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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:
.................................................................
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[Logo] AlliedSignal Inc.
P.O. Box 3000
Morristown, NJ 07962-2496
LARRY BOSSIDY
Chairman and
Chief Executive Officer
March 11, 1996
Dear Shareowner:
It is my pleasure to invite you to attend AlliedSignal's 1996 Annual Meeting of
Shareowners. The meeting will be held on Monday, April 22, 1996 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 1995 and on how we plan to reach new goals in
1996. 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 22.
Sincerely,
LARRY BOSSIDY
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NOTICE OF ANNUAL MEETING
The Annual Meeting of Shareowners of AlliedSignal Inc. (the 'Company') will
be held on Monday, April 22, 1996 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
1996;
(3) A shareowner proposal regarding the Company's maquiladora operations;
(4) A shareowner proposal regarding a global set of standards;
(5) A shareowner proposal regarding the annual election of directors; and
(6) 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, 1996, 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 11, 1996
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.
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<TABLE>
<CAPTION>
Table of Contents Page
<S> <C>
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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
Shareowner Proposals.............................................................................. 21
3 -- Proposal regarding the Company's Maquiladora Operations................................. 21
4 -- Proposal regarding a Global Set of Standards............................................ 23
5 -- Proposal regarding the Annual Election of Directors..................................... 25
Additional Information............................................................................ 27
Directions to Company Headquarters................................................................ A-1
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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 22, 1996, 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 11, 1996.
Owners of record of the Company's Common Stock (the 'Common Stock') at the
close of business on March 1, 1996, are entitled to notice of and to vote at the
Annual Meeting. At February 20, 1996, there were 283,772,796 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 proposals described in this
Proxy Statement (Proposals 3, 4 and 5). 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 through 5 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
Proposals 3, 4 and 5 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 those
proposals.
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
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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 1999 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 Robert B. Palmer, who was elected by the Board in
October 1995. Eugene E. Covert has 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 1999
<TABLE>
<S> <C>
[PHOTO OF HANS W. BECHERER, Chairman and Chief Executive Officer of Deere & Company
HANS W. BECHERER] 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 60
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</TABLE>
2
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<PAGE>
<TABLE>
<S> <C>
[PHOTO OF ROBERT P. LUCIANO, Chairman of the Board of Schering-Plough Corporation
ROBERT P. LUCIANO] 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 Chief Executive Officer from 1982 through 1995. He has been Chairman of the Board
since 1984. He is a director of C.R. Bard, Inc. and Merrill Lynch & Co.
Director since 1989 Age 62
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[PHOTO OF ROBERT B. PALMER, Chairman, President and Chief Executive Officer of Digital Equipment
ROBERT B. PALMER] Corporation
Mr. Palmer joined Digital Equipment Corporation, a provider of networked computer
systems, software and services, in 1985. He advanced through a series of executive
positions until he became President and Chief Executive Officer in 1992 and Chairman of
the Board in 1995.
Director since 1995 Age 55
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[PHOTO OF JOHN R. STAFFORD, Chairman, President and Chief Executive Officer of American Home
JOHN R. STAFFORD] 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 58
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</TABLE>
3
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<PAGE>
INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 1997
<TABLE>
<S> <C>
[PHOTO OF LAWRENCE A. BOSSIDY, Chairman of the Board and Chief Executive Officer of the Company
LAWRENCE A. BOSSIDY] 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 Corporation) 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 Champion International Corporation and Merck
& Co., Inc.
Director since 1991 Age 61
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[PHOTO OF ANN M. FUDGE, Executive Vice President of Kraft Foods, Inc.
ANN M. FUDGE] 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 44
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</TABLE>
4
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<PAGE>
<TABLE>
<S> <C>
[PHOTO OF PAUL X. KELLEY, Vice Chairman for Corporate Strategy of Cassidy & Associates
PAUL X. KELLEY] 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., London
Insurance Group Inc., PHH Corporation, Saul Centers, Inc., Sturm, Ruger & Company, Inc.,
UST Inc. and The Wackenhut Corporation.
Director since 1987 Age 67
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[PHOTO OF ROBERT C. WINTERS, Chairman Emeritus of The Prudential Insurance Company of America
ROBERT C. WINTERS] 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 64
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INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR TERM EXPIRING IN 1998
[PHOTO OF RUSSELL E. PALMER, Chairman and Chief Executive Officer of The Palmer Group
RUSSELL E. PALMER] 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, Federal Home Loan Mortgage Corporation, GTE Corporation,
Imasco Limited, The May Department Stores Company and Safeguard Scientifics, Inc.
Director since 1987 Age 61
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</TABLE>
5
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<PAGE>
<TABLE>
<S> <C>
[PHOTO OF IVAN G. SEIDENBERG, Chairman and Chief Executive Officer of NYNEX Corporation
IVAN G. SEIDENBERG] Mr. Seidenberg joined NYNEX Corporation, a telecommunications and information services
provider, 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
Chairman and Chief Executive Officer in 1995. He is a director of Melville Corporation
and Viacom Inc.
Director since 1995 Age 49
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[PHOTO OF ANDREW C. SIGLER, Chairman and Chief Executive Officer of Champion International
ANDREW C. SIGLER] 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 64
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[PHOTO OF THOMAS P. STAFFORD, Consultant, General Technical Services, Inc.
THOMAS P. STAFFORD] 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 65
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</TABLE>
6
<PAGE>
<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 nine meetings of the Board in 1995, with individual
attendance averaging 98% of the meetings. Average attendance by incumbent
directors at all meetings of the Board and Committees of the Board on which they
served was also 98%.
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
1995 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 1995, are Messrs. R. E. Palmer (Chairman), Becherer, J. Stafford
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,
Messrs. R. B. Palmer and Sigler and Lt. Gen. T. Stafford. It met four times in
1995.
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 1995, are Messrs.
Bossidy (Chairman), Luciano 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
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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 five times in 1995. The
Committee members are Messrs. Luciano (Chairman), Becherer, Seidenberg 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 twice in 1995,
are Messrs. Becherer (Chairman), Luciano, R. E. Palmer, Seidenberg 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 1995. Its members are Messrs. Winters (Chairman), Luciano, R. E.
Palmer, Sigler and J. Stafford and Ms. Fudge.
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 Messrs. R. B. Palmer and Seidenberg. It met twice in 1995.
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 (nine during 1995). 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
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$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 1996). 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 retiring
between ages 60 and 70 is entitled to such benefit for a number of months equal
to the number of months served, while a director who retires at age 70 or above
is entitled to such benefit for life. 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 (up to five). 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
fair market value of the Common Stock 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
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VOTING SECURITIES
As of February 20, 1996, State Street Bank & Trust Company, 225 Franklin
Street, Boston, Massachusetts 02101 ('State Street'), held 33,492,720 shares, or
approximately 11.8%, 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 2,946,674 shares, or approximately
1.0%, of the outstanding Common Stock as trustee of various trusts, with sole
voting power as to 2,530,785 shares, shared voting power as to 11,360 shares,
sole investment power as to 2,520,735 shares, and shared investment power as to
15,310 shares.
J. P. Morgan & Co. Incorporated, 60 Wall Street, New York, NY 10260, has
informed the Company that, as of February 20, 1996, it beneficially owned
14,076,908 shares, or approximately 5.0%, of the outstanding Common Stock, with
sole voting power as to 7,984,676 shares, shared voting power as to 286,010
shares, sole investment power as to 13,524,298 shares and shared investment
power as to 465,810 shares.
Set forth below is certain information with respect to beneficial ownership
of the Common Stock as of February 20, 1996 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.................................................. 468,036(3)(4)
Hans W. Becherer................................................ 3,700(3)
Lawrence A. Bossidy............................................. 1,205,436(3)(4)
Daniel P. Burnham............................................... 442,633(3)
Eugene E. Covert................................................ 4,611(3)
Ann M. Fudge.................................................... 3,700(3)
Paul X. Kelley.................................................. 6,273(3)(4)
Peter M. Kreindler.............................................. 219,806(3)(4)
Robert P. Luciano............................................... 4,700(3)
Robert B. Palmer................................................ 1,500
Russell E. Palmer............................................... 4,700(3)
Frederic M. Poses............................................... 413,654(3)(4)
Ivan G. Seidenberg.............................................. 1,900(3)
Andrew C. Sigler................................................ 5,700(3)
John R. Stafford................................................ 8,700(3)
Thomas P. Stafford.............................................. 3,700(3)
Robert C. Winters............................................... 13,534(3)
All directors and executive officers as a group,
including the above (29 in number)............................ 3,925,305(3)(4)
</TABLE>
(footnotes on next page)
10
<PAGE>
<PAGE>
- ------------
(1) The total for each individual is less than 0.5%, 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, 454,400; Mr.
Bossidy, 960,000; Mr. Burnham, 396,250; Mr. Kreindler, 214,468; Mr. Poses,
391,900; Mr. Seidenberg, 400; each other indicated non-employee director,
700; and all directors and executive officers as a group, 3,498,932. 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, 45,090; Mr. Bossidy, 6,700; Gen. Kelley, 3,592; Mr. Kreindler,
9,001; Mr. Poses, 58,515; and all directors and executive officers as a
group, 184,250.
------------------------
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. One transaction during 1995 by each of Paul R. Schindler and
Richard P. Schroeder, officers of the Company, was reported after the due date
and a gift of shares by Mr. Bossidy was inadvertently omitted from his Form 5
report filed in 1995.
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.
11
<PAGE>
<PAGE>
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 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
varies based on individual performance and the individual's skills, experience
and background.
Annual incentive bonus. In 1995, each executive was eligible to receive an
annual cash bonus. The 'target' levels for these bonuses, like the base salary
levels, were set with reference to competitive conditions and 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 consists
of stock option grants which vest over a multi-year period. Options for
executive officers 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. Depending on the executive,
grants are either made annually, with vesting over a three-year period, or
periodically, with vesting over a longer period but subject to acceleration if
specified financial performance objectives are achieved. 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 efforts.
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
12
<PAGE>
<PAGE>
Common Stock and the shareowners' return. This component of the compensation
system (through extended vesting) also is designed to create an incentive for
the individual to remain with the Company. In addition, awards of restricted
units may be made on a select basis to individual executives in order to enhance
the retention incentive. These units vest over an extended period of up to ten
years.
The Company intends, to the extent practicable, to preserve deductibility
under the Internal Revenue Code of compensation paid to its executive officers
while maintaining compensation programs to attract and retain highly qualified
executives in a competitive environment. Accordingly, compensation paid under
the Company's 1993 Stock Plan and Incentive Compensation Plan is generally
deductible, although certain compensation paid to some executives may not be
deductible.
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 these annual reviews, the Committee considers information provided
by the Chief Executive Officer and the Senior Vice President-Human Resources and
Communications and uses surveys and reports prepared by independent compensation
consultants. In 1995, the Committee reviewed the levels of ownership in shares
and share-equivalents of the Common Stock for each executive officer. Since
ownership levels for most of the officers are well in excess of guidelines
established at other large industrial companies, the Committee has not
instituted specific guidelines for executive stock ownership.
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 1995, awards to executive officers as a group reflected the overall
financial performance of the Company, which included record sales and net income
and achievement of the Company's earnings per share goals. Awards to individuals
also reflected performance against their specific management objectives, as well
as the performance of the operations or functions for which they were
responsible.
In addition, the Committee in 1995 approved long-term incentive and
retention awards with extended vesting and performance vesting for the
Presidents of the Company's three business sectors. The Committee decided to
make a significant, one-time grant of options and restricted units to each
Sector President. In order to promote long-term retention of critical management
talent and focus these key individuals on long-term performance of the Company
as a whole, each President received 500,000 options which vest ratably over nine
years. Acceleration of vesting would occur following three consecutive years of
at least 15% growth in the Company's
13
<PAGE>
<PAGE>
consolidated earnings per share. An additional 150,000 options were granted to
each President, with 50,000 vesting only if the Company achieves at least 15%
annual growth in consolidated earnings per share for four consecutive years and
100,000 vesting only if the Company achieves such growth for five consecutive
years. All of the options were granted in tandem with limited stock appreciation
rights. Each of the Presidents also received 30,000 restricted units which vest
on the tenth anniversary of the grant or earlier upon achievement of three
consecutive years of consolidated earnings per share growth of at least 15%.
These special awards to Sector Presidents are aligned with the
performance-vesting and long-term retention focus of the long-term incentive
awards provided to the Chief Executive Officer in 1994.
A small group of other key executives (including some executive officers)
who are viewed as critical resources for enabling the Company to realize
long-term objectives were granted restricted units. These special retention
grants vest at the end of ten years, with the same opportunity for accelerated
vesting as indicated above. The Committee expects to provide special retention
grants of a similar nature to a small number of executives annually.
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. Under that agreement, Mr. Bossidy is entitled
to an annual salary of $2,000,000 and a minimum target incentive bonus of 80% of
base salary. Based on the Company's financial performance in 1995, which
included a 12% increase in sales and 15% increase in net income, with both sales
and earnings at record levels, as well as a 40% increase in the price of the
Common Stock, strategic and globalization initiatives and new total quality
initiatives, including operational excellence and technical excellence, the
Committee awarded Mr. Bossidy a bonus of $2,350,000. In light of the significant
grant of options and restricted units made to Mr. Bossidy in 1994 under the
terms of his employment agreement, no further grants were made to him in 1995.
------------------------
Members of the Management Development and Compensation Committee:
Robert P. Luciano, Chairman
Hans W. Becherer
Ivan G. Seidenberg
John R. Stafford
14
<PAGE>
<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
------------------------------------ -------------------------
Securities
Name and Principal Other Annual Restricted Underlying All Other
Position Year Salary Bonus Compensation Unit Awards(1) Options(#) Compensation(2)
- -------------------- ----- ---------- ---------- ------------ -------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence A. 1995 $2,000,000 $2,350,000 $58,206(3) -- -- $1,005,653
Bossidy 1994 1,625,000 2,000,000 7,260 $8,756,250 1,800,000 858,589
Chairman of the 1993 1,100,000 1,500,000 68,698(3) 343,450 300,000 412,590
Board and Chief
Executive Officer
Frederic M. 1995 475,000 625,000 2,710 1,072,500 650,000 61,254
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
(Engineered
Materials)
Daniel P. 1995 450,000 445,000 70 1,072,500 650,000 73,290
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
(Aerospace)
John W. 1995 450,000 400,000 767 1,072,500 650,000 52,991
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
(Automotive)
Peter M. 1995 410,000 380,000 468 680,000 70,000 38,855
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, General
Counsel and
Secretary
</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 in 1994, which vest as described under 'Employment
and Termination Arrangements,' and all restricted units included for 1995,
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 1995 were as follows: Mr. Bossidy, 733,746 units ($34,852,935);
Mr. Poses, 59,618 units ($2,831,855); Mr. Burnham, 56,368 units
($2,677,480); Mr. Barter, 54,343 units ($2,581,293); and Mr. Kreindler,
48,146 units ($2,286,935). Common Stock dividend equivalents are payable on
each unit.
15
<PAGE>
<PAGE>
(2) Amounts shown for 1995 consist of matching contributions made by the Company
under the savings plan and supplemental savings plan: for Mr. Bossidy,
$80,004; Mr. Poses, $38,004; Mr. Burnham, $36,000; Mr. Barter, $36,000; and
Mr. Kreindler, $16,404; the value of life insurance premiums: for Mr.
Bossidy, $921,638; Mr. Poses, $19,305; Mr. Burnham, $37,145; Mr. Barter,
$16,285; and Mr. Kreindler, $22,060; and above-market interest earned during
1995 on previously deferred compensation but not paid or payable in 1995:
for Mr. Bossidy, $4,011; Mr. Poses, $3,945; Mr. Burnham, $145; Mr. Barter,
$706; and Mr. Kreindler, $391.
(3) For 1995 and 1993, respectively, includes $18,627 and $27,420 for estate
planning and $23,690 and $20,143 for Company-provided transportation.
OPTION TABLES
The following tables contain information concerning stock options, all of
which were granted with an exercise price equal to 100% of the fair market value
of the Common Stock on the date of grant.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Exercise Grant Date
Options Employees in Price Expiration Present
Name Granted Fiscal Year ($/Sh) Date Value(1)
- ------------------------------------ --------- ------------ -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Lawrence A. Bossidy................. -- -- -- -- --
Frederic M. Poses................... 500,000(2) 7.8 $35.57 2/1/05 $5,450,000
50,000(3) 0.8 35.57 2/1/05 545,000
100,000(4) 1.6 35.57 2/1/05 1,090,000
Daniel P. Burnham................... 500,000(2) 7.8 35.57 2/1/05 5,450,000
50,000(3) 0.8 35.57 2/1/05 545,000
100,000(4) 1.6 35.57 2/1/05 1,090,000
John W. Barter...................... 500,000(2) 7.8 35.57 2/1/05 5,450,000
50,000(3) 0.8 35.57 2/1/05 545,000
100,000(4) 1.6 35.57 2/1/05 1,090,000
Peter M. Kreindler.................. 70,000(5) 1.1 35.57 2/1/05 763,000
</TABLE>
- ------------
(1) Options are valued using a Black-Scholes option pricing model. The model
assumes a historic five-year average volatility (23.0%), the average
dividend yield for the three years ended December 31, 1994 (1.8%), a 7.35%
risk-free rate of return (based on the average zero coupon five-year U.S.
Treasury note yield for the month of grant), and an expected option life of
five and one-half years based on past experience. 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 present values, total shareowner
16
<PAGE>
<PAGE>
value will have appreciated by approximately $3.1 billion, and the value of
the named officers' options will be less than 0.8% of the total shareowner
appreciation.
(2) These options vest in cumulative installments of 10% per year for eight
years commencing on January 1, 1996, and the final installment of 20% vests
on January 1, 2004. They are subject to earlier vesting on 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 options are
accompanied by tandem limited stock appreciation rights ('LSARs'), which
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.
(3) These options and accompanying tandem LSARs 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, 1999.
(4) These options and accompanying tandem LSARs 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, 2000.
(5) These options, which are accompanied by tandem LSARs, vest in cumulative
installments of 40% on January 1, 1996 and 30% on each of January 1, 1997
and 1998.
------------------------
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........... 150,000 $4,055,550 780,000 1,770,000 $12,161,640 $25,917,510
Frederic M. Poses............. 177,736 5,075,198 266,900 761,000 4,317,024 9,135,543
Daniel P. Burnham............. 130,264 2,498,391 271,250 761,000 5,766,111 9,135,543
John W. Barter................ 6,736 150,907 357,600 718,400 8,592,349 8,688,739
Peter M. Kreindler............ 25,000 533,877 120,668 155,600 1,839,302 2,142,203
</TABLE>
17
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<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>
1991 1992 1993 1994 1995
Company Common Stock 170.5 239.4 317.9 278.8 396.8
S&P 500 130.5 140.4 154.6 156.6 215.4
Composite Group 131.0 142.6 164.7 176.9 252.2
</TABLE>
In each case, a $100 investment on December 31, 1990 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>
<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 $ 40,792 $ 90,792 $ 140,792 $ 190,792 $ 240,792
700,000 60,792 130,792 200,792 270,792 340,792
900,000 80,792 170,792 260,792 350,792 440,792
1,100,000 100,792 210,792 320,792 430,792 540,792
1,500,000 140,792 290,792 440,792 590,792 740,792
2,000,000 190,792 390,792 590,792 790,792 990,792
2,800,000 270,792 550,792 830,792 1,110,792 1,390,792
3,100,000 300,792 610,792 920,792 1,230,792 1,540,792
3,500,000 340,792 690,792 1,040,792 1,390,792 1,740,792
</TABLE>
The benefit amounts shown in the Pension Table are computed on a straight
life annuity basis. At January 1, 1996, the following individuals had the
indicated number of years of credited service for pension purposes: Mr. Bossidy,
4.6; Mr. Poses, 26.33; Mr. Burnham, 13.67; Mr. Barter, 19.83; and Mr. Kreindler,
4.0.
The amounts in the Salary and Bonus columns of the Summary Compensation
Table for 1995 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, as amended in 1994, provides for
his employment through April 1, 2000 at a salary of $2,000,000 per year, and a
target annual
19
<PAGE>
<PAGE>
incentive bonus of at least 80% of salary. The agreement also provided for the
grant in 1994 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. In addition, the
agreement 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 were 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. 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 1996 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 1995 to the Company and its
subsidiaries worldwide were approximately $13,700,000.
20
<PAGE>
<PAGE>
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.
SHAREOWNER PROPOSALS
Shareowners have given the Company notice of their intention to introduce
the following proposals for consideration and action by the shareowners at the
Annual Meeting. The proposed resolutions and accompanying statements have been
provided by the respective proponents. For the reasons stated, the Board of
Directors does not support these proposals. The affirmative vote of a majority
of the shares of Common Stock present or represented and entitled to vote on the
proposals at the Annual Meeting is required for approval of each proposal.
3 -- SHAREOWNER PROPOSAL REGARDING
THE COMPANY'S MAQUILADORA OPERATIONS
This proposal has been submitted by the Missionary Oblates of Mary
Immaculate of Texas, 7711 Madonna Drive, San Antonio, Texas 78216 (the owner of
2,500 shares of Common Stock); the Sisters of Charity of Cincinnati, Mount St.
Joseph, Ohio 45051 (26,000 shares); the World Division of the General Board of
Global Ministries of the United Methodist Church of New York, 475 Riverside
Drive, New York, New York 10115 (31,900 shares); the Sisters of St. Francis of
Philadelphia, Our Lady of Angels Convent -- Glen Riddle, Aston, Pennsylvania
19014 (200 shares); the Maryknoll Fathers and Brothers, PO Box 306, Maryknoll,
New York 10545 (5,400 shares); the Society of the Divine Word, 5342 South
University, Chicago, Illinois 60615 (20,054 shares); and the Sisters of Loretto,
3001 S. Federal Blvd., Box 1113, Denver, Colorado 80236 (200 shares).
------------------------
'WHEREAS, we believe U.S. companies have the responsibility wherever
they do business to pay employees a living sustainable wage, enabling them
to provide for themselves and their families.
'The economic crisis in Mexico, precipitated by the peso devaluation
in December, 1994, has further undermined the purchasing power of
maquiladora workers. Prior to the crisis, the average pay of a maquiladora
worker was $30 to $50 for a 48 hour week. Today, as a result of a 1995
projected annual inflation rate of 50%, workers' purchasing power has
declined dramatically. We believe that the modest wage increases suggested
by the Mexican government of 7% in January 1995 and 12% in April 1995 do
not adequately address the workers' loss of purchasing power.
'A 1994 market basket study, using First Quarter, 1994 figures prior
to the devaluation, reveals a maquiladora worker worked 69.0 minutes to
purchase 5 lbs. of rice, 113.2 minutes for cooking oil (48 oz.), 87.0
minutes for 1 lb. of chicken, 142.9 minutes for a gallon of milk, and 69.8
minutes for one dozen eggs (Market Basket Survey, Ruth Rosenbaum, 1994).
21
<PAGE>
<PAGE>
'Pollution from the maquiladora industry is a bi-national problem
which threatens the health of citizens both in Mexico and the United
States. Hazardous waste pollutes rivers and aquifers and contaminates
drinking water. Accidental chemical leaks from plants or transportation
vehicles carrying hazardous materials impact both sides of the border.
'RESOLVED: The shareholders request the Board of Directors to initiate
a review of our company's maquiladora operations, including the adequacy of
wage levels and environmental standards and practices. A summary report of
the review and recommendations for changes in policies, programs and
practices in light of this review to be made available to shareholders
within six months of the 1996 meeting.'
SUPPORTING STATEMENT
'The proponents of this resolution firmly believe there is a need for
strict, enforceable standards of conduct for corporations operating around
the world, including Mexico. We believe corporations should protect the
environment and pay sustainable community wages which are significantly
higher than the marginal survival wages paid in the maquiladoras. We define
a sustainable community wage as one that allows a worker to meet basic
needs, set aside money for future purchases and earn enough discretionary
income to participate in support of the development of small businesses in
a local community (Market Basket Survey).
'It is essential that our company regularly review its environmental
performance, as well as its wages and benefits policies, including average
wages paid to employees, how these compare to the local cost of living and
poverty level, and the level of profit sharing with employees (required by
Mexican law). We propose that the reviews utilize an ongoing market basket
survey to determine sustainable wage purchasing power. Our company should
consider additional ways to support environmentally sound sustainable
development in the communities where it operates.'
BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Company for a number of years has responded to shareowner inquiries
regarding its maquiladora operations in Mexico and has prepared reports
describing the compensation and benefit arrangements at its maquilas. The
Company regards maquilas as an integral part of its operations and is committed
to providing competitive compensation and benefits and good and safe working
conditions to its employees. The compensation and benefit programs at the
Company's maquilas are reviewed regularly and are designed to keep the Company
competitive with neighboring employers in Mexico. As a result, the Company has
been able to attract and retain the work force required to conduct operations in
Mexico by providing compensation and benefits which compare favorably with those
offered by others.
The maquiladora operations comply with the Company's worldwide policies and
procedures and with all applicable Mexican laws. The Company has a strong
commitment to environmental excellence and is recognized as a worldwide pioneer
in conducting health, safety and environmental audits of its facilities. The
Company regularly reviews the health, safety and
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environmental performance of its maquilas and works with other companies to
improve industry environmental practices in Mexico, including training Mexican
business and regulatory officials and supporting the development of pollution
control infrastructure.
The Board believes that in light of the Company's ongoing review of its
maquiladora operations, the actions called for by the proposal are unnecessary.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
4 -- SHAREOWNER PROPOSAL REGARDING
A GLOBAL SET OF STANDARDS
This proposal has been submitted by the Sisters of St. Francis, Mount St.
Francis, 3390 Windsor Avenue, Dubuque, Iowa 52001 (the owner of 2,300 shares of
Common Stock).
------------------------
'WHEREAS, our company, as a major global corporation, faces an
increasing number of complex problems which also affect our interests as
shareholders. The international context within which our company works is
very different as we approach the year 2000 than it was in the past.
'Companies operating in the global economy are faced with important
and different issues arising from diverse cultures and political and
economic contexts which force management to address concerns beyond the
traditional business focus. These issues include human rights, just wages
and safe working conditions, child and forced labor, the environment, and
sustainable community development.
'We believe global companies need to develop comprehensive codes of
conduct or standards to guide the formulation of company policies, programs
and practices to address the new issues they face in the global
marketplace. In fact many companies are doing just this and revising their
traditional codes or guidelines to meet these new realities. These global
standards address key issues, such as wages and benefits, health and
safety, working hours, freedom of association, discrimination, child and
forced labor, environmental protection and human rights. In addition,
hundreds of companies have created a special set of global environmental
standards to guide their operations.
'For example, our company needs to develop and implement clear
guidelines for its maquiladora operations in Mexico, where its employees
are receiving marginal survival wages. Our company should assure
shareholders that its employees are paid a sustainable wage which enables
them to provide for themselves and their families.
'RESOLVED, the shareholders request the Board of Directors to review
and amend its code or standards for its international operations and to
report a summary of this review to shareholders by September 1996.'
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SUPPORTING STATEMENT
'The items we recommend be reviewed include the following topics:
1. To provide wages to its employees at a sustainable community wage
level, measured in terms of real purchasing power, and paying
equal salaries for equal work regardless of gender, age, race,
class, or culture.
2. To operate out of a global standard governing its employment
practices and industrial relations which respects employees'
rights to freedom of association, labor organization, free
collective bargaining and is non-discriminatory in employment.
3. To devise ways to protect human rights -- civil, political, social
and economic -- consistent with respect for human dignity and
international human rights standards.
4. To establish high standards for worker health and safety, and
promote a fair and dignified quality of life for workers and their
communities.
5. To improve local infrastructure, such as, housing, potable water,
sewers, child care, upgrading management and mechanical skills of
workers.
6. To review other categories that the company believes are essential
to its global operations.
'We believe a company poised to compete in the 21st Century should
have clear global standards to guide them. This is in the best interests of
shareholders and thus we urge you to vote in favor of this resolution.'
BOARD OF DIRECTORS' RECOMMENDATION -- THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREOWNERS VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
The Company's existing Code of Conduct applies to its operations throughout
the world. The Code, as well as the policies and practices on which it is based,
reflect the Company's long-term commitment to the highest levels of integrity
and ethics in the conduct of its worldwide business. The Code has been printed
in a number of languages and distributed to employees at the Company's domestic
and international locations.
The Code reaffirms the principles that have guided the Company in its
expected relationships and behaviors with its key constituencies, including
customers, suppliers, employees, shareowners and the communities in which the
Company operates. It also reaffirms the Company's policy to abide by the
national and local laws of its host nations and communities.
The Company's ongoing concern for the well-being of its employees
throughout the world is reflected in the Code, which states that: 'The Company
recognizes the dignity of the individual, respects and trusts each employee,
pays for performance with compensation and benefits that are competitive, and
promotes self-development through training that broadens work-related skills.'
It is the Company's policy, reiterated in the Code, to treat its employees on a
nondiscriminatory basis and to provide them with a safe and healthy workplace.
The Board of Directors believes that the Company is addressing its ethical
and legal obligations in a responsible manner as its operations expand in the
global marketplace. The existing Code of Conduct and its underlying policies
address the issues raised in the proposal in
24
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a way the Board believes appropriate for a worldwide business enterprise and in
light of the diverse cultural, economic and political environments in which the
Company conducts its international operations. Since the Board believes the
existing Code, which is already subject to periodic review and modification, is
an appropriate statement of the Company's guiding principles, it does not
support the further review and amendment sought by the proposal.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
5 -- SHAREOWNER PROPOSAL REGARDING THE
ANNUAL ELECTION OF DIRECTORS
This proposal has been submitted by Mr. John Chevedden, 2215 Nelson Avenue,
No. 205, Redondo Beach, California 90278 (the owner of 442 shares of Common
Stock).
------------------------
'RESOLVED: The stockholders of AlliedSignal request that the Board of
Directors take the steps necessary for all AlliedSignal Directors to be
elected annually.'
'Currently Directors face election once every 3 years. I believe
infrequent elections help insulate directors and senior executives from the
consequences of poor performance. If the AlliedSignal Board members are
elected on an annual basis, I as one of the owners of the company, believe
their oversight will be more zealous, objective and more effectively
directed toward the following issues and forthcoming similar issues that
face AlliedSignal:
Approximately 120 AlliedSignal employees who lost their jobs in a
wave of layoffs in the Phoenix, Arizona area filed a lawsuit against
AlliedSignal in April 1995. The suit alleges that AlliedSignal wrongfully
`targeted its older workers for layoff' and then launched `an aggressive
corporate policy to recruit and hire new college graduates.' In March 1995,
the Equal Employment Opportunity Commission issued a finding of
AlliedSignal Age-Discrimination.
At the annual shareholders meeting in April, Mr. Bossidy denied
there was a policy of age discrimination at AlliedSignal. The following
day, the Phoenix lawsuit was filed and reported in newspapers across the
country, including The Wall Street Journal.
This lawsuit has resulted in notable adverse publicity which I
believe drives away current employees of superior skill and increases the
difficulty of hiring qualified employees, critical to the high technology
specialties of AlliedSignal.
AlliedSignal has recently terminated employees of long standing
contribution to the company in large numbers. At the same time, the Board
approved a six-year contract for Mr. Bossidy, hired as recently as 1991,
worth up to $47 million.
AlliedSignal was involved in a proposed but not completed
controversial technology sale that arguably could have helped the Peoples
Republic of China upgrade its missile program. China is charged with
weapons exports to countries that support terrorism and human rights
abuses.
25
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In February 1995, the EPA alleged that AlliedSignal did not
adequately control levels of mercury contamination to which workers at the
LCP Chemicals toxic waste site were exposed.
'To insure the monitoring of these and similar important issues as
well as Mr. Bossidy's performance, especially as a result of the long term
security of his employment contract, it is important that all Board members
be elected annually.
'I urge you to vote yes for the annual election of all AlliedSignal
Board members.'
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. For the reasons indicated
below, it is the Board's opinion that the classified Board serves the Company
and its shareowners well.
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.
The Board of Directors disagrees with the proponent's contention that its
oversight would be different if all directors were elected annually. The Board
believes that directors elected to a classified Board are no less accountable to
shareowners than they would be if elected annually. The Board is routinely made
aware of all significant issues affecting the Company. Further, the filing of
lawsuits or publication of charges made against the Company does not necessarily
mean that they are factual.
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.
Previous shareowner proposals to eliminate the classified Board of
Directors have been defeated by the shareowners. 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.
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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 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 1997 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 1997 Annual Meeting must be received by the
Company not later than November 11, 1996. 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 11, 1996
27
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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
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[LOGO]
NOTICE OF 1996 ANNUAL MEETING
AND PROXY STATEMENT
<PAGE>
<PAGE>
APPENDIX 1
BANK OF NEW YORK CARD
[LOGO] PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
ANNUAL MEETING OF SHAREOWNERS -- APRIL 22, 1996
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 22,
1996, 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: Hans W. Becherer, Robert P. Luciano, Robert B. Palmer
and John R. Stafford.
NOTE: After signing, please insert this ALLIEDSIGNAL INC.
Proxy in the enclosed envelope so that P.O. BOX 11010
the address at right shows through the NEW YORK, N.Y. 10203-0010
window.
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' PROPOSALS 3, 4 AND 5.
(SPECIFY CHOICES AND SIGN ON THE REVERSE SIDE)
<PAGE>
<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
(H.W. Becherer, R.P. Luciano, R.B. Palmer and J.R. Stafford)
FOR all WITHHOLD AUTHORITY EXCEPTION
nominees [X] to vote for all nominees [X] (see instruction [X]
below)
Instruction: To withhold authority to vote for any individual nominee(s), mark
the 'Exception' box and write the name(s) on the line below.
- --------------------------------------------------------------------
2. Appointment of Independent Accountants
FOR [X] AGAINST [X] ABSTAIN [X]
A VOTE 'AGAINST' PROPOSALS 3-5 IS RECOMMENDED BY THE BOARD OF DIRECTORS:
3. Shareowner proposal regarding the Company's maquiladora operations
FOR [X] AGAINST [X] ABSTAIN [X]
4. Shareowner proposal regarding a global set of standards
FOR [X] AGAINST [X] ABSTAIN [X]
5. Shareowner proposal regarding the annual election of directors
FOR [X] AGAINST [X] ABSTAIN [X]
Please complete (X) if you:
Plan to attend the Have written comments
Annual Meeting [X] 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 __________________________________________________, 1996
(Please Insert Date)
Signed _______________________________________________________
_______________________________________________________
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
Please complete (X) if you want your vote kept confidential under
the policy described on page 1 of the Proxy Statement. [X]
<PAGE>
<PAGE>
APPENDIX 2
SAVINGS PLAN PROXY CARD
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 22, 1996, 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: Hans W. Becherer, Robert P. Luciano, Robert B. Palmer
and John R. 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' PROPOSALS
3, 4 AND 5. 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>
<PAGE>
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
1. Election of Directors
(H.W. Becherer, R.P. Luciano, R.B. Palmer and J.R. Stafford)
[ ] 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' PROPOSALS 3-5 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
3. Shareowner proposal regarding the Company's maquiladora operations
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Shareowner proposal regarding a global set of standards
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Shareowner proposal regarding the annual election of directors
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN EXACTLY AS NAME APPEARS.
Dated __________________________________________________, 1996
(Please Insert Date)
Signed _______________________________________________________
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
<PAGE>
APPENDIX 3
THRIFT PLAN PROXY CARD
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 22, 1996, 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: Hans W. Becherer, Robert P. Luciano, Robert B. Palmer
and John R. 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'
PROPOSALS 3, 4 AND 5. 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>
<PAGE>
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
1. Election of Directors
(H.W. Becherer, R.P. Luciano, R.B. Palmer and J.R. Stafford)
[ ] 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' PROPOSALS 3-5 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
3. Shareowner proposal regarding the Company's maquiladora operations
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Shareowner proposal regarding a global set of standards
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Shareowner proposal regarding the annual election of directors
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN EXACTLY AS NAME APPEARS.
Dated __________________________________________________, 1996
(Please Insert Date)
Signed _______________________________________________________
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
<PAGE>
APPENDIX 4
TRUCK BRAKE SYSTEMS PROXY CARD
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 22, 1996, 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: Hans W. Becherer, Robert P. Luciano, Robert B. Palmer
and John R. 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' PROPOSALS
3, 4 AND 5. 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>
<PAGE>
A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
1. Election of Directors
(H.W. Becherer, R.P. Luciano, R.B. Palmer and J.R. Stafford)
[ ] 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' PROPOSALS 3-5 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
3. Shareowner proposal regarding the Company's maquiladora operations
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Shareowner proposal regarding a global set of standards
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Shareowner proposal regarding the annual election of directors
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN EXACTLY AS NAME APPEARS.
Dated __________________________________________________, 1996
(Please Insert Date)
Signed _______________________________________________________
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
<PAGE>
APPENDIX 5
ASEC MANUFACTURING SAVINGS PLAN PROXY CARD
REQUEST FOR CONFIDENTIAL INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIEDSIGNAL INC.
PURSUANT TO THE ASEC MANUFACTURING 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 22, 1996, 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: Hans W. Becherer, Robert P. Luciano, Robert B. Palmer
and John R. 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' PROPOSALS
3, 4 AND 5. 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]
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A VOTE 'FOR' PROPOSALS 1 AND 2 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
1. Election of Directors
(H.W. Becherer, R.P. Luciano, R.B. Palmer and J.R. Stafford)
[ ] 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' PROPOSALS 3-5 IS RECOMMENDED BY THE
BOARD OF DIRECTORS:
3. Shareowner proposal regarding the Company's maquiladora operations
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Shareowner proposal regarding a global set of standards
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Shareowner proposal regarding the annual election of directors
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please sign exactly as name appears.
Dated __________________________________________________, 1996
(Please Insert Date)
Signed _______________________________________________________
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
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APPENDIX 6
SP LETTER
[LOGO] AlliedSignal Inc.
P.O. Box 3000
Morristown, NJ 07962-2496
LARRY BOSSIDY
Chairman and
Chief Executive Officer
March 11, 1996
Dear Plan Participant:
Thanks to the commitment of AlliedSignal's employees, 1995 was another
outstanding year for the Company, with sales and earnings rising significantly
to record levels. Wall Street took notice of our results, and the Company's
stock price rose 40% during the year. In addition, the common stock dividend was
increased again this year, representing the fourth consecutive annual increase
of at least 15%. I am delighted that participants in the savings plans are
benefiting from this higher return on their shares.
Enclosed is a meeting notice and proxy statement for the 1996 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 1996
another year of progress for the Company.
Sincerely,
LARRY BOSSIDY
Enclosures
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