BANNER AEROSPACE, INC.
DEFERRED BONUS PLAN
January 21,1998; Amended January 7, 1999; and Amended April 8,
1999
Section 1. Purpose
This Plan permits Recipients to elect to defer payment of their
Bonus.
Section 2. Definitions
(a) "Bonus" means the amount of Bonus (payable in shares of
AlliedSignal,
Inc. common stock) a Participant is entitled to receive
as determined
by the Committee in connection with 1998 or 1999
Extraordinary
Transactions .
(b) "Bonus Deferral Election" means an election to defer
payment of a
Bonus until a date specified by the Participant, which
date shall not
be later than December 31, 2005.
(c) "Bonus Deferral Participant" means a Recipient who has
made a Bonus
Deferral Election and who has been designated by the
Committee as
eligible to participate in the Plan.
(d) "Committee" means the Compensation and Stock Option
Committee of the
Board, which Committee shall administer this Plan, as
provided in
Section 10 hereof.
(e) "Corporation" means Banner Aerospace, Inc. and its
corporate
successors.
(f) "Deferred Bonus" means Bonus deferred pursuant to the
terms of this
Plan.
(g) "Deferred Bonus Account" means the account or accounting
entry which
signifies the total amount of Deferred Bonus for a
particular fiscal
year with respect to each Bonus Deferral Participant.
(h) "Deferred Bonus Election Form" means the form by which
an eligible
person elects to become a Bonus Deferral Participant.
(i) "Designation of Beneficiary Form" means the form by
which a
Participant designates a beneficiary or beneficiaries,
or modifies a
prior designation of a beneficiary or beneficiaries.
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(j) "Participant" means a Recipient who is a Bonus Deferral
Participant.
(k) "Plan" shall mean this Deferred Bonus Plan, or any
amendment thereto.
(1) "Payment Date" means each date the Participant elects to
receive
payment of all or a portion of the Deferred Bonus.
(m) "Recipient" means a person who (i) has been designated
by the
Committee to be entitled to participate in this Plan,
and (ii) is
deemed to be an "Accredited Investor"(as defined under
Federal
Securities Laws). A Recipient need not be an employee of
the
Corporation. Recipients participating in the Plan shall
provide such
certifications and other evidence as the Corporation may
reasonably
require to establish that they are Accredited Investors.
(n) "Undistributed Balance" of any Deferred Bonus means that
portion of
any Deferred Bonus which has not been distributed to the
Bonus Deferral
Participant by dint of his or her Bonus Deferral
Election.
Section 3. Eligibility
Each Recipient, or other person deemed eligible to receive a
Bonus as
determined by the Committee, is eligible to make a Bonus Deferral
Election and
become a Bonus Deferral Participant.
Section 4. Participation
In order to participate in the Plan, a Recipient must make a
valid Bonus
Deferral Election by executing and filing with the Corporation,
before the
period of time for which the Recipient would otherwise be
eligible to receive
the Bonus being deferred, a Bonus Deferral Election Form and a
Designation of
Beneficiary From.
A Participant's Bonus Deferral Election defers payment of
Bonus awarded
after the date of the adoption of the Plan to the Payment Date
designated by
the Participant. Interest shall be paid by the Corporation on the
Undistributed
Balance of any Deferred Bonus at 8% per annum, compounded
annually, as computed
in accordance with Section 5. The Bonus Deferral Election is
irrevocable, but
each Participant may at any time or from time to time amend the
designation of
beneficiary or beneficiaries.
Each Participant may, at any time or from time to time,
amend the designation of beneficiary or beneficiaries. In
addition, each Participant may, at any time or from time to time,
amend the Bonus Deferral Election; provided, however, that: (i)
such amendments are made before the applicable bonus is otherwise
payable; (ii) such amendments may only extend the deferral
period, and may not shorten the deferral period; and (iii) the
deferral period may not, in any event, extend beyond December 31,
2005.
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The Corporation shall establish a single Deferred Bonus
Account and shall
credit to that Deferred Bonus Account the Bonus designated by
each and all
Participants.
Section 5. Payment of Accounts and Method of Computation
Except as provided in Section 7 below, payment shall be made
to each
Participant from the Deferred Bonus Account on the Payment Date
specified in
that Participant's Deferral Bonus Election Form.
Section 6. Form of Bonus and Payment
The Bonus eligible to be deferred represents a fixed number
of shares of
common stock of AlliedSignal Inc. owned by the Corporation. The
closing stock
price of such stock on the date the Bonus is awarded by the
Committee will be
used to calculate interest under Section 4, which amount will be
increased by
interest earned in prior periods for purposes of computing the
annual interest
to be calculated under Section 4. Any dividends payable on such
stock during
the deferral period shall be paid for the benefit of the
Corporation. The
number of Shares shall be adjusted to give effect to any stock
splits or other
recapitalization events of AlliedSignal Inc., which could affect
the number of
Shares held during the deferral period. Distributions of Bonus to
a Participant
shall be made in kind. Distributions of interest to a Participant
shall be made
in cash at such time and in such proportion as payments of Bonus,
as designated
on the Participant's Bonus Deferral Election.
Section 7. Death of a Participant
Upon the death of a Participant, the full amount held for
him or her in
the Deferred Bonus Account shall be paid to the beneficiary or
beneficiaries of
such Account designated by the Participant on his last submitted
Designation of
Beneficiary Form for such account.
Section 8. Participant's Rights Unsecured
The right of the Participant or any beneficiary of a
Participant to
receive any distribution hereunder shall be an unsecured claim
against the
general assets of the Corporation. Notwithstanding anything
herein to the
contrary, the Corporation shall not sell, transfer or otherwise
alienate the
Deferred Bonus Account, and the stock held therein, except for
distributions to
Participants or their beneficiary or beneficiaries in accordance
with this
Plan. Notwithstanding the foregoing, the Committee may vote the
stock of
AlliedSignal, Inc. which is subject to the Plan, participate in
reorganizations, recapitalizations, mergers or other events and
receive all
proceeds in liquidation of AlliedSignal Inc.
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Section 9. Participant's Interest is Nonforfeitable
The interest of a Participant or any beneficiary of a
Participant in his
Deferred Bonus Account shall in all events be vested and
nonforfeitable,
irrespective of any continuing relationship between the
Participant and the
Corporation.
Section 10. Administration of the Plan - Committee
The Plan shall be administered by the Committee. The
Committee shall act
by vote of a majority of its members or by unanimous written
consent. The Plan
may be amended, modified, or terminated by the Committee, except
that no such
action shall (without the consent of the Participant, or, if the
Participant
has deceased, any beneficiary or beneficiaries, distributed or
personal
representative) alter the rights of a Participant with respect to
the Deferred
Bonus Account established pursuant to this Plan prior to the date
of such
amendment, modification or termination.
Section 11. Alienation
Neither the Deferred Bonus Account nor any amount, the
payment of which
has been deferred under this Plan, shall be subject in any manner
to the
Participant's or his creditor's sale, transfer, levy or charge,
and any attempt
by such Participant or his creditors to so alienate, sell,
transfer, levy or
charge the same shall be void; nor shall any such amount be in
any manner
subject to the debts, contracts, liabilities, engagements or
torts of the
Participant.
Section 12. Taxes
The Participants and their beneficiaries, distributees, and
personal
representative will bear all Federal, foreign, state, local or
other income or
other taxes imposed on amounts paid under this Plan. All such
taxes shall be
computed by, and remitted to, the Corporation at each Payment
Date, for deposit
by the Corporation with the appropriate taxing jurisdiction.
Section 13. Consent
By electing to become a Participant, each Recipient shall be
deemed
conclusively to have accepted and consented to all the terms of
this Plan and
all actions or decisions made by the Corporation, or the
Committee with regard
to the Plan. Such terms and consent shall also apply to and be
binding upon the
beneficiaries, distributees, and personal representatives and
other successors
in interest of each Participant.
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Section 14. Severability
In the event any provision of this Plan would serve to
invalidate the
Plan, that provision shall be deemed to be null and void, and the
Plan shall be
construed as if it did not contain the particular provision that
would make it
invalid.
Section 15. Applicable Law
The Plan shall be interpreted and construed under the laws of the
State of
Delaware.
Section 16. No Right of Continuing Employment
Nothing contained herein shall be construed as conferring
upon the
Participant the right to continue in the employment of the
Corporation.
Amendment Date April 8, 1999
On April 8, 1999, Banner became a wholly-owned subsidiary of The
Fairchild Corporation. The Boards of Directors of Fairchild and
Banner amended the Banner Deferred Bonus Plan to provide as
follows, effective as of May 21, 1999:
1. The Plan shall henceforth be administered by the
Fairchild Compensation & Stock Option Committee rather
than the Banner Compensation & Stock Option Committee.
2. The shares of AlliedSignal common stock presently
held in each Participant's Deferred Bonus Account may
be sold, at the election of the Fairchild Board, and
proceeds from such sale may be reinvested in other
securities. Each Participant's Deferred Bonus Account
shall be credited with the proceeds or new securities,
as applicable, from the sale and reinvestments of the
AlliedSignal shares presently credited to such
Participant's account.
3. In the future, the Fairchild Board may authorize
further sales and reinvestments of any securities held
at any time in each Participant's Deferred Bonus
Account, and such Participant's account shall be
credited with the proceeds or securities from any such
sales and reinvestments.
4. Upon a Participant's request, the Participant
shall be notified of the type and number of securities
held in his/her Deferred Bonus Account.
5. Upon termination of each Participant's bonus
deferral period, he/she shall be entitled to receive
accrued interest (as provided in the Plan), and the
proceeds or securities (as the case may be) credited to
his/her Deferred Bonus Account as per paragraphs 2 and
3 above.