Honeywell 2002 Annual Report Download - page 53

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(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.
4. Deferral Requirements
Amounts may be deferred under this Plan for a minimum period of three years
or such shorter period as may be approved by the Committee. Except as otherwise
provided in paragraphs 9 or 10 or as approved by Committee, 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withdrawn from a Participant Account prior to the earlier of: three years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 Deferral Amounts were
earned; 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 affiliates. Notwithstanding the
preceding provisions of this Section 4, a Participant may request an immediate
withdrawal of all or a portion of such Participant's Account prior to any date
described above or prior to the date the Account has been completely withdrawn,
provided that such a request and withdrawal shall be subject to such penalties,
restrictions or conditions as may be established by the Corporation from time to
time. The penalty shall be a percentage of the amount requested to be withdrawn,
calculated as the difference between (a) 6%, and (b) 50% of the amount, if any,
by which 10% exceeds the interest rate on 10-year U.S. Treasury Bonds on the
first business day of the calendar quarter during which the withdrawal request
is made.
5. Interest Equivalents
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 the calendar year until the Deferral Amounts are
distributed.
The rate of notional interest established by the Committee shall be set
forth on Schedule A attached hereto and made a part hereof. Any portion of such
rate designated as the "Contingent Rate" shall become nonforfeitable only if the
Participant is still employed by the Corporation or any affiliate at the end of
the third full calendar year following the calendar year in which the Deferral
Amount relates, provided, however, in the event a Participant terminates
employment with the Corporation or an affiliate prior to such date for reasons
other than gross cause, the Committee shall treat such portion as nonforfeitable
in the event the Participant's employment with the Corporation or Affiliate is
involuntarily terminated (including a termination for "good reason" under any
applicable severance plan of the Corporation or affiliate) or is terminated for
such reasons as the Committee may determine from time to time in its