{"id":43629,"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-inc2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-option-agreement-alliedsignal-inc-and-honeywell-inc2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-option-agreement-alliedsignal-inc-and-honeywell-inc2.html","title":{"rendered":"Stock Option Agreement &#8211; AlliedSignal Inc. and Honeywell Inc."},"content":{"rendered":"<pre>\n                           STOCK OPTION AGREEMENT\n\n     THIS STOCK OPTION AGREEMENT (this 'Agreement'), dated as of June 4,\n1999, 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 execution\nand delivery of this Agreement entering into an Agreement and Plan of\nMerger (the 'Merger Agreement') pursuant to which, among other things,\nMerger Subsidiary will merge with and into the Company on the terms and\nsubject to the conditions stated therein; and\n\n     WHEREAS, in order to induce Parent to enter into the Merger Agreement\nand as a condition for Parent's agreeing so to do, the Company has granted\nto Parent the Stock Option (as hereinafter defined), on the terms and\nconditions 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 herein\nhave the respective meanings assigned to them in the Merger Agreement.\n\n     Section 2. Grant of Stock Option. The Company hereby grants to Parent\nan irrevocable option (the 'Stock Option') to purchase, on the terms and\nsubject to the conditions hereof, for $109.453 per share (the 'Exercise\nPrice') in cash, up to 25,241,518 fully paid and non-assessable shares (the\n'Option Shares') of the Company's common stock, par value $1.50 per share\n(the 'Common Stock'). The Exercise Price and number of Option Shares shall\nbe subject to adjustment as provided in Section 5 below.\n\n     Section 3. Exercise of Stock Option.\n\n          (a) Parent may, subject to the provisions of this Section 3,\nexercise the Stock Option, in whole or in part, at any time or from time to\ntime, after the occurrence of a Company Trigger Event (defined below) and\nprior to the Termination Date. 'Termination Date' shall mean, subject to\nSection 9(a), the earliest of (i) the Effective Time of the Merger, (ii)\n120 days after the date full payment contemplated by Section 10.5(a) of the\nMerger Agreement is made by the Company to Parent thereunder, (iii) the\ndate of the termination of the Merger Agreement so long as, in the case of\nthis clause (iii), no Company Trigger Event has occurred or could still\noccur pursuant to Section 10.5(a) of the Merger Agreement or (iv) the first\nanniversary of the date of termination of the Merger Agreement.\nNotwithstanding the occurrence of the Termination Date, Parent shall be\nentitled to purchase Option Shares pursuant to any exercise of the Stock\nOption, on the terms and subject to the conditions hereof, to the extent\nParent exercised the Stock Option prior to the occurrence of the\nTermination Date. A 'Company Trigger Event' shall mean an event the result\nof which is that the total fee or fees required to be paid by the Company\nto Parent pursuant to Section 10.5(a) of the Merger Agreement is equal to\n$350 million.\n\n          (b) Parent may purchase Option Shares pursuant to the Stock\nOption 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 the Company\nand its Subsidiaries, taken as a whole.\n\n          (c) If Parent shall be entitled to and wishes to exercise the\nStock Option, it shall do so by giving the Company written notice (the\n'Stock Exercise Notice') to such effect, specifying the number of Option\nShares to be purchased and a place and closing date not earlier than three\nbusiness days nor later than 10 business days from the date of such Stock\nExercise Notice. If the closing cannot be consummated on such date because\nany condition to the purchase of Option Shares set forth in Section 3(b)\nhas not been satisfied or as a result of any restriction arising under any\napplicable law or regulation, the closing shall occur five days (or such\nearlier time as Parent may specify) after satisfaction of all such\nconditions and the cessation of all such restrictions.\n\n          (d) So long as the Stock Option is exercisable pursuant to the\nterms of Section 3(a), Parent may elect to send a written notice to the\nCompany (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 the Company shall pay to Parent 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\nParent shall specify. As used herein, 'Spread' shall mean the excess, if\nany, 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 Parent of the applicable\ncash amount with respect to the Option Shares or the applicable portion\nthereof, the obligations of the Company to deliver Option Shares pursuant\nto Section 3(e) shall be terminated with respect to the number of Option\nShares 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, Parent\nshall make payment to the Company of the aggregate purchase price for the\nOption Shares to be purchased and the Company shall deliver to Parent a\ncertificate representing the purchased Option Shares, registered in the\nname of Parent or its designee and (ii) at any closing pursuant to Section\n3(d) hereof, the Company will deliver to Parent cash in an amount\ndetermined pursuant to Section 3(d) hereof. Any payment made by Parent to\nthe Company, or by the Company to Parent, pursuant to this Agreement shall\nbe made by wire transfer of immediately available funds to a bank\ndesignated by the party receiving such funds, provided that the failure or\nrefusal by the Company to designate such a bank account shall not preclude\nParent from exercising the Stock Option. If at the time of the issuance of\nOptions Shares pursuant to the exercise of the Stock Option, Company Rights\nor any similar securities are outstanding, then the Option Shares issued\npursuant to such exercise shall be accompanied by corresponding Company\nRights or such similar securities.\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 certificate\n          is subject to resale restrictions arising under the\n          Securities Act of 1933, as amended.'\n\n     It is understood and agreed that the above legend shall be removed by\ndelivery of substitute certificate(s) without this reference (i) if Parent\nshall have delivered to the Company a copy of a no-action letter from the\nstaff of the Securities and Exchange Commission, or a written opinion of\ncounsel, in form and substance reasonably satisfactory to the Company, to\nthe effect that such legend is not required for purposes of, or resale may\nbe effected pursuant to an exemption from registration under, the\nSecurities 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 Parent. Parent hereby represents and\nwarrants to the Company that any Option Shares acquired by Parent upon the\nexercise of the Stock Option will not be, and the Stock Option is not\nbeing, acquired by Parent with the intention of making a public\ndistribution thereof, other than pursuant to an effective registration\nstatement under the Securities Act or otherwise in compliance with the\nSecurities 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 Parent's rights hereunder, the type\nand number of shares or securities purchasable upon the exercise of the\nStock Option and the Exercise Price shall be adjusted appropriately, and\nproper provision will be made in the agreements governing such transaction,\nso that Parent will receive upon exercise of the Stock Option a number and\nclass of shares or amount of other securities or property that Parent would\nhave received in respect of the Option Shares had the Stock Option been\nexercised immediately prior to such event or the record date therefor, as\napplicable. In no event shall the number of shares of Common Stock subject\nto the Stock Option exceed 19.9% of the number of shares of Common Stock\nissued and outstanding at the time of exercise (without giving effect any\nshares subject or issued pursuant to the Stock Option).\n\n          (b) Without limiting the foregoing, whenever the number of Option\nShares 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 the Company\nenters into an agreement (i) to consolidate with or merge into any Person,\nother than Parent or one of its Subsidiaries, and the Company will not be\nthe continuing or surviving corporation in such consolidation or merger,\n(ii) to permit any Person, other than Parent or one of its Subsidiaries, to\nmerge into the Company and the Company 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 the Company or\nany other Person or cash or any other property, or the shares of Common\nStock outstanding immediately prior to the consummation of such merger\nwill, after 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 Parent or\none of its Subsidiaries, then, and in each such case, the agreement\ngoverning this transaction shall make proper provision so that the Stock\nOption will, upon the consummation of any such transaction and upon the\nterms and conditions set forth herein, be converted into, or exchanged for,\nan option with identical terms appropriately adjusted to acquire the number\nand class of shares or other securities or property that Parent would have\nreceived in respect of Option Shares had the Stock Option been exercised\nimmediately prior to such consolidation, merger, sale or transfer or the\nrecord date therefor, as applicable, and will make any other necessary\nadjustments. The Company shall take such steps in connection with such\nconsolidation, 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) The Company 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 the Company, and to issue the\nappropriate number of shares of Common Stock pursuant to the terms of this\nAgreement. All of the Option Shares to be issued pursuant to the Stock\nOption, upon issuance and delivery thereof pursuant to this Agreement, will\nbe duly authorized, validly issued, fully paid and nonassessable, and will\nbe delivered free and clear of all claims, liens, charges, encumbrances and\nsecurity interests (other than those created by this Agreement).\n\n          (b) The Company 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 the\nCompany.\n\n          (c) The Company agrees that promptly after the occurrence of a\nCompany 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 Parent in Parent's preparing and processing\nthe required notices or applications) in order to permit Parent to exercise\nthe Stock Option and purchase Option Shares pursuant to such exercise.\n\n          (d) The parties agree that Parent would be irreparably damaged if\nfor any reason the Company failed, in breach of its obligations hereunder,\nto issue any of the Option Shares (or other securities or property\ndeliverable pursuant to Section 5 hereof) upon exercise of the Stock Option\nor to perform any of its other obligations under this Agreement, and that\nParent would not have an adequate remedy at law for money damages in such\nevent. Accordingly, Parent shall be entitled to specific performance and\ninjunctive and other equitable relief to enforce the performance of this\nAgreement by the Company. Accordingly, if Parent should institute an action\nor proceeding seeking specific enforcement of the provisions hereof, the\nCompany hereby waives the claim or defense that Parent has an adequate\nremedy at law and hereby agrees not to assert in any such action or\nproceeding the claim or defense that such a remedy at law exists. The\nCompany further agrees to waive any requirements for the securing or\nposting of any bond in connection with obtaining any such equitable relief.\nThis provision is without prejudice to any other rights that Parent may\nhave against the Company for any failure to perform its obligations under\nthis Agreement.\n\n     Section 7. Listing of Option Shares. Promptly after the occurrence of\na Company Trigger Event and from time to time thereafter if necessary, the\nCompany will apply to list all of the Option Shares subject to the Stock\nOption on the NYSE and will use its reasonable best efforts to obtain\napproval 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 Option,\nParent requests the Company in writing to register under the Securities Act\nany of the Option Shares received by Parent hereunder, the Company will use\nits reasonable best efforts to cause the offering of the Option Shares so\nspecified in such request to be registered as soon as practicable so as to\npermit the sale or other distribution by Parent of the Option Shares\nspecified in its request (and to keep such registration in effect for a\nperiod of at least 90 days), and in connection therewith the Company shall\nprepare and file as promptly as reasonably possible (but in no event later\nthan 60 days from receipt of Parent's request) a registration statement\nunder the Securities Act to effect such registration on an appropriate\nform, which would permit the sale of the Option Shares by Parent in\naccordance with the plan of disposition specified by Parent in its request.\nThe Company shall not be obligated to make effective more than two\nregistration statements pursuant to the foregoing sentence; provided,\nhowever, that the Company may postpone the filing of a registration\nstatement relating to a registration request by Parent under this Section 8\nfor a period of time (not in excess of 90 days) if in the Company's\nreasonable, good faith judgment such filing would require the disclosure of\nmaterial information that the Company has a bona fide business purpose for\npreserving as confidential (but in no event shall the Company exercise such\npostponement right more than once in any twelve month period).\n\n          (b) The Company shall notify Parent in writing not less than 10\ndays 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 Parent wishes to have any portion of its\nOption Shares included in such registration statement, it shall advise the\nCompany in writing to that effect within two business days following\nreceipt of such notice, and the Company will thereupon include the number\nof Option Shares indicated by Parent under such Registration Statement;\nprovided that if the managing underwriter(s) of the offering pursuant to\nsuch registration statement advise the Company that in their opinion the\nnumber of shares of Common Stock requested to be included in such\nregistration exceeds the number which can be sold in such offering on a\ncommercially reasonable basis, priority shall be given to securities\nintended to be registered by the Company for its own account and,\nthereafter, the Company shall include in such registration Option Shares\nrequested by Parent to be included therein pro rata with the shares of\nCommon Stock intended to be included therein by other stockholders of the\nCompany.\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 the Company's expense except for underwriting discounts or\ncommissions and brokers' fees. The Company and Parent agree to enter into a\ncustomary underwriting agreement with underwriters upon such terms and\nconditions as are customarily contained in underwriting agreements with\nrespect to secondary distributions. The Company shall indemnify Parent, its\nofficers, directors, agents, other controlling persons and any underwriters\nretained by Parent in connection with such sale of such Option Shares in\nthe customary way, and shall agree to customary contribution provisions\nwith such persons, with respect to claims, damages, losses and liabilities\n(and any expenses relating thereto) arising (or to which Parent, 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 Parent or its underwriters to the Company. Parent and its underwriters,\nrespectively, shall indemnify the Company to the same extent with respect\nto information furnished in writing to the Company by Parent and such\nunderwriters, respectively.\n\n     Section 9. Miscellaneous.\n\n          (a) Extension of Exercise Periods. The periods during which\nParent may exercise its rights under Sections 2 and 3 hereof shall be\nextended in each such case at the request of Parent to the extent necessary\nto avoid liability by Parent under Section 16(b) of the Exchange Act by\nreason 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 to\neither party hereunder shall be in writing (including facsimile or similar\nwriting) 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\n                  Attention:  Peter M. Kreindler\n                  Senior Vice President, General Counsel\n                    and Secretary\n                  Facsimile No.: (973) 455-4217\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\n                  Attention:  Edward D. Grayson\n                  Vice President and General Counsel\n                  Facsimile No.: (612) 951-3859\n\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 restriction\nof this Agreement is held to be invalid, void or unenforceable, the\nremainder 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 more\ncounterparts, each of which shall be an original, but all of which together\nshall constitute one and the same Agreement.\n\n          (i) Headings. The section headings herein are for convenience\nonly and shall not affect the construction hereof.\n\n          (j) Assignment. This Agreement shall be binding upon each party\nhereto and such party's successors and assigns. This Agreement shall not be\nassignable by the Company, but may be assigned by Parent in whole or in\npart to any direct or indirect wholly-owned subsidiary of Parent, provided\nthat Parent shall remain liable for any obligations so assigned.\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 be of\nthe essence in the performance of obligations hereunder.\n\n          (m) Public Announcement. Parent and the Company will consult with\neach other before issuing any press release or making any public statement\nwith respect to this Agreement and the transactions contemplated hereby and\nshall not issue any press release or make any public statement without the\nprior consent of the other party, which shall not be unreasonably withheld.\nNotwithstanding the foregoing, any such press release or public statement\nas may be required by applicable law or any listing Agreement with any\nnational securities exchange, may be issued prior to such consultation, if\nthe party making the release or statement has used its reasonable efforts\nto consult with the other party.\n\n     Section 10. Profit Limitation.\n\n          (a) Notwithstanding any other provision of this Agreement or the\nMerger Agreement, in no event shall Parent's Total Profit (as defined\nbelow) exceed $400 million (the 'Maximum Amount') and, if it otherwise\nwould exceed such Maximum Amount, Parent at its sole election may (i) pay\ncash to the Company, (ii) deliver to the Company for cancellation Option\nShares previously purchased by Parent, or (iii) any combination thereof, so\nthat Parent's actually realized Total Profit (as defined below) shall not\nexceed the Maximum Amount after taking into account the foregoing actions.\n\n          (b) Notwithstanding any other provision of this Agreement, the\nStock Option may not be exercised for a number of Option Shares as would,\nas of the date of the Stock Exercise Notice or Cash Exercise Notice, as\napplicable, 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, Parent, at\nits discretion, may (in addition to any of the actions specified in Section\n10(a) above) increase the Exercise Price for that number of Option Shares\nset forth in the Stock Exercise Notice or Cash Exercise Notice, as\napplicable, so that the Notional Total Profit shall not exceed the Maximum\nAmount; provided, that nothing in this sentence shall restrict any exercise\nof the Stock Option permitted hereby on any subsequent date at the Exercise\nPrice 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 Parent pursuant to Section 10.5(a) of the Merger\nAgreement less any repayment by Parent to the Company pursuant to Section\n10(a)(i) hereof, (ii) (x) the net cash amounts or the fair market value of\nany property received by Parent pursuant to the sale of Option Shares (or\nof any other securities into or for which such Option Shares are converted\nor exchanged), less (y) Parent's purchase price for such Option Shares (or\nother securities) plus (iii) the aggregate amounts received by Parent\npursuant to Section 3(d).\n\n          (d) As used herein, the term 'Notional Total Profit' with respect\nto any number of Option Shares as to which Parent may propose to exercise\nthe Stock Option shall mean the Total Profit determined as of the date of\nthe Stock Exercise Notice or Cash Exercise Notice, as applicable, assuming\nthat the Stock Option was exercised on such date for such number of Option\nShares and assuming that such Option Shares, together with all other Option\nShares previously acquired upon exercise of the Stock Option and held by\nParent and its affiliates as of such date, were sold for cash at the\nclosing price on the NYSE for the Common Stock as of the close of business\non the preceding trading day (less customary brokerage commissions).\n\n     Section 11. Restrictions on Certain Actions; Covenants of Parent. From\nand after the date of exercise of the Stock Option (other than an exercise\ncontemplated by Section 3(d) hereof), in whole or part, and for as long as\nParent owns shares of Common Stock acquired pursuant to the exercise of the\nStock Option:\n\n          (a) Without the prior consent of the Board of Directors of the\nCompany, Parent 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 in\n     Rule 13d-3 under the Exchange Act) of more than 25% of any class of\n     Voting Securities (as defined in below), or any rights or options to\n     acquire such ownership (including from a third party);\n\n          (ii) propose a merger, consolidation or similar transaction\n     involving the Company;\n\n          (iii)offer or propose to purchase, lease or otherwise acquire all\n     or a substantial portion of the assets of the Company;\n\n          (iv) solicit or participate in the solicitation of any proxies or\n     consents with respect to the securities of the Company;\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 the\n     foregoing; and\n\n          (b) (i) Parent agrees to be present in person or to be\nrepresented by proxy at all stockholder meetings of the Company 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) Parent agrees to vote or cause to be voted all Voting\n     Securities beneficially owned by it or its affiliates proportionately\n     with the votes cast by all other stockholders present and voting.\n\n          (iii)The provisions of this Section 11 shall terminate at such\n     time as the Stock Option granted hereby expires without having been\n     exercised in whole or part. The provisions of this Section 11 shall\n     not apply to actions taken pursuant to the Merger Agreement. 'Voting\n     Securities' means the shares of Common Stock, preferred stock and any\n     other securities of the Company entitled to vote generally for the\n     election of directors or any other securities (including, without\n     limitation, rights and options), convertible into, exchangeable into\n     or exercisable for, any of the foregoing (whether or not presently\n     exercisable, convertible or exchangeable).\n\n     IN WITNESS WHEREOF, the Company and Parent have caused this Agreement\nto be duly executed as of the day and year first above written.\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-43629","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\/43629","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=43629"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43629"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43629"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}