RELIANCE ELECTRIC CO/DE, SC 14D9/A, 1994-11-22

RELIANCE ELECTRIC CO/DE
SC 14D9/A, 1994-11-22
MOTORS & GENERATORS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14D-9
(AMENDMENT NO. 7)

SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

RELIANCE ELECTRIC COMPANY
(NAME OF SUBJECT COMPANY)

RELIANCE ELECTRIC COMPANY
(NAME OF PERSON(S) FILING STATEMENT)

CLASS A COMMON STOCK, $.01 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)

759458102
(CUSIP NUMBER OF CLASS OF SECURITIES)

WILLIAM R. NORTON, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
RELIANCE ELECTRIC COMPANY
6065 PARKLAND BOULEVARD
CLEVELAND, OHIO 44124
(216) 266-5800
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON(S) AUTHORIZED TO RECEIVE NOTICE
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)

COPIES TO:

<TABLE>
<S> <C>
MICHAEL L. MILLER, ESQ. JOSEPH B. FRUMKIN, ESQ.
CALFEE, HALTER & GRISWOLD SULLIVAN & CROMWELL
800 SUPERIOR AVENUE, SUITE 1800 125 BROAD STREET
CLEVELAND, OHIO 44114 NEW YORK, NEW YORK 10004
(216) 622-8200 (212) 558-4000
</TABLE>

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This Amendment No. 7 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated November 3, 1994, as amended (the "Schedule
14D-9"), filed by Reliance Electric Company, a Delaware corporation (the
"Company"), relating to the tender offer disclosed in the Schedule 14D-1, dated
October 21, 1994, as amended (the "Schedule 14D-1"), of the bidder, ROK
Acquisition Corporation, a Delaware corporation ("ROK") and a wholly owned
subsidiary of Rockwell International Corporation, a Delaware corporation
("Rockwell"), to purchase all of the outstanding Shares upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 21,
1994, as supplemented and amended by the Supplement thereto dated November 22,
1994 (the "Supplement") and the related Letters of Transmittal (together, the
"Offer"). Capitalized terms used and not defined herein shall have the meanings
set forth in the Schedule 14D-9.

ITEM 2. TENDER OFFER OF THE BIDDER.

Item 2 is hereby amended and restated in its entirety as follows:

This Statement relates to the tender offer for the Class A Shares by ROK
and Rockwell pursuant to the Offer, as amended pursuant to the terms of the
Reliance-Rockwell Merger Agreement (the "Amended Offer").

The Schedule 14D-1 states that the principal executive offices of ROK and
Rockwell are located at 2201 Seal Beach Boulevard, Seal Beach, California
90740-8250.

ITEM 3. IDENTITY AND BACKGROUND.

Item 3 is hereby amended and supplemented by adding thereto the following:

At a meeting of the Board of Directors of the Company on November 21, 1994,
the directors approved amending certain employee benefit plans of the Company.
Such amendments became effective upon the termination of the Reliance-General
Signal Merger Agreement on November 21, 1994 and are described as set forth
below.

The Company's Change in Control Severance Pay Plan (the "Severance Plan")
has been amended to entitle the participants thereunder to the severance
benefits previously described in this Item 3 if their employment is terminated
within two years following a Change in Control (now defined in the Severance
Plan to include the acquisition of beneficial ownership of 30% of the Company's
shares by a person or group of persons under common control whether or not such
acquisition is approved by the Board of Directors).

The Company's 1990 Key Employee Stock Option Plan ("1990 KESOP") and 1994
Outside Directors Stock Option Plan ("1994 ODSOP") have been amended to provide
that a Change in Control will occur upon the acquisition of beneficial ownership
of 30% of the Company's shares by a person or group of persons under common
control whether or not such acquisition is approved by the Board of Directors.
As previously discussed under this Item 3, options under the 1990 KESOP and 1994
ODSOP would become vested upon a Change in Control.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

Item 4 is hereby amended and supplemented by adding thereto the following:

On November 17, 1994, after the Amendment Agreement, which, among other
things permitted the Company to conduct negotiations with Rockwell without
giving General Signal a right to terminate the Reliance-General Signal Merger
Agreement, was executed by the Company, General Signal and Rockwell, Mr. Morley
spoke to Mr. Beall to discuss the terms upon which a transaction between
Reliance and Rockwell could be effected. Mr. Beall indicated to Mr. Morley that
he considered $30 to be a full and fair price for Reliance Class A Shares, but
that Rockwell's financial advisors would meet with the Company's financial
advisors to discuss the valuation of the Company. On November 18, 1994,
representatives of Goldman Sachs, Prudential Securities and Dillon Read met to
discuss issues relating to the price Rockwell was willing to pay for Shares.
Dillon Read reiterated Rockwell's position that under the circumstances $30 was
an adequate price

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for Class A Shares. On November 19, 1994, Mr. Beall called Mr. Morley concerning
the Offer and Rockwell's commitment to succeeding in the Offer. During this
conversation he indicated a possible willingness to increase Rockwell's offer
modestly, to perhaps $30.25 or $30.50.

At meetings held on November 20, 1994 and November 21, 1994, the Board of
Directors of the Company met and considered the Offer and the Proposed
Reliance-General Signal Merger. At the meeting on November 20, the Board of
Directors discussed the level to which General Signal might be prepared to
increase the exchange ratio. The Board of Directors also considered the events
since the commencement of the Offer, the history of the Company's discussions
with General Signal, the terms and conditions included in the November 17 draft
of the Reliance-Rockwell Merger Agreement, the likely support for the Proposed
Reliance-General Signal Merger, and the presentations of its legal and financial
advisors. Messrs. Beall and Morley spoke several times on November 20, 1994
regarding the price Rockwell was willing to pay for the Shares and Mr. Beall
ultimately indicated that he would recommend to the Rockwell Board of Directors
a $31.00 price per Class A Share and an equivalent price for convertible Shares.
On November 21, 1994, the Board of Directors unanimously approved the terms of
the Reliance-Rockwell Merger Agreement and the execution and delivery thereof.
The Board of Directors also (i) determined that the Amended Offer, the Proposed
Rockwell Merger and the transactions contemplated by the Reliance-Rockwell
Merger Agreement are fair to and in the best interests of Company stockholders,
(ii) approved and adopted the Reliance-Rockwell Merger Agreement and (iii)
recommended that the Company's stockholders accept the Amended Offer and tender
their Shares pursuant thereto. A form of letter to stockholders communicating
the Board of Directors' recommendation is filed as Exhibit 33 hereto and is
incorporated herein by reference.

In reaching the conclusions with respect to the Amended Offer and the
Proposed Rockwell Merger, the Board of Directors made certain judgments and
considered many factors, including the following:

(1) The Proposed Reliance-General Signal Merger, while an attractive
proposal, did not have a current market value sufficiently high to have
a reasonable probability of being approved by holders of the Shares so
long as the Rockwell Offer was outstanding. In addition, while General
Signal expressed on November 19, 1994 a willingness to increase the
exchange ratio in the Proposed Reliance-General Signal Merger, the
increase suggested as a possibility was not sufficient to achieve a
likelihood of obtaining the necessary approval from holders of Shares.
The Board of Directors also considered the possible adverse effects on
the Company's business that could result from the distractions of a
hostile takeover contest and an extended period of uncertainty
regarding the Company's future direction.

(2) The Board of Directors considered the absence of any serious
expressions of interest from third parties other than Rockwell since
the announcement of the Proposed Reliance-General Signal Merger and
since the announcement of the Offer. Although the Reliance-General
Signal Merger Agreement prohibited the Company from soliciting interest
from third parties, the Company was free to receive unsolicited
expressions of interest.

(3) The Board of Directors considered the terms of the Amendment Agreement
and the possibility that the Company might not be able to obtain the
agreement of General Signal to enter into another such agreement.

(4) At the November 21, 1994 meeting of the Board of Directors, Goldman
Sachs orally advised the Board of Directors, and confirmed by letter
dated November 21, 1994, that, based upon and subject to the matters
set forth in their opinion, the consideration to be received by holders
of Shares pursuant to the Reliance-Rockwell Merger Agreement is fair to
such holders, and Prudential Securities orally advised the Board of
Directors, and confirmed by letter dated November 21, 1994, that, based
upon and subject to the matters set forth in their opinion, the
consideration to be received by holders of Shares pursuant to the
Reliance-Rockwell Merger Agreement is fair, from a financial point of
view, to such holders. Copies of the written opinions of Goldman Sachs
and Prudential Securities are attached hereto as Exhibits 34 and 35 and
are incorporated herein by reference. Stockholders are urged to read
the text of such opinions in their entirety for a statement of matters
considered, assumptions made and the scope of review of Goldman Sachs
and Prudential Securities.

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(5) The Board considered the terms of the Reliance-Rockwell Merger
Agreement, including (a) the increase in the price of the Amended Offer
to $31.00 per Class A Share, (b) the right of the Company to provide
information to and negotiate with a third party that contacts the
Company without triggering a right of Rockwell to terminate the
Reliance-Rockwell Merger Agreement or collect a termination fee, (c)
the right of Reliance to terminate the Reliance-Rockwell Merger
Agreement in order to accept a superior acquisition transaction while
paying an expense reimbursement fee of $10 million to Rockwell, (d) the
limited conditions to the Amended Offer (see Item 8(g)(ii)(B) below),
and (e) the limited conditions to the Proposed Rockwell Merger.

The Board of Directors did not assign relative weights to the factors
discussed above.

ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.

Item 6(b) is hereby amended and restated in its entirety as follows:

(b) To the best knowledge of the Company, none of its executive officers,
directors, affiliates or subsidiaries has determined whether, with
respect to any shares held of record or beneficially owned by such
persons, they intend to tender to ROK and Rockwell, sell or hold such
Shares, except that Mr. Sherrill has advised the Company that it is his
present intention not to tender his Shares to ROK and Rockwell in order
to attempt to defer until 1995 the taxable gain on the sale of his
Shares.

ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.

Item 8 is hereby amended and supplemented by adding thereto the following:

(b) The Rights Agreement. At its meeting on November 21, 1994, the
Company's Board of Directors unanimously authorized the officers of the Company
to enter into an amendment to the Rights Agreement (the "Rights Agreement
Amendment") to provide that (i) neither Rockwell nor ROK will become an
"Acquiring Person," that no "Trigger Event," "Shares Acquisition Date" or
"Distribution Date" (as such terms are defined in the Rights Agreement) will
occur and that Section 13 of the Rights Agreement will not be triggered, in each
case as a result of the announcement, commencement or consummation of the Offer
or the Amended Offer, the execution of the Reliance-Rockwell Merger Agreement or
any amendment thereto or the consummation of the transactions contemplated
thereby (including, without limitation, the Proposed Reliance-Rockwell Merger),
with the effect that none of such events will trigger the exercisability of the
Rights, the separation of the Rights from the stock certificates to which they
are attached or any other provision of the Rights Agreement, (ii) a Distribution
Date will in no event occur prior to the Effective Time (as defined in the
Reliance-Rockwell Merger Agreement) or the earlier termination of the
Reliance-Rockwell Merger Agreement and (iii) the Rights will no longer be
outstanding upon the consummation of the Proposed Reliance-Rockwell Merger.

(c) Section 203 of the Delaware General Corporation Law. At its meeting on
November 21, 1994, the Board unanimously adopted a resolution (i) approving for
purposes of Section 203 the entry by ROK and Rockwell into the Reliance-Rockwell
Merger Agreement and the consummation by ROK and Rockwell of the transactions
contemplated thereby and (ii) determining that neither ROK nor Rockwell shall be
an "interested stockholder" of the Company within the meaning of the Delaware
General Corporation Law as a result of ROK's purchase of Shares pursuant to the
Amended Offer.

(g) The Reliance-Rockwell Merger Agreement

(i) General. On November 21, 1994, the Company announced that it had
entered into the Reliance-Rockwell Merger Agreement. The Reliance-Rockwell
Merger Agreement is filed as Exhibit 36 hereto and is incorporated by
reference herein. As further described below, the Reliance-Rockwell Merger
Agreement provides for (A) the Amended Offer by ROK and Rockwell and (B)
upon the acceptance and payment for Shares tendered pursuant to the Amended
Offer and the fulfillment of certain other conditions, the consummation of
the Proposed Rockwell Merger.

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(ii) The Amended Offer. Pursuant to the terms of the
Reliance-Rockwell Merger Agreement, ROK and Rockwell have agreed to amend
the Offer as follows:

(A) to increase the purchase price per Class A Share, Class B Share
and Class C Share to $31, $31 and $83.948, respectively;

(B) to provide that the obligation of ROK and Rockwell to accept
for payment and pay for Shares tendered pursuant to the Amended Offer
shall only be subject to (1) the tender of a majority of the Class A
Shares (on a fully diluted basis) (the "Minimum Condition"), (2) the
absence of an injunction or legal prohibition with respect to the
Amended Offer or the Proposed Rockwell Merger, (3) the absence of a
termination by the Company, ROK or Rockwell of the Reliance-Rockwell
Merger Agreement in accordance with the terms described in paragraph
(vi) below, (4) the representations and warranties made by the Company
in the Reliance-Rockwell Merger Agreement having been true and correct
in all material respects as of the Expiration Date (as defined in the
Supplement) and as of the Expiration Date the Company having in all
material respects performed its material obligations and agreements and
complied with its material covenants to be performed and complied with
by it under the Reliance-Rockwell Merger Agreement and (5) Rockwell, ROK
and the Company not having agreed that ROK shall terminate the Amended
Offer or postpone the payment for Shares pursuant thereto;

(D) to extend the Expiration Date of the Amended Offer to 12:00
midnight, New York City time, on Tuesday, December 6, 1994.

Except as described above, ROK and Rockwell have agreed that the
Amended Offer shall be on the same terms and subject to the same
conditions as the Offer and, without the prior written consent of the
Company, ROK will not (A) decrease the purchase price per Share or
change the form of consideration payable in the Amended Offer, (B)
decrease the number of Shares sought pursuant to the Amended Offer, (C)
waive the Minimum Condition, (D) impose additional conditions to the
Amended Offer or (E) amend any other term of the Amended Offer in any
manner adverse to the holders of Shares.

Upon acceptance and payment of Shares by Rockwell pursuant to the
Amended Offer, the Company has agreed promptly to take all actions
necessary to cause a majority of directors of the Company to be comprised
of Rockwell's designees, whether by accepting resignations of certain
incumbent directors and/or by increasing the size of the Board. Information
concerning the Company's present directors and Rockwell's intended
designees is included in the Information Statement attached as Annex I to
this Amendment No. 7.

(iii) The Proposed Rockwell Merger. Subject to the terms of the
Reliance-Rockwell Merger Agreement, if Rockwell or ROK acquire at least 90%
of the outstanding Class A Shares, 90% of the outstanding Class B Shares,
and 90% of the outstanding Class C Shares, the parties to the Rockwell-
Reliance Merger Agreement will, at the request of Rockwell or ROK, cause
the Proposed Rockwell Merger to become effective as soon as practicable
after the acceptance and payment for Shares pursuant to the Amended Offer.
Otherwise, the Company shall, in accordance with applicable law, duly call
a special meeting of stockholders as soon as practicable following the
purchase and payment for Shares pursuant to the Amended Offer for the
purpose of considering and taking action upon the Proposed Rockwell Merger.
As part of the Proposed Rockwell Merger, ROK shall be merged with and into
the Company, with the Company being the surviving corporation and becoming
a wholly owned subsidiary of Rockwell. Pursuant to the Proposed Rockwell
Merger, all then outstanding Class A Shares, Class B Shares and Class C
Shares shall be cancelled and, other than any Shares held by Rockwell, ROK
and any subsidiary of Rockwell or ROK, in the treasury of the Company or by
any subsidiary of the Company and other than any Dissenting Shares (as
defined in the Reliance-Rockwell Merger Agreement), shall be converted into
the right to receive $31, $31 and $83.948, respectively, in cash.

In addition, pursuant to the Proposed Rockwell Merger, each
outstanding option under the Company's option plans shall become fully
exercisable and vested, shall be cancelled and for each Share

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subject to an option a holder shall be entitled to receive an amount in
respect thereof equal to $31 less the exercise price thereof.

(iv) Certain Required Actions by the Company. In connection with the
Amended Offer and the Proposed Rockwell Merger, the Company has represented
and agreed that (A) the Board of Directors of the Company has unanimously
determined that each of the Amended Offer and the Proposed Rockwell Merger
is fair to, and in the best interests of, the stockholders of the Company
and will recommend acceptance of the Amended Offer and approval and
adoption of the Reliance-Rockwell Merger Agreement and the Proposed
Rockwell Merger by the stockholders of the Company and (B) Goldman Sachs
and Prudential Securities, the Company's financial advisors, have rendered
to the Board their opinions that the consideration to be received by the
stockholders of the Company pursuant to the Amended Offer and the Proposed
Rockwell Merger is fair to such stockholders, in the case of Prudential
Securities from a financial point of view. Subject to the provisions
regarding termination of the Reliance-Rockwell Merger Agreement described
in paragraph (vi) below, the recommendation referred to in subparagraph (A)
of this paragraph (iv) may be withdrawn, modified or amended to the extent
the Board deems it necessary to do so in the exercise of its fiduciary and
other legal obligations after being so advised in writing by outside
counsel.

(v) Prohibition on Solicitation. The Reliance-Rockwell Merger
Agreement provides that, among other things, the Company and its
subsidiaries, and their directors, officers, employees, agents and
representatives, will not directly or indirectly solicit, initiate,
facilitate or encourage (including by way of furnishing non-public
information) any inquiry or proposal with respect to an Acquisition
Transaction (as defined in the Reliance-Rockwell Merger Agreement) or
negotiate, explore or otherwise communicate with any third party with
respect to any Acquisition Transaction or enter into any agreement,
arrangement or understanding requiring the Company to abandon, terminate or
fail to consummate the Proposed Rockwell Merger; provided, that in response
to an unsolicited written proposal with respect to an Acquisition
Transaction from a financially capable third party that contains no
financing condition, the Company may furnish or disclose non-public
information and negotiate or otherwise communicate with such third party if
the Company's Board of Directors determines that taking such action is
reasonably likely to lead to an Acquisition Transaction more favorable to
the stockholders of the Company than the Amended Offer and the Proposed
Rockwell Merger and determines (and the Company's outside counsel opines in
writing) that failing to take such action would constitute a breach of its
fiduciary duties.

(vi) Termination of Reliance-Rockwell Merger Agreement. (A) The
Reliance-Rockwell Merger Agreement may be terminated at any time prior to
the Effective Time:

(1) by mutual consent of the Boards of Directors of the Company and
Rockwell;

(2) by either the Company or Rockwell if, without fault of such
terminating party, the acceptance and payment for Shares pursuant to the
Amended Offer shall not have occurred on or before March 31, 1995, which
date may be extended by mutual consent of the parties;

(3) by either the Company or Rockwell if the Amended Offer expires
or is terminated or withdrawn pursuant to its terms without any Shares
being purchased thereunder; provided, however, that Rockwell may not
terminate the Reliance-Rockwell Merger Agreement if Rockwell's or ROK's
termination of, or failure to accept for payment or pay for any Shares
tendered pursuant to, the Amended Offer does not follow the occurrence,
or failure to occur, as the case may be, of any condition to the Amended
Offer or is otherwise in violation of the terms of the Amended Offer; or

(4) by either the Company or Rockwell, if any court of competent
jurisdiction in the United States or other governmental body in the
United States shall have issued an order (other than a temporary
restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of Shares
pursuant to the Amended Offer or the Proposed Rockwell Merger, and such
order, decree, ruling or other action shall have become final and
nonappealable; provided, that the party seeking to terminate the
Reliance-Rockwell Merger Agreement shall have used its best efforts to
remove or lift such order, decree or ruling.

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(B) The Reliance-Rockwell Merger Agreement may be terminated and
the Amended Offer and the Proposed Rockwell Merger may be abandoned by
action of the Board of Directors of Rockwell, at any time prior to the
acceptance and payment for Shares pursuant to the Amended Offer, if the
Board of Directors of the Company shall (1) withdraw, modify or change
its recommendation or approval of the Reliance-Rockwell Merger Agreement
or the Amended Offer in a manner adverse to Rockwell, (2) recommend any
proposal in respect of an Acquisition Transaction, or (3) fail to
reaffirm its recommendation and approval in respect of the Reliance-
Rockwell Merger Agreement and the Amended Offer promptly after any
request therefor by Rockwell.

(C) The Reliance-Rockwell Merger Agreement may be terminated and
the Proposed Rockwell Merger may be abandoned at any time prior to the
Effective Time, by action of the Board of Directors of the Company, (1)
if there exists a material breach or breaches of any representation,
warranty or covenant of Rockwell or ROK contained in the
Reliance-Rockwell Merger Agreement, which breach shall not have been
cured within 10 days of notice of such breach, or (2) to allow the
Company to enter into an agreement in respect of an Acquisition
Transaction which the Board determines is more favorable to the
Company's stockholders from a financial point of view than the
transactions contemplated by the Reliance-Rockwell Merger Agreement
(provided, that upon such termination, the Company pays to Rockwell the
expense reimbursement fee described in paragraph (vii) below).

(vii) Section 9.05(b) of the Reliance-Rockwell Merger Agreement provides
that (A) if during the term of the Reliance-Rockwell Merger Agreement any
corporation, partnership, person, other entity or group (as defined in Section
13(d)(3) of the Exchange Act) other than Rockwell or ROK or any of their
respective subsidiaries or affiliates shall have become the beneficial owner of
more than 50% of the outstanding Class A Shares (either on a primary or a fully
diluted basis), (B) the Company shall have terminated the Reliance-Rockwell
Merger Agreement as described in subparagraph (C)(2) of paragraph (vi), or (C)
Rockwell shall have terminated the Reliance-Rockwell Merger Agreement as
described in subparagraph (B) of paragraph (vi), then the Company shall
promptly, but in no event later than two days after the date of such termination
or event, pay Rockwell an expense reimbursement fee of $10 million, provided,
that no fee shall be paid if Rockwell shall be in material breach of its
obligations under the Reliance-Rockwell Merger Agreement.

(viii) Indemnification. (A) The Reliance-Rockwell Merger Agreement
provides that from and after the Effective Time, Rockwell shall indemnify,
defend and hold harmless the present and former officers, directors, employees
and agents of the Company and its subsidiaries against all losses, claims,
damages, expenses or liabilities arising out of actions or omissions or alleged
actions or omissions occurring at or prior to the Effective Time to the same
extent and on the same terms and conditions (including with respect to
advancement of expenses) provided for in the Company's Certificate of
Incorporation and By-Laws and agreements in effect at the date of the
Reliance-Rockwell Merger Agreement (to the extent consistent with the applicable
law).

(B) The Reliance-Rockwell Merger Agreement provides that for a period of
six years after the Effective Time, Rockwell shall cause to be maintained in
effect the current policies of directors' and officers' liability insurance
maintained by the Company (provided, that Rockwell may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are no less advantageous) with respect to claims arising from
facts or events which occurred before the Effective Time; provided, however,
that Rockwell shall not be obligated to make annual premium payments for such
insurance to the extent such premiums exceed 250% of the premiums paid as of the
date of the Reliance-Rockwell Merger Agreement by the Company for such
insurance.

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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.

Item 9 is hereby amended and supplemented by adding thereto to the
following:

<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE NO.
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Exhibit 33 Form of Letter to Shareholders commenting on the Board of Directors'
Recommendations*........................................................

Exhibit 34 Written Opinion of Goldman Sachs, dated November 21, 1994*..............

Exhibit 35 Written Opinion of Prudential Securities, dated November 21, 1994*......

Exhibit 36 Agreement and Plan of Merger, dated as of November 21, 1994 by and among
the Company, ROK and Rockwell...........................................

Exhibit 37 Press Release, dated November 21, 1994, of the Company..................
</TABLE>

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* Included in copies mailed to shareholders of the Company.

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SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Dated: November 22, 1994

RELIANCE ELECTRIC COMPANY

By: /s/ JOHN C. MORLEY
---------------------------------
Name: John C. Morley
Title: President and Chief
Executive Officer

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EXHIBIT 33

[Reliance Electric Logo] November 22, 1994

Dear Reliance Electric Shareholder:

I am pleased to inform you that Reliance has entered into a Merger
Agreement with Rockwell International Corporation and a subsidiary of Rockwell
providing for the acquisition of all of the issued and outstanding shares of
Reliance common stock at a net price of $31.00 per share of Class A and Class B
Common Stock and $83.948 per share of Class C Common Stock.

Enclosed is a Supplement to the Offer to Purchase from Rockwell reflecting
the terms of its revised Tender Offer. The Rockwell Tender Offer is conditioned
upon, among other things, a majority of the total number of shares of common
stock outstanding (on a fully diluted basis) being validly tendered and not
withdrawn. The Merger Agreement provides that, as promptly as practicable
following the Rockwell Tender Offer, all shares which are not tendered through
the Rockwell Tender Offer will be acquired through a second step merger at the
same price per share as the Tender Offer.

Reliance's Board of Directors has, in light of and subject to the terms and
conditions set forth in the Merger Agreement, determined that each of the
revised Rockwell Tender Offer and the Rockwell Merger are fair to, and in the
best interests of, the shareholders of Reliance.

Your Board of Directors has unanimously approved the revised Rockwell
Tender Offer and the Rockwell Merger and recommends that shareholders ACCEPT the
revised Rockwell Tender Offer and tender their shares.

Attached is a copy of Reliance's Schedule 14D-9 amendment relating to the
revised Rockwell Tender Offer, which is being filed today with the Securities
and Exchange Commission. This document should be read carefully. In particular,
I call your attention to Item 4, which describes both the reasons for the Board
of Directors' unanimous recommendations and certain additional factors that
shareholders may wish to consider.

Sincerely,

/s/ JOHN C. MORLEY

John C. Morley
President and Chief Executive Officer

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[Letterhead of Goldman, Sachs & Co.]

PERSONAL AND CONFIDENTIAL
Exhibit 34

November 21, 1994

Board of Directors
Reliance Electric Company
6065 Parkland Boulevard
Cleveland, OH 44124

Gentlemen:

You have requested our opinion as to the fairness to the holders of the
outstanding shares of Class A common stock, par value $.01 per share (the
"Class A Common Stock"), Class B common stock, par value $.01 per share (the
"Class B Common Stock"), and Class C common stock, par value $.01 per share (the
"Class C Common Stock", and together with the Class A Common Stock and Class B
Common Stock, collectively, the "Shares"), of Reliance Electric Company (the
"Company") of the Consideration (as defined below) to be received by such
holders pursuant to the Agreement and Plan of Merger dated as of November 21,
1994 by and among the Company, ROK Acquisition Corporation and Rockwell
International Corporation (together, "Rockwell") (the "Agreement"). Pursuant to
the Agreement, Rockwell will amend its tender offer (the "Offer") to provide
for the purchase of all outstanding Shares for a cash price per share of $31.00
with respect to each of the Class A Common Stock and Class B Common Stock and a
cash price per share of $83.948 with respect to the Class C Common Stock
(collectively, the "Consideration") and, following the Offer, complete a merger
in which Shares not purchased pursuant to the Offer will receive an amount
of cash per share equal to the price paid for such Shares in the Offer.

Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company having provided certain investment banking services
to the Company from time to time, including (i) acting as financial advisor
with respect to the potential sale of the Company in 1991, (ii) acting as
managing underwriter of the initial public offering of Class A Common Stock in
May 1992, (iii) acting as managing underwriter of a public offering of 6.80%
Notes in April 1993 and (iv) acting as its financial advisor in connection
with, and having participated in certain of the negotiations leading to, the
recently terminated agreement contemplating a strategic business combination
with General Signal Corporation and the Agreement. We have also from time to
time provided investment banking services to Rockwell and may do so in the
future.

In connection with this opinion, we have received, among other things, the
Agreement; Rockwell's Offer to Purchase, dated October 21, 1994; Annual Reports
to Stockholders and Annual Reports on Form 10-K of the Company for the two
years ended December 31, 1993; certain interim reports to

<PAGE> 2
Reliance Electric Company
November 21, 1994
Page Two

stockholders and Quarterly Reports on Form 10-Q; and certain other
communications from the Company to its stockholders prepared by its management.
We also have held discussions with members of the senior managements of the
Company regarding its past and current business operations, financial condition
and future prospects. In addition, we have reviewed the reported price and
trading activity for the Class A Common Stock, compared certain financial and
stock market information for the Company, with similar information for certain
other companies the securities of which are publicly traded, reviewed the
financial terms of certain recent business combinations and performed such
other studies and analyses as we considered appropriate. In our analysis, we
have assumed that each share of Class B Common Stock is the equivalent of one
share of Class A Common Stock and each share of Class C Common Stock is the
equivalent of 2.708 shares of Class A Common Stock, based upon the rates at
which such shares, by their terms, may be converted by the holders into shares
of Class A Common Stock in connection with certain transfers of such shares,
including the merger contemplated by the Agreement, and the rates at which they
share in distributions to holders of all classes of Shares.

We have relied without independent verification upon the accuracy and
completeness of all of the financial and other information reviewed by us for
purposes of this opinion. In addition, we have not made an independent
evaluation or appraisal of the assets and liabilities of the Company or any of
its subsidiaries and we have not been furnished with any such evaluations or
appraisals.

Based upon and subject to the foregoing and based upon such other matters as we
considered relevant, it is our opinion that as of the date hereof the
Consideration to be received by the holders of Shares pursuant to the Agreement
is fair to such holders.

Very truly yours,

/s/ Goldman, Sachs & Co.

GOLDMAN, SACHS & CO.

<PAGE> 1

Exhibit 35

[Letterhead of Prudential Securties Incorporated]
November 21, 1994

Board of Directors
Reliance Electric Company
6065 Parkland Boulevard
Cleveland, OH 44124

Dear Sirs:

We understand that Reliance Electric Company (the "Company"), Rockwell
International Corporation ("Rockwell") and Rockwell's wholly-owned subsidiary,
ROK Acquisition Corporation, have entered into an Agreement and Plan of Merger
(the "Agreement") dated as of November 21, 1994. Pursuant to the Agreement,
Rockwell will amend its Offer to Purchase dated October 21, 1994 (as amended,
the "Offer") to purchase (i) for $31.00 per share in cash each outstanding
share of the Company's Class A common stock, par value $.01 per share, and each
outstanding share of the Company's Class B common stock, par value $.01 per
share, and (ii) for $83.948 per share in cash each outstanding share of the
Company's Class C common stock, par value $.01 per share (collectively, the
"Consideration"). The Class A common stock, together with the Class B common
stock and the Class C common stock of the Company, are referred to collectively
as the "Shares". The Agreement also provides that, following the Offer,
Rockwell will complete a merger in which Shares not purchased pursuant to the
Offer will receive an amount of cash per share equal to the price paid for such
Shares in the Offer.

Prudential Securities Incorporated ("Prudential Securities") has been
requested by the Company to provide its opinion as to whether the Consideration
is fair, from a financial point of view, to the stockholders of the Company.

In conducting our analysis and arriving at our opinion, we have reviewed
such materials and considered such financial and other factors as we deemed
appropriate under the circumstances, including among others, the following: (i)
the Agreement; (ii) the Company's historical financial and other data and
analysis that were publicly available or furnished to us regarding the Company;
(iii) certain internal financial analyses and projections prepared by the
management of the Company; (iv) trading history of the Company's Class A common
stock; (v) publicly available financial, operating and stock market data for
the Company and for companies engaged in businesses that we deemed comparable
to the Company or otherwise relevant to our inquiry; (vi) the financial terms
of certain other recent transactions that we deemed relevant; and (vii) such
other factors as we deemed appropriate. We have met with senior officers of
management of the Company to discuss its business prospects and financial
condition, as well as its estimates and judgments on future financial
performance and such other matters as we believed relevant to our inquiry. Our
opinion is based on economic, financial and market conditions as they exist and
can be evaluated as of the date hereof. In our analysis, we have assumed that
each share of the Company's Class B common stock is the equivalent of one share
of the

<PAGE> 2

The Board of Directors
Reliance Electric Company
November 21, 1994
Page 2

Company's Class A common stock and each share of the Company's Class C common
stock is the equivalent of 2.708 shares of the Company's Class A common stock,
based upon the rates at which such shares, by their terms, may be converted by
the holders into shares of the Company's Class A common stock in connection with
certain transfers of such shares, including the merger contemplated by the
Agreement, and the rates at which they share in distributions to holders of all
classes of Shares.

In connection with our review and analysis and in arriving at our opinion,
we have assumed and relied upon the accuracy and completeness of all of the
financial and other information provided to us or publicly available and have
not attempted independently to verify any such information. We have neither made
nor obtained any independent appraisals of the properties or facilities of the
Company. With respect to estimates of future financial performance provided to
us by the Company, we have assumed that they represent the best currently
available estimates and judgments of management as to the future financial
performance of the Company.

Since 1986, Prudential Securities has been retained by the Company on a number
of occasions to act as a financial advisor or as an underwriter and has
received customary compensation for providing such services. Since 1989, such
services have included acting as managing underwriter of a public offering of
$1.50 Junior Exchangeable Preferred Stock in 1989, as placement agent in a
private placement of $1.50 Junior Exchangeable Preferred Stock in 1990, as
financial advisor to the Company in its potential sale in 1991, as managing
underwriter in the public offering of Class A common stock in 1992, as managing
underwriter in the public offering of 6.80% Notes in 1993, and as financial
advisor in connection with the recently terminated agreement contemplating a
strategic business combination with General Signal Corporation and the
Agreement. Mr. H. Virgil Sherrill, Chairman of the Board of Directors of the
Company and a stockholder of the Company, is a Senior Director of Prudential
Securities, a non-officer position. In the ordinary course of business,
Prudential Securities may actively trade the Company's Class A common stock for
its own account and for the accounts of customers, and, accordingly, may at any
time hold a long or short position in such common stock. The Prudential
Insurance Company of America and certain of its affiliates, including
Prudential Securities, currently own an aggregate of over 2.4 million shares
of the Company's Class A and Class B common stock. Prudential Securities also
provides equity research regarding the Company.

Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, the Consideration is fair, from a financial point of view, to
the stockholders of the Company.

Very truly yours,

/s/ Prudential Securities Incorporated

<PAGE> 1
Exhibit 36

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of November 21, 1994 (the
"Agreement"), by and among RELIANCE ELECTRIC COMPANY, a Delaware corporation
("Reliance"), ROK ACQUISITION CORPORATION, a Delaware corporation (the
"Purchaser"), and ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation
("Rockwell"). Reliance and the Purchaser are hereinafter sometimes collectively
referred to as the "Constituent Corporations."

RECITALS

WHEREAS, the Boards of Directors of Rockwell, the Purchaser and
Reliance have each approved the acquisition of Reliance by Rockwell upon the
terms and subject to the conditions set forth herein;

WHEREAS, on October 21, 1994, the Purchaser commenced an offer to
purchase (the "Initial Offer"): (i) all outstanding shares of Class A Common
Stock, par value $.01 per share (the "Class A Shares"), of Reliance and the
associated Series A preferred stock purchase rights (the "Class A Rights")
issued pursuant to the Rights Agreement dated as of August 29, 1994 between
Reliance and Society National Bank, as Rights Agent (as the same may be
amended, the "Rights Agreement"), at a purchase price of $30 per Class A Share
(and associated Class A Right), (ii) all outstanding shares of Class B Common
Stock, par value $.01 per share (the "Class B Shares"), of Reliance and the
associated Series B preferred stock purchase rights (the "Class B Rights")
issued pursuant to the Rights Agreement at a purchase price of $30 per Class B
Share (and associated Class B Right), and (iii) all outstanding shares of Class
C Common Stock, par value $.01 per share (the "Class C Shares" and, together
with the Class A Shares and the Class B Shares, the "Shares"), of Reliance and
the associated Series C preferred stock purchase rights (the "Class C Rights"
and, together with the Class A Rights and the Class B Rights, the "Rights")
issued pursuant to the Rights Agreement at a purchase price of $81.24 per Class
C Share (and associated Class C Right), subject to certain conditions;

WHEREAS, the Boards of Directors of Rockwell, the Purchaser and
Reliance have each determined that it is in the best interests of their
respective stockholders for the Purchaser to acquire Reliance pursuant to the
Initial Offer, as amended pursuant to the terms of this Agreement (the "Amended
Offer");
<PAGE> 2

WHEREAS, in furtherance of such acquisition, the Boards of Directors of
Rockwell, the Purchaser and Reliance have each approved the merger of the
Purchaser with and into Reliance in accordance with the terms of this Agreement
and the General Corporation Law of the State of Delaware (the "DGCL") and with
any other applicable law; and

WHEREAS, the Board of Directors of Reliance (the "Board") has, in light
of and subject to the terms and conditions set forth herein, (i) determined
that the consideration to be paid for each Share in the Amended Offer and the
Merger (as hereinafter defined) is fair to, and in the best interests of, the
stockholders of Reliance and (ii) resolved to approve and adopt this Agreement
and the transactions contemplated hereby and to recommend acceptance of the
Amended Offer and approval and adoption by the stockholders of Reliance of this
Agreement and the Merger.

NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:

ARTICLE I

THE AMENDED OFFER

Section 1.01. The Amended Offer. (a) Rockwell and the Purchaser have
filed with the Securities and Exchange Commission (the "SEC") a Tender Offer
Statement on Schedule 14D-1 with respect to the Initial Offer which contains
(included as an exhibit) the Purchaser's Offer to Purchase dated October 21,
1994 (the "Offer to Purchase") and forms of the related letters of transmittal
(collectively, the "Offer Documents"). As promptly as practicable (but no
later than the second business day after the date of this Agreement), Rockwell
and the Purchaser shall file with the SEC an amendment to the Offer Documents
(as so amended, and as the same may be further amended or supplemented in
accordance with the terms of this Agreement, the "Amended Offer Documents").
The Amended Offer Documents shall contain a supplement to the Offer to
Purchase, which shall be mailed to the holders of Shares and which shall
describe this Agreement and the negotiations preceding this Agreement and shall
amend the Offer (i) to increase the price per Class A Share, Class B Share and
Class C Share payable in connection with the Offer to $31.00, $31.00 and
$83.948, respectively, (ii) to provide that the obligation of the Purchaser and
Rockwell to accept for payment and pay for Shares tendered pursuant to the
Amended Offer shall only be subject to the conditions set forth in Annex I
hereto, (iii) to eliminate

2
<PAGE> 3

the requirement that holders of Shares also tender their Rights associated
therewith and (iv) to extend the expiration date of the Amended Offer to 12:00
midnight, New York City time, on Tuesday, December 6, 1994; it being understood
and agreed that, except for the foregoing amendments or as otherwise provided
herein, the Amended Offer shall be on the same terms and subject to the same
conditions as the Initial Offer. Without the prior written consent of
Reliance, the Purchaser shall not decrease the price per Share or change the
form of consideration payable in the Amended Offer, decrease the number of
Shares sought, waive the Minimum Condition (as defined in Annex I), impose
additional conditions to the Amended Offer or amend any other term of the
Amended Offer in any manner adverse to the holders of Shares. Upon the terms
and subject to the conditions of the Amended Offer, the Purchaser will accept
for payment and purchase, as soon as permitted under the terms of the Amended
Offer, all Shares validly tendered and not withdrawn prior to the expiration of
the Amended Offer. Reliance agrees that no Shares held by Reliance or any of
its wholly-owned subsidiaries will be tendered pursuant to the Amended Offer.

(b) Each of Rockwell and the Purchaser, on the one hand, and Reliance,
on the other hand, agrees promptly to correct any information provided by it
for use in the Amended Offer Documents if and to the extent that it shall have
become false or misleading in any material respect, and Rockwell and the
Purchaser further agree to take all steps necessary to cause the Amended Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
stockholders of Reliance, in each case as and to the extent required by
applicable federal securities laws.

(c) Rockwell and the Purchaser agree that the Purchaser shall not
terminate or withdraw the Amended Offer or extend the expiration date of the
Amended Offer unless at the expiration date of the Amended Offer the conditions
to the Amended Offer described in Annex I hereto shall not have been satisfied
or earlier waived. If at the expiration date of the Amended Offer, the
conditions to the Amended Offer described in Annex I hereto shall not have been
satisfied or earlier waived but, in the reasonable belief of Reliance, may be
satisfied prior to March 31, 1995, the Purchaser shall extend the expiration
date of the Amended Offer for an additional period or periods of time until the
earlier of (i) the date such conditions are satisfied or earlier waived and the
Purchaser becomes obligated to accept for payment and pay for Shares tendered
pursuant to the Amended Offer or (ii) this Agreement is terminated in
accordance with its terms; provided that this sentence shall not be applicable
in the event the conditions set forth in paragraph (c)(ii) of Annex I hereto
shall not have

3
<PAGE> 4

been satisfied or earlier waived at the expiration date of the Amended
Offer. Rockwell and the Purchaser shall use their best efforts to consummate
the Amended Offer.

Section 1.02. Reliance Actions. (a) Reliance hereby approves of and
consents to the Amended Offer and represents that (i) the Board, by vote of all
directors at a meeting duly called and held, has, in light of and subject to
the terms and conditions set forth herein, unanimously (x) determined that each
of the Amended Offer and the Merger is fair to, and in the best interests of,
the stockholders of Reliance and (y) approved and adopted this Agreement and
the transactions contemplated hereby, including the Amended Offer and the
Merger, and resolved to recommend acceptance of the Amended Offer and approval
and adoption of this Agreement and the Merger and the other transactions
contemplated hereby by the stockholders of Reliance and (ii) Goldman, Sachs &
Co. and Prudential Securities Incorporated, Reliance's financial advisors, have
rendered to the Board their opinions that the consideration to be received by
the stockholders of Reliance pursuant to the Amended Offer and the Merger is
fair to such stockholders (in the case of Prudential Securities Incorporated,
from a financial point of view).

(b) Reliance hereby agrees promptly to prepare and, after review by
the Purchaser, to file with the SEC and to mail to its stockholders, an
amendment to Reliance's Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the Amended Offer (together with any amendments or supplements
thereto, the "Amended Schedule 14D-9") containing the recommendation described
in Section 1.02(a) hereof and to disseminate the Amended Schedule 14D-9 as
required by Rule 14d-9 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Each of Reliance, on the one hand, and
Rockwell and the Purchaser, on the other hand, agree promptly to correct any
information provided by either of them for use in the Amended Schedule 14D-9 if
and to the extent that it shall have become false or misleading in any material
respect, and Reliance further agrees to take all steps necessary to cause the
Amended Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the stockholders of Reliance, in each case as and to the extent
required by applicable federal securities laws; provided, however, that,
subject to the provisions of Article IX, such recommendation may be withdrawn,
modified or amended to the extent that the Board deems it necessary to do so in
the exercise of its fiduciary and other legal obligations after being so
advised in writing by outside counsel.

4
<PAGE> 5

to applicable law, shall be held in confidence) and assistance as the
Purchaser or its agents or representatives may reasonably request in connection
with the preparation of the Amended Offer and communicating the Amended Offer
to the record and beneficial holders of the Shares.

Section 1.03. Directors. (a) Subject to compliance with applicable
law, promptly upon the payment by the Purchaser for Shares purchased pursuant
to the Amended Offer, and from time to time thereafter, Reliance shall, upon
request of Rockwell, promptly take all actions necessary to cause a majority of
the directors of Reliance to be comprised of Rockwell's designees, including by
accepting the resignations of those incumbent directors designated by Reliance
or increasing the size of the Board and causing Rockwell's designees to be
elected.

(b) Reliance's obligations to appoint Rockwell's designees to the
Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder, if applicable. Reliance shall promptly take all actions required
pursuant to such Section and Rule in order to fulfill its obligations under
this Section 1.03 and shall include in the Amended Schedule 14D-9 such
information with respect to Reliance and its officers and directors as is
required under such Section and Rule in order to fulfill its obligations under
this Section 1.03. Rockwell will supply any information with respect to itself
and its officers, directors and affiliates required by such Section and Rule to
Reliance.

(c) Following the election or appointment of Rockwell's designees
pursuant to this Section 1.03 and prior to the Effective Time (as hereinafter
defined), any amendment or termination of this Agreement by Reliance, any
extension by Reliance of the time for the performance of any of the obligations
or other acts of Rockwell or the Purchaser or waiver of any of Reliance's
rights hereunder, will require the concurrence of a majority of the directors
of Reliance then in office who were not designated by Rockwell.

ARTICLE II

THE MERGER

Section 2.01. The Merger. (a) In accordance with the provisions of
this Agreement and the DGCL, at the Effective Time, the Purchaser shall be
merged with and into Reliance (the "Merger"), and Reliance shall be the
surviving corporation (hereinafter sometimes called the "Surviving
Corporation") and shall continue its corporate existence under the laws of the

5
<PAGE> 6

State of Delaware. At the Effective Time the separate existence of the
Purchaser shall cease.

(b) The name of the Surviving Corporation shall be "Reliance Electric
Company."

(c) The Merger shall have the effects on Reliance and the Purchaser as
Constituent Corporations of the Merger as provided under the DGCL.

Section 2.02. Effective Time. The Merger shall become effective at
the time of filing of, or at such later time specified in, a certificate of
merger (the "Certificate of Merger") (or, if applicable, a certificate of
ownership and merger), in the form required by and executed in accordance with
the DGCL, filed with the Secretary of State of the State of Delaware (the
"Delaware Secretary of State") in accordance with the provisions of Section 251
of the DGCL (or in the event Section 3.04 hereof is applicable, Section 253 of
the DGCL). The date and time when the Merger shall become effective is herein
referred to as the "Effective Time."

Section 2.03. Certificate of Incorporation and By-Laws of Surviving
Corporation. The Certificate of Incorporation and By-Laws of the Purchaser
shall be the Certificate of Incorporation and By-Laws of the Surviving
Corporation until thereafter amended as provided by law.

Section 2.04. Directors and Officers of Surviving Corporation. (a)
Subject to applicable law, the directors of the Purchaser immediately prior to
the Effective Time shall be the initial directors of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.

(b) The officers of Reliance immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation and shall hold
office until their respective successors are duly elected and qualified, or
their earlier death, resignation or removal.

Section 2.05. Further Assurances. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, properties or assets of either of the Constituent Corporations
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this

6
<PAGE> 7

Agreement, the officers of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such other actions and things as may
be necessary or desirable to vest, perfect or confirm any and all right, title
and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.

ARTICLE III

CONVERSION OF SHARES

Section 3.01. Effect on Reliance Shares and the Purchaser's
Capital Stock. (a) As of the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, each Share issued and
outstanding immediately prior to the Effective Time (other than any Shares held
by Rockwell, the Purchaser, any subsidiary of Rockwell or the Purchaser, in the
treasury of Reliance or by any subsidiary of Reliance, which Shares, by virtue
of the Merger and without any action on the part of the holder thereof, shall
be cancelled and retired and shall cease to exist with no payment being made
with respect thereto, and other than any Dissenting Shares (as hereinafter
defined)) shall be converted into the right to receive $31.00 in cash, in the
case of Class A Shares and Class B Shares (the "Class A Merger Price"), and
$83.948 in cash, in the case of Class C Shares (the "Class C Merger Price"),
payable to the holder thereof, without interest thereon, as set forth in
Section 4.02 hereof.

(b) As of the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof, each share of capital stock of the
Purchaser issued and outstanding immediately prior to the Effective Time shall
be converted into and become one fully paid and nonassessable share of Common
Stock, par value $1.00 per share, of the Surviving Corporation.

Section 3.02. Reliance Option Plans. (a) Reliance shall take all
actions necessary to provide that, immediately prior to the Effective Time, (i)
each outstanding option to purchase Class A Shares (the "Options") granted
under either Reliance's 1990 Key Employee Stock Option Plan or Reliance's 1994
Outside Directors Stock Option Plan (collectively, the "Option Plans"), whether
or not then exercisable or vested, shall become fully exercisable and vested,
(ii) each Option which is then outstanding shall be cancelled and (iii) in

7
<PAGE> 8

consideration of such cancellation, and except to the extent that Rockwell
or the Purchaser and the holder of any such Option otherwise agree, Reliance
(or, at Rockwell's option, Rockwell or the Purchaser) shall pay to such
holders of Options an amount in respect thereof equal to the product of (A)
the excess, if any, of the Class A Merger Price over the exercise price
thereof and (B) the number of Class A Shares subject thereto (such payment to
be net of applicable withholding taxes); provided that the foregoing (x) shall
be subject to obtaining any necessary consents of holders of Options and the
making of any necessary amendments to the Option Plans, it being agreed that
Reliance will use its best efforts to obtain any such consents and make any
such amendments, and (y) shall not require any action which violates the Option
Plans; provided, further, that if it is determined that compliance with any of
the foregoing would cause any individual subject to Section 16 of the Exchange
Act to become subject to the profit recovery provisions thereof, any Options
held by such individual will be cancelled or purchased, as the case may be, as
promptly as possible so as not to subject such individual to any liability
pursuant to Section 16, but no later than at the Effective Time, and such
individual will be entitled to receive from Reliance or the Surviving
Corporation at the Effective Time or as soon as practicable thereafter (or, if
later, the date six months and one day following the grant of such option), for
each Share subject to an Option, an amount equal to the excess, if any, of the
Class A Merger Price over the per Class A Share exercise price of such Option.

(b) Except as provided herein or as otherwise agreed to by the parties
and to the extent permitted by the Option Plans, (i) the Option Plans shall
terminate as of the Effective Time and the provisions in any other plan,
program or arrangement, providing for the issuance or grant of any other
interest in respect of the capital stock of Reliance or any of its subsidiaries
shall be deleted as of the Effective Time and (ii) Reliance shall use all
reasonable efforts to ensure that following the Effective Time no holder of
Options or any participant in the Option Plans or any other plans, programs or
arrangements shall have any right thereunder to acquire any equity securities
of Reliance, the Surviving Corporation or any subsidiary thereof.

Section 3.03. Stockholders' Meeting. (a) If required by applicable
law in order to consummate the Merger, Reliance, acting through the Board,
shall, in accordance with applicable law:

(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following
the purchase of

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<PAGE> 9

and payment for Shares by the Purchaser pursuant to the Amended Offer
for the purpose of considering and taking action upon the Merger and this
Agreement and such other matters as may be necessary to consummate the
transactions contemplated herein;

(ii) prepare and file with the SEC a preliminary proxy statement
relating to the matters to be considered at the Special Meeting pursuant
to this Agreement and use its reasonable best efforts (x) to obtain and
furnish the information required to be included by the SEC in the Proxy
Statement (as hereinafter defined) and, after consultation with Rockwell,
to respond promptly to any comments made by the SEC with respect to the
preliminary proxy statement and to cause a definitive proxy statement (the
"Proxy Statement") to be mailed to its stockholders and (y) to obtain the
necessary approvals of the Merger, this Agreement and such other matters
as may be necessary to consummate the transactions contemplated hereby by
its stockholders; and

(iii) subject to the fiduciary obligations of the Board under
applicable law as advised by outside counsel, include in the Proxy
Statement the recommendation of the Board that stockholders of Reliance
vote in favor of the approval of the Merger, the adoption of this
Agreement and such other matters as may be necessary to consummate the
transactions contemplated hereby.

(b) Rockwell agrees that it will vote, or cause to be voted, all of
the Shares then owned by it, the Purchaser or any of its other subsidiaries in
favor of the approval of the Merger, the adoption of this Agreement and such
other matters as may be necessary to consummate the transactions contemplated
hereby.

Section 3.04. Merger Without Meeting of Stockholders. Notwithstanding
Section 3.03 hereof, in the event that Rockwell, the Purchaser or any other
subsidiary of Rockwell shall acquire at least 90% of the outstanding Class A
Shares, 90% of the outstanding Class B Shares and 90% of the outstanding Class
C Shares pursuant to the Amended Offer or otherwise, the parties hereto agree,
at the request of Rockwell or the Purchaser, to take all necessary and
appropriate action (including, without limitation, conversion of any Class B
Shares and Class C Shares into Class A Shares) to cause the Merger to become
effective as soon as practicable after the acceptance for payment and purchase
of Shares by the Purchaser pursuant to the Amended Offer without a meeting of
stockholders of Reliance in accordance with Section 253 of the DGCL.

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<PAGE> 10

Section 3.05. Consummation of the Merger. As soon as practicable
after the satisfaction or waiver of the conditions set forth in Article VIII
hereof, the Surviving Corporation shall execute in the manner required by the
DGCL and file with the Delaware Secretary of State the Certificate of Merger
(or, in the event Section 3.04 hereof is applicable, the Purchaser shall
execute in the manner required by the DGCL and file with the Delaware Secretary
of State a certificate of ownership and merger), and the parties shall take
such other and further actions as may be required by law to make the Merger
effective as promptly as is practicable.

ARTICLE IV

DISSENTING SHARES; PAYMENT FOR SHARES

Section 4.01. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for such Shares in
accordance with Section 262 of the DGCL, if such Section 262 provides for
appraisal rights for such Shares in the Merger ("Dissenting Shares"), shall not
be converted into the right to receive the Class A Merger Price or Class C
Merger Price, as provided in Section 3.01 hereof, unless and until such holder
fails to perfect or withdraws or otherwise loses his right to appraisal and
payment under the DGCL. If, after the Effective Time, any such holder fails to
perfect or withdraws or loses his right to appraisal, such Dissenting Shares
shall thereupon be treated as if they had been converted as of the Effective
Time into the right to receive the Class A Merger Price or Class C Merger
Price, if any, to which such holder is entitled, without interest or dividends
thereon. Reliance shall give Rockwell prompt notice of any demands received by
Reliance for appraisal of Shares and Rockwell shall have the right to
participate in all negotiations and proceedings with respect to such demands.
Reliance shall not, except with the prior written consent of Rockwell, make any
payment with respect to, or settle or offer to settle, any such demands.

Section 4.02. Payment for Shares. (a) From and after the Effective
Time, a bank or trust company to be designated by Rockwell shall act as paying
agent (the "Paying Agent") in effecting the payment of the Class A Merger Price
or Class C Merger Price for certificates (the "Certificates") formerly
representing Shares and entitled to payment of the Class A Merger Price or
Class C Merger Price pursuant to Section 3.01 hereof. At the Effective Time,
Rockwell or the Purchaser shall deposit, or cause to be deposited, in trust

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with the Paying Agent the aggregate Class A Merger Price and Class C Merger
Price to which holders of Shares shall be entitled at the Effective Time
pursuant to Section 3.01 hereof.

(b) Promptly after the Effective Time, the Paying Agent shall mail to
each record holder of Certificates that immediately prior to the Effective Time
represented Shares (other than Certificates representing Shares held by
Rockwell or the Purchaser, any subsidiary of Rockwell or the Purchaser, in the
treasury of Reliance or by any subsidiary of Reliance) a form of letter of
transmittal which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and instructions for use in surrendering such
Certificates and receiving the Class A Merger Price or Class C Merger Price, as
the case may be, therefor. Upon the surrender of each such Certificate, the
Paying Agent shall pay the holder of such Certificate the Class A Merger Price
or Class C Merger Price, as the case may be, multiplied by the number of Class
A Shares, Class B Shares or Class C Shares, as appropriate, formerly
represented by such Certificate, in consideration therefor, and such
Certificate shall forthwith be cancelled. Until so surrendered, each such
Certificate (other than Certificates representing Dissenting Shares and
Certificates representing Shares held by Rockwell or the Purchaser, any
subsidiary of Rockwell or the Purchaser, in the treasury of Reliance or by any
subsidiary of Reliance) shall represent solely the right to receive the
aggregate Class A Merger Price or Class C Merger Price, as the case may be,
relating thereto. No interest shall be paid or accrued on the Class A Merger
Price or Class C Merger Price.

(c) Promptly following the date which is one year after the Effective
Time, the Paying Agent shall deliver to Rockwell all cash, Certificates and
other documents in its possession relating to the transactions described in
this Agreement, and the Paying Agent's duties shall terminate. Thereafter, each
holder of a Certificate formerly representing a Share (other than Certificates
representing Dissenting Shares and Certificates representing Shares held by
Rockwell or the Purchaser, any subsidiary of Rockwell or the Purchaser, in the
treasury of Reliance or by any subsidiary of Reliance) may surrender such
Certificate to Rockwell and (subject to applicable abandoned property, escheat
and similar laws) receive in consideration therefor the aggregate Class A
Merger Price or Class C Merger Price, as the case may be, relating thereto,
without any interest or dividends thereon.

(d) The Class A Merger Price or the Class C Merger Price, if
applicable, shall be net to each holder of Certificates in cash, subject to
reduction only for any

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applicable federal back-up withholding or stock transfer taxes payable by such
holder.

(e) If payment of cash in respect of any Certificate is to be made to
a person other than the person in whose name such Certificate is registered, it
shall be a condition to such payment that the Certificate so surrendered shall
be properly endorsed or shall be otherwise in proper form for transfer and that
the person requesting such payment shall have paid any transfer and other taxes
required by reason of such payment in a name other than that of the registered
holder of the Certificate surrendered or shall have established to the
satisfaction of Rockwell or the Paying Agent that such tax either has been paid
or is not payable.

(f) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates formerly representing Shares (other than Certificates
representing Shares held by Rockwell or the Purchaser, any subsidiary of
Rockwell or the Purchaser, in the treasury of Reliance or by any subsidiary of
Reliance) are presented to the Surviving Corporation or the Paying Agent, they
shall be surrendered and cancelled in return for the payment of the aggregate
Class A Merger Price or Class C Merger Price, as the case may be, relating
thereto, as provided in this Article IV, subject to applicable law in the case
of Dissenting Shares.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF RELIANCE

Reliance represents and warrants to Rockwell and the Purchaser as
follows:

Section 5.01. Organization. Reliance and each of its Significant
Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of incorporation and Reliance and each of its Significant Subsidiaries has all
requisite corporate power and authority to own, lease and operate their
respective properties and to carry on their respective businesses as now being
conducted. Reliance and each of its subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except in such jurisdictions where the

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<PAGE> 13

failure to be so duly qualified or licensed and in good standing would not,
individually or in the aggregate, have a material adverse effect on the
business, operations, assets, financial condition or results of operations of
Reliance and its subsidiaries taken as a whole (a "Reliance Material Adverse
Effect"). Reliance owns directly all of the outstanding capital stock of each
of its Significant Subsidiaries. As used in this Agreement a "Significant
Subsidiary" means a corporation which is a "significant subsidiary" within
the meaning of Rule 1-02(v) of Regulation S-X.

Section 5.02. Capitalization. The authorized capital stock of
Reliance consists of 100,000,000 Class A Shares, 100,000,000 Class B Shares,
12,000,000 Class C Shares and 15,000,000 shares of preferred stock, par value
$.10 per share ("Reliance Preferred Stock"). As of November 18, 1994, there
were 35,542,437 Class A Shares, 694,064 Class B Shares, 5,250,000 Class C
Shares and no shares of Reliance Preferred Stock issued and outstanding, and
there are no Shares or shares of Reliance Preferred Stock held in Reliance's
treasury. All of the outstanding Class A Shares are convertible into Class B
Shares and vice versa on a share for share basis. Each Class C Share is
convertible into 2.708 Class A Shares under certain circumstances as set forth
in Reliance's certificate of incorporation. As of the date hereof, there were
outstanding options to purchase 1,105,829 Class A Shares under Reliance option
plans. Except for the conversion rights of holders of Shares with respect to
conversion of such Shares into other classes of Shares pursuant to the
certificate of incorporation of Reliance, the rights granted pursuant to the
Rights Agreement (which agreement will be amended as described in Section 5.07
hereof), and options and rights to receive Class A Shares under Reliance option
plans (which shall be cancelled pursuant to Section 3.02(a) hereof), there were
not as of November 18, 1994, and at all times thereafter through the Effective
Time there will not be, any existing options, warrants, calls, subscriptions,
or other rights or other agreements or commitments obligating Reliance or any
of its subsidiaries to issue, transfer or sell any shares of capital stock of
Reliance or any of its subsidiaries or any other securities convertible into or
evidencing the right to subscribe for any such shares. All issued and
outstanding Shares are duly authorized and validly issued, fully paid,
non-assessable and free of preemptive rights with respect thereto.

Section 5.03. Authority. Reliance has full corporate power and
authority to execute and deliver this Agreement and, subject to the approval of
its stockholders, if required, to consummate the transactions contemplated
hereby.

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The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Board, and other than the approval by its stockholders, if
required, no other corporate proceedings are necessary to authorize this
Agreement or the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Reliance and,
assuming this Agreement constitutes a legal, valid and binding agreement of the
other parties hereto, it constitutes a legal, valid and binding agreement of
Reliance, enforceable against it in accordance with its terms.

Section 5.04. No Violations; Consents and Approvals. (a) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by Reliance with any of the
provisions hereof will (i) violate any provision of its certificate of
incorporation or by-laws, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default, or
give rise to any right of termination, cancellation or acceleration or any
right which becomes effective upon the occurrence of a merger, consolidation or
change in control, under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture or other instrument of indebtedness for money
borrowed to which Reliance or any of its subsidiaries is a party, or by which
Reliance or any of its subsidiaries or any of their respective properties is
bound, other than the Competitive Advance and Revolving Credit Facility
Agreement, dated as of April 21, 1993 among Reliance and the Lenders named
therein and Chemical Bank, as administrative agent, and any violations,
defaults, breaches of or rights under notes, bonds, mortgages, indentures or
other instruments of indebtedness related to indebtedness for borrowed money
amounting in the aggregate to less than $20,000,000, or (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default, or give rise to any right of termination, cancellation
or acceleration or any right which becomes effective upon the occurrence of a
merger, consolidation or change in control, under, any of the terms, conditions
or provisions of any license, franchise, permit or agreement (other than those
covered by the preceding clause (ii)) to which Reliance or any of its
subsidiaries is a party, or by which Reliance or any of its subsidiaries or any
of their respective properties is bound, or (iv) violate any statute, rule,
regulation, order or decree of any public body or authority by which Reliance
or any of its subsidiaries or any of their respective properties is bound,
excluding from the foregoing clauses (iii) and (iv) violations, breaches,
defaults or rights under the laws of any jurisdiction outside the United States
or which, either individually or in the aggregate, would

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not have a Reliance Material Adverse Effect or materially impair Reliance's
ability to consummate the transactions contemplated hereby or for which
Reliance has received or, prior to the consummation of the Amended Offer, shall
have received appropriate consents or waivers.

(b) No filing or registration with, notification to, or authorization,
consent or approval of, any governmental entity is required in connection with
the execution and delivery of this Agreement by Reliance, or the consummation
by Reliance of the transactions contemplated hereby, except (i) expiration of
the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), which waiting period has expired, (ii) in
connection, or in compliance, with the provisions of the Exchange Act, (iii)
the filing of the Certificate of Merger with the Delaware Secretary of State,
(iv) such filings and consents as may be required under any environmental law
pertaining to any notification, disclosure or required approval triggered by
the Merger or the transactions contemplated by this Agreement, (v) filing with,
and approval of, the New York Stock Exchange, Inc. and the SEC with respect to
the delisting and deregistration of the Class A Shares, (vi) such consents,
approvals, orders, authorizations, notifications, registrations, declarations
and filings as may be required under the corporation, takeover or blue sky laws
of various states or non-U.S. changes in control laws or regulations and (vii)
such other consents, approvals, orders, authorizations, notifications,
registrations, declarations and filings not obtained prior to the consummation
of the Amended Offer the failure of which to be obtained or made would not,
individually or in the aggregate, have a Reliance Material Adverse Effect, or
materially impair Reliance's ability to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.

Section 5.05. SEC Documents; Financial Statements. (a) Reliance has
made available to Rockwell and the Purchaser copies of each registration
statement, report, proxy statement, information statement or schedule filed
with the SEC by Reliance since January 1, 1994 (the "SEC Documents"). As of
their respective dates, Reliance's SEC Documents complied in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended, and the Exchange Act, as the case may be, none of such SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

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<PAGE> 16

(b) Neither Reliance nor any of its subsidiaries, nor any of their
respective assets, businesses, or operations, is as of the date of this
Agreement a party to, or is bound or affected by, or receives benefits under
any contract or agreement or amendment thereto, that in each case would be
required to be filed as an exhibit to a Form 10-K as of the date of this
Agreement that has not been filed as an exhibit to an SEC Document filed prior
to the date of this Agreement.

(c) As of their respective dates, the consolidated financial
statements included in Reliance's SEC Documents complied as to form in all
material respects with then applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto) and fairly presented Reliance's consolidated
financial position and that of its consolidated subsidiaries as at the dates
thereof and the consolidated results of their operations and statements of cash
flows for the periods then ended (subject, in the case of unaudited statements,
to the lack of footnotes thereto, to normal year-end audit adjustments and to
any other adjustments described therein).

Section 5.06. Absence of Certain Changes. Since September 30, 1994 to
the date of this Agreement, and excluding the payments contemplated by Section
5.11 hereof, Reliance has not (a) suffered any event or occurrence which,
individually or in the aggregate, would have a Reliance Material Adverse Effect
or (b) made any changes in accounting methods, principles or practices or (c)
declared, set aside or paid any dividend or other distribution with respect to
its capital stock. Since September 30, 1994 to the date of this Agreement,
each of Reliance and its subsidiaries has conducted its operations according to
its ordinary course of business consistent with past practice.

Section 5.07. Rights Agreement. The Rights Agreement will be, within
two business days after the date hereof, amended to provide that (i) neither
Rockwell nor the Purchaser will become an "Acquiring Person," that no "Trigger
Event," "Shares Acquisition Date" or "Distribution Date" (as such terms are
defined in the Rights Agreement) will occur and that Section 13 of the Rights
Agreement will not be triggered, in each case as a result of the announcement,
commencement or consummation of the Initial Offer or the Amended Offer, the
execution or delivery of this Agreement or any amendment hereto or the
consummation of the transactions contemplated hereby (including, without
limitation, the Merger), with the effect that none of such events will trigger
the exercisability of the

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Rights, the separation of the Rights from the stock certificates to which
they are attached or any other provision of the Rights Agreement, (ii) a
Distribution Date will in no event occur prior to the Effective Time or the
earlier termination of this Agreement and (iii) the Rights will no longer be
outstanding upon the consummation of the Merger. Reliance will promptly
furnish to Rockwell and the Purchaser a complete and correct copy of the Rights
Agreement, as so amended.

Section 5.08. Information. None of the Amended Schedule 14D-9, the
Proxy Statement, if any, or any other document filed or to be filed by or on
behalf of Reliance with the SEC or any other governmental entity in connection
with the transactions contemplated by this Agreement contained when filed or
will, at the respective times filed with the SEC or other governmental entity
and, in addition, in the case of the Proxy Statement, if any, at the date it or
any amendment or supplement is mailed to stockholders and at the time of any
Special Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading; provided that the foregoing shall not apply to
information supplied by Rockwell or the Purchaser specifically for inclusion or
incorporation by reference in any such document. The Amended Schedule 14D-9
and the Proxy Statement, if any, will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder. None of the information supplied by Reliance specifically for
inclusion or incorporation by reference in the Amended Offer Documents or in
any other document filed or to be filed by or on behalf of Rockwell or the
Purchaser with the SEC or any other governmental entity in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

Section 5.09. Delaware Section 203. The Board has taken all
appropriate and necessary action such that the provisions of Section 203 of the
DGCL will not apply to any of the transactions contemplated by this Agreement.

Section 5.10. Broker's Fees. Except for fees and expenses
specifically described in Reliance's Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Initial Offer payable in connection with the
engagement of Goldman, Sachs & Co. and Prudential Securities Incorporated by

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Reliance, neither Reliance nor any of its subsidiaries or any of its
directors or officers has incurred any liability for any broker's fees,
commissions, or financial advisory or finder's fees in connection with any of
the transactions contemplated by this Agreement, and neither Reliance nor any
of its subsidiaries or any of its directors or officers has employed any other
broker, finder or financial advisor in connection with any of the transactions
contemplated by this Agreement.

Section 5.11. Termination of General Signal Agreement. (a) The
Agreement and Plan of Merger, dated as of August 30, 1994, by and between
General Signal Corporation, a New York corporation ("General Signal"), and
Reliance, as amended to date (the "General Signal Agreement"), has been
terminated in accordance with its terms, and Reliance has paid to General
Signal the fees and expenses required pursuant thereto. The aggregate amount
of all fees and expenses paid or payable by Reliance to General Signal as a
result of such termination shall not exceed $55,150,000. Reliance has not paid
General Signal and is not required under the General Signal Agreement (or under
any other agreement or understanding between General Signal and Reliance or
otherwise) to pay to General Signal any amounts beyond those specified in the
immediately preceding sentence.

(b) Notwithstanding any other provision of this Agreement to the
contrary, Rockwell and the Purchaser acknowledge and consent to payment to
General Signal of the amount set forth in paragraph (a) of this Section 5.11.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF ROCKWELL AND THE PURCHASER

Rockwell and the Purchaser represent and warrant to Reliance
as follows:

Section 6.01. Organization. Each of Rockwell and the Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware and each of Rockwell and the Purchaser has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.

Section 6.02. Authority. Each of Rockwell and the Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized and approved by

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the Board of Directors of each of Rockwell and the Purchaser and by Rockwell
as the sole stockholder of the Purchaser and no other corporate proceedings
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Rockwell and the Purchaser and, assuming this
Agreement constitutes a legal, valid and binding agreement of Reliance, it
constitutes a legal, valid and binding agreement of each of Rockwell and the
Purchaser, enforceable against them in accordance with its terms.

Section 6.03. No Violations; Consents and Approvals. (a) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by Rockwell or the Purchaser
with any of the provisions hereof will (i) violate any provision of their
respective certificates of incorporation or by-laws, (ii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default, or give rise to any right of termination, cancellation or
acceleration or any right which becomes effective upon the occurrence of a
merger, under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture or other instrument of indebtedness for money borrowed to
which Rockwell or the Purchaser is a party, or by which Rockwell or the
Purchaser or any of their respective properties is bound, (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default, or give rise to any right of termination, cancellation
or acceleration or any right which becomes effective upon the occurrence of a
merger, under, any of the terms, conditions or provisions of any license,
franchise, permit or agreement to which Rockwell or the Purchaser is a party,
or by which Rockwell or the Purchaser or any of their respective properties is
bound, or (iv) violate any statute, rule, regulation, order or decree of any
public body or authority by which Rockwell or the Purchaser or any of its
respective properties is bound, excluding from the foregoing clauses (ii),
(iii) and (iv) violations, breaches, defaults or rights which, either
individually or in the aggregate, would not have a material adverse effect on
Rockwell's or the Purchaser's ability to perform their respective obligations
pursuant to this Agreement or consummate the Amended Offer and the Merger (a
"Rockwell Material Adverse Effect") or for which Rockwell or the Purchaser has
received appropriate consents or waivers.

(b) No filing or registration with, notification to, or authorization,
consent or approval of, any governmental entity is required by Rockwell or the
Purchaser in connection with the execution and delivery of this Agreement, or
the consummation by Rockwell or the Purchaser of the transactions

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<PAGE> 20

contemplated hereby, except (i) expiration of the waiting period under
the HSR Act, which waiting period has expired, (ii) in connection, or in
compliance, with the provisions of the Exchange Act, (iii) the filing of the
Certificate of Merger with the Delaware Secretary of State, (iv) such filings
and consents as may be required under any environmental law pertaining to any
notification, disclosure or required approval triggered by the Merger or the
transactions contemplated by this Agreement, (v) such consents, approvals,
orders, authorizations, notifications, approvals, registrations, declarations
and filings as may be required under the corporation, takeover or blue sky laws
of various states and (vi) such other consents, orders, authorizations,
registrations, declarations and filings not obtained prior to the Effective
Time the failure of which to be obtained or made would not, individually or in
the aggregate, have a Rockwell Material Adverse Effect.

Section 6.04. Information. Neither the Amended Offer Documents nor
any other document filed or to be filed by or on behalf of Rockwell or the
Purchaser with the SEC or any other governmental entity in connection with the
transactions contemplated by this Agreement contained when filed or will, at
the respective times filed with the SEC or other governmental entity, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading; provided that the foregoing shall not apply to information supplied
by Reliance specifically for inclusion or incorporation by reference in any
such document. None of the information supplied by Rockwell or the Purchaser
specifically for inclusion or incorporation by reference in the Amended
Schedule 14D-9, the Proxy Statement, if any, or any other document filed or to
be filed by or on behalf of Reliance with the SEC or any other governmental
entity in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.

Section 6.05. Financing. Rockwell or the Purchaser has and will have
at the time of acceptance for payment and purchase of Shares under the Amended
Offer and at the Effective Time, the funds necessary to consummate the Amended
Offer and the Merger and the transactions contemplated thereby and to pay
related fees and expenses.

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ARTICLE VII

COVENANTS

Section 7.01. Conduct of Business of Reliance. Except as contemplated
by this Agreement or as expressly agreed to in writing by Rockwell, during the
period from the date of this Agreement to the Effective Time, each of Reliance
and its subsidiaries will conduct its operations according to its ordinary
course of business consistent with past practice, and will use all commercially
reasonable efforts to preserve intact its business organization, to keep
available the services of its employees and to maintain satisfactory
relationships with suppliers, distributors, customers and others having
business relationships with it and will take no action which would materially
adversely affect the ability of the parties to consummate the transactions
contemplated by this Agreement.

Section 7.02. Acquisitions and Divestitures. Prior to the Effective
Time, Reliance shall keep Rockwell advised of the status of all discussions and
negotiations concerning possible acquisitions and divestitures of any
corporations or businesses, and Reliance agrees that without the prior written
consent of Rockwell it shall not make, or agree to make, any such acquisition
or divestiture.

Section 7.03. No Solicitation. (a) Reliance agrees that, prior to
the Effective Time, it shall not, and shall not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors, officers, employees,
agents or representatives to, directly or indirectly, solicit, initiate,
facilitate or encourage (including by way of furnishing or disclosing
non-public information) any inquiries or the making of any proposal with
respect to any merger, consolidation or other business combination involving
Reliance or its subsidiaries or acquisition of any kind of all or substantially
all of the assets or capital stock of Reliance and its subsidiaries taken as a
whole (an "Acquisition Transaction") or negotiate, explore or otherwise
communicate in any way with any third party (other than Rockwell or the
Purchaser) with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Merger or any other transactions contemplated by this
Agreement; provided that Reliance may, in response to an unsolicited written
proposal with respect to an Acquisition Transaction from a financially capable
third party that contains no financing condition, (i) furnish or disclose
non-public information to such third party and (ii) negotiate, explore or
otherwise communicate with such third party, in each case only if the Board
determines in good faith by a majority vote, after consultation with its legal
and financial advisors,

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and after receipt of the written opinion of outside legal counsel of
Reliance that failing to take such action would constitute a breach of the
fiduciary duties of the Board, that taking such action is reasonably likely to
lead to an Acquisition Transaction that is more favorable to the stockholders
of Reliance than the Amended Offer and the Merger and that failing to take such
action would constitute a breach of the Board's fiduciary duties.

(b) Reliance shall immediately advise in writing Rockwell of the
receipt of any inquiries or proposals relating to an Acquisition Transaction
and any actions taken pursuant to Section 7.03(a).

Section 7.04. Access to Information. From the date of this Agreement
until the Effective Time, Reliance will give Rockwell and its authorized
representatives (including counsel, environmental and other consultants,
accountants and auditors) full access during normal business hours to all
facilities, personnel and operations and to all books and records of Reliance
and its subsidiaries, will permit Rockwell to make such inspections as it may
reasonably require and will cause its officers and those of its subsidiaries to
furnish Rockwell with such financial and operating data and other information
with respect to its business and properties as Rockwell may from time to time
reasonably request. Other than as required by applicable law, Rockwell agrees
that any information furnished to it, its subsidiaries or its authorized
representatives pursuant to this Section 7.04 will be kept confidential for a
period of three years from the date hereof.

Section 7.05. Best Efforts; Other Actions. Subject to the terms and
conditions herein provided and applicable law, each of Reliance, Rockwell and
the Purchaser shall use its best efforts promptly to take, or cause to be
taken, all other actions and do, or cause to be done, all other things
necessary, proper or appropriate under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, (i) the obtaining of all necessary consents,
approvals or waivers under its material contracts and (ii) the lifting of any
legal bar to the Merger.

Section 7.06. Public Announcements. Before issuing any press release
or otherwise making any public statements with respect to this Agreement, the
Amended Offer or the Merger, Rockwell, the Purchaser and Reliance will consult
with each other as to its form and substance and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by law.

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Section 7.07. Notification of Certain Matters. Each of Reliance and
Rockwell shall give prompt notice to the other party of (i) the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which would
be likely to cause either (A) any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at any time from
the date hereof to the acceptance for payment of Shares pursuant to the Amended
Offer, (B) any condition set forth in Annex I to be unsatisfied in any material
respect at any time from the date hereof to the date the Purchaser purchases
Shares pursuant to the Amended Offer or (C) any condition set forth in Article
VIII hereof to be unsatisfied in any material respect at any time from the date
hereof to the Effective Time, and (ii) any material failure of Reliance or
Rockwell, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 7.07 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.

Section 7.08. Indemnification. (a) From and after the Effective
Time, Rockwell shall indemnify, defend and hold harmless the present and former
officers, directors, employees and agents of Reliance and its subsidiaries
against all losses, claims, damages, expenses or liabilities arising out of
actions or omissions or alleged actions or omissions occurring at or prior to
the Effective Time to the same extent and on the same terms and conditions
(including with respect to advancement of expenses) provided for in Reliance's
Certificate of Incorporation and By-Laws and agreements in effect at the date
hereof (to the extent consistent with applicable law).

(b) For a period of six years after the Effective Time, Rockwell shall
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by Reliance (provided that Rockwell
may substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous) with respect to
claims arising from facts or events which occurred before the Effective Time;
provided, however, that Rockwell shall not be obligated to make annual premium
payments for such insurance to the extent such premiums exceed 250% of the
premiums paid as of the date hereof by Reliance for such insurance.

(c) The provisions of this Section 7.08 are intended to be for the
benefit of, and shall be enforceable by each indemnified party hereunder, his
or her heirs and his or her representatives.

23
<PAGE> 24

Section 7.09. Expenses. Except as set forth in Section 9.05(b)
hereof, Rockwell and Reliance shall bear their respective expenses incurred in
connection with this Agreement, the Amended Offer and the Merger, including,
without limitation, the preparation, execution and performance of this
Agreement and the transactions contemplated hereby, and all fees and expenses
of investment bankers, finders, brokers, agents, representatives, counsel and
accountants.

Section 7.10. Reliance Rights Agreement. Except as contemplated by
Section 5.07 hereof or the last sentence of this Section 7.10, Reliance shall
not redeem the Rights or amend or terminate the Rights Agreement prior to the
consummation of the Merger unless required to do so by order of a court of
competent jurisdiction or fiduciary obligations. Reliance will take any
necessary further actions to cause the Rights not to be outstanding upon
consummation of the Merger. If requested to do so by Rockwell or the
Purchaser, Reliance shall redeem all outstanding Rights at a redemption price
of $0.01 per Right effective immediately prior to the acceptance for payment of
any Shares by the Purchaser pursuant to the Amended Offer.

Section 7.11. State Takeover Laws. Reliance shall, upon the request
of Rockwell or the Purchaser, take all reasonable steps to assist in any
challenge by Rockwell or the Purchaser to the validity or applicability to the
transactions contemplated by this Agreement, including the Initial Offer, the
Amended Offer and the Merger, of any state takeover law.

ARTICLE VIII

CONDITIONS TO THE OBLIGATIONS OF ROCKWELL,
THE PURCHASER AND RELIANCE

The respective obligations of each party to effect the Merger shall be
subject to the fulfillment of each of the following conditions:

Section 8.01. Purchase of Shares. The Purchaser shall have accepted
for payment and paid for Shares pursuant to the Amended Offer in accordance
with the terms thereof; provided that this condition shall be deemed to have
been satisfied with respect to Rockwell and the Purchaser if the Purchaser
fails to accept for payment or pay for Shares pursuant to the Amended Offer in
violation of the terms of the Amended Offer.

Section 8.02. Stockholder Approval. The vote of the stockholders of
Reliance necessary to consummate the

24
<PAGE> 25

transactions contemplated by this Agreement shall have been obtained, if
required by applicable law.

Section 8.03. No Legal Impediments. No statute, rule, regulation,
judgment, writ, decree, order or injunction shall have been promulgated,
enacted, entered, enforced or deemed applicable to this Agreement or the
Merger, and no other action shall have been taken, by any domestic, foreign or
supranational government or governmental, administrative or regulatory
authority or agency or by any court or tribunal, domestic, foreign or
supranational, that has the effect of making illegal or directly or indirectly
restraining, prohibiting or restricting the consummation of the Merger.

ARTICLE IX

TERMINATION AND ABANDONMENT

Section 9.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time:

(a) by mutual consent of the Boards of Directors of Rockwell and
Reliance;

(b) by either Rockwell or Reliance if, without fault of such
terminating party, the purchase of Shares pursuant to the Amended Offer
shall not have occurred on or before March 31, 1995, which date may be
extended by mutual written consent of the parties hereto;

(c) by Rockwell or Reliance if the Amended Offer expires or is
terminated or withdrawn pursuant to its terms without any Shares being
purchased thereunder; provided, however, that Rockwell may not terminate
this Agreement pursuant to this Section 9.01(c) if Rockwell's or the
Purchaser's termination of, or failure to accept for payment or pay for
any Shares tendered pursuant to, the Amended Offer does not follow the
occurrence, or failure to occur, as the case may be, of any condition set
forth in Annex I hereto or is otherwise in violation of the terms of the
Amended Offer; or

(d) by either Rockwell or Reliance if any court of competent
jurisdiction in the United States or other governmental body in the
United States shall have issued an order (other than a temporary
restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of Shares
pursuant to the Amended Offer or the Merger, and such order, decree,
ruling or other action shall have become

25
<PAGE> 26

final and nonappealable; provided that the party seeking to terminate
this Agreement shall have used its best efforts to remove or lift such
order, decree or ruling.

Section 9.02. Termination by Rockwell. This Agreement may be
terminated and the Amended Offer and the Merger may be abandoned by action of
the Board of Directors of Rockwell, at any time prior to the purchase of Shares
pursuant to the Amended Offer, if the Board shall (a) withdraw, modify or
change its recommendation or approval in respect of this Agreement or the
Amended Offer in a manner adverse to Rockwell, (b) have recommended any
proposal in respect of an Acquisition Transaction, or (c) fail to reaffirm its
recommendation and approval in respect of this Agreement and the Amended Offer
promptly after any request therefor by Rockwell.

Section 9.03. Termination by Reliance. This Agreement may be
terminated and the Merger may be abandoned by action of the Board, at any time
prior to the Effective Time, (a) if there shall be a material breach of any of
Rockwell's or the Purchaser's representations, warranties or covenants
hereunder, which breach shall not be cured within ten days of notice thereof,
or (b) to allow Reliance to enter into an agreement in respect of an
Acquisition Transaction which the Board determines is more favorable to
Reliance's stockholders from a financial point of view than the transactions
contemplated hereby (provided that, upon such termination, Reliance shall pay
to Rockwell the fee described in Section 9.05(b) hereof).

Section 9.04. Procedure for Termination. In the event of termination
and abandonment of the Merger and the Amended Offer by Rockwell or the Merger
by Reliance pursuant to this Article IX, written notice thereof shall forthwith
be given to the other.

Section 9.05. Effect of Termination and Abandonment. (a) In the event
of termination of this Agreement and abandonment of the Merger pursuant to this
Article IX, no party hereto (or any of its directors or officers) shall have
any liability or further obligation to any other party to this Agreement,
except as provided in this Section 9.05 and except that nothing herein shall
relieve any party from liability for any breach of this Agreement.

(b) If (i) after the date hereof and during the term of this
Agreement any corporation, partnership, person, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act) other than Rockwell or the
Purchaser or any of their respective subsidiaries or affiliates shall have
become the beneficial owner of more than 50% of the outstanding Class A

26
<PAGE> 27

Shares (either on a primary or a fully diluted basis) or (ii) Rockwell
shall have terminated this Agreement pursuant to Section 9.02 hereof or (iii)
Reliance shall have terminated this Agreement pursuant to Section 9.03(b)
hereof, then in any such case Reliance shall promptly, but in no event later
than two days after the date of such termination or event, pay Rockwell an
expense reimbursement fee of $10,000,000, which amount shall be payable in same
day funds, provided, that no fee shall be paid pursuant to this Section 9.05(b)
if Rockwell shall be in material breach of its obligations hereunder.

ARTICLE X

DEFINITIONS

Section 10.01. Terms Defined in the Agreement. The following terms
used herein shall have the meanings ascribed in the indicated sections.

<TABLE>
<S> <C>
Acquisition Transaction . . . . . . . . . . . 7.03(a)
Agreement . . . . . . . . . . . . . . . . . . Preamble
Amended Offer . . . . . . . . . . . . . . . . Recitals
Amended Offer Documents . . . . . . . . . . . 1.01(a)
Amended Schedule 14D-9 . . . . . . . . . . . . 1.02(b)
Board . . . . . . . . . . . . . . . . . . . . Recitals
Certificate of Merger . . . . . . . . . . . . 2.02
Certificates . . . . . . . . . . . . . . . . . 4.02(a)
Class A Merger Price . . . . . . . . . . . . . 3.01
Class A Rights . . . . . . . . . . . . . . . . Recitals
Class A Shares . . . . . . . . . . . . . . . . Recitals
Class B Rights . . . . . . . . . . . . . . . . Recitals
Class B Shares . . . . . . . . . . . . . . . . Recitals
Class C Merger Price . . . . . . . . . . . . . 3.01
Class C Rights . . . . . . . . . . . . . . . . Recitals
Class C Shares . . . . . . . . . . . . . . . . Recitals
Constituent Corporations . . . . . . . . . . Preamble
Delaware Secretary of State . . . . . . . . . 2.02
DGCL . . . . . . . . . . . . . . . . . . . . . Recitals
Dissenting Shares . . . . . . . . . . . . . . 4.01
Effective Time . . . . . . . . . . . . . . . . 2.02
Exchange Act . . . . . . . . . . . . . . . . . 1.02(b)
General Signal . . . . . . . . . . . . . . . . 5.11(a)
General Signal Agreement . . . . . . . . . . . 5.11(a)
HSR Act . . . . . . . . . . . . . . . . . . . 5.04(b)
Initial Offer . . . . . . . . . . . . . . . . Recitals
Merger . . . . . . . . . . . . . . . . . . . . 2.01(a)
Minimum Condition . . . . . . . . . . . . . . Annex I
Offer Documents . . . . . . . . . . . . . . . 1.01(a)
Offer to Purchase . . . . . . . . . . . . . . 1.01(a)
Option Plans . . . . . . . . . . . . . . . . . 3.02(a)
Options . . . . . . . . . . . . . . . . . . . 3.02(a)
</TABLE>

27
<PAGE> 28

<TABLE>
<S> <C>
Paying Agent . . . . . . . . . . . . . . . . . 4.02(a)
person . . . . . . . . . . . . . . . . . . . . 11.09
Proxy Statement . . . . . . . . . . . . . . . 3.03(a)(ii)
Purchaser . . . . . . . . . . . . . . . . . . Preamble
Reliance . . . . . . . . . . . . . . . . . . . Preamble
Reliance Material Adverse Effect . . . . . . . 5.01
Reliance Preferred Stock . . . . . . . . . . . 5.02
Rights . . . . . . . . . . . . . . . . . . . . Recitals
Rights Agreement . . . . . . . . . . . . . . . Recitals
Rockwell . . . . . . . . . . . . . . . . . . . Preamble
Rockwell Material Adverse Effect . . . . . . . 6.03(a)
SEC . . . . . . . . . . . . . . . . . . . . . 1.01(a)
SEC Documents . . . . . . . . . . . . . . . . 5.05(a)
Shares . . . . . . . . . . . . . . . . . . . . Recitals
Significant Subsidiary . . . . . . . . . . . . 5.01
Special Meeting . . . . . . . . . . . . . . . 3.03(a)(i)
subsidiary . . . . . . . . . . . . . . . . . . 11.09
Surviving Corporation . . . . . . . . . . . . 2.01(a)
</TABLE>

ARTICLE XI

MISCELLANEOUS

Section 11.01. Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by written
agreement of Rockwell, the Purchaser and Reliance at any time prior to the
Effective Time with respect to any of the terms contained herein.

Section 11.02. Waiver of Compliance; Consents. Any failure of
Rockwell, the Purchaser or Reliance to comply with any obligation, covenant,
agreement or condition herein may be waived by Reliance, the Purchaser or
Rockwell, respectively, only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
11.02.

Section 11.03. Survivability; Investigations. The respective
representations and warranties of Rockwell, the Purchaser and Reliance
contained herein or in any certificates or other documents delivered prior to
or as of the Effective Time shall not be deemed waived or otherwise affected by
any investigation made by any party hereto and shall not survive the Merger.
The covenants and agreements of the Surviving

28
<PAGE> 29

Corporation and Rockwell and the Purchaser, including those contained in
Section 7.08 hereof, shall survive the Effective Time without limitation.

Section 11.04. Notices. All notices and other communications
hereunder shall be in writing and shall be delivered personally, by next-day
courier or mailed by registered or certified mail (return receipt requested),
first class postage prepaid, or telecopied with confirmation of receipt, to the
parties at the addresses specified below (or at such other address for a party
as shall be specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof). Any such notice shall
be effective upon receipt, if personally delivered or telecopied, one day after
delivery to a courier for next-day delivery, or three days after mailing, if
deposited in the U.S. mail, first class postage prepaid.

(a) if to Reliance, to

Reliance Electric Company
6065 Parkland Avenue
Cleveland, Ohio 44124
Telecopy: (216) 266-5852
Attention: Vice President, General Counsel
and Secretary

with a copy to

Calfee, Halter & Griswold
800 Superior Avenue
Suite 1800
Cleveland, Ohio 44114
Telecopy: (216) 241-0816
Attention: Michael L. Miller, Esq.

and

Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Joseph B. Frumkin, Esq.

29
<PAGE> 30

(b) if to Rockwell or the Purchaser, to

Rockwell International Corporation
2201 Seal Beach Boulevard
Seal Beach, California 90740
Telecopy: (310) 797-5020
Attention: Senior Vice President, General
Counsel and Secretary

with a copy to:

Chadbourne & Parke
30 Rockefeller Plaza
New York, New York 10112
Telecopy: (212) 541-5369
Attention: Peter R. Kolyer, Esq.

and

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
Attention: Steven A. Rosenblum, Esq.

Section 11.05. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties. This Agreement is not intended to confer any rights or remedies
hereunder upon any other person except the parties hereto and, with respect to
Section 7.08, the present and former officers, directors, employees and agents
of Reliance.

Section 11.06. Governing Law. Except as the laws of the State of
Delaware are by their terms applicable, this Agreement shall be governed by the
laws of the State of New York (regardless of the laws that might otherwise
govern under applicable New York principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction,
effect, performance and remedies.

Section 11.07. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

30
<PAGE> 31

Section 11.08. Severability. In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect against a party hereto, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby and such invalidity, illegality or
unenforceability shall only apply as to such party in the specific jurisdiction
where such judgment shall be made.

Section 11.09. Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement. As used in this Agreement, (i)
the term "person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof; and (ii) the term "subsidiary"
of any specified corporation shall mean any corporation of which a majority of
the outstanding securities having ordinary voting power to elect a majority of
the board of directors are directly or indirectly owned by such specified
corporation or any other person of which a majority of the equity interests
therein are, directly or indirectly, owned by such specified corporation.

Section 11.10. Guarantee. Rockwell hereby guarantees the due
performance by the Purchaser of all of the Purchaser's obligations incurred in
connection with the Amended Offer and the Merger.

Section 11.11. Entire Agreement. This Agreement, including the
schedules, annexes and exhibits hereto and the documents and instruments
referred to herein and therein, embodies the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein and
therein and supersedes all prior agreements and understandings between the
parties with respect to such subject matter. There are no representations,
promises, warranties, covenants, or

31
<PAGE> 32

undertakings in respect of such subject matter, other than those expressly set
forth or referred to herein and therein.

IN WITNESS WHEREOF, Rockwell, the Purchaser and Reliance have caused
this Agreement to be signed by their respective duly authorized officers as of
the date first above written.

ROCKWELL INTERNATIONAL CORPORATION

By: /s/ WILLIAM J. CALISE, JR.
-------------------------------
Name: William J. Calise, Jr.
Title: Senior Vice President,
General Counsel and Secretary

ROK ACQUISITION CORPORATION

By: /s/ WILLIAM J. CALISE, JR.
-------------------------------
Name: William J. Calise, Jr.
Title: Secretary

RELIANCE ELECTRIC COMPANY

By: /s/ JOHN C. MORLEY
-------------------------------
Name: John C. Morley
Title: President and Chief Executive
Officer

32
<PAGE> 33

ANNEX I

Conditions to the Amended Offer. Notwithstanding any other provision
of the Amended Offer, the Purchaser shall not be required to accept for payment
or, subject to any applicable rules and regulations of the SEC, including Rule
14e-l(c) promulgated under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Amended Offer), pay for, and may delay the acceptance for
payment of any tendered Shares and amend or terminate the Amended Offer as to
any Shares not then paid for if (i) the condition that there shall be validly
tendered and not withdrawn prior to the expiration of the Amended Offer a
number of Shares which represents at least a majority of the number of Class A
Shares outstanding on a fully diluted basis (assuming conversion of all Class B
Shares and Class C Shares into Class A Shares and the exercise of all
outstanding Options) (the "Minimum Condition") shall not have been satisfied or
(ii) at any time after execution of this Merger Agreement and before the time
of payment for any such Shares (whether or not any Shares have theretofore been
accepted for payment or paid for pursuant to the Amended Offer), any of the
following events shall occur:

(a) there shall be in effect an injunction or other order, decree,
judgment or ruling by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission or a statute, rule,
regulation, executive order or other action shall have been promulgated,
enacted or taken by a governmental authority or a governmental, regulatory or
adminstrative agency or commission which in any such case (i) restrains or
prohibits the making or consummation of the Amended Offer or the consummation
of the Merger, (ii) prohibits or restricts the ownership or operation by
Rockwell or the Purchaser (or any of their respective affiliates or
subsidiaries) of any portion of its or Reliance's business or assets which is
material to the business of all such entities taken as a whole, or compels
Rockwell or the Purchaser (or any of their respective affiliates or
subsidiaries) to dispose of or hold separate any portion of its or Reliance's
business or assets which is material to the business of all such entities taken
as a whole, (iii) imposes material limitations on the ability of the Purchaser
effectively to acquire or to hold or to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote the Shares
purchased by the Purchaser on all matters properly presented to the
stockholders of Reliance, (iv) imposes any material limitations on the ability
of Rockwell or the Purchaser or any of their respective affiliates or
subsidiaries effectively to control in any material respect the business and
operations of Reliance and its subidiaries, or (v) which otherwise would
materially

<PAGE> 34

adversely affect Reliance and its subsidiaries taken as a whole; or

(b) this Agreement shall have been terminated by Reliance, Rockwell
or the Purchaser in accordance with its terms; or

(c) (i) the representations and warranties made by Reliance in this
Agreement shall not have been true and correct in all material respects when
made, or shall have ceased to be true and correct in all material respects as
of the Expiration Date (as defined in the Amended Offer Documents) as if made
as of such date, or (ii) as of the Expiration Date Reliance shall not in all
material respects have performed its material obligations and agreements and
complied with its material covenants to be performed and complied with by it
under this Agreement; or

(d) Rockwell, the Purchaser and Reliance shall have agreed that the
Purchaser shall amend the Amended Offer to terminate the Amended Offer or
postpone the payment for Shares pursuant thereto.

The foregoing conditions are for the sole benefit of Rockwell and the
Purchaser and may be asserted by Rockwell or the Purchaser regardless of the
circumstances (including any action or inaction by Rockwell or the Purchaser)
giving rise to any such conditions and may be waived by Rockwell or the
Purchaser in whole or in part at any time and from time to time in their sole
discretion, in each case, subject to the terms of this Agreement. The failure
by Rockwell or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.

<PAGE> 1
Exhibit 37

Stephen A. Van Oss
94-18
November 21, 1994 Stephen A. Van Oss
216-266-5809

Reliance and Rockwell Enter Into Merger Agreement

Cleveland, Ohio -- November 21, 1994 -- Reliance Electric Company (NYSE:REE)
announced today that it has entered into an Agreement and Plan of Merger with
Rockwell International Corporation (NYSE:ROK) pursuant to which Rockwell will
amend its tender offer to offer $31.00 per share for Class A and Class B Common
Stock of the Company and $83.948 per share for Class C Common Stock.
Immediately prior to execution of the Agreement with Rockwell, the Merger
Agreement with General Signal Corporation (NYSE:GSX) was terminated and the
Company paid to General Signal a $50 million termination fee and $5.15 million
in expenses. As previously reported, the Company was able to take these actions
because of an agreement with General Signal and Rockwell giving the Company the
ability to conduct negotiations with Rockwell and reach an agreement on a
possible merger.

John C. Morley, Reliance's President and Chief Executive Officer, said, "We are
very pleased to have reached this agreement with Rockwell, and believe that
$31.00 per share is a fair price and in the best interests of our shareholders.
The combination of Reliance and Rockwell's Allen-Bradley unit will create a
globally competitive entity in the electrical equipment industry. We appreciate
the cooperation of General Signal and their Chairman and Chief Executive
Officer, Ed Carpenter, in permitting Reliance to negotiate with Rockwell."

The Board of Directors of Reliance Electric recommends that shareholders accept
the amended Rockwell offer and tender their shares to Rockwell.

Reliance Electric Company, headquartered in Cleveland, Ohio, designs,
manufactures, sells and services a broad range of industrial and
telecommunications equipment and has annual sales in excess of $1.6 billion.
Reliance operates 43 manufacturing plants worldwide in 10 countries and employs
approximately 14,000 people.