Supplemental Executive Retirement Plan - Honeywell International Inc.
HONEYWELL INTERNATIONAL INC. SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN FOR EXECUTIVES IN
CAREER BAND 6 AND ABOVE
Effective as of August 1, 1998
The purpose of the Honeywell International Inc. Supplemental Executive
Retirement Plan for Executives in Career Band 6 and Above is to provide certain
Executives and their Beneficiaries with monthly retirement income benefits under
all defined benefit deferred compensation plans maintained by the Company that
are at least equal to the benefits that would have been payable had such
Executives been covered by the Retirement Program and the Supplemental Pension
Plan (as defined herein) throughout their Credited Service (as defined herein)
with the Company.
To the extent required to determine benefits under this Plan, the terms and
provisions of the Pension Plans and the Supplemental Pension Plan shall be
deemed to be incorporated by reference.
2.1 "Beneficiary" or "Beneficiaries" means the person or persons designated as
a Participant's joint or contingent annuitant and/or beneficiary, if any,
under the applicable Pension Plan(s).
2.2 "Board" means the Board of Directors of Honeywell International Inc.
2.3 "Code" means the Internal Revenue Code of 1986, as amended from time to
2.4 "Committee" means the Management Development and Compensation Committee of
the Company's Board of Directors.
2.5 "Common Stock" means the common stock of Honeywell International Inc. or
such other stock for which such common stock may be exchanged as a result
of a split-up, recapitalization, reclassification or other corporate
2.6 "Company" means Honeywell International Inc. and its subsidiaries and
2.7 "Credited Service" means years of service with the Company for which credit
would be given under the terms of Pension Plans for benefit accrual
2.8 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
2.9 "Executive" means an individual employed by the Company in Career Band 6 or
above as of the individual's termination of employment or retirement date,
2.10 "Participant" means an individual eligible for benefits under this Plan in
accordance with Article III.
2.11 "Plan" means the Honeywell International Inc. Supplemental Executive
Retirement Plan for Executives in Career Band 6 and Above.
2.12 "Pension Plan" means any defined benefit plan (within the meaning of Code
Section 414(j)) that is subject to the provisions of Code Section 401(a)
and that covers salaried employees of the Company, including, without
limitation, the Retirement Program.
2.13 "Retirement Program" means the portion of the Honeywell International Inc.
Retirement Earnings Plan applicable to participants in Allied Signal Inc.
Retirement Program (Provisions Relating to Allied Salaried Employees), as
the same may be amended or referred to from time to time, and any successor
provisions of such plan.
2.14 "Supplemental Benefit" means the benefit described in Section 4.1 of the
2.15 "Supplemental Pension Plan" means the Honeywell International Inc.
Supplemental Pension Plan, as the same may be amended from time to time,
and any successor plan.
3.1 Eligibility - In General. Participation in the Plan shall be limited to
those Executives who have earned Credited Service under a Pension Plan
other than the Retirement Program. Notwithstanding the previous sentence,
no Executive who has entered into any individual agreement or arrangement
with the Company concerning retirement benefits shall be entitled to any
benefit under Article IV except to the extent otherwise expressly provided
in such agreement or arrangement.
3.2 Status at Termination/Retirement Date. No benefits shall be payable under
the Plan if on the date of such individual's termination of employment or
retirement date, as applicable, the Executive (a) is not employed by the
Company in a Career Band 6 or above position, (b) is entitled to any
severance benefits payable under the Honeywell Key Employee Severance Plan
or under any other contract, agreement or arrangement between the Executive
and Honeywell Inc. (or its successors or affiliates) that are attributable
to any "change in control" of Honeywell Inc. in 1999 as defined in such
Plan or other contracts, agreements or arrangements, or (c) is a
participant in the Retirement Earnings Plan portion of the Honeywell
International Inc. Retirement Earnings Plan.
4.1 Amount of Benefit. Subject to the terms of this Article IV, a Participant
shall receive a monthly Supplemental Benefit. The monthly Supplemental
Benefit shall be determined by comparing (a) the sum of the monthly
retirement benefits (normal or early) actually payable to the Participant
under the Pension Plan(s) and the Supplemental Pension Plan (as applied to
the applicable Pension Plan(s)) in accordance with the distribution method
selected by the Participant, and (b) the sum of the monthly retirement
benefits (normal or early) that would be payable to the Participant under
the Retirement Program and the Supplemental Pension Plan (as applied to the
Retirement Program) if all of the Participant's Credited Service had been
earned solely under the Retirement Program and if such Participant had made
the same distribution method election as under (a) above. The monthly
Supplemental Benefit shall equal the amount, if any, by which (b) exceeds
(a) for the applicable monthly period.
4.2 Payment of Benefit. Except as otherwise provided in Section 4.3, the
Supplemental Benefit shall generally be paid at the same time benefits are
paid to the Participant under the applicable Pension Plan(s). The
Supplemental Benefit shall be paid directly to the Participant or, in the
event of the Participant's death, to the Participant's Beneficiary.
4.3 Form of Payment. The Supplemental Benefit shall generally be paid in the
same form as the retirement benefit payable to the Participant under the
applicable Pension Plan(s). Notwithstanding the previous sentence, however,
a Participant may request that payment of his or her Supplemental Benefit
be made in a single lump sum payment. Any such request shall be made in
writing to the Plan Administrator, whose decision with respect thereto
shall be final, conclusive and binding upon all persons having or claiming
to have any right or interest under this Plan. Any lump sum payment
approved under this Section 4.3 shall be actuarially equivalent to the
Participant's Supplemental Benefit. For this purpose, actuarial equivalence
shall be determined by using the "applicable mortality table" and the
"applicable interest rate" described in Section 417(e) of the Code,
provided that the applicable interest rate shall be determined as of the
third calendar month preceding the month during which the benefit
commencement date occurs.
4.4 Death and Disability Benefits. As more fully described in Section 4.1, this
Plan provides benefits only for Executives who are receiving early or
normal retirement benefits under a Pension Plan. The Plan does not provide
pre-retirement death benefits, disability benefits or any other type of
ancillary benefits that may be available under the Retirement Program or
the applicable Pension Plan.
5.1 Plan Administrator. The Plan Administrator and "named fiduciary" for
purposes of ERISA shall be the Senior Vice President-Human Resources and
Communications of the Company (or any senior officer of the Company
succeeding to the principal responsibilities of such officer). The Plan
Administrator shall have the authority to appoint one or more other named
fiduciaries of the Plan and to designate persons, other than named
fiduciaries, to carry out fiduciary responsibilities under the Plan,
pursuant to Section 405(c)(1)(B) of ERISA.
5.2 Powers and Duties of Plan Administrator. The Plan Administrator shall have
the full discretionary power and authority to 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); to determine all questions of fact arising under the
Plan, including questions as to eligibility for and the amount of benefits;
to establish such rules and regulations (consistent with the terms of the
Plan) as it deems necessary or appropriate for administration of the Plan;
to delegate responsibilities to others to assist it in administering the
Plan; to retain attorneys, consultants, accountants, actuaries or other
persons (who may be employees of the Company) to render advice and
assistance as it shall determine to be necessary to effect the proper
discharge of any duty for which it is responsible; to prepare and
distribute to Participants information explaining the Plan; to prescribe
procedures to be followed by Participants and Beneficiaries filing
applications for benefits; and to 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
Company in determining any Participant's entitlement to and the amount of
benefits payable under the Plan. Any determination of the Plan
Administrator, including interpretations of the Plan and determinations of
questions of fact, shall be final and binding on all parties.
5.3 Indemnification. To the extent permitted by law, the Company shall
indemnify the Plan Administrator and his delegates 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.
5.4 Records. The Plan Administrator shall keep or cause to be kept such records
and shall prepare or cause to be prepared such returns or reports as may be
required by law or necessary for the proper administration of the Plan. All
resolutions, proceedings, acts and determinations of the Plan Administrator
shall be recorded by the Plan Administrator and such records, together with
any documents and instruments as may be necessary for the administration of
the Plan, shall be preserved in the custody of the Plan Administrator.
5.5 Information from Participants. Each Participant shall be required to
furnish to the Plan Administrator, in the form prescribed by it, such
personal data, affidavits, authorizations to obtain information, and other
information as the Plan Administrator may deem appropriate for the proper
administration of the Plan.
5.6 Reliance. The Plan Administrator and its delegates shall be entitled to
rely upon all valuations, certificates and reports furnished by any actuary
or accountant selected by the Plan Administrator or any delegate and upon
all opinions given by any legal counsel selected by the Plan Administrator
or any delegate. The Plan
Administrator and its delegates shall be fully protected with respect to
any action taken or suffered by their having relied in good faith upon such
actuary, accountant or counsel and all action so taken or suffered shall be
conclusive upon each of them and upon all Participants and their
5.7 Compensation and Expenses. Unless authorized by the Board, neither the Plan
Administrator nor its delegates shall be compensated for service in such
capacity, but shall be reimbursed for reasonable expenses incident to the
performance of such duties.
5.8 Claims Procedures and Appeals. Any claim or appeal under this Plan shall be
subject to the following rules:
(a) Any request or claim for Plan benefits must be made in writing and
shall be deemed to be filed by a Participant 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
(b) The Plan Administrator shall provide notice in writing to any
Participant 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 Participant's claim or,
if special circumstances require, and the Participant is so notified
in writing, within 180 days of the receipt by the Plan Administrator
of the Participant'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
(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 Participant 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.
(c) 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 Participant 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.
(d) If the Participant 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.
(e) The Plan Administrator shall advise the Participant 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.
(f) Any dispute, controversy, or claim arising out of or relating to any
Plan benefit, including, without limitation, any dispute controversy
or claim as to whether the decision of the Plan Administrator
respecting the benefits under this Plan or interpretation of this Plan
is arbitrary and capricious, that is not settled in accordance with
the procedures outlined in this Section 5.8, shall be settled by final
and binding arbitration in accordance with the American Arbitration
Association Employment Dispute Resolution or other applicable Rules.
Before resorting to arbitration, an aggrieved Participant must first
follow the review procedure outlined in this Section of the Plan. If
there is still a dispute after the procedures in this Section have
been exhausted, the Participant must request arbitration in writing
within six (6) months after the Plan Administrator issues, or is
deemed to have issued, its determination under subparagraph (e) above.
The arbitrator shall be selected by mutual agreement of the parties,
if possible. If the parties fail to reach agreement upon appointment
of an arbitrator within 30 days following receipt by one party of the
other party's notice of desire to arbitrate, the arbitrator shall be
selected from a panel or panels of persons submitted by the American
Arbitration Association (the "AAA"). The selection process shall be
that which is set forth in the AAA Employment Dispute Resolution
Rules, except that, if the parties fail to select an arbitrator from
one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an
arbitrator has been selected.
All fees and expenses of the arbitration, including a transcript if
requested, will be borne by the Company. The arbitrator shall have no
power to amend, add to or subtract from this Plan. The award shall be
admissible in any court or agency action seeking to enforce or render
unenforceable this Plan or any portion thereof. Any action to enforce
or vacate the arbitrator's award shall be governed by the Federal
Arbitration Act if applicable.
PLAN AMENDMENT OR TERMINATION
6.1 Right to Amend. The Company shall have the right at any time to amend the
Plan. No such amendment shall have the effect specified in Section 6.3.
6.2 Right of the Company to Terminate Plan. The Company intends and expects
that from year to year it will be able to and will deem it advisable to
continue this Plan in effect. Subject to the provisions of Section 6.3, the
Company reserves the right to terminate the Plan at any time.
6.3 Restrictions on Amendment or Termination. No amendment or termination of
the Plan shall be made which would adversely affect any Participant's
benefit under this Plan (determined in accordance with the terms of the
applicable Pension Plans and Supplemental Pension Plans in effect on the
day immediately preceding such amendment or termination) or that would
adversely affect the benefit that is being paid to any person at the time
of such amendment or termination. The prohibitions of this Section 6.3
shall apply notwithstanding any legal right or ability of the Company to
amend or terminate this Plan.
7.1 No Assignment of Benefit. No benefit under the Plan, nor any other interest
hereunder of any Participant or Beneficiary shall be assignable,
transferable or subject to sale, mortgage, pledge, hypothecation,
commutation, anticipation, garnishment, attachment, execution, or levy of
any kind, and the Plan Administrator shall not recognize any attempt to
assign, transfer, sell, mortgage, pledge, hypothecate, commute or
anticipate the same, except to the extent required by law and except that
no amount shall be payable hereunder until and unless any and all amounts
representing debts or other obligations owed to the Company by the
Participant with respect to whom such amount would otherwise be payable
shall have been fully paid and satisfied.
7.2 No Implied Rights to Employment. The adoption and maintenance of this Plan
shall not be deemed to constitute a contract between the Company and any
employee or to be a consideration for or condition of employment of any
person. No provision of the Plan shall be deemed to give any employee the
right to continue in the employ of the Company or to interfere with the
right of the Company to discharge any employee at any time without regard
to the effect which such discharge might have upon the employee's
participation in the Plan or benefits under it.
7.3 Unsecured General Creditor. Benefits payable under this Plan shall be
general, unsecured obligations of the Company. The Company shall not be
required to set aside funds for the payment of its obligations hereunder.
However, the Company
may, in its sole discretion, establish funds for the payment of its
obligations hereunder. In such case, however, no Participant or Beneficiary
shall have any title to or beneficial ownership in any assets which the
Company may earmark to pay benefits hereunder. Any such funds shall remain
assets of the Company and subject to the claims of its general creditors.
The Plan is intended to be unfunded for tax purposes and for purposes of
Title I of ERISA.
7.4 Employment with More than One Company. If any Participant shall be entitled
to benefits under a Pension Plan on account of service with more than one
business of the Company, the obligations under this Plan shall be
apportioned among such Company businesses on the basis of service with
7.5 Effect of Adverse Determination. Notwithstanding any provision set forth
herein, if the Internal Revenue Service determines, for any reason, that
all or any portion of the amounts credited under this Plan is currently
includible in the taxable income of any Participant, then the amounts so
determined to be includible in income shall be distributed in a lump sum to
such Participant as soon as practicable.
7.6 Payment of Benefits. If the Plan Administrator determines that a person
entitled to receive any benefit payment is under a legal disability or is
incapacitated in any way so as to be unable to manage his financial
affairs, the Plan Administrator may direct the Company to make payments to
the Participant's legal representative or to a relative or other person for
the Participant's benefit, or to apply the payment for the benefit of such
person in such manner as the Plan Administrator considers advisable. Any
payment of a benefit in accordance with the provisions of this Section 7.6
shall be complete discharge of any liability to make such payment.
7.7 Effectuation of Intent. In the event it should become impossible for the
Company or the Plan Administrator to perform any act required by the Plan,
the Company or Plan Administrator may perform such other act as it in good
faith determines will most nearly carry out the intent and purposes of the
7.8 Headings. The headings of Articles and Sections of this Plan are for
convenience of reference only, and in case of conflict between any such
headings and the text of this Plan, the text shall govern.
7.9 Copy of Plan. An executed copy of the Plan shall be available for
inspection by any Executive or other person entitled to benefits under the
Plan at reasonable times at the offices of the Company.
7.10 Rules of Construction. Masculine pronouns used herein shall refer to men or
women or both and nouns and pronouns when stated in the singular shall
include the plural and when stated in the plural shall include the
singular, wherever appropriate.
7.11 Governing Law. This Plan and its provisions shall be construed in
accordance with the laws of the State of Delaware to the extent such
Delaware law is not inconsistent with the provisions of ERISA.
7.12 Severability. If any provision of this Plan is held invalid, the invalidity
shall not affect other provisions of the Plan which can be given effect
without the invalid provision, and to this end the provisions of this Plan
shall be severable.
7.13 Expense of Administration. The reasonable expenses incident to the
operation of the Plan shall be paid by the Company.
7.14 Successors. This Plan shall be binding upon and inure to the benefit of the
Company, its successors and assigns and each Participant and his heirs,
executors, administrators and legal representatives.