Document zd3Qx0ZRgEL2kL79eeYNKkY1R

i pay in connection with environmental matters in excess of the SHAREHOLDERS' EQUITY amounts recorded or disclosed above will not have a material There are 150 million Common Shares authorized. There were 11 adverse effect on its financial' condition or-results of operations. million and 12 million Common Shares held in treasury at the end With respect to the DCBU operations acquired at January 31. 1994. of 1992 and 1991, respectively, which were reissued in conjunction to date the Company has conducted only a due diligence, pre-acqui with the June 1993 two-for-one stock split. At December 31, 1993. sition review of the environmental loss contingencies and expendi 5.8 million Common Shares were reserved principally for exercise tures at these operations. Although additional investigation and and gram of stock options. At December 31, 1993. there were 15.417 review is in progress, the Company is not yet able to evaluate holders of record of Common Shares. Additionally. 15.508 employees were shareholders through participation in the Share Purchase and t conclusively the scope of any environmental issues. The Company Investment Plan. expects that these operations will have environmental exposure similar to that of other electrical equipment manufacturers. The In private placements the Company sold 1.3 million Common Shares Company's exposure is limited, however, by the agreement between in 1993 for aggregate net proceeds of $62 million, and sold an addi the Company and Westinghouse Electric Corporation, pursuant to tional 800.000 Common Shares in January 1994 for aggregate net which the Company acquired DCBU. With respect to environmental proceeds of $38 million. In May 1993, the Company redeemed its conditions existing prior to the acquisition. Westinghouse has agreed share purchase rights at a redemption price of 3-1/3 cents for each to retain certain responsibilities, to share the cost of others and to right, for a total payment of $2 million. indemnify the Company for its share of those costs to the extent that they exceed S3.3 million annually. For locations in the United Stales, this obligation to share and to indemnify extends for ten years, and for locations elsewhere it extends for fifteen years. The Company's Employee Stock Ownership Plan (ESOP) was estab lished to prefund a portion of the anticipated matching contributions through 1999 to its Share Purchase and Investment Plan fSPIP) for participating United States employees. That portion of SPIP The Company continues to modify, on an ongoing, regular basis, expense related to the ESOP is calculated by first determining the certain of its processes in order to reduce the impact on the environ ratio of shares allocated to employee ESOP accounts relative to shares ment. Efforts in this regard include the removal of many underground released, and then applying that ratio to the amount contributed to storage tanks and the reduction or elimination of certain chemicals the ESOP. That amount, along with dividends on unallocated Common and wastes in its operations. Shares held by the ESOP, is used to repay the notes, including inter est, in level installments. Unallocated ESOP shares are allocated OPTIONS FOR COMMON SHARES Options have been granted to certain employees, under various to employee ESOP accounts in aggregate amounts based on loan principal payments made by the ESOP. plans, to purchase the Company's Common Shares at prices equal to fair market value as of date of grant. These options expire ten years LEASE COMMITMENTS from date of grant. A summary of stock option activity follows: Future minimum rental commitments as of December 31. 1993, im A verage price per share Shares 7992 Average price per share Shares under noncancelable operating leases, which expire at various dates and in most cases contain renewal options, are as follows (in millions): 1994. S28: 1995, $23; 1996, $17; 1997. $14; 1998. SI2; and after 1998. S91. Outstanding. January 1 SIK.XI 1.16)1.07(1 s:h .1.1 3.836.274 Rental expense in 1993. 1992 and 1991 (in millions) was $43. $45 Granled .14.34 S'-1.7-0 54.10 808.070 and $49. respectively. F. erased :7.:x 50 (t .221.6 lit 1 Canceled .* > 5: itlW.-IU'i 29.47 (5-J.ObJ PENSION PLANS j Outstanding. December 51 S.'l 51 V.NxI) S2X.8I 3.368.670 The Company has non-contributory defined benefit pension plans 1 Shares exercisable Januarx 1 December M Shares reserved lor future c ranis ' Januarx 1 '.V'u \ss : -JM! /S s _\X'o xx: j.9u.\nu .?..\'J.~5> 5.710 5> covering the majority of employees. Plans covering salaried and ter tain hourly employees provide benefits that are generally based on years of service and final average compensation. Benefits for other hourlv employees are generally based on years of service. Company poliev iv to fund at least the minimum amount required by applicable Deeeniher .'1 l '-/ '-0 regulations. In the event of a change in control of the Company. excess pension plan assets of North American operations may he dedicated to funding of health and welfare benefits for employee-, and retiree-- T