Early Retirement Agreement

Exhibit 10.22


EARLY RETIREMENT AGREEMENT


EARLY RETIREMENT AGREEMENT (this "Agreement"), dated as of July 3, 2001, by and between Honeywell International, Inc., a Delaware corporation (the "Company"), and Michael R. Bonsignore ("Executive").


WHEREAS, Executive has expressed his intention to retire from employment with the Company and, in connection with his retirement, the Company and Executive have determined to settle all of their respective rights and obligations in respect of his Employment Agreement (as defined below) and other matters pertaining to Executive's services with the Company;


NOW, THEREFORE, in consideration of their mutual promises, the Company and Executive agree as follows:


1. Retirement and Resignation. Effective as of the date hereof (the "Effective Date"), the Executive shall retire from active employment and hereby resigns, effective as of the Effective Date, (i) as Chairman of the Board of Directors and Chief Executive Officer of the Company and (ii) from employment with and as a member of the Board of Directors of the Company and each of its subsidiaries and affiliates.


2. Provision of Consulting Services. During the period beginning on the Effective Date and continuing until the second anniversary of the Effective Date (the "Consulting Period"), the Executive shall provide consulting services commensurate with his status and experience with respect to matters related to strategic acquisitions as shall be reasonably requested from time to time by the Chairman of the Board of Directors of the Company. The Executive shall provide consulting services to Company as needed and when reasonably requested, provided that, without his prior consent, Executive shall not be required to devote more than 50 hours in any calendar month to the performance of any consulting services hereunder. The Executive shall determine the time and location at which he shall perform such services, subject to the right of the Company to reasonably request by advance written notice that such services be performed at a specific time and at a specific location. The Executive shall honor any such request unless he has a conflicting business commitment that would preclude him from performing such services at the time and/or place requested by the Company, and in such circumstances shall make reasonable efforts to arrange a mutually satisfactory alternative. The Company shall use its reasonable best efforts not to require the performance of consulting services in any manner that unreasonably interferes with any other business activity of the Executive.


3. Cancellation of the Employment Agreement. The Executive and the Company are parties to an Employment Agreement (the "Employment


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Agreement"), dated and effective as of December 1, 1999. The term of the Employment Agreement would have expired December 31, 2004. The Employment Agreement is hereby canceled and the parties shall have no further obligations to each other thereunder except as specifically provided in this Agreement.


4. Unpaid Accrued Benefits. The Company shall promptly pay to the Executive any portion of the Executive's base salary, and accrued but unused vacation, through the Effective Date that has not yet been paid. The Executive shall receive second quarter 2001 dividends with respect to his Restricted Units (as defined in the Employment Agreement). In addition, Executive shall be paid, at the time annual cash bonuses are paid to other senior executive officers of the Company in accordance with the Company's Incentive Compensation Plan for Executive Employees, a prorated annual cash bonus in an amount equal to the product of (i) the annual cash bonus that would have been payable to Executive for 2001 under such plan had Executive not terminated his employment with the Company based solely on the Company's performance factor (and without regard to any other adjustment permitted under such plan) times (ii) a fraction, the numerator of which is the number of days during 2001 prior to and including the date of Executive's retirement in accordance with Section 1, and the denominator of which is 365. The Company shall also pay or provide to the Executive all compensation and benefits due and payable to the Executive, or as to which the Executive has vested rights (including, without limitation, rights as a retiree of the Company based on his age and service), in accordance with the terms and conditions of the Company's compensation and benefit plans, programs or arrangements as in effect immediately prior to the Effective Date (except as otherwise expressly provided in the Agreement).


5. Retirement Benefits.


(a) Separation Payment. Executive shall be entitled to a separation payment (the "Separation Payment") in an amount equal to three times the sum of his annual base salary, as in effect immediately prior to the Effective Date, plus his Minimum Target Bonus (as defined in the Employment Agreement). The Separation Payment shall be paid in one lump-sum payment on January 2, 2002 (the sum of Executive's annual base salary and Minimum Target Bonus is hereafter referred to as his "Annual Cash Compensation").


(b) SERP Benefit.


(i) Subject to the terms and conditions set forth herein, the
Executive shall receive a supplemental retirement benefit (the "SERP
Benefit"), in the form of an unreduced 100% joint and survivor annuity
for his life and that of his current spouse, with the annual benefit
equal to (1) the product of (A) 70% times (B) the Executive's Annual
Cash Compensation reduced by (2) the actuarial equivalent value of the
aggregate annual vested benefit (expressed as a life annuity commencing
on the third anniversary of the date hereof) payable to the Executive
under the terms of


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any and all "defined benefit plans" (as defined in Section 3(35) of the
Employee Retirement Income Security Act of 1974, as amended), including
any excess benefit or supplemental retirement plans or agreements,
whether or not heretofore funded, maintained by the Company or any of
its subsidiaries or affiliates. The actuarial present value of the SERP
Benefit shall be paid to the Executive (or, if he shall not survive, to
his spouse, if then living, or otherwise to his estate) in one lump sum
on January 2, 2002. The lump sum amount shall be calculated in
accordance with Section 4.3 of the Company's Supplemental Executive
Retirement Program for Executives in Career Band 6 and Above, but
applying the discount rate (5.78%) applicable thereunder for lump sum
payments to be paid on the Effective Date.


(ii) Notwithstanding anything in Section 4(b)(i) to the
contrary, if the Company publicly announces that (x) it has entered
into a definitive agreement which, if consummated, would result in a
change in the ownership or effective control of the Company or in the
ownership of a substantial portion of the assets of the Company, or (y)
it has adopted a plan of reorganization or similar plan, which, if
consummated, - would result in the distribution of a substantial
portion of the value of the Company's assets to its shareholders, the
Executive may, by written notice to the Company prior to the date that
is 30 days after the date on which such announcement is made, elect to
receive the SERP Benefit on the date such transaction or such
reorganization is consummated. The Company shall use its reasonable
best efforts to provide written notice to the Executive of such
announcement within five business days of the date on which such
announcement is made.


(iii) The Executive has heretofore executed a Promissory Note
(the "Promissory Note"), dated January 2, 2001, in favor of the
Company. The loan evidenced by the Promissory Note was made by the
Company to the Executive to partially offset the Executive's income tax
liability resulting from the Company's funding of a portion of the SERP
Benefit in 2000. The Executive agrees to pay to the Company, within 60
days following the commencement of the payment of the SERP Benefit (the
date on which the Executive makes such payment, the "Loan Repayment
Date"), the then principal amount outstanding under the Promissory
Note. Any interest accrued under the Promissory Note as of the
Effective Date is hereby forgiven and, from and after the Effective
Date, no interest shall accrue in respect of any unpaid principal. On
the Loan Repayment Date, the Company shall pay to the Executive an
amount equal to the interest on $464,000 (which amount represents the
income tax liability paid by the Executive in excess of the amount
loaned by the Company) at a rate of 6% per annum compounded
semi-annually on June 30 and December 31, for the period beginning on
April 15, 2001 and ending on the Loan Repayment Date (such amount the
"Interest Payment"). The Company shall also pay to the Executive an
additional amount or amounts as a gross-up for any income tax liability
incurred by the


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Executive as a result of the operation of this Section 4(b)(iii)
(including any income recognized by reason of the gross-up obligation
set forth in this sentence) or the deemed income recognition to the
Executive under Section 7872 of the Code in respect of the period after
the Effective Date during which the Promissory Note remains outstanding
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