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
-----------------
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