Honeywell 2008 Annual Report Download - page 327

(2) Tendering (actually or by attestation) to the Company previously acquired Shares that have been held by the Participant for at least six (6) months,
subject to paragraph (5) below, and that have a Fair Market Value on the day prior to the date of exercise equal to the applicable portion of the Exercise
Price being so paid;
(3) Instructing the Company to withhold Shares that would otherwise be issued having a Fair Market Value on the date of exercise equal to the
applicable portion of the Exercise Price being so paid (provided such withholding has been expressly authorized by the Committee); or
(4) Any combination of the methods described in paragraphs (1), (2) and (3) above.
(5) Notwithstanding the foregoing, the Committee, in consideration of applicable accounting standards, may waive any holding period on Shares
required to tender pursuant to paragraph (2) or prohibit withholding pursuant to paragraph (3).
(g) 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 Right 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.
(h) Certain Prohibitions. The following terms or actions shall not be permitted with respect to any Award of Stock Options or Stock Appreciation Rights:
(1) No Repricing. Except as otherwise provided in Section 9, 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.
(2) No Dividend Equivalents. The Committee shall not provide for the payment of Dividend Equivalents with respect to Stock Options or Stock
Appreciation Rights.
(3) No Reload Options. The Committee shall not grant Stock Options or Stock Appreciation Rights that have reload features under which the exercise
of a Stock Option or Stock Appreciation Right by a Participant automatically entitles the Participant to a new Stock Option or Stock Appreciation Right.
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