Exhibit (10)(iii)(g)
HONEYWELL CORPORATE EXECUTIVE COMPENSATION PLAN
(Amended and Restated Effective February 21, 1995)
SECTION 1 - PURPOSE OF THE PLAN
The purpose of the Honeywell Corporate Executive Compensation Plan is to provide
compensation to executives that (a) is compatible with the diverse sizes and
characteristics of the operating units within Honeywell, (b) is equitable
internally and competitive externally, and (c) meets Honeywell's "pay for
performance" philosophy by directly relating individual, unit, and company-wide
performance to compensation.
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SECTION 2 - DEFINITIONS
2.1 BASE PLAN. The Honeywell Retirement Benefit Plan, as from time to time
amended.
2.2 BASE SALARY. The regular, monthly, straight-time cash earnings, including
salary continuations because of illness, disability or other authorized leave of
absence. Excluded are any other salary continuations, stock incentives, special
payments or allowances because of work location, or any other benefits or
special payments.
2.3 BOARD OF DIRECTORS. The Board of Directors of Honeywell.
2.4 COMMITTEE. The Personnel Committee of the Board of Directors.
2.5 COMPANY. Honeywell and any domestic or foreign subsidiary of Honeywell in
which it owns a majority of the voting stock.
2.6 COMPOSITE INCENTIVE PERCENTAGE. That percentage obtained by weighing the
Leveraged Incentive Percentage of a Unit in accordance with approved Influence
Weightings.
2.7 COMPOSITE PERFORMANCE PERCENTAGE. The percent of actual performance of
On-Plan objectives by a Unit after applying any Unit Performance Adjustment and
weighting such Unit performance in accordance with predetermined financial
measures assigned by Corporate Management.
2.8 CORPORATE MANAGEMENT. The Chief Executive Officer and the Chief Operating
Officer of Honeywell, respectively, and any other officials to whom they
delegate responsibility hereunder.
2.9 DEFERRED AWARD ACCOUNT OR ACCOUNT. The unfunded bookkeeping account
maintained by the Company for a Participant who elects to defer payment of his
or her Incentive Award(s) pursuant to Section 6.1.
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2.10 EARLY RETIREMENT DATE. 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" under the Base Plan.
2.11 FINAL INCENTIVE FUND. The actual fund available for allocation of
incentive awards to a Unit's Participants after making any Incentive Fund
Adjustments.
2.12 HONEYWELL. Honeywell Inc., a Delaware corporation.
2.13 INCENTIVE AWARD OR AWARD. An award of incentive pay to a Participant under
Section 5 of the Plan.
2.14 INCENTIVE FUND ADJUSTMENT. An adjustment to a Unit's Incentive Fund by the
Unit's cognizant President of a dollar amount equal to a plus or minus
percentage no greater than 20 percent of the Unit's On-Plan Incentive Fund to
reflect his or her assessment of the Unit's total performance.
2.15 INCENTIVE UNIT OR UNIT. The Company or a part thereof (for example,
Strategic Business Unit, operation, division, group, business, or major
corporate staff department) for which Unit objectives are set.
2.16 INFLUENCE WEIGHTINGS. Multipliers resulting from an assessment of the
degree of interdependence between Incentive Units based on a percentage
relationship established by Corporate Management.
2.17 LEVERAGED INCENTIVE PERCENTAGE. A percentage which equals 100 percent plus
or minus specified multiples, as determined by Corporate Management prior to the
beginning of the calendar year to which an award relates, times the Unit's
variance from On-Plan performance and which is not less than 0 percent nor
greater than 200 percent.
2.18 NORMAL RETIREMENT DATE. Retirement by a Participant on or after his or her
"Social Security Retirement Age" as defined under his or her Base Plan.
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2.19 ON-PLAN. A financial performance of a Participant or Unit which equals 100
percent of his or her or its annual approved objectives.
2.20 ON-PLAN INCENTIVE FUND. The sum of On-Plan incentive amounts for each
Participant in a Unit.
2.21 ON-PLAN INCENTIVE PERCENTAGE. That percentage of a Participant's Base
Salary determined from time to time by Corporate Management for each Honeywell
salary grade level which determines the On-Plan incentive amount for such
Participant.
2.22 PARTICIPANT. An employee of the Company employed in a position which
satisfies the eligibility requirements of Section 3.4, whose participation is
recommended by the top management of his Unit and approved by a level of
management designated by the Company as appropriate on the job level involved,
during any portion of the Term of the Plan during which such employee is within
the grade levels "A" through "U" under the Plan.
2.23 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
his or her customary occupation or employment for wage or profit, as determined
by the Committee.
2.24 PLAN. This Honeywell Corporate Executive Compensation Plan, as amended and
restated effective February 21, 1995.
2.25 TERM. The term of the Plan shall be indefinite and continuing subject to
amendment, cancellation or termination at any time by the Board of Directors.
2.26 TOP MANAGEMENT OF UNIT. The manager with the highest level of authority,
as designated by Corporate Management, of an Incentive Award Unit.
2.27 UNIT INCENTIVE FUND. The dollar amount available to a Unit for Incentive
Awards, prior to the application of the Incentive Fund Adjustment, obtained by
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multiplying the Unit's Composite Incentive Percentage by the Unit's On-Plan
Incentive Fund.
2.28 UNIT OBJECTIVES. The annual financial objectives set for the Company and
each Unit by Corporate Management (for example, operating profit, net income,
and return on investment). With approval by Corporate Management, Unit
Objectives may also include specified non-financial objectives.
2.29 UNIT PERFORMANCE ADJUSTMENT. A dollar or percentage adjustment applied by
Corporate Management to compensate for unforeseen circumstances which
significantly impact the Unit's attainment of its established financial
objectives (for example, unplanned acquisitions, divestitures, or foreign
exchange effects).
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SECTION 3 - ADMINISTRATION OF THE PLAN
3.1 AMENDMENT AND TERMINATION. The Board of Directors may amend, cancel, or
terminate the Plan at any time and any such amendment, cancellation or
termination may be retroactively effective except that no amendment,
cancellation or termination shall adversely affect Awards earned under the Plan
for calendar years completed before adoption of any such amendment, cancellation
or termination. The Plan shall not be deemed to be a contract for employment or
a guarantee of compensation.
3.2 COMMITTEE. The Plan shall be administered by the Committee, with the
assistance of the Honeywell Corporate Compensation Department. All payments of
Incentive Awards under the Plan are subject to the discretion of the Committee.
The Committee shall have authority to establish, administer, and interpret such
rules with respect to the Plan as it deems appropriate. Any decision of the
Committee with respect to such rules and the interpretation, construction,
administration and application of the Plan shall be conclusive and binding.
3.3 ESTABLISHMENT OF OBJECTIVES. Corporate Management shall recommend to the
Committee what objectives and performance measures shall be utilized for the
Company and each Unit and Participant for purposes of the Plan. The Committee
shall have the authority to make final decisions as to such annual objectives
and appropriate performance measures which shall be applied under the Plan.
Honeywell shall maintain an appropriate recordkeeping system for Incentive
Awards.
3.4 ELIGIBILITY OF EMPLOYEE'S POSITION. The employee's position must be
recommended for participation by the top management of his or her unit, and
satisfy the following criteria:
(a) ACCOUNTABILITY OF POSITION.
The employee's position must be sufficiently accountable to directly
impact the financial results of Honeywell or one or more of its
operating Units.
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(b) REPORTING LEVEL OF POSITION.
The employee's position must report at a sufficiently high level in
the organization to regularly impact management decisions of Honeywell
or one or more of its operating Units.
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SECTION 4 - SALARY STRUCTURE OF PARTICIPANTS
4.1 DETERMINATION OF BASE SALARY. The Base Salary of Participants is
determined from time to time as follows:
(a) JOB EVALUATION. The Honeywell executive job evaluation method is used
for preparing position descriptions, assessing position
responsibilities, and assigning positions to salary grades and ranges.
Each position is evaluated by the Honeywell Corporate Compensation
Department and approved by a level of management designated by the
Company as appropriate for the job level involved.
(b) SALARY GRADES AND RANGES. Each salary grade is assigned a salary
range. A salary grade encompasses positions whose market pay
typically falls within a plus or minus 20 percent of the salary grade
midpoint. Salary grade midpoints generally have a 13 to 15 percent
differential.
4.2 ADJUSTMENTS TO BASE SALARY. The Base Salary of Participants may be
adjusted from time to time as follows:
(a) REVIEW OF SALARY RANGES. Salary ranges are reviewed at least annually
and adjusted as necessary to assure that they are competitive with pay
opportunities provided by selected, large, high-technology companies.
Changes in salary ranges are approved by the Committee.
(b) CHANGES IN BASE SALARY. Changes in Base Salary are designed to
reflect performance of the Participant over time, as measured against
the performance requirements of the Participant's position. Such
adjustments to Base Salary must be approved by the next two higher
levels of Company management or, if no such levels exist, the
Committee.
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SECTION 5 - CALCULATION OF INCENTIVE AWARD
5.1 ESTABLISHING UNIT OBJECTIVES. At the beginning of each year, Unit
Objectives are approved by Corporate Management for the Company and each of the
Incentive Units for the year. Such objectives may vary by Unit to reflect the
characteristics and emphases of the Units.
5.2 ASSESSING UNIT PERFORMANCE. After the end of each year, actual performance
against unit objectives is measured for the Company and each of its Units.
Actual results for each objective are expressed as a percentage of the objective
or plan. Performance against any one objective is limited to 200 percent after
leveraging under Section 5.5.
5.3 ADJUSTING UNIT FINANCIAL RESULTS. A Unit Performance Adjustment to
compensate for unforeseen circumstances which significantly impact the Unit's
performance may be applied by Corporate Management to reflect a dollar impact
which was not taken into account in establishing Unit objectives for the
calendar year.
5.4 WEIGHTING UNIT PERFORMANCE. The percentage of the Unit's performance
determined under Section 5.2, after application of any Unit Performance
Adjustment, shall thereupon be weighted by the respective percentage assigned by
Corporate Management to each objective (for example, 50 percent ROI, 50 percent
Operating Profit), equal to a 100 percent total, to arrive at the Composite
Performance Percentage for the Unit.
5.5 CALCULATING LEVERAGED INCENTIVE PERCENTAGE. The Unit's Composite
Performance Percentage is then adjusted up or down by a Leveraged Incentive
Percentage for each one percent deviation from On-Plan performance between 70
and 130 percent, or such other range as determined by Corporate Management and
approved by the Committee prior to the beginning of the calendar year to which
an Award relates, to arrive at the Unit's Leveraged Incentive Percentage.
5.6 DETERMINING ORGANIZATIONAL INFLUENCE WEIGHTINGS. Unless otherwise approved
by the Chief Executive Officer, the Unit's Leveraged Incentive Percentage
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shall be weighted according to Influence Weightings to determine the Composite
Incentive Percentage of the Unit:
(a) COMPANY INFLUENCE. From 0 to 20 percent of a Unit's Composite
Incentive Percentage, as determined in the sole discretion of the
Chief Executive Officer, shall be based upon the performance of the
Company.
(b) UNIT INFLUENCE. At least 40 percent of a Unit's Composite Incentive
Performance shall be based on its own performance.
(c) OTHER UNIT INFLUENCE. Where a Unit has a significant interdependence
with another Unit, additional approved Influence Weightings may be
used in determining the Unit's Composite Incentive Percentage.
5.7 ESTABLISHING ON-PLAN INCENTIVE FUND. The On-Plan Incentive Percentage for
each Participant is multiplied by his or her annual Base Salary for the calendar
year or, (i) in the event that the Participant is promoted or demoted during the
calendar year by each Base Salary applicable to the Participant on a pro-rata
basis for that portion of the calendar year, (ii) in the event a Participant
retires, was laid off, or left work because of death or Permanent and Total
Disability, or who became a Participant in the Plan after January 1 of the
calendar year, by his or her Base Salary for the months he or she was a
Participant in the Plan. Such amounts shall then be added to an amount
calculated in that manner for all other Participants in the Unit in order to
arrive at the On-Plan Incentive Fund for the Unit.
5.8 COMPUTING UNIT INCENTIVE FUND. The Unit's Composite Incentive Percentage
is multiplied by the On-Plan Incentive Fund of the Unit and may then be
increased or decreased by Corporate Management provided that the sum of Unit
Incentive Funds so adjusted may not exceed the sum of such funds prior to such
adjustment.
5.9 DETERMINING FINAL INCENTIVE FUND. At the end of each calendar year,
Corporate Management assesses a Unit's performance against both its financial
and non-financial objectives and may, in its discretion, adjust the Unit
Incentive Fund by an Incentive Fund Adjustment of a plus or minus percentage no
greater than 20 percent of the Unit's On Plan Incentive Fund to reflect his or
her assessment of the Unit's total
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performance, including its attainment of non-financial objectives, to determine
the Final Incentive Fund of the Unit. Non-financial objectives may vary by Unit
and may include, among other factors, innovation, risk taking, human resource
productivity improvement, equal opportunity, Company image, customer service,
product development, and progress toward long-term objectives. In the case of
individual Presidents and inside directors of Honeywell, the Committee assesses
the performance of these Participants against such objectives which it may
select and may adjust the Incentive Fund applicable to those Participants in the
same manner as provided above for other Participants in this Section 5.9 to
reflect its assessment of such Participants' performance.
5.10 ALLOCATING THE UNIT'S FINAL INCENTIVE FUND TO PARTICIPANTS. The Unit's
Final Incentive Fund is allocated to individual Participants by the Top
Management of Unit, reviewed by appropriate higher level management, approved by
Corporate Management and, except as otherwise provided in Section 7, paid to the
Participant in the month of February of the calendar year following the
incentive year during which the Award was earned unless the Participant has
elected to defer payment of the Award in accordance with Section 8. Individual
Awards are based on the Unit's Final Incentive Fund adjusted to reflect the
Participant's actual performance against individual goals and objectives. The
sum of individual awards for a Unit cannot exceed such Unit's Final Incentive
Fund.
5.11 LIMITATIONS. The amount of total Incentive Awards distributed under the
Plan is limited as follows:
(a) PERCENTAGE OF ON-PLAN INCENTIVE. No Participant or Unit may receive
more than 200 percent of his or its On-Plan Incentive Fund.
(b) AMOUNT OF INCENTIVE COMPENSATION. The amount which the Company may
distribute as Awards for any calendar year pursuant to the Plan to
those Participants that are determined by the Committee to be the
executives subject to the limit on incentive compensation under
Article XI of Honeywell's By-laws shall not exceed the amount which,
when added to the amount of incentive compensation accrued for such
year under the Honeywell Long-Range Stock Incentive Plan and any
performance-
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related award under the Honeywell Stock and Incentive Plan with
respect to such executives, would equal the limit on incentive
compensation for such year under that Article of the By-Laws, as in
effect at the end of such year. Individual payments under this Plan
to such Participants shall be reduced pro rata to the extent necessary
to comply with this limitation after any payments under the Honeywell
Long-Range Stock Incentive Plan to these Participants have first been
reduced.
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SECTION 6 - LOCATION EXECUTIVE COMPENSATION PLANS
6.1 GENERAL. An Incentive Unit may, with the approval of the Committee,
administer a "location executive compensation plan" under and pursuant to the
provisions of this Plan. Such plans shall be administered by the Unit's
president with all payments of Incentive awards subject to his or her discretion
as exercised in accordance with the rules established by the Committee as
permitted by Section 3.2.
6.2 HOME AND BUILDING CONTROL/INTERNATIONAL EXECUTIVE COMPENSATION PLAN. The
Home and Building Control/International Executive Compensation Plan constitutes
a location executive compensation plan which has been approved by the Committee.
It shall be administered by the President, Home and Building
Control/International, pursuant to the terms of this Plan except that Section
5.6(a) shall not be applicable.
6.3 INDUSTRIAL AUTOMATION CONTROL EXECUTIVE COMPENSATION PLAN. The Industrial
Automation Control Executive Compensation Plan constitutes a location executive
compensation plan which has been approved by the Committee. It shall be
administered by the President, Industrial Automation Control, pursuant to the
terms of this Plan except that Section 5.6(a) shall not be applicable.
6.4 MICROSWITCH EXECUTIVE COMPENSATION PLAN. The Microswitch Executive
Compensation Plan constitutes a location executive compensation plan which has
been approved by the Committee. It shall be administered by the President,
Industrial Automation Control, pursuant to the terms of this Plan except that
Section 5.6(a) shall not be applicable.
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SECTION 7 - DEFERRED PAYMENT OF AWARDS
7.1 ELECTION TO DEFER. Not later than the last day of the first calendar
quarter during 1985 and not later than the last day of the year prior to the
year to which an Incentive Award relates during calendar years thereafter, each
Participant shall be provided the opportunity to make an irrevocable election to
defer the payment of the Award for that respective calendar year.
7.2 AMOUNT OF DEFERRAL. Each Participant may elect to defer the payment of a
specified dollar amount, any excess over a specified dollar amount, or a
designated percentage of the Award. The minimum amount of the Award which may
be deferred with respect to a calendar year is $1,000.
7.3 PERIOD OF DEFERRAL. Subject to earlier payment under Section 7.6, a
Participant may elect to defer commencement of payment of the Award until the
earlier of March 15 of the calendar year following the Participant's Early
Retirement Date or Normal Retirement following the Participant's Normal
Retirement Date.
7.4 DESIGNATION OF FORM OF PAYMENT. Each Participant who elects to receive
deferred payment of his Award may specify whether such deferred amount is to be
paid in a lump sum on or about March 15 of the year following the earlier of the
year in which the Participant's Early Retirement Date or Normal Retirement Date
occurs, or in approximately equal annual installments over a period of not more
than ten (10) years commencing on or about March 15 of the year following the
earlier of the year in which the Participant's Early Retirement Date or Normal
Retirement Date occurs.
7.5 CREDITS TO DEFERRED AWARD ACCOUNT. In the event that the Participant
elects to defer payment of his or her Award, a credit in the amount of such
deferred payment shall be made to the Participant's Deferred Award Account no
later than February 28 of the calendar year following the incentive year during
which the Award was earned. During the term of the Plan, interest shall be
credited to each Participant's Deferred Award Account (a) annually as of
February 15, (b) as of the last day of the month preceding a Change in Control
of the Company, and (c) at the time of distribution of the entire balance of or
annual installment from such Account for the year or portion thereof then ended,
based on the average daily balance of the Account for such year or portion
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thereof, at the average effective interest rate on the composite of long-term
and short-term borrowings of Honeywell Inc. and designated finance company
subsidiaries for the five (5) years ending with the calendar year prior to the
calendar year in which interest is being credited, as such rate may be
determined for purposes of the financial reports prepared for the Honeywell
Corporate Treasurer.
7.6 EVENT TRIGGERING PAYMENT OF DEFERRED AWARD ACCOUNT. Participant's Deferred
Award Account shall be paid or commenced to be paid by Honeywell to such
Participant, or, in the event of his or her death or incapacity, to the person
or persons legally entitled thereto, after the earliest to occur of the
following events:
(a) the Participant's Early Retirement Date,
(b) the Participant's Normal Retirement Date,
(c) the Participant's death,
(d) termination of the Participant's employment with the Company for any
reason other than death, Early Retirement, or retirement on or after
his or her Normal Retirement Date, or
(e) a Change in Control as defined in Section 8, with the form and
commencement of such payment being determined by the provisions of
Section 7.7.
7.7 MANNER OF PAYMENT OF DEFERRED AWARD ACCOUNT. The manner of payment of the
Deferred Award Account to a Participant where clauses (a) and (b) of Section 7.6
are applicable shall be in a lump sum which shall be paid to him or her on or
about March 15 of the year following the year in which the earlier of such
events set forth in clauses (a) or (b) occur unless the Participant has elected
installment payments pursuant to Section 7.4 whereby approximately equal annual
installments over a period of not more than ten (10) years shall be made
beginning with an initial installment to be paid on or about March 15 of the
year following the year in which such event occurs. The form of payment of the
Deferred Award Account to a Participant where clauses (c) or (d) of Section 7.6
are applicable shall be in a lump sum which shall be paid to the
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Participant within sixty (60) days following the occurrence of any event set
forth in such clauses. The form of payment of the Deferred Award Account to a
Participant upon a Change in Control shall be in a manner set forth in Section
8.
7.8 EARLY PAYMENT OF DEFERRED AWARD ACCOUNT. Notwithstanding any contrary
provisions of Section 7, in the event that the Participant or beneficiary incurs
a financial hardship, he or she may apply to the Committee to receive an amount
from the Participant's Deferred Award Account sufficient to satisfy the
emergency need. If the application is approved by the Committee, it will direct
Honeywell to pay an amount necessary to meet the emergency need. The term
"financial hardship" shall mean an event resulting from an illness or accident
of the Participant or of a dependent of the Participant, loss of the
Participant's property due to casualty, the layoff of the Participant or other
circumstances arising as a result of events beyond the control of the
Participant. An event shall not constitute a "financial hardship" to the extent
that such hardship may be relieved through reimbursement or compensation by
insurance or otherwise or by liquidation of the Participant's assets, to the
extent that the liquidation of such assets would not itself cause a financial
hardship. Also, a "financial hardship" shall not include the need to send a
Participant's child to college or the desire to purchase a home.
7.9 ADMINISTRATIVE PROCEDURES. The Committee may adopt such rules and
regulations governing such deferrals and specifications as it deems appropriate.
All deferred payments hereunder shall be paid in cash from the general funds of
the Company and no special or separate fund shall be established and no other
segregation of assets shall be made to assure the payment of benefits hereunder.
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SECTION 8 - CHANGE IN CONTROL
8.1 PAYMENTS UPON CHANGE IN CONTROL. Notwithstanding any provision in the Plan
to the contrary, in the event of a "Change in Control", as defined in this
Section, each Participant shall receive payment of:
(a) the Participant's Incentive Award, based upon an assumption of On-Plan
performance for the incentive year during which such Change in Control
occurs, multiplied by a fraction, the numerator of which is the number
of months (calculated to the nearest whole month) of such
Participant's participation in the Plan during the incentive year in
which the Change in Control occurs and the denominator being twelve
and
(b) all amounts, if any, credited to the Participant's Deferred Award
Account, as of the effective date of such Change in Control, including
any interest accrued in accordance with Section 7.5 of the Plan,
which payments shall be distributed on the fifth business day after such Change
in Control as a lump sum cash payment.
8.2 DEFINITION OF CHANGE OF CONTROL. For all purposes of the Plan, a "Change
in Control" of the Company 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 the Company, any subsidiary of the Company, any "person"
(as hereinabove defined) acting on behalf of the Company 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 the
Company or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
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representing 30 percent or more of the combined voting power of the
Company's then outstanding securities;
(b) during any period of not more than two consecutive years (not
including any period prior to the execution of this amendment to the
Plan), individuals who at the beginning of such period constitute the
Board of Directors of the Company (the "Board"), and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this Section) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) 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 the Company approve a merger or consolidation of
the Company with any other corporation, other than (i) a merger or
consolidation which would result in the voting securities of the
Company 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 the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30 percent of the
combined voting power of the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or any
transaction having a similar effect).
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SECTION 9 - CHANGES IN EMPLOYEE STATUS
9.1 TRANSFERS BETWEEN UNITS. A Participant who transfers between Units before
the end of a calendar year shall be eligible to receive an Award based on the
performance of either the old or new Unit or a combination thereof. The
determination will be made by Corporate Management on a case-by-case basis.
Generally, a pro rata allocation will be made, but if an individual transfers
early in a calendar year, the Award may be calculated as if the Participant had
been in the new Unit all year. If the transfer is late in the year, it may be
calculated as if the Participant had been in the former Unit the entire year.
Transfers in the second or third quarter generally result in a prorated
calculation (for example, six months based on the old Unit and six months based
on the new Unit).
9.2 PARTICIPATION FOR A PARTIAL YEAR. A Participant who (i) ceases to be a
Participant in the Plan during a calendar year because of voluntary retirement,
layoff, position assignment, Permanent and Total Disability, or death, or (ii)
becomes a Participant in the Plan after January 1 of any year, shall be eligible
for an Incentive Award determined under Section 5, but pro-rated to reflect the
portion of the year in which he or she was a Participant.
A Participant whose employment terminates because of resignation or Company-
initiated employment termination shall not be eligible for an Incentive Award
for the calendar year in which such employment termination occurs.
Notwithstanding the foregoing, the Incentive Award for any Participant who
becomes a Participant in the Plan after January 1 of any year solely as a result
of ceasing to be a participant in the Honeywell Senior Management Performance
Incentive Plan, shall be pro-rated only to the extent such person was not an
employee of the Company during such year.
9.3 DISCHARGE. If a Participant is discharged from the Company before an
Incentive Award has been made for a calendar year because of malfeasance (which
shall include, among other reasons, neglect of duties, divulgence of Company
secrets, or breach of Company policy), the Participant shall forfeit any and all
rights he or she would have had to an Incentive Award under the Plan for that
year, unless a specific contrary decision is made by Corporate Management.
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SECTION 10 - ASSIGNMENT AND BENEFICIARIES
10.1 DESIGNATION OF BENEFICIARY. Neither amounts awarded to a Participant or
credited to the Participant's Deferred Award Compensation Account nor any other
rights or benefits of a Participant under the Plan may be assigned, transferred,
pledged or alienated in any way; provided, however, that a Participant may
designate a beneficiary or beneficiaries to receive after the Participant's
death payments at the times and in the amounts to which the Participant would
have been entitled under the Plan if he or she were alive. The beneficiary or
beneficiaries last designated by the Participant to receive the proceeds under
the Company Basic Life Insurance Plan upon his or her death shall be the
designated beneficiary or beneficiaries for purposes of this Plan. Such
designation of a Participant's beneficiary or beneficiaries may be replaced by a
new designation or may be revoked by the Participant at any time. The
designation or revocation of a beneficiary shall not be effective unless it is
on a form provided for that purpose by the Company, signed by the Participant
and delivered to the Company prior to the Participant's death.
10.2 DISTRIBUTION TO DESIGNATED BENEFICIARY. In the case of death of a
Participant who has made a valid beneficiary designation which has not been
subsequently replaced or revoked, amounts to which the Participant would have
been entitled under the Plan shall be distributed in accordance with the Plan to
the designated beneficiary or beneficiaries to the extent the designation of
such beneficiary or beneficiaries is valid and enforceable under applicable law.
Any amount distributable to a Participant upon death and not subject to such a
designation shall be distributed to the Participant's legal representative or
estate. If there is any question as to the legal right of any beneficiary to
receive the distribution under the Plan, the amount in question may be paid to
the legal representative or estate of the Participant, at the option of the
Committee, in which event the Company shall have no further liability to anyone
with respect to such amount.
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SECTION 11 - GENERAL CONDITIONS
11.1 LIMITATION OF RIGHTS. Nothing in this Plan and no action taken pursuant to
its provisions shall be construed to:
(a) give any employee of the Company any right to any compensation, except
as specifically provided herein;
(b) be evidence of any agreement, contract, or understanding, expressed or
implied, that the Company will employ a Participant in any particular
position or at any particular rate of remuneration;
(c) limit in any way the right of the Company to terminate a Participant's
employment at any time;
(d) give any Participant any right, title, or interest whatever in or to
any investments which the Company may make to aid it in meeting its
obligations hereunder;
(e) create a trust of any kind or a fiduciary relationship between the
Company and a Participant or any other person; and
no assets of the Company or any of its subsidiaries shall be segregated with
respect to any deferred amounts and all such amounts shall constitute unsecured
contractual obligations of the Company and its subsidiaries.
11.2 APPLICABLE LAW. All questions pertaining to the construction, validity and
effect of the 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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