<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 March 31, 1996
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 April 24, 1996
______________________________________ ________________________________
Common Stock, par value $.50 per share 61,456,980<PAGE>
<PAGE> 2
SUNDSTRAND CORPORATION
FORM 10-Q
For the Quarter Ended March 31, 1996
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 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
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 Ended
March 31,
------------------
(Amounts in millions except per share data) 1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 368 $ 346
Costs, expenses, and other income:
Costs of products sold 241 226
Marketing and administration 79 75
Restructuring charge - 58
Interest expense 7 9
Interest income (1) (1)
Other, net - 1
------- -------
326 368
------- -------
Earnings (loss) before income taxes 42 (22)
Less income taxes 16 (4)
------- -------
Net earnings (loss) $ 26 $ (18)
======= =======
Weighted-average number of common shares outstanding 61.6 63.3
Earnings (loss) per share $ .42 $ (.29)
======= =======
Cash dividends per common share $ .17 $ .15
</TABLE>
3<PAGE>
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<TABLE>
Sundstrand Corporation and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
<CAPTION> Three Months Ended
March 31,
-----------------
(Amounts in millions) 1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
Cash flow from operating activities:
Net earnings (loss) $ 26 $ (18)
Adjustments to reconcile net earnings (loss) to net
cash provided by operating activities:
Depreciation 15 16
Amortization 3 4
Deferred income taxes 4 (20)
Change in operating assets and liabilities excluding
the effects of acquisitions and divestitures:
Accounts receivable - 4
Inventories (11) (27)
Other assets - (4)
Accounts payable (4) 5
Accrued expenses 18 84
Other (1) (3)
------- -------
Total adjustments 24 59
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 50 41
------- -------
Cash flow from investing activities:
Cash paid for property, plant, and equipment (16) (11)
Proceeds from sale of assets 1 1
Investment in IRB trust 2 (6)
Investment in equity companies - (1)
------- -------
NET CASH USED FOR INVESTING ACTIVITIES (13) (17)
------- -------
Cash flow from financing activities:
Net repayments of borrowings supported by
lines of credit (48) (23)
Issuance of long-term debt - 8
Principal payments on long-term debt - (3)
Proceeds from stock options exercised 1 2
Purchase of treasury stock (10) -
Dividends paid (11) (10)
------- -------
NET CASH USED FOR FINANCING ACTIVITIES (68) (26)
------- -------
Effect of exchange rate changes on cash 1 (1)
------- -------
Decrease in cash and cash equivalents (30) (3)
Cash and cash equivalents at January 1 75 66
------- -------
CASH AND CASH EQUIVALENTS AT MARCH 31 $ 45 $ 63
======= =======
Supplemental cash flow information:
Interest paid $ 2 $ 4
Income taxes paid $ 3 $ 6
</TABLE>
4<PAGE>
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<TABLE>
Sundstrand Corporation and Subsidiaries
Condensed Consolidated Balance Sheet (Unaudited)
<CAPTION>
March 31, December 31,
(Amounts in millions) 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 45 $ 75
Accounts receivable, net 281 281
Inventories, net of progress payments 340 330
Deferred income taxes 49 55
Other current assets 20 20
------- -------
Total current assets 735 761
Property, Plant, and Equipment, net 445 449
Intangible Assets, net 266 266
Deferred Income Taxes 77 75
Other Assets 42 42
------- -------
$ 1,565 $ 1,593
======= =======
Liabilities and Shareholders' Equity
Current Liabilities
Notes payable $ 120 $ 168
Long-term debt due within one year 7 7
Accounts payable 99 102
Accrued salaries, wages, and commissions 29 24
Accrued postretirement benefits other than pensions 17 17
Restructuring liability 25 27
Other accrued liabilities 101 93
------- -------
Total current liabilities 398 438
Long-Term Debt 221 221
Accrued Postretirement Benefits Other Than Pensions 364 363
Other Liabilities 94 90
Shareholders' Equity
Common stock, at par value 38 38
Other shareholders' equity 450 443
------- -------
488 481
------- -------
$ 1,565 $ 1,593
======= =======
</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 Consolidated Financial Statements
(Unaudited)
ACCOUNTING POLICIES
The financial statements should be read in conjunction with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995.
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 March 31, 1996, and December 31, 1995, were:
<CAPTION>
March 31, December 31,
(Amounts in millions) 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 52 $ 51
Work in process 128 118
Finished goods and parts 180 179
------- -------
360 348
Less progress payments 20 18
------- -------
$ 340 $ 330
======= =======
Prior to the application of progress payments, the inventories shown above
included costs related to long-term contracts of $39 million and $52
million, at March 31, 1996, and December 31, 1995, respectively.
</TABLE>
STOCK SPLIT
On February 20, 1996, the Registrant's Board of Directors authorized a
two-for-one stock split payable as a 100 percent stock dividend which was
distributed on March 19, 1996, to shareholders of record on March 5, 1996.
Shareholders' equity has been restated to give retroactive recognition to
the stock split in prior periods by reclassifying from retained earnings to
common stock the par value of the additional shares arising from the split.
In addition, all references to the number of shares and per share amounts
of the Registrant's common stock have been restated to reflect the split.
6<PAGE>
<PAGE> 7
RESTRUCTURING
During 1995, the Registrant's Board of Directors approved a restructuring
plan which resulted in a pretax charge of $58 million. The charge was
taken to reduce excess manufacturing capacity caused by reductions in
manufacturing volume and increases in manufacturing productivity, and to
write down the assets of the Industrial segment's Spectronic Instruments
business (Spectronic) and the Aerospace segment's Advanced Power Technology
product line (APT) in anticipation of their divestiture. The charge
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 of the Lima
facility is expected to be completed in mid-1996. The disposition of the
Lima facility is expected to be completed by mid-1997 and the sales of
Spectronic and a majority interest in APT were completed in the third
quarter of 1995. Since the restructuring charge was recorded,
approximately $2 million has been paid and charged against the
restructuring liability, including costs to terminate 204 employees.
Additionally, during the first quarter approximately $5 million was
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
CONDITIONS AND RESULTS OF OPERATIONS
The financial information for the quarter ended March 31, 1996, as
compared with the financial information for the quarter ended March 31,
1995, and the balance sheet at December 31, 1995, 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, 1995, and the financial data
as presented in Item 1 above.
RESULTS OF OPERATIONS
Sales in the first quarter of 1996 increased to $368 million from $346
million in the first quarter of 1995. The majority of this increase
was in the Aerospace segment where sales increased $20 million to $177
million in the first quarter of 1996 from $157 million in the first
quarter of 1995. Industrial segment sales were $191 million in the
first quarter of 1996, which was flat compared with first quarter 1995
sales of $189 million. Excluding sales from the divested Spectronic
Instruments business (Spectronic) and the Advanced Power Technology
product line (APT), total first quarter 1996 sales increased by 11
percent compared with the first quarter of 1995.
Net earnings in the first quarter of 1996 were $26 million, or $.42 per
share, compared with a net loss of $18 million, or $.29 per share, in
the first quarter of 1995. Excluding the $58 million pretax restructuring
charge taken in the first quarter of 1995 and related period costs incurred
in the first quarter of 1996, net earnings increased to $29 million, or
$.47 per share, in the first quarter of 1996, compared with $22 million,
or $.35 per share, in the first quarter of 1995. This increase was
attributable primarily to higher sales, a more profitable sales mix, and
the effects of ongoing cost reductions.
STOCK SPLIT
On February 20, 1996, the Registrant's Board of Directors authorized a
two-for-one stock split payable as a 100 percent stock dividend which
was distributed on March 19, 1996, to shareholders of record on March 5,
1996. Shareholders' equity has been restated to give retroactive
recognition to the stock split in prior periods by reclassifying from
retained earnings to common stock the par value of the additional
shares arising from the split. In addition, all references to the
number of shares and per share amounts of the Registrant's common
stock have been restated to reflect the split.
ORDERS
Unfilled orders totaled $927 million at March 31, 1996, down $4 million
from $931 million at December 31, 1995. Incoming orders of $363 million
in the first quarter of 1996, were down $204 million compared with
incoming orders of $567 million in the first quarter of 1995. The
decrease in incoming orders was due primarily to unusually strong first
quarter 1995 orders which included a $172 million long-term contract
for the propulsion system for the United Kingdom's Royal Navy Spearfish
heavyweight torpedo program. Also contributing to the decrease were
orders in the first quarter of 1995 related to Spectronic and APT which,
as previously discussed, were divested.
8<PAGE>
<PAGE> 9
AEROSPACE OVERVIEW
First quarter 1996 sales for ongoing businesses in the Aerospace segment
were up 16 percent compared with the same period in 1995, with increases
in commercial sales, particularly in the aftermarket, and flat military
sales. Operating profit, excluding restructuring costs, increased by
$12 million on the strength of the higher commercial volume, resulting
in an operating profit margin of 15.3 percent of sales, compared with
9.6 percent in the first quarter of 1995.
INDUSTRIAL OVERVIEW
Industrial segment sales for ongoing businesses increased by 6 percent
for the first quarter of 1996 compared with the same period in 1995.
Operating profit before restructuring costs for the first quarter fell
by 12 percent, yielding an operating profit margin of 15.2 percent
compared with 17.5 percent in the first quarter of 1995. The decline
in operating profit was primarily a result of weakness at Sullair Europe.
Total Industrial orders for ongoing businesses in the first quarter
were down by 6 percent compared with the same period in 1995.
LIQUIDITY & CAPITAL RESOURCES
Working capital increased to $337 million at March 31, 1996, compared with
$323 million at December 31, 1995. Lower notes payable and higher
inventories partially offset by lower cash and cash equivalents were
primarily responsible for the increase. Available cash and a portion of
current period earnings were used to reduce notes payable while the
increase in inventories was due primarily to increased sales activity.
Net cash provided by operating activities increased to $50 million for
the first quarter of 1996 from $41 million for the first quarter of 1995.
A decrease in the amount of cash used to build inventories and higher
net earnings, excluding the first quarter 1995 restructuring charge, were
primarily responsible for the increase. Fluctuations in the cash flow
related to net earnings (loss), deferred income taxes, and accrued
expenses were due primarily to the 1995 restructuring charge. However,
net cash used for restructuring activities was approximately $2 million
in the first quarter of 1996.
In the first quarter of 1996, the Registrant used $13 million for investing
activities primarily for the purchase of fixed assets. Cash used for
financing activities totaled $68 million in the first quarter of 1996
and was used primarily to repay notes payable, repurchase common stock,
and pay dividends. In the quarter ended March 31, 1995, the Registrant
used $17 million of cash for investing activities primarily for the
purchase of fixed assets and for the formation of an industrial revenue
bond (IRB) trust related to capital improvements at the Registrant's
Auburn, Alabama, facility. Net cash used for financing activities was
$26 million in the first three months of 1995 and consisted primarily
of cash used to reduce commercial paper borrowings and to pay dividends
partially offset by the issuance of the Auburn, Alabama, IRB.
The Registrant repurchased approximately 276,000 shares of its common
stock in the first quarter of 1996 and an additional 10,000 shares in
April. As of March 31, 1996, the Registrant had repurchased approximately
12 million shares of the 20 million shares authorized for repurchase by
the Registrant's Board of Directors. The Registrant plans to continue
to repurchase stock on an opportunistic basis.
9<PAGE>
<PAGE> 10
On March 31, 1996, the Registrant's ratio of total debt to total capital
was 41.6 percent compared with 45.2 percent at December 31, 1995.
On April 16, 1996, the Registrant's Board of Directors declared a
quarterly cash dividend of $.17 per share payable on June 18, 1996,
to holders of record on June 4, 1996.
OUTLOOK
The following forward-looking statements are subject to market risks
and opportunities that could have a material impact on actual results,
as set forth in the Registrant's annual report on Form 10-K filed with
the Securities and Exchange Commission.
The Registrant continues to expect 1996 sales of its ongoing businesses
to improve by 5 percent to 10 percent, which should generate earnings
of between $2.25 and $2.40 per share before restructuring costs and
any additional share repurchases. Restructuring period costs are
projected to be $5 million in the second quarter, $2 million in the
third quarter, and $1 million in the fourth quarter. Partially offsetting
these period costs are a $7 million curtailment gain projected for the
second quarter and an approximate $1 million settlement gain projected
for the fourth quarter.
In the Aerospace segment for 1996, total commercial OEM sales had been
projected to grow by 10 percent to 20 percent, but now are projected to
grow by about 5 percent reflecting the loss of sales as a result of
Fokker's bankruptcy. The Registrant's commercial OEM sales, excluding
the 1995 sales of APT, are projected to grow between 10 percent and
15 percent The commercial aftermarket business is projected to grow
between 5 percent and 10 percent from the level achieved in 1995.
Military sales are expected to increase marginally compared with 1995.
Total sales for ongoing Aerospace businesses are expected to rise by
5 percent to 10 percent during 1996, and should generate sustained
improvement in Aerospace operating profit. For the full year, the
Registrant now expects Industrial sales to grow by about 5 percent
and Industrial operating profit margins to again exceed 17 percent.
10<PAGE>
<PAGE> 11
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, 1995. 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 resolution adopted by the Board of
Directors of Registrant on April 16, 1996,
amending Registrant's By-laws, effective May 1,
1996.
(b) Registrant's By-laws, including all amendments as
effective May 1, 1996.
(11) Statement Re Computation of Per Share Earnings
(a) Computation of Fully Diluted Earnings Per
Share (Unaudited) for the quarters ended
March 31, 1996 and 1995.
(27) Financial Data Schedule
(b) Reports on Form 8-K.
None
11<PAGE>
<PAGE> 12
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: May 1, 1996 /s/ Richard M. Schilling
-----------------------------
Richard M. Schilling
Vice President and General
Counsel and Secretary
Date: May 1, 1996 /s/ DeWayne J. Fellows
-----------------------------
DeWayne J. Fellows
Vice President and Controller
12
<PAGE>
Exhibit (3)(a)
RESOLVED, by the Board of Directors of Sundstrand Corporation,
that the By-laws of the Corporation be, and they hereby are, amended
effective May 1, 1996, as follows:
1. The first sentence of Section 4.1 is amended to delete
the words "an Executive Vice President for Special Projects;"
after the word "Industrial;".
2. Section 4.10 is deleted in its entirety.
3. Sections 4.11 through 4.16 are renumbered as Sections 4.10
through 4.15, respectively.
4. The first sentence of renumbered Section 4.10 is amended by
adding the words "and environmental" before the word "matters"
and is further amended by deleting the word "staff" and
inserting in the place thereof the words "and environmental
affairs staffs".
<PAGE>
Exhibit (3)(b)
BY-LAWS
OF
SUNDSTRAND CORPORATION
(A Delaware Corporation)
Effective May 1, 1996
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; 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. 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 and
environmental matters involving the Corporation and shall direct
the Corporation's legal and environmental affairs staffs. 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 President 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 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 4.13. 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 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 4.14. 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 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 canceled, 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>
<TABLE>
Exhibit (11)(a)
Computation of Fully Diluted Earnings Per Share (Unaudited)
Quarter Ended
March 31,
--------------------
(Amounts in millions except per share data) 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
EARNINGS
Net earnings (loss) $ 26 $ (18)
======= =======
_____________________________________________________________________________
SHARES
Weighted-average number of common shares outstanding 61.6 63.3
Additional shares assuming conversion of stock options 0.5 0.2
------- -------
Pro forma shares 62.1 63.5
======= =======
_____________________________________________________________________________
FULLY DILUTED EARNINGS (LOSS) PER SHARE
Net earnings (loss) $ .42 $ (.29)
======= =======
</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
MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 45
<SECURITIES> 0
<RECEIVABLES> 281
<ALLOWANCES> 0
<INVENTORY> 340
<CURRENT-ASSETS> 735
<PP&E> 445
<DEPRECIATION> 0
<TOTAL-ASSETS> 1565
<CURRENT-LIABILITIES> 398
<BONDS> 221
<COMMON> 38
0
0
<OTHER-SE> 450
<TOTAL-LIABILITY-AND-EQUITY> 1565
<SALES> 368
<TOTAL-REVENUES> 368
<CGS> 241
<TOTAL-COSTS> 320
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7
<INCOME-PRETAX> 42
<INCOME-TAX> 16
<INCOME-CONTINUING> 26
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26
<EPS-PRIMARY> .42
<EPS-DILUTED> 0
</TABLE>
