-----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, EG6pvGaYKh2k0gbPIjrur++VkFRVJAGH4mkFrO1h4ADUc3eRBUyz0VpbQcBFBkVz EsWVoGnb0T5hmhEOW3GxlQ== 0000006164-95-000042.txt : 19951119 0000006164-95-000042.hdr.sgml : 19951119 ACCESSION NUMBER: 0000006164-95-000042 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMP INC CENTRAL INDEX KEY: 0000006164 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 230332575 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04235 FILM NUMBER: 95590282 BUSINESS ADDRESS: STREET 1: P O 3608 CITY: HARRISBURGH STATE: PA ZIP: 17105 BUSINESS PHONE: 7175640100 MAIL ADDRESS: STREET 1: PO BOX 3608 M S 176 41 CITY: HARRISBURG STATE: PA ZIP: 17105 FORMER COMPANY: FORMER CONFORMED NAME: AMP INC & PAMCOR INC DATE OF NAME CHANGE: 19890410 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN METAL PRODUCTS CO DATE OF NAME CHANGE: 19661211 10-Q 1 10Q INFORMATION SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (mark one) [XX] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1995 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to _________ ******************************** Commission File No. 1-4235 AMP INCORPORATED a Pennsylvania corporation (Exact name of registrant as specified in charter, and state of incorporation) ******************************** Employer Identification No. 23-0332575 Harrisburg, Pennsylvania 17105-3608 (Address of principal executive offices of registrant) (717) 564-0100 (Registrant's telephone number, including area code) ******************************** Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X]. NO [ ]. The number of shares of AMP Common Stock (without Par Value) outstanding at November 6, 1995 was 217,599,216. This number includes several thousand shares of AMP Common Stock that were placed in reserve for exchange of M/A-COM, Inc. common stock in the registrant's merger with M/A-COM, Inc. but represent fractional shares that will be paid in cash and will not be exchanged or outstanding in the future. Includes an Exhibit Index. AMP Incorporated & Subsidiaries PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The Consolidated Statements of Income for the three months and the nine months ended September 30, 1995 and 1994, the Consolidated Statements of Cash Flows for the nine months ended September 30, 1995 and 1994, and the Consolidated Balance Sheets at September 30, 1995 and December 31, 1994, are presented below. See the notes to these condensed consolidated financial statements at the end thereof. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (dollars in thousands, except per share data) For the Three Months Ended September 30, 1995 1994 (2) ----------- ----------- Net Sales.......................... $ 1,297,413 $ 1,105,175 Cost of Sales...................... 884,128 726,792 ----------- ----------- Gross income................... 413,285 378,383 Selling, General and Administrative Expenses........... 232,984 214,531 ----------- ----------- Income from operations......... 180,301 163,852 Interest Expense................... (9,059) (7,238) Other Income (Deductions), net..... 1,700 (5,930) ----------- ----------- Income before income taxes..... 172,942 150,684 Income Taxes....................... 62,220 55,540 ----------- ----------- Net Income......................... $ 110,722 $ 95,144 =========== =========== (1) Per Share - Net income......... $.51 $.44 Cash dividends......... $.23 $.21 (1) Weighted average number of shares. 217,796,691 216,923,674 =========== =========== (1) Per share data and weighted average shares for 1994 have been retroactively restated to reflect the 2-for-1 stock split on March 2, 1995. (2) Figures for 1994 have been restated to reflect the pooling of interests with M/A-COM on June 30, 1995. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (dollars in thousands, except per share data) For the Nine Months Ended September 30, 1995(2) 1994 (2) ----------- ----------- Net Sales.......................... $ 3,929,241 $ 3,178,254 Cost of Sales...................... 2,646,703 2,096,628 ----------- ----------- Gross income................... 1,282,538 1,081,626 Selling, General and Administrative Expenses........... 747,794 604,118 ----------- ----------- Income from operations......... 534,744 477,508 Interest Expense................... (28,456) (21,060) Other Deductions, net..... (16,363) (19,906) ----------- ----------- Income before income taxes..... 489,925 436,542 Income Taxes....................... 176,370 164,382 ----------- ----------- Net Income......................... $ 313,555 $ 272,160 =========== =========== (1) Per Share - Net income......... $1.44 $1.25 Cash dividends......... $ .69 $ .63 (1) Weighted average number of shares 217,628,152 216,984,195 =========== =========== (1) Per share data and weighted average shares for 1994 have been retroactively restated to reflect the 2-for-1 stock split on March 2, 1995. (2) Figures have been restated to reflect the pooling of interests with M/A-COM on June 30, 1995. AMP Incorporated & Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed and Unaudited) (dollars in thousands) For the Nine Months Ended September 30, 1995 (1) 1994 (1) --------- --------- Cash and Cash Equivalents at January 1.................. $ 244,568 $ 267,702 Operating Activities: Net income................................ 313,555 272,160 Noncash adjustments - Depreciation and amortization........... 264,553 228,115 Changes in operating assets and liabilities........................ (130,102) (85,647) Other, net.............................. 161,447 22,102 --------- --------- Cash provided by operating activities........................... 609,453 436,730 --------- --------- Investing Activities: Additions to property, plant and equipment............................ (516,464) (311,527) Other, net................................ (35,823) (37,287) --------- --------- Cash used for investing activities........................... (552,287) (348,814) --------- --------- Financing Activities: Changes in short-term debt................ 81,454 (66,127) Additions to long-term debt............... 29,009 62,170 Reductions of long-term debt.............. (87,968) (9,222) Purchases of treasury stock............... (112) (5,914) Dividends paid............................ (146,481) (132,125) Other Net................................. 12,850 1,192 --------- --------- Cash used for financing activities........................... (111,248) (150,026) --------- ---------- Effect of Exchange Rate Changes on Cash.................................... 2,450 8,410 --------- ---------- Cash and Cash Equivalents at September 30................................ $ 192,936 $ 214,002 ========= ========== Changes in Operating Assets and Liabilities: Receivables............................... $(114,868) $(107,763) Inventories............................... (80,898) (82,692) Other current assets...................... (4,564) 2,476 Payables, trade and other................. 4,822 36,888 Accrued payrolls and benefits............. 64,869 31,775 Other accrued liabilities................. 537 33,669 --------- --------- $(130,102) $ (85,647) Interest paid during the periods was approximately equal to amounts charged to expense. (1) Figures have been restated to reflect the pooling of interests with M/A-COM on June 30, 1995. AMP Incorporated & Subsidiaries CONSOLIDATED BALANCE SHEETS (Condensed) (dollars in thousands) September 30, December 31, 1995 1994 (1) ----------- ----------- ASSETS (unaudited) Current Assets: Cash and cash equivalents.......... $ 192,936 $ 244,568 Securities available for sale...... 62,737 156,708 Receivables........................ 1,046,373 908,390 Inventories--- Finished goods and work in process........................ 397,401 373,094 Purchased and manufactured parts. 263,047 199,493 Raw materials.................... 76,111 69,366 ----------- ----------- Total inventories.............. 736,559 641,953 Other current assets............... 248,571 222,681 ----------- ----------- Total current assets........... 2,287,176 2,174,300 ----------- ----------- Property, Plant and Equipment........ 4,188,728 3,713,660 Less - Accumulated depreciation.... 2,350,144 2,138,978 ----------- ----------- Property, plant and equipment, net........................... 1,838,584 1,574,682 ----------- ----------- Investments and Other Assets......... 329,280 343,564 ----------- ----------- TOTAL ASSETS......................... $ 4,455,040 $ 4,092,546 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Short-term debt.................... $ 267,139 $ 182,338 Payables, trade and other.......... 434,195 403,947 Accrued liabilities................ 576,511 520,637 ----------- ----------- Total current liabilities........ 1,277,845 1,106,922 Long-Term Debt....................... 223,719 278,843 Other Liabilities and Deferred Credits................... 236,633 211,026 ----------- ----------- Total liabilities................ 1,738,197 1,596,791 Shareholders' Equity................. 2,716,843 2,495,755 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.............................. $ 4,455,040 $ 4,092,546 =========== =========== (1) Figures have been restated to reflect the pooling of interests with M/A-COM on June 30, 1995. AMP Incorporated & Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (September 30, 1995 Unaudited) 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report and Form 10-K, and Form 10-Q as of and for the three months ended March 31, 1995 and as of and for the six months ended June 30, 1995. The information furnished reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods. Net Income and Cash Dividends per share - per share amounts were calculated using the weighted average number of shares outstanding during each period, adjusted for the impact of the Company's stock option and restricted stock plans using the Treasury Stock Method when the effect is dilutive. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Note: Unless otherwise noted, figures have been restated to reflect the pooling of interests with M/A-COM on June 30, 1995. THIRD QUARTER 1995 Sales--$1.30 billion, up 17% from year-earlier $1.11 billion, down slightly from record $1.34 billion in second quarter Earnings Per Share--51 cents/share, up 16% from year-earlier 44 cents/share Bookings--$1.34 billion, up 20% year-to-year, seasonally down from record $1.40 billion in second quarter Order Backlog--Up $46 million during quarter to record $1.06 billion Employment--Up 4,000 during quarter to 40,100, primarily due to inclusion of joint venture and certain contract employees NINE MONTHS (1) Sales--Record $3.93 billion, up 24% from $3.18 billion in year- earlier period Earnings Per Share--Record $1.62/share before 18 cents reduction (2 cents first quarter, 16 cents second quarter) from M/A-COM merger effect; up 27% from $1.28/share in year-earlier period before inclusion of M/A-COM Capital Expenditures--Record $516 million Third quarter sales of $1.30 billion were up 17% from $1.11 billion in the year-earlier period, but down slightly from the record $1.34 billion in the second quarter because of the usual seasonal softness and the changes in the value of the U.S. dollar which reduced third quarter sales $25 million from the second quarter and increased sales $34 million from the year-earlier period. Third quarter earnings of 51 cents/share (up 16% year-to-year from 44 cents) are in line with analyst consensus estimates. Second quarter earnings were 61 cents before, and 45 cents after, one-time merger charges and 4% more outstanding shares. Compared to the second quarter, third quarter earnings were negatively impacted by the seasonal dip in sales, currency effects, a charge for consolidating our U.S. military/aerospace connector operations, inclusion of the full loss of our AMP-AKZO printed circuit board business because we are acquiring sole ownership of AMP-AKZO by buying the 50% interest of Akzo Nobel NV, and a higher effective tax rate (36% vs. 34%). The tax rate was reduced in the second quarter to achieve a 36% rate for the entire year. Margins before special charges and inclusion of AMP- AKZO's full loss are holding steady. Third quarter sales in the U.S. were up 16%. International sales were up 13% in local currencies and 19% in U.S. dollars compared to third quarter 1994. Nine months worldwide sales were up 24%, with U.S. sales (43% of the total) up 15%. Strongest sales growth in the U.S. has been in the automotive, communications, and industrial/commercial electronics markets. International sales were up 20% in local currencies and 31% in U.S. dollars. The change in the average level of the U.S. dollar increased 1995 nine months sales $183 million compared to the year-earlier period. European sales were up 24% in local currencies and 37% in U.S. dollars in the first nine months. Sales were strongest in the automotive, communications, and industrial/commercial equipment markets. Strongest country growth was in Germany, Great Britain, The Netherlands, and Spain. Although European car production has leveled off, we are achieving good growth in this market because of market share gains and rising electronic and connector content in vehicles. Asia/Pacific nine months sales were up 15% in local currencies and 27% in U.S. dollars. Because of the slow economic recovery and car production decline, our sales in Japan (over half of the regional total) were up only 7% in local currencies, while up 23% in U.S. dollars. Strong, broad-based sales growth continued in the rest of the region because of robust economic growth and further migration of manufacturing activities to this region. Strongest markets were commercial/industrial equipment, computers, and networking equipment and systems. Sales in the Americas outside the U.S. were up 16%. EXPANSION Capital expenditures were $516 million for the first nine months and are expected to reach $700 million this year, up significantly from $473 million last year and $370 million in 1993. About two-thirds of this spending is for machinery and equipment for capacity additions, productivity improvements, and tooling for new products. Most of the balance is for approximately one million more square feet of floor space. In the Harrisburg area we recently occupied a new 200,000 sq. ft. engineering facility and will soon complete a significant expansion of the corporate human resources development center. In Europe, 1995 expansion includes projects in the Czech Republic, Hungary, Scotland, and Switzerland. Asia/Pacific expansion activity includes Malaysia, and China. Employment rose 4,000 primarily because of first-time inclusion of AMP-AKZO, (formerly a 50/50 joint venture), and a contract manufacturing operation as wholly owned subsidiaries. OUTLOOK The outlook for continued growth is good. Sales should set a new high in the fourth quarter. If currency rates remain at present levels, fourth quarter sales would be increased about $20 million. With higher sales, earnings should be several cents better in the fourth quarter than the third quarter, and continue to rise next year. For this year it looks like earnings will be about $2.15-2.20/share before the reduction of about 19 cents/share from merger effects, up about 22-25% from $1.76 in 1994 before restating for inclusion of M/A-COM. Our planning scenario assumes moderate economic growth throughout most of the industrialized world, with no recessions likely in the next year or two, gradual recovery of the Japanese economy, and continued strong economic growth in the rest of Asia Pacific. Looking at the markets we serve, we believe we are in a transition from exceptionally rapid growth for much of this year in certain markets such as semiconductors and computers, to a good, but more moderate and sustainable growth rate next year and beyond. Growth prospects for our core business of electrical/electronic connection devices (over 80% of sales) are good because of our extremely diversified worldwide participation in all electrical and electronic markets (growing 2 to 3 times faster than GDP), a steady stream of new products, timely entry into emerging geographic markets, and business environment trends which favor globally deployed suppliers who can meet steadily higher quality, delivery and service requirements. The $25 billion connector industry is projected to grow at a 6-9% annual growth rate the rest of this decade and we expect to exceed this rate by continuing to gradually gain market share in each region. Our overall sales growth rate during the rest of this decade should be better than the core business rate because of the increasing contribution from the faster growing M/A-COM wireless communications components business (about 8% of current sales) and our Global Interconnect Systems Business Group (about 9% of current sales). This group includes most of our diversification into related components, cables, cable and panel assemblies, electro-optics, networking/premises wiring units, and ATM communications products and systems. With small shares in a variety of fast growing markets totaling some $80 billion or more, this group has good prospects of growing significantly faster than our core business for the next few years. In addition, continued use of acquisitions and strategic alliances as an integral part of our strategy certainly enhances our growth prospects. They leverage our basic capabilities and speed entry into new product and market sectors. Earnings could grow better than sales for the next few years because of the positive effects of good sales growth, productivity improvements, M/A-COM's rising margins, attainment of profitability in our Global Interconnect Systems Business Group, AMP-AKZO and military/aerospace operations, and perhaps a slightly better product pricing environment if industry capacity utilization rates rise. ORGANIZATIONAL CHANGES William S. Urkiel, age 49, joined AMP last month and has been elected Corporate Controller. He has a BA degree from Marist College and an MBA from Iona University. Mr. Urkiel held various financial positions at IBM during the last 27 years--most recently as Vice President-Finance of IBM Japan. J. Peter Ballantyne, age 49, was appointed divisional Vice President-Optical Interconnect Systems Group. He received bachelor and masters degrees in engineering from Carleton University (Ottawa), and a Ph.D. in engineering from Cambridge. He held various engineering and manufacturing management positions at AT&T during the last 23 years--most recently as Vice President-New Business Development in AT&T's Multimedia Products and Services Group. M/A-COM PROGRESS REPORT M/A-COM was merged into AMP on June 30, 1995 through issuance of 7.6 million shares of AMP stock. The leading supplier of components for the wireless communications industry, M/A-COM's sales have increased each quarter this year and margins improved in the third quarter--and prospects are quite good for these trends to continue. The smooth integration with AMP, the rapid conversion from military to commercial business, and the steady improvement in performance is beyond our original expectations. To keep ahead of rising demand, M/A-COM is adding significantly more production capability--a 40,000 sq. ft. gallium arsenide facility purchased from Cray Computer in Colorado. DIVIDEND ACTION On October 25, 1995, the Board of Directors declared a regular quarterly dividend of 23 cents/share payable December 1, 1995 to shareholders of record November 6, 1995. The total 1995 dividend of 92 cents per share is up from 84 cents in 1994, 80 cents in 1993, and 76 cents in 1992--the 42nd consecutive annual increase. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits -- 10.A - AMP Management Incentive Plan, as amended effective January 25, 1995. 10.B - 1993 Long-Term Equity Incentive Plan, as amended effective January 1, 1995. 10.C - Performance Restricted Share Agreement 27 - Financial Data Schedule (B) Reports on Form 8-K -- There were no reports on Form 8-K filed for the three months ended September 30, 1995. 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. Date: November 13, 1995 AMP INCORPORATED (Registrant) By: /s/ Robert Ripp __________________________________ R. Ripp Vice President and Chief Financial Officer By: /s/ W. S. Urkiel __________________________________ William S. Urkiel Corporate Controller EXHIBIT INDEX ------------- Exhibit Number Description - ------- ----------- 10.A - AMP Management Incentive Plan, as amended effective _____, 1995. 10.B - 1993 Long-Term Equity Incentive Plan, as amended effective _____, 1995. 10.C - Performance Restricted Share Agreement 27 - Financial Data Schedule EX-10.A 2 MANAGEMENT INCENTIVE PLAN AMP INCORPORATED HARRISBURG, PA 17105 - ------------------------------------------------------------------------------ AMP INCORPORATED AMP INCORPORATED MANAGEMENT INCENTIVE PLAN Plan Document Effective January 25, 1995 - ------------------------------------------------------------------------------ AMP INCORPORATED HARRISBURG, PA 17105 - ------------------------------------------------------------------------------ TABLE OF CONTENTS Section - ------- A. Plan Summary........................................................1 B. Plan Objectives.....................................................1 C. Plan Administration.................................................1 D. Plan Participation..................................................2 E. Plan Measures and Targets...........................................2 F. Participant Incentive Opportunities.................................3 G. Award Payouts and Timing............................................6 H. Administrative Information..........................................6 APPENDICES A. PLAN YEAR TOTAL AWARD SCHEDULE AMP INCORPORATED HARRISBURG, PA 17055 - ------------------------------------------------------------------------------ AMP INCORPORATED MANAGEMENT INCENTIVE PLAN A. PLAN SUMMARY The AMP Incorporated (AMP) Management Incentive Plan (the "Plan") allows officers and key senior executives to share in the financial achievements of AMP on an annual basis. The Plan recognizes and rewards for the achievement of both financial results, focusing on key objective, financial performance targets at the corporate and business unit levels, and individual nonfinancial objectives. The financial measures of performance, including the corporate-wide and unit-specific targets, together with the individual nonfinancial objectives are established at the beginning of each year at the time the participants are designated. The weighting between corporate, business unit and individual factors is also predetermined at that time. A range of incentive award levels is set for each participant at the beginning of each year, with the threshold award level requiring 90 percent performance of the respective goal and the maximum award level reached if 120 percent of the performance goal is attained. The extent to which goals are achieved is certified at the end of the plan year to determine the actual award for each participant. B. PLAN OBJECTIVES The objectives of the Plan are to: -- Stimulate and reward outstanding performance. -- Link the business plan process, including the attainment of key corporate priorities and financial objectives, with the compensation system. -- Provide competitive total compensation opportunities to attract and retain key executives. C. PLAN ADMINISTRATION The Plan shall be administered by a committee (the "Committee") of the Board of Directors of AMP composed of two or more directors, each of whom is an "outside director" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. No member of the Committee shall be a current employee of AMP, a former officer of AMP, a former employee of AMP still receiving compensation for prior services other than benefits under a tax-qualified retirement plan, or a person receiving direct or indirect remuneration from AMP in any capacity other than as a director. The Committee shall have full and final authority in its discretion and in acccordance with the provisions of the Plan, to: i) interpret the provisions of the Plan and to decide all questions of fact arising in its application, and the Committee's interpretation and decisions shall be in all respects final, conclusive and binding; ii) determine the employees who will be participants; iii) annually determine the threshold, target and - ------------------------------------------------------------------------------ -1- maximum award levels for each participant; iv) establish at the beginning of each year objective, performance-based corporate-wide and business unit- specific financial goals, together with the weighting between corporate, business unit and individual goals for each participant; v) certify in writing the level of performance of the corporate-wide and unit-specific financial goals following the end of the plan year; vi) impose such conditions on the grant of awards or decrease the amount of the payout, as it deems appropriate; and vii) make all other determinations, rules and regulations necessary or advisable for the administration of this Plan. No member of the Committee shall be personally liable for any action or determination in respect to administration of the Plan if made in good faith. D. PLAN PARTICIPATION AMP officers and key senior executives are eligible to participate in the Plan. The Committee and the Chief Executive Officer and President believe that AMP's officers and key senior executives are in the best position to make significant contributions to the success of the Company and its businesses. Participants for each plan year are designated by the Committee during the first quarter of the plan year. E. PLAN MEASURES AND TARGETS The corporate-wide financial measure(s) are determined in the first quarter of each year by the Committee based on the financial target(s) best suited, in the judgment of the Committee in its sole discretion, to provide the desired direction for AMP during the ensuing year. The goals for the plan year could be an earnings per share target, a value added goal, or any other existing or newly devised objective financial performance measure(s), or any combination thereof. For each participant directly involved with a business unit of AMP, a financial target or targets is also established by the Committee for that business unit in the first quarter of each plan year. These targets are tailored to each business unit dependent on the nature of its business operations and the stage of its business development. Finally, individual nonfinancial objectives are established in the first quarter of each plan year for each participant. These objectives are based on the duties and responsibilities of the participant in support of the overall financial and strategic goals of AMP and, with the exception of the Chairman of the Board and the Chief Executive Officer and President, are developed in discussions and agreement between the participant and the participant's manager. The individual objectives of the Chairman of the Board and the Chief Executive Officer and President are predetermined by the Committee. Once the financial goals are determined by the Committee at the beginning of the plan year, they are not adjusted throughout the plan year absent extraordinary circumstances beyond the control of AMP. Examples of such extraordinary circumstances include unanticipated significant currency fluctuations and tax changes. When the corporate-wide and unit-specific (if applicable) targets are set, a performance range is also established around each of these targets. The range includes a threshold--the minimum level of performance against the target that must be achieved before any payments are made, and the maximum-- the performance level beyond which no additional awards are earned. The relationship between the targets, maximums and thresholds (expressed as a percentage of target) is fixed for plan purposes and is as follows: THRESHOLD TARGET MAXIMUM --------- ------ ------- 90% 100% 120% Performance of the individual nonfinancial objectives, expressed as a percentage, is applied directly to the maximum incentive award level described in Section F below and is not subject to a threshold-maximum performance range. - ------------------------------------------------------------------------------ -2- The relative weighting between corporate, business unit and individual goals is predetermined by the Committee for each participant in the first quarter of each plan year. Examples of such weighting for a participant with corporate-wide, unit-specific and individual performance goals are weighting all three goals equally at 1/3, or weighting the corporate-wide and unit- specific bonus calculations at 2/5 each and the individual performance goal at 1/5. A participant with no business unit responsibility may have the corporate-wide bonus calculation made at 2/3 or 4/5 and the individual performance at 1/3 or 1/5, respectively, or any other similar combination. F. PARTICIPANT INCENTIVE OPPORTUNITIES The incentive award for plan participants is based on the extent to which financial and individual goals are achieved, and on the target incentive award profile for each participant, the latter of which varies based on the participant's level of responsibility. The target incentive award level (expressed as a percentage of base earnings) and corresponding threshold and maximum incentive award levels (also expressed as a percentage of base earnings) are established in the first quarter of each plan year by the Committee. Actual participant incentive awards may vary from the target incentive awards dependent on the degree to which corporate-wide, unit- specific (if applicable) and individual goals are achieved. The annual award for each participant is the product of the participant's actual calculated incentive award and his or her base earnings actually earned during the plan year. In no event may a participant receive more than $1.5 million in any annual award made under the Plan. The following two examples illustrate how the achievement of financial and individual goals impact actual participant incentive awards, using hypothetical plan participants: ILLUSTRATIVE ASSUMPTIONS AND CALCULATIONS ----------------------------------------- GOALS: ----- Corporate-wide: Earnings Per Share Goal = $3.00 Unit -specific: Executive A is the general manager of Business Unit A that has an operating income objective of $2 million; Executive B is the director of corporate environmental compliance Individual: Executive A has four individual nonfinancial goals; Executive B has five individual nonfinancial goals FINANCIAL AND INDIVIDUAL PERFORMANCE RANGE: ------------------------------------------- Goal Threshold Target Maximum ---- --------- ------ ------- Corporate EPS $2.70 $3.00 $3.60 Business Unit A $1.8 million $2 million $2.4 million in operating in operating in operating income income income Individual M A N A G E M E N T D I S C R E T I O N PARTICIPANTS' BASE EARNINGS AND INCENTIVE AWARD LEVELS: ------------------------------------------------------- Executive A: ------------ Base Earnings for Executive A = $100,000 Threshold for Executive A = 10% ($10,000) Target for Executive A = 35% ($35,000) Maximum for Executive A = 53% ($53,000) Weighting = Corporate-wide: 2/5 Unit-specific: 2/5 Individual: 1/5 - ------------------------------------------------------------------------------ -3- Executive B: ------------ Base Earnings for Executive B = $50,000 Threshold for Executive B = 10% ($5,000) Target for Executive B = 20% ($10,,000) Maximum for Executive B = 30% ($15,000) Weighting = Corporate-wide: 2/3 Individual: 1/3 CORRESPONDING INCENTIVE RANGE: ------------------------------ Executive A: ----------- Incentive Range Based on Achievement of Goals --------------------------------------------- Below Threshold Threshold Target Maximum Goal (weight) Performance Performance Performance Performance - ------------- ----------- ----------- ----------- ----------- Corporate (2/5) $0 $4,000 $14,000 $21,200 Business Unit A (2/5) $0 $4,000 $14,000 $21,200 Individual (1/5) $0 $2,000 $ 7,000 $10,600 --------- --------- ---------- --------- Total $0 $10,000 $35,000 $53,000 Executive B: ------------ Incentive Range Based on Achievement of Goals --------------------------------------------- Below Threshold Threshold Target Maximum Goal (weight) Performance Performance Performance Performance - ------------- ----------- ----------- ----------- ----------- Corporate (2/3) $ 0 $3,333 $6,667 $10,000 Individual (1/3) $ 0 $1,667 $3,333 $ 5,000 --------- --------- --------- --------- Total $ 0 $5,000 $10,000 $15,000 For financial performance between threshold, target and maximum, straight-line interpolation is applied. Appendix A summarizes the incentive levels based on performance scenarios between threshold and maximum for several of the currently applicable target levels. The incentive levels shown are applied to each financial goal and weighted appropriately. Because the applicable target levels are established annually and their relationships with the corresponding threshold and maximum levels will vary dependent on the target levels designated, Appendix A may change annually. The following illustrates how the hypothetical participants' awards are calculated using Appendix A, based on illustrative performance levels: ILLUSTRATIVE ACTUAL PERFORMANCE: - -------------------------------- Executive A: ------------ Actual Percent Plan Year of Target Goals Performance Achieved --------------- ----------- -------- Corporate EPS $2.90 97%(1) Business Unit A $2.1 million 105%(2) Individual 4 of 4 goals met N/A(3) (1) $2.90 (hypothetical actual EPS) divided by $3.00 (hypothetical target) - ------------------------------------------------------------------------------ -4- (2) $2.1 million (hypothetical actual operating income) divided by $2.0 million (hypothetical target) (3) Full attainment of individual goals earns the participant the maximum available incentive award level. For Executive A, this is 53% before being weighted Executive B: ------------ Actual Percent Plan Year of Target Goals Performance Achieved ------------- ----------- -------- Corporate EPS $2.90 97%(1) Individual 4 of 5 goals met N/A(2) (1) $2.90 (hypothetical actual EPS) divided by $3.00 (hypothetical target) (2) 4 of 5 individual goals performed represents 80% achievement of the 30% maximum incentive award level for Executive B, or 24% before being weighted ILLUSTRATIVE PARTICIPANTS' INCENTIVE CALCULATION: - ------------------------------------------------- Executive A: ------------ Total Award Based Actual Goals On Performance(1) Incentive Award(2) -------------- ----------------- ------------------ Corporate EPS 27.5% 11.0% Business Unit A 39.5% 15.8% Individual 53% 10.6% ----------- Total 37.4% Total Incentive $37,400(3) (1) Based on the hypothetical target award level of 35% for Executive A and derived from Appendix A using the corresponding "Percent of Target Achieved" calculated above (2) The Total Award % multiplied by the weighted factor, which is 2/5 for Corporate EPS, 2/5 for Business Unit profits and 1/5 for individual goals (3) The Total Incentive Award as a percentage of the actual earnings for the plan year, which in the case of hypothetical Executive A is 37.4% of $100,000 Executive B: ------------ Total Award Based Actual Goals On Performance(1) Incentive Award(2) ------------- ----------------- ------------------ Corporate EPS 17.0% 11.3% Individual 24.0% 8.0% ------------ Total 19.3% Total Incentive $9,650(3) (1) Based on the hypothetical target award level of 20% for Executive B and derived from Appendix A using the corresponding "Percent of Target Achieved" calculated above (2) The Total Award % multiplied by the weighted factor, which is 2/3 for Corporate EPS and 1/3 for individual goals (3) The Total Incentive Award as a percentage of the actual earnings for the plan year, which in the case of hypothetical Executive B is 19.3% of $50,000 Performance against corporate, business unit ( if applicable) and individual goals and the calculation of the earned incentive awards are certified by the Committee in the first quarter of the year following the plan year. The Committee has the authority to adjust participant awards downward, if appropriate. - ------------------------------------------------------------------------------ -5- G. AWARD PAYOUTS AND TIMING Awards are paid in cash, subject to applicable withholding, after AMP's results have been verified by the Company and certified by the Committee. Typically, awards are paid before the end of the first quarter of the year following each plan year. To receive awards, participants must be active employees in good standing at AMP on December 31 of the plan year. However, different guidelines apply for those participants who retire, become disabled or die during the plan year. See Section H, subsections a) through c) below for details on these guidelines. The Committee has the authority to make exceptions to these rules and guidelines. H. ADMINISTRATIVE INFORMATION This section contains important information about changes in employment status, plan provisions for promotions, transfers and new hires, tax provisions and other administrative matters. a) Termination Before Year-End For Reasons Other Than Retirement, Disablement or Death --------------------------------------------------------------- Participants who leave AMP on or before December 31 of the plan year forfeit all award opportunities for the current plan year under this plan. If, however, employment is terminated after the completion of the plan year, participants are eligible to receive an award for the prior plan year. The Committee has the authority to make exceptions to this guideline. b) Retirement, Disablement and Death --------------------------------- Participants who retire, become disabled or die during the plan year are eligible to receive pro rata awards. For retirement and disablement, awards are paid after that plan year--regardless of the date of change--to enable the appropriate calculations to be made. For estate purposes, awards to employees who die are paid as soon as possible following death and will be based on anticipated performance. The Committee has the authority to make exceptions to this guideline. c) Promotions, Transfers and New Hires ----------------------------------- Participants who are promoted into the Plan, hired into the Plan, or transferred into or out of the Plan, are eligible to receive pro rata awards based on the period of active employment while under the Plan. For participants who transfer from one eligible position to another eligible position, awards are prorated and determined jointly by the former and new managers. The Committee has the authority to make exceptions to this guideline. d) Taxes on Awards --------------- Participant awards are taxed as ordinary income, in keeping with current U.S. and local tax laws. e) Amendment --------- The Committee also has the right to amend, suspend or terminate the Plan at any time for any reason. Such changes may be necessary if there are changes in laws, regulations or accounting practices, mergers, acquisitions, divestitures, or other extraordinary, unusual or nonrecurring items. f) Employment ---------- Participation in the Plan does not guarantee continued employment by AMP. g) Management, Accounting and Financial Decisions ---------------------------------------------- Nothing in this Plan shall affect the authority of the management of AMP to make management, business, accounting and financial decisions concerning the Company. h) Non-Assignability ----------------- Prior to its payment in cash, no right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the same whether voluntary, involuntary or by - ------------------------------------------------------------------------------ -6- operation of law, shall be void except by will or by the laws of descent and and distribution or by such other means as the Committee may approve from time to time. No right or benefit under the Plan shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any participant under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under the Plan, then such right or benefit shall, in the sole discretion of the Committee, cease and determine, and in such event, AMP may hold or apply the same or any part thereof for the benefit of the participant, the participant's spouse, children or other dependents, or any of them, in such manner and in such proportion as the Committee may determine. i) Non-Uniform Determinations -------------------------- The Committee's determinations under the Plan (including without limitation determinations of the persons to participate under the Plan, award levels, objective performanced-based goals, relative weighting between goals, and the terms of such awards) need not be uniform and may be made by it selectively among persons who participate, or are eligible to participate, under the Plan, whether or not such persons are similarly situated. j) Effect on Other Plans --------------------- Nothing in this Plan shall be construed to limit the right of AMP to establish any other forms of incentives or compensation for employees of the Company, whether payable in cash or otherwise, in connection with any proper corporate purpose. k) Severability ------------ If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any person or award, or would disqualify the Plan or any award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or an award, such provision shall be stricken as to such jurisdiction, person, or award, and the remainder of the Plan and any such award shall remain in full force and effect. l) Construction ------------ Wherever any words are used in this Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply. m) Headings -------- Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. n) Governing Law ------------- The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the Commonwealth of Pennsylvania and applicable Federal law. January 25, 1995 - ------------------------------------------------------------------------------ -7- AMP INCORPORATED HARRISBURG, PA 17105 - ------------------------------------------------------------------------------ APPENDIX A - PLAN YEAR TOTAL AWARD SCHEDULE (For Use in Converting Percents of Corporate-Wide and Unit-Specific Financial Target Achievement Into Non-Weighted Incentive Award Percents) Percent of Financial ______________________Incentive Profile__________________________ Target Achieved 10%-35%-53% 10%-30%-45% 10%-25%-38% 10%-20%-30% 120% 53.0% 45.0% 38.0% 30.0% 119% 52.1% 44.3% 37.4% 29.5% 118% 51.2% 43.5% 36.7% 29.0% 117% 50.3% 42.8% 36.1% 28.5% 116% 49.4% 42.0% 35.4% 28.0% 115% 48.5% 41.3% 34.8% 27.5% 114% 47.6% 40.5% 34.1% 27.0% 113% 46.7% 39.8% 33.5% 26.5% 112% 45.8% 39.0% 32.8% 26.0% 111% 44.9% 38.3% 32.2% 25.5% 110% 44.0% 37.5% 31.5% 25.0% 109% 43.1% 36.8% 30.9% 24.5% 108% 42.2% 36.0% 30.2% 24.0% 107% 41.3% 35.3% 29.6% 23.5% 106% 40.4% 34.5% 28.9% 23.0% 105% 39.5% 33.8% 28.3% 22.5% 104% 38.6% 33.0% 27.6% 22.0% 103% 37.7% 32.3% 27.0% 21.5% 102% 36.8% 31.5% 26.3% 21.0% 101% 35.9% 30.8% 25.7% 20.5% 100% 35.0% 30.0% 25.0% 20.0% 99% 32.5% 28.0% 23.5% 19.0% 98% 30.0% 26.0% 22.0% 18.0% 97% 27.5% 24.0% 20.5% 17.0% 96% 25.0% 22.0% 19.0% 16.0% 95% 22.5% 20.0% 17.5% 15.0% 94% 20.0% 18.0% 16.0% 14.0% 93% 17.5% 16.0% 14.5% 13.0% 92% 15.0% 14.0% 13.0% 12.0% 91% 12.5% 12.0% 11.5% 11.0% 90% 10.0% 10.0% 10.0% 10.0% Note: After the total award is attained, it is multiplied by the appropriate financial goal weight. EX-10.B 3 EQUITY INCENTIVE PLAN January 25, 1995 AMP INCORPORATED ---------------- 1993 LONG-TERM EQUITY INCENTIVE PLAN ------------------------------------ (As Amended and Restated Effective January 1, 1995) 1993 LONG-TERM EQUITY INCENTIVE PLAN ------------------------------------ January 1995 2 - ------------------------------------------------------------------------------ 1. PURPOSE. The purposes of the AMP Incorporated 1993 Long-Term Equity Incentive Plan (the "Plan") are to encourage selected employees of AMP Incorporated (the "Company") to acquire a proprietary interest in the Common Stock of the Company, thereby aligning their interests with the interests of the shareholders; to generate an increased incentive to contribute to the Company's future growth and profitability, thus enhancing the value of the Company for the benefit of its shareholders; and to strengthen the ability of the Company to attract and retain exceptionally qualified individuals upon whom the sustained progress, growth and profitability of the Company depend. 2. DEFINITIONS. As used in the Plan, the following terms shall have the meanings set forth below: a) "Agreement" shall mean any agreement, contract, certificate or other instrument or document that is in writing and evidences any Award granted under the Plan. b) "Award" shall mean any Option, Stock Bonus Unit, Supplemental Cash Bonus, Performance Restricted Share or other grant made under the Plan. c) "Award Date" shall mean the date on which an Award is made under the Plan. d) "Board" shall mean the board of directors of the Company. January 1995 3 - ------------------------------------------------------------------------------ e) "Bonus Computation Date" shall mean the Award anniversaries for payment of a portion of Stock Bonus Unit and/or Supplemental Cash Bonus as described in Section 8 a). f) "Change in Control" shall mean those events and conditions that may occasion a change in control in the Company as defined in Section 12. g) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. h) "Committee" shall mean a committee of the Board designated by such Board to administer the Plan and composed of two or more directors, each of whom is a "disinterested person" within the meaning of Rule 16b-3. No member of the Committee shall be a current or former employee of the Company or shall have received an Award under the Plan within a one-year period prior to his or her appointment to the Committee. No member of the Committee shall participate in any decisions of the Committee that will or could affect their own distributions or other participation under the Plan. i) "Common Stock" shall mean the Common Stock of the Company, no par value. j) "Company" or "Corporation" shall mean AMP Incorporated, a corporation organized under the laws of the Commonwealth of Pennsylvania, and any of its subsidiaries, partnerships and joint ventures. January 1995 4 - ------------------------------------------------------------------------------ k) "Competing Business" shall mean, as applied to a particular period of time, a business that at such time is engaged in the manufacture, sale or other disposition of a product or products that is in competition with a product or products of the Company. l) "Designated Value" shall mean the amount designated by the Committee with respect to a Stock Bonus Unit as defined in Section 8 b). m) "Exchange Act" means the Securities Exchange Act of 1934, as amended. n) "Fair Market Value" shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as set forth in Sections 7 a), 7 d), 8 b), and 8 c) or otherwise established from time to time by the Committee. o) "Incentive Stock Option" (ISO) shall mean an option granted under Section 7 of the Plan that is intended to meet the requirements of Section 422 of the Code, or any successor provision thereto. p) "Nonqualified Stock Option" (NQSO) shall mean an option granted under Section 7 of the Plan that is not intended to be an Incentive Stock Option or does not qualify as an Incentive Stock Option. January 1995 5 - ------------------------------------------------------------------------------ q) "Option" shall be a right to purchase a specified number of Shares at a given price within a specified period of time, and shall be either an Incentive Stock Option or a Nonqualified Stock Option. r) "Participant" shall mean those officers and other key employees designated to be granted an Award under the Plan as defined in Section 5. s) "Performance Restricted Share" shall mean a restricted Share granted under Section 10 of the Plan that will either become an unrestricted Share or be forfeited based on Company performance during the Performance Vesting Period. t) "Performance Vesting Period" shall mean a period of three or more consecutive fiscal years of the Company specified by the Committee in conjunction with an Award of Performance Restricted Shares under Section 10 of the Plan. u) "Person" shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof. v) "Plan" shall mean the AMP Incorporated 1993 Long-Term Equity Incentive Plan. January 1995 6 - ------------------------------------------------------------------------------ w) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation thereto. x) "Securities Act" means the Securities Act of 1933, as amended. y) "Share" or "Shares" shall mean the shares of Common Stock. z) "Stock Bonus Unit" shall mean any Award granted subject and pursuant to Section 8. aa) "Supplemental Cash Bonus" shall mean any Award granted under Section 9 in conjunction with a Stock Bonus Unit. 3. Administration. The Plan shall be administered by the Committee in accordance with its provisions. The Committee shall have full and final authority in its discretion to: i) interpret the provisions of the Plan and to decide all questions of fact arising in its application, and its interpretation and decisions shall be in all respects final, conclusive and binding; ii) determine the employees who will be Participants; iii) determine the type of Award to be made and the amount, size and terms of each such Award; iv) determine the time when Awards will be granted; v) impose such conditions on the grant of Awards as it deems appropriate; and vi) make all other determinations, rules and regulations necessary or advisable for the administration of this Plan. January 1995 7 - ------------------------------------------------------------------------------ No member of the Committee shall be personally liable for any action or determination in respect to the administration of the Plan if made in good faith. 4. Shares Subject to Plan. The shares of stock subject to Options, Stock Bonus Units and Performance Restricted Shares shall be the Shares. Subject to the below-noted provisions, the maximum number of Shares that may be awarded under the Plan during its term shall be 5,000,000 Shares, subject to adjustment in accordance with Section 20 hereof. Such Shares may, in whole or part, be authorized and unissued shares or issued Shares reacquired by the Company. In addition to this number of Shares that may be awarded under the Plan during its term, to the extent permitted by Rule 16b-3 promulgated under the Exchange Act and any interpretations of the Securities and Exchange Commission Staff thereunder: i) if the total available Shares in any year are not awarded, the remaining balance of Shares shall be available for use in ensuing years; ii) similarly, if Awards which have been made under the Plan for any reason expire, terminate or are forfeited with all or any portion thereof remaining unexercised or unpaid, then the Shares corresponding to such unexercised or unpaid Awards will again be available for award under the Plan; and iii) to the extent Awards of Stock Bonus Units are paid in cash rather than Shares, or are paid in Shares and the number of Shares distributed is less than the number of Stock Bonus Units awarded, the remaining balance of Shares will be available for future awards under the Plan. 5. Participants. Persons eligible to receive Awards under the Plan shall be limited to those officers and other key employees of the Company who, in the opinion of the January 1995 8 - ------------------------------------------------------------------------------ Committee, are in positions in which their decisions, actions, and counsel significantly impact upon the growth and financial success of the Company. The Committee's decisions with respect to participation shall be final and binding. 6. Awards Under the Plan. Awards under the Plan may be in the form of Options (both Nonqualified Stock Options and Incentive Stock Options), Stock Bonus Units with or without Supplemental Cash Bonuses, Performance Restricted Shares, or any combination of the above. Awards shall be made in such frequency and on such date as the Committee shall determine for each Participant. Effective for awards made beginning in 1995, no more than 2 percent of the 5,000,000 shares of Common Stock approved for distribution under the Plan during its term may be made subject to awards made to any one participant under the Plan in a given year. 7. Options. Options shall be evidenced by Option Agreements in such form and containing such terms and conditions as the Committee shall approve from time to time, consistent with this Plan. Option Agreements shall contain in substance, but not be limited to, the following terms and conditions: a) Option Price. The Option exercise price for each Share shall be equal to 100% of the Fair Market Value of a Share on the Award Date, as determined by the closing sale price reported on the New York Stock Exchange Composite Tape or such higher price as may be determined by the Committee in respect to any Option. January 1995 9 - ------------------------------------------------------------------------------ b) Number of Shares. Each Option Agreement shall state the number of Shares covered by each Option Award. c) Exercise of Option. Each Option Agreement shall state the period or periods of time, as may be determined by the Committee, within which the Option may be exercised by the Participant, in whole or in part, provided that, subject to the provisions of the next sentence, the Option may not vest or be exercised earlier than twelve months after the Award Date of the Option nor later than ten years after the Award Date of the Option. Notwithstanding the previous sentence, the Committee shall have the power to permit, in its discretion, an acceleration of the previously determined exercise terms, subject to the terms of this Plan, under such circumstances and upon such terms and conditions as it deems appropriate. Each Option Agreement shall state the minimum number of Options that can be exercised in the event a Participant chooses to exercise fewer than the total number of Options that are exercisable, and the procedures and methods that must be followed in order to exercise an Option. During the life of a Participant, Options shall be exercisable only by such person or, if disabled, by such person's guardian or legal representative. After the death of a Participant, Options may be exercised, subject to the terms of the Plan, by the Participant's personal representative or by any person empowered to do so by will or by the laws of descent and distribution. d) Payment for Shares. Shares purchased pursuant to an Option Agreement shall be paid for in full at the time of exercise, either in the form of cash, January 1995 10 - ------------------------------------------------------------------------------ Common Stock (whether by previously owned Shares or by having the Company withhold a portion of the Shares to be received) valued at Fair Market Value on the date of payment as determined by the closing sales price of the New York Stock Exchange Composite Tape, or in a combination thereof, as the Committee may determine. e) Rights upon Termination of Employment. In the event that a Participant ceases to be an employee of the Company for any cause, all Options will terminate immediately or as the Committee may determine in its sole discretion. Furthermore, if the Committee in its sole discretion so determines, the period within which an Option may be exercised may be extended beyond the date of termination of employment if a Participant continues to perform services for the Company or a subsidiary thereof on either a full or part time basis either as an independent contractor or on a consulting basis or otherwise. In no event may the Committee continue the term of the Option beyond its term as stipulated in the Option Agreement. Notwithstanding the foregoing, any extension of the term of an Option beyond the date of termination of employment shall be contingent on such conditions as the Committee, in its sole discretion, may determine, including but not limited to the requirement that the Participant shall not, whether full time or part time, as an employee, independent contractor, consultant, advisor or otherwise, engage in or perform any services prior to the exercise and payment of such Option for a business that is a Competing Business, or otherwise act in a manner that is inimical or contrary to the best interests of January 1995 11 - ------------------------------------------------------------------------------ the Company. In the event that any of such conditions shall not be fulfilled, the extension of the term of the Option and the obligations of the Company under this Section 7 shall forthwith terminate and the Participant's rights hereunder shall be canceled. f) Individual Limitations. Option Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to qualify such Options as Incentive Stock Options, including but not limited to the following: i) Notwithstanding anything herein to the contrary, the aggregate Fair Market Value (determined as of the time the Option(s) is granted) of the Shares that may become first exercisable in any calendar year with an Incentive Stock Option shall not exceed $100,000 for each Participant; options exercised in excess of $100,000 in a given year shall be treated as Nonqualified Stock Options. ii) Notwithstanding anything herein to the contrary, no Incentive Stock Option shall be granted to any individual if at the time the Option is to be granted the individual owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company unless at the time such Option is granted the Option price is at least 110 percent of the Fair Market Value of January 1995 12 - ------------------------------------------------------------------------------ the Shares subject to Option and such Option by its terms is not exercisable after the expiration of five years from the Award Date. iii) The Committee may require Participants to give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Stock Option if such disposition occurs within 2 years from the Award Date of such Option or 1 year from the date of transfer of such Shares to Participant. These requirements to give prompt notice of disposition may be referred to in legends contained on the certificates evidencing such Shares. g) Other Terms. Each Incentive Stock Option Agreement shall contain such other terms, conditions and provisions as the Committee may determine to be necessary or desirable in order to qualify such Option as a tax-favored Option within the meaning of Section 422 of the Code, or any amendment thereof, substitute therefor, or regulation thereunder. No Incentive Stock Option shall be granted unless such Option, when granted, qualifies as an Incentive Stock Option. Subject to the limitations of Section 22 below, the Committee shall have the power to amend the terms of any Option. 8. Stock Bonus Units. Stock Bonus Units granted under the Plan shall be evidenced by Agreements in such form and containing such terms and conditions as the Committee shall approve from time to time, consistent with this Plan. The Agreements shall specify, but not be limited to, the number of Stock Bonus Units January 1995 13 - ------------------------------------------------------------------------------ awarded to a Participant, the Designated Value of the Shares as of the Award Date, and the Bonus Computation Dates: a) Bonus Computation Dates. At the time of the Award of Stock Bonus Units, the Committee shall establish with respect to each such Award, Bonus Computation Dates that are the fourth, fifth and sixth anniversaries of the Award Date and at which time one-third of the Stock Bonus Units shall be calculated and paid. b) Designated Value. The Designated Value shall be an amount designated by the Committee on the Award Date, but in no event less than 95% of the Fair Market Value as determined by the average closing sales price as reflected on the New York Stock Exchange Composite Tape for the 10 trading days immediately prior to such Award Date. c) Payment Determination. The amount of payment, if any, shall be determined on each of the specified Bonus Computation Dates by subtracting the Designated Value from the Fair Market Value as determined by the average closing sales price as reflected on the New York Stock Exchange Composite Tape for the 10 trading days immediately prior to such Bonus Computation Date, and multiplying such difference by the number of Stock Bonus Units maturing on the Bonus Computation Date. d) Form of Payment. Subject to the provisions of the next sentence, Awards shall be paid in Shares with the exception that fractional Shares shall be paid January 1995 14 - ------------------------------------------------------------------------------ in cash. The Committee, in its sole discretion, may determine that Awards or any portion thereof may be paid in cash. e) Time of Payment . Awards shall be paid as of each Bonus Computation Date, or as soon thereafter as practical, taking into consideration effects of any short-swing profit liability imposed by Section 16 of the Exchange Act in a manner determined by the Committee. Payments may, in the sole discretion of the Committee, be made in lump sum distributions and/or installments. Notwithstanding the foregoing, the Committee may, in its sole discretion at any time or times after the first anniversary of the Award Date, accelerate the date that is the Bonus Computation Date under such circumstances and upon such terms and conditions as it deems appropriate. f) Termination Prior to Award Being Fully Earned. Unless the Committee, in its sole discretion, determines otherwise, an Award granted to a Participant shall terminate for all purposes when a Participant terminates employment with the Company except in the case of death, disability, or retirement. A Participant, or the estate of a Participant, whose employment was terminated due to death, disability or retirement occurring more than one year after the Award Date shall be eligible to receive a pro rata portion of the payment of his or her Award based upon the portion of the performance period during which the Participant was employed, in such amount and manner and with such conditions as the Committee shall determine. January 1995 15 - ------------------------------------------------------------------------------ If the Committee in its sole discretion so determines, employment shall not be considered as terminated for the purposes of this Section 8 f) so long as a Participant continues to perform services for the Company or a subsidiary thereof on either a full or part time basis either as an independent contractor or on a consulting basis or otherwise, provided, however, that Participant during such period does not, whether full time or part time, engage in or perform any services as an employee, independent contractor, consultant, advisor or otherwise, for a Competing Business. 9. Supplemental Cash Bonus Awards. The Committee may, in its sole discretion, grant Supplemental Cash Bonus Awards to Participants in conjunction with payments with respect to Stock Bonus Units. The Supplemental Cash Bonus Award shall be paid in cash and shall be a percentage no greater than that calculated to provide an Award sufficient to pay the anticipated United States Federal income tax at a maximum rate for the highest taxable bracket with respect to both the payment for Stock Bonus Units and the Supplemental Cash Bonus Award rounded up to the next highest whole percentage point. Payment of the Supplemental Cash Bonus shall be made at the same time as payment of the Stock Bonus Units. 10. Performance Restricted Shares. Performance Restricted Shares awarded under the Plan shall be evidenced by Share certificates issued to the Participant at the time of the Award that bear such legend or legends as the Company deems necessary or appropriate. These Performance Restricted Shares shall be January 1995 16 - ------------------------------------------------------------------------------ governed by Agreements in such form and containing such terms and conditions as the Committee shall approve from time to time, consistent with the Plan. These Agreements shall also contain in substance, but not be limited to, the following terms and conditions: a) Performance Vesting Period. At the time of an Award of Performance Restricted Shares, the Committee shall establish with respect to such Award a Performance Vesting Period equal to three or more consecutive fiscal years of the Company. Awards of Performance Restricted Shares applicable to a Performance Vesting Period shall be made by the Committee no later than the end of the first calendar quarter of the first fiscal year in the Performance Vesting Period. b) Terms of an Award. In making an Award of Performance Restricted Shares, the Committee shall specify i) a number of Performance Restricted Shares covered by the Award, ii) the applicable Performance Vesting Period, iii) the minimum average annual ROE to be attained by the Company over the Performance Vesting Period as a pre-condition to any of the Performance Restricted Shares becoming vested at the end of the Performance Vesting Period, iv) a target average annualized earnings growth rate to be attained by the Company over the Performance Vesting Period, v) and a super-target average annualized earnings growth rate to be attained by the Company over the Performance Vesting Period. For purposes hereof, 1) average annual ROE for a Performance Vesting Period shall be the arithmetic average of the annual ROE numbers January 1995 17 - ------------------------------------------------------------------------------ reported for each fiscal year in the Performance Vesting Period, and 2) the average annualized earnings growth rate for a Performance Vesting Period shall be the constant rate of year-to- year earnings growth that, were it to occur consistently over the Performance Vesting Period, would generate the actual aggregate earnings realized during the Performance Vesting Period. c) Vesting of Performance Restricted Shares. At the end of a Performance Vesting Period, all Performance Restricted Shares awarded with respect to the Performance Vesting Period shall be forfeited, canceled and returned to the Company if the minimum average annual ROE target applicable to the Performance Vesting Period has not been attained. If the ROE target has been attained or exceeded at such point in time, the number of Performance Restricted Shares awarded to a Participant at the outset of the Performance Vesting Period that become vested will be determined by the actual average annualized earnings growth rate attained over the Performance Vesting Period, as follows: i) If the actual average annualized earnings growth rate over the Performance Vesting Period is 0% or less, all Performance Restricted Shares awarded with respect to the Performance Vesting Period shall be forfeited, canceled, and returned to the Company. ii) If the actual average annualized earnings growth rate over the Performance Vesting Period is between 0% earnings growth and January 1995 18 - ------------------------------------------------------------------------------ the target average annualized earnings growth rate applicable to the Performance Vesting Period, the actual growth rate stated as a percentage of the target growth rate will determine the percentage of the Performance Restricted Shares of each Participant that will be vested, with the balance of the Performance Restricted Shares to be forfeited, canceled and returned to the Company. iii) If the actual average annualized earnings growth rate over the Performance Vesting Period is between the target level and the super-target level of average annualized earnings growth applicable to the Performance Vesting Period, the Participant will be vested in between 100% and 200% of the Performance Restricted Shares awarded at the outset of the Performance Vesting Period, with the applicable vesting percentage determined using direct proportions (e.g., if the earnings growth rate is 1/4 of the spread between the target and the super-target, the vesting percentage would be 125%; if the earnings growth rate is 8/10 of the spread between the target and the super-target, the vesting percentage would be 180%). iv) If the actual average annualized earnings growth rate over the Performance Vesting Period is at or above the super- target level, the Participant will be vested in 200% of the Performance Restricted Shares awarded at the outset of the Performance Vesting Period. January 1995 19 - ------------------------------------------------------------------------------ d) Voting of Performance Restricted Shares. During the Performance Vesting Period applicable to an Award of Performance Restricted Shares, all voting rights appurtenant to the Performance Restricted Shares shall be fully exercisable by the Participant notwithstanding the performance vesting restrictions. However, during the Performance Vesting Period, no voting rights shall exist or be exercisable with respect to Performance Restricted Shares credited to the dividend reinvestment account described in Section 10 e) below. e) Dividends. All dividends (cash or stock) payable on non-vested Performance Restricted Shares during the Performance Vesting Period applicable to such Award shall be held by the Company in a phantom dividend reinvestment account. Cash dividends will be deemed to have been invested in further Performance Restricted Shares using the closing price on the New York Stock Exchange on the dividend payment date. Dividends that would be payable on such dividend reinvestment account Performance Restricted Shares will also be credited to the account and deemed invested in further Performance Restricted Shares. At the end of the Performance Vesting Period, the Participant shall be vested in the same percentage of the balance of the Performance Restricted Shares credited to the dividend reinvestment account as the percentage the Participant is vested, in accordance with the terms of the Plan, for the Award of the Performance Restricted Shares applicable to the Performance Vesting Period. The Participant's vested Performance Restricted Shares under the dividend reinvestment account shall be paid January 1995 20 - ------------------------------------------------------------------------------ out to the Participant in actual Shares, without further restriction, plus cash for any fractional Share. f) Form and Time of Payment. As soon as practical after the end of a Performance Vesting Period, the Company shall issue to each Participant with Performance Restricted Shares that vested with respect to the Performance Vesting Period a certificate for the number of such vested Shares plus the related number of vested Shares attributable to the dividend reinvestment account. The Company shall concurrently cancel the Share certificate issued at the outset of the Performance Vesting Period to evidence the Performance Restricted Share Award. g) Termination Prior to Award Being Fully Earned. Unless the Committee, in its sole discretion, determines otherwise, an Award granted to a Participant shall terminate for all purposes when a Participant terminates employment with the Company except in the case of death, disability, or retirement. A Participant, or the estate of a Participant, whose employment was terminated due to death, disability or retirement occurring more than one year after the Award Date shall be eligible to receive a pro rata portion of the payment of his or her Award based upon the portion of the Performance Vesting Period during which the Participant was employed, in such amount and manner and with such conditions as the Committee shall determine. If the Committee in its sole discretion so determines, employment shall not be considered as terminated for the purposes of this Section 10 g) so January 1995 21 - ------------------------------------------------------------------------------ long as a Participant continues to perform services for the Company or a subsidiary thereof on either a full or part time basis either as an independent contractor or on a consulting basis or otherwise, provided, however, that Participant during such period does not, whether full time or part time, engage in or perform any services as an employee, independent contractor, consultant, advisor or otherwise, for a Competing Business, or otherwise act in a manner that is inimical or contrary to the best interests of the Company. 11. Non-Registration. In the event the Shares to be issued hereunder have not been registered under the Securities Act or a registration is not then currently effective with respect to such Shares, the Committee shall require, as a condition to the exercise of any Option and the award or vesting of any Performance Restricted Shares under this Plan, that the Participant deliver to the Company at the time of such exercise, award or vesting a bona fide written representation and agreement, in a form satisfactory to the Committee, signed by the Participant or other person then entitled to exercise such Option or receive vested Performance Restricted Shares, stating that the Shares are being acquired for his or her own account, for investment and without any present intention of distribution or reselling said Shares, or any of them, except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that the Participant or other person then entitled to exercise such Option or receive vested Performance Restricted Shares will indemnify the Company against and hold it free and harmless from any loss, damages, expense or liability resulting to the Company if any sale or distribution of the Shares by such person is contrary to the January 1995 22 - ------------------------------------------------------------------------------ representation and agreement referred to above. The Committee may take whatever additional actions it reasonably deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other Federal or state securities laws or regulations, including but not limited to Rule 144 promulgated under the Securities Act. Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of Shares acquired on an Option exercise or upon vesting of Performance Restricted Shares does not violate the Securities Act, and may issue stop-transfer orders covering such Shares. Share certificates evidencing Shares issued on exercise of such Option or vesting of such Performance Restricted Shares shall bear an appropriate legend referring to the provisions of this Section 11 and the agreements herein. 12. Change in Control. For the purposes of this Section, "Change in Control" shall mean the first to occur of any one of four events described below: a) The acquisition of beneficial ownership (other than from the Company) by any person, entity or "group" within the meaning of Section 13 d) 3) or Section 14 d) 2) of the Exchange Act excluding, for this purpose, the Company or its subsidiaries, or any employee benefit plan of the Company or its subsidiaries that acquires beneficial ownership of voting securities of the Company (within the meaning of Rule 13d-3 promulgated under the Exchange Act), of 30% or more of either the then outstanding shares of Common Stock or the combined voting power of the Company's then January 1995 23 - ------------------------------------------------------------------------------ outstanding voting securities entitled to vote generally in the election of directors; or b) A change in the persons constituting the Board as it existed in the immediately preceding calendar year (the "Incumbent Board") such that the directors of the Incumbent Board no longer constitute a majority of the Board; provided that any person becoming a director in a subsequent year whose election, or nomination for election, by the Company's shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of the Plan, considered as though such person were a member of the Incumbent Board; or c) Approval by the shareholders of the Company of a reorganization, merger or consolidation, in each case with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of the reorganized, merged or consolidated corporation's then outstanding voting securities; or January 1995 24 - ------------------------------------------------------------------------------ d) A liquidation or dissolution of the Company or the sale of all or substantially all of the assets of the Company. Notwithstanding the provisions of Sections 7, 8, 9, and 10 hereof and the terms of each Agreement, upon the occurrence of a Change of Control as defined above, all Options that are unexercised and unexpired shall become immediately and automatically vested for the period of their remaining terms, and all Stock Bonus Units, Supplemental Cash Bonus Awards, Performance Restricted Shares and other applicable Awards granted under the Plan that are unvested and unpaid shall automatically become immediately vested and payable, without any further action by the Committee. 13. General Restrictions. The Plan and each Award under the Plan shall be subject to the condition that, if at any time the Committee shall determine that the Plan, an Award under the Plan or the issuance or purchase of Shares in connection therewith requires or it is desirable that it has i) the listing, registration or qualification of the Shares subject or related to the Plan upon any securities exchange or under any state or Federal law or under the rules and regulations of the Securities and Exchange Commission or any other governmental regulatory body, or ii) the consent or approval of any government regulatory body, or iii) an Agreement by the recipient of an Award with respect to the disposition of Shares, then such Plan will not be effective and the Award may not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee. January 1995 25 - ------------------------------------------------------------------------------ 14. Rights of a Shareholder. The recipient of any Award under the Plan shall not be, nor have any of the rights of, a shareholder with respect thereto unless and until certificates for Shares are issued to such Participant. 15. Rights to Terminate Employment. Nothing in the Plan or in any Agreement entered into pursuant to the Plan shall confer upon any Participant the right to continue in the employment of the Company or affect any right that the Company may have to terminate the employment of such Participant for any reason whatsoever, with or without good cause. 16. Management, Accounting and Financial Decisions. Nothing in this Plan shall affect the authority of the management of the Company to make management, business, accounting and financial decisions concerning the Company. 17. Withholding of Taxes; Withholding of Shares. a) Whenever the Company proposes or is required to issue or transfer Shares under the Plan, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy any Federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such Shares. Withholding requirements may be satisfied by cash payments or, at the election of a Participant, by having the Company withhold a portion of the Shares or Supplemental Cash Bonus to be received, or by delivering previously owned Shares, having a value equal January 1995 26 - ------------------------------------------------------------------------------ to the amount to be withheld (or such portion thereof as the Participant may elect). b) Any election to have Shares withheld under this Section or, if so determined by the Committee, under Section 7 d), may be subject, in the Committee's discretion, to one or more of the following restrictions in accordance with Section 16(b) of the Exchange Act: i) the election shall be irrevocable; ii) the election shall be subject, in whole or in part, to the approval of the Committee and to such rules as it may adopt; iii) the Option that may be part of the transaction must not be exercised within six months following the election; and iv) the election shall be made during the time period specified in Rule 16b-3(e) promulgated under the Exchange Act. Whenever payments under the Plan are to be made in cash, such payments shall be net of an amount sufficient to satisfy any Federal, state and/or local withholding tax requirements. 18. Non-Assignability. Prior to its settlement in the form of cash or fully vested Shares, no right or benefit under this Plan shall be subject to anticipation, alienation, sale, January 1995 27 - ------------------------------------------------------------------------------ assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the same whether voluntary, involuntary or by operation of law, shall be void except by will or by the laws of descent and distribution or by such other means as the Committee may approve from time to time. No right or benefit under the Plan shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under the Plan, then such right or benefit shall, in the sole discretion of the Committee, cease and determine, and in such event, the Company may hold or apply the same or any part thereof for the benefit of the Participant, Participant's spouse, children or other dependents, or any of them, in such manner and in such proportion as the Committee may determine. The Committee may impose such restrictions on the transferability of the Shares as it deems appropriate. Any such restrictions shall be set forth in the respective Agreement and may be referred to in legends contained on the certificates evidencing such Shares. 19. Non-Uniform Determinations. The Committee's determinations under the Plan (including without limitation determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Agreements evidencing same, and the establishment of values and performance targets) need not be uniform and may be made by it selectively January 1995 28 - ------------------------------------------------------------------------------ among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. 20. Adjustments. In the event of any change in the outstanding Shares of the Company by reason of a stock dividend or distribution, recapitalization, merger, consolidation, split-up, combination, exchange of shares or the like, the Committee shall adjust the maximum number of Shares that may be issued under the Plan and shall provide for an equitable adjustment of any outstanding and unexercised Award or any Shares issuable pursuant to an outstanding and unexercised Award under this Plan, to the end that after such event the Participant's proportionate interest shall be maintained as before the occurrence of such event. 21. Delegation. The Committee may delegate to one or more officers or managers of the Company, or a committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to: i) grant Awards to Participants; ii) cancel, modify, waive rights with respect to Participants; or iii) alter, discontinue, suspend, or terminate Awards held by Participants; provided, however, that no such Participants shall be an officer, director or ten percent shareholder of the Company within the meaning of those terms under Section 16 of the Exchange Act. 22. Amendment. The Board may amend, suspend or terminate the Plan at any time or from time to time, except that no amendment shall be effective without shareholder approval if shareholder approval of such amendment, suspension or termination would be required in order to ensure that the Plan, as amended, would continue to January 1995 29 - ------------------------------------------------------------------------------ meet the requirements of Rule 16b-3 promulgated under the Exchange Act. Except as may be provided in any Agreement, the termination or any modification or amendment of the Plan shall not, without the consent of a Participant, affect a Participant's rights under an Award previously granted. 23. Effect on Other Plans. Nothing in this Plan shall be construed to limit the right of the Company to establish any other forms of incentives or compensation for employees of the Company, or to grant or assume Options or restricted stock otherwise than under this Plan in connection with any proper corporate purpose. 24. Duration of the Plan. The Plan shall remain in effect until all Awards under the Plan either have been satisfied by the issuance of Shares or the payment of cash, or have expired or been forfeited by their terms, but no Award shall be granted more than ten years after the date the Plan is adopted by the Board or the date the Plan receives shareholder approval, whichever is earlier. 25. Funding of the Plan. This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Award under this Plan and payment of Awards shall be subordinate to the claims of the Company's general creditors. 26. Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed January 1995 30 - ------------------------------------------------------------------------------ applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect. 27. Construction. Wherever any words are used in this Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply. 28. Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. 29. Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the Commonwealth of Pennsylvania and applicable Federal law. January 1995 31 - ------------------------------------------------------------------------------ 30. Effective Date. The Plan was duly approved by the stockholders of the Company at the 1993 Annual Meeting of Stockholders and was effective on July 1, 1993. Subject to the provisions of Section 31, this amendment and restatement of the Plan as amended shall be effective on January 1, 1995. 31. Approval of Stockholders. Notwithstanding anything herein to the contrary, the Plan as amended and restated herein shall be effective only if it is approved by holders of a majority of the outstanding Shares entitled to vote and either present in person or represented by proxy at an Annual Meeting of Stockholders to be held in 1995. EX-10.C 4 PERFORMANCE RESTRICTED SHARE AGREE AMP Incorporated PERFORMANCE RESTRICTED SHARE AGREEMENT For the purpose of (a) encouraging key employees to acquire a proprietary interest in the Common Stock of AMP Incorporated (the "Corporation"), thereby aligning their interests with the interests of the shareholders, (b) providing added incentive to key employees to contribute to the future growth and profitability of the Corporation, and (c) attracting and retaining exceptionally qualified employees, the Corporation, pursuant to the terms and conditions of the AMP Incorporated 1993 Long-Term Equity Incentive Plan (as amended and restated effective January 1, 1995) (the "Plan"), will award Performance Restricted Shares of Common Stock to certain participants. This Agreement, entered into pursuant to the terms of the Plan, is to evidence that effective as of July 25, 1995 the Committee has designated James E. Marley ("Participant") as a participant under the Plan, has awarded 20,000 Performance Restricted Shares to Participant, has designated January 1, 1995 to December 31, 1997 as the Performance Vesting Period for such Performance Restricted Shares, has designated 16% as the minimum average annual return on equity ("ROE") to be attained by the Corporation over the Performance Vesting Period, has designated 15% as the target average annualized earnings growth rate to be attained by the Corporation over the Performance Vesting Period, and has designated 18% as the super-target average annualized earnings growth rate to be attained by the Corporation over the Performance Vesting Period. The grant, holding, and vesting of such Performance Restricted Shares shall be subject to the terms and conditions of the Plan and the following: Article I. Definitions. 1.1. "Agreement" means this "Performance Restricted Share Agreement" between the Corporation and Participant. 1.2. "Award" shall mean any grant of Performance Restricted Shares made to Participant under the Plan and this Agreement. 1.3. "Award Date" means the date designated by the Committee as of which Performance Restricted Shares are awarded to Participant under the Plan. 1.4. "Board" shall mean the Board of Directors of the Corporation. 1.5. "Change in Control" shall have the meaning set forth in Section 12 of the Plan. 1.6. "Committee" means the committee of the Board as described in Section 2(h) of the Plan. 1.7. "Common Stock" means common stock of the Corporation, no par value. 1.8. "Competing Business" means, as applied to a particular period of time, a business that at such time is engaged in the manufacture, sale or other disposition of a product or products that is in competition to a product or products of the Corporation or its subsidiaries, partnerships or joint ventures. 1.9. "Corporation" shall have the meaning set forth in the first paragraph of this Agreement. 1.10. "Exchange Act" means the Securities Exchange Act of 1934, as amended. 1.11. "Fair Market Value" means the closing sales price of a Share as reflected on the New York Stock Exchange Composite Tape for the relevant date. 1.12. "Participant" shall have the meaning set forth in the second paragraph of this Agreement. 1.13. "Performance Restricted Share" shall mean a restricted Share granted under the Plan that will either become an unrestricted Share or be forfeited based on the Corporation's financial performance during the Performance Vesting Period. 1.14. "Performance Vesting Period" shall mean a period of three or more consecutive fiscal years of the Corporation established by the Committee in conjunction with an Award of Performance Restricted Shares under the Plan and specified in the second paragraph of this Agreement. 1.15. "Plan" shall have the meaning set forth in the first paragraph of this Agreement. 1.16. "ROE" shall have the meaning set forth in the second paragraph of this Agreement. 1.17. "Securities Act" means the Securities Act of 1933, as amended. 1.18. "Share" or "Shares" means a share or shares of Common Stock. 1.19. "Termination of Employment" means the termination of employment by the Corporation or by a subsidiary, but not the transfer of employment from the Corporation to a subsidiary of the Corporation or vice versa or from one subsidiary of the Corporation to another such subsidiary. If the Committee in its sole discretion so determines, employment shall not be considered as terminated for the purposes of Section 3.1 so long as Participant continues to perform services for the Corporation or a subsidiary thereof on either a full or part time basis as an independent contractor or on a consulting basis or otherwise, provided, however, that Participant during such period does not, whether full time or part time, engage in or perform any services as an employee, independent contractor, consultant, advisor, or otherwise for a Competing Business. Article II. Awards of Performance Restricted Shares. 2.1. "Performance Restricted Shares": Performance Restricted Shares awarded under the Plan shall be evidenced by Share certificates issued in the name of Participant at the time of the Award. These Performance Restricted Shares shall be subject to terms and conditions specified in this Agreement and in the Plan, and shall bear such legend or legends as the Corporation deems necessary or appropriate, including but not necessarily limited to the following: (a) "The registered holder of the shares represented by this certificate may, at the time of issuance thereof, be deemed an affiliate of the issuer under the Securities Act of 1933, as amended". (b) "The shares represented by this certificate are subject to, and may not be transferred except in compliance with, a Performance Restricted Share Agreement dated [enter the date of the underlying Agreement] between AMP Incorporated and [enter the name of Participant]. These shares are subject to forfeiture in the event of a breach of the terms and conditions of said Performance Restricted Share Agreement. A copy of the Agreement is available without cost from AMP Incorporated, Harrisburg, Pennsylvania". 2.2. "Performance Criteria": The second paragraph of this Agreement specifies the performance criteria that will govern the vesting of the Performance Restricted Shares awarded to Participant hereunder. Vesting will depend on the following performance criteria over the Performance Vesting Period: (a) the minimum average annual ROE to be attained by the Corporation over the Performance Vesting Period as a pre-condition to any of the Performance Restricted Shares becoming vested at the end of the Performance Vesting Period, (b) a target average annualized earnings growth rate to be attained by the Corporation over the Performance Vesting Period, and (c) a super-target average annualized earnings growth rate to be attained by the Corporation over the Performance Vesting Period. For purposes hereof, average annual ROE for a Performance Vesting Period shall be the arithmetic average of the annual ROE numbers reported for each fiscal year in the Performance Vesting Period, and the average annualized earnings growth rate for a Performance Vesting Period shall be the constant rate of year-to-year earnings growth that, were it to occur consistently over the Performance Vesting Period, would generate the actual aggregate earnings realized during the Performance Vesting Period. 2.3. "Vesting of Performance Restricted Shares": At the end of the Performance Vesting Period, all Performance Restricted Shares awarded with respect to the Performance Vesting Period shall be forfeited, canceled, and returned to the Corporation if the minimum average annual ROE target designated in the second paragraph of this Agreement has not been attained. If the ROE target has been attained or exceeded, the number of Performance Restricted Shares awarded to Participant hereunder that become vested will be determined by the actual average annualized earnings growth rate attained over the Performance Vesting Period, as follows: (a) If the actual average annualized earnings growth rate over the Performance Vesting Period is 0% or less, all Performance Restricted Shares awarded with respect to the Performance Vesting Period shall be forfeited, canceled, and returned to the Corporation. (b) If the actual average annualized earnings growth rate over the Performance Vesting Period is between 0% earnings growth and the target average annualized earnings growth rate specified in the second paragraph of this Agreement, the actual growth rate stated as a percentage of the target growth rate will determine the percentage of the Performance Restricted Shares of Participant that will be vested, with the balance of the Performance Restricted Shares to be forfeited, canceled and returned to the Corporation. (c) If the actual average annualized earnings growth rate over the Performance Vesting Period is between the target level and the super-target level of average annualized earnings growth applicable to the Performance Vesting Period, Participant will be vested in between 100% and 200% of the Performance Restricted Shares awarded hereunder, with the applicable vesting percentage determined using direct proportions (e.g., if the earnings growth rate is 1/4 of the spread between the target and the super-target, the vesting percentage would be 125%; if the earnings growth rate is 8/10 of the spread between the target and the super-target, the vesting percentage would be 180%). (d) If the actual average annualized earnings growth rate over the Performance Vesting Period is at or above the super-target level, Participant will be vested in 200% of the Performance Restricted Shares awarded hereunder. 2.4. "Stock Power": Upon request of the Corporation from time to time, Participant agrees to execute and deliver to the Corporation one or more stock powers in such form as may be specified by the Corporate Secretary of the Corporation, authorizing the transfer of the Performance Restricted Shares to the Corporation. After the Performance Vesting Period has ended and the number of Performance Restricted Shares that vested, if any, is known, these executed stock power forms will be used to transfer back to the Corporation the certificate that evidences the Performance Restricted Shares and is held in safekeeping by the Corporation. Thereafter a new certificate will be issued and delivered to Participant representing the vested Shares. 2.5. "Voting of Performance Restricted Shares": During the Performance Vesting Period, all voting rights appurtenant to the Performance Restricted Shares shall be fully exercisable by Participant notwithstanding the performance vesting restrictions. However, during the Performance Vesting Period, no voting rights shall exist or be exercisable with respect to Performance Restricted Shares credited to the dividend reinvestment account described in Section 2.6. 2.6. "Dividends": All dividends (cash or stock) payable on non-vested Performance Restricted Shares during the Performance Vesting Period shall be held by the Corporation in a phantom dividend reinvestment account. Cash dividends will be deemed to have been invested in further Performance Restricted Shares based on the Fair Market Value of Shares on the dividend payment date. Dividends that would be payable on such dividend reinvestment account Performance Restricted Shares will also be credited to the account and similarly deemed invested in further Performance Restricted Shares. At the end of the Performance Vesting Period, Participant shall be vested in the same percentage of the balance of the Performance Restricted Shares credited to the dividend reinvestment account as the percentage the Participant is vested, in accordance with the terms of the Plan, in the Performance Restricted Shares awarded hereunder. Participant's vested Performance Restricted Shares under the dividend reinvestment account shall be paid out to Participant in actual Shares, without further restriction, plus cash for any fractional Share. 2.7. "Form and Time of Payment": As soon as practical after the end of a Performance Vesting Period, the Corporation shall issue to Participant a certificate for the number of Shares, if any, representing the number of Performance Restricted Shares that vested with respect to the Performance Vesting Period plus the number of vested Shares attributable to the related dividend reinvestment account. The Corporation shall concurrently cancel the Share certificate issued at the outset of the Performance Vesting Period to evidence the Performance Restricted Share Award. 2.8. "Non-Registration": In the event the Performance Restricted Shares to be issued hereunder in connection with an Award or the Shares to be issued in connection with the vesting of Performance Restricted Shares have not been registered under the Securities Act or a registration is not then currently effective with respect to such Performance Restricted Shares or Shares, the Participant shall deliver to the Corporation, as a condition to the award and vesting of the Performance Restricted Shares under this Agreement, at the time of such award or vesting, a bona fide written representation and agreement, in a form satisfactory to the Committee, signed by Participant or other person then entitled to such Shares, stating that the Shares are being acquired for his or her own account, for investment and without any present intention of distribution or reselling said Shares, or any of them, except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that Participant or other person then entitled to such Shares will indemnify the Corporation against and hold it free and harmless from any loss, damages, expense or liability resulting to the Corporation if any sale or distribution of the Shares by such person is contrary to the representation and agreement referred to above. The Committee may take whatever additional actions it reasonably deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other Federal or state securities laws or regulations, including but not limited to Rule 144 promulgated under the Securities Act. Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of Shares acquired under the Plan does not violate the Securities Act, and may issue stop-transfer orders covering such Shares. Share certificates evidencing Shares issued under the Plan shall bear an appropriate legend referring to the provisions of this Section and the agreements herein. None of the provisions of this Agreement shall relieve Participant of his or her obligations to comply with applicable Federal and state securities laws in connection with the Performance Restricted Shares, the Shares, and transactions related thereto. 2.9. "Certificate In Safekeeping": The certificate(s) evidencing the Performance Restricted Shares shall be retained by the Corporation until the Performance Restricted Shares either vest or are forfeited, canceled and returned to the Corporation as provided for in this Agreement. Article III. Termination of Employment. 3.1. "Rights Upon Termination of Employment": In the event that Participant experiences a Termination of Employment for any reason other than death, disability, or retirement more than one year after the Award Date, all unvested Performance Restricted Shares then held hereunder will terminate immediately or as the Committee may determine in its sole discretion. If Participant's employment is terminated due to death, disability, or retirement more than one year afer the Award Date, then Participant, or the estate of Participant, shall be eligible to receive a pro rata portion of his or her Performance Restricted Shares based on the portion of the Performance Vesting Period during which Participant was employed, in such amount or manner and with such conditions as the Committee shall determine. 3.2. "Fulfillment of Conditions": Any extension by the Committee of an Award beyond the date of a Termination of Employment shall be contingent on such conditions as the Committee, in its sole discretion, may determine, including but not limited to the fulfillment of the conditions that: (a) Participant shall not, whether full time or part time, as an employee, on a consulting or advisory basis or otherwise, engage in or perform any services during the period between the date of Participant's Termination of Employment and the end of the Performance Vesting Period for a business that at such time shall be a Competing Business, nor shall Participant at any time (i) disclose information relative to the business of the Corporation and its subsidiaries that is confidential or (ii) otherwise act or conduct himself or herself in a manner that is inimical or contrary to the best interest of the Corporation and its subsidiaries. (b) The Participant shall be available during the period between the date of Participant's Termination of Employment and the end of the Performance Vesting Period for such consulting and advisory services as the Corporation or its subsidiaries may reasonably request, taking fairly into consideration the age, health, residence and individual circumstances of Participant and the total value of the Award held by Participant under the Plan during the Performance Vesting Period. In the event that any of such conditions shall not be fulfilled, the obligations of the Corporation hereunder shall forthwith terminate, as shall the continuation of the Performance Vesting Period beyond Termination of Employment hereunder; provided that any such cancellation shall be in addition to and not in lieu of any of the rights or remedies available to the Corporation or its subsidiaries arising out of Participant's breach of any provision of this Agreement or the Plan. Ownership as a passive investor of not more than five percent (5%) of the outstanding shares of the stock of any company listed on a national securities exchange or having at least one hundred (100) shareholders of record shall not in itself be deemed a nonfulfillment of the conditions herein set forth. Article IV. Administration of Plan. 4.1. "Committee": The Committee shall administer the Plan and this Agreement in accordance with their provisions and shall have full and final authority in its discretion to (a) interpret the provisions of the Plan and this Agreement and decide all questions of fact arising in their application, and its interpretations and decisions shall be in all respects final, conclusive and binding; and (b) make all other determinations, rules and regulations necessary or advisable for the administration of the Plan and this Agreement. No member of the Committee shall be personally liable for any action or determination in respect to the administration of the Plan and this Agreement if made in good faith. Article V. Miscellaneous. 5.1. "Withholding of Taxes": Whenever the Corporation proposes or is required to issue or transfer Shares under the Plan and this Agreement, the Corporation shall have the right to require Participant to remit to the Corporation an amount sufficient to satisfy any Federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such Shares. Withholding requirements may be satisfied by cash payments or, at the election of Participant, by having the Corporation withhold a portion of the Shares to be received, or by delivering previously owned Shares, having a value equal to the amount to be withheld (or such portion thereof as Participant may elect). Any election to have Shares withheld under this Section may be subject, in the Committee's discretion, to such restrictions as the Committee may determine, including but not limited to one or more of the following restrictions in accordance with Section 16(b) of the Exchange Act: (a) the election shall be irrevocable; (b) the election shall be subject, in whole or in part, to the approval of the Committee and to such rules as it may adopt; (c) the election must be made at least six months prior to the transfer of Shares under the Plan and this Agreement; and (d) the election shall be made during the time period specified in Rule 16b-3(e) promulgated under the Exchange Act, or any successor rule or regulation thereto. 5.2. "Non-Alienation of Benefits": Prior to its settlement in the form of Shares, no right or benefit under the Plan and this Agreement shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the same whether voluntary, involuntary or by operation of law, shall be void except by will or by the laws of descent and distribution or by such other means as the Committee may approve from time to time. No right or benefit under the Plan and this Agreement shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If Participant should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under the Plan and this Agreement, then such right or benefit shall, in the sole discretion of the Committee, cease and terminate, and in such event, the Corporation may hold or apply the same or any part thereof for the benefit of Participant, the Participant's spouse, children or other dependents, or any of them, in such manner and in such proportion as the Committee may determine. Any restrictions on transferability of the Shares either described above or otherwise provided for in this Agreement may be referred to in legends contained on the certificates evidencing such Shares. 5.3. "Legal Holiday": If and when the date on which a computation or distribution is to be made or other action is to be taken under the Plan or this Agreement falls on a Saturday, Sunday, or a legal holiday, such computation or distribution shall be made or such other action taken on the next succeeding business day. 5.4. "Change in Control": Notwithstanding any provisions hereof to the contrary, upon the occurrence of a Change in Control, all Performance Restricted Shares granted under the Plan and this Agreement that are then unvested shall become immediately and automatically vested and payable, without any further action by the Committee. 5.5. "General Restrictions": The Plan and each Award under the Plan and this Agreement and the issuance or purchase of Shares in connection therewith shall be subject to the condition that, if at any time the Committee shall determine that the Plan, this Agreement, an Award under the Plan and this Agreement or the issuance or purchase of Shares in connection therewith requires or it is desirable that it has (a) the listing, registration or qualification of the Shares subject or related to the Plan upon any securities exchange or under any state or Federal law or under the rules and regulations of the Securities and Exchange Commission or any other governmental regulatory body, or (b) the consent or approval of any government regulatory body, or (c) an agreement by Participant with respect to the disposition of Shares, then the Plan and this Agreement will not be effective and the Award may not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee. 5.6. "Rights of a Shareholder": Participant, and any person claiming under or through Participant or under the Plan or this Agreement, shall not be, nor have any of the rights of, a shareholder with respect thereto, nor shall they have any right or interest in any cash or other property, unless and until certificates for Shares are issued to Participant after compliance with all the terms and conditions of the Plan and this Agreement. Participant shall only have those rights provided for under the terms and conditions of the Plan and this Agreement. 5.7. "Rights to Terminate Employment": Nothing in the Plan or this Agreement shall confer upon Participant the right to continue in the employment of the Corporation, or to continue in any position or at any level of remuneration, or affect any right that the Corporation may have to terminate the employment of Participant for any reason whatsoever, with or without good cause. 5.8. "Management, Accounting and Financial Decisions": Nothing in the Plan or this Agreement shall affect the authority of the management of the Corporation to make management, business, accounting and financial decisions concerning the Corporation. 5.9. "Non-Uniform Determinations": The Committee's determinations under the Plan (including without limitation determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same, and the establishment of values and performance targets) need not be uniform and may be made by the Committee selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. 5.10. "Adjustments": In the event of any change in the outstanding Shares by reason of a stock dividend or distribution, recapitalization, merger, consolidation, split-up, combination, exchange of shares or the like, the Committee shall adjust the maximum number of Shares that may be issued under the Plan and shall provide for an equitable adjustment of any outstanding and unexercised Award or any Shares issuable pursuant to an outstanding and unexercised Award under the Plan and this Agreement, to the end that after such event Participant's proportionate interest shall be maintained as before the occurrence of such event. The decision of the Committee with respect to the nature and amount of the adjustment(s) shall be conclusive and binding upon Participant and all persons claiming under or through Participant or under the Plan or this Agreement. 5.11. "Delegation": The Committee may delegate to one or more officers or managers of the Corporation, or a committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to: (a) grant Awards to participants under the Plan; (b) cancel, modify, or waive rights with respect to participants under the Plan; or (c) alter, discontinue, suspend, or terminate Awards held by participants under the Plan; provided, however, that no such participant shall be an officer, director or ten percent shareholder of the Corporation within the meaning of those terms under Section 16 of the Exchange Act. 5.12. "Amendment": The Board may amend, suspend or terminate the Plan at any time or from time to time, except that no amendment shall be effective without shareholder approval if shareholder approval of such amendment, suspension or termination would be required in order to ensure that the Plan, as amended, would continue to meet the requirements of Rule 16b-3 promulgated under the Exchange Act, or any successor rule or regulation thereto. Except as may be provided in this Agreement, the termination or any modification or amendment of the Plan shall not, without the consent of Participant, affect Participant's rights under an Award previously granted. 5.13. "Effect on Other Plans": Nothing in the Plan or this Agreement shall be construed to limit the right of the Corporation to establish any other forms of incentives or compensation for employees of the Corporation or to grant or assume options otherwise than under the Plan or this Agreement in connection with any proper corporate purpose. 5.14. "Duration of the Agreement": This Agreement shall remain in effect until all Awards under this Agreement either have been satisfied by the issuance of Shares or have expired or been forfeited by their terms. 5.15. "Funding of the Plan": The Plan shall be unfunded. The Corporation shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Award under the Plan or this Agreement, and payment of Awards shall be subordinate to the claims of the Corporation's general creditors. 5.16. "Severability": If any provision of the Plan or this Agreement or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person, or Award, and the remainder of the Plan and this Agreement and any such Award shall remain in full force and effect. 5.17. "Construction": Wherever any words are used in the Plan or this Agreement in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply. 5.18. "Headings": Headings are given to the Sections and subsections of the Plan and this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or this Agreement or any provision thereof. 5.19. "Governing Law": The validity, construction and effect of the Plan and this Agreement and any rules and regulations relating to the Plan and this Agreement shall be determined in accordance with the laws of the Commonwealth of Pennsylvania and applicable Federal law. AMP Incorporated Dated____________________________ By /s/ D F Henschel ----------------------------- Corporate Secretary Participant hereby acknowledges receipt of a copy of the Plan and this Agreement, accepts his or her designation as a Participant under and subject to all the terms and conditions set forth herein and in the Plan, and agrees to all such terms and conditions. Dated____________________________ /s/ J E Marley ------------------------- Participant restrst/agreemt 08/23/95 --------------------------------------------- AMP Incorporated General Offices Harrisburg, Pennsylvania -------------------- <> -------------------- PERFORMANCE RESTRICTED SHARE AGREEMENT Issued to JAMES E. MARLEY Participant Dated JULY 25, 1995 SCHEDULE 1 The following individuals entered into Restricted Stock Agreements with AMP that are substantially identical in all material respects, except as to the parties and the number of restricted shares awarded, as set forth in this Schedule. All Restricted Stock Agreements have an effective date of July 25, 1995. Name Restricted Shares Awarded J. E. Marley 20,000 W. J. Hudson 25,000 R. Ripp 9,100 D. Horowitz 9,100 J. Gurski 7,400 H. Cole 7.400 J. Hassan 9,100 EX-27 5 FDS FOR 9-MOS 1995 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S 1995 SECOND QUARTER REPORT TO SHAREHOLDERS AND IS QUALIFIED BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1995 SEP-30-1995 192,936 62,737 1,046,373 0 736,559 2,287,176 4,188,728 2,350,144 4,455,040 1,277,845 0 79,523 0 0 2,637,320 4,455,040 3,929,241 3,929,241 2,646,703 2,646,703 48,683 0 28,456 489,925 176,370 313,555 0 0 0 313,555 1.44 1.44
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