Honeywell 2006 Annual Report Download - page 195

6. Form of Payment. Performance Shares [and Dividend Shares] will be paid in shares of the Company's common stock ("Shares") except as may
otherwise provided in Section 11 below.
7. [FOLLOWING INCLUDED AT COMMITTEE'S DISCRETION: Dividend Shares. You will earn dividend equivalents in the form of
additional shares ("Dividend Shares") based on your Actual Award. The number of Dividend Shares will be calculated by dividing the sum of cash
dividends that you would have earned on your Actual Award had you held those earned Shares throughout the Performance Cycle by the average
Honeywell closing Share price for the 30 trading days preceding [LAST DAY OF PERFORMANCE CYCLE], with any fractional Shares rounded
up to the nearest whole Share. Dividend Shares will be paid in accordance with Section 5.]
8. Termination of Employment. If your employment with the Company is terminated for any reason other than death or Disability prior to the date an
Actual Award payment is to be made pursuant to Section 5 above, any unpaid Actual Award [and Dividend Shares] shall be forfeited and your rights
with respect to any award under this Agreement will terminate unless the Committee, or its designee, determines otherwise in its sole and absolute
discretion.
9. Death or Disability. If your employment with the Company terminates because of death or Disability (as defined in the Stock Plan) prior to the first
installment payment of your Actual Award, you or your estate will receive, as your Actual Award for the Performance Cycle, the greater of (i) your
Actual Award determined pursuant to Section 2 above at the time the death or Disability occurs, or (ii) your Target Award. [No Dividend Shares will
be paid in this case. OR Dividend Shares will be calculated as provided in Section 7.] The Actual Award[ and Dividend Shares] will be payable in a
single lump sum at the time the first installment payment is scheduled to be paid under Section 5.
If your death or Disability occurs after the first installment payment of your Actual Award (determined in accordance with Section 2) [and unpaid
Dividend Shares] has been made but before the second installment payment has been made, the Company shall pay the second installment payment
in a lump sum as soon as practicable after the date of death or Disability.
10. [FOLLOWING INCLUDED AT COMMITTEE'S DISCRETION: No Deferral.You cannot defer payment of the Performance Shares[ or
Dividend Shares].
OR
Deferral of Payment. If you would like to defer payment of the Actual Award, you may make a request to the Committee in writing in the form and
at the time designated by the Committee. You must submit a suggested payment schedule with the request for deferral. The Committee may, in its
sole discretion, determine whether to permit deferral of payment in the manner requested. If the Committee does not accept your proposed payment
schedule, then payment will be made as provided in Section 5. You cannot defer payment of Dividend Shares.]
11. Change in Control. In the event of a Change in Control (as defined in the Stock Plan), you will be deemed to have earned an Actual Award at a
Plan Payout Percentage of 100%. In such case, you shall receive both installments of your Actual Award [and Dividend Shares] in a single sum
payment no later than the earlier of 90 days after the date of the Change in Control or two and one-half months after the end of the calendar year in
which the Change in Control occurs. Such single sum payment will be in cash or Shares, as determined by the Committee.
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