Exhibit (10)(iii)(b)
HONEYWELL SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
FOR MID-CAREER HIRES
(MID-CAREER SERP)
(Effective September 20, 1994)
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 AUGMENTED YEARS OF CREDITED SERVICE FOR BENEFIT ACCRUAL. . . . . 1
1.3 BASE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 CODE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 CORPORATE EXECUTIVE COMPENSATION PLAN (CECP) . . . . . . . . . . 2
1.7 EARLY RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 EARNINGS LIMITATION. . . . . . . . . . . . . . . . . . . . . . . 2
1.9 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 HONEYWELL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 NORMAL RETIREMENT. . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 PARTICIPANT. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 PERMANENT AND TOTAL DISABILITY . . . . . . . . . . . . . . . . . 3
1.14 PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 PREDECESSOR EMPLOYER . . . . . . . . . . . . . . . . . . . . . . 3
1.16 SPOUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II - PLAN FORMULA. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 MID-CAREER SERP FORMULA. . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III - BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 NORMAL RETIREMENT. . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 EARLY RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 CHANGE IN CONTROL. . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 PERMANENT AND TOTAL DISABILITY . . . . . . . . . . . . . . . . . 8
3.5 IMMEDIATE PRE-RETIREMENT SURVIVING SPOUSE BENEFIT. . . . . . . . 8
3.6 DEFERRED SURVIVING SPOUSE BENEFIT. . . . . . . . . . . . . . . . 8
3.7 SURVIVING CHILDREN'S BENEFIT . . . . . . . . . . . . . . . . . . 8
3.8 VESTED PARTICIPANT'S BENEFIT . . . . . . . . . . . . . . . . . . 9
ARTICLE IV - PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . 10
4.1 FORM OF PAYMENT TO PARTICIPANT . . . . . . . . . . . . . . . . . 10
4.2 TIME OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 PAYMENT SUBSEQUENT TO A CHANGE IN CONTROL. . . . . . . . . . . . 11
4.4 PAYMENTS SUBSEQUENT TO THE PARTICIPANT'S RETIREMENT. . . . . . . 13
ARTICLE V - ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . 14
5.1 PERSONNEL COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI - AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . 15
6.1 AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII - GENERAL CONDITIONS . . . . . . . . . . . . . . . . . . . . . . 16
7.1 NON-ASSIGNABILITY OF THE RIGHT TO RECEIVE BENEFITS . . . . . . . 16
7.2 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII - FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 SOURCE OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 STATUS OF PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . 17
8.3 FICA AND FUTA CONTRIBUTIONS ON PLAN BENEFITS . . . . . . . . . . 17
ARTICLE IX - CLAIMS PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . . 19
9.1 FILING OF A CLAIM FOR BENEFITS.. . . . . . . . . . . . . . . . . 19
9.2 NOTIFICATION TO CLAIMANT OF DECISION.. . . . . . . . . . . . . . 19
9.3 CONTENT OF NOTICE. . . . . . . . . . . . . . . . . . . . . . . . 19
9.4 REVIEW PROCEDURE.. . . . . . . . . . . . . . . . . . . . . . . . 20
9.5 DECISION ON REVIEW . . . . . . . . . . . . . . . . . . . . . . . 20
TABLE I
ACTUARIAL ASSUMPTIONS FOR LUMP SUM PAYMENTS . . . . . . . . . . . . . . 22
TABLE II:
VESTED ACCRUED BENEFITS UNDER THE MID-CAREER SERP THROUGH
DECEMBER 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
TABLE III:
ACTUARIAL EQUIVALENT OF ANNUITY AND INDIVIDUALIZED SERP ARRANGEMENTS. . 24
HONEYWELL SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
FOR MID-CAREER HIRES
(MID-CAREER SERP)
(Amended and Restated Effective September 20, 1994)
ARTICLE I - DEFINITIONS
1.1 ACT. The Employee Retirement Income Security Act of 1974, as
from time to time amended.
1.2 AUGMENTED YEARS OF CREDITED SERVICE FOR BENEFIT ACCRUAL. One year of
credited service for benefits for each of the first 5 "Years of Credited Service
For Benefit Accrual" which the Participant has completed under the Base Plan,
and one-half year of credited service for benefits for each of the next 10
"Years of Credited Service for Benefit Accrual" subsequently completed by the
Participant under the Base Plan. In no event shall the Augmented Years of
Credited Service for Benefit under this Plan exceed
(i) ten; or
(ii) the number of years and months of the Participant's employment
with his or her Predecessor Employer (unless such prior
employment is less than 5 full years); or
(iii) that number of Augmented Years of Credited Service for Benefit
Accrual which when added to his or her "Years of Credited Service
for Benefit Accrual" under the Base Plan equals 30,
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whichever is least. Augmented Years of Credited Service for Benefit Accrual
will be computed on the basis of years and full months of "Credited Service for
Benefit Accrual" under the Base Plan; if such aggregate includes a fraction of a
month, such fraction, if less than 15 days, will be disregarded, and if 15 days
or more, will be treated as a full month.
1.3 BASE PLAN. The Honeywell Retirement Benefit Plan, as from time to time
amended.
1.4 CODE. The Internal Revenue Code of 1986, as from time to time amended.
1.5 COMPANY. Honeywell Inc. and any subsidiary which is designated for
inclusion in the Plan, as hereafter defined, by the Board of Directors of
Honeywell Inc.
1.6 CORPORATE EXECUTIVE COMPENSATION PLAN (CECP). An incentive compensation
plan maintained by the Company to provide incentive compensation for a select
group of management or highly compensated employees, as from time to time
amended.
1.7 EARLY RETIREMENT. "Early Retirement" by a Participant under his or her
Base Plan, which is defined as the termination of employment on or after his or
her 55th birthday and after he or she has been credited with 10 or more years of
"Credited Service for Benefit Accrual", as determined under the Base Plan.
1.8 EARNINGS LIMITATION. The maximum amount of compensation of a Participant
and his or her family members permitted to be taken into account under the Base
Plan pursuant to Section 401(a)(17) of the Code (as it may be adjusted from time
to time pursuant to the Code).
1.9 EFFECTIVE DATE. The effective date of this Plan is September 15, 1992.
1.10 HONEYWELL. Honeywell Inc., a Delaware corporation.
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1.11 NORMAL RETIREMENT. "Normal Retirement" by a Participant on or after his
or her "Social Security Retirement Age" as defined in his or her Base Plan.
1.12 PARTICIPANT. An employee of the Company who was covered under the
Corporate Executive Compensation Plan at the time of his or her cessation of
active work with the Company, who is a participant in the Base Plan on or after
the Effective Date, and who is nominated by the Personnel Committee to
participate in this Plan.
1.13 PERMANENT AND TOTAL DISABILITY. The disability of a Participant whereby
such Participant is wholly disabled by bodily injury or disease and will be
permanently, continuously and wholly prevented thereby for life from engaging in
any occupation or employment for wage or profit.
1.14 PLAN. This Honeywell Mid-Career Hire Supplementary Executive Retirement
Plan ("Mid-Career SERP").
1.15 PREDECESSOR EMPLOYER. The last employer for whom Participant was engaged
on a substantially full-time basis prior to his or her date of hire by Honeywell
as an employee, partner, officer, director, or principal. The term shall also
include any "Affiliated Company", as defined in the Base Plan, of the
Predecessor Employer.
1.16 SPOUSE. A person who is formally married to a Participant as determined
by the Honeywell Pension and Retirement Administrative Committee for purposes of
the Base Plan by applying the laws of the state or country in which it
determines that the Participant is domiciled at the time of such determination
of status.
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ARTICLE II - PLAN FORMULA
2.1 MID-CAREER SERP FORMULA. That annual benefit equal to Paragraph (a),
minus Paragraph (b), less Paragraph (c).
(a) The applicable benefit computed with respect to the Participant under
the Base Plan:
(i) by including under the definition of "Earnings" for the purposes
of arriving at "Final Average Earnings" under the Base Plan the
amount of any "Earnings" under the Base Plan which are in excess
of the Earnings Limitation;
(ii) by including under the definition of "Earnings" for purposes of
arriving at "Final Average Earnings" under the Base Plan the
amount of any deferred incentive award in the year in which the
award would otherwise have been paid by the Corporate Executive
Compensation Plan;
(iii) by disregarding the provisions of the Base Plan limiting the
maximum benefit payable thereunder to the maximum benefit
permitted by the provisions of Section 415 of the Code in a
pension plan qualifying under Section 401 of the Code;
(iv) by not exceeding the Participant's frozen "Accrued Benefit"
determined under the Base Plan as of June 30, 1989 (or June 30,
1990, whichever may be applicable) as required by Section 8.2 of
the Base Plan; and
(v) by including "Augmented Credited Service for Benefit Accrual"
under this Mid-Career SERP, if the Mid-Career SERP is applicable
to the Participant.
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(b) the applicable benefit computed with respect to the Participant under
the Base Plan:
(i) by including under the definition of "Earnings" for the purposes
of arriving at "Final Average Earnings" under the Base Plan the
amount of any "Earnings" under the Base Plan which are in excess
of the Earnings Limitation;
(ii) by including under the definition of "Earnings" for purposes of
arriving at "Final Average Earnings" under the Base Plan the
amount of any deferred incentive award in the year in which the
award would otherwise have been paid by the Corporate Executive
Compensation Plan;
(iii) by disregarding the provisions of the Base Plan limiting the
maximum benefit payable thereunder to the maximum benefit
permitted by the provisions of Section 415 of the Code in a
pension plan qualifying under Section 401 of the Code;
(iv) by not exceeding the Participant's frozen "Accrued Benefit"
determined under the Base Plan as of June 30, 1989 (or June 30,
1990, whichever may be applicable) as required by Section 8.2 of
the Base Plan; and
(v) by excluding "Augmented Credited Service for Benefit Accrual"
under this Mid-Career SERP, if such Plan is applicable to the
Participant.
(c) the actuarial equivalent of the annual benefit payable with respect
to the Participant under individualized annuity or supplementary
executive retirement arrangements provided by Honeywell and specified
on Table III.
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ARTICLE III - BENEFITS
3.1 NORMAL RETIREMENT. Upon Normal Retirement, a Participant shall be
eligible for life for an annual benefit determined by calculating the
Participant's annual "Normal Retirement Benefit" under the Base Plan and
benefits under any other annuity or supplementary retirement arrangement
provided by the Company, in accordance with the Mid-Career SERP Formula as
prescribed in Section 2.1.
3.2 EARLY RETIREMENT. Upon Early Retirement, a Participant shall be eligible
for life for an annual benefit determined by calculating the Participant's
annual "Early Retirement Benefit" under the Base Plan and benefits under any
other annuity or supplementary retirement arrangement provided by the Company,
in accordance with the Mid-Career SERP Formula as prescribed in Section 2.1.
3.3 CHANGE IN CONTROL. In the event of a "Change in Control," as defined in
this Section for all purposes of this Plan, each Participant's accrued benefit
under this Plan shall become immediately and fully vested and shall be paid to
the Participant in accordance with Section 4.3(a) of this Plan.
For purposes of this Plan, a "Change in Control" of Honeywell shall have
occurred if:
(a) any "person", as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than Honeywell, any subsidiary of Honeywell, any "person" (as
hereinabove defined) acting on behalf of Honeywell as underwriter
pursuant to an offering who is temporarily holding securities in
connection with such offering, any trustee or other fiduciary holding
securities under an employee benefit plan of Honeywell or any
corporation owned, directly or indirectly, by the stockholders of
Honeywell in substantially the same proportions as their ownership of
stock of Honeywell), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Honeywell representing 30 percent or
6
more of the combined voting power of Honeywell's then outstanding
securities;
(b) during any period not to exceed two consecutive years (not including
any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board of Directors of
Honeywell (the "Board"), and any new director (other than a director
designated by a "person" who has entered into an agreement with
Honeywell to effect a transaction described in clause (a), (c) or (d)
of this Section) whose election by the Board of nomination for
election by Honeywell's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;
(c) the stockholders of Honeywell approve a merger or consolidation of
Honeywell with any other corporation, other than (i) a merger or
consolidation which would result in the voting securities of
Honeywell outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50 percent of
the combined voting power of the voting securities of Honeywell or
such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement
a recapitalization of Honeywell (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30 percent of
the combined voting power of Honeywell's then outstanding securities;
or
(d) the stockholders of Honeywell approve a plan of complete liquidation
of Honeywell or an agreement for the sale or disposition by Honeywell
of all or substantially all of the Company's assets (or any
transaction having a similar effect).
7
3.4 PERMANENT AND TOTAL DISABILITY. Upon the receipt of benefits by a
Participant under his or her Base Plan, based on a determination of Permanent
and Total Disability, he or she shall be eligible for life for an annual benefit
determined by calculating the Participant's annual "Disability Retirement
Benefit" under the Base Plan less the benefits under any other individualized
annuity or supplementary retirement arrangement provided by the Company, in
accordance with the CECP SERP Formula as prescribed in Section 2.1.
3.5 IMMEDIATE PRE-RETIREMENT SURVIVING SPOUSE BENEFIT. Upon the death of a
married Participant who is eligible for Early Retirement under his or her Base
Plan but who has not yet retired under such plan, his or her surviving Spouse on
the date of his or her death shall be eligible for life for an annual benefit
determined by calculating the surviving Spouse's annual "Pre-Retirement
Surviving Spouse Benefit" under the Participant's Base Plan less the benefits
under any other individualized annuity or supplementary retirement arrangement
provided by the Company, in accordance with the Mid-Career SERP Formula as
prescribed in Section 2.1.
3.6 DEFERRED SURVIVING SPOUSE BENEFIT. Upon the death of a married
Participant who is vested but not eligible for Early Retirement under his or her
Base Plan and who is in the "Active Service" of the Company (as defined in the
Base Plan) on the date of his or her death, on the first day of the month
following the date such Participant would have attained his or her earliest
retirement eligibility under his or her Base Plan as a vested Participant, his
or her surviving Spouse on the date of his or her death shall be eligible for
life for an annual benefit determined by calculating the surviving Spouse's
annual "Deferred Pre-retirement Surviving Spouse Benefit" under the
Participant's Base Plan less the benefits under any other individualized annuity
or supplementary retirement arrangement provided by the Company, in accordance
with the Mid-Career SERP Formula as prescribed in Section 2.1.
3.7 SURVIVING CHILDREN'S BENEFIT. Upon the death of a Participant who is
eligible for Early Retirement under his or her Base Plan and who is in the
"Active Service" of the Company (as defined in the Base Plan), the surviving
"Child" (as defined in the Base Plan) of a Participant (a) who has no surviving
Spouse on the date of his or her
8
death, or (b) whose surviving Spouse dies while receiving or while eligible to
receive survivor benefits under the Base Plan, shall be eligible until such
Child's attainment of age 23 for an annual benefit determined by calculating the
Child's annual "Surviving Children's Benefit" under the Participant's Base Plan
less the benefits under any other individualized annuity or supplementary
retirement arrangement provided by the Company, in accordance with the Mid-
Career SERP Formula as prescribed in Section 2.1.
The benefit shall be divided equally among all such Children as defined in the
Base Plan and an equal share shall be paid to such Child while he qualifies as a
Child. The portion of the benefit payable to each such Child shall be
redetermined as of the last day of the month following the date any recipient
ceases to be a Child and the remaining such Children shall thereupon receive an
equal share of such benefit.
3.8 VESTED PARTICIPANT'S BENEFIT. Upon the receipt of benefits by a
Participant under his or her Base Plan who is not eligible for Early Retirement
but for whom a specified accrued benefit has been determined under this Plan in
accordance with Section 8.3 of this Plan, he or she shall be eligible for life
for an annual benefit determined by calculating the Participant's "Vested
Terminated Participant Benefit" under the Participant's Base Plan in accordance
with the Mid-Career SERP Formula as prescribed in Section 2.1.
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ARTICLE IV - PAYMENT OF BENEFITS
4.1 FORM OF PAYMENT TO PARTICIPANT.
(a) NORMAL FORM OF PAYMENT.
Except as otherwise provided in Paragraph (b) of this Section 4.1, a
benefit under this Plan shall be paid in the form of the benefit paid
with respect to the Participant under his or her Base Plan. Any
election, designation of a beneficiary(ies) or contingent
annuitant(s), or revocation made prior to the Participant's "Benefit
Starting Date" and in effect under the Participant's Base Plan shall
be in effect under this Plan.
(b) LUMP SUM FORM OF PAYMENT.
Notwithstanding the provisions of Paragraph (a) of Section 4.1, a
Participant, who is eligible for Early Retirement or who will be
eligible for Early Retirement within 13 months, may elect to receive
the present value of the benefits payable to him or her under this
Plan, as computed as of the last day of the month in which the
earlier of the date of the Participant's Early Retirement or Normal
Retirement occurs, by utilizing the interest rate and mortality
assumptions set forth in Table I, which may be modified from time to
time by the Board of Directors of Honeywell Inc. (or, in the case of
the Participant's earlier death, the present value of such benefits
so computed as of the later of the last day of the month in which the
Participant's death or the Participant's earliest retirement
eligibility under his or her Base Plan occurs) in a lump sum cash
payment. The Participant's written election to receive a lump sum
cash payment shall be submitted on a form provided for that purpose
by the Company, and consented to by the Participant's Spouse in
writing if the Participant is married, and delivered to the Vice
President, Corporate Compensation and Benefits of Honeywell, at least
13 months prior to the Participant's Early Retirement or Normal
Retirement. Such Spouse's consent must acknowledge the effect of
such election and be witnessed by a notary public. If a Participant
dies after making such election and prior to his or her Early
Retirement or Normal Retirement, the lump sum
10
cash payment shall be made to the Participant's surviving Spouse in
accordance with Section 3.5 or Section 3.6, whichever may be
applicable, or to the Participant's surviving Children in accordance
with Section 3.7.
4.2 TIME OF PAYMENTS. Benefit payments paid pursuant to Sections 3.1 or 3.2,
respectively, shall begin (or, in lieu thereof, in the event that the
Participant has complied with Section 4.1(b), be paid) 30 days after the
Participant's Normal Retirement or Early Retirement, as the case may be.
Payments pursuant to Section 3.4 of the Plan shall commence 30 days after the
later of (a) the last day of the calendar month in which the Participant is
determined to be Permanently and Totally disabled under his or her Base Plan or
(b) 6 months after his or her last full day of active employment if he or she
elects an immediate disability benefit under his or her Base Plan; but if he or
she elects a deferred disability benefit under his or her Base Plan, payments
shall commence (or, in the event that the Participant has complied with Section
4.1(b), the present value of such benefits shall be paid) 30 days after his or
her Early Retirement or Normal Retirement. Payments pursuant to Sections 3.5
and 3.6 of this Plan, shall commence (or, in the event that the Participant has
complied with Section 4.1(b), the present value of such benefits shall be paid)
30 days after the Participant's death if he or she was eligible for Early
Retirement or 30 days after the date he or she would have attained his or her
earliest retirement eligibility under his or her Base Plan. Payments pursuant
to Section 3.7 of this Plan shall commence (or, in the event that the
Participant has complied with Section 4.1(b), the present value of such benefits
shall be paid) 30 days after the date of the Participant's death.
4.3 PAYMENT SUBSEQUENT TO A CHANGE IN CONTROL.
(a) PAYMENTS UPON TERMINATION OF EMPLOYMENT. Notwithstanding any Plan
provision to the contrary, if within 3 years subsequent to a Change
in Control, a Participant's employment shall be terminated by the
Participant for "Good Reason" (as defined in the Honeywell Key
Employee Severance Plan) or by the Company other than for "Cause" (as
defined in the Honeywell Key Employee Severance Plan) or Permanent
and Total Disability, the present value of the benefits payable
pursuant to Section 3.3 (utilizing the interest rate and mortality
assumptions set forth
11
in Table I, which may be modified from time to time by the Board of
Directors of Honeywell) shall be paid as a lump sum cash payment to
the Participant on the fifth day after such termination.
(b) PAYMENTS UPON IMPOSITION OF FEDERAL OR STATE TAXES. If subsequent to
a Change in Control, any Participant is determined to be subject to
Federal or state income tax on any amount accrued on his or her
behalf under this Plan prior to the time of payment hereunder,
Federal or state taxes attributable to the amount determined to be so
taxable shall be distributed by the Plan to such Participant. An
amount accrued on his or her behalf under this Plan shall be
determined to be subject to Federal income tax upon the earliest of:
(i) a final determination by the United States Internal Revenue
Service (hereinafter referred to as "IRS") addressed to the
Participant which is not appealed to the courts;
(ii) a final determination by the United States Tax Court or any other
Federal Court affirming any such determination by the IRS; or
(iii) an opinion by the Tax Counsel of the Company, addressed to the
Company and the Trustee, that, by reason of Treasury Regulations,
amendments to the Code, published IRS rulings, court decisions or
other substantial precedent, amounts accrued on a Participant's
behalf hereunder are subject to Federal or state income tax prior
to payment.
The Company shall undertake at its sole expense to defend any tax claims
described herein which are asserted by the IRS or by any state revenue
authority against any Participant subsequent to a Change in Control,
including attorney fees and costs of appeal, and shall have the sole
authority to determine whether or not to appeal any determination made by
the IRS, by any state revenue authority or by a lower court. The Company
also agrees to
12
reimburse any Participant for any interest or penalties in respect of
Federal or state tax claims hereunder upon receipt of documentation of
same. Any distributions from this Plan to a Participant under this Section
4.3(b) shall be applied in an equitable manner to reduce Company
liabilities to such Participant under the Plans.
4.4 PAYMENTS SUBSEQUENT TO THE PARTICIPANT'S RETIREMENT. At any time before
or after a Change in Control, a Participant, after he or she has retired under
the provisions of the Base Plan on or after December 17, 1991, or the surviving
Spouse or beneficiary of the Participant, after the Participant's death
subsequent to such retirement on or after December 17, 1991, may elect to
receive the present value of such benefits or remaining benefits to which he or
she is entitled under this Plan in one lump-sum cash payment at any time after
the Participant's date of retirement or death, respectively, as computed as of
the last day of the month in which the request is received by the Vice
President, Corporate Compensation and Benefits of Honeywell, by utilizing the
interest rate and mortality assumptions set forth in Table I, which may be
modified from time to time by the Board of Directors of Honeywell and then
reduced by a penalty, which shall be forfeited to the Company which is equal to
10 percent of the present value of any unpaid benefits. Payment of such
benefits shall be effected on the last day of the next month following the month
in which the request is received.
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ARTICLE V - ADMINISTRATION OF THE PLAN
5.1 PERSONNEL COMMITTEE. The Plan shall be administered by the Personnel
Committee of Honeywell's Board of Directors which shall have the authority to
determine Plan eligibility and the amount of Plan benefits to which a
Participant or beneficiary is entitled to receive, interpret the Plan, maintain
records and issue such regulations as it shall from time to time deem
appropriate. The interpretations of such Committee shall be final. The
Committee shall have absolute discretion in carrying out its responsibilities.
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ARTICLE VI - AMENDMENT AND TERMINATION
6.1 AMENDMENT AND TERMINATION. The Board of Directors of Honeywell Inc. may
amend or terminate the Plan at any time except in the event of a Change in
Control as defined in Section 3.3; provided, however, that no such amendment or
termination shall adversely affect a benefit payable on the Normal or Early
Retirement, death or Total and Permanent Disability of a Participant with
respect to the Participant's employment by the Company prior to the date of such
amendment or termination unless such benefit is or becomes payable under another
plan or practice adopted by such Board of Directors. In the event of a Change
in Control as defined in Section 3.3, the Board may not amend or terminate the
Plan in any manner that shall adversely affect a benefit payable on the Normal
or Early Retirement, death or Permanent and Total Disability of, or any
available optional form of payment to, a Participant for a period of 3 years
from the date of the Change in Control. In the event of termination of the
Plan, any benefits which have accrued hereunder shall be paid in the form and at
the time determined under Section 4.3(a) of the Plan.
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ARTICLE VII - GENERAL CONDITIONS
7.1 NON-ASSIGNABILITY OF THE RIGHT TO RECEIVE BENEFITS. The right to receive
benefits under the Plan may not be anticipated, alienated, sold, transferred,
assigned, pledged, encumbered, or subjected to any charge or legal process.
7.2 APPLICABLE LAW. All questions pertaining to the construction, validity
and effect of this Plan shall be determined in accordance with the laws of the
United States and the State of Minnesota, other than its laws respecting choice
of law.
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ARTICLE VIII - FUNDING
8.1 SOURCE OF PAYMENTS. All payments hereunder shall be paid in cash from the
general funds of the Company, and no special or separate fund shall be
established since it is the intent to pay benefits as they become payable from
operating revenue. The Company may, however, in its sole discretion, establish
a separate reserve which may be held by it from which such benefits may be paid.
The foregoing shall not preclude the establishment by the Company of a "rabbi
trust" or the use of assets contributed to a "rabbi trust" to pay benefits under
the Plan.
8.2 STATUS OF PARTICIPANTS. A Participant shall have no right, title, or
interest whatever in or to any investments which the Company may make to aid it
in meeting its obligations hereunder. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship, between the Company and a
Participant or any beneficiary. To the extent that any person acquires a right
to receive payments from the Company, such right shall be no greater than the
right of an unsecured creditor.
8.3 FICA AND FUTA CONTRIBUTIONS ON PLAN BENEFITS. All amounts which have
accrued to a Participant under this Plan with respect to a Participant's service
with the Company after December 31, 1983, as provided in this Section 8.3 shall
be considered "wages" for purposes of the Federal Insurance Contribution Act
("FICA") and the Federal Unemployment Tax Act ("FUTA") as of the earliest of (i)
the date of the commencement of the Participant's Normal Retirement benefits,
Early Retirement benefits, Total and Permanent Disability benefits, or
commencement of Pre-retirement Surviving Spouse Benefits to the Participant's
Spouse or Surviving Children's Benefit to his or her Child or Children ("Benefit
Commencement Date"); (ii) the date in 1993 on which an active Participant
submitted an application for retirement benefits under the Base Plan or resigned
his or her employment with the Company, effective in 1994 but prior to July 1,
1994; or (iii) the date in 1993 on which a specified vested accrued benefit is
determined with respect to any other Participant in this Plan who is designated
by the Vice President Corporate Human Resources and approved by the Chief
Executive Officer of the Company prior to December 31, 1993. Attached hereto
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as Table II is a list of the Participants described in subparts (ii) and (iii)
above and the amount of their accrued benefits under this Plan which became
vested in 1993.
Effective with the first payment made under the Plan after December 31, 1990,
any amount taken into account as wages with respect to a Participant's Benefit
Commencement Date occurring after the applicable effective date specified in the
Social Security Amendment of 1983 by reason of this Section 8.3 shall not again
be treated as wages for FICA or FUTA purposes. However, no Participant shall be
entitled to a refund from the Company of any previously paid FICA or FUTA
contributions as a result of the application of this Section 8.3.
In order to compute the present value of a Participant's benefit under this Plan
for purposes of determining the amount of any FICA or FUTA contribution payable
with respect to such benefit, such present value shall be determined in
accordance with Table I.
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ARTICLE IX - CLAIMS PROCEDURE
9.1 FILING OF A CLAIM FOR BENEFITS. Upon denial of benefits by the Company,
the Participant or the Participant's beneficiary shall make a claim to the
Personnel Committee for the benefits provided under the Plan in the manner
provided in this Article.
9.2 NOTIFICATION TO CLAIMANT OF DECISION. If a claim is wholly or partially
denied, notice of the decision, meeting the requirements of Section 9.3 shall be
furnished to the claimant within 90 days after receipt of the claim by the
Personnel Committee, unless special circumstances, such as the need to hold a
hearing, require an extension of time for processing the claim. If an extension
of time is required, written notice of the extension shall be furnished to the
claimant prior to the end of the initial 90 day period, indicating the special
circumstances requiring the extension and the date by which a final decision is
expected. An extension of time shall in no event exceed a period of 90 days from
the end of the initial 90 day period. If notice of the denial of a claim is not
furnished in accordance with the provisions of this Section, the claim shall be
deemed denied and the claimant may proceed with the review procedure set forth
in Section 9.3.
9.3 CONTENT OF NOTICE. The Personnel Committee shall provide to any claimant
who is denied a claim for benefits written notice setting forth in a manner
calculated to be understood by the claimant, the following:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent provisions of this Plan on which the
denial is based;
(c) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why that
material or information is necessary; and
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(d) An explanation of this Plan's claim review procedure, as set forth in
this Section 9.4 and 9.5, together with any review procedures
specified by the Personnel Committee.
9.4 REVIEW PROCEDURE. The purpose of the review procedures set forth in this
Section 9.4 as follows is to provide a procedure by which a claimant under this
Plan may have a reasonable opportunity to appeal a denial of a claim to the
Personnel Committee for a full and fair review. To accomplish that purpose, the
claimant or his or her duly authorized representative:
(a) May request a review upon written application to the Personnel
Committee,
(b) May review pertinent documents; and
(c) May submit issues and comments in writing.
A claimant (or his or her duly authorized representative) shall request a review
by filing a written application for review with the Personnel Committee at any
time within 60 days after receipt by the claimant of written notice of the
denial of the claim.
9.5 DECISION ON REVIEW. A decision of a denied claim shall be made in the
following manner:
(a) The decision on review shall be made by the Personnel Committee,
which may in its discretion hold a hearing on the denied claim. The
Personnel Committee shall make its decision promptly, and not later
than 60 days after receipt of the request for review, unless special
circumstances (such as the need to hold a hearing) require an
extension of time for processing, in which case a decision shall be
rendered as soon as possible, but not later than 120 days after
receipt of the request for review. If an extension of time for review
is required because of special circumstances, written notice of the
extension shall be furnished
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to the claimant prior to the commencement of the extension. If the
decision on review is not furnished within the time specified, the
claim shall be deemed denied on review.
(b) The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be
understood by the claimant, and specific references to the pertinent
provisions of the Plan on which the decision is based.
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TABLE I
ACTUARIAL ASSUMPTIONS FOR LUMP SUM PAYMENTS
(Effective through December 21, 1993)
The present value of Plan benefits for purposes of Section 4.1(b), Section
4.3(a), Section 4.4, and Section 8.3 shall be calculated using the
following actuarial assumptions:
Interest: 8-1/2 percent per annum discount rate
Mortality: 1983 Group Annuity Mortality Table for
healthy males
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TABLE II
VESTED ACCRUED BENEFITS UNDER THE MID-CAREER
SERP THROUGH DECEMBER 31, 1993
The following Participant, who was determined in accordance with the provisions
of Section 8.3(iii) of this Plan, has a vested accrued benefit under this Plan
payable at his "Social Security Retirement Age", as defined in the Base Plan, in
the indicated monthly amounts as calculated on a life annuity basis:
NAME MONTHLY LIFE ANNUITY PAYABLE
AT SOCIAL SECURITY RETIREMENT AGE
-------------------------------------------------------------------------------
Grierson, James J. . . . . . . . . . . . . . . . . . . . . . . . . . . $3,505.43
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TABLE III
ACTUARIAL EQUIVALENT OF ANNUITY
AND INDIVIDUALIZED SERP ARRANGEMENTS
The following are the actuarial equivalents computed on a monthly life only
basis of the individualized annuity or SERP arrangements provided by the Company
to the specified Participants:
PARTICIPANT ARRANGEMENT MONTHLY AMOUNT
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