Amended and restated
as of January 1, 1994
SUPPLEMENTAL NON-QUALIFIED SAVINGS PLAN FOR HIGHLY COMPENSATED
EMPLOYEES OF ALLIEDSIGNAL INC. AND ITS SUBSIDIARIES (Career Band
6 and above)
1. ELIGIBILITY
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Those highly compensated employees ("HCEs") of AlliedSignal
Inc. (the "Corporation") and its subsidiaries within the meaning
of Section 414(q) of the Internal Revenue Code of 1986 (the
"Code") in Career Band 6 and above who are eligible to
participate in the AlliedSignal Savings Plan (the "Qualified
Savings Plan") are eligible to participate in the Supplemental
Non-Qualified Savings Plan for Highly Compensated Employees of
AlliedSignal Inc. and its Subsidiaries (Career Band 6 and above)
(the "Plan").
2. Definitions
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Capitalized terms not otherwise defined in the Plan have the
respective meanings set forth in the Qualified Savings Plan.
3. Participation
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(a) Time and Form of Election. Any eligible employee may
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become a participant in the Plan (a "Participant") as of the
beginning of the next available pay period, by executing a
written notice of election to participate and filing such notice
with the Corporation prior to the beginning of such pay period.
Such notice may direct that a portion (determined in accordance
with paragraph 4(a)) of the base annual salary exclusive of shift
differentials, overtime or other premium pay, bonus, incentive or
other extra compensation but inclusive of severance pay (unless
otherwise specifically excluded by the severance pay plan) or
salary deferred under this Plan or otherwise ("Base Annual
Salary"), which would have been payable to such Participant
during such pay period and succeeding pay periods, in lieu of
such payment, be credited to a deferred compensation account
maintained under the Plan as an unfunded book entry stated as a
cash balance (the "Participant's Account"). Amounts so credited
to the Participant's Account shall constitute "Participant
Deferred Contributions." A Participant's election to direct that
a portion of his or her Base Annual Salary be credited to the
Participant's Account shall continue in effect until the
Participant terminates such election, the Participant is no
longer an HCE or the Participant is no longer eligible to
contribute to the Qualified Savings Plan. Any such termination
shall be effective only with respect to the Participant's Base
Annual Salary payable after the end of the pay period in which
one of the events in the preceding sentence occurs. Amounts
credited to the Participant's Account prior to the effective date
of the termination of the election shall not be
affected and shall be distributed only in accordance with the
terms of the Plan and Participant's distribution election
thereunder.
(b) Change or Resumption of Amount Deferred. A Participant
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may elect once ever 30 days in connection with a Qualified
Savings Plan election, to change the amount of Base Annual Salary
to be credited to the Participant's Account in the Plan
commencing with the next available pay period following his or
her election. Amounts credited to the Participant's Account
prior to the effective date of such change shall not be affected
by such change and shall be distributed only in accordance with
the terms of the Plan.
4. Contributions to Participants' Accounts
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(a) Participant Deferred Contributions. A Participant may
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elect to defer an aggregate amount, rounded to the nearest full
dollar, equal to (i) a full percentage of such Participant's Base
Annual Salary from 1% to the maximum percentage permitted under
the Qualified Savings Plan and Section 415(c)(1)(B) of the Code
for Before-Tax Contributions by an individual who is not an HCE
and who is eligible to participate in the Qualified Savings Plan,
without regard to any other limitations which may apply under the
Code and without regard to any After-Tax Contributions which
might be made under the Qualified Savings Plan, minus (ii) the
full amount of Before-Tax Contributions made by such Participant
under the Qualified Savings Plan, provided, however, that a
Participant who elects to defer any such amount hereunder shall
be required to make the maximum Before-Tax Contributions
permissible under the Qualified Savings Plan (after giving effect
to deferrals under the Plan or otherwise).
(b) Plan Employer Contributions. There shall be credited
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to the Participant's Account employer contributions under the
Plan ("Plan Employer Contributions") in an aggregate amount equal
to (i) minus (ii) where (i) is 50% (for participants in the
Qualified Savings Plan with less than 60 Months of Participation)
or 100% (for participants in the Qualified Savings Plan with at
least 60 Months of Participation) of the lesser of (x) 8% of the
Participant's Base Annual Salary or (y) the sum of the
Participant's Participant Contributions under the Qualified
Savings Plan and Participant Deferred Contributions under the
Plan, and (ii) is the total amount of Employer Contributions made
with respect to the Participant under the Qualified Savings Plan,
provided that in no event shall the combined Plan Employer
Contributions and Employer Contributions made with respect to the
Participant, exceed 8% of the Participant's Base Annual Salary,
and provided, further, that Plan Employer Contributions shall not
be made with respect to a Participant during any period of
suspension of Employer Contributions with respect to such
Participant under the terms of the Qualified Savings Plan,
whether or not such Participant continues to make Participant
Contributions under the Qualified Savings Plan during the period
of such suspension.
(c) Vesting. Participant Deferred Contributions, Plan
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Employer Contributions, and all amounts accrued with respect to
Participant Deferred Contributions and Plan Employer
Contributions in accordance with paragraph 5 shall be vested at
the time such amounts are credited to the Participant's Account.
(d) All Contributions Prorated. Participant Deferred
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Contributions and Plan Employer Contributions shall be credited
to a Participant's Account each pay period.
5. The Participant's Account
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Participant Deferred Contributions and Plan Employer
Contributions shall be credited to the Participant's Account
under the Plan as unfunded book entries stated as cash balances.
Participant Deferred Contributions credited to the Participant's
Account prior to January 1, 1994 or after the Participant has
terminated employment shall accrue amounts (to be posted each
Valuation Date) equivalent to interest, compounded daily, at a
rate based upon the cost to the Corporation of borrowing at a
fixed rate for a 15-year term. Such rate shall be determined
annually by the Chief Financial Officer of the Corporation in
consultation with the Treasurer of the Corporation. Participant
Deferred Contributions credited to the Participant's Account on
or after January 1, 1994, but before a Participant terminates
employment shall accrue amounts (to be posted each Valuation
Date) equivalent to interest, compounded daily, at a rate
determined annually by the Management Development and
Compensation Committee (the "Committee") of the Board of
Directors (the "Board") of the Corporation. The rate established
in the preceding sentence shall not exceed the greater of (i) 10%
or (ii) 200% of the 10-year U.S. Treasury Bond rate at the time
of determination and, once established for a calendar year, shall
remain in effect with respect to all Participant Deferred
Contributions credited to the Participant's Account during such
calendar year until the amounts are distributed. Plan Employer
Contributions credited to the Participant's Account shall accrue
amounts (to be posted each Valuation Date) equivalent to earnings
(or be reduced by amounts equivalent to losses) at a variable
rate equal to the rate of return on amounts invested in
AlliedSignal Common Stock as of each Valuation Date. Amounts
credited to the Participant's Account shall continue to accrue
(or be reduced by) amounts equivalent to interest, earnings or
losses (as the case may be) until distributed in accordance with
the Plan.
6. Distribution from Accounts
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(a) Form of Election. At the time a Participant makes an
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election pursuant to paragraphs 3(a), 3(c) or 3(d), the
Participant shall also make an election with respect to the
distribution of the aggregate amount of the cash balance credited
to the Participant's Account pursuant to such election. A
Participant may elect to receive such amount in one lump-sum
payment or in a number of approximately equal annual installments
(up to twenty-five such installments or, effective January 1,
1995, up to fifteen installments). The lump-sum payment or the
first installment shall be paid in cash as soon as practicable
during the month of January of such future calendar year as the
Participant may designate, or, if the Participant so elects, as
soon as practicable during the month of January of the calendar
year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the
Participant terminates employment with the Corporation or any of
its subsidiaries (whether by reason of Retirement or otherwise).
Except as otherwise provided in paragraph 8, subsequent
installments shall be paid in cash as soon as practicable during
the month of January of each succeeding calendar year until the
entire amount credited to the Participant's Account shall have
been paid. Notwithstanding the foregoing, Plan Employer
Contributions credited during the months of July
through December to an Account of a Participant, who is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, may not
be paid to the Participant prior to the month of April (for Plan
Employer Contributions credited during the months of July through
September) and July (for Plan Employer Contributions credited
during the months of October through December) of the calendar
year immediately following the calendar year in which such Plan
Employer Contributions were credited.
(b) Adjustment of Method of Distribution. Prior to the
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beginning of any calendar year, a Participant may elect to change
the timing and method of distribution of the aggregate amount of
the cash balance credited to the Participant's Account commencing
with such calendar year. Amounts credited to the Participant's
Account prior to the effective date of such change (the "Prior
Balance"), and all amounts thereafter accrued with respect to the
Prior Balance, shall not be affected by such change and, except
as otherwise determined by the Committee pursuant to the
following sentence or paragraph 8, shall be distributed only in
accordance with the election in effect at the time such Prior
Balance was credited to the Participant's Account. Prior to
January 1, 1995, a Participant may, by written notice to the
Corporation, request that the Committee authorize a further
deferral of the distribution of the Participant's Account from
that previously elected; the Committee shall in its sole
discretion determine whether to authorize any such further
deferral.
(c) Any cash balance credited to a Participant's Account
which is not covered by a timely distribution election under
paragraphs (a) and (b) shall be distributed to the Participant in
one lump-sum payment to be paid to the Participant in cash as
soon as practicable during the month of January of the calendar
year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the
Participant terminates his employment with the Corporation or any
of its subsidiaries (whether by reason of Retirement or
otherwise); provided, however, if the Participant has elected
pursuant to paragraphs 9(a)(i) or 9(a)(ii), the lump sum payment
shall nevertheless be made within the 90-day period following a
Change in Control, as defined in paragraph 9(c).
7. Distribution on Death
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If a Participant should die before all amounts credited to
the Participant's Account have been paid in accordance with the
election referred to in paragraphs 6(a) or 6(b), the balance in
such Participant's Account shall be paid in cash as soon as
practicable following the Participant's death, but if the
participant has elected pursuant to paragraphs 9(a)(i) or
9(a)(ii), at least within the 90-day period following a Change in
Control, as defined in paragraph 9(c), to the beneficiary
designated in writing by the Participant and filed with the
Corporation. If (a) no such designation has been made or (b) the
designated beneficiary shall have predeceased the Participant and
no further designation has been made, then such balance shall be
paid to the estate of the Participant. A participant may change
the designated beneficiary at any time during the Participant's
lifetime by filing a subsequent designation in writing with the
Corporation.
8. Payment in the Event of Hardship
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Upon receipt of a request from a Participant or a
Participant's designated beneficiary, delivered in writing to the
Corporation along with a Certificate of Unavailability of
Resources, the Committee, the Senior Vice President - Human
Resources and Communications, or his designee, may cause the
Corporation to accelerate (or require the subsidiary of the
Corporation which employs or employed the Participant to
accelerate) payment of all or any part of the amount credited to
the Participant's Account, including accrued amounts, if it finds
in its sole discretion that payment of such amounts in accordance
with the Participant's prior election under paragraphs 6(a) or
6(b) would result in severe financial hardship to the Participant
or the Participant's beneficiary and such hardship is the result
of an unforseeable emergency caused by circumstances beyond the
control of the Participant or beneficiary. Acceleration of
payment may not be made under this paragraph 8 to the extent that
such hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of
the Participant's assets, to the extent the liquidation of assets
would not itself cause severe financial hardship or (iii) by
cessation of deferrals under this Plan or any tax-qualified
savings plan of the Corporation.
9. Change in Control
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(a)(i) Initial Lump-Sum Payment Election. Notwithstanding any
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election made pursuant to paragraph 6, any person who becomes eligible
to participate in the Plan may file a written election with the Corporation
at the time the individual makes an election to participate pursuant to
paragraph 3(a), to have the aggregate amount credited to the Participant's
paragraph 3(a), to have the aggregate amount credited to the Participant's
Account commencing with the date on which such written election
is filed, paid in one-lump sum payment as soon as practicable
following a Change in Control but in no event later than 90 days
after such Change in Control.
(a)(ii) Subsequent Lump-Sum Payment Election. A
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Participant who did not make an election pursuant to paragraph
9(a)(i) or who has revoked, pursuant to paragraph 9(a)(iii), an
election previously made under paragraph 9(a)(i) or this
paragraph 9(a)(ii) may, prior to the earlier of a Change in
Control or the beginning of the calendar year in which the
election is to take effect, elect to have the aggregate amount
credited to the Participant's Account for all calendar years
commencing with the first calendar year beginning after the date
the election is made, paid in one lump-sum payment as soon as
practicable following a Change in Control but in no event later
than 90 days after such Change in Control. Amounts credited to
the Participant's Account prior to the effective date of the
election made pursuant to this paragraph 9(a)(ii) shall not be
affected by such election and shall be distributed following a
Change in Control in accordance with any prior election in effect
under paragraphs 9(a)(i) or 9(a)(ii).
(a)(iii) Revocation of Lump-Sum Payment Elections. A
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Participant may, prior to the earlier of a Change in Control or
the beginning of any calendar year, file an election revoking any
election made pursuant to paragraphs 9(a)(i) or 9(a)(ii), with
respect to amounts credited to the Participant's Account
commencing with the first calendar year beginning after the
election is made. Amounts credited to the Participant's Account
prior to the effective date of the election
made pursuant to this paragraph 9(a)(iii) shall not be affected by such
election and shall be distributed following a Change in Control in
accordance with any prior election in effect under paragraphs 9(a)(i) or
9(a)(ii).
(b) Interest and Dividend Equivalents. Notwithstanding
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anything to the contrary in the Plan, after a Change in Control,
the Plan may not provide, or be amended to provide (i) amounts
equivalent to interest accrued with respect to Participant
Deferred Contributions in the Participant's Account or (ii)
amounts equivalent to earnings or losses accrued or reduced with
respect to Plan Employer Contributions in the Participant's
Account, at rates lower than the rates in effect under paragraph
5 immediately prior to the Change in Control.
(c) Definition of Change in Control. For purposes of the
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Plan, a Change in Control is deemed to occur at the time (i) when
any entity, person or group (other than the Corporation, any
subsidiary or any savings, pension or other benefit plan for he
benefit of employees of the Corporation or its subsidiaries)
which therefore beneficially owned less than 30% of the
AlliedSignal common stock then outstanding acquires shares of
AlliedSignal common stock in a transaction or series of
transactions that results in such entity, person or group
directly or indirectly owning beneficially 30% or more of the
outstanding AlliedSignal common stock, (ii) of the purchase of
shares of AlliedSignal common stock pursuant to a tender offer or
exchange offer (other than an offer by the Corporation) for all,
or any part of, the AlliedSignal common stock, (iii) of in which
the Corporation will not survive as an independent, publicly
owned corporation, a consolidation, or a sale, exchange or other
disposition of all or substantially all of the Corporation's
assets, (iv) of a substantial change in the composition of the
Board during any period of two consecutive years such that
individuals who at the beginning of such period were members of
the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by
the stockholders of the Corporation, of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the
period, or (v) of any transaction or other event which the
Nominating and Board Affairs Committee of the Board, in its
discretion, determines to be a Change in Control for purposes of
the Plan.
10. Limitations for Certain Participants.
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Notwithstanding anything to the contrary in paragraph 6(b),
8 or 9, a Participant who is subject to the provisions of Section
16 of the Securities Exchange Act of 1934 may, but only as to
that portion of the Participant's Account which is not
attributable to Plan Employer Contributions, make a request for a
further deferral pursuant to paragraph 6(b), a request for an
accelerated payment pursuant to paragraph 8 or an election
pursuant to paragraphs 9(a)(i) through (iii).
11. Miscellaneous.
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(a) The right of a Participant to receive any amount
credited to the Participant's Account shall not be transferable
or assignable by the Participant, except by will or by the laws
of descent and distribution. To the extent that any person
acquires a right to receive any amount credited to a
Participant's Account hereunder, such right shall be no greater
than that of an
unsecured general creditor of the Corporation. Except as expressly
provided herein, any person having an interest in any amount credited
to a Participant's Account under the Plan shall not be entitled to payment
until the date the amount is due and payable. No person shall be entitled
to anticipate any payment by assignment, pledge or transfer in any
form or manner prior to actual or constructive receipt thereof.
(b) Neither the Corporation nor any of its subsidiaries
shall be required to reserve or otherwise set aside funds for the
payment of its obligations hereunder. However, the Corporation
or any subsidiary may, in its sole discretion, establish funds
for payment of its obligations hereunder. Any such funds shall
remain assets of the Corporation or such subsidiary, as the case
may be, and subject to the claims of its general creditors. Such
funds, if any, shall not be deemed to be assets of the Plan. The
Plan is intended to be unfunded for tax purposes and for purposes
of Title I of the Employee Retirement Income Security Act of
1974, as amended.
(c) The Senior Vice President-Human Resources and
Communications of the Corporation shall have full authority to
interpret the Plan and make all determinations deemed necessary
or desirable for the Plan's implementation, consulting with such
other officers of the Corporation as the Senior Vice President-
Human Resources and Communications shall deem appropriate.
(d) The Corporation may at any time amend or terminate the
Plan. No amendment or termination shall impair the rights of a
Participant with respect to amounts then credited to the
Participant's Account.
(e) Each Participant will receive periodic statements (not
less frequently than annually) regarding the Participant's
Account. Each such Statement shall indicate the amount of the
cash balance credited to the Participant's Account as of the end
of the period covered by such statement.