Morris Township, NJ, Aug 13—Diversified manufacturer Honeywell International Inc. will pay former chief executive Michael Bonsignore a $9 million separation payment as part of the agreement that replaced him with former head Lawrence Bossidy in July.

The separation payment is three times Bonsignore's annual base salary of $1.5 million plus his target bonus of the same amount. In addition, any interest that has or will accrue on a $1.6 million loan that Honeywell lent to Bonsignore earlier this year has been forgiven, according to Honeywell spokesman Tom Crane. The loan was made because Honeywell had accelerated the funding to Bonsignore's pension plan to minimize its taxes, which in turn put a larger tax burden on Bonsignore.

Bonsignore will also receive pension benefits and services such as office and clerical support, executive transportation, security services and financial and tax planning services during his lifetime, although he will not be allowed to use the company owned aircraft for personal travel.

New CEO Lawrence Bossidy, who was brought back just hours after European regulators killed the company's $42 billion merger with General Electric Co. will receive an annual salary of $2 million, along with the option to purchase 500,000 shares at $36.27 per share.

If the company terminates Bossidy's employment or upon the expiration of his contract, whichever comes first, Honeywell has agreed to provide lifetime post retirement services, facilities and other arrangements.

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