-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dnqh3sRqHOGF0aL7K+R8IzyhEfALkw3JTwF6sbg0DQkZsWC/LwzIkrhRM55qqy8I gdEjey5uSPz4ZVVY4DXo0Q== 0000095395-94-000010.txt : 19941121 0000095395-94-000010.hdr.sgml : 19941121 ACCESSION NUMBER: 0000095395-94-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941108 SROS: MSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNDSTRAND CORP /DE/ CENTRAL INDEX KEY: 0000095395 STANDARD INDUSTRIAL CLASSIFICATION: 3728 IRS NUMBER: 361840610 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05358 FILM NUMBER: 94558051 BUSINESS ADDRESS: STREET 1: 4949 HARRISON AVE STREET 2: P O BOX 7003 CITY: ROCKFORD STATE: IL ZIP: 61125 BUSINESS PHONE: 8152266000 10-Q 1 THIRD QUARTER FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________. Commission file number 1-5358 Sundstrand Corporation (Exact name of registrant as specified in its charter) Delaware 36-1840610 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4949 Harrison Avenue, P.O. Box 7003, Rockford, IL 61125-7003 (Address of principal executive offices and Zip code) (815) 226-6000 (Registrant's telephone number, including area code) ______________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at October 31, 1994 Common Stock, par value 32,221,562 $.50 per share PAGE SUNDSTRAND CORPORATION FORM 10-Q For the Quarter Ended September 30, 1994 INDEX Part I. Financial Information Page Item 1. Financial Statements 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information Item 1. Legal Proceedings 11 Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 2 PAGE PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Sundstrand Corporation and Subsidiaries Condensed Consolidated Statement of Earnings (Unaudited)
Three Months Nine Months Ended September 30, Ended September 30, (Amounts in millions except ------------------- ------------------- per share data) 1994 1993 1994 1993 - - - - ---------------------------------------------------------------------------------------------------- Net sales $ 339.7 $ 324.7 $ 995.1 $1,007.2 Costs, expenses and other income: Costs of products sold 225.9 223.2 670.8 662.3 Marketing and administration 68.4 69.8 210.4 224.1 Interest expense 7.5 10.0 21.5 30.8 Interest income (.9) (.8) (3.3) (3.2) Other, net 1.7 4.6 1.0 6.9 --------- --------- --------- --------- 302.6 306.8 900.4 920.9 --------- --------- --------- --------- Earnings from continuing operations before income taxes 37.1 17.9 94.7 86.3 Less income taxes 13.4 2.4 34.1 26.3 --------- --------- --------- --------- Earnings from continuing operations 23.7 15.5 60.6 60.0 Loss from discontinued SDC business, prior to discontinuance, net of taxes - - - (.7) Earnings from discontinued SDC business, subsequent to discontinuance, net of taxes - 1.6 - 2.1 --------- --------- --------- --------- Net earnings $ 23.7 $ 17.1 $ 60.6 $ 61.4 ========= ========= ========= ========= Weighted-average number of common shares outstanding 32.9 35.8 32.9 35.8 Earnings (loss) per share: Earnings from continuing operations $ .72 $ .44 $ 1.84 $ 1.68 Loss from discontinued SDC business, prior to discontinuance - - - (.02) Earnings from discontinued SDC business, subsequent to discontinuance - .05 - .06 --------- --------- --------- --------- Net earnings $ .72 $ .49 $ 1.84 $ 1.72 ========= ========= ========= ========= Cash dividends per common share $ .30 $ .30 $ .90 $ .90 ========= ========= ========= =========
3 PAGE Sundstrand Corporation and Subsidiaries Condensed Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended September 30, ------------------------ (Amounts in millions) 1994 1993 - - - - ----------------------------------------------------------------------------------------- Cash flow from operating activities: Net earnings $ 60.6 $ 61.4 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 59.9 65.6 Deferred income taxes (20.2) (1.2) Settlements of losses on long-term contracts (2.9) (4.1) Change in operating assets and liabilities excluding the effects of acquisitions and divestitures: Accounts receivable 16.4 57.1 Inventory 6.5 (.1) Other assets (.4) 13.2 Accounts payable 28.0 (7.5) Accrued expenses (54.1) (25.8) Cash provided by discontinued SDC business - 20.9 Other 8.8 13.9 --------- --------- Total adjustments 42.0 132.0 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 102.6 193.4 --------- --------- Cash flow from investing activities: Cash paid for property, plant and equipment (33.1) (43.3) Proceeds from sale of property, plant and equipment 4.3 2.1 Cash paid for HMD-Kontro, net of cash acquired (24.5) - Investment in equity companies (6.3) - Cash used for discontinued SDC business - (5.4) --------- --------- NET CASH USED FOR INVESTING ACTIVITIES (59.6) (46.6) --------- --------- Cash flow from financing activities: Net borrowings (payments) supported by lines of credit 66.9 (48.7) Issuance of short-term debt - 8.0 Principal payments on long-term debt (1.6) (3.5) Additional debt for HMD-Kontro acquisition 24.5 - Repurchase of common stock (37.9) (60.4) Dividends paid (29.5) (32.2) --------- --------- NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 22.4 (136.8) --------- --------- Effect of exchange rate changes on cash (13.1) (6.1) --------- --------- Increase in cash and cash equivalents 52.3 3.9 Cash and cash equivalents at January 1 15.4 5.2 --------- --------- CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $ 67.7 $ 9.1 ========= ========= Supplemental cash flow information: Interest paid $ 17.0 $ 24.0 Income taxes paid $ 87.0 $ 60.5
4 PAGE Sundstrand Corporation and Subsidiaries Condensed Consolidated Balance Sheet (Unaudited)
September 30, December 31, (Amounts in millions) 1994 1993 - - - - ----------------------------------------------------------------------------------------- Assets Current Assets Cash and cash equivalents $ 67.7 $ 15.4 Accounts receivable, net 274.2 283.7 Inventories, net of progress payments 309.2 312.6 Deferred income taxes 56.2 71.8 Other current assets 12.5 9.4 --------- --------- Total current assets 719.8 692.9 Property, Plant and Equipment, net 459.5 471.5 Intangible Assets, net 290.2 274.4 Deferred Income Taxes 66.9 31.3 Other Assets 44.3 41.8 --------- --------- $1,580.7 $1,511.9 ========= ========= Liabilities and Shareholders' Equity Current Liabilities Notes payable $ 118.0 $ 26.6 Long-term debt due within one year 7.8 8.2 Accounts payable 110.3 82.1 Income taxes payable - 34.6 Accrued salaries, wages and commissions 28.2 26.4 Accrued postretirement benefits other than pensions 19.3 19.5 Other accrued liabilities 114.4 130.2 --------- --------- Total current liabilities 398.0 327.6 Long-Term Debt 246.5 246.8 Accrued Postretirement Benefits Other Than Pensions 354.8 348.7 Other Liabilities 64.7 76.6 Shareholders' Equity Common stock, at par value 18.9 18.9 Other shareholders' equity 497.8 493.3 --------- --------- 516.7 512.2 --------- --------- $1,580.7 $1,511.9 ========= =========
5 PAGE The financial information contained herein is unaudited but, in the opinion of the management of the Registrant, includes all adjustments (all of which are normal recurring adjustments) necessary for a fair presentation of the results of operations for the periods indicated. Notes to Condensed Consolidated Financial Statements (Unaudited) ACCOUNTING POLICIES The financial statements are condensed and should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 1993. PRINCIPLES OF CONSOLIDATION provide for the inclusion of the accounts of Sundstrand Corporation and all subsidiaries. All intercompany transactions are eliminated in consolidation. CASH EQUIVALENTS are considered by the Registrant to be all highly liquid debt instruments purchased with original maturities of three months or less. INVENTORIES The components of inventories at September 30, 1994, and December 31, 1993, were as follows: Sept. 30, Dec. 31, (Amounts in millions) 1994 1993 - - - - ---------------------------------------------------------------------------------------- Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50.1 $ 43.8 Work in process . . . . . . . . . . . . . . . . . . . . . . . . . 121.4 135.8 Finished goods and parts. . . . . . . . . . . . . . . . . . . . . 155.6 156.4 -------- -------- 327.1 336.0 Less progress payments. . . . . . . . . . . . . . . . . . . . . . 17.9 23.4 -------- -------- $ 309.2 $ 312.6 ======== ======== Prior to the application of progress payments, the inventories shown above included costs related to long-term contracts of $57.0 million and $61.4 million, at September 30, 1994, and December 31, 1993, respectively.
PROPERTY, PLANT AND EQUIPMENT During 1994, the Company changed its estimate of the average useful lives used to compute depreciation for certain fixed assets. This change resulted from internal asset management procedures that are designed to ensure continued compliance with government contract accounting requirements and was made to better reflect the estimated periods during which such assets will remain in service. The change had the effect of increasing net earnings by $1.8 million, or $.06 per share, and $3.6 million, or $.11 per share, in the three months and nine months ended September 30, 1994, respectively. 6 PAGE Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The financial information for the quarter ended September 30, 1994, as compared with the financial information for the quarter ended September 30, 1993, and the balance sheet at December 31, 1993, is discussed below, and should be read in conjunction with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993, and the financial data as presented in Item 1 above. RESULTS OF OPERATIONS Third quarter 1994 sales increased by $15.0 million, to $339.7 million, compared with third quarter 1993 sales of $324.7 million. Third quarter 1994 Aerospace segment sales of $175.7 million increased by $6.1 million compared with third quarter 1993 sales of $169.6 million. Commercial original equipment manufacturer (OEM) sales and commercial aftermarket sales each increased by approximately $8 million and military OEM sales decreased by approximately $9 million in third quarter 1994 compared with third quarter 1993. Industrial segment sales increased to $164.0 million in third quarter 1994 compared with $155.1 million in third quarter 1993. The 6 percent sales increase was due primarily to the first quarter acquisitions of HMD Group Limited and the business of The Kontro Company (HMD-Kontro acquisition) and improvements in Falk's and Sullair's sales, partially offset by the effect of the divestiture of Falk's Brazilian operation and weaker sales at Milton Roy. Third quarter 1994 earnings from continuing operations were $23.7 million, or $.72 per share, compared with third quarter 1993 earnings from continuing operations of $15.5 million, or $.44 per share. The increase in third quarter earnings from continuing operations was due primarily to improved sales and operating margins in both the Aerospace and Industrial segments. Third quarter 1994 earnings benefitted by $1.8 million from decreased depreciation expense due to the change in depreciable lives described on page 6. Earnings per share for the same period also benefitted from the effects of the share repurchase program, although no shares were repurchased during the third quarter of 1994. Third quarter 1993 earnings benefitted by $2.7 million due to a 1993 tax law change which increased the federal statutory rate for corporations from 34 percent to 35 percent and allowed the amortization of certain goodwill to be tax deductible. Sales for the first nine months of 1994 were $995.1 million, a decline of $12.1 million, from sales of $1,007.2 million for the same 1993 period. The decline in military business was primarily responsible for Aerospace segment sales decreasing to $508.4 million in the first nine months of 1994 from $529.7 million in the first three quarters of 1993. Including the effects of the HMD-Kontro acquisition and the divestiture of Falk's Brazilian operation, Industrial segment sales for the first nine months of 1994 were $486.7 million, a $9.2 million increase from sales of $477.5 million for the first nine months of 1993. 7 PAGE Earnings from continuing operations, including a $3.6 million benefit related to the change in depreciable lives, were $60.6 million, or $1.84 per share, for the first nine months of 1994. Earnings from continuing operations for the first nine months of 1993 were $60.0 million, or $1.68 per share, which included a $2.7 million benefit from a 1993 tax law change. Decreased Aerospace segment operating profit in the nine months ended September 30, 1994, compared with the same 1993 period, was offset by increased Industrial segment operating profit and decreased interest expense. The decrease in Aerospace segment operating profit was due in part to the previously disclosed short-term manufacturing inefficiencies related primarily to the transfer of production from the Brea, California, plant to the Puerto Rico plant and to the realignment of manufacturing activities at other Aerospace plants and to the decline in military sales. Earnings per share for the first nine months of 1994 also benefitted from the effects of the share repurchase program. Third quarter 1994 incoming orders were $371.8 million, a $126.6 million increase over third quarter 1993 incoming orders of $245.2 million. New orders for the first nine months of 1994 increased by $204.8 million, to $1,029.7 million, over new orders of $824.9 million for the same period last year. Total unfilled orders on September 30, 1994, were $717.0 million, compared with $731.7 million on September 30, 1993, and $682.4 million on December 31, 1993. INDUSTRIAL OVERVIEW Third quarter sales for Falk's ongoing businesses increased 11 percent while sales at Sullair improved 5 percent, as strength across all U.S. product lines was tempered by prior booking weakness in Europe. Milton Roy sales were down 4 percent, excluding the HMD-Kontro acquisition. Industrial incoming orders, excluding acquisitions and divestitures, were up 19 percent in the third quarter and 8 percent in the first nine months of 1994, compared with the same periods in 1993. Industrial unfilled orders at September 30, 1994, were $137.9 million, compared with $103.8 million at September 30, 1993, and $110.2 million at December 31, 1993. AEROSPACE OVERVIEW Aerospace segment sales in the third quarter of 1994 increased 4 percent from the third quarter of 1993, reflecting a 16 percent increase in commercial revenues partially offset by a 13 percent decline in military markets. Aerospace incoming orders were significantly higher in the third quarter compared with the same period last year, which was depressed by substantial commercial OEM cancellations. Commercial aftermarket bookings improved 33 percent in the quarter and 16 percent compared with the first nine months of 1993. Aerospace unfilled orders at September 30, 1994, were $579.1 million, compared with $627.9 million at September 30, 1993, and $572.2 million at December 31, 1993. 8 PAGE LIQUIDITY & CAPITAL RESOURCES Working capital decreased to $321.8 million at September 30, 1994, from $365.3 million at December 31, 1993. The $43.5 million decrease was due primarily to an increase in notes and accounts payable, partially offset by an increase in cash and a reduction in income taxes payable. The increase in notes payable was due primarily to the repurchase of common stock under the stock repurchase program, the HMD-Kontro acquisition and the discontinuance of a cash management policy which reduced notes payable at quarter end using available foreign cash. The increase in cash also was due primarily to the discontinuation of this cash management policy. The reduction in income taxes payable related primarily to a $34.9 million first quarter 1994 payment relating to the gain on the sale of Sundstrand Data Control (SDC). Net cash provided by operating activities for the first nine months of 1994 declined to $102.6 million compared with $193.4 million for the first nine months of 1993. The decrease was due primarily to the decline in accounts receivable being $40.7 million less in the first nine months of 1994 compared with the same 1993 period, the previously mentioned tax payment relating to the gain on the sale of SDC and the absence of cash flow in 1994 from SDC, which was reflected as a discontinued operation in 1993. In the nine months ended September 30, 1994, the Registrant used $59.6 million of cash for investing activities, primarily for the purchase of fixed assets and the HMD-Kontro acquisition. In the same 1993 period, $46.6 million of cash was used for investing activities, primarily for the purchase of fixed assets. In the first nine months of 1994, $22.4 million of cash was provided by financing activities, primarily net borrowings supported by lines of credit and borrowings for the HMD-Kontro acquisition, partially offset by cash used to repurchase common stock and pay dividends. In the same 1993 period, $136.8 million of cash was used for financing activities, primarily for debt and dividend payments and for the repurchase of common stock. As previously disclosed, the Registrant's Board of Directors authorized the repurchase of up to ten million shares of the Registrant's outstanding common stock. As of September 30, 1994, a total of approximately four million of the authorized shares had been repurchased. No repurchases of common stock were made under this program in the third quarter. At September 30, 1994, the Registrant's ratio of total debt to total capital was 41.9 percent compared with 35.5 percent at December 31, 1993. The increase was due primarily to the previously discussed increase in notes payable and the effects of the share repurchase program. TAX ISSUES As previously disclosed, the Registrant has been pursuing a legal reversal of a 1992 Tax Court opinion related to the allocation of payments made upon the resolution of government contract disputes. In the third quarter, after having its Petition for Writ of Certiorari to the United States Supreme Court denied, the Registrant ceased its efforts to reverse the Tax Court decision and made a payment of $17.8 million to the U.S. government. Existing tax and interest provisions were sufficient to cover the resolution of this issue. 9 PAGE GOVERNMENT CONTRACT MATTERS As previously disclosed, the Registrant has been involved in settlement negotiations with the U.S. Navy related to the termination of a contract for the supply of jet aircraft start units. In October 1994, a settlement was reached in which the Registrant expects to recover approximately $9.5 million. Actions are ongoing to implement the settlement agreement, including the verification of termination settlement expenses, arrangement of payment and commencement of the administrative closeout process. The resolution of this matter is not expected to have a material financial impact on the Registrant, nor impact the Registrant's ability to enter into future contractual agreements with the U.S. Navy. OUTLOOK Based on the strength of orders during the first nine months, the Registrant is maintaining its outlook for 1994 earnings to be between $2.70 and $3.00 per share, exclusive of the impact on earnings of the change in depreciable lives, which is expected to be $5.5 million, or $.17 per share. Although the Registrant projects that 1995 earnings will exceed the 1994 forecasted range, it does not expect that earnings will reach the $3.60 per share average recently projected by analysts. 10 PAGE PART II - OTHER INFORMATION Item 1. Legal Proceedings The Registrant has disclosed various legal proceedings in its Form 10-K for the fiscal year ended December 31, 1993. There have been no material legal developments since that time, except as set forth under "Tax Issues" and "Government Contract Matters" in Part I, Item 2 herein, and under "Tax Issues" in Part I, Item 2 of the Registrant's Form 10-Q for the quarterly period ended June 30, 1994. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (3) Articles of Incorporation and By-laws (a) Text of resolution adopted by the Board of Directors of Registrant on April 19, 1994, amending Registrant's By-laws, effective July 1, 1994. (b) Registrant's By-laws, including all amendments as effective July 1, 1994. (10) Material Contracts (a) Agreement dated September 24, 1994, between Registrant and Harry C. Stonecipher, Registrant's former Chairman of the Board, President and Chief Executive Officer, providing for Mr. Stonecipher's early retirement from his employment with the Registrant. (b) Employment Agreement dated October 3, 1994, between Registrant and Don R. O'Hare, Registrant's Chairman of the Board and Chief Executive Officer. (11) Statement Re Computation of Per Share Earnings (a) Computation of Fully Diluted Earnings Per Share (Unaudited) for the quarters ended September 30, 1994, and 1993, and for the nine months ended September 30, 1994, and 1993. (27) Financial Data Schedule (b) Reports on Form 8-K None 11 PAGE SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Sundstrand Corporation (Registrant) Date: November 3, 1994 /s/ Richard M. Schilling -------------------------- Richard M. Schilling Vice President and General Counsel and Secretary Date: November 3, 1994 /s/ DeWayne J. Fellows ------------------------- DeWayne J. Fellows Vice President, Controller 12 EX-3.A 2 Exhibit (3)(a) AMENDMENT OF BY-LAWS Mr. Stonecipher referred to the material in the Board Agenda Book regarding the amendment of the Corporation's By- Laws effective July 1, 1994, to eliminate the officer position of Vice President, International Relations and Business Development. Thereupon, on motion duly made by Don R. O'Hare, and seconded by Charles Marshall, the following resolution was adopted: RESOLVED, by the Board of Directors of Sundstrand Corporation, that the By-Laws of the Corporation be, and they hereby are, amended effective July 1, 1994, as follows: 1. The first sentence of Section 4.1 of Article IV (OFFICERS) is amended to read as follows: "The officers of the Corporation shall consist of a Chairman of the Board, President and Chief Executive Officer; an Executive Vice President and Chief Financial Officer; an Executive Vice President and Chief Operating Officer, Aerospace; an Executive Vice President and Chief Operating Officer, Industrial; a Vice President, Personnel and Public Relations; a Vice President and General Counsel; one or more other Vice Presidents; a Secretary; a Treasurer; and a Controller, all of whom shall be elected by the Board of Directors and shall hold office until their successors are duly elected and qualified." 2. Section 4.11 of Article IV (OFFICERS) is deleted in its entirety. 3. Sections 4.12 through 4.16 of Article IV (OFFICERS) are renumbered Sections 4.11 through 4.15, respectively. EX-3.B 3 Exhibit (3)(b) BY-LAWS OF SUNDSTRAND CORPORATION (A Delaware Corporation) Effective July 1, 1994 ARTICLE I OFFICES Section 1.1. PRINCIPAL OFFICE. The principal office of the Corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle. Section 1.2. OTHER OFFICES. The Corporation may also have offices at such other places, either within or without the State of Delaware, as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II STOCKHOLDERS' MEETINGS Section 2.1. PLACE OF MEETINGS. All annual and special meetings of the stockholders shall be held at such place, either within or without the State of Delaware, as may be fixed by the Board and specified in the notice of the meeting. Section 2.2. ANNUAL MEETINGS. An annual meeting of stockholders shall be held on such date and at such hour as may be fixed by the Board and specified in the notice of the meeting, when they shall elect by a plurality vote a Board of Directors and transact such other business as may properly be brought before the meeting. Section 2.3. LIST OF STOCKHOLDERS. The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The original or duplicate stock ledger shall be the only evidence as to who are the stockholders entitled to examine such list or stock ledger or transfer book or to vote in person or by proxy at any meeting of stockholders. Section 2.4. SPECIAL MEETINGS OF STOCKHOLDERS. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board and shall be called by the Chairman of the Board or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning eighty percent or more in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 2.5. NOTICE OF MEETINGS. Except as otherwise expressly provided by law or by the Certificate of Incorporation or these By-Laws, written or printed notice of each annual or special meeting of stockholders shall be given by mail at least ten but not more than sixty days before the meeting to the stockholders of record entitled to vote thereat. Every such notice shall be directed to a stockholder at his address as it shall appear on the transfer books of the Corporation; shall state the date, time and place of the meeting; and, in the case of a special meeting, shall state briefly the purposes thereof. Business transacted at all special meetings shall be confined to the purposes stated in the notice thereof. Section 2.6. QUORUM AND ADJOURNMENTS. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be necessary and sufficient to constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute, by the Certificate of Incorporation, or by these By-Laws. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The absence from any meeting of the number required by law or by the Certificate of Incorporation or these By-Laws for action upon any given matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting if the number required in respect of such other matter or matters shall be present. Once a quorum is present at a meeting, it shall be deemed to be acting thereafter throughout the meeting, irrespective of any withdrawals. Nothing in these By- Laws shall affect the right to adjourn where a quorum is present. Section 2.7. VOTING BY STOCKHOLDERS. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the Certificate of Incorporation or of these By- Laws a different vote is required, in which case such express provision shall govern and control the decision of such question. At any meeting of the stockholders every stockholder having the right to vote shall be entitled to vote in person, or by proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney or agent thereunto authorized in writing, and bearing a date not more than three years prior to said meeting, unless said instrument provides for a longer period. Except as otherwise provided by the Certificate of Incorporation, each stockholder present in person or by proxy at any meeting shall have, on each matter on which stockholders are entitled to vote, one vote for each share of stock having voting power, registered in his name on the books of the Corporation. Section 2.8. NEW BUSINESS PROPOSALS AT ANNUAL MEETINGS. Only such new business shall be conducted, and only such proposals shall be acted upon at an annual meeting of stockholders, as shall have been properly brought before such annual meeting (a) by, or at the direction of, the Board of Directors, or (b) by any stockholder of the Corporation who complies with the notice procedures set forth in this Section 2.8. A stockholder who wishes to bring a proposal before an annual meeting shall give timely notice thereof in writing to the Secretary of the Corporation. Such notice, to be timely, shall be delivered to, or mailed and received by the Secretary at the principal executive offices of the Corporation at least sixty days but not more than ninety days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than seventy days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, such notice by a stockholder to be timely shall be so delivered or received not later than the close of business on the tenth day following the earlier of the day on which notice of the scheduled annual meeting was mailed or the day on which public disclosure thereof was made. Each such stockholder notice shall set forth as to each proposal to be brought before the annual meeting (a) a brief description of the proposal and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the transfer books of the Corporation, of the stockholder proposing such business and any other stockholders known by such stockholder to be supporting the proposal, (c) the class and number of shares of the Corporation's stock which are beneficially owned by the stockholder on the date of such stockholder notice and by any other stockholders known by such stockholder to be supporting such proposal, and (d) any financial interest of the stockholder in such proposal. The Board of Directors may reject any stockholder proposal not timely made in accordance with the terms of this Section 2.8. If the Board of Directors, or a designated committee thereof, determines that the information provided in a stockholder's notice does not satisfy the informational requirements of this Section 2.8 in any material respect, the Secretary shall promptly notify such stockholder of the deficiency in the notice. The stockholder shall have an opportunity to cure the deficiency by providing additional information to the Secretary within five days from the date such notice of deficiency is given to the stockholder, as the Board of Directors or such committee shall reasonably determine. If the deficiency is not cured within such period, or if the Board of Directors or such committee determines that the additional information provided by the stockholder, together with the information previously provided, does not satisfy the requirements of this Section 2.8 in any material respect, then the Board of Directors may reject such proposal. The Secretary shall notify the stockholder in writing whether his proposal has been made in accordance with the time and informational requirements of this Section 2.8. Notwithstanding the procedure set forth in this Section 2.8, if neither the Board of Directors nor such committee makes a determination as to the validity of any stockholder proposal, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether the stockholder proposal was made in accordance with the terms of this Section 2.8. If the presiding officer determines that the stockholder's proposal was not made in accordance with the terms of this Section 2.8, he shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting. This Section 2.8 shall not prevent the consideration and approval or disapproval at an annual meeting of reports of officers, directors and committees of the Board of Directors, but, in connection with such reports, no new business shall be acted upon at such annual meeting unless stated, filed and received as herein provided. ARTICLE III DIRECTORS Section 3.1. NUMBER, ELECTION AND TERMS OF OFFICE OF DIRECTORS. The number of directors which shall constitute the whole Board shall be eleven in number. Directors need not be stockholders in the Corporation. Except as provided in Section 3.3, the directors shall be elected at the annual meeting of the stockholders, and each director elected shall hold office until his successor is elected and qualified or until his earlier resignation. The directors shall be divided into three classes: Class I, Class II and Class III. Such classes shall be as nearly equal in number as possible. The term of office of the initial Class I directors shall expire at the annual meeting of stockholders in 1971, the term of office of the initial Class II directors shall expire at the annual meeting of stockholders in 1972, and the term of office of the initial Class III directors shall expire at the annual meeting of stockholders in 1973, or thereafter in each case when their respective successors are elected and qualified. At each annual election held after classification and the initial election of directors according to classes, the directors chosen to succeed those whose terms then expire shall be identified as being of the same class as the directors they succeed and shall be elected for a term expiring at the third succeeding annual meeting or thereafter when their respective successors in each case are elected and qualified. Section 3.2. CORPORATE RECORDS. The directors may keep the books of the Corporation, except such as are required by law to be kept within the State of Delaware, outside of Delaware at such place or places as they may from time to time determine. Section 3.3. VACANCIES. Vacancies occurring in the Board of Directors and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, and any director so chosen shall hold office until his successor is elected and qualified. A director elected to fill a vacancy shall be elected for the unexpired portion of the term of his predecessor in office. A director elected to fill a newly created directorship shall serve for the term provided herein for the class of directors for which such director was elected. Section 3.4. GENERAL POWERS. The business and affairs of the Corporation shall be managed by its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. Section 3.5. PLACE OF MEETINGS. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 3.6. ANNUAL MEETINGS. The first meeting of each newly elected Board shall constitute the annual meeting of said Board and shall be convened as soon as is conveniently possible but in no event more than two weeks after the date of the annual meeting of stockholders in each year at such time and place as shall be fixed by the Chairman of the Board. Section 3.7. REGULAR MEETINGS. Regular meetings of the Board shall be held upon notice, or without notice, at least quarterly, at such time and place as shall from time to time be determined by the Board. Section 3.8. SPECIAL MEETINGS. Special meetings of the Board may be called by the Chairman of the Board or any four directors. Notice of each special meeting of the Board may be given by mail, telegraph or cable, personal delivery or telephone. Notice by mail shall be given at least three days before the meeting; notice by any other means shall be given a reasonable period of time before the time of such meeting but in no event shall such notice be given less than one hour before such meeting. If notice is by telephone, such notice shall be promptly confirmed by telegraph or cable to each director. Section 3.9. QUORUM. At all meetings of the Board, the presence of a majority of the full number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these By-Laws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.10. ACTION BY BOARD WITHOUT MEETING. Notwithstanding anything contained in these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any Committee thereof may be taken without a meeting, if a written consent thereto is signed by all members of the Board or of such Committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or the Committee. Section 3.11. COMPENSATION OF DIRECTORS. The Board of Directors, by resolution adopted by a majority of the whole Board, may establish reasonable compensation of all directors for services to the Corporation as directors, officers or otherwise. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of any Committee may be allowed like compensation for their services to the Corporation. Section 3.12. INTERESTED DIRECTORS. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or Committee which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if (1) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the Committee, and the Board or Committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, Committee, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of the Committee which authorizes the contract or transaction. Section 3.13. COMMITTEES. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more Committees, each Committee to consist of two or more of the directors of the Corporation. Any such Committee, to the extent provided in the resolution not inconsistent with the provisions of the Statutes of Delaware, shall have and may exercise the powers and authority of the Board of Directors in the management of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. A majority of the members of the Committee then holding office shall constitute a quorum at all meetings and each such Committee shall keep regular minutes of its proceedings and report the same to the whole Board. Section 3.14. NOMINATION FOR ELECTION OF DIRECTORS. Nominations for the election of Directors shall be properly made by the Board of Directors or a nominating committee appointed by the Board of Directors or by any stockholder entitled to vote in the election of Directors generally; provided, however, that any such stockholder may nominate one or more persons for election as Directors at a meeting only if such stockholder has given written notice of such stockholder's intent, either by personal delivery or by United States mail, postage prepaid, to the Secretary not later than (1) with respect to an election to be held at an annual meeting of stockholders, ninety days prior to the anniversary date of the immediately preceding annual meeting, and (2) with respect to an election to be held at a special meeting of stockholders for the election of directors, the close of business on the tenth day following the date on which notice of such meeting is first given to stockholders. Each such notice shall set forth: (a) the name and address, as they appear on the transfer books of the Corporation, of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission as then in effect; and (e) the consent of each nominee to serve as a director of the Corporation if so elected. The presiding officer of any meeting at which a stockholder or its representative attempts to nominate one or more persons for election as directors may refuse to acknowledge the nomination of any person not made in compliance with the provisions of this Section 3.14. ARTICLE IV OFFICERS Section 4.1. DESIGNATION: NUMBER. The officers of the Corporation shall consist of a Chairman of the Board, President and Chief Executive Officer; an Executive Vice President and Chief Financial Officer; an Executive Vice President and Chief Operating Officer, Aerospace; an Executive Vice President and Chief Operating Officer, Industrial; a Vice President, Personnel and Public Relations; a Vice President and General Counsel; one or more other Vice Presidents; a Secretary; a Treasurer; and a Controller, all of whom shall be elected by the Board of Directors and shall hold office until their successors are duly elected and qualified. In addition, the Chairman of the Board, President and Chief Executive Officer may appoint a Tax Director, one or more Assistant Secretaries, Assistant Treasurers and Assistant Controllers and such other officers and agents as the Chairman of the Board, President and Chief Executive Officer may deem necessary or desirable, who shall hold their offices for such terms and shall have such authority and perform such duties as shall be determined by the Chairman of the Board, President and Chief Executive Officer from time to time. Any Executive Vice President or Vice President designated by a resolution of the Board of Directors or by delegation of the Chairman of the Board, President and Chief Executive Officer shall have authority to sign contracts and any other documents as specifically authorized by the Board of Directors or the Chairman of the Board, President and Chief Executive Officer or which are within the ordinary course of the business of the Corporation. Section 4.2. NON-CORPORATE OFFICERS. The Chairman of the Board, President and Chief Executive Officer shall have authority to appoint from time to time officers of divisions, product groups or other segments of the Corporation's business for such terms, with such authority and at such salary as the Chairman of the Board, President and Chief Executive Officer in his sole discretion shall determine; provided, however, such appointed officer shall under no circumstances have authority to bind any other division, product group or other segment of the Corporation's business nor to bind the Corporation, except as to the normal and usual business affairs of the division, product group or other segment of the Corporation's business of which he is an officer. Such appointed officer, as such, shall not be construed as an officer of the Corporation. Section 4.3. SALARIES. The salaries of the officers elected pursuant to Section 4.1 above shall be determined by the Board of Directors. The salaries of all other officers and agents of the Corporation appointed by the Chairman of the Board, President and Chief Executive Officer shall be determined by the Board of Directors or the Chairman of the Board, President and Chief Executive Officer. Section 4.4. REMOVAL. Any officer elected by the Board of Directors and any officer or agent appointed by the Chairman of the Board, President and Chief Executive Officer, as the case may be, may be removed at any time by the Board of Directors or the Chairman of the Board, President and Chief Executive Officer, respectively, whenever in its or his judgment the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any vacancy occurring in any elected office of the Corporation shall be filled by the Board of Directors. Section 4.5. CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER. The Chairman of the Board, President and Chief Executive Officer shall be the chief executive officer of the Corporation. The Chairman of the Board, President and Chief Executive Officer shall preside at all meetings of stockholders and of the Board and shall see that all orders and resolutions of the Board are carried into effect. Subject to the control of the Board, the Chairman of the Board, President and Chief Executive Officer shall have general supervision, control and management of the affairs and business of the Corporation. The Chairman of the Board, President and Chief Executive Officer and/or the Executive Vice President and Chief Financial Officer shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. Section 4.6. EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER. The Executive Vice President and Chief Financial Officer shall be the chief financial officer of the Corporation and shall be in charge of the financial, accounting, taxation, administration, personnel and public relations activities of the Corporation and shall be under the direction and report to the Chairman of the Board, President and Chief Executive Officer. He and/or the Chairman of the Board, President and Chief Executive Officer shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. Section 4.7. EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, AEROSPACE. The Executive Vice President and Chief Operating Officer, Aerospace shall be the chief operating officer of the Corporation's aerospace businesses. He shall assist the Chairman of the Board, President and Chief Executive Officer in the general supervision, control and management of the affairs and business of the Corporation's aerospace businesses and the Corporation's government contracts and compliance activities. Section 4.8. EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, INDUSTRIAL. The Executive Vice President and Chief Operating Officer, Industrial shall be the chief operating officer of the Corporation's industrial businesses. He shall assist the Chairman of the Board, President and Chief Executive Officer in the general supervision, control and management of the affairs and business of the Corporation's industrial businesses. Section 4.9. VICE PRESIDENT, PERSONNEL AND PUBLIC RELATIONS. The Vice President, Personnel and Public Relations shall be in charge of the personnel functions of the Corporation and shall be directly responsible in such capacity for labor relations involving the Corporation and its employees. He shall also be in charge of the public relations activities of the Corporation. He shall be under the direction of and report to the Executive Vice President and Chief Financial Officer. Section 4.10. VICE PRESIDENT AND GENERAL COUNSEL. The Vice President and General Counsel shall be the chief legal officer of the Corporation, shall be responsible for all legal matters involving the Corporation and shall direct the Corporation's legal staff. He shall be under the direction of and report to the Chief Executive Officer. Section 4.11. OTHER VICE PRESIDENTS. The other Vice Presidents shall perform such duties as may be prescribed by the Board of Directors or the Chairman of the Board, President and Chief Executive Officer. Section 4.12. SECRETARY AND ASSISTANT SECRETARIES. (a) The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for Committees of the Board when required. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the Chairman of the Board, President and Chief Executive Officer. He shall keep in safe custody the seal of the Corporation, and affix the same to any instrument requiring it, and when affixed it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary. (b) The Assistant Secretaries in the order of their seniority shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary, and shall perform such other duties as the Chairman of the Board, President and Chief Executive Officer shall prescribe. Section 4.13. TREASURER AND ASSISTANT TREASURERS. (a) The Treasurer shall, subject to the direction of the Executive Vice President and Chief Financial Officer, have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all money and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors. (b) He shall disburse the funds of the Corporation when proper to do so, taking proper vouchers for such disbursements, and shall render to the Executive Vice President and Chief Financial Officer, the Chairman of the Board, President and Chief Executive Officer and the Board of Directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation. (c) If required by the Board of Directors, he shall give the Corporation a bond in such sum, and with such surety or sureties as shall be satisfactory to the Board, for the faithful performance of the duties of his office, and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. (d) The Treasurer shall be under the direction of and report to the Executive Vice President and Chief Financial Officer. (e) The Assistant Treasurers in the order of their seniority shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors or the Executive Vice President and Chief Financial Officer shall prescribe. Section 4.14. CONTROLLER AND ASSISTANT CONTROLLERS. (a) The Controller shall be the chief accounting officer of the Corporation and shall be responsible for the installation and supervision of all accounting records, including the preparation and interpretation of financial statements, the continuous audit of accounts and records, and such other duties usually incident to the office of Controller. He shall be under the direction of the Executive Vice President and Chief Financial Officer and shall, in addition to the foregoing duties, perform such other duties as may be assigned to him by the Board of Directors or the Executive Vice President and Chief Financial Officer. (b) The Assistant Controllers in the order of their seniority shall, in the absence or disability of the Controller, perform the duties and exercise the powers of the Controller and shall perform such other duties as the Board of Directors or the Executive Vice President and Chief Financial Officer shall prescribe. Section 4.15. TAX DIRECTOR. The Tax Director shall be responsible for the preparation and signing of all federal and state tax returns, consents, elections, closing agreements and all other documents related to the determination of any federal or state tax liability of the Corporation, and as such shall be under the direction of and report to the Executive Vice President and Chief Financial Officer. ARTICLE V SHARES AND THEIR TRANSFER Section 5.1. CERTIFICATES OF STOCK. Certificates for shares of stock of the Corporation shall be in such form as shall be approved by the Board, and during the period while more than one class of stock or more than one series of any class of the Corporation is authorized, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificates which the Corporation shall issue to represent such class or series of stock, or else there shall appear on the certificates a statement that the Corporation shall furnish such information to a stockholder without charge if it be requested. They shall exhibit the holder's name and number of shares, and, with respect to each class of stock of the Corporation, or series thereof, if there be more than one class or series thereof, shall bear a distinguishing letter, and each class or series thereof, if any, shall be numbered serially and be issued in consecutive order. They shall bear the Corporate seal or a facsimile thereof and shall be signed by the Chairman of the Board, President and Chief Executive Officer, an Executive Vice President, or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation. If such certificate is countersigned (1) by a transfer agent other than the Corporation or its employee, or, (2) by a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with same effect as if he were such officer, transfer agent, or registrar at the date of issue. Section 5.2. TRANSFER OF STOCK. Upon surrender to the Corporation or its transfer agent of a certificate representing shares, duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, a new certificate shall be issued to the person entitled thereto, and the old certificate cancelled, and the transaction recorded upon the books of the Corporation. Section 5.3. LOST, STOLEN OR DESTROYED CERTIFICATES. Any person, claiming a certificate for shares of the Corporation to be lost, stolen or destroyed, shall make affidavit of the fact and lodge the same with the Secretary of the Corporation accompanied by a signed application for a new certificate. Such person shall also give the Corporation a bond of indemnity with one or more sureties satisfactory to the Board of Directors, and in an amount which in their judgment shall be sufficient to save the Corporation from loss, or shall qualify under such blanket bond as may from time to time be approved by the Board of Directors, and thereupon the proper officers may cause to be issued a new certificate of like tenor with the one alleged to be lost, stolen or destroyed. Section 5.4. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. Section 5.5. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. Section 5.6. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may from time to time appoint a transfer agent and registrar in one or more cities; may require all certificates evidencing shares of stock of the Corporation to bear the signatures of a transfer agent and registrar; and may provide that such certificates shall be transferable in more than one city. ARTICLE VI INDEMNIFICATION OF OFFICERS AND DIRECTORS The Corporation shall, to the fullest extent to which it is empowered to do so by the General Corporation Law of Delaware, or any other applicable laws, as from time to time in effect, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the Corporation or a division thereof, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding. The provisions of this Article shall be deemed to be a contract between the Corporation and each director or officer who serves in any such capacity at any time while this Article and the relevant provisions of the General Corporation Law of Delaware or other applicable law, if any, are in effect, and any repeal or modification of any such law or of this Article shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. The Corporation shall, to the fullest extent to which it is empowered to do so by the General Corporation Law of Delaware, and with respect to the Employee Retirement Income Security Act of 1974, or any other applicable laws, as from time to time in effect, indemnify any officer, director or employee of the Corporation or an affiliated corporation, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was serving at the request of the Corporation as an individual Trustee, Committee member, administrator or fiduciary of a pension or other benefit plan for employees of the Corporation, or of an affiliated corporation or other enterprise. Persons who are not covered by the foregoing provisions of this Article and who are or were employees or agents of the Corporation or a division thereof, or are or were serving at the request of the Corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the Board of Directors of the Corporation. The indemnification provided or permitted by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled by law or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article. The Corporation shall, to the fullest extent to which it is empowered to do so by the General Corporation Law of Delaware, or any other applicable laws, as from time to time in effect, pay expenses, including attorneys' fees, incurred in defending any action, suit or proceeding, in advance of the final disposition of such action, suit or proceeding, to any person who is or was a party or is threatened to be made a party to any such threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation, upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized by applicable laws. ARTICLE VII MISCELLANEOUS PROVISIONS Section 7.1. CHECKS, DRAFTS AND OTHER INSTRUMENTS; SECURITY VOTING AND PROXIES. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness, issued in the name of the Corporation shall be signed by such officer or officers, or such other person or persons, as the Board of Directors may from time to time designate. In the absence of specific action by the Board of Directors, the Chairman of the Board, President and Chief Executive Officer or any Executive Vice President or Vice President shall have the authority to grant proxies to vote, or vote, on behalf of the Corporation the securities of other corporations, both domestic and foreign, held by the Corporation. Section 7.2. SEAL. The corporate seal of the Corporation shall be in such form as the Board of Directors may determine and shall include the name of the Corporation and the words "Corporate Seal, Delaware." The seal may be used by causing it, or a facsimile thereof, to be impressed or affixed or in any manner reproduced. Section 7.3. FISCAL YEAR. The fiscal year of the Corporation shall commence on the first day of January in each year and end on the following 31st day of December. Section 7.4. NOTICES. Notice by mail shall be deemed to have been given at the time the same shall be mailed. Notice by telegraph shall be deemed to have been given when the same shall have been delivered for prepaid transmission into the custody of a company ordinarily engaged in the transmission of such messages. Section 7.5. WAIVER OF NOTICE. Whenever any notice whatever is required to be given under the provisions of the laws of the State of Delaware or under the provisions of the Certificate of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Except as may be otherwise specifically provided by law, any waiver by mail, telegraph, cable or wireless bearing the name of the person entitled to notice shall be deemed a waiver in writing duly signed. The presence of any person at any meeting either in person or by proxy shall be deemed the equivalent of a waiver in writing duly signed, except where the person attends for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Section 7.6. DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of law and of the Certificate of Incorporation. Section 7.7. CREATION OF RESERVES. Before payment of any dividend or making any distribution of profits, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board from time to time, in its absolute discretion, may think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Board shall think conducive to the interest of the Corporation, and the Board may at any time modify or abolish any such reserve in the manner in which it was created. Section 7.8. AMENDMENTS. These By-Laws may be altered or repealed by the affirmative vote of the majority of the entire number of directors specified from time to time in the restated Certificate of Incorporation at any regular meeting of the Board or at any special meeting of the Board, if notice of the proposed alteration or repeal be contained in the notice of such special meeting; provided, however, that any provisions of these By-Laws resulting from such alteration or repeal shall at all times be in conformance with the Restated Certificate of Incorporation and the laws of the State of Delaware. EX-10.A 4 Exhibit (10)(a) SUNDSTRAND CORPORATION Corporate Offices 4949 Harrison Avenue P.O. Box 7003 Rockford, Illinois 61125-7003 Phone (815) 226-6000 TWX 910-631-4255 Telex 25-7440 September 24, 1994 Mr. Harry C. Stonecipher 2304 Stoneridge Close Rockford, IL 61107 Dear Harry: For good and valuable consideration both parties acknowledge having received, this letter agreement proposes terms and conditions under which Sundstrand Corporation (the "Company") will, for certain purposes only, grant your request to take an early retirement from your employment with the Company effective this date. Your signing below will indicate your agreement with the provisions of this letter, which shall constitute the entire agreement between the Company and you regarding your retirement. It is agreed that, other than as set forth herein, the Company's grant of your request to take an early retirement shall not trigger any right in you, or any duty or obligation on the part of the Company, under any corporate stock plan or otherwise, and you hereby expressly waive any agreement to the contrary. You will be paid your accrued salary through the date hereof. You presently have 144,000 unreleased restricted shares of stock under the Company's Restricted Stock Plans and the Stock Incentive Plan. The Compensation Committee has authorized the Company to release from applicable restrictions 40,000 of the said shares as soon as possible. For this purpose, the Company will cause to be released from escrow such 40,000 shares, less the number of shares, based upon the closing price (less $.50 per share for shares issued under the Stock Incentive Plan upon conversion of your Cash Equivalent Rights) on the New York Stock Exchange of a Sundstrand common share as of the release date, necessary to pay any withholding under applicable federal, state and local tax laws. The Company will determine such necessary amount, deem it to have been paid to you and then reimbursed by you to the Company to meet the said withholding requirements. PAGE Harry C. Stonecipher September 24, 1994 Page 2 Under the Stock Incentive Plan, you presently have 45,000 options granted as of December 1, 1992, at an option price of $38.625 per option. The Compensation Committee has determined that the options will become fully exercisable by you as of the date of this letter and the exercise period will end one year from the date hereof. As a result of your decision to retire, under terms of the Officer Incentive Compensation Plan, no bonus would be payable to you for the 1994 plan year. However, the Company, after the end of 1994, based upon the overall performance of the Company for such year, will determine whether a bonus would otherwise have been payable. If a bonus would have been payable, the Company will pay to you 75% of such amount. Your benefits under the tax-qualified employee retirement plans in which you participate and under the non tax-qualified supplemental retirement plan will be determined as soon as possible after your retirement from employment and paid in accordance with applicable provisions of such plans and in addition you will receive benefits to which you are entitled under your special retirement arrangement with the Company and under the Director Emeritus Retirement Plan. The Board of Directors has accepted your resignation as a director effective the date of this letter and has elected you a Director Emeritus entitling you to all benefits that persons holding such title are entitled to. To the extent the Company is required by applicable law to withhold from the amounts or benefits set forth in the preceding paragraphs which are to be paid to you, the Company shall have the right to make such withholding, as applicable, from such amounts or in accordance with plan provisions. As Chairman of the Board, President and Chief Executive Officer of the Company, you have had access to confidential information regarding the business and products of the Company and its subsidiary companies and divisions and its affiliates (collectively "Sundstrand"). You agree that during the period beginning on the date of this letter and for a period of three years thereafter, you will not, without the written consent of the Company's Chief Executive Officer, use or disclose to others any Confidential Information which you received directly or indirectly from Sundstrand or any information which you shall, or should have reason to, believe is of a confidential nature. For purposes of this letter, "Confidential Information" shall mean the designs, inventions, developments, processes, techniques, testing and servicing procedures, programs, equipment, prototypes, costs and pricing structures, market analyses and marketing plans, sales figures and customer relationships not generally known. In addition, you agree that, except for the PAGE Harry C. Stonecipher September 24, 1994 Page 3 position you have identified to the undersigned, for the period aforestated you will not undertake employment as an owner, director, officer, employee or consultant with any company or other organization engaged in the manufacture and/or sale of products competitive with any of the present products of Sundstrand without the previous written consent of the Company's Chief Executive Officer, which consent will not be unreasonably withheld. You hereby fully and unconditionally release and forever discharge the Company and its subsidiary companies, and their directors, officers, employees, agents and shareholders from, and agree to indemnify and hold them harmless from, any and all actions, causes of action, claims, rights, obligations, damages, costs (including attorneys' fees), suits and demands of whatsoever kind, nature and character, known or unknown, in law or in equity, which you, your heirs, representatives or assigns now or in the future may have, or have ever had, which arose prior to the date of this letter, including any thereof arising out of or based upon any obligations of the Company under your employment agreement with the Company or under the 1975, 1982 and 1989 Restricted Stock Plans and the 1992 Stock Incentive Plan of the Company except as specifically provided for in this letter agreement, but excluding any thereof arising out of or based upon any obligations of the Company to you under this letter, post retirement benefits and any indemnification to you under the Company's Certificate of Incorporation, By-laws or applicable laws. You understand there is a risk that subsequent to the execution of this letter you may discover, incur or suffer claims which are unknown or unanticipated, and which if known on the date this letter was executed may have materially affected your decision to execute this letter. Despite this, you expressly waive all rights under any laws of any state or territory in the United States or other jurisdiction which might otherwise preserve such claims. By signing below, you acknowledge your understanding and agreement that conduct contrary to these provisions on your part will constitute a breach of this letter agreement. In the event of your breach of the terms of this letter, you hereby acknowledge and agree that damages constitute an inadequate remedy at law and that the Company shall be entitled, at its election, to specifically enforce the terms and provisions hereof by equitable relief including specific performance and/or injunctive relief. You hereby acknowledge and agree that the Company's failure to enforce any aspect of this letter agreement shall not cure any breach by you, nor shall it prevent the Company from pursuing any other breach of this agreement. Further, in the event of a breach by either party, it is agreed that the reasonable attorneys' fees, costs and expenses incurred by the prevailing party in enforcement hereof will be paid by the losing party. PAGE Harry C. Stonecipher September 24, 1994 Page 4 This letter agreement supersedes and cancels any other obligations the Company may have had to you in any form regarding your retirement or the termination of your employment with the Company, and contains the entire agreement between the parties hereto with respect to that subject. This letter agreement may not be modified except in a writing signed by the signatories hereto. Notices or correspondence by one party to this letter may be addressed to the other at its address as set forth on the first page of this letter, unless notice is provided in writing of any change of address. This letter and all questions of its interpretation, performance, enforcement and the rights and remedies of the parties hereto shall be determined in accordance with the laws of the State of Illinois. You acknowledge and affirm that (1) you have not purchased or sold any shares of common stock of the Company, or other options thereon or related rights thereto, within the past 6 months and 1 day, (2) you are subject to certain filing obligations under Section 16(a) of the Securities Exchange Act of 1934 (including, but not limited to, the Form 5 filing or substitute statement therefor) and (3) to the best of your knowledge, you have timely filed any necessary Section 16(a) reports with the Securities and Exchange Commission and the New York Stock Exchange. Legal rights which you may have could be affected by your agreeing to the foregoing. You represent and acknowledge that you have consulted an attorney prior to signing this letter agreement. By signing, you will be acknowledging that you have had adequate time and advice to consider the terms stated herein, that you have carefully read this letter, that you understand the provisions of this letter and are fully aware of its effect, and that you are executing this letter of your own free will. This letter shall be effective upon signing by both parties. Very truly yours, SUNDSTRAND CORPORATION By: /s/ Richard M. Schilling Richard M. Schilling Vice President and General Counsel and Secretary I have read and agree to the terms and conditions stated above. /s/ Harry C. Stonecipher Harry C. Stonecipher Date: September 24, 1994 EX-10.B 5 Exhibit (10)(b) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of this 3rd day of October, 1994, between SUNDSTRAND CORPORATION, a Delaware corporation (the "Company"), and Don R. O'Hare ("Executive"). WHEREAS, Executive is employed as Chairman of the Board and Chief Executive Officer of the Company and the Company desires to assure the benefits of the Executive's future services, and Executive is willing to commit to render such services, upon the terms and conditions set forth below. NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties have agreed as follows: 1. Employment. The Company agrees to employ Executive in an executive capacity, and Executive agrees to serve the Company, upon the terms and conditions and for the period of employment hereinafter set forth. Throughout the Employment Period (as hereinafter defined), except as otherwise provided in Section 11 or unless otherwise agreed in writing by Executive and the Company, the Company shall neither demote Executive nor assign to Executive any duties or responsibilities that are inconsistent with his position as Chief Executive Officer and the duties, responsibilities and status of such position. 2. Employment Period. The term of the Executive's employment under this Agreement shall commence as of September 26, 1994, and, subject to earlier termination of Executive's employment and termination of this Agreement as provided in Section 7, shall expire upon the earlier of September 25, 1996, or the employment by the Company as provided in Section 11 of a new Chief Executive Officer (the "Employment Period"). 3. Compensation. Throughout the Employment Period, the Company shall pay or provide Executive with the following, and Executive shall accept the same, as compensation for the PAGE -2- performance of his undertakings and the services to be rendered by him under this Agreement. (a) A salary payable not less often than bi-weekly, at a rate of $650,000 per annum. (b) (i) A prorated bonus for the period September 26, 1994 through December 31, 1994 (or if earlier the date of hiring of a Chief Executive Officer as provided in Section 11) based upon the assumption that Executive was a participant in the Company's Officer Incentive Compensation Plan during such period. Such bonus shall be determined based upon the opportunity level under the Plan for the Chief Executive Officer and the performance elements approved by the Compensation Committee for the 1994 plan year. (ii) Participation in the Company's Officer Incentive Compensation Plan for the 1995 and 1996 plan years, provided that for any plan year the bonus amount will be prorated to reflect the actual period of employment as Chief Executive Officer. (c) Participation in the following employee benefit plans, policies, practices and arrangements maintained by the Company in which Executive is presently eligible to participate: - Sundstrand Corporation Disability Plan - Accidental Death Insurance - Executive and Spouse Physical - Sundstrand Corporation Group Life Insurance Plan - Use of Company Airplane - Financial Services - Snow Plowing and Other Personal Services Such plans are hereinafter collectively referred to as the "Benefit Plans". In the event Executive at any time during the Employment Period is not eligible to participate in any Benefit Plan for which Executive was previously eligible or the Company terminates or materially amends any Benefit Plan, the Company shall provide to Executive benefits comparable with those benefits that would have been received by Executive if Executive continued to participate in such Plans. (d) Paid vacations in accordance with the Company's vacation policy as in effect from time to time, and PAGE -3- all paid holidays given by the Company to its executive officers. 4. Expenses. During the Employment Period, the Company shall promptly pay or reimburse Executive for all reasonable expenses incurred by Executive in the performance of duties hereunder. 5. Conditions of Employment. Throughout the Employment Period: (a) The Company shall not require or assign duties to Executive which would require him to move the location of his principal business office or his principal place of residence outside the City of Rockford or the County of Winnebago, Illinois (the "Rockford Area"); (b) The Company shall not require or assign duties to Executive which would require him to spend more than forty-five (45) normal working days away from the Rockford Area during any consecutive twelve-month period; (c) The Company shall provide an office to Executive, the location and furnishings of which shall be equivalent to the offices provided to him on the date of this Agreement; and (d) The Company shall provide secretarial services and other administrative services to Executive which shall be equivalent to the secretarial services and other administrative services provided to him on the date of this Agreement. 6. Continuation of Benefits. If the Company shall fail to observe or perform any covenant or agreement contained in this Agreement to be observed or performed by the Company, then Executive shall, until such time as Executive's Employment Period hereunder would otherwise terminate pursuant to the provisions of Section 2 or Section 7, continue to receive all benefits which the Company has hereinabove in Section 3 agreed to pay to and provide for Executive, in each case in the amounts and at the times provided for in Section 3. The parties agree that, in such event, PAGE -4- such payments and benefits shall be deemed to constitute liquidated damages for the Company's breach of this Agreement. 7. Termination. This Agreement shall terminate upon the following circumstances: (a) The date of resignation or death of Executive during the Employment Period; provided, however, that Executive or Executive's estate, heirs and beneficiaries, as the case may be, shall be paid the full amount of Executive's salary through the end of the month in which his resignation or death occurs, but in no event for any period thereafter, and all other benefits which would be applicable to Executive or Executive's estate, heirs and beneficiaries under the Company's Benefit Plans in which Executive participates as in effect on the date of Executive's resignation or death; (b) Following conviction of Executive of a felony, the date as of which Executive's right to file an appeal after conviction has expired, or if Executive files an appeal after conviction, the date as of which the appellate court fails to reverse the conviction, and the Company shall pay Executive his full salary through such date of termination and the Company shall have no further obligations to Executive under this Agreement except with respect to any rights Executive might otherwise have under the Company's Benefit plans as in effect on the date of termination of Executive; (c) The date of Executive's resignation in accordance with Section 11, unless Executive becomes a consultant as provided in Section 12; (d) The date Executive ceases to be a consultant as provided in Section 12; or (e) The date as of which the Company elects to terminate this Agreement in accordance with Section 10. 8. Covenant Not to Compete. Without the consent of the Company, Executive shall not at any time during the term of this Agreement undertake employment as an owner, director, officer, employee or consultant with any business entity directly engaged in the manufacture and/or sale of products competitive with any material product or product line of the Company; provided, however, PAGE -5- that Executive shall not be deemed to have breached this undertaking if his sole relation with such entity consists of his holding, directly or indirectly, an equity interest in such entity not greater than two percent (2%) of such entity's outstanding equity interest. For purposes hereof the term "material product or product line of the Company" shall mean any product or product line of the Company, the gross sales of which during any calendar year during the five (5) year period preceding the Executive's undertaking such employment were at least $50 million. 9. Disclosure of Confidential Information. Without the consent of the Company, Executive shall not at any time during the term of this Agreement disclose to any other business entity confidential information concerning the Company or the Company's trade secrets of which Executive has gained knowledge during his employment with the Company. 10. Breach of Section 8 or Section 9. In the event of a breach by Executive of the provisions of Section 8 or Section 9 of this Agreement, the Company may terminate this Agreement under Section 7(e), but only if the Company complies with the following provisions: (a) The Company shall provide Executive with written notice of its belief that a breach of Section 8 or Section 9 of this Agreement has occurred and shall afford Executive sixty (60) days or such longer period as the Company may determine to cure the alleged breach. (b) In the event Executive does not cure the breach, the Company shall be required to institute a judicial proceeding to determine whether a breach of Section 8 or Section 9 of this Agreement has occurred and Executive has not cured such breach. (c) This Agreement may then be terminated only upon a judicial determination that Executive has breached the provisions of Section 8 or Section 9 and has failed to cure such breach; provided, however, that this Agreement may not be terminated until either all appellate proceedings have been exhausted or the time PAGE -6- within which Executive may appeal an adverse ruling has expired. 11. Hiring of Chairman and CEO. The Board of Directors of the Company intends to identify and hire an individual to assume the position of and replace Executive as Chief Executive Officer of the Company. Executive shall provide such assistance to the Board with respect to this effort as the Board reasonably requests. Upon the hiring of such an individual to fill the position of Chief Executive Officer of the Company (the "Chief Executive"), Executive shall immediately resign from the position of Chief Executive Officer of the Company and, except as provided in Articles 12 and 13, Executive shall not be entitled to any further compensation or benefits under this Agreement other than the payment of all compensation and benefits earned or accrued to the date of his resignation which have not been paid as of such date. 12. Consultant. Executive shall, upon request of the Board of Directors or its designee, become a consultant to the Chief Executive, until the earlier of Executive's death, Executive's termination of the consultant position, or September 25, 1996. During the period he is a consultant, Executive shall perform such services as the Board or its designee reasonably requests which services shall not be inconsistent with the consulting services required under the Consulting Agreement heretofore in effect between the Company and Executive, which agreement is referred to in Section 17. The compensation to be provided to Executive during the period he is a consultant pursuant to this Section 12 shall be limited to a consultant's fee payable bi-monthly at a rate of $650,000 per annum. In the event of either the termination of the consulting arrangement under this Section 12 or the death of Executive prior to September 25, 1996, Executive or Executive's estate, heirs and beneficiaries, as the case may be, shall within ten (10) days thereafter be paid a single lump sum amount equal to $1.3 million less the sum of all salary compensation paid to Executive pursuant to Section 3(a) and all PAGE -7- consultant compensation paid to Executive pursuant to this Section 12. 13. Termination Following Hiring of Chief Executive Officer. In the event Executive, following the hiring of the Chief Executive, does not become a consultant pursuant to Section 12, Executive within ten (10) days after his resignation as Chief Executive Officer, in addition to the compensation and benefits to be paid pursuant to Section 11, shall be paid a single lump sum amount equal to $1.3 million less the amount of all salary compensation otherwise paid to executive pursuant to Section 3(a) and Section 11 of this Agreement. 14. Notices. Notice given pursuant to this Agreement shall be in writing and shall be deemed given when received and if to the Company, to the Board of Directors of Sundstrand Corporation, Attention: Vice President and General Counsel and Secretary of the Company. 15. Successors. This Agreement may not be assigned by the Company, and the obligations of the Company provided for in this Agreement shall be binding legal obligations of any successor to the Company by purchase, merger, consolidation, or otherwise. This Agreement may not be assigned by Executive during his life, and upon his death will be binding upon and inure to the benefit of his heirs, legatees and the legal representatives of his estate. 16. Waiver, Modification and Interpretation. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and an appropriate officer of the Company empowered to sign same by the Board of Directors of the Company. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions PAGE -8- at the same time or at any prior or subsequent time. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Illinois. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. 17. Termination of Consulting Agreement. Effective as of the date hereof, the Consulting Agreement between the Company and Executive, which was extended through September 30, 1995, is terminated and no further payments will be made to Executive thereunder. 18. Headings. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first written above. SUNDSTRAND CORPORATION By: /s/ Richard M. Schilling Vice President and General Counsel and Secretary /s/ Don R. O'Hare Executive EX-11.A 6 Exhibit (11)(a) Computation of Fully Diluted Earnings Per Share (Unaudited) Quarter Ended Nine Months Ended September 30, September 30, ---------------- ----------------- (Amounts in millions except per share data) 1994 1993 1994 1993 - - - - --------------------------------------------------------------------------------------------------- EARNINGS Earnings from continuing operations $ 23.7 $ 15.5 $ 60.6 $ 60.0 Loss from discontinued SDC business, prior to discontinuance, net of taxes - - - (.7) Earnings from discontinued SDC business, subsequent to discontinuance, net of taxes - 1.6 - 2.1 ------- ------- ------- ------- Net earnings $ 23.7 $ 17.1 $ 60.6 $ 61.4 ======= ======= ======= ======= =================================================================================================== SHARES Weighted-average number of common shares outstanding 32.9 35.8 32.9 35.8 Additional shares assuming conversion of stock options .1 - .1 - ------- ------- ------- ------- Fully diluted shares 33.0 35.8 33.0 35.8 ======= ======= ======= ======= =================================================================================================== FULLY DILUTED EARNINGS PER SHARE Earnings from continuing operations $ .72 $ .44 $ 1.84 $ 1.68 Loss from discontinued SDC business, prior to discontinuance, net of taxes - - - (.02) Earnings from discontinued SDC business, subsequent to discontinuance, net of taxes - .05 - .06 ------- ------- ------- ------- Net earnings $ .72 $ .49 $ 1.84 $ 1.72 ======= ======= ======= =======
EX-27 7
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1994 SEP-30-1994 67,700 0 274,200 0 309,200 719,800 459,500 0 1,580,700 398,000 246,500 18,900 0 0 497,800 1,580,700 995,100 995,100 670,800 670,800 0 0 21,500 94,700 34,100 60,600 0 0 0 60,600 1.84 1.84
-----END PRIVACY-ENHANCED MESSAGE-----