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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 10, 1996
SUNDSTRAND CORPORATION
_____________________________________________________
(Exact name of Registrant as specified in its charter)
Delaware 1-5358 36-1840610
____________________________ ___________ _____________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
4949 Harrison Avenue
P.O. Box 7003
Rockford, Illinois 61125-7003
________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (815) 226-6000
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Item 5. Other Events.
Robert J. Smuland resigned as a director of Sundstrand
Corporation effective June 10, 1996. As previously announced, on
May 6, 1996, he left his position as Executive Vice President and
Chief Operating Officer, Aerospace of the Corporation.
Item 7. Exhibits.
Exhibit (1) -- Termination agreement between the
Registrant and Robert J. Smuland,
dated as of June 7, 1996
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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)
Dated: June 11, 19996 By: /s/ Richard M. Schilling
_________________________________
Name: Richard M. Schilling
Title: Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Page in Sequentially
Exhibit Description Numbered Copy
_______ ___________ ___________________
(1) Termination agreement between
Sundstrand Corporation and
Robert J. Smuland, dated as of
June 7, 1996.
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Exhibit (1)
SUNDSTRAND CORPORATION
Corporate Offices
4949 Harrison Avenue
P.O. Box 7003
Rockford, Illinois 61125-70003
Phone (815) 226-6000
TWX 910-631-4255
Telex 25-7440
June 7, 1996
(A revision following
negotiation of the letter
dated May 6, 1996)
Mr. Robert J. Smuland
2015 El Rancho Lane
Rockford, IL 61107
Dear Bob:
The purpose of this letter agreement is to set forth terms
and conditions under which your employment with Sundstrand
Corporation (the "Company") has terminated effective May 6, 1996
and you will resign as a director of the Company and all officer,
directorships and other positions you hold with its subsidiaries
and affiliates (collectively, with the Company, the "Companies")
as of June 7, 1996 (the "Resignation Date"). Your signing below
will indicate your agreement with the provisions of this letter
agreement, which supersedes all prior negotiations,
understandings and agreements and constitutes the entire
agreement between the Company and you, with both parties
intending to be legally bound and acknowledging that
modifications hereto may be made only in writing.
Concurrent with your execution and delivery of this letter
agreement, you will be paid $36,537.76, equivalent to the amount
of your salary from May 7 through May 31, 1996. In addition, (i)
concurrent with your execution and delivery of this letter
agreement you will receive a lump sum payment of $825,000,
comprised of one year and three months of salary plus a bonus for
all of 1996 at the target level of $200,000, and (ii) the amount
of $3,532,714.29, together with interest at the rate of 4% per
annum to you, or in the event of your prior death, to your
estate, will be paid as follows: your purchase price of $21,000
for your restricted stock immediately with the remainder paid in
two equal annual installments, the first installment on June 7,
1997, and the second installment on June 7, 1998; provided that
if at any time prior to receipt of an installment you have
materially breached any of the terms of this letter agreement,
you shall not be entitled to any further installment payments;
and provided further that you shall be entitled to notice of any
breach and offered 30 days in which to cure said breach. If you
fail to cure said breach within said 30 days, your remaining
installments shall be forfeited. You will not receive any
payment from the Officer Incentive Compensation Plan for the year<PAGE>
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Mr. Robert J. Smuland
June 7, 1996
Page 2
1996 or, except as expressly provided herein, under any incentive
or bonus plan, retirement plan, welfare benefit plan or other
benefit plan, program or arrangement of the Companies. Provided,
however, any compensation previously deferred by you shall be
payable in accordance with the terms of the deferral, which terms
with respect to your deferred compensation shall not be
changeable by the Company.
Your execution of this letter agreement will acknowledge your
election to retire effective June 1, 1996, during the early
retirement incentive announced April 22, 1996, and to receive
your entire retirement benefit in the form of a lump sum. Your
total benefit under the Sundstrand Corporation Retirement Plan-Aerospace,
the Sundstrand Corporation Supplemental Retirement
Plan and the supplemental pension promise made to you when
initially hired is $2,034,259.41 and will be paid to you within
five business days of your and your wife's signing the applicable
retirement application and tax notices, provided that such period
is subject to extension if you elect to exercise your right,
hereby granted, to verify this pension calculation within ten
days of your execution and delivery of this letter.
You presently hold 96,000 shares of restricted stock under
the 1982 Restricted Stock Plan, the 1989 Restricted Stock Plan
and the Stock Incentive Plan which will not be vested by the
Resignation Date (i.e., the Period of Restriction under these
plans will not have ended) and, with respect to the restricted
stock mentioned above, on the Resignation Date you will sell and
the Company will repurchase such 96,000 shares for the price
which you paid for them. In addition, you presently hold options
to purchase 86,250 shares of the common stock of the Company
under the Stock Incentive Plan of which 23,124 will already be
vested as of the Resignation Date. The Compensation Committee of
the Board of Directors of the Company has determined, pursuant to
Section 6.8(b) of that Plan and conditioned upon your execution
and effectiveness of this letter agreement, that all of the
nonvested options will vest as of June 7, 1996, and the exercise
period for such newly vested options will lapse one year after
the Resignation Date, i.e. June 7, 1997. The 23,124 previously
vested options will continue to be exercisable until their normal
expiration date.
Following the Resignation Date, the Company will provide you
and your spouse with health care coverage equivalent to that which
is provided under the Company's retiree medical plan for persons
who retire from your location on June 7, 1996. The retiree medical
plan differs from your existing coverage in several respects,
including non-coverage of dental and vision expenses, and is
subject to change, including changes in the premiums and co-payments
you will be required to pay (additional information is
available from the Sundstrand Aerospace Employee Benefits
Administrator). You should be aware that the Company will be
obligated by law to send you a COBRA notice regarding<PAGE>
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Mr. Robert J. Smuland
June 7, 1996
Page 3
continuation of your current medical plan. Please be advised that
if you elect such COBRA continuation, the arrangement set forth
above to provide you with health care coverage equivalent to that
provided under the Company's retiree medical plan will be
superseded, and your medical coverage will be limited to that made
available under the COBRA election.
You acknowledge that the payment of taxes with respect to
any payments or benefits provided by the Company is your sole
responsibility, whether or not income taxes are withheld by the
Company, and you agree to hold the Company harmless from any
obligation in connection therewith, including interest and
penalties.
You acknowledge that you have been a senior executive
officer of the Company and (i) are privy to and have knowledge of
trade secrets and other Confidential Information (defined below),
(ii) have developed long term personal relationships with many of
the Companies' customers as a result of your employment with the
Company, and (iii) have occupied a position of trust and confidence
with respect to the Companies' customers and Confidential
Information. For purposes of this letter agreement, "Confidential
Information" shall mean trade secrets and confidential or
proprietary information regarding designs, inventions, existing and
proposed new products, processes, techniques, testing and servicing
procedures, know how, programs, equipment, prototypes, costs,
margins and pricing structures, business plans, projections, market
analyses and marketing plans, sales figures and customer
relationships, customer lists, confidential manufacturing and
financial data and any other information regarding the Companies
not generally known or a matter of public knowledge or available
from other sources without restrictions and not bound to any
obligation of confidentiality to the Company. You also acknowledge
that the Companies conduct their business worldwide and that your
duties and responsibilities have been worldwide.
You agree that during the period beginning on the date
hereof and ending two years from the Resignation Date you will not
directly or indirectly influence or attempt to influence any of the
Companies' customers or prospective customers in a manner to divert
or attempt to divert business away from the Companies. In addition,
you agree that for the period aforestated you will not own, manage,
operate, participate in, perform services for or otherwise carry
on, assist or be connected with any business engaged in the design,
development, manufacture and/or sale of products or services
competitive with any of the present products or services of the
Companies, without the prior written consent of the Company's Chief
Executive Officer, which consent will not be unreasonably withheld.
You agree that from and after the date hereof you will not,
without the written consent of the Company's Chief Executive
Officer, disclose to others any trade secrets or other<PAGE>
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Mr. Robert J. Smuland
June 7, 1996
Page 4
Confidential Information of which you have knowledge. The
foregoing notwithstanding, you agree at all times to comply with
the terms and conditions of that certain "Employee Patent and
Confidential Information Agreement" executed by you on January 9,
1989. You also agree to immediately turn over to the Company all
copies of documents and other written, printed or graphic matter
and computer materials in your possession or control that relate to
the Companies' business.
You agree not to divulge or to disclose, without prior
written permission from the Company's Chief Executive Officer, at
any time in the future any information concerning the terms of this
letter agreement unless required by court process or order of court
or otherwise as required by law. In view of the positions you held
with the Companies, you agree to favorably promote the Companies,
their management and businesses in your dealings with third parties
and, to that end, you further agree not to engage in any conduct
harmful to the Companies or their employees or businesses and not
to publish or otherwise make any statement which is critical of the
Companies, their employees or their businesses or products. The
Company agrees to direct its officers elected by its Board of
Directors not to make disparaging remarks about you.
You hereby unconditionally release and forever discharge the
Companies and their divisions and their directors, officers,
employees and agents, and their respective predecessors,
successors, heirs, personal representatives and assigns, from any
and all actions, claims, rights, lawsuits, damages and expenses
(including attorneys' fees) of any kind, known or unknown, fixed or
contingent, liquidated or unliquidated, in law or in equity, and
whether arising from tort statute or tort, which you or your heirs
or personal representatives now or in the future may have, or have
ever had, arising from your employment and other relationships with
the Companies. This includes a waiver of any claim you may have
under local, state or federal law, including but not limited to the
Illinois Human Rights Law, the Civil Rights Act of 1964, the
Employee Retirement Income Security Act, the Americans with
Disabilities Act, and the Age Discrimination in Employment Act of
1967, as amended by the Older Workers Benefit Protection Act
("ADEA"), in each case as amended, and the Illinois doctrines of
defamation, libel, slander, invasion of privacy, intentional
infliction of emotional distress, interference with contractual
relations, retaliatory discharge, employment contracts, wrongful
discharge, implied contracts or implied covenants of good faith,
fair dealing, any other statute, authority or law and all other
civil rights, human rights and anti-discrimination statutes, codes,
executive orders, regulations, rules, and ordinances. You agree
not to sue the Company or any of the other released entities or
persons with respect to claims covered by the foregoing release.
By signing below, you acknowledge your understanding that
conduct contrary to the provisions of this letter agreement on<PAGE>
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Mr. Robert J. Smuland
June 7, 1996
Page 5
your part will constitute a breach of this letter agreement by you
which is likely to cause irreparable harm to the Company.
Therefore, you hereby acknowledge and agree that, in the event of a
breach of this letter agreement by you, damages constitute an
inadequate remedy at law and that the Company shall be entitled to
specific performance of the terms of this letter agreement,
attorneys fees and/or injunctive relief. This letter agreement
shall be construed in accordance with the laws of the State of
Illinois (other than its conflicts of laws principles) applicable
to contracts made and to be performed entirely within Illinois, and
you and the Company agree that Illinois shall have exclusive
personal jurisdiction over both parties in any lawsuit with respect
to this letter agreement or your employment and other relationships
with the Companies, and venue for any such suit shall lie in any
state or federal court in the City of Rockford, Illinois.
You acknowledge and agree that you would not otherwise be
entitled to receive from the Company the consideration set forth in
the second, third and fourth paragraphs of this letter agreement
but for the agreement of the Company herein to provide such
consideration. You also acknowledge and agree that this letter
agreement is not in connection with an exit incentive, early
retirement, or other employment termination program offered to a
group or class of employees. You further acknowledge and agree
that you are not resigning from the Board of Directors of the
Company because of a disagreement with the Company on any matter
relating to the Company's operations, policies or practices.
As to your release and waiver of rights under all Age
Discrimination in Employment Acts, you acknowledge that you are
hereby advised to consult with an attorney prior to executing this
release and have been given a period of 21 days within which to
consider its terms. You further acknowledge being informed that
for a period of 7 days following your execution of this letter
agreement, you have the right to revoke said document and that it
shall not become effective or enforceable until such revocation
period has expired.
Very truly yours,
SUNDSTRAND CORPORATION
/s/ Richard M. Schilling
Richard M. Schilling
Vice President and General
Counsel and Secretary
I have read and agree to the terms and conditions stated above.
Date: June 10, 1996 /s/ Robert J. Smuland
____________________ _________________________
Robert J. Smuland
