Honeywell 2002 Annual Report Download - page 41

(d) All Contributions Prorated. Total Contribution Amounts shall be
credited to a Participant's Account each pay period.
5. The Participant's Account
(a) Crediting of Participant's Accounts. Participant Deferred Contributions
shall be credited to the Participant's Account under the Plan as unfunded book
entries stated as cash balances. Participant Deferred Contributions credited to
the Participant's Account prior to January 1, 1994 or after the Participant has
terminated employment shall accrue amounts (to be posted each Valuation Date)
equivalent to interest, compounded daily, at a rate based upon the cost to the
Corporation of borrowing at a fixed rate for a 15-year term. Such rate shall be
determined annually by the Chief Financial Officer of the Corporation in
consultation with the Treasurer of the Corporation. Participant Deferred
Contributions credited to the Participant's Account on or after January 1, 1994,
but before a Participant terminates employment, shall accrue amounts (to be
posted each Valuation Date) equivalent to interest, compounded daily, at a rate
determined annually by the Management Development and Compensation Committee
(the "Committee") of the Board of Directors (the "Board") of the Corporation.
The rate established in the preceding sentence 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 and, once established for a calendar year, shall remain in effect
with respect to all Participant Deferred Contributions credited to the
Participant's Account during such calendar year until such amounts are
distributed. Plan Employer Contributions shall be credited to the Participant's
Account under the Plan as unfunded book entries stated as shares of Common Stock
(including fractional shares). The number of shares of Common Stock credited to
a Participant's Account shall be determined by dividing the equivalent cash
amount (as determined under Section 4(b)) by the closing price of Common Stock
on the day that such Plan Employer Contributions are credited to the
Participant's Account. Amounts equivalent to the dividends that would have been
payable in respect of the Common Stock shall be credited to the Participant's
Account as if reinvested in Common Stock, with the number of shares credited
determined by dividing the equivalent cash dividend amount by the closing price
of Common Stock on the date the dividends would have been payable. Amounts
credited to the Participant's Account shall accrue amounts equivalent to
interest and dividends, as the case may be, until distributed in accordance with
the Plan.
(b) Transition Rule for Plan Employer Contributions. The balance of each
Participant's Account attributable to Plan Employer Contributions, determined as
of the close of business on the day prior to the effective date of the amendment
and restatement of the Plan and adjusted to reflect all gains, losses and
dividends that have been credited to such Participant's Account through the day
prior to such effective date, shall be converted into the equivalent number of
shares of Common Stock by dividing such balance by the closing price of Common
Stock on the trading date next preceding such effective date. Such amount shall
be an unfunded book entry only and shall (i) thereafter be credited with
equivalent dividend amounts in accordance with Section 5(a), and (ii) be
distributed in accordance with Section 6(a)(ii).
6. Distribution from Accounts
(a) Form of Election.
(i) Participant Deferred Contributions. At the time a Participant makes an
election pursuant to Section 3(a), the Participant shall also make an election
with respect to the
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