Alliedsignal Inc. Severance Plan

AlliedSignal Inc. Severance Plan
For Senior Executives
Restated
as of
1/1/94


PART I
GENERAL PROVISIONS


ARTICLE I -- PURPOSE AND AUTHORITIES


1.01 The purpose of this Plan is to provide for the payment of severance related benefits to selected
employees of AlliedSignal Inc. and its subsidiaries in the event of an involuntary Termination. 1.02 This Plan is comprised of Part I -- general provisions relating to the operation of the Plan and Part
II -- special provisions which become effective only upon Change in Control. 1.03 As set forth herein, this Plan constitutes an amendment and restatement as of January 1, 1994, of the
Severance Plan for Senior Executives established by Allied Corporation on March 31, 1983 and amended and
restated by AlliedSignal Inc. as of April 25, 1988, January 1, 1990 and April 29, 1991. 1.04 This Plan was established and has been amended and restated by Allied Corporation and its successor
AlliedSignal Inc. by authority of the respective Boards of Directors as set forth in resolutions dated
March 31, 1983, April 25, 1988 , December 15, 1989, April 29, 1991 and February 4, 1994. 1.05 This Plan is intended to be an unfunded plan for a select group of management and highly compensated
employees. 1.06 Interpretation of this Plan and the effect of its provisions shall be governed by the laws of the State
of New Jersey. 1.07 If any provision of this Plan is held illegal or invalid for any reason, the other provisions of this
Plan shall not be affected.


ARTICLE II -- DEFINITIONS


2.01 AlliedSignal -- means AlliedSignal Inc., a Delaware corporation and its subsidiaries. 2.02 Annual Base Salary -- means an amount equal to the product of Base Salary and twelve.
2 2.03 Annual Incentive Compensation -- Except as provided in Section 8.01, means
(A) For employees who either become Participants after April 29, 199l or who are Participants as of
April 29, 1991, are not in pay status and elect prior to June 30, 1991 to have Annual Incentive
Compensation calculated based on the following formula, the product of (a) times (b) where (a) is the
target percentage which would be utilized in determining the Incentive Award for the Participant in the
calendar year in which Participant's Involuntary Termination occurs and (b) is Annual Base Salary. 2.04 Base Salary -- means the monthly base salary payable to a Participant at the highest rate in effect
during any of the thirty-six months preceding Involuntary Termination. 2.05 Board of Directors means the Board of Directors of AlliedSignal. 2.06 Career Band -- means the salary and position classification adopted by AlliedSignal for use after
January 1, 1994. 2.07 Change in Control -- is deemed to occur at the time (i) when any entity, person or group (other than
AlliedSignal, any subsidiary or any savings, pension or other benefit plan for the benefit of employees
of AlliedSignal or its subsidiaries) which theretofore 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 AlliedSignal) for all, or any part of, the Common Stock, (iii) of
a merger in which AlliedSignal will not survive as an independent, publicly owned corporation, a
consolidation, or a sale, exchange or other disposition of all or substantially all of AlliedSignal's
assets, (iv) of a substantial change in the composition of the Board of Directors during any period of
two consecutive years such that individuals who at the beginning of such period were members of the
Board of Directors cease for any reason to constitute at least a majority thereof, unless the election,
or the nomination for election by the shareowners of AlliedSignal, 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 Management Development and
Compensation Committee of the Board of Directors, in its discretion, determines to be a change in
control for purposes of this Plan. 2.08 Code -- means the Internal Revenue Code of 1986, as amended from time to time. 2.09 Common Stock -- means the Common Stock of AlliedSignal or such other stock into which the Common Stock
may be changed as a result of split-ups, recapitalizations, reclassifications and the like.
3 2.10 Determination Year -- means a calendar year within which performance is measured for purposes of
determining the amount of Incentive Awards payable for that year. 2.11 Effective Date -- means March 31, 1983. 2.12 Gross Cause -- Except as provided in Section 8.02, means conduct by a Participant which is fraud,
misappropriation of AlliedSignal property or intentional misconduct damaging to such property or
business of AlliedSignal, or the commission of a crime. 2.13 Incentive Award -- means an Incentive Compensation Award or any other annual incentive award determined
under the Incentive Compensation Plan for Executive Employees of AlliedSignal Inc. and its Affiliates
and any predecessor or successor plan but shall not include any Performance Improvement Award or any
other long-term incentive award under any such plan. 2.14 Involuntary Termination -- Except as provided in Section 8.04, means severance of the employment
relationship at AlliedSignal's initiative for reasons other than death or Gross Cause. Notwithstanding
the preceding sentence, in the event of a sale or transfer of a facility or line of business that causes
a severance of the employment relationship with AlliedSignal, an Involuntary Termination shall be deemed
to have occurred only if the Participant is not offered substantially comparable employment with the new
employer, all as determined by the Named Fiduciary, in his or her sole discretion. 2.15 Named Fiduciary -- means the person defined in Sections 5.01 and 11.01. 2.16 (a) Participant -- means an Existing Participant, an Officer Participant or a New Participant.
(b) Existing Participant -- Except as further defined in Section 3.01, means an individual who, on July
1, 1993, was an employee of AlliedSignal in Salary Grade 20 or above or an employee of any other Plan
Sponsor who had adopted the Plan with respect to the employee and the employee was on that date in a
position comparable to a position with AlliedSignal of Salary Grade 20 or above.
(c) Officer Participant -- Except as further defined in Section 3.01, means an individual (other than an
Existing Participant) who is an officer of AlliedSignal as determined by the Named Fiduciary in his or
her sole discretion.
(d) New Participant -- Except as further defined in Section 3.01, means an individual (other than an
Existing Participant) who is employed by AlliedSignal in a position evaluated in Career Band 6 or above
or employed by another Plan Sponsor who has adopted the Plan with respect to the employee in a position
comparable to a position with AlliedSignal of Career Band 6 or above, all as determined by the Named
Fiduciary in his or her sole discretion.
4 2.17 Plan -- means the AlliedSignal Inc. Severance Plan for Senior Executives. 2.18 Plan Administrator -- means AlliedSignal or such other entity or person as AlliedSignal may designate to
administer the terms and conditions of the Plan. 2.19 Plan Sponsor -- means AlliedSignal, any successor to or affiliate of AlliedSignal (or a principal
subsidiary) including, but only following Change in Control, any other person, organization or entity
that agrees in writing to be a Plan Sponsor for a period of time which extends at least throughout the
two-year period following Change in Control. 2.20 Pro Rata Factor -- means, (i) for the Determination Year in which Involuntary Termination occurs, a
fraction the numerator of which is equal to the number of calendar months which have elapsed from the
first day of the calendar month following Involuntary Termination through December 31st of the
Determination Year and the denominator of which is twelve, and (ii) for any subsequent Determination
Year shall mean a fraction, the numerator of which is equal to the Severance Pay Factor, reduced by the
number of calendar months which have elapsed from the first day of the calendar month following
Involuntary Termination through December 31st of the year preceding the Determination Year and the
denominator of which is twelve. Provided, however, that the Pro Rata Factor shall never be greater than
1.0. 2.21 Salary Grade -- means the salary and position classification used by AlliedSignal prior to January 1,
1994 or any comparable salary and position classification used by any other Plan Sponsor. 2.22 Severance Pay Factor -- means, with respect to any Participant, the relevant factor specified in Section
4.02. 2.23 Severance Period -- means the period, commencing on the first day of the first month following
Involuntary termination, which is comprised of the number of consecutive months equal to the lesser of
(i) the Severance Pay Factor or (ii) the number of months occurring before the first day of the month
following the Participant's attainment of age 65 or, if later, eligibility to receive an unreduced
retirement benefit under a plan or program maintained by a Plan Sponsor.


ARTICLE III -- PARTICIPATION


3.01 An employee of a Plan Sponsor who is at any time a Participant shall continue to be a Participant in the
Plan until the employment relationship with the Plan Sponsor is severed for reasons other than an
Involuntary Termination, or if earlier in time, the employee ceases to be employed in a position
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equivalent to Career Band 6 or above. Provided, however, that any employee who ceases to be employed in
a position equivalent to Career Band 6 or above on or after Change in Control shall nevertheless
continue to be a Participant in the Plan. 3.02 A Participant in the Plan who is at any time the subject of an Involuntary Termination and, therefore,
entitled to benefits under Article IV shall continue to be a Participant until all of the benefits for
which he or she is entitled under Article IV, as of the date of his or her Involuntary Termination, have
been paid.


ARTICLE IV -- BENEFITS


4.01 Eligibility for Pay, Benefit and Pension Service Continuation -- A Participant who is the subject of an
Involuntary Termination shall receive the benefits described in this Article IV. 4.02 Pay, Benefit and Pension Service Continuation for Existing Participants
(A) Pay Continuation
(i) An Existing Participant shall receive a benefit in an amount equal to his or her
Base Salary multiplied by the relevant Severance Pay Factor determined as follows:


SALARY GRADE AS
OF SEVERANCE PAY
JULY 1, 1993 FACTOR
--------------- -------------

20 and 21 18
22 and 23 24
24 and above 36


provided, however, that the Severance Pay Factor of an Existing Participant, whose Salary Grade is
reduced after a Change in Control, shall not be reduced.
(ii) An Officer Participant shall receive a benefit in an amount equal to his or her Base Salary multiplied
by a Severance Pay Factor of 18.
(iii) A New Participant shall receive a benefit in an amount equal to his or her Base Salary
multiplied by a Severance pay factor of 12.
(B) Annual Incentive Compensation -- An Existing Participant or an Officer Participant shall receive a
benefit in an amount equal to Annual Incentive Compensation multiplied by the relevant Pro Rata
Factor. The Pro Rata Factor shall be determined for the calendar year in which Involuntary
Termination occurs and each
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calendar year thereafter through the end of the calendar year in which the Severance Period ends.
(C) Benefit Continuation -- For the Severance Period, the Plan Sponsor will continue the Participant's
employee benefits, including, without limitation, continuation of the Participant's savings plan
participation (to the extent permissible under Section 401(a) of the Code) and basic and
contributory life and medical insurance (including qualified dependents), at the active employee
coverage level and prevailing employee contribution rate, if any, provided, however, (i) that such
level of continued benefits shall not exceed the level of benefits in effect on the date of the
Participant's Involuntary Termination, (ii) that such continuation of benefits will cease on the
date similar benefits are provided the Participant by a subsequent employer, (iii) executive
perquisites, such as automobiles or memberships, will be governed by the terms of the particular
program, and (iv) that no employee benefit shall be continued for a longer period of time than that
provided by the terms of the controlling employee benefit plan applicable to the Participant on the
date of the Participant's Involuntary Termination.
(D) Pension Service Continuation -- Except as otherwise provided by an applicable pension plan, and,
subject to the requirements for qualification of Section 401(a) of the Code, only the first twelve
(12) months of the Severance Period, Pay Continuation and Annual Incentive Compensation will be
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