RESTRICTED-STOCK RETIREMENT PLAN FOR
NON-EMPLOYEE DIRECTORS
1. PURPOSE OF THE PLAN. The purpose of the Honeywell Restricted-Stock
Retirement Plan for Non-Employee Directors ("Plan") is to grant to
non-employee directors of Honeywell Inc. ("Company") awards ("Awards") of
shares of Common Stock, par value $1.50 per share, of the Company ("Stock")
that will be available without restriction on retirement from the Board and
will increase their proprietary interest in the Company and their
identification with the interests of the Company's stockholders
("Stockholders"). The Plan shall become effective on the date ("Effective
Date") the Plan is approved by the Stockholders or such later date as may be
established by the Board of Directors of the Company ("Board").
2. GRANT OF AWARDS. Each non-employee director ("Director") of the
Company elected at or after the 1988 Annual Meeting of Stockholders shall be
granted Awards under the Plan as follows:
(a) ANNUAL AWARDS. On the date of each Annual Meeting of
Stockholders ("Annual Meeting"), each person who has served as a
Director since the prior Annual Meeting shall receive an Award of Stock
having the Fair Market Value (as defined in Section 3) equal to one-half
the fees earned by the Director since the date of the prior Annual
Meeting.
(b) INITIAL AWARD. Each Director who, at the time of the 1988
Annual Meeting, has served at least two full years as Director shall
receive an additional initial award of Stock having the Fair Market
Value equal to the number of full years of service as a Director ending
with the 1987 Annual Meeting times the Fair Market Value of the Award
that Director receives under Section 2(a).
3. FAIR MARKET VALUE. For purposes of determining the number of shares
of Stock granted under any Award, the "Fair Market Value" of the Stock shall
equal the average of the reported closing prices for the Stock on the New
York Stock Exchange for the twenty (20) consecutive trading business days
immediately preceding the Annual Meeting; and all fractional shares shall be
rounded to the nearest whole number.
4. ISSUANCE OF STOCK. As promptly as practical following the Annual
Meeting for each Award, the Company shall issue certificates
("Certificates"), registered in the name of each Director receiving an Award,
representing the number of shares of Stock covered by the Award. The Stock
shall have the rights and be subject to the restrictions and other terms and
conditions of the Plan.
5. RIGHTS. Upon issuance of the Certificates, the Directors in whose
names they are registered shall, subject to the restrictions of the Plan,
have all of the rights of a
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Stockholder with respect to the Stock, including the right to vote the Stock
and receive cash dividends and other cash distributions thereon.
6. RESTRICTED PERIOD. The Stock shall be subject to the restrictions
of the Plan for a period ("Restricted Period") from the date of grant of
Stock until the earlier of:
(I) the occurrence of a Change in Control (as defined below); and
(II) the date on which the Director will have served five years as a
Director (including service prior to the grant of the Stock) and the first to
occur of the following events:
(a) the Director retires from the Board in compliance with the
Board's retirement policy as then in effect;
(b) the Director's service on the Board terminates as a result of
not being nominated for reelection by the Board, but not as a result of
the Director's declining to serve again;
(c) the Director's service on the Board terminates because the
Director, although nominated for reelection by the Board, is not
reelected by the Stockholders;
(d) the Director is unable to serve because of disabilities;
(e) the Director dies.
For purposes of the Plan, a "Change in Control" of the Company
shall have occurred if:
(i) any "person", as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company or any of its
subsidiaries; any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its
subsidiaries; an underwriter temporarily holding securities
pursuant to an offering of such securities; or any corporation
owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined
in Rule 13d-3
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under the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power of
the Company's then outstanding securities; or
(ii) during any period of not more than two consecutive years
(not including any period prior to the execution of this amendment
to the Plan), individuals who at the beginning of such period
constitute the Board of Directors of the Company (the "Board"), and
any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of this Section)
whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity)
more than 50% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no "person" (as hereinabove defined) acquires
more than 30% of the combined voting power of the Company's then
outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition of the Company of all or substantially all of the
Company's assets (or any transaction having a similar effect).
7. FORFEITURE OF STOCK. If the date ("Termination Date") a Director's
service on the Board terminates is before the end of the Restricted Period,
the Director shall forfeit and return to the Company all Stock awarded to the
Director under the Plan.
8. RECEIPT OF STOCK. If a Director's Termination Date is at or after
the end of the Restricted Period, the Director shall receive, free and clear
of the restrictions of the Plan, all Stock previously awarded under the Plan.
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9. RESTRICTIONS. The Stock shall be subject to the following
restrictions during the Restricted Period:
(a) The Stock shall be subject to forfeiture to the Company as
provided in the Plan.
(b) The Stock may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of; and neither the right to receive
Stock nor any interest under the Plan may be assigned by a Director, and
any attempted assignment shall be void.
(c) The Certificates shall be held by the Company and shall, at
the option of the Company, bear an appropriate restrictive legend and be
subject to appropriate "stop transfer" orders. The Director shall
deliver to the Company a stock power endorsed in blank to the Company.
(d) Any additional Stock or other securities or property (other
than cash) that may be issued with respect to Stock awarded under the
Plan as a result of any stock dividend, stock split, business
combination or other event, shall be subject to the restrictions and
other terms and conditions of the Plan.
(e) A Director shall not be entitled to receive any Stock prior to
the completion of any registration or qualification of the Stock under
any federal or state law or governmental rule or regulation that the
Company, in its sole discretion, determines to be necessary or advisable.
10. WAIVER. In the event a Director's service on the Board terminates,
the Board, in its sole discretion, may waive the forfeiture provisions of
Section 7 as to some or all of the Stock subject to forfeiture thereunder.
11. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
committee ("Committee") that shall be the Nominating Committee of the Board
or such other committee of Directors as may be designated by the Board. The
Committee shall have full power, discretion and authority to interpret and
administer the Plan, except that the Committee shall have no power to (a)
determine the eligibility for Awards or the number of shares of Stock or
timing or value of Awards to be granted to any Director, or (b) take any
action specifically delegated to the Board under the Plan. The Committee's
interpretations and actions shall, except as otherwise determined by the
Board, be final, conclusive and binding on all persons for all purposes.
12. AMENDMENT OR TERMINATION OF THE PLAN. The Board may, at any time,
amend or terminate the Plan; but no amendment or termination shall, without
the written consent of a Director, reduce the Director's rights under
previously granted Awards. No amendment
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shall, without approval of the Stockholders, increase the percentage of fees
on which an Annual Award is based in Section 2(a), or modify the requirements
of Sections 1 and 2 as to eligibility for participation in the Plan.
13. NO RIGHT TO RENOMINATION. Nothing in the Plan or in any Award shall
confer upon any Director the right to be nominated for reelection to the Board.
14. STATEMENT OF ACCOUNT. Each Director shall receive an annual
statement, within thirty days following each Annual Meeting, showing the
number of shares of Stock that have been awarded to the Director under the
Plan.