SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 1-8974
AlliedSignal Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-2640650
------------------------------- -------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
101 Columbia Road
P. O. Box 4000
Morristown, New Jersey 07962-2497
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(201)455-2000
----------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock June 30, 1994
- --------------------- ------------------
$1 par value 282,793,144 shares
<PAGE>
AlliedSignal Inc.
Index
-----
Page No.
--------
Part I. - Financial Information
Item 1. Condensed Financial Statements:
Consolidated Balance Sheet -
June 30, 1994 and December 31, 1993 3
Consolidated Statement of Income -
Three and Six Months Ended June 30,
1994 and 1993 4
Consolidated Statement of Cash Flows-
Six Months Ended June 30,
1994 and 1993 5
Notes to Financial Statements 6
Report on Review by Independent
Accountants 7
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 8
Part II. - Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
2
<PAGE>
AlliedSignal Inc.
Consolidated Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
-------- ------------
(Dollars in millions)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 688 $ 892
Accounts and notes receivable - net 1,531 1,343
Inventories - net (Note 2) 1,694 1,745
Other current assets 616 587
------- -------
Total current assets 4,529 4,567
Investments and long-term receivables 538 553
Property, plant and equipment 8,342 8,168
Accumulated depreciation and
amortization (4,273) (4,074)
Cost in excess of net assets of
acquired companies - net 1,108 1,087
Other assets 544 528
------- -------
Total assets $10,788 $10,829
======= =======
LIABILITIES
Current Liabilities
Accounts payable $ 1,233 $ 1,207
Short-term borrowings 90 57
Commercial paper 37 164
Current maturities of long-term debt 99 137
Accrued liabilities 1,789 1,924
------- -------
Total current liabilities 3,248 3,489
Long-term debt 1,531 1,602
Deferred income taxes 386 339
Postretirement benefit obligations
other than pensions 1,725 1,689
Other liabilities 1,271 1,320
SHAREOWNERS' EQUITY
Capital - common stock issued 358 358
- additional paid-in capital 2,455 2,453
Common stock held in treasury, at cost (1,505) (1,437)
Cumulative translation adjustment 10 (7)
Retained earnings 1,309 1,023
------- -------
Total shareowners' equity 2,627 2,390
------- -------
Total liabilities and shareowners' equity $10,788 $10,829
======= =======
</TABLE>
Notes to Financial Statements are an integral part of this statement.
3
<PAGE>
AlliedSignal Inc.
Consolidated Statement of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(Dollars in millions except
per share amounts)
<S> <C> <C> <C> <C>
Net sales $3,187 $3,055 $6,173 $5,956
------ ------ ------ ------
Cost of goods sold 2,541 2,466 4,943 4,820
Selling, general and
administrative expenses 346 336 660 650
------ ------ ------ ------
Total costs and expenses 2,887 2,802 5,603 5,470
------ ------ ------ ------
Income from operations 300 253 570 486
Equity in income of affiliated companies 30 24 60 49
Other income (expense) (3) (2) (16) (11)
Interest and other financial charges (38) (43) (75) (88)
------ ------ ------ ------
Income before taxes on income 289 232 539 436
Taxes on income 93 65 174 123
------ ------ ------ ------
Income before cumulative effect of
change in accounting principle 196 167 365 313
Cumulative effect of change in
accounting principle:
Accounting for postemployment
benefits, net of income taxes - - - (245)
------ ------ ------ ------
Net income $ 196 $ 167 $ 365 $ 68
====== ====== ====== ======
Earnings per share of common
stock: (Note 3)
Before cumulative effect of change
in accounting principle $ .69 $ .59 $ 1.29 $ 1.10
Cumulative effect of change in
accounting principle - - - (.86)
------ ------ ------ ------
Net earnings $ .69 $ .59 $ 1.29 $ .24
====== ====== ====== ======
Cash dividends per share of
common stock $.1675 $ .145 $.3125 $ .29
====== ====== ====== ======
</TABLE>
Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
AlliedSignal Inc.
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30
---------------------
1994 1993
---- ----
(Dollars in millions)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 365 $ 68
Adjustments to reconcile net income to net
cash flows from operating activities:
Cumulative effect of change in accounting for
postemployment benefits - 245
Streamlining and restructuring (84) (112)
Depreciation and amortization (includes goodwill) 278 275
Undistributed earnings of equity affiliates 2 (2)
Deferred taxes 71 59
(Increase) in accounts and notes receivable (168) (48)
Decrease in inventories 46 16
(Increase) in other current assets (31) (4)
Increase (decrease) in accounts payable 15 (94)
(Decrease) in accrued liabilities (85) (9)
Other (101) (43)
------ ------
Net cash flow provided by operating activities 308 351
------ ------
Cash flows from investing activities:
Expenditures for property, plant and equipment (255) (283)
Proceeds from disposals of property, plant and
equipment 15 15
Decrease in other investments 7 48
(Increase) in other investments (9) (15)
Decrease (increase) in marketable securities 14 (16)
Cash paid for acquisitions (41) (11)
Proceeds from sales of businesses 135 -
------ ------
Net cash flow (used for) investing activities (134) (262)
------ ------
Cash flows from financing activities:
Net increase (decrease) in commercial paper (127) 247
Net increase in short-term borrowings 27 27
Proceeds from issuance of common stock 30 91
Proceeds from issuance of long-term debt 2 -
Repurchases of long-term debt
(including current maturities) (122) (233)
Repurchases of common stock (94) (193)
Cash dividends on common stock (87) (82)
Redemption of common stock purchase rights (7) -
------ ------
Net cash flow (used for) financing activities (378) (143)
------ ------
Net (decrease) in cash and cash equivalents (204) (54)
Cash and cash equivalents at beginning of year 892 931
------ ------
Cash and cash equivalents at end of period $ 688 $ 877
====== ======
</TABLE>
Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
AlliedSignal Inc.
Notes to Financial Statements
(Unaudited)
(Dollars in millions)
Note 1. In the opinion of management, the accompanying unaudited
consolidated financial statements reflect all adjustments, consisting only
of normal adjustments, necessary to present fairly the financial position
of AlliedSignal Inc. and its consolidated subsidiaries at June 30, 1994 and
the results of operations for the three and six months ended June 30, 1994
and 1993 and the changes in cash flows for the six months ended June 30,
1994 and 1993. The results of operations for the three-and six-month
periods ended June 30, 1994 should not necessarily be taken as indicative
of the results of operations that may be expected for the entire year 1994.
In the fourth quarter of 1993 the Company adopted Financial Accounting
Standards Board Statement No. 112 - "Employers' Accounting for
Postemployment Benefits" effective as of January 1, 1993. The 1993
financial statements have been restated to include both ongoing and
cumulative effects of the accounting change.
The financial information as of June 30, 1994 should be read in conjunction
with the financial statements contained in the Company's Form 10-K Annual
Report for 1993.
In July 1994 the Company amended its 3-Year Credit Agreement by extending
the maturity by one year to July 7, 1997 and amended its 364-Day Credit
Agreement changing the maturity to July 3, 1995. The amendments also
included certain other minor changes in terms and conditions.
Note 2. Inventories are valued at the lower of cost or market using the
last-in, first-out (LIFO) method for certain qualifying domestic
inventories and the first-in, first-out (FIFO) or the average cost method
for other inventories.
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
-------- -----------
<S> <C> <C>
Raw materials $ 467 $ 504
Work in process 683 635
Finished products 780 824
Supplies and containers 53 51
------- -------
1,983 2,014
Less - Progress payments (172) (154)
Reduction to LIFO
cost basis (117) (115)
------- -------
$1,694 $1,745
======= =======
</TABLE>
Note 3. Based on the weighted average number of shares outstanding during
each period: three months ended June 30, 1994, 283,264,305 shares, and
1993, 282,418,502 shares; and six months ended June 30, 1994, 283,856,928
shares, and 1993, 283,301,774 shares. No dilution results from outstanding
common stock equivalents. Share and per share data for all periods reflect
the March 1994 two-for-one stock split.
6
<PAGE>
Report on Review by Independent Accountants
-------------------------------------------
To the Board of Directors
of AlliedSignal Inc.
We have reviewed the accompanying consolidated balance sheet of
AlliedSignal Inc. and its consolidated subsidiaries as of June 30, 1994,
and the consolidated statements of income for the three-month and six-month
periods ended June 30, 1994 and 1993, and of cash flows for the six month
periods ended June 30, 1994 and 1993. This financial information is the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial information referred to above for it to be
in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993, and the
related consolidated statements of income, of retained earnings, and of
cash flows for the year then ended (not presented herein); and in our
report dated February 3, 1994 except for Note 1 (Subsequent Events) which
is as of February 7, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet information as of
December 31, 1993, is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
4 Headquarters Plaza North
Morristown, NJ 07962
July 25, 1994
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Results of Operations
---------------------
Second Quarter 1994 Compared with Second Quarter 1993
- -----------------------------------------------------
Net sales in the second quarter of 1994 totaled $3.2 billion, an
increase of $132 million, or 4 percent, compared with the second quarter of
last year. Of this increase, $191 million was due to higher sales volumes.
A partial offset was a decrease in prices of $27 million and a decrease of
$32 million due to the effect of foreign exchange rates on reported sales
of automotive's European operations. Sales for engineered materials and
automotive increased by $77 and $63 million, respectively, while sales for
aerospace declined by $8 million. Engineered materials' sales improved due
to strong performances by laminates, carpet fibers, CFC substitutes,
plastic resins, oximes and environmental catalysts. Automotive's sales
increased due to higher volumes of air bags and braking systems for both
cars and minivans. Sales for turbochargers were significantly higher
because of strong diesel truck sales in North America and the increasing
preference for turbo-diesel powered cars in Europe. North American
aftermarket sales also increased. Although sales of heavy truck brake
systems in North America were strong, reported worldwide sales of heavy
truck brake systems were down, reflecting the transfer of the Company's
European truck brake business to a joint venture with Knorr-Bremse AG in
October 1993. Sales for a number of aerospace businesses were impacted by
reduced military spending and continued weakness in the commercial aviation
industry. However, sales were higher for commercial avionics products and
aircraft landing systems, in part reflecting the contributions of recently
acquired businesses, and for technical services.
Income from operations of $300 million increased by $47 million, or 19
percent, compared with last year's second quarter. Operating income for
engineered materials improved by 25 percent, automotive by 17 percent and
aerospace by 8 percent. Operating expenses for corporate were unchanged.
The Company's operating margin for the second quarter of 1994 was 9.4
percent, compared with 8.3 percent for the same period last year. See the
discussion of net income below for information by segment.
Equity in income of affiliated companies of $30 million increased by
$6 million, or 25 percent, compared to last year mainly due to higher
profits from the Paxon high-density polyethylene joint venture, partly
offset by lower profits from the UOP process technology joint venture.
Interest and other financial charges of $38 million decreased $5
million, or 12 percent, from 1993's second quarter reflecting a lower level
and a more favorable mix of debt outstanding.
The effective tax rate in the second quarter of 1994 was 32.3 percent.
The 1993 rate was 28.0 percent. The 4.3 percentage point increase reflects
a higher level of earnings subject to the statutory rate and the additional
non-deductibility of certain expenses and a higher rate resulting from the
1993 tax act.
8
<PAGE>
Net income for aerospace increased 17 percent primarily reflecting
productivity measures, including business consolidations, materials
management and manufacturing process improvements mainly in the engines
group, as well as higher sales in aircraft landing systems and general
aviation avionics, partly offset by the impact of lower sales due to
reduced military spending and weakness in the commercial aviation industry.
Automotive's income increased 32 percent due to the popularity of cars and
minivans equipped with the Company's air bags and anti-lock brakes. Income
for turbochargers was significantly higher due to higher sales in North
America and Europe. Productivity gains also added to the income increase
for automotive. Earnings for engineered materials improved by 21 percent
reflecting higher sales volumes, manufacturing efficiencies and higher
earnings from the Paxon joint venture.
Net income of $196 million, or $.69 a share, was higher than last
year's $167 million, or $.59 a share, for the reasons discussed above.
Six Months 1994 Compared with Six Months 1993
- ---------------------------------------------
Net sales in the first six months of 1994 totaled $6.2 billion, an
increase of $217 million, or 4 percent, compared with the first six months
of last year. Of this increase, $343 million was due to increased sales
volumes. Partly offsetting was a decrease in prices of $54 million and a
decrease of $72 million due to the effect of foreign exchange rates on
reported sales of automotive's European operations. Sales for engineered
materials and automotive increased by $141 and $92 million, respectively,
while sales for aerospace declined by $16 million. Engineered materials'
sales improved because of higher sales volumes of carpet fibers, laminates,
CFC substitutes, industrial fibers and environmental catalysts.
Automotive's sales increased due to higher volumes for turbochargers in
both North America and Europe and for North American brakes and air bags.
North American heavy truck brake systems sales increased, while worldwide
sales declined, reflecting the joint venture with Knorr-Bremse AG. The
aerospace decrease is mainly due to the effects of continued cutbacks in
military spending and weakness in the commercial aviation industry.
Aerospace sales include a $68 million contract settlement with the U.S. Air
Force in the first quarter of 1994. Sales from commercial avionics and
landing systems were higher, in part reflecting the contributions of recently
acquired businesses.
Income from operations of $570 million increased by $84 million, or 17
percent, compared with 1993's first six months. Operating income for
automotive improved by 19 percent, engineered materials by 18 percent and
aerospace by 9 percent. Operating expense for corporate decreased by 4
percent. The Company's operating margin for the first six months of 1994
was 9.2 percent, compared with 8.2 percent last year. See the discussion
of net income below for information by segment.
Productivity (the constant-dollar-basis relationship of sales to
costs) of the Company's businesses improved by 5.9 percent compared with
last year's first six months.
Equity in income of affiliated companies of $60 million increased by
$11 million, or 22 percent, compared to last year mainly due to higher
profits
9
<PAGE>
from the Paxon joint venture, partly offset by lower profits from
the UOP joint venture.
Other income (expense) of $(16) million was unfavorable by $5 million,
or 45 percent, compared to last year's first six months mainly due to a
higher amount for minority interest as a result of the formation of a
joint venture with Knorr-Bremse in the United States, along with reduced
interest income. A partial offset resulted from reduced foreign exchange
hedging costs.
Interest and other financial charges of $75 million decreased $13
million, or 15 percent, from last year reflecting a lower level and a more
favorable mix of debt outstanding.
The effective tax rate for the first six months of 1994 was 32.4
percent. The 1993 rate was 28.2 percent. The 4.2 percentage point
increase is due to a higher level of earnings subject to the statutory rate
and the additional non-deductibility of certain expenses and a higher rate
resulting from the 1993 tax act.
Earnings for aerospace increased 14 percent, primarily due to cost
savings from business consolidations, materials management and other
productivity programs. Income from general aviation avionics and landing
systems was higher. Productivity improvements in the engines business
contributed to significantly higher net income. A contraction of military
spending and weakness in the commercial aviation industry resulted in lower
earnings for many other aerospace businesses. The contract settlement with
the Air Force had an insignificant impact on net income. Automotive's net
income increased 25 percent reflecting productivity improvements throughout
the business coupled with higher sales for air bags and turbochargers.
Income for North American braking systems was lower due to higher
costs. Earnings for engineered materials improved 18 percent, reflecting
higher sales volumes, manufacturing efficiencies and a higher profit
contribution from the Paxon joint venture.
Income before the cumulative effect of change in accounting principle
of $365 million was $52 million higher than last year, and earnings per
share of $1.29 increased $.19 for the reasons discussed above. Net income
was $365 million, or $1.29 a share, compared to last year's $68 million, or
$.24 a share. The first six months of 1993 includes a "catch-up" charge of
$245 million, or $.86 a share, reflecting the adoption of Financial
Accounting Standards Board Statement No. 112 - "Employers' Accounting for
Postemployment Benefits."
Financial Condition
-------------------
June 30, 1994 Compared with December 31, 1993
- ---------------------------------------------
On June 30, 1994, the Company had $688 million in cash and cash
equivalents, compared with $892 million at year-end 1993. The $204 million
decrease primarily reflects the pay down of debt. The current ratio at
June 30, 1994 was 1.4X, compared with 1.3X at year-end 1993.
On June 30, 1994, the Company's long-term debt amounted to $1,531
million, down $71 million from year-end 1993. Total debt of $1,757 million
on June 30,
10
<PAGE>
1994 was down from $1,960 million at year-end, mainly reflecting
a reduction in commercial paper outstanding. The Company's total debt as a
percent of capital decreased from 42.7 percent at year-end to 37.7 percent
at June 30, 1994.
During the first six months of 1994, the Company spent $255 million
for capital expenditures, compared with $283 million in the corresponding
period in 1993. Spending by the business segments and corporate for the
1994 six month period was as follows: aerospace-$61 million; automotive-
$85 million; engineered materials-$105 million, and corporate-$4 million.
During the first six months of 1994, the Company repurchased 2.6
million shares of common stock for $94 million. Common stock is
repurchased to meet the requirements for shares issued under employee
benefit plans and a shareowner dividend reinvestment plan. At June 30,
1994, the Company had remaining authority to repurchase 13.9 million shares
of common stock.
During the second quarter of 1994, the Company completed the sales of
its mechanical and hydraulic actuation business and of its general aviation
hangar operations. The Company will continue to supply the hangar
facilities with engine parts, technical support and quality assurance on
engine-related maintenance. These dispositions will result in a reduction
of annual sales of approximately $180 million. As a result of the disposal
of these two businesses, and the disposal of another small business in the
first quarter, the Company realized cash proceeds of $135 million.
In May 1994 the Company signed a memorandum of understanding with
Textron Inc. to acquire Textron's Lycoming Turbine Engine Division
(Lycoming Division) for approximately $375 million plus the assumption of
certain liabilities. The Lycoming Division's 1993 sales were approximately
$620 million. The Lycoming Division manufactures turbofan engines for
regional airlines, helicopter engines for commercial, military and utility
aircraft, military tank engines and marine propulsion engines.
Review by Independent Accountants
- ---------------------------------
The "Independent Accountants' Report" included herein is not a
"report" or "part of a Registration Statement" prepared or certified by an
independent accountant within the meanings of Section 7 and 11 of the
Securities Act of 1933, and the accountants' Section 11 liability does not
extend to such report.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As a result of accepting and handling certain shipments of
wastewaters to its plant in Fairfield, Alabama (a) the Company on July 14,
1994 agreed to pay a $25,000 civil penalty to the Alabama Department of
Environmental Management (ADEM) for alleged violations of the Clean Water
Act, and (b) ADEM proposed on July 20, 1994 an additional civil penalty of
$250,000 for alleged violations of Alabama's hazardous waste management
regulations.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following exhibits are filed with this Form 10-Q:
--------
10.1 Letter Amendment, dated as of July 5, 1994, to the
Revolving Credit Agreement, dated as of July 7, 1993,
among the Company, certain banks, Citibank, N.A., as
Administrative Agent for the banks, and ABN AMRO Bank N.V.
and Morgan Guaranty Trust Company of New York, as Co-Agents
10.2 Letter Amendment, dated as of July 5, 1994, to the 364-Day
Credit Agreement, dated as of July 7, 1993, among the
Company, certain banks, Citibank, N.A., as Administrative
Agent for the banks, and ABN AMRO Bank N.V. and Morgan
Guaranty Trust Company of New York, as Co-Agents
10.3 Amended and restated Agreement dated as of May 6, 1994
between the Company and Lawrence A. Bossidy
15 Independent Accountants' Acknowledgment Letter as to the
incorporation of their report relating to unaudited
interim financial statements
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
-------------------
the quarter ended June 30, 1994.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
AlliedSignal Inc.
Date: August 15, 1994 By: /s/ G. Peter D'Aloia
----------------------------
G. Peter D'Aloia
Vice President and Controller
(on behalf of the Registrant
and as the Registrant's
Principal Accounting Officer)
13
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
2 Omitted (Inapplicable)
4 Omitted (Inapplicable)
10.1 Letter Amendment, dated as of
July 5, 1994, to the Revolving
Credit Agreement, dated as of
July 7, 1993, among the Company,
certain banks, Citibank, N.A., as
Administrative Agent for the
banks, and ABN AMRO Bank N.V. and
Morgan Guaranty Trust Company of
New York, as Co-Agents
10.2 Letter Amendment, dated as of
July 5, 1994, to the 364-Day
Credit Agreement, dated as of
July 7, 1993, among the Company,
certain banks, Citibank, N.A., as
Administrative Agent for the
banks, and ABN AMRO Bank N.V. and
Morgan Guaranty Trust Company of
New York, as Co-Agents
10.3 Amended and restated Agreement
dated as of May 6, 1994 between
the Company and
Lawrence A. Bossidy
11 Omitted (Inapplicable)
15 Independent Accountants'
Acknowledgment Letter as
to the incorporation of their
report relating to unaudited
interim financial statements
18 Omitted (Inapplicable)
19 Omitted (Inapplicable)
22 Omitted (Inapplicable)
23 Omitted (Inapplicable)
24 Omitted (Inapplicable)
27 Omitted (Inapplicable)
99 Omitted (Inapplicable)
14
<PAGE>
LETTER AMENDMENT
TO: The Banks parties to the Dated as of July 5, 1994
Credit Agreement referred to below
Gentlemen:
We refer to the Revolving Credit Agreement dated as of July 7,
1993 (the "Credit Agreement") among the undersigned, you and
Citibank, N.A., as your Administrative Agent. Unless otherwise
defined herein, the terms defined in the Credit Agreement, as
amended by this letter amendment, shall be used herein as therein
defined. It is hereby agreed by you and us as follows:
The Credit Agreement is, effective as of the date first
above written, hereby amended as follows:
(a) The definition of "Applicable Percentage" contained
---------------------
in Section 1.01 is amended by deleting the chart therein
and substituting for such chart the following:
<TABLE>
<CAPTION>
Public Debt Rating
S&P/Moody's Facility Fee Libor/CD Spread
----------- ------------ -------- --------
Column A Column B
-------- --------
<S> <C> <C> <C>
Level 1:
AA-/Aa3 .075% .175% .2375%
or higher
------------------------------------------------------------
Level 2:
A/A2 or
higher but .10% .2125% .2750%
less than
Level 1
------------------------------------------------------------
Level 3:
A-/A3 or
higher but .125% .25% .3125%
less than
Level 2
------------------------------------------------------------
Level 4:
Less than .20% .2750% .40%
A-/A3
------------------------------------------------------------
</TABLE>
<PAGE>
(b) By adding to Section 1.01 the following: "Notes" has the
-----
meaning specified in Section 3.03.
(c) The definition of "Termination Date" contained in Section
----------------
1.01 is amended by deleting the date "July 7, 1996" therein
and substituting for such date the date "July 7, 1997".
(d) Section 3.03 is amended in full to read as follows:
Section 3.03. Evidence of Debt. The indebtedness of
----------------
each Borrower to each Bank shall be evidenced by a
promissory note in the form of Exhibit L hereto (each,
a "Note" and collectively, the "Notes").
(e) Section 7.01 is amended by (i) deleting the word "and"
at the end of subparagraph (v) thereof, (ii) deleting the
period at the end of subparagraph (vi) thereof and
substituting therefore "; and" and (iii) adding new subparagraph
(vii) as follows:
(vii) Duly executed Notes by each Borrower to
the order of each Bank.
(f) Section 8.02 is amended by adding the words "and the
applicable Notes" to the second line of such Section
following the word "Agreement".
(g) Article IX is amended by adding to the end thereof a
new Section 9.12, to read as follows:
Section 9.12. Change of Control. If a Change of Control
-----------------
shall occur (i) the Company will, within ten calendar days
after the occurrence thereof, give the Administrative
Agent notice thereof and shall describe in reasonable
detail the facts and circumstances giving rise thereto
and (ii) each Bank may, by notice to the Company and
the Administrative Agent given not later than 50
calendar days after such Change of Control, terminate
its Commitment, which shall be terminated effective the
later of (A) the date which is 60 calendar days after
such Change of Control or (B) the end of the Interest
Period for any Loan outstanding at the time of such
Change of Control or for any Loan made pursuant to the
next sentence of this Section. Upon the occurrence of
a Change of Control, the Borrower's right to make
Borrowings under this Agreement shall be suspended for
a period of 60 calendar days, except for Loans having
an Interest Period ending not later than 90 calendar
days after such Change of Control. A notice of
termination pursuant to this Section shall not have the
effect of accelerating any outstanding Loan.
<PAGE>
For purposes of this Section, the following terms have
the following meanings:
A "Change of Control" shall occur if (i) any
person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of
1934, as amended) (other than the Company, any
Subsidiary of the Company or any savings, pension or
other benefit plan for the benefit of employees of the
Company or its Subsidiaries) which theretofore
beneficially owned less than 30% of the Voting Stock
then outstanding shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 30% or more in voting power of the outstanding
Voting Stock of the Company or (ii) during any period
of 12 consecutive calendar months, individuals who were
directors of the Company on the first day of such
period shall cease to constitute a majority of the
board of directors of the Company.
"Voting Stock" means capital stock of any class or
classes (however designated) having voting power for
the election of directors of the Company, other than
stock having such power only by reason of the happening
of a contingency.
(h) Section 10.01 (i) is amended in full to read as
follows:
(i) Default in payment when due of any amount of
principal or interest required to be paid hereunder or
under any Note; or
(i) Section 10.01 (iv) is amended by adding the words "or
the applicable Note" after the word "Agreement".
(j) Section 12.16 is amended by adding the words "or the
applicable Notes" after the word "Agreement" in the first
sentence.
(k) The Exhibits are amended by adding to the Exhibits
attached thereto "Exhibit L", the form of which is attached
hereto as Exhibit A.
On and after the effective date of this letter amendment,
each reference in the Credit Agreement and the Notes to "this
Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, shall mean and be a reference
to the Credit Agreement as amended by this letter amendment. The
Credit Agreement, as amended by this letter amendment, is and
shall continue to be in full force and effect and is hereby in
all respects ratified and confirmed.
<PAGE>
If you agree to the terms and provisions hereof, please
evidence such agreement by executing and returning at least two
counterparts of this letter amendment to Citibank N.A., 399 Park
Avenue, 9th Floor, N.Y., N.Y. 10043, Attention of Rosemary Bell.
This letter amendment shall become effective as of the date first
above written when and if counterparts of this letter amendment
shall have been executed by us and the Banks. This letter
amendment is subject to the provisions of Section 12.06 of the
Credit Agreement.
This letter amendment may be executed in any number of
counterparts and by any combination of the parties hereto in
separate counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and
the same letter amendment.
Very truly yours,
AlliedSignal Inc.
By: /s/ Nancy A. Garvey
---------------------------------
Title: Vice President and
Treasurer
THE ADMINISTRATIVE AGENT:
------------------------
CITIBANK, N.A.
as Administrative Agent
By: /s/ Michael Mandracchia
---------------------------------
Title: Vice President/Attorney
in Fact
Address for Notices:
399 Park Avenue
New York, New York 10043
Attention: Michael Mandracchia
Telephone: (212) 559-3245
Telecopier No.: (212) 826-2371
THE CO-AGENTS:
-------------
ABN AMRO BANK N.V.,
as Co-Agent
By: /s/ John W. Deegan
---------------------------------
Title: Vice President
<PAGE>
By: /s/ Duane P. Helkowski
---------------------------------
Title: Corporate Banking Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Co-Agent
By: /s/ Sandra J.S. Kurek
---------------------------------
Title: Associate
Commitment: THE BANKS:
- ------------- ---------------
$30,000,000 ABN AMRO BANK N.V.
By: /s/ John W. Deegan
---------------------------------
Title: Vice President
By: /s/ Duane P. Helkowski
---------------------------------
Title: Corporate Banking Officer
$30,000,000 CITIBANK, N.A.
By: /s/ Michael Mandracchia
---------------------------------
Title: Vice President/Attorney
in Fact
$15,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Sandra J.S. Kurek
---------------------------------
Title: Associate
$15,000,000 J.P. MORGAN DELAWARE
By: /s/ David J. Morris
---------------------------------
Title: Vice President
<PAGE>
$20,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Donald J. Chin
---------------------------------
Title: Vice President
$20,000,000 BANK OF MONTREAL
By: /s/ Thruston W. Pettus
---------------------------------
Title: Director
$20,000,000 BANQUE NATIONALE DE PARIS
NEW YORK BRANCH
By: /s/ Robert S. Taylor, Jr.
---------------------------------
Title: Senior Vice President
By: /s/ Richard L. Sted
---------------------------------
Title: Senior Vice President
By: /s/ Renaud Kohler
---------------------------------
Title: Assistant Vice President
$20,000,000 CANADIAN IMPERIAL BANK OF
COMMERCE
By: /s/ Dean T. Criares
---------------------------------
Title:
$20,000,000 CHEMICAL BANK
By: /s/ John C. Riordan
---------------------------------
Title: Vice President
$20,000,000 DEUTSCHE BANK AG
(Joint commitment) NEW YORK BRANCH
By: /s/ Robert A. Maddux
---------------------------------
Title: Director
By: /s/ Andreas J. Dirnagl
---------------------------------
Title: Assistant Vice President
<PAGE>
DEUTSCHE BANK AG
CAYMAN ISLANDS BRANCH
By: /s/ Robert A. Maddux
---------------------------------
Title: Director
By: /s/ Christopher S. Hall
---------------------------------
Title: Vice President
$20,000,000 MELLON BANK, N.A.
By: /s/ Reyton R. Latimer
---------------------------------
Title: Senior Vice President
$20,000,000 NATIONAL WESTMINSTER BANK PLC
By: /s/ R.A. Stevens
---------------------------------
Title: Vice President
$20,000,000 NATIONSBANK OF NORTH CAROLINA,
N.A.
By: /s/ Scott Jackson
---------------------------------
Title: Vice President
$20,000,000 ROYAL BANK OF CANADA
By: /s/ A. Birr
---------------------------------
Title: Senior Manager
$20,000,000 THE BANK OF NEW YORK
By: /s/ Peter Angelica
---------------------------------
Title: Vice President
$20,000,000 THE BANK OF TOKYO TRUST COMPANY
By: /s/ M.R. Marron
---------------------------------
Title: Vice President
<PAGE>
$20,000,000 THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ Dawn Lee Lum
---------------------------------
Title: Vice President
$20,000,000 THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ Judith L. Mayberry
---------------------------------
Title: Vice President
$20,000,000 THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
By: /s/ R. Forster
---------------------------------
Title: Vice President
$20,000,000 THE INDUSTRIAL BANK OF JAPAN
LIMITED, NEW YORK BRANCH
By: /s/ Takeshi Kawano
---------------------------------
Title: Senior Vice President
$20,000,000 THE TORONTO-DOMINION BANK
By: /s/ Jano Mott
---------------------------------
Title: Mgr. Cr. Admin.
$20,000,000 UNION BANK OF SWITZERLAND
NEW YORK BRANCH
By: /s/ Daniel H. Perron
---------------------------------
Title: Vice President
By: /s/ James P. Kelleher
---------------------------------
Title: Assistant Treasurer
$450,000,000 Total of the Commitments
<PAGE>
Exhibit A
Exhibit L
Promissory Note
Dated: _____________, 19__
FOR VALUE RECEIVED, the undersigned, -----------------------
- --------, a ------------------corporation (the "Borrower"), HEREBY
PROMISES TO PAY to the order of ---------------------- (the
"Bank") for the account of its applicable Lending Office (as
defined in the Credit Agreement referred to below), the aggregate
of each Loan (as defined below) made by the Bank to the borrower
pursuant to the Credit Agreement, as are specified in the Credit
Agreement; provided, however, that the final payment shall be in
-------- -------
the amount necessary to repay in full the aggregate unpaid principal
amount of all such Loans.
The Borrower promises to pay interest on the unpaid
principal amount of each Loan from the date of such Loan until
such principal amount is paid in full, at such interest rates,
and payable at such times, as are specified in the Credit
Agreement.
Both principal and interest in respect of each Loan (i) in
United States Dollars are payable in lawful money of the United
State of America to the Administrative Agent (as defined below)
at the office of Citibank, N.A., at 399 Park Avenue, New York,
New York, United States of America, in same day funds and (ii) in
any currency other than United States Dollars are payable in such
currency at the Bank's office which the Bank shall designate for
such payment in same day funds. Each Loan made to the Borrower
pursuant to the Credit Agreement, and all payments made on
account of the principal amount thereof, shall be recorded by the
Bank and, prior to any transfer hereof, endorsed on the grid
attached hereto which is a part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Revolving Credit Agreement
dated as of July 7, 1993, as it may be amended (the "Credit Agreement"),
among the Borrower, the Bank and certain other lenders parties thereto,
and Citibank N.A., as Administrative Agent for the Bank and such other
lenders. The Credit Agreement, among other things (i) provides
for the making of loans (the "Loans") by the Bank to the Borrower
from time to time in an aggregate amount not to exceed at any
time outstanding the Bank's Commitment (as defined in the Credit
Agreement), the indebtedness of the Borrower resulting from each
such Loan being evidenced by this Promissory Note, and (ii)
contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments
on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified.
[NAME OF BORROWER]
By:
-----------------
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Loan or Prepaid Balance Made By
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
<PAGE>
LETTER AMENDMENT
TO: The Banks parties to the Dated as of July 5, 1994
Credit Agreement referred to below
Gentlemen:
We refer to the 364-Day Credit Agreement dated as of July 7,
1993 (the "Credit Agreement") among the undersigned, you and
Citibank, N.A., as your Administrative Agent. Unless otherwise
defined herein, the terms defined in the Credit Agreement, as
amended by this letter amendment, shall be used herein as therein
defined. It is hereby agreed by you and us as follows:
The Credit Agreement is, effective as of the date first
above written, hereby amended as follows:
(a) The first paragraph is amended by deleting the date
"July 7, 1993" therein and substituting for such date the
date "July 5, 1994".
(b) Section 1.01 is amended by deleting the date "July 7,
1993" therein and substituting for such date the date "July
5, 1994".
(c) The definition of "Applicable Percentage" contained in
---------------------
Section 1.01 is amended by deleting the chart therein and
substituting for such chart the following:
<TABLE>
<CAPTION>
Public Debt Rating
S&P/Moody's Facility Fee Libor/CD Spread
----------- ------------ -------- --------
Column A Column B
-------- --------
<S> <C> <C> <C>
Level 1:
AA-/Aa3 .06% .19% .2525%
or higher
------------------------------------------------------------
Level 2:
A/A2 or
higher but .08% .2325% .2950%
less than
Level 1
------------------------------------------------------------
Level 3:
A-/A3 or
higher but .10% .2750% .3375%
less than
<PAGE>
Level 2
------------------------------------------------------------
Level 4:
Less than .15% .3250% .45%
A-/A3
------------------------------------------------------------
</TABLE>
(d) The definition of "Effective Date" is amended by
--------------
deleting the date "July 7, 1993" and substituting for such date
"July 5, 1994".
(e) Adding to Section 1.01 the following: "Notes" has the
-----
meaning specified in Section 3.03.
(f) The definition of "Revolver Termination Date" contained
-------------------------
in Section 1.01 is amended by deleting the date "July 5, 1994" therein
and substituting for such date the date "July 3, 1995".
(g) The definition of "Termination Date" contained in
----------------
Section 1.01 is amended by deleting the date "July 5, 1995" therein and
substituting for such date the date "July 3, 1996".
(h) Section 3.03 is amended in full to read as follows:
Section 3.03. Evidence of Debt. The indebtedness of
----------------
each Borrower to each Bank shall be evidenced by a
promissory note in the form of Exhibit L hereto (each,
a "Note" and collectively, the "Notes").
(i) Section 7.01 is amended by (i) deleting the word "and"
at the end of subparagraph (v) thereof, (ii) deleting the
period at the end of subparagraph (vi) thereof and
substituting therefore "; and" and (iii) adding new subparagraph
(vii) as follows:
(vii) Duly executed Notes by each Borrower to
the order of each Bank.
(j) Section 8.02 is amended by adding the words "and the
applicable Notes" to the second line of such Section
following the word "Agreement".
(k) Article IX is amended by adding to the end thereof a
new Section 9.12, to read as follows:
Section 9.12. Change of Control. If a Change of Control
-----------------
shall occur (i) the Company will, within ten calendar days
after the occurrence thereof, give the Administrative
Agent notice thereof and shall describe in reasonable
detail the facts and circumstances giving rise thereto
and (ii) each Bank may, by notice to the Company and
<PAGE>
the Administrative Agent given not later than 50
calendar days after such Change of Control, terminate
its Commitment, which shall be terminated effective the
later of (A) the date which is 60 calendar days after
such Change of Control or (B) the end of the Interest
Period for any Loan outstanding at the time of such
Change of Control or for any Loan made pursuant to the
next sentence of this Section. Upon the occurrence of
a Change of Control, the Borrower's right to make
Borrowings under this Agreement shall be suspended for
a period of 60 calendar days, except for Loans having
an Interest Period ending not later than 90 calendar
days after such Change of Control. A notice of
termination pursuant to this Section shall not have the
effect of accelerating any outstanding Loan.
For purposes of this Section, the following terms have
the following meanings:
A "Change of Control" shall occur if (i) any
person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of
1934, as amended) (other than the Company, any
Subsidiary of the Company or any savings, pension or
other benefit plan for the benefit of employees of the
Company or its Subsidiaries) which theretofore
beneficially owned less than 30% of the Voting Stock
then outstanding shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 30% or more in voting power of the outstanding
Voting Stock of the Company or (ii) during any period
of 12 consecutive calendar months, individuals who were
directors of the Company on the first day of such
period shall cease to constitute a majority of the
board of directors of the Company.
"Voting Stock" means capital stock of any class or
classes (however designated) having voting power for
the election of directors of the Company, other than
stock having such power only by reason of the happening
of a contingency.
(l) Section 10.01 (i) is amended in full to read as
follows:
(i) Default in payment when due of any amount of
principal or interest required to be paid hereunder or
under any Note; or
(m) Section 10.01 (iv) is amended by adding the words "or
the applicable Note" after the word "Agreement".
<PAGE>
(n) Section 12.16 is amended by adding the words "or the
applicable Notes" after the word "Agreement" in the first
sentence.
(o) The Exhibits are amended by adding to the Exhibits
attached thereto "Exhibit L", the form of which is attached
hereto as Exhibit A.
On and after the effective date of this letter amendment,
each reference in the Credit Agreement and the Notes to "this
Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, shall mean and be a reference
to the Credit Agreement as amended by this letter amendment. The
Credit Agreement, as amended by this letter amendment, is and
shall continue to be in full force and effect and is hereby in
all respects ratified and confirmed.
If you agree to the terms and provisions hereof, please
evidence such agreement by executing and returning at least two
counterparts of this letter amendment to Citibank N.A., 399 Park
Avenue, 9th Floor, N.Y., N.Y. 10043, Attention of Rosemary Bell.
This letter amendment shall become effective as of the date first
above written when and if counterparts of this letter amendment
shall have been executed by us and the Banks. This letter
amendment is subject to the provisions of Section 12.06 of the
Credit Agreement.
This letter amendment may be executed in any number of
counterparts and by any combination of the parties hereto in
separate counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and
the same letter amendment.
Very truly yours,
AlliedSignal Inc.
By: /s/ Nancy A. Garvey
---------------------------------
Title: Vice President and
Treasurer
THE ADMINISTRATIVE AGENT:
------------------------
CITIBANK, N.A.
as Administrative Agent
By: /s/ Michael Mandracchia
---------------------------------
Title: Vice President/Attorney
in Fact
<PAGE>
Address for Notices:
399 Park Avenue
New York, New York 10043
Attention: Michael Mandracchia
Telephone: (212) 559-3245
Telecopier No.: (212) 826-2371
THE CO-AGENTS:
-------------
ABN AMRO BANK N.V.,
as Co-Agent
By: /s/ Duane P. Helkowski
---------------------------------
Title: Corporate Banking Officer
By: /s/ John W. Deegan
---------------------------------
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Co-Agent
By: /s/ Sandra J.S. Kurek
---------------------------------
Title: Associate
Commitment: THE BANKS:
- ------------- ---------------
$30,000,000 ABN AMRO BANK N.V.
By: /s/ Duane P. Helkowski
---------------------------------
Title: Corporate Banking Officer
By: /s/ John W. Deegan
---------------------------------
Title: Vice President
$30,000,000 CITIBANK, N.A.
By: /s/ Michael Mandracchia
---------------------------------
Title: Vice President/Attorney
in Fact
$15,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Sandra J.S. Kurek
---------------------------------
Title: Associate
$15,000,000 J.P. MORGAN DELAWARE
By: /s/ David J. Morris
---------------------------------
Title: Vice President
$20,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Donald J. Chin
---------------------------------
Title: Vice President
$20,000,000 BANK OF MONTREAL
By: /s/ Thruston W. Pettus
---------------------------------
Title: Director
<PAGE>
$20,000,000 BANQUE NATIONALE DE PARIS
NEW YORK BRANCH
By: /s/ Robert S. Taylor, Jr.
---------------------------------
Title: Senior Vice President
By: /s/ Richard L. Sted
---------------------------------
Title: Senior Vice President
By: /s/ Renaud Kohler
---------------------------------
Title: Assistant Vice President
$20,000,000 CANADIAN IMPERIAL BANK OF
COMMERCE
By: /s/ Dean T. Criares
---------------------------------
Title: Authorized Signatory
$20,000,000 CHEMICAL BANK
By: /s/ John C. Riordan
---------------------------------
Title: Vice President
$20,000,000 DEUTSCHE BANK AG
(Joint commitment) NEW YORK BRANCH
By: /s/ Robert A. Maddux
---------------------------------
Title: Director
By: /s/ Christopher S. Hall
---------------------------------
Title: Vice President
DEUTSCHE BANK AG
CAYMAN ISLANDS BRANCH
By: /s/ Robert A. Maddux
---------------------------------
Title: Director
By: /s/ Christopher S. Hall
---------------------------------
Title: Vice President
$20,000,000 MELLON BANK, N.A.
By: /s/ Reyton R. Latimer
---------------------------------
Title: Senior Vice President
$20,000,000 NATIONAL WESTMINSTER BANK PLC
By: /s/ R.A. Stevens
---------------------------------
Title: Vice President
<PAGE>
$20,000,000 NATIONSBANK OF NORTH CAROLINA,
N.A.
By: /s/ Scott Jackson
---------------------------------
Title:
$20,000,000 ROYAL BANK OF CANADA
By: /s/ A. Birr
---------------------------------
Title: Senior Manager
$20,000,000 THE BANK OF NEW YORK
By: /s/ Peter Angelica
---------------------------------
Title: Vice President
$20,000,000 THE BANK OF TOKYO TRUST COMPANY
By: /s/ M.R. Marron
---------------------------------
Title: Vice President
$20,000,000 THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ Dawn Lee Lum
---------------------------------
Title: Vice President
<PAGE>
$20,000,000 THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ Judith L. Mayberry
---------------------------------
Title: Vice President
$20,000,000 THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED
By: /s/ R. Forster
---------------------------------
Title: Vice President
$20,000,000 THE INDUSTRIAL BANK OF JAPAN
LIMITED, NEW YORK BRANCH
By: /s/ Takeshi Kawano
---------------------------------
Title: Senior Vice President
$20,000,000 THE TORONTO-DOMINION BANK
By: /s/ Jano Mott
---------------------------------
Title: Mgr. Cr. Admin.
$20,000,000 UNION BANK OF SWITZERLAND
NEW YORK BRANCH
By: /s/ Daniel H. Perron
---------------------------------
Title: Vice President
By: /s/ James P. Kelleher
---------------------------------
Title: Assistant Treasurer
$450,000,000 Total of the Commitments
<PAGE>
Exhibit A
Exhibit L
Promissory Note
Dated: _____________, 19__
FOR VALUE RECEIVED, the undersigned, -----------------------
- --------, a ------------------corporation (the "Borrower"), HEREBY
PROMISES TO PAY to the order of ---------------------- (the
"Bank") for the account of its applicable Lending Office (as
defined in the Credit Agreement referred to below), the aggregate
principal amount of the Loans (as defined below) made by the Bank
to the Borrower pursuant to the Credit Agreement outstanding on
the Revolver Termination Date (as defined in the Credit
Agreement), on the Termination Date (as defined in the Credit
Agreement); provided, however, that any such payment shall be in
the amount necessary to repay in full the unpaid principal amount
thereof.
The Borrower promises to pay interest on the unpaid
principal amount of each Loan from the date of such Loan until
such principal amount is paid in full, at such interest rates,
and payable at such times, as are specified in the Credit
Agreement.
Both principal and interest in respect of each Loan (i) in
United States Dollars are payable in lawful money of the United
State of America to the Administrative Agent (as defined below)
at the office of Citibank, N.A., at 399 Park Avenue, New York,
New York, United States of America, in same day funds and (ii) in
any currency other than United States Dollars are payable in such
currency at the Bank's office which the Bank shall designate for
such payment in same day funds. Each Loan made to the Borrower
pursuant to the Credit Agreement, and all payments made on
account of the principal amount thereof, shall be recorded by the
Bank and, prior to any transfer hereof, endorsed on the grid
attached hereto which is a part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the 364-Day Credit Agreement
dated as of July 5, 1994, as it may be amended (the "Credit Agreement"),
among the Borrower, the Bank and certain other lenders parties thereto,
and Citibank N.A., as Administrative Agent for the Bank and such other
lenders. The Credit Agreement, among other things (i) provides
for the making of loans (the "Loans") by the Bank to the Borrower
from time to time in an aggregate amount not to exceed at any
time outstanding the Bank's Commitment (as defined in the Credit
Agreement), the indebtedness of the Borrower resulting from each
such Loan being evidenced by this Promissory Note, and (ii)
contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments
on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified.
[NAME OF BORROWER]
By:
-----------------
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Loan or Prepaid Balance Made By
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
<PAGE>
AGREEMENT
AGREEMENT, dated as of May 6, 1994 between AlliedSignal
Inc., a Delaware corporation (the "Corporation"), and
Lawrence A. Bossidy (the "Executive").
WHEREAS, the Corporation and Executive are parties to
an Agreement dated as of December 19, 1991 (the "December
1991 Agreement") under which Executive has served the
Corporation in the capacities of Chairman of the Board of
Directors and Chief Executive Officer;
WHEREAS, the December 1991 Agreement was modified by
letter agreement dated August 12, 1992;
WHEREAS, the Corporation desires to extend Executive's
term of employment through April 1, 2000, the first day of
the month immediately following Executive's attainment of
age 65, and to provide an incentive for Executive to remain
with the Corporation through retirement and achieve
extraordinary operating results for the benefit of the
Corporation and its shareowners; and
WHEREAS, Executive has committed that he will remain with
the Corporation through retirement;
NOW, THEREFORE, in consideration of the execution and
delivery of these presents, the mutual promises contained
herein and other good and valuable consideration, the
parties hereto hereby agree that the December 1991 Agreement
as amended is further amended and restated to read in its
entirety as follows:
Section 1. Term and Capacity of Employment
(a) The Corporation and Executive agree that Executive
shall be employed by the Corporation from the date of this
Agreement through April 1, 2000 under the terms set forth in
this Agreement. Executive, for so long as he is elected a
member of and Chairman of the Board of Directors of the
Corporation, shall perform the duties of that office.
Executive also shall continue as the Chief Executive Officer
of the Corporation and shall serve in that capacity through
the term of this Agreement at the pleasure of the Board of
Directors of the Corporation.
(b) During the term of his employment under this
Agreement, Executive shall have the powers, responsibilities
and authorities of Chief Executive Officer and Chairman of
the Board of Directors of the Corporation as established by
custom and practice on the date first set forth herein.
(c) During the term of his employment under this
Agreement, Executive shall during reasonable business hours
perform his duties hereunder (reasonable sick leave and
vacations excepted) and shall not during such term, without
the consent of the Board of Directors, engage, directly or
indirectly, in any other business for compensation or profit
except that he may, with the approval of the Board of
Directors of the Corporation, serve as a director of any
other corporation which, on the advice of counsel for the
Corporation, is not considered to be in competition with the
Corporation for purposes of the antitrust laws, and he may
receive compensation therefor.
Section 2. Compensation
(a) As compensation for Executive's services under
this Agreement, the Corporation shall, commencing on June 1,
1994, pay Executive a salary at the rate of $2,000,000 per
year, payable in equal monthly installments. Executive's
salary for the month of May 1994 shall be at the rate set by
the Board of Directors of the Corporation in October, 1992.
<PAGE>
(b) As further compensation, Executive shall be
eligible for awards under the AlliedSignal Inc. Incentive
Compensation Plan for Executive Employees (the "Incentive
Plan") (with a target bonus opportunity of at least 80
percent of salary) and any plan which is a successor to that
plan. Executive's annual incentive bonus on account of
service in calendar year 1994, in the event that the
Corporation meets its financial targets for the year, shall
be no less than $1,850,000.
(c) As further compensation, Executive shall receive
as of May 6, 1994 the following awards under the 1993 Stock
Plan for Employees of AlliedSignal Inc. and its Affiliates
(the "Stock Plan"):
(i) an award of 1,500,000 Stock Options with the
terms set forth in Exhibit A hereto; and
(ii) awards of 250,000, 50,000, and 75,000 Units
with the restrictions and conditions set forth,
respectively, in Exhibits B through D hereto.
Section 3. Life Insurance and Long-Term Disability
Benefits
The Corporation shall provide life insurance
coverage for the benefit of Executive as set forth in
Appendix E hereto. The Corporation shall also provide
Executive with long-term disability benefits as set forth in
Appendix F hereto.
Section 4. Retirement Benefits
(a) Upon termination of Executive's employment with
the Corporation for any reason other than death, the
Corporation shall pay to Executive a benefit equal to (i) an
annuity for Executive's lifetime consisting of annual
payments, each equal to 60 percent of Executive's final
average compensation, reduced by the sum of the amounts of
the comparable annuity payable under the Corporation's
Salaried Employees' Pension Plan and Supplemental Retirement
Plan for Executives and Key Executives ("Supplemental
Retirement Plan") and the comparable annuity payable under
the pension plans of Executive's predecessor employer
determined in accordance with the provisions of paragraph
(c) of this Section 4 and (ii) upon Executive's death, an
annuity payable to his surviving spouse for her lifetime
equal to 50 percent of the annuity payable for Executive's
lifetime. The benefit payable under this paragraph (a) shall
be reduced by three percentage points for each full year or
a pro rata portion thereof on account of any period of less
than a full year that termination of Executive's employment
precedes Executive's sixty-second birthday.
(b) In the event Executive's employment with the
Corporation is terminated by reason of death, the
Corporation will pay a benefit equal to an annuity for the
lifetime of his spouse, if she shall survive, equal to 50
percent of the monthly payments that would have been payable
pursuant to paragraph (a)(i) of this Section 4 (without
taking into account the reductions provided therein) for
Executive's lifetime if his employment had terminated at or
after age 62. The benefit payable under this paragraph
shall be reduced by the sum of (i) the Survivor Benefit
payable under the Corporation's Executive Benefit Program,
and (ii) the Preretirement Survivor's Benefit payable under
the Salaried Employees' Pension Plan and Supplemental
Retirement Plan and (iii) any comparable benefit payable
under the supplementary pension plan of Executive's
predecessor employer (net after offsetting payments under
the qualified pension plan and the excess benefit plan of
such employer). Any reductions provided under the preceding
sentence shall be determined on a comparable annuity basis.
The benefit determined under this paragraph (b) shall be
paid to Executive's surviving spouse, except to the extent
he has made a beneficiary designation to the contrary under
paragraph (d) of this Section 4.
(c) The amount of the benefits payable from the pension
plans of Executive's predecessor employer comprising the
<PAGE>
reduction described in paragraph (a)(i) of this Section 4
shall be determined as of the date Executive's employment
with the Corporation terminates and shall be equal to the
amount of the comparable annuity values of any periodic
payments he is then receiving or may become eligible to
receive and the comparable annuity value of any lump-sum
payment previously received under the qualified pension
plan, excess benefit plan and supplementary plan of such
predecessor employer. With respect to any such benefits
which are not then in payment status it shall be assumed for
purposes of this determination that Executive has elected to
receive such benefits in the form of a comparable annuity
coincidental with termination of employment or the earliest
possible date thereafter. Provided, however, that in the
circumstances where Executive's employment with the
Corporation terminates on or after his sixty-second birthday
or Executive's employment is terminated by reason of death,
or Executive is disabled or is the subject of an Involuntary
Termination (as defined in Section 5 of this Agreement)
while employed by the Corporation, the amount of the benefit
subject to determination under this paragraph (c) of Section
4 shall be limited to the comparable annuity payable under
the supplementary pension plan of Executive's predecessor
employer (net after offsetting payments under the qualified
pension plan and the excess benefit plan of such employer).
(d) Executive at any time prior to termination of his
employment with the Corporation (i) may elect to have any
benefit payable under paragraph (a) or (b) of this Section 4
paid in the form of a lump-sum payment and (ii) may
designate a beneficiary other than his surviving spouse to
receive any benefit payable under paragraph (b) of this
Section 4. The elections provided by (i) and (ii) may be
made at the same time or different times. The amount of such
lump-sum payment shall be equal to the present value of the
benefit determined to be payable to, or on behalf of,
Executive under paragraph (a) or (b) of this Section 4 as of
the date Executive's employment is terminated. For purposes
of this paragraph (d), "present value" shall be determined
by application of the interest rate and mortality
assumptions utilized under the Corporation's Supplemental
Retirement Plan. Any election by Executive under this
paragraph (d) may be revoked any time prior to termination
of his employment and a new election may be made at that
time or any time thereafter prior to such termination. A
designation or change of beneficiary under this paragraph
(d) must be in writing on forms authorized by the
Corporation, must be executed by the Executive and will not
be effective until filed with the Corporation.
(e) Any benefit which becomes payable pursuant to this
Section 4, shall be paid by the Corporation (i) in the case
of a benefit determined pursuant to paragraph (a) or
paragraph (b) of this Section 4, commencing on a date, and
(ii) in the case of a lump-sum benefit described in
paragraph (d) of this Section 4, on a date, which is not
later than the first day of the month immediately following
the month in which Executive's employment with the
Corporation terminates.
(f) Solely for the purposes of this Section 4 and for
no other purpose: "employment" or "while in the employ" of
the Corporation shall include any period during which
severance payments are payable under the Corporation's
Severance Plan for Senior Executives (the "Severance Plan")
or disability payments are payable under the arrangements
described in Appendix F of this Agreement; references to
employment being "terminated" refer to termination whether
voluntary or involuntary on the part of Executive or at the
request of the Corporation; "comparable annuity" means an
annuity payable for the joint lifetimes of Executive and his
spouse, with a benefit payable to Executive's
surviving spouse for the period following his death which is
equal to one-half of the benefit payable for Executive's
lifetime; "total compensation" means salary, short term
incentive compensation awards (which in the case of short
term incentive compensation paid on account of service in
1991 shall be deemed to equal the greater of $800,000 or the
amount of short term incentive compensation actually paid to
him by the Corporation on account of service in 1991), any
additional payments in respect of incentive compensation,
and annual severance payments pursuant to the Severance
<PAGE>
Plan, but excluding in all circumstances any incentive
compensation payments attributable to long-term awards; and
"final average compensation" means the average of
Executive's highest three calendar years' total
compensation, provided that if Executive does not receive
compensation from the Corporation for at least three
calendar years, then "final average compensation" shall be
the sum of the total compensation received by Executive in
respect of the period he is employed by the Corporation
divided by three; except that if prior to December 31, 1994
Executive's employment terminates due to death or
Involuntary Termination (as such term is defined in the
Severance Plan as modified in Executive's case by Section 5
of this Agreement) the average of Executive's highest three
calendar years' of total compensation shall be deemed to be
equal to the greater of $1,800,000 or the average of the
total compensation received by him for the full calendar
years he is employed by the Corporation. The foregoing
definitions shall not apply for purposes of computing the
annual benefit payable to Executive under the Corporation's
Salaried Executives' Pension Plan; such computation shall be
made in accordance with the Corporation's usual policies.
Section 5. Early Termination
In the event of the termination of Executive's
employment, the consequences of such termination shall be
determined in accordance with the Severance Plan, which is
incorporated by reference in this Agreement, with the
additions and modifications in respect of the Executive as
set forth below. "Severance Period" for purposes of the
Severance Plan shall, in Executive's case, be thirty-six
months. "Severance Pay Factor" for purposes of the
Severance Plan shall, in Executive's case, be equal to the
number of months of Executive's Severance Period.
"Involuntary Termination" for purposes of the Severance Plan
and this Agreement shall have the meaning set forth in
Section 2.14, or if applicable Section 8.04, of the
Severance Plan, as modified by application of the term
"Gross Cause" as defined in this Section 5, and shall, in
Executive's case, also mean termination of Executive's
employment at the initiative of Executive within six months
following (i) any act or failure to act by the Board of
Directors of the Corporation which would cause Executive (A)
to be removed from the office of Chief Executive Officer or
the office of Chairman of the Board of Directors on a date
earlier than Executive's sixty-fifth birthday or (B) to not
be nominated for election as a director by the shareowners
of the Corporation at any meeting of shareowners of the
Corporation held for that purpose on a date earlier than
Executive's sixty-fifth birthday; (ii) any significant
diminution in the powers, responsibilities and authorities
described in Section 1(b) of this Agreement; or (iii) the
failure of the Corporation to obtain, within 45 days after a
merger, consolidation, sale or similar transaction, the
written assumption of its obligation to perform this
Agreement by any successor. "Gross Cause" for purposes of
the Severance Plan and this Agreement shall, in Executive's
case mean (i) conviction of a felony; or (ii) willful gross
neglect or willful gross misconduct in carrying out
Executive's duties resulting, in either case, in material
economic harm to the Corporation, unless Executive believed
in good faith that such act or non-act was in the best interests
of the Corporation. Notwithstanding the provisions of Sections
4.05 and 10.03 of the Severance Plan, Executive shall not forfeit
any benefits unless he is guilty of Gross Cause as defined in this
Section 5.
Section 6. Participation in Other Benefit Plans and
Compensation Arrangements
While employed by the Corporation, Executive shall be
entitled to participate in each of the Corporation's plans
for the benefit of its salaried employees and in all other
compensation arrangements or programs which are or may
hereafter be made available to the senior executives of the
<PAGE>
Corporation. It is anticipated that Executive will incur
expenses necessary to the discharge of his duties hereunder,
and the Corporation shall reimburse Executive for those
expenses, in accordance with its established policies and
such other arrangements as may be approved by the
Corporation from time to time.
Section 7. Resolution of Disputes
Any disputes arising under or in connection with this
Agreement shall, at the election of Executive, be resolved
by arbitration, to be held in Manhattan, in accordance with
the rules and procedures of the American Arbitration
Association. All costs, fees and expenses of any arbitration
in connection with this Agreement that results in any
decision requiring the Corporation to make a payment to
Executive shall be borne by, and be the obligation of, the
Corporation.
Section 8. Survivorship
The respective rights and obligations of the parties
hereunder shall survive any termination of Executive's
employment to the extent necessary to effect the intended
preservation of such rights and obligations.
Section 9. Entire Agreement, Governing Law
(a) This Agreement embodies the entire agreement of
the parties hereto, and it may be modified only by an
agreement in writing signed by both parties.
(b) This Agreement shall be interpreted and governed
by the laws of the State of New York without reference to
principles of conflict of laws.
Section 10. Undertaking by Corporation in Case of Sale or
Liquidation of Assets
The Corporation agrees that, in the event of the sale
or liquidation of all or substantially all of the assets of
the Corporation, it shall take whatever action it legally
can in order to cause the assignee or transferee of such
assets expressly to assume the liabilities, obligations and
duties of the Corporation hereunder.
IN WITNESS WHEREOF, AlliedSignal Inc. has caused this
Agreement to be signed in its corporate name by one of its
directors and its corporate seal to be hereunto affixed and
to be attested by its General Counsel, and Lawrence A.
Bossidy has hereunto set his hand, all as of the day and
year first above written.
[Corporate Seal] AlliedSignal Inc.
Attest:
/s/ Peter M. Kreindler By: /s/ Delbert C. Staley
- ---------------------- --------------------------
General Counsel Delbert C. Staley,
Director and Chairman
of the Management
Development and
Compensation Committee
/s/ L. A. Bossidy
-------------------
Lawrence A. Bossidy
<PAGE>
APPENDIX A TO EMPLOYMENT AGREEMENT OF
LAWRENCE A. BOSSIDY
1993 Stock Plan for Employees
of AlliedSignal Inc. and its Affiliates
OPTION AGREEMENT
(With Limited Stock Appreciation Rights)
OPTION AGREEMENT made in Morris Township, New Jersey,
as of the 6th day of May 1994 between AlliedSignal Inc., a
Delaware corporation (the "Corporation") and Lawrence A.
Bossidy, a regular full-time employee of the Corporation
(the "Executive").
1. The Corporation has this day granted to the
Executive the option (the "Option") to purchase all or any
part of an aggregate of 1,500,000 shares of its common stock
(the "Common Stock") and limited stock appreciation rights
(the "Limited Rights") with respect to all such shares under
the 1993 Stock Plan for Employees of AlliedSignal Inc. and
its Affiliates (the "Stock Plan"), subject to the provisions
of this Agreement. The Executive hereby accepts the grant
and agrees to be bound by the terms and conditions of this
Agreement with respect thereto.
2. The purchase price of the shares of Common Stock
covered by the Option shall be $34.38 per share.
3. The term of the Option and the Limited Rights
shall be for a period of ten years from the date hereof,
subject to earlier termination or cancellation as provided
in the Stock Plan or this Agreement.
4. The Option is a non-qualified Option for federal
income tax purposes.
5. The Option shall become exercisable as to 100% of
the covered shares at the earliest of the Executive's
attainment of age 65, the Executive's death or total
disability (as defined in the Stock Plan) or on April 1st of
the calendar year immediately following the occurrence of a
Qualifying Event. For purposes of this Agreement
"Qualifying Event" shall mean a series of three consecutive
calendar years beginning after 1993, as to each of which the
Corporation has reported an annual rate of growth in
Consolidated Earnings Per Share equal to or greater than 15%
over the prior year's Consolidated Earnings Per Share. For
purposes of this Agreement "Consolidated Earnings Per Share"
for a calendar year shall mean consolidated net income for
that year as shown on the consolidated statement of income
for the Corporation, adjusted to omit the effects of
extraordinary items, gain or loss on the disposal of a
business segment(other than provisions for operating losses
or income during the phase-out period), unusual or
infrequently occurring events or transactions and the
cumulative effects of changes in accounting principles,
all as determined in accordance with generally accepted
accounting principles; divided by the weighted average
number of outstanding shares of Common Stock for the
calendar year. Prior thereto, the Option shall become
exercisable in cumulative installments as follows: to the
extent of 10% of the number of shares specified in paragraph
1 of this Agreement on each of May 6, 1995, May 6, 1996,
May 6, 1997, May 6, 1998 and May 6, 1999.
<PAGE>
6. Exercise of the Option is subject to the
conditions that to the extent required at the time of exercise
(a) the shares of Common Stock covered by the Option shall be duly
listed, upon official notice of issuance, upon the New York
Stock Exchange and (b) a Registration Statement under the
Securities Act of 1933 with respect to such shares shall be
effective.
7. The Option and the Limited Rights shall not be
transferable by the Executive otherwise than by will, the
laws of descent and distribution, or by transfer to a member
or members of the Executive's immediate family as provided
in paragraph 14 of the Plan, and the Option may be exercised
during the lifetime of the Executive only by the Executive,
by the Executive's guardian or legal representative or by an
immediate family member transferee.
8. If and to the extent that the Option is
exercisable, upon the occurrence of an acceleration date
(as defined in the Stock Plan) the Limited Rights shall entitle
the Executive to receive a cash payment as described in the
Stock Plan. The Option shall cease to be exercisable to the
extent of the number of shares of Common Stock with respect
to which the Executive receives such cash payment.
9. Nothing in this Agreement or the Stock Plan shall
confer upon the Executive any right to continue in the
employ of the Corporation, any of its subsidiaries or any
parent or interfere in any way with the right of the
Corporation, any such subsidiary or parent to terminate such
employment at any time.
10. Subject to the terms and conditions of this
Agreement, the Option may be exercised by written notice to
the Corporation, at 101 Columbia Road, Morristown, New
Jersey 07962, attention of the Director-Compensation, Shared
Services Department, who will also have forms available for
any such exercise.
11. The Corporation shall have the right, prior to the
payment of cash in connection with the Limited Rights or the
issuance of any shares or the payment of cash in connection
with the exercise of the Option, to withhold or require
payment by the Executive of any amounts necessary to satisfy
applicable tax requirements.
12. Except as otherwise provided in this Agreement,
the exercise of the Option and the receipt of any cash
payment as the holder of Limited Rights are subject to the
provisions of the Stock Plan, as the Stock Plan may be
amended from time to time, and any rules and regulations
which may be prescribed thereunder, provided that, unless
otherwise required by law, no amendment may, without the
consent of the Executive, adversely affect the rights of the
Executive under this Agreement. A copy of the Stock Plan,
as in effect on the date hereof, and the prospectus, dated
December 20, 1993, have been delivered to the Executive,
receipt of which is hereby acknowledged by the Executive.
13. The Corporation and the Executive agree that the
validity, performance, interpretation and other incidents of
this Agreement shall be governed by the law of the State of
Delaware.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be duly executed by its Chairman of the
Management Development and Compensation Committee, and the
Executive has duly executed this Agreement, all as of the
day and year first above written.
AlliedSignal Inc.
/s/ L.A. Bossidy By: /s/ Delbert C. Staley
- ------------------- --------------------------
Lawrence A. Bossidy Delbert C. Staley
Director and
Chairman, Management
Development and
Compensation
Committee
<PAGE>
APPENDIX B TO EMPLOYMENT AGREEMENT OF
LAWRENCE A. BOSSIDY
1993 Stock Plan for Employees of
AlliedSignal Inc. and its Affiliates
RESTRICTED UNIT AGREEMENT
RESTRICTED UNIT AGREEMENT made in Morris
Township, New Jersey as of the 6th day of May 1994 between
AlliedSignal Inc., a Delaware corporation (the "Corporation")
and Lawrence A. Bossidy, a regular full-time employee of the
Corporation (the "Executive").
1. The Corporation hereby awards to the Executive
250,000 Restricted Units under the 1993 Stock Plan for
Employees of AlliedSignal Inc. and its Affiliates (the
"Plan"), subject to the provisions of this Agreement. The
award shall be effective as of May 6, 1994. The Executive
hereby accepts the award and agrees to be bound by the terms
and conditions of this Agreement with respect thereto.
2. The Corporation shall establish and maintain a
Restricted Unit account for and on behalf of the Executive
and shall record in such account the number of Restricted
Units awarded to the Executive. The Executive shall be paid
currently an amount equal to the cash dividends paid by the
Corporation upon one share of its common stock (the "Common
Stock") for each Restricted Unit then credited to the
Executive's account ("Dividend Equivalents"). Any Dividend
Equivalents not paid currently to the Executive shall be
credited to the Executive's account, shall not be subject to
forfeiture and may bear interest at a rate and subject to
such terms as determined by the Management Development and
Compensation Committee (the "Committee"). No shares of
Common Stock shall be issued to the Executive at the time
the award is made, and the Executive shall not be, nor have
any of the rights or privileges of, a shareowner of the
Corporation with respect to any Restricted Units recorded in
the account.
3. Unless otherwise provided by law, the Executive
shall not have a disposable interest in the Restricted Unit
account, and any attempted disposition of the account by the
Executive, whether by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means, whether
such disposition be voluntary, or involuntary, or by
judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), shall be
null and void and have no effect.
4. The Executive shall not have any interest in any
fund or specific asset of the Corporation by reason of this
award or the Restricted Unit account established for the
Executive.
5. The restrictions applicable to the Restricted Units
shall lapse on April 1st of the calendar year immediately
following the occurrence of a Qualifying Event. For
purposes of this Agreement, "Qualifying Event" shall mean a
series of three consecutive calendar years beginning after
1993, as to each of which the Corporation has reported an
annual rate of growth in Consolidated Earnings Per Share
equal to or greater than 15% over the prior year's
Consolidated Earnings Per Share. For purposes of this
Agreement "Consolidated Earnings Per Share" for a calendar
year shall mean consolidated net income for that year as
shown on the consolidated statement of income for the
<PAGE>
Corporation, adjusted to omit the effects of extraordinary
items, gain or loss on the disposal of a business
segment(other than provisions for operating losses or income
during the phase-out period), unusual or infrequently
occurring events and transactions and the cumulative effects
of changes in accounting principles, all as determined in
accordance with generally accepted accounting principles;
divided by the weighted average number of outstanding shares
of Common Stock for the calendar year. However, all
restrictions applicable to the Restricted Units shall lapse
or terminate upon the Executive's death, total disability
(as defined in the Plan), attainment of age 65 or the
occurrence of an acceleration date (as defined in the Plan).
Nothing in this Agreement shall limit the discretion of the
Committee to shorten or terminate the period during which
restrictions shall be applicable to any of the Restricted
Units or to waive any conditions for the lapse or
termination of restrictions with respect to all or any
portion of the Restricted Units.
6. Except as otherwise provided in this Agreement, if
the Executive does not remain a regular full-time employee
of the Corporation, any of its subsidiaries or any parent or
any combination thereof until the lapse or termination of
the restrictions applicable to the Restricted Units, the
Restricted Units with respect to which the restrictions have
not lapsed or terminated shall be forfeited and all rights
of the Executive with respect to such Restricted Units shall
terminate. Nothing in this Agreement or the Plan shall
confer upon the Executive any right to continue in the
employ of the Corporation, any of its subsidiaries or any
parent or interfere in any way with the right of the
Corporation, any such subsidiary or parent to terminate such
employment at any time.
7. Except upon the occurrence of an acceleration date
and except as otherwise provided in this Agreement, the
Corporation shall, as soon as practicable following the
lapse or termination of restrictions applicable to any
portion of the Restricted Units, deliver to the Executive or
the Executive's beneficiary or estate, as the case may be,
one share of Common Stock for each Restricted Unit with
respect to which the restrictions have lapsed ("vested
unit") and cash equal to any Dividend Equivalents
credited to the Executive's account with respect to each
such vested unit and the interest thereon; provided,
however, that the Committee may, in its sole discretion,
elect to pay cash or part cash and part Common Stock in lieu
of delivering only Common Stock for the vested units. If a
cash payment is made in lieu of delivering Common Stock, the
amount of such cash payment shall be equal to the mean
between the highest and lowest sales prices of the Common
Stock as reported on the New York Stock Exchange Composite
Tape for the date on which payment is made, or if there are
no sales on such date, on the next preceding day on which
there were sales.
8. If the Executive desires that payment of vested
units (and any Dividend Equivalents credited to the
Executive's account with respect to such vested units and
the interest thereon) be made at a date later than that
provided in paragraph 7 of this Agreement, the Executive
shall, prior to the date on which the restrictions
applicable to such units lapse or terminate, make a request
in writing to the Committee to have such payment
deferred. The Executive shall submit a suggested payment
schedule with the request for deferment. The Committee may,
in its sole discretion, determine whether to permit such
deferment of payment in the manner requested by the
Executive. Should a deferred payment schedule not be
accepted, then payment shall be made in accordance with the
provisions of paragraph 7 of this Agreement. Any deferred
payment schedule accepted by the Committee shall be binding
on the Executive and may not thereafter be revoked. However,
when circumstances are deemed justifiable by the Committee,
it may, upon agreement with the Executive or the Executive's
<PAGE>
estate, make payment of the account other than in
strict compliance with the deferred payment schedule.
9. Upon the occurrence of an acceleration date (as
defined in the Plan), all outstanding vested units
(including Restricted Units whose restrictions have lapsed
as a result of the occurrence of such acceleration date and
vested units where payment was previously deferred) shall be
converted into cash as soon as practicable but in no event
later than 90 days after such acceleration date in an amount
equal to the total number of vested units credited to the
Executive's account multiplied by the "Multiplication
Factor" (as defined in the Plan). All vested units and
credited Dividend Equivalents (other than vested units and
credited Dividend Equivalents where payment was previously
deferred and no election was made for a lump sum payment)
shall be payable in cash as soon as practicable but in no
event later than 90 days after such acceleration date.
10. The Corporation shall have the right, prior to the
crediting or payment of any Dividend Equivalent, the
issuance or delivery of any shares of Common Stock or the
payment of cash in lieu of shares hereunder, to withhold or
require payment by the Executive of any amounts necessary to
satisfy applicable tax requirements.
11. This Agreement is subject to the provisions of the
Plan as it may be amended from time to time, and any rules
and regulations which may be prescribed thereunder by the
Committee, provided that, unless otherwise required by law,
no amendment may, without the consent of the Executive,
adversely affect the rights of the Executive under this
Agreement. A copy of the Plan, as in effect on the date
hereof, and the prospectus, dated December 20, 1993, have
been delivered to the Executive, receipt of which is hereby
acknowledged by the Executive.
12. The Corporation and the Executive agree that the
validity, performance, interpretation and other incidents of
this Agreement shall be governed by the law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be duly executed by its Chairman of the
Management Development and Compensation Committee, and the
Executive has duly executed this Agreement, all as of the
day and year first above written.
AlliedSignal Inc.
/s/ L.A. Bossidy By: /s/ Delbert C. Staley
- ------------------- --------------------------
Lawrence A. Bossidy Delbert C. Staley
Director and Chairman,
Management Development
and Compensation
Committee
<PAGE>
APPENDIX C TO EMPLOYMENT AGREEMENT OF
LAWRENCE A. BOSSIDY
1993 Stock Plan for Employees of
AlliedSignal Inc. and its Affiliates
RESTRICTED UNIT AGREEMENT
RESTRICTED UNIT AGREEMENT made in Morris Township, New
Jersey as of the 6th day of May 1994 between AlliedSignal
Inc., a Delaware corporation (the "Corporation") and
Lawrence A. Bossidy, a regular full-time employee of the
Corporation (the "Executive").
1. The Corporation hereby awards to the Executive
50,000 Restricted Units under the 1993 Stock Plan for
Employees of AlliedSignal Inc. and its Affiliates (the
"Plan"), subject to the provisions of this Agreement. The
award shall be effective as of May 6, 1994. The Executive
hereby accepts the award and agrees to be bound by the terms
and conditions of this Agreement with respect thereto.
2. The Corporation shall establish and maintain a
Restricted Unit account for and on behalf of the Executive
and shall record in such account the number of Restricted
Units awarded to the Executive. The Executive's Restricted
Unit account shall be credited currently with an amount
equal to the cash dividends paid by the Corporation upon
one share of its common stock (the "Common Stock") for each
Restricted Unit then credited to the Executive's account
("Dividend Equivalents"). Dividend Equivalents credited to
the Executive's account shall be subject to the same
restrictions applicable to the Restricted Units and bear
interest at a rate and subject to such terms as determined
by the Management Development and Compensation Committee
(the "Committee"). No shares of Common Stock shall be
issued to the Executive at the time the award is made, and
the Executive shall not be, nor have any of the rights or
privileges of, a shareowner of the Corporation with respect
to any Restricted Units recorded in the account.
3. Unless otherwise provided by law, the Executive
shall not have a disposable interest in the Restricted Unit
account, and any attempted disposition of the account by the
Executive, whether by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means, whether such
disposition be voluntary, or involuntary, or by judgment,
levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), shall be null
and void and have no effect.
4. The Executive shall not have any interest in any
fund or specific asset of the Corporation by reason of this
award or the Restricted Unit account established for the
Executive.
5. Any provision of the Plan to the contrary
notwithstanding, the restrictions applicable to the
Restricted Unit account shall lapse solely on April 1st of
the first calendar year immediately following the occurrence
of a Qualifying Event. For purposes of this Agreement
"Qualifying Event" shall mean a series of four consecutive
calendar years beginning after 1993, as to each of which the
Corporation has reported an annual rate of growth in
Consolidated Earnings Per Share equal to or greater than 15%
over the prior year's Consolidated Earnings Per Share. For
purposes of this Agreement "Consolidated Earnings Per Share"
for a calendar year shall mean consolidated net income for
<PAGE>
that year as shown on the consolidated statement of income
for the Corporation, adjusted to omit the effects of
extraordinary items, gain or loss on the disposal of a
business segment(other than provisions for operating losses
or income during the phase-out period), unusual or
infrequently occurring events and transactions and the
cumulative effects of changes in accounting principles, all
as determined in accordance with generally accepted
accounting principles; divided by the weighted average
number of outstanding shares of Common Stock for the
calendar year. Nothing in this Agreement shall limit the
discretion of the Committee to shorten or terminate the
period during which restrictions shall be applicable to the
Restricted Unit account or to waive any conditions for the
lapse or termination of restrictions with respect to all or
any portion of the Restricted Unit account.
6. If the Executive does not remain a regular full-time
employee of the Corporation, any of its subsidiaries or any
parent or any combination thereof until the lapse or
termination of the restrictions applicable to the Restricted
Unit account, the Restricted Unit account shall be forfeited
and all rights of the Executive thereto shall terminate.
Nothing in this Agreement or the Plan shall confer upon the
Executive any right to continue in the employ of the
Corporation, any of its subsidiaries or any parent or
interfere in any way with the right of the Corporation, any
such subsidiary or parent to terminate such employment at
any time.
7. Unless the Executive has made an election to the
contrary as provided in paragraph 8, the Corporation shall,
as soon as practicable following the lapse or termination of
restrictions applicable to any portion of the Restricted
Units, deliver to the Executive or the Executive's
beneficiary or estate, as the case may be, one share of
Common Stock for each Restricted Unit with respect to which
the restrictions have lapsed ("vested unit") and cash equal
to any Dividend Equivalents credited to the Executive's
account with respect to each such vested unit and the
interest thereon; provided, however, that the Committee may,
in its sole discretion, elect to pay cash or part cash and
part Common Stock in lieu of delivering only Common Stock
for the vested units. If a cash payment is made in lieu of
delivering Common Stock, the amount of such cash payment
shall be equal to the mean between the highest and lowest
sales prices of the Common Stock as reported on the New York
Stock Exchange Composite Tape for the date on which payment
is made, or if there are no sales on such date, on the next
preceding day on which there were sales.
8. If the Executive desires that payment of vested
units (and any Dividend Equivalents credited to the
Executive's account with respect to such vested units and
the interest thereon) be made at a date later than that
provided in paragraph 7 of this Agreement, the Executive
shall, prior to the date on which the restrictions
applicable to such units lapse or terminate, make a request
in writing to the Committee to have such payment
deferred. The Executive shall submit a suggested payment
schedule with the request for deferment. The Committee may,
in its sole discretion, determine whether to permit such
deferment of payment in the manner requested by the
Executive. Should a deferred payment schedule not be
accepted, then payment shall be made in accordance with the
provisions of paragraph 7 of this Agreement. Any deferred
payment schedule accepted by the Committee shall be binding
on the Executive and may not thereafter be revoked. However,
when circumstances are deemed justifiable by the Committee,
it may, upon agreement with the Executive or the Executive's
estate, make payment of the account other than in strict
compliance with the deferred payment schedule.
9. Upon the occurrence of an acceleration date (as
defined in the Plan), all outstanding vested units
(including vested units where payment was previously
<PAGE>
deferred) shall be converted into cash as soon as
practicable but in no event later than 90 days after such
acceleration date in an amount equal to the total number of
vested units credited to the Executive's account multiplied
by the "Multiplication Factor" (as defined in the Plan).
All vested units and credited Dividend Equivalents (other
than vested units and credited Dividend Equivalents where
payment was previously deferred and no election was made for
a lump sum payment) shall be payable in cash as soon as
practicable but in no event later than 90 days after such
acceleration date.
10. The Corporation shall have the right, prior to the
crediting or payment of any Dividend Equivalent, the
issuance or delivery of any shares of Common Stock or the
payment of cash in lieu of shares hereunder, to withhold or
require payment by the Executive of any amounts necessary to
satisfy applicable tax requirements.
11. Except as otherwise provided herein, this
Agreement is subject to the provisions of the Plan as it may
be amended from time to time, and any rules and regulations
which may be prescribed thereunder by the Committee,
provided that, unless otherwise required by law, no
amendment may, without the consent of the Executive,
adversely affect the rights of the Executive under this
Agreement. A copy of the Plan, as in effect on the date
hereof, and the prospectus, dated December 20, 1993, have
been delivered to the Executive, receipt of which is hereby
acknowledged by the Executive.
12. The Corporation and the Executive agree that the
validity, performance, interpretation and other incidents of
this Agreement shall be governed by the law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be duly executed by its Chairman of the
Management Development and Compensation Committee, and the
Executive has duly executed this Agreement, all as of the
day and year first above written.
AlliedSignal Inc.
/s/ L.A. Bossidy By: /s/ Delbert C. Staley
- ------------------- --------------------------
Lawrence A. Bossidy Delbert C. Staley
Director and
Chairman, Management
Development and
Compensation Committee
<PAGE>
APPENDIX D TO EMPLOYMENT AGREEMENT OF
LAWRENCE A. BOSSIDY
1993 Stock Plan for Employees of
AlliedSignal Inc. and its Affiliates
RESTRICTED UNIT AGREEMENT
RESTRICTED UNIT AGREEMENT made in Morris Township,
New Jersey as of the 6th day of May 1994 between AlliedSignal
Inc., a Delaware corporation (the "Corporation") and
Lawrence A. Bossidy, a regular full-time employee of the
Corporation (the "Executive").
1. The Corporation hereby awards to the Executive
75,000 Restricted Units under the 1993 Stock Plan for
Employees of AlliedSignal Inc. and its Affiliates (the
"Plan"), subject to the provisions of this Agreement. The
award shall be effective as of May 6, 1994. The Executive
hereby accepts the award and agrees to be bound by the terms
and conditions of this Agreement with respect thereto.
2. The Corporation shall establish and maintain a
Restricted Unit account for and on behalf of the Executive
and shall record in such account the number of Restricted
Units awarded to the Executive. The Executive's Restricted
Unit account shall be credited currently with an amount
equal to the cash dividends paid by the Corporation upon one
share of its common stock (the "Common Stock") for each
Restricted Unit then credited to the Executive's account
("Dividend Equivalents"). Dividend Equivalents credited to
the Executive's account shall be subject to the same
restrictions applicable to the Restricted Units and bear
interest at a rate and subject to such terms as determined
by the Management Development and Compensation Committee
(the "Committee"). No shares of Common Stock shall be
issued to the Executive at the time the award is made, and
the Executive shall not be, nor have any of the rights or
privileges of, a shareowner of the Corporation with respect
to any Restricted Units recorded in the account.
3. Unless otherwise provided by law, the Executive
shall not have a disposable interest in the Restricted Unit
account, and any attempted disposition of the account by the
Executive, whether by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means, whether
such disposition be voluntary, or involuntary, or by
judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), shall be
null and void and have no effect.
4. The Executive shall not have any interest in any
fund or specific asset of the Corporation by reason of this
award or the Restricted Unit account established for the
Executive.
5. Any provision of the Plan to the contrary
notwithstanding, the restrictions applicable to the
Restricted Unit account shall lapse solely on April 1st of
the first calendar year immediately following the occurrence
of a Qualifying Event. For purposes of this Agreement,
"Qualifying Event" shall mean a series of five consecutive
calendar years beginning after 1993, as to each of which the
Corporation has reported an annual rate of growth in
Consolidated Earnings Per Share equal to or greater than 15%
over the prior year's Consolidated Earnings Per Share. For
purposes of this Agreement, "Consolidated Earnings Per
Share" for a calendar year shall mean consolidated net
<PAGE>
income for that year as shown on the consolidated statement
of income for the Corporation, adjusted to omit the effects
of extraordinary items, gain or loss on the disposal of a
business segment(other than provisions for operating losses
or income during the phase-out period), unusual or
infrequently occurring events and transactions and the
cumulative effects of changes in accounting principles, all
as determined in accordance with generally accepted
accounting principles; divided by the weighted average
number of outstanding shares of Common Stock for the
calendar year. Nothing in this Agreement shall limit the
discretion of the Committee to shorten or terminate the
period during which restrictions shall be applicable to the
Restricted Unit account or to waive any conditions for the
lapse or termination of restrictions with respect to all or
any portion of the Restricted Unit account.
6. If the Executive does not remain a regular full-time
employee of the Corporation, any of its subsidiaries or any
parent or any combination thereof until the lapse or
termination of the restrictions applicable to the Restricted
Unit account, the Restricted Unit account shall be forfeited
and all rights of the Executive thereto shall terminate.
Nothing in this Agreement or the Plan shall confer upon the
Executive any right to continue in the employ of the
Corporation, any of its subsidiaries or any parent or
interfere in any way with the right of the Corporation, any
such subsidiary or parent to terminate such employment at
any time.
7. Unless the Executive has made an election to the
contrary as provided in paragraph 8, the Corporation shall,
as soon as practicable following the lapse or termination of
restrictions applicable to any portion of the Restricted
Units, deliver to the Executive or the Executive's
beneficiary or estate, as the case may be, one share of
Common Stock for each Restricted Unit with respect to which
the restrictions have lapsed ("vested unit") and cash equal
to any Dividend Equivalents credited to the Executive's
account with respect to each such vested unit and the
interest thereon; provided, however, that the Committee may,
in its sole discretion, elect to pay cash or part cash and
part Common Stock in lieu of delivering only Common Stock
for the vested units. If a cash payment is made in lieu of
delivering Common Stock, the amount of such cash payment
shall be equal to the mean between the highest and lowest
sales prices of the Common Stock as reported on the New York
Stock Exchange Composite Tape for the date on which payment
is made, or if there are no sales on such date, on the next
preceding day on which there were sales.
8. If the Executive desires that payment of vested
units (and any Dividend Equivalents credited to the
Executive's account with respect to such vested units and
the interest thereon) be made at a date later than that
provided in paragraph 7 of this Agreement, the Executive
shall, prior to the date on which the restrictions
applicable to such units lapse or terminate, make a
request in writing to the Committee to have such payment
deferred. The Executive shall submit a suggested payment
schedule with the request for deferment. The Committee may,
in its sole discretion, determine whether to permit such
deferment of payment in the manner requested by the
Executive. Should a deferred payment schedule not be
accepted, then payment shall be made in accordance with the
provisions of paragraph 7 of this Agreement. Any deferred
payment schedule accepted by the Committee shall be binding
on the Executive and may not thereafter be revoked. However,
when circumstances are deemed justifiable by the Committee,
it may, upon agreement with the Executive or the Executive's
estate, make payment of the account other than in strict
compliance with the deferred payment schedule.
9. Upon the occurrence of an acceleration date (as
defined in the Plan), all outstanding vested units
(including vested units where payment was previously
<PAGE>
deferred) shall be converted into cash as soon as
practicable but in no event later than 90 days after such
acceleration date in an amount equal to the total number of
vested units credited to the Executive's account multiplied
by the "Multiplication Factor" (as defined in the Plan).
All vested units and credited Dividend Equivalents (other
than vested units and credited Dividend Equivalents where
payment was previously deferred and no election was made for
a lump sum payment) shall be payable in cash as soon as
practicable but in no event later than 90 days after such
acceleration date.
10. The Corporation shall have the right, prior to the
crediting or payment of any Dividend Equivalent, the
issuance or delivery of any shares of Common Stock or the
payment of cash in lieu of shares hereunder, to withhold or
require payment by the Executive of any amounts necessary to
satisfy applicable tax requirements.
11. Except as otherwise provided herein, this
Agreement is subject to the provisions of the Plan as it may
be amended from time to time, and any rules and regulations
which may be prescribed thereunder by the Committee,
provided that, unless otherwise required by law, no
amendment may, without the consent of the Executive,
adversely affect the rights of the Executive under this
Agreement. A copy of the Plan, as in effect on the date
hereof, and the prospectus, dated December 20, 1993, have
been delivered to the Executive, receipt of which is hereby
acknowledged by the Executive.
12. The Corporation and the Executive agree that the
validity, performance, interpretation and other incidents of
this Agreement shall be governed by the law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be duly executed by its Chairman of the
Management Development and Compensation Committee, and the
Executive has duly executed this Agreement, all as of the
day and year first above written.
AlliedSignal Inc.
/s/ L.A. Bossidy By: /s/ Delbert C. Staley
- ------------------- --------------------------
Lawrence A. Bossidy Delbert C. Staley
Director and
Chairman, Management
Development and
Compensation Committee
<PAGE>
APPENDIX E TO EMPLOYMENT AGREEMENT OF
LAWRENCE A. BOSSIDY
Life Insurance
- ---- ---------
Corporation Insurance Plans
- ----------- --------- -----
Salaried Employees Life Insurance Plan
Non-contributory--Two times base salary $4,000,000(a)
Supplemental Life Insurance--
Four times base salary $8,000,000(a)
Group Universal Life
Up to five times base salary
(as previously elected by Executive)
Split-Dollar Policies
Metropolitan Life Insurance
Company Flexible-Premium
Adjustable Life Policies(b)
#883215036U
#883215037U
#917590655U
Northwestern Mutual
Life Insurance Policies(c)
#7589713
#7945757
#8357499
#8441286
#8746278
#9369664
(a): Assumes a base annual salary of $2,000,000.
Insurance to increase as salary increases, except that in
the case of the Supplemental Life Insurance the coverage
increases as salary increases only until Executive attains
age 60.
(b): Policies are currently owned by Executive's
Insurance Trust (the "Trust") and are subject to the terms
of the Insurance Agreement entered into with the Corporation
on July 26, 1991 and related Collateral Assignments of the
same date.
(c): Policies are owned by Executive and are
subject to the terms of the Insurance Agreement entered into
with the Corporation on July 26, 1991 and the related
Collateral Assignment of the same date.
<PAGE>
APPENDIX F TO EMPLOYMENT AGREEMENT OF
LAWRENCE A. BOSSIDY
Long Term Disability Benefits
- ---- ---- ---------- --------
After six months of salary continuation, Executive shall be
paid a monthly benefit equal to $166,666* for the first five
years of his disability and $83,333* for the next five years
of his disability; provided, however, that no benefits will
be paid after the date the Executive attains age 65. These
benefits will be reduced by any benefits paid to Executive
pursuant to the Executive Benefit Program, the Voluntary
Employees' Beneficiary Association Long-Term Disability
Income Plan or any other longterm disability program
sponsored by the Corporation.
* These amounts assume a base annual salary of
$2,000,000. If base annual salary is increased, these
amounts will increase proportionally.
EXHIBIT 15
----------
August 15, 1994
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware that the June 30, 1994 Quarterly Report on
Form 10-Q of AlliedSignal Inc. which includes our report
dated July 25, 1994 (issued pursuant to the provisions of
Statement on Auditing Standards Nos. 42 and 71) will be
incorporated by reference in the Prospectuses constituting
part of AlliedSignal Inc.'s Registration Statements, on
Forms S-8 (Nos. 33-09896, 33-50314, 33-51031, 33-51455,
33-55410 and 33-65792), on Forms S-3 (Nos. 33-00631, 33-13211
and 33-14071) and on Form S-8 (filed as an amendment to Form S-14,
No. 2-99416-01). We are also aware of our responsibilities
under the Securities Act of 1933.
Very truly yours,
/s/ Price Waterhouse LLP
Price Waterhouse LLP
