Skip to main content
Find a Lawyer

Salary Deferral Plan for Selected Employees - AlliedSignal Inc.

Salary Deferral Plan for Selected Employees of AlliedSignal Inc. and its
Affiliates (Career Band 6 and above or employees who occupy positions equivalent

     Those employees of AlliedSignal Inc. (the 'Corporation') and its affiliates
whose positions are evaluated in Career Band 6 and above or who occupy positions
equivalent  thereto and  who are  designated by  the Management  Development and
Compensation Committee (the  'Committee'), shall be  eligible to participate  in
this  supplemental non-qualified Salary Deferral  Plan for Selected Employees of
AlliedSignal Inc. and its Affiliates (Career  Band 6 and above or employees  who
occupy positions equivalent thereto) (the 'Plan').
     An eligible employee may become a participant in the Plan (a 'Participant')
by  filing a timely written deferral  election with the Corporation. Such notice
shall direct that a portion of the compensation elements described in  paragraph
3(a) and paragraph 3(b) be credited to an unfunded deferred compensation account
maintained  for the  Participant under  the Plan  (the 'Participant  Account' or
'Account'). A  Participant's  direction  shall become  effective  for  the  next
succeeding  pay period  or payment date,  as appropriate, and  shall continue in
effect until the employee terminates such direction or is no longer eligible  to
be  a  Participant.  Any  modification of  a  Participant's  direction  shall be
effective only with respect to compensation payable with respect to pay  periods
which  begin after  the date  such direction is  received by  the Corporation or
payment dates which occur later in time, and amounts previously credited to  the
Participant's Account shall not be affected.
     (a)  Base Annual Salary -- A Participant may, prior to the commencement of
any pay period, elect to defer an aggregate amount of base annual salary,
exclusive of any bonus or any other compensation  or allowance  paid or  payable
by the Corporation or its affiliates  (the 'Base Annual  Salary'). The amount
deferred under  this paragraph 3(a) shall not be  greater than fifty percent
(50%) of the Participant's Base Annual Salary for such pay period.
     (b) Incentive Awards -- A Participant may, to the extent that the
AlliedSignal Inc. Incentive Compensation Plan For

Executive Employees (the 'Incentive  Plan') permits deferrals  of  an  incentive
award  (the  'Incentive  Award')  payable thereunder, elect  to  defer an amount
not greater than  one hundred percent  of such  Incentive  Award. Any amount  so
deferred shall  be deemed  to be deferred under  this  Plan  but shall,  to  the
extent the provisions of the Incentive Plan are not inconsistent with this Plan,
otherwise be subject  to the terms of the  Incentive  Plan.  Any  deferral of an
Incentive Award shall be made by filing an appropriate written deferral election
with the  Corporation  not  later  than  ninety days  prior  to the  end of  the
performance  period with  respect to  which the Incentive Award is payable.
     (c) Deferral Amounts -- All amounts determined under this paragraph 3 which
are the subject of a written   deferral election (the 'Deferral Amounts') shall,
in  accordance  with  the  relevant  Participant  direction,  be  credited  to a
Participant Account maintained under  the Plan on the  same day the Base  Annual
Salary or Incentive Award would otherwise have been payable.
     Amounts  may be  deferred under  this Plan  for a  minimum period  of three
years. No amount  shall be  withdrawn from a  Participant Account  prior to  the
earlier of: three years following the last day of the calendar year in which the
amount  is credited to the Participant Account; the date the Participant reaches
normal retirement age and is eligible to receive a benefit under a pension  plan
of the Corporation or one of its affiliates; the date of Participant's death; or
the  date the Participant ceases to be employed by the Corporation or any of its
     Deferral Amounts  shall accrue  additional amounts  equivalent to  interest
('Interest Equivalents'), compounded daily, from the date the Deferral Amount is
credited  to  the  Account  to  the date  of  distribution.  A  single  rate for
calculating Interest  Equivalents  shall be  established  by the  Committee,  in
its  sole discretion, for all Deferral  Amounts credited to Participant Accounts
in each calendar year.  The rate established by  the Committee 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. Such  Interest Equivalents, once  established for  a
calendar  year,

shall remain in effect with respect to Deferral Amounts credited to Participant
Accounts during that calendar year until the Deferral Amounts are  distributed.
     All amounts credited to  a Participant's Account  pursuant to paragraphs  3
and  4  shall  be  unfunded  general  obligations  of  the  Corporation,  and no
Participant shall have any  claim to or  security interest in  any asset of  the
Corporation on account thereof.
     At  the time a Participant  makes an election pursuant  to paragraph 3, the
Participant shall also make an election with respect to the distribution of  the
Deferral  Amounts and Interest Equivalents accrued thereon which are credited to
the Participant's Account pursuant to such election. A Participant may elect  to
receive   such  distribution  in  one  lump-sum   payment  or  in  a  number  of
approximately equal annual payments (provided the payment period may not include
more than  fifteen such  installments). The  lump-sum or  the first  installment
shall be paid as soon as practicable during the month of January of the calendar
year designated by the Participant. Except as otherwise provided in paragraphs 8
and  9, all installment payments following the initial installment payment shall
be paid in  cash as  soon as  practicable during the  month of  January of  each
succeeding  calendar year until the entire amount in the Account shall have been
     If  a  Participant  should   die  before  all   amounts  credited  to   the
Participant's Account have been distributed, the balance in the Account shall be
paid as soon as practical thereafter to the beneficiary designated in writing by
the  Participant.  Payments to  a  beneficiary pursuant  to  a designation  by a
Participant shall be  in such  form as  the Participant  shall elect,  including
periodic  payments as described in  paragraph 7, but in  the absence of any such
election, the  payment  shall  be  made  in  one  lump  sum  to  the  designated
beneficiary  as soon as practicable following the death of the Participant. Such
beneficiary designations shall  be effective when  received by the  Corporation,
and  shall remain in effect until rescinded or

modified  by  the  Participant  by   an  appropriate  written  direction.  If no
beneficiary is properly designated by  the  Participant  or  if  the  designated
beneficiary   shall   have  predeceased  the  Participant,  such  balance in the
Account  shall be  paid to the  estate of  the Participant.
     (a) Initial Lump Sum Election -- Notwithstanding any election made pursuant
to paragraph 7, a Participant may file a written election with the Corporation
to have the Deferral Amounts and Interest Equivalents accrued thereon which  are
credited thereafter to the Participant's Account 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.
     (b)  Revocation of Lump-Sum Election -- A Participant may revoke an
election made pursuant to paragraph 9(a) by filing an appropriate written notice
with the Corporation. A revocation notice filed pursuant to this paragraph 9(b)
shall be effective with  respect to  Deferral Amounts  and Interest  Equivalents
accrued thereon which are credited thereafter to the Participant's Account.
     (c) Limitation on Elections -- Any election made pursuant to paragraphs
9(a) or 9(b) shall not be effective unless filed with the Corporation at least
90 days prior to a Change in Control.
     (d) 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 savings, pension or other benefit
plan for the benefit of employees of the Corporation or its subsidiaries)  which
theretofore  beneficially owned less than 30%  of the Corporation's common stock
(the 'Common  Stock') then outstanding, acquires  shares of  Common Stock  in  a
transaction  or a 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 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 ('Offer'), (iii) of a merger in which the Corporation will not
survive as an independent, publicly owned corporation, a consolidation, 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 shareowners 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 Committee, in its
sole discretion, determines to be a Change in Control  for purposes of the Plan.
     (a)  No Alienation of Benefits -- Except insofar as may otherwise be
required by law, no amount payable at any time  under the Plan shall  be subject
in  any manner  to alienation  by anticipation, sale,  transfer, assignment,
bankruptcy, pledge, attachment, charge,  or encumbrance  of any kind  nor in any
manner be subject to the debts or liabilities of any person and any attempt to
so alienate or subject any such amount, whether presently or thereafter payable,
shall be void. If any person shall attempt to, or shall alienate, sell,
transfer, assign, pledge, attach, charge, or otherwise encumber any amount
payable under the Plan, or any part thereof, or if by reason of such person's
bankruptcy or other event happening  at any such  time such amount would be made
subject to the person's debts or liabilities or would otherwise not be enjoyed
by that person, then  the Corporation,  if it so elects, may direct  that such
amount be withheld and that same or any  part thereof  be paid  or applied  to
or  for the  benefit of  such person,  the person's spouse, children  or other
dependents, or  any of them, in such manner and proportion as the Corporation
may deem proper.
     (b) No Right or Interest in Corporation's Assets -- Neither the Corporation
nor  any of its Affiliates  shall be required to  reserve or otherwise set aside
funds for the payment  of obligations arising under  this Plan. The  Corporation
may,  in its  sole discretion,  establish funds,  segregate assets  or take such
other action  as it  shall  determine necessary  or  appropriate to  secure  the
payment  of its obligations  arising under this  Plan. Nothing contained herein,
and no action taken pursuant to the  provisions of this Plan shall create or  be
construed to create a trust of any kind, or a fiduciary relationship between the
Corporation  and any  Participant or  any other person.  To the  extent that any
person acquires a right to receive

payments under this Plan, such right shall be no  greater than  the  right of an
unsecured creditor of the Corporation.
     (c) Administration -- The Corporation shall have sole discretion and
authority to administer the Plan, including the  authority  to  interpret  its
terms, promulgate  regulations thereunder, determine eligibility  to participate
in the Plan and make any finding of  fact which  may be  necessary to  determine
the obligation of the Plan with respect to the payment of benefits.
     (d) Amendment -- The Corporation may amend, modify or terminate the Plan at
any time, or from time  to time; provided, however, that  no change to the  Plan
shall  impair the right of any Participant with respect to amounts then credited
to an Account.
     (e) Accounting -- Each Participant shall receive periodic statements (not
less frequently than annually) setting forth the cumulative Deferral Amounts and
Interest  Equivalents credited to, and any distributions from, the Participant's
     (f) Facility of Payments -- If the  Corporation shall find that any person
to whom any amount is payable under the Plan  is unable to  care for  his or her
affairs because of illness  or accident, or  is a minor, or  has died, then  any
payment due the person or the person's estate (unless a prior claim therefor has
been  made by a duly appointed legal representative), may, if the Corporation so
elects in  its sole  discretion, be  paid to  the person's  spouse, a  child,  a
relative,  an institution  having custody  of such  person, or  any other person
deemed  by  the  Corporation  to  be  a  proper  recipient  on  behalf  of  such
person  otherwise  entitled to  payment. Any  such payment  shall be  a complete
discharge of the liability of the Corporation and the Plan therefor.
     (g) Governing Law -- The Plan is intended to constitute an unfunded
deferred compensation  arrangement for a select group of management or highly
compensated personnel and  all rights  thereunder  shall be  governed  by and
construed  in accordance with the laws of New York.

Was this helpful?

Copied to clipboard