Honeywell 2002 Annual Report Download - page 42

distribution of the aggregate amount of the Participant Deferred Contributions,
plus earnings credited thereon pursuant to Section 5 (collectively the
"Participant Deferred Contribution Amounts"), credited to the Participant's
Account pursuant to such election. A Participant may elect to receive such
amount in one lump-sum payment or in a number of annual installments (up to
fifteen installments). The lump-sum payment or the first installment shall be
paid in cash as soon as practicable during the month of January of such future
calendar year as the Participant may designate or, if the Participant so
elects, as soon as practicable during the month of January of the calendar
year immediately following the later of the year in which the Participant last
contributed to the Plan or the year in which the Participant terminates
employment with the Corporation or any of its subsidiaries (whether by reason
of Retirement or otherwise). Except as otherwise provided in Section 8,
subsequent installments shall be paid in cash as soon as practicable during
the month of January of each succeeding calendar year until the entire amount of
the Participant Deferred Contribution Amounts shall have been paid. The amount
of each installment shall be determined by multiplying the balance of the
Participant Deferred Contribution Amounts each year by a fraction, the numerator
of which is one and the denominator of which is (A) the number of installments
elected, reduced by (B) one for each annual installment previously received.
(ii) Plan Employer Contributions. The distribution election made pursuant
to subsection (i) above shall also apply to the timing of the distribution of
the aggregate number of shares of Common Stock representing the Plan Employer
Contributions plus reinvested dividends pursuant to Section 5 (collectively the
"Plan Employer Contribution Amounts") credited to the Participant's Account
pursuant to Section 5. Except to the extent otherwise provided with respect to
fractional shares, all distributions of Plan Employer Contribution Amounts shall
be made in Common Stock. A Participant may elect to receive such Plan Employer
Contribution Amounts in one lump-sum payment or in a number of annual
installments (up to fifteen installments). The lump-sum payment or the first
installment shall be paid as soon as practicable during the month of January of
such future calendar year as the Participant may designate, or, if the
Participant so elects, as soon as practicable during the month of January of the
calendar year immediately following the later of the year in which the
Participant last contributed to the Plan or the year in which the Participant
terminates employment with the Corporation or any of its subsidiaries (whether
by reason of Retirement or otherwise). Except as otherwise provided in Section
8, subsequent installments shall be paid as soon as practicable during the month
of January of each succeeding calendar year until the entire amount of the Plan
Employer Contribution Amounts shall have been paid. The amount of each
installment shall be determined by (A) multiplying the balance of the Plan
Employer Contribution Amounts on the last Valuation Date of each year by a
fraction, the numerator of which is one and the denominator of which is (x) the
number of installments elected, reduced by (y) one for each annual installment
previously received, and (B) rounding the result down to the next whole share of
Common Stock; provided, however, the amount of the last installment shall be
determined without regard to the rounding requirement of the preceding portion
of this sentence. Any fractional shares of Common Stock shall be paid in an
equivalent cash amount, as determined using the closing price of Common Stock on
the trading date next preceding the distribution date.
(b) Adjustment of Method of Distribution. Prior to the beginning of any
calendar year, a Participant may elect to change the timing and method of
distribution of the Participant Deferred Contribution Amounts and Plan Employer
Contribution Amounts credited to the Participant's Account commencing with
such calendar year. Participant Deferred Contribution Amounts and Plan
Employer Contribution Amounts credited to the Participant's Account prior to
the effective date of such change (the "Prior Balance"), and all amounts
thereafter accrued with
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