Summary
Honeywell International Inc. (HON) filed an 8-K on December 20, 2004, to report material amendments to its nonqualified deferred compensation plans, equity compensation plans, individual employment agreements, and severance plans and agreements. These amendments, effective January 1, 2005, are designed to comply with new restrictions imposed by Section 409A of the Internal Revenue Code, enacted as part of the American Jobs Creation Act of 2004. The primary objective of these amendments is to ensure the Plans operate in accordance with a reasonable interpretation of the new federal tax regulations until further interpretive guidance is released by the Treasury Department and Internal Revenue Service. The changes address potential impacts on the timing of elections, distributions, and benefit accelerations. Additionally, for amounts deferred after January 1, 2005, Honeywell reserves the right to modify the interest rate credited to deferred compensation accounts.
Key Highlights
- 1Honeywell amended material definitive agreements, including deferred compensation and equity plans, along with employment and severance agreements.
- 2These amendments are driven by new regulations under Section 409A of the Internal Revenue Code, effective January 1, 2005.
- 3The purpose is to align existing plans with the newly enacted requirements and subsequent interpretations.
- 4Key areas of amendment include timing of elections, distribution timing and form, and benefit acceleration.
- 5Honeywell reserves the right to amend the interest rate applied to deferred compensation for amounts deferred after January 1, 2005.
- 6The company intends to operate its plans in compliance with a reasonable interpretation of Section 409A pending further IRS guidance.