-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L7w2/bhX2sdXGdByyIDv7TMCHO/k5Fh/qWpB8W9FbcNV9EqNJw0Zc6EQngw+/F3p i+D/B9zkR5/m99Zhm/JDnA== 0000040834-97-000008.txt : 19970424 0000040834-97-000008.hdr.sgml : 19970424 ACCESSION NUMBER: 0000040834-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970423 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL SIGNAL CORP CENTRAL INDEX KEY: 0000040834 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 160445660 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00996 FILM NUMBER: 97585895 BUSINESS ADDRESS: STREET 1: ONE HIGH RIDGE PARK CITY: STAMFORD STATE: CT ZIP: 06904 BUSINESS PHONE: 2033578800 MAIL ADDRESS: STREET 1: P O BOX 10010 CITY: STAMFORD STATE: CT ZIP: 06904 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL RAILWAY SIGNAL CO DATE OF NAME CHANGE: 19710926 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1997 Commission file number 1-996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 GENERAL SIGNAL CORPORATION (Exact name of registrant as specified in its charter) New York 16-0445660 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) High Ridge Park, Box 10010, Stamford, Connecticut 06904-2010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (203) 329-4100 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. X (Yes) (No) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $1.00 50,203,552 (Class) (Outstanding at April 17, 1997) GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES INDEX Page No. PART I - FINANCIAL INFORMATION: Statement of Earnings - Three Months Ended March 31, 1997 and 1996 3 Balance Sheet - As of March 31, 1997 and December 31, 1996 4 Condensed Statement of Cash Flow - Three Months Ended March 31, 1997 and 1996 6 Notes to Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II - OTHER INFORMATION: 14 PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Statement of Earnings (In millions, except per-share data) (Unaudited) Three Months Ended March 31, 1997 1996 Net sales $505.6 $481.7 -------- ------- Cost of sales 357.3 351.4 Selling, general and administrative expenses 104.4 102.0 Gain on disposition - - (20.8) -------- --------- 461.7 432.6 -------- --------- Operating earnings 43.9 49.1 Interest expense, net 3.4 6.8 -------- --------- Earnings before income taxes 40.5 42.3 -------- --------- Income taxes 16.2 16.9 -------- --------- Net earnings $24.3 $25.4 ======== ========= Net earnings per share $0.47 $0.51 ======== ========= Dividends declared per share $0.255 $0.24 ======== ========= Average shares outstanding 52.2 49.5 ======== ========= See accompanying notes to financial statements. GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Balance Sheet (In millions) (Unaudited) (Audited) March 31, December 31, Assets 1997 1996 Current assets: Cash and cash equivalents $ 40.0 $ 17.7 Accounts receivable, net 352.8 353.0 Inventories, net 247.1 240.6 Prepaid expenses and other current assets 23.7 24.7 Deferred income taxes 54.4 55.9 ------- ------- Total current assets 718.0 691.9 Property, plant and equipment, net of accumulated depreciation and amortization 305.3 310.0 Intangibles, net of accumulated amortization 372.5 381.3 Other assets 170.0 167.8 ------- ------- Total assets $1,565.8 $1,551.0 ========= ========= See accompanying notes to financial statements. GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Balance Sheet - Continued (In millions) (Unaudited) (Audited) March 31, December 31, Liabilities and Shareholders' Equity 1997 1996 Current liabilities: Short-term borrowings and current maturities of long-term debt $ 8.4 $ 5.6 Accounts payable 189.8 187.3 Accrued expenses 198.0 214.6 Income taxes 26.4 31.7 -------- ------- Total current liabilities 422.6 439.2 -------- ------- Long-term debt, less current maturities 241.8 201.3 Accrued post-retirement and post-employment obligations 130.7 133.2 Deferred income taxes 20.7 17.3 Other liabilities 18.2 16.2 -------- ------- Total long-term liabilities 411.4 368.0 -------- ------- Shareholders' equity: Common stock 78.4 78.2 Additional paid-in capital 359.4 337.1 Retained earnings 678.5 667.4 Cumulative translation adjustments (5.5) (1.4) Common stock in treasury (379.0) (337.5) -------- -------- Total shareholders' equity 731.8 743.8 -------- -------- Total liabilities and shareholders' equity $1,565.8 $1,551.0 ========= ========= See accompanying notes to financial statements. GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Statement of Cash Flow (In millions) (Unaudited) Three Months Ended March 31, 1997 1996 CASH FLOW FROM OPERATING ACTIVITIES: Net earnings $ 24.3 $ 25.4 Adjustments to reconcile net earnings to net cash from operating activities: Gain on disposition - - (20.8) Asset write down and other charges - - 19.7 Deferred income taxes 5.5 4.9 Depreciation and amortization 17.7 17.4 Pension credits (3.6) (2.7) Other, net (0.6) 3.9 Changes in assets and liabilities, net of effects from acquisitions and divestitures (23.4) (0.7) ------- ------- Net cash from operating activities 19.9 47.1 ------- ------- CASH FLOW FROM INVESTING ACTIVITIES: Divestitures 2.4 71.8 Capital expenditures (11.5) (11.4) Other, net 2.5 0.6 Net cash from investing activities (6.6) 61.0 -------- ------- CASH FLOW FROM FINANCING ACTIVITIES: Net change in short and long-term borrowings 82.6 (83.5) Dividends paid (13.6) (11.8) Issuance of common stock 7.2 3.0 Purchase of common stock (67.2) (0.9) -------- ------- Net cash from financing activities 9.0 (93.2) -------- ------- Net change in cash and cash equivalents 22.3 14.9 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 17.7 1.0 -------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 40.0 $ 15.9 ======== ========= See accompanying notes to financial statements. GENERAL SIGNAL CORPORATION AND CONSOLIDATED SUBSIDIARIES Notes to Financial Statements (Unaudited) 1. The accompanying unaudited financial statements reflect all adjustments (consisting of normal, recurring items) necessary for the fair presentation of results for these interim periods. These results are based upon generally accepted accounting principles consistently applied with those used in the preparation of the company's 1996 Annual Report on Form 10-K. 2. Certain reclassifications have been made to the 1996 financial statements to conform with the 1997 presentation. 3. Inventories March 31, December 31, 1997 1996 (In millions) Finished goods $ 76.1 $ 80.8 Work in process 70.4 63.2 Raw material and purchased parts 121.5 117.1 -------- -------- Total FIFO cost 268.0 261.1 Excess of FIFO cost over LIFO inventory value (20.9) (20.5) -------- --------- Net carrying value $ 247.1 $ 240.6 ======== ========= 4. Business Segment Information Three Months Ended March 31, 1997 1996 (In millions) Net sales: Process Controls $ 174.7 $ 173.1 Electrical Controls 236.0 222.6 Industrial Technology 94.9 86.0 -------- -------- $ 505.6 $ 481.7 ======== ======== Operating earnings: Process Controls $ 17.1 $ 38.5 a Electrical Controls 18.7 10.5 b Industrial Technology 18.3 7.2 c -------- -------- Total operating earnings before unallocated expenses and interest 54.1 56.2 Interest expense, net (3.4) (6.8) Unallocated expenses (10.2) (7.1) -------- --------- Earnings before income taxes $ 40.5 $ 42.3 ======== ========= a Includes a $20.8 gain on disposition of Kinney Vacuum and a charge of $4.0 for product warranty costs. b Includes an $11.1 charge related to plant closure costs, asset valuations and environmental costs. c Includes a $4.6 charge for asset valuations. 5. Property, Plant and Equipment March 31, December 31, 1997 1996 (In millions) Property, plant and equipment, $ 753.7 $ 747.3 at cost Accumulated depreciation and amortization (448.4) (437.3) ---------- -------- Property, plant and equipment, net $ 305.3 $ 310.0 ========== ======== 6. Capital Stock March 31, December 31, 1997 1996 (In millions) Common stock: Shares authorized 150.0 150.0 Shares issued 64.8 64.6 Treasury stock: Shares issued 13.8 13.2 7. Supplemental Information - Statement of Cash Flow Three Months Ended March 31, 1997 1996 (In millions) Cash paid for: Interest $ 3.9 $ 6.8 Income taxes $ 10.6 $ 4.7 The company had the following non-cash financing activity: Conversion of convertible debt into common stock $ 39.3 $ - - 8. Repurchase of Shares In December 1996, the Board of Directors approved a stock buy-back program of up to $100.0 million to offset any shares issued in relation to the call for the redemption of the 5.75 percent convertible subordinated notes. These shares are being purchased systematically in open market transactions. Through March 31, 1997, 1.7 million shares had been repurchased under the program. As of April 17, 1997, the program was completed with the total of 2.5 million shares repurchased for $100.0 million. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in millions, except per-share data) Results of Operations - First Quarter 1997 Compared With First Quarter 1996 1997 1996 Reported Reported Change Net sales $505.6 $481.7 5.0% Gross profit 148.3 130.3 13.8% Selling, general and administrative expenses 104.4 102.0 2.4% Operating earnings 43.9 49.1 (10.6%) Interest expense, net 3.4 6.8 (50.0%) Net earnings 24.3 25.4 (4.3%) Net earnings per share $0.47 $0.51 (7.8%) To facilitate a more meaningful comparison of the results of operations for the first quarter of 1997 with the same period in 1996, the following items reported in the first quarter 1996 net earnings should be excluded. Gain on disposition: In January 1996, the company disposed of Kinney Vacuum Company, a unit previously included in the Process Controls sector, for $29.0 and recorded a pre-tax gain of $20.8. Included in the gain was a LIFO liquidation of approximately $1.1 and transaction costs of approximately $0.5. Product warranty: In March 1996, the company extended warranty service to certain products sold by the Process Controls sector which were not covered by warranty. The company recorded $4.0 to cover the cost of such repairs. Through March 31, 1997, payments made against this reserve were $2.2. It is anticipated that the remaining amount will be expended in 1997. Capitalized software: The company reviews on an ongoing basis the carrying amount of company assets. As part of this review, in the first quarter of 1996, the future market potential of capitalized software in the Industrial Technology sector was determined to be impaired. Accordingly the company wrote off $4.6 of such software. Factory closure and other: As part of the company's ongoing review of operations, the company decided in March 1996 to close a factory in the Electrical Controls sector and provided $4.7 primarily for lease termination costs, asset write-downs and severance. In connection with this review, the company identified property, plant and equipment that will not be utilized in future operations, and, therefore, recorded a $4.4 charge to write-off the assets. Environmental: During the first quarter of 1996, the company changed its estimate of environmental costs to be incurred at one of its facilities in the Electrical Controls sector. The change in estimate of $2.0 was a result of additional information received about the method and extent of remediation required. The following table summarizes the results of operations for the first quarter of 1997 and 1996 excluding the items discussed above. 1997 1996 Reported Adjusted Change Net sales $505.6 $481.7 5.0% Gross profit 148.3 143.3 3.5% Margin percent 29.3% 29.7% Selling, general and administrative expenses 104.4 95.3 9.5% Percent of sales 20.6% 19.8% Operating earnings 43.9 48.0 (8.5%) Interest expense, net 3.4 6.8 (50.0%) Net earnings 24.3 24.7 (1.6%) Net earnings per share $0.47 $0.50 (6.0%) Net sales: Sales increased 5.0 percent over 1996 levels due to strong sales of electrical distributor and telecommunications products. International sales in 1997 represented approximately 23 percent of total net sales versus 22 percent in the same period of 1996. Both export and foreign sales increased approximately 10 percent, versus the same period last year, primarily as a result of improvements in international mixer and pump sales. Process Control sector sales were $174.7 in the first quarter of 1997 as compared to $173.1 in the same period in 1996. The small increase was primarily the result of strong international mixer sales and higher laboratory product sales. The increases were partially offset by lower sales volume of crystal growing furnaces as a result of a cyclical downturn in the semiconductor equipment market in late 1996 and continuing into 1997. Sales in the Electrical Controls sector increased 6.0 percent to $236.0 from $222.6, as compared to the same period last year. Sales increases were reported by five of the six units within the sector. The largest improvement was in the electrical construction materials market. These sales increases were partially offset by lower fire system sales. Industrial Technology sector sales increased 10.3 percent to $94.9 versus $86.0 in the same period in 1996. New networking product sales of the CD9000TM ESCON Director product as well as new application sales of an existing networking monitoring product were the primary reasons for the increase. Increased demand from North American automotive production also contributed to the growth. Gross profit: Gross profit as a percentage of sales decreased from 29.7 percent to 29.3 percent. The decrease was largely due to a shift to lower margin products, higher labor costs, new product development and new information systems costs. Selling, general and administrative expenses: Selling, general and administrative expenses as a percentage of sales increased in the first quarter from 19.8 percent in 1996 to 20.6 percent in 1997. This increase resulted from higher marketing, sales commissions and information systems costs. Included in selling, general and administrative expenses were pension credits of $3.6 in 1997 and $2.7 in 1996. Operating earnings: Operating earnings for the Process Controls sector decreased 21.2 percent to $17.1, versus $21.7 in the same period in 1996. The decline is primarily due to a shift in mix to lower margin products in the pump and coal feeder systems businesses, and lower volume in the crystal growing furnace business. 1996 operating earnings of the Process Controls sector included $0.5 of environmental insurance recoveries. Electrical Controls sector operating earnings decreased 13.4 percent to $18.7, versus $21.6 in the same period in 1996. The reduction was a result of higher manufacturing costs (primarily uninterruptible power systems and fire systems), new product development and information systems costs. Included in 1997 operating earnings is approximately $0.6 of pre-tax gain on the sale of a product line for approximately $2.4. 1996 operating earnings of the Electrical Controls sector included $0.9 of environmental insurance recoveries. Industrial Technology sector operating earnings increased 55.1 percent to $18.3 versus $11.8 in the same period in 1996. All units within this sector experienced higher operating earnings, reflecting the higher sales volume, a shift toward the higher margin CD9000TM ESCON Director product and productivity improvements in automotive product lines. Unallocated expenses increased to $10.2 in the first quarter of 1997 from $7.1 in the same period in 1996. This increase is primarily the result of higher expenses due to divested businesses and higher benefit cost accruals. Interest expense: Net interest expense decreased 50.0 percent to $3.4 due to the conversion of subordinated notes in late 1996 and early 1997 as well as lower average debt levels. Cash generated from operations and divestitures in 1996 was used to pay down debt incurred in connection with acquisitions made in 1995. Net earnings: Net earnings were $24.3 or $0.47 per share in 1997 compared to $24.7 or $0.50 per share in 1996. The company's effective tax rate was 40.0 percent in both 1997 and 1996. Financial Condition - March 31, 1997 Compared to December 31, 1996 The following summarizes the cash flow activity for the first three months of 1997 compared to the first three months of 1996. 1997 1996 Cash flow from operating activities $19.9 $47.1 Divestitures 2.4 71.8 Capital expenditures (11.5) (11.4) Other investing activities 2.5 0.6 Cash flow from investing activities (6.6) 61.0 Debt borrowings/(repayments) 82.6 (83.5) Dividends paid (13.6) (11.8) Purchase of common stock (67.2) (0.9) Issuance of common stock 7.2 3.0 Cash flow from financing activities 9.0 (93.2) Included in operating cash flow for 1997 and 1996 were expenditures of $2.0 and $9.3, respectively, related to previously divested operations and $1.7 and $2.0, respectively, for severance pay. Operating cash flow at March 31, 1997 decreased in comparison to first quarter 1996 primarily due to higher accounts receivable balances resulting from the higher sales volume and lower accrued expenses due to the utilization of disposition and restructuring accruals, as well as lower earnings. In December 1996, the company called for the redemption of its $100.0 5.75 percent convertible subordinated notes. As of December 31, 1996, notes with a face value of $57.4 had been converted into 1.5 million shares of the company's common stock. An additional $39.3 of notes was converted into 1.0 million shares of stock on January 2, 1997, while the remaining balance of the notes of $3.3 was redeemed for cash. Also in December 1996, the Board of Directors approved a stock buy-back program of up to $100.0 to offset the dilutive impact of shares issued in connection with the convertible notes redemption. On April 17, 1997, the company concluded the buy- back program with approximately 2.5 million shares repurchased. Total debt-to-total capitalization was 25.5 percent at March 31, 1997, up from 21.8 percent at year-end, due to higher long- term debt at the end of the first quarter. The debt level increased in the first quarter of 1997 in order to repurchase common shares under the stock buy-back program. The company is well positioned to finance future working capital requirements and capital expenditures through current earnings and available credit facilities. On April 7, 1997, the company sold $25.0 million 7.114 percent medium-term senior notes that are due on April 8, 2002. On April 18, 1997, the company sold an additional $25.0 million 7.00 percent medium-term senior notes that are due on October 18, 2000. The proceeds were used to pay down floating rate commercial paper. Accounting Policies In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share," which changes the methodology of calculating earnings per share. SFAS No. 128 requires the disclosure of diluted earnings per share regardless of its difference from basic earnings per share. The company plans to adopt SFAS No. 128 in December 1997. Early adoption is not permitted. Had the company adopted SFAS No. 128 as of March 31, 1997, the related per share disclosure for both basic and diluted earnings per share would have been $0.47 for the first quarter ended March 31, 1997 and $0.51 for the same period for 1996. Other Matters Since the company is a producer of capital goods and equipment, its results can vary with the relative strength of the economy. Demand for products in the Process Controls sector follows the demand for capital goods orders. The Electrical Controls sector depends upon several markets, principally the nonresidential construction and computer equipment industries. The Industrial Technology sector depends on several markets, primarily automotive, mass transportation, and telecommunications equipment. Mass transportation depends upon continued federal and local government spending, and telecommunications is dependent upon continued research and development and the continued success of new products. While no one marketplace or industry has a significant impact on the company's operations or results, the inherent pace of technological changes presents certain risks that the company monitors carefully. Success within all of the company's businesses is dependent upon the timely introduction and acceptance of new products. Forward-looking Statements The company may from time to time make projections concerning future operations and earnings. The company's forward-looking statements are based on the company's current expectations, which are subject to a number of risks and uncertainties that could materially affect or reduce such operations and earnings. In addition to the general factors identified in "Other Matters" above, the primary factors that could specifically affect the company's expectations include the failure of: (1) order rates increasing as expected, (2) productivity improvements meeting or exceeding budget, and (3) new products under development being produced and accepted as anticipated. PART II: OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Shareholders of the Registrant (the "Meeting") was held on April 17, 1997. (b) The Registrant solicited proxies for the Meeting pursuant to Regulation 14; there was no solicitation in opposition to management's nominees for directors as listed in the Proxy Statement, and all such nominees were elected. (c) The following describes the matters voted upon at the Meeting and sets forth the number of votes cast for, against or withheld and the number of abstentions as to each such matter: (i) Election of directors: Nominee For Withheld Van C. Campbell 42,613,046 299,844 Michael A. Carpenter 42,604,510 308,380 Robert D. Kennedy 42,613,867 299,023 The directors whose term of office as a director continued after the Meeting are Ursula F. Fairbairn, Ronald E. Ferguson, John R. Selby, H. Kent Bowen and Michael D. Lockhart. (ii) Approval of the General Signal Corporation 1997 Non- Employee Directors' Stock Option Plan: For Against Abstain 38,963,064 3,671,443 278,383 (iii) Authorization of appointment of Ernst & Young LLP as independent auditors for 1997: For Against Abstain 42,674,228 125,133 113,529 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: 3.2 By-laws of General Signal Corporation as amended through March 20, 1997. 10.1 General Signal Corporation Change in Control Severance Pay Plan as amended and restated October 17, 1996 and implemented by officer action April 14, 1997. 10.2 General Signal Corporation Benefit Equalization Plan as amended and restated October 17, 1996 and implemented by officer action dated April 14, 1997. 10.3 General Signal Corporation 1997 Non-Employee Directors' Stock Option Plan as approved by shareholders on April 17, 1997. 27.0 Financial Data Schedule (b) Reports on Form 8-K: The Registrant did not file any reports on Form 8-K during the quarter covered by this report. 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. GENERAL SIGNAL CORPORATION /s/ Raymond L. Arthur Raymond L. Arthur Vice President and Controller Chief Accounting Officer DATE: April 18, 1997 EX-3.2 2 GENERAL SIGNAL CORPORATION __________ BY-LAWS __________ As Amended Through March 20, 1997 ARTICLE I SHAREHOLDERS' MEETING SECTION 1. Annual Meeting: The Annual Meeting of the shareholders of this Corporation for the election of directors and the transaction of such other business as may properly come before such meeting shall be held each year on such date and at such time and place, whether within or without the State of New York, as shall be determined by the Board of Directors. SECTION 2. Special Meeting: A Special Meeting of the shareholders may be held at any time upon the call of the Board of Directors or the Chairman of the Board and shall be called by the Secretary at the written request of shareholders owning at least two-thirds of the outstanding shares of stock entitled to vote, which request shall specify the matters to be presented to such meeting. SECTION 3. Notice of Annual or Special Meeting: Written notice of the holding of each Annual or Special Meeting of the shareholders shall be given by the Secretary. Such notice shall state the place, date and hour of the meeting, and the purpose or purposes for which the meeting is called, and shall be signed by the Secretary, and shall indicate that it is being issued by or at the direction of the person or persons calling the meeting. A copy of such notice shall be mailed, postage prepaid, not less than ten nor more than fifty days before the date of the meeting, to each shareholder of record as of such record date, not less than ten nor more than fifty days before the date of the meeting, as may be fixed by the Board of Directors for determining the shareholders entitled to notice of, or to vote at, the meeting. Such notice shall be directed to the shareholder at his address as it appears on the record of shareholders, or, if he shall have filed with the Secretary a written request that notices to him be mailed to some other address, then directed to him at such other address. If, at any meeting, action is proposed to be taken which would, if taken, entitle certain shareholders to receive payment for their shares, the notice of such meeting shall include a statement of that purpose and to that effect. At any meeting of shareholders or any such adjourned meeting, only such business shall be conducted as shall have been properly brought before such meeting or any such adjourned meeting. To be properly brought before any meeting of shareholders or any such adjourned meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before such meeting or any such adjourned meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before such meeting or any such adjourned meeting by a shareholder. For business to be properly brought before any meeting of shareholders or any such adjourned meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than forty-five days nor more than sixty days prior to such meeting; provided, however, that in the event less than fifty-five days prior public disclosure of the date of such meeting is made to the shareholders or in the event the only public disclosure of the date of the meeting is written notice in accordance with this Article 1, Section 3, notice by such shareholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of such meeting was mailed or such public disclosure was made. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before such meeting (a) a brief description of the business desired to be brought before such meeting and the reasons for conducting such business at such meeting, (b) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business, (c) the class and number of shares of the securities of the Corporation which are beneficially owned by such shareholder, and (d) any material interest of such shareholder in such business. No business shall be conducted at any meeting of shareholders or any such adjourned meeting except in accordance with the procedures set forth in this Article 1, Section 3. In the event that a shareholder seeks to bring one or more matters before a meeting of shareholders or any such adjourned meeting, the Board of Directors shall establish a committee consisting of non-management directors for the purpose of reviewing compliance with this Article 1, Section 3; provided, however, that if the business to be brought before such meeting or any such adjourned meeting by a shareholder relates to the removal, replacement or election of one or more directors, the Secretary shall appoint two or more inspectors, neither of whom shall be an affiliate of the Corporation, to act in lieu of such committee to review compliance with this Article 1, Section 3. If the committee or the inspectors (as the case may be) shall determine that a shareholder has not complied with this Article 1, Section 3, the committee or the inspectors (as the case may be) shall direct the chairman of such meeting to declare to such meeting or any such adjourned meeting that such business was not properly brought before such meeting or any such adjourned meeting in accordance with the provisions of this Article 1, Section 3; and the chairman shall so declare to such meeting or any such adjourned meeting and any such business not properly brought before such meeting or any such adjourned meeting shall not be transacted. Only individuals who are nominated in accordance with the procedures set forth in this Article 1, Section 3, shall be eligible for election as directors. Nominations of individuals for election to the Board of Directors may be made at a meeting of shareholders or any such adjourned meeting by or at the direction of the board of Directors or by any shareholder of the Corporation entitled to vote for the election of directors at such meeting or any such adjourned meeting who complies with the notice procedures set forth in this Article 1, Section 3. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary. To be timely, a shareholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than forty-five days nor more than sixty days prior to such meeting; provided, however, that in the event less than fifty-five days prior public disclosure of the date of such meeting is made to the shareholders or in the event the only public disclosure of the date of the meeting is written notice in accordance with this Article 1, Section 3, notice by such shareholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of such meeting was mailed or such public disclosure was made. Such shareholder's notice shall set forth (a) as to each individual whom such shareholder proposes to nominate for election or re-election as director, (i) the name, age, business address and residence address of such individual, (ii) the principal occupation or employment of such individual, (iii) the class and number of shares, or the amount of any securities of the Corporation which are beneficially owned by such individual and (iv) any other information relating to such individual that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such individual's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the notice, (i) the name and address, as they appear on the Corporation's books, of such shareholder and (ii) the class and number of shares of the securities of the Corporation which are beneficially owned by such shareholder. At the request of the Board of Directors, any individual nominated by the Board of Directors for election as a director shall furnish to the Secretary that information required to be set forth in a shareholder's notice of nomination which pertains to the nominee. No individual shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Article 1, Section 3. In the event that a shareholder seeks to nominate one or more directors, the Secretary shall appoint two inspectors, neither of whom shall be an affiliate of the Corporation, to determine whether such shareholder has complied with this Article 1, Section 3. If the inspectors shall determine that such shareholder has not complied with this Article 1, Section 3, the inspector shall direct the chairman of such meeting or any such adjourned meeting to declare to such meeting or any such adjourned meeting that a nomination was not made in accordance with the prescribed procedures, and the chairman shall so declare to such meeting or any such adjourned meeting and the defective nomination shall be disregarded. SECTION 4. Presiding Officer: At all meetings of shareholders the Chairman of the Board shall preside, or in his absence, the Chairman of the Executive Committee, the President or any Vice President may preside. SECTION 5. Inspectors: Prior to each meeting of the shareholders, the Board of Directors may appoint two Inspectors of Election and two or more Alternate Inspectors, to serve at such meeting and any adjournment thereof. If any Inspector refuses to serve, or shall not be present at the meeting of the shareholders, the Alternate Inspectors shall act in the order of their appointment. SECTION 6. Voting and Method of: Except as otherwise provided in the Certificate of Incorporation, at all meetings of the shareholders, each shareholder entitled to vote shall be entitled to one vote for every share standing in his name on the record of shareholders, and all questions to be decided by the shareholders, except the question of election of directors and such other questions the manner of deciding which is specifically regulated by statute, shall be decided by a majority of the votes cast at the meeting in person or by proxy by the holders of shares entitled to vote thereon. All voting shall be viva-voce, except that any qualified voter may require a vote by ballot on any question to be decided. In case of a vote by ballot, each ballot shall state the name of the shareholder voting and the number, class and series (if any) of shares owned by him, and in addition, if such ballot be cast by a proxy, the name of the proxy shall be stated. SECTION 7. Quorum: Except as may be otherwise provided by law or by the Certificate of Incorporation, at all meetings of the shareholders, the holders of a majority of the shares entitled to vote thereat shall constitute a quorum for the transaction of any business. SECTION 8. Fiscal Year: The fiscal year of the Corporation shall close on the 31st day of December in each year. The officers of the Corporation shall prepare and cause to be submitted to the shareholders at the Annual Meeting a detailed statement showing the financial condition of the Corporation. ARTICLE II DIRECTORS SECTION 1. Election of Directors: The directors shall be classified with respect to their terms of office by dividing them into three classes. All classes shall be as nearly equal in number as possible, and no class shall include less than three directors. Subject to such limitations, the size of each class may be fixed by action of the shareholders or of the Board of Directors. At each Annual Meeting of Shareholders, directors to replace those whose terms expire at such Annual Meeting shall be elected to hold office until the expiration of the term of whatever class they are assigned to, provided that no director may be assigned to a class the term of which will expire later than the Annual Meeting next succeeding the director's attaining age 72. Notwithstanding the foregoing, Ralph E. Bailey, John P. Horgan and Roland W. Schmitt shall be permitted to be nominated for a one-year term at the 1996 Annual Meeting of Shareholders. Each director shall hold office until the expiration of the term for which he is elected, and until his successor has been elected and qualified, provided, however, that a director may be removed from office as a director, but only for cause, by action of the shareholders or of the Board of Directors. SECTION 2. Number of Directors: The number of the directors of the Corporation shall be not less than 7 nor more than 15 as shall be determined from time to time by the Board of Directors. SECTION 3. Newly Created Directorships and Vacancies: Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the Board for any reason may be filled by the vote of a majority of the directors then in office, although less than a quorum may exist. A director elected to fill a newly created directorship or a vacancy shall be elected to hold office until the next Annual Meeting of the shareholders, and (if he is to have a successor) until his successor has been elected and qualified. SECTION 4. Regular Meetings: Regular Meetings of the Board of Directors shall be held at such times and places as may be fixed by the Board of Directors provided that the Organization Meeting of the newly elected Board of Directors shall be held on the same day as the Annual Meeting of the shareholders, at which time the Executive Committee and other Committees of the Board and Officers shall be elected or appointed. Unless otherwise required by appropriate resolution of the Board of Directors, or by law, notice of any such meetings need not be given. SECTION 5. Special Meetings: Special Meetings of the Board of Directors shall be called by the Secretary upon the order of the Chairman of the Board, the President, or the Chairman of the Executive Committee, or upon the written request of five (5) directors. SECTION 6. Presiding Officer: At all meetings of the Board of Directors, the Chairman of the Board of Directors shall preside, or in his absence, the Chairman of the Executive Committee, the President or any Vice President who is a member thereof may preside. SECTION 7. Quorum: A majority of the directors then in office or half of such number when the number of directors then in office is even, but not less than one-third of the entire Board, shall constitute a quorum for the transaction of business at all meetings of the Board. SECTION 8. Notice: The Secretary shall mail to each director notice of any Special Meeting, or of any Regular Meeting, if required, at least two days before the meeting, or shall telegraph or telephone such notice not later than the day before such meeting. Each director shall file with the Secretary a designation of the address to which such notice to him shall be sent, and any such notice to him thereafter shall be addressed in accordance with his latest designation. SECTION 9. Designation of Executive and Other Committees: The Board of Directors shall by resolution adopted by a majority of the entire Board, designate an Executive Committee of not less than three of its members of whom the Chairman of the Board, the Chairman of the Executive Committee, and the President shall be ex officio members, and said Executive Committee shall have authority to exercise and shall exercise in the interim between the Regular and Special meetings of the Board of Directors all of the rights, powers and duties of the Board of Directors, except such as cannot be lawfully delegated. The Board of Directors may by resolution adopted by a majority of the entire Board, designate one or more directors as alternate members of the Executive Committee, who may replace any absent member or members of the Executive Committee, at any meeting thereof, when required to constitute a quorum. Meetings of the Executive Committee may be called by the Secretary upon order by the Chairman of the Executive Committee or in his absence by the Chairman of the Board, the President, or upon written request of two (2) members of the Executive Committee. At all meetings of the Executive Committee, the Chairman of the Executive Committee shall preside, or in his absence the Chairman of the Board or the President may preside. At all meetings of the Executive Committee, a majority of the full membership of the Executive Committee, including vacancies not filled or eliminated, shall constitute a quorum for the transaction of business. The Board of Directors may by resolution adopted by a majority of the entire Board, designate other Committees, each consisting of three or more directors, and delegate to them such powers and duties of the Board as may be lawfully delegated and determined to be appropriate by the Board. The Executive Committee and each other Committee designated pursuant to this Section, and each member or alternate member thereof, shall serve until the next Annual Meeting of the shareholders and at the pleasure of the Board of Directors. Vacancies in the Executive Committee or any other Committee, occurring for any reason, may by resolution adopted by a majority of the entire Board at any meeting of the Board of Directors, be filled or may be eliminated by reducing the number constituting the membership of such Committee, provided, however, that the membership of any Committee shall not be reduced to less than three. Notice of the time and place of any meeting of the Executive Committee shall be given in the manner provided in Section 8 of this Article for the giving of notice of meetings of the Board of Directors. Meetings of any other Committee designated pursuant to this Section 9 shall be held in such manner, and at such times and places, and upon such notice, if any, as shall be provided in the resolution of the Board creating such Committee. SECTION 10. Compensation: Each director who is not a full-time employee of the Corporation or of any consolidated subsidiary shall be paid such compensation for serving as a director as the Board of Directors may, from time to time, determine. Section 11. Action by Unanimous Written Consent: Any action required to be or permitted to be taken by the Board of Directors or any Committee thereof may be taken without a meeting if all members of the Board of Directors or the Committee consent in writing to the adoption of a resolution authorizing the action. The resolution and written consents thereto by the members of the Board of Directors or Committee shall be filed with the minutes of the proceedings of the Board of Directors or Committee. Section 12. Participation in Meetings by Means of Conference Telephone: Any one or more members of the Board of Directors or any Committee thereof may participate in a meeting of the Board of Directors or Committee by means of a conference telephone or similar communication equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such meeting. ARTICLE III OFFICERS SECTION 1. Executive Officers: The Officers of the Corporation shall consist of a Chairman of the Board of Directors, a President, a Vice President-Finance, one or more other Vice Presidents, one or more of whom may also be designated Executive Vice President or Senior Vice President, a Secretary, a Treasurer and a Controller, all of whom shall be elected annually by the Board at a meeting following the Annual Meeting of the shareholders. The Board may also elect one or more Assistant Treasurers and one or more Assistant Secretaries and such subordinate officers and agents of the Corporation as it may from time to time determine. The same person may hold two or more offices, except that the Chairman of the Board and President shall not hold the office of Secretary. SECTION 2. Duties of Chairman of the Board: The Chairman of the Board shall be a director and shall be chief executive officer of the Corporation and, subject to the direction of the Board, shall exercise general supervision over the business and affairs of the Corporation and shall perform such other duties as may be assigned to him from time to time by the Board. If the office of the President is not independently established, he shall perform all duties of that office. He shall preside at all meetings of the Board of Directors and shall also preside at all meetings of the shareholders of the Corporation. SECTION 3. Duties of President: The President shall be a director and shall be the chief operating officer of the Corporation and, subject to the direction of the Board of Directors and the Chairman of the Board, shall direct and supervise the business operations of the Corporation and shall perform such other duties as from time to time the Board of Directors may prescribe or the Chairman of the Board may assign to him. The office of the President will normally be vested in the Chairman of the Board, provided, however, that in the discretion of the Board of Directors, the position of President may be established independent of, but reporting to, the Chairman of the Board. SECTION 4. Duties of Vice President-Finance, and other Vice Presidents: The Vice President-Finance shall serve as principal financial officer of the Corporation and shall perform such other duties as shall from time to time be prescribed by the Board of Directors or assigned to him by the Chairman of the Board or by the President. Each other Vice President shall perform such duties as from time to time may be prescribed by the Board of Directors or assigned to him by the Chairman of the Board or the Officer to whom he reports. SECTION 5. Duties of Treasurer and Controller: The Treasurer shall have the care and custody of all the funds and securities of the Corporation and, in general, shall perform all the duties incident to the office of Treasurer including the appointment of depository and disbursement banks. The Controller shall have charge of the books of account of the Corporation and, in general, perform all the duties incident to the office of Controller. The Treasurer and the Controller shall also discharge such other duties as from time to time the Board of Directors may prescribe or the Chairman of the Board, the President, or the Vice President-Finance may assign. SECTION 6. Duties of Secretary: The Secretary shall keep the minutes of the meetings of the Board of Directors, of the Executive Committee and other Committees of the Board and of the shareholders, and shall attend to the giving and service of all notices for meetings of the Board of Directors, of the Executive Committee and other Committees of the Board and of the shareholders and otherwise whenever required, except to the extent, that such duties shall have been specifically delegated to another officer by the Board of Directors or by the Chairman of the Board. He shall have the custody of such books and papers as the Board of Directors, the Chairman of the Board, or the President may provide. He shall also discharge such other duties as from time to time the Board of Directors may prescribe or the Chairman of the Board, or the President may assign to him. SECTION 7. Assistant Officers: The Board of Directors may elect one or more Assistant Secretaries or one or more Assistant Treasurers. Each Assistant Secretary, if any, and each Assistant Treasurer, if any, shall have such authority and perform such duties as from time to time the Board of Directors may prescribe or the Chairman of the Board or the President may assign. SECTION 8. Subordinate Officers: The Board of Directors may elect such subordinate officers as it may deem desirable. Each such officer shall have such authority and perform such duties as the Board of Directors may prescribe. The Board of Directors may, from time to time, authorize any officer to appoint and remove subordinate officers and prescribe the powers and duties thereof. SECTION 9. Surety Bonds of Officers: The Board of Directors may require from any officer of the Corporation a bond in such amount as it may determine for the faithful discharge of the duties of any such officer; such bond to be approved by the Board and to be obtained at the expense of the Corporation. SECTION 10. Compensation of Officers: The Chairman of the Board, with the advice of the President of the Corporation, shall have power to fix the compensation of all officers of the Corporation, except the Chairman of the Board, the president and the officers reporting directly to either of them. The Board of Directors shall have power to fix the compensation of the Chairman of the Board, the President and of the officers reporting directly to either of them. The Board of Directors may authorize any officer, upon whom the power of appointing subordinate officers may have been conferred, to fix the compensation of such subordinate officers. Notwithstanding the foregoing, the Board of Directors may delegate to a Committee of the Board the responsibility of determining the incentive compensation and stock awards of the Chairman of the Board, the President and the officers reporting directly to either of them. SECTION 11. Vacancy: Any vacancy of an office occurring may be filled at any Regular or Special Meeting of the Board of Directors. SECTION 12. Removal of Officers: Any officer of the Corporation may be removed, with or without cause, by the vote of the Board of Directors at any meeting thereof. SECTION 13. Checks and Obligations: All notes and all checks, drafts, or other orders for the payment of money, and all endorsements thereof, executed on behalf of the Corporation shall be signed by any person or persons designated for the purpose either by the Board or by an officer or officers of the Corporation pursuant to authority delegated by the Board of Directors. SECTION 14. Execution of Contracts, Assignments, Deeds and other Documents: All contracts, agreements, assignments, transfers, guaranties, deeds, stock powers or other instruments of the Corporation may be executed and delivered by the Chairman of the Board, the President, or any Vice President or by such other officer or officers, or agent or agents, of the Corporation as shall be thereunto authorized from time to time either by the Board or by power of attorney executed by the Chairman of the Board, the President, any Senior Vice President, or by any person pursuant to authority granted by the Board; and the Secretary or any Assistant Secretary, the Treasurer or any Assistant Treasurer may affix the seal of the Corporation thereto and attest same. SECTION 15. Execution of Proxies: The Chairman of the Board, the President, or any Vice President or any other person designated by the Board of Directors, may authorize from time to time the execution and issuance of proxies to vote upon shares of stock of other corporations owned by the corporation, or authorize the execution of a consent to action taken or to be taken by such other corporation. All such proxies or consents may be signed in the name of the Corporation by any of the persons above-mentioned in this Section 15 or by any other person or persons designated for the purpose either by the Board of Directors or by power of attorney executed by any person pursuant to authority granted by the Board. SECTION 16. Facsimile Signatures: Any signature which is authorized by Section 13, 14 or 15 of this Article may be facsimile, if so determined by the Board of Directors, or by an officer or officers of the Corporation pursuant to authority delegated by the Board of Directors. ARTICLE IV CREATION OF DIVISIONS SECTION 1. Creation of Divisions: The Board of Directors may from time to time create divisions and may set apart to such divisions such aspects or portions of the business, affairs and properties of the Corporation as the Board may from time to time determine. Each division of the Corporation shall be organized and regulated as hereinafter provided in this Article IV. As used in the succeeding Sections of this Article, the term "Company" shall refer to any division of the Corporation. SECTION 2. Executive Officers of Company: The Chairman of the Board of the Corporation may appoint, with the advice of the President of the Corporation, as Executive Officers of the Company, a President, one or more Vice Presidents, appropriate Financial Officers and a Secretary and in his discretion, one or more Assistant Secretaries and Assistant Financial Officers and such subordinate officers as may from time to time be deemed desirable. Such officers shall be appointed as soon as practicable following the creation of the Company and thereafter shall hold office at the discretion of the Chairman of the Board of the Corporation. The same person may hold two or more offices of the Company, except the offices of President and Secretary of the Company, and any person holding an office of the Company may also be elected by the Board as an officer of the Corporation. Vacancies occurring in any office may be filled at any time by the Chairman of the Board of the Corporation, with the advice of the President of the Corporation. The Executive Officers and all other persons who shall serve the Company in the capacities set forth in this Article are hereby appointed agents of the Corporation with the powers and duties herein set forth. However, the authority of said agents shall be limited to matters related to the properties, business and affairs of the Company, and shall not extend to any other portion of the properties, business and affairs of the Corporation nor are such Executive Officers or other persons to be considered officers of the Corporation. SECTION 3. Authority of the Executive Officers of the Company: The President of the Company shall be the Chief Executive Officer of the Company. He shall exercise general supervision over the business, affairs and properties of the Company and shall be directly responsible to, and shall perform such other duties as may be assigned to him from time to time by, the Chairman of the Board or the assigned Officer or other employee of the Corporation to whom the President of the Company reports. All Executive Officers other than the President of the Company, and any subordinate officers, shall be directly responsible to the President of the Company and any Officer or other employee of the Corporation as the Chairman of the Board or the assigned Officer or other employee of the Corporation to whom the President of the Company reports shall direct. SECTION 4. Use of Divisional Names: In executing any document on behalf of any division of the Corporation, the name of such division shall be followed by the words "a division of General Signal Corporation." In any instance in which a division of the Corporation shall use the name of the division followed by the words, "a unit of General Signal," such words shall have the same meaning as "a division of General Signal Corporation." ARTICLE V INDEMNIFICATION SECTION 1. Indemnification: Except to the extent expressly prohibited by the New York Business Corporation Law, the Corporation shall indemnify each person made or threatened to be made a party to any action or proceeding, whether civil or criminal, and whether by or in the right of the Corporation or otherwise, by reason of the fact that such person or such person's testator or intestate is or was a director or officer of the Corporation, or serves or served at the request of the Corporation any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity while he or she was such a director or officer (hereinafter referred to as "Indemnified Person"), against judgments, fines, penalties, amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred in connection with such action or proceeding, or any appeal therein, provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such Indemnified Person establishes that either (a) his or her acts were committed in bad faith, or were the result of active and deliberate dishonesty, and were material to the cause of action so adjudicated, or (b) that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled. The Corporation shall advance or promptly reimburse upon request any Indemnified Person for all expenses, including attorneys' fees, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if such Indemnified Person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such Indemnified Person is entitled. Nothing herein shall limit or affect any right of any Indemnified Person otherwise than hereunder to indemnification or expenses, including attorneys' fees, under any statute, rule, regulation, certificate of incorporation, by-law, insurance policy, contract or otherwise. Anything in these by-laws to the contrary notwithstanding, no elimination of this by-law, and no amendment of this by-law adversely affecting the right of any Indemnified Person to indemnification or advancement of expenses hereunder shall be effective until the 60th day following notice to such Indemnified Person of such action, and no elimination of or amendment to this by-law shall thereafter deprive any Indemnified Person of his or her rights hereunder arising out of alleged or actual occurrences, acts or failures to act prior to such 60th day. The Corporation shall not, except by elimination or amendment of this by-law in a manner consistent with the preceding paragraph, take any corporate action or enter into any agreement which prohibits, or otherwise limits the rights of any Indemnified Person to, indemnification in accordance with the provisions of this by-law. The indemnification of any Indemnified Person provided by this by-law shall be deemed to be a contract between the Corporation and each Indemnified Person and shall continue after such Indemnified Person has ceased to be a director or officer of the Corporation and shall inure to the benefit of such Indemnified Person's heirs, executors, administrators and legal representatives. If the Corporation fails timely to make any payment pursuant to the indemnification and advancement or reimbursement of expenses provisions of this Article V and an Indemnified Person commences an action or proceeding to recover such payment, the Corporation in addition shall advance or reimburse such Indemnified Person for the legal fees and other expenses of such action or proceeding. The Corporation is authorized to enter into agreements with any of its directors or officers extending rights to indemnification and advancement of expenses to such Indemnified Person to the fullest extent permitted by applicable law, but the failure to enter into any such agreement shall not affect or limit the rights of such Indemnified Person pursuant to this by-law, it being expressly recognized hereby that all directors or officers of the Corporation, by serving as such after the adoption hereof, are acting in reliance hereon and that the Corporation is estopped to contend otherwise. Persons who are not directors or officers of the Corporation shall be similarly indemnified and entitled to advancement or reimbursement of expenses to the extent authorized at any time by the Board of Directors. In case any provision in this by-law shall be determined at any time to be unenforceable in any respect, the other provisions shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to its directors or officers, acting in such capacities or in the other capacities mentioned herein, to the fullest extent permitted by law whether arising from alleged or actual occurrences, acts or failures to act occurring before or after the adoption of this Article V. For purposes of this by-law, the Corporation shall be deemed to have requested an Indemnified Person to serve an employee benefit plan where the performance by such Indemnified Person of his or her duties to the Corporation also imposes duties on, or otherwise involves services by, such Indemnified Person to the plan or participants or beneficiaries of the plan, and excise taxes assessed on an Indemnified Person with respect to an employee benefit plan pursuant to applicable law shall be considered indemnifiable fines. For purposes of this by-law, the term "Corporation" shall include any legal successor to the Corporation, including any corporation which acquires all or substantially all of the assets of the Corporation in one or more transactions. ARTICLE VI CAPITAL STOCK SECTION 1. Certificates of Capital Stock: All certificates of stock of the Corporation, both preferred and common, shall be separately numbered and the facsimile signature of the Chairman of the Board, or the President, or a Vice President and the facsimile counter-signature of the Treasurer, or an Assistant Treasurer, or the Secretary or an Assistant Secretary and the facsimile seal of the Corporation shall appear thereon, all in manner as authorized under the laws of the State of New York and approved by the New York Stock Exchange. SECTION 2. Transfer Agent and Registrar: All certificates of stock of the Corporation shall be issued only through a Transfer Agent of the Corporation's stock, consisting of a Bank or Trust Company, duly appointed by the Board of Directors to act as Transfer Agent and bear the counter- signature of the Registrar of the Corporation's stock duly appointed by the Board of Directors to act as Registrar. Endorsement to the foregoing effect shall be made upon all certificates issued. SECTION 3. Transfer of Shares: Shares of stock shall be transferable only on the books of the Corporation by the holder thereof in person or pursuant to a power of attorney duly executed and filed with the Transfer Agent, upon the surrender of the certificate representing the shares to be transferred, properly endorsed. All certificates surrendered for transfer shall be cancelled by the Transfer Agent. SECTION 4. Lost, Destroyed or Stolen Certificates: No certificate for shares of stock of the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed or stolen except on production of such evidence of such loss, destruction or theft and on delivery to the Corporation, if the Board of Directors shall so require, of a bond of indemnity upon such terms and secured by such surety as the Board of Directors may in its discretion determine to be satisfactory. SECTION 5. Seal of Corporation: The seal of the Corporation shall be circular in form and bear the words "GENERAL SIGNAL CORPORATION" next inside the line of its circumference and the words "Incorporated June 13th, 1904" in the center within the line of an inner circle. ARTICLE VII AMENDMENTS SECTION 1. Amendments: Except as otherwise provided by the Certificate of Incorporation, any provision or provisions of these By-Laws, including any amendment thereof, regardless of the manner in which any such provision or amendment may have been adopted, may be deleted or amended in any respect at any Annual Meeting of the shareholders, or at any Special Meeting called for that purpose, by a majority of the votes cast at such meeting in person or by proxy by the holders of shares entitled to vote thereon, or with the exception of this Section 1 of Article VII, by a majority of the Board of Directors then in office at any meeting thereof. ARTICLE VIII WAIVER OF NOTICE SECTION 1. Waiver of Notice: Any notice required by these By-Laws may be waived in writing, either before or after the action requiring such notice is taken. EX-10.1 3 word\sevrance\plans\chctr48.doc GENERAL SIGNAL CORPORATION CHANGE IN CONTROL SEVERANCE PAY PLAN As Amended and Restated October 17, 1996 GENERAL SIGNAL CORPORATION CHANGE IN CONTROL SEVERANCE PAY PLAN Table of Contents Section Page 1 Purpose 1 2 Definitions 1 3 Benefits 3 4 Payments 5 5 Administration of the Plan 5 6 Litigation Expenses 6 7 Amendment, Suspension, or Termination of the Plan 6 8 Miscellaneous 6 SECTION 1. PURPOSE The purpose of the General Signal Corporation Change in Control Severance Pay Plan is to encourage Employees to make and continue careers with General Signal Corporation by providing eligible Employees with certain severance pay benefits upon such Employees' Involuntary Termination of employment following a Change in Control, as set forth herein. This Plan was adopted by the Board of Directors on February 12, 1987 and was amended from time to time thereafter. SECTION 2. DEFINITIONS When used herein the following terms shall have the following meanings: 2.1 "Board of Directors" means the Board of Directors of General Signal Corporation. 2.2 "Change in Control" shall be deemed to have occurred if: (a) the shareholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Corporation held by such shareholders outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by converting into Voting Securities of the surviving entity) at least 51 percent of the total voting power represented by the Voting Securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation; (b) the shareholders of the Corporation approve an agreement providing for the sale, exchange or other disposition of all or substantially all the assets of the Corporation for the securities of another entity, cash or other property; (c) the shareholders of the Corporation approve a plan of liquidation or dissolution of the Corporation; (d) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or other than a corporation owned directly or indirectly by the shareholders of the Corporation in substantially the same proportions as their ownership of Voting Securities of the Corporation, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of Voting Securities of the Corporation representing at least 20 percent of the total voting power represented by the Voting Securities of the Corporation then outstanding; or (e) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation and any new director whose election by the Board of Directors of the Corporation or nomination for election by the Corporation's shareholders was approved by a vote of at least two thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof. 2.3 "Corporate Benefits Committee" means the Corporate Benefits Committee provided for in Section 5. 2.4 "Corporation" means General Signal Corporation and its successors and assigns. 2.5 "Employee" means any executive officer of the Corporation, any exempt salaried employee in Position Level 15 or above employed at the Corporation's headquarters in Connecticut and any President of a unit of the Corporation; provided, however, that an Employee shall not include any employee who has a severance agreement with the Corporation providing for a designated termination date set forth in such agreement. 2.6 "Involuntary Termination" shall mean any termination of an Employee's employment by the Corporation, or by one of its subsidiaries, within two years after a Change in Control; provided, however, such term shall not include a termination by the Corporation or any of its subsidiaries, for (i) serious, willful misconduct in respect of the Employee's obligations to the Corporation or its subsidiaries, which has caused demonstrable and serious injury to the Corporation, monetary or otherwise, as evidenced by a determination in a binding and final judgment, order or decree of a court or administrative agency of competent jurisdiction, in effect after exhaustion or lapse of all rights of appeal, in an action, suit or proceeding, whether civil, criminal, administrative or investigative; or (ii) conviction of a felony, which has caused demonstrable and serious injury to the Corporation, monetary or otherwise, as evidenced by binding and final judgment, order, or decree of a court of competent jurisdiction, in effect after exhaustion or lapse of all rights of appeal. In addition to actual termination of employment, as and when so declared to be by the Employee the following shall be deemed an Involuntary Termination: (i) a reduction or change in an Employee's responsibilities, duties, authority, powers, functions, title, working conditions or status from those in effect immediately prior to the Change in Control; or (ii) a reassignment to another geographic location more than 50 miles from the Employee's place of employment immediately prior to the Change in Control; or (iii) a reduction in base salary and incentive compensation, if any, from those in effect immediately prior to the Change in Control. For purposes of the preceding sentence, a reduction in incentive compensation will be deemed to have occurred if and only if the percentage of salary paid as incentive compensation under the Corporation's Incentive Compensation Plan for any calendar year is less than the average percentage of salary paid to the Employee as incentive compensation under such Plan for the three calendar years preceding the Change in Control. Notwithstanding the foregoing, an Employee's failure to object in writing to the changes listed in subsections (i), (ii) and (iii) within 180 days of any such change shall constitute a waiver of such change being deemed an Involuntary Termination. 2.7 "Plan" means the General Signal Corporation Change in Control Severance Pay Plan as may be amended from time to time. 2.8 "Subsidiary" means a "subsidiary corporation" as defined in Section 425(f) of the Internal Revenue Code of 1986, as now in effect or as hereafter amended. 2.9 "Voting Securities" means any securities of the Corporation which vote generally in the election of directors. SECTION 3. BENEFITS 3.1 In the event of Involuntary Termination of any Employee who is an executive officer of the Corporation, the Corporation shall pay such officer 36 months of Compensation. 3.2 In the event of Involuntary Termination of any Employee who is not an executive officer of the Corporation or a President of a unit of the Corporation, the Corporation shall pay such person 24 months of Compensation. 3.3 In the event of Involuntary Termination of any President of a unit of the Corporation, the Corporation shall pay such person 12 months of the Employee's annual base salary in effect immediately prior to the date of Involuntary Termination. 3.4 For purposes of this Section, Compensation is calculated using the Employee's annual base salary in effect immediately prior to the date of Involuntary Termination plus the average of the three highest payments made to the Employee under the Corporation's Incentive Compensation Plan or any other applicable bonus plans in the five calendar years preceding the calendar year of Involuntary Termination. 3.5 Any payments pursuant to Sections 3.1, 3.2 or 3.3 of this Plan shall be paid in a lump sum within thirty (30) days following Involuntary Termination and such payments shall be reduced by the amount paid to the Employee pursuant to any other severance pay policy of the Corporation. 3.6 Within thirty (30) days following Involuntary Termination, the Corporation shall pay to an Employee described in Sections 3.1 or 3.2 a lump sum cash amount equal to the present value of the retirement benefit the Employee would have been entitled to receive under the terms of the Corporate Retirement Plan for Employees of General Signal Corporation as in effect on the day preceding the Change in Control (without regard to vesting thereunder) and the Benefit Equalization Plan as in effect on the day preceding the Change in Control had the Employee accumulated additional service equal to the period for which the Employee is paid under Sections 3.1 or 3.2 of this Plan. For purposes of calculating the lump sum cash payments provided by this Section, the present value shall be determined by using the lump sum factors contained in such Corporate Retirement Plan on the date of Involuntary Termination. 3.7 Within thirty (30) days following Involuntary Termination, the Corporation shall pay to an Employee described in Sections 3.1 or 3.2 a lump sum cash amount equal to the present value of the aggregate Matching Contributions that would have been made by the Corporation under the terms of the General Signal Corporation Savings and Stock Ownership Plan as in effect on the day preceding the Change in Control if the Employee had continued to be employed and to participate in such Savings Plan to the same extent as he participated in the year of such Involuntary Termination during the period for which the Employee is paid under Sections 3.1 or 3.2 of this Plan. For purposes of calculating the lump sum cash payments provided by this Section, the present value shall be determined by using the Pension Benefit Guaranty Corporation interest rate for immediate annuities on the date of Involuntary Termination. 3.8 During the period for which an Employee is paid under Sections 3.1 or 3.2 of this Plan, the Employee shall be deemed to be on layoff status and continue to be entitled to all benefits and service credit for benefits under medical, insurance, and other welfare benefit plans, programs and arrangements of the Corporation as if he were actively employed during such period (including meeting any age and service requirements for post retirement benefits). With respect to such welfare benefit plans, an Employee shall be entitled to purchase continued coverage for himself and all covered family members and the Corporation shall arrange for, and make available, such coverage as of his Involuntary Termination. Such coverage shall be no less in scope than that provided to the covered Employee (and covered family members) at the time of Change in Control. The cost of such coverage shall be shared by the Corporation and the Employee in the same proportion as exists at the time of Change in Control. With respect to medical (including HMO) and dental coverage, such coverage shall be in lieu of the Corporation's practice of affording health care continuation coverage to terminating employees and covered family members pursuant to the Consolidated Omnibus Reconciliation Budget Act of 1986, as amended, ("COBRA"), to the extent that the availability of such coverage to such Employee (and covered family members) satisfies the Corporation's legal obligations under COBRA. 3.9 If, by reason of the requirements for tax qualification or any other reason, benefits or service credits under any welfare benefit plan shall not be payable or provided under any such plan to the Employee or his dependents, beneficiaries or estate despite the provisions of Section 3.8 above, the Corporation itself shall, to the extent necessary, pay or provide for payment of such benefits and service credit for such benefits to the Employee or his dependents, beneficiaries or estate. SECTION 4. PAYMENTS 4.1 All severance payments shall be made from the general assets of the Corporation; provided, however, that such payments shall be reduced by the amount of any payments made to an Employee from any trust or special or separate fund established by the Corporation to assure such payments. The Corporation shall not be required to establish a special or separate fund or other segregation of assets to assure such payments, and, if the Corporation shall make any investments to aid it in meeting its obligations hereunder, Employees shall have no right, title or interest whatever in or to any such investments except as may otherwise be expressly provided in a separate written instrument relating to such investments. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind between the Corporation and any Employees. To the extent that any Employee acquires a right to receive payments from the Corporation hereunder, such right shall be no greater than the right of an unsecured creditor of the Corpora- tion. 4.2 The Corporation may deduct from severance payments any Federal, state or local withholding or other taxes or charges which is required to deduct under applicable laws. SECTION 5. ADMINISTRATION OF THE PLAN 5.1 The Corporate Benefits Committee shall have general responsibility for the administration and interpretation of the Plan. 5.2 The Corporate Benefits Committee may arrange for the engagement of such legal counsel, who may be counsel for the Corporation, and make use of such agents and clerical or other personnel as it shall require or may deem advisable for purposes of the Plan. The Corporate Benefits Committee may rely upon the written opinions of such counsel, may delegate to any agent or to any sub-committee or member of the Corporate Benefits Committee its authority to perform any act, including without limitation those matters involving the exercise of a discretion; provided, however, that such delegation shall be subject to revocation at any time at the discretion of the Corporate Benefits Committee. 5.3 If any claim for benefits under the Plan is wholly or partially denied, the Corporate Benefits Committee shall give written notice by registered or certified mail of such denial to the claimant within 90 days after receipt of the written claim by the Corporate Benefits Committee. Notice must be written in a manner calculated to be understood by the claimant, setting forth the specific reasons for such denial, specific reference to pertinent Plan provisions on which the denial is based, a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and an explanation of the Plan's claim review procedure. The Corporate Benefits Committee shall also advise the claimant that he or his duly authorized representative may request a review by the Corporate Benefits Committee of the decision to deny the claim by filing with the Corporate Benefits Committee, within 65 days after such notice has been received by the claimant, a written request for such review. The claimant may review pertinent documents and submit issues and comments in writing within the same 65 day period. If such request is so filed, such review shall be made by the Corporate Benefits Committee within 60 days after receipt of such request, unless special circumstances (including, but not limited to, a need to hold a hearing) require an extension of time for processing, in which case a decision shall be rendered not later than 120 days after receipt of the request for review. The claimant shall be given written notice within such 60 day period of the decision resulting from such review, which shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent Plan provisions on which the decision was based. SECTION 6. LITIGATION EXPENSES 6.1 In the event of any litigation or other proceeding between the Corporation and the Employee with respect to the subject matter of this Plan and the enforcement of his rights hereunder, the Corporation shall reimburse the Employee for all of his reasonable costs and expenses relating to such litigation or other proceeding, including his reasonable attorney's fees and expenses, provided that such litigation or proceeding results in any (a) settlement requiring the Corporation to make a payment to the Employee, or (b) judgment or order in whole or in part in favor of the Employee, regardless of whether such judgment or order is subsequently reversed on appeal or in a collateral proceeding. In no event shall the Employee be required to reimburse the Corporation for any of the costs and expenses relating to such litigation or other proceeding. The obligation of the Corporation under this section shall survive the termination for any reason of this Plan. SECTION 7. AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN 7.1 At any time prior to the occurrence, if any, of a Change in Control, the Board of Directors shall have the power to amend, suspend or terminate the Plan in whole or in part and for any reason. 7.2 For at least two years after the occurrence of a Change in Control, the Plan may not be amended, suspended or terminated. SECTION 8. MISCELLANEOUS 8.1 Nothing contained in the Plan shall give any Employee the right to be retained in the employment of the Corporation or any of its affiliated or associated corporations or affect the right of any such Employer to dismiss any Employee. 8.2 If the Corporate Benefits Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due him or her or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Corporate Benefits Committee so elects, be paid to his or her spouse, a child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Corporate Benefits Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Plan therefor. 8.3 Except insofar as may otherwise be required by law, no amount payable at any time under the Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind or in any manner be subject to the debts or liabilities of any person and any attempt so to alienate or subject any such amount, whether at the time or thereafter payable, shall be void. If any person shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under the Plan, or any part thereof, or if by reason of his or her bankruptcy or other occurrence at any time such amount would be made subject to his debts or liabilities or would otherwise not be enjoyed by him or her, then the Corporate Benefits Committee, if it so elects, may direct that such amount be withheld and that the same amount or any part thereof be paid or applied to or for the benefit of such person, in such manner and proportion as the Corporate Benefits Committee may deem proper. 8.4 The captions preceding the Sections of the Plan have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions of the Plan. 8.5 The Plan and all rights thereunder shall be governed by and construed in accordance with the laws of the State of New York. EX-10.2 4 File: 4.67 - emplbnft\pension.bep GENERAL SIGNAL CORPORATION BENEFIT EQUALIZATION PLAN As Amended and Restated October 17, 1996 GENERAL SIGNAL CORPORATION BENEFIT EQUALIZATION PLAN TABLE OF CONTENTS PAGE ARTICLE I Purpose 1 ARTICLE II Definitions 1 ARTICLE III Eligibility 2 ARTICLE IV Pension Benefits 3 ARTICLE V Source of Payment 3 ARTICLE VI Designation of Beneficiaries 4 ARTICLE VII Administration of the Plan 4 ARTICLE VIII Amendment and Termination 6 ARTICLE IX General Provisions 6 GENERAL SIGNAL CORPORATION BENEFIT EQUALIZATION PLAN ARTICLE I Purpose 1.1 General Signal Corporation established this amended and restated Benefit Equalization Plan effective as of October 14, 1993 solely for the purpose of providing to its eligible employees benefits which would have been payable from the tax-exempt trust under the tax-qualified pension benefit plan known as the Corporate Retirement Plan of General Signal Corporation but for the limitations placed by the Internal Revenue Code on benefits payable made with respect to such employees under such plan. This Plan constitutes an amendment and continuation of the Plan in effect prior to this restatement. The portions of the Plan providing benefits without regard to the limitation on compensation under Section 401(a)(17) of the Code ($150,000 for 1994), and taking into account deferrals under the General Signal Corporation Deferred Compensation Plan, constitutes an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. The portion of the Plan providing benefits above the limitations prescribed under Section 415 of the Code constitutes an "excess benefit plan" as defined in Section 3(36) of the Employee Retirement Security Act of 1974. ARTICLE II Definitions When used herein, the following terms shall have the following meanings: 2.1 "Act" means the Employee Retirement Income Security Act of 1974 as amended from time to time. 2.2 "Beneficiary" means the beneficiary or beneficiaries designated in accordance with Article VI of the Plan to receive the amount, if any, payable upon the death of an Employee who participates in the Plan. 2.3 "Benefit Limitations" means (a) the maximum "annual benefit" payable under the Corporate Retirement Plan in accordance with Section 415 of the Code, and (b) the maximum amount of pension plan benefits that could have been provided under the Corporate Retirement Plan without regard to the limitation prescribed under Section 401(a)(17) of the Code on the amount of annual compensation that can be taken into account under the Corporate Retirement Plan. 2.4 "Board of Directors" means the Board of Directors of the Company. 2.5 "Code" means the Internal Revenue Code, as amended from time to time. 2.6 "Company" means General Signal Corporation, a New York corporation, and its successors or assigns. 2.7 "Corporate Benefits Committee" means the committee appointed to administer and be the named fiduciary for administration of the Corporate Retirement Plan. 2.8 "Corporate Retirement Plan" means the Corporate Retirement Plan of General Signal Corporation, as amended and restated from time to time. 2.9 "Employee" means any person employed by an Employer who is eligible to receive a benefit under the Corporate Retirement Plan. 2.10 "Employer" means the Company and each subsidiary thereof that participates in the Corporate Retirement Plan. 2.11 "Human Resources Officer" means the chief human resources officer of the Company. 2.12 Investment Committee means the committee appointed to be responsible for all assets and be the named fiduciary for all assets of the Corporate Retirement Plan. 2.13 "Pension Benefits" means the benefits described in Article IV of the Plan. 2.14 "Plan" means the General Signal Corporation Benefit Equalization Plan as set forth herein and as amended and restated from time to time. ARTICLE III Eligibility 3.1 Each Employee with respect to whom benefits are reduced under the Corporate Retirement Plan as a result of any of the Benefit Limitations shall participate in the Plan. ARTICLE IV Pension Benefits 4.1 The amount of Pension Benefits payable to or in respect of an Employee shall be equal to the actuarial value of the difference between (a) the amount of benefits which would have been payable to or in respect of the Employee under the Corporate Retirement Plan without regard to the Benefit Limitations and (b) the amount of benefits actually payable to or in respect of the Employee thereunder. In addition, the amount of Pension Benefits shall be increased in the amount of additional benefits to which the Employee would have been entitled under the Corporate Retirement Plan had the deferral of any compensation under the General Signal Corporation Deferred Compensation Plan been included as part of the Employee's earnings and paid to the Employee during the applicable calendar year. 4.2 Subject to Section 4.3, Pension Benefits shall be payable in the form of a life annuity for a single Employee and in the form of a 50% joint and survivor annuity for a married Employee, beginning on the individual's retirement date, unless the Corporate Benefits Committee authorizes another manner or time of payment. The Company reserves the right to limit payments in any given year to such amount as would not cause a loss of deductibility pursuant to Section 162(m) of the Code. 4.3 In the event that the lump sum value of the Pension Benefits under the Plan shall be $20,000 or less, such Pension Benefits shall be payable in a lump sum settlement of Actuarially Equivalent (as defined in the Corporate Retirement Plan) value in full discharge of all liability in respect of such Pension Benefits. The lump sum payment shall be made as soon as administratively practicable following the Employee's termination of service or death. The Pension Benefits of any Employee who receives such a lump sum payment and who subsequently accrues Pension Benefits under this Plan shall be reduced by the Actuarial Equivalent of the Pension Benefits on which the lump sum amount was so paid. ARTICLE V Source of Payment 5.1 All payments provided for under the Plan shall be paid in cash from the general funds of the Company; provided, however, that such payments shall be reduced by the amount of any payments made to the Employee or his or her dependents, beneficiaries or estate from any trust or special or separate fund established by the Company to assure such payments. The Company shall not be required to establish a special or separate fund or other segregation of assets to assure such payments, and, if the Company shall make any investments to aid it in meeting its obligations hereunder, a participant shall have no right, title, or interest whatever in or to any such investments except as may otherwise be expressly provided in a separate written instrument relating to such investments. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind between the Company and any participants. To the extent that any participant acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company. 5.2 The Investment Committee may, for financial reasons, establish a grantor trust for the benefit of participants in the Plan. The assets of said trust will be held separate and apart from other Company funds and shall be used exclusively for the purposes set forth in the Plan and the applicable trust agreement, subject to the following conditions: (a) the creation of said trust shall not cause the Plan to be other than "unfunded" for purposes of Title I of the Act: (b) the Company shall be treated as the "grantor" of said trust for purposes of Sections 671 and 677 of the Code; and (c) said trust agreement shall provide that its assets may be used to satisfy claims of the Company's general creditors, provided that the rights of such general creditors are enforceable under federal and state law. ARTICLE VI Designation of Beneficiaries 6.1 Unless an Employee who participates in the Plan otherwise files with the Corporate Benefits Committee a written designation of one or more persons as the Beneficiary who shall be entitled to receive the amount, if any, payable under the Plan upon such Employee's death, the Employee's beneficiary under the Corporate Retirement Plan shall be deemed to have been designated the Beneficiary for Pension Benefits. If the Corporate Benefits Committee is in doubt as to the right of any person to receive such amount, the Corporate Benefits Committee may retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Corporate Benefits Committee may pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and the Company therefor. ARTICLE VII Administration of the Plan 7.1 The Plan shall be administered by the Corporate Benefits Committee which shall have full power and authority to interpret, construe and administer the Plan, and review claims for benefits under the Plan, and the Corporate Benefits Committee's interpretations and constructions of the Plan and actions thereunder shall be binding and conclusive on all persons and for all purposes. 7.2 The members of the Corporate Benefits Committee shall be the named fiduciaries of the Plan for administration of the Plan (including but not limited to complying with reporting and disclosure requirements and establishing and maintaining Plan records), and shall engage such certified public accountants, who may be accountants for the Company, as it shall require or may deem advisable for purposes of administration of the Plan. The Corporate Benefits Committee may arrange for the engagement of such legal counsel, who may be counsel for the Company, and make use of such agents and clerical or other personnel as they each shall require or may deem advisable for purposes of the Plan. The Corporate Benefits Committee may rely upon the written opinion of such counsel and the accountants engaged by the Corporate Benefits Committee and may delegate to any such agent or to any sub-committee or member of the Corporate Benefits Committee its authority to perform any act hereunder, including without limitation those matters involving the exercise of discretion, provided that such delegation shall be subject to revocation at any time at the discretion of the Corporate Benefits Committee. 7.3 To the maximum extent permitted by law, no member of the Corporate Benefits Committee or Investment Committee shall be personally liable by reason of any contract or other instrument executed by such member or on such member's behalf in his or her capacity as a member of said Committees nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums of which are paid from the Company's own assets), each member of the Corporate Benefits Committee, Investment Committee and each other officer, employee or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan, or to the management and control of the assets of the Plan, may be delegated or allocated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan unless arising out of such person's own fraud or willful misconduct. Each Employer will pay such proportion of any claim and/or expense as the Company directs. 7.4 If any claim for benefits under the Plan is wholly or partially denied, the Corporate Benefits Committee shall give written notice by registered or certified mail of such denial to the claimant within 90 days after receipt of the written claim by the Corporate Benefits Committee. Notice must be written in a manner calculated to be understood by the claimant, setting forth the specific reasons for such denial, specific reference to pertinent Plan provisions on which the denial is based, a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and an explanation of the Plan's claim review procedure. The Corporate Benefits Committee shall also advise the claimant that the claimant or the claimant's duly authorized representative may request a review by the Corporate Benefits Committee of the decision to deny the claim by filing with the Corporate Benefits Committee, within 65 days after such notice has been received by the claimant, a written request for such review. The claimant may review pertinent documents and submit issues and comments in writing within the same 65 day period. If such request is so filed, such review shall be made by the Corporate Benefits Committee with 60 days after receipt of such request, unless special circumstances (including, but not limited to, a need to hold a hearing) require an extension of time for processing, in which case a decision shall be rendered not later than 120 days after receipt of the request for review. The claimant shall be given written notice within such 60 day period of the decision resulting from such review, which shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent Plan provisions on which the decision was based. ARTICLE VIII Amendment and Termination 8.1 The Company expects and intends to maintain the Plan in force indefinitely, but the Company, by action of the Board of Directors, may change, suspend or terminate the Plan at any time. The Human Resources Officer may adopt amendments to the Plan which it deems necessary or appropriate to comply with applicable laws or government regulations or which do not materially increase the annual cost of the Plan. Notwithstanding the foregoing, no such action shall retroactively impair or otherwise adversely affect the rights of any person to benefits under the Plan which have accrued prior to the date of any such action, as determined by the Corporate Benefits Committee. ARTICLE IX General Provisions 9.1 This Plan shall be binding upon and inure to the benefit of the Company and its successors and assigns and the Employee and the designees and the estate of the Employee. Nothing in this Plan shall preclude the Company from consolidating or merging into or with, or transferring all or substantially all of its assets to, another corporation which assumes this Plan and all obligations of the Company hereunder. Upon such a consolidation, merger or transfer of assets and assumption, the term "Company" shall refer to such other corporation and this Plan shall continue in full force and effect. 9.2 Neither the Plan nor any action taken hereunder shall be construed as giving to an Employee the right to be retained in the employ of the Employer or as affecting the right of the Employer to dismiss any Employee. 9.3 The Company may withhold from any benefits payable under this Plan all Federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling. 9.4 Except insofar as may otherwise be required by law, no amount payable at any time under the Plan and the Fund shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be void. If any person shall attempt to, or shall alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under the Plan and Fund, or any part thereof, or if by reason of such person's bankruptcy or other event happening at any such time such amount would be made subject to such person's debts or liabilities or would otherwise not be enjoyed by the such person, then the Corporate Benefits Committee, if it so elects, may direct that such amount be withheld and that the same or any part thereof be paid or applied to or for the benefit of such person, such person's spouse, children or other dependents, or any of them, in such manner and proportion as the Corporate Benefits Committee may deem proper. 9.5 If the Corporate Benefits Committee shall find that any person to whom any amount is or was payable hereunder is unable to care for such person's affairs because of illness or accident, or has died, then the Company, if it so elects, may direct that any payment due such person or such person's estate (unless a prior claim therefor has been made by a duly appointed legal representative) or any part thereof be paid or applied for the benefit of such person or to or for the benefit of such person's spouse, children or other dependents, an institution maintaining or having custody of such person, any other person deemed by the Corporate Benefits Committee to be a proper recipient on behalf of such person otherwise entitled to payment, or any of them, in such manner and proportion as the Company may deem proper. Any such payment shall be in complete discharge of the liability of the Corporate Benefits Committee therefor. 9.6 Whenever, under this Plan, it is necessary to determine whether one benefit is less than, equal to, or larger than another, whether or not such benefits are provided under this Plan, such determination shall be made by the Company's independent consulting actuary, using mortality, interest and any other assumptions normally used at the time by such actuary in determining actuarial equivalents under the Corporate Retirement Plan. 9.7 All elections, designations, requests, notices, instructions, and other communications from an Employee, Beneficiary or other person to the Corporate Benefits Committee required or permitted under the Plan shall be in such form as is prescribed from time to time by the Corporate Benefits Committee, shall be mailed by first-class mail or delivered to such location as shall be specified by the Corporate Benefits Committee, and shall be deemed to have been given and delivered only upon actual receipt thereof at such location. 9.8 The benefits payable under this Plan shall be in addition to all other benefits provided for Employees of the Company. 9.9 The captions preceding the sections and articles hereof have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions of the Plan. 9.10 This Plan shall be governed by the laws of the State of New York from time to time in effect. EX-10.3 5 GENERAL SIGNAL CORPORATION 1997 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN 1. Purpose The purpose of this Plan is to align further the interests of non-employee directors with other shareholders of General Signal Corporation (the "Corporation"). 2. Administration The Plan shall be administered by the Committee on Directors (the "Committee") of the Board of Directors. The Committee shall act by a majority vote or by a written statement signed by all of the members. Subject to the express provisions of this Plan, the Committee shall grant stock options to non-employee directors, and determine the number of shares to be subject to each grant and the terms and conditions thereof. 3. Stock Subject to Plan The shares to be issued under this Plan shall be made available, at the discretion of the Board of Directors or the Committee, either from the authorized but unissued shares of Common Stock of the Corporation or from shares of Common Stock reacquired by the Corporation, including shares purchased in the open market. Subject to adjustment as provided in the last paragraph of this Section 3: (a) the aggregate number of shares of Common Stock reserved and available for issuance under this Plan, subject to Section 3(b) below, shall be 125,000 shares; and (b) the shares available for granting awards in any year shall be increased by any shares represented by options that expire unexercised for any reason. In the event that the number of outstanding shares of Common Stock of the Corporation shall be changed by reason of split-ups, combinations of shares, recapitalization, stock dividends or equity distributions, the Board of Directors shall appropriately adjust the number of shares for which awards may thereafter be granted under this Plan either in the aggregate or to any single participant, the number of shares then subject to awards granted previously under this Plan, and the price per share payable upon exercise of such awards. Awards may also contain provisions for their continuation or for other equitable adjustments after changes in shares of Common Stock resulting from reorganization, sale, merger, consolidation or similar occurrence. 4. Eligibility and Participation Awards under this Plan may be granted only to a director of the Corporation who is not also an officer or other employee of the Corporation or of one of its subsidiaries, and who has been elected, re-elected or is continuing as a member of the Board following the applicable Annual Meeting of Shareholders of the Corporation ("Eligible Director"). 5. Stock Options Grant Each year, as of the date of the Annual Meeting of Shareholders of the Corporation, each Eligible Director shall be eligible to receive a non-qualified stock option to purchase shares of Common Stock of the Corporation. Subject to shareholder approval, each Eligible Director shall receive an option to purchase 2,000 shares on the date of the 1997 Annual Meeting of Shareholders. On each successive Annual Meeting of Shareholders, each Eligible Director may be granted an additional option to purchase shares in an amount as determined by the Committee. Option Prices The purchase price of the Common Stock under each option shall be equal to 100% of the fair market value of the stock on the date the option is granted. The purchase price is to be paid in full upon the exercise of the option, and payment shall be made in cash, or by check, bank draft or money order payable to the order of the Corporation, or by delivering shares of Common Stock of the Corporation of equivalent fair market value on the day before the option is exercised. Fair market value shall be the closing price on the New York Stock Exchange or, in the event that no sale shall have taken place, the mean between the closing bid and asked prices. Form of Option Options granted pursuant to this Plan to Eligible Directors shall be evidenced by Stock Option Agreements in such form as the Committee shall from time to time adopt. Option Period The options granted hereunder shall expire on a date which is ten years after the date of grant of the options. Vesting Each option granted to an Eligible Director shall vest and be exercisable on the date of the grant. Termination of Options If an Eligible Director ceases to serve on the Board of Directors for any reason other than death, disability or retirement, any outstanding options not yet exercised at the time the Eligible Director so ceases to serve may be exercised within one week following the date the Eligible Director so ceases to serve, but in no event later than the expiration date of the option. In the event of the death or disability of an Eligible Director while a member of the Board of Directors, any outstanding options may be exercised (in the case of death by the optionee's personal representative, heir or legatee) during the period ending one year after the date of such death or disability, but in no event later than the expiration date of the option. In the event of retirement, any outstanding options may be exercised during the period ending 5 years after the date of such retirement, but in no event later than the expiration date of the option. In the event of a retired Director's death during the fifth year after retirement, his or her heirs or estate may exercise any outstanding options during the period ending one year after such death, but in no event later than the expiration date of the option. Non-Transferability of Option No option granted under this Plan to an Eligible Director shall be transferable otherwise than by will or the laws of descent and distribution, and an option may be exercised during the lifetime of the Eligible Director thereof, only by him or her; provided, however, that the Committee may permit limited transferability in conformance with rules promulgated by the Securities and Exchange Commission [,and provided further, however, that following retirement of an Eligible Director, the options held by such Eligible Director may be transferred by gift.] 6. Governing Law The validity, construction and effect of this Plan, any rules and regulations relating to this Plan, and any awards under this Plan, shall be determined in accordance with the laws of New York without giving effect to principles of conflict of laws. 7. Effective Period of Plan This Plan shall become effective upon the date of its approval by the shareholders of the Corporation. Unless earlier terminated by the Board of Directors, this Plan shall terminate on April 17, 2002; provided, however, that any such termination shall not affect awards granted prior thereto. 8. Amendment of Plan The Board of Directors of the Corporation may from time to time make such amendments of this Plan as it shall deem advisable; provided, however, that the Board of Directors may not, without further approval of the holders of a majority of all outstanding shares of the Corporation entitled to vote thereon, (i) increase the maximum number of shares as to which awards may be granted under this Plan (except as otherwise provided in Section 3), (ii) permit the granting of options at less than 100% of fair market value at time of grant, (iii) change the class of persons eligible to receive awards under this Plan, or (iv) make any other amendment for which shareholder approval is required. No amendment of this Plan may, without the consent of the holder of an existing award, adversely affect such holder's rights thereunder. EX-27 6
5 0000040834 GENERAL SIGNAL CORPORATION 1000 3-MOS DEC-31-1997 MAR-31-1997 40000 90 367800 15000 247100 718000 753700 448400 1565800 422600 241800 0 0 78400 653400 1565800 505600 505600 357300 461700 0 823 3400 40500 16200 24300 0 0 0 24300 0.47 0
-----END PRIVACY-ENHANCED MESSAGE-----