Honeywell 2008 Annual Report Download - page 302

terms and conditions that the Committee, in its discretion, may determine and set forth in the Award Agreement, subject to the provisions
below:
(a) Form. Stock Options granted under the Plan will, at the discretion of the Committee and as set forth in the Award Agreement, be in
the form of Incentive Stock Options, Nonqualified Stock Options or a combination of the two. If an Incentive Stock Option and a
Nonqualified Stock Option are granted to the same Participant under the Plan at the same time, the form of each will be clearly identified,
and they will be deemed to have been granted in separate grants. In no event will the exercise of one Award affect the right to exercise the
other Award. Stock Appreciation Rights may be granted either alone or in connection with concurrently or previously issued Nonqualified
Stock Options.
(b) Exercise Price. The Committee will set the Exercise Price of Stock Options or Stock Appreciation Rights granted under the Plan at a
price that is equal to or greater than the Fair Market Value of a Share on the date of grant, subject to adjustment as provided in Section 5.3.
The Exercise Price of Incentive Stock Options, however, will be equal to or greater than 110 percent of the Fair Market Value of a Share on
the date of grant if the Participant receiving the Stock Options owns stock possessing more than 10 percent of the total combined voting
power of all classes of stock of the Company or of any subsidiary or parent corporation of the Company, as defined in Section 424 of the
Code. The Exercise Price of a Stock Appreciation Right granted in tandem with a Stock Option will be equal to the Exercise Price of the
related Stock Option. The Committee will set forth the Exercise Price of a Stock Option or Stock Appreciation Right in the Award
Agreement.
(c) Term and Timing of Exercise: Stock Options and Stock Appreciation Rights will lapse not later than 10 years after the date of grant,
as determined by the Committee at the time of grant. Unless determined otherwise by the Committee at the time of grant, each Stock
Option or Stock Appreciation Right granted under the Plan will be exercisable in whole or in part, subject to the following conditions:
(i) The Committee will determine and set forth in the Award Agreement the date on which any Award of Stock Options or Stock
Appreciation Rights to a Participant may first be exercised; provided, however, that, except for Stock Options and Stock Appreciation
Rights granted as Performance Awards and except as provided in Section 5.1, such Award shall not become fully vested for at least
three years following the date of grant.
(ii) A Stock Appreciation Right granted in tandem with a Stock Option is subject to the same terms and conditions as the related
Stock Option and will be exercisable only to the extent that the related Stock Option is exercisable.
(iii) Stock Options and Stock Appreciation Rights will become immediately vested and exercisable as of the effective date of a
Change in Control in accordance with Section 5.4.
(iv) Stock Options and Stock Appreciation Rights will vest and remain