Exhibit 10.16
HONEYWELL INTERNATIONAL
INC.
SEVERANCE PLAN FOR CORPORATE STAFF EMPLOYEES
(Involuntary Termination Following a Change in Control)
Amended and restated, effective as of January 1, 2009
ARTICLE I
PURPOSE
The purpose of this Plan is to
provide severance benefits to Plan Participants in the event of the
Involuntary Termination of their employment following a Change in
Control. The Plan was established by Honeywell International Inc.
(formerly AlliedSignal Inc.) and was originally effective as of
February 6, 1988. The Plan was amended and restated effective
October 21, 1988, April 1, 1999, October 24, 2000 and December 20,
2001 and amended effective January 1, 2008. The Plan is now hereby
amended and restated effective as of January 1, 2009 to implement
changes required pursuant to and consistent with Section 409A of
the Code. Capitalized terms used but not defined in this Article I
shall have the meanings ascribed to them in Article II below.
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 or a predecessor of
Honeywell is or was a member, (b) any unincorporated trade or
business which is under common control with Honeywell, as
determined under Section 414(c) of the Code, or (c) any
organization, employment with which is counted as employment with
Honeywell or a predecessor of Honeywell under the provisions of
Sections 414(m), (n), or (o) of the Code.
2.2 Annual Incentive Compensation
- means the product of (a) times (b), where (a) is a
Participant’s target award level under the Honeywell
International Inc. Incentive Compensation Plan for Executive
Employees, 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.
2.3 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, but in no event less than
the annual base salary being paid to the Participant on the day
prior to a Change in Control.
2.4 Board of Directors - means the
Board of Directors of Honeywell.
2.5 Change in Control - is deemed
to occur at the time (a) when any entity, person or group (other
than Honeywell, any subsidiary or any savings, pension or other
benefit plan for the
benefit of employees of Honeywell) 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) for all, or any part of, the Common Stock, (c)
of a merger in which Honeywell 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’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, 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 Management
Development and Compensation Committee of the Board of Directors,
in its discretion, determines to be a change in control for
purposes of this Plan.
2.6 Code - means the Internal
Revenue Code of 1986, as amended from time to time, together with
the applicable final regulations issued thereunder.
2.7 Common Stock - means the
Common Stock of Honeywell or such other stock into which the Common
Stock may be changed as a result of split-ups, recapitalizations,
reclassifications and the like.
2.8 Corporate Staff Employee -
means a salaried or non-union hourly employee of Honeywell employed
in Career Bands 1 through 7 who, during a Potential Change In
Control Period (as defined in Section 4.5 below) and/or at the time
of a Change in Control, (a) is not associated with (i) an operating
business of Honeywell or (ii) Business Services or any successor
organization, and (b) (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,
(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, or (iii)
reported prior or subsequent to a Change in Control directly to the
Chairman and Chief Executive Officer of Honeywell. For purposes of
subsection (a) above, an employee (x) whose work is not primarily
associated with business operations or supportive of one or more
particular businesses, (y) who is a functional leader, and (z) who
has corporate-wide strategic responsibilities or whose role is to
coordinate cross-business unit functions (whether or not located in
the United States), as well as such employee’s direct
reports, shall be considered a Corporate Staff Employee. The Plan
Administrator’s final determination as to whether an employee
satisfies the definition of Corporate Staff Employee shall be
deemed to be conclusive and binding. Corporate Staff Employee shall
not include any 1988 Plan Employee.
2.9 ERISA - means the Employee
Retirement Income Security Act of 1974, as amended from time to
time, together with the applicable final regulations issued
thereunder.
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2.10 Good Reason – means,
without the Participant’s consent (a) a material reduction in
the Participant’s Pay in effect immediately prior to the
Change in Control other than a reduction that is generally
applicable to all salaried and non-union hourly employees of
Honeywell, (b) 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, (c) in
the case of a Band 5 or above Participant or a Participant who met
the definition of Corporate Staff Employee immediately prior to the
December 20, 2001 amendment and restatement of the Plan, a material
reduction in one or more of the following factors: the
Participant’s position, function, responsibilities or
reporting level or in the standard of performance required of the
Participant, as determined immediately prior to a Change in
Control, (d) a material change in the geographic location at which
the Participant must perform the services from the location the
Participant was required to perform services immediately prior to a
Change in Control, or (e) an action by Honeywell that under
applicable law constitutes constructive discharge. Notwithstanding
the foregoing, Good Reason shall not be deemed to have occurred
unless, the Participant provides written notice to Honeywell
identifying the event or omission constituting the reason for a
Good Reason termination no more than ninety (90) days following the
first occurrence of such event or omission. Within thirty (30) days
after notice has been provided to Honeywell, Honeywell shall have
to opportunity, but shall have no obligation, to cure such event or
conditions that give rise to a Good Reason termination. If
Honeywell fails to cure the events or conditions giving rise to
Participant’s Good Reason termination by the end of the
thirty (30) day cure period, the Participant’s employment
shall terminate at the end of the thirty (30) day cure period.
2.11 Gross Cause - means fraud,
misappropriation of Honeywell property or intentional misconduct
damaging to such property or business of Honeywell, or the
commission of a crime.
2.12 Honeywell - means Honeywell
International Inc., a Delaware corporation, and any successors
thereto.
2.13 Hour of Service - means each
hour for which a Participant is directly or indirectly paid by
Honeywell, a predecessor of Honeywell 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.
2.14 Involuntary Termination -
means (a) termination by Honeywell 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 for Good Reason. In evaluating whether a
Participant has incurred an Involuntary Termination pursuant to
subsection (b) above, the Plan Administrator shall consider the
specific facts and circumstances of the Participant’s
claim.
2.15 1988 Plan Employee - means an
individual who (a) 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”), (b) who
ceased to meet the Plan’s definition of
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Corporate Staff Employee solely by reason of the April 1, 1999
amendment of such definition, and (c) 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.
2.16 Participant – means a
Corporate Staff Employee and such other key management personnel,
and their direct reports, who (a) have corporate-wide
responsibilities; (b) hold positions likely to be eliminated upon a
Change in Control and (c) are designated as Plan Participants by
the Senior Vice President-Human Resources and Communications, in
his sole discretion, based on the relevant facts and circumstances;
provided, however, that in no event shall the number of such
Participants designated by the Senior Vice President-Human
Resources and Communications increase the total number of
Participants by more than five percent (5%).
2.17 Pay - means Base Salary and,
as to a Participant employed in Band 5 or above, Annual Incentive
Compensation.
2.18 Plan - means the Honeywell
International Inc. Severance Plan for Corporate Staff Employees
(Involuntary Termination Following a Change in Control).
2.19 Plan Administrator - means
the person or entity identified in Section 5.1 to administer the
terms and conditions of the Plan.
2.20 Plan Sponsor - means
Honeywell. Any successor to Honeywell (or a principal subsidiary)
shall be deemed a Plan Sponsor.
2.21 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.
2.22 Senior Severance Plan –
means the Honeywell International Inc. Severance Plan for Senior
Executives in effect from time to time.
2.23 Severance Pay Period - means
the applicable severance period specified in Schedule A attached
hereto.
2.24 Specified Employee - means
any Participant who, at any time during the twelve (12) month
period ending on the identification date (as determined by the Vice
President, Compensation and Benefits or its delegate), is a
“specified employee” under Section 409A of the Code, as
determined by the Vice President – Compensation and Benefits
(or his delegate), which determination of “specified
employees,” including the number and identity of persons
considered “specified employees” and identification
date, shall be made by the Vice President – Compensation and
Benefits (or his delegate) in accordance with the provisions of
Sections 416(i) and 409A of the Code.
2.25 Year of Service - means any
consecutive 12-month period commencing on a Participant’s
date of hire or rehire with Honeywell, any predecessor of Honeywell
or an Affiliated Company, and anniversaries thereof during which
the Participant has completed at least 1,000 Hours of Service.
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ARTICLE III
PARTICIPATION
The benefits provided under the Plan are limited solely to
Participants. Notwithstanding any other provision of the Plan to
the contrary, no individual who first satisfies the definition of
“Corporate Staff Employee” after December 31, 2007
shall participate in the Plan.
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 (or any successor
to Honeywell) in accordance with this Article IV.
4.2 Pay, and Benefit and Pension
Service Continuation
(a)
Pay Continuation - A Participant shall receive Base Salary paid in
installments in accordance with Honeywell’s normal payroll
periods during the Severance Pay Period, with the first installment
to be paid within sixty (60) days following the date of the
Participant’s Involuntary Termination. In addition to
continuation of Base Salary, Participants employed in Career Band 5
or above shall receive Annual Incentive Compensation, paid during
the Severance Pay Period in equal installments in accordance with
the Participant’s normal pay period, with the first
installment to be paid within sixty (60) days following the date of
the Participant’s Involuntary Termination, unless delayed
pursuant to Section 12.2(b) below.
(b)
Benefit Continuation - For the Severance Pay Period, the
Participant shall be entitled to the continuation of the following
employee benefits:
(i)
Vacation accruals at the rate in effect on the date of the
Participant’s Involuntary Termination with the dollar value
of accruals paid in a single lump sum within sixty (60) days of the
date accrued;
(ii)
Basic and contributory medical insurance (including for qualified
dependents) (“Health Plan Coverage”), at the active
employee coverage level and prevailing active employee contribution
rate, if any; provided, however, (1) that such level of Health Plan
Coverage shall not exceed the level of Health Plan Coverage in
effect on the date of the Participant’s Involuntary
Termination, (2) that such continuation of Health Plan Coverage
will cease on the earlier of (I) the first month that similar
benefits are provided to the Participant by a subsequent employer,
(II) the first month in which the Participant fails to pay to
Honeywell the prevailing active employee contribution rate, or
(III) the end of the Severance Pay Period,
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and (3) the Employer-paid portion of the monthly premium for the
Health Plan Coverage shall be imputed as income to the Participant
as may be required under Section 105(h) of the Code, subject to
applicable withholding from amounts otherwise payable to the
Participant.
(iii)
Basic and contributory life insurance (including for qualified
dependents) (“Life Insurance Coverage”), at the active
employee coverage level and prevailing active employee contribution
rate, if any; provided, however, (1) that such level of Life
Insurance Coverage shall not exceed the level of Life Insurance
Coverage in effect on the date of the Participant’s
Involuntary Termination, (2) that such continuation of Life
Insurance Coverage will cease on the earlier of (I) the date
similar benefits are provided the Participant by a subsequent
employer, (II) the first month in which the Participant fails to
pay to Honeywell the prevailing active employee contribution rate,
or (III) the end of the Severance Pay Period, and (3) the
Employer-paid contributions required to maintain the Life Insurance
Coverage will be imputed as income to the Participant as may be
required by applicable law.
(iv)
To the extent that a Participant was provided with a flex-perk
allowance, executive liability insurance or an executive life
insurance plan or policy immediately prior to an Involuntary
Termination, such benefit or benefits shall be continued for the
duration of the Severance Pay Period.
(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, whether qualified
or non-qualified, in which a Participant has accrued a benefit are
collectively referred to as the “DB Plans”). During
their Severance Pay Period, Participants shall continue to be
credited with additional age and service credit for purposes of
benefit accrual (up to a maximum of 12 months of a
Participant’s Severance Pay Period), vesting and eligibility
under the DB Plans in which they participate. At the end of a
Participant’s Severance Pay Period, Participants shall
immediately be credited with 3 years of age and service,
respectively, for purposes of benefit accruals, vesting and
eligibility under the DB Plans; provided, however, that such 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) enab
