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[LOGO OF RELIANCE ELECTRIC COMPANY]
6065 PARKLAND BOULEVARD
CLEVELAND, OHIO 44124-6106
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND
RULE 14F-1 THEREUNDER
November 22, 1994
This information is being furnished by Reliance Electric Company, a
Delaware corporation ("Reliance" or the "Company"), to its shareholders in
connection with the possible designation by Rockwell International Corporation,
a Delaware corporation ("Rockwell"), pursuant to the Agreement and Plan of
Merger dated as of November 21, 1994 (the "Merger Agreement") among the Company,
Rockwell and ROK Acquisition Corporation, a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of Rockwell, of persons to be elected
to the Board of Directors of the Company other than at a meeting of the
Company's shareholders.
The Purchaser commenced a tender offer (the "Offer") disclosed in the
Tender Offer Statement on Schedule 14D-1 dated October 21, 1994. The terms and
conditions of the Offer were set forth in the Offer to Purchase dated October
21, 1994 (the "Offer to Purchase") and related Letters of Transmittal
(collectively, the "Offer Documents"). In accordance with the Merger Agreement,
the Offer was amended and supplemented (the "Amended Offer") by the Supplement
to the Offer to Purchase dated November 22, 1994 (as so amended and as the same
may be further amended and supplemented, the "Amended Offer Documents") which
are being mailed by the Purchaser to the Company's shareholders concurrently
herewith. The Merger Agreement provides, among other things, for the merger (the
"Merger") of the Purchaser into the Company, with the Company surviving as a
wholly-owned subsidiary of Rockwell, as more fully described in the Amended
Offer Documents, in the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9"), and in the Company's amendment to the
Schedule 14D-9 with respect to the Offer (together with any amendments or
supplements thereto, the "Amended Schedule 14D-9") being mailed to the Company's
shareholders concurrently herewith. The Merger Agreement further provides that
as of the Effective Time (as defined in the Merger Agreement) each share of the
Company's Class A Common Stock (the "Class A Shares") and of the Company's Class
B Common Stock (the "Class B Shares") shall be converted into the right to
receive $31.00 in cash, and that each share of the Company's Class C Common
Stock (the "Class C Shares", and, together with the Class A Shares and the Class
B Shares, the "Shares") shall be converted into the right to receive $83.948 in
cash.
The Company had 35,542,437 Class A Shares, 694,064 Class B Shares and
5,250,000 Class C Shares outstanding as of November 18, 1994.
THE BOARD OF DIRECTORS
GENERAL
The Certificate of Incorporation of the Company provides that the Board of
Directors shall consist of no less than three and no more than 12 members. The
exact size of the Board of Directors may be fixed from time to time by the Board
of Directors. It is currently set at six members. Directors are elected for a
term of one year and until the election and qualification of their successors.
The Merger Agreement provides that, if requested by Rockwell, the Company
will, promptly following the purchase by the Purchaser of more than 50% of the
outstanding Shares of the Company pursuant to the Amended Offer, take all
actions necessary to cause persons designated by Rockwell ("Rockwell Designees")
to constitute a majority of the total number of members of the Board of
Directors, including by accepting resignations of those incumbent directors
designated by the Company or by increasing the size of the Board and causing the
Rockwell Designees to be elected.
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Rockwell has informed the Company that if the Purchaser purchases 50% or
more of the outstanding Shares pursuant to the Amended Offer, Rockwell will
request the Company to take all necessary action to elect Donald R. Beall, W.
Michael Barnes, William J. Calise, Jr., Don H. Davis, Jr., Jodie K. Glore,
Charles H. Harff and Richard R. Mau to the Board of Directors of the Company. To
the extent that fewer than seven Rockwell Designees are required to constitute a
majority of the Board of Directors of the Company, Rockwell will select from
among the foregoing persons that number of Rockwell Designees as will be
sufficient to constitute such a majority.
Information concerning the Rockwell Designees is set forth in Annex A
hereto. To the best knowledge of the Company, none of the Rockwell Designees
beneficially owns any equity securities of the Company.
CURRENT DIRECTORS
Certain information concerning the current directors including the name and
age of each, his current principal occupation (which has continued for at least
five years unless otherwise indicated), the name and principal business of the
organization in which his occupation is carried on, the year each was first
elected to the Board of Directors of the Company, all positions and offices held
during fiscal year 1993 with the Company and his directorships in other
publicly-held companies is set forth below. All information is furnished as of
November 18, 1994.
ANTHONY C. HOWKINS (70), A graduate of Fordham University with a B.S., Mr.
Howkins is a retired Group Head and Policy Committee Member of Citibank, N.A., a
capacity in which he served from 1982 to 1986. He is also a director of Yasuda
Trust and Banking Co. Ltd.
Member: Audit Committee First became a Director: 1987
Compensation Committee
Nominating Committee
JOHN C. MORLEY (63), President and Chief Executive Officer of the Company
and its predecessor since December 1980. A graduate of Yale University, with an
M.B.A. from the University of Michigan Graduate School of Business
Administration, Mr. Morley held numerous executive positions with Exxon
Corporation from 1958 to 1980, including President of Exxon Chemical USA and
Senior Vice President of Exxon USA. He is also a director of AMP Incorporated,
Ferro Corporation and KeyCorp.
Member: Executive Committee First became a Director: 1986
ALFRED M. RANKIN, JR. (53), President and Chief Executive Officer of NACCO
Industries, Inc., a Cleveland, Ohio-based holding company for The North American
Coal Corporation, Hamilton Beach/Proctor Silex, Inc., NACCO Materials Handling
Group, Inc., Materials Handling, Inc. and The Kitchen Collection, Inc., since
1991. A graduate of Yale University and its Law School with a Juris Doctorate,
Mr. Rankin was the President and Chief Operating Officer of NACCO from 1989
until 1991. Prior to that, from 1987 until 1989, he was the Vice Chairman and
Chief Operating Officer of Eaton Corporation. He is also a director of the BF
Goodrich Company, The Vanguard Group, The Standard Products Company, NACCO
Materials Handling Group, Inc. and NACCO Industries, Inc.
Member: Audit Committee First became a Director: 1993
Compensation Committee
DUDLEY P. SHEFFLER (50), Vice President of the Company and President of its
wholly-owned subsidiary, Reliance Comm/Tec Corporation. A graduate of the
University of Kentucky, with an M.B.A. from the University of Michigan Graduate
School of Business Administration, Mr. Sheffler joined the Company in 1970 and
has been a Vice President of the Company and its predecessor since 1981. He has
been the President of Reliance Comm/Tec Corporation since April 1989.
First became a Director: 1993
H. VIRGIL SHERRILL (74), Chairman of the Board of Directors of the Company.
A graduate of Yale University, also with an LL.B. from the Yale Law School, Mr.
Sherrill has been a Senior Director, a non-
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officer position, of Prudential Securities since 1986. From 1981 to 1982 he was
President and from 1982 until 1986 he was Vice Chairman of Prudential
Securities.
Member: Executive Committee (Chairman) First became a Director: 1986
Compensation Committee (Chairman)
Nominating Committee (Chairman)
E. MANDELL DE WINDT (73), Retired Chairman and Chief Executive Officer of
Eaton Corporation, a Cleveland, Ohio-based manufacturer of engine components,
transmissions, electrical equipment and controls. Mr. de Windt served Eaton
Corporation in that capacity from 1969 to 1986. He also served as Eaton's
President from 1967 to 1969. Mr. de Windt attended Williams College. He is also
a director of Birmingham Steel Corp., Cleveland-Cliffs Inc. and DTM Investors,
Inc., and is a Trustee of Carnegie Funds Group.
Member: Audit Committee (Chairman) First became a Director: 1987
Compensation Committee
Nominating Committee
DIRECTORS' FEES AND ATTENDANCE
For fiscal year 1993, each non-employee director was compensated for his
services at the following standard rates: an annual retainer of $25,000 plus
$1,000 for each Board of Directors meeting attended and $1,000 for each
committee meeting attended. In addition, the Chairman of each of the Audit,
Compensation and Nominating Committees received an annual retainer of $3,000.
Ten meetings of the Board of Directors were held during fiscal year 1993.
No director attended fewer than 75% of the total number of meetings of the Board
and of all meetings of committees on which he served which were held during
1993.
COMMITTEES OF THE BOARD
The Board of Directors has four standing Board committees: the Executive
Committee, the Audit Committee, the Compensation Committee and the Nominating
Committee. The members of these committees are indicated below.
The Executive Committee exercises the power and authority of the Board of
Directors in the interim period between Board meetings. The Executive Committee
did not meet during the last fiscal year. The members of the Executive Committee
are Messrs. Morley and Sherrill. Mr. Sherrill is the Chairman of the Executive
Committee.
The Audit Committee is responsible for overseeing the effectiveness of the
Company's accounting policies and practices, financial reporting and internal
controls. Specifically, the Committee reviews and approves the scope of the
annual examination of the books and records of the Company and reviews the
findings and recommendations of the independent accountants on completion of the
audit; reviews and approves the fees of the independent accountants; considers
the organization, scope and adequacy of the Company's internal controls and
internal audit functions; monitors the extent to which the Company has
implemented changes recommended by the independent accountants or the Committee;
and provides oversight with respect to accounting principles employed in the
Company's financial reporting. The Audit Committee met two times during the last
fiscal year. The members of the Audit Committee are Messrs. Howkins, Rankin and
de Windt. Mr. de Windt is the Chairman of the Audit Committee.
The Compensation Committee is responsible for the determination of
compensation payable to the executive officers of the Company consistent with
the Company's compensation philosophy as stated in this Information Statement.
Pursuant to the Compensation Committee charter, the Committee's responsibilities
include, but are not limited to, the oversight of the development and
administration of executive incentive programs, executive compensation structure
and the approval of base pay, bonus awards and long-term incentive awards for
executive officers. The Compensation Committee also is responsible for the
administra-
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tion of the Company's employee stock option plans and has the authority to
determine to whom options are granted, the number of shares covered by the
options, the time at which options are granted and the exercise price of the
options, all subject to the provisions of the applicable Plan. The Compensation
Committee met three times during the last fiscal year. The members of the
Compensation Committee are Messrs. Howkins, Rankin, Sherrill and de Windt. Mr.
Sherrill is the Chairman of the Compensation Committee.
The Nominating Committee reviews potential candidates for election as
Directors of the Company and makes recommendations to the Board of Directors as
to nominees for election. The Nominating Committee did not meet during the last
fiscal year. Shareholders of the Company desiring to submit names of potential
candidates for consideration by the Nominating Committee for election as
Directors of the Company may do so by writing to the Chairman of the Nominating
Committee, at the address of the Company's principal executive offices, 6065
Parkland Boulevard, Cleveland, Ohio 44124-6106. The members of the Nominating
Committee are Messrs. Howkins, Sherrill and de Windt. Mr. Sherrill is the
Chairman of the Nominating Committee.
The following table sets forth, as of November 18, 1994, certain
information concerning the executive officers of the Company, all of whom are
elected by the Board of Directors on an annual basis and serve at the pleasure
of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES HELD
- ----------------------------------- --- ----------------------------------------------------
<S> <C> <C>
John C. Morley..................... 63 President and Chief Executive Officer of the Company
and its predecessor since December 1980; elected
Director of the Company in 1986. Held numerous
executive positions with Exxon Corporation from 1952
to 1980, including President of Exxon Chemical USA
and Senior Vice President of Exxon USA. Director of
AMP Incorporated, Ferro Corporation and KeyCorp.
Peter J. Tsivitse.................. 64 Vice President, Technology and Corporate Development
since 1989; Operating and Group Vice President from
1978 to 1989. Joined the Company in 1952 as a design
engineer.
Dudley P. Sheffler................. 50 Vice President of the Company since 1981 and
President of its wholly owned subsidiary, Reliance
Comm/Tec Corporation since 1989; elected Director of
the Company in October 1993.
William R. Norton.................. 51 Vice President, General Counsel and Secretary since
1991 and Associate General Counsel and Assistant
Secretary from 1978 to 1991. Joined the Company in
1976 as an attorney.
E. Scott Dalton.................... 54 Vice President, Human Resources and Community
Affairs since 1986, Group Employee Relations Manager
from 1985 to 1986 and Director of Personnel
Adminstration and Compensation from 1977 to 1985.
Joined the Company in 1977 as Director of
Compensation.
John D. Hutson..................... 62 Vice President since March 1993 and Treasurer since
1992. Assistant Treasurer from 1977 to 1992. Joined
the Company in 1956 as a management trainee.
Joseph D. Swann.................... 53 Vice President since 1993 and General Manager of the
Company's Mechanical Group since 1982. Joined the
Company in 1969 as a technical service manager.
</TABLE>
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<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES HELD
- ----------------------------------- --- ----------------------------------------------------
<S> <C> <C>
James A. Guseilo................... 47 Vice President and Controller since March 1993.
Controller of Reliance Comm/Tec since 1989. Joined
the Company in 1976 as supervisor of corporate
accounting.
Robert L. Matejka.................. 52 Assistant Controller since March 1993. Director of
Accounting and Control since 1989. Joined the
Company in 1973 as a member of the corporate
accounting staff.
Albin A. Muren..................... 56 Vice President since October 1993. General Manager
of the Company's Electrical Group since 1986. Joined
the Company in 1963 as a sales trainee.
</TABLE>
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SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of Class A Shares,
as of November 18, 1994 unless otherwise noted, by (i) each Director and nominee
for election as a Director of the Company, (ii) each executive officer named in
the Executive Compensation tables below and (iii) all Directors and executive
officers as a group. All information with respect to beneficial ownership has
been furnished by the respective Director, officer or stockholder, as the case
may be. Unless otherwise indicated below, each stockholder named below has sole
voting and investment power with respect to the number of shares set forth
opposite such stockholder's respective name.
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER OF SHARES PERCENTAGE OF CLASS A VOTING
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) COMMON STOCK(1) POWER(2)
- ------------------------------------------ --------------------- --------------------- ------------
<S> <C> <C> <C>
Anthony C. Howkins(3)..................... 30,000 0.1 0.1
John C. Morley(4)......................... 836,525 1.6 2.4
Alfred M. Rankin, Jr.(5).................. 2,000 0.004 0.01
Dudley P. Sheffler(6)..................... 213,127 0.4 0.6
H. Virgil Sherrill(7)..................... 1,131,820 2.2 3.2
E. Mandell de Windt(8).................... 75,000 0.1 0.2
E. Scott Dalton(9)........................ 209,022 0.4 0.6
Joseph D. Swann(10)....................... 59,261 0.1 0.2
Peter J. Tsivitse, Ph.D.(11).............. 287,213 0.6 0.8
All Directors and executive officers as a
Group (14 persons including the
individuals named above)(12)............ 3,119,358 6.2 8.8
</TABLE>
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(1) In calculating the number of and percentage of Class A Shares beneficially
owned, all 694,064 outstanding Class B Shares and all 5,250,000 outstanding
Class C Shares are assumed to have been converted into Class A Shares. The
Class B Shares may be converted into Class A Shares on a one share to one
share basis. The Class C Shares may be converted into Class A Shares on a
one Class C Share to 2.708 Class A Shares basis upon disposition by the
holder or pursuant to certain requirements of the Bank Holding Company Act
of 1956, as amended, the applicable rules and regulations promulgated
thereunder and the Certificate of Incorporation of the Company. In
accordance with Securities and Exchange Commission ("Commission") rules,
each beneficial owner's holdings have been calculated assuming full
exercise of outstanding options covering Class A Shares exercisable by such
owner within 60 days after November 18, 1994, but no exercise of
outstanding options covering Class A Shares held by any other person.
(2) The outstanding Class B Shares and Class C Shares are not assumed to have
been converted into Class A Shares for purposes of calculating the
percentage of voting power because they are non-voting. In addition, in
accordance with Commission rules, each beneficial owner's holdings have
been calculated assuming full exercise of outstanding options covering
Class A Shares exercisable by such owner within 60 days after November 18,
1994, but no exercise of outstanding options covering Class A Shares held
by any other person.
(3) Mr. Howkins is a Director of the Company.
(4) Mr. Morley is a Director and an executive officer of the Company. Mr.
Morley's ownership is comprised of 769,584 Class A Shares which he owns
directly, 6,736 Class A Shares owned by one of his children, 205 Class A
Shares which he owns indirectly through the Company's Savings and
Investment Plan and 60,000 Class A Shares which he has the right to acquire
through the exercise of stock options. The ownership of the shares held by
his child is attributed to Mr. Morley pursuant to Commission rules.
(5) Mr. Rankin is a Director of the Company.
(6) Mr. Sheffler is a Director and an executive officer of the Company. Mr.
Sheffler's ownership is comprised of 182,920 Class A Shares which he owns
directly, 207 Class A Shares which he owns
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indirectly through the Company's Savings and Investment Plan and 30,000
Class A Shares which he has the right to acquire through the exercise of
stock options.
(7) Mr. Sherrill is a Director of the Company. Mr. Sherrill's share ownership
includes 40,000 Class A Shares owned by the Sherrill Foundation, of which
Mr. Sherrill is the President. Mr. Sherrill has no financial interest in
the shares owned by the Sherrill Foundation. The ownership of the shares
held by the Sherrill Foundation is attributed to Mr. Sherrill pursuant to
Commission rules.
(8) Mr. de Windt is a Director of the Company. Mr. de Windt's ownership is
comprised of 75,000 Class A Shares which he has the right to acquire
through the exercise of stock options.
(9) Mr. Dalton is an executive officer of the Company. Mr. Dalton's ownership
is comprised of 178,800 Class A Shares which he owns directly, 222 Class A
Shares which he owns indirectly through the Company's Savings and
Investment Plan, 6,000 Class A Shares owned by his wife and 24,000 Class A
Shares which he has the right to acquire through the exercise of stock
options. The ownership of the shares held by his wife is attributed to Mr.
Dalton pursuant to Commission rules.
(10) Mr. Swann is an executive officer of the Company. Mr. Swann's ownership is
comprised of 50,000 Class A Shares which he owns directly, 261 Class A
Shares which he owns indirectly through the Company's Savings and
Investment Plan and 9,000 Class A Shares which he has the right to acquire
through the exercise of stock options.
(11) Dr. Tsivitse is an executive officer of the Company. Dr. Tsivitse's
ownership is comprised of 120,150 Class A Shares which he owns directly,
2,063 shares which he owns indirectly through the Company's Savings and
Investment Plan, 135,000 Class A Shares owned by his wife and 30,000 Class
A Shares which he has the right to acquire through the exercise of stock
options. The ownership of the shares held by his wife is attributed to Dr.
Tsivitse pursuant to Commission rules.
(12) Includes the 318,800 Class A Shares which the executive officers and
Directors of the Company have the right to acquire within 60 days after
November 18, 1994 through the exercise of stock options. For purposes of
calculating the number and percentage of outstanding Class A Shares owned
by the executive officers and Directors, the shares which they have the
right to acquire during that period by exercise of stock options are deemed
to be outstanding. Also includes 7,857 shares of Class A Shares in
executive officers' personal accounts under the Savings and Investment
Plan.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers, directors and greater than 10%
shareholders ("Reporting Persons") to file certain reports ("Section Reports")
with respect to beneficial ownership of the Company's equity securities. Based
on a review of the Section Reports filed by Reporting Persons with respect to
the period since January 1, 1993 through December 31, 1993, all filing
requirements applicable to Reporting Persons have been complied with, except for
the officers referred to below. Messrs. E. Scott Dalton, Robert L. Matejka and
William R. Norton each inadvertently omitted to report one transaction in 1993.
Each officer, however, did promptly report the inadvertent omission when it was
brought to his attention.
CERTAIN TRANSACTIONS
In connection with the Company's April 1993 public offering of its ten year
6.80% notes due April 2003, Prudential Securities acted as one of the two
managing underwriters for the offering. The entire group of underwriters,
including the two managing underwriters, received an aggregate of $975,000 in
commissions, based on rates which were consistent with industry practices.
At the time when the transaction discussed above was entered into, the
Company took steps to determine that this transaction was on terms no less
favorable than those which could have been obtained from an unrelated third
party.
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STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's Class A Shares against the
cumulative total return of the S&P Composite -- 500 Stock Index and the Dow
Jones -- Electrical Equipment Index for the period beginning upon the Company's
initial public offering of its Class A Shares on May 6, 1992 to December 31,
1993. The graph assumes that the value of the investment in the Company's Class
A Shares and each index was $100 at May 6, 1992 and that all dividends, if any,
were reinvested.
COMPARISON OF THE COMPANY'S CLASS A SHARES,
S&P 500 INDEX AND DOW JONES ELECTRICAL EQUIPMENT INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) RELIANCE S&P 500 DJ EEI
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1992 90.79 97.92 92.44
1992 90.79 100.24 97.64
1992 106.58 104.54 95.66
1993 113.84 108.37 99.68
1993 98.68 108.18 103.23
1993 96.71 110.11 99.87
1993 88.82 111.91 101.50
</TABLE>
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EXECUTIVE COMPENSATION
Decisions on compensation of executives are made by the four-member
Compensation Committee. Each member of the Committee is a non-employee director.
Set forth below is a report of the Compensation Committee addressing the
Company's executive compensation policies for 1993.
REPORT OF COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF RELIANCE ELECTRIC COMPANY
In connection with the Company's organization in December 1986, the Board
of Directors established the Compensation Committee to review and make
recommendations regarding the Company's compensation programs. The following
report of the Compensation Committee describes the philosophy, objectives and
components of the Company's executive compensation programs for 1993 and
discusses the determinations concerning the compensation for the President and
Chief Executive Officer of the Company for 1993.
The members of the Compensation Committee are H. Virgil Sherrill, Chairman,
Anthony C. Howkins, Alfred M. Rankin, Jr. and E. Mandell de Windt. Each of
Messrs. Sherrill, Howkins, Rankin and de Windt are non-employee Directors of the
Company.
COMPENSATION PHILOSOPHY
Reliance's compensation philosophy is to ensure that its compensation
programs are competitive and support the achievement of the Company's
performance objectives. To that end, the compensation programs are intended to
-- relate to the creation of shareholder value;
-- relate executive compensation to the achievement of annual and longer
term financial, operational and strategic objectives;
-- provide competitive levels of compensation; and
-- provide assistance in attracting and retaining highly qualified
management personnel.
COMPENSATION PROGRAM
As a means of implementing these compensation philosophies and objectives,
the Company's 1993 compensation program for executive officers consisted of the
following primary elements: base salary, an executive performance award and a
non-qualified stock option award. These particular elements are further
explained below.
BASE SALARY
Base salaries are determined by evaluating the executive officer's
responsibilities and by comparisons to other companies' compensation programs in
the competitive marketplace. For many years the Company has participated in the
Towers Perrin Executive Compensation Survey (the "Towers Perrin Survey") and the
Committee relies heavily on the Towers Perrin Compensation Data Bank which
contains the results of the survey. The 1993 Towers Perrin Survey included 407
corporate participants that had sales ranging from $50 million to $132 billion.
Of the eight companies that comprise the Dow Jones Electrical Equipment Index
(the "Electrical Index Participants") used for comparison purposes in the
Performance Graph in this Information Statement, five are included in the Towers
Perrin Survey. These five companies are Emerson Electric, Honeywell, Thomas &
Betts, Westinghouse Electric and W.W. Granger Inc. Compensation decisions are
not based on specific comparisons to the Electrical Index Participants.
Comparisons are made with the 69 companies in the Towers Perrin Survey that had
sales in the $1 billion to $3 billion range (the "Comparison Companies"). The
Company's base salaries are determined upon a review and analysis of the
Comparison Companies and consistently have fallen in the middle of the data
ranges of the Comparison Companies. Actual salaries are adjusted based upon the
performance of the Company and the performance of
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the individual executive within Company-wide salary guidelines as determined by
the competitive environment.
PERFORMANCE AWARDS
For 1993, the Compensation Committee approved payments under an executive
performance award program (the "EPA Program") to approximately 140 key
employees, including executive officers. The EPA Program awards are based upon
targeted corporate goals and a formula which takes into account measures such as
net sales billed and earnings before interest and taxes ("EBIT"), with a heavier
weight attributed to EBIT. Individual awards under the EPA Program take into
consideration corporate, business unit and individual performance versus these
targeted goals and formulas. Awards under the EPA Program are reviewed and
approved by the Compensation Committee.
LONG TERM INCENTIVES
The Company maintains the 1990 Key Employee Stock Option Plan to provide
long-term incentives to its employees, including executive officers. In 1993,
the Compensation Committee provided stock option grants of 232,800 of Class A
Shares to its executives and other key employees under this Plan. During 1993,
Hewitt Associates was engaged to review the adequacy of the Company's 1990 Key
Employee Stock Option Plan, the Company's only long-term incentive program.
Under the 1990 plan officers received awards in 1992 and 1993 only. The size of
the awards was found to be comparatively low with reference to the Hewitt data
base of more than 400 manufacturing and service companies and certain
comparative companies. The Hewitt Associates review indicated that the Company's
total long-term incentive compensation offering for executive officers was
approximately 50% of the competitive long-term compensation of similarly sized
companies. As a result, two new long-term executive compensation plans were
developed and are proposed for stockholder approval at the upcoming 1994 Annual
Meeting of Stockholders. The two plans are the 1994 Reliance Electric Company
Executive Stock Option Plan and the 1994 Reliance Electric Company Executive
Long Term Incentive Plan, both of which are described in this Information
Statement. Previous stock option awards to individuals were not considered in
determining the individual's award in 1993. The Committee believes that by
providing these persons who have substantial responsibility for the management
and growth of the Company with a more competitive total compensation opportunity
by increasing their potential ownership in the Company, the best interests of
the stockholders and executives will be more closely aligned.
Each of these plans is intended to satisfy the requirements of Section
162(m) of the Internal Revenue Service regulations to be "performance-based"
compensation and therefore deductible by the Company.
1993 COMPENSATION FOR THE PRESIDENT AND CEO
In considering the compensation for the President and Chief Executive
Officer (the "CEO") for 1993, the Compensation Committee reviewed his existing
compensation arrangements and both Company and individual performance. For
fiscal year 1993 the CEO received a base salary of $567,000, representing a 4.0%
increase from 1992. This increase reflected the Committee's comparison of Mr.
Morley's compensation versus compensation of chief executives of similarly sized
companies. The CEO also received a cash bonus of $260,000 under the EPA Program.
This bonus represents a 20% decrease from the bonus awarded for 1992. This
reduced bonus reflects the Company's less favorable overall performance in 1993
compared to 1992. The bonus at the same time includes the Committee's
recognition of the CEO's efforts to align the Company's workforce, manufacturing
capacity and structure with the current and expected market conditions in an
effort to improve productivity, capacity and administrative efficiency. As an
incentive for future performance and
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consistent with competitive practices; Mr. Morley was granted an option to
purchase up to 15,000 Class A Shares under the Company's 1990 Key Employee Stock
Option Plan.
Compensation Committee
of the Board of Directors
H. Virgil Sherrill, Chairman
Anthony C. Howkins
Alfred M. Rankin, Jr.
E. Mandell de Windt
COMPENSATION COMMITTEE INSIDER INTERLOCKS AND INSIDER PARTICIPATION
John C. Morley, the Company's President and Chief Executive Officer, served
as a member of the Compensation Committee of the Board of Directors until
February 1993. Mr. Morley did not participate or vote on matters pertaining to
his compensation while a member of the Compensation Committee, nor was he
present at meetings relating to his compensation.
1994 EXECUTIVE LONG-TERM INCENTIVE PLAN
The 1994 Executive Long-Term Incentive Plan (the "1994 LTIP") was adopted
by the Board of Directors in February 1994 and approved by the stockholders at
the 1994 Annual Meeting of Stockholders. In August 1994, the Company's Board of
Directors adopted an amendment to the 1994 LTIP (the "LTIP Amendment," the 1994
LTIP as amended by the LTIP Amendment being hereinafter referred to as the
"Amended LTIP") providing that an Award Payout (as defined in the Amended LTIP)
would become payable 30 days following the effective date of a Change in Control
(as defined in the Amended LTIP 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 acqusition is approved by the Board of
Directors) as if the Performance Goals (as defined in the Amended LTIP)
thereunder had been fully achieved and reducing the amount of the Award Payout
pro rata based upon the period of time the Performance Units (as defined in the
Amended LTIP) are outstanding prior to the consummation of any event
constituting a Change in Control.
1994 OUTSIDE DIRECTORS STOCK OPTION PLAN
The 1994 Outside Directors Stock Option Plan (the "1994 Outside Directors
Plan" or the "Plan") provides for the issuance of options to purchase a maximum
of an aggregate of 50,000 of the Company's Class A Shares, which constitutes
approximately 0.15% of the Company's outstanding Class A Shares, to Directors
who are not also employees of the Company or any subsidiary ("Outside
Directors"). There are presently four eligible Outside Directors. The Plan will
terminate on April 21, 1998, unless earlier terminated by resolution of the
Board of Directors.
On April 21, 1994, each Outside Director was granted an option to purchase
1,000 Class A Shares at the then fair market value calculated by reference to
the closing price of the Class A Shares on the New York Stock Exchange.
SUMMARY COMPENSATION TABLE
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1993, 1992 and 1991, of those persons who were, at December
31, 1993: (i) the chief executive officer; and (ii) the other four most highly
compensated executive officers of the Company. The Chief Executive Officer and
such other executive officers are hereinafter referred to collectively as the
"Named Executive Officers."
I-11
<PAGE> 12
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------------- ------------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION(6)
- --------------------------------- ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
John C. Morley................... 1993 $567,000 $260,000 $52,104(2) 15,000(4) $ 357,870(7)
President and Chief 1992 545,000 325,000 54,649(3) 60,000(5) 364,520(8)
Executive Officer 1991 515,000 274,000 -- -- --
Peter J. Tsivitse(4)............. 1993 288,000 175,500 -- -- 30,864(9)
Vice President 1992 277,000 195,000 -- 30,000(5) 40,171(10)
1991 263,000 192,000 -- -- --
Dudley P. Sheffler............... 1993 262,000 130,000 -- 7,500(4) 76,785(11)
Vice President 1992 247,000 145,000 -- 30,000(5) 86,502(12)
1991 233,000 120,000 -- -- --
E. Scott Dalton.................. 1993 188,000 100,000 -- 6,000(4) 77,558(13)
Vice President 1992 181,000 110,000 -- 24,000(5) 86,932(14)
1991 171,000 105,000 -- -- --
Joseph D. Swann.................. 1993 183,000 95,000 -- 6,000(4) 6,216(15)
Vice President 1992 170,700 85,000 -- 9,000(5) 9,225(16)
1991 163,320 76,000 -- -- --
</TABLE>
- ---------------
(1) Unless otherwise indicated, no executive officer named in the Summary
Compensation Table received personal benefits or perquisites in excess of
the lesser of $50,000 or 10% of his aggregate salary and bonus. Pursuant to
Commission transition rules, only 1992 and 1993 information is required to
be shown.
(2) Annual compensation related to incremental costs to the Company of,
including among other things (i) personal use under Company policy of the
Company airplane for personal security reasons ($22,464); (ii) group term
life insurance ($18,041); (iii) financial and tax services; (iv) use of a
Company car; and (v) reimbursement of club dues, all of which are reported
for personal income tax purposes.
(3) Annual compensation related to incremental costs to the Company of,
including among other things (i) personal use under Company policy of the
Company airplane for personal security reasons ($28,565); (ii) group term
life insurance ($13,127); (iii) financial and tax services; (iv) use of a
Company car; and (v) reimbursement of club dues, all of which are reported
for personal income tax purposes.
(4) These options were granted on December 16, 1993 pursuant to the 1990 Key
Employee Stock Option Plan. Fifty percent of the shares subject to the
option becomes exercisable on December 16, 1995, while the remaining 50%
becomes exercisable on December 16, 1996.
(5) These options were granted on March 6, 1992 pursuant to the 1990 Key
Employee Stock Option Plan. Fifty percent of the shares subject to the
option became exercisable on September 5, 1993, while the remaining 50%
became exercisable on September 6, 1994.
(6) This column includes benefits provided to the Named Executive Officers
under (i) the Reliance Electric Company Savings and Investment Plan (the "S
& I Plan") and (ii) the Reliance Electric Company Deferred Compensation
Plan with respect to the S & I Plan (the "Deferred Compensation Plan").
This column also includes contingent amounts which may be payable under the
nonqualified Special Retirement Program for Elected Officers (the
"Retirement Program"). Pursuant to Commission transition rules, only 1992
and 1993 information is required to be shown.
(7) Includes benefits provided to Mr. Morley under (i) the S & I Plan ($4,497),
(ii) the Deferred Compensation Plan ($15,687) and (iii) the Retirement
Program ($337,686).
(8) Includes benefits provided to Mr. Morley under (i) the S & I Plan ($4,364),
(ii) the Deferred Compensation Plan ($26,782) and (iii) the Retirement
Program ($333,374).
(9) Includes benefits provided to Dr. Tsivitse under (i) the S & I Plan
($4,497), (ii) the Deferred Compensation Plan ($5,385) and (iii) the
Retirement Program ($20,982).
I-12
<PAGE> 13
(10) Includes benefits provided to Dr. Tsivitse under (i) the S & I Plan
($4,436), (ii) the Deferred Compensation Plan ($14,314) and (iii) the
Retirement Program ($29,421).
(11) Includes benefits provided to Mr. Sheffler under (i) the S & I Plan
($4,497), (ii) the Deferred Compensation Plan ($4,833) and (iii) the
Retirement Program ($67,455).
(12) Includes benefits provided to Mr. Sheffler under (i) the S & I Plan
($4,364), (ii) the Deferred Compensation Plan ($9,526) and (iii) the
Retirement Program ($72,612).
(13) Includes benefits provided to Mr. Dalton under (i) the S & I Plan ($4,497),
(ii) the Deferred Compensation Plan ($1,923) and (iii) the Retirement
Program ($71,138).
(14) Includes benefits provided to Mr. Dalton under (i) the S & I Plan ($4,364),
(ii) the Deferred Compensation Plan ($6,736) and (iii) the Retirement
Program ($75,832).
(15) Includes benefits provided to Mr. Swann under (i) the S & I Plan ($4,497)
and (ii) the Deferred Compensation Plan ($1,719).
(16) Includes benefits provided to Mr. Swann under (i) the S & I Plan ($4,364)
and (ii) the Deferred Compensation Plan ($4,861).
STOCK OPTIONS
The following tables contain information concerning (1) the grant of stock
options to the Named Executives and (2) the exercise and appreciation of stock
options held by the Named Executives.
1993 OPTION GRANTS
Shown below is information on grants of stock options pursuant to the
Company's 1990 Key Employee Stock Option Plan during the fiscal year ended
December 31, 1993 to the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
- ------------------------------------------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENTAGE OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERMS
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------
NAME GRANTED(1)(2) FISCAL YEAR (PER SHARE)(3) DATE 5% 10%
- ------------------------------ ------------- ------------- -------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
John C. Morley................ 15,000 6.4% $17.25 12/16/2003 $162,726 $412,381
President and Chief
Executive Officer
Peter J. Tsivitse(4).......... -- -- -- -- -- --
Vice President
Dudley P. Sheffler............ 7,500 3.2 17.25 12/16/2003 81,368 206,198
Vice President
E. Scott Dalton............... 6,000 2.6 17.25 12/16/2003 65,091 164,952
Vice President
Joseph D. Swann............... 6,000 2.6 17.25 12/16/2003 65,091 164,952
Vice President
</TABLE>
- ---------------
(1) These options were granted on December 16, 1993 pursuant to the 1990 Key
Employee Stock Option Plan. Fifty percent of the shares subject to the
option becomes exercisable on December 16, 1995, while the remaining 50%
become exercisable on December 16, 1996.
(2) In general, an optionee's rights under an option shall cease upon his or her
termination of employment. In the event of a "change of control" an option
will become immediately exercisable for all shares subject to the option.
Change of control means either (a) the purchase of at least 30% of the
Company's Class A Shares by a person or group of persons under common
control or (b) a change in the membership of the Company's Board of
Directors of a magnitude of at least 30% but only if such change in the
membership of the Board of Directors is not approved by at least
three-quarters of the Directors sitting prior to such change.
(3) Based on the closing price of the Class A Shares of $17.25 on the New York
Stock Exchange on December 16, 1993.
I-13
<PAGE> 14
(4) Dr. Tsivitse, who is 64 years old, was not granted options in 1993 because
such options, pursuant to the terms of the 1990 Key Employee Stock Option
Plan, would not vest prior to his required retirement age.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to unexercised stock options at
December 31, 1993 to purchase the company's Class A Shares by the Named
Executive Officers. No Named Executive Officer exercised any stock options to
purchase the Company's Class A Shares during the fiscal year ended December 31,
1993.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1993 OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NUMBER OPTIONS AT IN-THE-MONEY OPTIONS
OF SHARES DECEMBER 31, 1993 AT DECEMBER 31, 1993(1)
ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Morley........... -- -- 30,000 45,000 -- --
President and Chief
Executive Officer
Peter J. Tsivitse........ -- -- 15,000 15,000 -- --
Vice President
Dudley P. Sheffler....... -- -- 15,000 22,500 -- --
Vice President
E. Scott Dalton.......... -- -- 12,000 10,000 -- --
Vice President
Joseph D. Swann.......... -- -- 4,500 10,500 -- --
Vice President
</TABLE>
- ---------------
(1) Based on the closing price of the Class A Shares of $16.875 on the New York
Stock Exchange on December 31, 1993. As a result, all unexercised options
were not "In-the-money" options as of that date.
Pursuant to the Merger Agreement, each outstanding option under the
Company's option plans shall become fully exercisable and vested, shall be
cancelled and for each Share subject to an option a holder shall be entitled to
receive an amount in respect thereof equal to $31 less the exercise price
thereof.
SEVERANCE AGREEMENTS AND CHANGE IN CONTROL SEVERANCE PAY PLAN
The Company has entered into Amended and Restated Severance Agreements with
the Named Executive Officers of the Company (collectively, the "Current
Severance Agreements"). Pursuant to the Current Severance Agreements, in the
event of the Named Executive Officer's involuntary termination of employment
without cause, or as a result of disability or death, the Named Executive
Officer will be paid (i) an amount equal to two years' salary at the Named
Executive Officer's base salary rate in effect on the date of his termination of
employment and (ii) an amount equal to twice the amount of the bonus paid or
payable to the Named Executive Officer for the Company's fiscal year immediately
preceding the date of his termination of employment. In addition, certain other
benefits of the Company, including the ability to exercise stock options, will
continue for a period of two years from the date of his termination. No
severance benefits are payable due to a Named Executive Officer's involuntary
termination of employment for cause or his voluntary termination of employment.
The Current Severance Agreements terminate in April 1994. Effective as of April
1994 the Company entered into new Severance Agreements with the executive
officers of the Company (the "New Severance Agreements", and, collectively with
the Current Severance Agreements, the "Severance Agreements"). The New Severance
Agreements are substantially similar to the Current Severance Agreements, except
that the New Severance Agreements do not provide for severance benefits in the
event of an executive's disability or death. The New Severance Agreements will
terminate in April 1996.
I-14
<PAGE> 15
In connection with the Proposed Reliance-General Signal Merger (as defined
in the Schedule 14D-9 and Amended Schedule 14D-9 being mailed to the Company's
shareholders concurrently herewith), in lieu of severance benefits provided
under the Severance Agreements, on August 29, 1994, the Company's Board of
Directors adopted the Company Change in Control Severance Pay Plan (the
"Severance Plan"). The Severance Plan provides severance benefits to each of the
Company's executive officers, and certain other executives, if their employment
is terminated within two years of the consummation of the transaction
contemplated by the Proposed Reliance-General Signal Merger Agreement. Under the
Severance Plan, the participants would be entitled to a lump sum payment of
between one and three years' salary and the continuation of certain other
benefits, depending on the level of the participant's position with the Company.
The executive officers of the Company would receive three years' salary and the
continuation of certain other benefits under the Severance Plan if terminated
within two years of the consummation of the Proposed Reliance-General Signal
Merger. The Severance Plan was amended after commencement of the Rockwell Offer
so that participants would be entitled to benefits if terminated within two
years of the purchase of Shares by Rockwell pursuant to the Amended Offer.
GOLDEN PARACHUTE EXCISE TAX AGREEMENT
The Company has entered into an Agreement Relating to Golden Parachute
Excise Tax (The "Excise Tax Agreement") with the executive officers of the
Company. Under the Excise Tax Agreement, the Company agreed to pay each
executive officer, under certain circumstances, an amount or amounts ("gross-
ups") equal to any excise tax payable by such executive officer under Section
1990 of the Internal Revenue Code of 1906, as amended (the "Code"), or any
successor provision, with respect to certain payments received by the executive
officer from the Company. The Company's obligation to make payments under the
Excise Tax Agreement arises only under those circumstances in which the
executive officer's Class A Shares or non-qualified stock options or both are
sold or exchanged, in whole or in part, contingent on a "change of ownership or
control" (as defined under Section 4999 of the Code, or any successor provision)
and the payment of any amount with respect to, or the receipt of any securities
or options in exchange for such shares or options gives rise, directly or
indirectly, to the imposition of the excise tax.
DEFINED BENEFIT PENSION PLANS
The following table shows the estimated annual retirement benefit payable
to participating employees, including executive officers, in the earnings and
years of service classifications indicated under the Company's defined pension
benefit plans.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS FOR YEARS OF SERVICE
AVERAGE INDICATED
ANNUAL ------------------------------------------------------------
EARNINGS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 125,000 $ 33,700 $ 45,500 $ 49,400 $ 53,400 $ 57,300
150,000 40,900 55,200 60,100 64,900 69,800
175,000 48,100 64,900 70,700 76,500 82,300
200,000 55,300 74,500 81,300 88,100 94,800
300,000 84,000 113,300 123,800 134,300 114,800
400,000 112,800 152,000 166,300 180,600 194,800
500,000 141,500 190,800 208,800 226,800 244,800
600,000 170,300 229,500 251,300 273,100 294,800
700,000 199,000 268,300 293,800 319,300 344,800
800,000 227,800 307,000 336,300 365,600 394,800
900,000 256,500 345,800 378,800 411,800 444,800
1,000,000 285,300 384,500 421,300 458,100 494,800
</TABLE>
The compensation covered consists of salary and bonus set forth in the
Summary Compensation Table. The calculation of retirement benefits under the
plans is based upon average earnings for the highest 60 consecutive months
within the 120 months preceding termination of employment.
Sections 401(a)(17) and 415 of the Code limit the annual benefits which may
be paid from a tax-qualified retirement plan. As permitted by the Employee
Retirement Income Security Act of 1974, the
I-15
<PAGE> 16
Company has supplemental plans which authorize the payment out of general funds
of the Company of any benefits calculated under provisions of the applicable
plan which may be above the limits under these sections.
The credited years of service for Messrs. Morley, Tsivitse, Sheffler,
Dalton and Swann are 7, 42, 24, 17 and 24, respectively.
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of Class A Shares,
as of February 28, 1994 unless otherwise noted by each person or group known by
the Company to own beneficially more than 5% of its outstanding Class A Shares
on a fully converted basis or otherwise. All information with respect to
beneficial ownership has been furnished by the respective Director, officer or
stockholder, as the case may be. Unless otherwise indicated below, each
stockholder named below has sole voting and investment power with respect to the
number of shares set forth opposite such stockholder's respective name.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES CLASS A PERCENTAGE
BENEFICIALLY COMMON OF VOTING
NAME OF BENEFICIAL OWNER OWNED(1) STOCK(1) POWER(2)
- -------------------------------------------------------- ------------ ------------- ----------
<S> <C> <C> <C>
Citicorp(3)............................................. 14,217,000 28.3% --
College Retirement Equities Fund(4)..................... 1,738,100 3.5 5.3
</TABLE>
- ---------------
(1) In calculating the number of and percentage of Class A Shares beneficially
owned, all 3,161,832 outstanding Class B Shares and all 5,250,000
outstanding Class C Shares are assumed to have been converted into Class A
Shares. The Class B Shares may be converted into Class A Shares on a one
share to one share basis. The Class C Shares may be converted into Class A
Shares on a one Class C Share to 2.788 Class A Shares basis upon disposition
by the holder or pursuant to certain requirements of the Bank Holding
Company Act of 1956, as amended, the applicable rules and regulations
promulgated thereunder and the Certificate of Incorporation of the Company.
In accordance with Securities and Exchange Commission ("Commission") rules,
each beneficial owner's holdings have been calculated assuming full exercise
of outstanding options covering Class A Shares exercisable by such owner
within 60 days after February 28, 1994, but no exercise of outstanding
options covering Class A Shares held by any other person.
(2) The outstanding Class B Shares and Class C Shares are not assumed to have
been converted into Class A Shares for purposes of calculating the
percentage of voting power because they are non-voting. In addition, in
accordance with Commission rules, each beneficial owner's holdings have
been calculated assuming full exercise of outstanding options covering
Class A Shares exercisable by such owner within 60 days after February 28,
1994, but no exercise of outstanding options covering Class A Shares held
by any other person.
(3) Citicorp's ("Citicorp") share ownership is comprised of 5,250,000 non-voting
Class C Shares which are held by its wholly-owned subsidiary, Court Square
Capital Limited ("Court Square Capital"), and which are convertible into
14,217,000 Class A Shares, subject to certain restrictions. This
information was obtained by the Company from Citicorp's Schedule 13G as
filed with the Commission in February 1994. The address of Citicorp is 399
Park Avenue, New York, New York 10043.
(4) College Retirement Equities Fund ("CREF") has sole voting and dispositive
power over the 1,738,100 Class A Shares shown in the table above. This
information is as of December 31, 1993 and was obtained by the Company from
CREF's Schedule 13G filed with the Commission in February 1994. The address
of CREF is 730 Third Avenue, New York, New York 10017.
CHANGES IN CONTROL
The Amended Offer, if consummated, will result in a change in control of
the Company. See the Offer to Purchase and the Amended Offer Documents for
additional information concerning the Amended Offer, Rockwell and the Purchaser.
I-16
<PAGE> 17
ANNEX A
ROCKWELL'S DIRECTOR DESIGNEES
Rockwell has provided the Company with the following information regarding
the Rockwell Designees. The Company assumes no responsibility for the accuracy
or completeness of such information.
The following table sets forth the name, age, business address, present
principal occupation or employment and five-year employment history of each of
the Rockwell Designees. Unless otherwise indicated, the principal business
address of each such person is 2201 Seal Beach Boulevard, Seal Beach,
California, 90740-8250. None of the Rockwell Designees is a director of, or
holds any positions with, the Company, and none of the Rockwell Designees owns
any Shares.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND MATERIAL
OCCUPATIONS, POSITIONS, OFFICES OR
NAME AND BUSINESS ADDRESS AGE EMPLOYMENTS FOR THE PAST FIVE YEARS
- --------------------------- --- ----------------------------------------------------------
<S> <C> <C>
Donald R. Beall............ 55 Chairman of the Board and Chief Executive Officer of
Rockwell; Director of Amoco Corporation, The Procter &
Gamble Company and The Times Mirror Company.
W. Michael Barnes.......... 52 Senior Vice President, Finance & Planning and Chief
Financial Officer of Rockwell since July 1991; Vice
President, Business Development and Planning of Rockwell
prior thereto.
William J. Calise, Jr...... 56 Senior Vice President, General Counsel and Secretary of
625 Liberty Avenue Rockwell since November 1994; Partner, Chadbourne & Parke
Pittsburgh, PA 15222-3123 (law firm), New York City, prior thereto. Mr. Calise is
also Secretary of ROK.
Don H. Davis, Jr........... 53 Executive Vice President and Chief Operating Officer of
Rockwell since January 1994; Senior Vice President and
President, Automation of Rockwell from June 1993 to
January 1994; President of Allen-Bradley prior thereto.
Jodie K. Glore............. 47 President and Chief Executive Officer of Allen-Bradley
1201 South Second Street since June 1994; Senior Vice President -- Automation Group
Milwaukee, WI 52304 of Allen-Bradley from January 1992 through June 1994;
Corporate Vice President Sales of Square D Company from
October 1990 through December 1991; Vice
President -- Power Equipment Group of Square D Company
prior thereto. Mr. Glore is also President and a Director
of ROK.
Charles H. Harff........... 65 Senior Vice President and Special Counsel of Rockwell
625 Liberty Avenue since November 1994; Senior Vice President, General
Pittsburgh, PA 15222-3123 Counsel and Secretary of Rockwell prior thereto. Mr. Harff
is also Vice President and a Director of ROK.
Richard R. Mau............. 63 Senior Vice President, Communications of Rockwell.
</TABLE>
I-17
