{"id":43628,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-option-agreement-alliedsignal-inc-and-honeywell-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-option-agreement-alliedsignal-inc-and-honeywell-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-option-agreement-alliedsignal-inc-and-honeywell-inc.html","title":{"rendered":"Stock Option Agreement &#8211; Alliedsignal Inc. and Honeywell Inc."},"content":{"rendered":"<pre>                           STOCK OPTION AGREEMENT\n\n          THIS STOCK OPTION AGREEMENT (this 'Agreement'), dated as of June\n4, 1999, between ALLIEDSIGNAL INC., a Delaware corporation ('Parent'), and\nHONEYWELL INC., a Delaware corporation (the 'Company').\n\n                           W I T N E S S E T H :\n\n          WHEREAS, Parent and the Company are concurrently with the\nexecution and delivery of this Agreement entering into an Agreement and\nPlan of Merger (the 'Merger Agreement') pursuant to which, among other\nthings, Merger Subsidiary will merge with and into the Company on the terms\nand subject to the conditions stated therein; and\n\n          WHEREAS, in order to induce the Company to enter into the Merger\nAgreement and as a condition for the Company's agreeing so to do, Parent\nhas granted to the Company the Stock Option (as hereinafter defined), on\nthe terms and conditions set forth herein;\n\n          NOW, THEREFORE, in consideration of the mutual covenants and\nagreements set forth herein and in the Merger Agreement, and for other good\nand valuable consideration, the adequacy of which is hereby acknowledged,\nthe parties hereto agree as follows:\n\n          Section 1. Definitions. Capitalized terms used and not defined\nherein have the respective meanings assigned to them in the Merger\nAgreement.\n\n          Section 2. Grant of Stock Option. Parent hereby grants to the\nCompany an irrevocable option (the 'Stock Option') to purchase, on the\nterms and subject to the conditions hereof, for $58.375 per share (the\n'Exercise Price') in cash, up to 109,308,537 fully paid and non-assessable\nshares (the 'Option Shares') of Parent's common stock, par value $1.00 per\nshare (the 'Common Stock'). The Exercise Price and number of Option Shares\nshall be subject to adjustment as provided in Section 5 below.\n\n          Section 3. Exercise of Stock Option.\n\n               (a) The Company may, subject to the provisions of this\nSection 3, exercise the Stock Option, in whole or in part, at any time or\nfrom time to time, after the occurrence of a Parent Trigger Event (defined\nbelow) and prior to the Termination Date. 'Termination Date' shall mean,\nsubject to Section 9(a), the earliest of (i) the Effective Time of the\nMerger, (ii) 120 days after the date full payment contemplated by Section\n10.6(a) of the Merger Agreement is made by Parent to the Company\nthereunder, (iii) the date of the termination of the Merger Agreement so\nlong as, in the case of this clause (iii), no Parent Trigger Event has\noccurred or could still occur pursuant to Section 10.6(a) of the Merger\nAgreement or (iv) the first anniversary of the date of termination of the\nMerger Agreement. Notwithstanding the occurrence of the Termination Date,\nthe Company shall be entitled to purchase Option Shares pursuant to any\nexercise of the Stock Option, on the terms and subject to the conditions\nhereof, to the extent the Company exercised the Stock Option prior to the\noccurrence of the Termination Date. A 'Parent Trigger Event' shall mean an\nevent the result of which is that the total fee or fees required to be paid\nby Parent to the Company pursuant to Section 10.6(a) of the Merger\nAgreement is equal to $350 million.\n\n               (b) The Company may purchase Option Shares pursuant to the\nStock Option only if all of the following conditions are satisfied: (i) no\npreliminary or permanent injunction or other order issued by any federal or\nstate court of competent jurisdiction in the United States shall be in\neffect prohibiting delivery of the Option Shares, (ii) any waiting period\napplicable to the purchase of the Option Shares under the HSR Act shall\nhave expired or been terminated, and (iii) any prior notification to or\napproval of any other regulatory authority in the United States or\nelsewhere required in connection with such purchase shall have been made or\nobtained, other than those which if not made or obtained would not\nreasonably be expected to result in a significant detriment to Parent and\nits Subsidiaries, taken as a whole.\n\n               (c) If the Company shall be entitled to and wishes to\nexercise the Stock Option, it shall do so by giving Parent written notice\n(the 'Stock Exercise Notice') to such effect, specifying the number of\nOption Shares to be purchased and a place and closing date not earlier than\nthree business days nor later than 10 business days from the date of such\nStock Exercise Notice. If the closing cannot be consummated on such date\nbecause any condition to the purchase of Option Shares set forth in Section\n3(b) has not been satisfied or as a result of any restriction arising under\nany applicable law or regulation, the closing shall occur five days (or\nsuch earlier time as the Company may specify) after satisfaction of all\nsuch conditions and the cessation of all such restrictions.\n\n               (d) So long as the Stock Option is exercisable pursuant to\nthe terms of Section 3(a), the Company may elect to send a written notice\nto Parent (the 'Cash Exercise Notice') specifying a date not later than 20\nbusiness days and not earlier than 5 business days following the date such\nnotice is given on which date Parent shall pay to the Company in exchange\nfor the cancellation of the relevant portion of the Stock Option an amount\nin cash equal to the Spread (as hereinafter defined) multiplied by all or\nsuch relevant portion of the Option Shares subject to the Stock Option as\nthe Company shall specify. As used herein, 'Spread' shall mean the excess,\nif any, over the Exercise Price of the higher of (x) if applicable, the\nhighest price per share of Common Stock paid or proposed to be paid by any\nPerson pursuant to any Acquisition Proposal relating to Parent (the\n'Proposed Alternative Transaction Price') or (y) the average of the closing\nprices of the shares of Common Stock on the principal securities exchange\nor quotation system on which the Common Stock is then listed or traded as\nreported in The Wall Street Journal (but subject to correction for\ntypographical or other manifest errors in such reporting) for the five\nconsecutive trading days immediately preceding the date on which the Cash\nExercise Notice is given (the 'Average Market Price'). If the Proposed\nAlternative Transaction Price includes any property other than cash, the\nProposed Alternative Transaction Price shall be the sum of (i) the fixed\ncash amount, if any, included in the Proposed Alternative Transaction Price\nplus (ii) the fair market value of such other property. If such other\nproperty consists of securities with an existing public trading market, the\naverage of the closing prices (or the average of the closing bid and asked\nprices if closing prices are unavailable) for such securities in their\nprincipal public trading market on the five trading days ending five days\nprior to the date on which the Cash Exercise Notice is given shall be\ndeemed to equal the fair market value of such property. If such other\nproperty includes anything other than cash or securities with an existing\npublic trading market, the Proposed Alternative Transaction Price shall be\ndeemed to equal the Average Market Price. Upon exercise of its right\npursuant to this Section 3(d) and the receipt by the Company of the\napplicable cash amount with respect to the Option Shares or the applicable\nportion thereof, the obligations of Parent to deliver Option Shares\npursuant to Section 3(e) shall be terminated with respect to the number of\nOption Shares specified in the Cash Exercise Notice. The Spread shall be\nappropriately adjusted, if applicable, to give effect to Section 5.\n\n               (e) (i) At any closing pursuant to Section 3(c) hereof, the\nCompany shall make payment to Parent of the aggregate purchase price for\nthe Option Shares to be purchased and Parent shall deliver to the Company a\ncertificate representing the purchased Option Shares, registered in the\nname of the Company or its designee and (ii) at any closing pursuant to\nSection 3(d) hereof, Parent will deliver to the Company cash in an amount\ndetermined pursuant to Section 3(d) hereof. Any payment made by the Company\nto Parent, or by Parent to the Company, pursuant to this Agreement shall be\nmade by wire transfer of immediately available funds to a bank designated\nby the party receiving such funds, provided that the failure or refusal by\nParent to designate such a bank account shall not preclude the Company from\nexercising the Stock Option.\n\n               (f) Certificates for Common Stock delivered at the closing\ndescribed in Section 3(c) hereof shall be endorsed with a restrictive\nlegend which shall read substantially as follows:\n\n               'The transfer of the shares represented by this\n               certificate is subject to resale restrictions arising\n               under the Securities Act of 1933, as amended.'\n\n          It is understood and agreed that the above legend shall be\nremoved by delivery of substitute certificate(s) without this reference (i)\nif the Company shall have delivered to Parent a copy of a no-action letter\nfrom the staff of the Securities and Exchange Commission, or a written\nopinion of counsel, in form and substance reasonably satisfactory to\nParent, to the effect that such legend is not required for purposes of, or\nresale may be effected pursuant to an exemption from registration under,\nthe Securities Act or (ii) in connection with any sale registered under the\nSecurities Act. In addition, these certificates shall bear any other legend\nas may be required by applicable law.\n\n          Section 4. Representations of the Company. The Company hereby\nrepresents and warrants to Parent that any Option Shares acquired by the\nCompany upon the exercise of the Stock Option will not be, and the Stock\nOption is not being, acquired by the Company with the intention of making a\npublic distribution thereof, other than pursuant to an effective\nregistration statement under the Securities Act or otherwise in compliance\nwith the Securities Act.\n\n          Section 5. Adjustment upon Changes in Capitalization or Merger.\n\n               (a) In the event of any change in the outstanding shares of\nCommon Stock by reason of a stock dividend, stock split, reverse stock\nsplit, split-up, merger, consolidation, recapitalization, combination,\nconversion, exchange of shares, extraordinary or liquidating dividend or\nsimilar transaction which would effect the Company's rights hereunder, the\ntype and number of shares or securities purchasable upon the exercise of\nthe Stock Option and the Exercise Price shall be adjusted appropriately,\nand proper provision will be made in the agreements governing such\ntransaction, so that the Company will receive upon exercise of the Stock\nOption a number and class of shares or amount of other securities or\nproperty that the Company would have received in respect of the Option\nShares had the Stock Option been exercised immediately prior to such event\nor the record date therefor, as applicable. In no event shall the number of\nshares of Common Stock subject to the Stock Option exceed 19.9% of the\nnumber of shares of Common Stock issued and outstanding at the time of\nexercise (without giving effect any shares subject or issued pursuant to\nthe Stock Option).\n\n               (b) Without limiting the foregoing, whenever the number of\nOption Shares purchasable upon exercise of the Stock Option is adjusted as\nprovided in this Section 5, the Exercise Price shall be adjusted by\nmultiplying the Exercise Price by a fraction, the numerator of which is\nequal to the number of Option Shares purchasable prior to the adjustment\nand the denominator of which is equal to the number of Option Shares\npurchasable after the adjustment.\n\n               (c) Without limiting or altering the parties' rights and\nobligations under the Merger Agreement, in the event that Parent enters\ninto an agreement (i) to consolidate with or merge into any Person, other\nthan the Company or one of its Subsidiaries, and Parent will not be the\ncontinuing or surviving corporation in such consolidation or merger, (ii)\nto permit any Person, other than the Company or one of its Subsidiaries, to\nmerge into Parent and Parent will be the continuing or surviving\ncorporation, but in connection with this merger, the shares of Common Stock\noutstanding immediately prior to the consummation of this merger will be\nchanged into or exchanged for stock or other securities of Parent or any\nother Person or cash or any other property, or the shares of Common Stock\noutstanding immediately prior to the consummation of such merger will,\nafter such merger, represent less than 50% of the outstanding voting\nsecurities of the merged company, or (iii) to sell or otherwise transfer\nall or substantially all of its assets to any Person, other than the\nCompany or one of its Subsidiaries, then, and in each such case, the\nagreement governing this transaction shall make proper provision so that\nthe Stock Option will, upon the consummation of any such transaction and\nupon the terms and conditions set forth herein, be converted into, or\nexchanged for, an option with identical terms appropriately adjusted to\nacquire the number and class of shares or other securities or property that\nthe Company would have received in respect of Option Shares had the Stock\nOption been exercised immediately prior to such consolidation, merger, sale\nor transfer or the record date therefor, as applicable, and will make any\nother necessary adjustments. Parent shall take such steps in connection\nwith such consolidation, merger, liquidation or other transaction as may be\nreasonably necessary to assure that the provisions hereof shall thereafter\napply as nearly as possible to any securities or property thereafter\ndeliverable upon exercise of the Stock Option.\n\n          Section 6. Further Assurances; Remedies.\n\n               (a) Parent agrees to maintain, free from preemptive rights,\nsufficient authorized but unissued or treasury shares of Common Stock so\nthat the Stock Option may be fully exercised without additional\nauthorization of Common Stock after giving effect to all other options,\nwarrants, convertible securities and other rights of third parties to\npurchase shares of Common Stock from Parent, and to issue the appropriate\nnumber of shares of Common Stock pursuant to the terms of this Agreement.\nAll of the Option Shares to be issued pursuant to the Stock Option, upon\nissuance and delivery thereof pursuant to this Agreement, will be duly\nauthorized, validly issued, fully paid and nonassessable, and will be\ndelivered free and clear of all claims, liens, charges, encumbrances and\nsecurity interests (other than those created by this Agreement).\n\n               (b) Parent agrees not to avoid or seek to avoid (whether by\ncharter amendment or through reorganization, consolidation, merger,\nissuance of rights, dissolution or sale of assets, or by any other\nvoluntary act) the observance or performance of any of the covenants,\nagreements or conditions to be observed or performed hereunder by Parent.\n\n               (c) Parent agrees that promptly after the occurrence of a\nParent Trigger Event it shall take all actions as may from time to time be\nrequired (including (i) complying with all applicable premerger\nnotification, reporting and waiting period requirements under the HSR Act\nand (ii) in the event that prior notification to or approval of any other\nregulatory authority in the United States or elsewhere is necessary before\nthe Stock Option may be exercised, complying with its obligations\nthereunder and cooperating with the Company in the Company's preparing and\nprocessing the required notices or applications) in order to permit the\nCompany to exercise the Stock Option and purchase Option Shares pursuant to\nsuch exercise.\n\n               (d) The parties agree that the Company would be irreparably\ndamaged if for any reason Parent failed, in breach of its obligations\nhereunder, to issue any of the Option Shares (or other securities or\nproperty deliverable pursuant to Section 5 hereof) upon exercise of the\nStock Option or to perform any of its other obligations under this\nAgreement, and that the Company would not have an adequate remedy at law\nfor money damages in such event. Accordingly, the Company shall be entitled\nto specific performance and injunctive and other equitable relief to\nenforce the performance of this Agreement by Parent. Accordingly, if the\nCompany should institute an action or proceeding seeking specific\nenforcement of the provisions hereof, Parent hereby waives the claim or\ndefense that the Company has an adequate remedy at law and hereby agrees\nnot to assert in any such action or proceeding the claim or defense that\nsuch a remedy at law exists. Parent further agrees to waive any\nrequirements for the securing or posting of any bond in connection with\nobtaining any such equitable relief. This provision is without prejudice to\nany other rights that the Company may have against Parent for any failure\nto perform its obligations under this Agreement.\n\n          Section 7. Listing of Option Shares. Promptly after the\noccurrence of a Parent Trigger Event and from time to time thereafter if\nnecessary, Parent will apply to list all of the Option Shares subject to\nthe Stock Option on the NYSE and will use its reasonable best efforts to\nobtain approval of such listing as soon as practicable.\n\n          Section 8. Registration of the Option Shares.\n\n               (a) If, within two years of the exercise of the Stock\nOption, the Company requests Parent in writing to register under the\nSecurities Act any of the Option Shares received by the Company hereunder,\nParent will use its reasonable best efforts to cause the offering of the\nOption Shares so specified in such request to be registered as soon as\npracticable so as to permit the sale or other distribution by the Company\nof the Option Shares specified in its request (and to keep such\nregistration in effect for a period of at least 90 days), and in connection\ntherewith Parent shall prepare and file as promptly as reasonably possible\n(but in no event later than 60 days from receipt of the Company's request)\na registration statement under the Securities Act to effect such\nregistration on an appropriate form, which would permit the sale of the\nOption Shares by the Company in accordance with the plan of disposition\nspecified by the Company in its request. Parent shall not be obligated to\nmake effective more than two registration statements pursuant to the\nforegoing sentence; provided, however, that Parent may postpone the filing\nof a registration statement relating to a registration request by the\nCompany under this Section 8 for a period of time (not in excess of 90\ndays) if in Parent's reasonable, good faith judgment such filing would\nrequire the disclosure of material information that Parent has a bona fide\nbusiness purpose for preserving as confidential (but in no event shall\nParent exercise such postponement right more than once in any twelve month\nperiod).\n\n               (b) Parent shall notify the Company in writing not less than\n10 days prior to filing a registration statement under the Securities Act\n(other than a filing on Form S-4 or S-8 or any successor form) with respect\nto any shares of Common Stock. If the Company wishes to have any portion of\nits Option Shares included in such registration statement, it shall advise\nParent in writing to that effect within two business days following receipt\nof such notice, and Parent will thereupon include the number of Option\nShares indicated by the Company under such Registration Statement; provided\nthat if the managing underwriter(s) of the offering pursuant to such\nregistration statement advise Parent that in their opinion the number of\nshares of Common Stock requested to be included in such registration\nexceeds the number which can be sold in such offering on a commercially\nreasonable basis, priority shall be given to securities intended to be\nregistered by Parent for its own account and, thereafter, Parent shall\ninclude in such registration Option Shares requested by the Company to be\nincluded therein pro rata with the shares of Common Stock intended to be\nincluded therein by other stockholders of Parent.\n\n               (c) All expenses relating to or in connection with any\nregistration contemplated under this Section 8 and the transactions\ncontemplated thereby (including all filing, printing, reasonable\nprofessional, roadshow and other fees and expenses relating thereto) will\nbe at Parent's expense except for underwriting discounts or commissions and\nbrokers' fees. Parent and the Company agree to enter into a customary\nunderwriting agreement with underwriters upon such terms and conditions as\nare customarily contained in underwriting agreements with respect to\nsecondary distributions. Parent shall indemnify the Company, its officers,\ndirectors, agents, other controlling persons and any underwriters retained\nby the Company in connection with such sale of such Option Shares in the\ncustomary way, and shall agree to customary contribution provisions with\nsuch persons, with respect to claims, damages, losses and liabilities (and\nany expenses relating thereto) arising (or to which the Company, its\nofficers, directors, agents, other controlling persons or underwriters may\nbe subject) in connection with any such offer or sale under the federal\nsecurities laws or otherwise, except for information furnished in writing\nby the Company or its underwriters to Parent. The Company and its\nunderwriters, respectively, shall indemnify Parent to the same extent with\nrespect to information furnished in writing to Parent by the Company and\nsuch underwriters, respectively.\n\n          Section 9. Miscellaneous.\n\n               (a) Extension of Exercise Periods. The periods during which\nthe Company may exercise its rights under Sections 2 and 3 hereof shall be\nextended in each such case at the request of the Company to the extent\nnecessary to avoid liability by the Company under Section 16(b) of the\nExchange Act by reason of such exercise.\n\n               (b) Amendments; Entire Agreement. This Agreement may not be\nmodified, amended, altered or supplemented, except upon the execution and\ndelivery of a written agreement executed by the parties hereto. This\nAgreement, together with the Merger Agreement (including any exhibits and\nschedules thereto), contains the entire agreement between the parties\nhereto with respect to the subject matter hereof and supersedes all prior\nand contemporaneous agreements and understandings, oral or written, with\nrespect to such transactions.\n\n               (c) Notices. All notices, requests and other communications\nto either party hereunder shall be in writing (including facsimile or\nsimilar writing) and shall be given,\n\n          if to Parent, to:\n\n                  AlliedSignal Inc.\n                  101 Columbia Road\n                  P.O. Box 3000\n                  Morristown, NJ  07962-2496\n                  Attention:  Peter M. Kreindler\n                  Senior Vice President,\n                  General Counsel\n                    and Secretary\n                  Facsimile No.:    (973) 455-4217\n\n\n          with a copy to:\n\n                  Fried, Frank, Harris, Shriver &amp; Jacobson\n                  One New York Plaza\n                  New York, NY 10004-1980\n                  Attention:    Arthur Fleischer, Jr., Esq.\n                                Charles M. Nathan, Esq.\n                  Facsimile No.:    (212) 859-4000\n\n\n          if to the Company, to:\n\n                  Honeywell Inc.\n                  Honeywell Plaza\n                  Minneapolis, MN  55408\n                  Attention:  Edward D. Grayson\n                  Vice President and General Counsel\n                  Facsimile No.: (612) 951-3859\n\n          with a copy to:\n\n                  Skadden, Arps, Slate, Meagher &amp; Flom LLP\n                  919 Third Avenue\n                  New York, NY 10022-3897\n                  Attention:    Peter Allan Atkins, Esq.\n                                David J. Friedman, Esq.\n                  Facsimile No.:    (212) 735-2000\n\nor to such other address or facsimile number as either party may hereafter\nspecify for the purpose by notice to the other party hereto. Each such\nnotice, request or other communication shall be effective (i) if given by\nfacsimile, when such facsimile is transmitted to the facsimile number\nspecified in this Section 9 and the appropriate facsimile confirmation is\nreceived or (ii) if given by any other means, when delivered at the address\nspecified in this Section 9.\n\n               (d) Expenses. Each party hereto shall pay its own expenses\nincurred in connection with this Agreement, except as otherwise\nspecifically provided herein and without limiting anything contained in the\nMerger Agreement.\n\n               (e) Severability. If any term, provision, covenant or\nrestriction of this Agreement is held to be invalid, void or unenforceable,\nthe remainder of the terms, provisions, covenants and restrictions of this\nAgreement shall remain in full force and effect and shall in no way be\naffected, impaired or invalidated.\n\n               (f) Governing Law. This Agreement shall be governed by and\nconstrued in accordance with the laws of the State of Delaware without\nregard to principles of conflicts of law.\n\n               (g) Jurisdiction. Any suit, action or proceeding seeking to\nenforce any provision of, or based on any matter arising out of or in\nconnection with, this Agreement or the transactions contemplated hereby or\nthereby may be brought in any federal or state court located in the State\nof Delaware, and each of the parties hereby consents to the jurisdiction of\nsuch courts (and of the appropriate appellate courts therefrom) in any such\nsuit, action or proceeding and irrevocably waives, to the fullest extent\npermitted by law, any objection which it may now or hereafter have to the\nlaying of the venue of any such suit, action or proceeding in any such\ncourt or that any such suit, action or proceeding which is brought in any\nsuch court has been brought in an inconvenient forum. Process in any such\nsuit, action or proceeding may be served on any party anywhere in the\nworld, whether within or without the jurisdiction of any such court.\nWithout limiting the foregoing, each party agrees that service of process\non such party as provided in Section 9(c) shall be deemed effective service\nof process on such party.\n\n               (h) Counterparts. This Agreement may be executed in two or\nmore counterparts, each of which shall be an original, but all of which\ntogether shall constitute one and the same Agreement.\n\n               (i) Headings. The section headings herein are for\nconvenience only and shall not affect the construction hereof.\n\n               (j) Assignment. This Agreement shall be binding upon each\nparty hereto and such party's successors and assigns. This Agreement shall\nnot be assignable by Parent, but may be assigned by the Company in whole or\nin part to any direct or indirect wholly-owned subsidiary of the Company,\nprovided that the Company shall remain liable for any obligations so\nassigned.\n\n               (k) Survival. All representations, warranties and covenants\ncontained herein shall survive the execution and delivery of this Agreement\nand the consummation of the transactions contemplated hereby.\n\n               (l) Time of the Essence. The parties agree that time shall\nbe of the essence in the performance of obligations hereunder.\n\n               (m) Public Announcement. The Company and Parent will consult\nwith each other before issuing any press release or making any public\nstatement with respect to this Agreement and the transactions contemplated\nhereby and shall not issue any press release or make any public statement\nwithout the prior consent of the other party, which shall not be\nunreasonably withheld. Notwithstanding the foregoing, any such press\nrelease or public statement as may be required by applicable law or any\nlisting Agreement with any national securities exchange, may be issued\nprior to such consultation, if the party making the release or statement\nhas used its reasonable efforts to consult with the other party.\n\n          Section 10. Profit Limitation.\n\n               (a) Notwithstanding any other provision of this Agreement or\nthe Merger Agreement, in no event shall the Company's Total Profit (as\ndefined below) exceed $400 million (the 'Maximum Amount') and, if it\notherwise would exceed such Maximum Amount, the Company at its sole\nelection may (i) pay cash to Parent, (ii) deliver to Parent for\ncancellation Option Shares previously purchased by the Company, or (iii)\nany combination thereof, so that the Company's actually realized Total\nProfit (as defined below) shall not exceed the Maximum Amount after taking\ninto account the foregoing actions.\n\n               (b) Notwithstanding any other provision of this Agreement,\nthe Stock Option may not be exercised for a number of Option Shares as\nwould, as of the date of the Stock Exercise Notice or Cash Exercise Notice,\nas applicable, result in a Notional Total Profit (as defined below) of more\nthan the Maximum Amount and, if exercise of the Stock Option otherwise\nwould result in the Notional Total Profit exceeding such amount, the\nCompany, at its discretion, may (in addition to any of the actions\nspecified in Section 10(a) above) increase the Exercise Price for that\nnumber of Option Shares set forth in the Stock Exercise Notice or Cash\nExercise Notice, as applicable, so that the Notional Total Profit shall not\nexceed the Maximum Amount; provided, that nothing in this sentence shall\nrestrict any exercise of the Stock Option permitted hereby on any\nsubsequent date at the Exercise Price set forth in Section 2 hereof.\n\n               (c) As used herein, the term 'Total Profit' shall mean the\naggregate amount (before taxes) of the following: (i) the cash amount\nactually received by the Company pursuant to Section 10.6(a) of the Merger\nAgreement less any repayment by the Company to Parent pursuant to Section\n10(a)(i) hereof, (ii) (x) the net cash amounts or the fair market value of\nany property received by the Company pursuant to the sale of Option Shares\n(or of any other securities into or for which such Option Shares are\nconverted or exchanged), less (y) the Company's purchase price for such\nOption Shares (or other securities) plus (iii) the aggregate amounts\nreceived by the Company pursuant to Section 3(d).\n\n               (d) As used herein, the term 'Notional Total Profit' with\nrespect to any number of Option Shares as to which the Company may propose\nto exercise the Stock Option shall mean the Total Profit determined as of\nthe date of the Stock Exercise Notice or Cash Exercise Notice, as\napplicable, assuming that the Stock Option was exercised on such date for\nsuch number of Option Shares and assuming that such Option Shares, together\nwith all other Option Shares previously acquired upon exercise of the Stock\nOption and held by the Company and its affiliates as of such date, were\nsold for cash at the closing price on the NYSE for the Common Stock as of\nthe close of business on the preceding trading day (less customary\nbrokerage commissions).\n\n          Section 11. Restrictions on Certain Actions; Covenants of the\nCompany. From and after the date of exercise of the Stock Option (other\nthan an exercise contemplated by Section 3(d) hereof), in whole or part,\nand for as long as the Company owns shares of Common Stock acquired\npursuant to the exercise of the Stock Option:\n\n               (a) Without the prior consent of the Board of Directors of\nParent, the Company will not, and will not permit any of its affiliates to:\n\n               (i) acquire or agree, offer or propose to acquire, ownership\n          (including, but not limited to, beneficial ownership as defined\n          in Rule 13d-3 under the Exchange Act) of more than 25% of any\n          class of Voting Securities (as defined in below), or any rights\n          or options to acquire such ownership (including from a third\n          party);\n\n               (ii) propose a merger, consolidation or similar transaction\n          involving Parent;\n\n               (iii)offer or propose to purchase, lease or otherwise\n          acquire all or a substantial portion of the assets of Parent;\n\n               (iv) solicit or participate in the solicitation of any\n          proxies or consents with respect to the securities of Parent;\n\n               (v) enter into any agreements or arrangements with any third\n          party with respect to any of the foregoing; or\n\n               (vi) request permission to do any of the foregoing or any\n          permission to make any public announcement with respect to any of\n          the foregoing; and\n\n               (b) (i) The Company agrees to be present in person or to be\nrepresented by proxy at all stockholder meetings of Parent so that all\nshares of Voting Securities beneficially owned by it or its affiliates may\nbe counted for the purpose of determining the presence of a quorum at such\nmeetings.\n\n               (ii) The Company agrees to vote or cause to be voted all\n          Voting Securities beneficially owned by it or its affiliates\n          proportionately with the votes cast by all other stockholders\n          present and voting.\n\n               (iii)The provisions of this Section 11 shall terminate at\n          such time as the Stock Option granted hereby expires without\n          having been exercised in whole or part. The provisions of this\n          Section 11 shall not apply to actions taken pursuant to the\n          Merger Agreement. 'Voting Securities' means the shares of Common\n          Stock, preferred stock and any other securities of Parent\n          entitled to vote generally for the election of directors or any\n          other securities (including, without limitation, rights and\n          options), convertible into, exchangeable into or exercisable for,\n          any of the foregoing (whether or not presently exercisable,\n          convertible or exchangeable).\n\n          IN WITNESS WHEREOF, Parent and the Company have caused this\nAgreement to be duly executed as of the day and year first above written.\n\n\n\n                                    ALLIEDSIGNAL INC.\n\n                                    By:\/s\/ Lawrence A. Bossidy\n                                       -----------------------\n                                    Name:  Lawrence A. Bossidy\n                                    Title: Chairman and Chief Executive\n                                           Officer\n\n\n                                    HONEYWELL INC.\n\n                                    By: \/s\/ Michael R. Bonsignore\n                                        -------------------------\n                                    Name:  Michael R. Bonsignore\n                                    Title: Chairman and Chief Executive\n                                           Officer\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7791],"corporate_contracts_industries":[9473],"corporate_contracts_types":[9622,9626],"class_list":["post-43628","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-honeywell-international-inc","corporate_contracts_industries-aerospace__aircraft","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43628"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43628"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43628"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}