1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 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 1-2384
TRW INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 34-0575430
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1900 RICHMOND ROAD, CLEVELAND, OHIO 44124
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(216) 291-7000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
---------------------------------------- ---------------------------
Common Stock, par value $0.625 per share New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Philadelphia Stock Exchange
Rights to Purchase Cumulative Redeemable New York Stock Exchange
Serial Preference Stock II, Series 4 Chicago Stock Exchange
Pacific Stock Exchange
Philadelphia Stock Exchange
Cumulative Serial Preference Stock II, New York Stock Exchange
$4.40 Convertible Series 1
Cumulative Serial Preference Stock II, New York Stock Exchange
$4.50 Convertible Series 3
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
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 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 ]
The aggregate market value of the registrant's voting stock held by
non-affiliates was $6,376,542,513.50 as of February 28, 1997. This amount was
computed on the basis of the closing price of the registrant's voting securities
included in the NYSE-Composite Transactions report for such date, as published
in the Midwest edition of The Wall Street Journal or, in the case of the
registrant's voting cumulative preference stock, for the date of the most recent
trade, as reported in the Dow Jones News Retrieval Service.
As of February 28, 1997 there were 125,664,076 shares of TRW Common Stock,
$0.625 par value, outstanding.
The following documents have been incorporated herein by reference to the extent
indicated herein:
TRW Proxy Statement dated March 12, 1997 Part III
TRW Annual Report to Security Holders for the year
ended December 31, 1996 Parts I, II and IV
2
TRW INC.
INDEX TO
ANNUAL REPORT ON FORM 10-K
FOR YEAR ENDED DECEMBER 31, 1996
PART I PAGE
----
Item 1. Business............................................................ 1
Item 2. Properties.......................................................... 5
Item 3. Legal Proceedings................................................... 5
Item 4. Submission of Matters to a Vote of Security Holders................. 6
Executive Officers of the Registrant.......................................... 6
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters............................................................ 7
Item 6. Selected Financial Data............................................. 8
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.............................................. 8
Item 8. Financial Statements and Supplementary Data......................... 8
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure............................................... 8
PART III
Item 10. Directors and Executive Officers of the Registrant................. 8
Item 11. Executive Compensation............................................. 9
Item 12. Security Ownership of Certain Beneficial Owners and Management..... 9
Item 13. Certain Relationships and Related Transactions..................... 9
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K... 9
3
PART I
ITEM 1. BUSINESS
INDUSTRY SEGMENTS AND PRODUCT CLASSIFICATIONS
TRW is an international company that provides advanced technology products
and services. The principal businesses of TRW and its subsidiaries are the
design, manufacture and sale of products and the performance of systems
engineering, research and technical services for industry and the United States
Government in two industry segments: Automotive and Space & Defense. TRW's
principal products and services include automotive systems and components;
spacecraft; software and systems engineering support services; and electronic
systems, equipment and services. TRW was incorporated under the laws of Ohio on
June 17, 1916. As used herein the terms "TRW" and the "Company" refer to TRW
Inc. or to TRW Inc. and its subsidiaries or to a subsidiary of TRW Inc.
In 1996, the Company completed the sale of substantially all the businesses
comprising its Information Systems & Services segment. The Company's financial
statements and related notes reflect as discontinued operations for all periods
presented the operating results and net assets, as well as the related
transaction gain, of this segment. Financial information herein has been
restated to reflect only continuing operations. Reference is made to the
information related to the divestiture presented under the note entitled
"Discontinued operations" in the Notes to Financial Statements on page 27 of the
TRW Annual Report to Security Holders for the year ended December 31, 1996 (the
"TRW 1996 Annual Report"), which information is incorporated herein by
reference.
AUTOMOTIVE
TRW's Automotive segment designs, manufactures and sells a broad range of
steering, suspension, engine, safety, engineered fastening, electronic,
electromechanical and other components and systems for passenger cars and
commercial vehicles, including trucks, buses, farm machinery and off-highway
vehicles. These products include occupant safety systems such as seat belt
systems and inflatable restraint systems, steering wheels, manual and power
steering gears, engine valves and valve train components, suspension components,
electronic monitoring and control systems, electromechanical assemblies,
fasteners, stud welding systems and other components.
The products included in this industry segment are sold primarily to
automotive original equipment manufacturers. In addition, TRW sells its
automotive components for use as aftermarket parts to automotive original
equipment manufacturers and others for resale through their own independent
distribution networks.
In February 1997, TRW purchased from Magna International Inc. an 80 percent
equity interest in MST Automotive GmbH Automobil-Sicherheitstechnik and Temic
Bayern-Chemie Airbag GmbH for a cost of approximately U.S. $450 million. The
Company and Magna also formed a strategic alliance for the design, development
and production of automotive products for the global market.
SPACE & DEFENSE
TRW's Space & Defense segment includes spacecraft, software and systems
engineering support services and electronic systems, equipment and services.
The Company's spacecraft activities include the design and manufacture of
spacecraft equipment, propulsion subsystems, electro-optical and instrument
systems, spacecraft payloads, high-energy lasers and laser technology and other
high-reliability components. TRW's software and systems engineering support
services are in the fields of command and control, security for defense and
nondefense applications, counterterrorism, undersea surveillance, antisubmarine
warfare and other high-technology space and defense mission support systems,
management of radioactive waste, automated fingerprint matching, upgrading of
the nation's air traffic control program and other civilian applications. The
Company's electronic systems, equipment and services include the design and
manufacture of communications systems, avionics systems and other electronic
technologies for space and defense applications.
Products and services in this industry segment are sold and distributed
principally to the United States Government. TRW's spacecraft business involves
the sale to the United States Government of subsystems and components for space
propulsion and unmanned spacecraft for defense, scientific research and
communications purposes. TRW is currently participating in a number of
spacecraft programs. Software and systems engineering and integration support
services are sold primarily to the United States Government defense agencies and
to Federal civilian and other state and local governmental agencies. These
services include a wide variety of computer software systems and analytical
services for space and defense, air traffic control, and advanced communication
and data retrieval applications. Sales to the United States Government of
electronic systems, equipment and services consist of systems and subsystems for
defense and space
1
4
applications, including communications, command and control, guidance,
navigation, electric power, sensing and electronic display equipment. While
classified projects are not discussed herein, the operating results relating to
classified projects are included in the Company's consolidated financial
statements, and the business risks associated with such projects do not differ
materially from those of other projects for the United States Government.
TRW also performs diverse testing and general research projects in many of
the technical disciplines related to its Space & Defense products and services
under both private and United States Government contracts, including several
advanced defense system projects.
RESULTS BY INDUSTRY SEGMENT
Reference is made to the information relating to the Company's industry
segments, including sales, operating profit and identifiable assets attributable
to each segment for each of the years 1994 through 1996, presented under the
note entitled "Industry segments" in the Notes to Financial Statements on page
35 of the TRW 1996 Annual Report. Such information is incorporated herein by
reference.
FOREIGN AND DOMESTIC OPERATIONS
TRW manufactures products or has facilities in 26 countries throughout the
world. TRW's operations outside the United States are in Argentina, Australia,
Austria, Brazil, Canada, China, the Czech Republic, France, Germany, Hong Kong,
India, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Saudi Arabia,
South Africa, South Korea, Spain, Taiwan, Thailand, Turkey, and the United
Kingdom. TRW also exports products manufactured by it in the United States. Such
export sales accounted for 8% of total sales during 1996, 8% of total sales
during 1995 and 7% of total sales during 1994, or $764 million, $813 million and
$595 million, respectively.
TRW's foreign operations are subject to the usual risks that may affect
such operations. These include, among other things, customary exchange controls
and currency restrictions, currency fluctuations, changes in local economic
conditions, exposure to possible expropriation or other government actions,
unsettled political conditions and foreign government-sponsored boycotts of the
Company's products or services for noncommercial reasons. Most of the
identifiable assets associated with TRW's foreign operations are located in
countries where the Company believes such risks to be minimal.
Reference is made to the information relating to the dollar amounts of
sales, operating profit and identifiable assets by geographic area for each of
the years 1994 through 1996 presented under the note entitled "Geographic
segments" in the Notes to Financial Statements on page 36 of the TRW 1996 Annual
Report. Such information is incorporated herein by reference.
GENERAL
COMPETITION
TRW encounters intense competition in substantially all segments of its
business. The Company's competitive position varies for its different products
and services. However, TRW believes that it is a significant supplier of many of
the products it manufactures and of many of the services it provides.
In the Automotive segment, competitors include independent suppliers of
parts and components as well as the Company's original equipment customers, many
of whom are integrated manufacturers who produce or could produce substantial
portions of their requirements for parts and components internally. Depending on
the particular product, the number of the Company's competitors may vary
significantly and many of the products have high capital requirements and
require high engineering content. In the Automotive segment, the principal
methods of competition are price, engineering excellence, product quality,
customer service, delivery time and proprietary position.
TRW competes for contracts covering a variety of United States Government
projects and programs, principally in the Space & Defense segment of its
business. Such competition is based primarily on technical ability, product
quality and price. TRW's competitors for United States Government contracts
typically are large, technically-competent firms with substantial assets, some
of which have become considerably larger through the ongoing industrial
consolidation process.
CUSTOMERS
Sales, directly and indirectly, to the United States Government, including
the Department of Defense, the National Aeronautics and Space Administration and
other agencies, constituted 32% of TRW's total sales for 1996, 30% for 1995
2
5
and 30% for 1994, or $3,121 million, $2,890 million and $2,533 million,
respectively. Sales to the United States Government represented 93% of the sales
of the Space & Defense segment in 1996, 93% in 1995 and 90% in 1994, or $3,120
million, $2,887 million and $2,528 million, respectively.
Companies engaged in United States Government contracting are subject to
certain unique business risks, including dependence on Congressional
appropriations and administrative allotment of funds, changes in Government
policies that may reflect military and political developments, time required for
design and development, significant changes in contract scheduling, complexity
of designs and the rapidity with which they become obsolete, necessity of design
improvements, difficulty in forecasting costs and schedules when bidding on
developmental and highly sophisticated technical work and other factors
characteristic of the industry.
United States Government contracting laws also provide that the Government
is to do business only with responsible contractors. In this regard, the United
States Department of Defense and other federal agencies have the authority,
under certain circumstances, to suspend or debar a contractor or organizational
parts of a contractor from further Government contracting for a certain period
"to protect the Government's interest." Such action may be taken for, among
other reasons, commission of fraud or a criminal offense in connection with a
United States Government contract. A suspension may also be imposed if a
contractor is indicted for such matters. In the event of any suspension or
debarment, the Company's existing contracts would continue unless terminated or
canceled by the United States Government under applicable contract provisions.
Other than the United States Government, TRW's largest customers
(determined by including sales to their affiliates throughout the world but
excluding sales to such customers or their affiliates that ultimately result in
sales to the United States Government) are Ford Motor Company, Volkswagen AG and
Chrysler Corporation. Such sales by TRW's Automotive segment to Ford, Volkswagen
and Chrysler, and their respective subsidiaries, during 1996 accounted for 23%,
10% and 10%, respectively, of sales of the Automotive segment, compared to 23%,
10% and 9%, respectively, during 1995 and 24%, 9% and 10%, respectively, during
1994. Such sales by TRW's Automotive segment to Ford and its subsidiaries
accounted for 15% of TRW's total sales for 1996, 15% for 1995 and 16% for 1994,
or $1,470 million, $1,474 million and $1,363 million, respectively.
BACKLOG
The backlog of orders for TRW's domestic operations, without options, at
December 31, 1996 and December 31, 1995 is estimated to have been approximately
$5,285 million and $5,105 million, respectively, of which it is estimated that,
directly or indirectly, United States Government business accounted for
approximately $4,631 million and $4,464 million, respectively. Reported backlog
at the end of 1996 does not include approximately $2.9 billion of negotiated and
priced, but unexercised, options for defense and non-defense programs.
Unexercised options at the end of 1995 were valued at $2.6 billion. The exercise
of options is at the discretion of the customer, and as in the case of
Government contracts generally, dependent on future government funding. Of the
total domestic backlog at December 31, 1996 and at December 31, 1995, 95% was
attributable to the Space & Defense segment, and virtually all of the backlog
attributable to United States Government business related to that segment.
The determination of TRW's backlog involves substantial estimating,
particularly with respect to customer requirements contracts and long-term
contracts of a cost-reimbursement or incentive nature. A substantial portion of
the variations in TRW's estimated backlog in recent years is attributable to the
timing of the award and performance of United States Government and certain
other contracts. Subject to various qualifications, including those set forth
herein, and assuming no terminations, cancellations or changes and completion of
orders in the normal course, TRW has estimated that approximately 51% of the
December 31, 1996 backlog will be delivered in 1997, 19% in 1998 and 30%
thereafter.
United States Government contracts and related customer orders generally
are subject to termination in whole or in part at the convenience of the
Government whenever the Government believes that such termination would be in
its best interest. Multi-year Government contracts and related orders are
subject to cancellation if funds for contract performance for any subsequent
contract year become unavailable. If any of its Government contracts were to be
terminated or canceled under these circumstances, TRW generally would be
entitled to receive payment for work completed and allowable termination or
cancellation costs. Whether the occurrence of any such termination or
cancellation would have an adverse effect on TRW would depend upon the
particular contract and the circumstances of the termination or cancellation.
Backlog data and comparisons thereof as of different dates may not be
reliable indicators of either future sales or the ratio of future direct and
indirect United States Government sales to other sales.
3
6
INTELLECTUAL PROPERTY
TRW owns significant intellectual property, including a large number of
patents, copyrights and trade secrets, and is involved in numerous licensing
arrangements. Although TRW's intellectual property plays an important role in
maintaining TRW's competitive position in a number of the markets that it
serves, no single patent, copyright, trade secret or license, or group of
related patents, copyrights, trade secrets or licenses, is, in the opinion of
management, of such value to TRW that the business of TRW or of any industry
segment of TRW would be materially affected by the expiration or termination
thereof. TRW's general policy is to apply for patents on an ongoing basis in the
United States and appropriate other countries on its significant patentable
developments.
TRW also views its name and mark as significant to its business as a whole.
In addition, TRW owns a number of other trade names and marks applicable to
certain of its businesses and products that it views as important to such
businesses and products.
RESEARCH AND DEVELOPMENT
Research and development costs totaled $1,981 million, $1,882 million and
$1,655 million in 1996, 1995 and 1994, respectively, of which customer-funded
research and development was $1,425 million in 1996, $1,360 million in 1995 and
$1,157 million in 1994. Company-funded research and development costs, which
included research and development for commercial products, independent research
and development and bid and proposal work related to government products and
services, totaled $412 million in 1996, $392 million in 1995 and $390 million in
1994. A portion of the cost incurred for independent research and development
and bid and proposal work is recoverable through overhead charged to government
contracts. Company-funded product development costs, including engineering and
field support for new customer requirements, were $144 million in 1996, $130
million in 1995 and $108 million in 1994.
EMPLOYEES
At December 31, 1996, TRW had approximately 65,200 employees, of whom
approximately 34,100 were employed in the United States.
RAW MATERIALS AND SUPPLIES
Materials used by TRW include or contain steel, stainless steel, pig iron,
ferro-chrome, aluminum, brass, copper, tin, platinum, special alloys, sodium
azide, glass, ceramics, plastic powders and laminations, carbon and plastic
materials, synthetic rubber, paper, and gold, silver, nickel, zinc and copper
plating materials. TRW also purchases from suppliers various types of equipment
and component parts that may include such materials. TRW's operations are
dependent upon the ability of its suppliers of materials, equipment and
component parts to meet performance and quality specifications and delivery
schedules. In some cases, there is only a limited number of suppliers for a
material or product due to the specialized nature of the item. Shortages of
certain raw materials, equipment and component parts have existed in the past
and may exist again in the future. TRW has taken a number of steps to protect
against and to minimize the effect of such shortages. However, any future
inability of TRW to obtain raw materials, equipment or component parts could
have a material adverse effect on the Company. TRW's operations also are
dependent on adequate supplies of energy. TRW has continued its programs to
conserve energy used in its operations and has made available alternative
sources of energy.
ENVIRONMENTAL REGULATIONS
Federal, state and local requirements relating to the discharge of
materials into the environment, or otherwise relating to the protection of the
environment, have had and will continue to have an effect on TRW and its
operations. The Company has made and continues to make expenditures for projects
relating to the environment, including pollution control devices for new and
existing facilities. The Company is conducting a number of environmental
investigations and remedial actions at current and former Company locations to
comply with various federal, state and local laws and, along with other
companies, has been named a potentially responsible party for certain waste
management sites. Each of these matters is subject to various uncertainties, and
some of these matters may be resolved unfavorably to the Company. A reserve
estimate reflecting cost ranges is established using standard engineering cost
estimating techniques for each matter for which sufficient information is
available. In the determination of cost ranges, consideration is given to the
professional judgment of the Company's environmental engineers in consultation
with outside environmental specialists, when necessary. At multi-party sites,
the reserve estimate also reflects the expected allocation of total project
costs among the various potentially responsible parties. At December 31, 1996,
the Company had reserves for environmental matters of $77 million, including $7
million of accruals recorded during the year. The Company aggressively pursues
reimbursement for environmental costs from its insurance carriers. Insurance
recoveries are recorded as a reduction of environmental costs when fixed and
determinable. The Company does not believe that compliance with environmental
protection laws
4
7
and regulations will have a material effect upon its capital expenditures or
competitive position, and TRW's capital expenditures for environmental control
facilities during 1997 and 1998 are not expected to be material to the Company.
The Company believes that any liability that may result from the resolution of
environmental matters for which sufficient information is available to support
cost estimates will not have a material adverse effect on the Company's
earnings. However, the Company cannot predict the effect on future earnings of
expenditures for aspects of certain matters for which there is insufficient
information. In addition, the Company cannot predict the effect on future
earnings of compliance with environmental laws and regulations with respect to
currently unknown environmental matters or the possible effect on future
earnings of compliance with environmental requirements imposed in the future.
CAPITAL EXPENDITURES
During the five years ended December 31, 1996, TRW's capital expenditures
and the net book value of its assets retired or sold were:
(IN MILLIONS)
--------------------------------------------------------
CAPITAL EXPENDITURES
-------------------------------------
LAND, NET BOOK
BUILDINGS MACHINERY VALUE OF
YEAR ENDED AND LEASEHOLD AND ASSETS RETIRED
DECEMBER 31, IMPROVEMENTS EQUIPMENT TOTAL OR SOLD
---------------- ------------- --------- ----- --------------
1996... $ 76 $ 424 $500 $ 29
1995... 74 392 466 21
1994... 92 396 488 19
1993... 73 386 459 47
1992... 94 419 513 62
On an industry segment basis, capital expenditures during 1996 and 1995
were as follows: Automotive, $342 million and $314 million, respectively; and
Space & Defense, $157 million and $114 million, respectively. Of total capital
expenditures, 59% in 1996 and 66% in 1995 were invested in the United States.
ITEM 2. PROPERTIES
TRW's operations include numerous manufacturing, research and development
and warehousing facilities. TRW owns or leases principal facilities located in
21 states in the United States and in 25 other countries. Approximately 59% of
the principal domestic facilities are used by the Automotive segment and 41% are
used by the Space & Defense segment. Substantially all of the foreign facilities
are used by the Automotive segment.
The Company also owns or leases certain smaller research and development
properties and administrative, marketing, sales and office facilities throughout
the United States and in various parts of the world. In addition, TRW operates
facilities on property owned directly or indirectly by the United States
Government. The Company owns its world headquarters in Lyndhurst, Ohio and its
regional headquarters for its Space & Defense segment in Redondo Beach,
California.
In the opinion of management, the Company's facilities are generally well
maintained and are suitable and adequate for their intended use.
Reference is made to the information concerning long-term rental
obligations under operating leases presented under the note entitled "Lease
commitments" in the Notes to Financial Statements on page 33 of the TRW 1996
Annual Report. Such information is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
On December 15, 1987, the Commissioner of the Indiana Department of
Environmental Management issued an Order to TRW and several other respondents
relating to alleged contamination of the public water supply in Shelbyville,
Indiana by, among other sources, two closed facilities that were formerly
operated by TRW's Connectors Division. The Order requires the respondents to
fund the relocation of the main well field for Shelbyville to a location that
can provide a safe source of potable water and to perform a remedial
investigation of the source and extent of contamination within a one-mile radius
of the well field. The Order also requires the respondents to pay civil
penalties of $25,000 per day for
5
8
violations of law which allegedly occurred prior to issuance of the Order. TRW
has filed a petition for review of the Order. The Order is not expected to have
a material effect on the Company's financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
None during the fourth quarter of 1996.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names and ages of, and the positions and offices held by, each person
designated an executive officer of the Company as of March 20, 1997, together
with the offices held by each such person during the last five years, are listed
below. For purposes hereof, the term "executive officer" includes the Chairman
of the Board, the President, each Vice President in charge of a principal
business function and any other officer who performs a policy-making function
for the Company. Each executive officer is elected annually and, unless the
executive officer resigns or terminates employment with the Company or is
removed from office by action of the Company's Directors, will hold office for
the ensuing year or until a successor is elected in accordance with the
Company's Regulations. It is expected that on or about June 1, 1997 W. B.
Lawrence will assume the responsibilities of General Counsel and Secretary from
M. A. Coyle. None of the Company's executive officers has a family relationship
to any other executive officer.
POSITIONS AND BUSINESS EXPERIENCE
NAME AGE DURING THE PAST FIVE YEARS
- --------------- --- -------------------------------------------------------
B. Blankenstein 58 Executive Vice President and General Manager, TRW
Steering, Suspension & Engine Group (1996 to the
present)
Managing Director, TRW Deutschland GmbH (1995 - 1996)
Vice President and General Manager, TRW's Global Engine
Components business (1994 - 1996)
Managing Director, TRW Motorkomponenten GmbH & Co. KG
(1991 - 1995)
M. A. Coyle 55 Executive Vice President (1989 to the present), General
Counsel (1980 to the present) and Secretary (1976 to
the present)
J. T. Gorman 59 Chairman of the Board and Chief Executive Officer (1988
to the present) and Director (1984 to the present)
T. W. Hannemann 54 Executive Vice President and General Manager, TRW Space
& Electronics Group (1993 to the present)
Executive Vice President and General Manager, TRW Space
& Defense Sector (1991 - 1992)
P. S. Hellman 47 President, Chief Operating Officer and Director (1995
to the present)
Executive Vice President and Assistant President (1994)
Executive Vice President, Chief Financial Officer and
Assistant President (1994)
Executive Vice President and Chief Financial Officer
(1991 - 1994)
H. V. Knicely 61 Executive Vice President, Human Resources and
Communications (1995 to the present)
Executive Vice President, Human Resources,
Communications & Information Resources (1989 - 1994)
W. B. Lawrence 52 Executive Vice President, Planning, Development &
Government Affairs (1989 to the present)
C. G. Miller 54 Executive Vice President and Chief Financial Officer
(1996 to the present)
Executive Vice President, Chief Financial Officer and
Controller (1996)
Vice President and Controller (1990 - 1996)
6
9
POSITIONS AND BUSINESS EXPERIENCE
NAME AGE DURING THE PAST FIVE YEARS
- --------------- --- -------------------------------------------------------
J. S. Remick 58 Executive Vice President and General Manager, TRW
Occupant Restraint Systems Group (1996 to the
present)
Executive Vice President and General Manager, TRW
Steering, Suspension & Engine Group (1995 - 1996)
Vice President and Deputy General Manager, Automotive
(1995)
Vice President and General Manager, TRW Steering &
Suspension Systems, North and South America
(1991 - 1995)
P. Staudhammer 63 Vice President, Science & Technology (1993 to the
present)
Vice President and Director of the Center for
Automotive Technology (1990 - 1993)
J. P. Stenbit 56 Executive Vice President and General Manager, TRW
Systems Integration Group (1994 to the present)
Vice President and General Manager, TRW Systems
Integration Group (1990 - 1994)
R. D. Sugar 48 Executive Vice President and General Manager, TRW
Automotive Electronics Group (1996 to the present)
Executive Vice President and Chief Financial Officer
(1994 - 1996)
Vice President, Group Development, TRW Space &
Electronics Group (1992 - 1994)
Vice President, Strategic Business Development, TRW
Space & Defense Sector (1992)
Vice President and General Manager, TRW Space
Communications Division (1987 - 1992)
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- ------- ---------------------------------------------------------------------
Reference is made to the information set forth in the table presented under
"Stock prices and dividends (unaudited)" on page 37 of the TRW 1996 Annual
Report and to the information presented under the note entitled "Debt and credit
agreements" in the Notes to Financial Statements on page 32 of the TRW 1996
Annual Report. The information contained in such table and the information
contained in the next-to-last paragraph of text in such note to financial
statements are incorporated herein by reference.
The Company's Common Stock is traded principally on the New York Stock
Exchange and is also traded on the Chicago, Pacific, Philadelphia, London and
Frankfurt exchanges.
On February 28, 1997, there were 26,404 shareholders of record of the
Company's Common Stock.
7
10
ITEM 6. SELECTED FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
----------------------------------------------------------
YEARS ENDED DECEMBER 31,
----------------------------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
Sales........................................... $9,857 $9,568 $8,491 $7,330 $7,557
Earnings from continuing operations before
cumulative effect of accounting changes....... 182 395 277 177 154
Per share of Common Stock:
Fully diluted earnings -- continuing
operations................................. 1.37 2.93 2.09 1.35 1.23
Primary earnings -- continuing operations..... 1.38 2.96 2.10 1.36 1.23
Cash dividends declared....................... 1.17 1.05 0.985 0.94 0.92
Total assets.................................... 5,899 5,670 5,435 5,042 5,158
Long-term debt.................................. 458 539 693 868 938
Shares used in computing per share amounts:
Fully diluted................................. 133.2 134.8 132.9 131.5 124.6
Primary....................................... 131.7 133.2 131.6 129.5 124.6
In 1996, the Company recorded charges of $314 million ($202 million after
tax, or $1.52 per share) primarily for actions taken, in part, to enhance the
Company's competitiveness. As a result of these actions, several manufacturing
facilities throughout the world will be closed or consolidated and employment
Company-wide will be reduced by approximately 2,500 people. Also during 1996,
the Company applied the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of," resulting in the recognition of $71
million ($50 million after tax, or $0.37 per share) of impairment losses. The
losses were primarily a result of technological changes and the decision to
close certain facilities in the Automotive segment.
On October 23, 1996, the Company's Board of Directors authorized a
two-for-one stock split effected in the form of a stock dividend. Accordingly,
all references to the number of shares and per share amounts have been restated
to give retroactive recognition to the stock dividend.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Reference is made to the information presented under the heading
"Management's Discussion and Analysis of the Results of Operations and Financial
Condition" on pages 17 through 20 of the TRW 1996 Annual Report. Such
information is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the financial statements headed "Statements of
Earnings," "Balance Sheets," "Statements of Cash Flows" and "Statements of
Changes in Shareholders' Investment," and the accompanying notes thereto, on
pages 21 through 36 of the TRW 1996 Annual Report. Reference is also made to the
information included in the table presented under the heading "Quarterly
financial information (unaudited)" on page 36 of such report. Such statements,
the accompanying notes and such table are incorporated herein by reference.
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
Reference is made to the information relating to TRW's Directors which is
presented under the heading "Election of Directors" on pages 1 through 5 of the
TRW Proxy Statement dated March 12, 1997, as filed with the Securities and
Exchange Commission (the "TRW Proxy Statement"). Such information, beginning
with the third paragraph on page 1 and ending with the second paragraph on
page 5, is incorporated herein by reference.
8
11
See the information presented in Part I of this Report under the heading
"Executive Officers of the Registrant" for information relating to TRW's
executive officers.
ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the information presented under the heading
"Compensation of Executive Officers" on pages 12 through 20 of the TRW Proxy
Statement. Reference is also made to the information presented under the heading
"Director Compensation" on page 7 of the TRW Proxy Statement. Such information
is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Reference is made to the information presented under the heading "Ownership
of Shares" on page 6 of the TRW Proxy Statement. Reference is also made to the
information presented under the heading "Outstanding Securities" on pages 21 and
22 of the TRW Proxy Statement. Such information is incorporated herein by
reference.
There are no agreements or arrangements known to TRW that might, at a
subsequent date, result in a change in control of TRW.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) FINANCIAL STATEMENTS AND SCHEDULES
(1) FINANCIAL STATEMENTS
The following financial statements of the registrant and its
subsidiaries included in the TRW 1996 Annual Report are incorporated
herein by reference:
Statements of Earnings -- Years ended December 31, 1996, 1995 and 1994
(page 21)
Balance Sheets -- December 31, 1996 and 1995 (pages 22 and 23)
Statements of Cash Flows -- Years ended December 31, 1996, 1995 and
1994 (page 24)
Statements of Changes in Shareholders' Investment -- Years ended
December 31, 1996, 1995 and 1994 (page 25)
Notes to Financial Statements -- (pages 26 - 36)
(2) FINANCIAL STATEMENT SCHEDULES
All Schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are not applicable and,
therefore, have been omitted.
Financial statements and summarized financial information of
unconsolidated subsidiaries and 50% or less owned persons accounted for
by the equity method have been omitted because such subsidiaries and
persons, considered individually or in the aggregate, do not constitute
a significant subsidiary.
9
12
(3) EXHIBITS
2(a) Recapitalization Agreement, dated as of February 9, 1996, among IS&S
Acquisition Corp., and TRW Inc., TRW IS&S International, Inc.,
Information Systems and Services, Inc. (f/k/a TRW Environmental
Management Company), TRW Hotel Company Inc., TRW Microwave Inc. and
IS&S Holdings, Inc. (f/k/a TRW Target Marketing Services, Inc.)
(Exhibit 2.1 to TRW Form 8-K Current Report dated October 4, 1996 is
incorporated herein by reference).
2(b) Amendment No. 1, dated June 17, 1996 to Recapitalization Agreement,
dated as of February 9, 1996, among IS&S Acquisition Corp., and TRW
Inc., TRW IS&S International, Inc., Information Systems and Services,
Inc. (f/k/a TRW Environmental Management Company), TRW Hotel Company
Inc., TRW Microwave Inc. and IS&S Holdings, Inc. (f/k/a TRW Target
Marketing Services, Inc.) (Exhibit 2.2 to TRW Form 8-K Current Report
dated October 4, 1996 is incorporated herein by reference).
2(c) Amendment No. 2, dated August 13, 1996 to Recapitalization Agreement,
dated as of February 9, 1996, among IS&S Acquisition Corp., and TRW
Inc., TRW IS&S International, Inc., Information Systems and Services,
Inc. (f/k/a TRW Environmental Management Company), TRW Hotel Company
Inc., TRW Microwave Inc. and IS&S Holdings, Inc. (f/k/a TRW Target
Marketing Services, Inc.) (Exhibit 2.3 to TRW Form 8-K Current Report
dated October 4, 1996 is incorporated herein by reference).
2(d) Amendment No. 3, dated September 18, 1996 to Recapitalization
Agreement, dated as of February 9, 1996, among IS&S Acquisition Corp.,
and TRW Inc., TRW IS&S International, Inc., Information Systems and
Services, Inc. (f/k/a TRW Environmental Management Company), TRW Hotel
Company Inc., TRW Microwave Inc. and IS&S Holdings, Inc. (f/k/a TRW
Target Marketing Services, Inc.) (Exhibit 2.4 to TRW Form 8-K Current
Report dated October 4, 1996 is incorporated herein by reference).
3(a) Amended Articles of Incorporation as amended April 24, 1996 (Exhibit
3(a) to TRW Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 is incorporated herein by reference).
3(b) Regulations as amended April 30, 1980 (Exhibit 3(b) to TRW Annual
Report on Form 10-K for the year ended December 31, 1980 is
incorporated herein by reference).
4(a) Rights Agreement dated as of April 24, 1996 between TRW Inc. and
National City Bank, as Rights Agent (Exhibit 1 to TRW Form 8-A
Registration Statement dated April 25, 1996 is incorporated herein by
reference).
4(b) Indenture between TRW Inc. and The Chase Manhattan Bank (National
Association), as successor Trustee, dated as of May 1, 1986 (Exhibit 2
to TRW Form 8-A Registration Statement dated July 3, 1986 is
incorporated herein by reference).
4(c) First Supplemental Indenture between TRW Inc. and The Chase Manhattan
Bank (National Association), as successor Trustee, dated as of July 26,
1989 (Exhibit 4(b) to TRW Form S-3 Registration Statement, File
No. 33-30350, is incorporated herein by reference).
*10(a) 1979 Stock Option Plan as amended April 28, 1982 (Exhibit A to TRW
Proxy Statement dated March 18, 1982 is incorporated herein by
reference).
*10(b) TRW Operational Incentive Plan (Exhibit 10(b) to TRW Annual Report on
Form 10-K for the year ended December 31, 1989 is incorporated herein
by reference).
*10(c) TRW Executive Health Care Plan as amended and restated effective
August 1, 1995 (Exhibit 10(c) to TRW Annual Report on Form 10-K for
the year ended December 31, 1995 is incorporated herein by reference).
*10(d) 1984 Stock Option Plan (Exhibit A to TRW Proxy Statement dated March 19,
1984 is incorporated herein by reference).
*10(e) 1989 TRW Long-Term Incentive Plan (Exhibit A to TRW Proxy Statement
dated March 17, 1989 is incorporated herein by reference).
*10(f) 1994 TRW Long-Term Incentive Plan as amended and restated effective
February 4, 1997.
*10(g) 1997 TRW Long-Term Incentive Plan (Exhibit A to TRW Proxy Statement
dated March 12, 1997 is incorporated herein by reference).
*10(h) Form of Strategic Incentive Grant.
*10(i) Form of U.S. Nonqualified Stock Option Agreement.
10
13
*10(j) Form of U.S. Transferable Nonqualified Stock Option Agreement.
*10(k) Form of Director Transferable Nonqualified Stock Option Agreement.
*10(l) Deferred Compensation Plan for Non-Employee Directors of TRW Inc.
reflecting amendments effective August 1, 1990 (Exhibit 10(k) to TRW
Annual Report on Form 10-K for the year ended December 31, 1990 is
incorporated herein by reference).
*10(m) Deferred Compensation Plan for Non-Employee Directors of TRW Inc.
dated July 1, 1997.
*10(n) TRW Directors' Pension Plan as amended and restated effective August 1,
1990 (Exhibit 10(l) to TRW Annual Report on Form 10-K for the year
ended December 31, 1990 is incorporated herein by reference).
*10(o) Form of Amended and Restated Employment Continuation Agreements with
executive officers (Exhibit 10(k) to TRW Annual Report on Form 10-K
for the year ended December 31, 1995 is incorporated herein by
reference).
*10(p) TRW Inc. Deferred Compensation Plan as amended and restated effective
February 4, 1997.
*10(q) TRW Benefits Equalization Plan (as Amended and Restated, effective
August 1, 1996) (Exhibit 10(a) to TRW Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996 is incorporated herein by
reference).
*10(r) TRW Supplementary Retirement Income Plan (as Amended and Restated,
effective August 1, 1996) (Exhibit 10(b) to TRW Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996 is incorporated herein
by reference).
*10(s) TRW Inc. Key Executive Life Insurance Plan dated as of February 7,
1996 (Exhibit 10(v) to TRW Annual Report on Form 10-K for the year
ended December 31, 1995 is incorporated herein by reference).
*10(t) TRW Inc. Financial Counseling Program (Exhibit 10(w) to TRW Annual
Report on Form 10-K for the year ended December 31, 1995 is
incorporated herein by reference).
10(u) Three Year Revolving Credit Agreement dated July 1, 1992 among TRW
Inc. and various financial institutions (Exhibit 19.1 to TRW Quarterly
Report on Form 10-Q for the quarter ended June 30, 1992 is
incorporated herein by reference).
10(v) Amendment dated June 30, 1993 to Three Year Revolving Credit Agreement
dated July 1, 1992 among TRW Inc. and various financial institutions
(Exhibit 10.1 to TRW Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993 is incorporated herein by reference).
10(w) Amendment dated as of March 1, 1994 to Three Year Revolving Credit
Agreement dated July 1, 1992 among TRW Inc. and various financial
institutions (Exhibit 10(cc) to TRW Annual Report on Form 10-K for the
year ended December 31, 1993 is incorporated herein by reference).
10(x) Amendment dated February 28, 1995 to Multi-Year Revolving Credit
Agreement (formerly entitled Three Year Revolving Credit Agreement)
dated July 1, 1992 among TRW Inc. and various financial institutions
(Exhibit 10(u) to TRW Annual Report on Form 10-K for the year ended
December 31, 1994 is incorporated herein by reference).
10(y) Amendment dated May 8, 1996 to Multi-Year Revolving Credit Agreement
(formerly entitled Three Year Revolving Credit Agreement) dated July 1,
1992 among TRW Inc. and various financial institutions.
*10(z) TRW Inc. Stock Plan for Non-Employee Directors (as Amended and
Restated, effective August 1, 1995) (Exhibit 10.1 to TRW Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995 is
incorporated herein by reference).
11 Computation of Earnings per Share.
12 Computation of Ratio of Earnings to Fixed Charges -- Unaudited
(Supplement to Exhibit 12 of the following Form S-3 Registration
Statement of the Company: No. 33-61711, filed August 10, 1995).
13 Portions of the TRW Annual Report to Security Holders for the year
ended December 31, 1996 incorporated herein by reference.
21 Subsidiaries of the Registrant.
23(a) Consent of Independent Auditors.
23(b) Consent of Independent Auditors (with respect to financial statements
of The TRW Canada Stock Savings Plan).
11
14
24(a) Power of Attorney.
24(b) Certified Resolutions.
27 Financial Data Schedule.
99(a) Financial Statements of The TRW Employee Stock Ownership and Stock
Savings Plan for the year ended December 31, 1996.
99(b) Financial Statements of The TRW Canada Stock Savings Plan for the year
ended December 31, 1996.
Certain instruments with respect to long-term debt have not been
filed as exhibits as the total amount of securities authorized under any
one of such instruments does not exceed 10% of the total assets of the
registrant and its subsidiaries on a consolidated basis. The registrant
agrees to furnish to the Commission a copy of each such instrument upon
request.
* Management contract, compensatory plan or arrangement required to
be filed as an exhibit pursuant to Item 14(c) of this report.
(b) REPORTS ON FORM 8-K
Current Report on Form 8-K dated October 4, 1996 as to Information
Systems & Services divestiture, including pro forma financial
information.
Current Report on Form 8-K dated October 23, 1996 as to stock dividend.
Current Report on Form 8-K dated December 20, 1996 as to Magna
International acquisition.
12
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TRW Inc.
Date: March 20, 1997
By /s/ M. A. COYLE
----------------------------------
MARTIN A. COYLE,
EXECUTIVE VICE PRESIDENT AND
SECRETARY
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.
SIGNATURE TITLE DATE
J. T. GORMAN* Chairman of the Board, March 20, 1997
Chief Executive Officer
and Director
P. S. HELLMAN* President, Chief Operating Officer and March 20, 1997
Director
C. G. MILLER* Executive Vice President and March 20, 1997
Chief Financial Officer
T. A. CONNELL* Vice President and Controller March 20, 1997
M. H. ARMACOST Director March 20, 1997
M. FELDSTEIN* Director March 20, 1997
R. M. GATES* Director March 20, 1997
C. H. HAHN* Director March 20, 1997
G. H. HEILMEIER* Director March 20, 1997
K. N. HORN* Director March 20, 1997
E. B. JONES* Director March 20, 1997
W. S. KISER* Director March 20, 1997
D. B. LEWIS* Director March 20, 1997
J. T. LYNN* Director March 20, 1997
L. M. MARTIN* Director March 20, 1997
J. D. ONG* Director March 20, 1997
R. W. POGUE* Director March 20, 1997
MARTIN A. COYLE, by signing his name hereto, does hereby sign and execute
this report on behalf of each of the above-named officers and Directors of TRW
Inc., pursuant to a power of attorney executed by each of such officers and
Directors and filed with the Securities and Exchange Commission as an exhibit to
this report.
March 20, 1997
*By /s/ M. A. COYLE
-------------------------------
MARTIN A. COYLE,
ATTORNEY-IN-FACT
13
16
REPORT OF INDEPENDENT AUDITORS
Shareholders and Directors
TRW Inc.
We have audited the consolidated financial statements of TRW Inc. and
subsidiaries listed in Item 14(a)(1) of the annual report on Form 10-K of TRW
Inc. for the year ended December 31, 1996. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of TRW Inc. and
subsidiaries at December 31, 1996 and 1995, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Cleveland, Ohio
January 20, 1997
F-1
17
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
2(a) Recapitalization Agreement, dated as of February 9, 1996, among IS&S Acquisition
Corp., and TRW Inc., TRW IS&S International, Inc., Information Systems and
Services, Inc. (f/k/a TRW Environmental Management Company), TRW Hotel Company
Inc., TRW Microwave Inc. and IS&S Holdings, Inc. (f/k/a TRW Target Marketing
Services, Inc.) (Exhibit 2.1 to TRW Form 8-K Current Report dated October 4, 1996
is incorporated herein by reference).
2(b) Amendment No. 1, dated June 17, 1996 to Recapitalization Agreement, dated as of
February 9, 1996, among IS&S Acquisition Corp., and TRW Inc., TRW IS&S
International, Inc., Information Systems and Services, Inc. (f/k/a TRW
Environmental Management Company), TRW Hotel Company Inc., TRW Microwave Inc. and
IS&S Holdings, Inc. (f/k/a TRW Target Marketing Services, Inc.) (Exhibit 2.2 to
TRW Form 8-K Current Report dated October 4, 1996 is incorporated herein by
reference).
2(c) Amendment No. 2, dated August 13, 1996 to Recapitalization Agreement, dated as of
February 9, 1996, among IS&S Acquisition Corp., and TRW Inc., TRW IS&S
International, Inc., Information Systems and Services, Inc. (f/k/a TRW
Environmental Management Company), TRW Hotel Company Inc., TRW Microwave Inc. and
IS&S Holdings, Inc. (f/k/a TRW Target Marketing Services, Inc.) (Exhibit 2.3 to
TRW Form 8-K Current Report dated October 4, 1996 is incorporated herein by
reference).
2(d) Amendment No. 3, dated September 18, 1996 to Recapitalization Agreement, dated as
of February 9, 1996, among IS&S Acquisition Corp., and TRW Inc., TRW IS&S
International, Inc., Information Systems and Services, Inc. (f/k/a TRW
Environmental Management Company), TRW Hotel Company Inc., TRW Microwave Inc. and
IS&S Holdings, Inc. (f/k/a TRW Target Marketing Services, Inc.) (Exhibit 2.4 to
TRW Form 8-K Current Report dated October 4, 1996 is incorporated herein by
reference).
3(a) Amended Articles of Incorporation as amended April 24, 1996 (Exhibit 3(a) to TRW
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996 is
incorporated herein by reference).
3(b) Regulations as amended April 30, 1980 (Exhibit 3(b) to TRW Annual Report on Form
10-K for the year ended December 31, 1980 is incorporated herein by reference).
4(a) Rights Agreement dated as of April 24, 1996 between TRW Inc. and National City
Bank, as Rights Agent (Exhibit 1 to TRW Form 8-A Registration Statement dated
April 25, 1996 is incorporated herein by reference).
4(b) Indenture between TRW Inc. and The Chase Manhattan Bank (National Association),
as successor Trustee, dated as of May 1, 1986 (Exhibit 2 to TRW Form 8-A
Registration Statement dated July 3, 1986 is incorporated herein by reference).
4(c) First Supplemental Indenture between TRW Inc. and The Chase Manhattan Bank
(National Association), as successor Trustee, dated as of July 26, 1989 (Exhibit
4(b) to TRW Form S-3 Registration Statement, File No. 33-30350, is incorporated
herein by reference).
*10(a) 1979 Stock Option Plan as amended April 28, 1982 (Exhibit A to TRW Proxy
Statement dated March 18, 1982 is incorporated herein by reference).
*10(b) TRW Operational Incentive Plan (Exhibit 10(b) to TRW Annual Report on Form 10-K
for the year ended December 31, 1989 is incorporated herein by reference).
*10(c) TRW Executive Health Care Plan as amended and restated effective August 1, 1995
(Exhibit 10(c) to TRW Annual Report on Form 10-K for the year ended December 31,
1995 is incorporated herein by reference).
18
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
*10(d) 1984 Stock Option Plan (Exhibit A to TRW Proxy Statement dated March 19, 1984 is
incorporated herein by reference).
*10(e) 1989 TRW Long-Term Incentive Plan (Exhibit A to TRW Proxy Statement dated March
17, 1989 is incorporated herein by reference).
*10(f) 1994 TRW Long-Term Incentive Plan as amended and restated effective February 4,
1997.
*10(g) 1997 TRW Long-Term Incentive Plan (Exhibit A to TRW Proxy Statement dated March
12, 1997 is incorporated herein by reference).
*10(h) Form of Strategic Incentive Grant.
*10(i) Form of U.S. Nonqualified Stock Option Agreement.
*10(j) Form of U.S. Transferable Nonqualified Stock Option Agreement.
*10(k) Form of Director Transferable Nonqualified Stock Option Agreement.
*10(l) Deferred Compensation Plan for Non-Employee Directors of TRW Inc.
reflecting amendments effective August 1, 1990 (Exhibit 10(k) to TRW
Annual Report on Form 10-K for the year ended December 31, 1990 is
incorporated herein by reference).
*10(m) Deferred Compensation Plan for Non-Employee Directors of TRW Inc. dated
July 1, 1997.
*10(n) TRW Directors' Pension Plan as amended and restated effective August 1, 1990
(Exhibit 10(l) to TRW Annual Report on Form 10-K for the year ended December 31,
1990 is incorporated herein by reference).
*10(o) Form of Amended and Restated Employment Continuation Agreements with executive
officers (Exhibit 10(k) to TRW Annual Report on Form 10-K for the year ended
December 31, 1995 is incorporated herein by reference).
*10(p) TRW Inc. Deferred Compensation Plan as amended and restated effective February 4, 1997.
*10(q) TRW Benefits Equalization Plan (as Amended and Restated, effective August 1,
1996) (Exhibit 10(a) to TRW Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996 is incorporated herein by reference).
*10(r) TRW Supplementary Retirement Income Plan (as Amended and Restated, effective
August 1, 1996) (Exhibit 10(b) to TRW Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 is incorporated herein by reference).
*10(s) TRW Inc. Key Executive Life Insurance Plan dated as of February 7, 1996 (Exhibit
10(v) to TRW Annual Report on Form 10-K for the year ended December 31, 1995 is
incorporated herein by reference).
*10(t) TRW Inc. Financial Counseling Program (Exhibit 10(w) to TRW Annual Report on Form
10-K for the year ended December 31, 1995 is incorporated herein by reference).
10(u) Three Year Revolving Credit Agreement dated July 1, 1992 among TRW Inc. and
various financial institutions (Exhibit 19.1 to TRW Quarterly Report on Form 10-Q
for the quarter ended June 30, 1992 is incorporated herein by reference).
10(v) Amendment dated June 30, 1993 to Three Year Revolving Credit Agreement dated July
1, 1992 among TRW Inc. and various financial institutions. (Exhibit 10.1 to TRW
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993 is incorporated
herein by reference).
10(w) Amendment dated as of March 1, 1994 to Three Year Revolving Credit Agreement
dated July 1, 1992 among TRW Inc. and various financial institutions. (Exhibit
10(cc) to TRW Annual Report on Form 10-K for the year ended December 31, 1993 is
incorporated herein by reference).
19
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
10(x) Amendment dated February 28, 1995 to Multi-Year Revolving Credit Agreement (for-
merly entitled Three Year Revolving Credit Agreement) dated July 1, 1992 among
TRW Inc. and various financial institutions (Exhibit 10(u) to TRW Annual Report
on Form 10-K for the year ended December 31, 1994 is incorporated herein by
reference).
10(y) Amendment dated May 8, 1996 to Multi-Year Revolving Credit Agreement (formerly
entitled Three Year Revolving Credit Agreement) dated July 1, 1992 among TRW Inc.
and various financial institutions.
*10(z) TRW Inc. Stock Plan for Non-Employee Directors (as Amended and Restated,
effective August 1, 1995) (Exhibit 10.1 to TRW Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 is incorporated herein by reference).
11 Computation of Earnings per Share.
12 Computation of Ratio of Earnings to Fixed Charges -- Unaudited.
13 Portions of the TRW Annual Report to Security Holders for the year ended December 31,
1996 incorporated herein by reference.
21 Subsidiaries of the Registrant.
23(a) Consent of Independent Auditors.
23(b) Consent of Independent Auditors (with respect to financial statements of The TRW
Canada Stock Savings Plan).
24(a) Power of Attorney.
24(b) Certified Resolutions.
27 Financial Data Schedule.
99(a) Financial Statements of The TRW Employee Stock Ownership and Stock Savings Plan
for the year ended December 31, 1996.
99(b) Financial Statements of The TRW Canada Stock Savings Plan for the year ended
December 31, 1996.
Certain instruments with respect to long-term debt have not been filed as
exhibits as the total amount of securities authorized under any one of such
instruments does not exceed 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis. The registrant agrees to furnish to the
Commission a copy of each such instrument upon request.
* Management contract, compensatory plan or arrangement required to be filed as
an exhibit pursuant to Item 14(c) of this report.