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 March 31, 1995
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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
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AlliedSignal Inc.
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(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
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(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 March 31, 1995
- --------------------- ------------------
$1 par value 284,298,441 shares
<PAGE>
AlliedSignal Inc.
Index
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Page No.
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Part I. - Financial Information
Item 1. Condensed Financial Statements:
Consolidated Balance Sheet -
March 31, 1995 and December 31, 1994 3
Consolidated Statement of Income -
Three Months Ended March 31, 1995 and 1994 4
Consolidated Statement of Cash Flows-
Three Months Ended March 31, 1995 and 1994 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 4. Submission of Matters to a Vote of
Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
- 2 -
<PAGE>
AlliedSignal Inc.
Consolidated Balance Sheet
(Unaudited)
March 31, December 31,
1995 1994
--------- ------------
(Dollars in millions)
ASSETS
Current Assets:
Cash and cash equivalents $ 512 $ 508
Accounts and notes receivable - net
(Note 2) 1,861 1,697
Inventories - net (Note 3) 1,877 1,743
Other current assets 653 637
------- -------
Total current assets 4,903 4,585
Investments and long-term receivables 504 475
Property, plant and equipment 9,010 8,792
Accumulated depreciation and
amortization (4,718) (4,532)
Cost in excess of net assets of
acquired companies - net 1,347 1,349
Other assets 671 652
------- -------
Total assets $11,717 $11,321
======= =======
LIABILITIES
Current Liabilities:
Accounts payable $ 1,291 $ 1,296
Short-term borrowings 227 133
Current maturities of long-term debt 184 130
Accrued liabilities 1,953 1,832
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Total current liabilities 3,655 3,391
Long-term debt 1,317 1,424
Deferred income taxes 428 406
Postretirement benefit obligations
other than pensions 1,827 1,790
Other liabilities 1,287 1,328
SHAREOWNERS' EQUITY
Capital - common stock issued 358 358
- additional paid-in capital 2,464 2,458
Common stock held in treasury, at cost (1,488) (1,505)
Cumulative translation adjustment 70 18
Unrealized holding gain on equity securities 37 40
Retained earnings 1,762 1,613
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Total shareowners' equity 3,203 2,982
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Total liabilities and shareowners' equity $11,717 $11,321
======= =======
Notes to Financial Statements are an integral part of this
statement.
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<PAGE>
AlliedSignal Inc.
Consolidated Statement of Income
(Unaudited)
Three Months Ended
March 31
--------
1995 1994
---- ----
(Dollars in millions
except per share amounts)
Net sales $3,419 $2,986
------ ------
Cost of goods sold 2,747 2,402
Selling, general and
administrative expenses 358 314
------ ------
Total costs and expenses 3,105 2,716
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Income from operations 314 270
Equity in income of affiliated companies 49 30
Other income (expense) (19) (13)
Interest and other financial charges (41) (37)
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Income before taxes on income 303 250
Taxes on income 105 81
------ ------
Net income $ 198 $ 169
====== ======
Earnings per share of common
stock (Note 4) $ .70 $ .60
====== ======
Cash dividends per share of
common stock $ .195 $ .145
======= =======
Notes to Financial Statements are an integral part of this
statement.
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<PAGE>
AlliedSignal Inc.
Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
March 31
------------------
1995 1994
---- ----
(Dollars in millions)
Cash flows from operating activities:
Net income $ 198 $ 169
Adjustments to reconcile net income to net
cash flows from operating activities:
Streamlining and restructuring -- (44)
Depreciation and amortization (includes goodwill) 152 135
Undistributed earnings of equity affiliates (22) (7)
Deferred taxes 40 35
(Increase) in accounts and notes receivable (152) (105)
Decrease (increase)in inventories (124) 1
(Increase) in other current assets (16) (1)
(Decrease) in accounts payable (27) (11)
Increase (decrease) in accrued liabilities 101 (50)
Other (50) (56)
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Net cash flow provided by operating activities 100 66
------ ------
Cash flows from investing activities:
Expenditures for property, plant and equipment (145) (111)
Proceeds from disposals of property, plant and
equipment 20 7
Decrease in other investments -- --
(Increase) in other investments -- (5)
Decrease in marketable securities -- 16
Cash paid for acquisitions - net 31 (22)
Proceeds from sales of businesses -- 27
------ ------
Net cash flow (used for) investing activities (94) (88)
------ ------
Cash flows from financing activities:
Net increase in commercial paper 89 1
Net increase in short-term borrowings 3 57
Proceeds from issuance of common stock 20 24
Proceeds from issuance of long-term debt -- 1
Payments of long-term debt (59) (79)
Repurchases of common stock (1) (15)
Cash dividends on common stock (54) (41)
Redemption of common stock purchase rights -- (7)
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Net cash flow (used for) financing activities (2) (59)
------ ------
Net increase (decrease) in cash and cash equivalents 4 (81)
Cash and cash equivalents at beginning of year 508 892
------ ------
Cash and cash equivalents at end of period $ 512 $ 811
====== ======
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 March 31, 1995 and the results of operations and the
changes in cash flows for the three months ended March 31, 1995 and
1994. The results of operations for the three-month period ended
March 31, 1995 should not necessarily be taken as indicative of the
results of operations that may be expected for the entire year 1995.
The financial information as of March 31, 1995 should be read in
conjunction with the financial statements contained in the Company's
Form 10-K Annual Report for 1994.
Note 2. Accounts and notes receivable consist of the following:
March 31, December 31,
1995 1994
--------- ------------
Trade $1,699 $1,526
Other 198 204
------ ------
1,897 1,730
Less-Allowance for doubtful
accounts and refunds (36) (33)
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$1,861 $1,697
======= =======
Note 3. 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:
March 31, December 31,
1995 1994 (a)
--------- ------------
Raw materials $ 550 $ 488
Work in process 824 761
Finished products 743 711
Supplies and containers 69 70
------ ------
2,186 2,030
Less - Progress payments (184) (160)
Reduction to LIFO
cost basis (125) (127)
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$1,877 $1,743
======= ======
(a) Reclassified for comparative purposes.
Note 4. Based on the weighted average number of shares outstanding
during each period, as follows: 1995, 283,765,137 shares, and 1994,
284,456,136 shares. No dilution results from outstanding common
stock equivalents.
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<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 subsidiaries as of March 31, 1995, and the
consolidated statements of income and of cash flows for the three-
month periods ended March 31, 1995 and 1994. 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, 1994, 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 1, 1995 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, 1994, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which
it has been derived.
Price Waterhouse LLP
4 Headquarters Plaza North
Morristown, NJ 07962
April 21, 1995
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<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Results of Operations
---------------------
First Quarter 1995 Compared with First Quarter 1994
- ---------------------------------------------------
Net sales in the first quarter of 1995 totaled $3.4 billion, an
increase of $433 million, or 15%, compared with the first quarter of
last year. Of this increase, $237 million was due to higher sales
volumes by the automotive and engineered materials segments, $137
million reflects the consolidation of recent acquisitions and the
impact of dispositions and $61 million was due to favorable foreign
exchange fluctuations in the automotive segment. Automotive's sales
increased $250 million, or 22%, engineered materials was $133
million, or 18%, higher and aerospace had a $50 million, or 5%,
gain.
Automotive benefited from growing sales of turbochargers in the
U.S., Europe and Asia, expanded sales of braking systems worldwide,
continued strength in North American medium and heavy truck brakes,
strong worldwide sales of safety restraints and higher sales of
aftermarket products, primarily in Europe. Sales volumes were
higher for most engineered materials business units, including
fibers, performance materials, engineering plastics, laminate
systems, environmental catalysts and carbon materials. Aerospace's
sales increased reflecting the acquisition of the Lycoming turbine
engine business in October 1994. Recent events and new government
requirements have also resulted in heightened demand for commercial
avionics' aircraft safety equipment, such as collision avoidance,
wind shear detection and ground proximity warning systems.
Aerospace equipment systems also had higher sales. Year-to-year
quarterly sales comparisons were adversely affected by a one-time
contract settlement in 1994 and, in 1995, by delays in government
electronics systems' shipments.
Selling, general and administrative expenses increased $44
million, or 14%, reflecting in part the impact of acquisitions over
the past year.
Income from operations of $314 million increased by $44
million, or 16%, compared with last year's first quarter.
Automotive's operating income improved by 25%, engineered materials'
by 24% and aerospace's by 6%. Operating expense for corporate was
unfavorable by $10 million. The Company's operating margin for the first
quarter of 1995 was 9.2% compared with 9.0% for the same period 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 5.4% compared with
last year's first quarter.
Equity in income of affiliated companies of $49 million
increased by $19 million, or 63%, compared with last year mainly
because of improved joint venture earnings for Paxon high-density
polyethylene, UOP process technology and Atlantic Research
hybrid inflator technology.
- 8 -
<PAGE>
Other income (expense) of $(19) million was unfavorable by $6
million compared with last year's first quarter mainly due to lower
interest income and higher minority interest reflecting the truck
brake business joint venturing with Knorr-Bremse in the United
States.
Interest and other financial charges of $41 million increased
by $4 million, or 11%, from 1994's first quarter reflecting a lower
amount capitalized.
The effective tax rate in the first quarter of 1995 was 34.6%
compared with 32.4% in 1994. The 2.2 percentage point increase over
the 1994 rate is primarily due to growth in both domestic and
foreign earnings that are subject to the statutory rate.
Aerospace's net income rose to $56 million from $52 million, an
increase of 8%, reflecting increased earnings for engines, aerospace
equipment systems and commercial avionics systems.
Automotive's net income rose to $62 million from $46 million a
year ago, a 35% increase, reflecting increased sales of automotive
systems and components on higher car and light truck production in
Europe and North America and increased utilization of turbo diesel
engines in Western European passenger cars and North American light
trucks. Net income was significantly higher for braking systems-
Europe, safety restraint systems, turbocharging systems and truck
brake systems. Worldwide aftermarket income was up, primarily
driven by Europe. The Company continues to reap the benefits of
strong AlliedSignal content in popular minivans and sport utility
vehicles as well as certain new car models.
Engineered materials' net income increased to $94 million from
$78 million, a 21% increase. Net income was higher for fibers,
performance materials, engineering plastics, laminate systems,
environmental catalysts and carbon materials. Income improved in
the quarter due to volume and price increases, partially offset by
higher raw materials costs. There was a substantial increase in
net income from the Paxon joint venture with Exxon and the UOP joint
venture with Union Carbide.
Net income in the 1995 first quarter of $198 million, or
$0.70 a share, was higher than last year's net income of $169
million, or $0.60 a share, for the reasons discussed above.
Financial Condition
-------------------
March 31, 1995 Compared with December 31, 1994
- ----------------------------------------------
On March 31, 1995 the Company had $512 million in cash and cash
equivalents, compared with $508 million at year-end 1994. The
current ratio at March 31, 1995 was 1.3X, compared with 1.4X at year-
end 1994.
On March 31, 1995 the Company's long-term debt amounted to
$1,317 million, $107 million lower than at year-end 1994. Total
debt of $1,728 million on March 31, 1995 was $41 million higher than
at year-end. The Company's total debt as a percent of capital
decreased from 34.1% at year-end to 33.1% at March 31, 1995.
- 9 -
<PAGE>
During the first three months of 1995, the Company spent $145
million for capital expenditures, compared with $111 million in the
corresponding period in 1994. Spending for the 1995 three month
period was as follows: aerospace-$29 million; automotive-$51
million; engineered materials-$57 million, and corporate-$8 million.
In April 1995 the Company completed the purchase of The Budd
Company's Wheel & Brake Division for approximately $160 million.
The division manufactures rotors, hubs, drums and related assemblies
for passenger cars and light trucks; steel disc wheels for heavy
trucks; demountable rims; and hub and drum assemblies for medium-
and heavy-duty vehicles and had 1994 sales of about $250 million.
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.
- 10 -
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareowners of the Company held
on April 24, 1995, the following matters set forth in the Company's
Proxy Statement dated March 10, 1995, which was filed with the
Securities and Exchange Commission pursuant to Regulation 14A under
the Securities Exchange Act of 1934, were voted upon with the
results indicated below.
(1) The nominees listed below were elected directors for
a three-year term ending in 1998 with the respective votes set forth
opposite their names:
FOR WITHHELD
--- --------
Russell E. Palmer 238,244,499 4,925,686
Ivan G. Seidenberg 238,397,642 4,772,543
Andrew C. Sigler 238,088,857 5,081,328
Thomas P. Stafford 238,127,316 5,042,869
(2) A proposal seeking approval of the appointment of
Price Waterhouse LLP as independent accountants for 1995 was
approved, with 238,139,205 votes cast FOR, 2,501,701 votes cast
AGAINST and 2,529,279 abstentions;
(3) A shareowner proposal recommending that steps be
taken to eliminate the election of directors by classes was not
approved, with 91,858,803 votes cast FOR, 124,882,768 votes cast
AGAINST, 5,464,053 abstentions and 20,964,561 broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed with this
--------
Form 10-Q:
10.1 Supplemental Non-Qualified Savings
Plan for Highly Compensated Employees of
AlliedSignal Inc. and its Subsidiaries, as
amended
10.2 Salary Deferral Plan for Selected
Employees of AlliedSignal Inc. and its
Affiliates, as amended
15 Independent Accountants' Acknowledgment Letter
as to the incorporation of their report relating
to unaudited interim financial statements
27 Financial Data schedule
(b) Reports on Form 8-K. No reports on Form 8-K were
-------------------
filed by the Company during the quarter ended March 31, 1995.
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<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: May 8, 1995 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)
- 12 -
<PAGE>
EXHIBIT INDEX
Exhibit Description
Number
2 Omitted (Inapplicable)
4 Omitted (Inapplicable)
10.1 Supplemental Non-Qualified
Savings Plan for Highly
Compensated Employees of
AlliedSignal Inc. and its
Subsidiaries, as amended
10.2 Salary Deferral Plan for
Selected Employees of
AlliedSignal Inc. and its
Affiliates, as amended
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 Financial Data Schedule
99 Omitted (Inapplicable)
- 13 -
Amended and restated
as of January 1, 1994
SUPPLEMENTAL NON-QUALIFIED SAVINGS PLAN FOR HIGHLY COMPENSATED
EMPLOYEES OF ALLIEDSIGNAL INC. AND ITS SUBSIDIARIES (Career Band
6 and above)
1. ELIGIBILITY
-----------
Those highly compensated employees ("HCEs") of AlliedSignal
Inc. (the "Corporation") and its subsidiaries within the meaning
of Section 414(q) of the Internal Revenue Code of 1986 (the
"Code") in Career Band 6 and above who are eligible to
participate in the AlliedSignal Savings Plan (the "Qualified
Savings Plan") are eligible to participate in the Supplemental
Non-Qualified Savings Plan for Highly Compensated Employees of
AlliedSignal Inc. and its Subsidiaries (Career Band 6 and above)
(the "Plan").
2. Definitions
-----------
Capitalized terms not otherwise defined in the Plan have the
respective meanings set forth in the Qualified Savings Plan.
3. Participation
-------------
(a) Time and Form of Election. Any eligible employee may
-------------------------
become a participant in the Plan (a "Participant") as of the
beginning of the next available pay period, by executing a
written notice of election to participate and filing such notice
with the Corporation prior to the beginning of such pay period.
Such notice may direct that a portion (determined in accordance
with paragraph 4(a)) of the base annual salary exclusive of shift
differentials, overtime or other premium pay, bonus, incentive or
other extra compensation but inclusive of severance pay (unless
otherwise specifically excluded by the severance pay plan) or
salary deferred under this Plan or otherwise ("Base Annual
Salary"), which would have been payable to such Participant
during such pay period and succeeding pay periods, in lieu of
such payment, be credited to a deferred compensation account
maintained under the Plan as an unfunded book entry stated as a
cash balance (the "Participant's Account"). Amounts so credited
to the Participant's Account shall constitute "Participant
Deferred Contributions." A Participant's election to direct that
a portion of his or her Base Annual Salary be credited to the
Participant's Account shall continue in effect until the
Participant terminates such election, the Participant is no
longer an HCE or the Participant is no longer eligible to
contribute to the Qualified Savings Plan. Any such termination
shall be effective only with respect to the Participant's Base
Annual Salary payable after the end of the pay period in which
one of the events in the preceding sentence occurs. Amounts
credited to the Participant's Account prior to the effective date
of the termination of the election shall not be
<PAGE>
affected and shall be distributed only in accordance with the
terms of the Plan and Participant's distribution election
thereunder.
(b) Change or Resumption of Amount Deferred. A Participant
---------------------------------------
may elect once ever 30 days in connection with a Qualified
Savings Plan election, to change the amount of Base Annual Salary
to be credited to the Participant's Account in the Plan
commencing with the next available pay period following his or
her election. Amounts credited to the Participant's Account
prior to the effective date of such change shall not be affected
by such change and shall be distributed only in accordance with
the terms of the Plan.
4. Contributions to Participants' Accounts
---------------------------------------
(a) Participant Deferred Contributions. A Participant may
----------------------------------
elect to defer an aggregate amount, rounded to the nearest full
dollar, equal to (i) a full percentage of such Participant's Base
Annual Salary from 1% to the maximum percentage permitted under
the Qualified Savings Plan and Section 415(c)(1)(B) of the Code
for Before-Tax Contributions by an individual who is not an HCE
and who is eligible to participate in the Qualified Savings Plan,
without regard to any other limitations which may apply under the
Code and without regard to any After-Tax Contributions which
might be made under the Qualified Savings Plan, minus (ii) the
full amount of Before-Tax Contributions made by such Participant
under the Qualified Savings Plan, provided, however, that a
Participant who elects to defer any such amount hereunder shall
be required to make the maximum Before-Tax Contributions
permissible under the Qualified Savings Plan (after giving effect
to deferrals under the Plan or otherwise).
(b) Plan Employer Contributions. There shall be credited
---------------------------
to the Participant's Account employer contributions under the
Plan ("Plan Employer Contributions") in an aggregate amount equal
to (i) minus (ii) where (i) is 50% (for participants in the
Qualified Savings Plan with less than 60 Months of Participation)
or 100% (for participants in the Qualified Savings Plan with at
least 60 Months of Participation) of the lesser of (x) 8% of the
Participant's Base Annual Salary or (y) the sum of the
Participant's Participant Contributions under the Qualified
Savings Plan and Participant Deferred Contributions under the
Plan, and (ii) is the total amount of Employer Contributions made
with respect to the Participant under the Qualified Savings Plan,
provided that in no event shall the combined Plan Employer
Contributions and Employer Contributions made with respect to the
Participant, exceed 8% of the Participant's Base Annual Salary,
and provided, further, that Plan Employer Contributions shall not
be made with respect to a Participant during any period of
suspension of Employer Contributions with respect to such
Participant under the terms of the Qualified Savings Plan,
whether or not such Participant continues to make Participant
Contributions under the Qualified Savings Plan during the period
of such suspension.
(c) Vesting. Participant Deferred Contributions, Plan
-------
Employer Contributions, and all amounts accrued with respect to
Participant Deferred Contributions and Plan Employer
Contributions in accordance with paragraph 5 shall be vested at
the time such amounts are credited to the Participant's Account.
<PAGE>
(d) All Contributions Prorated. Participant Deferred
--------------------------
Contributions and Plan Employer Contributions shall be credited
to a Participant's Account each pay period.
5. The Participant's Account
-------------------------
Participant Deferred Contributions and Plan Employer
Contributions shall be credited to the Participant's Account
under the Plan as unfunded book entries stated as cash balances.
Participant Deferred Contributions credited to the Participant's
Account prior to January 1, 1994 or after the Participant has
terminated employment shall accrue amounts (to be posted each
Valuation Date) equivalent to interest, compounded daily, at a
rate based upon the cost to the Corporation of borrowing at a
fixed rate for a 15-year term. Such rate shall be determined
annually by the Chief Financial Officer of the Corporation in
consultation with the Treasurer of the Corporation. Participant
Deferred Contributions credited to the Participant's Account on
or after January 1, 1994, but before a Participant terminates
employment shall accrue amounts (to be posted each Valuation
Date) equivalent to interest, compounded daily, at a rate
determined annually by the Management Development and
Compensation Committee (the "Committee") of the Board of
Directors (the "Board") of the Corporation. The rate established
in the preceding sentence shall not exceed the greater of (i) 10%
or (ii) 200% of the 10-year U.S. Treasury Bond rate at the time
of determination and, once established for a calendar year, shall
remain in effect with respect to all Participant Deferred
Contributions credited to the Participant's Account during such
calendar year until the amounts are distributed. Plan Employer
Contributions credited to the Participant's Account shall accrue
amounts (to be posted each Valuation Date) equivalent to earnings
(or be reduced by amounts equivalent to losses) at a variable
rate equal to the rate of return on amounts invested in
AlliedSignal Common Stock as of each Valuation Date. Amounts
credited to the Participant's Account shall continue to accrue
(or be reduced by) amounts equivalent to interest, earnings or
losses (as the case may be) until distributed in accordance with
the Plan.
6. Distribution from Accounts
--------------------------
(a) Form of Election. At the time a Participant makes an
----------------
election pursuant to paragraphs 3(a), 3(c) or 3(d), the
Participant shall also make an election with respect to the
distribution of the aggregate amount of the cash balance credited
to the Participant's Account pursuant to such election. A
Participant may elect to receive such amount in one lump-sum
payment or in a number of approximately equal annual installments
(up to twenty-five such installments or, effective January 1,
1995, up to fifteen installments). The lump-sum payment or the
first installment shall be paid in cash as soon as practicable
during the month of January of such future calendar year as the
Participant may designate, or, if the Participant so elects, as
soon as practicable during the month of January of the calendar
year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the
Participant terminates employment with the Corporation or any of
its subsidiaries (whether by reason of Retirement or otherwise).
Except as otherwise provided in paragraph 8, subsequent
installments shall be paid in cash as soon as practicable during
the month of January of each succeeding calendar year until the
entire amount credited to the Participant's Account shall have
been paid. Notwithstanding the foregoing, Plan Employer
Contributions credited during the months of July
<PAGE>
through December to an Account of a Participant, who is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, may not
be paid to the Participant prior to the month of April (for Plan
Employer Contributions credited during the months of July through
September) and July (for Plan Employer Contributions credited
during the months of October through December) of the calendar
year immediately following the calendar year in which such Plan
Employer Contributions were credited.
(b) Adjustment of Method of Distribution. Prior to the
------------------------------------
beginning of any calendar year, a Participant may elect to change
the timing and method of distribution of the aggregate amount of
the cash balance credited to the Participant's Account commencing
with such calendar year. Amounts credited to the Participant's
Account prior to the effective date of such change (the "Prior
Balance"), and all amounts thereafter accrued with respect to the
Prior Balance, shall not be affected by such change and, except
as otherwise determined by the Committee pursuant to the
following sentence or paragraph 8, shall be distributed only in
accordance with the election in effect at the time such Prior
Balance was credited to the Participant's Account. Prior to
January 1, 1995, a Participant may, by written notice to the
Corporation, request that the Committee authorize a further
deferral of the distribution of the Participant's Account from
that previously elected; the Committee shall in its sole
discretion determine whether to authorize any such further
deferral.
(c) Any cash balance credited to a Participant's Account
which is not covered by a timely distribution election under
paragraphs (a) and (b) shall be distributed to the Participant in
one lump-sum payment to be paid to the Participant in cash as
soon as practicable during the month of January of the calendar
year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the
Participant terminates his employment with the Corporation or any
of its subsidiaries (whether by reason of Retirement or
otherwise); provided, however, if the Participant has elected
pursuant to paragraphs 9(a)(i) or 9(a)(ii), the lump sum payment
shall nevertheless be made within the 90-day period following a
Change in Control, as defined in paragraph 9(c).
7. Distribution on Death
---------------------
If a Participant should die before all amounts credited to
the Participant's Account have been paid in accordance with the
election referred to in paragraphs 6(a) or 6(b), the balance in
such Participant's Account shall be paid in cash as soon as
practicable following the Participant's death, but if the
participant has elected pursuant to paragraphs 9(a)(i) or
9(a)(ii), at least within the 90-day period following a Change in
Control, as defined in paragraph 9(c), to the beneficiary
designated in writing by the Participant and filed with the
Corporation. If (a) no such designation has been made or (b) the
designated beneficiary shall have predeceased the Participant and
no further designation has been made, then such balance shall be
paid to the estate of the Participant. A participant may change
the designated beneficiary at any time during the Participant's
lifetime by filing a subsequent designation in writing with the
Corporation.
<PAGE>
8. Payment in the Event of Hardship
--------------------------------
Upon receipt of a request from a Participant or a
Participant's designated beneficiary, delivered in writing to the
Corporation along with a Certificate of Unavailability of
Resources, the Committee, the Senior Vice President - Human
Resources and Communications, or his designee, may cause the
Corporation to accelerate (or require the subsidiary of the
Corporation which employs or employed the Participant to
accelerate) payment of all or any part of the amount credited to
the Participant's Account, including accrued amounts, if it finds
in its sole discretion that payment of such amounts in accordance
with the Participant's prior election under paragraphs 6(a) or
6(b) would result in severe financial hardship to the Participant
or the Participant's beneficiary and such hardship is the result
of an unforseeable emergency caused by circumstances beyond the
control of the Participant or beneficiary. Acceleration of
payment may not be made under this paragraph 8 to the extent that
such hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of
the Participant's assets, to the extent the liquidation of assets
would not itself cause severe financial hardship or (iii) by
cessation of deferrals under this Plan or any tax-qualified
savings plan of the Corporation.
9. Change in Control
-----------------
(a)(i) Initial Lump-Sum Payment Election. Notwithstanding any
---------------------------------
election made pursuant to paragraph 6, any person who becomes eligible
to participate in the Plan may file a written election with the Corporation
at the time the individual makes an election to participate pursuant to
paragraph 3(a), to have the aggregate amount credited to the Participant's
paragraph 3(a), to have the aggregate amount credited to the Participant's
Account commencing with the date on which such written election
is filed, paid in one-lump sum payment as soon as practicable
following a Change in Control but in no event later than 90 days
after such Change in Control.
(a)(ii) Subsequent Lump-Sum Payment Election. A
------------------------------------
Participant who did not make an election pursuant to paragraph
9(a)(i) or who has revoked, pursuant to paragraph 9(a)(iii), an
election previously made under paragraph 9(a)(i) or this
paragraph 9(a)(ii) may, prior to the earlier of a Change in
Control or the beginning of the calendar year in which the
election is to take effect, elect to have the aggregate amount
credited to the Participant's Account for all calendar years
commencing with the first calendar year beginning after the date
the election is made, paid in one lump-sum payment as soon as
practicable following a Change in Control but in no event later
than 90 days after such Change in Control. Amounts credited to
the Participant's Account prior to the effective date of the
election made pursuant to this paragraph 9(a)(ii) shall not be
affected by such election and shall be distributed following a
Change in Control in accordance with any prior election in effect
under paragraphs 9(a)(i) or 9(a)(ii).
(a)(iii) Revocation of Lump-Sum Payment Elections. A
----------------------------------------
Participant may, prior to the earlier of a Change in Control or
the beginning of any calendar year, file an election revoking any
election made pursuant to paragraphs 9(a)(i) or 9(a)(ii), with
respect to amounts credited to the Participant's Account
commencing with the first calendar year beginning after the
election is made. Amounts credited to the Participant's Account
prior to the effective date of the election
<PAGE>
made pursuant to this paragraph 9(a)(iii) shall not be affected by such
election and shall be distributed following a Change in Control in
accordance with any prior election in effect under paragraphs 9(a)(i) or
9(a)(ii).
(b) Interest and Dividend Equivalents. Notwithstanding
---------------------------------
anything to the contrary in the Plan, after a Change in Control,
the Plan may not provide, or be amended to provide (i) amounts
equivalent to interest accrued with respect to Participant
Deferred Contributions in the Participant's Account or (ii)
amounts equivalent to earnings or losses accrued or reduced with
respect to Plan Employer Contributions in the Participant's
Account, at rates lower than the rates in effect under paragraph
5 immediately prior to the Change in Control.
(c) Definition of Change in Control. For purposes of the
-------------------------------
Plan, a Change in Control is deemed to occur at the time (i) when
any entity, person or group (other than the Corporation, any
subsidiary or any savings, pension or other benefit plan for he
benefit of employees of the Corporation or its subsidiaries)
which therefore beneficially owned less than 30% of the
AlliedSignal common stock then outstanding acquires shares of
AlliedSignal common stock in a transaction or series of
transactions that results in such entity, person or group
directly or indirectly owning beneficially 30% or more of the
outstanding AlliedSignal common stock, (ii) of the purchase of
shares of AlliedSignal common stock pursuant to a tender offer or
exchange offer (other than an offer by the Corporation) for all,
or any part of, the AlliedSignal common stock, (iii) of in which
the Corporation will not survive as an independent, publicly
owned corporation, a consolidation, or a sale, exchange or other
disposition of all or substantially all of the Corporation's
assets, (iv) of a substantial change in the composition of the
Board during any period of two consecutive years such that
individuals who at the beginning of such period were members of
the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by
the stockholders of the Corporation, of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the
period, or (v) of any transaction or other event which the
Nominating and Board Affairs Committee of the Board, in its
discretion, determines to be a Change in Control for purposes of
the Plan.
10. Limitations for Certain Participants.
------------------------------------
Notwithstanding anything to the contrary in paragraph 6(b),
8 or 9, a Participant who is subject to the provisions of Section
16 of the Securities Exchange Act of 1934 may, but only as to
that portion of the Participant's Account which is not
attributable to Plan Employer Contributions, make a request for a
further deferral pursuant to paragraph 6(b), a request for an
accelerated payment pursuant to paragraph 8 or an election
pursuant to paragraphs 9(a)(i) through (iii).
11. Miscellaneous.
-------------
(a) The right of a Participant to receive any amount
credited to the Participant's Account shall not be transferable
or assignable by the Participant, except by will or by the laws
of descent and distribution. To the extent that any person
acquires a right to receive any amount credited to a
Participant's Account hereunder, such right shall be no greater
than that of an
<PAGE>
unsecured general creditor of the Corporation. Except as expressly
provided herein, any person having an interest in any amount credited
to a Participant's Account under the Plan shall not be entitled to payment
until the date the amount is due and payable. No person shall be entitled
to anticipate any payment by assignment, pledge or transfer in any
form or manner prior to actual or constructive receipt thereof.
(b) Neither the Corporation nor any of its subsidiaries
shall be required to reserve or otherwise set aside funds for the
payment of its obligations hereunder. However, the Corporation
or any subsidiary may, in its sole discretion, establish funds
for payment of its obligations hereunder. Any such funds shall
remain assets of the Corporation or such subsidiary, as the case
may be, and subject to the claims of its general creditors. Such
funds, if any, shall not be deemed to be assets of the Plan. The
Plan is intended to be unfunded for tax purposes and for purposes
of Title I of the Employee Retirement Income Security Act of
1974, as amended.
(c) The Senior Vice President-Human Resources and
Communications of the Corporation shall have full authority to
interpret the Plan and make all determinations deemed necessary
or desirable for the Plan's implementation, consulting with such
other officers of the Corporation as the Senior Vice President-
Human Resources and Communications shall deem appropriate.
(d) The Corporation may at any time amend or terminate the
Plan. No amendment or termination shall impair the rights of a
Participant with respect to amounts then credited to the
Participant's Account.
(e) Each Participant will receive periodic statements (not
less frequently than annually) regarding the Participant's
Account. Each such Statement shall indicate the amount of the
cash balance credited to the Participant's Account as of the end
of the period covered by such statement.
Salary Deferral Plan
for
Selected Employees of AlliedSignal Inc. and its Affiliates
(Career Band 6 and Above or Employees Who Occupy Positions
Equivalent Thereto)
Amended and Restated
as of January 1, 1995
<PAGE>
1. Eligibility
-----------
Those employees of AlliedSignal Inc. (the "Corporation") and
its affiliates whose positions are evaluated in Career Band 6 and
above or who occupy positions equivalent thereto and who are
designated by the Management Development and Compensation
Committee (the "Committee"), shall be eligible to participate in
this supplemental non-qualified Salary Deferral Plan for Selected
Employees of AlliedSignal Inc. and its Affiliates (Career Band 6
and Above or Employees Who Occupy Positions Equivalent Thereto)
(the "Plan").
2. Participation
-------------
An eligible employee may become a participant in the Plan (a
"Participant") by filing a timely written deferral election with
the Corporation. Such notice shall direct that a portion of the
compensation elements described in paragraph 3(a) and paragraph
3(b) be credited to an unfunded deferred compensation account
maintained for the Participant under the Plan (the "Participant
Account" or "Account"). A Participant's direction shall become
effective for the pay period or payment date in the next
succeeding calendar year (or for a newly eligible Participant, for
the next succeeding pay period or payment date after the receipt
of the direction by the Corporation), and shall continue in effect
until the Participant terminates such direction, effective as of
the end of the calendar year, or is no longer eligible to be a
Participant. Any modification of Participant's direction shall be
effective only with respect to compensation payable with respect
to pay periods in the calendar year next following the date such
direction is received by the Corporation.
3. Contributions to Participant Accounts
-------------------------------------
(a) Base Annual Salary A Participant may, prior to the
------------------
beginning of any calendar year (and with respect to a newly
eligible Participant, within thirty days after first becoming so
eligible) elect to defer an aggregate amount of base annual salary
otherwise payable in such subsequent calendar year ( or with
respect to a newly eligible Participant, in the remainder of the
calendar year), exclusive of any bonus or any other compensation
or allowance paid or payable by the Corporation or its affiliates
(the "Base Annual Salary"). The amount deferred under this
paragraph 3(a) shall not be greater than fifty percent (50%) of
the Participant's Base Annual Salary for such pay period.
(b) Incentive Awards A Participant may, to the extent that
----------------
the AlliedSignal Inc. Incentive Compensation Plan For Executive
Employees (the "Incentive Plan") permits deferrals of an incentive
award (the "Incentive Award") payable thereunder, elect to defer
an amount not greater than one hundred percent of such Incentive
Award. Any amount so deferred shall be deemed to be deferred
under this Plan but shall, to the extent the provisions of the
Incentive Plan are not inconsistent with this Plan, otherwise be
subject to the terms of the Incentive Plan. Any deferral of an
Incentive Award shall be made by filing an appropriate written
deferral election with the Corporation not later than ninety days
prior to the end of the performance period with respect to which
the Incentive Award is payable.
(c) Deferral Amounts All amounts determined under this
----------------
paragraph 3 which are the subject of a written deferral election
(the "Deferral Amounts") shall, in accordance with the relevant
Participant direction, be credited to a Participant Account
maintained under the Plan on the same day the Base Annual Salary
or Incentive Award would otherwise have been payable.
<PAGE>
4. Deferral Requirements
---------------------
Amounts may be deferred under this Plan for a minimum period
of three years. Except as otherwise provided in paragraph 9, no
amount shall be withdrawn from a Participant Account prior to the
earlier of: three years following the last day of the calendar
year in which the amount is credited to the Participant Account;
the date the Participant reaches normal retirement age and is
eligible to receive a benefit under a pension plan of the
Corporation or one of its affiliates; the date of Participant's
death; or the date the Participant ceases to be employed by the
Corporation or any of its affiliates.
5. Interest Equivalents
--------------------
Deferral Amounts shall accrue additional amounts equivalent
to interest ("Interest Equivalents"), compounded daily, from the
date the Deferral Amount is credited to the Account to the date of
distribution. A single rate for calculating Interest Equivalents
shall be established by the Committee, in its sole discretion, for
all Deferral Amounts credited to Participant Accounts in each
calendar year. The rate established by the Committee shall not
exceed the greater of (i) 10% or (ii) 200% of the 10-year U.S.
Treasury Bond rate at the time of determination. Such Interest
Equivalents, once established for a calendar year, shall remain in
effect with respect to Deferral Amounts credited to Participant
Accounts during that calendar year until the Deferral Amounts are
distributed.
6. Participant Accounts
--------------------
All amounts credited to a Participant's Account pursuant to
paragraphs 3 and 4 shall be unfunded general obligations of the
Corporation, and no Participant shall have any claim to or
security interest in any asset of the Corporation on account
thereof.
7. Distribution from Accounts
--------------------------
At the time a Participant makes an election pursuant to
paragraph 3, the Participant shall also make an election with
respect to the distribution of the Deferral Amounts and Interest
Equivalents accrued thereon which are credited to the
Participant's Account pursuant to such election. A Participant
may elect to receive such distribution in one lump-sum payment or
in a number of approximately equal annual payments (provided the
payment period may not include more than fifteen such
installments). The lump-sum or the first installment shall be
paid as soon as practicable during the month of January of the
calendar year designated by the Participant. Except as otherwise
provided in paragraphs 8, 9 and 10, all installment payments
following the initial installment payment shall be paid in cash as
soon as practicable during the month of January of each succeeding
calendar year until the entire amount in the Account shall have
been paid.
8. Distribution on Death
---------------------
If a Participant should die before all amounts credited to
the Participant's Account have been distributed, the balance in
the Account shall be paid as soon as practical thereafter to the
beneficiary designated in writing by the Participant. Payments to
a beneficiary pursuant to a designation by a
<PAGE>
Participant shall be in such form as the Participant shall elect,
including periodic payments as described in paragraph 7, but in the absence
of any such election, the payment shall be made in one lump sum to the
designated beneficiary as soon as practicable following the death
of the Participant. Such beneficiary designations shall be
effective when received by the Corporation, and shall remain in
effect until rescinded or modified by the Participant by an
appropriate written direction. If no beneficiary is properly
designated by the Participant or if the designated beneficiary
shall have predeceased the Participant, such balance in the
Account shall be paid to the estate of the Participant.
9. Payment in the Event of Hardship
--------------------------------
Upon receipt of a request from a Participant or a
Participant's designated beneficiary, delivered in writing to the
Corporation along with a Certificate of Unavailability of Other
Resources form, the Committee, the Senior Vice President - Human
Resources and Communications, or his designee, may cause the
Corporation to accelerate (or require the subsidiary of the
Corporation which employs or employed the Participant to
accelerate) payment of all or any part of the Deferral Amount and
Interest Equivalents credited to the Participant's Account, if it
finds in its sole discretion that payment of such amounts in
accordance with the Participant's prior election under paragraph 3
would result in hardship to the Participant or beneficiary and
such hardship is the result of an unforeseeable emergency caused
by circumstances beyond the control of the Participant or
beneficiary. Acceleration of payment may not be made under this
paragraph 8 to the extent that such hardship is or may be relieved
(i) through reimbursement or compensation by insurance or
otherwise, (ii) by liquidation of the Participant's assets, to the
extent the liquidation of assets would not itself cause severe
financial hardship or (iii) by cessation of deferrals under this
Plan or any tax-qualified savings plan of the Corporation.
10. Change in Control
-----------------
(a) Initial Lump Sum Election Notwithstanding any election
-------------------------
made pursuant to paragraph 7, a Participant may file a written
election with the Corporation to have the Deferral Amounts and
Interest Equivalents accrued thereon which are credited thereafter
to the Participant's Account paid in one lump-sum payment as soon
as practicable following a Change in Control, but in no event
later than 90 days after such Change in Control.
(b) Revocation of Lump-Sum Election A Participant may
-------------------------------
revoke an election made pursuant to paragraph 10(a) by filing an
appropriate written notice with the Corporation. A revocation
notice filed pursuant to this paragraph 10(b) shall be effective
with respect to Deferral Amounts and Interest Equivalents accrued
thereon which are credited thereafter to the Participant's
Account.
(c) Limitation on Elections Any election made pursuant to
-----------------------
paragraphs 10(a) or 10(b) shall not be effective unless filed with
the Corporation at least 90 days prior to a Change in Control.
(d) Definition of Change in Control For purposes of the
-------------------------------
Plan, a Change in Control is deemed to occur at the time (i) when
any entity, person or group (other than the Corporation, any
subsidiary or savings, pension or other benefit plan for the
benefit of employees of the Corporation
<PAGE>
or its subsidiaries) which theretofore beneficially owned less than 30%
of the Corporation's common stock (the "Common Stock") then outstanding,
acquires shares of Common Stock in a transaction or a series of
transactions that results in such entity, person or group directly
or indirectly owning beneficially 30% or more of the outstanding
Common Stock, (ii) of the purchase of Common Stock pursuant to a
tender offer or exchange offer (other than an offer by the
Corporation) for all, or any part of, the Common Stock, (iii) of a
merger in which the Corporation will not survive as an
independent, publicly owned corporation, a consolidation, a sale,
exchange or other disposition of all or substantially all of the
Corporation's assets, (iv) of a substantial change in the
composition of the Board during any period of two consecutive
years such that individuals who at the beginning of such period
were members of the Board cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination
for election by the shareowners of the Corporation, of each new
director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning
of the period, or (v) of any transaction or other event which the
Committee, in its sole discretion, determines to be a Change in
Control for purposes of the Plan.
10. Miscellaneous
-------------
(a) No Alienation of Benefits Except insofar as may
-------------------------
otherwise be required by law, no amount payable at any time under
the Plan shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge, or encumbrance of any kind nor in any manner
be subject to the debts or liabilities of any person and any
attempt to so alienate or subject any such amount, whether
presently or thereafter payable, shall be void. If any person
shall attempt to, or shall alienate, sell, transfer, assign,
pledge, attach, charge, or otherwise encumber any amount payable
under the Plan, or any part thereof, or if by reason of such
person's bankruptcy or other event happening at any such time such
amount would be made subject to the person's debts or liabilities
or would otherwise not be enjoyed by that person, then the
Corporation, if it so elects, may direct that such amount be
withheld and that same or any part thereof be paid or applied to
or for the benefit of such person, the person's spouse, children
or other dependents, or any of them, in such manner and proportion
as the Corporation may deem proper.
(b) No Right or Interest in Corporation's Assets Neither
--------------------------------------------
the Corporation nor any of its Affiliates shall be required to
reserve or otherwise set aside funds for the payment of
obligations arising under this Plan. The Corporation may, in its
sole discretion, establish funds, segregate assets or take such
other action as it shall determine necessary or appropriate to
secure the payment of its obligations arising under this Plan.
This Plan is intended to be unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act
of 1974, as amended. Nothing contained herein, and no action taken
pursuant to the provisions of this Plan shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between the Corporation and any Participant or any
other person. To the extent that any person acquires a right to
receive payments under this Plan, such right shall be no greater
than the right of an unsecured creditor of the Corporation.
(c) Administration The Corporation shall have sole
--------------
discretion and authority to administer the Plan, including the
authority to interpret its terms, promulgate regulations
thereunder, determine eligibility to participate in the Plan and
make any finding of fact which may be necessary to determine the
obligation of the Plan with respect to the payment of benefits.
<PAGE>
(d) Amendment The Corporation may amend, modify or
---------
terminate the Plan at any time, or from time to time; provided,
however, that no change to the Plan shall impair the right of any
Participant with respect to amounts then credited to an Account.
(e) Accounting Each Participant shall receive periodic
----------
statements (not less frequently than annually) setting forth the
cumulative Deferral Amounts and Interest Equivalents credited to,
and any distributions from, the Participant's Account.
(f) Facility of Payments If the Corporation shall find that
--------------------
any person to whom any amount is payable under the plan is unable
to care for his or her affairs because of illness or accident, or
is a minor, or has died, then any payment due the person or the
person's estate (unless a prior claim therefor has been made by a
duly appointed legal representative), may, if the Corporation so
elects in its sole discretion, be paid to the person's spouse, a
child, a relative, an institution having custody of such person,
or any other person deemed by the Corporation to be a proper
recipient on behalf of such person otherwise entitled to payment.
Any such payment shall be a complete discharge of the liability of
the Corporation and the Plan therefor.
(g) Governing Law The Plan is intended to constitute an
-------------
unfunded deferred compensation arrangement for a select group of
management or highly compensated personnel and all rights
thereunder shall be governed by and construed in accordance with
the laws of New York.
EXHIBIT 15
----------
May 8, 1995
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware that the March 31, 1995 Quarterly Report on
Form 10-Q of AlliedSignal Inc. which includes our report dated
April 21, 1995 (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, 22-58345, 33-58347 and
33-65792), on Forms S-3 (Nos. 33-00631, 33-13211, 33-14071 and
33-55425) 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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet at March 31, 1995 and the consolidated statement of
income for the three months ended March 31, 1995 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> MAR-31-1995
<CASH> 512
<SECURITIES> 0
<RECEIVABLES> 1,699
<ALLOWANCES> 36
<INVENTORY> 1,877
<CURRENT-ASSETS> 4,903
<PP&E> 9,010
<DEPRECIATION> 4,718
<TOTAL-ASSETS> 11,717
<CURRENT-LIABILITIES> 3,655
<BONDS> 1,317
<COMMON> 358
0
0
<OTHER-SE> 2,845
<TOTAL-LIABILITY-AND-EQUITY> 11,717
<SALES> 3,419
<TOTAL-REVENUES> 3,419
<CGS> 2,747
<TOTAL-COSTS> 2,747
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41
<INCOME-PRETAX> 303
<INCOME-TAX> 105
<INCOME-CONTINUING> 198
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 198
<EPS-PRIMARY> .70
<EPS-DILUTED> 0
</TABLE>
