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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-6357
ESTERLINE TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-2595091
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10800 NE 8TH STREET
BELLEVUE, WASHINGTON 98004
(Address of principal executive offices) (Zip code)
Registrant's telephone number,
including area code 206/453-9400
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
Common Stock ($.20 par value) New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate by check mark whether the Registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
X Yes No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. (X)
As of January 17, 1997, 8,518,800 shares of the Registrant's
common stock were outstanding. The aggregate market value of such
common stock held by non-affiliates at such date was $216,164,550
(based upon the closing sales price of $25.375 per share).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Annual Report to Shareholders for Fiscal Year ended
October 31, 1996 -- Parts I, II and IV.
Portions of Definitive Proxy Statement relating to the 1997 Annual
Meeting of Shareholders, to be held on March 5, 1997 -- Part III.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
Certain statements in the Form 10-K and documents incorporated
by reference contain forward-looking statements within the meanings
of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such
statements involve risks and uncertainties, certain of which are
discussed below, regarding matters that could significantly affect
expected results including information about industry trends, growth
and backlog. Thus, these forward-looking statements may be materially
different from actual future outcomes. The Company does not undertake
any obligation to publicly release the results of any revisions that
may be made to these forward-looking statements to reflect any future
events or circumstances.
Cyclicality of Business. The Company's business is susceptible to
economic cycles and its results can vary widely based on a number of
factors, including domestic and foreign economic conditions and
developments affecting the specific industries and customers served.
The products sold by most of the Company businesses represent capital
investment or support for capital investment by either the initial
customer or the ultimate end-user. Also, a significant portion of the
sales and profitability of some Company businesses is derived from the
telecommunications, computer and aerospace markets and defense and
other government contracts. Changes in general economic conditions or
conditions in these and other specific industries, capital acquisition
cycles and government policies, collectively or individually, can have
a significant effect on the Company's results of operations and
financial condition. For example, in fiscal 1995, strong demand for the
Automation Group's manufacturing equipment products, particularly at
Excellon, was primarily responsible for the Company's sales increases.
Subsequently in 1996, the Automation Group experienced a drop off due to
uncertainty among automated manufacturing equipment users, while at the
same time, the Aerospace Group was benefiting from improvements in the
aerospace markets. There can be no assurance that such trends will
continue at their current levels.
Dependence on Major Customers; Backlog. Certain of the Company's
subsidiaries are dependent on a relatively small number of customers
and defense programs which change from time to time. For example,
Armtec is dependent on the U.S. Army. Significant customers in fiscal
1996 included the U.S. Army, Snecma and Boeing. There can be no
assurance that the Company's current customers will continue to buy
the Company's products at their current levels. Moreover, orders
included in backlog are generally subject to cancellation by the
Company's customers. The inability to replace sales due to the loss
of any major customer or defense program could have a material
adverse effect on the Company's results of operations and financial
condition.
Dependence on Proprietary Technology. The Company's subsidiaries
take precautionary steps to protect their technological advantages and
rely in part on patent, trademark, trade secret and copyright law to
protect their intellectual property. There can be no assurances that
the precautionary steps taken by the Company will prevent
misappropriation of its technology. Litigation may be necessary in the
future to enforce the Company's patents and other intellectual property
rights, to protect the Company's trade secrets, to determine the
validity and scope of proprietary rights of others or to defend against
claims of infringement or invalidity by others. Such litigation could
result in substantial costs and diversion of resources and could have a
material adverse effect on the Company's operating results and
financial condition.
Risk of Foreign Operations. Foreign sales represented
approximately 35% of the Company's total sales in fiscal 1996. Foreign
sales are subject to numerous risks, including political and economic
instability in foreign markets, restrictive trade policies of foreign
governments, economic conditions in local markets, inconsistent product
regulation by foreign agencies or governments, the imposition of
product tariffs and the burdens of complying with a wide variety of
international and U.S. export laws and differing regulatory
requirements. To the extent that foreign sales are transacted in a
foreign currency, the Company would be subject to the risk of losses
due to foreign currency fluctuations. In addition, the Company has
substantial assets denominated in foreign currencies which are not
offset by liabilities denominated in such foreign currencies. These net
foreign currency investments are subject to material changes in the
event of fluctuations in foreign currencies against the U.S. dollar.
Product Liability. The Company is subject to the risk of claims
arising from injuries to persons or property due to the use of its
products. Although the Company maintains general liability and product
liability insurance, there can be no assurance that such insurance will
be sufficient to cover any claims that may arise.
Volatility of Stock Price. The trading price of the Company's
Common Stock has from time to time fluctuated widely and in the future
may be subject to similar fluctuations in response to
quarter-to-quarter variations in the Company's operating results,
announcements of technological innovations or new products by the
Company or its competitors, announcements of marketing and distribution
arrangements by the Company, general conditions in the industries in
which the Company competes and other events or factors. In addition, in
recent years broad stock market indices, in general, and the securities
of technology companies, in particular, have experienced substantial
price fluctuations. Such broad market fluctuations also may adversely
affect the future trading price of the Common Stock.
Risks Associated With Acquisitions. A key operating strategy of
the Company is the pursuit of selective acquisitions. Although the
Company reviews many possible acquisitions, including some outside of
its current markets and acquisition criteria, the Company currently has
no commitments or agreements to acquire any specific businesses or
other material assets. There can be no assurance that any acquisition
will be consummated, or if consummated, that any such acquisition will
be successfully integrated or will not have a material adverse effect
upon the Company's financial condition or results of operations.
Certain Anti-Takeover Provisions. The Company's Restated
Certificate of Incorporation, as amended, and Bylaws contain provisions
for a classified Board of Directors and restricting the ability of
stockholders to call special meetings. These provisions could delay or
impede the removal of incumbent directors and could make more difficult
a merger, tender offer or proxy contest involving the Company, even if
such events might be favorable to the Company's stockholders. In
addition, certain agreements to which the Company is a party, including
loan and employment agreements, contain provisions that impose
substantial penalties upon the Company in the event of a change of
control.
The Company's Stockholder Rights Plan is designed to cause
substantial dilution to any "Acquiring Person" that attempts to merge
or consolidate with, or that takes certain other actions affecting the
Company on terms that are not approved by the Board of Directors of the
Company. The Company is also subject to the "business combination"
statute of the Delaware General Corporation Law. In general, the
statute prohibits a publicly held Delaware corporation from engaging
various "business combination" transactions with any "interested
stockholder" for a period of three years after the date of the
transaction in which such person became an "interested stockholder,"
unless the business combination is approved in a prescribed manner.
These provisions could discourage or make more difficult a merger,
tender offer or other similar transaction, even if favorable to the
Company's stockholders.
PART I
ITEM 1. BUSINESS
(a) General Development of Business.
Esterline Technologies Corporation, a Delaware corporation formed
in 1967 (the "Company"), is a diversified manufacturing company that has
strong market positions within, or in support of, a variety of general
manufacturing industries, including electronic equipment, metal
fabrication, commercial aerospace and defense. The Company conducts its
operations through three business segments: its Automation Group,
Aerospace and Defense Group, and Instrumentation Group. The six
principal subsidiaries of the Company generated approximately 81% and
82% of net sales and 81% and 83% of operating earnings in fiscal 1996
and 1995, respectively. The six principal subsidiaries are Excellon
Automation Co. ("Excellon") and W. A. Whitney Co. ("Whitney") in the
Automation Group, Armtec Defense Products Co. ("Armtec") and Auxitrol
S. A. ("Auxitrol") in the Aerospace and Defense Group, and Federal
Products Co. ("Federal") and Korry Electronics Co. ("Korry") in the
Instrumentation Group.
The Company's senior management group joined the Company in 1987.
In its efforts to improve shareholder returns, management has downsized
and restructured the Company and navigated it through extended
downturns in both the electronics capital goods and commercial
aerospace and defense markets. Since October 31, 1989, senior
management has reduced the Company's total debt from $172.1 million to
$40.9 million at October 31, 1996. During February 1996, the Company
completed a public offering (the "Public Offering") which generated
funds that are available for general corporate purposes including the
acquisition of companies.
In August 1996, the Company acquired the assets of Mason Electric
Co. which became a part of the Aerospace and Defense Group. Also during
the year, the Company acquired a noncontrolling equity interest in a
company and executed an agreement to acquire a product line. The
Company is continuing its plan for growth through the acquisition of
companies and product lines, the development of new products and the
search for new applications of current products.
(b) Financial Information About Industry Segments.
A summary of net sales to unaffiliated customers, operating
earnings and identifiable assets attributable to the Company's business
segments for the fiscal years ended October 31, 1996, 1995 and 1994 is
incorporated herein by reference to Note 13 to the Company's
Consolidated Financial Statements on pages 44 and 45 of the Annual
Report to Shareholders for the fiscal year ended October 31, 1996.
(c) Narrative Description of Business.
The Company consists of 13 individual businesses segmented into
three groups. Specific comments covering all of the Company's business
segments and operating units are set forth below.
AUTOMATION GROUP
The Automation Group consists of four subsidiaries of which
Excellon and Whitney are the principal subsidiaries. In fiscal 1996 and
1995, the Automation Group accounted for 42% and 44%, respectively, of
the Company's net sales. Equipment Sales Co. ("ESCI") and Tulon Co.
("Tulon") comprise the remaining members of the Automation Group.
Excellon
Excellon is a leading manufacturer of highly efficient automated
drilling systems for the printed circuit board manufacturing industry.
Excellon experienced significant growth during 1995 but experienced a
drop off midway through 1996 due to uncertainty among automated
manufacturing equipment users, especially in the printed circuit board
("PCB") industry, as they delayed capital purchase decisions.
Nonetheless, growing capacity requirements of printed circuit board
manufacturers and the proliferation of increasingly more complex boards
is continuing to render older printed circuit board drilling machines
obsolete, therefore providing continued demand for Excellon machines.
As the number of electronic applications multiply, board designers are
forced to integrate increasingly more functions into smaller packages,
requiring more PCB holes, smaller holes and much tighter tolerances
between holes. Management believes that its drilling systems enable its
customers to achieve one of the lowest costs per hole, an increasingly
important consideration in the cost-conscious electronics industry.
Excellon's high levels of research and development expenditures
are key to maintaining its important technology lead. Excellon's latest
product developments are micro-drilling machines that automatically
load or unload circuit boards in combination with fully integrated
material handling systems. These drilling equipment systems, in
combination with Excellon's powerful software, respond to customer
needs for increased flexibility and smaller, shorter production runs in
an automated production environment. These units feature a tool
management system that provides access to 600 tools per spindle,
integrated laser inspection for broken bits and full Z-axis control for
precision depth drilling. Depending on the configuration ordered,
Excellon's System 2000 machine, for example, can automatically load
circuit board material onto one of five drilling stations, drill the
board to exact pre-programmed specifications and then unload the
finished boards. This level of automation translates into dramatic
productivity advantages for Excellon's customers. An Excellon system
can provide access to any function of the drilling machine, full
process analysis traceability of system or operator performance and
statistical process control. Its color touch-screen with easy-to-read
menus available in nine different languages provides for ease of
operation.
In fiscal 1996, 1995 and 1994, printed circuit board drilling
equipment accounted for 22%, 26% and 18% respectively, of the Company's
consolidated net sales.
Whitney
Whitney designs and builds highly productive automated machine
tool and material handling systems for cutting and punching sheet,
plate and structural steel for construction, transportation,
agricultural and mining equipment manufacturers and independent steel
fabrication centers. Whitney produces equipment specifically designed
for mid- to heavy-plate metal that enables manufacturers to meet rigid
cut quality and accuracy standards. Whitney's computer-controlled heavy
punching and cutting machines significantly reduce setup time, decrease
work-in-process time and material handling and enable customers to
utilize just-in-time production to lower inventory and costs.
Management believes that Whitney's proprietary TRUECut(TM) oxygen
plasma cutting technology virtually eliminates rejected parts and
additional finish work, resulting in improved throughput and reduced
cost per part. In its niche, Whitney is a leading supplier in the
United States and has market positions in both Europe and Asia. Whitney
continually evaluates new approaches to metal cutting such as laser
technology, but to date has not found such technology to be competitive
with Whitney's current systems in its market niche.
Other
ESCI acts as a sales representative for various manufacturers'
products sold to the PCB assembly industry, including high-speed
assembly equipment.
Tulon produces tungsten carbide drill and router bits, commonly
ranging in size from 7mm down to .25mm -- but some are as small as
.10mm -- for use in PCB drilling equipment. Tulon utilizes computerized
equipment which automatically inspects drill bits and provides the
product consistency customers need for higher-technology drilling.
Tulon's products can be used in drilling machines produced by other
companies as well as the machines produced by Excellon.
Backlog
At October 31, 1996 the backlog of the Automation Group (all of
which is expected to be filled during fiscal 1997) was $19.2 million
compared with $35.9 million at October 31, 1995. The decrease was
primarily attributable to uncertainty experienced by automated
manufacturing equipment users.
AEROSPACE AND DEFENSE GROUP
The Aerospace and Defense Group consists of six subsidiaries
of which Auxitrol and Armtec are the principal subsidiaries. In
fiscal 1996 and 1995, the Aerospace and Defense Group accounted for
32% and 28%, respectively, of the Company's net sales. Hytek
Finishes Co. ("Hytek"), Midcon Cables Co. ("Midcon"), TA Mfg. Co.
("TA") and Mason Electric Co. ("Mason") comprise the remaining
companies in the Aerospace and Defense Group.
Armtec
Armtec manufactures molded fiber cartridge cases, mortar
increments, igniter tubes and other combustible ammunition components
for the United States Armed Forces and licenses such technology to
foreign defense contractors and governments. Armtec currently is the
only U.S. producer of combustible ordnance products utilized by the
U.S. Army. These products include the 120mm combustible case used as
the main armament system on the U.S. Army's M-1A1 and M-1A2 tanks, the
60mm, 81mm and 120mm combustible mortar increments and the 155mm
combustible case for artillery ammunition. As opposed to metal
cartridge casings, Armtec's products are part of the ammunition
propulsion system and are combusted when fired. In fiscal 1996, Armtec
was designated by the U.S. Army as having the preferred technology for
its new generation 155mm artillery system.
Auxitrol
Auxitrol, headquartered in France, manufactures high precision
temperature and pressure sensing devices used primarily in aerospace
applications; liquid level measurement devices for ships and storage
tanks; pneumatic accessories (including pressure gauges and
regulators); and industrial alarms. Auxitrol's principal customers are
jet and rocket engine manufacturers, aerospace equipment manufacturers,
shipbuilders, petroleum companies, processors and electric utilities.
Exhaust gas temperature sensing equipment for a jet engine manufacturer
constitutes a significant portion of Auxitrol's sales. Auxitrol also
distributes products manufactured by others, including valves,
temperature and pressure switches and flow gauges.
In addition, Auxitrol manufactures electrical penetration devices
for nuclear power plants under license for sale in territories which
cover European and certain other foreign countries. These penetration
devices permit electrical signals to pass through containment domes
while maintaining pressure integrity and signal continuity. Auxitrol is
also part of a joint venture with a Russian company to facilitate use
of its penetration devices in nuclear plants for Eastern Europe.
Other
Hytek provides specialized metal finishing and inspection
services, including plating, anodizing, polishing, nondestructive
testing and organic coatings, primarily to the commercial aircraft,
aerospace and electronics markets. Hytek also serves the semi-conductor
industry using an automated tin-lead plating line which employs some of
the most advanced automated plating technology available.
Midcon manufactures electronic and electrical cable assemblies and
cable harnesses for the military, government contractors and the
commercial electronics market, offering both product design services
and product assembly to customer specifications. Its proprietary cable,
EverFlex(TM), uses an internally developed, patented design to provide a
unique solution to significant problems in wiring applications
involving vibration, abrasion and repetitive movement.
TA designs and manufactures specialty clamps and elastomeric
compounds in custom molded shapes for wiring and tubing installations
for airframe and jet engine manufacturers as well as military and
commercial airline aftermarkets. TA's products include proprietary
elastomers which are specifically formulated for various extreme
applications, including high-temperature environments on or near a jet
engine.
Mason was acquired in August 1996 and is the newest addition to
the Aerospace and Defense Group. Mason primarily manufactures control
sticks, grips and wheels to aerospace customer specifications. Mason
also manufactures specialized switching systems for commercial and
military aircraft as well as for land- based military vehicles such as
tanks and missile launchers.
Backlog
At October 31, 1996 the backlog of the Aerospace and Defense Group
(of which $16.1 million is expected to be filled after fiscal 1997) was
$71.6 million, compared with $36.3 million at October 31, 1995. This
strong increase is due to improving aerospace markets as well as the
addition of Mason.
INSTRUMENTATION GROUP
The Instrumentation Group consists of three subsidiaries of which
Federal and Korry are the principal subsidiaries. In fiscal 1996 and
1995, the Group's net sales represented 26% and 28%, respectively, of
the Company's net sales. Angus Electronics Co. ("Angus") is the other
company in the Instrumentation Group.
Federal
Federal manufactures a broad line of high-precision analog and
digital dimensional and surface measurement and inspection instruments
as well as systems for a wide range of industrial quality control and
scientific applications. Manufacturers use Federal equipment for direct
shop-floor inspections to reduce costly rework at more advanced
production stages. Federal's products include: dial indicators, air
gauges, electronic gauges and other precision gauges where
high-precision measurement is required; and custom-built and dedicated
semi-automatic and automatic gauging systems. Distributed products
manufactured by others include laser interferometer systems used
primarily to check machine tool calibrations. Federal's equipment is
used extensively in precision metal working. Its markets include the
automotive, farm implement, construction equipment, aerospace, ordnance
and bearing industries.
In each of fiscal years 1996, 1995 and 1994, gauge products
manufactured by Federal accounted for 12%, 12% and 13%, respectively,
of the Company's consolidated net sales.
Korry
Korry is a market and technology leader in the manufacture of
high-reliability electro-optical instrumentation components and
systems, illuminated push button switches, indicators, panels and
keyboards that act as human interfaces in a broad variety of control
and display applications. Korry's products have been designed into many
existing aircraft systems, and as a result, Korry enjoys a considerable
spares and retrofit business. Korry's customers include original
equipment manufacturers and the aftermarkets (equipment operators and
spare parts distributors), primarily in the commercial aviation,
airborne military, ground-based military equipment and shipboard
military equipment markets. Korry's proprietary products provide its
customers with a significant technological advantage in such areas as
night vision -- a top defense priority -- and in the area of active
matrix liquid crystal displays, a technology expected to have broad
usage in commercial aerospace and military applications.
Other
Angus manufactures recording instruments together with other
analytical, process and environmental monitoring instrumentation. These
include analog strip chart and digital printout recorders as well as
electronic and multi-channel microprocessor-based recording equipment.
Customers of Angus include industrial equipment manufacturers, electric
utilities, scientific laboratories, pharmaceutical manufacturers and
process industries.
Backlog
At October 31, 1996, the backlog of the Instrumentation Group (of
which $8.5 million is expected to be filled after fiscal 1997) was
$36.4 million compared with $31.1 million at October 31, 1995. The
Instrumentation Group's backlog is benefiting from the rising demands
of customers in the aerospace markets.
MARKETING AND DISTRIBUTION
For most of the Company's products, the maintenance of a service
capability is an integral part of the marketing function. Each of the
Company's separate operating units maintains its own separate and
distinct sales force, outside representatives or distributor
relationships. In particular:
Automation Group products manufactured by Excellon are
marketed domestically principally through employees and in
foreign markets through employees and independent
distributors. Whitney products are sold principally through
independent distributors and representatives.
Aerospace and Defense Group products manufactured by Auxitrol
are marketed through employees and independent
representatives. Armtec's products are marketed domestically
and abroad by employees and independent representatives.
Instrumentation Group products manufactured by Federal and
Korry are marketed domestically principally through employees
and outside sales representatives and in foreign markets
through both employees and independent representatives.
RESEARCH AND DEVELOPMENT
Currently, the Company's subsidiaries conduct product development
and design programs with approximately 145 professional engineers,
technicians and support personnel, supplemented by independent
engineering and consulting firms when needed. In fiscal 1996,
approximately $15.4 million was expended for research, development and
engineering, compared with $16.6 million in 1995 and $13.7 million in
1994.
FOREIGN OPERATIONS
The Company's principal foreign operations consist of
manufacturing facilities of Auxitrol located in France and Spain. In
addition, other locations include a manufacturing facility of Tulon
located in Mexico, sales and service operations of Excellon located in
England, Germany and Japan, and sales offices of TA and Korry located
in England and France, respectively. Whitney also has a small
manufacturing and distribution facility in Italy. For further
information regarding foreign operations, reference is made to Note 1
to the Consolidated Financial Statements on page 36, and Note 13 to the
Consolidated Financial Statements on pages 44 and 45, of the Company's
Annual Report to Shareholders for the fiscal year ended October 31,
1996, which is incorporated herein by reference.
EMPLOYEES
The Company and its subsidiaries had 3,137 employees at October
31, 1996. Less than 10% of these employees were members of an organized
labor union.
GOVERNMENT CONTRACTS AND SUBCONTRACTS
As a contractor and subcontractor to the United States Government,
the Company is subject to various laws and regulations that are more
restrictive than those applicable to non-government contractors.
Although only 2% of the Company's sales are made directly to the United
States Government, the Company's subcontracting activities account for
approximately 9% of additional sales. Therefore, approximately 11% of
the Company's sales are governed by rules favoring the government's
contractual position. As a consequence, such contracts may be subject
to protest or challenge by unsuccessful bidders or to termination,
reduction or modification in the event of changes in government
requirements, reductions in federal spending, or other factors. The
accuracy and appropriateness of certain costs and expenses used to
substantiate direct and indirect costs of the Company for the United
States Government under both cost-plus and fixed-price contracts are
subject to extensive regulation and audit by the Defense Contract Audit
Agency, an arm of the United States Department of Defense.
COMPETITION, PATENTS AND LEASES
The Company's subsidiaries experience varying degrees of
competition with respect to their products and services. The Company
competes in most markets it serves with numerous other companies, many
of which have far greater sales volume and financial resources. The
principal competitive factors in the commercial markets in which the
Company participates are product performance and service. Part of
product performance requires expenditures in research and development
that lead to product improvement on a rapid basis. The market for many
of the Company's products may be affected by rapid and significant
technological changes and new product introduction. Current competitors
or new entrants could introduce new products with features that render
the Company's products obsolete or less marketable. Excellon's
principal competitors are Hitachi, Ltd. and Pluritec. Whitney's
principal competitors are Cincinnati, Inc., Trumpf, Mazak and U.S.
Amada. Auxitrol's principal competitors are Ametek and Rosemount.
Federal's principal competitors are Starrett and Mitutoyo. Korry's
principal competitors are Eaton-MSC and Ducommun Jay-El.
The subsidiaries hold a number of patents but in general rely on
technical superiority, exclusive features in their equipment and
marketing and service to customers to meet competition. Licenses which
help maintain a significant competitive advantage include a long-term
license agreement under which Auxitrol manufactures and sells
electrical penetration assemblies.
SOURCES AND AVAILABILITY OF RAW MATERIALS AND COMPONENTS
Due to the Company's diversification, the sources and availability
of raw materials and components are not nearly as important as they
would be for a company that manufactures a single product. However,
certain components and supplies such as air bearing spindles purchased
by Excellon and a few components purchased by Whitney and certain other
raw materials and components purchased by other subsidiaries are
purchased from a single source. In such instances, ongoing efforts are
conducted to develop alternative sources or designs to help avoid the
possibility of any business impairment.
ENVIRONMENTAL MATTERS
The Company is subject to federal, state, local and foreign laws,
regulations and ordinances that (i) govern activities or operations
that may have adverse environmental effects, such as discharges to air
and water, as well as handling and disposal practices for solid and
hazardous wastes and (ii) impose liability for the costs of cleaning
up, and certain damages resulting from, sites of past spills, disposals
or other releases of hazardous substances (together, "Environmental
Laws").
The Company's various operations use certain substances and
generate certain wastes that are regulated as or may be deemed
hazardous under applicable Environmental Laws, or for which the Company
has incurred cleanup obligations. While the Company endeavors at each
of its facilities to assure compliance with Environmental Laws, from
time to time operations of the Company have resulted or may result in
certain noncompliance with applicable requirements under Environmental
Laws for which the Company has incurred cleanup and related costs.
However, the Company believes that any such noncompliance or cleanup
liability under current Environmental Laws would not have a material
adverse effect on the Company's results of operations and financial
condition.
The Company has been identified as a potentially responsible party
("PRP"), pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"), and
analogous state Environmental Laws, for the cleanup of contamination
resulting from past disposals of hazardous wastes at certain sites to
which the Company, among others, sent wastes in the past. CERCLA
requires PRPs to pay for cleanup of sites from which there has been a
release or threatened release of hazardous substances. Courts have
interpreted CERCLA to impose strict, joint and several liability upon
all persons liable for cleanup costs. As a practical matter, however,
at sites where there are multiple PRPs, the costs of cleanup typically
are allocated among the parties according to a volumetric or other
standard. Although there can be no assurance, the Company believes,
based on, among other things, a review of the data available to the
Company regarding each such site, including the minor volumes of waste
which the Company is alleged to have contributed, and a comparison of
the Company's liability at each such site to settlements previously
reached by the Company in similar cases, that it has adequately accrued
for the estimated costs associated with such matters. Nonetheless,
until the Company's proportionate share is finally determined at each
such site, there can be no assurance that such matters, or any similar
liabilities that arise in the future, will not have a material adverse
effect on the Company's results of operations or financial condition.
Liabilities have been accrued for environmental remediation costs
expected to be incurred in the disposition of manufacturing facilities.
No provision has been recorded for environmental remediation costs
which could result from changes in laws or other circumstances
currently not contemplated by the Company.
(d) Financial Information About Foreign and Domestic
Operations and Export Sales.
See "Foreign Operations" above.
ITEM 2. PROPERTIES
The following table summarizes the principal properties (in excess
of 50,000 square feet) owned or leased by the Company and its
subsidiaries as of October 31, 1996:
Approximate
Type of Number of Owned
Location Facility Square Feet or Leased
-------- -------- ----------- ---------
Rockford, IL Office and Plant (A) 257,000 Owned
Providence, RI Office and Plant (I) 166,000 Owned
Torrance, CA Office and Plant (A) 150,000 Leased
Seattle, WA Office and Plant (I) 138,000 Leased
Coachella, CA Office and Plant (D) 110,000 Owned
Kent, WA Office and Plant (D) 93,000 Owned
Joplin, MO Office and Plant (D) 92,000 Owned
Bourges, France Plant (D) 69,000 Owned
Indianapolis, IN Office and Plant (I) 63,000 Owned
San Fernando, CA Office and Plant (D) 52,000 Leased
The Company group (business segment) operating each facility
described above is indicated by the letter following the description of
the facility, as follows:
(A)- Automation
(D)- Aerospace and Defense
(I)- Instrumentation
In addition to the properties listed above, a 64,000 square foot
facility in Nashua, New Hampshire was sold in December 1996.
Liabilities have been accrued for environmental remediation costs which
could be incurred in the disposition of the New Hampshire facility.
ITEM 3. LEGAL PROCEEDINGS
In October 1995, the Company identified irregularities in the
allocation of certain labor charges at its Armtec Defense Products
subsidiary and is participating in the Department of Defense Voluntary
Disclosure Program. Management believes that the eventual outcome of
this issue will not have a material adverse effect on the financial
position or future operating results of the Company.
In addition, the Company has various lawsuits and claims, both
offensive and defensive, and contingent liabilities arising from the
conduct of business, including those associated with Government
contracting activities, none of which, in the opinion of management, is
expected to have a material effect on the Company's financial position
or results of operations. Liabilities have been accrued for
environmental remediation costs expected to be incurred in the
disposition of manufacturing facilities. No provision has been recorded
for environmental remediation costs which could result from changes in
laws or other circumstances currently not contemplated by the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the
fourth quarter of the fiscal year ended October 31, 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The following information which appears in the Company's Annual
Report to Shareholders for fiscal 1996 is hereby incorporated by
reference:
(a) The high and low market sales prices of the Company's
common stock for each quarterly period during the fiscal
years ended October 31, 1996 and 1995, respectively (page
31 of the Annual Report to Shareholders).
(b) Restrictions on the ability to pay future cash dividends
(Note 6 to Consolidated Financial Statements, page 40 of
the Annual Report to Shareholders).
No cash dividends were paid during the fiscal years ended October
31, 1996 and 1995 as the Company continued its policy of retaining all
internally generated funds to support the long-term growth of the
Company and to retire debt obligations.
On January 17, 1997, there were approximately 1,001 record holders
of the Company's common stock.
The principal market for the Company's common stock is the New
York Stock Exchange.
ITEM 6. SELECTED FINANCIAL DATA
The Company hereby incorporates by reference the Selected
Financial Data of the Company which appears on page 31 of the Company's
Annual Report to Shareholders for fiscal 1996.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company hereby incorporates by reference Management's
Discussion and Analysis of Results of Operations and Financial
Condition which is set forth on pages 26-30 of the Company's Annual
Report to Shareholders for fiscal 1996.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company hereby incorporates by reference the Consolidated
Financial Statements and the report thereon of Deloitte & Touche LLP,
dated December 11, 1996, which appear on pages 32-47 of the Company's
Annual Report to Shareholders for fiscal 1996.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Directors.
The Company hereby incorporates by reference the information set
forth under "Election of Directors" in the definitive form of the
Company's Proxy Statement, relating to its Annual Meeting of
Shareholders to be held on March 5, 1997, filed with the Securities and
Exchange Commission and the New York Stock Exchange on January 17,
1997.
(b) Executive Officers.
The names and ages of all executive officers of the Company and
the positions and offices held by such persons as of January 17, 1997
are as follows:
Name Position with the Company Age
------------------ ------------------------- ---
Wendell P. Hurlbut Chairman, President and 65
Chief Executive Officer
Robert W. Cremin Executive Vice President and 56
Chief Operating Officer
Robert W. Stevenson Executive Vice President and 57
Chief Financial Officer,
Secretary and Treasurer
Larry A. Kring Group Vice President 56
Stephen R. Larson Group Vice President 52
Marcia J. M. Greenberg Vice President, Human Relations 44
Mr. Hurlbut has been Chairman, President and Chief Executive
Officer since January 1993. From February 1989 through December 1992,
he was President and Chief Executive Officer and a director. From June
1988 to February 1989, he was President and Chief Operating Officer.
From November 1987 to June 1988, he was Executive Vice President,
Operations. From October 1978 to September 1989, Mr. Hurlbut served in
various capacities ranging from Group Vice President to President and
Chief Executive Officer of Criton Technologies. From November 1972 to
October 1978 he served as President of Heath Tecna Aerospace Company.
Mr. Hurlbut has a B.S. degree in Engineering from the University of
Washington. Mr. Hurlbut is also a member of the Board of Directors of
the National Association of Manufacturers.
Mr. Cremin has been Executive Vice President and Chief Operating
Officer since October 1996. From January 1991 to October 1996, he was
Senior Vice President and Group Executive. From October 1987 to
December 1990, he was Group Vice President. From July 1976 to September
1989, Mr. Cremin served in various capacities ranging from Director,
Program Analysis to Group Vice President of Criton Technologies. Mr.
Cremin has a M.B.A. from the Harvard Business School and a B.S. degree
in Metallurgical Engineering from Polytechnic Institute of Brooklyn.
Mr. Stevenson has been Executive Vice President, Chief Financial
Officer, Secretary and Treasurer since October 1987. From March 1968 to
September 1989, Mr. Stevenson served in various capacities ranging from
Assistant Controller to Executive Vice President, Chief Financial
Officer and Secretary of Criton Technologies. Mr. Stevenson has a M.B.A.
from the Wharton School of Business at the University of Pennsylvania
and a B.A. degree from Stanford University.
Mr. Kring has been Group Vice President since August 1993. From
November 1978 to July 1993, he was President and Chief Executive
Officer of Heath Tecna Aerospace Co., a unit of Ciba Composites
Division, Anaheim, California. Mr. Kring has a M.B.A. from California
State University at Northridge and a B.S. degree in Aeronautical
Engineering from Purdue University. He is a director of Active Apparel
Group, Inc.
Mr. Larson has been Group Vice President since April 1991. From
February 1978 to March 1991, he held various executive positions with
Korry Electronics, a subsidiary of the Company, including President and
Executive Vice President, Marketing. Mr. Larson has a M.B.A. degree
from the University of Chicago and a B.S. degree in Electrical
Engineering from Northwestern University.
Ms. Greenberg has been Vice President, Human Resources since March
1993. From January 1992 to February 1993, she was a partner in the law
firm of Bogle & Gates, Seattle, Washington. From August 1984 to
December 1991, she was an associate attorney with Bogle & Gates. Ms.
Greenberg has a J.D. degree from Northwestern University School of Law
and a B.A. degree from Portland State University.
ITEM 11. EXECUTIVE COMPENSATION
The Company hereby incorporates by reference the information set
forth under "Executive Compensation" in the definitive form of the
Company's Proxy Statement, relating to its Annual Meeting of
Shareholders to be held on March 5, 1997, filed with the Securities and
Exchange Commission and the New York Stock Exchange on January 17,
1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Company hereby incorporates by reference the information with
respect to stock ownership set forth under "Security Ownership of
Certain Beneficial Owners and Management" in the definitive form of the
Company's Proxy Statement, relating to its Annual Meeting of
Shareholders to be held on March 5, 1997, filed with the Securities and
Exchange Commission and the New York Stock Exchange on January 17,
1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) Financial Statements.
The following consolidated financial statements, together with the
report thereon of Deloitte & Touche LLP, dated December 11, 1996,
appearing on pages 32-47 of the Company's Annual Report to Shareholders
for fiscal 1996, are hereby incorporated by reference:
Annual Report
Page Number
-------------
Consolidated Statement of Operations Years ended
October 31, 1996, 1995 and 1994 . . . . . . . 32
Consolidated Balance Sheet -- October 31, 1996 and
1995 33
Consolidated Statement of Cash Flows -- Years ended
October 31, 1996, 1995 and 1994 . . . . . . . 34
Consolidated Statement of Shareholders' Equity --
Years ended October 31, 1996, 1995 and 1994 . 35
Notes to Consolidated Financial Statements . . . 36-46
Report of Independent Auditors . . . . . . . . . 47
(a)(2) Financial Statement Schedules.
The following additional financial data should be read in
conjunction with the consolidated financial statements in the Annual
Report to Shareholders for the fiscal year ended October 31, 1996:
Independent Auditors' Report
Schedule VIII -- Valuation and Qualifying Accounts and
Reserves, see page 21.
(a)(3) Exhibits.
Exhibit
Number Exhibit
------- -------
3.1 Composite Restated Certificate of Incorporation of the
Company as amended by Certificate of Amendment dated
March 14, 1990. (Incorporated by reference to Exhibit
19 to the Company's Quarterly Report on Form 10-Q for
the quarter ended July 31, 1990.)
3.2 By-laws of the Company, as amended and restated
December 15, 1988. (Incorporated by reference to
Exhibit 3.2 to the Company's Annual Report on Form
10-K for the fiscal year ended October 31, 1988.)
4.2 Form of Rights Agreement, dated as of December 9,
1992, between the Company and Chemical Bank, which
includes as Exhibit A thereto the form of Certificate
of Designation, Preferences and Rights of Series A
Serial Preferred Stock and as Exhibit B thereto the
form of Rights Certificate (Incorporated by reference
to Exhibit 1 to the Company's Registration Statement
on Form 8-A filed December 17, 1992.)
10.1 Amendment of Lease and Agreement, dated March 11,
1959, between the City of Torrance, California, and
Longren Aircraft Company, Inc., as original lessee;
Lease, dated July 1, 1959, between the City of
Torrance and Aeronca Manufacturing Corporation, as
original lessee; and Assignment of Ground Lease, dated
September 26, 1985, from Robert G. Harris, as
successor lessee under the foregoing leases, to
Excellon Industries, Inc., relating to principal
manufacturing facility of Excellon at 24751 Crenshaw
Boulevard, Torrance, California. (Incorporated by
reference to Exhibit 10.1 to the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1986.)
10.4 Industrial Lease dated July 17, 1984 between 901
Dexter Associates and Korry Electronics Co., First
Amendment to Lease dated May 10, 1985, Second
Amendment to Lease dated June 20, 1986, Third
Amendment to Lease dated September 1, 1987, and
Notification of Option Exercise dated January 7, 1991,
relating to the manufacturing facility of Korry
Electronics at 901 Dexter Avenue N., Seattle,
Washington. (Incorporated by reference to Exhibit 10.4
to the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1991.)
10.4a Fourth Amendment dated July 27, 1994 to Industrial
Lease dated July 17, 1984 between Houg Family
Partnership, as successor to 901 Dexter Associates,
and Korry Electronics Co. (Incorporated by reference
to Exhibit 10.4a to the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1994.)
10.5 Industrial Lease dated July 17, 1984 between 801
Dexter Associates and Korry Electronics Co., First
Amendment to Lease dated May 10, 1985, Second
Amendment to Lease dated June 20, 1986, Third
Amendment to Lease dated September 1, 1987, and
Notification of Option Exercise dated January 7, 1991,
relating to the manufacturing facility of Korry
Electronics at 801 Dexter Avenue N., Seattle
Washington. (Incorporated by reference to Exhibit 10.5
to the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1991.)
10.5a Fourth Amendment dated March 28, 1994 to Industrial
Lease dated July 17, 1984 between Michael Maloney and
the Bancroft & Maloney general partnership, as
successor to 801 Dexter Associates, and Korry
Electronics Co. (Incorporated by reference to Exhibit
10.5a to the Company's Annual Report on Form 10-K for
the fiscal year ended October 31, 1994.)
10.9 Note Agreement, dated as of July 15, 1992, among
Esterline Technologies Corporation, certain of its
subsidiaries, The Northwestern Mutual Life Insurance
Company and New England Mutual Life Insurance Company
relating to 8.75% Senior Notes due July 30, 2002 of
Esterline Technologies Corporation and certain of its
subsidiaries. (Incorporated by reference to Exhibit
10.9 to the Company's Quarterly Report on Form 10-Q
for the quarter ended July 31, 1992.)
10.9a Amendment to Note Agreement, executed as of October
31, 1993, to that certain Note Agreement, dated and
effective as of July 15, 1992 , among Esterline
Technologies Corporation, certain of its subsidiaries,
The Northwestern Mutual Life Insurance Company and New
England Mutual Life Insurance Company relating to
8.75% Senior Notes due July 30, 2002 of Esterline
Technologies Corporation and certain of its
subsidiaries. (Incorporated by reference to Exhibit
10.9a to the Company's Annual Report on Form 10-K for
the fiscal year ended October 31, 1993.)
10.10 Compensation of Directors. (Incorporated by reference
to first paragraph under "Other Information as to
Directors" in the definitive form of the Company's
Proxy Statement, relating to its 1997 Annual Meeting
of Shareholders to be held on March 5, 1997, filed
with the Securities and Exchange Commission and the
New York Stock Exchange on January 17, 1997.)
10.21 Credit Agreement executed and effective as of October
31, 1996 among Esterline Technologies Corporation and
certain of its subsidiaries, various financial
institutions and Bank of America, National Trust and
Savings Association, as Agent.
10.22 Real Property Lease and Sublease, dated June 28, 1996,
between 810 Dexter L.L.C. and Korry Electronics Co.
11 Schedule setting forth computation of earnings per
share for the five fiscal years ended October 31,
1996.
13 Portions of the Annual Report to Shareholders for the
fiscal year ended October 31, 1996, incorporated by
reference herein.
21 List of subsidiaries.
23 Consent of Deloitte & Touche LLP.
27 Financial Data Schedule.
Exhibit Management Contracts or
Number Compensatory Plan Arrangements
------- ------------------------------
10.13 Amended and Restated 1987 Stock Option Plan.
(Incorporated by reference to Exhibit 10.13 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended January 31, 1992.)
10.15 Esterline Corporation Supplemental Retirement Income
Plan for Key Executives. (Incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form
10-K for the fiscal year ended October 31, 1989.)
10.16c Esterline Corporation Long-Term Incentive Compensation
Plan, Fiscal Years 1993 through 1996. (Incorporated by
reference to Exhibit 10.16c to the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1993.)
10.16d Esterline Corporation Long-Term Incentive Compensation
Plan, Fiscal Years 1994 through 1997. (Incorporated by
reference to Exhibit 10.16d to the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1994.)
10.16e Esterline Technologies Corporation Long-Term Incentive
Compensation Plan, Fiscal Years 1995 through 1998.
10.16f Esterline Technologies Corporation Long-Term Incentive
Compensation Plan, Fiscal Years 1996 through 1999.
10.19 Executive Officer Termination Protection Agreement.
(Incorporated by reference to Exhibit 10.19 to the
Company's Annual Report on Form 10-K for the fiscal
year ended October 31, 1992.)
10.20c Esterline Technologies Corporation Corporate
Management Incentive Compensation Plan for Fiscal Year
1997.
(b) Reports on Form 8-K.
There were no Reports on Form 8-K filed during the fourth
quarter of fiscal year 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ESTERLINE TECHNOLOGIES CORPORATION
(Registrant)
By /s/ Robert W. Stevenson
------------------------------------
Robert W. Stevenson
Executive Vice President,
Chief Financial Officer, Secretary
and Treasurer (Principal Financial
and Accounting Officer)
Dated: January 29, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
/s/ Wendell P. Hurlbut Director, Chairman, President January 29, 1997
---------------------- and Chief Executive Officer ----------------
(Wendell P. Hurlbut) (Principal Executive Officer) Date
/s/ Robert W. Stevenson Executive Vice President, January 29, 1997
---------------------- Chief Financial Officer, ----------------
(Robert W. Stevenson) Secretary and Treasurer Date
(Principal Financial and
Accounting Officer)
/s/ Gilbert W. Anderson Director January 29, 1997
----------------------- ----------------
(Gilbert W. Anderson) Date
/s/ John F. Clearman Director January 29, 1997
----------------------- ----------------
(John F. Clearman) Date
/s/ Edwin I. Colodny Director January 29, 1997
----------------------- ----------------
(Edwin I. Colodny) Date
/s/ E. John Finn Director January 29, 1997
---------------------- ----------------
(E. John Finn) Date
/s/ Robert F. Goldhammer Director January 29, 1997
---------------------- ----------------
(Robert F. Goldhammer) Date
/s/ Jerome J. Meyer Director January 29, 1997
---------------------- ----------------
(Jerome J. Meyer) Date
/s/ Paul G. Schloemer Director January 29, 1997
--------------------- ----------------
(Paul G. Schloemer) Date
/s/ Malcolm T. Stamper Director January 29, 1997
--------------------- ----------------
(Malcolm T. Stamper) Date
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and the Board of Directors
Esterline Technologies Corporation
Bellevue, Washington
We have audited the consolidated financial statements of Esterline
Technologies Corporation as of October 31, 1996 and 1995, and for each
of the three years in the period ended October 31, 1996, and have
issued our report thereon dated December 11, 1996; such financial
statements and report are included in your 1996 Annual Report to
Shareholders and are incorporated herein by reference. Our audits also
included the financial statement schedule of Esterline Technologies
Corporation, listed in Item 14. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is
to express an opinion based on our audits. In our opinion, such
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
/s/ Deloitte & Touche LLP
Seattle, Washington
December 11, 1996
ESTERLINE TECHNOLOGIES CORPORATION AND SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(in thousands)
For Years Ended October 31, 1996, 1995 and 1994
Deduction for
Balance at Additions Purpose for Balance
Beginning Charged which Reserve at End
Description of Year to Income was Created of Year
----------- ---------- --------- ------------- -------
Reserve for doubtful
accounts receivable
Year Ended October 31
---------------------
1996 $ 4,117 $ 782 $ (815) $ 4,084
========= ========= ========= =========
1995 $ 2,201 $ 2,095 $ (179) $ 4,117
========= ========= ========= =========
1994 $ 2,417 $ 117 $ (333) $ 2,201
========= ========= ========= =========
Restructuring reserves related to
accounts receivable and inventory
Year Ended October 31
---------------------
1996 $ 1,195 $ -- $ -- $ 1,195
1995 $ 3,546 $ -- $ (2,351) $ 1,195
1994 $ 3,890 $ -- $ (344) $ 3,546
ESTERLINE TECHNOLOGIES CORPORATION
Form 10-K Report for Fiscal Year Ended
October 31, 1996
INDEX TO EXHIBITS
Exhibit
Number Exhibit Page No.
------- ------- --------
3.1 Composite Restated Certificate of
Incorporation of the Company as amended
by Certificate of Amendment dated March
14, 1990. (Incorporated by reference to
Exhibit 19 to the Company's Quarterly
Report on Form 10-Q for the quarter ended
July 31, 1990.)
3.2 By-laws of the Company, as amended and
restated December 15, 1988. (Incorporated
by reference to Exhibit 3.2 to the
Company's Annual Report on Form 10-K for
the fiscal year ended October 31, 1988.)
4.2 Form of Rights Agreement, dated as of
December 9, 1992, between the Company and
Chemical Bank, which includes as Exhibit
A thereto the form of Certificate of
Designation, Preferences and Rights of
Series A Serial Preferred Stock and as
Exhibit B thereto the form of Rights
Certificate (Incorporated by reference to
Exhibit 1 to the Company's Registration
Statement on Form 8-A filed December 17,
1992.)
10.1 Amendment of Lease and Agreement, dated
March 11, 1959, between the City of
Torrance, California, and Longren
Aircraft Company, Inc., as original
lessee; Lease, dated July 1, 1959,
between the City of Torrance and Aeronca
Manufacturing Corporation, as original
lessee; and Assignment of Ground Lease,
dated September 26, 1985, from Robert G.
Harris, as successor lessee under the
foregoing leases, to Excellon Industries,
Inc., relating to principal manufacturing
facility of Excellon at 24751 Crenshaw
Boulevard, Torrance, California.
(Incorporated by reference to Exhibit
10.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended
October 31, 1986.)
10.4 Industrial Lease dated July 17, 1984
between 901 Dexter Associates and Korry
Electronics Co., First Amendment to Lease
dated May 10, 1985, Second Amendment to
Lease dated June 20, 1986, Third
Amendment to Lease dated September 1,
1987, and Notification of Option Exercise
dated January 7, 1991, relating to the
manufacturing facility of Korry
Electronics at 901 Dexter Avenue N.,
Seattle, Washington. (Incorporated by
reference to Exhibit 10.4 to the Company's
Annual Report on Form 10-K for the
fiscal year ended October 31, 1991.)
Exhibit Number Exhibit Page No.
10.4a Fourth Amendment dated July 27, 1994 to
Industrial Lease dated July 17, 1984
between Houg Family Partnership, as
successor to 901 Dexter Associates, and
Korry Electronics Co. (Incorporated by
reference to Exhibit 10.4a to the Company's
sAnnual Report on Form 10-K for the
fiscal year ended October 31, 1994.)
10.5 Industrial Lease dated July 17, 1984
between 801 Dexter Associates and Korry
Electronics Co., First Amendment to Lease
dated May 10, 1985, Second Amendment to
Lease dated June 20, 1986, Third
Amendment to Lease dated September 1,
1987, and Notification of Option Exercise
dated January 7, 1991, relating to the
manufacturing facility of Korry
Electronics at 801 Dexter Avenue N.,
Seattle, Washington. (Incorporated by
reference to Exhibit 10.5 to the Company's
Annual Report on Form 10-K for the
fiscal year ended October 31, 1991.)
10.5a Fourth Amendment dated March 28, 1994 to
Industrial Lease dated July 17, 1984
between Michael Maloney and the Bancroft
& Maloney general partnership, as
successor to 801 Dexter Associates, and
Korry Electronics Co. (Incorporated by
reference to Exhibit 10.5a to the Compan's
Annual Report on Form 10-K for the
fiscal year ended October 31, 1994.)
10.9 Note Agreement, dated as of July 15,
1992, among Esterline Technologies
Corporation, certain of its subsidiaries,
The Northwestern Mutual Life Insurance
Company and New England Mutual Life
Insurance Company relating to 8.75%
Senior Notes due July 30, 2002 of
Esterline Technologies Corporation and
certain of its subsidiaries.
(Incorporated by reference to Exhibit
10.9 to the Company's Quarterly Report on
Form 10-Q for the quarter ended July 31,
1992.)
10.9a Amendment to Note Agreement, executed as
of October 31, 1993, to that certain Note
Agreement, dated and effective as of July
15, 1992 , among Esterline Technologies
Corporation, certain of its subsidiaries,
The Northwestern Mutual Life Insurance
Company and New England Mutual Life
Insurance Company relating to 8.75%
Senior Notes due July 30, 2002 of
Esterline Technologies Corporation and
certain of its subsidiaries.
(Incorporated by reference to Exhibit
10.9a to the Company's Annual Report on
Form 10-K for the fiscal year ended
October 31, 1993.)
10.10 Compensation of Directors. (Incorporated
by reference to first paragraph under
"Other Information as to Directors" in
the definitive form of the Company's
Proxy Statement, relating to its 1997
Annual Meeting of Shareholders to be held
on March 5, 1997, filed with the
Securities and Exchange Commission and
the New York Stock Exchange on January
17, 1997.)
10.21 Credit Agreement executed and effective
as of October 31, 1996 among Esterline
Technologies Corporation and certain of
its subsidiaries, various financial
institutions and Bank of America,
National Trust and Savings Association,
as Agent. 26
10.22 Real Property Lease and Sublease, dated
June 28, 1996, between 810 Dexter L.L.C.
and Korry Electronics Co. 119
11 Schedule setting forth computation of
earnings per share for the five fiscal
years ended October 31, 1996. 141
13 Portions of the Annual Report to
Shareholders for the fiscal year ended
October 31, 1996, incorporated by
reference herein. 143
21 List of subsidiaries. 165
23 Consent of Deloitte & Touche LLP. 166
27 Financial Data Schedule
Exhibit Management Contracts or
Number Compensatory Plan Arrangements
------- ------------------------------
10.13 Amended and Restated 1987 Stock Option
Plan. (Incorporated by reference to
Exhibit 10.13 to the Company's Quarterly
Report on Form 10-Q for the quarter ended
January 31, 1992.)
10.15 Esterline Corporation Supplemental
Retirement Income Plan for Key
Executives. (Incorporated by reference to
Exhibit 10.15 to the Company's Annual
Report on Form 10-K for the fiscal year
ended October 31, 1989.)
10.16c Esterline Corporation Long-Term Incentive
Compensation Plan, Fiscal Years 1993
through 1996. (Incorporated by reference
to Exhibit 10.16c to the Company's Annual
Report on Form 10-K for the fiscal year
ended October 31, 1993.)
10.16d Esterline Corporation Long-Term Incentive
Compensation Plan, Fiscal Years 1994
through 1997. (Incorporated by reference
to Exhibit 10.16d to the Company's Annual
Report on Form 10-K for the fiscal year
ended October 31, 1994.)
10.16e Esterline Technologies Corporation
Long-Term Incentive Compensation Plan,
Fiscal Years 1995 through 1998. 167
10.16f Esterline Technologies Corporation
Long-Term Incentive Compensation Plan,
Fiscal Years 1996 through 1999. 173
10.19 Executive Officer Termination Protection
Agreement. (Incorporated by reference to
Exhibit 10.19 to the Company's Annual
Report on Form 10-K for the fiscal year
ended October 31, 1992.)
10.20c Esterline Technologies Corporation
Corporate Management Incentive
Compensation Plan for Fiscal Year 1997. 179