Honeywell 2008 Annual Report Download - page 305

purposes of this $100,000 limit, the Participant's Incentive Stock Options under this Plan and all other plans maintained by the
Company and its Affiliates will be aggregated. To the extent any Incentive Stock Option would exceed the $100,000 limit, the Incentive
Stock Option will afterwards be treated as a Nonqualified Stock Option for all purposes.
(iv) Timing of Exercise. If the Committee exercises its discretion in the Award Agreement to permit an Incentive Stock Option to be
exercised by a Participant more than three months after the Participant has ceased being an Employee (or more than 12 months if the
Participant is permanently and totally disabled, within the meaning of Section 22(e) of the Code), the Incentive Stock Option will
afterwards be treated as a Nonqualified Stock Option for all purposes. For purposes of this paragraph (iv), an Employee's employment
relationship will be treated as continuing intact while the Employee is on military leave, sick leave or another approved leave of absence
if the period of leave does not exceed 90 days, or a longer period to the extent that the Employee's right to reemployment with the
Company or an Affiliate is guaranteed by statute or by contract. Where the period of leave exceeds 90 days and the Employee's right to
reemployment is not guaranteed by statute or contract, the employment relationship will be deemed to have ceased on the 91st day of
the leave.
(v) Transfer Restrictions. In no event will the Committee permit an Incentive Stock Option to be transferred by a Participant other
than by will or the laws of descent and distribution, and any Incentive Stock Option awarded under this Plan will be exercisable only by
the Participant during the Participant's lifetime.
(f) Exercise of Stock Appreciation Rights. Upon exercise, Stock Appreciation Rights may be redeemed for cash or Shares or a
combination of cash and Shares, in the discretion of the Committee, and as described in the Award Agreement. Cash payments will be
equal to the excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price, for each Share for which a Stock
Appreciation Rights was exercised. If the Stock Appreciation Right is redeemed for Shares, the Participant will receive a number of whole
Shares equal to the quotient of the cash payment amount divided by the Fair Market Value of a Share on the date of exercise.
(g) Certain Prohibitions. The following terms or actions shall not be permitted with respect to any Award of Stock Options or Stock
Appreciation Rights:
(i) No Repricing. Except as otherwise provided in Section 5.3, in no event will the Committee decrease the Exercise Price of a Stock
Option or Stock Appreciation Right after the date of grant or cancel outstanding Stock Options or Stock Appreciation Rights and grant
replacement Stock Options or Stock Appreciation Rights with a lower Exercise Price than that of the replaced Stock Options or Stock
Appreciation Rights or other Awards or purchase underwater Stock Options from a Participant for cash or replacement Awards without
first obtaining the approval of the Company's shareowners in a manner that complies with the rules of the New York Stock Exchange.