Delaware
|
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25-1797617
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1201 South Second Street,
Milwaukee, Wisconsin
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53204
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
x
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Accelerated Filer
¨
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Non-accelerated Filer
¨
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Smaller Reporting Company
¨
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Page No.
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December 31,
2012 |
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September 30,
2012 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
954.3
|
|
|
$
|
903.9
|
|
Short-term investments
|
350.0
|
|
|
350.0
|
|
||
Receivables
|
1,125.7
|
|
|
1,187.3
|
|
||
Inventories
|
646.6
|
|
|
619.0
|
|
||
Deferred income taxes
|
200.5
|
|
|
208.6
|
|
||
Other current assets
|
115.5
|
|
|
118.7
|
|
||
Total current assets
|
3,392.6
|
|
|
3,387.5
|
|
||
Property, net of accumulated depreciation of $1,241.3 and $1,211.5, respectively
|
579.5
|
|
|
587.1
|
|
||
Goodwill
|
1,025.3
|
|
|
948.8
|
|
||
Other intangible assets, net
|
216.8
|
|
|
209.5
|
|
||
Deferred income taxes
|
345.3
|
|
|
351.1
|
|
||
Other assets
|
151.6
|
|
|
152.5
|
|
||
Total
|
$
|
5,711.1
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|
|
$
|
5,636.5
|
|
LIABILITIES AND SHAREOWNERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
253.0
|
|
|
$
|
157.0
|
|
Accounts payable
|
481.2
|
|
|
547.6
|
|
||
Compensation and benefits
|
152.0
|
|
|
246.4
|
|
||
Advance payments from customers and deferred revenue
|
224.0
|
|
|
204.1
|
|
||
Customer returns, rebates and incentives
|
178.9
|
|
|
168.7
|
|
||
Other current liabilities
|
198.8
|
|
|
207.8
|
|
||
Total current liabilities
|
1,487.9
|
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|
1,531.6
|
|
||
Long-term debt
|
905.0
|
|
|
905.0
|
|
||
Retirement benefits
|
1,109.9
|
|
|
1,105.8
|
|
||
Other liabilities
|
240.5
|
|
|
242.4
|
|
||
Commitments and contingent liabilities (Note 11)
|
|
|
|
||||
Shareowners’ equity:
|
|
|
|
||||
Common stock (shares issued: 181.4)
|
181.4
|
|
|
181.4
|
|
||
Additional paid-in capital
|
1,419.4
|
|
|
1,416.7
|
|
||
Retained earnings
|
3,949.5
|
|
|
3,858.8
|
|
||
Accumulated other comprehensive loss
|
(1,180.1
|
)
|
|
(1,225.3
|
)
|
||
Common stock in treasury, at cost (shares held: December 31, 2012 and September 30, 2012, 41.6)
|
(2,402.4
|
)
|
|
(2,379.9
|
)
|
||
Total shareowners’ equity
|
1,967.8
|
|
|
1,851.7
|
|
||
Total
|
$
|
5,711.1
|
|
|
$
|
5,636.5
|
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Sales
|
|
|
|
||||
Products and solutions
|
$
|
1,334.2
|
|
|
$
|
1,325.5
|
|
Services
|
155.0
|
|
|
148.4
|
|
||
|
1,489.2
|
|
|
1,473.9
|
|
||
Cost of sales
|
|
|
|
||||
Products and solutions
|
(774.8
|
)
|
|
(752.8
|
)
|
||
Services
|
(107.1
|
)
|
|
(102.4
|
)
|
||
|
(881.9
|
)
|
|
(855.2
|
)
|
||
Gross profit
|
607.3
|
|
|
618.7
|
|
||
Selling, general and administrative expenses
|
(373.5
|
)
|
|
(362.4
|
)
|
||
Other (expense) income
|
(1.2
|
)
|
|
1.6
|
|
||
Interest expense
|
(15.4
|
)
|
|
(15.0
|
)
|
||
Income before income taxes
|
217.2
|
|
|
242.9
|
|
||
Income tax provision
|
(55.8
|
)
|
|
(59.6
|
)
|
||
Net income
|
$
|
161.4
|
|
|
$
|
183.3
|
|
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
1.16
|
|
|
$
|
1.29
|
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Diluted
|
$
|
1.14
|
|
|
$
|
1.27
|
|
|
|
|
|
||||
Cash dividends per share
|
$
|
0.47
|
|
|
$
|
0.425
|
|
Weighted average outstanding shares:
|
|
|
|
||||
Basic
|
139.3
|
|
|
141.8
|
|
||
Diluted
|
141.2
|
|
|
143.9
|
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Net income
|
$
|
161.4
|
|
|
$
|
183.3
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Pension and other postretirement benefit plan adjustments
|
21.9
|
|
|
13.5
|
|
||
Currency translation adjustments
|
24.3
|
|
|
(45.8
|
)
|
||
Net unrealized losses on cash flow hedges
|
(1.0
|
)
|
|
(2.7
|
)
|
||
Other comprehensive income (loss)
|
45.2
|
|
|
(35.0
|
)
|
||
Comprehensive income
|
$
|
206.6
|
|
|
$
|
148.3
|
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Continuing operations:
|
|
|
|
||||
Operating activities:
|
|
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|
||||
Net income
|
$
|
161.4
|
|
|
$
|
183.3
|
|
Adjustments to arrive at cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
27.0
|
|
|
23.9
|
|
||
Amortization of intangible assets
|
8.2
|
|
|
8.7
|
|
||
Share-based compensation expense
|
11.2
|
|
|
11.4
|
|
||
Retirement benefit expense
|
42.8
|
|
|
26.2
|
|
||
Pension trust contributions
|
(9.3
|
)
|
|
(309.2
|
)
|
||
Net loss on disposition of property and investments
|
—
|
|
|
0.1
|
|
||
Income tax benefit from the exercise of stock options
|
0.5
|
|
|
—
|
|
||
Excess income tax benefit from share-based compensation
|
(10.6
|
)
|
|
(9.8
|
)
|
||
Changes in assets and liabilities, excluding effects of acquisitions and foreign
currency adjustments:
|
|
|
|
||||
Receivables
|
69.3
|
|
|
1.5
|
|
||
Inventories
|
(22.4
|
)
|
|
(45.1
|
)
|
||
Accounts payable
|
(60.7
|
)
|
|
3.1
|
|
||
Compensation and benefits
|
(90.4
|
)
|
|
(150.8
|
)
|
||
Income taxes
|
33.6
|
|
|
57.0
|
|
||
Other assets and liabilities
|
6.7
|
|
|
10.7
|
|
||
Cash provided by (used for) operating activities
|
167.3
|
|
|
(189.0
|
)
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Capital expenditures
|
(21.6
|
)
|
|
(31.6
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(84.4
|
)
|
|
(10.9
|
)
|
||
Purchases of short-term investments
|
(87.5
|
)
|
|
(150.0
|
)
|
||
Proceeds from maturities of short-term investments
|
87.5
|
|
|
—
|
|
||
Proceeds from sale of property and investments
|
0.2
|
|
|
1.8
|
|
||
Cash used for investing activities
|
(105.8
|
)
|
|
(190.7
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Net issuance of short-term debt
|
96.0
|
|
|
350.0
|
|
||
Cash dividends
|
(65.5
|
)
|
|
(60.3
|
)
|
||
Purchases of treasury stock
|
(92.9
|
)
|
|
(9.7
|
)
|
||
Proceeds from the exercise of stock options
|
38.1
|
|
|
5.2
|
|
||
Excess income tax benefit from share-based compensation
|
10.6
|
|
|
9.8
|
|
||
Other financing activities
|
—
|
|
|
(0.1
|
)
|
||
Cash (used for) provided by financing activities
|
(13.7
|
)
|
|
294.9
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
9.6
|
|
|
(19.9
|
)
|
||
|
|
|
|
||||
Cash provided by (used for) continuing operations
|
57.4
|
|
|
(104.7
|
)
|
||
|
|
|
|
||||
Discontinued operations:
|
|
|
|
||||
Cash used for discontinued operating activities
|
(7.0
|
)
|
|
(0.2
|
)
|
||
Cash used for discontinued operations
|
(7.0
|
)
|
|
(0.2
|
)
|
||
|
|
|
|
||||
Increase (decrease) in cash and cash equivalents
|
50.4
|
|
|
(104.9
|
)
|
||
Cash and cash equivalents at beginning of period
|
903.9
|
|
|
988.9
|
|
||
Cash and cash equivalents at end of period
|
$
|
954.3
|
|
|
$
|
884.0
|
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Net income
|
$
|
161.4
|
|
|
$
|
183.3
|
|
Less: Allocation to participating securities
|
(0.2
|
)
|
|
(0.4
|
)
|
||
Net income available to common shareowners
|
$
|
161.2
|
|
|
$
|
182.9
|
|
Basic weighted average outstanding shares
|
139.3
|
|
|
141.8
|
|
||
Effect of dilutive securities
|
|
|
|
||||
Stock options
|
1.6
|
|
|
1.7
|
|
||
Performance shares
|
0.3
|
|
|
0.4
|
|
||
Diluted weighted average outstanding shares
|
141.2
|
|
|
143.9
|
|
||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
1.16
|
|
|
$
|
1.29
|
|
Diluted
|
$
|
1.14
|
|
|
$
|
1.27
|
|
|
Three Months Ended December 31,
|
||||||||||||
|
2012
|
|
2011
|
||||||||||
|
Grants
|
|
Wtd. Avg.
Share
Fair Value
|
|
Grants
|
|
Wtd. Avg.
Share
Fair Value
|
||||||
Stock options
|
1,064
|
|
|
$
|
25.11
|
|
|
1,378
|
|
|
$
|
23.50
|
|
Performance shares
|
79
|
|
|
98.15
|
|
|
93
|
|
|
101.57
|
|
||
Restricted stock and restricted stock units
|
61
|
|
|
79.58
|
|
|
80
|
|
|
73.83
|
|
||
Unrestricted stock
|
7
|
|
|
69.38
|
|
|
9
|
|
|
54.55
|
|
|
Fair Value
|
|
Wtd. Avg. Useful Life
|
||
Customer relationships
|
$
|
7.1
|
|
|
10 years
|
Technology
|
3.0
|
|
|
5 years
|
|
Other intangible assets
|
1.0
|
|
|
5 years
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
Finished goods
|
$
|
276.5
|
|
|
$
|
262.5
|
|
Work in process
|
158.6
|
|
|
149.5
|
|
||
Raw materials, parts and supplies
|
211.5
|
|
|
207.0
|
|
||
Inventories
|
$
|
646.6
|
|
|
$
|
619.0
|
|
|
Architecture &
Software
|
|
Control
Products &
Solutions
|
|
Total
|
||||||
Balance as of September 30, 2012
|
$
|
387.7
|
|
|
$
|
561.1
|
|
|
$
|
948.8
|
|
Acquisition of businesses
|
—
|
|
|
70.7
|
|
|
70.7
|
|
|||
Translation
|
1.1
|
|
|
4.7
|
|
|
5.8
|
|
|||
Balance as of December 31, 2012
|
$
|
388.8
|
|
|
$
|
636.5
|
|
|
$
|
1,025.3
|
|
|
December 31, 2012
|
||||||||||
|
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Amortized intangible assets:
|
|
|
|
|
|
||||||
Computer software products
|
$
|
127.4
|
|
|
$
|
64.5
|
|
|
$
|
62.9
|
|
Customer relationships
|
80.2
|
|
|
32.9
|
|
|
47.3
|
|
|||
Technology
|
92.2
|
|
|
52.8
|
|
|
39.4
|
|
|||
Trademarks
|
32.2
|
|
|
13.8
|
|
|
18.4
|
|
|||
Other
|
22.5
|
|
|
17.4
|
|
|
5.1
|
|
|||
Total amortized intangible assets
|
354.5
|
|
|
181.4
|
|
|
173.1
|
|
|||
Intangible assets not subject to amortization
|
43.7
|
|
|
—
|
|
|
43.7
|
|
|||
Total
|
$
|
398.2
|
|
|
$
|
181.4
|
|
|
$
|
216.8
|
|
|
September 30, 2012
|
||||||||||
|
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Amortized intangible assets:
|
|
|
|
|
|
||||||
Computer software products
|
$
|
123.4
|
|
|
$
|
61.2
|
|
|
$
|
62.2
|
|
Customer relationships
|
72.6
|
|
|
30.7
|
|
|
41.9
|
|
|||
Technology
|
88.9
|
|
|
50.9
|
|
|
38.0
|
|
|||
Trademarks
|
32.1
|
|
|
12.9
|
|
|
19.2
|
|
|||
Other
|
21.4
|
|
|
16.9
|
|
|
4.5
|
|
|||
Total amortized intangible assets
|
338.4
|
|
|
172.6
|
|
|
165.8
|
|
|||
Intangible assets not subject to amortization
|
43.7
|
|
|
—
|
|
|
43.7
|
|
|||
Total
|
$
|
382.1
|
|
|
$
|
172.6
|
|
|
$
|
209.5
|
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
Unrealized losses on foreign exchange contracts
|
$
|
13.0
|
|
|
$
|
21.5
|
|
Product warranty obligations
|
36.2
|
|
|
37.8
|
|
||
Taxes other than income taxes
|
36.9
|
|
|
37.1
|
|
||
Accrued interest
|
15.0
|
|
|
15.6
|
|
||
Income taxes payable
|
27.5
|
|
|
14.7
|
|
||
Other
|
70.2
|
|
|
81.1
|
|
||
Other current liabilities
|
$
|
198.8
|
|
|
$
|
207.8
|
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Balance at beginning of period
|
$
|
37.8
|
|
|
$
|
38.5
|
|
Accruals for warranties issued during the current period
|
8.2
|
|
|
9.6
|
|
||
Adjustments to pre-existing warranties
|
(1.0
|
)
|
|
3.1
|
|
||
Settlements of warranty claims
|
(8.8
|
)
|
|
(7.1
|
)
|
||
Balance at end of period
|
$
|
36.2
|
|
|
$
|
44.1
|
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2:
|
Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
|
Level 3:
|
Unobservable inputs for the asset or liability.
|
|
|
|
Fair Value (Level 2)
|
||||||
Derivatives Designated as Hedging Instruments
|
Balance Sheet Location
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
Forward exchange contracts
|
Other current assets
|
|
$
|
6.4
|
|
|
$
|
8.7
|
|
Forward exchange contracts
|
Other assets
|
|
0.3
|
|
|
1.3
|
|
||
Forward exchange contracts
|
Other current liabilities
|
|
(6.8
|
)
|
|
(8.4
|
)
|
||
Forward exchange contracts
|
Other liabilities
|
|
(1.3
|
)
|
|
(1.5
|
)
|
||
Total
|
|
|
$
|
(1.4
|
)
|
|
$
|
0.1
|
|
|
|
|
Fair Value (Level 2)
|
||||||
Derivatives Not Designated as Hedging Instruments
|
Balance Sheet Location
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
Forward exchange contracts
|
Other current assets
|
|
$
|
3.1
|
|
|
$
|
2.3
|
|
Forward exchange contracts
|
Other assets
|
|
—
|
|
|
0.1
|
|
||
Forward exchange contracts
|
Other current liabilities
|
|
(6.2
|
)
|
|
(13.1
|
)
|
||
Forward exchange contracts
|
Other liabilities
|
|
(0.3
|
)
|
|
—
|
|
||
Total
|
|
|
$
|
(3.4
|
)
|
|
$
|
(10.7
|
)
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Forward exchange contracts (cash flow hedges)
|
$
|
(0.7
|
)
|
|
$
|
(1.9
|
)
|
Foreign currency denominated debt (net investment hedges)
|
(0.1
|
)
|
|
—
|
|
||
Total
|
$
|
(0.8
|
)
|
|
$
|
(1.9
|
)
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Sales
|
$
|
(0.4
|
)
|
|
$
|
(0.2
|
)
|
Cost of sales
|
1.2
|
|
|
2.7
|
|
||
Total
|
$
|
0.8
|
|
|
$
|
2.5
|
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Other (expense) income
|
$
|
0.3
|
|
|
$
|
(6.0
|
)
|
|
December 31, 2012
|
||||||||||||||||||
|
|
|
Fair Value
|
||||||||||||||||
|
Carrying Amount
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Cash and cash equivalents
|
$
|
954.3
|
|
|
$
|
954.3
|
|
|
$
|
846.3
|
|
|
$
|
108.0
|
|
|
$
|
—
|
|
Short-term investments
|
350.0
|
|
|
350.0
|
|
|
—
|
|
|
350.0
|
|
|
—
|
|
|||||
Short-term debt
|
253.0
|
|
|
253.0
|
|
|
—
|
|
|
253.0
|
|
|
—
|
|
|||||
Long-term debt
|
905.0
|
|
|
1,181.7
|
|
|
—
|
|
|
1,181.7
|
|
|
—
|
|
|
September 30, 2012
|
||||||||||||||||||
|
|
|
Fair Value
|
||||||||||||||||
|
Carrying Amount
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Cash and cash equivalents
|
$
|
903.9
|
|
|
$
|
903.9
|
|
|
$
|
779.4
|
|
|
$
|
124.5
|
|
|
$
|
—
|
|
Short-term investments
|
350.0
|
|
|
350.0
|
|
|
—
|
|
|
350.0
|
|
|
—
|
|
|||||
Short-term debt
|
157.0
|
|
|
157.0
|
|
|
—
|
|
|
157.0
|
|
|
—
|
|
|||||
Long-term debt
|
905.0
|
|
|
1,187.9
|
|
|
—
|
|
|
1,187.9
|
|
|
—
|
|
|
Pension Benefits
|
||||||
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Service cost
|
$
|
23.1
|
|
|
$
|
17.9
|
|
Interest cost
|
40.2
|
|
|
41.9
|
|
||
Expected return on plan assets
|
(56.8
|
)
|
|
(57.0
|
)
|
||
Amortization:
|
|
|
|
||||
Prior service credit
|
(0.6
|
)
|
|
(0.6
|
)
|
||
Net actuarial loss
|
36.3
|
|
|
23.7
|
|
||
Net periodic benefit cost
|
$
|
42.2
|
|
|
$
|
25.9
|
|
|
Other Postretirement
Benefits
|
||||||
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Service cost
|
$
|
0.6
|
|
|
$
|
0.5
|
|
Interest cost
|
1.6
|
|
|
1.8
|
|
||
Amortization:
|
|
|
|
||||
Prior service credit
|
(2.7
|
)
|
|
(2.6
|
)
|
||
Net actuarial loss
|
1.1
|
|
|
0.6
|
|
||
Net periodic benefit cost
|
$
|
0.6
|
|
|
$
|
0.3
|
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Sales
|
|
|
|
||||
Architecture & Software
|
$
|
657.5
|
|
|
$
|
650.5
|
|
Control Products & Solutions
|
831.7
|
|
|
823.4
|
|
||
Total
|
$
|
1,489.2
|
|
|
$
|
1,473.9
|
|
Segment operating earnings
|
|
|
|
||||
Architecture & Software
|
$
|
183.2
|
|
|
$
|
189.2
|
|
Control Products & Solutions
|
92.8
|
|
|
102.7
|
|
||
Total
|
276.0
|
|
|
291.9
|
|
||
Purchase accounting depreciation and amortization
|
(5.2
|
)
|
|
(5.0
|
)
|
||
General corporate – net
|
(18.5
|
)
|
|
(20.2
|
)
|
||
Non-operating pension costs
1
|
(19.7
|
)
|
|
(8.8
|
)
|
||
Interest expense
|
(15.4
|
)
|
|
(15.0
|
)
|
||
Income before income taxes
|
$
|
217.2
|
|
|
$
|
242.9
|
|
•
|
macroeconomic factors, including global and regional business conditions, the availability and cost of capital, the cyclical nature of our customers’ capital spending, sovereign debt concerns and currency exchange rates;
|
•
|
laws, regulations and governmental policies affecting our activities in the countries where we do business;
|
•
|
the successful development of advanced technologies and demand for and market acceptance of new and existing products;
|
•
|
the availability, effectiveness and security of our information technology systems;
|
•
|
competitive products, services and solutions and pricing pressures, and our ability to provide high quality products, services and solutions;
|
•
|
a disruption of our operations and supply chain due to natural disasters, acts of war, strikes, terrorism, social unrest or other causes;
|
•
|
our ability to protect confidential information and enforce our intellectual property rights;
|
•
|
our ability to successfully address claims by taxing authorities in the various jurisdictions where we do business;
|
•
|
our ability to attract and retain qualified personnel;
|
•
|
our ability to manage costs related to employee retirement and health care benefits;
|
•
|
the uncertainties of litigation, including liabilities related to the safety and security of the products, services and solutions we sell or to alleged intellectual property infringements;
|
•
|
our ability to manage and mitigate the risks associated with our solutions business;
|
•
|
a disruption of our distribution channels;
|
•
|
the availability and price of components and materials;
|
•
|
the successful integration and management of acquired businesses;
|
•
|
the successful execution of our cost productivity and globalization initiatives; and
|
•
|
other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings.
|
•
|
investments in manufacturing, including upgrades, modifications and expansions of existing facilities or production lines, and the creation of new facilities or production lines;
|
•
|
investments in basic materials production capacity, partly in response to higher commodity pricing;
|
•
|
our customers’ needs for productivity and cost reduction, sustainable production (cleaner, safer and more energy efficient), quality assurance and overall global competitiveness;
|
•
|
industry factors that include our customers’ new product introductions, demand for our customers’ products or services, and the regulatory and competitive environments in which our customers operate;
|
•
|
levels of global industrial production and capacity utilization;
|
•
|
regional factors that include local political, social, regulatory and economic circumstances; and
|
•
|
the spending patterns of our customers due to their annual budgeting processes and their working schedule.
|
•
|
achieve growth rates in excess of the automation market by expanding our served market and strengthening our competitive differentiation;
|
•
|
diversify our revenue streams by broadening our portfolio of products, services and solutions, expanding our global presence and serving a wider range of customer applications;
|
•
|
grow market share by gaining new customers and by capturing a larger share of existing customers’ spending;
|
•
|
enhance our market access by building our channel capability and partner network;
|
•
|
make acquisitions that serve as catalysts to organic growth by adding complementary technology, expanding our served market, increasing our domain expertise or continuing our geographic diversification;
|
•
|
deploy human and financial resources to strengthen our technology leadership and our intellectual capital business model; and
|
•
|
continuously improve quality and customer experience and drive annual cost productivity.
|
•
|
The Industrial Production Index (Total Index), published by the Federal Reserve, which measures the real output of manufacturing, mining, and electric and gas utilities. The Industrial Production Index is expressed as a percentage of real output in a base year, currently 2007. Historically there has been a meaningful correlation between the changes in the Industrial Production Index and the level of automation investment made by our U.S. customers in their manufacturing base.
|
•
|
The Manufacturing Purchasing Managers’ Index (PMI), published by the Institute for Supply Management (ISM), which is an indicator of the current and near-term state of manufacturing activity in the U.S. According to the ISM, a PMI measure above 50 indicates that the U.S. manufacturing economy is generally expanding while a measure below 50 indicates that it is generally contracting.
|
•
|
Industrial Equipment Spending, which is an economic statistic compiled by the Bureau of Economic Analysis (BEA). This statistic provides insight into spending trends in the broad U.S. industrial economy. This measure over the longer term has proven to demonstrate a reasonable correlation with our domestic growth.
|
•
|
Capacity Utilization (Total Industry), which is an indicator of plant operating activity published by the Federal Reserve. Historically there has been a meaningful correlation between Capacity Utilization and levels of U.S. industrial production.
|
|
Industrial
Production
Index
|
|
PMI
|
|
Industrial
Equipment
Spending
(in billions)
|
|
Capacity
Utilization
(percent)
|
|||
Fiscal 2013
|
|
|
|
|
|
|
|
|||
Quarter ended:
|
|
|
|
|
|
|
|
|||
December 2012
|
97.6
|
|
|
50.7
|
|
|
$202.8
|
|
78.5
|
|
Fiscal 2012
|
|
|
|
|
|
|
|
|||
Quarter ended:
|
|
|
|
|
|
|
|
|||
September 2012
|
97.4
|
|
|
51.5
|
|
|
198.0
|
|
78.6
|
|
June 2012
|
97.3
|
|
|
49.7
|
|
|
197.8
|
|
78.9
|
|
March 2012
|
96.7
|
|
|
53.4
|
|
|
190.7
|
|
78.7
|
|
December 2011
|
95.3
|
|
|
53.1
|
|
|
196.6
|
|
77.9
|
|
Fiscal 2011
|
|
|
|
|
|
|
|
|||
Quarter ended:
|
|
|
|
|
|
|
|
|||
September 2011
|
94.2
|
|
|
52.5
|
|
|
187.0
|
|
77.1
|
|
•
|
Sales related to our process initiative declined approximately 2 percent in the
first
quarter of
2013
due to low beginning solutions backlog and project delays.
|
•
|
Logix organic sales in the
first
quarter of
2013
increased 5 percent year over year.
|
•
|
Organic sales in emerging markets were essentially flat year over year. Strong growth in emerging EMEA and Latin America was mostly offset by declines in Asia Pacific, particularly China and India. Emerging markets represented
20 percent
of total company sales in the
first
quarter of
2013
.
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Sales
|
|
|
|
||||
Architecture & Software
|
$
|
657.5
|
|
|
$
|
650.5
|
|
Control Products & Solutions
|
831.7
|
|
|
823.4
|
|
||
Total sales (a)
|
$
|
1,489.2
|
|
|
$
|
1,473.9
|
|
Segment operating earnings
1
|
|
|
|
||||
Architecture & Software
|
$
|
183.2
|
|
|
$
|
189.2
|
|
Control Products & Solutions
|
92.8
|
|
|
102.7
|
|
||
Total segment operating earnings
2
(b)
|
276.0
|
|
|
291.9
|
|
||
Purchase accounting depreciation and amortization
|
(5.2
|
)
|
|
(5.0
|
)
|
||
General corporate — net
|
(18.5
|
)
|
|
(20.2
|
)
|
||
Non-operating pension costs
3
|
(19.7
|
)
|
|
(8.8
|
)
|
||
Interest expense
|
(15.4
|
)
|
|
(15.0
|
)
|
||
Income before income taxes
|
217.2
|
|
|
242.9
|
|
||
Income tax provision
|
(55.8
|
)
|
|
(59.6
|
)
|
||
Net income
|
$
|
161.4
|
|
|
$
|
183.3
|
|
|
|
|
|
||||
Diluted EPS
|
$
|
1.14
|
|
|
$
|
1.27
|
|
|
|
|
|
||||
Adjusted EPS
|
$
|
1.23
|
|
|
$
|
1.31
|
|
|
|
|
|
||||
Diluted weighted average outstanding shares
|
141.2
|
|
|
143.9
|
|
||
Total segment operating margin
2
(b/a)
|
18.5
|
%
|
|
19.8
|
%
|
(1)
|
See Note 13 in the Condensed Consolidated Financial Statements for the definition of segment operating earnings.
|
(2)
|
Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We believe that these measures are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.
|
(3)
|
Beginning in fiscal 2013, we redefined segment operating earnings to exclude non-operating pension costs. Non-operating pension costs were reclassified to a separate line item within the above table for all periods presented. These costs were previously included in segment operating earnings and in general corporate-net. We continue to include service cost and amortization of prior service cost in the business segment that incurred the expense as these costs represent the operating cost of providing pension benefits to our employees.
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2012
|
|
2011
|
||||
Income from continuing operations
|
|
$
|
161.4
|
|
|
$
|
183.3
|
|
Non-operating pension costs
|
|
19.7
|
|
|
8.8
|
|
||
Tax effect of non-operating pension costs
|
|
(7.2
|
)
|
|
(3.1
|
)
|
||
Adjusted Income
|
|
$
|
173.9
|
|
|
$
|
189.0
|
|
|
|
|
|
|
||||
Diluted EPS from continuing operations
|
|
$
|
1.14
|
|
|
$
|
1.27
|
|
Non-operating pension costs per diluted share, before tax
|
|
0.14
|
|
|
0.06
|
|
||
Tax effect of non-operating pension costs per diluted share
|
|
(0.05
|
)
|
|
(0.02
|
)
|
||
Adjusted EPS
|
|
$
|
1.23
|
|
|
$
|
1.31
|
|
|
|
|
|
|
||||
Effective tax rate
|
|
25.7
|
%
|
|
24.5
|
%
|
||
Tax effect of non-operating pension costs
|
|
0.9
|
%
|
|
0.4
|
%
|
||
Adjusted Effective Tax Rate
|
|
26.6
|
%
|
|
24.9
|
%
|
|
|
Three Months Ended
December 31, |
||||||||||
(in millions, except per share amounts)
|
|
2012
|
|
2011
|
|
Change
|
||||||
Sales
|
|
$
|
1,489.2
|
|
|
$
|
1,473.9
|
|
|
$
|
15.3
|
|
Income before income taxes
|
|
217.2
|
|
|
242.9
|
|
|
(25.7
|
)
|
|||
Diluted EPS
|
|
1.14
|
|
|
1.27
|
|
|
(0.13
|
)
|
|||
Adjusted EPS
|
|
1.23
|
|
|
1.31
|
|
|
(0.08
|
)
|
|
|
|
Change vs.
|
|
Change in Organic Sales vs.
|
||||
|
Three Months Ended December 31, 2012
|
|
Three Months Ended December 31, 2011
|
|
Three Months Ended December 31, 2011
|
||||
United States
|
$
|
761.1
|
|
|
6
|
%
|
|
6
|
%
|
Canada
|
106.3
|
|
|
1
|
%
|
|
(2
|
)%
|
|
Europe, Middle East and Africa
|
296.1
|
|
|
(6
|
)%
|
|
(2
|
)%
|
|
Asia-Pacific
|
197.4
|
|
|
(7
|
)%
|
|
(9
|
)%
|
|
Latin America
|
128.3
|
|
|
4
|
%
|
|
7
|
%
|
|
Total Sales
|
$
|
1,489.2
|
|
|
1
|
%
|
|
1.5
|
%
|
•
|
Organic sales growth in the United States was driven primarily by transportation and oil and gas industries, as consumer industries lagged the region growth rate.
|
•
|
EMEA's organic sales declined due to flat OEM demand and lower beginning solutions backlog. EMEA emerging markets saw strong double-digit organic growth.
|
•
|
Asia-Pacific organic sales declined due to significant declines in China and India, partially offset by sales growth in the balance of the region.
|
•
|
Organic sales growth in Latin America was led by strong growth in Brazil.
|
|
|
Three Months Ended
December 31, |
|
||||||||||
(in millions, except percentages)
|
|
2012
|
|
2011
|
|
Change
|
|
||||||
Sales
|
|
$
|
657.5
|
|
|
$
|
650.5
|
|
|
$
|
7.0
|
|
|
Segment operating earnings
|
|
183.2
|
|
|
189.2
|
|
|
(6.0
|
)
|
|
|||
Segment operating margin
|
|
27.9
|
%
|
|
29.1
|
%
|
|
(1.2
|
)
|
pts
|
|
|
Three Months Ended
December 31, |
|
||||||||||
(in millions, except percentages)
|
|
2012
|
|
2011
|
|
Change
|
|
||||||
Sales
|
|
$
|
831.7
|
|
|
$
|
823.4
|
|
|
$
|
8.3
|
|
|
Segment operating earnings
|
|
92.8
|
|
|
102.7
|
|
|
(9.9
|
)
|
|
|||
Segment operating margin
|
|
11.2
|
%
|
|
12.5
|
%
|
|
(1.3
|
)
|
pts
|
|
Three Months Ended
December 31, |
||||||
|
2012
|
|
2011
|
||||
Cash provided by (used for):
|
|
|
|
||||
Operating activities
|
$
|
167.3
|
|
|
$
|
(189.0
|
)
|
Investing activities
|
(105.8
|
)
|
|
(190.7
|
)
|
||
Financing activities
|
(13.7
|
)
|
|
294.9
|
|
||
Effect of exchange rate changes on cash
|
9.6
|
|
|
(19.9
|
)
|
||
Cash provided by (used for) continuing operations
|
$
|
57.4
|
|
|
$
|
(104.7
|
)
|
|
|
|
|
||||
The following table summarizes free cash flow (in millions):
|
|
|
|
||||
Cash provided by continuing operating activities
|
$
|
167.3
|
|
|
$
|
(189.0
|
)
|
Capital expenditures of continuing operations
|
(21.6
|
)
|
|
(31.6
|
)
|
||
Excess income tax benefit from share-based compensation
|
10.6
|
|
|
9.8
|
|
||
|
|
|
|
||||
Free cash flow
|
$
|
156.3
|
|
|
$
|
(210.8
|
)
|
Credit Rating Agency
|
|
Short-Term
Rating
|
|
Long-Term
Rating
|
|
Outlook
|
Standard & Poor’s
|
|
A-1
|
|
A
|
|
Stable
|
Moody’s
|
|
P-2
|
|
A3
|
|
Stable
|
Fitch Ratings
|
|
F1
|
|
A
|
|
Stable
|
|
Three Months Ended December 31, 2012
|
|
Three Months Ended December 31, 2011
|
|||||||||||||||||||||
Sales
|
|
Effect of
Changes in
Currency
|
|
Sales
Excluding
Effect of
Changes in
Currency
|
|
Effect of
Acquisitions
|
|
Organic
Sales
|
|
Sales
|
||||||||||||||
United States
|
$
|
761.1
|
|
|
$
|
(0.9
|
)
|
|
$
|
760.2
|
|
|
$
|
(1.5
|
)
|
|
$
|
758.7
|
|
|
$
|
717.6
|
|
|
Canada
|
106.3
|
|
|
(3.2
|
)
|
|
103.1
|
|
|
—
|
|
|
103.1
|
|
|
105.2
|
|
|||||||
Europe, Middle East and Africa
|
296.1
|
|
|
12.8
|
|
|
308.9
|
|
|
—
|
|
|
308.9
|
|
|
315.0
|
|
|||||||
Asia-Pacific
|
197.4
|
|
|
(2.2
|
)
|
|
195.2
|
|
|
(1.7
|
)
|
|
193.5
|
|
|
213.2
|
|
|||||||
Latin America
|
128.3
|
|
|
3.4
|
|
|
131.7
|
|
|
—
|
|
|
131.7
|
|
|
122.9
|
|
|||||||
Total Company Sales
|
$
|
1,489.2
|
|
|
$
|
9.9
|
|
|
$
|
1,499.1
|
|
|
$
|
(3.2
|
)
|
|
$
|
1,495.9
|
|
|
$
|
1,473.9
|
|
|
Three Months Ended December 31, 2012
|
|
Three Months Ended December 31, 2011
|
||||||||||||||||||||
|
Sales
|
|
Effect of
Changes in
Currency
|
|
Sales
Excluding
Effect of
Changes in
Currency
|
|
Effect of
Acquisitions
|
|
Organic
Sales
|
|
Sales
|
||||||||||||
Architecture & Software
|
$
|
657.5
|
|
|
$
|
6.6
|
|
|
$
|
664.1
|
|
|
$
|
—
|
|
|
$
|
664.1
|
|
|
$
|
650.5
|
|
Control Products & Solutions
|
831.7
|
|
|
3.3
|
|
|
835.0
|
|
|
(3.2
|
)
|
|
831.8
|
|
|
823.4
|
|
||||||
Total Company Sales
|
$
|
1,489.2
|
|
|
$
|
9.9
|
|
|
$
|
1,499.1
|
|
|
$
|
(3.2
|
)
|
|
$
|
1,495.9
|
|
|
$
|
1,473.9
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Approx. Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
||||||
October 1 - 31, 2012
|
|
560,000
|
|
|
$
|
69.88
|
|
|
560,000
|
|
|
$
|
897,540,191
|
|
November 1 - 30, 2012
|
|
269,407
|
|
|
77.62
|
|
|
269,407
|
|
|
876,628,368
|
|
||
December 1 - 31, 2012
|
|
340,000
|
|
|
81.58
|
|
|
340,000
|
|
|
848,891,536
|
|
||
Total
|
|
1,169,407
|
|
|
75.07
|
|
|
1,169,407
|
|
|
|
(1)
|
Average price paid per share includes brokerage commissions.
|
(2)
|
On June 7, 2012, the Board of Directors authorized us to expend up to $1.0 billion to repurchase shares of our common stock. Our repurchase program allows management to repurchase shares at its discretion. However, during quarterly “quiet periods,” defined as the period of time from quarter-end until two business days following the furnishing of our quarterly earnings results to the SEC on Form 8-K, shares are repurchased at our broker’s discretion pursuant to a share repurchase plan subject to price and volume parameters.
|
Exhibit 10.1*
|
|
—
|
|
Form of Stock Option Agreement under the Company's 2012 Long-Term Incentives Plan for options granted to executive officers of the Company after December 5, 2012.
|
Exhibit 10.2*
|
|
—
|
|
Form of Restricted Stock Agreement under the Company's 2012 Long-Term Incentives Plan for shares of restricted stock awarded to executive officers of the Company after December 5, 2012.
|
Exhibit 10.3*
|
|
—
|
|
Form of Performance Share Agreement under the Company's 2012 Long-Term Incentives Plan for performance shares awarded to executive officers of the Company after December 5, 2012.
|
Exhibit 15
|
|
—
|
|
Letter of Deloitte & Touche LLP regarding Unaudited Financial Information.
|
Exhibit 31.1
|
|
—
|
|
Certification of Periodic Report by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
Exhibit 31.2
|
|
—
|
|
Certification of Periodic Report by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
Exhibit 32.1
|
|
—
|
|
Certification of Periodic Report by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Exhibit 32.2
|
|
—
|
|
Certification of Periodic Report by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Exhibit 101
|
|
—
|
|
Interactive Data Files.
|
|
|
|
ROCKWELL AUTOMATION, INC.
(Registrant)
|
||
|
|
|
|
||
Date:
|
February 6, 2013
|
|
By
|
|
/s/ T
HEODORE
D. C
RANDALL
|
|
|
|
|
|
Theodore D. Crandall
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
Date:
|
February 6, 2013
|
|
By
|
|
/s/ D
AVID
M. D
ORGAN
|
|
|
|
|
|
David M. Dorgan
Vice President and Controller
(Principal Accounting Officer)
|
Exhibit No.
|
|
Exhibit
|
10.1*
|
|
Form of Stock Option Agreement under the Company's 2012 Long-Term Incentives Plan for options granted to executive officers of the Company after December 5, 2012.
|
10.2*
|
|
Form of Restricted Stock Agreement under the Company's 2012 Long-Term Incentives Plan for shares of restricted stock awarded to executive officers of the Company after December 5, 2012.
|
10.3*
|
|
Form of Performance Share Agreement under the Company's 2012 Long-Term Incentives Plan for performance shares awarded to executive officers of the Company after December 5, 2012.
|
15
|
|
Letter of Deloitte & Touche LLP regarding Unaudited Financial Information.
|
31.1
|
|
Certification of Periodic Report by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
31.2
|
|
Certification of Periodic Report by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
|
32.1
|
|
Certification of Periodic Report by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of Periodic Report by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
|
Interactive Data Files.
|
Date of Grant
|
Type of Grant
|
Number of Shares
|
Option Price
|
12/6/2012
|
ISO
|
|
$
|
12/6/2012
|
NQ
|
|
$
|
(a)
|
during your employment with the Corporation or a Subsidiary (as such terms are defined in the Plan) and for two years after the date of your retirement or other termination of such employment, you shall not (i) directly or indirectly, except with the approval of the Corporation, engage or otherwise participate in any business that is competitive with any significant line of business of the Corporation or any of its Subsidiaries (otherwise than through ownership of not more than 5% of the voting securities of any such competitive business); or (ii) solicit or induce, or cause any other person or entity to solicit, any employee of the Corporation or any of its Subsidiaries to leave his or her employment with the Corporation or any of its Subsidiaries to accept employment or other engagement with any other person or entity; and
|
(b)
|
in the event that you breach this undertaking, in addition to any and all other remedies the Corporation may have, (i) the Corporation shall have the right to determine by written notice to you that any of the Options then outstanding shall immediately lapse and cease to be exercisable; and (ii) you agree to pay the Corporation upon written demand the amount of the excess of the Fair Market Value (as defined in the Plan) of any shares of Stock (as defined in the Plan) you acquired upon exercise of any of the Options (other than Options exercised more than two years before the date of your retirement or other termination of employment) over the exercise price for such Stock.
|
Agreed to:
|
|
ROCKWELL AUTOMATION, INC.
|
Date: __________________________
|
|
By:
|
|
|
|
_______________________________
|
|
|
Employee Signature
|
|
Douglas M. Hagerman
|
|
|
Senior Vice President,
|
<employee id>
|
|
General Counsel and Secretary
|
1.
|
Definitions
|
(a)
|
Change of Control
: Change of Control shall have the same meaning as such term has in the Plan.
|
(b)
|
Charles Schwab
: Charles Schwab & Co., Inc., the stock option administrator whom Rockwell Automation has engaged to administer and process all Option exercises.
|
(c)
|
Corporation
: Rockwell Automation and its Subsidiaries (as such term is defined in the Plan).
|
(d)
|
Customer Service Center
: Charles Schwab's Customer Service Center that is used to facilitate Option transactions. Contact Charles Schwab at (877) 804-3529.
|
(e)
|
Exercise Request and Attestation Form
: Such form as may be accepted by Charles Schwab in connection with the use of already-owned shares to pay all or part of the exercise price for the Option Stock to be purchased on exercise of any of the Options.
|
(f)
|
Notice of Exercise Form
: The form attached as Exhibit 1 or any other form accepted by the Secretary of Rockwell Automation in his sole discretion.
|
(g)
|
Options
: The stock option or stock options listed in the first paragraph of the Stock Option Agreement dated December 6, 2012 to which these Stock Option Terms and Conditions are attached.
|
(h)
|
Option Stock
: The Stock issuable or transferable on exercise of the Options.
|
(i)
|
Plan
: Rockwell Automation’s 2012 Long-Term Incentives Plan, as such Plan may be amended and in effect at the relevant time.
|
(j)
|
Rockwell Automation
: Rockwell Automation, Inc., a Delaware corporation, and any successor thereto.
|
(k)
|
Stock
: Stock shall have the same meaning as such term has in the Plan.
|
(l)
|
Stock Option Agreement
: These Stock Option Terms and Conditions together with the Stock Option Agreement dated December 6, 2012 to which they are attached.
|
2.
|
When Options May be Exercised
|
(a)
|
if you die while an Employee (as defined in the Plan), your estate, or any person who acquires the Options by bequest or inheritance, may exercise all the Options not theretofore exercised within (and only within) the period beginning on your date of death (even if you die before you have become entitled to exercise all or any part of the Options) and ending three years thereafter; and
|
(b)
|
if your employment by the Corporation terminates other than by death, then:
|
(i)
|
if your retirement or other termination date is before December 6, 2013, the Options will terminate on your retirement or other termination and may not be exercised at any time;
|
(ii)
|
if your employment by the Corporation is terminated for “cause” (as reasonably determined by the Corporation applying the definition in this Agreement), the Options will immediately terminate upon your termination and may not be exercised at any time;
|
(iii)
|
if your employment by the Corporation terminates on or after December 6, 2013 by reason of your retirement, you (or if you die after your retirement date, your estate or any person who acquires the Options by bequest or inheritance) may thereafter exercise the Options within (and only within) the period starting on the date you would otherwise have become entitled to exercise the part of the Options so exercised and ending on the fifth anniversary of your retirement date; and
|
(iv)
|
if your employment by the Corporation terminates on or after December 6, 2013 for any reason not specified in subparagraph (a) or in clauses (ii) or (iii) of this subparagraph (b), you (or if you die after your termination date, your estate or any person who acquires the Options by bequest or inheritance) may thereafter exercise the Options within (and only within) the period ending three (3) months after your termination date but only to the extent they were exercisable on your termination date.
|
3.
|
Exercise Procedure
|
(a)
|
To exercise all or any part of the Options, you (or after your death, your estate or any person who has acquired the Options by bequest or inheritance) must first obtain authorization from Rockwell Automation's Office of the Secretary by submitting a Notice of Exercise Form to Rockwell Automation's Office of the Secretary (Attention: Stock Option Administration; facsimile number (414) 382-8487) or by other means acceptable to the Secretary of Rockwell Automation, and then contact the stock option administrator, Charles Schwab, by using the Customer Service Center as follows:
|
(i)
|
contact the Customer Service Center by calling (877) 804-3529, Monday through Friday 9 a.m. to 9 p.m., ET, and follow the instructions provided;
|
(ii)
|
the Customer Service Center confirms the Option transaction;
|
(iii)
|
full payment of the exercise price for the Option Stock to be purchased on exercise of the Options may be made:
|
•
|
by check (wire) to your Charles Schwab account; or
|
•
|
in already-owned Stock; or
|
•
|
in a combination of check (wire) to your Charles Schwab account and Stock; or
|
•
|
by authorizing Charles Schwab or a third party approved by Rockwell Automation to sell the Stock (or a sufficient portion of the Stock) acquired upon exercise of the Options; and
|
(iv)
|
in the case of an exercise of the Options by any person other than you seeking to exercise the Options, such documents as Charles Schwab or the Secretary of Rockwell Automation shall require to establish to their satisfaction that the person seeking to exercise the Options is entitled to do so.
|
(b)
|
An exercise of the whole or any part of the Options shall be effective:
|
(i)
|
if you elect (or after your death, the person entitled to exercise the Options elects) to pay the exercise price for the Option Stock entirely by check (wire), upon
|
(ii)
|
if you elect (or after your death, the person entitled to exercise the Options elects) to pay the exercise price of the Option Stock in Stock or in a combination of Stock and check, upon (A) completion of your transaction by using the Customer Service Center and full payment of the exercise price (as described in Section 3(d) herein) and withholding taxes (if applicable) are received by Charles Schwab within three (3) business days following the exercise; and (B) receipt of any documents required pursuant to Section 3(a)(iv) herein.
|
(c)
|
If you choose (or after your death, the person entitled to exercise the Options chooses) to pay the exercise price for the Option Stock to be purchased on exercise of any of the Options entirely by check, payment must be made by:
|
•
|
delivering to Charles Schwab a check (wire) in the full amount of the exercise price of such Option Stock; or
|
•
|
arranging with a stockbroker, bank or other financial institution to deliver to Charles Schwab full payment, by check or (if prior arrangements are made with Charles Schwab) by wire transfer, of the exercise price of such Option Stock .
|
(d)
|
(i) If you choose (or after your death, the person entitled to exercise the Options chooses) to use already-owned Stock to pay all or part of the exercise price for the Option Stock to be purchased on exercise of any of the Options, you (or after your death, the person entitled to exercise the Options) must deliver to Charles Schwab an Exercise Request and Attestation Form and cash representing one share, per grant exercised, to settle the rounding of the exercise costs. To perform such a stock swap transaction or a partial swap transaction, the Exercise Request and Attestation Form must be submitted via fax (720) 785-8884 by 4 PM ET on the date of exercise. Any questions concerning a stock swap transaction should be referred to (877) 636-7551 (Stock Option Administration Group Hotline). The Exercise Request and Attestation Form must attest to your ownership of Stock representing:
|
•
|
at least the number of shares of Stock whose value, based on the Fair Market Value (as defined in the Plan) on the day you have exercised your Options through the Customer Service Center, equals the exercise price for the Option Stock; or
|
•
|
any lesser number of shares of Stock you desire (or after your death, the person entitled to exercise the Options desires) to use to pay the exercise price for such Option Stock and a check in the amount of such exercise price less the value of the Stock to which you are attesting, based on the Fair Market Value on the day you have exercised your Options through the Customer Service Center.
|
(ii)
|
If you choose (or after your death, the person entitled to exercise the Options chooses) to use Stock acquired upon exercise of the Options to pay all or part of the exercise price for the remaining Option Stock to be purchased on exercise of any of the Options, you (or after your death, the person entitled to exercise the Options) must contact the Customer Service Center at (877) 804-3529.
|
(iii)
|
Charles Schwab will advise you (or any other person who, being entitled to do so, exercises the Options) of the exact number of shares of Stock, valued in accordance with Section 4(a)(ii) of the Plan at their Fair Market Value on the date of exercise, and any funds required to pay in full the exercise price for the Option Stock purchased. In accordance with Section 3(e) herein, you (or such other person) must pay, by check, in Stock or in a combination of check and Stock, any balance required to pay in full the exercise price of the Option Stock purchased within three (3) business days after the exercise has been completed through the Customer Service Center.
|
(iv)
|
Notwithstanding any other provision of this Stock Option Agreement, the Secretary of Rockwell Automation may limit the number, frequency or volume of successive exercises of any of the Options in which payment is made, in whole or in part, by delivery of Stock pursuant to this subparagraph (d) to prevent unreasonable pyramiding of such exercises.
|
(e)
|
An exercise completed through the Customer Service Center, whether or not full payment of the exercise price for the Option Stock is received by Charles Schwab, shall constitute a binding contractual obligation by you (or the other person entitled to exercise the Options) to proceed with and conclude that exercise of the Options (but only so long as you continue, or the other person entitled to exercise the Options continues, to be entitled to exercise the Options on that date). By your acceptance of this Stock Option Agreement, you agree (for yourself and on behalf of any other person who becomes entitled to exercise the Options) to deliver or cause to be delivered to Charles Schwab in full the exercise price for the Option Stock, that payment being by check, wire transfer, in Stock or in a combination of check and Stock, on or before the third business day after the date on which you complete the exercise through the Customer Service Center. If such payment is not made, you (for yourself and on behalf of any other person who becomes entitled to exercise the Options) authorize the Corporation, in its discretion, to set off against salary payments or other amounts due or which may become due you (or the other person entitled to exercise the Options) any balance of the exercise price for such Option Stock remaining unpaid thereafter.
|
(f)
|
An Exercise Confirmation representing the number of shares of Option Stock purchased will be issued the third business day (i) after Charles Schwab has received full payment therefor or (ii) at Rockwell Automation’s or Charles Schwab’s election in their sole discretion, after Rockwell Automation or Charles Schwab has received (x) full payment of the exercise price of the Option Stock and (y) any reimbursement in respect of withholding taxes due pursuant to Section 5 herein.
|
4.
|
Transferability
|
5.
|
Withholding
|
6.
|
Headings
|
7.
|
References
|
8.
|
Entire Agreement
|
9.
|
Applicable Laws and Regulations
|
Exhibit 1
|
Notice of Exercise Form
|
•
|
A check payable to the Rockwell Automation Employee Stock Option Program or a wire transfer to Charles Schwab for credit to the Rockwell Automation Employee Stock Option Program in the amount of the Total Purchase Price of the above-itemized stock option(s);
or
|
•
|
A number of shares of Rockwell Automation Common Stock surrendered or sold to pay the Total Purchase Price of the above-itemized stock option(s);
or
|
•
|
A combination of (i) a check payable to the Rockwell Automation Employee Stock Option Program or a wire transfer to Charles Schwab for credit to the Rockwell Automation Employee Stock Option Program, and (ii) a number of Shares surrendered or sold; which together amount to the Total Purchase Price of the above-itemized stock option(s).
|
|
Signature
|
|
Print Name
|
|
Date
|
/s/ K
EITH
D. N
OSBUSCH
|
Keith D. Nosbusch
Chairman, President and
Chief Executive Officer
|
|
|
/
S
/ T
HEODORE
D. C
RANDALL
|
Theodore D. Crandall
Senior Vice President and
Chief Financial Officer
|
/
S
/ K
EITH
D. N
OSBUSCH
|
Keith D. Nosbusch
Chairman, President and
Chief Executive Officer
|
/
S
/ T
HEODORE
D. C
RANDALL
|
Theodore D. Crandall
Senior Vice President and
Chief Financial Officer
|