Skip to main content
Find a Lawyer

Severance Plan for Corporate Staff Employees - Honeywell International Inc.

                          HONEYWELL INTERNATIONAL INC.
                  Severance Plan for Corporate Staff Employees
             (Involuntary Termination Following a Change in Control)
                           Effective February 6, 1988















                                     Amended and Restated as of October 24, 2000









                          HONEYWELL INTERNATIONAL INC.

                  Severance Plan for Corporate Staff Employees
             (Involuntary Termination following a Change in Control)


Article I     Purpose

1.1           The purpose of this Plan is to provide severance benefits to
              Corporate Staff Employees of Honeywell International Inc. in the
              event of the Involuntary Termination of their employment following
              a Change in Control. This Plan constitutes the amendment and
              restatement, as of October 24, 2000, of the Severance Plan for
              Corporate Staff Employees (Involuntary Termination following a
              Change in Control) established by Honeywell International Inc.
              (formerly AlliedSignal Inc.) as of February 6, 1988, and amended
              and restated effective October 21, 1988 and April 1, 1999.

Article II    Definitions

2.1           Affiliated Company - means (a) any member of a controlled group of
              corporations as defined in Section 414(b) of the Code of which
              Honeywell International Inc. or a predecessor of Honeywell
              International Inc. is or was a member, (b) any unincorporated
              trade or business which is under common control with Honeywell
              International Inc. as determined under Section 414(c) of the Code,
              or (c) any organization, employment with which is counted as
              employment with Honeywell International Inc. or a predecessor of
              Honeywell International Inc. under the provisions of Section
              414(m), (n), or (o) of the Code.

2.2           Honeywell International Inc. - means Honeywell International Inc.,
              a Delaware corporation, and its subsidiaries, and any successors
              thereto.

2.3           Annual Incentive Compensation - means the product of (a) times (b)
              where (a) is such employee's target award level under the
              Incentive Compensation Plan for Executive Employees of Honeywell
              International Inc. and its Subsidiaries, or any successor plan,
              for the most recent incentive period ended prior to the Change in
              Control, and (b) is Base Salary. Long-term performance incentive
              awards shall not be considered in determining Annual Incentive
              Compensation.

2.4           Base Salary - means the annual base salary, exclusive of bonus,
              incentive or other extra compensation but inclusive of overtime
              (in the case of non-exempt Participants), being paid to a
              Participant at the time of Involuntary Termination of employment.

2.5           Board of Directors - means the Board of Directors of Honeywell
              International Inc.

2.6           Change in Control - is deemed to occur at the time (a) when any
              entity, person or group (other than Honeywell International Inc.,
              any subsidiary or any savings,


                                       2






              pension or other benefit plan for the benefit of employees of
              Honeywell International Inc.) 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,
              (b) of the purchase of shares of Common Stock pursuant to a tender
              offer or exchange offer (other than any offer by Honeywell
              International Inc.) for all, or any part of, the Common Stock, (c)
              of a merger in which Honeywell International Inc. will not survive
              as an independent, publicly owned corporation, a consolidation, or
              a sale, exchange or other disposition of all or substantially all
              of Honeywell International Inc.'s assets, (d) 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
              stockholders of Honeywell International Inc., 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 (e) of any transaction or other event which the
              Compensation Committee of the Board of Directors, in its
              discretion, determines to be a change in control for purposes of
              this Plan.

2.7           Code - means the Internal Revenue Code of 1986, as amended from
              time to time.

2.8           Common Stock - means the Common Stock of Honeywell International
              Inc. or such other stock into which the Common Stock may be
              changed as a result of split-ups, recapitalizations,
              reclassifications and the like.

2.9           Corporate Staff Employee - means a salaried or non-union hourly
              employee of Honeywell International Inc. employed in Career Bands
              1 through 7 who (a) is not associated with a strategic business
              unit of Honeywell International Inc. (including Business
              Services), and (b) who (i) has a reporting relationship, prior to
              a Change in Control, either direct or through one or more other
              employees, to one of the then Senior Vice Presidents of Honeywell
              International Inc., (ii) prior to a Change in Control, held a
              position similar to a position which on April 1, 1999 had a
              reporting relationship, either direct or indirect or through one
              or more other employees, to one of the then Senior Vice Presidents
              of Honeywell International Inc., or (iii) reported prior or
              subsequent to a Change in Control directly to the Chairman and
              Chief Executive Officer of Honeywell International Inc. or the
              President and COO of Honeywell International Inc. Corporate Staff
              Employee shall not include any 1988 Plan Employee.

2.10          ERISA - means the Employee Retirement Income Security Act of 1974,
              as amended from time to time.


                                       3






2.11          Gross Cause - means fraud, misappropriation of Honeywell
              International Inc. property or intentional misconduct damaging to
              such property or business of Honeywell International Inc., or the
              commission of a crime.

2.12          Hour of Service - means each hour for which a Participant is
              directly or indirectly paid by Honeywell International Inc., a
              predecessor of Honeywell International Inc. or an Affiliated
              Company for performance of duties and for reasons other than
              performance of duties and includes regular time, overtime,
              vacations, holidays, sickness, disability, paid layoff, and
              similar paid periods. Hours of Service shall be computed and
              credited in accordance with Department of Labor Regulation Section
              2530.200b-2(b) and (c), as amended from time to time.

2.13          Involuntary Termination - means (a) termination by Honeywell
              International Inc. of the Participant's employment during the
              Protected Period, other than upon mandatory retirement in
              compliance with applicable law, death or for Gross Cause, or (b)
              termination of employment by a Participant during the Protected
              Period following (i) a reduction in the Participant's Pay or
              employee benefits other than a reduction which is generally
              applicable to all salaried and non-union hourly employees of
              Honeywell International Inc., (ii) permanent elimination of the
              Participant's position, not including transfer pursuant to the
              sale of a facility or line of business in which the Participant is
              offered substantially comparable employment with the new employer,
              (iii) a material change in the position, function,
              responsibilities or reporting level or in the standard of
              performance required of the Participant, (iv) any geographic
              relocation of a Participant's position (as determined immediately
              prior to a Change in Control) to a new location, or (v) an action
              by Honeywell International Inc. that under applicable law
              constitutes constructive discharge.

2.14          1988 Plan Employee - means an individual who (i) met the
              definition of Corporate Staff Employee under the Plan immediately
              prior to its amendment and restatement on April 1, 1999 (the "1988
              Plan Definition"), (ii) who ceased to meet the Plan's definition
              of Corporate Staff Employee solely by reason of the April 1, 1999
              amendment of such definition, and (iii) satisfies the 1988 Plan
              Definition as of the Change in Control. 1988 Plan Employees shall
              have their benefits, if any, determined solely with reference to
              the Plan as amended and restated effective October 21, 1988, a
              copy of which is attached hereto as Exhibit A.

2.15          Participant - means a Corporate Staff Employee.

2.16          Pay - means Base Salary and, as to a Participant employed in Band
              5 or above, Annual Incentive Compensation.

2.17          Plan - means the Honeywell International Inc. Severance Plan for
              Corporate Staff Employees (Involuntary Termination Following a
              Change in Control).

                                       4






2.18          Plan Administrator - means the person or entity identified in
              Section 5.01 to administer the terms and conditions of the Plan.

2.19          Plan Sponsor - means Honeywell International Inc. Any successor to
              Honeywell International Inc. (or a principal subsidiary) shall be
              deemed a Plan Sponsor.

2.20          Protected Period - means, with respect to each Participant, the
              period beginning on the date of a Change in Control that occurs
              after he or she becomes a Participant and ending at the expiration
              of twenty-four (24) months following such Change in Control.

2.21          Year of Service - means any consecutive 12-month period commencing
              on a Participant's date of hire or rehire with Honeywell
              International Inc., any predecessor of Honeywell International
              Inc. or an Affiliated Company, and anniversaries thereof during
              which the Participant has completed at least 1,000 Hours of
              Service.

Article III   Participation

3.1           The benefits provided under the Plan are limited solely to
              Participants.

Article IV    Eligibility for and Continuation of Pay, Benefits and Pension
              Service

4.1           Eligibility for Pay, Benefit and Pension Service Continuation

              In the event of the Involuntary Termination of a Participant's
              employment during the Protected Period, Pay, benefit and pension
              service continuation shall be provided to the Participant by
              Honeywell International Inc. (or any successor to Honeywell
              International Inc.) in accordance with this Article IV.

4.2           Pay, Benefit and Pension Service Continuation

              A)    Pay Continuation - A Participant shall receive Base Salary,
                    paid in accordance with his or her normal payroll period,
                    and, as to Participants employed in Career Band 5 or above,
                    Annual Incentive Compensation, paid annually, for the period
                    specified in Schedule A attached hereto.

              B)    Benefit Continuation - For the period of Pay continuation,
                    Honeywell International Inc. will continue the Participant's
                    employee benefits, including, without limitation, vacation
                    accruals, continuation of the Participant's savings plan
                    participation (to the extent permissible under Section
                    401(a) of the Code), 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, that (a) such level of
                    continued benefits shall not exceed the level of benefits in
                    effect on the date of the Participant's Involuntary


                                       5






                    Termination, prior to any reduction thereto, (b) such
                    continuation of life and medical benefits will cease on the
                    date similar benefits are provided the Participant by a
                    subsequent employer, and (c) the executive flex-perk
                    allowance will be continued during the entire severance pay
                    period, subject to 4.2(D).

              C)    Pension Service Continuation - Participants entitled to
                    benefits under the Plan shall become 100% vested in their
                    defined benefit pension plan benefits (all defined benefit
                    plans in which a Participant has accrued a benefit are
                    collectively referred to as the "DB Plans"). During their
                    Pay continuation period, Participants shall continue to be
                    credited with additional age and service credit for purposes
                    of benefit accrual (up to a maximum of twelve (12) months of
                    a Participant's Pay continuation period), vesting and
                    eligibility under the DB Plans in which they participate. At
                    the end of a Participant's Pay continuation period,
                    Participants shall immediately be credited with three (3)
                    years of age and service, respectively, for purposes of
                    benefit accruals, vesting and eligibility under the DB
                    Plans; provided, however, that such three (3) years of
                    additional age shall be credited only if such additional age
                    credits would (either alone or in conjunction with a bridge
                    leave of absence) enable a Participant to be eligible for
                    immediate payment of an early or normal retirement benefit
                    under the applicable defined benefit pension plan in which
                    the Participant participates. The normal policy for
                    qualifying bridge leaves of absence, as reflected in the
                    applicable defined benefit pension plan in which the
                    Participant participates, shall remain applicable
                    thereafter. Notwithstanding the foregoing, a Participant
                    shall be eligible for the additional three (3) years of age
                    and service credit under the DB Plans only if such
                    Participant executes a general release of claims against
                    Honeywell International Inc., its subsidiaries and
                    affiliates in a form and manner prescribed by the Plan
                    Administrator.

              D)    If any payment to a Participant made pursuant to the terms
                    of this Plan (including payments from any benefit or
                    compensation plan or program sponsored or funded by
                    Honeywell International Inc. but excluding payments and
                    benefits provided upon a change in control under the
                    AlliedSignal Severance Plan for Senior Executives, Honeywell
                    Inc. Tier 1A and Tier 1B agreements, and any similar plan or
                    arrangement under which participants have their benefits
                    increased because of taxes under Section 4999 of the Code)
                    is determined to be an "excess parachute payment" within the
                    meaning of Section 280G or any successor or substitute
                    provision of the Code, with the effect that either the
                    Participant is liable for the payment of the tax described
                    in Section 4999 or any successor or substitute provision of
                    the Code (hereafter the "Section 4999 tax") or Honeywell
                    International Inc. has withheld the amount of the Section
                    4999 tax, an additional benefit shall be paid pursuant to
                    this Plan


                                       6







                    to such affected Participant, in an amount, which when added
                    to all payments constituting "parachute payments" for
                    purposes of Section 280G or any successor or substitute
                    provision of the Code, is sufficient to cause the remainder
                    of (i) the sum of the "parachute payments", including any
                    payments made pursuant to this subparagraph D), less (ii)
                    the amount of all state, local and federal income taxes and
                    the Section 4999 tax attributable to such payments and
                    penalties and interest on any amount of Section 4999 tax,
                    other than penalties and interest on any amount of Section
                    4999 tax with respect to which such payment was paid to the
                    Participant on or before the due date of the Participant's
                    federal income tax return on which such Section 4999 tax
                    should have been paid, to be equal to the remainder of (iii)
                    sum of the "parachute payments", excluding any payments made
                    pursuant to this subparagraph D), less (iv) the amount of
                    all state, local and federal income taxes attributable to
                    such payments determined as though the Section 4999 tax and
                    penalties and interest on any amount of Section 4999 tax,
                    other than penalties and interest on any amount of Section
                    4999 tax with respect to which a payment made pursuant to
                    this subparagraph D) was paid to the Participant on or
                    before the due date of the Participant's federal income tax
                    return on which such Section 4999 tax should have been paid,
                    did not apply. Notwithstanding the foregoing, payments to be
                    made pursuant to this subparagraph D), when added to
                    benefits provided under Section 4.2.B)(c), shall not in the
                    aggregate exceed three million dollars ($3,000,000) or such
                    greater amount as approved by Honeywell International Inc.
                    or its successor. In the event such payments exceed the
                    limitation described above, the designation of the type and
                    order of such payments to be reduced hereunder shall be made
                    by the Plan Administrator in his sole discretion. In such
                    case, a Participant shall, to the extent otherwise allowable
                    by law, be entitled to waive all or any portion of his or
                    her right to any benefit triggered by a Change in Control in
                    order to avoid the imposition of any tax under Section 4999
                    of the Code or any successor or substitute provision of the
                    Code.

4.3          Benefit Limitations

              To avoid duplication of benefits, the amount of any similar
              benefits under this Plan shall be offset and reduced by the amount
              of any similar benefit provided the Participant under other
              severance plans sponsored by Honeywell International Inc. for
              which the Participant may be eligible, regardless of whether the
              payments under this Plan are made at an earlier or a later date
              than payments under a similar plan would have been made. In
              addition, notwithstanding any plan provisions to the contrary, to
              the extent a Participant who was a former employee of Honeywell
              Inc. would be eligible for benefits under both this Plan and
              another severance plan sponsored by Honeywell Inc., such
              Participant shall only be entitled to benefits


                                       7






              under this Plan to the extent such Participant waives his or her
              rights to benefits under such other severance plan.

Article V     Administration

5.1           Plan Administrator

              Prior to the occurrence of a Change in Control, Honeywell
              International Inc.'s Vice President-Worldwide Human Resources
              shall be the Plan Administrator within the meaning of ERISA
              Section 3(16)(A), and the named fiduciary within the meaning of
              ERISA Section 402. In the event of an impending Change in Control,
              Honeywell International Inc.'s Vice President-Worldwide Human
              Resources shall appoint a person independent of Honeywell
              International Inc. or persons operating under its control or on
              its behalf (hereafter, the "Corporation") to be the new Plan
              Administrator effective upon the occurrence of a Change in Control
              and the Vice President-Worldwide Human Resources shall immediately
              provide to the new Plan Administrator such information with
              respect to each Participant as shall be necessary to enable the
              new Plan Administrator to determine the amount of any benefit
              which is then or may thereafter become payable to such
              Participant.

5.2           Powers and Duties of Plan Administrator.

              Except as otherwise provided in this Section, the Plan
              Administrator shall have the full discretionary power and
              authority to (i) determine the amount and timing of any benefit
              payable under the Plan, (ii) construe and interpret the Plan
              (including, without limitation, supplying omissions from,
              correcting deficiencies in, or resolving inconsistencies or
              ambiguities in, the language of the Plan), (iii) determine all
              questions of fact arising under the Plan, including questions as
              to eligibility for and the amount of benefits, (iv) establish such
              rules and regulations (consistent with the terms of the Plan) as
              it deems necessary or appropriate for administration of the Plan,
              (v) delegate responsibilities to others to assist it in
              administering the Plan, and (vi) perform all other acts it
              believes reasonable and proper in connection with the
              administration of the Plan. The Plan Administrator shall be
              entitled to rely on the records of the Corporation in determining
              any Participant's entitlement to and the amount of benefits
              payable under the Plan.

5.3           Benefit Claims and Appeals.

              Any request or claim for Plan benefits shall be deemed to be filed
              when a written request is made by the claimant or the claimant's
              authorized representative which is reasonably calculated to bring
              the claim to the attention of the Plan Administrator.


                                       8






                  The Plan Administrator shall provide notice in writing to any
                  claimant when a claim for benefits under the Plan has been
                  denied in whole or in part. Such notice shall be provided
                  within 90 days of the receipt by the Plan Administrator of the
                  claimant's claim or, if special circumstances require, and the
                  claimant is so notified in writing, within 180 days of the
                  receipt by the Plan Administrator of the claimant's claim. The
                  notice shall be written in a manner calculated to be
                  understood by the claimant and shall:

                         (i)     set forth the specific reasons for the denial
                                 of benefits;

                         (ii)    contain specific references to Plan provisions
                                 relative to the denial;

                         (iii)   describe any material and information, if any,
                                 necessary for the claim for benefits to be
                                 allowed, that had been requested, but not
                                 received by the Plan Administrator; and

                         (iv)    advise the claimant that any appeal of the Plan
                                 Administrator's adverse determination must be
                                 made in writing to the Plan Administrator
                                 within 60 days after receipt of the initial
                                 denial notification, and must set forth the
                                 facts upon which the appeal is based.

              If notice of the denial of a claim is not furnished within the
              time periods set forth above, the claim shall be deemed denied and
              the claimant shall be permitted to proceed to the review
              procedures set forth below. If the claimant fails to appeal the
              Plan Administrator's denial of benefits in writing and within 60
              days after receipt by the claimant of written notification of
              denial of the claim (or within 60 days after a deemed denial of
              the claim), the Plan Administrator's determination shall become
              final and conclusive.

              If the claimant appeals the Plan Administrator's denial of
              benefits in a timely fashion, the Plan Administrator shall
              re-examine all issues relevant to the original denial of benefits.
              Any such claimant or his or her duly authorized representative may
              review any pertinent documents, as determined by the Plan
              Administrator, and submit in writing any issues or comments to be
              addressed on appeal.

              The Plan Administrator shall advise the claimant and such
              individual's representative of its decision, which shall be
              written in a manner calculated to be understood by the claimant,
              and include specific references to the pertinent Plan provisions
              on which the decision is based. Such response shall be made within
              60 days of receipt of the written appeal, unless special
              circumstances require an extension of such 60-day period for not
              more than an additional 60 days. Where such extension is
              necessary, the claimant shall be given written notice of the
              delay. If the decision on review is not furnished within the time
              set forth above, the claim shall be deemed denied on review.


                                       9







5.4           Plan Year

              The plan year shall be the calendar year.

5.5           Indemnification.

              To the extent permitted by law, the Corporation shall indemnify
              the Plan Administrator from all claims for liability, loss, or
              damage (including payment of expenses in connection with defense
              against such claims) arising from any act or failure to act in
              connection with the Plan.

Article VI    Unfunded Obligation.

6.1           All benefits payable under this Plan shall constitute an unfunded
              obligation of the Corporation. Payments shall be made, as due,
              from the general funds of Corporation. This Plan shall constitute
              solely an unsecured promise by the Corporation to pay severance
              benefits to participants to the extent provided herein.

Article VII   Inalienability of Benefits.

7.1           No Participant shall have the power to transfer, assign,
              anticipate, mortgage or otherwise encumber any rights or any
              amounts payable under this Plan; nor shall any such rights or
              amounts payable under this Plan be subject to seizure, attachment,
              execution, garnishment or other legal or equitable process, or for
              the payment of any debts, judgments, alimony, or separate
              maintenance, or be transferable by operation of law in the event
              of bankruptcy, insolvency, or otherwise. In the event a person who
              is receiving or is entitled to receive benefits under the Plan
              attempts to assign, transfer or dispose of such right, or if an
              attempt is made to subject such right to such process, such
              assignment, transfer or disposition shall be null and void.
              Nothing in this Section 7.1 shall prevent a Participant from
              waiving all or any portion of any benefit triggered by a Change in
              Control in accordance with Section 4.2.D).

Article VIII  Withholding

8.1           The Corporation shall have the right to withhold any taxes
              required to be withheld with respect to any payments due under
              this Plan.

Article       IX Amendment or Termination.

9.1           Plan Amendments - The Board of Directors reserves the right to
              amend the Plan from time to time prior to a Change in Control.
              However, no amendment shall


                                       10







              reduce any benefit being paid or then payable to a Participant.
              Further, no amendment shall reduce the benefits provided by the
              Plan to persons who were Participants as of the date of such
              amendment or adversely affect in any manner the rights of persons
              who were Participants as of the date of such amendment to benefits
              provided under this Plan. This Plan may not be amended or
              terminated after a Change in Control; provided, however, the Plan
              may be amended if the purpose of the amendment is to increase
              benefits hereunder.

              Notwithstanding anything in this Plan to the contrary, the Vice
              President-Worldwide Human Resources shall be permitted to amend
              the Plan to reflect changes in Honeywell International Inc.'s
              organization; provided, however, that no such amendment (i) shall
              increase or decrease benefits under the Plan, or (ii) increase the
              total number of Participants by more than five percent (5%) during
              any twelve month period.

9.2           Plan Termination - The Board of Directors reserves the right to
              terminate the Plan. However, such termination shall not adversely
              affect the rights of persons who were Participants as of the date
              of such termination.

Article X.    Plan Not a Contract of Employment; Honeywell International Inc.'s
              Policies Control.

10.1          Nothing contained in this Plan shall give an employee the right to
              be retained in the employment of Honeywell International Inc..
              This Plan is not a contract of employment between Honeywell
              International Inc. and any employee. Any dispute involving issues
              of employment, other than claims for benefits under this Plan,
              shall be governed by the appropriate employment dispute resolution
              policies and procedures of Honeywell International Inc..

Article XI        Action by the Honeywell International Inc.

11.1          Unless expressly indicated to the contrary herein, any action
              required to be taken by Honeywell International Inc. may be taken
              by action of its Board of Directors or by any appropriate officer
              or officers traditionally responsible for such determination or
              actions, or such other individual or individuals as may be
              designated by the board of directors or any such officer.

Article XII   Governing Law

12.1          The Plan is an employee welfare benefit plan within the meaning of
              Section 3(1) of ERISA, and will be construed in accordance to
              ERISA's requirements.

Article XIII  Severability


                                       11






13.1          If any provision of this Plan shall be held illegal or invalid for
              any reason, said illegality or invalidity shall not affect the
              remaining parts of this Plan, but this Plan shall be construed and
              enforced as if said illegal or invalid provision had never been
              included herein.


                                       12






                                   SCHEDULE A


                                     
Bands                     Severance Pay Period

5 and 6                   18 months Base Salary and Annual Incentive Compensation

4                         One month notice, plus:

                          Years of Service           Base Salary
                          ----------------           -----------

                          0-4                        6 months
                          5-9                        9 months
                          10-19                      12 months
                          20+                        15 months

3                         One month notice, plus:

                          Years of Service           Base Salary
                          ----------------           -----------

                          0-9                        3 months
                          10-25                      6 months
                          26+                        9 months


Non-exempt                One month notice, plus:

                          Years of Service           Base Salary
                          ----------------           -----------

                          0-12                       3 months
                          13-25                      6 months
                          26+                        9 months


                                       13





Was this helpful?

Copied to clipboard