Employment Agreement - AlliedSignal Inc. and Alan Belzer



[LOGO]                             AlliedSignal Inc.            201 455 3997
                                   P.O. Box 2245                201 455 2608 Fax
                                   Morristown, NJ 07962-2245

DONALD J. REDLINGER
Senior Vice President
Human Resources


December 21, 1993
 
Mr. Alan Belzer
AlliedSignal Inc.
101 Columbia Road
Morristown, NJ 07962
 
Dear Alan:
 
This  letter  will  confirm  our  understanding  regarding  the  extent  of your
salary continuation and other benefits to which you are entitled as a result  of
the termination of your employment on December 31, 1993.
 
SALARY CONTINUATION
 
For   the   36-month   salary   continuation   period   commencing   with   your
termination date on December  31, 1993, your compensation  at an annual rate  of
$765,000  with benefits as set forth below  and as described in, and subject the
conditions set  forth  in,  the  AlliedSignal Inc.  Severance  Plan  for  Senior
Executives,  will continue to be paid  through December 31, 1996 (the 'Severance
Period'). The Severance  Period includes  a ninety  (90) day  notice period  for
purposes of certain benefit programs. You will receive payment for earned unused
vacation.
 
INCENTIVE COMPENSATION DURING SALARY CONTINUATION
 
You  will  be eligible  for  full  bonus  consideration  for 1993. In  addition,
incentive compensation payments will be made under the Severance Plan for Senior
Executives  for  calendar  years  of   1994,  1995  and  1996.  Such   incentive
compensation  payments will  be based  on a  target bonus  percentage of  75% in
accordance with the Plan.
 
STANDARD COMPANY PROVIDED BENEFITS
 
You  may  elect  to   retain  your  coverage  in   the  Group  Life  and  Health
Insurance  Programs at  active employee  rates through the  end of  the month in
which salary  continuation  ends;  provided, however,  group  life  and  medical
insurance will cease on the date you become eligible for similar coverage from a
subsequent employer.
 
EXECUTIVE LIFE INSURANCE
 
Your  Executive  Life  coverage  of  $3,060,000  is 100%  vested and will remain
in force until  you reach  age 65.  At age 65,  ownership of  the company  owned
policies  ($3,060,000) will be transferred to you.  The cash value of the policy
will be taxable to you  at that time. However, there  will be cash available  to
borrow to offset a 30% tax liability.
 

 

EXECUTIVE STOCK OPTIONS
 
The Committee has approved the vesting of  all stock  options effective December
31, 1993. As a participant in the Corporation's Stock Plan, you  will have until
the lapse dates noted below to exercise these options.
 


            PREVIOUSLY    COMMITTEE
DATE OF       VESTED       VESTED      OPTION
 GRANT        SHARES       SHARES      PRICE     LAPSE DATE
- - - - - --------    ----------    ---------    ------    ----------
                                     
02/04/87       7,500         --        $46.38    02/04/1997
02/03/89      50,000         --        $34.75    02/03/1999
02/09/90      56,250        18,750     $35.44    02/08/2000
02/01/91       --           37,500     $28.69    01/31/2001
03/26/92      32,800        49,200     $54.07    03/25/2002
03/25/93       --           83,000     $68.69    03/24/2003

 
The  accompanying  performance  units  on  the non-qualified options will  lapse
without value.
 
     For assistance in exercising your options, please contact Mark Wolitzer  in
Morristown at (201) 455-5435.
 
RESTRICTED UNITS
 
The Committee approved the lapsing of restrictions on all outstanding restricted
units as of December 30, 1993.
 


YEAR OF AWARD                       UNVESTED UNITS
- - - - - --------------                      --------------
                                 
     1989                               40,000
     1990                                1,875
     1991                                7,000
     1992                                3,750
     1993                                2,635

 
The units will be paid in one of two ways:
 
          [*] 100% stock  upon receipt  of  a check  from  you for  the  minimum
              Federal and State tax withholding
 
          [*] 50%  stock, 50%  cash with  minimum withholding  deducted from the
              cash
 
RETIREMENT BENEFITS
 
At  the  end  of  the  Severance  Period,  you will be  eligible for a  80-point
pension.  You will  be provided  with an estimate  of your  pension benefits and
options available to you in accordance with the Plan, under separate cover. Your
qualified benefits will  be paid in  an annuity form,  while your  non-qualified
benefit can be paid in a lump sum, with approval.
 
ALLIEDSIGNAL SAVINGS PLAN
 
As  a  participant  in  the AlliedSignal Savings  Plan (ASSP),  you may elect to
continue to participate  in ASSP through  the earlier of  the conclusion of  the
salary  continuation  period  or  the  date  on  which  you  become  eligible to
participate in a  similar plan  sponsored by a  subsequent employer.  If you  so
elect, you will be required to continue to make contributions to ASSP by payroll
deduction from any severance payments due you and per ASSP the company will also
continue its contributions. Following the severance period, you will be entitled
to a distribution from ASSP in the manner described in the Plan.
 

 

SUPPLEMENTAL SAVINGS PLAN
 
Participation in the Supplemental  Savings Plan  may continue  during the salary
continuation period. Participation as well as withdrawals and distributions will
be in accordance with the terms of the Plan.
 
PERQUISITES
 
You will be permitted to purchase  your company  car for 75%  of the fair market
value.  The  amount by which  the fair market  value exceeds the  purchase price
will be included as income on your 1993 W-2.
 
Financial  and estate  planning assistance will  be paid by  the company on your
behalf through calendar year 1994. Tax preparation will be  paid by  the Company
on your behalf for tax years 1993 and 1994.
 
All other company-provided perquisites will cease on December 31, 1993.
 
CONTINGENCIES
 
If  you  become  ill  while  on this severance arrangement, you will continue to
receive  severance pay. In the event of  your death during the severance period,
any remaining payments will be made to your designated beneficiary.
 
CONFIDENTIALITY
 
You will continue to be bound by your existing  agreement  with  the Corporation
regarding  disclosure   of  trade  secrets  or  other  confidential  information
divulged  to  or acquired by  you during or  in connection with  your employment
with the Corporation.
 
In the event of your death  during the severance period,  any remaining payments
should be paid to:
 
                Debra L. Cruz and
              Frances Belzer Reid -- Daughters
        Name: __________________________________
 
        Social Security Number: ________________
 
        Address: _______________________________
 
                 _______________________________
 
                 _______________________________
 
If  no  designation  has  been  made,  or if  the  designated beneficiary  shall
predecease you, any such balance shall be paid to your estate.
 
GENERAL RELEASE
 
In  consideration  of  the  foregoing,  you hereby  release the Corporation from
any and all claims which you now, or hereafter may have in connection with  your
employment  or the termination thereof,  except for such claims  as you may have
with respect to the benefits set forth above.
 

 

Please sign and date the original and  the enclosed copy in  the  space provided
below, retain the signed original for your files and return the copy to me.
 
                                          AlliedSignal Inc.
 
                                          BY: /s/ D.R. REDLINGER
                                              ------------------
                                          Agreed: /s/ A. BELZER
                                                 --------------
                                          Date: 12/21/93
                                                ----------------

I elect/ [the words  'do not elect'  are crossed out here in the paper format]
to continue Group Life and Medical Insurance through the Severance Period.
 
                                                      12/21/93
                                                      --------
                                                       (Date)
 
I request that my restricted units be paid in (select one):
 
                          100% stock
        -----------------
               X          50% stock, 50% cash
        -----------------