83 4.94
Long-term debt to total capitalization % 49.6 2.4 2.9 3.3 3.3
Total debt to total capitalization % 51.4 4.2 4.4 4.8 5.4
Shares outstanding:
At December 31 102,508 100,796 100,304 99,846 98,374
Average during year 102,206 100,558 100,138 99,650 98,248
Plant and equipment additions $ 44,722 39,062 39,248 24,491 24,073
Depreciation $ 37,213 27,312 25,742 24,039 22,749
Research and development expenses $ 13,161 7,795 8,029 6,022 6,426
Employees at December 31 13,700 7,300 7,800 7,300 6,500
</TABLE>
37
<PAGE>
Quarterly and Common Stock Data
Quarterly Financial Data (Unaudited)
was as summarized below:
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------------
March 31 June 30 September 30 December 31
----------------- ------------------ ------------------ ------------------
In thousands except
per share amounts 1994 1993 1994 1993 1994 1993 1994 1993
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenues $771,439 $750,022 $881,042 $829,318 $870,911 $779,536 $937,923 $800,305
Operating costs 520,264 508,887 583,910 556,998 579,917 527,854 606,026 528,547
Operating income 91,316 77,585 131,113 101,935 126,337 93,529 150,019 112,513
Net income 50,915 42,027 70,727 54,799 71,399 50,946 84,742 58,798
Net income per share .45 .37 .62 .49 .63 .45 .75 .52
--------------------------------------------------------------------------------------------------------
</TABLE>
Common Stock Price and Dividend Data - The
common stock of Illinois Tool Works Inc. is
listed on the New York Stock Exchange and the
Chicago Stock Exchange. Quarterly market price
and dividend data for 1994 and 1993 were as
shown below:
<TABLE>
<CAPTION>
Market Price Dividends
Per Share Paid
---------------------
High Low Per Share
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1994
First quarter $45-1/8 $37 $.13
Second quarter 42-1/4 36-3/4 .13
Third quarter 44-7/8 37 .13
Fourth quarter 45-1/2 39-5/8 .15
1993
First quarter $39 $32-1/2 $.12
Second quarter 38-3/4 34-7/8 .12
Third quarter 40-1/2 35-1/4 .12
Fourth quarter 39-7/8 36 .13
</TABLE>
The approximate number of holders of record of
common stock as of February 22, 1995 was 3,700.
This number does not include beneficial owners
of the Company's securities held in the name of
nominees.
38
<PAGE>
EXHIBIT 21
FEBRUARY 1995
ILLINOIS TOOL WORKS INC.
SUBSIDIARIES AND AFFILIATES
<TABLE>
<CAPTION>
PERCENT
COMPANY RELATIONSHIP OWNERSHIP
------- ------------ ---------
<S> <C> <C>
Accu-Lube Manufacturing GmbH - Germany Affiliate 50%
Action Fasteners Pty. Ltd. - Australia (1) Subsidiary 100%
Andrex Radiation Products A/S - Denmark Subsidiary 100%
Andrex NDT Products (UK) Ltd. - England (2) Subsidiary 100%
Automated Label Systems Company - Ohio (3) Partnership 100%
Buell Industries, Inc. - Delaware Subsidiary 100%
Cintas Inyectadas Citex S.A. - Spain (4) Subsidiary 100%
Coding Products Inc. - Michigan (5) Subsidiary 100%
Crones & Co. GmbH - Germany (6) Subsidiary 100%
Cumberland Leasing Co. - Illinois (7) Subsidiary 100%
Denepark Pty Ltd. - Australia Subsidiary 100%
Devcon Limited - Ireland Subsidiary 100%
Devcon de Mexico S.A. - Mexico Subsidiary 100%
DeVilbiss Ransburg de Mexico S.A. de C.V.- Mexico (8) Subsidiary 100%
DeVilbiss Holding S.A. - France (9) Subsidiary 100%
DeVilbiss Equipmentos Para Pintura Industrial Ltda
- Brazil Subsidiary 100%
Envases Multipac, S.A. de C.V. - Mexico Affiliate 49%
Etanco, S.A. - Spain (10) Subsidiary 10%
Expandet S.A. - France (11) Subsidiary 100%
Fixing System S.A. - Switzerland Subsidiary 100%
Fixlock A.B. - Sweden Subsidiary 100%
Gema Volstatic AG - Switzerland (8) Subsidiary 100%
Gema Volstatic S.A. - France (8) Subsidiary 100%
Gerrard-Signode Pte. Ltd. - Singapore Affiliate 49%
Glen Lake Venture - Illinois Affiliate 50%
Gunther S.A. - France (9) Subsidiary 100%
ITW Asia (Pte.) Limited - Singapore Subsidiary 100%
ITW Austria Vertriebs-Ges.m.b.H.- Austria (12) Subsidiary 100%
ITW Ateco GmbH - Germany (6) Subsidiary 100%
ITW Befestigungssyteme GmbH - Germany (13) Subsidiary 100%
ITW Bevestigingssystemen B.V. - Netherlands ( (14) Subsidiary 100%
ITW Belgium S.A. - Belgium Subsidiary 100%
ITW Canada Inc. - Canada Subsidiary 100%
ITW Cayman - Cayman Islands (15) Subsidiary 100%
ITW de Argentina S.A. - Argentina (16) Subsidiary 100%
ITW de France S.A. - France (9) Subsidiary 100%
ITW (Deutschland) GmbH - Germany (8) Subsidiary 100%
ITW Development Corporation - Illinois Subsidiary 100%
ITW do Brasil Participacoes Ltda. - Brazil Subsidiary 100%
ITW Dynatec (Hong Kong) Limited - Hong Kong Affiliate 50%
ITW Dynatec Kabushiki Kaisha - Japan Affiliate 50%
ITW Dynatec Klebetechnik Holding GmbH- Germany (6) Subsidiary 100%
ITW Dynatec Singapore Pte. Ltd. - Singapore Affiliate 50%
ITW Dynatec Thailand Ltd. - Thailand Affiliate 50%
ITW Espana S.A. - Spain (17) Subsidiary 100%
ITW FSC Inc. - Barbados Subsidiary 100%
ITW Fastex Italia S.p.A. - Italy Subsidiary 100%
ITW Finishing Systems & Products Pty. Ltd.
- Australia (8) Subsidiary 100%
ITW Fixations - France (18) Subsidiary 100%
ITW Fixfast AB - Sweden (19) Subsidiary 100%
ITW Hi-Cone Holdings - Ireland (20) Subsidiary 100%
ITW Hi-Cone - Ireland (21) Subsidiary 100%
I.T.W. Inc. - Illinois Subsidiary 100%
ITW Industriesysteme GmbH - Germany (22) Subsidiary 100%
ITW Industry Co., Ltd. - Japan (23) Subsidiary 100%
ITW International Inc. - Delaware Subsidiary 100%
ITW Italia S.p.A. - Italy Subsidiary 100%
ITW Korea Inc. - Korea Subsidiary 100%
ITW Leasing & Investments Inc. - Delaware Subsidiary 100%
ITW Limited - England Subsidiary 100%
ITW Mapri Industria e Commercio Ltda. - Brazil (24) Subsidiary 94.3%
ITW Meritex Sdn Bhd - Malaysia (25) Subsidiary 100%
ITW Mima Europe S.A. - France ( 9) Subsidiary 100%
ITW Nederland B.V. - Netherlands Subsidiary 100%
ITW New Zealand - New Zealand Subsidiary 100%
</TABLE>
<PAGE>
PAGE 2 FEBRUARY 1995
ILLINOIS TOOL WORKS INC. SUBSIDIARIES AND AFFILIATES
<TABLE>
<CAPTION>
PERCENT
COMPANY RELATIONSHIP OWNERSHIP
------- ------------ ---------
<S> <C> <C>
ITW-Nifco Inc. - Delaware Affiliate 50%
ITW Oberflachentechnik GmbH - Germany (6) Subsidiary 100%
ITW Overseas Holdings Inc. - Delaware Subsidiary 100%
ITW Overseas Investment Corp. - Delaware Subsidiary 100%
ITW Packaging Corporation - Delaware Subsidiary 100%
ITW Participations S.A. - France Subsidiary 100%
ITW Polska Inc. - Delaware Subsidiary 100%
ITW Polska Sp. z o.o. - Poland (26) Subsidiary 100%
ITW Residuals Inc. - Delaware (7) Subsidiary 100%
ITW Shelf Corporation - Delaware Subsidiary 100%
ITW Shippers S.A. - Belgium (27) Subsidiary 100%
ITW Signode India Limited - India Affiliate 29%
ITW South America Inc. - Delaware Subsidiary 100%
ITW Surfaces & Finition S.A. - France (28) Subsidiary 100%
ITW Switches Asia Ltd. - Taiwan Subsidiary 100%
I.T.W. (Thailand) Co., Ltd. - Thailand Subsidiary 100%
ITW XP Inc. - Delaware Subsidiary 100%
Illinois Tool Works FSC Inc - Barbados Subsidiary 100%
Impex Walcar B.V. - Netherlands (14) Subsidiary 100%
IMSA Signode, S.A. de C.V. - Mexico Affiliate 50%
Inmobiliaria Cit, S.A. de C.V. - Mexico Affiliate 49%
Indiana Pickling and Processing Company - Indiana (29) Affiliate 35%
Jambro Ltd. - New Zealand Subsidiary 100%
Jambro Pty. Ltd. - Australia (1) Subsidiary 100%
Kormag Industries e Comercio Ltda. - Brazil Affiliate 40%
LSH Holding Corp. - Delaware Subsidiary 100%
Liljendals Bruk Ab - Finland Subsidiary 100%
Loveshaw Corporation, The - Delaware (30) Subsidiary 100%
Macon Klebetechnik GmbH - Germany (31) Subsidiary 100%
Maple Control Company - Michigan Subsidiary 100%
Maple Roll Leaf Company, Inc. - Michigan (32) Subsidiary 100%
Meritex (Penang) Sdn. Bhd. - Malaysia (25) Subsidiary 100%
Meritex Plastic Industries, Inc. - Texas Subsidiary 100%
Meypack Verpackungs und Palettiertechnik GmbH
- Germany (6) Subsidiary 100%
Miller Automation, Inc. - Wisconsin (33) Subsidiary 100%
Miller Electric Mfg. Co. - Wisconsin (33) Subsidiary 100%
Miller Europe, S.p.A. - Italy (34) Subsidiary 100%
Miller Group France S.A., The - France (9 ) Subsidiary 100%
Miller Group, Ltd., The - Wisconsin Subsidiary 100%
Miller Insurance, Ltd. - Bermuda (33) Subsidiary 100%
Miller Services of Appleton, Ltd. - Wisconsin (33) Subsidiary 100%
Miller Thermal, Inc. - Wisconsin (33) Subsidiary 100%
Mima, Inc. - Florida Subsidiary 100%
Minigrip Inc. - Delaware Subsidiary 100%
N. A. Woodworth Company - Michigan Subsidiary 100%
Nifco Hi-Cone Leasing Company Limited - Japan Affiliate 40%
Odesign, Inc. - Illinois Subsidiary 100%
Odesign II, Inc. - Illinois Subsidiary 100%
Odesign III, Inc. - Illinois Subsidiary 100%
Odesign IV, Inc. - Illinois Subsidiary 100%
Oxo Welding Equipment Company Inc. - Illinois (33) Subsidiary 100%
Pro/Mark Corporation - Connecticut Subsidiary 100%
Packaging Leasing Systems Inc. - Delaware Subsidiary 80%
Padlocker, Inc. - New York (30) Subsidiary 100%
Paslode Corporation - Illinois Subsidiary 100%
Paslode Corporation - Florida - Florida (35) Subsidiary 100%
Paslode S.A.R.L. - France (9) Subsidiary 100%
Plastiglide Manufacturing Leasing Limited Partnership
- Illinois Partnership 60.4%
Pow Con Incorporated - Delaware (33) Subsidiary 100%
Ransburg Comercial Ltda. - Brazil (8) Subsidiary 100%
Ransburg Corporation - Indiana Subsidiary 100%
Ransburg Equipamentos Industrials Ltda. - Brasil (36) Affiliate 50%
Ransburg-Gema KK - Japan (8) Subsidiary 100%
Ransburg-Gema s.r.l. - Italy (8) Subsidiary 100%
</TABLE>
<PAGE>
PAGE 3 FEBRUARY 1995
ILLINOIS TOOL WORKS INC. SUBSIDIARIES AND AFFILIATES
<TABLE>
<CAPTION>
PERCENT
COMPANY RELATIONSHIP OWNERSHIP
------- ------------ ---------
<S> <C> <C>
Ransburg Manufacturing Corporation - Indiana (8) Subsidiary 100%
Scanilec B.V. - Netherlands (14) Subsidiary 100%
Shippers Paper Products Company - Ohio Subsidiary 100%
Signode B.V. - Netherlands (14) Subsidiary 100%
Signode Bernpak GmbH - Germany Subsidiary 100%
Signode Bernpak, Inc. - Delaware Subsidiary 100%
Signode France - France (9) Subsidiary 100%
Signode Hong Kong Limited - Hong Kong Subsidiary 100%
Signode International Trading Corporation - Illinois Subsidiary 100%
Signode Ireland Limited - Ireland (37) Affiliate 50%
Signode Kabushiki Kaisha - Japan Subsidiary 100%
Signode Overseas Inc. of Illinois - Illinois Subsidiary 100%
Signode Packaging Systems Limited - East Africa Affiliate 20%
Signode Pickling Corporation - Delaware Subsidiary 100%
Signode Systems GmbH - Germany Subsidiary 100%
Simco (Europe) B.V. - Netherlands (8) Subsidiary 100%
Simco Japan Kabushiki Kaisha - Japan (38) Affiliate 50%
Simco (Nederland) B.V. - Netherlands (39) Subsidiary 100%
Societe de Prospection et D'Invention Techniques
- France (9) Subsidiary 100%
Societe Novvelle SARL Provence Plastic - France (18) Subsidiary 100%
Soparca S.A. - France (9) Subsidiary 100%
Steinmax GmbH - Germany (6) Subsidiary 100%
Vortec Corporation - Ohio (8) Subsidiary 100%
W. A. Deutsher Pty. Ltd. - Australia Subsidiary 100%
Waterbury Buckle Company - Connecticut Subsidiary 100%
</TABLE>
( 1) Wholly owned by W. A. Deutsher Pty. Ltd.
( 2) Ownership interest is by Andrex Radiation Products A/S
( 3) 50% owned by ITW Packaging Corporation; 50% owned by ITW XP Inc.
( 4) Wholly owned by ITW Espana S.A.
( 5) 80% owned by Maple Control Company; 20% owned by Illinois Tool Works Inc.
( 6) Wholly owned by ITW (Deutschland) GmbH
( 7) Wholly owned by ITW Leasing & Investments Inc.
( 8) Wholly owned by Ransburg Corporation
( 9) Wholly owned by ITW Participations S.A.
(10) Ownership interest is by ITW Espana S.A.
(11) Wholly owned by Soparca S.A.
(12) Wholly owned by Automated Label Systems Company
(13) 64% owned by ITW (Deutschland) GmbH; 36% owned by ITW Ateco GmbH
(14) Wholly owned by ITW Nederland B.V.
(15) Wholly owned by ITW Overseas Holdings Inc.
(16) Wholly owned by ITW South America Inc.
(17) Wholly owned by ITW International Inc.
(18) Wholly owned by Societe de Prospection et D'Invention Techniques
(19) Wholly owned by Fixlock A.B.
(20) .1% owned by ITW Cayman; 99.9% by ITW Overseas Investment Corp.
(21) .1% owned by ITW Cayman; 99.9% by ITW Hi-Cone Holdings
(22) Wholly owned by Signode Bernpak GmbH
(23) Wholly owned by Ransburg-Gema KK
(24) 94% owned by Illinois Tool Works Inc.; .3% owned by ITW do Brasil
Paricipacoes Ltda.
(25) Wholly owned by Meritex Plastic Industries, Inc.
(26) Wholly owned by ITW Polska Inc.
(27) Wholly owned by ITW Belgium S.A.
(28) Wholly owned by DeVilbiss Holding, S.A. - France
(29) Ownership interest is by Signode Pickling Corporation
(30) Wholly owned by LSH Holding Corp.
(31) Wholly owned by ITW Dynatec Klebetechnik Holding GmbH
(32) Wholly owned by Maple Control Company
(33) Wholly owned by The Miller Group, Ltd.
(34) 98.5% owned by Miller Electric Mfg. Co.; 1.5% owned by The Miller Group,
Ltd.
(35) Wholly owned by Paslode Corporation
(36) Ownership interest is by Ransburg Comercial Ltda.
(37) Ownership interst is by ITW Limited
(38) Ownership interest is by Ransburg Corporation
(39) Wholly owned by Simco (Europe) B.V.
<PAGE>
EXHIBIT 22
ILLINOIS TOOL WORKS INC.
3600 WEST LAKE AVENUE
GLENVIEW, ILLINOIS 60025
March 27, 1995
PROXY STATEMENT
For the Annual Meeting of Stockholders of Illinois Tool Works Inc.
To Be Held on May 5, 1995
ELECTION OF DIRECTORS
Fourteen directors of the Company are to be elected to hold office until
the next annual meeting or until their successors are duly elected and qualified
or until their earlier resignation or removal. Unless otherwise directed,
proxies will be voted at the meeting for the election of the persons listed
below, or in the event of an unforeseen contingency, for different persons as
substitutes. The Nominating Committee and the Board as a whole are recommending
the addition of Messrs. Crowther and Farrell as directors in anticipation of the
retirement of Messrs. Cathcart and Nichols at the 1996 annual meeting. Calvin
A. H. Waller is also being recommended as a director in light of the mandatory
retirement of four directors in 1997. The Company anticipates that three
additional directors will stand for election at the 1996 annual meeting of
stockholders. Set forth below are the name, age, principal occupation and other
information concerning each nominee.
Julius W. Becton, Jr. (68)
Former President, Prairie View A&M University from 1989 through 1994.
Mr. Becton served as Director of the Federal Emergency Management
Agency from 1985 to 1989 after 40 years of commissioned service in the U.S.
Army, during which he attained the rank of Lieutenant General. He is a
director of The Wackenhut Corporation, and has been a director of the
Company since 1992.
1
<PAGE>
Silas S. Cathcart (68)
Former Chairman, Kidder, Peabody Group, Inc. (investment banking) from
January 1989 through January 1990, Chairman and Chief Executive Officer
from February 1988 to January 1989, and President and Chief Executive
Officer from May 1987 to February 1988. In May 1986, Mr. Cathcart retired
as Chairman of Illinois Tool Works Inc., a position that he had held since
1972. Mr Cathcart is a director of Baxter International Inc., General
Electric Company and The Quaker Oats Company and has been a director of the
Company since 1964.
Susan Crown (36)
Vice President, Henry Crown and Company since 1984. Henry Crown and Company
is a family owned and operated company with investments in securities, real
estate, resort properties and manufacturing operations. Ms. Crown is a
director of Baxter International Inc. She is also a trustee and executive
committee member of Rush-Presbyterian-St. Luke's Medical Center in Chicago
and a trustee of The Yale Corporation. She has been a director of the
Company since 1994.
H. Richard Crowther (62)
Vice Chairman of Illinois Tool Works Inc. Mr. Crowther will retire as Vice
Chairman of the Company on March 31, 1995, a position he has held since
1990. Prior to becoming Vice Chairman, Mr. Crowther was Executive Vice
President, and has a total of 36 years with the Company.
W. James Farrell (52)
President of the Company since December 1994; Executive Vice President from
1983 to December 1994, with a total of 29 years with the Company. Mr.
Farrell is a director of Hon Industries Inc.
Richard M. Jones (68)
Former Chairman and Chief Executive Officer, Guaranty Federal Savings Bank
from 1989 through 1991. Mr. Jones was President of Sears, Roebuck and Co.
(diversified merchandise, insurance, real estate and financial services)
from 1986 to 1988 and Chief Financial Officer from 1980 to 1988. Mr. Jones
is a director of Applied Power Inc., baker, Fentress & Co., Guaranty
Federal Savings Bank and MCI Communications Corp., and has been a director
of the Company since 1988.
George D. Kennedy (68)
Former Chairman, Mallinckrodt Group Inc. (animal and human health) from
1991 to 1994 and Chairman and Chief Executive Officer from 1986 to 1991.
Mr. Kennedy is a director of American National Can Corporation, Brunswick
Corporation, Kemper National Insurance Company, Kemper Corporation,
Mallinckrodt Group Inc., Scotsman Industries, Inc. and Stone Container
Corporation, and has been a director of the Company since 1988.
Richard H. Leet (68)
Former Vice Chairman, Amoco Corporation (oil and chemicals) from March 1991
to October 1991 and Executive Vice President from 1983 through February
1991. Mr. Leet is a director of Great Lakes Chemical Corporation, Landauer
Inc. and Vulcan Materials Corp., was formerly President of the Boy Scouts
of America, and has been a director of the Company since 1988.
Robert C. McCormack (55)
Partner, Trident Capital L.P. (venture capital) since January 1993;
Assistant Secretary of the Navy from 1990 to 1993; Deputy Under Secretary
of Defense from 1987 to 1990; and Managing Director, Morgan Stanley & Co.
Incorporated (investment banking) from 1985 to 1987. Mr. McCormack has been
a director of the Company since 1993 and was previously a director from
1978 through 1987.
John D. Nichols (64)
Chairman and Chief Executive Officer of the Company since May 1986;
President and Chief Executive Officer from January 1982 to May 1986. Mr.
Nichols is a director of Household International Inc., Philip Morris Cos.
Inc., Rockwell International Corporation and Stone Container Corporation.
He has been a director of the Company since 1981.
2
<PAGE>
Phillip B. Rooney (50)
President and Chief Operating Officer, WMX Technologies Inc. (environmental
services) since 1985, Chairman and Chief Executive Officer, Waste
Management Inc. (solid waste management) since November 1993; Chairman and
Chief Executive Officer, Wheelabrator Technologies Inc. (waste-to-energy)
since 1990; and Chairman of the Board, Rust International Inc.
(engineering, design and construction services) since January 1983. Mr.
Rooney is a director of Caremark International Inc., Chemical Waste
Management, Inc., Rust International Inc., The ServiceMaster Company, Urban
Shopping Centers Inc., Waste Management International plc, Wheelabrator
Technologies Inc. and WMX Technologies, Inc., and has been a director of
the Company since 1990.
Harold B. Smith (61)
Chairman of the Executive Committee of the Company since 1982. Mr. Smith is
a director of W.W. Grainger Inc. and Northern Trust Corporation and a
Trustee of The Northwestern Mutual Life Insurance Company. He has been a
director of the Company since 1968.
Ormand J. Wade (55)
Former Vice Chairman, Ameritech Corp. (telecommunications products and
services) from 1989 to 1993; President of the Ameritech Bell Group form
1987 to 1989; and President and Chief Executive Officer, Illinois Bell
Telephone Company from 1982 through 1986. Mr. Wade is a director of Andrew
Corporation, NBD Bancorp Inc. and Westell Inc. He has been a director of
the Company since 1985.
Calvin A. H. Waller (57)
Senior Vice President, ICF Kaiser International Inc. (energy and
environmental group) since August 1994. Former President and Chief
Executive Officer of RKK Ltd. (environmental technology) from 1993 to 1994
and Chief Operating Officer and Executive Vice President from November 1991
to May 1993. After 32 years of military service, Mr. Waller retired form
the Army in October 1991 with the rank of Lieutenant General, having
served, among other positions, as Deputy Commander-in-Chief of Operations
Desert Shield and Desert Storm. Mr. Waller is a director of Interpoint
Corp. and RADICA Games, Ltd. of Hong Kong.
3
<PAGE>
SECURITY OWNERSHIP
The following table sets forth information regarding ownership of the
Company's Common Stock as of December 31, 1994 by each director and nominee for
director; by each of the named executive officer; by directors, nominees and
executive officers as a group; and by other persons who, to the knowledge of the
Company, own of record or beneficially more than 5% of the outstanding Common
Stock of the Company.
<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Owner or Group Beneficial Ownership ( ) Percent of Class
--------------------------------- ------------------------- ----------------
<S> <C> <C>
Directors and Nominees
(Other Than Executive Officers)
Julius W. Becton, Jr. . . . . . . . . . . . . . . . . . 1,300(2) *
Silas S Cathcart. . . . . . . . . . . . . . . . . . . . 185,974(3) *
Susan Crown . . . . . . . . . . . . . . . . . . . . . . 3,900(2)(4) *
Richard M. Jones. . . . . . . . . . . . . . . . . . . . 5,500(2) *
George D. Kennedy . . . . . . . . . . . . . . . . . . . 1,760(2) *
Richard H. Leet . . . . . . . . . . . . . . . . . . . . 4,500( ) *
Robert C. McCormack . . . . . . . . . . . . . . . . . . 7,274,250(5)(6) 6.3
Phillip B. Rooney . . . . . . . . . . . . . . . . . . . 5,500( ) *
Harold B. Smith . . . . . . . . . . . . . . . . . . . . 19,785,454(6)(7) 17.2
Ormand J. Wade. . . . . . . . . . . . . . . . . . . . . 1,900(2) *
Calvin A. H. Waller . . . . . . . . . . . . . . . . . . -- --
Executive Officers
H. Richard Crowther . . . . . . . . . . . . . . . . . . 186,532(8)(9) *
W. James Farrell. . . . . . . . . . . . . . . . . . . . 95,686(8)(10) *
Robert H. Jenkins . . . . . . . . . . . . . . . . . . . 58,036(8)(11) *
John D. Nichols . . . . . . . . . . . . . . . . . . . . 426,428(8)(12) *
Frank S. Ptak . . . . . . . . . . . . . . . . . . . . . 69,702(8) *
Directors, Nominees and Executive Officers
as a Group (24 Persons) . . . . . . . . . . . . . . . . 21,099,787(8) 18.3
Other Principal Beneficial Owners
Edward Byron Smith, Jr. . . . . . . . . . . . . . . . . 7,592,906(6)(13) 6.6
The Northern Trust Company. . . . . . . . . . . . . . . 21,479,850(14) 18.6
<FN>
--------------
* Less than 1% of Class
(1) Unless otherwise noted, ownership is direct.
(2) Includes 900 shares of restricted stock granted on January 3, 1995 under
the Directors' Restricted Stock Plan.
(3) Includes 12,920 shares owned by Mr. Cathcart's wife, as to which he
disclaims beneficial ownership; 11,684 shares owned by a trust as to which
Mr. Cathcart has sole voting and investment power; 560 shares owned by a
trust as to which he shares voting and investment power; and 6,000 shares
owned by a charitable organization of which he is president and a
director.
(4) Includes 1,000 shares owned in a trust as to which Ms. Crown shares voting
and investment power.
(5) Includes 3,760 shares held in a revocable living trust as to which Mr.
McCormack has sole voting and investment power, 200 shares owned in a
trust as to which he shares voting and investment power with The Northern
Trust Company, and 7,270,090 shares as described in footnote 6.
(6) Robert C. McCormack, Harold B. Smith, Edward Byron Smith, Jr. and The
Northern Trust Company are trustees of twelve trusts owning 7,270,090
shares as to which they share voting and investment power.
6
<PAGE>
(7) Includes 151,088 shares held in a revocable living trust as to which
Harold B. Smith has sole voting and investment power; 11,018,732 shares
owned in twelve trusts as to which he shares voting and investment power
with The Northern Trust Company and others; 1,099,240 shares owned in ten
trusts as to which he shares voting and investment power; 7,270,090 shares
as described in Footnote 6; and 44,056 shares owned by a charitable
foundation of which he is a director.
(8) Includes shares covered by stock options exercisable within 60 days of
December 31, 1994 as follows: Mr. Crowther, 35,068; Mr. Farrell, 47,496;
Mr. Jenkins, 25,500; Mr. Nichols, 12,500; Mr. Ptak, 34,750; and directors,
nominees and executive officers as a group, 320,564.
(9) Includes 146,464 shares held in a revocable living trust as to which Mr.
Crowther shares voting and investment power.
(10) Includes 1,962 shares held by Mr. Farrell as custodian for his minor
children, as to which he disclaims beneficial ownership.
(11) Includes 100 shares allocated to Mr. Jenkins' account in the Company's
Savings and Investment Plan.
(12) Includes 322,038 shares held in a family partnership of which Mr. Nichols
is general partner and shares voting and investment powers; 5,600 shares
owned in a revocable living trust as to which Mr. Nichols has sole voting
and investment power; 7,200 shares owned by Mr. Nichols' wife, as to which
Mr. Nichols disclaims beneficial ownership; 6,148 shares held by Mrs.
Nichols as custodian for their minor children, as to which Mr. Nichols
disclaims beneficial ownership; 3,522 shares allocated to his account in
the Company's Savings and Investment Plan; and 69,430 shares owned by a
charitable foundation of which he is a co-trustee.
(13) Includes 10,874 shares owned in a trust as to which Edward Byron Smith,
Jr. has sole voting and investment power; 96,200 shares owned in a trust
as to which The Northern Trust Company has sole voting and investment
power; 122,392 shares owned in three trusts as to which Mr. Smith shares
voting and investment power, and 7,270,090 shares as described in Footnote
6. Also includes the following shares held for the benefit of Mr. Smith's
minor children: 65,190 shares owned in two trusts as to which The Northern
Trust Company has sole voting and investment power; 6,720 shares held in a
trust as to which Mr. Smith and his wife share voting and investment
power; 9,320 shares held in a trust as to which Mr. Smith's wife and
sisters share voting and investment power; and 4,400 shares owned in two
trusts as to which Mr. Smith sisters share voting and investment power.
(14) Including its holdings as trustee described in Footnotes 5, 6, 7, and 13,
The Northern Trust Company and its affiliates act as sole fiduciary or co-
fiduciary of trusts and other fiduciary accounts which own an aggregate of
21,479,850 shares. They have sole voting power with respect to 2,064,801
shares and share voting power with respect to 18,770,111 shares. They have
sole investment power with respect to 1,795,806 shares and share
investment power with respect to 19,448,598 shares. In addition, The
Northern Trust Company holds in other accounts, but does not beneficially
own, 9,923,449 shares, resulting in aggregate holdings by The Northern
Trust Company of 31,403,299 shares (27.2%).
</TABLE>
Because of their holdings individually and as trustees, the holdings of
their immediate families and/or their positions with the Company, Robert C.
McCormack, Edward Byron Smith Jr. and Harold B. Smith may be deemed to be
"controlling persons" of the Company within the meaning of the Securities Act of
1933, as amended.
The Company maintains normal commercial banking relationships with The
Northern Trust Company, which also acts as the trustee under the Company's
pension plan. The Northern Trust Company is wholly owned subsidiary of Northern
Trust Corporation. Harold B. Smith, a director of the Company, is also a
director of Northern Trust Corporation.
The Northern Trust Company's address is 50 South LaSalle Street, Chicago,
IL 60675 and the address of each of the other beneficial owners of more than 5%
of the Company's Common Stock is c/o The Secretary, Illinois Tool Works Inc.,
3600 West Lake Avenue, Glenview, IL 60025.
7
<PAGE>
EXECUTIVE COMPENSATION
The table below summarizes the compensation of the Chief Executive Officer
and the other four most highly compensated Executive Officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------- ------------------------- ------------
Securities
Restricted Underlying All Other
Name and Other Annual Stock Options LTIP Compensation
Principal Position Year Salary($)(1) Bonus($)(2) Compensation($)( ) Awards($)(4) ($)( ) Payouts($) ($)
------------------ ---- ------------ ----------- ------------------ ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John D. Nichols. . . . 1994 652,067 750,000 --- --- --- 1,042,776( ) 27,014( )( )
Chairman and Chief 1993 600,000 567,600 --- --- 50,000 950,111( ) 12,269
Executive Officer 1992 580,684 530,900 --- --- --- 782,097( ) 6,365
H. Richard Crowther. . 1994 282,298 287,100 --- 218,750 17,918 --- 12,136( )( )
Vice Chairman 1993 273,000 258,000 --- --- 42,708 --- 8,322
1992 283,651 250,000 --- --- 6,082 --- 6,806
W. James Farrell . . . 1994 250,650 291,300 --- 1,400,000 --- --- 9,836( )( )
President 1993 242,000 228,000 --- --- 36,986 --- 7,332
1992 233,448 146,000 --- --- --- --- 6,860
Robert H. Jenkins. . . 1994 214,641 218,000 --- 1,400,000 --- --- 7,813( )( )
Executive 1993 200,000 177,000 --- --- 30,000 --- 6,050
Vice President 1992 186,905 150,000 --- --- --- --- 5,452
Frank S. Ptak. . . . . 1994 192,165 195,000 --- 1,400,000 --- --- 7,380( )( )
Executive 1993 180,000 177,000 --- --- 30,000 139,758(7) 5,507
Vice President 1992 172,500 173,000 --- --- --- --- 5,003
_____________
<FN>
(1) The dollars displayed in the salary column reflect the actual salary earned
during 1994, including any amounts deferred under the Company's 1993
Executive Contributory Retirement Income Plan or the Savings and Investment
Plan or both.
(2) Amounts awarded under the Executive Incentive Plan are calculated on the
base salary of record as of December 31 for the respective years.
(3) Perquisites and other personal benefits, securities or property in the
aggregate do not exceed the threshold reporting level of the lesser of
$50,000 or 10% of total salary and bonus reported for the named Executive
Officer.
(4) Represents the value of restricted stock grants authorized under the 1979
Stock Incentive Plan and approved by the Compensation Committee at their
December 1994 meeting. The number of shares granted and their value as of
December 31, 1994 for each of the officers is as follows: Mr. Crowther,
5,000 shares ($218,750); Mr. Farrell, 32,000 shares ($1,400,000); Mr.
Jenkins, 32,000 shares ($1,400,000); and Mr. Ptak, 32,000 shares
($1,400,000). These individuals may exercise full voting rights as to the
restricted stock and are entitled to receive all dividends and other
distributions paid on the restricted stock from the date of grant until
forfeited or sold. Mr. Crowther's shares will vest in five equal annual
installments commencing December 31, 1995. Messrs. Farrell, Jenkins and
Ptak's shares each vest in the following manner: 3,200 on December 31,1995;
4,800 on December 31, 1996; 6,400 on December 31, 1997; 6,400 on December
31, 1998; 6,400 on December 31,1999; 3,200 on December 31, 2000; and 1,600
on December 31, 2001. Unvested shares will be forfeited if the executive
leaves the Company before retirement.
(5) Stock option grants have been adjusted where appropriate to reflect the 2
for 1 stock split effective June 1993.
(6) For 1994, the market value of 20,000 phantom stock units, the vesting of
which was approved by the Compensation Committee on February 15, 1995 to be
effective March 31, 1995, was $875,000 as of
8
<PAGE>
December 31, 1994; and interest and dividends credited on 264,000 shares in
Mr. Nichols' Phantom Stock Account totaled $167,776. For 1993, the market
value as of the date of vesting (March 31, 1994) for 20,000 phantom shares
was $810,000, and interest and dividends credited on 244,000 shares in his
Account totaled $140,111. For 1992, the market value at the date of vesting
(December 11, 1992) for 20,000 phantom stock units was $628,750, and
interest and dividends credited on 264,000 shares to his Account totaled
$153,347. The Compensation Committee previously authorized the distribution
to Mr. Nichols on December 31, 1992 of (i) the market share of and accrued
dividends and interest on the 20,000 phantom stock units vested for 1992
totaling $659,683, and (ii) the market value of and accrued dividends and
interest on 20,000 phantom stock units earned in 1991 totaling $666,567.
Other than the December 31, 1992 distribution referred to in the previous
sentence, all vested units and accrued interest and dividends are being
held for Mr. Nichols in his Account and have not been distributed. Units
have been adjusted where appropriate to reflect the 2 for 1 stock split
effective June 1993.
(7) Cash and market value of Common Stock paid in 1993 for performance share
appreciation units granted under the Company's 1979 Stock Incentive Plan
for a three-year performance period ended December 31, 1992.
(8) Includes Company matching contributions to the Executive Officers' accounts
in the 1993 Executive Contributory Retirement Income Plan. For 1994 the
amounts are: Mr. Nichols, $19,562; Mr. Crowther, $8,469; Mr. Farrell,
$7,525; Mr. Jenkins, $6,439; and Mr. Ptak, $5,765.
(9) Includes interest credited on deferrred compensation in excess of 120% of
the Applicable Federal Long-term Rate. For 1994 the amounts are:
Mr. Nichols, $7,452; Mr. Crowther, $3,667; Mr. Farrell, $1,711;
Mr. Jenkins, $1,374; and Mr. Ptak, $1,555.
</TABLE>
______________________
The table below sets forth information as to options granted during 1994 to
the Executive Officers listed in the Summary Compensation Table.
Option Grants in 1994
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of
Stock Price Appreciation
Individual Grants for Option Term ( )
-------------------------------------------------------------- -------------------------------
Number of
Securities
Underlying % of Total
Options Options Granted
Granted to Employees Exercise or Base Expiration
Name ($) in 1994 Price ($/Sh) Date 0% ($) 5% ($) 10% ($)
---- ---------- --------------- ---------------- ---------- ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
John D. Nichols. . . . . . . . --- --- --- --- --- --- ---
H. Richard Crowther. . . . . . 4,360(2) 3.5% 44.375 12/11/97 0 33,245 70,250
3,496(2) 2.8% 44.375 12/06/99 0 45,291 100,736
10,056(2) 8.2% 44.375 12/13/01 0 189,368 444,320
W. James Farrell . . . . . . . --- --- --- --- --- --- ---
Robert H. Jenkins. . . . . . . --- --- --- --- --- --- ---
Frank S. Ptak. . . . . . . . . --- --- --- --- --- --- ---
___________
<FN>
(1) The dollar amounts under these columns are the result of calculations at 0%
and at the 5% and 10% rates set by the Securities and Exchange Commission. They
are therefore not intended to forecast possible future appreciation, if any, of
the Company's Stock price and do not reflect any income tax liability of the
individual recipients nor the time value of money. The Company did not use an
alternative formula for a grant date valuation, as the Company is not aware of
any formula which will determine with reasonable accuracy a present value based
on future unknown or volatile factors.
9
<PAGE>
(2) These grants were made on August 26, 1994 in connection with the exercise
of previously granted options containing a reload feature. These grants
also contain a reload feature providing that if the exercise price is paid
by surrender of previously owned shares of Common Stock, a new option in
the amount of the shares surrendered will be granted. The exercise price of
the new option will equal the markeet value of a share of Common Stock on
the date of grant. The option will vest in one year, provided the shares
acquired on exercise of the underlying option are held for one year, and
will expire on the same date as the underlying option.
</TABLE>
______________________
The table below sets forth information as to option exercises during 1994
as well as the number and value of unexercised options as of December 31,
1994 for the Executive Officers listed in the Summary Compensation Table.
Aggregated Option Exercises in 1994
and 1994 Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised In-
Unexercised Options the-Money Options at
at Year-End ( ) Year-End ($)(1)
Shares -------------------- ------------------------
Acquired on Value Exer- Unexer- Exer- Unexer-
Name Exercise( ) Realized( ) cisable cisable cisable cisable
---- ----------- ----------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
John D. Nichols. . . . . . . . --- --- 12,500 37,500 92,188 276,583
H. Richard Crowther. . . . . . 38,382 825,699 35,068 47,912 506,228 264,113
W. James Farrell . . . . . . . 6,000 117,375 47,496 27,500 728,538 235,938
Robert H. Jenkins. . . . . . . 2,000 42,375 25,500 27,500 334,501 235,938
Frank S. Ptak. . . . . . . . . --- --- 34,750 26,250 659,188 218,438
___________
<FN>
(1) Based on the year-end closing market price of the Company's Common Stock
($43.75).
</TABLE>
Retirement Plans
The Company's principal non-contributory defined benefit Pension Plan
covers substantially all employees of the parent company and certain domestic
subsidiaries. Executive Officers participate in this plan on the same basis as
do more than 10,000 other eligible employees. Benefit amounts are based on
years of service and average monthly compensation for the five highest
consecutive years out of the last ten years of employment. The Company did not
make any contributions to the Pension Plan during the year ended December 31,
1994.
The following table illustrates the maximum estimated annual benefits to be
paid upon normal retirement at age 65 to individuals in specified compensation
and years of service classifications. The table does not reflect the limitations
contained in the Internal Revenue Code of 1986 on benefit accruals under the
Pension Plan. Under a plan adopted by the Board of Directors, supplemental
payments in excess of those limitations will be made to participants designated
by the Compensation Committee in order to maintain benefits upon retirement at
the levels provided under the Pension Plan's formula.
<TABLE>
<CAPTION>
Estimated Annual Normal Retirement Benefits(1)
--------------------------------------------------------------------------
Years of service at normal retirement(2)
Compensation(3) 10 15 20 25 30 35 40
--------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 500,000. . . . . . . $ 32,500 $123,750 $165,000 $206,250 $247,500 $266,250 $285,000
750,000. . . . . . . 123,750 185,625 247,500 309,375 371,250 399,375 427,500
1,000,000. . . . . . . 165,000 247,500 330,000 412,500 495,000 532,500 570,000
1,250,000. . . . . . . 206,250 309,375 412,500 515,625 618,750 665,625 712,500
1,500,000. . . . . . . 247,500 371,250 495,000 618,750 742,500 798,750 855,000
1,750,000. . . . . . . 288,750 433,125 577,500 721,875 866,250 931,875 997,500
___________
<FN>
(1) Amounts shown exceed actual amounts by .65% of Social Security covered
compensation for each year of service up to 30 years.
10
<PAGE>
(2) Years of service as of December 31, 1994 for the five most highly
compensated Executive Officers were as follows: Mr. Nichols, 25.2 years;
Mr. Crowther, 36.0 years; Mr. Farrell, 29.5 years; Mr. Jenkins, 15.6 years;
Mr. Ptak, 19.1 years. The years of service for Mr. Nichols reflect the
Company's agreement to provide him pension benefits to which he otherwise
would be entitled if his service with certain previous employers had been
with the Company.
(3) Compensation includes all amounts shown under the columns "Salary" and
"Bonus" in the Summary Compensation Table.
</TABLE>
The Company's 1982 Executive Contributory Retirement Income Plan provided
certain executives designated by the Compensation Committee the opportunity to
supplement their retirement benefits in exchange for salary reductions during
the four-year period 1983 through 1986. Under the plan the Company agreed to pay
benefits upon retirement, death or disability, with the actual benefit amounts
dependent upon the amount of the deferral, the amount of the Company's
contribution, and the age of the participant at entry into the plan. Four of the
five named Executive Officers included in the Summary Compensation Table were
eligible and elected to have their salaries reduced by 10%. During the period of
salary reduction the executives could not contribute to and did not receive the
Company's matching contribution in the Savings and Investment Plan. The Company
purchased insurance on the lives of the participants to fund the benefits, with
the 10% of salary retained by the Company and the 3% of base compensation that
the Company would have contributed to match participant contributions to the
Savings and Investment Plan applied to the premium for insurance. Under the 1982
Plan, annual benefits payable beginning at the normal retirement age of 65 for
15 years were fixed following the deferral period and are as follows: Mr.
Nichols, $107,658; Mr. Crowther, $69,477; Mr. Farrell, $113,529; and Mr.
Jenkins, $70,240.
11
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports dated January 31, 1995 included or incorporated by reference in this
Form 10-K into the Company's previously filed registration statements on Form
S-8 (File No.'s 33-8510 and 33-53517), Form S-4 (File No. 33-22403) and Form S-3
(File No. 33-5780).
ARTHUR ANDERSEN LLP
Chicago, Illinois,
March 24, 1995
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Julius W. Becton, Jr.
------------------------------------
(signature)
Julius W. Becton, Jr.
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Silas S. Cathcart
------------------------------------
(signature)
Silas S. Cathcart
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Susan Crown
------------------------------------
(signature)
Susan Crown
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Richard M. Jones
------------------------------------
(signature)
Richard M. Jones
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) George D. Kennedy
------------------------------------
(signature)
George D. Kennedy
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Richard H. Leet
------------------------------------
(signature)
Richard H. Leet
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Robert C. McCormack
------------------------------------
(signature)
Robert C. McCormack
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) John D. Nichols
------------------------------------
(signature)
John D. Nichols
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Harold B. Smith
------------------------------------
(signature)
Harold B. Smith
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Phillip B. Rooney
------------------------------------
(signature)
Phillip B. Rooney
------------------------------------
(printed name)
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
FORM 10-K ANNUAL REPORT
-----------------------
POWER OF ATTORNEY
-----------------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose
signature appears below constitutes and appoints John D. Nichols,
Harold B. Smith, H. Richard Crowther and Stewart S. Hudnut, and
each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities, to sign the
Companys's Form 10-K Annual Report and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney this 17th day of February 1995.
(s) Ormand J. Wade
------------------------------------
(signature)
Ormand J. Wade
------------------------------------
(printed name)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the Statement
of Income and the Statement of Financial Position and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 76,867
<SECURITIES> 0
<RECEIVABLES> 632,238
<ALLOWANCES> 19,600
<INVENTORY> 439,486
<CURRENT-ASSETS> 1,262,933
<PP&E> 1,400,794
<DEPRECIATION> 759,559
<TOTAL-ASSETS> 2,580,498
<CURRENT-LIABILITIES> 628,433
<BONDS> 272,987
<COMMON> 201,166
0
0
<OTHER-SE> 1,340,355
<TOTAL-LIABILITY-AND-EQUITY> 2,580,498
<SALES> 3,461,315
<TOTAL-REVENUES> 3,461,315
<CGS> 2,290,117
<TOTAL-COSTS> 2,290,117
<OTHER-EXPENSES> 22,344
<LOSS-PROVISION> 7,191
<INTEREST-EXPENSE> 26,943
<INCOME-PRETAX> 450,283
<INCOME-TAX> 172,500
<INCOME-CONTINUING> 277,783
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 277,783
<EPS-PRIMARY> 2.45
<EPS-DILUTED> 2.45
</TABLE>
