Honeywell Savings and Ownership Plan Summary Plan Description November 1, 2016 This Summary Plan Description summarizes important Plan provisions. The formal Plan document, as amended from time to time, will govern if there is a conflict between the description of the Plan contained herein and the Plan document. THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
TABLE OF CONTENTS Page ABOUT THIS BOOKLET... 1 A WORD ON TAX MATTERS... 1 HR HELP... 1 ACCESSING YOUR PLAN ACCOUNT... 2 PROSPECTUS... 4 SECTION 1 - ELIGIBILITY... 5 SECTION 2 - ENROLLMENT... 6 SECTION 3 - MONEY GOING INTO YOUR ACCOUNT... 9 SECTION 4 - INVESTING CONTRIBUTIONS YOUR RESPONSIBILITIES... 16 SECTION 5 - VESTING YOUR RIGHTS TO MONEY IN YOUR ACCOUNT... 33 SECTION 6 - USING YOUR ACCOUNT WHILE EMPLOYED... 35 SECTION 7 - DISTRIBUTION OF YOUR ACCOUNT... 43 SECTION 8 - TAX CONSIDERATIONS... 47 SECTION 9 - MILITARY DUTY... 51 SECTION 10 - ERISA... 53 APPENDIX A SPECIFIC PLAN PROVISIONS FOR PARTICIPANTS WHO ARE IN A PARTICIPATING UNIT WHICH PROVIDES FOR COMPANY MATCHING CONTRIBUTIONS... A-1 APPENDIX B DEFINITIONS... B-1 APPENDIX C INVESTMENT RETURNS AND ADDITIONAL PROSPECTUS INFORMATION... C-1 APPENDIX D SPECIAL RULES FOR CERTAIN PARTICIPANTS WHO WERE FORMERLY EMPLOYED BY AN ACQUIRED COMPANY... D-1 APPENDIX E SPECIAL RULES FOR CERTAIN PARTICIPANTS WHO FORMERLY PARTICIPATED IN CERTAIN COMPANY-SPONSORED PLANS...E-1 -i-
About This Booklet This booklet is a Summary Plan Description ( SPD ) which summarizes in everyday language the terms of the Honeywell Savings and Ownership Plan, as amended and restated effective November 1, 2016 (the Plan ). The formal Plan document, as amended from time to time, governs if there are any differences, ambiguities or inconsistencies with this SPD. Honeywell intends to continue the Plan. However, Honeywell may modify, change, revise, amend or terminate the Plan at any time. Please review this entire SPD because if you take parts of it out of context, you may not have a complete or accurate understanding of the Plan. Most importantly, the Plan is detailed and not every rule that may apply to you can be summarized here, particularly situations that only apply to a small number of Participants. If you have any questions, please contact HR Help, as described below. The official Plan document and the terms of the Plan cannot be changed by statements made by any person. Accordingly, you should not consider the Plan to have been changed based on oral or written statements made by (or discussions you have with) a supervisor or human resources representative. Likewise, you should not consider the Plan to have been changed by the general information provided on the Plan s Website. The SPD is comprised of this document and all of the attached Appendices. Capitalized terms throughout this SPD are defined in Appendix B Definitions attached hereto or in the section of the SPD in which they first appear. The terms of this SPD describe the general terms of the Plan, effective as of November 1, 2016. If you terminated employment prior to November 1, 2016, the amount of your Plan benefit was described in the SPD that was in effect at the time you terminated employment. However, if you previously terminated employment, but maintain an Account balance in the Plan, the terms of this SPD titled Accessing Your Plan Account, Section 7 Distribution of Your Account, Section 8 Tax Considerations, and Section 10 ERISA will generally apply to you. This SPD constitutes a portion of the Plan s Prospectus, as described in the Prospectus and Additional Prospectus Information sections. These and other portions of the Plan s Prospectus (including the Company s filings and disclosures made with the Securities Exchange Commission) specifically are not incorporated into and are not part of this SPD. This SPD is updated periodically. You are encouraged to obtain a current SPD when making decisions about your Plan Account. A Word on Tax Matters Tax laws are technical and are subject to change and varying interpretations. As such, statements in this SPD regarding the federal income and excise tax consequences of participating in the Plan, particularly those regarding withdrawals, loans and distributions, are intended as general 1
summaries only and are not intended to provide you with specific tax advice. You are encouraged to seek professional tax advice from your personal tax advisor regarding these matters. HR Help If you have any questions or believe that you have received information which is inconsistent with the Plan or this SPD, please call HR Help at 1-877-258-3699, Option 1 for Savings Programs (1-877-677-3590 for hearing impaired, 1-904-791-2025 for international calls). Participant Service Representatives are available to assist you Monday through Friday, between 9:00 a.m. and 8:00 p.m. Eastern Time ( ET ). Accessing Your Plan Account This section is provided for your convenience and is not part of the SPD or statement by a Plan fiduciary. The processes for accessing your account may be subject to change. You have two ways to access your Plan Account: Log on to the Savings Programs Website; or Call HR Help to reach the automated phone system. Make sure you have your login information. A. Using the Web You can access the Savings Programs Website via HR Direct on the Honeywell Intranet or via the Internet at https://honeywell.voya.com. When you log on to the Savings Programs Website, you will be able to access your personal Plan Account information, obtain Plan information, view or designate your Beneficiary(ies), project Account balances, use a variety of modeling tools, and conduct certain transactions. B. Using the Savings Programs Automated Phone System You may use the Savings Programs automated phone system to obtain Plan information, access your personal Plan Account information, and conduct certain transactions. You can speak with a Participant Service Representative in the Savings Programs Group by hitting the 0 key to: Obtain additional information or explanations not available on the Website or automated phone system; and Initiate transactions handled outside of the Website or the automated phone system. To access your Account using the Savings Programs automated phone system, you must: 2
Call HR Help at 1-877-258-3699. HR Help is available 7 days a week, 24 hours a day. Select Option 1 for the Savings Programs automated phone system. Call 1-904-791-2025 if you are calling from outside the United States. If you have a hearing impairment and you also have the appropriate TDD equipment, you may call 1-877-677-3590. This line operates Monday-Friday, 9:00 a.m.-6:00 p.m. ET. Participant Service Representatives are available Monday-Friday, 9:00 a.m.-8:00 p.m. ET. Participant Service Representatives are not available on certain holidays. To obtain a holiday schedule, please speak with a Participant Service Representative or log on to the Savings Programs Website. C. When You Need to Speak with a Participant Service Representative You (or in the event of your death, your Beneficiary) must speak with a Participant Service Representative in the Savings Programs Group to: Report your death; or Request that a withdrawal check be sent to you overnight. D. Daily Valuation 1. Provides up-to-date Account information Plan Accounts are valued each business day (every day the New York Stock Exchange is open for business). When you log on to the Savings Programs Website or call HR Help, the information you receive about your Account is as of the prior business day. 2. Implements most transactions and changes on the day of the call Any transactions or changes you request on the Savings Programs Website or automated phone system will be processed as of the close of business on the same day as long as your transaction is confirmed by 4:00 p.m. ET on a business day (or the close of the stock market, if earlier). Otherwise, the request will be processed the next business day. Note: Transactions will include earnings or losses attributable to the business day on which the transaction is processed. 3
Prospectus Honeywell established the Plan to provide eligible Employees with a program to save for retirement. The Plan is a profit sharing plan with a cash or deferred compensation arrangement as well as an employee stock ownership plan. The Plan provides Employees the option to save for their retirement on a before-tax and/or after-tax basis. This SPD, including the section titled Appendix C Investment Returns And Additional Prospectus Information (collectively, the Prospectus ), constitutes part of a prospectus covering securities that have been registered under the Securities Act. The information about the Plan in this Prospectus is only applicable beginning on November 1, 2016. This Prospectus relates to shares of Honeywell common stock and participation interests in the Plan s trust which are offered to Plan Participants. Under applicable law, this Prospectus is not available for the reoffer or resale of Honeywell common stock received pursuant to the Plan by Honeywell s affiliates, as that term is defined in Rule 405 under the Securities Act. These affiliates may reoffer or resell shares received under the Plan pursuant to a separate prospectus or pursuant to Rule 144 under the Securities Act. With respect to the Honeywell common stock held in the Plan s trust, you should rely only on the information incorporated by reference or provided in this Prospectus (including any documents incorporated by reference). No one is authorized to provide you with information or make any representations about Honeywell common stock as it relates to the Plan other than as contained in this Prospectus, and if given or made, such information or representations must not be relied upon. You should not assume that the information in this Prospectus is accurate as of any date other than November 1, 2016. This Prospectus may be updated by providing appendices or by amending this Prospectus. You are urged to retain this Prospectus for future reference. The formal Plan document, as amended from time to time, will govern if there is a conflict between the description of the Plan contained in this Prospectus and the Plan document. The information in this portion of the SPD titled Prospectus is made by Honeywell in its capacity as issuer of the securities and is not part of the official SPD as it is a required Securities and Exchange Commission communication made by the Company and not by the Plan fiduciaries. 4
Section 1 Eligibility The Plan is open to full-time and eligible part-time Employees of any unit of Honeywell participating in the Plan ( Participating Unit ). A unit participates upon approval from the Plan Administrator. If you are a full-time Employee, you are eligible to participate upon your date of hire. A full-time Employee is any Employee who is classified as such by Honeywell. If you are a part-time Employee, you are eligible to participate after you complete a Year of Eligibility Service. A part-time Employee is any Employee who is classified as such by Honeywell. A Year of Eligibility Service means any 12-month period of employment, measured from your date of hire, in which you complete at least 1,000 Hours of Service. If you do not complete at least 501 Hours of Service in such 12-month period of employment, you will incur a Break in Service. If you incur a Break in Service, you will complete a Year of Eligibility Service if you complete 1,000 Hours of Service in a 12-month period measured from your first Hour of Service after your Break in Service. Generally, an Hour of Service is any hour for which you are paid or entitled to be paid by Honeywell, either because you worked or because you did not work but were entitled to be paid. If you are rehired and you were eligible to participate in the Plan during your prior service as an Employee, you will be eligible to participate in the Plan upon your date of rehire, as long as you otherwise qualify. Once you terminate employment, you will no longer be eligible to contribute to the Plan. You are NOT eligible to enroll in the Plan if you are: A union Employee covered by a collective bargaining agreement that does not provide for your participation in the Plan. Eligible to participate in any other savings plan sponsored by Honeywell. A temporary employee, a leased employee, or a co-op student who did not complete a Year of Eligibility Service on or before December 1, 1999. Employed by an employment agency that is not an affiliated company. Not treated as an Employee on the payroll of Honeywell but are reclassified as an Employee by an outside governmental agency (or, on review, by Honeywell). Rendering services pursuant to a written arrangement that states that you are not eligible for participation in the Plan. 5
A nonresident alien who received no earned income from sources within the United States from Honeywell during the 12-month period immediately preceding the date that otherwise would be your enrollment date. A nonresident alien whose principal place of employment is located outside the United States. An Employee of a company that was merged with or was acquired by Honeywell prior to the date that your participation in the Plan was permitted by the Plan Administrator. An employee employed by an affiliated company of Honeywell in Puerto Rico. Section 2 Enrollment A. The Enrollment Process You will receive enrollment information and a Savings Programs Password shortly after the Savings Programs Group is notified of your eligibility to participate in the Plan. Your Password gives you access to the Savings Programs Website and the Savings Programs automated phone system. You may enroll via the Savings Programs Website or by calling HR Help. The only form you may need to fill out and return is your Beneficiary/Consent Designation Form. The Beneficiary/Consent Designation Form allows you to name the person(s) or entities to whom your Account would be paid if you died before receiving a full payout. You may also elect to complete your Beneficiary/Consent Designation Form online. Important Beneficiary Designations When you die, if a valid Beneficiary designation is not in effect, if your Beneficiary is not permitted to receive a Plan benefit, or if the previously designated Beneficiary does not outlive you, the Beneficiary will be your surviving Spouse, if any. If you do not have a surviving Spouse, the Beneficiary will be your estate. Life events such as marriage, divorce, birth and death can impact the designation of a Beneficiary. Therefore, after your death, your Beneficiary designation and any supporting documentation will be evaluated to confirm that your Beneficiary designation is valid. It is important that you review and update your Beneficiary designation as appropriate in connection with any life events (including due to your own marriage or divorce or the birth or death of any intended Beneficiaries). If you are an active Employee, you must update your marital status by contacting HR Help, 1-877-258-3699 (select Option 4, then press 3). Subject to notarized spousal consent requirements, if applicable, a designation or change of Beneficiary may be made by properly completing and submitting, prior to your death, a Beneficiary/Consent Designation Form through the Savings Programs Website or by calling HR Help. You and your Beneficiary(ies) should retain for your/their records a copy of your Beneficiary designation (including properly completed and notarized spousal consent, if applicable) and proof of delivery (including fax confirmation, if faxed). Whether or not a valid Beneficiary designation is in effect at the time of your death will be determined in the sole discretion of the Plan Administrator. Please refer to the definition of Beneficiary in Appendix B for additional information. 6
Your enrollment selection authorizes Honeywell to make Plan payroll deductions. It also records your contribution and investment elections. Once your enrollment is completed, payroll deductions will begin as soon thereafter as is administratively practicable. Automatic Enrollment Applicable to Participants who received an enrollment notification prior to May 15, 2016 Prior to May 15, 2016, Participants were automatically enrolled in the Plan if they did not make an affirmative election to participate (or not to participate) in the Plan within 60 days after their hire dates. The Plan stopped mailing automatic enrollment notices (and automatically enrolling participants) May 15, 2016. If you were previously automatically enrolled in the Plan, the Before- Tax Contributions of two percent of your Base Pay will continue until you make an affirmative election to participate in the Plan at a different contribution level (or not to participate). B. Rollover Contributions If you receive a cash distribution of $200 or more from an Eligible Retirement Plan (other than a Roth IRA) that is eligible for tax-deferred treatment, you may, with the approval of the Plan Administrator, contribute all or a portion of the distribution to the Plan as a Rollover Contribution. You may not roll over after-tax amounts from an IRA into the Plan. If you were previously employed by a company acquired by Honeywell in connection with a business acquisition or transaction and you become an Employee of Honeywell in connection with that acquisition or transaction, you may also be permitted, with the approval of the Plan Administrator, to roll over the balance of certain outstanding loans made to you from the tax-qualified plan maintained by the acquired entity. You will not be permitted to make such a Rollover Contribution if the outstanding loan that you wish to roll over is in default at the time you request a rollover or if you elect to roll over less than your entire Account balance under the plan from which the loan was previously made. If you wish to inquire about such a rollover, please contacthr Help. You may make a Rollover Contribution directly through a trustee-to-trustee transfer between the other plan or IRA and the Plan, or indirectly by making the contribution to the Plan no later than 60 days after you receive the distribution from the other plan or IRA. Any Employee eligible to participate in the Plan may make a Rollover Contribution to the Plan. The Employee does not need to have made an election to contribute to the Plan to make a Rollover Contribution. When you make a Rollover Contribution, that contribution will be invested according to the election you made on the Plan s rollover paperwork. If you do not make a specific investment election, the Rollover Contribution initially will be allocated to the Default Investment Fund. If you make a Rollover Contribution to the Plan, proof of plan qualification and taxability such as an IRS Letter of Determination from the prior qualified plan and/or a copy of your final Account distribution statement from such plan must be provided, along with the Rollover Contribution 7
check made payable to State Street Bank. The Direct Rollover Application and instructions are available on the Plan s Website or by calling HR Help. If you have terminated employment with Honeywell and your Plan Account is more than $5,000, you may make a Rollover Contribution to this Plan inclusive of a lump-sum distribution from the Honeywell Retirement Earnings Plan. Note: In no event may amounts received by a Participant as a non-spousal Beneficiary of another individual under an Eligible Retirement Plan be directly or indirectly rolled over to the Plan. C. Transfers from Other Qualified Plans In connection with certain business acquisitions or transactions, the Plan may accept transferred assets from other tax-qualified plans (including plans merged into the Plan) for eligible Employees. Transfers will be in cash unless the Plan Administrator approves the transfer of assets in another form. Assets transferred from another tax-qualified plan will retain their status as before-tax, after-tax, an IRA, a rollover, etc. as closely as possible. Transferred prior plan company matching contribution amounts and prior plan company profit sharing contribution amounts will be held separately in Prior Employer Contribution Accounts. 8
Section 3 Money Going into Your Account Contributions to the Plan are made through payroll deductions. You may be able to make Before- Tax Contributions, After-Tax Contributions, Roth 401(k) Contributions or Catch-Up Contributions (made on a before-tax or Roth 401(k) (after-tax) basis), or a combination of the four. The chart below summarizes certain IRS annual limits applicable for the Plan. IRS Annual Limits Type of Limit 2016 2017 Elective Deferral Limit (combined contribution limit for Before-Tax Contributions and Roth 401(k) Contributions) $ 18,000 $ 18,000 Catch-Up Contribution Limit (combined contribution limit for Catch-Up Contributions made on a before-tax or Roth 401(k) (after-tax) basis) Annual Compensation Limit (maximum amount of Base Pay for Plan contributions) Highly Compensated Employee Limit (minimum 2015 or 2016 total annual earnings to be considered a Highly Compensated Employee for 2016 or 2017, respectively) $ 6,000 $ 6,000 $265,000 $270,000 $120,000 $120,000 Annual Additions Limit (combined contribution limit for all Employee and Company Contributions, including any Company Matching Contributions) The lesser of $53,000 or 100% of your compensation The lesser of $54,000 or 100% of your compensation A. Your Contributions Contributions are deducted from your Base Pay. You may contribute a percentage of Base Pay through payroll deductions as Before-Tax Contributions, After-Tax Contributions and/or Roth 401(k) Contributions. You may elect to contribute a per paycheck dollar amount of Base Pay through payroll deductions as Catch-Up Contributions. Your contribution election will apply to Base Pay paid on or after the date your contribution election becomes effective. 9
1. Base Pay Base Pay generally means your base rate of pay, plus lump-sum merit increases, sales commissions and nontaxable compensation received through a cafeteria plan under Section 125 of the Internal Revenue Code (such as before-tax medical premiums and contributions to flexible spending accounts). It also includes accrued vacation and nontaxable qualified transportation benefits. Base Pay does not generally include shift differentials, overtime, other premium pay, bonuses, incentive payments, or other extra compensation, or amounts deferred under any nonqualified deferred compensation plan. Base Pay does, however, include earnings coded as a WIP-Installation Program. Base Pay includes Base Pay amounts for services you perform before you terminate employment that are paid after you terminate employment and are attributable to the last payroll period in which you perform such services. Base Pay does not include amounts paid after termination of employment while on Honeywell s payroll as a result of the employment relationship that previously existed (for example, from a severance pay plan). Base Pay includes any pay received during a leave of absence (other than amounts paid directly from an insurance company, such as certain types of short-term disability pay), including a leave of absence on account of active duty in Qualified Military Service. For purposes of calculating contributions to the Plan, Base Pay is capped annually at the Annual Compensation Limit (as set forth for the applicable year in the IRS Annual Limits chart above). This limit may be adjusted by the IRS from time to time for inflation. 2. Before-Tax Contributions Before-Tax Contributions are contributions from your Base Pay before federal income tax is withheld. The result is lower current taxable income than if you made the same contributions with after-tax dollars. Before-Tax Contributions may be considered current earnings for certain state or local tax purposes, and they are subject to federal Social Security and Medicare taxes ( FICA ). Subject to any Plan limits, you may contribute up to the Elective Deferral Limit (as set forth for the applicable year in the IRS Annual Limits chart above) as Before-Tax Contributions and/or Roth 401(k) Contributions. This limit may be adjusted by the IRS from time to time for inflation. 3. After-Tax Contributions After-Tax Contributions are contributions from your Base Pay after federal income tax is withheld. These contributions are classified as current wages for federal, state and local income tax purposes, and they are subject to FICA. 4. Roth 401(k) Contributions Roth 401(k) Contributions are contributions from your Base Pay after federal income tax is withheld. These contributions are classified as current wages for federal, state and local income tax purposes. Subject to any Plan limits, you may contribute up to the Elective Deferral Limit (as set forth for the applicable year in the IRS Annual Limits chart above) as Before-Tax Contributions and/or Roth 401(k) Contributions. This limit may be adjusted by the IRS from time to time for inflation. 10
5. Before-Tax, After-Tax and Roth 401(k) Contribution Elections The percentage of Base Pay that you may contribute to the Plan is subject to the following rules: Union Employees may contribute any whole percentage from one percent to 30 percent of Base Pay per payroll as Before-Tax Contributions, After-Tax Contributions and/or Roth 401(k) Contributions. Nonunion hourly and salaried Employees who are not Highly Compensated Employees (as defined in Maximum Contribution Levels ) (other than those identified as officers of the Company, including the Chief Executive Officer and employees who report directly to the Chief Executive Officer) may contribute any whole percentage from 1 percent to 30 percent of Base Pay per payroll as Before-Tax Contributions, After-Tax Contributions and/or Roth 401(k) Contributions. Nonunion hourly and salaried Employees who are Highly Compensated Employees and who are not eligible to participate in the Honeywell Supplemental Savings Plan may contribute any whole percentage from 1 percent to 15 percent of Base Pay per payroll as Before-Tax Contributions, After-Tax Contributions and/or Roth 401(k) Contributions. Nonunion Employees who are identified as officers of the Company, including the Chief Executive Officer and employees who report directly to the Chief Executive Officer or are Highly Compensated Employees who are eligible to participate in the Honeywell Supplemental Savings Plan or Officers may contribute any whole percentage from 1 percent to 8 percent of Base Pay per payroll as Before-Tax Contributions and/or Roth 401(k) Contributions and 1 percent or 2 percent of Base Pay per payroll as After-Tax Contributions. The determination as to which category you fall into is periodically reviewed annually (looking at your compensation for the prior year) to determine if your contribution limits are set appropriately. If you contribute the maximum amount of Before-Tax Contributions and/or Roth 401(k) Contributions permitted under the Plan, you may proactively elect how any subsequent contributions will be applied after the limit is reached. You are permitted to elect to: (i) convert your Before-Tax Contribution and/or Roth 401(k) Contribution election to an After-Tax Contribution election, up to the Plan maximum; (ii) convert your Before-Tax Contribution and/or Roth 401(k) Contribution election to an After-Tax Contribution election, not to exceed your Company Matching Contribution level; or (iii) discontinue all Before-Tax Contributions and/or Roth 401(k) Contributions. If you do not make an election, your Before-Tax Contribution and/or Roth 401(k) Contribution election will continue in the Plan as an After-Tax Contribution election up to the Plan s contribution maximum. If you are enrolled in the Honeywell Supplemental Savings Plan, your Before-Tax Contribution election will continue on a before-tax basis in that plan. There are other limitations that apply to Highly Compensated Employees (including, without limitation, due to annual testing requirements as described in Section 3.C below). 11
6. Catch-Up Contributions In addition to Before-Tax Contributions, After-Tax Contributions and Roth 401(k) Contributions, certain Employees are eligible to contribute Catch-Up Contributions to the Plan on a before-tax or Roth 401(k) (after-tax) basis. You are eligible to make Catch-Up Contributions (regular before-tax and/or Roth 401(k) catch-up contributions) to the Plan for any Plan Year if, during that Plan Year: You are or will be at least age 50 by December 31 of the Plan Year; You are eligible to make Before-Tax Contributions and/or Roth 401(k) Contributions to the Plan; and Your current Before-Tax Contribution and/or Roth 401(k) Contribution election is at least 8 percent or you have maximized your Before-Tax and/or Roth 401(k) contributions for the year The maximum amount which may be contributed to the Plan in the form of Catch-Up Contributions is the amount shown as the Catch-Up Contribution Limit for the applicable year in the IRS Annual Limits chart at the beginning of Section 3. If you are eligible to make Catch-Up Contributions to the Plan, you can elect the dollar amount (minimum $1) to be deducted from each paycheck and contributed to the Plan as a Catch-Up Contribution. Any Catch-Up Contribution election is in addition to your Before-Tax Contribution and/or Roth 401(k) Contribution election. If you elect to make Catch-Up Contributions, your election will apply to each subsequent Plan Year unless you change or stop your election. Important Rules to Note: Catch-Up Contribution elections are made by indicating a dollar amount (NOT a percentage) of Base Pay to be deducted per paycheck. Catch-Up Contribution elections are not made by indicating a total dollar amount to be deducted for the entire Plan Year. Catch-Up Contribution elections that are for a dollar amount that is greater than the amount available to be deducted from your paycheck will be reduced as necessary. If you have a Salary Reduction Agreement in effect under which you contribute at least 8 percent of your Base Pay as Before-Tax Contributions and/or Roth 401(k) Contributions or you have reached a Plan limit as described in the section above or in Maximum Contribution Levels below, you may elect to make your Catch-Up Contributions. If at the end of the Plan year you did not contribute the lesser of the maximum contribution allowed under the Plan or the maximum Before-Tax Contribution and/or Roth 401(k) Contribution amount allowed by the Internal Revenue Code, all or a portion of your Catch- Up Contributions will be recharacterized as Before-Tax Contributions and/or Roth 401(k) Contributions to the maximum extent possible. 12
Catch-Up Contribution elections will be automatically cancelled if your Before-Tax Contribution and/or Roth 401(k) Contribution election is reduced to a rate less than eight percent, unless you have contributed the maximum amount of regular Before-Tax Contributions and/or Roth 401(k) Contributions to the Plan (i.e., the amount shown as the Elective Deferral Limit for the applicable year in the IRS Annual Limits chart at the beginning of Section 3). Catch-Up Contribution elections can be stopped and restarted. For most Plan purposes, amounts contributed to the Plan in accordance with your Catch-Up Contribution election are treated the same as regular Before-Tax Contributions or Roth 401(k) Contributions. Catch-Up Contributions are NOT considered the same as Before-Tax Contributions or Roth 401(k) Contributions for purposes of calculating any Company Matching Contributions. You will not receive Company Matching Contributions for any Catch-Up Contributions you may make to the Plan or for any amounts contributed to the Plan in accordance with a Catch-Up Contribution election, even if such contributions are recharacterized as regular Before-Tax Contributions or Roth 401(k) Contributions. B. Honeywell s Contributions Company Matching Contributions are made on a per payroll period basis following the completion of one Year of Vesting Service if provided for by your Participating Unit. Appendix A Specific Plan Provisions For Participants Who Are In A Participating Unit Which Provides For Company Matching Contributions provides more information regarding Company Matching Contributions (if any) with respect to your Participating Unit. If provided for by your Participating Unit, the Company may also make Discretionary Supplemental Contributions (you will be notified if this applies to you). All Company Contributions, including Company Matching Contributions and Discretionary Supplemental Employer Contributions, are contributed to and invested in the Honeywell Common Stock Fund. C. Maximum Contribution Levels Contribution elections for a given year are subject to the following rules: Total contributions to the Plan (including Company Matching Contributions, if any) are limited to the amount shown as the Annual Additions Limit for the applicable year in the IRS Annual Limits chart at the beginning of Section 3. The total of Before-Tax Contributions and/or Roth 401(k) Contributions is limited to the amount shown as the Elective Deferral Limit for the applicable year in the IRS Annual Limits chart at the beginning of Section 3. This limit applies to all tax-qualified savings plans in which you participate. Thus, if you contribute to this Plan and another employersponsored tax-qualified savings plan, the total amount you can contribute to BOTH plans in a given year is the amount shown as the Elective Deferral Limit for the applicable year in the IRS Annual Limits chart at the beginning of Section 3. 13
The Plan Administrator may implement Plan rules to further limit or cap the maximum amount of Before-Tax Contributions, After-Tax Contributions and Roth 401(k) Contributions for Highly Compensated Employees. For a given year, a Highly Compensated Employee is an employee whose total annual earnings from Honeywell in the prior year equal or exceed the amount shown as the Highly Compensated Employee Limit for the applicable year in the IRS Annual Limits chart at the beginning of Section 3. Additionally, there are annual tests applied to contribution amounts for Highly Compensated Employees, which could require refunds of Before-Tax Contributions, After- Tax Contributions and Roth 401(k) Contributions and the forfeiture of any related Company Matching Contributions. You will be notified if any refunds will be made to you. Note: If you are a new hire and participated in the plan of another employer during the same calendar year that you begin to participate in the Plan, you may contribute on a before-tax basis and/or as a Roth 401(k) Contribution between the two plans in the same calendar year only up to the amount shown as the Elective Deferral Limit for the applicable year in the IRS Annual Limits chart at the beginning of Section 3. If you contribute more than the allowable amount, you are required to request a refund from one of the plans. If you decide to request a refund from the Plan and wait until the next tax year following the year in which the limit was reached, the corrective distribution for your Before-Tax Contribution Account will be reported as taxable income for the prior year on 1099-R. The corrective distribution for your Roth 401(k) Contribution Account will be reported as non-taxable income for the prior year on 1099-R. The earnings on the excess contribution will be taxable in the following year. If the corrective distribution is processed after April 15, it will be reported on 1099-R for the distribution year. D. Changing Your Contribution Rate Before-Tax Contribution, After-Tax Contribution and Roth 401(k) Contribution elections may be changed, discontinued or restarted so long as you are not participating in the Honeywell Supplemental Savings Plan. To change contribution elections, use the Savings Programs Website or call HR Help. Your contribution election change will be effective for Base Pay paid in the next available pay period. If you made an irrevocable election to participate in the Honeywell Supplemental Savings Plan for a particular Plan Year, your election may not be changed during that Plan Year. Your Before-Tax Contributions are treated as wages for FICA purposes, and accordingly there is no reduction of Social Security benefits due to Before-Tax Contributions. E. Address Changes It is very important that you keep your address and contact information up to date while you have an Account with the Plan. Failure to update your address timely may result in Plan correspondence, payment (including dividend), and tax forms mailed to an incorrect address. If your address changes while you are an active Employee or during the 90-day period after you terminate employment, update your address by logging on to the Honeywell Intranet and accessing your Employee File through the Personal Information section of HR Direct or by calling HR Help at 1-877-258-3699 and selecting option 4. 14
If you are an inactive employee and your address changes after the 90-day period following your termination from employment, update your address with Voya via the Savings Programs Website or by writing to Voya at the following address: Regular Mail Voya Financial Attn.: Honeywell Savings Program Group P.O. Box 23679 Jacksonville, FL 33241-3679 Overnight Mail Voya Financial Attn.: Honeywell Savings Program Group 8900 Freedom Commerce Hwy. Jacksonville, FL 32256 If you do not keep your information up to date, your benefit payments may be delayed. If the Plan Administrator cannot locate you within three years of the date your payments are due to begin, your benefit will be forfeited, though it will be restored if you (or your Beneficiary, if you are deceased) later contact the Plan. 15
Section 4 Investing Contributions Your Responsibilities There are a variety of investment funds among which you may choose to invest your Before-Tax, After-Tax, Roth 401(k) and Catch-Up Contributions. Company Contributions (if any) contributed to your Account are invested in the Honeywell Common Stock Fund. You may transfer or reallocate Company Contributions from the Honeywell Common Stock Fund to another investment fund after you are 100 percent vested in your total Account. The Savings Plan Investment Committee (the SIC ) is the named fiduciary for the Plan with respect to Plan investments. However, you determine how you want to invest your Account among the available investment funds. Because you have control over the investment of your Account, Honeywell intends the Plan to constitute a plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). To the extent that the Plan satisfies the requirements of Section 404(c), the SIC and any other fiduciaries of the Plan are relieved of any losses that are the direct and necessary result of investment directions you give (or that are a direct result of a fiduciary s investment of your Account in the Target Date Funds (please refer to Target Date Funds below) by default where you fail to make an affirmative investment election). All investments, including Company Contributions (if any) contributed to your Account and invested in the Honeywell Common Stock Fund, are based on the fair market value of the investment on the date of the transaction, as described in Section D Daily Valuation under Accessing Your Plan Account. A. Investment Funds Available The Plan currently offers the following investment funds from which to choose. More information regarding the Plan s investment funds is available by logging on to the Savings Programs Website or by callinghr Help. 1. Short-Term Fixed Income Fund The fund s investment objective is to preserve capital, liquidity, and current income at levels that are typically higher than those provided by money market funds. While there is no guarantee the investment objective will be met, in striving to meet its investment objective, the fund may hold a diverse portfolio of high-quality U.S. Dollar denominated fixed income and cash equivalent investments of U.S. and non-u.s. issuers. This may include obligations of governments or their agencies, corporate securities, money market securities, agency mortgage-backed and assetbacked securities, and REIT debt obligations. The fund may hold these investments directly or indirectly through ownership in units of fixed income commingled investment trusts or banksponsored short-term investment funds. The fund s investment manager exercises full investment discretion over the fund, subject to investment guidelines established by the SIC from time to time. 16
The fund s minimum average portfolio quality at the time of purchase will be: AA- (Standard & Poor s), Aa3 (Moody s) or AA- (Fitch). The minimum quality of any security at the time of purchase will be: BBB (S&P), Baa2 (Moody s), or BBB (Fitch). The minimum quality of shortterm issues at the time of purchase will be: A2 (S&P), P2 (Moody s), or F2 (Fitch). No more than 15 percent of the portfolio may be invested in securities rated BBB or A2/P2. No more than 35 percent may be invested in corporate securities and no more than 20 percent may be invested in asset-backed securities ( ABS ). The minimum quality of ABS issues at the time of purchase will be: AAA (S&P), Aaa (Moody s), or F2 (Fitch). Investments held in the fund will have maximum maturities of no longer than three and one-half years at the time of purchase. The fund will maintain minimums of: 50 percent invested with legal final maturities less than 13 months (which may include up to 20 percent in variable rate demand notes (VRDNs)) and a 10 percent target allocation (with a 15 percent maximum and 10 percent minimum) to U.S. Government money market funds or STIF. Overall, the fund will have a maximum average weighted duration of one year which will be revisited from time to time. The fund seeks to preserve principal and liquidity and provide a competitive rate of return. However, as with all investments, the fund involves certain risks, including inflation risk and credit risk. Inflation risk is the possibility that dollars invested in the fund will not maintain the same purchasing power in the future. Credit risk is the possibility that a bond issuer or book value contract provider may be unable to make principal, interest or other payments on time, or at all. As with all investments in the Plan, this fund does not provide a guaranteed rate of return. Returns are subject to the continued financial stability of the issuers of the investments and short-term interest rates. The SIC may segregate and hold in a frozen sub-fund any investment contract, or other asset of the fund, if the SIC determines that the ability of the issuer of such asset to make payments has been impaired. Interest earned, if any, on assets in the frozen sub-fund will be credited to the sub- fund. You will not be permitted to reallocate or transfer your Account among the Plan s investment funds or make a withdrawal or receive a distribution from your portion of the frozen sub-fund until such time as the SIC determines otherwise. No new contributions will be invested in the frozen subfund. No investments were held within a frozen sub-fund as of November 2016. 2. Investment Grade Bond Fund This fund uses a multi-manager approach. This fund primarily invests in a commingled index fund largely consisting of fixed income securities and maintaining an overall intermediate maturity profile. The fund s focus is on securities rated investment grade or better (rated BBB and above by Standard & Poor s or the equivalent by other rating agencies) and issues guaranteed by the U.S. Government or its agencies or instrumentalities. The fund also invests a portion of its assets in an actively-managed core bond portfolio and an actively-managed multi-strategy portfolio to further diversify the fund. Subject to minimum credit and diversification standards that are in keeping with an investment grade classification, the core bond portfolio may invest in U.S. dollar denominated, fixed income securities issued by the U.S. Treasury, agencies of the U.S. government, municipals, non-agency mortgage backed securities, corporates, asset-backed securities, commercial mortgage backed securities, and non-u.s. governments and institutions. Subject to minimum credit and diversification standards, the strategic bond portfolio consists of 17
four components: core investment grade bonds, high yield/bank loans, non-dollar investment grade bonds (up to a maximum of 30 percent of the portfolio) and emerging markets (up to a maximum of 40 percent of the portfolio). A maximum of 70 percent of the strategic bond portfolio may be invested in issuers rated below investment grade. The fund may also be invested in commingled short-term investment funds offered by the Trustee. The investment objective of this fund is to provide, over an extended period of time, a total rate of return which is reflective of the broad U.S. market of investment-grade fixed income securities. The principal value of fixed income securities held in this fund fluctuates based primarily on the general level of interest rates, and the returns can be expected to be more volatile than those of the Short-Term Fixed Income Fund. There is no guarantee that the investment objective will be met. The fund s investment managers exercise full investment discretion over the fund, subject to investment guidelines reviewed and accepted by the SIC from time to time. 3. Global REIT Fund This fund uses a multi-manager approach. The objective of the fund is to achieve a rate of return, over time, that is representative of stocks of real estate investment trusts ( REITs ) and real estate management companies within and outside the United States. The fund primarily invests in a commingled fund that invests primarily in real estate investment trusts ( REITs ) and real estate management and development companies within and outside the United States. The fund also invests a portion of its assets in an actively-managed portfolio of publicly-traded U.S. REITs and common or preferred stock of real estate-related companies listed on a major U.S. stock exchange. The fund is constructed in such a way that the return of such investments, including income, seeks to approximate, but may not exactly track the returns of the FTSE EPRA/NAREIT Index. Pending the selection and purchase of investments of the type herein described and for purposes of liquidity, the fund may be invested in stock futures, options, and/or commingled short-term investment funds offered by the Trustee. There is no guarantee that the investment objective will be met. The fund involves certain risks including exposure to U.S. and non-u.s. real estate and real estate investment trusts, as well as equity market movements. The market value of securities held by this fund may fluctuate, sometimes significantly. However, the yield or income component of REIT securities and the broad diversification attained by investing in a large number of stocks in the U.S. and outside the U.S. generally results in less risk or return variability than an investment in a single stock. As REIT securities may tend to fluctuate differently than equity and fixed income securities, this fund may experience differing return variability than other funds offered. Short-term redemption fees are imposed when shares of this fund are sold before the end of a specified holding period. Please refer to Important Note Regarding Redemption Fees below for further information. 4. Value/Yield Equity Fund This fund uses a multi-manager approach and is invested primarily in common stocks, but may also invest in preferred stocks, bonds, debentures, or preferred stocks convertible into common stocks, equity index funds, and commingled short-term investment funds. The investment objective of the fund is to achieve, over an extended period of time, a return representative of 18
large-capitalization U.S. stocks, while maintaining a consistent investment style that focuses on value stocks. The fund invests in a passive index fund, as well as actively-managed portfolios for added diversification. The fund seeks to achieve this objective by obtaining a combination of dividend income and capital appreciation. The general focus is on securities with favorable value/yield characteristics such as above average dividend yield, and price-to-earnings and priceto-book value ratios lower than those of the market in general. There is no guarantee that the investment objective will be met. The market value of securities held by this fund may fluctuate, sometimes significantly. However, the broad diversification attained by investing in a large number of stocks generally results in less risk or return variability than an investment in a single stock. Since equity prices tend to fluctuate more than fixed income prices, this fund may experience greater return variability than the funds invested in fixed income securities or a combination of asset types. The fund s investment managers exercise full investment discretion and responsibility over the portion of the fund they manage, subject to investment guidelines reviewed and accepted by the SIC from time to time. 5. S&P 500 Equity Index Fund This fund is invested in a commingled fund that includes essentially all stocks contained in the Standard & Poor s Composite 500 Stock Index, a broad index of large- and medium-sized common stocks. Stocks are held in proportion to their respective weightings in that index. The fund may also include investments in commingled short-term investment funds offered by the Trustee. The investment objective of the fund is to provide a rate of return representative of large-capitalization U.S. stocks as measured by the Standard & Poor s Composite 500 Stock Index. There is no guarantee that the investment objective will be met. The market value of securities held by this fund will fluctuate with the equity market, sometimes significantly. However, the diversification attained by investing in a large number of stocks generally results in less risk than an investment in a single stock. Since equity securities tend to fluctuate more than fixed income securities, this fund may experience greater return variability than the funds investing in fixed income securities or a combination of asset types. 6. Growth Equity Fund This fund uses a multi-manager approach and is invested primarily in common stocks, but may also invest in preferred stocks, bonds, debentures or preferred stocks convertible into common stocks, equity index funds, and commingled short-term investment funds. The investment objective of the fund is to achieve, over an extended period of time, a return representative of large capitalization U.S. stocks, while maintaining a consistent investment style that focuses on growth stocks. The fund seeks to achieve this objective through an investment strategy that focuses on securities with favorable growth characteristics, such as anticipated growth in revenues and earnings. Accordingly, price-to-earnings and price-to-book value ratios may be higher than those of the broad market, whereas dividend yield may be less. There is no guarantee that the investment objective will be met. 19