Retirement Plan For Non-employee Directors

Retirement Plan for Non-Employee Directors
of AlliedSignal Inc.
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(As Amended Effective January 1, 1997)


1. Eligibility


Each member of the Board of Directors (the "Board") of AlliedSignal Inc. (the "Corporation") who is not an employee of the Corporation or any of its subsidiaries and who at the time of retirement from the Board, as defined in paragraph 6(f), shall have served five years on the Board, the Board of Directors of Allied Corporation (the "Allied Board"), the Board of Directors of The Signal Companies, Inc. (the "Signal Board") or the board of directors of any corporation acquired by the Corporation, Allied Corporation ("Allied") or The Signal Companies, Inc. ("Signal") if the Director was a non-employee director of the acquired corporation at the time of acquisition (an "Acquired Corporation Board"), or any combination thereof, as a non-employee director and shall have attained at least age 60 (an "Eligible Director") shall, unless the Eligible Director elects otherwise pursuant to paragraph 6(g), be eligible to receive a retirement benefit under the Retirement Plan for Non-Employee Directors of AlliedSignal Inc. (the "Plan"). Notwithstanding the foregoing, an Eligible Director shall not include (a) any individual who becomes a member of the Board after December 31, 1996, or (b) any members of the Board on December 31, 1996 who waived their rights to any benefits under the Plan in exchange for the crediting of a lump-sum amount in satisfaction thereof to their accounts under the Deferred Compensation Plan for Non-Employee Directors of AlliedSignal Inc., effective January 1, 1997.


2. Amount of Benefit


(a) An Eligible Director who at the time of retirement from the Board shall have attained age 70 shall be entitled to receive, for the remainder of the Director's lifetime, a retirement benefit at an annual rate equal to the annual Board retainer in effect for non-employee directors of the Board at the time of such retirement.


(b) An Eligible Director who at the time of retirement from the Board shall have attained age 60 but not age 70 shall be entitled to receive, for a period of time equal to the number of months such Director served as a non-employee director on the Board, the Allied Board, the Signal Board or any Acquired Corporation Board, or any combination thereof, a retirement benefit at an annual rate equal to the


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annual Board retainer in effect for non-employee directors of the Board at the time of such retirement.


3. Time of Payment


(a) Except as otherwise provided in paragraphs 3(b) and 3(c), the retirement benefit determined in accordance with paragraph 2 shall be paid to an Eligible Director commencing upon such Director's retirement from the Board (a "Retired Director") in as nearly equal as possible quarterly installments at the same time as quarterly installments of the annual Board retainer are paid to non-employee directors serving on the Board at the time of the payment. If such payments are made to current directors more frequently than quarterly, then amounts due under the Plan shall be paid on such more frequent basis. If an Eligible Director elects not to receive such payments or a Retired Director elects to stop receiving such payments prior to the receipt of all payments due under the Plan, such Director shall so advise the Corporation and may not thereafter elect to receive or resume receipt of such payments.


(b) Each member of the Board may irrevocably elect to receive a lump-sum payment of the present value of the retirement benefit, as determined in accordance with paragraphs 2 and 3(d), which remains payable, in the event the individual becomes a Retired Director on or before the second anniversary date of a Change in Control. Such lump-sum payment shall be made to the Retired Director within the 90-day period following the later of the Change in Control or such Director's retirement from the Board. Such election may be made by filing a written notice w ...