<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
AlliedSignal Inc.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
.................................................................
2) Aggregate number of securities to which transaction
applies:
.................................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
.................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
5) Total fee paid:
.................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
.................................................................
2) Form, Schedule or Registration Statement No.:
.................................................................
3) Filing Party:
.................................................................
4) Date Filed:
.................................................................
<PAGE>
[LOGO]
AlliedSignal Inc.
P.O. Box 3000
Morristown, NJ 07962-2496
LARRY BOSSIDY
Chairman and
Chief Executive Officer
March 10, 1995
Dear Shareowner:
It is my pleasure to invite you to attend AlliedSignal's 1995 Annual Meeting of
Shareowners. The meeting will be held on Monday, April 24, 1995 at 10:00 a.m.
local time at the Company's headquarters, 101 Columbia Road, Morris Township,
New Jersey. The Notice of Annual Meeting and Proxy Statement accompanying this
letter describe the business to be transacted at the meeting.
During the meeting, I will report to you on the Company's progress in achieving
both sales and earnings growth in 1994 and on how we plan to reach new goals in
1995. We welcome this opportunity to have a dialogue with our shareowners and
look forward to your comments and questions.
If you are a shareowner of record who plans to attend the meeting, please mark
the appropriate box on your proxy card. If your shares are held by a broker,
bank or other intermediary and you plan to attend, please send written
notification to the Company's Shareholder Relations Department, P.O. Box 50000,
Morristown, New Jersey 07962, and enclose evidence of your ownership (such as a
bank or brokerage firm account statement). The names of all those indicating
they plan to attend will be placed on an admission list held at the registration
desk at the entrance to the meeting.
It is important that your shares be represented at the meeting, regardless of
the number you may hold. Whether or not you plan to attend, please sign, date
and return your proxy card as soon as possible. This will not prevent you from
voting your shares in person if you are present.
A map and directions to the Company's headquarters appear at the end of the
Proxy Statement. I look forward to seeing you on April 24.
Sincerely,
LARRY BOSSIDY
<PAGE>
NOTICE OF ANNUAL MEETING
The Annual Meeting of Shareowners of AlliedSignal Inc. (the 'Company') will
be held on Monday, April 24, 1995 at 10:00 a.m. local time at the headquarters
of the Company, 101 Columbia Road, Morris Township, New Jersey, to consider and
take action upon the following matters described in the accompanying Proxy
Statement:
(1) Election of four directors;
(2) Appointment of Price Waterhouse LLP as independent accountants for
1995;
(3) A shareowner proposal regarding the election of directors by classes;
and
(4) The transaction of such other business as may properly come before the
meeting.
The Board of Directors has determined that owners of record of the
Company's Common Stock at the close of business on March 1, 1995, are entitled
to notice of and to vote at the meeting.
By Order of the Board of Directors
PETER M. KREINDLER
Senior Vice President,
General Counsel and Secretary
AlliedSignal Inc.
101 Columbia Road
Morris Township, NJ 07962
March 10, 1995
YOUR VOTE IS IMPORTANT
To vote your shares, please indicate your choices, sign
and date the proxy card, and return it in the enclosed
postage-paid envelope. You may vote in person at the
meeting even though you send in your proxy.
<PAGE>
<TABLE>
<CAPTION>
Table of Contents Page
<S> <C>
- -----------------------------------------------------------------------------------------------------------
General Information................................................................................ 1
1 -- Election of Directors......................................................................... 2
The Board of Directors and Committees of the Board............................................ 7
Compensation of Directors..................................................................... 8
Voting Securities.................................................................................. 10
Executive Compensation............................................................................. 11
2 -- Appointment of Independent Accountants........................................................ 20
3 -- Shareowner Proposal Regarding the Election of Directors by Classes............................ 21
Additional Information............................................................................. 22
Directions to Company Headquarters................................................................. A-1
</TABLE>
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of AlliedSignal Inc. (the 'Company') for use
at the Annual Meeting of Shareowners to be held on Monday, April 24, 1995, and
at any adjournment thereof. The solicitation of proxies provides all shareowners
who are entitled to vote on matters that come before the meeting with an
opportunity to do so whether or not they are able to attend the meeting in
person. This Proxy Statement and the related proxy card are first being sent to
the Company's shareowners on or about March 10, 1995.
Owners of record of the Company's Common Stock (the 'Common Stock') at the
close of business on March 1, 1995, are entitled to notice of and to vote at the
Annual Meeting. At February 21, 1995, there were 284,053,606 shares of Common
Stock outstanding. The owners of a majority of the shares entitled to vote,
present in person or represented by proxy, will constitute a quorum for the
transaction of business at the meeting. Shareowners are entitled to one vote for
each share held. If a shareowner is a participant in the Company's Dividend
Reinvestment and Share Purchase Plan (the 'Dividend Reinvestment Plan'), the
proxy card represents shares in the participant's plan account, as well as
shares held of record in the participant's name.
The shares represented by a properly signed and returned proxy card will be
voted as specified by the shareowner. If a proxy card is signed and returned but
no specification is made, the shares will be voted FOR the election of all
nominees for director (Proposal 1) and the appointment of independent
accountants (Proposal 2), and AGAINST the shareowner proposal described in this
Proxy Statement (Proposal 3). A proxy may be revoked by a shareowner at any time
before it is voted by notice in writing delivered to the Secretary, by
submission of another proxy bearing a later date or by voting in person at the
Annual Meeting.
Abstentions are not counted as votes 'for' or 'against' a proposal, but are
counted in determining the number of shares present or represented on a
proposal. Therefore, since approval of Proposals 2 and 3 requires the
affirmative vote of a majority of the shares of Common Stock present or
represented, abstentions have the same effect as a vote 'against' those
proposals. New York Stock Exchange rules prohibit brokers from voting on
Proposal 3 without receiving instructions from the beneficial owner of the
shares. In the absence of instructions, shares subject to such 'broker
non-votes' will not be counted as voted or as present or represented on that
proposal.
It is the policy of the Company that any proxy, ballot or other voting
material that identifies the particular vote of a shareowner will, if requested
thereon by the shareowner, be kept confidential, except in the event of a
contested proxy solicitation or as may be required by law. The Company may be
informed whether or not a particular shareowner has voted and will have access
to any comment written on a proxy, ballot or other material and to the identity
of the commenting shareowner. Under the policy, the inspectors of election at
any meeting will be independent parties unaffiliated with the Company.
1
<PAGE>
1 -- ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes that serve
staggered three-year terms and are as nearly equal in number as possible. The
Board has nominated four candidates for election as directors for a term ending
at the 1998 Annual Meeting. The vote of a plurality of the shares of Common
Stock present or represented and entitled to vote at the Annual Meeting is
required for election as a director.
All of the nominees are currently directors who were elected prior to the
last Annual Meeting, except Ivan G. Seidenberg, who was elected by the Board in
early 1995. William R. Haselton and Delbert C. Staley have reached retirement
age and will serve until the Annual Meeting pursuant to the directors'
retirement policy. The resulting temporary vacancy may be filled by the Board in
accordance with the Company's By-laws.
Each nominee has consented to being named in the Proxy Statement and to
serve if elected. If prior to the Annual Meeting any nominee should become
unavailable to serve, the shares represented by a properly signed and returned
proxy card will be voted for the election of such other person as may be
designated by the Board of Directors, or the Board may determine to leave the
vacancy temporarily unfilled. All directors serve subject to the retirement
policy described on page 7.
Certain information regarding each nominee and each director continuing in
office after the Annual Meeting is set forth below, including age and principal
occupation, a brief account of business experience during at least the last five
years, certain other directorships currently held and the year in which the
individual was first elected a director of the Company or one of its predecessor
companies.
NOMINEES FOR ELECTION FOR TERM EXPIRING IN 1998
<TABLE>
<S> <C>
[PHOTO OF RUSSELL E. PALMER]
RUSSELL E. PALMER, Chairman and Chief Executive Officer of The Palmer Group
After serving seven years as Dean of The Wharton School of the University of
Pennsylvania, Mr. Palmer in 1990 established The Palmer Group, a private investment
firm. He previously served as Managing Director and Chief Executive Officer of Touche
Ross International and Managing Partner and Chief Executive Officer of Touche Ross & Co.
(USA) (now Deloitte and Touche). He is a director of Bankers Trust Company, Bankers
Trust New York Corporation, Contel Cellular Inc., Federal Home Loan Mortgage
Corporation, GTE Corporation, Imasco Limited, The May Department Stores Company and
Safeguard Scientifics, Inc.
Director since 1987 Age 60
- ----------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
[PHOTO OF IVAN G. SEIDENBERG]
IVAN G. SEIDENBERG, President and Chief Executive Officer of NYNEX Corporation
Mr. Seidenberg joined NYNEX Corporation, a telecommunications company, in 1983 after
holding various positions with AT&T since 1966. He served in several senior management
positions at NYNEX before becoming a director and Vice Chairman of the Board in 1991,
President and Chief Operating Officer in 1994, and President and Chief Executive Officer
in January 1995. He will become Chairman and Chief Executive Officer in April. He is a
director of Melville Corporation and Scholastic, Inc.
Director since 1995 Age 48
- ----------------------------------------------------------------------------------------
[PHOTO OF ANDREW C. SIGLER]
ANDREW C. SIGLER, Chairman and Chief Executive Officer of Champion International
Corporation
Mr. Sigler began his career at Champion International Corporation, a paper and forest
products company, in 1956. He was elected President and Chief Executive Officer in 1974
and Chairman and Chief Executive Officer in 1979. He is a director of Bristol-Myers
Squibb Company, Chemical Banking Corporation and General Electric Company.
Director since 1994 Age 63
- ----------------------------------------------------------------------------------------
[PHOTO OF THOMAS P. STAFFORD]
THOMAS P. STAFFORD, Consultant, General Technical Services, Inc.
Lt. Gen. Stafford joined the consulting firm of General Technical Services, Inc. in
1984. He is also Vice Chairman and co-founder of Stafford, Burke and Hecker, Inc., a
Washington-based consulting firm. After serving as an astronaut for a number of years,
he retired in 1979 from the Air Force as Deputy Chief of Staff for Research, Development
and Acquisition and served as Vice Chairman of Gibraltar Exploration Limited until 1984.
Lt. Gen. Stafford is also Chairman of the Board of Omega Watch Corporation of America
and is a director of CMI Corporation, Fisher Scientific International Inc., Pacific
Scientific Company, Seagate Technology Inc., Tracor, Inc., Tremont Corporation, The
Wackenhut Corporation and Wheelabrator Technologies Inc.
Director since 1981 Age 64
- ----------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 1996
<TABLE>
<S> <C>
[PHOTO OF HANS W. BECHERER]
HANS W. BECHERER, Chairman and Chief Executive Officer of Deere & Company
Mr. Becherer began his business career with Deere & Company, a manufacturer of mobile
power machinery and a supplier of financial services, in 1962. After serving in a
variety of managerial and executive positions, he became a director of Deere in 1986 and
was elected President and Chief Operating Officer in 1987, President and Chief Executive
Officer in 1989 and Chairman and Chief Executive Officer in 1990. He is a director of
Schering-Plough Corporation.
Director since 1991 Age 59
- ----------------------------------------------------------------------------------------
[PHOTO OF EUGENE E. COVERT]
EUGENE E. COVERT, T. Wilson Professor of Aeronautics, Massachusetts Institute of
Technology
Dr. Covert has been associated with the Massachusetts Institute of Technology since
1952. He became Professor of Aeronautics and Astronautics in 1968, serving as Department
Head from 1985 until mid-1990, and also became the T. Wilson Professor of Aeronautics in
1993. Dr. Covert is a director of Physical Sciences Inc. and Rohr Industries, Inc.
Director since 1987 Age 69
- ----------------------------------------------------------------------------------------
[PHOTO OF ROBERT P. LUCIANO]
ROBERT P. LUCIANO, Chairman and Chief Executive Officer of Schering-Plough Corporation
Mr. Luciano joined Schering-Plough Corporation, a manufacturer and marketer of
pharmaceuticals and consumer products, in 1978. He served as President from 1980 to 1986
and became Chief Executive Officer in 1982 and Chairman of the Board in 1984. He is a
director of C.R. Bard, Inc. and Merrill Lynch & Co.
Director since 1989 Age 61
- ----------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
[PHOTO OF JOHN R. STAFFORD]
JOHN R. STAFFORD, Chairman, President and Chief Executive Officer of American Home
Products Corporation
Mr. Stafford has held a number of positions with American Home Products, a manufacturer
of pharmaceutical, health care, animal health, agricultural and food products, since
joining that company in 1970. He served as General Counsel, Vice President, Senior Vice
President and Executive Vice President before becoming President in 1981, an office he
held until 1990 and which he resumed in early 1994. Mr. Stafford was elected Chairman of
the Board and Chief Executive Officer in 1986. He is a director of Chemical Banking
Corporation, Metropolitan Life Insurance Company and NYNEX Corporation.
Director since 1993 Age 57
- ----------------------------------------------------------------------------------------
</TABLE>
INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 1997
<TABLE>
<S> <C>
[PHOTO OF LAWRENCE A. BOSSIDY]
LAWRENCE A. BOSSIDY, Chairman of the Board and Chief Executive Officer of the Company
Mr. Bossidy became Chief Executive Officer of the Company in July 1991 and Chairman of
the Board in January 1992. He previously served in a number of executive and financial
positions with General Electric Company, a diversified services and manufacturing
company, which he joined in 1957. Mr. Bossidy was Chief Operating Officer of General
Electric Credit Corporation (now General Electric Capital Company) from 1979 to 1981,
Executive Vice President and Sector Executive of GE's Services and Materials Sector from
1981 to 1984, and Vice Chairman and Executive Officer of GE from 1984 until he joined
the Company. He is a director of Merck & Co., Inc.
Director since 1991 Age 60
- ----------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
[PHOTO OF ANN M. FUDGE]
ANN M. FUDGE, Executive Vice President of Kraft Foods, Inc.
Ms. Fudge joined General Foods USA in 1986 and held several planning and marketing
positions before being appointed Executive Vice President and General Manager of the
Dinners and Enhancers Division in 1991. In 1994, she was named President of General
Foods' Maxwell House Coffee Company. In early 1995, Ms. Fudge became Executive Vice
President of Kraft Foods, Inc. (the successor to Kraft General Foods, Inc., of which
General Foods USA was an operating unit), while continuing to head the Maxwell House
Coffee Division as General Manager. Kraft is the multinational food business of Philip
Morris Companies Inc. Ms. Fudge is a director of Liz Claiborne, Inc.
Director since 1993 Age 43
- ----------------------------------------------------------------------------------------
[PHOTO OF PAUL X. KELLEY]
PAUL X. KELLEY, Vice Chairman for Corporate Strategy of Cassidy &
Associates
General Kelley served as Commandant of the Marine Corps from 1983 until his retirement
in 1987. He assumed his current position with Cassidy & Associates, a Washington-based
government relations firm, in 1989. General Kelley is a director of GenCorp Inc., PHH
Corporation, Saul Centers, Inc., Sturm, Ruger & Company, Inc., UST Inc. and The
Wackenhut Corporation.
Director since 1987 Age 66
- ----------------------------------------------------------------------------------------
[PHOTO OF ROBERT C. WINTERS]
ROBERT C. WINTERS, Chairman Emeritus of The Prudential Insurance Company of America
Mr. Winters joined Prudential, a provider of insurance and financial services, in 1953.
During his career with Prudential, he held various managerial positions prior to his
election as Executive Vice President in 1978, Vice Chairman in 1984 and Chairman and
Chief Executive Officer in 1987. He retired as Chairman and Chief Executive Officer and
became Chairman Emeritus in December 1994.
Director since 1989 Age 63
- ----------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The business of the Company is managed under the direction of the Board of
Directors. There were 10 meetings of the Board in 1994, with individual
attendance averaging 92% of the meetings. Mr. Sigler, who became a director in
March, attended six out of eight Board meetings and five out of seven meetings
of Committees on which he served.
The Board of Directors' retirement policy establishes 70 as the retirement
age for non-employee directors, as well as for any director who is or has been
the Company's Chief Executive Officer. A director who reaches retirement age
shall serve until the next Annual Meeting. The policy also provides that
non-employee directors who discontinue the principal position or identification
which prevailed at the time of their election (other than by virtue of a
promotion) shall offer to tender their resignations as directors. The Board has
discretion to make exceptions to the policy.
Because of the number of matters requiring Board consideration, and to make
the most effective use of individual Board members' capabilities, the Board of
Directors has established Committees to devote attention to specific subjects
and to assist it in the discharge of its responsibilities. The functions of
these Committees, their current members and the number of meetings held during
1994 are described below. A non-employee director may also attend a Committee
meeting as an alternate member at the request of the Committee Chairman (with
the concurrence of the Chairman of the Board).
The Audit Committee recommends the firm to be appointed as independent
accountants to audit the Company's financial statements and to perform services
related to the audit; reviews the scope and results of the audit with the
independent accountants; reviews with management and the independent accountants
the Company's interim and year-end operating results; considers the adequacy of
the internal accounting and auditing procedures of the Company; and considers
the accountants' independence. The members of the Audit Committee, which met
five times in 1994, are Messrs. Palmer (Chairman), Becherer, Haselton and
Winters, Ms. Fudge and Gen. Kelley.
The Corporate Responsibility Committee reviews the policies and programs
that are designed to assure the Company's compliance with legal and ethical
standards and that affect its role as a responsible corporate citizen, including
those relating to human resources issues such as equal employment opportunity,
to health, safety and environmental matters, and to proper business practices.
The members of the Committee are Gen. Kelley (Chairman), Dr. Covert, Ms. Fudge,
Mr. Sigler and Lt. Gen. T. Stafford. It met four times in 1994.
The Executive Committee possesses the powers of the Board to manage and
direct the business and affairs of the Company during the interval between Board
meetings, except as provided by Delaware law and except for those matters
assigned to the Audit and Management Development and Compensation Committees.
The members of the Executive Committee, which did not meet in 1994, are Messrs.
Bossidy (Chairman), Staley and Winters.
The Management Development and Compensation Committee reviews and
recommends the compensation arrangements for officers; approves such
arrangements for other senior level employees; considers matters related to
management development and succession and
7
<PAGE>
recommends individuals for election as officers; and reviews or takes such other
action as may be required in connection with the bonus, stock and other benefit
plans of the Company and its subsidiaries. It met six times in 1994. The
Committee members are Messrs. Staley (Chairman), Becherer, Haselton, Luciano and
J. Stafford.
The Nominating and Board Affairs Committee has as its principal role the
consideration and recommendation of individuals for nomination as directors. The
names of potential director candidates are drawn from a number of sources,
including recommendations from members of the Board, management and shareowners.
Shareowners wishing to recommend Board nominees should submit their
recommendations in writing to the Secretary, AlliedSignal Inc., P.O. Box 4000,
Morristown, New Jersey 07962, with the submitting shareowner's name and address
and pertinent information about the proposed nominee similar to that set forth
in this Proxy Statement for Board nominees, including current principal
occupation and employment, principal positions held during the last five years
and a list of all companies which the individual serves as a director. (See the
heading 'Additional Information -- Other Action at the Meeting' for a summary of
the procedure applicable to a shareowner nomination at an annual meeting.) This
Committee also reviews and makes recommendations to the Board with respect to
the composition of Board Committees and other Board-related matters, including
its organization, size, composition and compensation, as well as the
responsibilities, functions and talents of the Board and its members. The
members of the Nominating and Board Affairs Committee, which met three times in
1994, are Messrs. Luciano (Chairman), Palmer, J. Stafford, Staley and Winters.
The Retirement Plans Committee appoints the trustees for funds under the
employee pension benefit plans of the Company and certain subsidiaries; reviews
funding strategies; sets investment policy for fund assets; and oversees and
appoints members of other committees investing fund assets. This Committee met
three times in 1994. Its members are Messrs. Winters (Chairman), Becherer,
Luciano, Palmer and Sigler.
The Technology Committee has responsibility for corporate-wide technology
matters, including research, development and engineering, and advises the
Company with respect to its technology program and budget, proposed changes in
corporate strategy where technology is a significant component, and new
technologies of importance to the Company's existing business areas. The members
of this Committee are Lt. Gen. T. Stafford (Chairman), Dr. Covert, Gen. Kelley
and Mr. Staley. It met twice in 1994.
COMPENSATION OF DIRECTORS
Non-employee directors receive an annual Board retainer of $35,000 and a
fee of $1,500 for Board meetings attended on any day (10 during 1994). They also
receive an annual retainer of $5,400 for each Board Committee served, with
Committee Chairmen receiving an additional retainer of $4,000 for the Audit and
Management Development and Compensation Committees and $2,000 for all other
Board Committees. While no meeting fees are generally paid for attendance at
Committee meetings, a non-employee director who attends one or more Committee
meetings on any day as an alternate member receives a fee of $1,500. In
addition, a $1,000 fee is paid to non-employee directors for attendance at a
Committee meeting, or other extraordinary meeting related to Board business,
which occurs apart from a Board meeting, and a
8
<PAGE>
$1,000 per day fee is paid for special assignments. Non-employee directors are
also provided with $350,000 in business travel accident insurance and are
eligible to elect, without contribution by them, $100,000 in term life insurance
and medical and dental coverage for themselves and their eligible dependents.
All directors are reimbursed for expenses incurred in attending meetings.
Under the Deferred Compensation Plan for Non-Employee Directors, a
non-employee director may elect to defer, until a specified calendar year or
retirement from the Board, all or any portion of the director's compensation and
to have such compensation credited to a deferred account in cash or shares of
Common Stock. Amounts credited accrue amounts equivalent to interest or to
dividends. The rate of interest on amounts deferred in cash is the same as that
determined by the Management Development and Compensation Committee for amounts
deferred during the same year under the Company's Incentive Compensation Plan
(10% for 1995). Upon a change in control, all deferred amounts will be
considered cash equivalents and a director who has so elected will be entitled
to a lump sum payment of such amounts.
Pursuant to the Retirement Plan for Non-Employee Directors, directors who
retire from the Board at age 60 or above with at least five years of service as
a non-employee director are eligible for a retirement benefit at an annual rate
equal to the annual Board retainer in effect at retirement. A director who
retires at age 70 or above is entitled to such benefit for life, while a
director retiring between ages 60 and 70 is entitled to such benefit for a
number of months equal to the number of months served. In the event of the
director's death following retirement, benefits will continue to be paid to any
surviving spouse until the total number of payments made to the director and
spouse equals the lesser of the number of months served or 120 months. A
director (or spouse) who is entitled to a retirement benefit during the two-year
period following a change in control will receive a lump sum payment equal to
the present value of the benefit, if the director has so elected.
Under the Stock Plan for Non-Employee Directors, each new non-employee
director receives a one-time grant of 1,500 shares of Common Stock, which are
subject to transfer restrictions until the director's service terminates with
the consent of a majority of the other members of the Board, provided
termination occurs at or after age 65. During the restricted period, the
director has the right to receive dividends on and the right to vote the shares.
At the end of the restricted period, a director is entitled to one-fifth of the
shares granted for each year of service. The shares will be forfeited if the
director's service terminates (other than for death or disability) prior to the
end of the restricted period. The Plan also provides for the grant to each
non-employee director continuing in office after an Annual Meeting of an option
to purchase 1,000 shares of Common Stock at 100% of the market price on the date
of grant. Each option becomes fully vested at the earliest of the director's
retirement from the Board at or after age 70, death, disability or April 1 of
the third year after the date of grant. Prior thereto, each option becomes
exercisable in cumulative installments of 40% of the shares subject to the
option on April 1 of the year following the grant date and an additional 30% on
April 1 of each of the next two years.
9
<PAGE>
VOTING SECURITIES
As of February 21, 1995, State Street Bank & Trust Company, 225 Franklin
Street, Boston, Massachusetts 02101 ('State Street'), held 38,182,096 shares, or
approximately 13.4%, of the outstanding Common Stock as trustee of the Company's
savings plans. Under the terms of the plans, State Street is required to vote
shares attributable to any participant in accordance with instructions received
from the participant and to vote all shares for which it shall not have received
instructions in the same ratio as the shares with respect to which instructions
were received. State Street disclaims beneficial ownership of the shares
referred to above. State Street also held 2,842,473 shares, or approximately
1.0%, of the outstanding Common Stock as trustee of various trusts, with sole
voting power as to 2,224,265 shares, shared voting power as to 10,295 shares,
sole investment power as to 2,213,740 shares, and shared investment power as to
18,820 shares.
J. P. Morgan & Co. Incorporated, 60 Wall Street, New York, NY 10260, has
informed the Company that, as of February 21, 1995, it beneficially owned
15,029,065 shares, or approximately 5.3%, of the outstanding Common Stock, with
sole voting power as to 8,442,580 shares, shared voting power as to 273,200
shares, sole investment power as to 14,596,065 shares and shared investment
power as to 420,800 shares.
Set forth below is certain information with respect to beneficial ownership
of the Common Stock as of February 21, 1995 by each director, certain executive
officers and by all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
Number of
Name Shares(1)(2)
- --------------------------------------------------------- -------------------
<S> <C>
John W. Barter........................................... 377,735(3)(4)
Hans W. Becherer......................................... 3,400(3)
Lawrence A. Bossidy...................................... 985,857(3)(4)
Daniel P. Burnham........................................ 440,318(3)
Eugene E. Covert......................................... 4,240(3)
Ann M. Fudge............................................. 3,400(3)
William R. Haselton...................................... 6,838(3)(4)
Paul X. Kelley........................................... 5,894(3)(4)
Peter M. Kreindler....................................... 150,873(3)(4)
Robert P. Luciano........................................ 4,400(3)
Russell E. Palmer........................................ 4,400(3)
Frederic M. Poses........................................ 466,220(3)(4)
Ivan G. Seidenberg....................................... 1,500
Andrew C. Sigler......................................... 5,400(3)
John R. Stafford......................................... 4,400(3)
Thomas P. Stafford....................................... 3,400(3)
Delbert C. Staley........................................ 8,386(3)
Robert C. Winters........................................ 12,012(3)
All directors and executive officers as a group,
including the above (30 in number)..................... 3,830,720(3)(4)
</TABLE>
(footnotes on next page)
10
<PAGE>
- ------------
(1) The total for each individual is less than 0.4%, and the total for the group
is less than 1.4%, of the shares of Common Stock outstanding.
(2) Includes shares held individually, jointly with others or in the name of a
family member or of a bank, broker or nominee for the individual's account,
as well as shares attributable to participants under the Dividend
Reinvestment Plan and the AlliedSignal Savings Plan. Also includes
restricted shares as to which directors have sole voting power but no
investment power prior to the lapse of restrictions.
(3) Includes shares which the following have the right to acquire within 60 days
through the exercise of vested stock options: Mr. Barter, 364,336; Mr.
Bossidy, 730,000; Mr. Burnham, 401,514; Mr. Kreindler, 145,668; Mr. Poses,
444,636; each indicated non-employee director, 400; and all directors and
executive officers as a group, 3,333,192. No voting or investment power
exists with respect to such shares prior to acquisition.
(4) Does not include the following amounts credited to deferred share accounts,
as to which no voting or investment power exists prior to issuance: Mr.
Barter, 32,453; Mr. Bossidy, 6,700; Mr. Haselton, 4,224; Gen. Kelley, 3,592;
Mr. Kreindler, 4,500; Mr. Poses, 42,998; and all directors and executive
officers as a group, 120,684.
----------------------
The Company's directors and officers are required to file reports with the
Securities and Exchange Commission relating to their ownership of the Company's
equity securities. During 1994, a report filed by Nancy A. Garvey, Vice
President and Treasurer of the Company, was amended to include
previously-omitted shares held under the Dividend Reinvestment Plan and a report
relating to an option grant to Mr. Bossidy was inadvertently filed after the due
date.
EXECUTIVE COMPENSATION
REPORT OF THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
The Management Development and Compensation Committee of the Board of
Directors (the 'Committee'), subject to the approval of the Board of Directors,
determines the compensation of the Company's executive officers and oversees the
administration of executive compensation programs. The Committee is composed
solely of independent directors.
Executive Compensation Policies and Programs
The Company's executive compensation programs are designed to attract and
retain highly qualified executives and to motivate them to maximize shareowner
returns by achieving aggressive goals. The programs link each executive's
compensation directly to performance. A significant portion of each executive's
compensation is dependent upon the appreciation of the Common Stock and meeting
financial goals and other individual performance objectives.
There are three basic components to this 'pay for performance' system: base
pay; annual incentive bonus; and long-term, equity-based incentive compensation
(primarily stock options). Each component is addressed in the context of
competitive conditions. In determining competitive
11
<PAGE>
compensation levels, the Company analyzes information from several independent
surveys which include information regarding comparably-sized industrial
companies. Since the Company's market for executive talent extends beyond its
own industries, the survey data include companies outside the industrial
classifications represented in the Composite Group Index referred to below under
'Performance Graph.'
Base pay. Base pay is designed to be competitive within 20% above or below
median salary levels at other large industrial companies for equivalent
positions. The executive's actual salary relative to this competitive framework
will vary based on individual performance and the individual's skills,
experience and background.
Annual incentive bonus. In 1994, each executive was eligible to receive an
annual cash bonus. The 'target' level for that bonus, like the base salary
level, was set with reference to competitive conditions. These target levels,
which were somewhat above median levels, were intended to motivate the Company's
executives by providing substantial bonus payments for the achievement of
aggressive goals. The actual amount paid was determined by performance. Whether
that payment was above or below target depended on two factors: first, financial
performance, which was measured against objectives established for net income,
cash flow and productivity increases; and second, the individual executive's
performance against other specific management objectives such as improving
customer satisfaction or negotiating strategic business alliances. Financial
objectives were given greater weight than other management objectives in
determining bonus payments. The types and relative importance of specific
financial and other business objectives varied among the Company's executives
depending on their positions and the particular operations or functions for
which they were responsible.
Long-term, equity-based incentive compensation. The long-term, equity-based
compensation program is tied directly to shareowner return. The executive is
rewarded if the shareowners receive the benefit of appreciation in the price of
the Common Stock. Under the program, long-term incentive compensation has
consisted of stock options and restricted units. The options are granted in
tandem with limited stock appreciation rights, which are designed to provide the
executive with an economic benefit comparable to that available to all
shareowners in the event of a tender offer for the Company's shares, a change in
control or similar event. The Company periodically grants new awards to provide
continuing incentives for future performance, without regard to the number of
outstanding awards. Like the annual bonus, the target award is set with regard
to competitive considerations, but each individual's actual award is based upon
the individual's performance, potential for advancement, leadership ability and
commitment to the Company's total quality program.
The principal purpose of the long-term incentive compensation program is to
encourage the Company's executives to enhance the value of the Company and,
hence, the price of the Common Stock and the shareowners' return. In addition,
this component of the compensation system (through extended vesting) is designed
to create an incentive for the individual to remain with the Company. In order
to enhance the retention incentive, long-term awards occasionally are made which
vest over periods longer than the customary three or four years for options and
restricted units, respectively.
12
<PAGE>
In order to align more closely the interests of the Company's executives
with those of its shareowners, the Committee has phased out the use of annual
restricted unit awards and has decided that unit grants after 1994 will be made
only to a limited number of senior executives, primarily as a retention
incentive.
The Company intends, to the extent practicable, to preserve deductibility
under the Internal Revenue Code (the 'Code') of compensation paid to its
executive officers while maintaining compensation programs to attract and retain
highly qualified executives in a competitive environment. Accordingly,
amendments were adopted, with shareowner approval, to the Company's 1993 Stock
Plan and Incentive Compensation Plan to allow compensation paid thereunder
generally to be deductible, although certain compensation paid to some
executives may not be deductible. As described below, in response to competitive
salary levels and to retain the services of Mr. Bossidy as Chairman and Chief
Executive Officer through his retirement, the Board of Directors approved an
amended long-term employment agreement for Mr. Bossidy. Some of the compensation
under that agreement may not be deductible, depending on amounts deferred.
Annual Reviews
Each year, the Committee reviews the executive compensation policies with
respect to the linkage between executive compensation and the creation of
shareowner value, as well as the competitiveness of the programs. The Committee
determines what changes, if any, are appropriate in the compensation programs.
In conducting this annual review, the Committee considers information provided
by the Chief Executive Officer and the Senior Vice President-Human Resources and
uses surveys and reports prepared by independent compensation consultants.
The Committee annually reviews with the Chief Executive Officer the
individual performance of each of the other executive officers and the Chief
Executive Officer's recommendations with respect to the appropriate compensation
awards. With Board authorization, the Committee approves salary actions and
determines the amount of annual bonus and the number of long-term, equity-based
awards for each officer. The Committee also reviews with the Chief Executive
Officer the financial and other objectives for each of the senior executive
officers for the following year.
In 1994, awards to executive officers as a group reflected the overall
financial performance of the Company, which represented substantially improved
income from operations and net income and achievement of the Company's operating
earnings per share goals, as well as improved productivity and working capital
turns. Awards to individuals also reflected performance against their specific
management objectives.
Chief Executive Officer
In May 1994, the Board of Directors, based upon the recommendation of the
Committee, approved an amended long-term employment agreement with Mr. Bossidy,
which extends until April 1, 2000. The Committee believed that Mr. Bossidy's
performance as Chief Executive Officer since he joined the Company in July 1991
has been critical to the Company's success. Financial results for 1993 reflected
improvement over 1991 results in net income (up by 92%), operating
13
<PAGE>
earnings per share (up by 85%), free cash flow ($365 million positive in 1993
compared to a net cash outflow of $195 million in 1991), return on equity (up by
195%) and market capitalization (up by 208%). The Committee also believed that
Mr. Bossidy's continued employment with the Company was essential to sustain the
initiatives that enabled the Company to achieve this performance. Accordingly,
the Committee concluded, and the Board concurred, that it was appropriate to
update the terms of his employment to make them competitive with compensation
packages then being offered to the nation's most highly-regarded, sought-after
chief executives and to extend the term of his agreement until his normal
retirement date. The agreement reflected Mr. Bossidy's commitment to remain with
the Company for the balance of his career.
The agreement provides for an annual base salary from June 1, 1994 through
retirement of $2,000,000 and a continued minimum target incentive bonus after
1994 of 80% of base salary. The agreement guaranteed a 1994 bonus of at least
$1,850,000 if financial targets for the year were met. The 1994 financial
results included an 8% increase in sales and a 16% increase in operating
earnings per share, with both sales and earnings at record levels, an
improvement of 14% in operating margins and 6.2% in productivity, and the
generation of positive cash flow of $302 million. Based on this overall
financial performance, as well as several strategic acquisitions and ventures
and new total quality initiatives, the Committee awarded Mr. Bossidy a bonus of
$2,000,000.
The Committee also decided to make a significant, one-time grant of options
and restricted units in lieu of future annual grants in order to maximize Mr.
Bossidy's ownership interest at this stage in his tenure and provide a more
significant incentive to sustain targeted performance levels. The agreement
provided for the grant of 1,500,000 options, 10% of which vest annually
beginning May 6, 1995, and 250,000 restricted units. All unvested options and
the restricted units vest on the earlier of Mr. Bossidy's reaching age 65 or
April 1 of the year following three consecutive years of at least 15% annual
growth in the Company's consolidated earnings per share beginning with 1994. The
agreement also provided for the grant of an additional 125,000 restricted units,
50,000 of which vest only if the Company achieves at least 15% annual growth in
consolidated earnings per share for four consecutive years and 75,000 of which
vest only if the Company achieves such growth for five consecutive years. These
grants are designed to link Mr. Bossidy's long-term incentive compensation to
the Company's performance and further align his interests with those of the
shareowners.
In early 1994, prior to consideration of the amended agreement, the
Committee awarded Mr. Bossidy options and restricted units under the Company's
long-term incentive compensation program. The awards reflected the Committee's
assessment of performance and the value of awards being made to chief executives
of other large industrial corporations.
----------------------
Members of the Management Development and Compensation Committee:
<TABLE>
<S> <C>
Delbert C. Staley, Chairman Robert P. Luciano
Hans W. Becherer John R. Stafford
William R. Haselton
</TABLE>
* * *
Note: Numbers in the following tables have been adjusted as appropriate to
reflect the two-for-one split of the Common Stock in March 1994.
14
<PAGE>
SUMMARY COMPENSATION TABLE
The following table contains information concerning the most highly
compensated executive officers of the Company, as required under applicable
rules of the Securities and Exchange Commission.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Restricted Securities
Name and Principal Other Annual Unit Underlying All Other
Position Year Salary Bonus Compensation Awards(1) Options(#) Compensation(2)
- ------------------ ---- ---------- ---------- ------------ ------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence A. 1994 $1,625,000 $2,000,000 $ 7,260 $ 8,756,250 1,800,000 $ 858,589
Bossidy 1993 1,100,000 1,500,000 68,698(3) 343,450 300,000 412,590
Chairman of the 1992 1,016,667 1,250,000 53,544(3) 459,900 300,000 388,512
Board and Chief
Executive
Officer
Frederic M. Poses 1994 450,000 525,000 18,717 82,925 120,000 55,305
Executive Vice 1993 430,000 425,000 -- 141,707 130,000 53,709
President 1992 410,000 370,000 -- 213,525 127,900 52,113
(Engineered
Materials)
Daniel P. Burnham 1994 416,670 390,000 65,903 82,925 120,000 70,485
Executive Vice 1993 392,500 340,000 39,225 141,707 130,000 320,610
President 1992 375,000 290,000 27,455 208,050 124,650 151,222
(Aerospace)
John W. Barter 1994 412,500 390,000 937 49,600 72,000 49,285
Executive Vice 1993 387,500 345,000 -- 91,564 84,000 47,287
President 1992 370,000 300,000 -- 136,875 82,000 45,889
(Automotive)(4)
Peter M. Kreindler 1994 385,000 340,000 880 45,725 66,000 37,468
Senior Vice 1993 367,500 305,000 -- 76,104 70,000 36,766
President, 1992 350,000 265,000 -- 335,925 175,450 20,365
General Counsel
and Secretary(5)
</TABLE>
- ------------
(1) Restricted unit awards, valued on the date of the award, entitle the holder
to receive one share of Common Stock for each unit when the unit vests. (A
portion of the unit may be paid in cash to cover applicable taxes.) All
units reflected in the table vest in equal annual installments on January 1
of each of the four years following the award, except for 250,000 units
included for Mr. Bossidy, which vest as described under 'Report of the
Management Development and Compensation Committee.' The total number of
units held and their value at the end of 1994 were as follows: Mr. Bossidy,
741,696 units ($25,217,664); Mr. Poses, 50,134 units ($1,704,556); Mr.
Burnham, 43,608 units ($1,482,672); Mr. Barter, 39,980 units ($1,359,320);
and Mr. Kreindler, 10,146 units ($344,964). Common Stock dividend
equivalents are payable on each unit.
(2) Amounts shown for 1994 consist of matching contributions made by the Company
under the savings plan and supplemental savings plan: for Mr. Bossidy,
$65,004; Mr. Poses, $36,000; Mr. Burnham, $33,340; Mr. Barter, $33,000; and
Mr. Kreindler, $15,408; and the value of life
15
<PAGE>
insurance premiums: for Mr. Bossidy, $793,585; Mr. Poses, $19,305; Mr.
Burnham, $37,145; Mr. Barter, $16,285; and Mr. Kreindler, $22,060. The
amount included for Mr. Bossidy reflects additional coverage due to the
increase in his base salary, as well as a change in the method of valuing
life insurance premiums paid with respect to certain policies which provide
for repayment of premiums to the Company. The maximum potential value of
those policies is calculated, in line with current SEC directions, as if the
1994 premiums were advanced without interest until the time the Company
expects to recover the premiums, as contrasted to the increase in policy
cash value used in prior years.
(3) For 1993, includes $27,420 for estate planning and $20,143 for
Company-provided transportation; for 1992, includes $19,850 for financial
planning and $22,956 for Company-provided transportation.
(4) Mr. Barter served as Senior Vice President and Chief Financial Officer until
October 1994.
(5) Mr. Kreindler became Secretary in December 1994.
OPTION TABLES
The following tables contain information concerning stock options, all of
which were granted with an exercise price equal to 100% of the fair market value
of the Common Stock on the date of grant.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Exercise Grant Date
Options Employees in Price Expiration Present
Name Granted Fiscal Year ($/Sh) Date Value(1)
- ------------------------------------ ------------ ------------ -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Lawrence A. Bossidy................. 300,000(2) 4.4 $ 38.75 1/16/04 $ 3,196,875
1,500,000(3) 22.2 34.38 5/5/04 14,181,750
Frederic M. Poses................... 120,000(2) 1.8 38.75 1/16/04 1,278,750
Daniel P. Burnham................... 120,000(2) 1.8 38.75 1/16/04 1,278,750
John W. Barter...................... 72,000(2) 1.1 38.75 1/16/04 767,250
Peter M. Kreindler.................. 66,000(2) 1.0 38.75 1/16/04 703,313
</TABLE>
- ------------
(1) Options are valued using a Black-Scholes-based formula. The formula assumes
historic five year average volatility and dividend yield, a 7% risk-free
return and a ten-year option period. No adjustments are made for risk of
forfeiture or, where applicable, non-transferability. Options will have no
actual value unless, and then only to the extent that, the Common Stock
price appreciates from the grant date to the exercise date. If the named
officers realize the grant date values, total shareowner value will have
appreciated by approximately $2.8 billion, and the value of the named
officers' options will be less than 0.8% of the total shareowner
appreciation.
(2) These options are exercisable in cumulative installments of 40% commencing
on January 1, 1995 and 30% on each of January 1, 1996 and 1997. Limited
stock appreciation rights ('LSARs') granted in tandem with the options
provide that in the event of a tender offer for the Company's shares, a
change in control or similar event, a cash payment will be made within 90
days equal to the difference between the option exercise price and a price
for the Common Stock related to the event, and the corresponding options
will expire. Although the Committee has discretion to grant, in exchange for
the surrender of an outstanding option, a new option with a price different
from the surrendered option, it has not done so and has no present intention
of doing so.
16
<PAGE>
(3) This option is exercisable in cumulative installments of 10% per year for
five years commencing on May 6, 1995 and will fully vest on the earlier of
Mr. Bossidy's reaching age 65 or April 1 of the year following the Company's
achievement of at least 15% growth in consolidated earnings per share for
three consecutive years. The option is accompanied by tandem LSARs.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired on Options at Year-End at Year-End
Exercise Value -------------------------- ---------------------------
Name (#) Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------ ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence A. Bossidy........... -- $ -- 480,000 2,220,000 $ 4,374,600 $ 3,524,000
Frederic M. Poses............. 32,500 1,059,260 294,266 261,370 3,082,406 766,226
Daniel P. Burnham............. -- -- 243,370 269,144 2,365,923 873,093
John W. Barter................ -- -- 270,736 162,000 3,445,210 470,916
Peter M. Kreindler............ 12,500 439,788 50,634 180,634 160,362 763,112
</TABLE>
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The following table contains information relating to certain restricted
unit awards made to Mr. Bossidy in May 1994 pursuant to his employment agreement
and which are not included in the Restricted Unit Awards column of the Summary
Compensation Table in accordance with rules of the Securities and Exchange
Commission.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Performance or Other
Number of Period Until
Name Restricted Units(1) Maturation or Payout
- ---------------------------------------------------------- ------------------- --------------------
<S> <C> <C>
Lawrence A. Bossidy....................................... 50,000 4/1/98(2)
75,000 4/1/99(3)
</TABLE>
- ------------
(1) Subject to the performance conditions set forth below, each unit entitles
Mr. Bossidy to one share of Common Stock (or, in the Committee's discretion,
the cash equivalent in lieu of all or part of the shares). Common Stock
dividend equivalents and amounts equivalent to interest thereon will accrue
and be paid out only on vesting of the restricted units.
(2) These units vest on April 1 of the year following the Company's achievement
of four consecutive years of at least 15% annual growth in consolidated
earnings per share; the earliest possible vesting date is April 1, 1998.
(3) These units vest on April 1 of the year following the Company's achievement
of five consecutive years of at least 15% annual growth in consolidated
earnings per share; the earliest possible vesting date is April 1, 1999.
17
<PAGE>
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total return on the
Common Stock to the total returns on the Standard & Poor's 500 Stock Index and a
composite index of corporations in the same industries as the Company (the
'Composite Group Index').
[PERFORMANCE GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C>
1990 1991 1992 1993 1994
Company Common Stock 81.9 139.6 196.0 260.3 228.3
S&P 500 96.9 126.4 136.0 149.8 151.7
Composite Group 93.9 123.0 133.9 154.7 166.2
</TABLE>
In each case, a $100 investment on December 31, 1989 and reinvestment
of all dividends are assumed. Returns are at December 31 of each
year.
----------------------
The Composite Group Index combines the total returns on the published Dow
Jones indices for the Aerospace & Defense, Automobile Parts & Equipment
Excluding Tire and Rubber Makers, and Chemical Groups. The total return for the
Composite Group Index is calculated by adding the products obtained from
separately multiplying the total return for each of the three Dow Jones groups
by the total market capitalization of the companies included in that group and
dividing by the total market capitalization of the companies included in the
three groups. This calculation is made for each year using stock market
capitalization data as of the beginning of the year provided to the Company by
Dow Jones. Shareowners may obtain this data from the Secretary, AlliedSignal
Inc., P.O. Box 4000, Morristown, New Jersey 07962.
18
<PAGE>
RETIREMENT BENEFITS
The following table illustrates the estimated annual pension benefits which
would be provided on retirement at age 65 under the Company's Retirement Program
(the 'Pension Plan') and an unfunded supplemental retirement plan (the
'Supplemental Plan'), after applicable deductions for Social Security benefits,
to salaried employees having specified average annual remuneration and years of
service.
PENSION TABLE
<TABLE>
<CAPTION>
Average Years of Service
Annual ----------------------------------------------------------------
Remuneration 5 10 15 20 25 - 30
- ------------ -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$500,000 $ 41,191 $ 91,191 $141,191 $ 191,191 $ 241,191
700,000 61,191 131,191 201,191 271,191 341,191
900,000 81,191 171,191 261,191 351,191 441,191
1,100,000 101,191 211,191 321,191 431,191 541,191
1,500,000 141,191 291,191 441,191 591,191 741,191
2,000,000 191,191 391,191 591,191 791,191 991,191
2,800,000 271,191 551,191 831,191 1,111,191 1,391,191
3,100,000 301,191 611,191 921,191 1,231,191 1,541,191
</TABLE>
The benefit amounts shown in the Pension Table are computed on a straight
life annuity basis. At January 1, 1995, the following individuals had the
indicated number of years of credited service for pension purposes: Mr. Bossidy,
3.6; Mr. Poses, 25.33; Mr. Burnham, 12.67; Mr. Barter, 18.83; and Mr. Kreindler,
3.0.
The amounts in the Salary and Bonus columns of the Summary Compensation
Table for 1994 would be included in computing remuneration for pension purposes.
Average annual remuneration under the Pension Plan is calculated based on the
highest paid 60 consecutive months of an employee's last 120 months of
employment.
Under his employment agreement, Mr. Bossidy is entitled to receive a
retirement benefit, commencing on termination of employment at age 62 or later,
equivalent to 60% of his final average compensation (based on his highest three
years of salary and bonus) payable annually for his lifetime, and 30% of his
final average compensation payable annually thereafter to his surviving spouse
for her lifetime. If Mr. Bossidy dies prior to retirement, a benefit equivalent
to 30% of his final average compensation will be paid for his surviving spouse's
lifetime. Benefits under the agreement will be reduced for retirement before age
62 and by any retirement benefits payable under the Pension Plan and
Supplemental Plan, any survivor benefit payable under the Company's executive
life insurance program and, under certain circumstances, benefits payable under
pension plans of his former employer.
EMPLOYMENT AND TERMINATION ARRANGEMENTS
Mr. Bossidy's agreement with the Company was amended in 1994 and provides
for his employment through April 1, 2000 at a salary of $2,000,000 per year, a
target annual incentive
19
<PAGE>
bonus of at least 80% of salary, and the one-time grant of 1,500,000 stock
options and 375,000 restricted units. For further information regarding Mr.
Bossidy's bonus and the terms of the options and restricted units, see 'Report
of the Management Development and Compensation Committee.' The agreement also
provides for benefits on retirement which are described under 'Retirement
Benefits.' The Company has assumed obligations for certain life insurance
policies and will be reimbursed from the proceeds of the policies for premiums
it pays; the value of these premiums is reflected in the Summary Compensation
Table.
Under the Severance Plan for Senior Executives (the 'Plan'), the executives
named in the Summary Compensation Table would be entitled to payments equivalent
to base salary and annual incentive bonus (and continuation of certain benefits,
such as group life and medical insurance coverage) for a period of 36 months (or
a lump sum payment following a change in control) if their employment is
terminated other than for 'gross cause' (which includes fraud and criminal
conduct). Payments would not continue after an executive reaches age 65. The
Plan provides for an additional payment sufficient to eliminate the effect of
any applicable excise tax on severance payments in excess of an amount
determined under Section 280G of the Internal Revenue Code. Payments subject to
the excise tax would not be deductible by the Company.
2 -- APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, which is composed entirely
of independent directors, the Board of Directors has appointed Price Waterhouse
LLP ('Price Waterhouse') as independent accountants for the Company to audit its
consolidated financial statements for 1995 and to perform audit-related
services, including review of the Company's quarterly interim financial
information and periodic reports and registration statements filed with the
Securities and Exchange Commission and consultation in connection with various
accounting and financial reporting matters. Price Waterhouse also performs
non-audit services for the Company.
The Board has directed that the appointment of Price Waterhouse be
submitted to the shareowners for approval. The affirmative vote of a majority of
the shares of Common Stock present or represented and entitled to vote on the
proposal at the Annual Meeting is required for approval. If the shareowners do
not approve, the Audit Committee and the Board will reconsider the appointment.
Price Waterhouse has audited the consolidated financial statements of the
Company and its predecessor, Allied Corporation, since 1969. Total fees for
services rendered by Price Waterhouse in 1994 to the Company and its
subsidiaries worldwide were approximately $11,500,000.
The Company has been advised by Price Waterhouse that it will have a
representative present at the Annual Meeting who will be available to respond to
appropriate questions. The representative will also have the opportunity to make
a statement if he desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREOWNERS VOTE FOR THE
APPROVAL OF THE APPOINTMENT OF PRICE WATERHOUSE AS INDEPENDENT ACCOUNTANTS.
20
<PAGE>
3 -- SHAREOWNER PROPOSAL REGARDING THE
ELECTION OF DIRECTORS BY CLASSES
The National Electrical Benefit Fund, 1125 15th Street, N.W., Washington,
DC 20005, the owner of 75,000 shares of Common Stock, has notified the Company
of its intention to introduce the proposal set forth below for consideration and
action by the shareowners at the Annual Meeting. The proposed resolution and
supporting statement were provided by the proponent. The affirmative vote of a
majority of the shares of Common Stock present or represented and entitled to
vote on the proposal at the Annual Meeting is required for approval of the
proposal.
----------------------
'BE IT RESOLVED: That the shareholders of AlliedSignal Inc.
('Company') urge that the Board of Directors take the necessary steps to
declassify the Board of Directors for the purpose of director elections.
The declassification shall be done in a manner that does not affect the
unexpired terms of directors previously elected.'
SUPPORTING STATEMENT
'The election of corporate directors is the primary avenue in the
American corporate governance system for shareholders to influence
corporate affairs and exert accountability on management.
'Therefore, as shareholders concerned about the value of our
investment, we are very disturbed by our Company's current system of
electing only one-third of the Board of Directors each year. We believe
this staggering of director terms prevents shareholders from annually
registering their views on the performance of the Board collectively and
each director individually.
'Staggered boards can help insulate directors and senior executives
from the consequences of poor performance by denying shareholders the
opportunity to replace an entire board which is pursuing failed policies.
'Concerns that the annual election of all directors would leave the
Company without experienced Board members in the event that all incumbents
are voted out is unfounded. If the owners should choose to replace the
entire board, it would be obvious that the incumbent directors'
contributions were not valued.
'We believe that allowing shareholders to annually register their
views on the performance of the Board collectively and each director
individually is one of the best methods to insure that our Company will be
managed in the best interests of the shareholders.'
BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Company's current system of electing directors by classes was approved
by the shareowners in 1985. Under this method, as provided in the Company's
Certificate of Incorporation and By-laws, approximately one-third of the
directors are elected annually by the shareowners.
21
<PAGE>
For the reasons indicated below, it is the Board's opinion that the
classified Board serves the Company and its shareowners well. The Board does not
believe that directors elected to a classified Board are any less accountable to
shareowners than they would be if elected annually, since the same standards of
performance apply regardless of the term of service.
With the classified Board, the likelihood of continuity and stability in
the Board's business strategies and policies is enhanced since generally
two-thirds of the directors at all times will have had prior experience and
familiarity with the business and affairs of the Company. This enables the
directors to build on past experience and plan for a reasonable period into the
future.
The classified Board is intended to encourage persons who may seek to
acquire control of the Company to initiate such action through negotiations with
the Board. At least two meetings of shareowners would generally be required to
replace a majority of the Board. By reducing the threat of an abrupt change in
the composition of the entire Board, classification of directors would give the
Board sufficient time to review any takeover proposal, study appropriate
alternatives and achieve the best results for all shareowners. The Board
believes that although a classified board enhances the ability to negotiate
favorable terms with a proponent of an unfriendly or unsolicited proposal, it
does not necessarily discourage takeover offers.
Adoption of this proposal would not in itself eliminate the classified
Board. Further action by the shareowners would be necessary to amend the
Certificate of Incorporation and By-laws, with an 80% vote of the outstanding
shares entitled to vote required for approval.
A proposal to eliminate the classified Board of Directors was previously
considered at Annual Meetings in 1990 and 1991 and was defeated by the holders
of more than two-thirds of the votes cast on each occasion. The Board continues
to believe that the classified Board is in the best interest of the shareowners
and that the shareowners should oppose efforts to eliminate it.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
ADDITIONAL INFORMATION
OTHER ACTION AT THE MEETING
The Board of Directors was not aware within a reasonable time before this
solicitation of any other matter to be presented for action at the Annual
Meeting. If any additional matters are properly presented, the shares
represented by a properly signed proxy card will be voted in accordance with the
judgment of the persons named on the proxy card.
Under the Company's By-laws, a shareowner of record entitled to vote at the
Annual Meeting who intends to make a nomination for the election of directors at
the meeting must give the Secretary of the Company written notice of such
intention in accordance with the prescribed procedure. In general, the By-law
procedure (the full provisions of which govern) requires that the notice be
received at the Company's headquarters not less than 30 nor more than 60 days
prior to the meeting and that it set forth the shareowner's name, address and
number of shares of Common Stock beneficially owned, together with information
about the candidate that would be required in a proxy statement and the
candidate's written consent to be nominated and to serve if
22
<PAGE>
elected. Nominations not made in accordance with the procedure prescribed in the
By-laws must be disregarded.
COST OF SOLICITATION
The cost of solicitation will be borne by the Company. In addition to
solicitation by mail, directors, officers and other employees of the Company may
solicit proxies personally or by telephone or other means of communication. The
Company will also reimburse persons holding stock in their names or those of
their nominees for their reasonable expenses in sending proxy material to their
principals and obtaining their proxies. The Company has retained Morrow & Co.,
New York, New York, at an approximate total cost of $25,000, plus out-of-pocket
expenses, to assist in the solicitation of proxies by mail, personally or by
telephone or other means of communication.
SHAREOWNER PROPOSALS FOR 1996 ANNUAL MEETING
Shareowners may submit proposals on matters appropriate for shareowner
action at the Company's annual meetings, consistent with regulations adopted by
the Securities and Exchange Commission. Proposals to be considered for inclusion
in the Proxy Statement for the 1996 Annual Meeting must be received by the
Company not later than November 10, 1995. Proposals should be directed to the
attention of the Secretary, AlliedSignal Inc., P.O. Box 4000, Morristown, New
Jersey 07962.
----------------------
Shareowners are urged to send in their proxies without delay.
By Order of the Board of Directors
PETER M. KREINDLER
Senior Vice President,
General Counsel and Secretary
March 10, 1995
23
<PAGE>
DIRECTIONS TO COMPANY HEADQUARTERS
101 COLUMBIA ROAD, MORRIS TOWNSHIP, N.J.
[AREA MAP]
FROM RTE. 80 (EAST OR WEST) AND RTE. 287 SOUTH:
Take Rte. 80 to Rte. 287 South to Exit 37 (Rte. 24 East -- Springfield).
Follow Rte. 24 East to Exit 2A (Rte. 510 West -- Morristown), which exits
onto Columbia Road. At second traffic light, make left into AlliedSignal.
FROM RTE. 287 NORTH:
Take Rte. 287 North to Exit 37 (Rte. 24 East -- Springfield). Follow Rte.
24 East to Exit 2A (Rte. 510 West -- Morristown), which exits onto
Columbia Road. At second traffic light, make left into AlliedSignal.
FROM NEWARK INTERNATIONAL AIRPORT:
Take Rte. 78 West to Rte. 24 West (Springfield -- Morristown). Follow Rte.
24 West to Exit 2A (Rte. 510 West -- Morristown), which exits onto
Columbia Road. At second traffic light, make left into AlliedSignal.
A-1
<PAGE>
[LOGO]
NOTICE OF 1995 ANNUAL MEETING
AND PROXY STATEMENT
<PAGE>
APPENDIX 1
BANK OF NEW YORK PROXY CARD
<PAGE>
PROXY
[LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
ANNUAL MEETING OF SHAREOWNERS -- APRIL 24, 1995
The undersigned hereby appoints LAWRENCE A. BOSSIDY and PETER M. KREINDLER
as proxies (each with power to act alone and with full power of substitution) to
vote, as designated herein, all shares the undersigned is entitled to vote at
the Annual Meeting of Shareowners of AlliedSignal Inc. to be held on April 24,
1995, and at any and all adjournments thereof. The proxies are authorized to
vote in their discretion upon such other business as may properly come before
the Meeting and any and all adjournments thereof.
------------------
Your vote for the election of Directors and the other proposals described in
the accompanying Proxy Statement may be specified on the reverse side. The
nominees for Director are: Russell E. Palmer, Ivan G. Seidenberg, Andrew C.
Sigler and Thomas P. Stafford.
<TABLE>
<S> <C>
NOTE: After signing, please insert this Proxy in the ALLIEDSIGNAL, INC.
enclosed envelope so that the address at right shows P.O. BOX 11010
through the window. NEW YORK, N.Y. 10203-0010
</TABLE>
IF PROPERLY SIGNED, DATED AND RETURNED, THIS PROXY WILL BE VOTED AS
SPECIFIED ON THE REVERSE SIDE OR, IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE
VOTED 'FOR' THE ELECTION OF ALL NOMINEES FOR DIRECTOR, 'FOR' PROPOSAL 2 AND
'AGAINST' PROPOSAL 3.
(SPECIFY CHOICES AND SIGN ON THE REVERSE SIDE)
<PAGE>
[ ]
PLEASE COMPLETE (X) IN BLUE OR BLACK INK.
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS:
1. Election of Directors (see list on other side)
FOR all [X] WITHHOLD AUTHORITY [X] EXCEPTION [X]
nominees to vote for all nominees (see
instruction
to the right)
2. Appointment of Independent Accountants
FOR [X] AGAINST [X] ABSTAIN [X]
Instruction: To withhold authority to vote for any individual nominee(s), mark
the 'Exception' box and write the name(s) on the line below.
A VOTE 'AGAINST' PROPOSAL 3 IS RECOMMENDED BY THE BOARD OF DIRECTORS:
3. Shareowner proposal regarding the Election of Directors by Classes
FOR [X] AGAINST [X] ABSTAIN [X]
Please complete (X) if you want your vote kept confidential under [X]
the policy described on page 1 of the Proxy Statement.
.............................................................
Please complete (X) if you:
Plan to attend the Annual Meeting [X]
Have written comments on this card [X]
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY. JOINT
OWNERS SHOULD ALL SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES
AND OTHERS ACTING IN A REPRESENTATIVE CAPACITY SHOULD
INDICATE TITLE WHEN SIGNING.
Dated...................................................., 1995
(Please Insert Date)
Signed.......................................................
.............................................................
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
<PAGE>
APPENDIX 2
SAVINGS PLAN PROXY CARD
<PAGE>
REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ALLIEDSIGNAL SAVINGS PLAN (THE 'PLAN')
The undersigned hereby instructs State Street Bank and Trust Company,
Trustee under the Plan, to vote, as designated herein, all shares of Common
Stock with respect to which the undersigned is entitled to instruct the Trustee
as to voting under the Plan at the Annual Meeting of Shareowners of AlliedSignal
Inc. to be held on April 24, 1995, and at any and all adjournments thereof. The
Trustee is also authorized to vote such shares in connection with the
transaction of such other business as may properly come before the Meeting and
any and all adjournments thereof.
-------------------------
Your vote for the election of Directors and the other proposals described
in the accompanying Proxy Statement may be specified on the reverse side. The
nominees for Director are: Russell E. Palmer, Ivan G. Seidenberg, Andrew C.
Sigler and Thomas P. Stafford.
IF THIS CARD IS PROPERLY SIGNED AND RETURNED, THE SHARES WILL BE VOTED AS
SPECIFIED HEREIN OR, IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED 'FOR' THE
ELECTION OF ALL NOMINEES FOR DIRECTOR, 'FOR' PROPOSAL 2 AND 'AGAINST' PROPOSAL
3. THE TRUSTEE WILL VOTE SHARES AS TO WHICH NO INSTRUCTIONS ARE RECEIVED IN THE
SAME RATIO AS SHARES WITH RESPECT TO WHICH INSTRUCTIONS HAVE BEEN RECEIVED
FROM OTHER PARTICIPANTS IN THE PLAN.
[CONTINUE AND SIGN ON THE REVERSE SIDE]
<PAGE>
- -------------------------------------------------------------------------------
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
- -------------------------------------------------------------------------------
1. Election of Directors (see list on other side)
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
(except as noted below) to vote for all nominees
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write the name(s) on the line below.
...............................................................................
2. Appointment of Independent Accountants
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- -------------------------------------------------------------------------------
A VOTE 'AGAINST' PROPOSAL 3 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
- -------------------------------------------------------------------------------
3. Shareowner proposal regarding the Election of Directors by Classes
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN EXACTLY AS NAME APPEARS.
Dated...................................................,1995
(Please Insert Date)
Signed.......................................................
<PAGE>
APPENDIX 3
THRIFT PLAN PROXY CARD
<PAGE>
REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ALLIEDSIGNAL THRIFT PLAN (THE 'PLAN')
The undersigned hereby instructs State Street Bank and Trust Company,
Trustee under the Plan, to vote, as designated herein, all shares of Common
Stock with respect to which the undersigned is entitled to instruct the Trustee
as to voting under the Plan at the Annual Meeting of Shareowners of AlliedSignal
Inc. to be held on April 24, 1995, and at any and all adjournments thereof. The
Trustee is also authorized to vote such shares in connection with the
transaction of such other business as may properly come before the Meeting and
any and all adjournments thereof.
-------------------------
Your vote for the election of Directors and the other proposals described
in the accompanying Proxy Statement may be specified on the reverse side. The
nominees for Director are: Russell E. Palmer, Ivan G. Seidenberg, Andrew C.
Sigler and Thomas P. Stafford.
IF THIS CARD IS PROPERLY SIGNED AND RETURNED, THE SHARES WILL BE VOTED AS
SPECIFIED HEREIN OR, IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED 'FOR' THE
ELECTION OF ALL NOMINEES FOR DIRECTOR, 'FOR' PROPOSAL 2 AND 'AGAINST' PROPOSAL
3. THE TRUSTEE WILL VOTE SHARES AS TO WHICH NO INSTRUCTIONS ARE RECEIVED IN THE
SAME RATIO AS SHARES WITH RESPECT TO WHICH INSTRUCTIONS HAVE BEEN RECEIVED
FROM OTHER PARTICIPANTS IN THE PLAN.
[CONTINUE AND SIGN ON THE REVERSE SIDE]
<PAGE>
- -------------------------------------------------------------------------------
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
- -------------------------------------------------------------------------------
1. Election of Directors (see list on other side)
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
(except as noted below) to vote for all nominees
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write the name(s) on the line below.
................................................................................
2. Appointment of Independent Accountants
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- -------------------------------------------------------------------------------
A VOTE 'AGAINST' PROPOSAL 3 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
- -------------------------------------------------------------------------------
3. Shareowner proposal regarding the Election of Directors by Classes
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN EXACTLY AS NAME APPEARS.
Dated...................................................,1995
(Please Insert Date)
Signed.......................................................
<PAGE>
APPENDIX 4
TRUCK BRAKE SYSTEMS PROXY CARD
<PAGE>
REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ALLIEDSIGNAL TRUCK BRAKE SYSTEMS COMPANY SAVINGS PLAN (THE
'PLAN')
The undersigned hereby instructs State Street Bank and Trust Company,
Trustee under the Plan, to vote, as designated herein, all shares of Common
Stock with respect to which the undersigned is entitled to instruct the Trustee
as to voting under the Plan at the Annual Meeting of Shareowners of AlliedSignal
Inc. to be held on April 24, 1995, and at any and all adjournments thereof. The
Trustee is also authorized to vote such shares in connection with the
transaction of such other business as may properly come before the Meeting and
any and all adjournments thereof.
-------------------------
Your vote for the election of Directors and the other proposals described
in the accompanying Proxy Statement may be specified on the reverse side. The
nominees for Director are: Russell E. Palmer, Ivan G. Seidenberg, Andrew C.
Sigler and Thomas P. Stafford.
IF THIS CARD IS PROPERLY SIGNED AND RETURNED, THE SHARES WILL BE VOTED AS
SPECIFIED HEREIN OR, IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED 'FOR' THE
ELECTION OF ALL NOMINEES FOR DIRECTOR, 'FOR' PROPOSAL 2 AND 'AGAINST' PROPOSAL
3. THE TRUSTEE WILL VOTE SHARES AS TO WHICH NO INSTRUCTIONS ARE RECEIVED IN THE
SAME RATIO AS SHARES WITH RESPECT TO WHICH INSTRUCTIONS HAVE BEEN RECEIVED
FROM OTHER PARTICIPANTS IN THE PLAN.
[CONTINUE AND SIGN ON THE REVERSE SIDE]
<PAGE>
- -------------------------------------------------------------------------------
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
- -------------------------------------------------------------------------------
1. Election of Directors (see list on other side)
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
(except as noted below) to vote for all nominees
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write the name(s) on the line below.
...............................................................................
2. Appointment of Independent Accountants
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- -------------------------------------------------------------------------------
A VOTE 'AGAINST' PROPOSAL 3 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
- -------------------------------------------------------------------------------
3. Shareowner proposal regarding the Election of Directors by Classes
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN EXACTLY AS NAME APPEARS.
Dated...................................................,1995
(Please Insert Date)
Signed.......................................................
<PAGE>
APPENDIX 5
SP LETTER
[LOGO] AlliedSignal Inc.
P.O. Box 3000
Morristown, NJ 07962-2496
LARRY BOSSIDY
Chairman and
Chief Executive Officer
March 10, 1995
Dear Plan Participant:
Thanks to the hard work and commitment of AlliedSignal's employees, 1994 was
another good year for the Company, with sales and earnings rising significantly
to record levels. In recognition of this performance, the common stock dividend
has been increased by 16% for the third consecutive year. I am delighted that
participants in the savings plans are benefiting from this higher income from
their shares.
Enclosed is a meeting notice and proxy statement for the 1995 Annual Meeting of
Shareowners. As a plan participant, you are entitled to instruct the Trustee,
State Street Bank and Trust Company, how to vote the AlliedSignal shares
attributable to your plan account. The proxy statement includes the proposals to
be voted on, as well as the recommendations of the Board of Directors. A card
requesting your confidential voting instructions is enclosed for your use.
This is your opportunity to have the plan shares voted in accordance with your
wishes. All votes are important, and I urge you to exercise your right to vote
by completing the instruction card at your earliest convenience.
If you own AlliedSignal shares other than through the plans, you will receive a
separate proxy card for those shares. In order to vote all your shares, you
should return your plan instruction card in the enclosed envelope to the
Trustee, and return any proxy card you receive for other shares in the separate
envelope provided with that card.
I look forward to your continuing support as we work together to make 1995 even
better than 1994.
Sincerely,
LARRY BOSSIDY
Enclosures
