EXHIBIT A
Case 2:04-cv-00424-ROS
Document 312-2
Filed 10/26/2007
Page 1 of 113
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA
Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates and Walter G. West, individually and on behalf of all others similarly situated, Plaintiffs, vs. Honeywell Retirement Earnings Plan, Honeywell Secured Benefit Plan, Plan Administrator of Honeywell Retirement Earnings Plan, and Plan Administrator of Honeywell Secured Benefit Plan,
Defendants.
No. CV04-0424 PHX ROS
CLASS ACTION PARTIAL SETTLEMENT AGREEMENT SUSAN MARTIN (AZ#014226) DANIEL L. BONNETT (AZ#014127) JENNIFER KROLL (AZ#019859) MARTIN & BONNETT, P.L.L.C. 3300 N. Central Avenue, Suite 1720 Phoenix, Arizona 85012-2517 Telephone: (602) 240-6900 [email protected] [email protected] [email protected] Attorneys for Plaintiffs 1 Case 2:04-cv-00424-ROS 10240190/1 Document 312-2 Filed 10/26/2007 Page 2 of 113
DAVID B. ROSENBAUM (AZ# 009819) DAWN L. DAUPHINE (AZ # 010833) OSBORN MALEDON P.A. 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Telephone: (602) 640-9000 [email protected] [email protected] MICHAEL L. BANKS, Pro Hac Vice AZEEZ HAYNE, Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5000 [email protected] [email protected] Attorneys for Defendants HOWARD SHAPIRO, Pro Hac Vice PROSKAUER ROSE LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112-4017 Telephone: (504) 310-4088 [email protected] Attorneys for Defendants
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA
Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates and Walter G. West, individually and on behalf of all others similarly situated, Plaintiffs, vs. Honeywell Retirement Earnings Plan, Honeywell Secured Benefit Plan, Plan Administrator of Honeywell Retirement Earnings Plan, and Plan Administrator of Honeywell Secured Benefit Plan,
Defendants.
No. CV04-0424 PHX ROS
CLASS ACTION PARTIAL SETTLEMENT AGREEMENT THIS CLASS ACTION PARTIAL SETTLEMENT AGREEMENT ("Agreement") is entered into by and between Named Plaintiffs and the Settlement Class, on the one hand, and the Honeywell Retirement Earnings Plan, the Honeywell Secured Benefit Plan, the Plan Administrator of the Honeywell Retirement Earnings Plan, and the Plan Administrator of the Honeywell Secured Benefit Plan on the other hand. RECITALS A. The words and phrases used in the preamble and these Recitals have the meanings
assigned to them in Article I -- Definitions. B. The Partial Settlement is structured as follows:
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The Parties agree that the Retirement Plan will make the Partial Settlement Payments, and that the Secured Benefit Plan will cease charging Ordinary Administrative Fees to the Secured Benefit Accounts for plan years beginning after December 31, 2007. The Parties agree that Honeywell will amend the Retirement Plan to provide the Partial Settlement Benefits, and that the Retirement Plan will pay the Special Incentive Awards and the Initial Fee Award as reasonable expenses of administering the Retirement Plan. The Parties agree that the Settlement Class will release all Released Claims against the Released Parties, and will limit to the Cap Amount the total value of relief for which the Released Parties may be held liable to the members of the Settlement Class on the Three Remaining Claims (including, without limitation, any award of additional benefits for Settlement Class members and attorneys' fees and costs for Class Counsel). The Parties will continue to litigate the Three Remaining Claims. C. Class Counsel has substantial experience with the requirements of ERISA and the
Code and has substantial experience litigating class actions on behalf of plan participants. D. Class Counsel has analyzed and evaluated the impact of this Agreement on Named
Plaintiffs and the Settlement Class. Based on its analysis and evaluation of the relevant factors, Class Counsel is satisfied that the terms and conditions of this Agreement are fair, reasonable, and adequate, and that this Partial Settlement is in the best interests of the Named Plaintiffs and the Settlement Class. E. Defendants have denied and continue to deny all of the allegations made by
Named Plaintiffs in the Litigation. Nevertheless, without admitting or conceding any liability or damages whatsoever, Defendants have agreed to partially settle the claims of the Settlement Class on the terms and conditions set forth in this Agreement to minimize the burden, expense, and uncertainty of continuing to defend the Litigation, to minimize the diversion of resources and 2 Document 312-2 Filed 10/26/2007 Page 5 of 113
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personnel required by continuing to defend the Litigation, to put to rest all of the claims released in Paragraph 4.01 of this Agreement, and to limit the total value of relief the Settlement Class and Class Counsel can seek on the Three Remaining Claims. Defendants have determined that it is in the best interests of the participants and beneficiaries of the Retirement Plan and the Secured Benefit Plan that the Litigation be partially settled in the manner and upon the terms and conditions set forth in this Agreement. F. As a result of these and other appropriate considerations, Named Plaintiffs and
Defendants have agreed to settle partially the Litigation as provided for herein. NOW, THEREFORE, in consideration of the mutual covenants and promises set forth in this Agreement, as well as the good and valuable consideration provided for herein, the Parties hereby agree to a partial settlement of the Litigation on the following terms and conditions: I. DEFINITIONS For purposes of this Agreement, the following terms, when used in capitalized form, will have the meanings indicated below. In addition, where appropriate, the plural of any defined term includes the singular, and the singular of any defined term includes the plural, as the case may be. Except as otherwise provided herein, the helping verb "will" is used in the sense of "shall" to indicate required or mandatory action rather than action that merely is anticipated to occur in the future. Occasionally, a term may be defined in another Paragraph of this Agreement by putting quotation marks around the term and placing the term in a parenthetical following its definition; a term defined in this manner is considered to be defined in this Article I. "Actuarial Equivalent" means an amount or benefit that has the same Actuarial Present Value as another amount or benefit, when the Actuarial Present Value of each amount or benefit is determined as of the same specified date using the same Valuation Assumptions.
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"Actuarial Present Value" means the value, determined as of a specified date, of an amount or a series of amounts due before or thereafter, where each amount is multiplied by the probability that the condition or conditions on which payment of the amount is contingent will be satisfied, and where each amount so multiplied is then increased (if due before) or discounted (if due thereafter) according to an assumed rate of interest to reflect the time value of money. For purposes of Paragraphs 3.02(c)(2) and 3.04(b)(4), Actuarial Present Value will be determined as of the Partial Settlement Calculation Date using the Valuation Assumptions. For purposes of Paragraph 3.10(b)(2), Actuarial Present Value will be determined as of the Subsequent Recovery Calculation Date using the Valuation Assumptions. For purposes of determining an Actuarial Equivalent under Paragraph 3.03, Actuarial Present Value will be determined as of a Settlement Class member's Per Capita Settlement Benefit Starting Date using the Applicable Interest Rate and the Applicable Mortality Table. "Agreement" means this Class Action Partial Settlement Agreement. "Allied Signal Retirement Program" means the Allied Signal Inc. Retirement Program (Provisions Relating to Covered Employees at the Company's Signal Locations) (Amended and Restated as of January 1, 1993), with amendments adopted or effective before January 1, 2000. "Applicable Interest Rate" means an interest rate of four and eighty-nine onehundredths percent (4.89%), compounded annually. "Applicable Mortality Table" means, on a specified date, the mortality table that is required to be used under Code § 417(e) to determine the minimum amount of a lump sum distribution payable on that date. "Applicable Percentage" means ((A-B)/A) x 90%, where A equals 35,000,000 and B equals the Initial Fee Award.
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"Beneficiary" means the person (or persons) who is or was receiving or is or was entitled to receive survivor benefits after June 30, 2002 as the Participant's beneficiary under the Garrett Retirement Plan, the Signal Retirement Plan, the Allied Signal Retirement Program or the Retirement Plan, as applicable, for purposes of the qualified joint and survivor annuity, the contingent annuity option, the period certain and life annuity option, the level income annuity option or the pre-retirement survivor annuity. For the avoidance of doubt, a person who is or was entitled to receive only additional death benefits under Section 4.9(e) of the Signal Retirement Plan, Section 7.4 of the Allied Signal Retirement Program or Section 6.09 of Supplement C to the Retirement Plan is not a Beneficiary for purposes of this Agreement. "Benefit Commencement Date" has the meaning provided in Section 4.01(g) of Supplement C to the Retirement Plan Document, Section 5.1(g) of the Allied Signal Retirement Program or in the Signal Retirement Plan. "Cap Amount" means $500 million and represents the maximum amount of Subsequent Recovery for which Defendants and the other Released Parties may be held liable in the Remaining Litigation. "Claim Form" means the form mutually agreed upon by Class Counsel and Defendants and attached hereto as Exhibit 1 that must be completed and returned to Class Counsel by Participants and Beneficiaries in accordance with Paragraph 2.13. "Class Counsel" means the law firm of Martin & Bonnett, P.L.L.C., 3300 North Central Avenue, Suite 1720, Phoenix, AZ 85012-2517. "Class Notice" means the notice mutually agreed upon by Class Counsel and Defendants in the form attached hereto as Exhibit 2, which Class Counsel will provide to the Settlement Class members as set forth in Paragraph 2.03.
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"Code" means the Internal Revenue Code of 1986, as amended and in effect from time to
"Company" means Honeywell and all organizations and entities that are required to be aggregated with Honeywell under Code §§ 414(b), (c), (m), (n) and (o). "Credited Service" has the meaning provided to that term under the Garrett Retirement Plan, the Signal Retirement Plan, the Allied Signal Retirement Program, or the Retirement Plan, as applicable. "Defendants" means the Retirement Plan, the Secured Benefit Plan, the Retirement Plan Administrator, the Secured Benefit Plan Administrator, and, as applicable, any agent appointed, designated or authorized by any of the Defendants specifically for the purpose of satisfying any of the obligations under this Agreement. "District Court" means the United States District Court for the District of Arizona. "Early Retirement Age" has the meaning provided in Section 1.07 of Supplement C of the Retirement Plan. "Earliest Distribution Date" means (a) with respect to Fractional Reduction Settlement Benefits, the first day of the month following ninety (90) calendar days after Final Approval; and (b) with respect to Per Capita Settlement Benefits, the first day of the month following one hundred twenty (120) calendar days after Final Approval. "Eligible Beneficiary" means a Beneficiary who has timely submitted a fully and accurately completed Claim Form pursuant to Paragraph 2.13, and the Participant with respect to whom the Beneficiary is a Beneficiary has died as of the Partial Settlement Calculation Date. If a Participant timely submits a fully and accurately completed Claim Form pursuant to Paragraph 2.13, but dies prior to the Partial Settlement Calculation Date with a surviving Beneficiary, the
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surviving Beneficiary will be deemed to be an Eligible Beneficiary if he or she is alive on the Partial Settlement Calculation Date. "Eligible Estate Representative" means the executor or administrator of the estate, or the qualified personal representative, of a Participant who has died without a Beneficiary after June 30, 2002 and before the Partial Settlement Calculation Date, or of a Beneficiary who has died after June 30, 2002 and before the Partial Settlement Calculation Date where the Participant with respect to whom the Beneficiary is a Beneficiary predeceased the Beneficiary; provided, however, that such executor, administrator or qualified personal representative has timely submitted a fully and accurately completed Claim Form pursuant to Paragraph 2.13. If a Participant timely submits a fully and accurately completed Claim Form pursuant to Paragraph 2.13, but dies prior to the Partial Settlement Calculation Date either without a surviving Beneficiary or with a surviving Beneficiary who dies prior to the Partial Settlement Calculation Date, the executor or administrator of the estate, or the qualified personal representative of the Participant will be deemed to be an Eligible Estate Representative. Furthermore, if a Participant predeceases his or her Beneficiary, and the Beneficiary timely submits a fully and accurately completed Claim Form pursuant to Paragraph 2.13, but dies prior to the Partial Settlement Calculation Date, the executor or administrator of the estate, or the qualified personal representative of the Beneficiary will be deemed to be an Eligible Estate Representative. Plaintiffs agree that the inclusion of the executors or administrators of the estates, or the qualified personal representatives of certain deceased Participants and Beneficiaries, does not create any precedential effect on the ability of an executor or administrator of the estate, or the qualified personal representative of a deceased Participant or Beneficiary, to be entitled to any Subsequent Relief. The inclusion in this Agreement of the executors or administrators of the estates, or the qualified personal representatives of certain deceased Participants and 7 Document 312-2 Filed 10/26/2007 Page 10 of 113
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Beneficiaries, shall not be used or relied upon to refute Defendants' contention that such individuals or entities are not entitled to participate as Parties in the Remaining Litigation or any recovery that may be associated with the Three Remaining Claims. "Eligible Participant" means a Participant who has timely submitted a fully and accurately completed Claim Form pursuant to Paragraph 2.13 and is alive on the Partial Settlement Calculation Date. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time. "Fairness Hearing" means the hearing to be held by the District Court, on a date and location to be determined by the District Court, on the motion for Final Approval of the Partial Settlement. "Final" means (a) a judgment approving the Partial Settlement has been entered by the District Court pursuant to Fed. R. Civ. P. 54(b); (b) (i) if rehearing, reconsideration, or appellate review of the judgment is not sought by any person, when the time to seek such rehearing, reconsideration, or appellate review has expired, or (ii) if rehearing, reconsideration, or appellate review of the judgment is sought by any person, when any and all avenues of rehearing, reconsideration, and appellate review (including in the United States Supreme Court) have been exhausted and no further rehearing, reconsideration, or appellate review is permitted (or the time for seeking such review has expired); and (c) no portion of the judgment approving the Partial Settlement has been altered, modified, amended, vacated, or overturned. "Final Approval" means that the District Court has entered the Partial Judgment pursuant to Fed. R. Civ. P. 54(b) and the Partial Judgment has become Final. "Fractional Reduction Settlement Benefits" means the portion of the Partial Settlement Benefits described in Section 3.02 of this Agreement. 8 Document 312-2 Filed 10/26/2007 Page 11 of 113
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"Fractional Reduction Difference" means the Applicable Percentage of the difference between a Fractional Reduction Participant's Post-Amendment Fractional Reduction Benefit and his or her Primary Benefit. "Fractional Reduction Participant" means an Eligible Participant who is credited with 35 years or more of Credited Service as of the later of the Partial Settlement Calculation Date or the Participant's Benefit Commencement Date. "Garrett Retirement Plan" means The Garrett Corporation Retirement Plan for Employees of The Garrett Corporation and Its Participating Subsidiary Companies in effect on December 31, 1983. "Garrett Secured Benefit Account" means the Garrett Secured Benefit Account For Former Participants In The Garrett Severance Plan as set forth in Article XVI to The Signal Companies, Inc. Savings and Stock Purchase Plan. "Garrett Severance Plan" means the Severance Plan for Employees of The Garrett Corporation and its Participating Subsidiaries. "Honeywell" means Honeywell International Inc., a Delaware corporation. "Individual Mistake" means an error related to the calculation of, or entitlement to, an individual Participant's or individual SBA Participant's benefits that involves a particularized, individualized data issue or the terms of an individual qualified domestic relations order ("QDRO"). An Individual Mistake does not include generally applicable claims under the Retirement Plan, the Allied Signal Retirement Program, the Signal Retirement Plan, the Garrett Retirement Plan, the Secured Benefit Plan, the Garrett Secured Benefit Account, or the Garrett Severance Plan that involve challenges to plan design, plan interpretation or plan language.
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"Initial Fee Application" means the motion to be filed by Class Counsel with the District Court for an award of reasonable attorneys' fees and costs relating to the Released Claims. The Initial Fee Application will not exceed $8.75 million. "Initial Fee Award" means the amount of attorneys' fees and costs awarded to Class Counsel pursuant to the Initial Fee Application. "Interest" means, with respect to a missed payment, the annual rate of interest in effect on the date of the missed payment, and on each anniversary thereof, compounded annually, during the period beginning on the date of the missed payment and ending on, for purposes of Paragraph 3.02, the Partial Settlement Calculation Date, or, for purposes of Paragraph 3.10, the Subsequent Recovery Calculation Date. Prior to December 21, 2000, the annual rate of interest in effect on a date shall be the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two (52) week T-Bills settled immediately preceding such date. After December 21, 2000, the annual rate of interest in effect on a date shall be the weekly average one-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week immediately preceding such date. "Litigation" means the case captioned Allen, et al. v. Honeywell Retirement Earnings Plan, et al., No. 2:04-cv-00424-ROS, pending in the District Court. "Lump Sum Distribution" means the single installment benefit described in Paragraph 3.03(d)(5)a. "Minimum Benefits Claim" means the claims, purported to be brought under ERISA §§ 502(a)(1)(B) and 502(a)(3), that Defendants violated the terms of the Signal Retirement Plan by applying the SBA Offset to the minimum benefit formulas of § 4.2(c)(i) of the Signal
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Retirement Plan, and that Defendants violated ERISA §§ 204(g) and 204(h) by amending the Signal Retirement Plan to apply the SBA Offset to such minimum benefit formulas. "Named Plaintiffs" means Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates, and Walter G. West, and their spouses, children, representatives, heirs, administrators, beneficiaries, alternate payees, executors, conservators, or assigns without limitation. "Normal Retirement Date" means, with respect to a Participant, his or her normal retirement date under Supplement C of the Retirement Plan, and/or under the Allied Signal Retirement Program, and/or the Signal Retirement Plan and/or the Garrett Retirement Plan, as applicable, except for purposes of Paragraphs 3.03 and 3.04(a), Normal Retirement Date means the first day of the month coinciding with or next following the Participant's sixty-fifth (65th) birthday. "Order Granting Preliminary Approval" means the order to be mutually agreed upon and proposed by the Parties, and entered by the District Court substantially in the form attached hereto as Exhibit 3 preliminarily approving the terms and conditions of this Agreement, including the manner and timing of providing notice to the Settlement Class, the time period for raising objections, and the date for the Fairness Hearing. "Ordinary Administrative Fees" means the administrative fees and costs incurred in administering the Secured Benefit Plan. "Ordinary Administrative Fees" does not include (i) investment management fees and costs associated with the investment and management of Secured Benefit Plan assets, or (ii) extraordinary administrative fees, such as fees associated with any future litigation. "Paragraph" means a paragraph of this Agreement.
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"Partial Judgment" means the order and final judgment to be mutually agreed upon and proposed by the Parties and entered by the District Court pursuant to Fed. R. Civ. P. 54(b) with respect to the Partial Settlement as set forth in Paragraph 2.09, without amendment, modification or alteration. "Partial Settlement" means the negotiated agreement among the Parties to settle the Released Claims, as reflected in this Agreement. "Partial Settlement Benefits" means the sum of all the additional benefits to be provided under the Retirement Plan Amendment, the value of which will not exceed (i) $35,000,000, less (ii) the Initial Fee Award. The Partial Settlement Benefits shall equal the sum of the Fractional Reduction Settlement Benefits and the Per Capita Settlement Benefits. The Partial Settlement Benefits provided pursuant to the Retirement Plan Amendment will be 100% vested. "Partial Settlement Benefit Commencement Date" means the date on which the Partial Settlement Benefits are to begin to be paid to an Eligible Participant, Eligible Beneficiary, or Eligible Estate Representative. "Partial Settlement Calculation Date" means the date Final Approval occurs. "Partial Settlement Payments" means the Partial Settlement Benefits, Special Incentive Awards, and the Initial Fee Award, the aggregate value of which will be $35,150,000. "Participant" means a former participant in the Garrett Retirement Plan and the Garrett Severance Plan who (i) became a vested participant in the Signal Retirement Plan and the Garrett Secured Benefit Account, (ii) is, was or may become eligible for benefits under the Signal Retirement Plan, the Allied Signal Retirement Program and/or the Retirement Plan, and (iii) was alive on July 1, 2002, or had a surviving Beneficiary who was alive on July 1, 2002. A Participant does not include a former participant in the Garrett Retirement Plan and the Garrett
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Severance Plan with respect to whom the assets and liabilities were transferred to a pension plan maintained by a third party unrelated to Honeywell or its predecessor companies. "Parties" means Defendants, Named Plaintiffs, and the Settlement Class, and includes their attorneys when acting on their behalf. "Per Capita Settlement Benefit" means the benefit payable under Paragraph 3.03. "Per Capita Settlement Benefit Account" means the hypothetical account established for bookkeeping purposes for an Eligible Participant, Eligible Beneficiary, or Eligible Estate Representative under Paragraph 3.03(c). The Per Capita Settlement Benefit Account will be used solely for purposes of calculating the amounts payable with respect to the Per Capita Settlement Benefit. The establishment of a Per Capita Settlement Benefit Account with respect to an individual will not result in the segregation of assets for his or her exclusive benefit under the Retirement Plan and will not result in the establishment of a defined contribution plan within the meaning of Code § 414(i) or of a plan described in Code § 414(k). "Per Capita Settlement Benefit Starting Date" means the date as of which payment of the Per Capita Settlement Benefit is scheduled to be made (or, in the case of a benefit payable in the form of an annuity, is scheduled to begin) under Paragraph 3.03. "Post-Amendment Fractional Reduction Benefit" means a Fractional Reduction Participant's Primary Benefit, but determined by multiplying the SBA Offset by a fraction (not greater than one), the numerator of which is 420 and the denominator of which is the Fractional Reduction Participant's completed months of Credited Service as of his or her Benefit Commencement Date. "Preliminary Approval" means the entry by the District Court of the Order Granting Preliminary Approval.
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"Pre-Retirement Death Benefit" means the pre-retirement death benefit provided under Paragraph 3.03(e). "Primary Benefit" means a Fractional Reduction Participant's accrued benefit, expressed as a single life annuity commencing on his or her Normal Retirement Date, and determined as of his or her Benefit Commencement Date under the Retirement Plan, and/or the Allied Signal Retirement Program, and/or the Signal Retirement Plan and/or the Garrett Retirement Plan, as applicable, without regard to this Agreement and without multiplying the SBA Offset by a fraction, the numerator of which is 420 and the denominator of which is the Fractional Reduction Participant's completed months of Credited Service as of his or her Benefit Commencement Date. If a Fractional Reduction Participant is receiving or is entitled to receive benefits determined under Supplement C of the Retirement Plan and any other Retirement Plan pension formula, such Fractional Reduction Participant's Primary Benefit refers only to his or her benefit under Supplement C of the Retirement Plan. "Proposed Scheduling Order" means the order described in Paragraph 2.02. "Qualified Joint and Survivor Annuity" means the annuity benefit described in Paragraph 3.03(d)(4). "Qualified Pre-Retirement Survivor Annuity" means the annuity benefit described in Paragraph 3.03(e)(3). "Release" means the release described in Paragraph 4.01. "Released Claims" means the claims described as released in Paragraph 4.01. "Released Parties" means the Retirement Plan, the Secured Benefit Plan, the Retirement Plan Administrator, the Secured Benefit Plan Administrator, the Company, and all of the Retirement Plan's, the Secured Benefit Plan's, the Retirement Plan Administrator's, the Secured Benefit Plan Administrator's and the Company's current and former parent corporations, 14 Document 312-2 Filed 10/26/2007 Page 17 of 113
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subsidiaries, divisions, affiliated and related entities and plans (including without limitation any employee benefit plans in which any current, former, or future Company employee does, did, or could have participated in connection with his or her employment), and each of their fiduciaries, administrators, actuaries, executors, directors, officers, members, employees, agents, insurers, representatives, attorneys, trustees, conservators, successors in interest and assigns. "Remaining Litigation" means the continued litigation of the Three Remaining Claims and the Subsequent Fee Application. "Retirement Plan" means the Honeywell Retirement Earnings Plan, Amended and Restated as of January 1, 2000, including all subsequent amendments. "Retirement Plan Administrator" means the plan administrator for the Retirement Plan, as provided in the Retirement Plan Document. "Retirement Plan Amendment" means the amendment to the Retirement Plan described in Article III, which shall be consistent with and not contrary to the provisions of this Agreement. "Retirement Plan Document" means the plan document for the Honeywell Retirement Earnings Plan, Amended and Restated as of January 1, 2000, including all subsequent amendments. "SBA" or "Secured Benefit Account" means the individual accounts of plan participants under the Secured Benefit Plan. "SBA Offset" means the offset described in Section 4.01(c) of Supplement C to the Retirement Plan, Section 5.1(c) of the Allied Signal Retirement Program, and Section 4.2(e)(i) of the Signal Retirement Plan. "SBA Offset Claim" means the claims, purported to be brought under ERISA §§ 502(a)(1)(B) and 502(a)(3), that Defendants violated ERISA § 204(g) by increasing from 3.5% to 7.5% the interest rate used to project forward a portion of Secured Benefit Account balances 15 Document 312-2 Filed 10/26/2007 Page 18 of 113
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from termination of employment to age 65 for purposes of calculating the SBA Offset following the merger of the Garrett Retirement Plan into the Signal Retirement Plan. "SBA Participant" means a former participant in the Garrett Severance Plan who became a vested participant in the Garrett Secured Benefit Account. "Secured Benefit Plan" means the Honeywell Secured Benefit Plan. "Secured Benefit Plan Administrator" means the plan administrator for the Secured Benefit Plan, as provided in the Secured Benefit Plan Document. "Secured Benefit Plan Document" means the plan document for the Honeywell Secured Benefit Plan. "Settlement Class" means the group of persons consisting of every Participant and SBA Participant and every derivative claimant of a Participant or SBA Participant. For this purpose, the derivative claimants of a Participant and SBA Participant include, without limitation, any spouse, domestic partner, civil union partner, child, representative, heir, administrator, beneficiary, alternate payee, executor, conservator, attorney, and/or assign of a Participant and SBA Participant. These derivative claimants are limited to the rights of and are subject to the defenses applicable against the Participant and SBA Participant from whom their claim derives. "Signal Retirement Plan" means The Signal Companies, Inc. Retirement Plan, as amended and restated effective January 1, 1984 with amendments adopted or effective before January 1, 1993. "Social Security Offset Claim" means the claims, purported to be brought under ERISA §§ 502(a)(1)(B) and 502(a)(3), that Defendants violated ERISA § 204(g) by applying the Social Security offset formula contained in Section 4.2(b) of the Signal Retirement Plan to service credited before January 1, 1984.
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"Special Incentive Awards" means the awards totaling $150,000 to be paid as a Retirement Plan administrative expense and to be allocated among the Named Plaintiffs as described in Paragraph 2.11. "Spouse" means the individual who is, or is treated as, the spouse of a Participant under Supplement C of the Retirement Plan, and/or under the Allied Signal Retirement Program, and/or the Signal Retirement Plan, and/or the Garrett Retirement Plan, as applicable. "Straight Life Annuity" means the annuity benefit described in Paragraph 3.03(d)(3). "Subsequent Fee Application" means any and all motions or petitions for attorneys' fees and costs related to the Three Remaining Claims. The Subsequent Fee Application and any award pursuant to the Subsequent Fee Application are limited as described in Paragraph 2.12(c). "Subsequent Fee Award" means the amount of attorneys' fees and costs awarded to Class Counsel pursuant to the Subsequent Fee Application, including, without limitation, any interest thereon. The Subsequent Fee Award is limited as described in Paragraph 2.12(c). "Subsequent Recovery" means the Subsequent Relief and the Subsequent Fee Award. "Subsequent Recovery Calculation Date" means one-hundred twenty (120) days after the first date on which: (a) a judgment or judgments have been entered by the District Court with respect to all Three Remaining Claims and the Subsequent Fee Application; and (b) (i) if rehearing, reconsideration, or appellate review of the judgment or judgments is not sought by any person, when the time to seek such rehearing, reconsideration, or appellate review has expired, or (ii) if rehearing, reconsideration, or appellate review of the judgment or judgments is sought by any person, when any and all avenues of rehearing, reconsideration, and appellate review (including in the United States Supreme Court) have been exhausted and no further rehearing, reconsideration, or appellate review is permitted (or the time for seeking such review has expired). 17
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"Subsequent Relief" means any and all relief that may be awarded to the Settlement Class relating to any or all of the Three Remaining Claims, including, without limitation, additional benefits, any interest thereon, and any portion of the Subsequent Fee Award that provides that it is to be paid out of such additional benefits and/or interest (for example, under a "common fund," "common benefit" or other similar doctrine), but specifically excluding any portion of the Subsequent Fee Award that provides that it is to be paid in addition to and not out of such additional benefits and/or interest (for example, under a "lodestar" method). Subsequent Relief is determined before and without regard to any adjustment therein pursuant to Paragraph 3.10(c). "Term Sheet" means the Term Sheet Partial Settlement entered into and executed by the Settlement Class on August 24, 2007 and by Defendants on August 27, 2007. "Three Remaining Claims" means the SBA Offset Claim, the Social Security Offset Claim, and the Minimum Benefits Claim. "Valuation Assumptions" means: (i) the Applicable Interest Rate, (ii) the Applicable Mortality Table, except that the probability of death will be assumed to be zero for any period before payment of the amount or series of amounts being valued commences, (iii) for purposes of Paragraphs 3.02(c)(2) and 3.04(b)(4), the assumption that each Eligible Participant or Eligible Beneficiary who, as of the Partial Settlement Calculation Date, has not yet had a Benefit Commencement Date with respect to his or her benefits under Supplement C of the Retirement Plan (determined without regard to this Agreement or any Subsequent Relief), will have a Benefit Commencement Date with respect to the amount or series of amounts being valued that is the later of the Earliest Distribution Date and (a) the date the Eligible 18 Document 312-2 Filed 10/26/2007 Page 21 of 113
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Participant would attain age 60 (if he or she has less than 35 years of Credited Service as of the Partial Settlement Calculation Date), or (b) the date the Eligible Participant would be entitled to the maximum early retirement subsidy with respect to such amount or amounts (i.e., generally his or her Early Retirement Age under Supplement C of the Retirement Plan) (if he or she has 35 years or more of Credited Service as of the Partial Settlement Calculation Date), and (iv) for purposes of Paragraph 3.10(b)(2), the assumption that each Participant or Beneficiary who, as of the Subsequent Recovery Calculation Date, has not yet had a Benefit Commencement Date with respect to his or her benefits under Supplement C of the Retirement Plan (determined without regard to this Agreement or any Subsequent Relief), will have a Benefit Commencement Date with respect to the amount or series of amounts being valued that is the later of the Subsequent Recovery Calculation Date or the date the Participant would be entitled to the maximum early retirement subsidy with respect to such amount or amounts (i.e., generally his or her Early Retirement Age under Supplement C of the Retirement Plan).
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II. PROCEDURES Preliminary Approval. As soon as reasonably practicable, the Parties will submit
this Agreement to the District Court, together with a joint motion to (i) preliminarily approve this Agreement, (ii) enter the Order Granting Preliminary Approval, (iii) set a date and time for the Fairness Hearing, and (iv) approve the Class Notice and Claim Form. As soon as reasonably practicable, the Parties will also submit to the District Court a joint motion asking the District Court to vacate its September 6, 2006 Order and certify a class consisting of the members of the Settlement Class pursuant to Fed. R. Civ. P. 23(a)(1)-(4) and 23(b)(1) and (b)(2) and appointing Named Plaintiffs as Settlement Class representatives and appointing Class Counsel as counsel for the Settlement Class. Neither Party may argue or draw any inferences based on the language in the joint motion to preliminarily approve this Agreement or the joint motion to vacate the District Court's September 6, 2006 Order and certify a class consisting of the members of the Settlement Class pursuant to Fed. R. Civ. P. 23(a)(1)-(4) and 23(b)(1) and (b)(2). The Parties will also submit to the District Court the Proposed Scheduling Order attached hereto as Exhibit 4 concerning the future litigation of the Three Remaining Claims. 2.02 Proposed Scheduling Order. The Proposed Scheduling Order will provide
deadlines for litigation of the Three Remaining Claims after the Partial Settlement becomes Final. The Proposed Scheduling Order will provide that the Remaining Litigation will not be stayed pending Final Approval of the Partial Settlement; provided, however, that until the Partial Settlement becomes Final, or until briefing by Defendants is closed in the Court of Appeals, if sooner, depositions and/or expert discovery, including the furnishing of expert reports, shall not take place. Should the District Court enter a scheduling order that directs that depositions and/or expert discovery must take place before the Partial Settlement becomes Final, or before briefing
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by Defendants is closed in the Court of Appeals, if sooner, the Parties will have the right to withdraw from the Partial Settlement and restore the status quo ante as it existed on July 9, 2007. 2.03 Class Notification. Within ten (10) days after entry of an Order Granting
Preliminary Approval, Defendants' counsel will furnish to Class Counsel in Microsoft Excel format or in a Microsoft Access database table, a list of the names and last known addresses of the Participants, SBA Participants and any Beneficiaries who are in pay status. Class Counsel will provide Settlement Class members with the Class Notice, which will include details of the proposed Partial Settlement, the date and time for the Fairness Hearing, and their right to object to this Agreement. The Class Notice distribution shall also include the Claim Form. The Class Notice and Claim Form will be sent by first-class mail to the last known address of each Settlement Class member as it appears in Defendants' records and will be published in the Arizona Republic, the Arizona Daily Star, the Daily Breeze, the Los Angeles Times, and USA Today. Additionally, Class Counsel will post the Class Notice and the Claim Form and provide other notices and/or information to Settlement Class members (subject to the limitations of Paragraph 5.04) on the website www.garrettaction.com. Class Counsel will use its best efforts to complete the mailing and publication of the Class Notice within fifteen (15) business days of the Order Granting Preliminary Approval. During the negotiations of this Agreement, the Parties have disagreed as to whether Defendants may seek the District Court's permission to enclose a "Questionnaire" to Participants, SBA Participants and Beneficiaries with the Class Notice and Claim Form or with the benefit election forms to be sent prior to the Partial Settlement Benefit Commencement Date. However, based on Defendants' agreement not to seek the District Court's permission to enclose a "Questionnaire" to Participants, SBA Participants and Beneficiaries with the Class Notice and Claim Form or with the benefit election forms, Class Counsel agrees and stipulates that when 21 Document 312-2 Filed 10/26/2007 Page 24 of 113
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Defendants re-submit a motion for the District Court's consideration seeking approval to send a Questionnaire to Participants, SBA Participants and Beneficiaries, Class Counsel will not make any arguments based upon Defendants' failure to send the Questionnaire with the Class Notice and Claim Form or with the benefit election forms or to not otherwise include a provision in the Settlement Agreement regarding the Questionnaire. Nothing in this Agreement shall create an inference against Plaintiffs' contentions, or limit Plaintiffs' arguments, that service of a questionnaire on Participants is not appropriate. 2.04 Final Fairness Hearing. In the motion for preliminary approval of this
Agreement, the Parties will request that the District Court set a Fairness Hearing as soon as practicable to determine the fairness, reasonableness and adequacy of the Partial Settlement, the dismissal with prejudice of the claims of the Named Plaintiffs and the Settlement Class against Defendants (excluding the Three Remaining Claims), the request of Class Counsel for an award of attorneys' fees and costs pursuant to the Initial Fee Application, and the request for Special Incentive Awards for the Named Plaintiffs. The Parties will request that the Fairness Hearing be set within sixty (60) days following the date for mailing the Class Notice. 2.05 Objections to Settlement. (a) Any Settlement Class member who wishes to object to the fairness,
reasonableness, or adequacy of this Agreement, or the request by Class Counsel for an award of fees and costs, must file with the Clerk of the District Court and serve all counsel, no later than fourteen (14) days before the Fairness Hearing, a statement of the objection, as well as the specific reason(s), if any, for each objection, including any legal support that the Settlement Class member wishes to bring to the District Court's attention and any evidence the Settlement Class member wishes to introduce in support of the objection. Any Settlement Class member who files 22
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and serves a written objection, as described herein, may appear at the Fairness Hearing and request to be heard with respect to the objection timely filed in accordance with this Paragraph. (b) Settlement Class members filing a written objection or appearing at the
Fairness Hearing in accordance with this Paragraph may do so either on their own or through an attorney hired at their own expense. If a Settlement Class member hires an attorney to represent him or her (at his or her own cost and expense), the attorney must file a notice of appearance with the Clerk of the District Court no later than fourteen (14) days before the Fairness Hearing or as the District Court may otherwise direct, and serve a copy of such notice of appearance on all counsel for the Parties. (c) Unless the District Court finds good cause for an exception, any Settlement
Class member (or his or her attorney) who fails to comply with the provisions of Paragraphs 2.05(a) and (b) will waive any rights the Settlement Class member may have to appear separately and/or to object, and will be bound by all the terms of the Agreement and by all proceedings, orders, and judgments in the Litigation. (d) The Parties shall file any written replies to objections submitted in
accordance with Paragraph 2.05(a) no later than seven (7) calendar days before the Fairness Hearing. 2.06 Effect of Failure to Grant Final Approval. If the District Court fails to enter the
Order Granting Preliminary Approval of the Partial Settlement in substantially the form submitted by the Parties or in a form which is otherwise agreed to by the Parties, or if the Partial Settlement does not receive Final Approval, as defined herein, either Party will have the right to declare the Partial Settlement and Agreement null and void with no further force and effect, and the Litigation will resume without prejudice to the rights (including, but not limited to, appeal rights) of any Party, unless the Parties successfully renegotiate the settlement and obtain final approval 23 Document 312-2 Filed 10/26/2007 Page 26 of 113
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of the renegotiated settlement. In the event a Party declares the Partial Settlement and this Agreement null and void in accordance with this Paragraph, the Litigation and any orders entered regarding dismissal in connection with the application for approval of the Partial Settlement or any orders entered vacating the September 6, 2006 class certification order shall be restored to the status quo ante as it existed on July 9, 2007. 2.07 Certification of Settlement Class. The Parties stipulate to certification of a class
solely for settlement purposes (which includes litigation of the Three Remaining Claims) pursuant to Fed. R. Civ. P. 23(a)(1)-(4) and 23(b)(1) and 23(b)(2), with Named Plaintiffs as the named class representatives, with Class Counsel as counsel for Named Plaintiffs and the Settlement Class, and the Settlement Class as a non-opt-out class. Entry of an order certifying the Settlement Class shall also vacate the District Court's prior class certification Order dated September 6, 2006. Certification of the Settlement Class pursuant to Fed. R. Civ. P. 23(a)(1)-(4), 23(b)(1) and 23(b)(2) with Named Plaintiffs as the named class representatives, with Class Counsel as counsel for Named Plaintiffs and the Settlement Class, and vacating the September 6, 2006 Order is a material condition of the Partial Settlement. Defendants will not seek to decertify the Settlement Class, but reserve their right to assert that some or all members of the Settlement Class are not entitled to any relief on any of the Three Remaining Claims (i.e., relief beyond that provided as Partial Settlement Benefits) for any reason, including, without limitation, on the basis of affirmative defenses such as the statute of limitations and laches. If the District Court (or Court of Appeals or United States Supreme Court) orders that the Settlement Class be certified pursuant to Fed. R. Civ. P. 23(b)(3), either Party will have the right to declare the Partial Settlement and this Agreement null and void, and the Litigation will resume without prejudice to the rights (including, but not limited to, appeal rights) of any Party. If the Partial Judgment is not entered, or if the Partial Settlement does not receive Final Approval, then no Settlement Class 24 Document 312-2 Filed 10/26/2007 Page 27 of 113
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shall be deemed to have been certified by, or as a result of, this Agreement, and the Litigation and the claims asserted by Named Plaintiffs shall, for all purposes with respect to the Parties, revert to their status as of July 9, 2007, and the District Court's September 6, 2006 order certifying the class shall be automatically reinstated without further action of the Parties or the District Court. In such event, Defendants shall not be deemed to have consented to the certification of any class, the agreements and stipulations in this Agreement concerning class certification or class definition shall not be used as evidence or argument to support class certification or class definition, and Defendants shall retain any rights they may have to move to decertify the class certified by the District Court in its September 6, 2006 Order, or to oppose any modification to that Order. 2.08 Cost of Class Notice and Administration of Partial Settlement. The Retirement
Plan will pay as an administrative expense all of the reasonable costs and expenses of postage, printing, duplicating, mailing, and newspaper publication of the Class Notice. All other expenses incident to the administration of providing the Class Notice and Claim Form and receipt of the Claim Form shall be borne by Class Counsel and the Settlement Class. The cost of processing Partial Settlement Payments under this Agreement shall be borne by the Retirement Plan. If the Partial Settlement or this Agreement is terminated for any reason, the Parties shall have no obligation to reimburse any other Party for the costs incurred under this Paragraph 2.08 or for any other costs or expenses incurred under this Agreement. 2.09 Entry of Partial Judgment. Not later than fourteen (14) days before the Fairness
Hearing, the Parties shall jointly submit to the District Court a mutually agreed upon motion for entry of the Partial Judgment and form of Partial Judgment. The Partial Judgment shall provide for the following:
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(a)
certifying the class settlement of the claims covered by this Agreement and finding the Settlement Class to be properly certified pursuant to Fed. R. Civ. P. 23(a)(1)-(4), 23(b)(1) and 23(b)(2) with Named Plaintiffs as the class representatives and Class Counsel as counsel for the Settlement Class; adjudging the Partial Settlement to be fair, reasonable and adequate; ordering that the Partial Settlement Agreement is approved and directing consummation of the terms and provisions of this Agreement, and requiring the Parties to take the necessary steps to effectuate the terms of this Partial Settlement; entering the Partial Judgment pursuant to Fed. R. Civ. P. 54(b); dismissing with prejudice all claims asserted in the Litigation, except the Three Remaining Claims, whether asserted by Named Plaintiffs on their own behalf or on behalf of the Settlement Class, against Defendants without additional cost to any of the Parties other than as provided for in this Agreement; awarding Partial Settlement Benefits consistent with the terms of this Agreement; awarding attorneys' fees and costs for Class Counsel pursuant to the Initial Fee Application consistent with the terms of this Agreement; granting Special Incentive Awards to the Named Plaintiffs consistent with the terms of this Agreement; ordering the Parties' submission to, and the District Court's continuing retention of, exclusive jurisdiction over this matter for the purpose of effectuating and supervising the enforcement, interpretation or implementation of the Partial Settlement, and resolving any disputes that may arise hereunder; and entering an injunction barring any Settlement Class member from filing a separate action with respect to the Three Remaining Claims or the Released Claims.
(b) (c)
(d) (e)
(f) (g) (h) (i)
(j)
Litigation of the Three Remaining Claims. Named Plaintiffs and Settlement
Class members reserve their right to prosecute the Three Remaining Claims in any manner they see fit; provided, however, that no Settlement Class member shall file any action outside the Litigation with respect to any of the Three Remaining Claims, that the provisions of Paragraph 26
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3.10 will apply if the Settlement Class prevails on any of the Three Remaining Claims and secures a Subsequent Recovery, and that the maximum amount of Subsequent Recovery for which Defendants and the other Released Parties may be held liable on the Three Remaining Claims shall not exceed the Cap Amount. Defendants reserve their right to defend the Three Remaining Claims in any manner they see fit, including, without limitation, Defendants' rights to: (a) argue that there is no liability whatsoever; (b) contest any and all relief sought by any Settlement Class member; and (c) argue that any relief proposed on behalf of any Settlement Class member should be reduced or eliminated. The Three Remaining Claims are: (a) (b) (c) the SBA Offset Claim; the Social Security Offset Claim; and the Minimum Benefits Claim.
Neither Party may argue or draw any inferences based on the language of the Settlement Agreement. In the event the Partial Settlement does not become Final, the Parties shall not be deemed to have consented to any characterization or limitation of the Three Remaining Claims or any other claims and no evidence or arguments can be offered and no inferences can be drawn regarding the content of this Agreement. 2.11 Special Incentive Awards. When the Partial Settlement is Final, the Retirement
Plan will pay to the Named Plaintiffs as Special Incentive Awards the total sum of $150,000, to be paid as a Retirement Plan administrative expense and to be allocated among the Named Plaintiffs as follows: Barbara Allen, in the amount of $20,000; Richard Dippold, in the amount of $15,000; Melvin Jones, in the amount of $25,000; Donald McCarty, in the amount of $15,000; Richard Scates, in the amount of $43,000; and 27
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Walter G. West, in the amount of $32,000. The Named Plaintiffs are receiving the Special Incentive Awards for their actual time expended, along with their expense and efforts in helping the Retirement Plan maintain compliance with ERISA. The Special Incentive Awards are in addition to the Partial Settlement Benefits and any Subsequent Relief that may be payable to the Named Plaintiffs in their capacity as Settlement Class members. Within thirty (30) days after Final Approval, the Retirement Plan will send by overnight mail to Class Counsel a check for each Named Plaintiff for the full amount of each Named Plaintiff's Special Incentive Award. Defendants will issue an IRS Form 1099 for each payment after the conclusion of the applicable tax year. 2.12 Payment of Attorneys' Fees and Costs Award. (a) At or before the Fairness Hearing, Class Counsel shall file the Initial Fee
Application with the District Court. The Initial Fee Application may seek attorneys' fees and costs of up to $8.75 million. Any award of attorneys' fees and costs finally approved by the District Court (and, if applicable, by the Court of Appeals or United States Supreme Court) will be paid from the Retirement Plan as an administrative expense of the Retirement Plan. The Initial Fee Award will not be paid to the extent such award exceeds $8.75 million. (b) Within thirty (30) days of Final Approval, the Retirement Plan will wire
transfer to one or more accounts specified by Class Counsel any Initial Fee Award as limited by this Agreement. (c) Upon the conclusion of the litigation of the Three Remaining Claims, and
if Named Plaintiffs prevail on any or all of the Three Remaining Claims, Class Counsel may file a Subsequent Fee Application. The Subsequent Fee Application may not exceed the lesser of (1) $125 million (i.e. twenty-five percent (25%) of the Cap Amount), and (2) the greater of (i) 28
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twenty-five percent (25%) of the value of the Subsequent Relief (as determined under Paragraph 3.10(b)), or (ii) Class Counsel's attorneys' fees and costs for litigating the Three Remaining Claims calculated pursuant to the lodestar method. Notwithstanding anything in this Agreement or any court order to the contrary, in no event will Class Counsel be entitled to receive an award of attorneys' fees and costs, including interest (if any) thereon, in connection with the Remaining Litigation in excess of the limit prescribed in the preceding sentence. In addition, in no event will the Subsequent Fee Application seek, nor will Defendants be required to pay an award of attorneys' fees and costs that are calculated under a "common fund," "common benefit," or any similar theory, but that are payable in addition to the Subsequent Relief, rather than out of it. If, however, attorneys' fees and costs pursuant to the Subsequent Fee Application are awarded based on the "lodestar" method of calculation, that amount will be paid in addition to the Subsequent Relief, unless a court directs that such Subsequent Fee Award be paid from the Subsequent Relief. (d) Defendants reserve their right to oppose any and all aspects of a
Subsequent Fee Application. Nothing in this Agreement shall be construed against Defendants' contention that Class Counsel is not entitled to any Subsequent Fee Award whether based on a "common fund," "common benefit" or any similar theory or based on a "lodestar" method of calculation or otherwise. 2.13 Submission of Claim Form. Class Counsel will enclose a Claim Form with the
Class Notice, will post a copy of the Claim Form on www.garrettaction.com, and will make copies of the Claim Form available to Settlement Class members upon request. To receive Partial Settlement Benefits, a Participant or Beneficiary must return the Claim Form to Class Counsel within sixty (60) days of the mailing of the Class Notice. Class Counsel shall forward the Claim Forms in scanned electronic format to Defendants within fourteen (14) days of receipt by Class 29 Document 312-2 Filed 10/26/2007 Page 32 of 113
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Counsel of same. For good cause, Class Counsel may, in its discretion, accept and forward to Defendants Claim Forms returned after the sixty (60) day period, which shall also be deemed timely and eligible for payment of Partial Settlement Benefits. In no event shall a Claim Form received after the Partial Settlement becomes Final be deemed timely. There shall only be one Claim Form submitted on behalf of or with respect to a Participant. If a Participant is still alive during the period for submitting Claim Forms, the Claim Form shall be submitted by the Participant. If the Participant dies before submitting a Claim Form, the Claim Form shall be submitted by (i) the surviving Beneficiary, if any, with respect to that Participant, (ii) if there is no surviving Beneficiary and the Participant died after June 30, 2002, then the executor or administrator of the estate, or the qualified personal representative, of the Participant, or (iii) if the Participant died with a surviving Beneficiary and the surviving Beneficiary dies after June 30, 2002 and before submitting a Claim Form, the Claim Form shall be submitted by the executor or administrator of the estate, or the qualified personal representative, of the Beneficiary. Class Counsel shall be responsible for determining, and shall have the discretionary authority to determine, whether the executor or administrator of the estate, or the qualified personal representative, of a Participant or Beneficiary, is an Eligible Estate Representative. Defendants shall cooperate with Class Counsel in providing pertinent information currently in their possession relevant to this issue. 2.14 Dismissal of Claims. Subject to the provisions of Paragraphs 2.06 and 2.07, the
Named Plaintiffs and the Settlement Class agree to the entry of the Partial Judgment as set forth in Paragraph 2.09, dismissing with prejudice all claims asserted in the Litigation except the Three Remaining Claims and the Subsequent Fee Application as limited pursuant to Paragraphs 2.12(c) and 3.10.
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III. BENEFITS Partial Settlement Benefits. In its capacity as sponsor of the Retirement Plan and
settlor of the trust or trusts thereunder, Honeywell will amend the Retirement Plan to provide the additional benefits specified in this Article III. 3.02 Fractional Reduction Settlement Benefits. (a) Retirement Plan Amendment. The Retirement Plan Amendment will
provide Partial Settlement Benefits to the Fractional Reduction Participants, their Beneficiaries or Eligible Estate Representatives, who timely return a Claim Form (as required by Paragraph 2.13 of this Agreement). To determine each Fractional Reduction Participant's (or his or her Beneficiary's or Eligible Estate Representative's) Fractional Reduction Partial Settlement Benefits under this Paragraph 3.02, the Retirement Plan Administrator will calculate such Participant's Fractional Reduction Difference, if any. (b) Time and Form of Payment. Fractional Reduction Partial Settlement
Benefits will be distributed in accordance with the following subparagraphs. (1) Living Fractional Reduction Participants who have had a Benefit Commencement Date on or before the Partial Settlement Calculation Date. a. If a Fractional Reduction Participant is living on the Partial Settlement Calculation Date and he or she has had a Benefit Commencement Date on or before the Partial Settlement Calculation Date, the Fractional Reduction Participant's Fractional Reduction Difference will be treated as a calculation error under the Garrett Retirement Plan, the Signal Retirement Plan, the Allied Signal Retirement Program or the Retirement Plan, as applicable. Such Fractional Reduction Difference will be treated as if it had been payable at such Fra