<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
ROCKWELL INTERNATIONAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ROCKWELL INTERNATIONAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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* Set forth the amount of which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and date of its filing.
1) Amount Previously Paid:
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Notes:
<PAGE> 2
[LOGO]
Letter to
Shareowners
Notice of 1995
Annual Meeting
and
Proxy Statement
<PAGE> 3
Dear Shareowner:
You are cordially invited to attend the annual meeting of shareowners of the
Corporation.
The meeting will be held at the Doubletree Hotel, Los Angeles Airport, 5400
West Century Boulevard, Los Angeles, California, on Wednesday, February 1, 1995,
at 10 a.m. At the meeting there will be a current report on the activities of
the Corporation followed by discussion and action on the matters described in
the Proxy Statement. Shareowners will have an opportunity to comment on or to
inquire about the affairs of the Corporation that may be of interest to
shareowners generally.
If you plan to attend the meeting, please complete and return the form
enclosed with your proxy or direction card, and an admittance card will be
forwarded to you promptly.
It is sincerely hoped that as many shareowners as can conveniently attend will
do so. However, if you cannot attend you will later receive a report to be
mailed to all shareowners concerning action taken at the meeting.
Sincerely yours,
Donald R. Beall
Chairman of the Board
and Chief Executive Officer
<PAGE> 4
ROCKWELL INTERNATIONAL CORPORATION
------------------------------------------------------------
2201 Seal Beach Boulevard, Seal Beach, California 90740-8250
Notice of 1995 Annual Meeting of Shareowners
TO THE SHAREOWNERS OF
ROCKWELL INTERNATIONAL CORPORATION:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Shareowners of Rockwell
International Corporation will be held at the Doubletree Hotel, Los Angeles
Airport, 5400 West Century Boulevard, Los Angeles, California, on Wednesday,
February 1, 1995, at 10 a.m. (Pacific Standard Time) for the following purposes:
<TABLE>
<S> <C>
(a) to elect directors of the Corporation;
(b) to consider and vote upon a proposal to
approve the selection by the Board of
Directors of the firm of Deloitte &
Touche LLP as auditors of the
Corporation;
(c) to consider and vote upon a proposal to
approve the adoption by the Board of
Directors of the 1995 Long-Term
Incentives Plan;
(d) to consider and vote upon a proposal to
approve the adoption by the Board of
Directors of the Directors Stock Plan;
and
(e) to transact such other business as may
properly come before the meeting.
</TABLE>
Only shareowners of record at the close of business on December 5, 1994, will
be entitled to notice of, and to vote at, the meeting.
By order of the Board of Directors.
William J. Calise, Jr.
Secretary
December 28, 1994
NOTE: THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND PROMPT RETURN OF
THE ACCOMPANYING PROXY. A RETURN ENVELOPE IS ENCLOSED.
2
<PAGE> 5
Proxy Statement
The 1995 Annual Meeting of Shareowners of Rockwell International Corporation
will be held on February 1, 1995, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareowners. This statement and the accompanying
proxy, which are first being sent to shareowners on or about December 28, 1994,
are furnished in connection with the solicitation by the Board of Directors of
proxies to be used at such meeting and at any adjournment thereof. If a proxy in
the accompanying form is duly executed and returned, the shares represented
thereby will be voted as specified therein, and if no specification is made, the
shares will be voted in accordance with the recommendations of the Board of
Directors. The proxy may, nevertheless, be revoked prior to its exercise by
delivering written notice of revocation to the Secretary of the Corporation, by
executing a later dated proxy or by attending the meeting and voting in person.
It is the Corporation's policy to keep confidential proxy cards, ballots and
voting tabulations that identify individual shareowners except as may be
necessary to meet any applicable legal requirements and, in the case of any
contested proxy solicitation, as may be necessary to permit proper parties to
verify the propriety of proxies presented by any person and the results of the
voting. The judges of election and any employees associated with processing
proxy cards or ballots and tabulating the vote are required to acknowledge their
responsibility to comply with this policy of confidentiality.
For shareowners participating in the Automatic Dividend Reinvestment Service,
the administering bank will only vote the shares that it holds for the
participant's account in accordance with the proxy returned by the participant
to the Corporation in respect of the shares of the Corporation which the
participant holds of record or in accordance with other written instructions.
VOTING SECURITIES
On December 5, 1994, the Corporation had outstanding shares of
Common Stock, shares of Class A Common Stock, shares of $4.75
Convertible Preferred Stock, Series A and shares of $1.35 Convertible
Preferred Stock, Series B. Each holder of Class A Common Stock is entitled to
ten votes for each share held and each holder of any of the other voting
securities is entitled to one vote for each share held. On December 5, 1994,
First Interstate Bank of California, Los Angeles, California, as trustee under
the Corporation's Savings Plan for its participating employees, held
shares of Common Stock and shares of Class A Common
Stock, representing approximately % of the total outstanding Common Stock,
% of the total outstanding Class A Common Stock and % of the aggregate
voting power of all of the Corporation's outstanding voting securities. Shares
held by the trustee on account of each of the participating employees will be
voted by the trustee in accordance with written instructions from the
participants, and where no instructions are received, as the trustee deems
proper.
NOMINEES FOR ELECTION AS DIRECTORS
It is intended that proxies in the accompanying form will be voted at the
meeting for the election to the Board of Directors of the named nominees, all of
whom now serve as directors. In accordance with the Board's policy on retirement
of directors, Mr. Ross D. Siragusa, Jr., who is a member of the Audit and
Environmental Responsibility Committees of the Board, is not standing for
re-election. The Board of Directors has amended the By-Laws of the Corporation
to decrease to thirteen, effective immediately prior to the Annual Meeting, the
number of directors to be elected. If for any reason any nominee named is not a
candidate (which is not expected) when the election occurs, it is expected that
proxies in the accompanying form will be voted for the election of the other
nominees named and may be voted for the election of a substitute nominee or, in
lieu thereof, the Board of Directors may reduce the number of directors in
accordance with the By-Laws of the Corporation. Except as otherwise provided in
the By-Laws of the Corporation, the directors elected serve until the next
annual meeting of shareowners and until their respective successors are elected
and qualify.
3
<PAGE> 6
INFORMATION AS TO
NOMINEES FOR DIRECTORS
There is shown below for each nominee for director, as reported to the
Corporation, the name, age and principal occupation; the position, if any, with
the Corporation; the period of service as a director of the Corporation (or a
predecessor company); other directorships held; and the committees of the Board
of Directors on which the nominee serves.
NOMINEES FOR DIRECTORS
<TABLE>
<S> <C>
DONALD R. BEALL
Chairman of the Board
and Chief Executive Officer
Director Since 1978
Age 56
</TABLE>
Mr. Beall was elected to his present position in February 1988 after serving
nine years as President and Chief Operating Officer. He joined the Corporation
in 1968 and served in a number of senior management positions prior to becoming
Executive Vice President in September 1977 and President in February 1979. He is
a member of the Board Composition Committee of the Board. Mr. Beall is a
director of Amoco Corporation, The Procter & Gamble Company and The Times Mirror
Company and a past chairman of the Board of Governors of the Aerospace
Industries Association. Among his other activities, he is a trustee of the
California Institute of Technology and a member of the University of
California-Irvine Board of Overseers and the Board of Visitors of its Graduate
School of Management. Mr. Beall is a member of The Business Council, The
Business Roundtable, the Chief Executives' Organization and the Council on
Competitiveness. He is also a director, trustee or member of a number of other
professional and civic organizations.
<TABLE>
<S> <C>
LEW ALLEN, JR.
Chairman of the Board,
The Charles Stark Draper
Laboratory, Inc.,
Space and Defense
Research
Director Since 1991
Age 69
</TABLE>
Dr. Allen is a member of the Science and Technology and Environmental and
Social Responsibility Committees of the Board. He served as Vice President of
the California Institute of Technology and Director of its Jet Propulsion
Laboratory from October 1982 through December 1990. Prior thereto he was Air
Force Chief of Staff and Director of the National Security Agency. A graduate of
West Point, he also holds a doctorate in physics from the University of
Illinois. Dr. Allen is Chairman of the Board of The Charles Stark Draper
Laboratory, Inc., a member of the National Academy of Engineering and the
Council on Foreign Relations and a director of the W. M. Keck Foundation.
- -------------------------------------------------------
<TABLE>
<S> <C>
RICHARD M. BRESSLER
Retired Chairman of the
Board,
El Paso Natural Gas Company,
Natural Gas Operations
Director Since 1986
Age 64
</TABLE>
Mr. Bressler is a member of the Compensation and Management Development and
Science and Technology Committees of the Board. He served as Chief Executive
Officer of Burlington Northern Inc. from 1980 through 1988. Mr. Bressler retired
in October 1990 as Chairman of both Burlington Northern Inc. and Burlington
Resources Inc., positions he had held since 1982 and 1989, respectively. He
served as Chairman of the Plum Creek Management Company from April 1989 to
January 1993. He was Chairman of the El Paso Natural Gas Company from October
1990 through December 1993. Mr. Bressler is a director of H. F. Ahmanson and
Company and General Mills, Inc. and is active in a number of business and civic
organizations.
4
<PAGE> 7
<TABLE>
<S> <C>
JOHN J. CREEDON
Consultant and Director
of Various Corporations;
Former President and
Chief Executive Officer,
Metropolitan Life
Insurance Company
Director Since 1988
Age 70
</TABLE>
Mr. Creedon is a member of the Audit and Environmental and Social
Responsibility Committees of the Board. He joined Metropolitan Life in 1942 and
was appointed Senior Vice President and General Counsel in 1973. He became an
Executive Vice President in 1976, President and a director in 1980, served as
Chief Executive Officer from 1983 through August 1989, and then as Chairman of
the Executive Committee until April 1991. He is a director of Corporate
Partners, Melville Corp., Metropolitan Life Insurance Company, NYNEX Corp.,
Praxair, Inc., Sonat, Inc. and Union Carbide Corp. He is also a director,
trustee or member of a number of business, educational and civic organizations.
- -------------------------------------------------------
<TABLE>
<S> <C>
ROBIN CHANDLER DUKE
National Chair, Population
Action International
International Family Planning
Director Since 1977
Age 71
</TABLE>
Mrs. Duke is Chairman of the Environmental and Social Responsibility Committee
and a member of the Compensation and Management Development and Board
Composition Committees of the Board. Her service as a director was
interrupted from 1979 into 1981. Mrs. Duke is Chairman of Population Action
Inter-national. She was previously a writer for the New York Journal
American, a registered representative on the New York Stock Exchange and
a Vice Chairman of the Institute of International Education. Mrs. Duke serves
as a director of the American Home Products Corp., International Flavors &
Fragrances, Inc. and River Bank America.
- --------------------------------------------------------
<TABLE>
<S> <C>
JUDITH L. ESTRIN
Computer Industry Consultant;
Former President and
Chief Executive Officer,
Network Computing Devices, Inc.,
Display Stations and Software for
Network Computing Environments
Director Since 1994
Age 40
</TABLE>
Ms. Estrin joined Network Computing Devices in July 1988 as Executive Vice
President and served as President and Chief Executive Officer from October 1993
into September 1994. In 1981 she co-founded Bridge Communications, serving
initially as Vice President, Engineering and subsequently as Executive Vice
President. Following the acquisition of Bridge by 3Com Corp. in September 1987,
she served as Senior Vice President and General Manager of 3Com's Bridge
Communications Division. Prior to her affiliation with Bridge, she was
Engineering Manager of the General Systems Division of Zilog Inc. A graduate of
UCLA, Ms. Estrin also holds an M.S.E.E. degree from Stanford University. She
also serves as a director of Federal Express Corp.
- -------------------------------------------------------
<TABLE>
<S> <C>
WILLIAM H. GRAY, III
President and
Chief Executive Officer
United Negro College Fund
Educational Assistance
Director Since 1994
Age 53
</TABLE>
Mr. Gray is a member of the Environmental and Social Responsibility and
Science and Technology Committees of the Board. He has been President of the
United Negro College Fund since September 1991 and senior minister, Bright Hope
Baptist Church in Philadelphia since 1972. He served in Congress from 1979 to
1991, as House Majority Whip, Chair of the Democratic Caucus and the House
Budget Committee and on the House Appropriations Committee. In addition, he has
taught at St. Peter's College and Temple University. Mr. Gray is a director of
Chase Manhattan Corp., Lotus Development Corp., MBIA, Inc., Prudential Insurance
Co. of America, Union Pacific Corp., Warner-Lambert Co. and Westinghouse
Electric Corp.
5
<PAGE> 8
<TABLE>
<S> <C>
JAMES CLAYBURN LA FORCE, JR.
Dean Emeritus,
John E. Anderson
Graduate School of
Management, University of
California, Los Angeles
Director Since 1980
Age 66
</TABLE>
Dr. La Force is a member of the Audit, Environmental and Social Responsibility
and Science and Technology Committees of the Board. After joining the UCLA
faculty as an Assistant Professor of Economics in 1962, he became an Associate
Professor in 1967 and a full Professor in 1971. He was Chairman, Department of
Economics, from 1969 until 1978, and Dean, John E. Anderson Graduate School of
Management from 1978 until June 1993. He is a director of The BlackRock Funds,
Eli Lilly & Company, Imperial Credit Industries, Inc., Jacobs Engineering Group,
Inc., Payden & Rygel Investment Trust, Provident Investment Council Mutual
Funds, Shearson VIP Fund and The Timken Company.
- -------------------------------------------------------
<TABLE>
<S> <C>
WILLIAM T. MCCORMICK, JR.
Chairman of the Board and
Chief Executive Officer,
CMS Energy Corporation,
Diversified Electric and
Gas Company Director
Since 1989
Age 50
</TABLE>
Mr. McCormick is a member of the Audit and Science and Technology Committees
of the Board. He has been Chairman of the Board and Chief Executive Officer of
CMS Energy Corporation since November 1985. Before joining CMS, he had been
Chairman and Chief Executive Officer of American Natural Resources Company
and Executive Vice President and a director of its parent corporation, The
Coastal Corporation. Mr. McCormick is a director of NBD Bancorp, Inc. and
Schlumberger Ltd. and, among his other activities, serves as a director of
the American Gas Association, the Edison Electric Institute and the National
Petroleum Council.
- -------------------------------------------------
<TABLE>
<S> <C>
JOHN D. NICHOLS
Chairman and Chief
Executive Officer,
Illinois Tool Works Inc.,
Engineered Components
and Industrial Systems
and Consumables
Director Since 1988
Age 64
</TABLE>
Mr. Nichols is a member of the Compensation and Management Development and
Science and Technology Committees of the Board. He joined Illinois Tool Works in
1980 as Executive Vice President, was named President, Chief Operating Officer
and a director in 1981, Chief Executive Officer in 1982 and Chairman of the
Board in 1986. He was previously Executive Vice President and Chief Operating
Officer of Aerojet-General Corporation from 1969 through 1979. Mr. Nichols is a
director of Household International, Philip Morris Companies Inc. and Stone
Container Corp. He serves as an Overseer of Harvard University and a trustee of
a number of cultural and business organizations.
- -------------------------------------------------------
<TABLE>
<S> <C>
BRUCE M. ROCKWELL
Senior Vice President,
First of Michigan
Corporation,
Investment Banking
Director Since 1969
Age 55
</TABLE>
Mr. Rockwell is Chairman of the Science and Technology Committee and a member
of the Compensation and Management Development and Board Composition Committees
of the Board. He joined First of Michigan Corporation in 1961 and in 1965 was
appointed Assistant Vice President and manager of the bond underwriting
department. In 1967, Mr. Rockwell was elected Vice President and in 1983 was
elected Senior Vice President-Fixed Income. He assumed his present position in
April 1988. Mr. Rockwell is past chairman of the Municipal Advisory Council of
Michigan and past President of the Bond Club of Detroit. He also serves as a
Board member of a number of civic and community organizations.
6
<PAGE> 9
<TABLE>
<S> <C>
WILLIAM S. SNEATH
Retired Chairman of the Board
and Chief Executive Officer,
Union Carbide Corporation,
Chemicals and Other Products
Director Since 1979
Age 68
</TABLE>
Mr. Sneath is Chairman of the Compensation and Management Development and
Board Composition Committees and a member of the Audit Committee of the Board.
He joined Union Carbide Corporation in 1950, was elected Treasurer in 1961,
became a Vice President and Chief Financial Officer in 1965, a director in 1969
and President and Chief Operating Officer in 1971. Mr. Sneath served as Chairman
of the Board and Chief Executive Officer of Union Carbide from January 1977
through December 1981. Mr. Sneath is a director of Union Carbide Corporation and
Metropolitan Life Insurance Company and is a member of The Business Council.
- -------------------------------------------------------
<TABLE>
<S> <C>
JOSEPH F. TOOT, JR.
President and
Chief Executive Officer,
The Timken Company,
Tapered Roller Bearings
and Specialty Steel
Director Since 1977
Age 59
</TABLE>
Mr. Toot is Chairman of the Audit Committee and a member of the
Compensation and Management Development and Board Composition Committees of
the Board. He joined The Timken Company in 1962 and served in various senior
executive positions until his election as Vice President-International
Operations in 1967. Mr. Toot became a director of Timken in 1968, was elected
Executive Vice President in 1973, President in 1979 and Chief Executive
Officer in 1992. Mr. Toot is a vice president of the Associates of The
Harvard Business School. In addition, he has served various community,
charitable and philanthropic organizations.
BOARD OF DIRECTORS AND COMMITTEES
The business of the Corporation is managed by or under the direction of the
Board of Directors. The Board has established several committees whose principal
functions are briefly described below. In the 1994 fiscal year, the Board held
eight meetings. Average attendance by incumbent directors at Board and Committee
meetings was 94% and all of the directors attended 75% or more of the meetings
of the Board and the Committees on which they served except Mr. Bressler, who
attended 64% of such meetings.
The Audit Committee is composed of six non-employee directors. Among its
functions, it reviews the scope and effectiveness of audits of the Corporation
by the independent public accountants and by the Corporation's internal
auditors; selects and recommends to the Board of Directors the employment of
independent public accountants for the Corporation, subject to approval of the
shareowners; reviews the audit plans of the independent public accountants and
the Corporation's internal auditors; reviews and approves the fees charged by
the independent public accountants; reviews the Corporation's annual financial
statements before their release; reviews the adequacy of the Corporation's
system of internal controls and recommendations of the independent public
accountants with respect thereto; reviews and acts on comments and suggestions
by the independent public accountants and by the internal auditors with respect
to their audit activities; and monitors compliance by the employees of the
Corporation with the Corporation's standards of business conduct policies. The
Committee met four times during the 1994 fiscal year.
The principal functions of the Board Composition Committee are to consider and
recommend to the Board qualified candidates for election as directors of the
Corporation, including recommendations as to the slate of director nominees
submitted to the shareowners at the annual meeting, and periodically to prepare
and submit to the Board for adoption the Committee's selection criteria for
director nominees. The Committee, which is composed of four non-employee
directors and Mr. Beall, met twice during the 1994 fiscal year. Shareowners
wishing to recommend candidates for consideration by the Committee can do so by
writing to the Secretary of the Corporation at its corporate office in
Pittsburgh, Pennsylvania, giving the candidate's name, bio-
7
<PAGE> 10
graphical data and qualifications. Any such recommendation should be accompanied
by a written statement from the individual of his or her consent to be named as
a candidate and, if nominated and elected, to serve as a director.
The six members of the Compensation and Management Development Committee are
non-employee directors and are ineligible to participate in any of the plans or
programs which are administered by the Committee except the Directors Stock
Plan. The principal functions of the Compensation and Management Development
Committee are to evaluate the performance of the Corporation's senior executives
and plans for management succession and development, to consider the design and
competitiveness of the Corporation's compensation plans, to review and approve
senior executive compensation and to administer the Corporation's Incentive,
Deferred Compensation, Stock Option and Long-Term Incentives Plans pursuant to
the terms of the respective plans. The Committee met four times during the 1994
fiscal year.
The Environmental and Social Responsibility Committee, which is composed of
seven non-employee directors, reviews and assesses the Corporation's policies
and practices in the following areas: employee relations, with emphasis on equal
employment opportunity and advancement; the protection and enhancement of the
environment and energy resources; product integrity and safety; employee health
and safety; and community and civic relations including programs for and
contributions to health, educational, cultural and other social institutions.
The Committee met three times during the 1994 fiscal year.
The principal function of the Science and Technology Committee, which is
composed of six non-employee directors, is to review and monitor science and
technological activities of the Corporation. The Committee met twice during the
1994 fiscal year.
During the 1994 fiscal year, non-employee directors of the Corporation
received an annual retainer of $33,000 for Board service, together with a
retainer for service on each Board committee at the annual rate of $1,500
through December 31, 1993 and thereafter at the annual rate of $4,000 ($5,000
for Chairmen) for service on the Audit and Compensation Committees and $2,000
($3,000 for Chairmen) for service on any other Board committee. Each director
(except Ms. Estrin, who was first elected a director in September 1994) also
received a grant of 400 shares of Common Stock immediately after the 1994 Annual
Meeting of Shareowners. Ms. Estrin received a grant of 200 shares of Common
Stock on November 2, 1994. In addition, during the part of the fiscal year
before December 31, 1993, non-employee directors received a fee of $1,000 for
each Board meeting attended and a fee of $900 ($1,200 for Chairmen) for each
committee meeting attended. The average retainer and attendance fees paid or
deferred to non-employee directors for the 1994 fiscal year was $60,348
(including valuing the stock grant at $41.125 per share, the closing price on
the date the shares were issued). Under the terms of the directors' deferred
compensation plan, a director may elect to defer all or part of the cash payment
of retainer and meeting fees until such time as shall be specified, with
interest on deferred amounts accruing quarterly at 120% of the federal long-term
rate set each month by the Secretary of the Treasury (prior to July 1, 1994, at
the prime interest rate).
Under the directors' retirement policy, the Corporation enters into consulting
agreements with retired directors who had at least five years of Board service
and had not been employees of the Corporation during the ten years prior to
retirement. The consulting agreements provide an annual fee equal to the Board
retainer fee and continue for the lesser of ten years (or if less, the number of
years of Board service of a director who retires before age 72) or life.
CERTAIN TRANSACTIONS AND OTHER RELATIONSHIPS
The Corporation and its subsidiaries during the 1993 fiscal year had sales and
purchase transactions in the normal course of business with unaffiliated
companies with which some of the Corporation's directors are associated in their
principal occupations in the following approximate amounts: purchases of
$244,000 from and sales of $1,085,000 to CMS Energy Corporation; purchases of
$707,000 from and sales of $87,000 to Illinois Tool Works Inc.; and purchases of
$37,202,000 from The Timken Company.
8
<PAGE> 11
OWNERSHIP BY MANAGEMENT OF EQUITY SECURITIES
The following table shows the beneficial ownership, reported to the
Corporation as of November 30, 1994, of the Corporation's Common Stock and Class
A Common Stock, including shares as to which a right to acquire ownership exists
(for example, through the exercise of stock options, conversions of securities
or through various trust arrangements) within the meaning of Rule 13d-3(d)(1)
under the Securities Exchange Act, of each director, each executive officer
listed in the table on page 10 and, as a group, of such persons and other
executive officers. No member of the group is the beneficial owner of any of the
Corporation's Preferred Stock.
<TABLE>
<CAPTION>
Beneficial Ownership on November 30, 1994
--------------------------------------------------------------------------------
Common Class A Total
------------------------ ----------------------- -----------------------
Percent of Percent of Percent of
Name Shares(1) Class(2) Shares(1) Class(2) Shares(1) Class(2)
---- --------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lew Allen, Jr........................... 1,600(3) -- -- -- 1,600(3) --
Donald R. Beall......................... (4:5:6) 0.3 (4:5:6) 0.3 (4:5:6) 0.3
Richard M. Bressler..................... 1,400 -- -- -- 1,400 --
John J. Creedon......................... 3,405 -- -- -- 3,405 --
Robin Chandler Duke..................... 3,284 -- 2,884 -- 6,168 --
Judith L. Estrin........................ 200 -- -- -- 200 --
William H. Gray, III.................... 605 -- -- -- 605 --
James Clayburn LaForce, Jr.............. 1,100(3) -- -- -- 1,100(3) --
William T. McCormick, Jr................ 5,400 -- -- -- 5,400 --
John D. Nichols......................... 1,900 -- -- -- 1,900 --
Bruce M. Rockwell....................... 16,458 -- 38,300(7) 0.1 54,758(7) --
Ross D. Siragusa, Jr.................... 76,908(8) -- 135,597(8) 0.3 212,505(8) 0.1
William S. Sneath....................... 2,200 -- 800 -- 3,000 --
Joseph F. Toot, Jr...................... 5,475 -- 4,925 -- 10,400 --
Kent M. Black........................... (4:5) 0.1 (4:5) 0.1 (4:5) 0.1
Don H. Davis, Jr........................ (5) -- (5) -- (5) --
Charles H. Harff........................ (4:5) 0.1 (4) -- (4:5) 0.1
Sam F. Iacobellis....................... (4:5:9) 0.1 (4:9) 0.1 (4:5:9) 0.1
All of the above and other executive
officers as a group (31 persons)...... (3:4:5) 1.1 (3:4:5) 1.4 (3:4:5) 1.1
<FN>
- ---------
(1) Each person has sole voting and investment power with respect to the shares
listed unless otherwise indicated.
(2) The shares owned by each person, and by the group, and the shares included
in the number of shares outstanding have been adjusted, and the percentage
of shares owned (where such percentage exceeds 0.1%) has been computed, in
accordance with Rule 13d-3(d)(1) under the Securities Exchange Act, except
that the Common shares owned and the related percentages do not include
Class A shares convertible into Common shares.
(3) Includes shares held jointly, or in other capacities, as to which in some
cases beneficial ownership is disclaimed.
(4) Includes shares held under the Corporation's Savings Plan as of November 30,
1994.
(5) Includes shares which may be acquired upon the exercise of outstanding stock
options as follows: 565,030, 361,000, 156,000, 183,000, 272,000 and
2,708,800 Common shares for Messrs. Beall, Black, Davis, Harff, Iacobellis
and the group, respectively, and 5,030, 8,000 and 36,950 Class A shares for
Messrs. Beall, Davis and the group, respectively.
(6) Includes shares, as to which beneficial ownership is disclaimed, as follows:
206,028 Common shares (including 190,000 shares underlying stock options)
and 3,468 Class A shares held as trustee under four trusts for the benefit
of family members and 10,000 Common shares owned by the Beall Family
Foundation, of which Mr. Beall is President and a director.
</TABLE>
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<PAGE> 12
(7) Includes 10,000 Class A shares held in a trust, of which Mr. Rockwell is a
successor trustee and one of the beneficiaries and as to which he disclaims
beneficial ownership except to the extent of the portion, if any, that may
ultimately be distributed to him.
(8) Includes 6,427 Common shares and 6,427 Class A shares owned by GameTime
Inc., of which Mr. Siragusa is President and a principal shareowner.
(9) Includes 73,250 Common shares (including 72,000 shares of underlying stock
options) and 1,250 Class A shares, as to which beneficial ownership is
disclaimed, held by or for the benefit of Mr. Iacobellis' family members.
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Corporation for the fiscal
years ended September 30, 1994, 1993 and 1992, of those persons who were (i) the
chief executive officer at any time during fiscal 1994, (ii) the other four most
highly compensated executive officers of the Corporation at September 30, 1994
and (iii) any other persons who were executive officers at any time during
fiscal 1994 and would have been included under clause (ii) if they had remained
executive officers at September 30, 1994 (the Named Officers):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
All Other
Annual Compensation Long-Term Compensation Compensation(1)
--------------------------------------------- ---------------------- ---------------
Awards(2) Payouts
--------- -------
Other Stock Long-Term
Annual Options Incentive
Name and Principal Position Year Salary Bonus(3) Compensation (Shares) Payouts(4)
--------------------------- ---- ------ -------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Donald R. Beall............... 1994 $815,000 $ $ 190,000 $ -0- $ 57,745
Chairman of the Board 1993 815,000 900,000 12,784 240,000 3,493,694 133,433
& Chief Executive Officer 1992 787,917 610,000 5,529 320,000 -0- 49,180
Kent M. Black................. 1994 545,833 92,000 -0- 36,341
Executive Vice President 1993 506,491 420,000 18,178 115,000 1,686,611 84,102
& Chief Operating Officer 1992 480,000 310,000 13,503 154,000 -0- 31,370
Don H. Davis, Jr.............. 1994 440,000 80,000 8,927
Senior Vice President 1993 358,750 287,718 11,216 35,000 409,605 8,812
& President--Automation 1992 325,000 82,550 7,750 45,000 -0- 8,812
Charles H. Harff.............. 1994 385,000 50,000 -0- 23,558
Senior Vice President, 1993 360,000 300,000 16,802 60,000 915,589 35,403
General Counsel & Secretary 1992 332,500 240,000 10,285 77,000 -0- 21,701
Sam F. Iacobellis............. 1994 493,000 72,000 -0- 31,092
Executive Vice President 1993 469,667 340,000 16,406 90,000 1,445,666 61,346
& Deputy Chairman 1992 448,500 290,000 10,854 120,000 -0- 32,262
for Major Programs
<FN>
- ---------
(1) Amounts contributed or accrued for fiscal years 1994, 1993 and 1992 for the
Named Officers (other than Mr. Davis for fiscal years 1993 and 1992) under
the Corporation's Savings Plan and the related supplemental savings plan and
amounts contributed for Mr. Davis under Allen-Bradley's Employee Savings
Plan for Salaried Employees for fiscal years 1994, 1993 and 1992.
(2) Although the Corporation's Long-Term Incentives Plans permit grants of
restricted stock and freestanding stock appreciation rights, no grants of
those incentives have been made.
(3) Amounts awarded under the Incentive Compensation Plan and, for Mr. Davis for
fiscal years 1993 and 1992, under Allen-Bradley's Management Incentive Plan,
for the respective fiscal years, even if deferred.
(4) Cash and market value of Common Stock paid in respect of performance units
granted under the Corporation's 1988 Long-Term Incentives Plan for a
three-year performance period ended September 30, 1993 and for Mr. Davis for
performance units granted to him under Allen-Bradley's Supplementary
Performance Unit Plan for the three-year performance periods ended September
30, 1994 and 1993. No payments were made in respect of a three-year
performance period ended September 30, 1992 since the established
performance objectives were not met.
</TABLE>
10
<PAGE> 13
OPTION GRANTS
Shown below is further information on grants to the Named Officers of stock
options pursuant to the 1988 Long-Term Incentives Plan during the fiscal year
ended September 30, 1994, which are reflected in the Summary Compensation Table
on page 10. No stock appreciation rights were granted under that Plan during
fiscal 1994.
<TABLE>
<CAPTION> Grant Date
Individual Grants Value
- --------------------------------------------------------------------------------------------------- ----------
Number of
Securities Percentage of
Underlying Total Options
Options Granted to Exercise or
Granted Employees in Base Price Expiration Grant Date
Name (Shares)(1) Fiscal 1994 (Per Share) Date Present Value(2)
---- ----------- ----------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Donald R. Beall...................... 190,000 8.8% $ 34.00 12/1/03 $1,649,200
Kent M. Black........................ 92,000 4.3% 34.00 12/1/03 798,560
Don H. Davis, Jr..................... 80,000 3.7% 34.00 12/1/03 694,400
Charles H. Harff..................... 50,000 2.3% 34.00 12/1/03 434,000
Sam F. Iacobellis.................... 72,000 3.3% 34.00 12/1/03 624,960
<FN>
- ---------
(1) All options granted to the Named Officers were granted on December 1, 1993
and first became exercisable December 1, 1994.
(2) These values are based on the Black-Scholes option pricing model which
produces a per option share-value of $8.68 using the following assumptions
and inputs: options exercised after 7 1/2 years, weighted five-year prior
stock price volatility and dividend yield of 0.1851 and 3.28%, respectively,
and an interest rate of 6.99% which was the zero coupon 7 1/2-year Treasury
bond rate at time of grant. The actual value, if any, the executive officer
may realize from these options will depend solely on the gain in stock price
over the exercise price when the options are exercised.
</TABLE>
The Black-Scholes option pricing methodology, on which the present value of
the stock options granted to the Named Officers is based, attempts to portray
the value of an option at the time of grant. While the options have no value if
the stock price does not increase, were the $8.68 present value of the options
converted into a future stock price at the end of the 7 1/2-year period when it
is assumed the options would be exercised, the shareowners of the approximately
221,130,000 shares outstanding on the grant date of those options (assuming that
number of shares remains outstanding) would realize aggregate appreciation of
$3,187.8 million compared to aggregate appreciation on the options of $7.0
million for the Named Officers (assuming that they held their options or the
shares acquired on exercise thereof for the whole 7 1/2-year period).
11
<PAGE> 14
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to (i) exercises by the Named Officers
during fiscal 1994 of options to purchase the Corporation's Common Stock or
Class A Common Stock granted under the 1988 Long-Term Incentives Plan and the
1981 Incentive Stock Option Plan for Key Employees and (ii) the unexercised
options to purchase the Corporation's Common Stock or Class A Common Stock
granted in fiscal 1994 and prior years under the 1988 Long-Term Incentives Plan,
the 1979 Stock Plan for Key Employees and the 1981 Incentive Stock Option Plan
for Key Employees to the Named Officers and held by them at September 30, 1994.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options Held At In-the-Money Options At
Shares September 30, 1994 September 30, 1994(1)
Acquired Value ---------------------------- ----------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald R. Beall........... -- -- 570,060 190,000(2) $3,195,510 $47,500(2)
Kent M. Black............. 10,060 $180,091 269,000 92,000 1,465,625 23,000
Don H. Davis, Jr.......... 4,000 41,250 84,000 80,000 535,375 20,000
Charles H. Harff.......... 4,000 50,000 133,000 50,000 704,750 12,500
Sam F. Iacobellis......... 10,000 192,500 200,000 72,000(2) 1,046,250 18,000(2)
<FN>
- ---------
(1) Based on the closing price on the New York Stock Exchange--Composite
Transactions of the Corporation's Common Stock on that date ($34.25).
(2) Held as trustee under trusts for family members and therefore beneficial
interest in these options is disclaimed.
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Management Development Committee of the Board of
Directors, which consists entirely of non-employee Directors (see page 8), has
furnished the following report on executive compensation:
COMPENSATION PHILOSOPHY AND OBJECTIVES
Under the Committee's supervision, the Corporation has developed and
implemented compensation policies, plans and programs intended to "pay for
performance" through meeting three fundamental objectives:
- foster the creation of shareowner value through close alignment of the
financial interests of executives with those of the Corporation's
shareowners
- recognize individual and team performance through evaluation of each
executive's effectiveness in meeting strategic and operating plan goals
- pay competitively to attract, retain and motivate the high caliber of
executives necessary for the Corporation's continuing leadership in the
diverse markets it serves
The Committee believes this sharp focus on "pay for performance" enhances
shareowner value creation as it:
- challenges each of the Corporation's businesses to reach their full
potential through achieving leadership market positions and improving
long-term financial performance
- rewards performance and motivates management to develop new products, invest
in new technologies and take the management actions--focused on promoting
teamwork, organizational effectiveness, streamlining and
empowerment--essential to assure quality, reduced product cycle times and
enhanced customer responsiveness
The Committee reports to the Board of Directors following each meeting of the
Committee on the substance of its discussion, data considered and action taken.
12
<PAGE> 15
EMPLOYEE STOCK OWNERSHIP
The Committee believes the focus on "pay for performance" is further sharpened
by aligning closely the financial interests of the Corporation's key executives
with those of the shareowners. Accordingly, in July 1993 it adopted the
following minimum Ownership Guidelines (multiple of base salary):
<TABLE>
<CAPTION>
COMMON STOCK
MARKET VALUE
-------------
<S> <C>
- Chief Executive Officer 8
- Executive Vice Presidents 5
- Major Business Unit Heads
and Senior Vice
Presidents 3
- Other Business Unit Heads
and other senior
executives 1.5
</TABLE>
Only shares owned directly or through the Corporation's Savings Plan, but not
shares subject to unexercised stock options, are considered for determining
whether an executive meets the Guidelines. At November 30, 1994, the
executives subject to the Guidelines owned an aggregate of shares of
the Corporation's Common Stock, with an aggregate market value of $ .
The ownership by % of the executives already meets the Guidelines. Executives
who do not meet the Guidelines are expected to do so within five years after the
date the Guidelines are applicable to them or within eight years in case of a
significant promotion.
COMPONENTS OF THE CORPORATION'S
COMPENSATION PLANS
- Strategy--In order to carry out its "pay for performance" philosophy, the
Committee sets base salaries generally somewhat below the median of other major
U.S. industrial companies, and provides opportunity for above-median
compensation through the Corporation's annual and long-term incentive plans
which depend heavily on corporate, business unit and individual performance. The
Committee considers the total compensation (earned or potentially available) of
each of the Named Officers and the other senior executives in establishing each
element of compensation. For the Named Officers, base compensation in a period
of acceptable performance (both by the individual and the Corporation) would
constitute about 20 to 30%, annual incentives about 20 to 30%, and long-term
incentives about 40 to 55% of total compensation.
In its deliberations, the Committee reviews data from industry, peer group and
national surveys of other major U.S. industrial companies. The surveys used by
the Corporation provide reference data on large samples of industrial companies
participating in national surveys that include 35 (71%) of the companies (in
addition to the Corporation) included in the S&P High Technology Composite
Index, a group of 12 diversified large industrial companies, four of which are
included in such Index, that the Corporation believes compete with its
businesses, and a group of 25 large industrial companies, six of which (in
addition to the Corporation) are included in such Index, that through
compensation consultants share relevant data. In addition, the Committee reviews
data on a less frequent basis from a group of 15 diversified large industrial
companies, eight of which are included in such Index. In determining the
components of compensation based in part on survey and peer-company data, the
Committee also considers the performance of other companies whose data is
included in such surveys.
The Committee periodically is advised by independent compensation consultants
concerning the Corporation's compensation programs in comparison to those of
other companies which the consultants believe compete with the Corporation for
executive talent.
Internal Revenue Code Section 162(m), enacted in 1993 and first applicable to
the Corporation for its fiscal year ending September 30, 1995, provides that
publicly held companies may not deduct in any taxable year compensation in
excess of one million dollars paid in that year to its chief executive officer
or any of its other four most highly compensated executive officers unless the
compensation is "performance based" as defined in that section. Grants of stock
options, on which the Corporation principally relies to provide long-term
incentive compensation to the officers to whose compensation this provision
might apply, are considered "performance based" compensation. Since the
Committee retains discretion to fix the specific amounts of base salaries and
annual incentive compensation for these officers, those elements would not
qualify as "performance based" compensation for these purposes.
13
<PAGE> 16
Accordingly, to avoid loss of the tax deduction, the Committee has adopted a
formal policy whereby any portion of the base, incentive or other compensation
of any person whose compensation is subject to the limitation on deductibility
under Section 162(m) exceeds one million dollars shall be deferred until the
executive's retirement or other termination of employment.
- Base Salary--In the early part of each fiscal year, the Committee reviews
with the Chief Executive Officer and the senior human resources executive and
approves, with any modifications it deems appropriate, an annual salary plan for
the Corporation's senior executives (other than the Chief Executive Officer).
This salary plan is developed by the Corporation's human resources staff under
the ultimate direction of the Chief Executive Officer based on the survey data
and consultants' reports described above and performance judgments as to the
past and expected future contributions of the individual senior executives.
- Annual Incentives--Near the beginning of each fiscal year, the Committee
reviews with the Chief Executive Officer the Corporate Goals and Objectives for
that year, including measurable financial return and shareowner value creation
objectives as well as long-term leadership goals that in part require more
subjective assessments. Principal 1994 financial goals included increasing
earnings per share above fiscal 1993 and achieving a return on equity of not
less than 19%. Shareowner value goals for 1994 included achieving a total return
(stock price appreciation and dividends) exceeding a composite of the peer
companies selected by the Corporation, making substantial investments in
advanced technologies and products through company-sponsored research and
development, and utilizing inter-business sharing of competencies, technology,
product development and facilities to achieve added leverage for competitive
advantage. The Corporation's long-term goals encompass its many initiatives to
enhance shareowner value described above under Compensation Philosophy and
Objectives.
After the end of the year, performance against the Corporate Goals and
Objectives is evaluated and the results are considered by the Compensation
Committee in awarding annual incentive compensation (see "Bonus" in the table on
page 10) to corporate executives who were not directly responsible for the
management of a business unit. Individual awards to members of the senior
management group, including the Named Officers other than the Chief Executive
Officer, are determined by the Committee after reviewing with the Chief
Executive Officer the recommended awards, taking into account the contributions
made and the levels of responsibility of each of the participants. While the
Committee believes achievement of the financial, shareowner value and long-term
leadership goals are each important, it accords greater significance to the
first two in determining the total amount available for annual incentive
payments.
The incentive compensation for executives responsible for the management of
business units is determined by the extent to which the respective business unit
achieves goals established at the beginning of each year tailored to the
particular business unit. For two of the business units, the measure is
performance profit before taxes; for one of the units, it is determined by
year-over-year sales growth and current-year return on sales, measured through a
performance matrix; and for six of the businesses, the measure is based 65% on
performance profit before taxes and 35% on the achievement of strategic goals
established at the beginning of the year. Achievement of established targets is
intended to provide incentive compensation at or above 100% of competitive
levels; and these business unit plans include significant upward and downward
leverage dependent on performance. In fiscal year 1994, executives of two of the
units, which did not meet their objectives, earned only one-fourth of
competitive annual incentive compensation while seven business units ranged
between 99% and 200% of competitive incentive compensation levels since their
performance met or exceeded established goals. Within each business unit, the
amount earned by that unit under its plan is allocated among individual
executives based on levels of responsibility and an assessment of their
individual performance by the business unit President in consultation with the
Chief Operating Officer to which the business unit reports and the senior human
resources executive.
The amount available for annual incentives is determined for the Corporation's
senior executives and other key management under the Corporation's Incentive
Compensation Plan or, for key
14
<PAGE> 17
Allen-Bradley executives, under Allen-Bradley's Management Incentive Plan. Under
the Corporation's Plan, the addition to the incentive fund for a fiscal year
cannot exceed either the aggregate amount of dividends declared on the
Corporation's outstanding stock during the year or an aggregate amount computed
by adding 2% of the first $100 million of the applicable net earnings (defined
as net income, before provision for domestic and foreign taxes based on income,
of the Corporation and its consolidated subsidiaries) for the year, and 3% of
the next $50 million of such earnings, and 4% of the next $25 million of such
earnings, and 5% of the balance of such earnings. Generally the Committee makes
awards under the Corporation's Plan in an aggregate amount well below the amount
available thereunder. Under Allen-Bradley's Management Incentive Plan, the
amount available for each Allen-Bradley executive's annual incentive is
determined by an arithmetic formula based on Allen-Bradley's annual sales growth
and return on sales; and actual awards are made upon assessment of the same
factors as for other business unit plans.
- Long-Term Incentives--The Corporation's 1988 Long-Term Incentives Plan
provides the flexibility to grant long-term incentives in a variety of forms,
including performance units, stock options, stock appreciation rights and
restricted stock.
Annually the Committee evaluates the type of long-term incentive it believes is
most likely to achieve the Corporation's total compensation objectives.
Since fiscal 1992, the Committee has granted stock options to both the
Corporation's senior and middle management groups. In fiscal 1993 and 1994, the
Committee also established performance unit plans covering most of the
Corporation's business units and providing long-term compensation opportunities
that depend on achieving goals measured for each unit by its earnings and return
on assets. The Committee also approved a new three-year performance period under
Allen-Bradley's supplementary performance plan under which potential
compensation is measured by achieving levels of sales growth and return on sales
set by the Committee for each three fiscal year performance cycle.
In determining the grants of stock options to the individual senior management
group, including the Named Officers other than the Chief Executive Officer, the
Committee reviewed with the Chief Executive Officer the recommended individual
awards, taking into account relevant survey data and the respective scope of
accountability, strategic and operational goals, and anticipated contributions
of each of the members of the senior management group. In both 1992 and 1993,
the long-term incentives for Mr. Davis were provided one-half through stock
option grants and one-half through participation in the Allen-Bradley
supplementary performance plan. The presidents of other business units for which
performance unit plans have been established also were afforded one-half of
their long-term incentive opportunities under those plans and one-half through
stock options, with the other key executives of those units participating only
in the business unit plans.
Prior to 1992, performance units were granted to senior management, generally
for three-year performance cycles having cumulative earnings per share targets
that determined the extent to which units were earned. Those grants produced
significant long-term compensation for periods when performance objectives were
fully or substantially met, including the three-year performance period covering
fiscal years 1991-1993 for which performance units were granted in fiscal 1991
(see "Long-Term Compensation--Payouts" in the table on page 10). For the
three-year performance period ended September 30, 1992, there was no payout
under either the Corporation's or Allen-Bradley's plan as the minimum
performance objectives were not met.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In July 1993 the Committee considered Mr. Beall's base salary which had been
in effect since March 1992. Without committing itself as to the timing of a
future increase, it recognized Mr. Beall's expressed desire that an increase
should not be authorized before March 1995 so that his total annual compensation
would be more dependent on annual incentive compensation tied to the Committee's
assessment of the Corporation's performance.
In November 1994, the Board of Directors adopted Corporate Governance
Guidelines which provide for annual assessment by the Board, in executive
session without the Chief Executive Of-
15
<PAGE> 18
ficer's participation, of that officer's performance. The Guidelines also
provide for the Board's action on the Chief Executive Officer's compensation
following recommendations by the Committee. In recommending Mr. Beall's annual
incentive compensation for 1994, the Committee took into account a number of
factors the sum total of which it believed demonstrated unusually successful
leadership. The Committee particularly considered that the Corporation
substantially met or exceeded each of its financial return and shareowner value
creation goals and made significant progress on each of its long-term leadership
objectives. The Committee viewed these as significant achievements in a year
that saw further contraction of defense spending, weak markets--some domestic,
some foreign--for several of the Corporation's businesses, and successful
downsizing and restructuring actions while concurrently committing necessary
talent and resources to the long-term development of the Corporation's
businesses. The Committee also took into account Mr. Beall's personal dedication
to assuring that throughout the Corporation there is a clear commitment to
customer responsiveness, quality, integrity and employment of the advanced
management practices that are essential to long-term leadership of the
Corporation's businesses and the enhancement of shareowner value. In December
1994, the Board in executive session received a report of the Committee as to
its evaluation of Mr. Beall's performance and its recommendations, which the
Board approved, of incentive compensation for Mr. Beall for the 1994 fiscal
year.
In determining the number of options granted to Mr. Beall for future long-term
incentives, the Committee took into account levels of option grants based on
data from several surveys of other major U.S. industrial companies (his grant
was slightly below the median of the companies surveyed according to one survey
and slightly above the median according to another) advice of independent
compensation consultants, data as to long-term compensation (e.g., options,
restricted stock, performance plans) from selected peer companies, information
on his total compensation and historical information regarding his long-term
compensation opportunities, together with the Committee's perception of Mr.
Beall's past and expected future contributions to the Corporation's achievement
of its long-term performance goals.
Compensation Committee
William S. Sneath, Chairman John D. Nichols
Richard M. Bressler Bruce M. Rockwell
Robin Chandler Duke Joseph F. Toot, Jr.
16
<PAGE> 19
SHAREOWNER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the cumulative total shareowner
return on the Corporation's Common Stock against the cumulative total return of
the S&P Composite-500 Stock Index and the S&P High Technology Composite Index
for the period of five fiscal years which commenced October 1, 1989 and ended
September 30, 1994, assuming in each case a fixed investment of $100 at the
respective closing prices on September 30, 1989 and reinvestment of all
dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
ROCKWELL COMMON, S&P COMPOSITE-500 & S&P HIGH TECHNOLOGY COMPOSITE INDICES
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ROCKWELL S&P HIGH
(FISCAL YEAR COVERED) COMMON S&P 500 INDEX TECH. COMP.
<S> <C> <C> <C>
1989 100 100 100
1990 107.94 90.69 85.92
1991 121.10 119.06 105.44
1992 120.86 132.18 107.4
1993 175.96 147.81 129.55
1994 172.05 153.26 150.90
<FN>
- ---------
FISCAL YEAR ENDED SEPTEMBER 30
* THE CUMULATIVE TOTAL RETURNS ON ROCKWELL COMMON STOCK AND EACH INDEX AS OF
EACH SEPTEMBER 30, 1990-1994 PLOTTED IN THE ABOVE GRAPH ARE AS FOLLOWS:
</TABLE>
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Rockwell Common.................................................. $107.94 $121.10 $120.86 $175.96 $172.05
S&P 500 Index.................................................... 90.69 119.06 132.18 147.81 153.26
S&P High Tech Comp. ............................................. 85.92 105.44 107.40 129.55 150.90
Closing market price at fiscal year end.......................... 24.38 26.50 25.50 36.00 34.25
Dividends per common share during fiscal year ended
September 30................................................... 0.80 0.86 0.92 0.96 1.02
</TABLE>
17
<PAGE> 20
RETIREMENT PLANS
The following table shows the estimated annual retirement benefits payable on
a straight life annuity basis to participating employees, including officers, in
the earnings and years of service classifications indicated, under the
Corporation's retirement plans which cover most officers and other salaried
employees on a non-contributory basis. Such benefits reflect a reduction to
recognize in part the Corporation's cost of Social Security benefits related to
service for the Corporation. The Corporation's plans also provide for the
payment of benefits to an employee's surviving spouse or other beneficiary.
<TABLE>
<CAPTION>
Average Estimated Annual Retirement Benefits for Years of Service Indicated
Annual ---------------------------------------------------------------------------
Earnings 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 ........................ $ 78,894 $118,341 $125,537 $ 132,733 $ 139,929 $ 147,125
500,000 ........................ 132,227 198,341 210,537 222,733 234,929 247,125
700,000 ........................ 185,560 278,341 295,537 312,733 329,929 347,125
900,000 ........................ 238,894 358,341 380,537 402,733 424,929 447,125
1,100,000 ........................ 292,227 438,341 465,537 492,733 519,929 547,125
1,300,000 ........................ 345,560 518,341 550,537 582,733 614,929 647,125
1,500,000 ........................ 398,894 598,341 635,537 672,733 709,929 747,125
1,700,000 ........................ 452,227 678,341 720,537 762,733 804,929 847,125
1,900,000 ........................ 505,560 758,341 805,537 852,733 899,929 947,125
2,100,000 ........................ 558,894 838,341 890,537 942,733 994,929 1,047,125
2,300,000 ........................ 612,227 918,341 975,537 1,032,733 1,089,929 1,147,125
</TABLE>
Covered compensation includes salary and annual bonus. The calculation of
retirement benefits under the plans generally is based upon average earnings for
the highest five consecutive years of the ten years preceding retirement.
The credited years of service for Messrs. Beall, Black, Davis, Harff and
Iacobellis are 26, 33, 32, 10 and 42, respectively.
Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended,
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
Corporation has supplemental plans which authorize the payment out of general
funds of the Corporation of any benefits calculated under provisions of the
applicable retirement plan which may be above the limits under these sections.
SELECTION OF AUDITORS
The directors of the Corporation have selected the firm of Deloitte & Touche
LLP, as the auditors of the Corporation subject to the approval of the
shareowners. Deloitte & Touche, and its predecessors, have acted for the
Corporation as auditors since 1934.
Before the Audit Committee recommended to the full Board the appointment of
Deloitte & Touche LLP, it carefully considered the qualifications of that firm,
including their performance in prior years and their reputation for integrity
and for competence in the fields of accounting and auditing.
The amount of the fees for audit and tax services performed by Deloitte &
Touche LLP for the Corporation relating to the 1994 fiscal year was
approximately $8.0 million. Representatives of Deloitte & Touche LLP, are
expected to be present at the meeting to respond to appropriate questions and to
make a statement if they desire to do so.
PROPOSAL TO APPROVE THE
1995 LONG-TERM INCENTIVES PLAN
A proposal will be presented to the meeting to approve the Corporation's 1995
Long-Term Incentives Plan (the Plan) which was adopted by the Board of Directors
(with Mr. Beall, the only director eligible to participate in the Plan, not
voting) on November 2, 1994, subject to approval by the shareowners of the
Corporation. The complete text
18
<PAGE> 21
of the Plan is set forth in Exhibit A to this Proxy Statement, and shareowners
are urged to review it together with the following information, which is
qualified in its entirety by reference to Exhibit A.
The Plan would replace the Corporation's 1988 Long-Term Incentives Plan (the
1988 Plan), which has been previously adopted by the shareowners of the
Corporation.
The new Plan is intended to continue to provide flexibility in adapting
compensation of key employees to changes in the Corporation's business and in
competitive compensation practices, as well as changes in pertinent tax and
accounting provisions. The Plan would have the effect of increasing the shares
available for grant of stock options or restricted stock and for earned
performance awards.
The purpose of the Plan is to foster creation of and enhance shareowner value
by linking the compensation of officers and other key employees to increases in
the price of the Corporation's stock or by offering the incentives of long-term
monetary rewards to key employees of the Corporation or its business units
directly linked to their contribution to shareowner value, thus providing means
by which persons of outstanding abilities can be attracted, motivated and
retained. The Plan is designed to permit the Corporation to make different types
of grants to meet competitive conditions and changing circumstances.
The Plan authorizes the issuance or transfer of an aggregate of 16 million
shares of Common Stock of the Corporation (Shares), provided that the total
number of Shares as to which grants may be made under the Plan in any one fiscal
year may not exceed 1 1/2% of the total outstanding and treasury shares. As of
November 30, 1994, the closing price of the Common Stock as reported in the New
York Stock Exchange--Composite
Transactions was $ .
As of November 30, 1994, options to purchase Shares were outstanding
under the 1988 Plan, no performance units were outstanding under the 1988 Plan
and units were outstanding under supplementary performance plans for key
employees of Allen-Bradley with respect to performance periods ending September
30, 1995 and 1996 as authorized by the 1988 Plan. In addition, payment was made
on December 7, 1994 with respect to units granted under supplementary
performance plans for a three-year performance period ending September 30, 1994.
As of November 30, 1994, Shares were available for grants under the 1988 Plan,
of which were granted to eligible employees on December 7, 1994. The balance
of those shares remain available for payments in respect of outstanding
performance units under supplementary performance plans. In addition, as of
November 30, 1994, options to purchase Shares were outstanding under the
Corporation's 1979 Stock Plan for Key Employees and 1981 Incentive Stock Option
Plan for Key Employees. No further options may be granted under those two plans.
If the Plan is approved by shareowners, no subsequent grants of performance
units, stock options or restricted stock will be made under the 1988 Plan.
Outstanding performance units under supplementary performance plans with respect
to performance periods not complete will remain eligible for payment in
accordance with the 1988 Plan, outstanding stock options and stock appreciation
rights under the 1988 Plan, the 1979 Plan and the 1981 Plan will remain
exercisable in accordance with their terms, and stock appreciation rights
related to outstanding stock options may be granted under any of those plans.
The Plan will be administered by the Compensation and Management Development
Committee (the Committee), consisting of three or more members of the Board of
Directors who are not eligible to participate in the Plan. In order to meet the
requirements of Internal Revenue Code Section 162(m), however, all grants under
the Plan will be made by a Grant Committee consisting of those members of the
Committee who are "outside directors" as defined for purposes of that section
and regulations thereunder. In addition, the Board of Directors has authority to
perform all functions of
19
<PAGE> 22
the Committee and the Grant Committee under the Plan.
The persons to whom grants are made under the Plan (Participants) will be
selected from time to time by the Grant Committee in its sole discretion from
among corporate officers and other key employees of the Corporation and its
subsidiaries and affiliates. In selecting Participants and determining the type
and amount of their grants, the Grant Committee may consider recommendations of
the Chief Executive Officer of the Corporation and will take into account such
factors as the Participant's level of responsibility, performance, performance
potential, level and type of compensation and potential value of grants under
the Plan.
The Plan permits grants to be made from time to time as performance units,
nonqualified stock options, incentive stock options, stock appreciation rights
and restricted stock. In addition, the Plan authorizes establishment of
supplementary performance plans applicable to one or more business units of the
Corporation.
Since it is within the discretion of the Grant Committee to determine which
employees will receive grants under the Plan and the type and amount thereof,
these matters cannot be specified at present. It is presently contemplated,
however, that approximately 450 employees will be eligible to participate in
performance plans established for various business units of the Corporation
pursuant to the Plan, and approximately 625 employees, including Mr. Beall and
the other Named Officers, will be eligible to receive grants of stock options,
stock appreciation rights and restricted stock under the Plan. It is presently
expected that executive officers, including Mr. Beall, would not initially
participate in performance plans under the Plan unless an executive officer's
principal accountability is the management of a single business unit.
It is not intended that the Plan would deprive the Board of Directors and the
responsible officers of the Corporation of their authority to pay sales
commissions or make arrangements for other types of bonuses or incentive
payments.
While the benefits that would have been received by or allocated to employees
eligible to receive grants under the Plan in fiscal 1994 if it had been in
effect in that year cannot be determined precisely, the following information on
grants and awards under the 1988 Plan may be generally indicative of those
benefits. Set forth below is information on grants of stock options to purchase
Shares pursuant to the 1988 Plan and awards of Shares in payment of earned
performance units under the 1988 Plan and supplementary performance plans
thereunder during the fiscal year ended September 30, 1994 to (i) the Named
Officers, (ii) the Named Officers and all other executive officers as a group,
(iii) nonexecutive directors as a group and (iv) employees (other than executive
officers) as a group.
20
<PAGE> 23
<TABLE>
<CAPTION>
SHARES SHARES AWARDED
UNDERLYING IN PAYMENT OF
OPTIONS PERFORMANCE UNITS
GRANTED GRANT EARNED FOR 3 YEAR AWARD
IN FISCAL DATE CYCLE ENDED DATE
NAME AND POSITION 1994 VALUE(1) 9/30/93 VALUE(2)
----------------- ---------- ----------- ----------------- ----------
<S> <C> <C> <C> <C>
Donald R. Beall....................... 190,000 $ 1,649,200 51,002 $1,746,818
Chairman of the Board &
Chief Executive Officer
Kent M. Black......................... 92,000 798,560 -0- -0-
Executive Vice President &
Chief Operating Officer
Don H. Davis, Jr...................... 80,000 694,400 3,118 106,792
Executive Vice President &
Chief Operating Officer
Charles H. Harff...................... 50,000 434,000 -0- -0-
Senior Vice President,
General Counsel & Secretary
Sam F. Iacobellis..................... 72,000 624,960 -0- -0-
Executive Vice President &
Deputy Chairman for Major Programs
All Executive Officers as a Group..... 533,500 4,630,780 69,900 2,394,075
All Non-Executive Directors as a
Group............................... -0- -0- -0- -0-
All Employees (Other Than Executive
Officers) as a Group................ 1,623,600 14,092,848 32,181 1,102,199
<FN>
- ---------
(1) Valued under the Black-Scholes option pricing methodology described on page
11.
(2) Valued at the closing market price at the end of the week prior to the
meeting at which the Committee determined the part of the payment for
performance units to be made in shares.
</TABLE>
PERFORMANCE PLANS
The Plan authorizes the establishment by the Committee of performance plans
applicable to the Corporation or one or more of its business components. Each
such plan must include provision for establishment of performance cycles (ending
no later than September 30, 2005) of not less than three fiscal years and
establishment of a performance measure and performance objectives based on
criteria selected by the Committee for the Corporation or the affected business
component and may provide for adjustment (up or down) of the performance
objectives or modification of the performance measure, or both, if the Committee
(or with its approval, the person or committee delegated to administer any plan
except insofar as it relates to any executive officer) determines that
conditions, involving changes in the economy, changes in law or government
regulations, changes in generally accepted accounting principles or material
acquisitions or divestitures, warrant. The Committee may authorize the
Corporation's Chief Executive Officer to approve the definitive terms and
conditions of any performance plan, including the employees or categories of
employees eligible to participate in each performance plan, but the Committee's
authorization is required for participation by any of the Corporation's
executive officers in a performance plan. Potential awards under performance
plans will be expressed as cash amounts and will be paid in cash unless the
Committee decides that payment should be in Shares or a combination of Shares
and cash.
21
<PAGE> 24
STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND RESTRICTED STOCK
The Plan authorizes grants to Participants of stock options, which may be
either incentive stock options eligible for special tax treatment or
nonqualified stock options, stock appreciation rights and restricted stock.
Under the provisions of the Plan authorizing the grant of stock options, (a)
the option price may not be less than the fair market value of the Shares at the
date of grant, (b) the aggregate fair market value (determined as of the date
the option is granted) of the Shares for which any employee may be granted
incentive stock options which are exercisable for the first time in any calendar
year may not exceed $100,000, (c) stock options generally may not be exercised
prior to one year nor after ten years from the date of grant and generally
become exercisable in three approximately equal installments on the first,
second and third anniversaries of the date of grant, and (d) at the time of
exercise of a stock option the option price must be paid in full in cash or in
Shares or in a combination of cash and Shares. If a participant who holds an
outstanding stock option or stock appreciation right dies, the Plan permits the
exercise thereof within three years of the date of death and even if it were not
exercisable at such date. The Plan permits the Committee to make determinations
as to exercisability upon other termination of a Participant's employment.
The Plan permits the grant of stock appreciation rights related to a stock
option (a tandem SAR), either at the time of the option grant or thereafter
during the term of the option, or the grant of stock appreciation rights
separate and apart from the grant of an option (a freestanding SAR). Tandem
SAR's permit an optionee, upon exercise of such rights and surrender of the
related option to the extent of an equivalent number of Shares, to receive a
payment equal to the excess of the fair market value (on the date of exercise)
of the portion of the option so surrendered over the option price of such
Shares. Freestanding SARs entitle the grantee, upon exercise of such rights to
receive a payment equal to the excess of the fair market value (on the date of
exercise) of all or part of a designated number of Shares over the fair market
value of such Shares on the date such rights were granted. Such payment may be
made in Shares (valued on the basis of the fair market value of the Shares on
the date of exercise of the stock appreciation rights), or in cash or partly in
cash and partly in Shares, as the Committee may determine.
Under the Plan, the Grant Committee may also grant Shares subject to specified
restrictions (restricted stock) to Participants in the Plan. Grants of
restricted stock are subject to forfeiture if the grantee does not continue as
an employee of the Corporation or a subsidiary or affiliate (i) for a period of
three years or longer, as may be specified by the Grant Committee, from the
grant date, or (ii) until performance criteria specified by the Grant Committee
are met, except that in the event of a grantee's death, or retirement under a
retirement plan of the Corporation after age 62 or becoming entitled to an
unreduced benefit under the applicable retirement plan, before the end of the
restricted period, the grantee's heirs or the grantee will be entitled to the
Shares. In the case of a grantee whose employment terminates for any other
reason before the end of the restricted period, the Committee, taking into
account the purpose of the Plan and such other factors as in its sole discretion
it deems appropriate, may waive the forfeiture of all or a portion of those
Shares of restricted stock granted. During the restricted period, Shares of
restricted stock have all the attributes of outstanding Shares, except that
certificates for such Shares and dividends thereon are delivered to and held by
the Corporation for the grantee's account. As and to the extent that Shares of
restricted stock are no longer subject to forfeiture, certificates therefor and
any dividends related thereto withheld by the Corporation, together with
interest thereon as determined by the Board of Directors, are delivered to the
grantee.
Under the Plan, stock options, freestanding SARs and restricted stock may not
be granted after September 30, 2005, but tandem stock appreciation rights may be
granted with respect to outstanding stock options granted before that date.
22
<PAGE> 25
TAX MATTERS
The following is a brief summary of advice received from counsel to the
Corporation regarding the principal federal income tax consequences of benefits
under the Plan under present law and regulations:
(a) Payments under Performance Plans. Any cash and the fair market value of
any Shares received as payments under performance plans established in
accordance with the Plan will constitute ordinary income to the employee in the
year in which paid, and the Corporation will be entitled to a deduction in the
same amount.
(b) Incentive Stock Options. The grant of an incentive stock option will not
result in any immediate tax consequences to the Corporation or the optionee. An
optionee will not realize taxable income, and the Corporation will not be
entitled to any deduction, upon the timely exercise of an incentive stock
option, but the excess of the fair market value of the Shares acquired over the
option price will be an item of tax preference for purposes of the alternative
minimum tax. If the optionee does not dispose of the Shares acquired within one
year after their receipt (and within two years after the option was granted),
gain or loss realized on the subsequent disposition of the Shares will be
treated as long-term capital gain or loss. Capital losses of individuals are
deductible only against capital gains and a limited amount of ordinary income.
In the event of an earlier disposition, the optionee will realize ordinary
income in an amount equal to the lesser of (i) the excess of the fair market
value of the Shares on the date of exercise over the option price; or (ii) if
the disposition is a taxable sale or exchange, the amount of any gain realized.
Upon such a disqualifying disposition, the Corporation will be entitled to a
deduction in the same amount and at the same time as the optionee realizes such
ordinary income.
(c) Nonqualified Stock Options. The grant of a nonqualified stock option will
not result in any immediate tax consequences to the Corporation or the optionee.
Upon the exercise of a nonqualified stock option, the optionee will realize
ordinary income, and the Corporation will be entitled to a deduction, equal to
the difference between the option price and the fair market value of the Shares
acquired at the time of exercise.
(d) Stock Appreciation Rights. Upon the exercise of either a tandem SAR or a
freestanding SAR, any cash received and the fair market value on the exercise
date of any Shares received will constitute ordinary income to the grantee. The
Corporation will be entitled to a deduction in the same amount and at the same
time.
(e) Restricted Stock. An employee normally will not realize taxable income
upon an award of restricted stock, and the Corporation will not be entitled to a
deduction, until the termination of the restrictions. Upon such termination, the
employee will realize ordinary income in an amount equal to the fair market
value of the Shares at that time, plus the amount of the dividends and interest
thereon to which the employee then becomes entitled. However, an employee may
elect to realize taxable ordinary income in the year the restricted stock is
awarded in an amount equal to its fair market value at that time, determined
without regard to the restrictions. The Corporation will be entitled to a
deduction in the same amount and at the same time as the employee realizes
income.
OTHER
During the period that stock appreciation rights are outstanding, the
Corporation will accrue as an expense the amount, if any, by which the fair
market value of the Shares as to which stock appreciation rights are expected to
be exercised exceeds the exercise price of any related option Shares or the fair
market value on the date of grant of the designated number of Shares for
freestanding SARs.
Under various proposals being considered for adoption by the Financial
Accounting Standards Board, publicly held issuers would be required to accrue
compensation expense in respect of stock options granted to employees. The
Corporation's management believes that the amounts of compensation expense it
would be required to accrue if any of these proposals were adjusted would not
have a material effect on the Corporation's financial statements.
In the event any change in or affecting Shares occurs, the Board of Directors
may make appropri-
23
<PAGE> 26
ate amendments to or adjustments in the Plan or grants made thereunder,
including changes in the number of Shares which may be issued or transferred
under the Plan and the number of Shares and price per Share subject to
outstanding options and stock appreciation rights.
In order to maintain the rights of participants in the event of a change of
control of the Corporation, the Plan provides that unless prior to the
occurrence of such a change the Board of Directors shall have determined
otherwise by vote of at least two-thirds of its members, all performance cycles
(except those under performance plans that do not provide for a change of
control contingency) not then complete shall be deemed completed, the respective
performance objectives shall be deemed to have been attained and all potential
awards granted with respect thereto shall be deemed to have been fully earned;
all outstanding stock options and stock appreciation rights then outstanding
shall become fully exercisable whether or not otherwise then exercisable; and
the restrictions on all Shares granted as restricted stock would lapse. A change
of control is deemed to occur under the same circumstances as provided in
Article III, Section 15(I)(1) of the Corporation's By-Laws, which provision was
approved by the shareowners at the 1987 Annual Meeting.
The Board of Directors may at any time amend, suspend or terminate the Plan or
grants made thereunder. It may not, however (except in making amendments and
adjustments in the event of changes in or affecting Shares) (i) without the
consent of the person affected, cancel or reduce any grant theretofore made
other than as provided for or contemplated in the agreement evidencing the grant
or (ii) without the approval of shareowners, change the class of persons
eligible to receive incentive stock options under the Plan, increase the number
of Shares that may be issued or transferred under the Plan, reduce the option
exercise price of any stock option below the fair market value of the Shares
covered thereby at the date of grant or decrease the forfeiture period for any
restricted stock below that permitted under the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL, WHICH IS
PRESENTED AS ITEM (C).
PROPOSAL TO APPROVE DIRECTORS STOCK PLAN
A proposal will be presented to the meeting to approve the Corporation's
Directors Stock Plan (the Directors Plan) which was adopted by the Board of
Directors on November 2, 1994, subject to approval of the shareowners of the
Corporation. The complete text of the Directors Plan is set forth in Exhibit B
to this Proxy Statement, and shareowners are urged to review it together with
the following information, which is qualified in its entirety by reference to
Exhibit B.
The purpose of the Directors Plan is to link a portion of the compensation of
non-employee directors directly with the interests of the shareowners. If
approved by shareowners, the Directors Plan would become effective at the time
of such approval and supersede a similar plan adopted by the Board of Directors
effective January 1, 1994. The first awards under the Directors Plan would be
made immediately following the meeting.
Participation in the Directors Plan is limited to directors who are not
employees of the Corporation or any of its subsidiaries. An aggregate of 75,000
shares of Common Stock of the Corporation (Shares) may be issued or transferred
under the Directors Plan, subject to appropriate adjustment in the event of any
change in or affecting Shares, including but not limited to stock dividends,
stock splits and recapitalizations.
If the Directors Plan is approved by shareowners, the grants of 400 Shares to
be made to each non-employee director elected at each annual meeting of
shareowners will be made under the Directors Plan beginning with grants
immediately after the 1995 Annual Meeting. In addition, each non-employee
director elected at a meeting of the Board would receive immediately after that
meeting an award of 400 Shares if elected after an annual meeting and prior to
May 1; 300 Shares if elected between May 1 and July 31; 200 Shares if elected
between August 1 and October 31; and 100 Shares if elected between November 1
and the next annual meeting. Directors are encouraged to hold shares granted
until their Board service ends, and shares awarded under the Directors Plan may
not in any event be sold, transferred or otherwise disposed of
24
<PAGE> 27
for a period of six months after receipt (except in the case of death or
disability of the director).
The Directors Plan will be administered by the Compensation and Management
Development Committee of the Board of Directors, consisting of three of more
members of the Board. The Board of Directors may amend the Directors Plan in any
respect, provided that no amendment may be made without shareowner approval that
would materially (i) increase the maximum number of Shares available for
issuance under the Directors Plan (other than adjustments to reflect changes in
or affecting Shares), (ii) increase the benefits accruing to participants under
the Directors Plan, or (iii) modify the requirements as to eligibility for
participation in the Directors Plan. Award provisions of the Directors Plan may
not be amended more than once every six months except to comport with changes in
the Internal Revenue Code, the Employee Retirement Income Security Act or
regulations under either of those statutes. The Board of Directors also has
authority to terminate the Directors Plan at any time.
Counsel to the Corporation has advised that the principal Federal income tax
consequences of benefits under the Directors Plan under present law and
regulations are that the fair market value of Shares awarded to a director
thereunder will constitute ordinary income to the director recognized for
Federal income tax purposes six months after the effective date of award unless
the director makes an election under Section 83(b) of the Internal Revenue Code
to recognize that income on the effective date of the award. The director's
holding period for tax purposes, including determining whether any gain or loss
on the Shares is long or short term, will begin on the date that income is
recognized. The Corporation will be entitled to a deduction equal to the income
recognized by the director on the date of recognition.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL, WHICH IS
PRESENTED AS ITEM (D).
VOTE REQUIRED
The 13 nominees for election as directors at the 1995 Annual Meeting of
Shareowners who receive the greatest number of votes cast for the election of
directors at that meeting by the holders of the Corporation's Common Stock,
Class A Common Stock, Series A Preferred Stock and Series B Preferred Stock,
voting together as one class, entitled to vote at the meeting, a quorum being
present, shall become directors at the conclusion of the tabulation of votes. An
affirmative vote of the holders of a majority of the voting power of the
Corporation's Common Stock, Class A Common Stock, Series A Preferred Stock and
Series B Preferred Stock, voting together as one class, present in person or
represented by proxy and entitled to vote at the meeting, a quorum being
present, is necessary to approve the action proposed in items (b) through (d) of
the accompanying Notice of 1995 Annual Meeting of Shareowners.
Under Delaware law and the Corporation's Restated Certificate of Incorporation
and By-Laws, the aggregate number of votes entitled to be cast by all
shareowners present in person or represented by proxy at the meeting, whether
those shareowners vote "for", "against" or abstain from voting (including broker
non-votes), will be counted for purposes of determining the minimum number of
affirmative votes required for approval of items (b) through (d) and the total
number of votes cast "for" that matter will be counted for purposes of
determining whether sufficient affirmative votes have been cast. The shares of a
shareowner who abstains from voting on a matter or whose shares are not voted by
reason of a broker non-vote on a particular matter will be counted for purposes
of determining whether a quorum is present at the meeting so long as the
shareowner is present in person or represented by proxy. An abstention from
voting or a broker non-vote on a matter by a shareowner present in person or
represented by proxy at the meeting has no effect in the election of directors
(assuming a quorum is present) and has the same legal effect as a vote "against"
any other matter even though the shareowner or interested parties analyzing the
results of the voting may interpret such a vote differently.
25
<PAGE> 28
OTHER MATTERS
The Board of Directors does not know of any other matters which may be
presented at the meeting. In the event of a vote on any matters other than
those referred to in items (a) through (d) of the accompanying Notice of 1995
Annual Meeting of Shareowners, it is intended that proxies in the accompanying
form will be voted thereon in accordance with the judgment of the person or
persons voting such proxies. The Corporation contemplates sending to all
shareowners after the meeting a report of the action taken at the meeting.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires the Corporation's
officers and directors, and persons who own more than ten percent of a
registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (SEC) and the New York Stock Exchange. Officers, directors
and greater than ten percent shareowners are required by SEC regulation to
furnish the Corporation with copies of all Forms 3, 4 and 5 they file.
Based solely on the Corporation's review of the copies of such forms it has
received and written representations from certain reporting persons that they
were not required to file Forms 5 for specified fiscal years, the Corporation
believes that all its officers, directors and greater than ten percent
beneficial owners complied with all filing requirements applicable to them with
respect to transactions during fiscal 1994.
ANNUAL REPORT
The Corporation's annual report to shareowners, including financial
statements, for the fiscal year ended September 30, 1994, has previously been
mailed to shareowners.
1995 SHAREOWNER PROPOSALS
To be eligible for inclusion in the Corporation's proxy statement, shareowner
proposals for the 1996 Annual Meeting of Shareowners must be received at the
Corporation's corporate office, 625 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3123, on or before August 30, 1995.
EXPENSES OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Corporation. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone or by telegraph, by a few regular employees of the Corporation without
additional compensation. The Corporation does not expect to pay any compensation
for the solicitation of proxies but will reimburse brokers and other persons
holding stock in their names, or in the names of nominees, for their expenses
for sending proxy material to principals and obtaining their proxies.
December 28, 1994
26
<PAGE> 29
EXHIBIT A
ROCKWELL INTERNATIONAL CORPORATION
1995 LONG-TERM INCENTIVES PLAN
1. PURPOSE
The purpose of the 1995 Long-Term Incentives Plan is to foster creation of and
enhance Rockwell shareowner value by linking the compensation of officers and
other key employees of the Corporation to increases in the price of Rockwell
stock or by offering the incentives of long-term monetary rewards to key
employees of Rockwell or its business units directly linked to their
contribution to the creation of Rockwell shareowner value, thus providing means
by which persons of outstanding abilities can be attracted, motivated and
retained.
2. DEFINITIONS
For the purpose of the Plan, the following terms shall have the meanings set
forth below:
(a) Board of Directors. The Board of Directors of Rockwell.
(b) Committee. The Compensation and Management Development Committee
designated by the Board of Directors from among its members who are not eligible
to receive a Grant under the Plan or a grant under a Performance Plan.
(c) Corporation. Rockwell and those of its subsidiary corporations or
affiliates designated by the Committee to participate in the Plan.
(d) Employees. Officers and other key employees of the Corporation, but not
directors who are not also employees of the Corporation.
(e) Executive Officer. An Employee who is an executive officer of Rockwell as
defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended, or
any successor provision.
(f) Fair Market Value. The closing price of the Common Stock of Rockwell as
reported in the New York Stock Exchange -- Composite Transactions on the date of
a determination (or on the next preceding day such stock was traded if it was
not traded on the date of a determination).
(g) Grant. A grant made pursuant to the Plan by the Grant Committee to an
Employee in the form of Options, Stock Appreciation Rights or Restricted Stock.
(h) Grant Committee. The Committee excluding those members of the Committee
who are not at the time any Grant is made "outside directors" as defined for
purposes of Section 162(m) and regulations thereunder.
(i) Option. An option to purchase Shares granted to an Employee by the Grant
Committee pursuant to Section 5 or 8 of the Plan.
(j) Participant. Any Employee to whom a Grant is made for so long as that
Grant remains outstanding.
(k) Performance Cycle. Any period of three or more consecutive fiscal years of
Rockwell established for Rockwell or a designated business component under a
Performance Plan.
(l) Performance Measure. Criteria established to serve as a measure of
performance of Rockwell or a designated business component during a Performance
Cycle under a Performance Plan.
(m) Performance Objectives. Levels of achievement, related to the Performance
Measure, established as goals for a Performance Cycle to be used in determining
whether and to what extent grants under a Performance Plan shall be deemed to be
earned.
(n) Performance Plan. A performance plan applicable to Rockwell or one or more
business components of the Corporation authorized pursuant to Section 4 of the
Plan.
(o) Plan. This 1995 Long-Term Incentives Plan.
(p) Restricted Period. The period (i) not less than three years or (ii) until
achievement of performance goals specified at the time of Grant by the Grant
Committee with respect to a Grant of Restricted Stock during which the Shares
are subject to forfeiture if the grantee does not continue as an Employee.
A-1
<PAGE> 30
(q) Restricted Stock. Shares subject to conditions prescribed by the Committee
under Section 7 of the Plan.
(r) Rockwell. Rockwell International Corporation.
(s) Section 162(m). Section 162(m) of the Internal Revenue Code, as amended,
or any successor provision.
(t) Shares. Shares of Common Stock of Rockwell.
(u) Stock Appreciation Right. A Right granted to an Employee by the Grant
Committee pursuant to Section 6 or 8 of the Plan (i) in conjunction with all or
any part of any Option, which entitles the Employee, upon exercise of such
Right, to surrender such Option, or any part thereof, and to receive a payment
equal to the excess of the Fair Market Value, on the date of such exercise, of
the Shares covered by such Option, or part thereof, over the purchase price of
such Shares pursuant to the Option (a Tandem Stock Appreciation Right) or (ii)
separate and apart from any Option, which entitles the Employee, upon exercise
of such Right, to receive a payment measured by the increase in the Fair Market
Value of a number of Shares designated by such Right from the date of grant of
such Right to the date on which the Employee exercises such Right (a
Freestanding Stock Appreciation Right).
(v) Supplementary Stock Plan. A supplementary stock plan applicable to
Employees subject to the tax laws of one or more countries other than the United
States authorized pursuant to Section 8 of the Plan.
3. PLAN ADMINISTRATION
(a) The Grant Committee shall determine the Employees to whom Grants are made,
the number of Shares or Stock Appreciation Rights to be subject to each Grant
and the Restricted Period for any Grant of Restricted Stock.
(b) The Committee shall exercise all other responsibilities, powers and
authority relating to the administration of the Plan not reserved to the Board
of Directors.
(c) The Board of Directors reserves the right, in its sole discretion, to
exercise or authorize another committee or person to exercise some of or all the
responsibilities, powers and authority vested in the Committee and the Grant
Committee under the Plan.
(d) In making their determinations with respect to Grants under the Plan or
grants under any Performance Plan, the Grant Committee and the Committee may
consider recommendations of the Chief Executive Officer of Rockwell and shall
take into account such factors as the Employee's level of responsibility,
performance, performance potential, level and type of compensation and potential
value of Grants.
4. PERFORMANCE PLANS
(a) The Committee may authorize Performance Plans applicable to Rockwell or
one or more business components of the Corporation on such terms and conditions,
not inconsistent with the Plan, and applicable to such Employees or categories
of Employees as the Committee shall determine. In connection with its
authorization of any Performance Plan, the Committee may authorize Rockwell's
Chief Executive Officer to approve the definitive terms and conditions of that
Performance Plan, including but not limited to the Employees or categories of
Employees to which that Performance Plan shall apply and the committee or person
who shall be delegated authority to administer that Performance Plan, except
that authorization by the Committee shall be required for participation by any
Executive Officer in any Performance Plan. Each Performance Plan shall include
provision for: (i) establishment of Performance Cycles of not less than three
consecutive fiscal years for each designated business component (and Rockwell if
a Performance Plan applicable to it should be authorized), provided that no
Performance Cycle shall begin later than September 30, 2005 and only one
Performance Cycle for Rockwell or any designated business component shall begin
with any one fiscal year; (ii) establishment of a Performance Measure and
Performance Objectives for each Performance Cycle established for Rockwell and
each designated business component; and (iii) approval by the Committee of any
grants thereunder to any Executive Officer. In addition, a Performance Plan may
but need not provide for (x) grants under such Performance Plan with respect to
a Performance Cycle to be made at any time during the Performance Cycle,
provided that any grant made after the first fiscal year of the
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Performance Cycle shall provide for a pro-rated award; (y) adjustment (up or
down) of the Performance Objectives or modification of the Performance Measure
(or both) for any designated business component for a Performance Cycle if the
Committee (or with the Committee's approval, the committee or person delegated
to administer the Performance Plan except insofar as it relates to any Executive
Officer) determines that conditions, including but not limited to changes in the
economy, changes in laws or government regulations, changes in generally
accepted accounting principles, or acquisitions or dispositions determined by
the Committee to be material, so warrant; and (z) a Change-of-Control
contingency similar to Section 13(f) of the Plan.
(b) Potential awards granted to participating Employees under Performance
Plans shall be expressed as cash amounts (whether in currency or in units having
a currency equivalent) and shall be paid in accordance with determinations of
the Committee. Payments shall be in cash unless the Committee determines to make
payment to one or more named participating Employees in Shares or a combination
of cash and Shares. Any payment which is made in cash may be made in a lump sum,
in installments or on a deferred basis. Any payment which is made in Shares
shall be valued at the Fair Market Value on the last trading day of the week
preceding the day of issuance or transfer of the Shares. No grant under a
Performance Plan shall bear interest except as may be determined by the
Committee in respect of payments made in installments or on a deferred basis.
(c) If and to the extent an award under a Performance Plan for any Performance
Cycle becomes payable to a participating Employee whose compensation is subject
to the limitation on deductibility under Section 162(m) for the applicable year
and the amount of that award when combined with all base, incentive or other
compensation of such Employee for the applicable year which constitutes
"applicable employee remuneration," as defined for purposes of Section 162(m),
would exceed the limitation of Section 162(m)(1), the amount payable pursuant to
the Performance Plan in excess of that limitation, whether payable in cash,
Shares or a combination of both, may in the sole discretion of the Grant
Committee be deferred until and paid on the first business day of the calendar
year following the Corporation's fiscal year in which such Employee's employment
by the Corporation terminates. The certificates for any Shares to which a
participating Employee will become entitled in respect of a payment deferred
pursuant to this paragraph and any dividends that may be paid in cash or
otherwise on those Shares shall be delivered to and held by Rockwell until the
end of the period for which such payment is deferred. At that time, those Shares
and dividends and any cash payment deferred pursuant to this paragraph shall be
delivered to the Employee, together with interest on the amount of cash
dividends and any such cash payment so delivered computed at the same rate and
in the same manner as interest credited from time to time under Rockwell's
Deferred Compensation Plan.
5. OPTIONS
The Grant Committee may grant from time to time to Employees, Options which
may be incentive stock options (as defined in Section 422 of the Internal
Revenue Code), nonqualified stock options, or both, to purchase Shares on terms
and conditions determined by the Committee, consistent with the provisions of
the Plan, including the following:
(a) The purchase price of the Shares subject to any Option shall not be less
than the Fair Market Value on the date the Option is granted.
(b) Each Option may be exercised in whole or in part from time to time during
such period as the Option shall specify; provided, however, that if the
Committee does not establish a different exercise schedule at or before the date
of grant of an Option, the Option shall become exercisable in three
approximately equal installments on each of the first, second and third
anniversaries of the date the Option is granted; and provided, further, that no
Option shall be exercisable prior to one year (except as provided in Section
9(c) or 13(f)) nor after ten years from the date of the grant thereof.
(c) Each Option may provide for related Stock Appreciation Rights.
(d) The aggregate Fair Market Value (determined as of the date the Option is
granted) of the Shares for which any Employee may be granted incentive stock
options which are exercisable for the
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first time in any calendar year under all plans of the Corporation and any
parent or subsidiary of the Corporation shall not exceed $100,000 (or such other
amount as may be fixed as the maximum amount permitted by Section 422(d) of the
Internal Revenue Code, as amended, or any successor provision). The Grant
Committee shall grant incentive stock options only to employees of Rockwell or a
corporation which is a subsidiary of Rockwell within the meaning of Section
425(f) of the Internal Revenue Code.
(e) The purchase price of the Shares with respect to which an Option or
portion thereof is exercised shall be payable in full in cash or in Shares or in
a combination of cash and Shares. The value of any Share delivered in payment of
the purchase price shall be its Fair Market Value on the date the Option is
exercised.
6. STOCK APPRECIATION RIGHTS
(a) The Grant Committee may grant Tandem Stock Appreciation Rights to an
Employee either at the time of grant of an Option or at any time thereafter
during the term of an Option. A Tandem Stock Appreciation Right shall be
exercisable only when and to the extent that the related Option is exercisable.
(b) The Grant Committee may grant from time to time to Employees, Freestanding
Stock Appreciation Rights on terms and conditions determined by the Committee,
consistent with the provisions of the Plan.
(c) The payment to which the grantee of a Stock Appreciation Right is entitled
upon exercise thereof may be made in Shares valued at Fair Market Value on the
date of exercise, or in cash or partly in cash and partly in Shares, as the
Committee may determine.
(d) Upon exercise of a Tandem Stock Appreciation Right and surrender of the
related Option or part thereof, such Option, to the extent surrendered, shall
not thereafter be exercisable, and the Shares covered by the surrendered Option
shall not again be available for Grants pursuant to the Plan, or awards under a
Performance Plan.
(e) Upon exercise of a Freestanding Stock Appreciation Right, any Shares
delivered in payment thereof shall not again be available for Grants pursuant to
the Plan, or awards under a Performance Plan.
7. RESTRICTED STOCK
The Grant Committee may grant from time to time to Employees, Shares of
Restricted Stock on terms determined by the Committee, consistent with the
provisions of the Plan, including the following:
(a) The Grant Committee shall specify a Restricted Period and may specify
performance or other criteria for each Grant of Restricted Stock, and the Shares
of Restricted Stock granted shall be forfeited if the grantee does not continue
as an Employee throughout the Restricted Period, or if and to the extent the
specified performance or other criteria are not met during the Restricted
Period, except as otherwise provided in Section 9(a), 9(b) or 13(f).
(b) Shares of Restricted Stock granted to an Employee shall have all the
attributes of outstanding Shares, except that certificates for such Shares and
any dividends that may be paid in cash or otherwise thereon shall be delivered
to and held by Rockwell. As and to the extent that Shares of Restricted Stock
are no longer subject to forfeiture, certificates therefor and any dividends
related thereto held by Rockwell shall be delivered to the Employee. There shall
also be paid to the Employee at such time interest on the amount of cash
dividends so delivered computed at the same rate and in the same manner as
interest credited from time to time under Rockwell's Deferred Compensation Plan.
8. SUPPLEMENTARY STOCK PLANS
(a) The Committee may authorize Supplementary Stock Plans applicable to
Employees subject to the tax laws of one or more countries other than the United
States and providing for the grant of Options, Stock Appreciation Rights,
Restricted Stock or any combination thereof to such Employees on terms and
conditions, consistent with the Plan, determined by the Committee which may
differ from the terms and conditions of Grants pursuant to Sections 5, 6 and 7
of the Plan for the purpose of complying with the conditions for qualification
of Options, Stock Appreciation Rights or Restricted Stock for favorable
treatment under foreign tax laws.
(b) Notwithstanding any other provision hereof, Options granted under any
Supplementary Stock
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Plan shall include provisions that conform with Sections 5(a), (b), (c) and (e)
and 6(d); Restricted Stock granted under any Supplementary Stock Plan shall
include provisions that conform with Sections 7(a) and (b); and subject to
Section 3(b), only the Grant Committee shall have authority to grant Options,
Stock Appreciation Rights or Restricted Stock under any Supplementary Stock
Plan.
9. EFFECT OF DEATH OR TERMINATION OF EMPLOYMENT
(a) If a participating Employee's employment by the Corporation terminates
prior to the end of a Performance Cycle under a Performance Plan or the
Restricted Period applicable to any Grant of Restricted Stock because of the
Employee's (i) death or (ii) retirement not less than one year after the
beginning of that Performance Cycle or the date of that Grant under a retirement
plan of the Corporation at or after attaining age 62 or accumulating 85 points
(or fulfilling such other criteria as may be required for an unreduced early
retirement benefit) for purposes of the applicable retirement plan, the amount
of the award under the Performance Plan or the number of Shares of Restricted
Stock such Employee shall be deemed to have earned shall be the amount or number
thereof determined as though such Employee's employment had not terminated prior
to the end of the Performance Cycle or Restricted Period.
(b) If a participating Employee's employment by the Corporation terminates
prior to the end of a Performance Cycle under a Performance Plan or the
Restricted Period applicable to any Grant of Restricted Stock, for any reason
other than death or retirement not less than one year after the beginning of
that Performance Cycle or the date of that Grant under a retirement plan of the
Corporation at or after attaining age 62 or accumulating 85 points (or
fulfilling such other criteria as may be required for an unreduced early
retirement benefit) under the applicable retirement plan, such Employee shall be
deemed not to have earned any award under the Performance Plan or Shares of
Restricted Stock except as and to the extent the Committee (or with the
Committee's approval, the committee or person delegated to administer a
Performance Plan except insofar as it relates to any Executive Officer), taking
into account the purpose of the Plan and such other factors as in its sole
discretion it deems appropriate, may determine, provided that the amount of the
award or the number of Shares of Restricted Stock which may be so determined by
the Committee to have been earned shall not exceed the amount or number which
would have been earned had the provisions of paragraph (a) above been
applicable.
(c) If the employment by the Corporation of a Participant who (or whose
permitted transferee) holds an outstanding Grant of Options or Stock
Appreciation Rights terminates by reason of the Participant's death, the Options
or Stock Appreciation Rights subject to that Grant and not theretofore exercised
may be exercised from and after the date of the Participant's death for a period
of three years (or until the expiration date specified in the Grant if earlier)
even if any of them was not exercisable at the date of death.
(d) If a Participant who (or whose permitted transferee) holds an outstanding
Grant of Options or Stock Appreciation Rights retires under a retirement plan of
the Corporation at any time after a portion thereof has become exercisable, the
Options or Stock Appreciation Rights subject to that Grant and not theretofore
exercised may be exercised from and after the date upon which they are first
exercisable under that Grant for a period of five years from the date of
retirement (or until the expiration date specified in the Grant if earlier),
even if any of them was not exercisable at the date of retirement, except that
any thereof (i) subject to a Grant made within eighteen months before such
retirement or (ii) held by a grantee (or a permitted transferee thereof) who
retires before either attaining age 62 or accumulating 85 points (or fulfilling
such other criteria as may be required for an unreduced early retirement
benefit) for purposes of the applicable retirement plan, may be exercised solely
for a period of three years from the date of retirement (or until the expiration
date specified in the Grant if earlier) or such shorter period as the Committee
may determine within 60 days of a grantee's retirement.
(e) If the employment by the Corporation of a Participant who (or whose
permitted transferee) holds an outstanding Grant of Options or Stock
Appreciation Rights is terminated for any reason other than death or retirement
under a retirement
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<PAGE> 34
plan of the Corporation, the Options or Stock Appreciation Rights subject to
that Grant and not theretofore exercised may be exercised only within ninety
days after termination of such employment (or until the expiration date
specified in the Grant if earlier) and only to the extent the grantee thereof
(or a permitted transferee) was entitled to exercise the Options or Stock
Appreciation Rights at the time of termination of such employment, unless and
except to the extent the Committee may otherwise determine; provided, however,
that the Committee shall not in any event permit a longer period of exercise
than would have been applicable had the provisions of paragraph (d) above been
applicable.
10. SHARES AVAILABLE
(a) The total number of Shares which may be delivered in payment and upon
exercise of Grants and in payments of awards under Performance Plans shall not
exceed 16 million, as adjusted from time to time as herein provided, and the
total number of Shares as to which Grants may be made in any one fiscal year of
the Corporation shall not exceed 1 1/2% of the total number of Shares
outstanding and held in Treasury as of the date of determination. Shares which
may be delivered in payment or upon exercise of Grants or in payments of awards
under Performance Plans may consist in whole or in part of unissued or
reacquired Shares; provided, however, that unless otherwise determined by the
Committee, Shares which may be granted as Restricted Stock shall consist only of
reacquired shares. Subject to Sections 6(d) and (e), if for any reason Shares as
to which an Option has been granted cease to be subject to purchase thereunder
or Shares granted as Restricted Stock are forfeited to the Corporation, then
such Shares shall again be available under the Plan.
(b) The total number of Shares subject to Options and Stock Appreciation
Rights granted to any one Employee in any one fiscal year of Rockwell under all
plans of Rockwell and any parent or subsidiary of Rockwell shall in no event
exceed 350,000, as adjusted from time to time as herein provided.
(c) No Option, Freestanding Stock Appreciation Right or Restricted Stock shall
be granted under the Plan or any Supplementary Stock Plan after September 30,
2005, but Options or Stock Appreciation Rights and Restricted Stock granted
theretofore may extend beyond that date, and Tandem Stock Appreciation Rights
may be granted after that date with respect to Options outstanding on that date.
11. ADJUSTMENTS
If there shall be any change in or affecting Shares on account of any merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split or combination, or other distribution to holders of Shares
(other than a cash dividend), there shall be made or taken such amendments to
the Plan and such adjustments and actions thereunder as the Board of Directors
may deem appropriate under the circumstances. Such amendments, adjustments and
actions may include, without limitation, changes in the number of Shares which
may be issued or transferred, in the aggregate or to any one Employee, pursuant
to the Plan, the number of Shares subject to outstanding Options and Stock
Appreciation Rights and the related price per share; provided, however, that no
such amendment, adjustment or action may change the limitation prescribed by
Section 10(b) to a number of Shares that is a greater proportion of the total
number of Shares outstanding and held in Treasury as of the effective date of
that amendment, adjustment or action than the proportion of the number of Shares
prescribed by Section 10(b) to the total number of Shares outstanding and held
in Treasury immediately prior thereto.
12. AMENDMENT AND TERMINATION
The Committee shall have the power in its discretion to amend, suspend or
terminate the Plan or Grants thereunder at any time except that, subject to the
provisions of Section 11, (a) without the consent of the person affected, no
such action shall cancel or reduce a Grant theretofore made other than as
provided for or contemplated in the agreement evidencing the Grant and (b)
without the approval of the shareowners of Rockwell, the Committee may not (i)
change the class of persons eligible to receive incentive stock options, (ii)
increase the number of Shares provided in Section 10(a) or 10(b), (iii) reduce
the Option exercise price of any Option below the Fair Market Value on the date
such Option was granted or decrease the
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forfeiture period for any Grant below that permitted under the Plan.
13. MISCELLANEOUS
(a) Except as determined by the Committee, no person shall have any claim to
receive a Grant or any payment under a Performance Plan, to receive payment in
respect of a Grant or under a Performance Plan in any form other than the
Committee shall approve or, in circumstances where Section 9 is applicable, to
be deemed to have earned any award under a Performance Plan or Shares of
Restricted Stock or to be entitled to exercise Options or Stock Appreciation
Rights for any particular period after termination of employment. There is no
obligation for uniformity of treatment of Employees under the Plan or any
Performance Plan. No Employee shall have any right as a Participant or a
participant under any Performance Plan to continue in the employ of the
Corporation for any period of time or to a continuation of any particular rate
of compensation, and the Corporation expressly reserves the right to discharge
or change the assignment of any Employee at any time.
(b) No Option, Stock Appreciation Right or right related to Restricted Stock
granted pursuant to the Plan or right to payment of an award under any
Performance Plan may be assigned, pledged or transferred except (i) by will or
by the laws of descent and distribution; or (ii) in the case of any Grant (other
than an Option granted as an incentive stock option) or any right to payment of
an award under a Performance Plan, by gift to any member of the Employee's
immediate family or to a trust for the benefit of one or more members of the
Employee's immediate family, if permitted in the applicable agreement governing
that Grant or right to payment; or (iii) as otherwise determined by the
Committee. Each Option, Stock Appreciation Right or right related to Restricted
Stock shall be exercisable, and each payment of an award under a Performance
Plan shall be payable, during the lifetime of the Employee to whom granted or
awarded only by or to such Employee, and any payment of an award under a
Performance Plan made after the death of a participating Employee entitled
thereto shall be paid to the legal representative of the estate or to the
designated beneficiary of such Employee, unless in any such case, the Grant or
right to payment has been transferred in accordance with the provisions of the
applicable agreement governing that Grant or right to payment, to a member of
the Employee's immediate family or a trust for the benefit of one or more
members of the Employee's immediate family, in which case it shall be
exercisable or payable only by or to such transferee (or to the legal
representative of the estate or to the heirs or legatees of such transferee).
For purposes of this provision, an Employee's "immediate family" shall mean the
Employee's spouse and natural, adopted or step-children and grandchildren.
(c) No person shall have the rights or privileges of a shareowner with respect
to Shares subject to an Option, deliverable as a payment, upon exercise of a
Stock Appreciation Right or under a Performance Plan until exercise of such
Option or Stock Appreciation Right, or delivery as a payment under the
Performance Plan.
(d) No fractional Shares shall be issued or transferred pursuant to the Plan.
If the portion of any payment pursuant to the Plan or a Performance Plan, to be
made in Shares is not equal to the value of a whole number of Shares, the person
entitled thereto shall be paid an amount equal to the Fair Market Value as of
the date of exercise of any fractional Share deliverable in respect of exercise
of a Stock Appreciation Right and the Fair Market Value as of the date of
payment of any fractional Share deliverable in respect of any payment under a
Performance Plan.
(e) The Corporation, the Board of Directors, the Committee, the Grant
Committee and the officers of Rockwell shall be fully protected in relying in
good faith on the computations and reports made pursuant to or in connection
with the Plan by the independent certified public accountants who audit the
Corporation's accounts or others (who may include Employees) whose services are
used by the Board of Directors, Committee or Grant Committee in its
administration of the Plan.
(f) Notwithstanding any other provision of the Plan, if a Change of Control
(as defined in Article III, Section 15(I)(1) of Rockwell's ByLaws) shall occur,
then unless prior to the occurrence thereof, the Board of Directors shall have
determined otherwise by vote of at least two-thirds of its members, (i) all
Performance Cycles (except those under Perform-
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<PAGE> 36
ance Plans that do not provide for a Change-of-Control contingency) not then
complete shall be deemed completed forthwith, the Performance Objectives
therefor shall be deemed to have been attained, and each participating Employee
shall be deemed to have earned the maximum amount that could have been earned
thereunder; (ii) all Options and any Stock Appreciation Rights then outstanding
pursuant to the Plan shall forthwith become fully exercisable whether or not
otherwise then exercisable; and (iii) the restrictions on all Shares granted as
Restricted Stock under the Plan shall forthwith lapse.
(g) The Corporation shall have the right in connection with the delivery of
any Shares in payment of a Grant or a payment under a Performance Plan or upon
exercise of an Option to require as a condition of such delivery that the
recipient represent that such Shares are being acquired for investment and not
with a view to the distribution thereof.
(h) The Corporation shall have the right in connection with any payment under
a Performance Plan, exercise of any Option or Stock Appreciation Right or
termination of the Restricted Period for any Restricted Stock, to deduct from
any such payment or any other payment by the Corporation, an amount equal to any
taxes required by law to be withheld with respect thereto or to require the
Employee or other person receiving such payment, effecting such exercise or
entitled to Shares and related payments on termination of such Restricted
Period, as a condition of and prior to such payment or exercise or delivery of
Shares on such termination, to pay to the Corporation an amount sufficient to
provide for any such taxes so required to be withheld.
(i) Unless otherwise determined by the Committee or provided in an agreement
between any Employee and the Corporation, for purposes of the Plan an Employee
on authorized leave of absence will be considered as being in the employ of the
Corporation.
(j) The Corporation shall bear all expenses and costs in connection with the
operation of the Plan, including costs related to the purchase, issue or
transfer of Shares, but excluding taxes imposed on any person receiving a
payment or delivery of Shares under the Plan or a Performance Plan.
14. INTERPRETATIONS AND DETERMINATIONS
The Committee shall have the power from time to time to interpret the Plan, to
adopt, amend and rescind rules, regulations and procedures relating to the Plan,
to make, amend and rescind determinations under the Plan and to take all other
actions that the Committee shall deem necessary or appropriate for the
implementation and administration of the Plan. All interpretations,
determinations and other actions by the Committee not revoked or modified by the
Board of Directors shall be final, conclusive and binding upon all parties.
15. EFFECTIVE DATE
Upon approval by the shareowners of Rockwell, the Plan shall become effective
as of October 1, 1994.
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EXHIBIT B
DIRECTORS STOCK PLAN OF
ROCKWELL INTERNATIONAL CORPORATION
1. PURPOSE OF THE PLAN
The purpose of the Directors Stock Plan (the Plan) is to link a portion of the
compensation of non-employee directors of Rockwell directly with the interests
of the shareowners.
2. PARTICIPANTS
Participants in the Plan shall consist of directors of Rockwell who are not
employees of Rockwell or any of its subsidiaries (Non-Employee Director). The
term "subsidiary" as used in the Plan means a corporation more than 50% of the
voting stock of which, or an unincorporated business entity more than 50% of the
equity interest in which, shall at the time be owned directly or indirectly by
Rockwell.
3. SHARES RESERVED UNDER THE PLAN
Subject to the provisions of Section 8 of the Plan, there shall be reserved
for delivery under the Plan an aggregate of 75,000 shares of Common Stock of
Rockwell (Shares). Shares to be delivered under the Plan may be authorized and
unissued Shares, Shares held in treasury or any combination thereof.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation and Management Development
Committee of the Board of Directors of Rockwell (the Committee). The Committee
shall have authority to interpret the Plan, and to prescribe, amend and rescind
rules and regulations relating to the administration of the Plan, and all such
interpretations, rules and regulations shall be conclusive and binding on all
persons.
5. EFFECTIVE DATE OF THE PLAN
The Plan shall be submitted to the shareowners of Rockwell for approval at the
Annual Meeting of Shareowners to be held on February 1, 1995, or any adjournment
thereof, and, if approved by the shareowners, shall become effective on the date
and at the time of such approval.
6. AWARD OF SHARES
Each Non-Employee Director who is elected a director at any Annual Meeting of
Shareowners of Rockwell shall receive an award of 400 Shares effective
immediately after that Annual Meeting. Each Non-Employee Director who is elected
a director at any meeting of the Board shall receive effective immediately after
that meeting an award of 400 Shares if elected after the annual meeting and
prior to May 1; an award of 300 Shares if elected between May 1 and July 31; an
award of 200 Shares if elected between August 1 and October 31; and an award of
100 Shares if elected between November 1 and the next annual meeting. A
participant shall not be required to make any payment for any Shares delivered
under the Plan. Upon the delivery of Shares under the Plan, the recipient shall
have the entire beneficial ownership interest in, and all rights and privileges
of a shareowner as to those Shares, including the rights to vote those Shares
and to receive dividends thereon.
7. RESTRICTION ON TRANSFER OF SHARES
No Shares received by a participant under the Plan may be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of for a period of six
months after receipt of those Shares, except in the case of the participant's
death or disability during that six-month period.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
If there shall be any change in or affecting Shares on account of any merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split or combination, or other distribution to holders of Shares
(other than a cash dividend), there shall be made or taken such amendments to
the Plan and such adjustments and actions thereunder as the Board may deem
appropriate under the circumstances.
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<PAGE> 38
9. GOVERNMENT AND OTHER REGULATIONS
The obligations of Rockwell to deliver Shares under the Plan shall be subject
to (i) all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation,
compliance with the Securities Act of 1933, as amended, and (ii) the condition
that such shares shall have been duly listed on the New York Stock Exchange.
10. AMENDMENT AND TERMINATION OF THE PLAN
The Plan may be amended by the Board in any respect, provided that, without
shareowner approval, no amendment shall (i) materially increase the maximum
number of shares of Common Stock available for delivery under the Plan (other
than adjustments pursuant to Section 8 hereof), (ii) materially increase the
benefits accruing to participants under the Plan, or (iii) materially modify the
requirements as to eligibility for participation in the Plan, and provided,
further, that Section 6 of the Plan may not be amended more than once every six
months except to comport with the changes in the Internal Revenue Code of 1986,
as amended, the Employee Retirement Income Securities Act, as amended, or the
regulations under either thereof. The Plan may also be terminated at any time by
the Board.
11. MISCELLANEOUS
(a) Nothing contained in this Plan shall be deemed to confer upon any person
any right to continue as a director of or to be associated in any other way with
Rockwell.
(b) To the extent that Federal laws do not otherwise control, the Plan and all
determinations made and actions taken pursuant hereto shall be governed by the
law of the State of Delaware.
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PROXY
ROCKWELL INTERNATIONAL CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints D.R. Beall and W.S. Sneath, jointly and
severally, proxies, with full power of substitution, to vote shares of capital
stock which the undersigned is entitled to vote at the Annual Meeting of
Shareowners to be held at the Doubletree Hotel, Los Angeles Airport, 5400 West
Century Boulevard, Los Angeles, California, on February 1, 1995, or any
adjournment thereof; such proxies being directed to vote as specified or, if no
specification is made, FOR the election of directors and FOR proposals (b), (c)
and (d), and to vote in accordance with their discretion on such other matters
as may properly come before the meeting.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS JUST SIGN
AND DATE THE OTHER SIDE; NO BOXES NEED TO BE CHECKED.
Comments:
(If you have written in the above space, please mark the "Comments" box
on the other side)
(continued and to be signed, on the other side)
<PAGE> 40
<TABLE>
<S> <C>
*******************
__________ ACCOUNT KEY __________ * Comments Noted *
* on Reverse Side *
* *
* O *
* *
*******************
</TABLE>
<TABLE>
<S> <C>
WHERE A VOTE IS NOT SPECIFIED, THE PROXIES WILL VOTE THE SHARES REPRESENTED BY THE PROXY FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS (b), (c) AND (d), AND WILL VOTE IN ACCORDANCE WITH THEIR DISCRETION ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
</TABLE>
<TABLE>
<C> <C> <S> <C>
(a) THE BOARD OF DIRECTORS RECOMMENDS VOTES (b)
The election of directors FOR (a), (b), (c) AND (d). The selection
FOR WITHHOLD Nominees: L. Allen, D.R. Beall, R.M. Bressler, J.J. Creedon, of auditors
all nominees AUTHORITY to vote R.C. Duke, J.L. Estrin, W.H. Gray, J.C. LaForce, W.T. McCormick,
listed for all nominees listed J.D. Nichols, B.M. Rockwell, W.S. Sneath and J.F. Toot. FOR AGAINST ABSTAIN
(Instruction: To withhold authority to vote for any individual
[X] [X] nominee, write that nominee's name in the space provided below.) [X] [X] [X]
________________________________________________________________
</TABLE>
<TABLE>
<S> <C> <C>
(c) (d)
Approve 1995 Long-Term Approve Directors Stock Plan
Incentives Plan
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
In signing as attorney, executor, administrator, trustee
[X] [X] [X] [X] [X] [X] or guardian, please give full title as such, and, if
signing for a corporation, please give your title. When
shares are in the name of more than one person each
should sign the proxy.
Dated: _________________________________________ , 1995
_______________________________________________________
(Signature)
_______________________________________________________
(Signature if held jointly)
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
</TABLE>
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
<PAGE> 41
<TABLE>
<S> <C>
FIRST FIRST INTERSTATE BANK
INTERSTATE OF CALIFORNIA
Bank 707 Wilshire Boulevard, W10-1
Los Angeles, CA 90017
</TABLE>
December 28, 1994
TO: PARTICIPANTS IN THE ROCKWELL INTERNATIONAL CORPORATION SAVINGS PLAN
You have recently been mailed a copy of the Rockwell International Corporation
1994 Annual Report.
Enclosed is a copy of the Rockwell International Corporation Letter to
Shareowners, Notice of 1995 Annual Meeting and Proxy Statement, together with a
Direction Card and a return envelope.
The enclosed Direction Card should be used to instruct us with respect to our
voting of the shares which we are holding for your account in the Rockwell
International Corporation Savings Plan.
Please sign, date and return the Direction Card in the enclosed pre-addressed
stamped envelope by January 27, 1995 so that we may vote the shares of Rockwell
International that we hold for your account in the way you choose. If you do not
complete and return the enclosed Direction Card by the above date, First
Interstate Bank of California, as Trustee, will vote such shares as it deems
proper.
Susana R. Ryan
Vice President
Enclosures
<PAGE> 42
DIRECTION CARD
ROCKWELL INTERNATIONAL CORPORATION SAVINGS PLAN
TO: FIRST INTERSTATE BANK OF CALIFORNIA, TRUSTEE
You are hereby directed to vote, with respect to the proposals listed below,
the number of shares of Rockwell International Common Stock and Class A Common
Stock held for my account in the Rockwell International Savings Plan at the
Annual Meeting of Shareowners of Rockwell International Corporation to be held
at the Doubletree Hotel, Los Angeles Airport, 5400 West Century Boulevard, Los
Angeles, California, on February 1, 1995, and at any adjournment thereof, as
follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS JUST SIGN
AND DATE THE OTHER SIDE; NO BOXES NEED TO BE CHECKED.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
*****************
* NO POSTAGE *
* NECESSARY *
* IF MAILED *
* IN THE *
* UNITED STATES *
*****************
-----------------
************************************************ -----------------
* BUSINESS REPLY MAIL * -----------------
* FIRST CLASS PERMIT NO. 6796 PITTSBURGH, PA * -----------------
************************************************ -----------------
POSTAGE WILL BE PAID BY ADDRESSEE -----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
OFFICE OF SECRETARY -----------------
ROCKWELL INTERNATIONAL CORPORATION -----------------
625 LIBERTY AVENUE
PITTSBURGH, PA 15222-9634
<PAGE> 43
__________ ACCOUNT KEY __________
<TABLE>
<S> <C>
IN THE ABSENCE OF AN EXPRESSED DIRECTION, THE TRUSTEE WILL VOTE ON THE LISTED PROPOSALS AND, IN ADDITION, ON OTHER BUSINESS WHICH
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF AS IT DEEMS PROPER.
</TABLE>
<TABLE>
<C> <C> <S> <C>
(a) THE BOARD OF DIRECTORS RECOMMENDS VOTES (b)
The election of directors FOR (a), (b), (c) AND (d). The selection
FOR WITHHOLD Nominees: L. Allen, D.R. Beall, R.M. Bressler, J.J. Creedon, of auditors
all nominees AUTHORITY to vote R.C. Duke, J.L. Estrin, W.H. Gray, J.C. LaForce, W.T. McCormick,
listed for all nominees listed J.D. Nichols, B.M. Rockwell, W.S. Sneath and J.F. Toot. FOR AGAINST ABSTAIN
(Instruction: To withhold authority to vote for any individual
[X] [X] nominee, write that nominee's name in the space provided below.) [X] [X] [X]
________________________________________________________________
</TABLE>
<TABLE>
<S> <C> <C>
(c) (d)
Approve 1995 Long-Term Approve Directors Stock Plan
Incentives Plan
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[X] [X] [X] [X] [X] [X]
In signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such.
Dated: __________________________________ , 1995
________________________________________________
(Signature)
PLEASE SIGN, DATE, AND RETURN THE DIRECTION CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
<PAGE> 44
[LOGO]
ADMITTANCE CARD REQUEST
If you plan to attend the Annual Meeting of Shareowners to be held on
February 1, 1995, this form may be used to request an admittance card. Please
fill in your name(s) and address and promptly return the form. The envelope
provided for return of your direction card may be used for this purpose or you
may tear off this business reply card and drop it in the U.S. mail. Upon receipt
of your request and verification of your share ownership, an admittance card
will be sent to you.
I/we plan to attend the meeting.
Name(s) ______________________________________________________________________
Please Print or Type
Street Address _______________________________________________________________
City ____________________ State ___________________ Zip Code _________________
<PAGE> 45
<TABLE>
<S> <C>
FIRST FIRST INTERSTATE BANK
INTERSTATE OF CALIFORNIA
Bank 707 Wilshire Boulevard, W10-1
Los Angeles, CA 90017
</TABLE>
December 28, 1994
TO: PARTICIPANTS IN THE ROCKWELL INTERNATIONAL CORPORATION SAVINGS PLAN FOR
CERTAIN REPRESENTED HOURLY EMPLOYEES
You have recently been mailed a copy of the Rockwell International Corporation
1994 Annual Report.
Enclosed is a copy of the Rockwell International Corporation Letter to
Shareowners, Notice of 1995 Annual Meeting and Proxy Statement, together with a
Direction Card and a return envelope.
The enclosed Direction Card should be used to instruct us with respect to the
voting of the shares held in your Savings Plan account by Mellon Bank, N.A.,
Savings Plan trustee.
Please sign, date and return the Direction Card in the enclosed pre-addressed
envelope by January 27, 1995 so that we may report to Mellon Bank your
instructions as to the voting of your Savings Plan shares. If you do not
complete and return the enclosed Direction Card by the above date, Mellon Bank
is required to vote your shares in the same proportion as directions received
from all other participants.
Susana R. Ryan
Vice President
Enclosures
<PAGE> 46
DIRECTION CARD
ROCKWELL INTERNATIONAL CORPORATION HOURLY SAVINGS PLAN
TO: FIRST INTERSTATE BANK OF CALIFORNIA
You are hereby directed to report to Mellon Bank, N.A., Savings Plan
Trustee, to vote, with respect to the proposals listed below, the number of
shares of Rockwell International Common Stock and Class A Common Stock held for
my account in the Rockwell International Savings Plan for Certain Represented
Hourly Employees at the Annual Meeting of Shareowners of Rockwell International
Corporation to be held at the Doubletree Hotel, Los Angeles Airport, 5400 West
Century Boulevard, Los Angeles, California, on February 1, 1995, and at any
adjournment thereof, as follows:
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS JUST SIGN
AND DATE THE OTHER SIDE; NO BOXES NEED TO BE CHECKED.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
*****************
* NO POSTAGE *
* NECESSARY *
* IF MAILED *
* IN THE *
* UNITED STATES *
*****************
-----------------
************************************************ -----------------
* BUSINESS REPLY MAIL * -----------------
* FIRST CLASS PERMIT NO. 6796 PITTSBURGH, PA * -----------------
************************************************ -----------------
POSTAGE WILL BE PAID BY ADDRESSEE -----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
OFFICE OF SECRETARY -----------------
ROCKWELL INTERNATIONAL CORPORATION -----------------
625 LIBERTY AVENUE
PITTSBURGH, PA 15222-9634
<PAGE> 47
__________ ACCOUNT KEY __________
<TABLE>
<S> <C>
IN THE ABSENCE OF AN EXPRESSED DIRECTION, THE TRUSTEE WILL VOTE ON THE LISTED PROPOSALS PROPORTIONATELY IN THE SAME MANNER AS THE
TRUSTEE VOTES SHARES AS TO WHICH IT HAS RECEIVED EXPRESS DIRECTIONS FROM OTHER PARTICIPANTS AND WILL VOTE ON OTHER BUSINESS WHICH
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF AS IT DEEMS PROPER.
</TABLE>
<TABLE>
<C> <C> <S> <C>
(a) THE BOARD OF DIRECTORS RECOMMENDS VOTES (b)
The election of directors FOR (a), (b), (c) AND (d). The selection
FOR WITHHOLD Nominees: L. Allen, D.R. Beall, R.M. Bressler, J.J. Creedon, of auditors
all nominees AUTHORITY to vote R.C. Duke, J.L. Estrin, W.H. Gray, J.C. LaForce, W.T. McCormick,
listed for all nominees listed J.D. Nichols, B.M. Rockwell, W.S. Sneath and J.F. Toot. FOR AGAINST ABSTAIN
(Instruction: To withhold authority to vote for any individual
[X] [X] nominee, write that nominee's name in the space provided below.) [X] [X] [X]
________________________________________________________________
</TABLE>
<TABLE>
<S> <C> <C>
(c) (d)
Approve 1995 Long-Term Approve Directors Stock Plan
Incentives Plan
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[X] [X] [X] [X] [X] [X]
In signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such.
Dated: __________________________________ , 1995
________________________________________________
(Signature)
PLEASE SIGN, DATE, AND RETURN THE DIRECTION CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
<PAGE> 48
[LOGO]
ADMITTANCE CARD REQUEST
If you plan to attend the Annual Meeting of Shareowners to be held on
February 1, 1995, this form may be used to request an admittance card. Please
fill in your name(s) and address and promptly return the form. The envelope
provided for return of your proxy card may be used for this purpose or you may
tear off this business reply card and drop it in the U.S. mail. Upon receipt of
your request and verification of your share ownership, an admittance card will
be sent to you.
I/we plan to attend the meeting.
Name(s) ______________________________________________________________________
Please Print or Type
Street Address _______________________________________________________________
City ____________________ State ___________________ Zip Code _________________
