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Subject: Employment Separation Agreement

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EXHIBIT 10.25


[HONEYWELL LOGO] Memorandum


Date: February 13, 2002


To: Barry C. Johnson


From: Donald J. Redlinger


Subject: Employment Separation Agreement and Release


This Employment Separation Agreement and Release ("Agreement and Release") confirms our mutual understanding regarding your rights and benefits incident to your termination of employment with Honeywell International Inc., its predecessor companies, affiliates, subsidiaries and business units, past and present ("Honeywell" or the "Company"). By signing this Agreement and Release, you hereby acknowledge that these benefits are in full satisfaction of all rights to termination or severance related benefits for which you may have been eligible or may claim to be eligible under any agreement or promise, to include the Honeywell International Inc. Severance Plan for Senior Executives ("Senior Severance Plan"), whether written or oral, express or implied, or any Company sponsored severance plan or program.


Date of Termination


You have previously agreed to your separation from service from the Company. Accordingly, your last day of active employment will be February 28, 2002.


Vacation Pay


Unused current year accrued vacation pay shall be paid periodically in accordance with your normal pay cycle. You are entitled to 3 days of unused current year accrued vacation pay. Current year vacation pay ceases to accrue as of your last day of active employment.


After your current year accrued vacation, you shall be entitled to 20 days of pay attributable to your grandfathered vacation transition amount. Your grandfathered vacation transition amount shall be paid periodically in accordance with your normal pay cycle ("Grandfathered Vacation Period").


Severance Pay


Based on the Senior Severance Plan, you would be entitled to $2,752,500 as part of your severance package. However, you are obligated to the Company for $1,071,268 due to a Supplemental Executive Retirement Plan ("SERP") overfunding and $736,287.98 for an outstanding tax loan. Therefore, the net amount due to you is $944,944.02, hereinafter


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referred to as the "Final Salary Continuation Amount". See Exhibit A for a detailed summary. Provided you sign and return this Agreement and Release in the form provided to you, at the end of your Grandfathered Vacation Period you shall receive 36 months of base salary continuation ("Salary Continuation Period") at the annualized rate of $314,981.34. The determination of the annualized rate is explained in detail hereinafter in this Agreement. Your Salary Continuation Period shall extend from April 3, 2002 through April 2, 2005. The period commencing on the day following your last day of active employment and ending on the last day of your Salary Continuation Period is referred to herein as the "Benefit Period".


The Company reserves the right in its sole discretion to continue your salary, but not at a rate in excess of the annualized rate of $314,981.34, and/or certain benefits while you review this Agreement and Release, provided that this salary and benefits continuation shall in no event be construed as a waiver by the Company of the provision in the Senior Severance Plan making benefits contingent on execution of a release of claims in favor of the Company. You agree that the salary continuation and benefits continuation you receive during the review period will be credited against the salary continuation and benefits continuation described in the Agreement and Release. If you choose not to sign and return this Agreement and Release in the form provided to you, then you will be required to reimburse the Company for any Consideration (as hereinafter defined) paid to you hereunder.


All vacation and base salary continuation benefits are subject to federal, state and other applicable taxes and withholdings.


Group Insurance Coverage


Provided you sign and return the Agreement and Release in the form provided to you, you may elect to retain your coverage in the Company's group insurance plans for active employees through the end of the month in which your Benefit Period ends, except as otherwise provided below. The employee share of any premiums shall automatically be deducted from your salary continuation amounts unless you notify us, in writing, that you wish to cancel your insurance coverage. Notwithstanding any provision herein to the contrary, eligibility for short-term disability coverage, long-term disability coverage and any business travel insurance that you may have will terminate as of your last day of active employment. You may elect to retain any Group Universal Life Insurance Program (GUL) coverage you have through your Benefit Period. If you wish to continue your GUL insurance beyond the Benefit Period on a direct pay basis, you can contact CIGNA at 800-243-3264.


As noted above, your active Honeywell group health insurance coverage will expire on April 30, 2005. At that time, you may elect to continue your group medical and dental insurance coverage pursuant to the federal COBRA law, assuming you have not allowed this coverage to expire during the Benefit Period. Honeywell's COBRA administrator will be contacting you at the end of your Benefit Period to provide you with further details and election forms. COBRA coverage is totally employee paid and is generally available at the rate of one hundred two percent (102%) of the applicable premium.


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Flexible Spending Accounts


Provided you sign and return this Agreement and Release in the form provided to you, you may elect to retain your coverage in the Company's Section 125 plan, including both health and dependent care flexible spending accounts, through the end of the month in which your Benefit Period ends. Any amounts you elect to contribute to a flexible spending account shall automatically be deducted from your vacation pay or base salary continuation amounts. If, at the time you cease to be treated as an active employee for Section 125 plan purposes, you are eligible to continue coverage in your health flexible spending account pursuant to the federal COBRA law, you will be notified by the Company's COBRA administrator.


Honeywell Savings Plan and Supplemental Savings Plan


You have a non-forfeitable right to your entire account balance, including your Company match account, in the Honeywell Savings and Ownership Plan I (the "Savings Plan"). You also have a non-forfeitable right to your account (if any) in the Honeywell Supplemental Savings Plan. You may continue to participate in the Savings Plan and the Honeywell Supplemental Savings Plan during your Benefit Period to the extent otherwise permissible under applicable law. Your current deductions will continue until the end of your Benefit Period unless you decide to change or terminate your contributions. At the end of your Benefit Period, you will receive information relating to the distribution of your Savings Plan account balance, if any. Your account (if any) in the Honeywell Supplemental Savings Plan will be paid to you in accordance with your previous payment election(s).


Loan payments, if any, will continue to be withheld during your Benefit Period. At the end of your Benefit Period you will have 90 days in which to repay any loan or it will default and be treated as taxable income, subject to regular taxes and an additional early withdrawal penalty (unless an exception to such early withdrawal penalty applies).


Pension Plans


You participated in Honeywell's Retirement Earnings Plan. However, you have not vested in this benefit and therefore no retirement benefit is payable from this plan.


You also participated in the Honeywell International Supplemental Executive Retirement Plan ("SERP"). In December 2000, $1,400,000 was funded by the Company in your name in order to provide you with this SERP benefit. You are eligible to receive a SERP benefit in accordance with the terms of your pension letter dated December 17, 2001. The annual SERP benefit amount at age 60 is $36,139, which is increased at 5% per year until the end of your Salary Continuation Period. The amount payable on May 1, 2005, following your Salary Continuation Period, is $39,685.08 per year. The value of this SERP benefit in the form of a lump sum payment is $394,732, based upon a payment date of April 4, 2002. This lump sum has been determined using the interest rate and


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mortality assumptions that are currently in effect under the SERP. In lieu of receiving this SERP benefit in the form described above, a lump sum payment will be made to you as part of the transfer of funds from your Escrow Account (see below).


Honeywell will also reimburse you for reasonable accountants' fees related to the above transaction.


Escrow Account


In order to provide for your retirement benefit under the SERP, in December, 2000, the Company funded an escrow account in the amount of $1,400,000. Upon re-calculation it was determined that this account was funded in excess of what was necessary in order to provide you with the SERP benefit described above.


In addition, the Company provided to you two loans, in the amounts of $576,940 and $112,000, in order for you to meet your tax obligations incident to the funding of this SERP benefit. The excess funding, combined with the loan repayment and interest accrued, result in an obligation from you to the Company. In consideration of the cancellation of this obligation, you agree to accept the Final Salary Continuation Amount of $944,944.02 (see Exhibit A). Furthermore, you will receive a lump sum payment of the entire value of your portion of the SERP escrow account ($1,400,000 plus interest) payable to you no earlier than the first day of your Salary Continuation Period, April 3, 2002.


Short-Term Incentive Compensation Plan


For the year 2001, your incentive award will be based upon individual and company performance and your ICP target of 75%. The Company reserves sole discretion regarding the amount and payment, of any bonus attributable to all or any portion of the calendar ye
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