<PAGE>
<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission file number 1-5358
Sundstrand Corporation
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 36-1840610
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4949 Harrison Avenue, P.O. Box 7003, Rockford, IL 61125-7003
____________________________________________________________
(Address of principal executive offices and Zip code)
(815) 226-6000
____________________________________________________
(Registrant's telephone number, including area code)
______________
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
____ ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 25, 1995
________________________ _______________________________
Common Stock, par value
$.50 per share 30,746,802<PAGE>
<PAGE> 2
SUNDSTRAND CORPORATION
FORM 10-Q
For the Quarter Ended September 30, 1995
INDEX
Page
Part I. Financial Information
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
2<PAGE>
<PAGE> 3
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
SUNDSTRAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
(Amounts in millions except ------------------- -------------------
per share data) 1995 1994 1995 1994
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Net sales $ 355 $ 340 $1,078 $ 995
Costs, expenses, and other income:
Costs of products sold 226 226 699 671
Marketing and administration 72 68 224 210
Restructuring charge (3) - 58 -
Interest expense 8 7 25 21
Interest income (2) - (4) (3)
Other, net (1) 2 (1) 1
------ ------ ------ ------
300 303 1,001 900
Earnings before income taxes 55 37 77 95
Less income taxes 21 13 34 34
------ ------ ------ ------
Net earnings $ 34 $ 24 $ 43 $ 61
====== ====== ====== ======
Weighted-average number of common
shares outstanding 31.5 32.9 31.5 32.9
Earnings per share $ 1.07 $ .72 $ 1.36 $ 1.84
====== ====== ====== ======
Cash dividends per common share $ .30 $ .30 $ .90 $ .90
====== ====== ====== ======
</TABLE>
3<PAGE>
<PAGE> 4
<TABLE>
SUNDSTRAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITTED)
<CAPTION>
Nine Months Ended
September 30,
-------------------
(Amounts in millions) 1995 1994
_______________________________________________________________________________
<S> <C> <C>
Cash flow from operating acitivities:
Net earnings $ 43 $ 61
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 59 60
Deferred income taxes (16) (20)
Change in operating assets and liabilities excluding
the effects of acquisitions and divestitures:
Accounts receivable 25 16
Inventory (52) 6
Other assets 7 -
Accounts payable (1) 28
Accrued expenses 68 (54)
Other 4 6
------ ------
Total adjustments 94 42
------ -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 137 103
------ ------
Cash flow from investing activities:
Cash paid for property, plant, and equipment (39) (33)
Proceeds from sale of assets 41 5
Cash paid for Dowty (8) -
Cash paid for HMD-Kontro, net of cash acquired - (25)
Investment in IRB trust (4) -
Investment in equity companies (2) (6)
------ ------
NET CASH USED FOR INVESTING ACTIVITIES (12) (59)
------ ------
Cash flow from financing activities:
Net borrowings (payments) supported by lines of credit (39) 67
Principal payments on long-term debt (5) (2)
Issuance of long-term debt 8 -
Additional debt for HMD-Kontro acquisition - 25
Purchase of treasury stock (50) (38)
Proceeds from stock options exercised 3 -
Dividends paid (29) (30)
------ ------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (112) 22
------ ------
Effect of exchange rate changes on cash (4) (13)
------ ------
Increase in cash and cash equivalents 9 53
Cash and cash equivalents at January 1 66 15
------ ------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $ 75 $ 68
====== ======
Supplemental cash flow information:
Interest paid $ 20 $ 17
Income taxes paid $ 51 $ 87
</TABLE>
4<PAGE>
<PAGE> 5
<TABLE>
SUNDSTRAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
<CAPTION>
September 30, December 31,
(Amounts in millions) 1995 1994
______________________________________________________________________________
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 75 $ 66
Accounts receivable, net 261 293
Inventories, net of progress payments 349 307
Deferred income taxes 64 55
Other current assets 11 14
------ ------
Total current assets 760 735
Property, Plant, and Equipment, net 440 459
Intangible Assets, net 266 286
Deferred Income Taxes 69 62
Other Assets 43 45
------ ------
$1,578 $1,587
====== ======
Liabilities and Shareholders' Equity
Current Liabilities
Notes payable $ 154 $ 194
Long-term debt due within one year 8 11
Accounts payable 92 95
Accrued salaries, wages, and commissions 26 23
Accrued postretirement benefits other than pensions 17 19
Other accrued liabilities 129 90
------ ------
Total current liabilities 426 432
Long-Term Debt 238 236
Accrued Postretirement Benefits Other Than Pensions 362 357
Other Liabilities 88 68
Shareholders' Equity
Common stock, at par value 19 19
Other shareholders' equity 445 475
------ ------
464 494
------ ------
$1,578 $1,587
====== ======
</TABLE>
5<PAGE>
<PAGE> 6
The financial information contained herein is unaudited but, in
the opinion of the management of the Registrant, includes all
adjustments (all of which are normal recurring adjustments)
necessary for a fair presentation of the results of operations
for the periods indicated.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
ACCOUNTING POLICIES
The financial statements are condensed and should be read in
conjunction with the Annual Report on Form 10-K for the year
ended December 31, 1994.
PRINCIPLES OF CONSOLIDATION provide for the inclusion of the
accounts of Sundstrand Corporation and all subsidiaries. All
intercompany transactions are eliminated in consolidation.
CASH EQUIVALENTS are considered by the Registrant to be all
highly liquid debt instruments purchased with original maturities
of three months or less.
<TABLE>
INVENTORIES
The components of inventories at September 30, 1995, and December
31, 1994, were as follows:
<CAPTION>
September 30, December 31,
(Amounts in millions) 1995 1994
______________________________________________________________________
<S> <C> <C>
Raw materials $ 54 $ 49
Work in process 124 117
Finished goods and parts 185 155
----- -----
363 321
Less progress payments 14 14
----- -----
$ 349 $ 307
===== =====
Prior to the application of progress payments, the inventories
shown above included costs related to long-term contracts of $64
million and $51 million, at September 30, 1995, and December 31,
1994, respectively.
</TABLE>
6<PAGE>
<PAGE> 7
RESTRUCTURING
On February 21, 1995, the Registrant's Board of Directors
approved a restructuring plan which resulted in a first quarter
pretax charge of $58 million. The charge was taken to reduce
excess manufacturing and engineering capacity caused by
reductions in manufacturing volume and increases in manufacturing
productivity, and to write down the assets of Milton Roy's
Spectronic Instruments business (Spectronic) and the Aerospace
segment's Advanced Power Technology product line (APT) in
anticipation of their divestiture. An additional $3 million
pretax charge was recorded in the second quarter related to these
dispositions. As a result of higher than anticipated awards of
funded development contracts and an increased projection of
future awards, the accrual for the termination of 125 engineers
of approximately $3 million, which was part of the first quarter
charge, was reversed in the third quarter, decreasing total year-
to-date restructuring charges to $58 million. The year-to-date
charges included $24 million in termination benefits for
approximately 350 employees, primarily consisting of workers at
the Registrant's Lima, Ohio, facility. Also included in the
charge was $29 million for the write-down of the assets of the
Lima facility, Spectronic, and APT, as well as $5 million for
disposition of the Lima facility. The shutdown and disposition
of the Lima facility are expected to be completed by the end of
1996 and the sales of Spectronic and a majority interest in APT
were completed on July 12, 1995, and September 6, 1995,
respectively. The decision not to terminate development
engineers has reduced the 1997 restructuring-related cost savings
and cash flow benefits from the amounts disclosed in the
Registrant's second quarter report on Form 10-Q. However, the
reductions in estimated cost savings and cash flow benefits
should be more than offset by projected additional margins from
the increased levels of funded development programs. The current
anticipated net effects of related expenses which are not subject
to accrual, cost savings, and non-recurring gains are a pretax
loss of $5 million in 1995 and pretax earnings of $7 million and
$14 million in 1996 and 1997, respectively. Excluding the
effect of the Spectronic and APT dispositions, the restructuring
is expected to reduce cash flow by about $14 million in 1995 and
provide a cash flow benefit of about $1 million and $6 million in
1996 and 1997, respectively.
Year to date, approximately $15 million has been charged against
the restructuring liability. Additionally, approximately $3
million has been charged directly to earnings related primarily
to the movement of equipment from the Lima facility to other
manufacturing sites.
7<PAGE>
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The financial information for the quarter ended September 30,
1995, as compared with the financial information for the quarter
ended September 30, 1994, and the balance sheet at December 31,
1994, is discussed below, and should be read in conjunction with
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994, and the financial data as presented in Item 1
above.
RESULTS OF OPERATIONS
Third quarter 1995 sales increased by $15 million, to $355
million, compared with third quarter 1994 sales of $340 million.
Third quarter 1995 Aerospace segment sales of $186 million were
up $11 million compared with third quarter 1994 primarily as a
result of higher commercial aftermarket sales partially offset by
lower commercial original equipment manufacturer (OEM) and
military sales. Third quarter 1995 Industrial segment sales of
$169 million were $4 million higher than third quarter 1994
primarily as a result of higher sales of Falk and Milton Roy,
excluding the non-core Spectronic Instruments business
(Spectronic).
Third quarter 1995 net earnings were $34 million, or $1.07 per
share, compared with third quarter 1994 net earnings of $24
million, or $.72 per share. The $10 million increase was due
primarily to the higher Aerospace operating profit stemming from
the increase in commercial aftermarket sales. Also contributing
to the increase were higher Industrial segment operating profit
and the reversal of a portion of the restructuring reserve
related to engineering layoffs, partially offset by
restructuring-related period expenses which were recognized as
incurred.
Sales for the first nine months of 1995 were $1,078 million, an
increase of $83 million, from sales of $995 million for the same
1994 period. All three Industrial businesses contributed as
Industrial segment sales increased to $559 million for the first
nine months of 1995, from $487 million for the first nine months
of 1994. Aerospace segment sales were $519 million for the
first nine months of 1995 compared with $508 million for the same
1994 period, increasing primarily as a result of higher
commercial aftermarket sales partially offset by a decline in
military sales.
Net earnings were $43 million, or $1.36 per share, for the first
nine months of 1995, which included pretax restructuring charges
of $58 million. Excluding these charges and the related period
costs, net income for the first nine months of 1995 was $85
million, or $2.70 per share, compared with $61 million, or $1.84
per share, for the same 1994 period. Higher sales and the
improvement in operating profitability in both the Industrial
segment and the commercial aftermarket portion of the Aerospace
segment, were primarily responsible for this earnings increase.
8<PAGE>
<PAGE> 9
RESTRUCTURING
As previously discussed, the Registrant recorded pretax charges
totaling $61 million in the first two quarters of 1995. As a
result of higher than anticipated awards of funded development
contracts and an increased projection of future awards, the
accrual for the termination of 125 engineers of approximately $3
million, which was part of the first quarter charge, was reversed
in the third quarter, decreasing total year-to-date restructuring
charges to $58 million. The decision not to terminate
development engineers has reduced the 1997 restructuring-related
cost savings and cash flow benefits from the amounts disclosed in
the Registrant's second quarter report on Form 10-Q. However,
the reductions in estimated cost savings and cash flow benefits
should be more than offset by projected additional margins from
the increased levels of funded development programs. The current
anticipated net effects of related expenses which are not subject
to accrual, cost savings, and non-recurring gains are a pretax
loss of $5 million in 1995 and pretax earnings of $7 million and
$14 million in 1996 and 1997, respectively. Excluding the effect
of the dispositions of Spectronic and a majority interest in the
Aerospace segment's Advanced Power Technology product line (APT),
the restructuring is expected to reduce cash flow by about $14
million in 1995 and provide a cash flow benefit of about $1
million and $6 million in 1996 and 1997, respectively. Year to
date, approximately $15 million has been charged against the
restructuring liability. Additionally, approximately $3 million
has been charged directly to earnings related primarily to the
movement of equipment from the Registrant's Lima, Ohio, facility
to other manufacturing sites.
ORDERS
Third quarter 1995 incoming orders were $322 million, a $50
million decrease from third quarter 1994 incoming orders of $372
million. New orders for the first nine months of 1995 increased
by $214 million, to $1,244 million, over new orders of $1,030
million for the same period last year due primarily to a $172
million long-term contract to provide the propulsion system for
the United Kingdom's Royal Navy Spearfish heavyweight torpedo
program. Total unfilled orders on September 30, 1995, were $913
million, compared with $717 million on September 30, 1994, and
$747 million on December 31, 1994.
INDUSTRIAL OVERVIEW
The following overview of the Industrial segment excludes the
divested Spectronic Instruments business. Third quarter
Industrial segment sales increased 7 percent compared with the
third quarter of 1994. Sales rose 16 percent at Falk and 5
percent at Milton Roy, and were flat at Sullair. Industrial
operating profit in the third quarter of 1995 was $30 million, or
17.8 percent of sales, compared with operating profit in the
third quarter of 1994 of $27 million, or 17.1 percent of sales.
Total Industrial orders of $173 million in the third quarter of
1995 increased 4 percent from $166 million in the third quarter
of 1994.
9<PAGE>
<PAGE> 10
AEROSPACE OVERVIEW
Aerospace segment sales were up by 6 percent compared with the
third quarter of 1994, with a 15 percent increase in commercial
sales partially offset by a 9 percent decline in military sales.
Commercial aftermarket sales increased 40 percent as worldwide
traffic continued to grow, while commercial OEM sales decreased 9
percent reflecting the flat near-term outlook for new aircraft
production. Aerospace operating profit in the third quarter of
1995 was $32 million, or 17.2 percent of sales. Operating profit
in the third quarter included approximately $2 million of period
costs related to the restructuring as well as the reversal of a
reserve, of approximately $3 million, booked in the first quarter
for the reduction of engineering staff. Because of a strong increase
in customer-funded development work, the staff reduction is no
longer appropriate. In the third quarter of 1994, the Aerospace
segment generated operating profit of $22 million, or 12.6
percent of sales. Aerospace incoming orders were $153 million in
the third quarter of 1995, compared with $199 million in the
third quarter of 1994. A $29 million increase in commercial
orders was more than offset by a $19 million reduction in backlog
related to the APT sale and by a $56 million decline in military
orders.
LIQUIDITY & CAPITAL RESOURCES
Working capital was $334 million at September 30, 1995, compared
with $303 million at December 31, 1994. The $31 million increase
was due primarily to higher inventories and cash and lower notes
payable, partially offset by increased accrued liabilities and
lower accounts receivable. Inventory increased in response to
higher sales and order activity while the accrued liabilities
increase was due primarily to the current portion of the
restructuring reserve. Lower sales in the third quarter of 1995
compared with the fourth quarter of 1994 were primarily
responsible for the lower accounts receivable balance at
September 30, 1995, compared with December 31, 1994.
Net cash provided by operating activities for the first nine
months of 1995 was $137 million compared with $103 million for
the first nine months of 1994. The $34 million increase was due
primarily to higher net earnings excluding the restructuring
charges. Fluctuations in the levels of inventory, accounts
payable, and accrued expenses (excluding the restructuring
charges) essentially offset each other. The fluctuation in
accrued expenses was due in part to higher income taxes paid in
1994 related to the gain from the sale of Sundstrand Data
Control.
In the nine months ended September 30, 1995, the Registrant used
$12 million of cash for investing activities, primarily for the
purchase of fixed assets and the ram air turbine product line of
Dowty Aerospace Hydraulics, Dowty Group Plc., Cheltenham, England
offset, in part, by the proceeds from the sale of assets. The
proceeds from sale of assets included cash received in
conjunction with the dispositions of Spectronic and APT. In the
same 1994 period, the Registrant used $59 million of cash for
investing activities, primarily for the purchase of fixed assets
and the HMD-Kontro acquisition. In the first nine months of
1995, $112 million of cash was used for financing activities,
primarily to repay borrowings supported by lines of credit,
repurchase common stock, and pay dividends. In the same period
of 1994, $22 million of cash was provided by financing
activities, primarily net borrowings supported by lines of credit
and borrowings for the HMD-Kontro acquisition, partially offset
by cash used to repurchase common stock and pay dividends.
10<PAGE>
<PAGE> 11
The Registrant repurchased approximately 564,000 shares of its
common stock during the third quarter and an additional 160,000
shares through October 19, 1995, at an average price of
approximately $65 per share. Through October 19, 1995, the
Registrant has repurchased a total of approximately 6 million
shares of the 10 million shares authorized for repurchase.
At September 30, 1995, the Registrant's ratio of total debt to
total capital was 46.3 percent compared with 47.1 percent at
December 31, 1994.
DISPOSITIONS
On July 12, 1995, the Registrant sold Spectronic for $19 million
to Life Sciences International Plc., London, England. On
September 6, 1995, the Registrant sold a majority interest in APT
in a leveraged buyout with a management-lead group. As a result
of the asset write downs included in the restructuring accrual,
neither transaction had a material impact on third quarter
earnings.
OUTLOOK
The Registrant currently projects that 1995 full-year earnings
per share, excluding restructuring costs, will be in the upper
end of the previously disclosed $3.70 to $4.00 range. Industrial
segment sales growth in 1996 is expected to range between five
and ten percent and the operating profit margin should be at
least as strong as the 1995 rate, which is expected to be
approximately 18 percent of sales, excluding the charge
associated with the divestiture of Spectronic. The Aerospace
operating profit margin is expected to be in the 16 percent range
in 1996 based on projections that the commercial OEM business
should grow by more than 20 percent and the commercial
aftermarket business should experience growth in the five to ten
percent range. An expected decline of five to ten percent in the
military OEM business in 1996 should be mitigated by a modest
increase in military aftermarket sales.
11<PAGE>
<PAGE> 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Registrant has disclosed various legal proceedings in its
Annual Report on Form 10-K for the fiscal year ended December 31,
1994. There have been no material changes in those proceedings
or other material legal developments since that time.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(3) Articles of Incorporation and By-laws
(a) Text of resolutions adopted by the Board of
Directors of Registrant on September 19, 1995,
amending Registrant's By-laws effective September
19, 1995, and October 1, 1995.
(b) Registrant's By-laws, including all amendments as
effective September 19, 1995.
(c) Registrant's By-laws, including all amendments as
effective October 1, 1995.
(10) Material Contracts
(a) Employment Agreement dated September 19, 1995,
between Registrant and Robert H. Jenkins,
Registrant's President and Chief Executive Officer,
effective October 1, 1995.
(b) Employment Agreement dated September 19, 1995,
between Registrant and Don R. O'Hare, Registrant's
Chairman of the Board, effective October 1, 1995.
(11) Statement Re Computation of Per Share Earnings
(a) Computation of Fully Diluted Earnings Per Share
(Unaudited) for the quarters ended September 30,
1995, and 1994, and for the nine months ended
September 30, 1995, and 1994.
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
12<PAGE>
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Sundstrand Corporation
______________________________
(Registrant)
Date: November 7, 1995 /s/ Richard M. Schilling
______________________________
Richard M. Schilling
Vice President and General
Counsel and Secretary
Date: November 7, 1995 /s/ DeWayne J. Fellows
______________________________
DeWayne J. Fellows
Vice President and Controller
13
<PAGE>
Exhibit (3)(a)
AMENDMENT OF BY-LAWS
RESOLVED, by the Board of Directors of Sundstrand
Corporation, that the By-Laws of the Corporation be, and they
hereby are, amended, effective immediately, by changing the word
"eleven" to the word "twelve" where it appears in the first
sentence of Section 3.1.
FURTHER RESOLVED, that the By-Laws of the Corporation be,
and they hereby are, amended, effective October 1, 1995, as
follows:
1. All references in the By-Laws to the title "Chairman
of the Board and Chief Executive Officer" are
changed to "President and Chief Executive Officer".
2. All references in the By-Laws to "the Board of
Directors or the Chairman of the Board and Chief
Executive Officer" are changed to "the Board of
Directors, the Chairman of the Board and/or the
President and Chief Executive Officer".
3. The first sentence of Section 4.1 is amended to read
as follows:
"The officers of the Corporation shall consist
of a Chairman of the Board; a President and Chief
Executive Officer; an Executive Vice President and
Chief Financial Officer; an Executive Vice President
and Chief Operating Officer, Aerospace; an Executive
Vice President and Chief Operating Officer,
Industrial; an Executive Vice President for Special
Projects; a Vice President and General Counsel; one
or more other Vice Presidents; a Secretary; a
Treasurer; and a Controller, all of whom shall be
elected by the Board of Directors and shall hold
office until their successors are duly elected and
qualified."
4. Section 4.5 is amended to read as follows:
"Section 4.5. Chairman of the Board. The
Chairman of the Board shall preside at all meetings
of stockholders and of the Board. He shall counsel
the President and Chief Executive Officer on plans,
policies, strategies, budgets and operating plans.
The Chairman of the Board shall participate in
activities such as strategic planning, acquisitions
and divestitures, and presentations to analysts.
The Chairman of the Board, the President and Chief
Executive Officer, and/or the Executive Vice
President and Chief Financial Officer shall execute
bonds, mortgages and other contracts requiring a
seal, under the seal of the Corporation, except
where required by law to be otherwise signed and
executed and except where the signing and execution
thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the
Corporation."
5. A new Section 4.6 is added reading as follows:
"Section 4.6. President and Chief Executive
Officer. The President and Chief Executive Officer
shall be the chief executive officer of the
Corporation. He shall see that all orders and
resolutions of the Board are carried into effect.
Subject to the control of the Board, the President
and Chief Executive Officer shall have general
supervision, control and management of the affairs
and business of the Corporation. The President and
Chief Executive Officer, the Chairman of the Board,
and/or the Executive Vice President and Chief
Financial Officer shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of
the Corporation, except where required by law to be
otherwise signed and executed and except where the
signing and execution thereof shall be expressly
delegated by the Board of Directors to some other
officer or agent of the Corporation."
6. Sections 4.6 through 4.15 are renumbered as Sections
4.7 through 4.16.
7. The renumbered Section 4.13(b) is amended to read as
follows:
"The Assistant Secretaries in the order of
their seniority shall, in the absence or disability
of the Secretary, perform the duties and exercise
the powers of the Secretary, and shall perform such
other duties as the Chairman of the Board and/or the
President and Chief Executive Officer shall
prescribe."
8. The renumbered Section 4.16 is amended to read as
follows:
"The Tax Director shall be responsible for the
preparation and signing of all federal and state tax
returns, consents, elections, closing agreements and
all other documents related to the determination of
any federal or state tax liability of the
Corporation, and as such shall be under the
direction of and report to the Treasurer."
<PAGE>
Exhibit (3)(b)
BY-LAWS
OF
SUNDSTRAND CORPORATION
(A Delaware Corporation)
Effective September 19, 1995
ARTICLE I
OFFICES
Section 1.1. PRINCIPAL OFFICE. The principal office of the
Corporation in the State of Delaware shall be in the City of
Wilmington, County of New Castle.
Section 1.2. OTHER OFFICES. The Corporation may also have
offices at such other places, either within or without the State
of Delaware, as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
Section 2.1. PLACE OF MEETINGS. All annual and special
meetings of the stockholders shall be held at such place, either
within or without the State of Delaware, as may be fixed by the
Board and specified in the notice of the meeting.
Section 2.2. ANNUAL MEETINGS. An annual meeting of
stockholders shall be held on such date and at such hour as may
be fixed by the Board and specified in the notice of the meeting,
when they shall elect by a plurality vote a Board of Directors
and transact such other business as may properly be brought
before the meeting.
Section 2.3. LIST OF STOCKHOLDERS. The Secretary shall
prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing
the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder who is present. The original or duplicate stock
ledger shall be the only evidence as to who are the stockholders
entitled to examine such list or stock ledger or transfer book or
to vote in person or by proxy at any meeting of stockholders.
Section 2.4. SPECIAL MEETINGS OF STOCKHOLDERS. Special
meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the Chairman of
the Board and shall be called by the Chairman of the Board or
Secretary at the request in writing of a majority of the Board of
Directors, or at the request in writing of stockholders owning
eighty percent or more in amount of the entire capital stock of
the Corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed
meeting.
Section 2.5. NOTICE OF MEETINGS. Except as otherwise
expressly provided by law or by the Certificate of Incorporation
or these By-Laws, written or printed notice of each annual or
special meeting of stockholders shall be given by mail at least
ten but not more than sixty days before the meeting to the
stockholders of record entitled to vote thereat. Every such
notice shall be directed to a stockholder at his address as it
shall appear on the transfer books of the Corporation; shall
state the date, time and place of the meeting; and, in the case
of a special meeting, shall state briefly the purposes thereof.
Business transacted at all special meetings shall be confined to
the purposes stated in the notice thereof.
Section 2.6. QUORUM AND ADJOURNMENTS. The holders of a
majority of the stock issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall be
necessary and sufficient to constitute a quorum at all meetings
of the stockholders for the transaction of business, except as
otherwise provided by statute, by the Certificate of
Incorporation, or by these By-Laws. If, however, such quorum
shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting, at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
The absence from any meeting of the number required by law or by
the Certificate of Incorporation or these By-Laws for action upon
any given matter shall not prevent action at such meeting upon
any other matter or matters which may properly come before the
meeting if the number required in respect of such other matter or
matters shall be present. Once a quorum is present at a meeting,
it shall be deemed to be acting thereafter throughout the
meeting, irrespective of any withdrawals. Nothing in these By-
Laws shall affect the right to adjourn where a quorum is present.
Section 2.7. VOTING BY STOCKHOLDERS. When a quorum is
present at any meeting, the vote of the holders of a majority of
the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the
statutes or of the Certificate of Incorporation or of these By-
Laws a different vote is required, in which case such express
provision shall govern and control the decision of such question.
At any meeting of the stockholders every stockholder having
the right to vote shall be entitled to vote in person, or by
proxy appointed by an instrument in writing, subscribed by such
stockholder or by his attorney or agent thereunto authorized in
writing, and bearing a date not more than three years prior to
said meeting, unless said instrument provides for a longer
period. Except as otherwise provided by the Certificate of
Incorporation, each stockholder present in person or by proxy at
any meeting shall have, on each matter on which stockholders are
entitled to vote, one vote for each share of stock having voting
power, registered in his name on the books of the Corporation.
Section 2.8. NEW BUSINESS PROPOSALS AT ANNUAL MEETINGS.
Only such new business shall be conducted, and only such
proposals shall be acted upon at an annual meeting of
stockholders, as shall have been properly brought before such
annual meeting (a) by, or at the direction of, the Board of
Directors, or (b) by any stockholder of the Corporation who
complies with the notice procedures set forth in this Section
2.8. A stockholder who wishes to bring a proposal before an
annual meeting shall give timely notice thereof in writing to the
Secretary of the Corporation. Such notice, to be timely, shall
be delivered to, or mailed and received by the Secretary at the
principal executive offices of the Corporation at least sixty
days but not more than ninety days prior to the scheduled annual
meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however,
that if less than seventy days' notice or prior public disclosure
of the date of the scheduled annual meeting is given or made,
such notice by a stockholder to be timely shall be so delivered
or received not later than the close of business on the tenth day
following the earlier of the day on which notice of the scheduled
annual meeting was mailed or the day on which public disclosure
thereof was made.
Each such stockholder notice shall set forth as to each
proposal to be brought before the annual meeting (a) a brief
description of the proposal and the reasons for conducting such
business at the annual meeting, (b) the name and address, as they
appear on the transfer books of the Corporation, of the
stockholder proposing such business and any other stockholders
known by such stockholder to be supporting the proposal, (c) the
class and number of shares of the Corporation's stock which are
beneficially owned by the stockholder on the date of such
stockholder notice and by any other stockholders known by such
stockholder to be supporting such proposal, and (d) any financial
interest of the stockholder in such proposal.
The Board of Directors may reject any stockholder proposal
not timely made in accordance with the terms of this Section 2.8.
If the Board of Directors, or a designated committee thereof,
determines that the information provided in a stockholder's
notice does not satisfy the informational requirements of this
Section 2.8 in any material respect, the Secretary shall promptly
notify such stockholder of the deficiency in the notice. The
stockholder shall have an opportunity to cure the deficiency by
providing additional information to the Secretary within five
days from the date such notice of deficiency is given to the
stockholder, as the Board of Directors or such committee shall
reasonably determine. If the deficiency is not cured within such
period, or if the Board of Directors or such committee determines
that the additional information provided by the stockholder,
together with the information previously provided, does not
satisfy the requirements of this Section 2.8 in any material
respect, then the Board of Directors may reject such proposal.
The Secretary shall notify the stockholder in writing whether his
proposal has been made in accordance with the time and
informational requirements of this Section 2.8. Notwithstanding
the procedure set forth in this Section 2.8, if neither the Board
of Directors nor such committee makes a determination as to the
validity of any stockholder proposal, the presiding officer of
the annual meeting shall determine and declare at the annual
meeting whether the stockholder proposal was made in accordance
with the terms of this Section 2.8. If the presiding officer
determines that the stockholder's proposal was not made in
accordance with the terms of this Section 2.8, he shall so
declare at the annual meeting and any such proposal shall not be
acted upon at the annual meeting.
This Section 2.8 shall not prevent the consideration and
approval or disapproval at an annual meeting of reports of
officers, directors and committees of the Board of Directors,
but, in connection with such reports, no new business shall be
acted upon at such annual meeting unless stated, filed and
received as herein provided.
ARTICLE III
DIRECTORS
Section 3.1. NUMBER, ELECTION AND TERMS OF OFFICE OF
DIRECTORS. The number of directors which shall constitute the
whole Board shall be twelve in number. Directors need not be
stockholders in the Corporation. Except as provided in Section
3.3, the directors shall be elected at the annual meeting of the
stockholders, and each director elected shall hold office until
his successor is elected and qualified or until his earlier
resignation. The directors shall be divided into three classes:
Class I, Class II and Class III. Such classes shall be as nearly
equal in number as possible. The term of office of the initial
Class I directors shall expire at the annual meeting of
stockholders in 1971, the term of office of the initial Class II
directors shall expire at the annual meeting of stockholders in
1972, and the term of office of the initial Class III directors
shall expire at the annual meeting of stockholders in 1973, or
thereafter in each case when their respective successors are
elected and qualified. At each annual election held after
classification and the initial election of directors according to
classes, the directors chosen to succeed those whose terms then
expire shall be identified as being of the same class as the
directors they succeed and shall be elected for a term expiring
at the third succeeding annual meeting or thereafter when their
respective successors in each case are elected and qualified.
Section 3.2. CORPORATE RECORDS. The directors may keep the
books of the Corporation, except such as are required by law to
be kept within the State of Delaware, outside of Delaware at such
place or places as they may from time to time determine.
Section 3.3. VACANCIES. Vacancies occurring in the Board of
Directors and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a
majority of the directors then in office, although less than a
quorum, and any director so chosen shall hold office until his
successor is elected and qualified. A director elected to fill a
vacancy shall be elected for the unexpired portion of the term of
his predecessor in office. A director elected to fill a newly
created directorship shall serve for the term provided herein for
the class of directors for which such director was elected.
Section 3.4. GENERAL POWERS. The business and affairs of
the Corporation shall be managed by its Board of Directors which
may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or
required to be exercised or done by the stockholders.
Section 3.5. PLACE OF MEETINGS. The Board of Directors of
the Corporation may hold meetings, both regular and special,
either within or without the State of Delaware.
Section 3.6. ANNUAL MEETINGS. The first meeting of each
newly elected Board shall constitute the annual meeting of said
Board and shall be convened as soon as is conveniently possible
but in no event more than two weeks after the date of the annual
meeting of stockholders in each year at such time and place as
shall be fixed by the Chairman of the Board.
Section 3.7. REGULAR MEETINGS. Regular meetings of the
Board shall be held upon notice, or without notice, at least
quarterly, at such time and place as shall from time to time be
determined by the Board.
Section 3.8. SPECIAL MEETINGS. Special meetings of the
Board may be called by the Chairman of the Board or any four
directors. Notice of each special meeting of the Board may be
given by mail, telegraph or cable, personal delivery or
telephone. Notice by mail shall be given at least three days
before the meeting; notice by any other means shall be given a
reasonable period of time before the time of such meeting but in
no event shall such notice be given less than one hour before
such meeting. If notice is by telephone, such notice shall be
promptly confirmed by telegraph or cable to each director.
Section 3.9. QUORUM. At all meetings of the Board, the
presence of a majority of the full number of directors shall be
necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the
directors present at any meeting at which there is a quorum shall
be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Certificate of
Incorporation or by these By-Laws. If a quorum shall not be
present at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum shall be present.
Section 3.10. ACTION BY BOARD WITHOUT MEETING.
Notwithstanding anything contained in these By-Laws, any action
required or permitted to be taken at any meeting of the Board of
Directors or of any Committee thereof may be taken without a
meeting, if a written consent thereto is signed by all members of
the Board or of such Committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the
Board of Directors or the Committee.
Section 3.11. COMPENSATION OF DIRECTORS. The Board of
Directors, by resolution adopted by a majority of the whole
Board, may establish reasonable compensation of all directors for
services to the Corporation as directors, officers or otherwise.
No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation
therefor. Members of any Committee may be allowed like
compensation for their services to the Corporation.
Section 3.12. INTERESTED DIRECTORS. No contract or
transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in
which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer
is present at or participates in the meeting of the Board or
Committee which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if (1)
the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the
Board of Directors or the Committee, and the Board or Committee
in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors,
even though the disinterested directors be less than a quorum; or
(2) the material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to
stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or (3) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, Committee, or the
stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board or
of the Committee which authorizes the contract or transaction.
Section 3.13. COMMITTEES. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one
or more Committees, each Committee to consist of two or more of
the directors of the Corporation. Any such Committee, to the
extent provided in the resolution not inconsistent with the
provisions of the Statutes of Delaware, shall have and may
exercise the powers and authority of the Board of Directors in
the management of the Corporation and may authorize the seal of
the Corporation to be affixed to all papers which may require it.
A majority of the members of the Committee then holding office
shall constitute a quorum at all meetings and each such Committee
shall keep regular minutes of its proceedings and report the same
to the whole Board.
Section 3.14. NOMINATION FOR ELECTION OF DIRECTORS.
Nominations for the election of Directors shall be properly made
by the Board of Directors or a nominating committee appointed by
the Board of Directors or by any stockholder entitled to vote in
the election of Directors generally; provided, however, that any
such stockholder may nominate one or more persons for election as
Directors at a meeting only if such stockholder has given written
notice of such stockholder's intent, either by personal delivery
or by United States mail, postage prepaid, to the Secretary not
later than (1) with respect to an election to be held at an
annual meeting of stockholders, ninety days prior to the
anniversary date of the immediately preceding annual meeting, and
(2) with respect to an election to be held at a special meeting
of stockholders for the election of directors, the close of
business on the tenth day following the date on which notice of
such meeting is first given to stockholders. Each such notice
shall set forth: (a) the name and address, as they appear on the
transfer books of the Corporation, of the stockholder who intends
to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder
of record of stock of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings
between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d)
such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission as then in effect; and (e) the consent of
each nominee to serve as a director of the Corporation if so
elected.
The presiding officer of any meeting at which a stockholder
or its representative attempts to nominate one or more persons
for election as directors may refuse to acknowledge the
nomination of any person not made in compliance with the
provisions of this Section 3.14.
ARTICLE IV
OFFICERS
Section 4.1. DESIGNATION: NUMBER. The officers of the
Corporation shall consist of a Chairman of the Board and Chief
Executive Officer; an Executive Vice President and Chief
Financial Officer; an Executive Vice President and Chief
Operating Officer, Aerospace; an Executive Vice President and
Chief Operating Officer, Industrial; an Executive Vice President
for Special Projects; a Vice President and General Counsel; one
or more other Vice Presidents; a Secretary; a Treasurer; and a
Controller, all of whom shall be elected by the Board of
Directors and shall hold office until their successors are duly
elected and qualified. In addition, the Chairman of the Board
and Chief Executive Officer may appoint a Tax Director, one or
more Assistant Secretaries, Assistant Treasurers and Assistant
Controllers and such other officers and agents as the Chairman of
the Board and Chief Executive Officer may deem necessary or
desirable, who shall hold their offices for such terms and shall
have such authority and perform such duties as shall be
determined by the Chairman of the Board and Chief Executive
Officer from time to time. Any Executive Vice President or Vice
President designated by a resolution of the Board of Directors or
by delegation of the Chairman of the Board and Chief Executive
Officer shall have authority to sign contracts and any other
documents as specifically authorized by the Board of Directors or
the Chairman of the Board and Chief Executive Officer or which
are within the ordinary course of the business of the
Corporation.
Section 4.2. NON-CORPORATE OFFICERS. The Chairman of the
Board and Chief Executive Officer shall have authority to appoint
from time to time officers of divisions, product groups or other
segments of the Corporation's business for such terms, with such
authority and at such salary as the Chairman of the Board and
Chief Executive Officer in his sole discretion shall determine;
provided, however, such appointed officer shall under no
circumstances have authority to bind any other division, product
group or other segment of the Corporation's business nor to bind
the Corporation, except as to the normal and usual business
affairs of the division, product group or other segment of the
Corporation's business of which he is an officer. Such appointed
officer, as such, shall not be construed as an officer of the
Corporation.
Section 4.3. SALARIES. The salaries of the officers elected
pursuant to Section 4.1 above shall be determined by the Board of
Directors. The salaries of all other officers and agents of the
Corporation appointed by the Chairman of the Board and Chief
Executive Officer shall be determined by the Board of Directors
or the Chairman of the Board and Chief Executive Officer.
Section 4.4. REMOVAL. Any officer elected by the Board of
Directors and any officer or agent appointed by the Chairman of
the Board and Chief Executive Officer, as the case may be, may be
removed at any time by the Board of Directors or the Chairman of
the Board and Chief Executive Officer, respectively, whenever in
its or his judgment the best interests of the Corporation will be
served thereby, but such removal shall be without prejudice to
the contract rights, if any, of the person so removed. Any
vacancy occurring in any elected office of the Corporation shall
be filled by the Board of Directors.
Section 4.5. CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER. The Chairman of the Board and Chief Executive Officer
shall be the chief executive officer of the Corporation. The
Chairman of the Board and Chief Executive Officer shall preside
at all meetings of stockholders and of the Board and shall see
that all orders and resolutions of the Board are carried into
effect. Subject to the control of the Board, the Chairman of the
Board and Chief Executive Officer shall have general supervision,
control and management of the affairs and business of the
Corporation. The Chairman of the Board and Chief Executive
Officer and/or the Executive Vice President and Chief Financial
Officer shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the Corporation, except where
required by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or
agent of the Corporation.
Section 4.6. EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER. The Executive Vice President and Chief Financial
Officer shall be the chief financial officer of the Corporation
and shall be in charge of the financial, accounting, taxation,
administration, personnel and public relations activities of the
Corporation and shall be under the direction and report to the
Chairman of the Board and Chief Executive Officer. He and/or the
Chairman of the Board and Chief Executive Officer shall execute
bonds, mortgages and other contracts requiring a seal, under the
seal of the Corporation, except where required by law to be
otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.
Section 4.7. EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING
OFFICER, AEROSPACE. The Executive Vice President and Chief
Operating Officer, Aerospace shall be the chief operating officer
of the Corporation's aerospace businesses. He shall assist the
Chairman of the Board and Chief Executive Officer in the general
supervision, control and management of the affairs and business
of the Corporation's aerospace businesses and the Corporation's
government contracts and compliance activities.
Section 4.8. EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING
OFFICER, INDUSTRIAL. The Executive Vice President and Chief
Operating Officer, Industrial shall be the chief operating
officer of the Corporation's industrial businesses. He shall
assist the Chairman of the Board and Chief Executive Officer in
the general supervision, control and management of the affairs
and business of the Corporation's industrial businesses.
Section 4.9. EXECUTIVE VICE PRESIDENT FOR SPECIAL PROJECTS.
The Executive Vice President for Special Projects shall assist
the Chairman of the Board and Chief Executive Officer in managing
strategic business issues for the Corporation and shall perform
such other duties as may be prescribed by the Chairman of the
Board and Chief Executive Officer.
Section 4.10. VICE PRESIDENT AND GENERAL COUNSEL. The Vice
President and General Counsel shall be the chief legal officer of
the Corporation, shall be responsible for all legal matters
involving the Corporation and shall direct the Corporation's
legal staff. He shall be under the direction of and report to
the Chief Executive Officer.
Section 4.11. OTHER VICE PRESIDENTS. The other Vice
Presidents shall perform such duties as may be prescribed by the
Board of Directors or the Chairman of the Board and Chief
Executive Officer.
Section 4.12. SECRETARY AND ASSISTANT SECRETARIES.
(a) The Secretary shall attend all sessions of the
Board of Directors and all meetings of the stockholders and
record the minutes of all proceedings in a book to be kept for
that purpose, and shall perform like duties for Committees of the
Board when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and of the Board of
Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or the Chairman of the Board
and Chief Executive Officer. He shall keep in safe custody the
seal of the Corporation, and affix the same to any instrument
requiring it, and when affixed it shall be attested by his
signature or by the signature of the Treasurer or an Assistant
Secretary.
(b) The Assistant Secretaries in the order of their
seniority shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary, and
shall perform such other duties as the Chairman of the Board and
Chief Executive Officer shall prescribe.
Section 4.13. TREASURER AND ASSISTANT TREASURERS.
(a) The Treasurer shall, subject to the direction of
the Executive Vice President and Chief Financial Officer, have
the custody of the corporate funds and securities and shall keep
full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all money and
other valuable effects in the name and to the credit of the
Corporation, in such depositories as may be designated by the
Board of Directors.
(b) He shall disburse the funds of the Corporation
when proper to do so, taking proper vouchers for such
disbursements, and shall render to the Executive Vice President
and Chief Financial Officer, the Chairman of the Board and Chief
Executive Officer and the Board of Directors, at the regular
meetings of the Board, or whenever they may require it, an
account of all his transactions as Treasurer and of the financial
condition of the Corporation.
(c) If required by the Board of Directors, he shall
give the Corporation a bond in such sum, and with such surety or
sureties as shall be satisfactory to the Board, for the faithful
performance of the duties of his office, and for the restoration
to the Corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his
control belonging to the Corporation.
(d) The Treasurer shall be under the direction of and
report to the Executive Vice President and Chief Financial
Officer.
(e) The Assistant Treasurers in the order of their
seniority shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer and
shall perform such other duties as the Board of Directors or the
Executive Vice President and Chief Financial Officer shall
prescribe.
Section 4.14. CONTROLLER AND ASSISTANT CONTROLLERS.
(a) The Controller shall be the chief accounting
officer of the Corporation and shall be responsible for the
installation and supervision of all accounting records, including
the preparation and interpretation of financial statements, the
continuous audit of accounts and records, and such other duties
usually incident to the office of Controller. He shall be under
the direction of the Executive Vice President and Chief Financial
Officer and shall, in addition to the foregoing duties, perform
such other duties as may be assigned to him by the Board of
Directors or the Executive Vice President and Chief Financial
Officer.
(b) The Assistant Controllers in the order of their
seniority shall, in the absence or disability of the Controller,
perform the duties and exercise the powers of the Controller and
shall perform such other duties as the Board of Directors or the
Executive Vice President and Chief Financial Officer shall
prescribe.
Section 4.15. TAX DIRECTOR. The Tax Director shall be
responsible for the preparation and signing of all federal and
state tax returns, consents, elections, closing agreements and
all other documents related to the determination of any federal
or state tax liability of the Corporation, and as such shall be
under the direction of and report to the Executive Vice President
and Chief Financial Officer.
ARTICLE V
SHARES AND THEIR TRANSFER
Section 5.1. CERTIFICATES OF STOCK. Certificates for shares
of stock of the Corporation shall be in such form as shall be
approved by the Board, and during the period while more than one
class of stock or more than one series of any class of the
Corporation is authorized, the powers, designations, preferences
and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights
shall be set forth in full or summarized on the face or back of
the certificates which the Corporation shall issue to represent
such class or series of stock, or else there shall appear on the
certificates a statement that the Corporation shall furnish such
information to a stockholder without charge if it be requested.
They shall exhibit the holder's name and number of shares, and,
with respect to each class of stock of the Corporation, or series
thereof, if there be more than one class or series thereof, shall
bear a distinguishing letter, and each class or series thereof,
if any, shall be numbered serially and be issued in consecutive
order. They shall bear the Corporate seal or a facsimile thereof
and shall be signed by the Chairman of the Board and Chief
Executive Officer, an Executive Vice President, or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation. If such
certificate is countersigned (1) by a transfer agent other than
the Corporation or its employee, or, (2) by a registrar other
than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with same effect as
if he were such officer, transfer agent, or registrar at the date
of issue.
Section 5.2. TRANSFER OF STOCK. Upon surrender to the
Corporation or its transfer agent of a certificate representing
shares, duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, a new
certificate shall be issued to the person entitled thereto, and
the old certificate cancelled, and the transaction recorded upon
the books of the Corporation.
Section 5.3. LOST, STOLEN OR DESTROYED CERTIFICATES. Any
person, claiming a certificate for shares of the Corporation to
be lost, stolen or destroyed, shall make affidavit of the fact
and lodge the same with the Secretary of the Corporation
accompanied by a signed application for a new certificate. Such
person shall also give the Corporation a bond of indemnity with
one or more sureties satisfactory to the Board of Directors, and
in an amount which in their judgment shall be sufficient to save
the Corporation from loss, or shall qualify under such blanket
bond as may from time to time be approved by the Board of
Directors, and thereupon the proper officers may cause to be
issued a new certificate of like tenor with the one alleged to be
lost, stolen or destroyed.
Section 5.4. RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be
more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action.
Section 5.5. REGISTERED STOCKHOLDERS. The Corporation shall
be entitled to treat the holder of record of any share or shares
of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
Section 5.6. TRANSFER AGENTS AND REGISTRARS. The Board of
Directors may from time to time appoint a transfer agent and
registrar in one or more cities; may require all certificates
evidencing shares of stock of the Corporation to bear the
signatures of a transfer agent and registrar; and may provide
that such certificates shall be transferable in more than one
city.
ARTICLE VI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Corporation shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware, or
any other applicable laws, as from time to time in effect,
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director
or officer of the Corporation or a division thereof, or is or was
serving at the request of the Corporation as a director or
officer of another corporation, partnership, joint venture, trust
or other enterprise, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding.
The provisions of this Article shall be deemed to be a
contract between the Corporation and each director or officer who
serves in any such capacity at any time while this Article and
the relevant provisions of the General Corporation Law of
Delaware or other applicable law, if any, are in effect, and any
repeal or modification of any such law or of this Article shall
not affect any rights or obligations then existing with respect
to any state of facts then or theretofore existing or any action,
suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of
facts.
The Corporation shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware,
and with respect to the Employee Retirement Income Security Act
of 1974, or any other applicable laws, as from time to time in
effect, indemnify any officer, director or employee of the
Corporation or an affiliated corporation, who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is
or was serving at the request of the Corporation as an individual
Trustee, Committee member, administrator or fiduciary of a
pension or other benefit plan for employees of the Corporation,
or of an affiliated corporation or other enterprise.
Persons who are not covered by the foregoing provisions of
this Article and who are or were employees or agents of the
Corporation or a division thereof, or are or were serving at the
request of the Corporation as employees or agents of another
corporation, partnership, joint venture, trust or other
enterprise, may be indemnified to the extent authorized at any
time or from time to time by the Board of Directors of the
Corporation.
The indemnification provided or permitted by this Article
shall not be deemed exclusive of any other rights to which those
indemnified may be entitled by law or otherwise, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under the
provisions of this Article.
The Corporation shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware, or
any other applicable laws, as from time to time in effect, pay
expenses, including attorneys' fees, incurred in defending any
action, suit or proceeding, in advance of the final disposition
of such action, suit or proceeding, to any person who is or was a
party or is threatened to be made a party to any such threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact
that such person is or was a director or officer of the
Corporation, upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the Corporation as authorized by applicable laws.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. CHECKS, DRAFTS AND OTHER INSTRUMENTS; SECURITY
VOTING AND PROXIES. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness,
issued in the name of the Corporation shall be signed by such
officer or officers, or such other person or persons, as the
Board of Directors may from time to time designate. In the
absence of specific action by the Board of Directors, the
Chairman of the Board and Chief Executive Officer or any
Executive Vice President or Vice President shall have the
authority to grant proxies to vote, or vote, on behalf of the
Corporation the securities of other corporations, both domestic
and foreign, held by the Corporation.
Section 7.2. SEAL. The corporate seal of the Corporation
shall be in such form as the Board of Directors may determine and
shall include the name of the Corporation and the words
"Corporate Seal, Delaware." The seal may be used by causing it,
or a facsimile thereof, to be impressed or affixed or in any
manner reproduced.
Section 7.3. FISCAL YEAR. The fiscal year of the
Corporation shall commence on the first day of January in each
year and end on the following 31st day of December.
Section 7.4. NOTICES. Notice by mail shall be deemed to
have been given at the time the same shall be mailed. Notice by
telegraph shall be deemed to have been given when the same shall
have been delivered for prepaid transmission into the custody of
a company ordinarily engaged in the transmission of such
messages.
Section 7.5. WAIVER OF NOTICE. Whenever any notice whatever
is required to be given under the provisions of the laws of the
State of Delaware or under the provisions of the Certificate of
Incorporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed
equivalent thereto. Except as may be otherwise specifically
provided by law, any waiver by mail, telegraph, cable or wireless
bearing the name of the person entitled to notice shall be deemed
a waiver in writing duly signed. The presence of any person at
any meeting either in person or by proxy shall be deemed the
equivalent of a waiver in writing duly signed, except where the
person attends for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully
called or convened.
Section 7.6. DIVIDENDS. Dividends upon the capital stock of
the Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board at any
regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property, or in shares of the capital stock,
subject to the provisions of law and of the Certificate of
Incorporation.
Section 7.7. CREATION OF RESERVES. Before payment of any
dividend or making any distribution of profits, there may be set
aside out of any funds of the Corporation available for dividends
such sum or sums as the Board from time to time, in its absolute
discretion, may think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other
purpose as the Board shall think conducive to the interest of the
Corporation, and the Board may at any time modify or abolish any
such reserve in the manner in which it was created.
Section 7.8. AMENDMENTS. These By-Laws may be altered or
repealed by the affirmative vote of the majority of the entire
number of directors specified from time to time in the restated
Certificate of Incorporation at any regular meeting of the Board
or at any special meeting of the Board, if notice of the proposed
alteration or repeal be contained in the notice of such special
meeting; provided, however, that any provisions of these By-Laws
resulting from such alteration or repeal shall at all times be in
conformance with the Restated Certificate of Incorporation and
the laws of the State of Delaware.
<PAGE>
Exhibit (3)(c)
BY-LAWS
OF
SUNDSTRAND CORPORATION
(A Delaware Corporation)
Effective October 1, 1995
ARTICLE I
OFFICES
Section 1.1. PRINCIPAL OFFICE. The principal office of the
Corporation in the State of Delaware shall be in the City of
Wilmington, County of New Castle.
Section 1.2. OTHER OFFICES. The Corporation may also have
offices at such other places, either within or without the State
of Delaware, as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
Section 2.1. PLACE OF MEETINGS. All annual and special
meetings of the stockholders shall be held at such place, either
within or without the State of Delaware, as may be fixed by the
Board and specified in the notice of the meeting.
Section 2.2. ANNUAL MEETINGS. An annual meeting of
stockholders shall be held on such date and at such hour as may
be fixed by the Board and specified in the notice of the meeting,
when they shall elect by a plurality vote a Board of Directors
and transact such other business as may properly be brought
before the meeting.
Section 2.3. LIST OF STOCKHOLDERS. The Secretary shall
prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing
the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder who is present. The original or duplicate stock
ledger shall be the only evidence as to who are the stockholders
entitled to examine such list or stock ledger or transfer book or
to vote in person or by proxy at any meeting of stockholders.
Section 2.4. SPECIAL MEETINGS OF STOCKHOLDERS. Special
meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the Chairman of
the Board and shall be called by the Chairman of the Board or
Secretary at the request in writing of a majority of the Board of
Directors, or at the request in writing of stockholders owning
eighty percent or more in amount of the entire capital stock of
the Corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed
meeting.
Section 2.5. NOTICE OF MEETINGS. Except as otherwise
expressly provided by law or by the Certificate of Incorporation
or these By-Laws, written or printed notice of each annual or
special meeting of stockholders shall be given by mail at least
ten but not more than sixty days before the meeting to the
stockholders of record entitled to vote thereat. Every such
notice shall be directed to a stockholder at his address as it
shall appear on the transfer books of the Corporation; shall
state the date, time and place of the meeting; and, in the case
of a special meeting, shall state briefly the purposes thereof.
Business transacted at all special meetings shall be confined to
the purposes stated in the notice thereof.
Section 2.6. QUORUM AND ADJOURNMENTS. The holders of a
majority of the stock issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall be
necessary and sufficient to constitute a quorum at all meetings
of the stockholders for the transaction of business, except as
otherwise provided by statute, by the Certificate of
Incorporation, or by these By-Laws. If, however, such quorum
shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting, at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
The absence from any meeting of the number required by law or by
the Certificate of Incorporation or these By-Laws for action upon
any given matter shall not prevent action at such meeting upon
any other matter or matters which may properly come before the
meeting if the number required in respect of such other matter or
matters shall be present. Once a quorum is present at a meeting,
it shall be deemed to be acting thereafter throughout the
meeting, irrespective of any withdrawals. Nothing in these By-
Laws shall affect the right to adjourn where a quorum is present.
Section 2.7. VOTING BY STOCKHOLDERS. When a quorum is
present at any meeting, the vote of the holders of a majority of
the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the
statutes or of the Certificate of Incorporation or of these By-
Laws a different vote is required, in which case such express
provision shall govern and control the decision of such question.
At any meeting of the stockholders every stockholder having
the right to vote shall be entitled to vote in person, or by
proxy appointed by an instrument in writing, subscribed by such
stockholder or by his attorney or agent thereunto authorized in
writing, and bearing a date not more than three years prior to
said meeting, unless said instrument provides for a longer
period. Except as otherwise provided by the Certificate of
Incorporation, each stockholder present in person or by proxy at
any meeting shall have, on each matter on which stockholders are
entitled to vote, one vote for each share of stock having voting
power, registered in his name on the books of the Corporation.
Section 2.8. NEW BUSINESS PROPOSALS AT ANNUAL MEETINGS.
Only such new business shall be conducted, and only such
proposals shall be acted upon at an annual meeting of
stockholders, as shall have been properly brought before such
annual meeting (a) by, or at the direction of, the Board of
Directors, or (b) by any stockholder of the Corporation who
complies with the notice procedures set forth in this Section
2.8. A stockholder who wishes to bring a proposal before an
annual meeting shall give timely notice thereof in writing to the
Secretary of the Corporation. Such notice, to be timely, shall
be delivered to, or mailed and received by the Secretary at the
principal executive offices of the Corporation at least sixty
days but not more than ninety days prior to the scheduled annual
meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date; provided, however,
that if less than seventy days' notice or prior public disclosure
of the date of the scheduled annual meeting is given or made,
such notice by a stockholder to be timely shall be so delivered
or received not later than the close of business on the tenth day
following the earlier of the day on which notice of the scheduled
annual meeting was mailed or the day on which public disclosure
thereof was made.
Each such stockholder notice shall set forth as to each
proposal to be brought before the annual meeting (a) a brief
description of the proposal and the reasons for conducting such
business at the annual meeting, (b) the name and address, as they
appear on the transfer books of the Corporation, of the
stockholder proposing such business and any other stockholders
known by such stockholder to be supporting the proposal, (c) the
class and number of shares of the Corporation's stock which are
beneficially owned by the stockholder on the date of such
stockholder notice and by any other stockholders known by such
stockholder to be supporting such proposal, and (d) any financial
interest of the stockholder in such proposal.
The Board of Directors may reject any stockholder proposal
not timely made in accordance with the terms of this Section 2.8.
If the Board of Directors, or a designated committee thereof,
determines that the information provided in a stockholder's
notice does not satisfy the informational requirements of this
Section 2.8 in any material respect, the Secretary shall promptly
notify such stockholder of the deficiency in the notice. The
stockholder shall have an opportunity to cure the deficiency by
providing additional information to the Secretary within five
days from the date such notice of deficiency is given to the
stockholder, as the Board of Directors or such committee shall
reasonably determine. If the deficiency is not cured within such
period, or if the Board of Directors or such committee determines
that the additional information provided by the stockholder,
together with the information previously provided, does not
satisfy the requirements of this Section 2.8 in any material
respect, then the Board of Directors may reject such proposal.
The Secretary shall notify the stockholder in writing whether his
proposal has been made in accordance with the time and
informational requirements of this Section 2.8. Notwithstanding
the procedure set forth in this Section 2.8, if neither the Board
of Directors nor such committee makes a determination as to the
validity of any stockholder proposal, the presiding officer of
the annual meeting shall determine and declare at the annual
meeting whether the stockholder proposal was made in accordance
with the terms of this Section 2.8. If the presiding officer
determines that the stockholder's proposal was not made in
accordance with the terms of this Section 2.8, he shall so
declare at the annual meeting and any such proposal shall not be
acted upon at the annual meeting.
This Section 2.8 shall not prevent the consideration and
approval or disapproval at an annual meeting of reports of
officers, directors and committees of the Board of Directors,
but, in connection with such reports, no new business shall be
acted upon at such annual meeting unless stated, filed and
received as herein provided.
ARTICLE III
DIRECTORS
Section 3.1. NUMBER, ELECTION AND TERMS OF OFFICE OF
DIRECTORS. The number of directors which shall constitute the
whole Board shall be twelve in number. Directors need not be
stockholders in the Corporation. Except as provided in Section
3.3, the directors shall be elected at the annual meeting of the
stockholders, and each director elected shall hold office until
his successor is elected and qualified or until his earlier
resignation. The directors shall be divided into three classes:
Class I, Class II and Class III. Such classes shall be as nearly
equal in number as possible. The term of office of the initial
Class I directors shall expire at the annual meeting of
stockholders in 1971, the term of office of the initial Class II
directors shall expire at the annual meeting of stockholders in
1972, and the term of office of the initial Class III directors
shall expire at the annual meeting of stockholders in 1973, or
thereafter in each case when their respective successors are
elected and qualified. At each annual election held after
classification and the initial election of directors according to
classes, the directors chosen to succeed those whose terms then
expire shall be identified as being of the same class as the
directors they succeed and shall be elected for a term expiring
at the third succeeding annual meeting or thereafter when their
respective successors in each case are elected and qualified.
Section 3.2. CORPORATE RECORDS. The directors may keep the
books of the Corporation, except such as are required by law to
be kept within the State of Delaware, outside of Delaware at such
place or places as they may from time to time determine.
Section 3.3. VACANCIES. Vacancies occurring in the Board of
Directors and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a
majority of the directors then in office, although less than a
quorum, and any director so chosen shall hold office until his
successor is elected and qualified. A director elected to fill a
vacancy shall be elected for the unexpired portion of the term of
his predecessor in office. A director elected to fill a newly
created directorship shall serve for the term provided herein for
the class of directors for which such director was elected.
Section 3.4. GENERAL POWERS. The business and affairs of
the Corporation shall be managed by its Board of Directors which
may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or
required to be exercised or done by the stockholders.
Section 3.5. PLACE OF MEETINGS. The Board of Directors of
the Corporation may hold meetings, both regular and special,
either within or without the State of Delaware.
Section 3.6. ANNUAL MEETINGS. The first meeting of each
newly elected Board shall constitute the annual meeting of said
Board and shall be convened as soon as is conveniently possible
but in no event more than two weeks after the date of the annual
meeting of stockholders in each year at such time and place as
shall be fixed by the Chairman of the Board.
Section 3.7. REGULAR MEETINGS. Regular meetings of the
Board shall be held upon notice, or without notice, at least
quarterly, at such time and place as shall from time to time be
determined by the Board.
Section 3.8. SPECIAL MEETINGS. Special meetings of the
Board may be called by the Chairman of the Board or any four
directors. Notice of each special meeting of the Board may be
given by mail, telegraph or cable, personal delivery or
telephone. Notice by mail shall be given at least three days
before the meeting; notice by any other means shall be given a
reasonable period of time before the time of such meeting but in
no event shall such notice be given less than one hour before
such meeting. If notice is by telephone, such notice shall be
promptly confirmed by telegraph or cable to each director.
Section 3.9. QUORUM. At all meetings of the Board, the
presence of a majority of the full number of directors shall be
necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the
directors present at any meeting at which there is a quorum shall
be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Certificate of
Incorporation or by these By-Laws. If a quorum shall not be
present at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum shall be present.
Section 3.10. ACTION BY BOARD WITHOUT MEETING.
Notwithstanding anything contained in these By-Laws, any action
required or permitted to be taken at any meeting of the Board of
Directors or of any Committee thereof may be taken without a
meeting, if a written consent thereto is signed by all members of
the Board or of such Committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the
Board of Directors or the Committee.
Section 3.11. COMPENSATION OF DIRECTORS. The Board of
Directors, by resolution adopted by a majority of the whole
Board, may establish reasonable compensation of all directors for
services to the Corporation as directors, officers or otherwise.
No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation
therefor. Members of any Committee may be allowed like
compensation for their services to the Corporation.
Section 3.12. INTERESTED DIRECTORS. No contract or
transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in
which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer
is present at or participates in the meeting of the Board or
Committee which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if (1)
the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the
Board of Directors or the Committee, and the Board or Committee
in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors,
even though the disinterested directors be less than a quorum; or
(2) the material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to
stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or (3) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, Committee, or the
stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board or
of the Committee which authorizes the contract or transaction.
Section 3.13. COMMITTEES. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one
or more Committees, each Committee to consist of two or more of
the directors of the Corporation. Any such Committee, to the
extent provided in the resolution not inconsistent with the
provisions of the Statutes of Delaware, shall have and may
exercise the powers and authority of the Board of Directors in
the management of the Corporation and may authorize the seal of
the Corporation to be affixed to all papers which may require it.
A majority of the members of the Committee then holding office
shall constitute a quorum at all meetings and each such Committee
shall keep regular minutes of its proceedings and report the same
to the whole Board.
Section 3.14. NOMINATION FOR ELECTION OF DIRECTORS.
Nominations for the election of Directors shall be properly made
by the Board of Directors or a nominating committee appointed by
the Board of Directors or by any stockholder entitled to vote in
the election of Directors generally; provided, however, that any
such stockholder may nominate one or more persons for election as
Directors at a meeting only if such stockholder has given written
notice of such stockholder's intent, either by personal delivery
or by United States mail, postage prepaid, to the Secretary not
later than (1) with respect to an election to be held at an
annual meeting of stockholders, ninety days prior to the
anniversary date of the immediately preceding annual meeting, and
(2) with respect to an election to be held at a special meeting
of stockholders for the election of directors, the close of
business on the tenth day following the date on which notice of
such meeting is first given to stockholders. Each such notice
shall set forth: (a) the name and address, as they appear on the
transfer books of the Corporation, of the stockholder who intends
to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder
of record of stock of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings
between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d)
such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission as then in effect; and (e) the consent of
each nominee to serve as a director of the Corporation if so
elected.
The presiding officer of any meeting at which a stockholder
or its representative attempts to nominate one or more persons
for election as directors may refuse to acknowledge the
nomination of any person not made in compliance with the
provisions of this Section 3.14.
ARTICLE IV
OFFICERS
Section 4.1. DESIGNATION: NUMBER. The officers of the
Corporation shall consist of a Chairman of the Board; a President
and Chief Executive Officer; an Executive Vice President and
Chief Financial Officer; an Executive Vice President and Chief
Operating Officer, Aerospace; an Executive Vice President and
Chief Operating Officer, Industrial; an Executive Vice President
for Special Projects; a Vice President and General Counsel; one
or more other Vice Presidents; a Secretary; a Treasurer; and a
Controller, all of whom shall be elected by the Board of
Directors and shall hold office until their successors are duly
elected and qualified. In addition, the President and Chief
Executive Officer may appoint a Tax Director, one or more
Assistant Secretaries, Assistant Treasurers and Assistant
Controllers and such other officers and agents as the President
and Chief Executive Officer may deem necessary or desirable, who
shall hold their offices for such terms and shall have such
authority and perform such duties as shall be determined by the
President and Chief Executive Officer from time to time. Any
Executive Vice President or Vice President designated by a
resolution of the Board of Directors or by delegation of the
President and Chief Executive Officer shall have authority to
sign contracts and any other documents as specifically authorized
by the Board of Directors or the President and Chief Executive
Officer or which are within the ordinary course of the business
of the Corporation.
Section 4.2. NON-CORPORATE OFFICERS. The President and
Chief Executive Officer shall have authority to appoint from time
to time officers of divisions, product groups or other segments
of the Corporation's business for such terms, with such authority
and at such salary as the President and Chief Executive Officer
in his sole discretion shall determine; provided, however, such
appointed officer shall under no circumstances have authority to
bind any other division, product group or other segment of the
Corporation's business nor to bind the Corporation, except as to
the normal and usual business affairs of the division, product
group or other segment of the Corporation's business of which he
is an officer. Such appointed officer, as such, shall not be
construed as an officer of the Corporation.
Section 4.3. SALARIES. The salaries of the officers elected
pursuant to Section 4.1 above shall be determined by the Board of
Directors. The salaries of all other officers and agents of the
Corporation appointed by the President and Chief Executive
Officer shall be determined by the Board of Directors or the
President and Chief Executive Officer.
Section 4.4. REMOVAL. Any officer elected by the Board of
Directors and any officer or agent appointed by the President and
Chief Executive Officer, as the case may be, may be removed at
any time by the Board of Directors or the President and Chief
Executive Officer, respectively, whenever in its or his judgment
the best interests of the Corporation will be served thereby, but
such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Any vacancy occurring in any
elected office of the Corporation shall be filled by the Board of
Directors.
Section 4.5. CHAIRMAN OF THE BOARD. The Chairman of the
Board shall preside at all meetings of stockholders and of the
Board. He shall counsel the President and Chief Executive
Officer on plans, policies, strategies, budgets and operating
plans. The Chairman of the Board shall participate in activities
such as strategic planning, acquisitions and divestitures, and
presentations to analysts. The Chairman of the Board, the
President and Chief Executive Officer, and/or the Executive Vice
President and Chief Financial Officer shall execute bonds,
mortgages and other contracts requiring a seal, under the seal of
the Corporation, except where required by law to be otherwise
signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the Corporation.
Section 4.6. PRESIDENT AND CHIEF EXECUTIVE OFFICER. The
President and Chief Executive Officer shall be the chief
executive officer of the Corporation. He shall see that all
orders and resolutions of the Board are carried into effect.
Subject to the control of the Board, the President and Chief
Executive Officer shall have general supervision, control and
management of the affairs and business of the Corporation. The
President and Chief Executive Officer, the Chairman of the Board,
and/or the Executive Vice President and Chief Financial Officer
shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the Corporation, except where required by
law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent of the
Corporation.
Section 4.7. EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER. The Executive Vice President and Chief Financial
Officer shall be the chief financial officer of the Corporation
and shall be in charge of the financial, accounting, taxation,
administration, personnel and public relations activities of the
Corporation and shall be under the direction and report to the
President and Chief Executive Officer. He and/or the President
and Chief Executive Officer shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of the
Corporation, except where required by law to be otherwise signed
and executed and except where the signing and execution thereof
shall be expressly delegated by the Board of Directors to some
other officer or agent of the Corporation.
Section 4.8. EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING
OFFICER, AEROSPACE. The Executive Vice President and Chief
Operating Officer, Aerospace shall be the chief operating officer
of the Corporation's aerospace businesses. He shall assist the
President and Chief Executive Officer in the general supervision,
control and management of the affairs and business of the
Corporation's aerospace businesses and the Corporation's
government contracts and compliance activities.
Section 4.9. EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING
OFFICER, INDUSTRIAL. The Executive Vice President and Chief
Operating Officer, Industrial shall be the chief operating
officer of the Corporation's industrial businesses. He shall
assist the President and Chief Executive Officer in the general
supervision, control and management of the affairs and business
of the Corporation's industrial businesses.
Section 4.10. EXECUTIVE VICE PRESIDENT FOR SPECIAL PROJECTS.
The Executive Vice President for Special Projects shall assist
the President and Chief Executive Officer in managing strategic
business issues for the Corporation and shall perform such other
duties as may be prescribed by the President and Chief Executive
Officer.
Section 4.11. VICE PRESIDENT AND GENERAL COUNSEL. The Vice
President and General Counsel shall be the chief legal officer of
the Corporation, shall be responsible for all legal matters
involving the Corporation and shall direct the Corporation's
legal staff. He shall be under the direction of and report to
the Chief Executive Officer.
Section 4.12. OTHER VICE PRESIDENTS. The other Vice
Presidents shall perform such duties as may be prescribed by the
Board of Directors or the President and Chief Executive Officer.
Section 4.13. SECRETARY AND ASSISTANT SECRETARIES.
(a) The Secretary shall attend all sessions of the Board of
Directors and all meetings of the stockholders and record the
minutes of all proceedings in a book to be kept for that purpose,
and shall perform like duties for Committees of the Board when
required. He shall give, or cause to be given, notice of all
meetings of the stockholders and of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board
of Directors or the President and Chief Executive Officer. He
shall keep in safe custody the seal of the Corporation, and affix
the same to any instrument requiring it, and when affixed it
shall be attested by his signature or by the signature of the
Treasurer or an Assistant Secretary.
(b) The Assistant Secretaries in the order of their
seniority shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary, and
shall perform such other duties as the Chairman of the Board
and/or the President and Chief Executive Officer shall prescribe.
Section 4.14. TREASURER AND ASSISTANT TREASURERS.
(a) The Treasurer shall, subject to the direction of the
Executive Vice President and Chief Financial Officer, have the
custody of the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all money and
other valuable effects in the name and to the credit of the
Corporation, in such depositories as may be designated by the
Board of Directors.
(b) He shall disburse the funds of the Corporation when
proper to do so, taking proper vouchers for such disbursements,
and shall render to the Executive Vice President and Chief
Financial Officer, the President and Chief Executive Officer and
the Board of Directors, at the regular meetings of the Board, or
whenever they may require it, an account of all his transactions
as Treasurer and of the financial condition of the Corporation.
(c) If required by the Board of Directors, he shall give
the Corporation a bond in such sum, and with such surety or
sureties as shall be satisfactory to the Board, for the faithful
performance of the duties of his office, and for the restoration
to the Corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his
control belonging to the Corporation.
(d) The Treasurer shall be under the direction of and
report to the Executive Vice President and Chief Financial
Officer.
(e) The Assistant Treasurers in the order of their
seniority shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer and
shall perform such other duties as the Board of Directors or the
Executive Vice President and Chief Financial Officer shall
prescribe.
Section 4.15. CONTROLLER AND ASSISTANT CONTROLLERS.
(a) The Controller shall be the chief accounting officer of
the Corporation and shall be responsible for the installation and
supervision of all accounting records, including the preparation
and interpretation of financial statements, the continuous audit
of accounts and records, and such other duties usually incident
to the office of Controller. He shall be under the direction of
the Executive Vice President and Chief Financial Officer and
shall, in addition to the foregoing duties, perform such other
duties as may be assigned to him by the Board of Directors or the
Executive Vice President and Chief Financial Officer.
(b) The Assistant Controllers in the order of their
seniority shall, in the absence or disability of the Controller,
perform the duties and exercise the powers of the Controller and
shall perform such other duties as the Board of Directors or the
Executive Vice President and Chief Financial Officer shall
prescribe.
Section 4.16. TAX DIRECTOR. The Tax Director shall be
responsible for the preparation and signing of all federal and
state tax returns, consents, elections, closing agreements and
all other documents related to the determination of any federal
or state tax liability of the Corporation, and as such shall be
under the direction of and report to the Treasurer.
ARTICLE V
SHARES AND THEIR TRANSFER
Section 5.1. CERTIFICATES OF STOCK. Certificates for shares
of stock of the Corporation shall be in such form as shall be
approved by the Board, and during the period while more than one
class of stock or more than one series of any class of the
Corporation is authorized, the powers, designations, preferences
and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights
shall be set forth in full or summarized on the face or back of
the certificates which the Corporation shall issue to represent
such class or series of stock, or else there shall appear on the
certificates a statement that the Corporation shall furnish such
information to a stockholder without charge if it be requested.
They shall exhibit the holder's name and number of shares, and,
with respect to each class of stock of the Corporation, or series
thereof, if there be more than one class or series thereof, shall
bear a distinguishing letter, and each class or series thereof,
if any, shall be numbered serially and be issued in consecutive
order. They shall bear the Corporate seal or a facsimile thereof
and shall be signed by the President and Chief Executive Officer,
an Executive Vice President, or a Vice President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation. If such certificate is
countersigned (1) by a transfer agent other than the Corporation
or its employee, or, (2) by a registrar other than the
Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with same effect as
if he were such officer, transfer agent, or registrar at the date
of issue.
Section 5.2. TRANSFER OF STOCK. Upon surrender to the
Corporation or its transfer agent of a certificate representing
shares, duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, a new
certificate shall be issued to the person entitled thereto, and
the old certificate cancelled, and the transaction recorded upon
the books of the Corporation.
Section 5.3. LOST, STOLEN OR DESTROYED CERTIFICATES. Any
person, claiming a certificate for shares of the Corporation to
be lost, stolen or destroyed, shall make affidavit of the fact
and lodge the same with the Secretary of the Corporation
accompanied by a signed application for a new certificate. Such
person shall also give the Corporation a bond of indemnity with
one or more sureties satisfactory to the Board of Directors, and
in an amount which in their judgment shall be sufficient to save
the Corporation from loss, or shall qualify under such blanket
bond as may from time to time be approved by the Board of
Directors, and thereupon the proper officers may cause to be
issued a new certificate of like tenor with the one alleged to be
lost, stolen or destroyed.
Section 5.4. RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be
more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action.
Section 5.5. REGISTERED STOCKHOLDERS. The Corporation shall
be entitled to treat the holder of record of any share or shares
of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
Section 5.6. TRANSFER AGENTS AND REGISTRARS. The Board of
Directors may from time to time appoint a transfer agent and
registrar in one or more cities; may require all certificates
evidencing shares of stock of the Corporation to bear the
signatures of a transfer agent and registrar; and may provide
that such certificates shall be transferable in more than one
city.
ARTICLE VI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Corporation shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware, or
any other applicable laws, as from time to time in effect,
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director
or officer of the Corporation or a division thereof, or is or was
serving at the request of the Corporation as a director or
officer of another corporation, partnership, joint venture, trust
or other enterprise, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding.
The provisions of this Article shall be deemed to be a
contract between the Corporation and each director or officer who
serves in any such capacity at any time while this Article and
the relevant provisions of the General Corporation Law of
Delaware or other applicable law, if any, are in effect, and any
repeal or modification of any such law or of this Article shall
not affect any rights or obligations then existing with respect
to any state of facts then or theretofore existing or any action,
suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of
facts.
The Corporation shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware,
and with respect to the Employee Retirement Income Security Act
of 1974, or any other applicable laws, as from time to time in
effect, indemnify any officer, director or employee of the
Corporation or an affiliated corporation, who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is
or was serving at the request of the Corporation as an individual
Trustee, Committee member, administrator or fiduciary of a
pension or other benefit plan for employees of the Corporation,
or of an affiliated corporation or other enterprise.
Persons who are not covered by the foregoing provisions of
this Article and who are or were employees or agents of the
Corporation or a division thereof, or are or were serving at the
request of the Corporation as employees or agents of another
corporation, partnership, joint venture, trust or other
enterprise, may be indemnified to the extent authorized at any
time or from time to time by the Board of Directors of the
Corporation.
The indemnification provided or permitted by this Article
shall not be deemed exclusive of any other rights to which those
indemnified may be entitled by law or otherwise, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under the
provisions of this Article.
The Corporation shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware, or
any other applicable laws, as from time to time in effect, pay
expenses, including attorneys' fees, incurred in defending any
action, suit or proceeding, in advance of the final disposition
of such action, suit or proceeding, to any person who is or was a
party or is threatened to be made a party to any such threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact
that such person is or was a director or officer of the
Corporation, upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the Corporation as authorized by applicable laws.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. CHECKS, DRAFTS AND OTHER INSTRUMENTS; SECURITY
VOTING AND PROXIES. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness,
issued in the name of the Corporation shall be signed by such
officer or officers, or such other person or persons, as the
Board of Directors may from time to time designate. In the
absence of specific action by the Board of Directors, the
President and Chief Executive Officer or any Executive Vice
President or Vice President shall have the authority to grant
proxies to vote, or vote, on behalf of the Corporation the
securities of other corporations, both domestic and foreign, held
by the Corporation.
Section 7.2. SEAL. The corporate seal of the Corporation
shall be in such form as the Board of Directors may determine and
shall include the name of the Corporation and the words
"Corporate Seal, Delaware." The seal may be used by causing it,
or a facsimile thereof, to be impressed or affixed or in any
manner reproduced.
Section 7.3. FISCAL YEAR. The fiscal year of the
Corporation shall commence on the first day of January in each
year and end on the following 31st day of December.
Section 7.4. NOTICES. Notice by mail shall be deemed to
have been given at the time the same shall be mailed. Notice by
telegraph shall be deemed to have been given when the same shall
have been delivered for prepaid transmission into the custody of
a company ordinarily engaged in the transmission of such
messages.
Section 7.5. WAIVER OF NOTICE. Whenever any notice whatever
is required to be given under the provisions of the laws of the
State of Delaware or under the provisions of the Certificate of
Incorporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed
equivalent thereto. Except as may be otherwise specifically
provided by law, any waiver by mail, telegraph, cable or wireless
bearing the name of the person entitled to notice shall be deemed
a waiver in writing duly signed. The presence of any person at
any meeting either in person or by proxy shall be deemed the
equivalent of a waiver in writing duly signed, except where the
person attends for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully
called or convened.
Section 7.6. DIVIDENDS. Dividends upon the capital stock of
the Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board at any
regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property, or in shares of the capital stock,
subject to the provisions of law and of the Certificate of
Incorporation.
Section 7.7. CREATION OF RESERVES. Before payment of any
dividend or making any distribution of profits, there may be set
aside out of any funds of the Corporation available for dividends
such sum or sums as the Board from time to time, in its absolute
discretion, may think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other
purpose as the Board shall think conducive to the interest of the
Corporation, and the Board may at any time modify or abolish any
such reserve in the manner in which it was created.
Section 7.8. AMENDMENTS. These By-Laws may be altered or
repealed by the affirmative vote of the majority of the entire
number of directors specified from time to time in the restated
Certificate of Incorporation at any regular meeting of the Board
or at any special meeting of the Board, if notice of the proposed
alteration or repeal be contained in the notice of such special
meeting; provided, however, that any provisions of these By-Laws
resulting from such alteration or repeal shall at all times be in
conformance with the Restated Certificate of Incorporation and
the laws of the State of Delaware.
<PAGE>
Exhibit (10)(a)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered
into as of the 19th day of September, 1995 between SUNDSTRAND
CORPORATION, a Delaware corporation (the "Company"), and Robert
H. Jenkins ("Executive").
WHEREAS, the Board of Directors of the Company on
September 19, 1995 elected Executive as President and Chief
Executive Officer of the Company effective October 1, 1995; and
WHEREAS, the Company desires to enter into this Agreement
to assure the benefits of Executive's future services to the
Company, and Executive is willing to commit to render such
services, upon the terms and conditions set forth below.
It is therefore mutually agreed as follows:
1. EMPLOYMENT. The Company agrees to employ Executive
as President and Chief Executive Officer and Executive agrees to
serve the Company, upon the terms and conditions and for the
period of employment hereinafter set forth. Throughout the
Employment Period (as hereinafter defined), unless otherwise
agreed in writing by Executive and the Company, the Company shall
neither demote Executive nor assign to Executive any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities and status as President and Chief Executive
Officer.
2. EMPLOYMENT PERIOD. The term of Executive's
employment under this Agreement shall commence on October 1,
1995, and shall expire, subject to earlier termination of
employment as hereinafter provided, on September 30, 1998 (the
"Employment Period"), provided however that on September 30, 1996
and each anniversary of such date, the Employment Period shall
automatically be extended for an additional year unless prior
thereto either party has given written notice to the other that
such party does not wish to extend the term of this Agreement.
3. COMPENSATION. Throughout the Employment Period, the
Company shall pay or provide Executive with the following, and
Executive shall accept the same, as compensation for the
performance of his undertakings and the services to be rendered
by him under this Agreement.
(a) A salary payable not less often than bi-weekly, at a
rate not less than the highest salary rate he has
attained on an annualized basis, but in no event less
than $650,000 per annum (the "Base Salary").
(b) Participation in all executive benefit or incentive
compensation plans now maintained or hereafter
established by the Company for the purpose of
providing compensation and/or benefits to executives
of the Company including, but not limited to, the
Company's 1989 Restricted Stock Plan, the Sundstrand
Corporation Stock Incentive Plan, the Officer
Incentive Plan, and any supplemental retirement,
salary continuation, stock option, deferred
compensation, supplemental medical or life insurance
or other bonus or incentive compensation plans.
Unless otherwise provided herein, Executive's
participation in such plans shall be on the same
basis and terms as other executive officers of the
Company. No additional compensation provided under
any of such plans shall be deemed to modify or
otherwise affect the terms of this Agreement or any
of Executive's entitlements hereunder.
(c) Participation in all employee benefit plans,
practices and programs maintained by the Company and
made available to employees generally including,
without limitation, all pension, retirement, savings,
medical, hospitalization, disability, dental, life or
travel accident insurance benefit plans (collectively
the "Benefit Plans"). Executive's participation in
such Benefit Plans shall be on the same basis and
terms as are applicable to employees of the Company
generally. In the event Executive at any time during
the Employment Period is not eligible to participate
in any Benefit Plan for which Executive was
previously eligible or the Company terminates or
materially amends any Benefit Plan, the Company shall
provide to Executive benefits comparable with those
benefits that would have been received by Executive
if Executive continued to participate in such Plans.
(d) Paid vacations in accordance with the Company's
vacation policy as in effect from time to time, and
all paid holidays given by the Company to its
executive officers.
(e) All fringe benefits and perquisites (e.g. physical
examinations, financial planning and tax preparation
services) made available by the Company to its
executive officers.
(f) Notwithstanding anything contained in this Agreement
to the contrary, in the event that any payment
(within the meaning of Section 28OG(b)(2) of the
Internal Revenue Code of 1986, as amended (the
"Code")), or distribution to or for the benefit of
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of,
his employment with the Company (a "Payment" or
"Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest
or penalties are incurred by Executive with respect
to such excise tax (such excise tax, collectively
referred to as the "Excise Tax"), then Executive
shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after
payment by Executive of all taxes (including any
interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the
Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
An initial determination shall be made as to whether
a Gross-Up Payment is required pursuant to this
Section 3(f) and the amount of such Gross-Up Payment
shall be made by a national independent accounting
firm selected by Executive (the "Accounting Firm").
All fees, costs and expenses (including, but not
limited to, the cost of retaining experts) of the
Accounting Firm shall be borne by the Company and the
Company shall pay such fees, costs and expenses as
they become due. The Accounting Firm shall provide
detailed supporting calculations, acceptable to
Executive, both to the Company and Executive within
fifteen (15) business days of the Termination Date,
if applicable, or such other time as requested by the
Company or by Executive (provided Executive
reasonably believes that any of the Payments may be
subject to the Excise Tax). The Gross-Up Payment, if
any, as determined pursuant to this Section 3(f)
shall be paid by the Company to Executive within five
(5) business days of the receipt of the Accounting
Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by Executive
with respect to a Payment or Payments, it shall
furnish Executive with an unqualified opinion that no
Excise Tax will be imposed with respect to any such
Payment or Payments. Any such initial determination
by the Accounting Firm of the Gross-Up Payment shall
be binding upon the Company and Executive subject to
the application of the paragraph set forth
immediately below.
As a result of the uncertainty in the application of
Section 4999 and 28OG of the Code, it is possible
that a Gross-Up Payment (or a portion thereof) will
be paid which should not have been paid (an
"Overpayment") or a Gross-Up Payment (or a portion
thereof) which should have been paid will not have
been paid (an "Underpayment"). An Underpayment shall
be deemed to have occurred upon notice (formal or
informal) to Executive from any governmental taxing
authority that the tax liability of Executive
(whether in respect of the then current taxable year
of Executive or in respect of any prior taxable year
of Executive) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments
with respect to which the Company has failed to make
a sufficient Gross-Up Payment. An Overpayment shall
be deemed to have occurred upon a "Final
Determination" (as hereinafter defined) that the
Excise Tax shall not be imposed upon a Payment or
Payments with respect to which Executive had
previously received a Gross-Up Payment. A Final
Determination shall be deemed to have occurred when
Executive has received from the applicable
governmental taxing authority a refund of taxes or
other reduction in his tax liability by reason of the
Overpayment and upon either (i) the date a
determination is made by, or an agreement is entered
into with, the applicable governmental taxing
authority which finally and conclusively binds
Executive and such taxing authority, or in the event
that a claim is brought before a court of competent
jurisdiction, the date upon which a final
determination has been made by such court and either
all appeals have been taken and finally resolved or
the time for all appeals has expired or (ii) the
statute of limitations with respect to Executive's
applicable tax return has expired. If an
Underpayment occurs, Executive shall promptly notify
the Company and the Company shall pay to Executive at
least five (5) business days prior to the date on
which the applicable governmental taxing authority
has requested payment, an additional Gross-Up Payment
equal to the amount of the Underpayment plus any
interest and penalties imposed on the Underpayment.
If an Overpayment occurs, the amount of the
Overpayment shall be treated as a loan by the Company
to Executive and Executive shall, within ten (10)
business days of the occurrence of such Overpayment,
pay the Company the amount of the Overpayment plus
interest at an annual rate equal to the rate provided
for in Section 1274(b)(2)(B) of the Code from the
date the Gross-Up Payment (to which the Overpayment
relates) was paid to Executive.
Notwithstanding anything contained in this Agreement
to the contrary, in the event it is determined that
an Excise Tax will be imposed on any Payment or
Payments, the Company shall pay to the applicable
governmental taxing authorities as Excise Tax
withholding, the amount of the Excise Tax that the
Company has actually withheld from the Payment or
Payments.
4. EXPENSES. During the Employment Period, the Company
shall promptly pay or reimburse Executive for all reasonable
expenses incurred by Executive in the performance of duties
hereunder.
5. CONDITIONS OF EMPLOYMENT. Throughout the Employment
Period, (a) the Company shall not require or assign duties to
Executive which would require him to move the location of his
principal business office or his principal place of residence
outside the area of Rockford, Illinois (the "Rockford Area"), (b)
the Company shall not require or assign duties to Executive which
would require him to spend more than forty-five (45) normal
working days away from the Rockford Area during any consecutive
twelve-month period, (c) the Company shall provide an office to
Executive, the location and furnishings of which shall be
equivalent to the offices provided to other members of the
executive office of the Company on the date of this Agreement,
and (d) the Company shall provide secretarial services and other
administrative services to Executive which shall be equivalent to
the secretarial services and other administrative services
provided to other members of the executive office of the Company
on the date of this Agreement.
6. CONTINUATION OF BENEFITS. If the Company shall fail
to observe or perform any covenant or agreement contained in this
Agreement to be observed or performed by the Company, then
Executive shall, until such time as Executive's Employment Period
hereunder would otherwise terminate pursuant to the provisions of
Section 2 or Section 7, continue to receive all benefits which
the Company has hereinabove in Section 3 agreed to pay to and
provide for Executive, in each case in the amounts and at the
times provided for in Section 3. The parties agree that, in such
event, such payments and benefits shall be deemed to constitute
liquidated damages for the Company's breach of this Agreement.
7. TERMINATION. This Agreement shall terminate upon the
following circumstances:
(a) The date of death of Executive during the Employment
Period; provided, however, that Executive's estate,
heirs and beneficiaries shall be entitled to receive
the full amount of his salary for the month in which
death occurs and all other benefits available to them
under the Company's Benefit Plans as in effect on the
date of death of Executive;
(b) Following conviction of Executive of a felony, the
date as of which Executive's right to file an appeal
after conviction has expired, or if Executive files
an appeal after conviction, the date as of which the
appellate court fails to reverse the conviction, and
the Company shall pay Executive his full salary
through such date of termination and the Company
shall have no further obligations to Executive under
this Agreement except with respect to any rights
Executive might otherwise have under the Company's
Benefit plans as in effect on the date of termination
of Executive; or
(c) The date as of which the Company elects to terminate
this Agreement in accordance with Section l0.
8. COVENANT NOT TO COMPETE. Without the consent of the
Company, Executive shall not at any time during the Employment
Period undertake employment as an owner, director, officer
employee or consultant with any business entity directly engaged
in the manufacture and/or sale of products competitive with any
material product or product line of the Company; provided,
however, that Executive shall not be deemed to have breached this
undertaking if his sole relation with such entity consists of his
holding, directly or indirectly, an equity interest in such
entity not greater than two percent (2%) of such entity's
outstanding equity interest. For purposes hereof the term
"material product or product line of the Company" shall mean any
product or product line of the Company, the gross sales of which
during any calendar year during the five (5) year period
preceding Executive's undertaking such employment were at least
$50 million.
9. UNAUTHORIZED DISCLOSURE. Executive shall not make
any Unauthorized Disclosure. For purposes of this Agreement,
"Unauthorized Disclosure" shall mean disclosure by Executive
without the consent of the Board to any person, other than an
employee of the Company or a person to whom disclosure is
reasonably necessary or appropriate in connection with the
performance by Executive of his duties as an executive of the
Company or as may be legally required, of any confidential
information obtained by Executive while in the employ of the
Company (including, but not limited to, any confidential
information with respect to any of the Company's customers or
methods of distribution) the disclosure of which he knows or has
reason to believe will be materially injurious to the Company;
provided, however, that such term shall not include the use or
disclosure by Executive, without consent, of any information
known generally to the public (other than as a result of
disclosure by him in violation of this Section 9) or any
information not otherwise considered confidential by a reasonable
person engaged in the same business as that conducted by the
Company.
10. BREACH OF SECTION 8 OR SECTION 9. In the event of a
breach by Executive of the provisions of Section 8 or Section 9
of this Agreement, the Company may terminate this Agreement under
Section 7(c), but only if the Company complies with the following
provisions:
(a) The Company shall provide Executive with written
notice of its belief that a breach of Section 8 or
Section 9 of this Agreement has occurred and shall
afford Executive sixty (60) days or such longer
period as the Company may determine to cure the
alleged breach.
(b) In the event Executive does not cure the breach, the
Company shall be required to institute a judicial
proceeding to determine whether a breach of Section 8
or Section 9 of this Agreement has occurred and
Executive has not cured such breach.
(c) This Agreement may then be terminated only upon a
judicial determination that Executive has breached
the provisions of Section 8 or Section 9 and has
failed to cure such breach; provided, however, that
this Agreement may not be terminated until either all
appellate proceedings have been exhausted or the time
within which Executive may appeal an adverse ruling
has expired.
11. LITIGATION EXPENSES. The Company shall pay to
Executive all out-of-pocket expenses, including attorneys' fees,
incurred by Executive in connection with any claim or legal
action or proceeding brought under or involving this Agreement,
whether brought by Executive or by or on behalf of the Company or
by another party; provided, however, the Company shall not be
obligated to pay to Executive out-of-pocket expenses, including
attorneys' fees, incurred by Executive in any claim or legal
action or proceeding involving Section 8 or Section 9 of this
Agreement if Company prevails in such litigation.
12. RETIREMENT PLANS. Executive shall participate in the
Sundstrand Corporation Retirement Plan-Aerospace and the
Sundstrand Corporation Supplemental Retirement Plan
(collectively, the "Retirement Plans"). For purposes of
determining the amount of Executive's accrued benefit under the
Retirement Plans, he shall be deemed to accrue "Years of Service"
and "Years of Participation" (as those terms are defined and used
in the Retirement Plans) from the date of this Agreement at the
rate of two (2) months for each month (or fraction thereof) of
actual service. If Executive's employment with the Company
terminates prior to completion of thirty (30) months of actual
service, he shall be entitled to a nonqualified benefit computed
pursuant to the Retirement Plans and the immediately preceding
sentence but without regard to any service requirement for
eligibility. Notwithstanding the foregoing, in the event of a
Change in Control (as hereinafter defined), Executive will
immediately become fully-vested in a benefit payable from the
Retirement Plans, which benefit will be calculated as though, at
the time of such Change in Control, he had twenty (20) Years of
Service and Years of Participation in the Retirement Plans,
regardless of the actual number of Years of Service and Years of
Participation at such time.
13. CHANGE IN CONTROL. For purposes of this Agreement, a
"Change in Control" shall mean any of the following events:
(a) The acquisition (other than from the Company) by any
person (as such term is defined in Sections 13(d) or
14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under
the 1934 Act) of thirty-three percent (33%) or more
of the combined voting power of the Company's then
outstanding voting securities;
(b) The individuals who, as of the date hereof, are
members of the Board (the "Incumbent Board"), cease
for any reason to constitute a majority of the Board,
unless the election, or nomination for election by
the Company's stockholders, of any new director was
approved by a vote of a majority of the Incumbent
Board, and such new director shall, for purposes of
this Agreement, be considered as a member of the
Incumbent Board; or
(c) Approval by stockholders of the Company of (i) a
merger or consolidation involving the Company if the
stockholders of the Company, immediately before such
merger or consolidation, do not, as a result of such
merger or consolidation, own, directly or indirectly,
more than sixty-seven percent (67%) of the combined
voting power of the then outstanding voting
securities of the corporation resulting from such
merger or consolidation in substantially the same
proportion as their ownership of the combined voting
power of the voting securities of the Company
outstanding immediately before such merger or
consolidation or (ii) a complete liquidation or
dissolution of the Company or an agreement for the
sale or other disposition of all or substantially all
of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur pursuant to Section 13(a), solely because
thirty-three percent (33%) or more of the combined voting power
of the Company's then outstanding securities is acquired by (i) a
trustee or other fiduciary holding securities under one or more
employee benefit plans maintained by the Company or any of its
subsidiaries or (ii) any corporation which, immediately prior to
such acquisition, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their
ownership of stock in the Company immediately prior to such
acquisition.
14. RETIREE HEALTH AND LIFE INSURANCE BENEFITS UPON A
CHANGE IN CONTROL. Notwithstanding anything to the contrary
contained in the Company's Benefit Plans and other applicable
programs and practices, upon a Change in Control:
(a) The eligibility requirements for the Company's
Retiree Health Insurance Plan shall be waived, and
commencing on the later of Executive's termination of
employment or attainment of age 55, he shall be
provided with the same health care coverage as
provided to other eligible retirees at that time; and
(b) The age 62 and 30-year requirements of the Executive
Life Insurance Program for retirees are waived, and
commencing on the later of Executive's termination of
employment or attainment of age 55, he shall be
provided with a life insurance benefit of one time
his annual Base Salary at the higher of the annual
rate in effect at the time of his termination of
employment or immediately prior to the Change in
Control.
15. STOCK AWARDS UPON A CHNAGE IN CONTROL. Upon a Change
in Control, all restrictions on any stock purchased by or
otherwise granted to Executive pursuant to the Company's 1989
Restricted Stock Plan, the Sundstrand Corporation Stock Incentive
Plan and any other restricted stock plan sponsored by the Company
shall immediately lapse and all such stock shall become fully
(100%) vested immediately, and shall be immediately deliverable
to Executive; all such stock shall be freely transferable by
Executive and the Company will have no right to direct or
restrict the disposition of such stock; and all stock options
shall become fully (100%) vested and shall become immediately
exercisable.
16. TERMINATION FOLLOWING A CHANGE IN CONTROL.
(a) TERMINATION DATE. For the purposes of this Section
16, "Termination Date" shall mean in the case of
Executive's death, his date of death, or in all other
cases, the date of Executive's last day of employment
with the Company.
(b) COMPENSATION UPON TERMINATION FOLLOWING A CHANGE IN
CONTROL. Notwithstanding the provisions of Section 7
or any other section of this Agreement and in
addition to any other amounts or benefits payable to
Executive or on his behalf pursuant to the terms of
this Agreement, following a Change in Control upon
termination of Executive's employment:
(i) for any reason, during the Employment Period,
the Company shall pay Executive or his
beneficiaries on his behalf all amounts earned
or accrued hereunder through the Termination
Date but not paid as of the Termination Date,
including Base Salary, vacation pay, bonuses
or incentive compensation and any previous
compensation which Executive has previously
deferred (including any interest earned or
credited thereon) (collectively "Accrued
Compensation"); and
(ii) (A) for any reason other than pursuant to the
provisions of Section 7, during the Employment
Period, the Company shall pay Executive a
"Bonus Amount" equal to the product of (x) (a)
the greatest amount of any cash bonus or
incentive compensation received by Executive
during the three fiscal years immediately
preceding the Termination Date or (b) if no
such bonus was received by Executive during
any of such three years, then an amount equal
to Executive's maximum bonus which could be
awarded for the fiscal year in which the
Termination Date occurs had he continued in
employment until the end of such fiscal year,
assuming all performance targets and goals (if
applicable) had been fully met by the Company
and by Executive, as applicable, for such year
and (y) a fraction (which shall not be less
than one) the numerator of which shall be the
number of months (each partial month shall be
treated as a full month) remaining in the
Employment Period (if Executive were to
continue in the employ of the Company) and the
denominator of which is 12; or
(B) for any reason pursuant to the provisions
of Section 7, during the Employment Period,
the Company shall pay to Executive or his
beneficiaries an amount equal to the bonus or
incentive award that Executive would have been
entitled to receive in respect of the fiscal
year in which Executive's Termination Date
occurs had he continued in employment until
the end of such fiscal year, calculated as if
all performance targets and goals (if
applicable) had been fully met by the Company
and by Executive, as applicable, for such
year, multiplied by a fraction (which shall
not be less than 0) the numerator of which is
the number of months (each partial month shall
be treated as a full month) remaining in such
fiscal year through the Termination Date and
the denominator of which is 12 (a "Pro Rata
Bonus").
(c) The Accrued Compensation and Bonus Amount or Pro Rata
Bonus, as the case may be, provided under this
Section 16 shall be paid in cash by the Company
within five (5) days after Executive's Termination
Date.
(d) Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the
terms of this Agreement and in accordance with the
Company's employee Benefit Plans and other applicable
programs, practices and arrangements then in effect,
to the extent that such plans, programs, practices
and arrangements do not conflict with the terms of
this Agreement.
17. NO MITIGATION. Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise and no such payment
shall be offset or reduced by the amount of any compensation or
benefits provided to Executive in any subsequent employment.
18. NOTICES. Notice given pursuant to this Agreement
shall be in writing and shall be deemed given when received and
if mailed shall be mailed by United States registered or
certified mail, return receipt requested, addressee only, postage
prepaid if to the Company, to the Board of Directors of
Sundstrand Corporation, Attention: Vice President and General
Counsel and Secretary of the Company, 4949 Harrison Avenue, P.O.
Box 7003, Rockford, Illinois 61125, or if to Executive, at 24868
Blue Stem Court, Barrington, Illinois 60010, or to such other
address as either party may have previously designated by notice
to the other party given in the foregoing manner.
19. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the Company, its
successors and assigns and the Company shall require any
successor or assignee to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or
assignment had taken place. The term "the Company" as used
herein shall include such successors and assigns. The term
"successors and assigns" as used herein shall mean a corporation
or other entity acquiring all or substantially all the assets and
business of the Company (including this Agreement) whether by
operation of law or otherwise.
Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by Executive, his
beneficiaries or legal representatives, except by will or by the
laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Executive's legal
representative.
20. WAIVER, MODIFICATION AND INTERPRETATION. No
provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and an appropriate
officer of the Company empowered to sign same by the Board of
Directors of the Company. No waiver by either party at any time
of any breach by the party of, or compliance with, any condition
or provision of this Agreement to be performed by the other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or at any prior or subsequent time.
The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of
Illinois. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
21. HEADINGS. The headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first written above.
SUNDSTRAND CORPORATION
By: /s/ Richard M. Schilling
---------------------------
Vice President and General
Counsel and Secretary
By: /s/ Robert H. Jenkins
---------------------------
Executive
<PAGE>
Exhibit (10)(b)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered
into as of this 19th day of September, 1995, between SUNDSTRAND
CORPORATION, a Delaware corporation (the "Company"), and Don R.
O'Hare ("Executive").
WHEREAS, Executive is employed as Chairman of the Board
and Chief Executive Officer of the Company and the Company
desires to assure the benefits of the Executive's future services
as Chairman of the Board, and Executive is willing to commit to
render such services, upon the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein, the parties have agreed as
follows:
1. EMPLOYMENT. The Company agrees to employ Executive
as Chairman of the Board, and Executive agrees to serve the
Company, upon the terms and conditions and for the period of
employment hereinafter set forth. Throughout the Employment
Period (as hereinafter defined), unless otherwise agreed in
writing by Executive and the Company, the Company shall neither
demote Executive nor assign to Executive any duties or
responsibilities that are inconsistent with his position as
Chairman of the Board and the duties, responsibilities and status
of such position.
2. EMPLOYMENT PERIOD. The term of the Executive's
employment under this Agreement shall commence as of October 1,
1995, and, subject to earlier termination of Executive's
employment and termination of this Agreement as provided in
Section 7, shall expire at the close of business on the date of
the Annual Meeting of Stockholders in 1997 (the "Employment
Period").
3. COMPENSATION. Throughout the Employment Period,
the Company shall pay or provide Executive with the following,
and Executive shall accept the same, as compensation for the
performance of his undertakings and the services to be rendered
by him under this Agreement.
(a) A salary payable not less often than bi-weekly, at
a rate not less than the highest salary rate he has
attained on an annualized basis but in no event
less than $650,000 per annum.
(b) Participation in the Company's Officer Incentive
Compensation Plan for the 1995 through 1997 plan
years, provided that for any plan year the bonus
amount will be prorated to reflect the actual
period of employment. Such bonus shall be
determined based upon the opportunity level under
the Plan for the Chairman of the Board and the
performance elements approved by the Compensation
Committee for the 1994 plan year.
(c) Participation in the Sundstrand Corporation Stock
Incentive Plan with respect to non-qualified stock
options granted thereunder.
(d) Participation in the following employee benefit
plans, policies, practices and arrangements
maintained by the Company in which Executive is
presently eligible to participate:
- Sundstrand Corporation Disability Plan
- Accidental Death Insurance
- Executive and Spouse Physical
- Sundstrand Corporation Group Life Insurance
Plan
- Use of Company Airplane
- Financial Services
- Snow Plowing and Other Personal Services
Such plans are hereinafter collectively referred to
as the "Benefit Plans". In the event Executive at
any time during the Employment Period is not
eligible to participate in any Benefit Plan for
which Executive was previously eligible or the
Company terminates or materially amends any Benefit
Plan, the Company shall provide to Executive
benefits comparable with those benefits that would
have been received by Executive if Executive
continued to participate in such Plans.
(e) Paid vacations in accordance with the Company's
vacation policy as in effect from time to time, and
all paid holidays given by the Company to its
executive officers.
4. EXPENSES. During the Employment Period, the
Company shall promptly pay or reimburse Executive for all
reasonable expenses incurred by Executive in the performance of
duties hereunder.
5. CONDITIONS OF EMPLOYMENT. Throughout the
Employment Period:
(a) The Company shall not require or assign duties to
Executive which would require him to move the
location of his principal business office or his
principal place of residence outside the City of
Rockford or the County of Winnebago, Illinois (the
"Rockford Area");
(b) The Company shall not require or assign duties to
Executive which would require him to spend more
than forty-five (45) normal working days away from
the Rockford Area during any consecutive
twelve-month period;
(c) The Company shall provide an office to Executive,
the location and furnishings of which shall be
equivalent to the offices provided to him on the
date of this Agreement; and
(d) The Company shall provide secretarial services and
other administrative services to Executive which
shall be equivalent to the secretarial services and
other administrative services provided to him on
the date of this Agreement.
6. CONTINUATION OF BENEFITS. If the Company shall
fail to observe or perform any covenant or agreement contained in
this Agreement to be observed or performed by the Company, then
Executive shall, until such time as Executive's Employment Period
hereunder would otherwise terminate pursuant to the provisions of
Section 2 or Section 7, continue to receive all benefits which
the Company has hereinabove in Section 3 agreed to pay to and
provide for Executive, in each case in the amounts and at the
times provided for in Section 3. The parties agree that, in such
event, such payments and benefits shall be deemed to constitute
liquidated damages for the Company's breach of this Agreement.
7. TERMINATION. This Agreement shall terminate upon
the following circumstances:
(a) The date of death of Executive during the
Employment Period; provided, however, that
Executive's estate, heirs and beneficiaries shall
be paid the full amount of Executive's salary
through the end of the sixth month following the
month in which his death occurs, but in no event
for any period thereafter, and all other benefits
which would be applicable to Executive or
Executive's estate, heirs and beneficiaries under
the Company's Benefit Plans in which Executive
participates as in effect on the date of
Executive's death;
(b) Following conviction of Executive of a felony, the
date as of which Executive's right to file an
appeal after conviction has expired, or if
Executive files an appeal after conviction, the
date as of which the appellate court fails to
reverse the conviction, and the Company shall pay
Executive his full salary through such date of
termination and the Company shall have no further
obligations to Executive under this Agreement
except with respect to any rights Executive might
otherwise have under the Company's Benefit plans as
in effect on the date of termination of Executive;
(c) The date as of which the Company elects to
terminate this Agreement in accordance with Section
10.
8. COVENANT NOT TO COMPETE. Without the consent of
the Company, Executive shall not at any time during the term of
this Agreement, or for a period of two years thereafter,
undertake employment as an owner, director, officer, employee or
consultant with any business entity directly engaged in the
manufacture and/or sale of products competitive with any material
product or product line of the Company; provided, however, that
Executive shall not be deemed to have breached this undertaking
if his sole relation with such entity consists of his holding,
directly or indirectly, an equity interest in such entity not
greater than two percent (2%) of such entity's outstanding equity
interest. For purposes hereof the term "material product or
product line of the Company" shall mean any product or product
line of the Company, the gross sales of which during any calendar
year during the five (5) year period preceding the Executive's
undertaking such employment were at least $50 million.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION. Without
the consent of the Company, Executive shall not at any time
during the term of this Agreement, or for a period of two years
thereafter, disclose to any other business entity confidential
information concerning the Company or the Company's trade secrets
of which Executive has gained knowledge during his employment
with the Company.
10. BREACH OF SECTION 8 OR SECTION 9. In the event of
a breach by Executive of the provisions of Section 8 or Section 9
of this Agreement, the Company may terminate this Agreement under
Section 7(c), but only if the Company complies with the following
provisions:
(a) The Company shall provide Executive with written
notice of its belief that a breach of Section 8 or
Section 9 of this Agreement has occurred and shall
afford Executive sixty (60) days or such longer
period as the Company may determine to cure the
alleged breach.
(b) In the event Executive does not cure the breach,
the Company shall be required to institute a
judicial proceeding to determine whether a breach
of Section 8 or Section 9 of this Agreement has
occurred and Executive has not cured such breach.
(c) This Agreement may then be terminated only upon a
judicial determination that Executive has breached
the provisions of Section 8 or Section 9 and has
failed to cure such breach; provided, however, that
this Agreement may not be terminated until either
all appellate proceedings have been exhausted or
the time within which Executive may appeal an
adverse ruling has expired.
11. LITIGATION EXPENSES. The Company shall pay to
Executive all out-of-pocket expenses, including attorneys' fees,
incurred by Executive in connection with any claim or legal
action or proceeding brought under or involving this Agreement,
whether brought by Executive or by or on behalf of the Company or
by another party; provided, however, the Company shall not be
obligated to pay to Executive out-of-pocket expenses, including
attorneys' fees, incurred by Executive in any claim or legal
action or proceeding involving Section 8 or Section 9 of this
Agreement if Company prevails in such litigation.
12. NOTICES. Notice given pursuant to this Agreement
shall be in writing and shall be deemed given when received and
if to the Company, to the Board of Directors of Sundstrand
Corporation, Attention: Vice President and General Counsel and
Secretary of the Company.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the Company, its
successors and assigns and the Company shall require any
successor or assignee to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or
assignment had taken place. The term "the Company" as used
herein shall include such successors and assigns. The term
"successors and assigns" as used herein shall mean a corporation
or other entity acquiring all or substantially all the assets and
business of the Company (including this Agreement) whether by
operation of law or otherwise.
Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by Executive, his
beneficiaries or legal representatives, except by will or by the
laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Executive's legal
representative.
14. WAIVER, MODIFICATION AND INTERPRETATION. No
provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and an appropriate
officer of the Company empowered to sign same by the Board of
Directors of the Company. No waiver by either party at any time
of any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by the
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or at any prior or
subsequent time. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Illinois. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
15. TERMINATION OF PRIOR EMPLOYMENT AGREEMENT;
CONSULTING AGREEMENT. Effective as of the date hereof, the
Employment Agreement between the Company and Executive entered
into as of October 3, 1994, is terminated and no further payments
will be made to Executive thereunder. Executive shall, upon
termination of the Employment Period, other than as a result of
termination pursuant to Section 7, and provided Executive is not
physically or mentally incapacitated, become a consultant to the
President and Chief Executive Officer pursuant to a Consulting
Agreement in the form of Exhibit A attached hereto, which
Executive and the Company shall enter into.
16. HEADINGS. The headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first written above.
SUNDSTRAND CORPORATION
By: /s/ Richard M. Schilling
---------------------------
Vice President and General
Counsel and Secretary
By: /s/ Don R. O'Hare
--------------------------
Executive<PAGE>
Exhibit A
CONSULTING AGREEMENT
This Agreement is made as of the 15th day of April,
1997, by and between Sundstrand Corporation, a Delaware
corporation (the "Company") and Don R. O'Hare ("Consultant").
WHEREAS, Consultant is the Chairman of the Board of
the Company;
WHEREAS, Consultant's employment as Chairman of the
Board will terminate effective as of the date of this Agreement,
and the Board of Directors wishes him to remain as a consultant
to assist the President and Chief Executive Officer, and
Consultant is willing to render such services upon the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the premises
and the mutual promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. DUTIES. During the Consultation Period (as defined
below), Consultant shall provide the Chairman, President and
Chief Executive Officer of the Company with his best advice and
assistance on such matters as the Chairman, President and Chief
Executive Officer shall request, including relations with the
Company's investors and identification and evaluation of
potential acquisition candidates. The Company will not have the
right to direct or supervise the manner in which Consultant
performs services under this Consulting Agreement.
2. TERM. The term of this Agreement shall commence on
the date hereof and shall expire, subject to earlier termination
as hereinafter provided, on April 14, 2000 (the "Consultation
Period"). This Agreement may be extended or renewed upon mutual
agreement of the parties.
3. COMPENSATION. The Company shall pay Consultant the
following, and Consultant shall accept the same, as compensation
for the performance of his undertakings and the services to be
rendered by him under this Agreement: An annual fee of $360,000,
payable in installments to be paid not less often than bi-weekly.
4. EMPLOYEE BENEFITS. Except as otherwise expressly
provided herein, employee benefits enjoyed by the Consultant
during his employment by the Company will be terminated, except
to the extent that such benefits are available to directors of
the Company or to other retired employees of the Company.
5. EXPENSES. Upon submission of appropriate invoices
or vouchers, the Company shall promptly pay or reimburse
Consultant for all reasonable expenses incurred by Consultant
during the Consultation Period in the performance of his duties
hereunder.
6. CONDITIONS OF CONSULTANT'S PERFORMANCE OF SERVICES.
Throughout the Consultation Period, (a) the Company shall not
require or assign projects to Consultant which would require him
to move the location of his principal business office or his
principal place of residence outside the City of Rockford or the
County of Winnebago, Illinois (the "Rockford Area"), (b) the
Company shall not require or assign projects to Consultant which
would require him to spend more than forty-five (45) normal
working days away from the Rockford Area during any consecutive
twelve-month period, (c) the Company shall provide office,
secretarial and administrative services, which shall be
reasonably satisfactory to Consultant, to assist Consultant in
the performance of his services under this Consulting Agreement.
7. CONTINUATION OF FEES. If the Company shall fail to
observe or perform any covenant or agreement contained in this
Agreement to be observed or performed by the Company, then
Consultant shall, until such time as the Consultation Period
hereunder would otherwise terminate pursuant to the provisions of
Section 2 or Section 8, continue to receive all fees which the
Company has hereinabove in Section 3 agreed to pay to and provide
for Consultant, in each case in the amounts and at the times
provided for in Section 3. The parties agree that, in such
event, such payments shall be deemed to constitute liquidated
damages for the Company's breach of this Agreement, and the
Company agrees that Consultant shall not be required to mitigate
his damages by seeking other employment or otherwise.
8. TERMINATION. This Agreement shall terminate upon
the following circumstances:
(a) The date of death of Consultant during the
Consultation Period; provided, however, that
Consultant's estate, heirs and beneficiaries
shall be entitled to receive the full amount
of his fee for the month in which death
occurs, and the Company shall have no
further obligations to Consultant under this
Agreement;
(b) Following the conviction of Consultant of a
felony, the date as of which Consultant's
right to file an appeal after conviction has
expired, or, if Consultant files an appeal
after conviction, the date as of which the
appellate court fails to reverse the
conviction, and the Company shall pay
Consultant his full fee through such date of
termination and the Company shall have no
further obligations to Consultant under this
Agreement; or
(c) The date as of which the Company elects to
terminate this Agreement in accordance with
Section 12.
9. COVENANT NOT TO COMPETE. Without the consent of
the Company, Consultant shall not at any time during the
Consultation Period undertake employment as an owner, director,
officer, employee or consultant with any business entity directly
engaged in the manufacture and/or sale of products competitive
with any material product or product lines of the Company;
provided, however, that Consultant shall not be deemed to have
breached this undertaking if his sole relation with such entity
consists of his holding, directly or indirectly, an equity
interest in such entity not greater than two percent (2%) of such
entity's outstanding equity interest. For purposes hereof, the
term "material product or product line of the Company" shall mean
any product or product line of the Company the gross sales of
which during any calendar year during the five (5) year period
preceding the Consultant's undertaking such employment were at
least $50 million.
10. DISCLOSURE OF CONFIDENTIAL INFORMATION. Without
the consent of the Company, Consultant shall not at any time
during the Consultation Period disclose to any other business
entity confidential information concerning the Company or the
Company's trade secrets of which Consultant has gained knowledge
during his employment with, or consultation to, the Company.
11. BUSINESS MATERIALS. All written materials, records
and documents made by the Consultant or coming into his
possession concerning the business or affairs of the Company or
any of its affiliates shall be the sole property of the Company
and its affiliates; and, upon the termination of the Consultation
Period or upon the request of the Company at any time, the
Consultant shall promptly deliver the same to the Company.
12. BREACH OF SECTION 9 OR SECTION 10. In the event of
a breach by Consultant of the provisions of Section 9 or Section
10 of this Agreement, the Company may terminate this Agreement
under Section 8(c), but only if the Company complies with the
following provisions:
(a) The Company shall provide Consultant with
written notice of its belief that a breach
of Section 9 or Section 10 of this Agreement
has occurred and shall afford Consultant
sixty (60) days or such longer period as the
Company may determine to cure the alleged
breach.
(b) In the event Consultant does not cure the
breach, the Company shall be required to
institute a judicial proceeding to determine
whether a breach of Section 9 or Section 10
of this Agreement has occurred and
Consultant has not cured such breach.
(c) This Agreement may then be terminated only
upon a judicial determination that
Consultant has breached the provisions of
Section 9 or Section 10 and has failed to
cure such breach; provided, however, that
this Agreement may not be terminated until
either all appellate proceedings have been
exhausted or the time within which
Consultant may appeal an adverse ruling has
expired.
13. LITIGATION EXPENSES. The Company shall pay to
Consultant out-of-pocket expenses, including attorneys' fees,
incurred by Consultant in connection with any claim or legal
action or proceeding brought under or involving this Agreement,
whether brought by Consultant or by or on behalf of the Company
or by another party; provided, however, the Company shall not be
obligated to pay to Consultant out-of-pocket expenses, including
attorneys' fees, incurred by Consultant in any claim or legal
action or proceeding involving Section 9 or Section 10 of this
Agreement if Company prevails in such litigation.
14. INDEPENDENT CONTRACTOR. Nothing contained herein
shall constitute the Consultant an employee or agent of the
Company, but the relationship of the Consultant to the Company
shall be one of an independent contractor.
15. NOTICES. Notices given pursuant to this Agreement
shall be in writing and shall be deemed given when received and
if mailed shall be mailed by United States registered or
certified mail, return receipt requested, addressee only, postage
prepaid if to the Company, to the Board of Directors of
Sundstrand Corporation, Attention: Vice President and General
Counsel and Secretary, P.O. Box 7003, 4949 Harrison Avenue,
Rockford, Illinois 61125, or if to Consultant, at 2939 Imperial
Oaks, Rockford, Illinois 61111, or to such other address as
either party may have previously designated by notice to the
other party given in the foregoing manner.
16. SUCCESSORS. This Agreement may not be assigned by
the Company, and the obligations of the Company provided for in
this Agreement shall be binding legal obligations of any
successor to the Company by purchase, merger, consolidation or
otherwise. This Agreement may not be assigned by Consultant
during his life and, upon his death, will be binding upon and
inure to the benefit of his heirs, legatees and the legal
representatives of his estate.
17. WAIVER, MODIFICATION AND INTERPRETATION. No
provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Consultant and an appropriate
officer of the Company empowered to sign same by the Board. No
waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the
same time or at any prior subsequent time. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Illinois. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other
provision of this Agreement.
18. HEADINGS. The headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.
IN WITNESS WHEREFORE, the parties hereto have
executed this Agreement on the day and year first written above.
SUNDSTRAND CORPORATION
By:
--------------------------
Vice President and General
Counsel and Secretary
By:
--------------------------
Consultant
<PAGE>
<TABLE>
Exhibit (11)(a)
Computation of Fully Diluted Earnings Per Share (Unaudited)
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- -----------------
(Amounts in millions except per share data) 1995 1994 1995 1994
________________________________________________________________________________
<S> <C> <C> <C> <C>
EARNINGS
Net earnings $ 34 $ 24 $ 43 $ 61
===== ===== ===== =====
_______________________________________________________________________________
SHARES
Weighted-average number of common shares
outstanding 31.5 32.9 31.5 32.9
Additional shares assuming conversion
of stock options .2 .1 .2 .1
----- ----- ----- -----
Fully diluted shares 31.7 33.0 31.7 33.0
===== ===== ===== =====
_______________________________________________________________________________
FULLY DILUTED EARNINGS PER SHARE
Net earnings $1.06 $ .72 $1.35 $1.84
===== ===== ===== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE REGISTRANT'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 75
<SECURITIES> 0
<RECEIVABLES> 261
<ALLOWANCES> 0
<INVENTORY> 349
<CURRENT-ASSETS> 760
<PP&E> 440
<DEPRECIATION> 0
<TOTAL-ASSETS> 1578
<CURRENT-LIABILITIES> 426
<BONDS> 238
<COMMON> 19
0
0
<OTHER-SE> 445
<TOTAL-LIABILITY-AND-EQUITY> 1578
<SALES> 1078
<TOTAL-REVENUES> 1078
<CGS> 699
<TOTAL-COSTS> 981
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25
<INCOME-PRETAX> 77
<INCOME-TAX> 34
<INCOME-CONTINUING> 43
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43
<EPS-PRIMARY> 1.36
<EPS-DILUTED> 1.35
</TABLE>
