Honeywell 2006 Annual Report Download - page 177

(d) Certain Other Transactions. In the event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or
substantially all of the Company's assets (on a consolidated basis), (iii) a merger, consolidation or similar transaction involving
the Company in which the Company is not the surviving corporation or (iv) a merger, consolidation or similar transaction
involving the Company in which the Company is the surviving corporation but the holders of shares of Common Stock receive
securities of another corporation and/or other property, including cash, the Committee shall, in its sole discretion, have the
power to:
(i) cancel, effective immediately prior to the occurrence of such event, each Award (whether or not then exercisable),
and, in full consideration of such cancellation, pay to the Participant to whom such Award was granted an amount in
cash, for each share of Common Stock subject to such Award equal to the value, as determined by the Committee in its
reasonable discretion, of such Award, provided that with respect to any outstanding Stock Option or Stock Appreciation
Right such value shall be equal to the excess of (A) the value, as determined by the Committee in its reasonable
discretion, of the property (including cash) received by the holder of a share of Common Stock as a result of such event
over (B) the exercise price of such Stock Option or Stock Appreciation Right; or
(ii) provide for the exchange of each Award (whether or not then exercisable or vested) for an Award with respect to,
as appropriate, some or all of the property which a holder of the number of shares of Common Stock subject to such
Award would have received in such transaction and, incident thereto, make an equitable adjustment as determined by the
Committee in its reasonable discretion in the exercise price of the Award, or the number of shares or amount of property
subject to the Award or, if appropriate, provide for a cash payment to the Participant to whom such Award was granted
in partial consideration for the exchange of the Award.
(e) Other Changes. In the event of any change in the capitalization of the Company or corporate change other than those
specifically referred to in subsections (b), (c) or (d), the Committee shall make equitable adjustments in the number and class of
shares subject to Awards outstanding on the date on which such change occurs and in such other terms of such Awards.
(f) Performance Awards. In the event of any transaction or event described in this Section 5.3, including without limitation
any corporate change referred to in subsection (e) hereof, the Committee shall have the power to make equitable adjustments in
any Performance Measure and in other terms of any Performance Award, provided that such adjustment is consistent with the
requirements of Section 162(m) of the Code and the regulations thereunder.