EXHIBIT 10.6
SUPPLEMENTAL NON-QUALIFIED SAVINGS PLAN FOR HIGHLY COMPENSATED
EMPLOYEES OF HONEYWELL INTERNATIONAL INC. AND ITS SUBSIDIARIES
(Career Band 6 and above)
(As Amended and Restated as of April 3, 2002)
1. Eligibility
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Those highly compensated employees ("HCEs") of Honeywell International
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 any of the qualified (as determined
under Code Section 401(a)) savings plans maintained by the Corporation or its
subsidiaries, other than any such plan maintained by Pittway Corporation and its
affiliates or by Honeywell Inc. prior to April 1, 2000, (the "Qualified Savings
Plans") are eligible to participate in the Supplemental Non-Qualified Savings
Plan for Highly Compensated Employees of Honeywell International 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 applicable Qualified Savings Plans.
3. Participation
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(a) Time and Form of Election. Any eligible employee may become a
participant in the Plan (a "Participant") as of the beginning of the next
available pay period, by executing a written or electronic notice of election to
participate and filing such notice with the Plan Administrator (as defined in
Section 10(a)) 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 Plans. 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 may elect at
any time to modify the amount of Base Annual Salary to be credited to the
Participant's Account under the Plan, which modification shall be effective for
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. Unless the Plan Administrator
shall have established a lesser amount, a Participant may elect to defer an
aggregate amount equal to the difference between (i) a full percentage of such
Participant's Base Annual Salary from 1% to the maximum percentage permitted
under the Qualified Savings Plans and Code Section 415(c)(1)(B) for Before-Tax
Contributions by an individual who is not an HCE and who is eligible to
participate in the Qualified Savings Plans, 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 Plans, and (ii)
the full amount of Before-Tax Contributions made by such Participant under the
Qualified Savings Plans; provided, however, that a Participant who elects to
defer any amount hereunder shall be required to make the maximum Before-Tax
Contributions permissible under the Qualified Savings Plans for the applicable
Plan Year (after giving effect to deferrals under the Plan or otherwise).
(b) Plan Employer Contributions. There shall be credited 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 entitled to a 50% Employer Contribution in the Qualified
Savings Plans) or 100% (for participants entitled to a 100% Employer
Contribution in the Qualified Savings Plans) 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 Plans and Participant
Deferred Contributions under the Plan, expressed as a percentage of Base Annual
Salary, and (ii) is the total amount of Employer Contributions made with respect
to the Participant under the Qualified Savings Plans; provided, however, 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 Plans, whether or not such Participant
continues to make Participant Contributions under the Qualified Savings Plans
during the period of such suspension. Notwithstanding the preceding sentence,
there shall be credited to the Participant's Account an amount equal to the
product of (i) the number of whole shares of common stock of Honeywell
International Inc. ("Common Stock") credited to such Participant's Account under
Section 5(b) on December 29, 2000, and (ii) $0.08 (such product rounded to the
nearest full dollar). The amount determined under the preceding sentence shall
be credited to the Participant's Account as Plan Employer Contributions in
accordance with Section 5(a) and shall be credited to such Account no later than
December 31, 2000.
(c) Vesting. Participant Deferred Contributions, Plan Employer
Contributions (collectively "Total Contribution Amounts") and all amounts
accrued with respect to Total
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Contribution Amounts in accordance with Section 5, shall be vested at the time
such amounts are credited to the Participant's Account.
(d) All Contributions Prorated. Total Contribution Amounts shall be
credited to a Participant's Account each pay period.
5. The Participant's Account
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(a) Crediting of Participant's Accounts. Participant Deferred
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 such amounts are distributed. Plan Employer
Contributions shall be credited to the Participant's Account under the Plan as
unfunded book entries stated as shares of Common Stock (including fractional
shares). The number of shares of Common Stock credited to a Participant's
Account shall be determined by dividing the equivalent cash amount (as
determined under Section 4(b)) by the closing price of Common Stock on the day
that such Plan Employer Contributions are credited to the Participant's Account.
Amounts equivalent to the dividends that would have been payable in respect of
the Common Stock shall be credited to the Participant's Account as if reinvested
in Common Stock, with the number of shares credited determined by dividing the
equivalent cash dividend amount by the closing price of Common Stock on the date
the dividends would have been payable. Amounts credited to the Participant's
Account shall accrue amounts equivalent to interest and dividends, as the case
may be, until distributed in accordance with the Plan.
(b) Transition Rule for Plan Employer Contributions. The balance of
each Participant's Account attributable to Plan Employer Contributions,
determined as of the close of business on the day prior to the effective date of
the amendment and restatement of the Plan and adjusted to reflect all gains,
losses and dividends that have been credited to such Participant's Account
through the day prior to such effective date, shall be converted into the
equivalent number of shares of Common Stock by dividing such balance by the
closing price of Common Stock on the trading date next preceding such effective
date. Such amount shall be an unfunded book entry only and shall (i) thereafter
be credited with equivalent dividend amounts in accordance with Section 5(a),
and (ii) be distributed in accordance with Section 6(a)(ii).
6. Distribution from Accounts
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(a) Form of Election.
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(i) Participant Deferred Contributions. At the time a Participant makes
an election pursuant to Section 3(a), the Participant shall also make an
election with respect to the distribution of the aggregate amount of the
Participant Deferred Contributions, plus earnings credited thereon pursuant to
Section 5 (collectively the "Participant Deferred Contribution Amounts"),
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
annual installments (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 Section
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 of
the Participant Deferred Contribution Amounts shall have been paid. The amount
of each installment shall be determined by multiplying the balance of the
Participant Deferred Contribution Amounts each year by a fraction, the numerator
of which is one and the denominator of which is (A) the number of installments
elected, reduced by (B) one for each annual installment previously received.
(ii) Plan Employer Contributions. The distribution election made
pursuant to subsection (i) above shall also apply to the timing of the
distribution of the aggregate number of shares of Common Stock representing the
Plan Employer Contributions plus reinvested dividends pursuant to Section 5
(collectively the "Plan Employer Contribution Amounts") credited to the
Participant's Account pursuant to Section 5. Except to the extent otherwise
provided with respect to fractional shares, all distributions of Plan Employer
Contribution Amounts shall be made in Common Stock. A Participant may elect to
receive such Plan Employer Contribution Amounts in one lump-sum payment or in a
number of annual installments (up to fifteen installments). The lump-sum payment
or the first installment shall be paid 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 Section
8, subsequent installments shall be paid as soon as practicable during the month
of January of each succeeding calendar year until the entire amount of the Plan
Employer Contribution Amounts shall have been paid. The amount of each
installment shall be determined by (A) multiplying the balance of the Plan
Employer Contribution Amounts on the last Valuation Date of each year by a
fraction, the numerator of which is one and the denominator of which is (x) the
number of installments elected, reduced by (y) one for each annual installment
previously received, and (B) rounding the result down to the next whole share of
Common Stock; provided, however, the amount of the last installment shall be
determined without regard to the rounding requirement of the preceding portion
of this sentence. Any fractional shares of Common Stock shall be paid in an
equivalent cash amount, as determined using the closing price of Common Stock on
the trading date next preceding the distribution date.
(b) Adjustment of Method of Distribution. Prior to the beginning of any
calendar year, a Participant may elect to change the timing and method of
distribution of the Participant Deferred Contribution Amounts and Plan Employer
Contribution Amounts credited to the
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Participant's Account commencing with such calendar year. Participant Deferred
Contribution Amounts and Plan Employer Contribution 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 provided in this
Section 6 or as determined by the Plan Administrator pursuant to Section 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.
(c)(i) Distribution Default for Participant Deferred Contribution
Amounts. Any Participant Deferred Contribution Amounts credited to a
Participant's Account which are not covered by a timely distribution election
under subsections (a) and (b) above shall be distributed to the Participant in
one lump-sum cash payment 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 made an election pursuant to Sections 9(a)(i) or 9(a)(ii), the
lump sum payment shall be made within the 90-day period following a Change in
Control, as defined in Section 9(c).
(c)(ii) Distribution Default for Plan Employer Contribution Amounts.
Any Plan Employer Contribution Amounts credited to a Participant's Account which
are not covered by a timely distribution election under subsections (a) and (b)
above shall be distributed to the Participant in Common Stock 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 it subsidiaries (whether by reason of Retirement or
otherwise); provided, however, if the Participant has made an election pursuant
to Sections 9(a)(i) or (ii), the distribution shall be made within the 90-day
period following a Change in Control, as defined in Section 9(c). Any fractional
shares of Common Stock shall be paid in an equivalent cash amount, as determined
using the closing price of Common Stock on the trading date next preceding the
distribution date.
(d) Changing Prior Distribution Elections. The Plan Administrator may
from time to time allow Participants to request new elections with respect to
the distribution of a Participant's Prior Balance under the Plan (other than any
portion of such Prior Balance for which distributions have already commenced).
The Plan Administrator shall reserve the right to accept or reject any such
request at any time and such election shall be subject to such restrictions and
limitations as the Plan Administrator shall determine in its sole discretion,
provided that any new election shall generally be required to be made at least
twelve (12) months prior to any scheduled payment date. The Plan Administrator
may also allow a Participant to request an immediate distribution of all or a
portion of such Participant's Prior Balance (including any portion of such Prior
Balance for which distributions have already commenced) and any Deferred
Contribution Amounts and Plan Employer Contribution Amounts credited to the
Participant's Account immediately prior to such request. Any such immediate
distribution shall be subject to a penalty equal to six percent (6%) of the
amount requested to be distributed and shall be subject to the approval of the
Plan Administrator and such other restrictions or conditions as may be
established by the Plan Administrator from time to time.
(e) Special Distribution Provision. Notwithstanding any provision in
this Plan to the contrary, if all or a portion of a Participant's Account is
determined to be includible in the Participant's gross income and subject to
income tax at any time prior to the time such Account
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would otherwise be paid, the Participant's Account or that portion of the
Participant's Account shall be distributed to the Participant. For this purpose,
an amount is determined to be includible in the Participant's gross income upon
the earliest of: (i) a final determination by the Internal Revenue Service
addressed to the Participant which is not appealed, (ii) a final determination
by the United States Tax Court or any other federal court affirming an IRS
determination, or (iii) an opinion addressed to the Corporation by the tax
counsel for the Corporation that, by reason of the Code, Treasury Regulations,
published Internal Revenue Service rulings, court decisions or other substantial
precedent, the amount is subject to federal income tax prior to payment.
7. Distribution on Death
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(a) Participant Deferred Contribution Amounts. If a Participant should
die before all Participant Deferred Contribution Amounts credited to the
Participant's Account have been paid in accordance with the election referred to
in Sections 6(a) or 6(b), the balance of the Participant Deferred Contribution
Amounts in such Participant's Account shall be paid in cash as soon as
practicable following the Participant's death to the beneficiary designated in
writing by the Participant and filed with the Plan Administrator; provided,
however, if the Participant has made an election pursuant to Sections 9(a)(i) or
9(a)(ii), such amount shall be paid within the 90-day period following a Change
in Control, as defined in Section 9(c). If (i) no beneficiary designation has
been made, or (ii) 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 Plan Administrator.
(b) Plan Employer Contribution Amounts. If a Participant should die
before all Plan Employer Contribution Amounts credited to the Participant's
Account have been paid in accordance with the election referred to in Sections
6(a) or 6(b), the balance of the Plan Employer Contribution Amounts in such
Participant's Account shall be paid in Common Stock as soon as practicable
following the Participant's death to the beneficiary designated in writing by
the Participant and filed with the Plan Administrator; provided, however, if the
Participant has made an election pursuant to Sections 9(a)(i) or 9(a)(ii), such
amount shall be paid within the 90-day period following a Change in Control, as
defined in Section 9(c). If (i) no such beneficiary designation has been made,
or (ii) 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 Plan Administrator. Any fractional shares of Common Stock shall
be paid in an equivalent cash amount, as determined using the closing price of
Common Stock on the trading date next preceding the distribution date.
8. Payment in the Event of Hardship
--------------------------------
Upon receipt of a request from a Participant, delivered in writing to
the Plan Administrator along with a Certificate of Unavailability of Resources
form, the Plan Administrator, 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 Sections 6(a) or 6(b) would result in severe
financial hardship to the Participant, and such hardship is the result of an
unforeseeable emergency caused by
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circumstances beyond the control of the Participant. Acceleration of payment may
not be made under this Section 8 to the extent that such hardship is or may be
relieved (a) through reimbursement or compensation by insurance or otherwise,
(b) by liquidation of the Participant's assets, to the extent the liquidation of
assets would not itself cause severe financial hardship, or (c) by cessation of
deferrals under this Plan or any tax-qualified savings plan of the Corporation
or its subsidiaries. Any distribution of Participant Deferred Contribution
Amounts pursuant to this Section 8 shall be made in cash, while any distribution
of Plan Employer Contribution Amounts pursuant to this Section 8 shall be made
in Common Stock. Any fractional shares of Common Stock shall be paid in an
equivalent cash amount, as determined using the closing price of Common Stock on
the trading date next preceding the distribution date.
9. Change in Control
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(a)(i) Initial Lump-Sum Payment Election. Notwithstanding any election
made pursuant to Section 6, any person who becomes eligible to participate in
the Plan may file a written election with the Plan Administrator at the time the
individual makes an election to participate pursuant to Section 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. Any distribution of Participant Deferred
Contribution Amounts pursuant to this Section 9 shall be made in cash, while any
distribution of Plan Employer Contribution Amounts pursuant to this Section 9
shall be made in Common Stock (or the common stock of any successor corporation
issued in exchange for, or with respect to, Common Stock incident to the Change
in Control). Any fractional shares of Common Stock (or the common stock of any
successor corporation issued in exchange for, or with respect to, Common Stock
incident to the Change in Control) shall be paid in an equivalent cash amount.
(a)(ii) Subsequent Lump-Sum Payment Election. A Participant who did not
make an election pursuant to Section 9(a)(i) or who has revoked, pursuant to
Section 9(a)(iii), an election previously made under Section 9(a)(i) or this
Section 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 Section 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 Sections 9(a)(i) or
9(a)(ii).
(a)(iii) Revocation of Prior Change in Control Payment Elections. A
Participant may, prior to a Change in Control, file an election revoking any
election made pursuant to Sections 9(a)(i) or 9(a)(ii) or file a new lump sum
payment election under this Section 9 with respect to amounts previously
credited to the Participant's Account. Any such revocation or new election shall
be made at the time specified by the Plan Administrator and shall be subject to
such restrictions and limitations as the Plan Administrator shall determine from
time to time.
(b) Interest Equivalents. Notwithstanding anything to the contrary in
the Plan, after a Change in Control, the Plan may not provide, or be amended to
provide, interest accruals with respect to Participant Deferred Contributions at
rates lower than the rates in effect under Section 5 immediately prior to the
Change in Control.
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(c) Definition of Change in Control. For purposes of the 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 the benefit of employees of the Corporation or its
subsidiaries) which therefore beneficially owned less than 30% of the common
stock then outstanding acquires shares of 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 Common Stock, (ii)
of the purchase of shares of Common Stock pursuant to a tender offer or exchange
offer (other than an offer by the Corporation) for all, or any part of, the
Common Stock, (iii) of a merger 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
Corporate Governance Committee of the Board, in its discretion, determines to be
a Change in Control for purposes of the Plan.
10. Administration
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(a) Plan Administrator. The Plan Administrator and "named fiduciary"
for purposes of ERISA shall be the Senior Vice President-Human Resources and
Communications of the Corporation (or the person acting in such capacity in the
event such position is abolished, restructured or renamed). The Plan
Administrator shall have the authority to appoint one or more other named
fiduciaries of the Plan and to designate persons, other than named fiduciaries,
to carry out fiduciary responsibilities under the Plan, pursuant to Section
405(c)(1)(B) of ERISA. Any person acting on behalf of the Plan Administrator
shall serve without additional compensation. The Plan Administrator shall keep
or cause to be kept such records and shall prepare or cause to be prepared such
returns or reports as may be required by law or necessary for the proper
administration of the Plan.
(b) Powers and Duties of Plan Administrator. The Plan Administrator
shall have the full discretionary power and authority to construe and interpret
the Plan (including, without limitation, supplying omissions from, correcting
deficiencies in, or resolving inconsistencies or ambiguities in, the language of
the Plan); to determine all questions of fact arising under the Plan, including
questions as to eligibility for and the amount of benefits; to establish such
rules and regulations (consistent with the terms of the Plan) as it deems
necessary or appropriate for administration of the Plan; to delegate
responsibilities to others to assist it in administering the Plan; to retain
attorneys, consultants, accountants or other persons (who may be employees of
the Corporation and its subsidiaries) to render advice and assistance as it
shall determine to be necessary to effect the proper discharge of any duty for
which it is responsible; and to perform all other acts it believes reasonable
and proper in connection with the administration of the Plan. The Plan
Administrator shall be entitled to rely on the records of the Corporation and
its subsidiaries in determining any Participant's entitlement to and the amount
of benefits payable under the Plan. Any determination of the Plan Administrator,
including interpretations of the Plan and determinations of questions of fact,
shall be final and binding on all parties.
(c) Indemnification. To the extent permitted by law, the Corporation
shall indemnify the Plan Administrator from all claims for liability, loss, or
damage (including payment of
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expenses in connection with defense against such claims) arising from any act or
failure to act in connection with the Plan.
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11. Claims Procedures and Appeals
-----------------------------
(a) Any request or claim for Plan benefits must be made in writing and
shall be deemed to be filed by a Participant when a written request is made by
the claimant or the claimant's authorized representative which is reasonably
calculated to bring the claim to the attention of the Plan Administrator.
(b) The Plan Administrator shall provide notice in writing to any
Participant when a claim for benefits under the Plan has been denied in whole or
in part. Such notice shall be provided within 90 days of the receipt by the Plan
Administrator of the Participant's claim or, if special circumstances require,
and the Participant is so notified in writing, within 180 days of the receipt by
the Plan Administrator of the Participant's claim. The notice shall be written
in a manner calculated to be understood by the claimant and shall:
(i) set forth the specific reasons for the denial of benefits;
(ii) contain specific references to Plan provisions relative
to the denial;
(iii) describe any material and information, if any, necessary
for the claim for benefits to be allowed, that had been requested, but not
received by the Plan Administrator; and
(iv) advise the Participant that any appeal of the Plan
Administrator's adverse determination must be made in writing to the Plan
Administrator within 60 days after receipt of the initial denial notification,
and must set forth the facts upon which the appeal is based.
(c) If notice of the denial of a claim is not furnished within the time
periods set forth above, the claim shall be deemed denied and the claimant shall
be permitted to proceed to the review procedures set forth below. If the
Participant fails to appeal the Plan Administrator's denial of benefits in
writing and within 60 days after receipt by the claimant of written notification
of denial of the claim (or within 60 days after a deemed denial of the claim),
the Plan Administrator's determination shall become final and conclusive.
(d) If the Participant appeals the Plan Administrator's denial of
benefits in a timely fashion, the Plan Administrator shall re-examine all issues
relevant to the original denial of benefits. Any such claimant, or his or her
duly authorized representative, may review any pertinent documents, as
determined by the Plan Administrator, and submit in writing any issues or
comments to be addressed on appeal.
(e) The Plan Administrator shall advise the Participant and such
individual's representative of its decision, which shall be written in a manner
calculated to be understood by the claimant, and include specific references to
the pertinent Plan provisions on which the decision is based. Such response
shall be made within 60 days of receipt of the written appeal, unless special
circumstances require an extension of such 60-day period for not more than an
additional 60 days. Where such extension is necessary, the claimant shall be
given written
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notice of the delay. If the decision on review is not furnished within the time
set forth above, the claim shall be deemed denied on review.
(f) Any dispute, controversy, or claim arising out of or relating to
any Plan benefit, including, without limitation, any dispute, controversy or
claim as to whether the decision of the Plan Administrator respecting the
benefits under this Plan or interpretation of this Plan is arbitrary and
capricious, that is not settled in accordance with the procedures outlined in
this Section 11, shall be settled by final and binding arbitration in accordance
with the American Arbitration Association Employment Dispute Resolution or other
applicable Rules. Before resorting to arbitration, an aggrieved Participant must
first follow the review procedure outlined in this Section of the Plan. If there
is still a dispute after the procedures in this Section have been exhausted, the
Participant must request arbitration in writing within six (6) months after the
Plan Administrator issues, or is deemed to have issued, its determination under
subparagraph (e) above.
The arbitrator shall be selected by mutual agreement of the
parties, if possible. If the parties fail to reach agreement upon appointment of
an arbitrator within 30 days following receipt by one party of the other party's
notice of desire to arbitrate, the arbitrator shall be selected from a panel or
panels of persons submitted by the American Arbitration Association (the "AAA").
The selection process shall be that which is set forth in the AAA Employment
Dispute Resolution Rules, except that, if the parties fail to select an
arbitrator from one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an arbitrator
has been selected.
All fees and expenses of the arbitration, including a
transcript if requested, will be borne by the Corporation. The arbitrator shall
have no power to amend, add to or subtract from this Plan. The award shall be
admissible in any court or agency action seeking to enforce or render
unenforceable this Plan or any portion thereof. Any action to enforce or vacate
the arbitrator's award shall be governed by the Federal Arbitration Act if
applicable.
12. Miscellaneous
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(a) Anti-Alienation. 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) Unsecured General Creditor. Neither the Corporation nor any of its
subsidiaries shall be required to reserve or otherwise set aside funds, Common
Stock or other assets 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.
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(c) Withholding. The Corporation shall withhold from any distribution
made from Participant Deferred Contribution Amounts the amount necessary to
satisfy applicable federal, state and local tax withholding requirements. With
respect to distributions of Plan Employer Contribution Amounts, the delivery of
the shares of Common Stock shall be delayed until the Participant makes
arrangements, pursuant to procedures to be adopted by the Plan Administrator, to
satisfy the applicable federal, state and local tax withholding requirements.
(d) Termination and Amendment. The Corporation may at any time amend or
terminate the Plan. Notwithstanding the foregoing, the Plan may not, without the
consent of an affected Participant, be amended in any manner which would (i)
adversely affect such Participant's rights and expectations with respect to
Deferred Amounts credited to such Participant's Account immediately prior to
such amendment (including, but not limited to, any amendment which would
adversely affect the rights or features applicable to, or any of the components
that are taken into account in determining, the Deferred Amount of any
Participant hereunder) or, (ii) with respect to any Participant whose employment
terminates either during a Potential Change in Control Period or within two
years following a Change in Control under circumstances entitling such
Participant to severance benefits under the Corporation's Severance Plan for
Corporate Staff Employees or Part II of the Corporation's Severance Plan for
Senior Executives, adversely affect such Participant's rights and expectations
with respect to amounts that would otherwise have been credited to such
Participant's Account as a result of the election of such Participant to defer
the receipt of severance payments pursuant to such plan. For purposes of the
preceding sentence, a "Potential Change in Control Period" shall commence when:
(A) the Corporation enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; (B) the Corporation or any
person or group publicly announces an intention to take or to consider taking
actions which, if consummated, would constitute a Change in Control; (C) any
person or group (other than the Corporation, any subsidiary or any savings,
pension or other benefit plan for the benefit of employees of the Corporation or
its subsidiaries) becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing 15% or more of either the then
outstanding shares of common stock of the Corporation or the combined voting
power of the Corporation's then outstanding securities (not including in the
securities beneficially owned by such person or group any securities acquired
directly from the Corporation or its affiliates); or (D) the Board adopts a
resolution to the effect that, for purposes of the Plan, a Potential Change in
Control Period has commenced. The Potential Change in Control Period shall
continue until the earlier of (I) a Change in Control or (II) the adoption by
the Board of a resolution stating that, for purposes of the Plan, the Potential
Change in Control Period has expired.
(e) Benefit Statements. 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 balances credited
to the Participant's Account as of the end of the period covered by such
statement.
(f) Legal Interpretation. This Plan and its provisions shall be
construed in accordance with the laws of the State of Delaware to the extent
such Delaware law is not inconsistent with the provisions of ERISA. The text of
this Plan shall, to the extent permitted by law, govern the determination of the
rights and obligations created or referred to herein. Headings to the Sections,
paragraphs and subparagraphs are for reference purposes only and do not limit or
extend the meaning of any of the Plan's provisions.
(g) Employment. The adoption and maintenance of this Plan shall not be
deemed to constitute a contract between the Corporation or its subsidiaries and
any employee or to be a
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consideration for or condition of employment of any person. No provision of the
Plan shall be deemed to give any employee the right to continue in the employ of
the Corporation or its subsidiaries or to interfere with the right of the
Corporation or its subsidiaries to discharge any employee at any time without
regard to the effect which such discharge might have upon the employee's
participation in the Plan or benefits under it.
(h) Fiduciary Capacities. Any person or group of persons may serve in
more than one fiduciary capacity with respect to the Plan. For purposes of this
Section 12(h), the term "fiduciary" shall have the same meaning as in ERISA.
(i) Participants Subject to Section 16. Notwithstanding anything herein
to the contrary, if any request, election or other action under the Plan
affecting a Participant subject to Section 16 of the Securities Exchange Act of
1934 should require the approval of the Committee to exempt such request,
election or other action from potential liability under Section 16, then the
approval of the Committee shall be obtained in lieu of the approval of the Plan
Administrator.
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